A list of our most frequently asked questions is shown below. If you have a question that is not in this list, please email us under the "Contact Us" tab or send us an email at email@example.com. When several of our potential customers and/or members ask the same question, we add it to the market trend signal FAQs list.
The goal of every stock market timing system is to calculate and indicate when "the market" is going up, down, or sideways. Market timing vendors instruct their members when to buy, sell, or short, but not what equities to trade. They attempt stock market prediction based on stock market trends. Most market timing systems recommend using their services with Index Exchange Traded Funds(ETFs), like the S&P500 ETF (SPY), mainly because they are less volatile and more predictable than individual stocks.
This is one of those interesting topics where "people" can be both right and wrong on a given topic! These people (you know who they are) feel "right" in saying that stock market timing can't be done successfully because: (a) they certainly can't do it, (b) they don't understand how anyone else does it, (c) they can't admit it for job security reasons, (d) they don't want you to believe it, and (e) no stock market timing system is 100% right 100% of the time.
On the other hand, these people are "wrong" in saying that stock market timing can't be done successfully because several stock market timing software companies have developed timing models that are 65-70% accurate (and that is tons better than "going it alone"). MIPS is one of the best of these stock market timing companies, and MIPS3 is the #1 Ranked model on TimerTrac.com since 2007!
The same type of people that believe that stock market timing can't be done successfully are the types that would not have believed that: (a) the world was not flat, (b) a 200-ton aircraft could get off the ground, fly at 600 miles/hour and cross the USA in 6 hours; (c) we could fly a man to the moon and bring him back alive; (d) we could make actual mechanical robots or nanobots to a billionth of an inch; (e) we could find a cure for polio; etc. When we put stock market timing in the perspective of the above, it seems relatively easy. I can personally testify that stock market timing algorithms are very complex, but the complex mathematics used in stock market timing is like child's play when compared to the mathematics used to direct the flight of a 40-ton missile flying at 12,000 miles/hour for 6,000 miles and "hitting" a pre-programmed target. Then again, stock market timing is not all about mathematics, as the best timing models also have lots of intuition and self-correction built in.
Do all "stock market timing systems" use the same techniques?
Not at all. Most use proprietary mathematical models that are very much different from other vendors. The main difference that the user sees is the number of Signals (hence Trades) that each stock market timer sends out. The signal rate can vary from very-low-frequency of 1 trade every 1-2 years all the way up to over 100 trades per year. MIPS offers low-to-medium trading frequency models that average 5-15 trades/year.
Do all stock market timing systems beat a buy-and-hold strategy ?
No, just like everything else, some do and some don't. The better models do beat the market in both up and in down markets. We would recommend that you check out the past performance of any model that you are evaluating using a third-party ranking service that uses "verified" signals (like TimerTrac.com or ThetaResearch.com). Pay close attention to the number of trades that the models require (in most cases, the number of trades/year required are more than the average investor is willing to make). Be careful with models that do not do well in down markets (like in 2008).
Do most stock market timing systems produce similar results ?
Not at all. Some excel in up markets, others shine in down markets, and many get clobbered in "sideways" markets (that is, they get "whipsawed"). Again, our suggestion would be to check their past performance over long time periods using a third-party ranking service that uses "verified" signals(like TimerTrac.com). If a model does not do well in up and down markets, look for another one (like MIPS).
How often is the MIPS3/MF stock market trading system right ?
Please see the tops of the "Home" or "Performance" pages. Basically, in the 12-year period from 2007-18, the percent of winning trades was about 65-70% with an average gain per trade of +3.5%; and the percent of losing trades was about 30-35% with an average loss per trade of only 1.3%. MIPS3 was right 70% of the time and the average gain was about 3 times better than the average loss. This shows that the MIPS internal algorithms that were designed to "Cut Losses Shot" are working well.
Why should I use a market timing in my investment strategy ?
This is the simplest questions in our list. You should use a good stock market timing system (like MIPS) because: (a) a good one will help you generate results better than you can achieve alone in up markets, (b) the model should get you out of market crashes in time to save your portfolio value and maybe your entire retirement, and (c) some (like MIPS) will produce great results in severe bear markets. So, MIPS does well in up markets and extremely well in down markets.
