Make Task Investing Easy with Build Alpha

Investment in stocks in such a volatile market nowadays has become a cause of concern and how to manage one’s finances. Most of the people ask their fund managers to invest in quality stocks at this point in time. Which is the best asset class to invest in and how to manage your portfolio? Some people think that investment is the most straightforward aspect of financial planning, whereas nobody knows the correct answer and is debatable. But now, with the advancement of technology, things have become quite more comfortable and if we look at the broader pictures with investing tools like Build Alpha, it is far easier to invest and trade with the best expertise available with you at every point of time.

Investment in the capital markets can be comparatively easier than other asset classes or yield drivers. One should invest smartly and systematically keeping in view the returns on your investment, but most of the investors do it otherwise, and everything is turned around like not placing the upside-down cake correctly, thus the toppings at the bottom scatters. With a tool like Build Alpha now investing activity has become way easier as it gives proper analysis of the trend of the market.

Especially for the new age investors who have just entered the market, they can quickly get the knowledge in the simplified version through this unique tool. It is very user friendly and an easy to access tool that serves just perfect for solving the queries and dilemmas of new as well the experienced traders and investors. Even if you are dealing in the market for long-term, there ought to be something or the other that may bother you or you may not understand as the market is quite volatile and it is quite difficult to depict the pattern well.

Here is where BuildAlpha comes into play by helping you out with that uncertain motions of the market where you fear to take your next steps. As with unpredicted levels and economic uncertainty of course comes a lot of risks. Build Alpha can help you identify these risks to hopefully sidestep them before they affect your portfolio.

Very well written by Warren Buffet, there are lots of ups and downs in the stock market, and one should be patient. That is why he termed the capital market where investing is a no-called-strike game. So now, with this unique and very useful tool, it has become much simpler to invest in the capital markets and earn money, and the same time the fear of losing will be minimized as now you have experienced moves, tested them and are ready for the next one. Therefore, do the research of the markets with the help of Build Alpha before you are interested in investing and before new risks hit the market.

Ideal Investing Tool

Trading and Investing is not an easy job and it is best if you have an expert’s advice or better yet a true quantified edge. To gather expert advice and quantified edge, there is a unique tool on the market which is designed specifically for trading and investing purposes. It will serve the purpose for the new investors, and for the existing ones who are experienced in providing them with expert advice, new methods of testing and validation. Build Alpha is the ideal software that will help you creating a trading or investing plan that experts would be proud of.

With this best investing tool, you inevitably live in the golden age of stock market investing. You will get unlimited information, which everyone can reach who is using the software. Build Alpha provides unparalleled data, signals and testing methods to help you build the best trading or investing strategies. It is such a unique tool which will help you in many ways.

It is very economical and is of great tool which small investors are taking great advantage of. These small investors spend next to nothing for tools, the best investing tools, and knowledge. If you’re someone who is invested in the stock market, you should surely look at BuildAlpha. It can even help you analyze your existing trading or investing strategies as well as help you create new ones.

Features of Build Alpha Investing Tool

1. The first advantage that you get from this tool, Build Alpha is the ability to test thousands of trading and investment signals without having to write any code yourself. You can select from candlestick patterns, technical indicators, volume, market breadth studies, intermarket signals, multi-timeframe signals and much more to test, create and build your perfect investment strategy – all is done point and click with no programming. This gives the trader and investor a significant advantage because of the amount of time saved.

2. Free Portfolio Analysis – Another feature that you should check for is the portfolio analysis or Portfolio Mode. With the help of Build Alpha, all the aspiring investors can analyze their portfolios for prospect and opportunity. This portfolio analysis tool will not cost a lot of money and will give you a lot of investing tools and tests you can use. It will offer you tremendous robust analysis tools. These tools possess a piece of expert advice which actually feels like it contains various experts. The tools also allow you to run simulations, find efficient quantitative test and factor-based financing models.

Individual stock investors can use this software for to find the best portfolio for their risk return desires. Investors can track trades, calculate risk-adjusted revenues, and conduct quantitative research. It will also assist you in maintaining your portfolio as a whole rather than just your individual strategies and positions.

