Swing Trader ($3.3K per position): Sector Rotation Strategy (TA&FA)

This AI robot is specifically designed for swing traders who want to trade a diversified set of stocks from a wide range of industries. By doing so, the robot aims to provide resistance to sharp changes in market conditions for a particular industry and maintain a balanced set of open positions.

The robot comes with a basic risk management strategy, which has been developed for a trading balance of $100,000 and a position size of $3300 per trade. However, traders have the flexibility to adjust their trading balance as per their requirements, and as a result, the position size will change proportionally. For instance, if the trading balance is adjusted to $50,000, the position size will automatically adjust to $1650.

The algorithm of the robot consists of two parts:

1. Analysis of the correlation between the movement direction of main stocks and other stocks included in the same sector. This analysis of correlated stocks is a popular method used by hedge funds to create trading strategies. Our team of quants conducted multi-level backtests on a large amount of historical data to identify correlation relationships between the sector leaders and other stocks included in it.
2. Creation of an optimal diversification model based on a quantitative analysis of the efficiency of various combinations of industries. The robot uses 22 sub-industries from different sectors such as Industrials, Energy, Consumer Services, Real Estate, and Finance. This approach ensures that our users are not overly dependent on market cycles or external events that could negatively affect the dynamics in a particular industry.

The average duration of a trade is only 2 days, allowing our users to effectively use capital and avoid getting stuck in a single position for an extended period. The maximum number of open trades is 86, which ensures good diversification to reduce the impact of a single 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 helps our users avoid large drawdowns.

The robot's trading results are shown without using margin. For complete trading statistics and equity chart, users can click on the "show more" button on the robot page. In the "Open Trades" tab, users can see live how the AI Robot selects equities, enters, and exits in paper trades. In the "Closed Trades" tab, users 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 03.20.2023.