An ETF is a mutual fund that trades like a stock. ETFs are relatively new instruments. (They have been around 20 years, but not 150 years like individual stocks.) Before ETFs, mutual funds only traded at the end of the trading day (with the purchase price being the closing price of the fund). ETFs actually trade all day on the major exchanges like a stock, hence the name Exchange Traded Funds (or ETFs). Many ETFs mimic the major indices (the Dow, the S&P 500, the Russell 2000, etc.) and are referred to as Index Funds. ETFs became instantly popular because, to spread their risk, investors could trade hundreds of stocks with one purchase (like the 500 stocks in the S&P 500).
What is "selling short" or being in a "short position" ?
First off, being in a "short position" means that you have already executed an order and have "shorted" the ETF (say SPY). From a financial gain/loss basis, selling SPY short is the opposite of buying it (i.e., when you are short, you make money when the ETF goes down and lose when it goes up). Basically, the way a "short" works is: (1) When you put in an order to "short" an ETF, your brokerage firm basically "lends you" the shares of the ETF for you to sell. (2) Of course, your brokerage firm expects you to pay them back the shares that you borrowed, so in effect you are now "short" the ETF (3) To protect themselves, your brokerage firm makes you put up money when your order is executed as collateral for the shares that they lent you. (4) If the ETF goes down in price and you buy it at a lower price(buy-to-cover), you make money; but if the ETF goes up and you buy-to-cover at the higher price, you lose money.
You will be very happy to know that you no longer have to go through this "shorting" process if you follow our instructions under the Services tab. Also, see the very next question in this FAQ section, "What is an inverse ETF?"
What is are "inverse" ETFs and how do they help me short ETFs?
It's simple. Inverse ETFs "mimic" a short position. That is, inverse ETFs effectively own short positions. A list of Inverse ETFs is shown under the Services tab. Therefore, when you "buy" an inverse ETF (say SH), you have essentially taken a short position in the underlying ETF (in this case, SPY). So, for those investors who want to use a MIPS buy/short strategy, you could simply buy the ETF that you are trading when you "go long" (like SPY) and then you "buy" the inverse ETF when you "go short" (in this case, SH). Buying inverse ETF instead of shorting is a lot simpler, with basically very similar same results (but not actually the same) as actually "shorting."
MIPS is a stock market timing system. The calculations in the MIPS "models" are based on intense analysis using applied mathematics and artificial intelligence to determine if the market is headed up, down, or sideways. MIPS uses over 150 technical indicators to make these decisions. Many of these technical indicators are tried-and-proven indicators that have been around for many years and many were developed by MIPS Timing Systems. The end result of any MIPS analysis depends upon how these technical indicators (commercially available and/or proprietary) are used in a "secret-sauce-mix." The signals from each of the individual indicators are "weighted" in importance in the final decision by a proprietary algorithm. Once decided upon, MIPS issues end-of-day signals via email telling its subscribers when the market is changing direction (up, down, or sideways), and the MIPS members trade on the next day's market open.
MIPS offers 5 trading "models", all with different trading frequencies. MIPS/Nitro is our best model and it cost a little more. We recommend MIPS/Nitro for investors trading a total of $20,000 or more. MIPS/Nitro, MIPS3 and MIPS4 are for medium-frequency traders (12-16 trades/year); MIPS2/LF is for low-frequency traders (5-6 trades/year); and MIPS1/VLF is for very-low-frequency traders (on average, about 1 trade every year). See a complete explanation in the Services section. (PS - MIPS is not for "day traders" that want to trade 10-20 times/week or hundred's of times/year.)
When trading with MIPS, investors need to have decided on:
(1) which MIPS trading model to use,
(2) which trading strategy to use (Long/Short or Long/Cash),
(3) which ETFs to trade (SPY, QQQ, or a combo of both.
Once an investor has decided on ALL of the above, we call it the investor's "Trading Profile". The Services section is designed to help you decide which MIPS Trading Profile is right for you.
For one thing, MIPS was developed totally in-house and produces astonishing results with a relatively small number of trades (i.e., better results with 1/4th as many trades as some of our competitors). An important element in MIPS' performance is that the mathematical algorithms that we developed are augmented by several "common sense" algorithms that largely limit mistakes and cut our losses. These two seemingly different concepts work together to produce better results for our members than those from competitive vendors (e.g., like less "whipsawing" and much larger gains on winning trades than losses on losing trades).