3. Education of Investors

To compete in today’s market, traders and investors need proper tools and education. Build Alpha comes complete with private training video course to assist new and advanced traders and investors on how to properly build strategies, test them and construct proper portfolios for individual risk/reward characteristics. This is an all in one tool that comes complete with training. This gives Build Alpha users significant advantage over their counterparts still attempting to learn and build strategies manually.

Quantifying Candlesticks for Trading Systems

Candlesticks are often a trader’s first exposure to technical analysis.

As a quantitative system developer for a high frequency and market making firm I can assure you that all the successful traders I have been lucky enough to meet have some type of system or at the very least know the general odds when placing their trades!

So today we’ll look at a way to define AND quantify candlesticks.

If we can do this, we can measure their usefulness as well as place smarter (more informed) trades.

Build Alpha: Smarter trades should ultimately mean better returns! Some patterns might be more effective than others while some patterns might work great on some symbols but not on others. The only way to find out is to: define, quantify and test.

Let’s breakdown how to define and quantify 4 popular candlestick patterns.

1. Inside Range or Inside Bar

Defined: A range that is contained within the previous bar’s range. Some require the direction of inside bar to be opposite of the preceding bar but I will not in this case.

Quantified: High[0] <= High[1] and Low[0] >= Low[1]

The high of the current bar denoted by [0] is less than or equal to the High of the previous bar denoted by [1]. The current low is also greater than or equal to the Low of 1 bar ago. We can then add another simple rule to check for positive or negative inside bars. Close[0] >= close[1] or Close[0] <= Close[1]

Quick Stat: In Gold futures, the day following a positive close inside bar has traded above the inside range’s high 72% of the time and only trades below the inside range’s low 44% of the time. The day following a negative close inside range trades above the inside range’s high 52% of the time and trades below the inside range’s low 49% of the time. Much more directional bias in the former.

2. Doji

Defined: An open and close that are very close together and an open and close near the middle of the bar to represent indecision.

Quantified: Absolute value (open – close) / range <= .10 and ibr >= .4 and ibr <= .6

This shows that the difference between the open and close, no matter which one is greater, is always less than or equal to 10% of the entire bar’s range. IBR is interbar rank or sometimes referred to as interbar strength. The value of IBR is what percentage of the bar’s range is below the close. So IBR > .4 and IBR < .6 means the bar’s close was in the middle 20% of the bar’s range. This combination of rules accurately defines a doji. Note: It ignores gravestone dojis or dragonfly dojis which can be accounted for by adjusting the IBR thresholds.

Quick Stat: In Gold Futures, the day following a ‘Doji’ as we have defined it here closes higher than the Doji’s close 62.6% of the time compared to closing lower only 37.9% of the time.

3. Hammer

Defined: A hammer is meant to show sellers taking control mid bar and then buyers regaining control and closing near the top of the bar leaving a long wick at the bottom of the candle.

Quantified: IBR > 90% and absolute value(open-close) / range <= 10%

Let’s assume the open or close must be within the top 10% of the bar’s range (ibr) and are contained within a 10% window of the bar’s range.

Quick Stat: In Gold Futures, the day following a Hammer (as defined above) only closes higher 46% of the time. Extremely small sample size due to our narrow definition.

Notes: We could do things like compare the height of the body to the lower wick or relax some of our rules above to find more ‘hammer’ occurrences. Additionally, some might only quantify a hammer based on relation to previous candles as well. Furthermore, looking more than 1 day ahead could also yield different results, too. Then of course adding other context like moving average comparison or other indicators, etc. can add/subtract value as well.

4. Bearish Kicker

Definition: This pattern shows a gap and go down bar after a strong up bar. This reversal pattern has candles in opposite directions.

Quantified: Close[1] > Open[1] and ibr[1] > .9 and High[0] < Low[1] and Close[0] < Open[0] and ibr[0] < .1

BuildAlpha: In the photo above you can see that the previous bar’s close was indeed above the previous bar’s open. It also closed in the top 90% of the bar’s range. The current bar’s high was below the previous bar’s low while closing negatively below the current bar’s open. The current bar also closed in the bottom 10% of the bar’s range.

Quick Stat: I will leave this one for you to research. I think this is a good starting point. Imagine if you had a tool to easily do this kind of thing!

A few future ideas:

Now that we can identify simple rules to define and test known patterns…. what if we combine ideas like these with MACD, RSI, Stochastics or other indicators to give more context? What happens to these patterns when we add a rule such as above or below the 50-period moving average?

