Swing Trader for Beginners: Exits from Low Volatility to Explosive Movements (TA&FA)

The main idea of this AI Robot is to find the moments when the stock price exits the period of low volatility and expects serious movements up and down.

This AI Robot is most suitable for beginner traders as its signals are very easy to follow. All new trades are opened at 9:40 ET, i.e., 10 minutes after the market opens. After entering the position, a fixed stop loss and a take profit of 3% of the current stock price are set. Thus, it is enough for our users to wait until 9:40 ET, see if new signals have appeared, open trades, place closing orders and be free until the next trading session.

The average duration of a trade is only 2 days, which allows our users not to stuck in one position for a long time and effectively use capital. The maximum number of open trades is 30, thanks to which control over positions does not take much time.

Opening trades after the breakout of the consolidation zone allows our users to enter the beginning of a new trend at the moment of its intensive development, which increases the chances of reaching the take profit zone. For analysis, the algorithm uses only stocks from the SP 500 index, which allows traders not to have problems with the spread or liquidity at the time of opening a trade.  After one of the stocks breaks out of the consolidation zone and forms a short-term uptrend, the AI algorithm of the robot begins to analyze the situation in terms of technical and fundamental analysis methods.

If, as a result of the analysis of all factors, our algorithm concludes that the uptrend is stable, then the robot opens a long position. If the technical and fundamental analysis shows that the breakout was most likely a false one, then a short position is opened.

The analysis is based on the BUY / SELL Analytical System - a complex method for assessing the market situation, consisting of the following blocks:

1. Technical Analysis (TA) score - signals from several technical indicators (MACD, RSI, Stochastic, etc.) are processed using neural networks.

2. Fundamental Analysis (FA) score - complex fundamental analysis based on quantitative comparative ratings (Valuation, P/E Growth, SMR etc.)

3. Buy / Sell rating system - processes the aggregate score results and generates a trading signal.

The robot's trading results are shown without using a margin. For a full trading statistics and equity chart, click on the "show more" button on the robot page. In the tab “Open Trades”, a user can see live how the AI Robot selects equities, enters, and exits in paper trades. In the tab “Closed trades”, a user can review all previous trades made by the AI Robot.

Disclaimer. The presented paper traded results (annualized returns, % wins/loss, and other statistics) are achieved by the application of the backtested and forward tested models. The past backtested and forward tested performance should not be taken as an indication or guarantee of future performance, and no representation or warranty, expressed or implied is made regarding future performance. Forward testing started on 12.12.2022.