Basically, an "inflection point" is where something changes direction (from up-to-down, or from right-to-left, etc). Wikipedia says:
"In differential calculus, an inflection point, point of inflection, or inflection (inflexion) is a point on a curve at which the curvature changes sign. The curve changes from being concave upwards (positive curvature) to concave downwards (negative curvature), or vice versa."
MIPS asks: "Isn't that what we investors are always looking for?"
It's very simple. MIPS issues end-of-day stock market "Signals" for each model via email (after the close), telling its subscribers when the market is changing direction (up, down, sideways). Subscribers simply enter orders to buy, sell, or short before the market's next opens. Then, they hold their positions until they hear from MIPS again. And YES, it's that simple, and you make money in up markets AND you also should make money in down markets (by going "short"). Even if you use a "long only" strategy (a buy/sell strategy that does not "short"), MIPS will get you to an "all cash" position when the market crashes (like in 2000 and 2008) and you will at least avoid financial disaster.
What can I trade using MIPS Buy/Sell/Short Signals
You will always want to trade equities that "correlate" well with the movements of the S&P 500 (which is the index for the 500 largest companies in the USA). For the average investor, we suggest trading the SPY or some combination of ETFs for USA: Large-Cap (SPY) and the NASDAQ (QQQ). Aggressive investors can trade "double leverage" ETFs (like SSO or OLD) for higher returns, but with much higher risk. Trading "1.5x leverage" on long signals (like from SSO and SPY), and "single leverage" ETFs (like SH) on short signals results in good returns with lower drawdowns. Remember, you can realize 1.5x leverage performance by trading 50% in SPY and 50% in SSO. Many MIPS users trade with 1.5x Long and 0.5x Short. See more under the "Services" tab for stock trading information.
MIPS signals are generated based on the behavior of the SPY (the index fund for the S&P 500)and the QQQ (the index of NASDAQ). MIPS works on all ETFs that "correlate" well with the SPY. The international ETF for the top 600 companies throughout the world outside the United States (EFA) should correlate well with the S&P 500, mainly because most of the companies in the S&P 500 are large, multinational companies. However, MIPS has not tested trading ETFs from other countries or emerging markets; hence this is not recommended at this time.
Are your MIPS3/MF "Signals" verified by a 3rd party company?
Absolutely, our Signals are tracked by both TimerTrac.com, the leading tracking company in the USA which tracks over 200 models; and by ThetaResearch.com a tracking company with many about 100 models used by RIA firms. The buy/sell/short Signals from our flagship model (the MIPS3) are verified by TimerTrac.com for all Signal Dates after 11/03/2005. The original MIPS/Nitro55 model was introduced in Jan'16, and has been tracked since then by both of these tracking companies. A new version (v8)of MIPS/Nitro55 was introduced in Nov'16, and is noted for its ability to "go to cash" in very fast-acting market volatility.
MIPS is a stock market trading system that was designed to produce incredible results with as few a number of trades as possible. MIPS is NOT a high-frequency trading system. Our flagship MIPS3/MF model trades an average of about 15 times/year (medium frequency). Over time, we have introduced three new models - MIPS1 is a "very" low frequency model that trades about 1 time/year; MIPS2 is a low frequency model that trades 6-8 times/year; and MIPS4 and MIPS/Nitro (MIPS3's "big brother", that trades about 12-16 times/year.
What does the "average" number of trades with a MIPS model mean?
The "Average" is calculated from the actual number of signals issued from each model over a long period of time (at least 10-15 years). So, if a model issued 104 trade signals in 105 years, we would report that this model traded an "average" of about 10 times/year. Keep in mind, however, that in any give year, the model could issue 2-3 signals in one month and then maybe only 3-4 signals in the next 6-8 months.
Do I need to check your website every day for Signals ?
Absolutely not, but you can. We do update the results on our website at least weekly. But, you may only want to hear from MIPS when it issues a signal change (like from Long to Short). When this happens (and only when this happens), MIPS sends an email to all subscribers telling them about the signal change, on the "Signal Date". The subscriber then place their trades before the market opens the next day (the "Trade Date"). To keep MIPS Members updated, we do issue "MIPS - Signal Status" emails every weekend. Of course, if you have not heard from MIPS in a while, feel free to click on "Current Signals" under the "Signals" tab when you visit the MIPS website at www.mipstiming.com.
