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.

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!

Combining Trading Rules To Smooth Performance

The market is “overbought” or “oversold” are common phrases you will hear across the finance space. However, it is actually extremely rare for these conditions to be true.

Today, we’ll attempt to show how trading rules can provide a better picture of the market while enhancing trading performance.

BuildAlpha: First, let’s simply define overbought as a 14 period RSI of greater or equal to 70.00 and let’s simply define oversold as a 14 period RSI of less than or equal to 30.00.

Below is a chart showing the RSI of the S&P 500’s ETF (NYSEARCA:SPY) with the overbought and oversold levels plotted.

From January 2002 to May 2017 here are some stats:

  • Days overbought 214 out of 3,878 or only 5.5%
  • Days oversold 60 out of 3,878 or only 1.5%
  • Days in the middle roughly 3,604 out of 3,878 or 92.9%

Of course when these overbought or oversold conditions are true the markets do appear easier to trade as volatility often expands and it seems easier to skim some meat off the bone, if you will. However, many strategy developers and traders focus on these overbought and oversold conditions when in reality it is extremely difficult to be patient 92 to 98+% of the time.

A simple solution is to augment your trading with trading systems that do well in these “common” times or regular conditions. Let’s look at how SPY did during this 92% of the time period the market was not overbought or oversold. The test period covers January 2002 to September 2012 (as we will save Q4 2012 to present day as out of sample data for later testing).

Build Alpha: As you can see that trading in these 92% of the time when the market is neither overbought or oversold is extremely trendless and encompass some serious drawdowns; making life extremely difficult for traders.

Let’s add an 8 period moving average filter and see if we can smooth out performance (performance only based on 100 shares for testing/demonstration purposes).

As you can see the moving average filter makes a significant difference albeit not perfect. That is, trading when prices are below the 8 period moving average produced significantly greater performance than when price was above the 8 period moving average. This is counter-intuitive for sure.

BuildAlpha: The process of continuing to refine and add filter and rules to our trading “system” is part of the strategy development process. It can be long and arduous. To keep this post short and sweet let’s “accept” these two rules (1. RSI between 30 and 70 and 2. Price below 8 SMA) and go ahead and see how this system would have performed on the out of sample data from September 2012 to May 2017.

The strategy holds up quite well and we now have some simple rules to follow/guide our trading in the “doldrums” that occur 92% of the time.

The long and arduous process of refining and adding conditions can be greatly simplified with modern computing power and software. Build Alpha attempts to make this process simple and fast! Build Alpha is trading software designed to create trading strategies from thousands of inputs, filters, and signals for the research-oriented trader and investor – no programming required!

Originally Posted: https://www.seeitmarket.com/combining-trading-rules-to-smooth-performance-16927/

Build Alpha Providing efficiency in Trading

Trading is a phenomenon which is not a cake walk. One cannot become an expert in this field unless one has gained some experience and knowledge in it. You need to seek guidance in the initial stages of trading. For taking help you can either reach out to some expert in this field or find advanced trading software that comes with training. As the trading in securities markets is based on interpretation of the market forces which in a lot of sense depends upon the market forces so the human interpretation can lack at times in analyzing certain aspects of it.

This is where software like Build Alpha comes into play and can help regulate your operation. This is a software which helps us in making strategies, testing our ideas, and building our confidence to run automated strategies in real-time. This is one of the best trading softwares to date and serves the needs of traders. Anticipating the trend or mean reversion becomes much easier if you do it through build alpha software solution. The best part… no programming is needed!

Trading software is a computer program designed to help traders and investors to trade and analyze stocks, commodities, futures and various currencies in forex market. It also gives you access to the latest news that affects the price movements of stocks and their trends. There are different types of trading softwares for both beginners and experts. BuildAlpha is one such software which is helping the traders to achieve the success in trading regardless of their skill level. It allows you to stress test each and every strategy.

View in and out of sample test results with ease, has data included, and generates actionable trading code all from one command center. There are fund managers who study short and long term charts with the help of these softwares. There are softwares available to know technical and fundamental aspects of the stocks. Many stock brokers provide softwares to their clients to trade on their own. The main features of the software are order placement and proper analysis of stocks. These softwares are built by third party and licensed to online brokers.

The software gets new updates every week which makes it more unique and worthy than other softwares which are alike in the trading market. The new peculiarities that are coming out every now and then are amazing it seems like trading has become easy with the aid of this software. You will experience the difference after using the Build Alpha software. You will become a person who will start analyzing what is important. Get efficiency in trading markets with the expert analyst feature of this software, which helps you in analyzing trends more specifically.

Learn the Skill of Trading with Build Alpha

Trading in financial markets is a tedious job. An expert’s advice is always required to invest in capital markets for a new trader. Listen to all fund managers, their views of investing based on different market conditions. Always do lot of research and take guidance from experts before investing. A new trader must utilize a stop loss, avoid greed and do not trade with fear while investing.

Make a portfolio of strategies or shares from different sectors and maybe receive help from your broker. There are experts who provide market tips which enable beginners to make a wise decision, but on the other hand, you can take the help of this new trending software which is proving to be one of the best solutions in the market: Build Alpha.

Fresh investors always go for those stocks which have reasonable valuations or big growth potential. Different market analysts have their own investment strategies owing to the Bull and Bear phase of the market. There are many loop holes for the ones who are trading for the first time in the market. Investing successfully is basically an initial as well as ongoing journey to explore, learn and succeed in financial markets.

BuildAlpha

No one can individually know all the things in the market, but with the aid of artificial intelligence like BuildAlpha software one can climb the ladder of success. You will learn a lot of new things about trading; the software is an overall solution to lead you toward the right path in trading and investing.

Investment and trading are two different aspects of shares, commodities and forex trading. There is intraday trading which requires comprehensive knowledge of market movements and its trends, microstructure, infrastructure and transaction costs. These trends are easily anticipated by the software which a normal human is unable to understand even if he or she is trading in the market for a long-time.

It is one of the outstanding tools which can boost up the confidence of new as well as existing investors in the trading market.  Anticipating the trend becomes easy if you do it through Build Alpha software solution. Also, Build Alpha has a new Intraday Edge feature which can help improve daily investment strategies by finding which hours of the day they are most effective to reduce your exposure and holding time.

The software is a guiding tool for all the young aspirants who want to learn and grow in trading.  It is one of the outstanding tools which can boost up the confidence of new as well as existing investors in the trading market. It guides in making strategies which can be utilized on a real-time basis for assisting our theories in the market (or finding new ones). This is one of the highly recommended softwares who is new to the world of stock market. Take a look at how Build Alpha can help you today.