It all starts with an event, a question confronting the markets. What happened to a market in the past when this event has occurred before?
Events can be anything - a technical indicator, a description of the current trend, an economic report, an earnings release, a crop report, a declaration of war. Basically an event can be any event or combination of events that results in a series of dates describing when that event has occurred in the past.
We then can ask the MIM how the market or markets have responded in the past when that event has been true. We analyze how the market responds to the event using what we call our Event Chart. Click here for an explanation of how the Event Charts are designed to make it easy to see at a glance whether an event has any historical tendencies, bullish, bearish, or flat.
We also provide a table of data showing the numbers behind the chart. The first part of the table shows the actual historical market outcomes. Below that are summary statistics that immediately show the profitability and risk profile.
Bottom Line: You get a clear picture of what to look for; how big a move took place in the past; the frequency and size of moves in favor of a trade and against it. This lets you know if this idea matches your risk profile, where to expect to take profits, and where to place stops.
