Swing Trader, Long Only ($6.2K per position): MACD & RSI Strategy for Financial Stocks (TA)

This AI Robot is for traders who prefer to open long only positions and trade stocks of companies from the financial sector using the signals of the well-known technical indicators MACD and RSI. The maximum number of open positions does not exceed 15-20, and the average trade duration is 7 days. After entering the trade, the robot places a fixed orders "Take profit" and "Stop Loss" at the level of 4% of the position opening price. All this makes following the signals of this robot simple and affordable even for beginner traders.

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 $6200 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 $3100.

Moving average convergence/divergence (MACD) is a trend-following momentum indicator that shows the relationship between two exponential moving averages (EMAs) of a security’s price. This indicator was created in the 1970s and gained wide popularity among traders due to its simple rules of use and good performance.

The relative strength index (RSI) is a widely used technical analysis tool that helps traders evaluate the momentum of a security's price changes. By measuring the magnitude and speed of recent price changes, RSI can identify potential overbought or oversold conditions in the security's price.

Using a unique system of multi-level backtests and a proprietary method for analyzing volatility and price dynamics of stocks, our team of quants created an effective strategy for using these indicators.

About sector:

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 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 03.01.2023.