Complete Trading Model (CTM) Glossary

2-Dimensional Percent Return Chart plots the CTM percent return against days held for each buy and sell combination for a price series.

3-Dimensional Annualized Return Chart plots on three axis the annualized return for each buy and sell combination for a price series.

3-Dimensional Percent Return Chart plots on three axis the percent return for each buy and sell combination for a price series.

Annualized Return for a CTM buy and sell combination is the interest rate that if compounded for the holding period gives the final investment value for the initial amount invested.

Average Annual Return for a CTM buy and sell combination is the CTM percent return divided by the number of years held.

Bow Tie Chart plots the annualized return over the percent return for each buy and sell combination for a price series.

Buy Downside and Sell Downside is the CTM trade type when you buy on the downside and sell on the downside. Therefore, you buy on or after the peak and sell after the peak of the upside price pattern.

Buy Upside and Sell Downside is the CTM trade type when you buy on the upside and sell on the downside. Therefore, you buy on or after the bottom and sell after the peak of the upside price pattern.

Buy Upside and Sell Upside is the CTM trade type when you buy on the upside and sell on the upside. Therefore, you buy on or after the bottom and sell on or before the peak of the upside price pattern.

Buy and Sell Combination is a single trade for a specified buy date and price and specified sell date and price. It is the basic building block for all further CTM computations and analysis.

Complete Trading Model (CTM) is a methodology developed by Richard Howard that computes the percent return for all buy and sell combinations for a selected price series. CTM computes the number and percentage of winning trades (return greater than zero) and the number of losing trades (return less than or equal to zero) for the price series. CTM can be used to confirm tops and bottoms using cumulative percent winners and cumulative returns.

CTM is the acronym for the Complete Trading Model.

CTM Trade Table contains the percent return for each buy and sell combination for a selected price series.

CTM Trade Types include buy upside and sell upside, buy upside and sell downside and buy downside and sell downside.

Cumulative Percent Winners is computed by dividing the total number of winning trades by the total number of trades as of a given date. Each date of the price series has a unique cumulative percent winner. It is used to determine a change in price direction from the upside to the downside or from the downside to the upside.

Cumulative Return is computed by dividing the sum of all the returns by the total number of trades as of a given date. Each date of the price series has a unique cumulative return. It is used to determine a change in price direction from the upside to the downside or from the downside to the upside.

Downside is the portion of the price series that is bounded by the top of the upside and the subsequent bottom price of the price series.

Percent Return is computed for each CTM buy and sell combination using the following equation: Percent Return = ((Sell price - Buy price)/Buy Price)*100.

Price Cycle one complete price upside followed by a complete price downside.

Price Series is a group of prices with a specified start and end date.

Relative Performance Chart compares the performance of two stocks on one chart. The performance measure is usually the percent return for each buy and sell combination of a price series. So the relative performance for one buy and sell combination is the difference between the percent return for two stocks that have the same buy date and same sell date.

Relative Performance Map, which is derived from the relative performance chart, shows on a flat surface the distribution of the relative performance for each buy and sell combination for a price series.

Upside is the portion of the price series that is bounded by the bottom price and the peak price of the price series.

Winners and Losers Map, which is derived from the 3-dimensional percent returns chart, shows on a flat surface the distribution of winners and losers for all buy and sell combinations for a price series.