Algorithmic Trading Tip: Follow the Signal

Every once in a while a forecast will have a signal so strong, it seems there might be a mistake. The I Know First signal indicator is comprised of thousands of elements. Every once in a while when all elements alight, a really strong bullish or bearish signals appears. If the predictability is above 0.5 it means the algorithm had detected a gold mine.

Here are a few examples:

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Figure 1: MTL Signal 2,949 in the 7 day time horizon chart. This is a prime example where the investment is certainly worth the risk of the low predictability. The signal is just too high, meaning that the stock has a high probability of not going up sharply (but not going down either) and a high probability of shooting like a rocket, hence the 65.12% return in just 7 days !

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Figure 2: NBG Signal -750 in the 1 month time horizon chart. Here is an example of an incredibly high signal accompanied by a very strong predictability (0.46). If the algorithm could talk it would say something like “ I think this company is going to crash, and I have been very consistent in predidcting exactly what it will do over the last 90 days”. The return? 13.65% return in 1 month.

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Figure 3: OXGN signal of -21,527 returns 19.31% in 3 month.

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Figure 4: HIMX signal of -1,211 returns 41.22% in 3 month.

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Figure 5: WETF signal of -130 returns 20.27% in 1 month.

To summarize, the higher the signal strength, the less important is the predictability. The lower the signal strength, the more important is the predictability. A signal strength of 100 in the 14 days horizon, is much stronger than a signal strength of 100 in the 1 year chart. The same rule applies to the predictability.

These five examples are of how the algorithm found the needle in a haystack. Any signal substantially higher than all other signals, and with predictability above 0.40 is a gold mine. The signal updates every day for all 6 timelines; make sure you take a glance daily to find these opportunities. (obviously they will be the first and last asset on every chart). Not receiving our forecast ? Join us !

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Related:

Algorithmic Trading Tip: Reading a Heatmap’s Indicators

Algorithmic Trading Tip: Deriving Information From a Heatmap