Trend Trader, Long Only: Profitability Model for Small Cap Stocks (FA)
Description:
This robot is specifically designed for traders who prefer to engage in small-cap stock trading, utilizing advanced algorithms for comprehensive profitability analysis. Due to its extended holding periods and limited simultaneous open trades, it caters to both novice traders and more advanced individuals independently managing their IRA accounts.
The algorithm of this robot is founded on a combination of two approaches:
1. A proprietary method of comparative analysis of company profitability, developed by our team of quants. Utilizing a pool of profitability indicators such as Total Revenue, Net Income, EBITDA, etc., the algorithm scrutinizes the dynamics of their changes. Employing a sophisticated ranking method, it assigns each company an individual score. Subsequently, the top 30 companies with the best profitability indicators are selected for opening positions.
2. The method involves analyzing profitability inspired by the renowned investor Ian Wyatt. It delves into profitability metrics such as Operating Income, EPS, etc., ranking stocks based on the maximum dynamics of growth in profitability indicators.
The fusion of these two methods empowers the robot's algorithm to select stocks that exhibit both stable average profitability indicators and high rates of growth.
Upon opening a trade, the robot places a fixed Stop Loss order at 20% of the opening price. Additionally, at the commencement of each month, the algorithm reviews the rating for each stock. If it falls below the required level, the position is closed, even if the Stop Loss level is not reached.
For user convenience, all signals for opening positions are delivered two hours after the market opens. This ensures maximum liquidity and enhances the robot's usability for users following its signals.
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 01.14.2024.
Summary (29 days)
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