Another question we can answer now is do our findings (statistics) show similarity on each stock and asset class? For example, the inside pattern works on Gold but not the same on others. It is important to check everything before investing hard earned money; few do this level of work and that is why very few win.

Imagine seeing a certain pattern work very well on stock #1. Then that recent success on stock #1 encourages you to take a similar set up on stock #2. This is a dangerous pitfall that those without the data make over and over again.

Yes, setting up all these tests and building a database of stats to use can be extremely difficult and time consuming. However, my goal with Build Alpha is to make it so simple that if you can click a mouse then you can run this type of research (and more).

Build Alpha: For a simple example, just click on the “hammer” signal or create your own candlestick patterns with the built-in open, high, low, close rule library and then combine with the built-in technical indicators, etc.

Stop trading randomly or without knowing the odds.

Originally Posted: https://www.seeitmarket.com/quantifying-candlesticks-for-trading-systems/

The Insights of Trading

Trading is not as easy as we think it is, it requires years of experience or proper expert advice. Most of us do not have years we can sacrifice to learn the markets and all that is required to be successful. In that case, it is necessary to find some expert advice or something equivalent to expert advice to assist in your decision making. This is especially true for investors who are investing in the market for the very first time. They need to step in the stock market with prudence and care as they are new traders with limited knowledge competing against some of the top sharks in the world. On the flip side, there are so many experts that it is hard to know which expert to trust and listen to as half of them are right and half of them might not really be experts at all.

To replace this confusion and need for an external investor, new software like Build Alpha can help. This software makes trading and investing about the data and finding the right data to support your investment ideas. If the data does not agree with your idea, then you should not act. One thing which should be in your mind while investing is to avoid greed and do not have fear while investing. Make a portfolio from various sectors, asset classes and countries. Researching your own data and constructing your own portfolio using powerful software like Build Alpha is proving to be the most trustworthy resolution in today’s complicated markets.

Talking about potential new investors, they are always in for those assets which have moderate valuations or big risk and reward characteristics. Different market analysts have their investment strategies owing to the Bull and Bear phase of the market. There are many loopholes for the ones who are trading for the first time in the market. This is a beginning as well as continuous guidance to explore, learn and succeed in the trading market.

There is no one that can independently know all the things in the market as it is a very vast dynamic area, but with the aid of human-made knowledge and powerful software like BuildAlpha, one can lead the scale of success as they have the guidance of more than one expert. You will discover a lot of innovative things about trading. The tool is an overall solution to guide you on the right track in the trading. To seek the answers in which you need and can trust.

So why are these trading tools becoming so important?

The first aspect is in the fact that these trading tools are the simplest way to conduct proper research and test ideas to compete with professional investors and hedge funds. Build Alpha works on any market cycle, interest rate environment, inflationary or deflationary economy and market trends or chop. It is important to devise a trading plan for all the different scenarios and having a tool that can test for this is paramount to both individual and professional success. Now we have just evened the playing field.

Next up is the need for diversification, which requires in-depth studies of correlations, different markets and how they interact. How will you construct a portfolio of diverse assets and strategies? Do you have a means for testing this portfolio in the different market cycles? This is the void Build Alpha can fill in your process to lead you to your desired result. Please do not trade or invest without data and proper testing, especially now that it is so easily possible!

Why Are Expert Analysis Tool Vital In Stock Market ?

One should invest in the right manner to get the appropriate return nowadays. A lot of hard work is put in to earn and in achieving your goals, which may not be sufficient for leading a comfortable lifestyle. In order to fulfill your dreams, the investment should be made appropriately to make your money work hard. Money lying in your bank is not earning anything, so you must trade or invest your money smartly to earn a return.

Investing in an equity market, one must have the proper knowledge of its technical as well as fundamental analysis. Both technical and fundamental analysis will tell you some about the movement of different stocks but how can you be sure? Quantitative analysis can be the missing piece. That is, using historical data and statistics to find the best opportunities.

This enables you to better decide on entering and exiting from the market. BuildAlpha is devised to help in making your investment decisions. Technical analysts tell you the movement of the prices of the various stocks and seemingly guess when to buy or sell a stock. But it is not always possible to take the support of human “experts” all day long, but now with the help of this analytical software, it has become possible. The software does not comprise a single expert knowledge but knowledge of various experts (that is, the historical data).

