Trend Trader, Long Only: Profitability Model for Russell 2000 Stocks (FA)

Overview: This robot is specifically designed for traders interested in small-cap stock trading within the Russell 2000 Index. It leverages advanced algorithms to conduct comprehensive profitability analyses. The Russell 2000 Index is widely recognized as the most quoted measure of the overall performance of small-cap to mid-cap stocks. It is commonly considered an indicator of the U.S. economy, given its focus on small-cap companies in the U.S. market. With its extended holding periods and a limited number of simultaneous open trades, the robot caters to both novice traders and more advanced individuals who independently manage their IRA accounts.

Strategic Features and Technical Basis: 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.

Position and Risk Management: 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.

Trading Dynamics and Specifications:

• Maximum Open Positions: Medium, allowing for diversified exposure while managing concentration risk.
• Robot Volatility: High, suited for navigating and capitalizing on market swings.
• Universe Diversification Score: Low, indicating a narrow array of instruments to hedge against sector-specific downturns and enhance profit opportunities.
• Profit to Dip Ratio (Profit/Drawdown): Medium, offering a balanced profit vs. drawdown scenario that makes it an ideal intermediates and experts.
• Optimal Market Condition Medium: If the current market volatility is Medium then you should use the Best Robots in Medium Volatility Market (VIX is Medium - this indicator is coming soon).  

Disclaimer: Disclaimers and Limitations

Simulated Performance: All simulated performance results are derived solely from real-time calculations using historical data. Algorithms receive minute-by-minute historical prices and other data from Morningstar and generate trades in real time based on these historical inputs, effectively eliminating any hindsight bias. 

Actual Performance: All actual performance results are derived solely from real-time calculations using current data. Algorithms receive minute-by-minute current prices and other data from Morningstar and generate trades in real time based on these current inputs, effectively eliminating any hindsight bias. 

Gross Performance: Gross performance results do not deduct any fees or expenses. These results reflect the total returns generated by the AI Robots without considering the costs associated with accessing the service. 

Net Performance (current performance chart): Net performance results deduct fees to provide a more accurate representation of returns experienced by the user. These deductions can include: Model Fee Deduction: Net performance results may deduct a model fee equivalent to the highest subscription fee charged to the intended audience. Actual Subscription Fees: Net performance results may also deduct the actual subscription fees paid by the user for access to AI Robots.