Trend Trader for Beginners: Piotroski F-score Model (FA)
Description:
This robot is tailor-made for novice traders who prefer engaging in long-term trends, relying on signals derived from advanced fundamental analysis models. Its emphasis on maintaining a small number of simultaneously open trades and holding positions for an extended period makes it an excellent choice for those new to trading.
At the core of the algorithm lies the well-established and time-tested method for evaluating a company's financial strength—the Piotroski F-score. Originating from the insights of Stanford University professor Joseph Piotroski, this score is widely embraced by professional hedge funds and value investors. The score assesses crucial financial indicators such as Return on Assets, Operating Cash Flow, and Asset Turnover Ratio. Following data processing, each company receives a score ranging from 0 to 9, where 0 signifies a weak financial position suitable for opening short positions, and 9 represents excellence, making them prime candidates for long positions.
However, our team of quants has not merely mechanically applied this method; they have enriched it with their own indicators, blending both classical and modern methods of cost analysis. The outcome is a comprehensive and effective company assessment algorithm.
On a daily basis, our mathematical prowess scans companies' financial statements, selecting those with the most favorable aggregate scores for long positions and the lowest scores for short positions. There are two exit strategies:
- In the event of a significant change in the company's score.
- When the stock price reaches 20% of the fixed stop-loss level from the trade's opening price.
All orders placed by the robot are conveniently accessible on the "Pending Orders" tab. Here, users can access crucial information, including the number of shares in the order, the order placement time, the order type (limit, market, or stop market), and the limit price level. This unique tool enables our users to anticipate all future actions of the robot and effectively utilize its signals for both monitoring and real trading.
The trading results of the robot are displayed without the use of margin. For comprehensive trading statistics and an equity chart, click on the "Show All Stats" button on the robot page. In the "Open Trades" tab, users can observe in real-time how the AI Robot selects equities, enters, and exits in paper trades. In the "Closed Trades" tab, users can review all previous trades executed 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 12.15.2023.
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