What is Day trading ALGO mode?
In Day trading ALGO mode, the number of financial assets traded is selected automatically according to the rules incorporated in SmarTrading system algorithm to provide high yield at acceptable risk level. In Day trading ALGO mode, the mechanical trading system works with small (up to nine assets) stock portfolios.
How does the system work in this mode?
The system analyzes trading results in the main U.S. stock markets – NYSE, Nasdaq, and AMEX – and selects financial assets on a daily basis, compiling a stock portfolio and generating signals for portfolio assets, providing trader with information on the level of initiated orders. When creating an investment portfolio, the following principle is used: one group of financial assets plays the role of "stabilizing anchor" and reduces risk of loss, while the other one provides high portfolio yield. Equity allocation among the selected assets is executed according to the concrete trader’s investment amount. As it is known from the modern financial theory, correct equity allocation among several assets allows achieving significant trading risk reduction
What yield is guaranteed by this mode?
Efficiency of strategy incorporated in our SmarTrading product is illustrated by the system’s work emulation results in Day trading ALGO mode, for the worst trader and the best trader in the group of 100 users. Those results are presented in the charts below.
| The results provided show yield accrued for one dollar invested |
| worst trader in the group of 100 |
best trader in the group of 100 |
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Trading period: January 3, 2000 to November 19, 2002
Emulation conditions:
Both charts’ results are received on condition that the daily initial account of each of the traders is $25,000, i.e. profit earned is not reinvested, while losses are compensated. Trading signals for 100 traders are calculated simultaneously. Number of assets in intraday portfolio is set by the system algorithm. The commission amount is $10 per order executed.
How do we evaluate the SmarTrading performance?
It is known that the two main parameters of any trading strategy are yield and risk. We will evaluate our product by these parameters, too.
How to evaluate risks?
When calculating signals, which can be used for market order initiation, the SmarTrading does not generate any stop-loss signal for an open position. The reason is that in the end of day strategy the actual stop-loss is position closing at the end of day. If you want to control your risks in a way more habitual to you, you can, after analyzing monthly yield calculations, establish stop-loss at the maximal loss level for the previous period, or use our risk management tools available.
For "manual" risk management one can use monthly yield charts, generated under the same conditions as those of accrued yield charts. The figures below present two such charts. The right one is for the best of 100 traders who took part in emulation. The left one is for the worst of traders.
| Accrued yield charts |
| worst trader in the group of 100 |
best trader in the group of 100 |
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Trading period: January 3, 2000 to November 19, 2002
Red columns on the charts denote unprofitable months. Blue columns denote profitable months.
As the figures show, the SmarTrading does not guarantee that you will earn profits continually. SmarTrading just provides that you appear among those who win more frequently. If you want to understand how such a result is achieved, take the link below
How can it happen
The information provided by SmarTrading results from mechanical trading system calculations.
This information should in no way be considered by recipients as indication to actual buying or selling stocks by any issuers.
All decisions made based on this information are the sole responsibility of its recipient.
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