We have to decide how much money to put on each trade as well, so to simplify things here we have just decided to invest 25%, a quarter of the cash we have, on each trade. We thought that was probably too many, so we decided to focus on our strongest signal family, EPS, which reduces it to 338 trades, or 1-2 trades a week over four years. Over the last 4 years, that actually ends up being 1107 signals. A typical casual trader typically only holds a long position, and only trades US stocks. We are just going to trade on the absolute best signals, the 5 stars, or to be precise, everything with a star rating of over 98. So fewer trades, with more profit is a good idea. The parameters for this signal selection were set for someone that does not trade all the time, and does not have the opportunity to monitor the markets every second of every day. Please bear in mind, the last 4 years have seen some extraordinary market conditions, something you might not expect a machine learning trading signal generator would be able to handle. For each example, we will outline exactly how we picked these, for you to replicate if you so wish. Below we have made some simple decisions regarding what to trade on, and we have backtested this over the last 4 years. To evaluate the performance of trading signals, you can look at a few different statistics: how often is it profit making? How much does the average signal return? Or how much would following the signals return? ORTEX provides you with many different signals and a significant number of statistics about them to enable you to pick which signals to trade. The gray lines are the most recent signals of this type, and we can clearly see that these have had a strong trend, reaching heights of 100% return on some occasions, as a median we have reached 40% return after 47 days. The colored lines are the median and the 25 th and 75 th percentiles. At the far left of the chart is the date of the signal, and at the furthest-right is 90 trading-days after the signal, or 30 days depending on the trading signal family. This shows aggregated data for all signals of the same type for a stock. The small icons on the image, 3 stacked on top of each other in three places are the three types of Short Squeeze signals firing on 3 different days before things really took off.Īfter the first Squeeze, we detected two more Short Squeeze events in GameStop as the price continued to climb, however on these occasions only one of the Short Squeeze signals triggered.īelow is the signal performance chart for a recent signal. You might see all three of them triggering at the same time, as we did on GameStop, NYSE:GME, just before the epic price moves at the end of January. They look at slightly different aspects of how to detect a Short Squeeze, considering everything from Short Interest, Utilization, Cost to Borrow and the Stock Price as well as the rate of change in these. The different types of signal look at different aspects of the metric that is the main base for that signal.įor example, the Short Squeeze signal comes in Type1, 2 and 3. ORTEX has five families of trading signals: Short Squeeze, EPS, RSI, MACD and Company Events. We also help you visualize this with star ratings, success bars and charts. If you are already familiar with them, please jump to the performance section, where we have a look back at the performance a portfolio has had if it had followed our signals.įor each signal we tell you how many times the signal has triggered in the past, the success rate and the average return, as well as what holding period has previously given the best return. We will start with a little explainer of the different trading signals we currently provide. This can all be seen from the data we display on our Alpha Trading Signals. We start by statistically determining rare events, and on top of this we use a machine learning algorithm to determine the likelihood of success. Hence, we have a two-pronged approach to our signals. ORTEX’ approach to trading signals is rather cautious, markets can be volatile, and history doesn’t always repeat itself. “Our 5 star EPS trading signals returned 2230% over 4 years” 2020 was a turbulent year, and we thought it might be a good time, a year after the markets reacted to the coronavirus, to review the performance of our signals. Regular users of ORTEX will be familiar with our Alpha Trading Signals they have highlighted valuable opportunities for a few years now.
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