First we look at the recent MPonzo chart update, as of Monday's close.
Then we examine the 1 standard deviation derived bracket for a bullish market and find the lower bracket value is 207.93.
Then we set up a credit spread with the break even expiration value as close to the lower bracket as possible.
This is a credit spread so we make money at the get-go.
Then we establish stop loss limits so that a strongly rising market does not produce the worse case scenario. (That part is still under study but we're roughly looking to avoid anything larger than a 1% loss.) If the markets do rise then we simply close the positions and wait for the next week's prompts.
We can actually implement a few other money management tactics to control drawdown and those will eventually be merged into the risk/reward control panel.