Types of Analysis by Software

Software, like Build Alpha, are best suited to serve the quantitative analysis, stock screening, and thereby provide the right base to start strong in the market, especially for someone new to the market. Once the investor sets a tracking portfolio of corporations (or commodities or forex), then the analysis tools become valuable. Once the investor has created the group, portfolio tools will present all the right techniques to achieve these funds efficiently, thereby helping you succeed in the complex stock market easily as the analysis tool helps in drawing out expert assumptions by drawing in various price patterns. Also, for technical analysis, they offer an excellent and interactive charting platform for clearing up your queries. An investor can quickly get to know about which indicators and moving averages work best on a particular market and can customize these to meet their desired plan.

Primary Functioning Of the Expert Tools

The primary function of Build Alpha is to allow the trader and investor the ability to find what price patterns, fundamental analysis and indicators work best in providing the best risk return. There are many advanced statistical tests like Monte Carlo simulations and noise testing that help the trader and investor decide if an investment strategy is robust and will likely show similar returns moving forward. This is the key to any solid investment strategy – not how it has done historically but how we expect it to perform going forward. Without being able to determine this then one is destined for failure.

What is the need for Trading Software?

Trading is one of the most popular activities in which people are doing these days to earn money, start a new career or even just supplement their income. Some even consider trading and investing a passive source of income – which of course requires some knowledge of the market. For someone who has already been trading and trying their luck, it can still be better to keep pushing forward without help. But for someone new to the trading market or the struggling trader, that person surely needs additional help to trade the right way.

Finally, there is a software to assist. A tool like a Build Alpha can help them facilitate trading ideas and better understand the financial outcomes, such as risk and reward, drawdown, position-sizing, etc. It can also be used on any market type such as futures, stocks, currencies, bonds and even cryptocurrencies. Dealing in all these markets as a primary market or secondary market is made easier with the help of software. Comparing the same with the other options like taking the help of gurus or trading ‘experts’ leads to massive misinformation, account loss, and brokerage cost. These firms and ‘educators’ present their buyers with buying ideas that have not been tested or on the behalf of other clients that want to take the other side.

Software like Build Alpha that helps in trading is quite accessible as it can be easily downloaded and launched from a desktop or portable device. There is no skill required to operate it as the software can take any user input and return satisfactory results for trading and investing decision making.

BuildAlpha

So Why are these trading tools Vital

Let’s see the following essential points of these trading tools:

Trading software helps in facilitating buying and examination of financial outcomes.

It helps the traders that are trading alone, which is the self-directed trader. They require to employ and discover how to efficiently manage their trading software in enhancement to learning how to buy or invest.

Many other General characteristics of these trading tools incorporate order arrangement, technical review, structural analysis, electronic trading, and journal trading. So there is a lot on your plate that is served with this single tool.

Comprehension of This Trading Tool

These trading tools like BuildAlpha are giving the right set of insight to the traders to deal in the security market. Many of the traders and investors these days have shifted towards making at least some of the trading and interpretation utilizing the self-directed trading accounts. This is the main reason that there is an increase in the demand for such software that will provide the right trading capabilities — also giving a thorough analysis and knowledge resources within the software.

This software can give users the right pricing information for assets, fundamental data, graphs, functional analysis, vital statistics, some basic chat rooms, and many other features that are vital from the investment point of view. You will get the best application programming interfaces, that help service the trading software management. So now you can run independently on their network.

Originally Posted: https://www.allperfectstories.com/trading-software/

Improving Strategies

A crazy cool way to use Build Alpha. I have to admit that I did not come up with this idea, but it was suggested to me by a potential Build Alpha user.

He was wondering if Build Alpha could help come up with some rules of when he should avoid trading his existing strategy or even when to fade his existing strategy. Heck any improvement is a plus, right?

