I struggled to become a profitable trader until I developed my market model several years ago. My goal was to create a system which would generate high probability BUY and SELL signals on S&P500.
The model is using 2 sets of indicators: breadth and technical. The buy / sell signals are provided when the breadth indicators are pointing up / down and the technical indicators are in a buy / sell mode. When my model is 100% LONG, most of my day and swing trades are bullish. Conversely, when it is 100% SHORT, I am primarily trading on the short side.
Before adding an indicator to the market model, I back-tested it and made sure that its buy and sell signals produced positive returns over time.
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Market Model Performance in 2018
The market model provided 3 big sell signals in 2019. Two of those were followed by substantial sell offs.
Market Model Performance in 2019
The market model flipped to BUY on Christmas Eve of 2018 and led to a monstrous rally from December lows. The model has also accurately ‘predicted’ several corrections in 2019 as well as the new big break out into the year end.
How To Follow My Market Model
I update my market model daily after each trading session on my web-site. I also provide additional insights, market analysis, tape reading and other relevant observations, which help me in my positioning, decision-making, sizing and trading.