About 70-80% of the effort in making money in the stock market is in determining whether "the market" is "trending" up or down. In MIPS terminology, by "the market, we mean S&P 500 Index (which accounts for about 85% of the money in the New York stock exchange). Almost everyone makes money in a up market and vice versa for a down market.
The MIPS models determine "the market trend" for us with an accuracy of about 65-70%. In addition, the gains from MIPS's winning trades are about 3 times bigger than the losses from losing trades.
Viable Trading Strategies Include: MIPS works well trading the S&P 500 ETF (SPY) and most stocks or indices ETF that "correlates" well with the SPY (like the QQQ). Most small-cap, mid-cap and large-cap US indices are well-correlated to the SPY (like the Russell 2000, the Nasdaq 100, etc). In general, even though these other indices track well with the SPY, their "volatility" is higher than that of the SPY (goes higher than the SPY in up markets and goes lower in down markets). Of course, this is great on MIPS's winning calls, but it is not good on losing calls. Correlates =>http://www.investopedia.com/terms/c/correlation.asp
For more aggressive investors, we recommend 1.5 leverage SPY on long signals and 1.0x SPY (or 0.5x SPY) on short signals. One can do this by trading 50% each of SPY and SSO on long signals and 100% SH (or 50% SH) on short signals. See right-most trading profile below... Click here for a full definiton of "Shorting" or "Going Short"...
Trading SPY or QQQ or IWM since 2007 (single leverage)
OTHER POPULAR TRADING PROFILES
I.) A popular trading profile by MIPS Members (and myself) is to trade the S&P 500 with 1.5x leverage on Long
signals and 0.5x leverage on Short signals. The simplist way to accounplishe this is:
(a) on Long signals trade 50% of your investment money in the singe leverage SPY (S&P500 ETF) and
the other 50% in the double leverage SSO, and
(b) on short signals short 50% of your investment money by buying the single leverage inverse ETF SH
with the other 50% in cash.
II.) Or, for slightly less upside risk, one could trade 1.25x SPY Long and 0.75x SH Short.