**Please note Build Alpha now accepts data in this format:  mm/dd/yyyy, hh:mm, open, high, low, close, volume, OI. Please refer to buildalpha.com/demo page for adding own data instructions**

*I say we found one strategy but we actually found tons that would be an improvement to his original strategy. Him and I only spoke specifically about one so that’s why in the video I slip and say we found one strategy. Did not feel like making a new video to clarify this minor point.*

He had a day trading system and compiled profit and loss results for that system in the following (Build Alpha accepted) format. Date, time, open, high, low, close, volume.  (*note BuildAlpha now accepts the time column as intraday capabilities are becoming fully operational*).

Below is his sample file. We purposely left the open (high and low) columns as all 0’s. The close column contains the end of day p&l from his original strategy.

We then set Build Alpha to have a maximum one bar holding period and to ONLY enter on the next bar’s open and to the ONLY exit on the next bar’s close. I will explain why this is in a minute.

We then chose the underlying symbol the original strategy was built on as market2. So for example, his original strategy trades ES (S&P500 Emini futures) so we only select Build Alpha signals calculated on Market2 which is set for ES.

So now if Build Alpha calculates a rule on ES-like close[0] <= square root(high[0] * low[0]) then we would “buy” the next bar’s open of market1 (again his results – which are 0) and “sell” the next bar’s close of his results which is the original strategy’s p&l for that day. This would essentially say that if this rule is true then go ahead with a green light to trade the original strategy the next day. If the rules are not true, then don’t trade the original strategy the next day. Ideally, we can find rules that increase risk-adjusted returns for the original strategy (which we did).

Now, what is even cooler is if we set Build Alpha to find short strategies we would essentially be “fading” his original strategy or finding rules of when to go opposite his original strategy.

Build Alpha found some good short/ “fade” rules to use as well. Here is an example that did quite well fading his original strategy (even out of sample – highlighted section).

After emailing him the results here is what he had to say in his email response:

“There are 2028 negative periods in my data with a gross loss of -1,217,880.26. That’s the theoretical maximum a short rule can achieve, if it were to find all losses. Your graph seems to show 380,000 short rule profits. That’s already 31% of all losses. If I don’t trade on these days, my net profit would go up by 380,000, a 46% increase.”

I thought this was a really unique way to use BuildAlpha and I wanted to share. I think the same analysis can be done on strategies with longer holding periods too. I would just import daily marked to market results of the original strategy and Build Alpha would essentially find rules of when to hedge your strategy or fade it for a day or two. I think this is certainly a unique approach to add some alpha to performance.

Anyways, thanks for reading as always and keep a lookout for some MAJOR upgrades coming to Build Alpha very soon!

Perks Of Using Trading Software

Stock trading has become a significant market segment. Every third person is dealing with the same trend. This segment of the market serves a great set of the potential to make a lot of money. There are instances where you will observe some of the wealthiest persons in society have made their estates in stock markets and investments; they have earned tremendously from this asset class.

However, most do not have a financial background or business degrees. It is not just their own expertise that has led them to such success in the market, but it is the assistance of trading and investment software. Software like Build Alpha can help guide traders and investors through tricky markets and identify the biggest trends that lead to wealth accumulation and a better understanding of the market.

 

This software, Build Alpha, helps them gain an entire overview. Beginners will be guided on the underlying trend of the market as well as advanced traders and investors who can find specific trends for stocks of interest. There are several thousands of people who are contemplating to make money in the stock market by analyzing a mixture of approaches. There are also, unfortunately, many business organizations that create lies, false narratives and sell misinformed ‘courses’ to naïve investors. Build Alpha software allows the investor to research the data himself and only trust the numbers, not some lie a business is selling.

This is the primary cause that stock trading software has become so popular with investors as the software can allow investors to execute their trading strategy quickly, based on facts and systematically. There are several goods of utilizing an automated trading system or stock investing software to make money in the stock exchange.

Let us investigate additional benefits of the stock trading tool.

One of the most significant benefits of using these systems for stock consideration is that it reduces the tremors of humans; it solely depends on the market trends in the trading process. It has often been observed that this software comes into the scene when most people spend money on the stock exchange when they give into their sentiments when they shouldn’t have. Traders have a much more comfortable time adhering to their investment plan when they control their emotions, passions, and the automated trading system helps in managing their emotions and taking a data first approach.

Many traders are helpless when they want to place the trade automatically, but now it can happen with the software. This execution by the software is quite exceptional and produces very reliable code.  Following a defined trading system based on data can help those who are nervous about investing and can also help those who are too eager to invest at every perceived opportunity. Automated trading systems created by powerful software like BuildAlpha can help both types of investors only act when data tells them.

