Swing Trader: Stocks from Financial Sector (TA&FA)

This AI Robot is for swing traders focused on trading stocks of companies from the financial sector. The trading algorithm is based on the analysis of the correlation between the direction of movement of main financial stocks and other stocks included in this sector.

The analysis of correlated (similar) stocks is one of the most popular methods for creating trading strategies used by hedge funds. In the process of creating this robot, our team of quants conducted multi-level backtests on a larger amount of historical data. This allowed us to identify correlations relationships between the leaders of the sector and the rest of the stocks included in it. At the next step, we created an efficient mechanism for finding optimal points for opening positions using a pool of our proven algorithms.

The financial sector consists of a wide range of industries, including banks (major and regional), investment companies, different types of insurance companies (Life, Property, Specialty Insurance) etc. Among the well-known companies in this sector, there are both companies with a long history that provide traditional types of financial services, such as Bank of America, Goldman Sachs, and new fintech companies that create financial services of the future - SoFi, Robinhood. Accordingly, financial stocks also have large differences in volatility, price dynamics, which requires the use of reliable algorithms for trading them.

The average duration of a trade is only 5 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 22, which ensures good diversification to reduce the impact of one trade on overall profitability.

After entering the trade, the AI Robot places a fixed order "Take profit" at the level of 4% of the position opening price. To exit the trade, the robot uses a fixed stop loss of 4% of the position opening price, which allows our users to avoid large drawdowns.

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 01.25.2023.