By Lipa Roitman Ph.D.
In the previous Part 1 article we analyzed the Top-10 data set, and compared it to a large, non-selected pool of signals. We proved that the Top-10 strategy, which is selecting stocks on the basis of high predictability and high signal strength, is superior to the non-Top-10. We are now conducting a number of additional simulations, were we quantify the signal strength, predictability, and trends, with more statistical details. The purpose is to find a “sweet spot”, the one rule that works for most of the markets most of the time, and shows less variation between different equities.This report confirms the findings of the Part 1 report, and also gives more detailed statistics. It confirms the importance of the signal strength and the rule of “trading when the signal is with the trend”, when the signal is weaker.Read the Full Report