Stock trading software like Build Alpha also allows traders to backtest their trading strategies. This automatic trading system is free from interpretation, and all the rules need to be met to perform the business, which expects traders can examine their buying procedures on actual data.

Imagine looking at your investment portfolio and knowing that each stock has been found using powerful software and has data to back up the decision. This would make for one relieved and happy investor.

Evaluation of Investment with The Best Investing Tool

Investing is the activity of getting your money to Investment with The Best Investing Toolork for you to create a second (or third or fourth) income stream. This kind of activity is called passive income and can lead to massive wealth. Passive income just needs the right thought and no active participation. Seeing the rising trend of a certain industry many people have started investing to capture a social movement or global trend. However, choosing the right tool to identify trends and where and when to invest can be a difficult task for most.

Successful investors must locate a successful investing tool! BuildAlpha is great at allowing investors to find profitable trends and areas of investment based on historical data, market factors and various other tools. Build Alpha provides investors with some level of expertise and understanding in their investments.

Build Alpha works as the executive support system. It has the expertise of experts to notify you out of difficult situations. There are many times if you are new to the industry and investing you get stuck with the technical terms and many more things. But this expert software provides you with all the technicalities that you need to know about the industry.

It will provide you with all the right shortcuts for calculating the profits of the net amounts and payoffs, potential risks, and more. All the initial margin, maintenance margin and even full code so you can automate your investments and hopefully generate passive income. Also, it will help you to understand how long it will take for an investment to double if its growth compounds, on what shares you should invest and at what prices you should invest.

The Stock Market is quite complex, and Build Alpha will help make it easier for you. The most popular investment is in stock index funds or mutual funds. Build Alpha will show you how you can create your own investments that have out earned stock index funds over the past decade or more. The tool will give you the expertise of an expert. It will help you with the right investments in any asset class: Investment Bonds, Mutual Funds, Cryptocurrencies and Physical Commodities.

How the Software Evaluates an Investment Portfolio

  • Step 1: Upload Your Portfolio to Build Alpha or to create your own! After you have a portfolio in the software, it will process your portfolio with its analysis techniques.
  • Step 2: You can run your portfolio of investment strategies through complex statistical tests to test your portfolios robustness in potential turbulent AND healthy markets.
  • Step 3: Generate automated code for each of your investment strategies so a computer can change your portfolio when necessary, so you do not have to bother. Follow the investment system!
  • Step 4: Enjoy your free time and hopeful passive income.

E-Ratio

Edge Ratio or E-Ratio measures how much a trade goes in your favor vs. how much a trade goes against you. The x-axis is the number of bars since the trading signal. A higher y-value signifies more “edge” at that step in time.

BuildAlpha: Measurements are normalized for volatility; this allows us to use e-ratio across all markets and regimes. Once normalized for volatility, 1 signifies that we have equal amounts of favorable movement compared to adverse movement.

In other words, the y-axis is an expression of how many units of volatility more or against you your trade gets. A measure of 1.2 would indicate .2 units more of favorable volatility and a measure of 0.8 would indicate .2 units more of adverse movement.

Build Alpha: The blue line is for the selected strategy’s signal and the red line is for a “random” strategy for the same market. The red line is to serve as a baseline to beat. Ideally, you’ll want to see a blue line above 1 and above the random line.

You may find many “good” strategies, but they may have an E-Ratio less than the red baseline or less than one. This would make us less confident that our signal will withstand the test of time.

Additionally, if E-Ratio falls off a cliff at bar 6… then it probably does not make sense to hold for 15 bars!

Another tool to make sure Build Alpha + Trader = Success.

How to calculate:

  1. Record Maximum Adverse Excursion and Maximum Favorable Excursion at each time step since signal.
  2. Normalize MAE and MFE for volatility. To compare across markets we need a common denominator. Let’s use ATR or a unit of volatility.
  3. Average all MFE and MAE values. Now you should have average MFE and average MAE at 1 bar since signal. Average MFE and average MAE at 2 bars since signal…
  4. Divide Average MFE by Average MAE at each time step.

Originally Posted: https://www.buildalpha.com/e-ratio/