What if I miss a signal at night and forget to check the next morining?
Most stock market timing systems send an email in the evening of the day of a signal change, and investors should place their trades on the open the next day. Our research has shown that over time, investors using low-to-medium trading frequency models (like MIPS) can occasionally place their trades at any time on the trade day without major negative consequences. This is because (a) trading during the day on the trade day can randomly be better or worse than on the open, and (b) the average "lifetime" of the trades on our medium frequency model averages about 20 days. So a portion of one day every now and then will not have a major impact on long-term results. Please be aware that this is NOT true for other higher frequency trading models, that trade 60 times/year and each trade may have a "lifetime" of only 3-4 days.
No, but MIPS is a very good stock market trading system for day traders who do not want to continue being day traders. The main contribution of MIPS for the average investor is great results with fewer trades. Most likely, MIPS can produce better results trading 15 times/year on average than 90% of day traders realize after sitting at their computers 8 hours/day making 5-10 trades/day. In fact, this is one of the major contributions that MIPS has made to your lives. Now WE sit at our computers 8-10 hours/day developing MIPS algorithms so YOU can go out and play all day !!!
Why are most of your stats shown trading the SPY ?
The best way to test the accuracy of any trading model is to trade the ETF that the market timing model used to generate its buy/sell/short signals (in our case the S&P 500, or the SPY). This eliminates many external parameters that could effect the results. Please remember, however, that you can trade other ETFs (like QQQ)with MIPS. See the "Services" tab on the main menu for other ETFs that you might want to trade.
End-of-Day (or EOD) means that MIPS issues buy/sell/short Signals after the market closes ("Signal Date") and subscribers place their trades before the market opens the next morning ("Trade Date). Hence, almost no intraday trading is required.
As a NEW SUBSCRIBER, is it wise for me to trade on your Current Signal ?
Since the MIPS models are low-to-medium-frequency trading models, MIPS signals will stay in effect for an average of 6-8 months, and it would NOT be good to miss one of these trends. We have developed safeguards to limit our "downdrafts", but you could possibly get pinched on your first trade. Over time, however, this should prove to be negligible. But remember, in strong markets, MIPS signals can stay in effect over one year.!!!
Does MIPS include dividends in its performance calculations ?
No, becasue many of the ETFs that we trade (like the NASDAQ) pay very low dividends, and the results would not be that much different. The SPY pays the highest dividend, but its dividend is less than 2% per year. So,in effect the dividends that you do get will make your results slightly higher than what we report herein.
Click the "Services" tab in the main menu and click on the "Trading Profiles" button on the top left. MIPS members select a MIPS model based on the model's long term performance, its Max Drawdown, AND the average number of trades/year. Some investors will give up some performance to reduce the number of trades (not recommended). Always, MIPS/Nitro is our best model. Otherwise, we recommend MIPS4 if you are going to trade ETFs on the next day's open trading ETFs (after a signal change) or MIPS3 if you must trade traditional mutual funds on the next day's close (as required on some company sponsored 401K accounts or most mutual funds). Either of the MIPS models should beat buy and hold significantly on a long-term basis.
That is an almost impossible question to answer correctly for everyone. But, we can provide some guidelines to the question, "What % of my investment money should I invest with MIPS?" Your total assets consist of (a) Hard Assets like your home, property, automobiles, etc. and (b) Liquid Assets like cash and any asset that can be quickly turned into cash (like stocks, bonds, CDs, etc). So, the maximum that one could invest would be their total liquid assets, but that is certainly not recommended. Financial advisors recommend that people keep as least 3 months of their expenses in cash for a rainy day, and invest the remainder in bonds and stocks/funds (let's say in ETFs). Let's call your stock/funds money in your liquid assets your "investment money". Advisors recommend that you "allocate" your investment money according to this rough formula: "Invest a percentage that equals your age in bonds and the remaining percentage in equities". So, if a member is 30 years old, he/she would invest about 30% of his/her investment money in bonds and 70% in ETFs; whereas, a member who is 60 years would have 60% in bonds and 40% in ETFs. This forces investors to "get more conservative" as they get closer to retirement. So, you could use MIPS to manage most or all of the equity/ETF part of your "investment money" as calculated above. Or course, younger or aggressive investors usually invest 90% in stocks/ETFs and keep 10% in bonds or in cash.
Absolutely, with the following considerations. In your IRA, since you cannot "short", you would have to buy an inverse ETF when MIPS issues a short signal. Even though we are comfortable with members buying any of the ETFs under the Services tab, in your IRA account we recommend that you "short" just the SPY by buying SH. In your 401K account where "trading" is discouraged, we recommend that you: (a) follow the low-frequency trading MIPS3, (b) buy Index ETFs or mutual funds like those under Services, or (c) go to a "100% Cash" position on both Cash and Short signals (that is, no shorts or inverse ETFs in 401K accounts).
What do you suggest for risk-tolerant investors that want higher returns?
You could simply trade mid-cap, because they outperform the SPY in the long term (but, of course, with higher volatility). But, if you want even higher returns and can sleep with higher risk, you could trade 1.5x leverage or 2.0x "double leverage" ETFs for the ETFs under the "Services" tab on the main menu. Aggressive investors can trade "double leverage" ETFs (like SSO) for higher returns, but with higher risk. Trading "double leverage" on long signals (like), and "single leverage" ETFs (like SH) on short signals results in good returns with lower drawdowns. See more under the "Services" tab for stock trading information.
As a Financial Advisor, can I use MIPS signals to manage my client's accounts?
MIPS3's "verified performance" growth trading the SPY and QQQ long/short was over 9 times your original money since 2007. In this same time-period, the SPY's growth was about 3 times your original money. So, starting with a $10,000 portfolio on 01/03/2007, an investor with a buy/hold SPY strategy would have had about $30,000 on 06/30/2021; but an investor using our MIPS3 model with a buy/short SPY strategy would have had over $90,000 on 06/30/2021. Therefore, the investor using MIPS would have had $60,000 more than the buy/hold investor! During this year period, the MIPS fees would have been about $8,000. So, MIPS3 would have made you about $52,000 more than buy/hold AFTER taking out the MIPS fees. And if you would had started with $20,000 you would have cleared over $100,000 of your initial investment (after fees). Imagine what you would have if you had started with $100,000 in 2007 !!!
Yes. And, if you are an Individual Investor and cancel within the first 30 days the first time that you subscribe, you are due a full one month refund. However, if you do not cancel in the first 30 days but do cancel later, you will be charged through the month in which you cancelled, but nothing after that. Annual subscriptions are for 12 months and cannot be cancelled until their year is up. There is no refunds for annual subscriptions.
We offer a full, unconditional refund to Monthly Subscribers who cancel within the first 30 days, the first time that they subscribe (one-time offer). Monthly Subscribers must send an e-mail cancellation request to firstname.lastname@example.org within the first 30 days to request a refund. There are no refunds for Annual Subscribers, nor for Monthly Subscribers who repeatedly subscribe and cancel. Please read our "Refund Policy" (click the "Refund/Cancellation" button on the bottom of our Home and Subscribe pages).
Most individual investors are taught to simply buy and hold, even in down markets. They are also told that (a) no one can time the market and (b) they should never consider short trades. And somehow, the SEC made it illegal for "retail" fund managers to execute short orders in their portfolios. But, everyone must have forgotten to tell the hedge fund managers this, as they have been making billions of dollars for the last 35 years.
MIPS Timing Systems, LLC, was formed to provide stock market timing signals for individual investors to help them make money in both bull markets and bear markets like the high-profile professional money managers do (that is, like hedge fund managers that can trade long and short as they see fit).
The MIPS Timing Systems models analyze the stock market and provide information to our members when the models issue buy, short, and/or cash "signals". The MIPS trading system uses the S&P 500 Exchange Traded Fund (ETF), the SPY Index Fund, to represent the market and uses SPY in one of its index trading strategies. MIPS is not for high frequency online trading or for day traders.
Most of the information regarding the stock market direction provided herein is derived from quantitative models and algorithms owned and developed by MIPS Timing Systems, LLC. These are made up of numerous technical indicators, some of which are published and some of which were developed in-house. These technical indicators are looking for new stock market trends and the exact time that the market changes its trend line from up-to-down or vice versa (i.e., an "inflection point" in the stock market trend line). This provides our members with new tools for timing the stock market and to better manage their stock market investments.