What is Day trading I mode ?
You will get to Day trading I mode if you decide to trade only in one financial asset. We cite this mode as an example of a more general option available to trader, i. e. an option of independently setting asset number to be selected by the mechanical trading system.
How does the system work?
The system analyzes trading results in the main U.S. stock markets – NYSE, Nasdaq, and AMEX – selects an exact number of financial assets as ordered by the trader (in this example – 1), and generates trading signals, providing trader with information on level of orders initiated. Equity allocation among the selected assets is executed according to the concrete trader’s investment amount. In this case, the entire trading amount will be invested in one stock. Such strategy provides the user with greater profit, as compared with DayTrading ALGO mode, but it is also accompanied with greater risk. As it is known from the modern financial theory, correct equity allocation among several assets allows achieving significant trading risk reduction. We recommend Day trading I mode to experienced traders only.
What is trading yield here?
Trading in one financial asset may earn yield greater than Day trading ALGO. However, risk in this case is greater, too, which conforms to the modern theory of finance pretty well.
Emulation results for the system working in Day trading I mode for 100 users are shown on the charts.
| Cumulative return |
| 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
The cited results of collective trading calculation illustrate yield per one dollar invested.
Emulation conditions:
The results are received on condition that the daily initial account 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 traded by each trader is 1. The commission amount is $10 per order executed.
Comparing these charts with similar charts representing system functioning in Day trading ALGO mode shows that higher yield of Day trading I mode is accompanied with an increased risk. For example, the greatest losses in Day trading I mode exceed the amount of the maximal losses in Day trading ALGO mode two-fold. The reason is that in Day trading ALGO mode the system diversifies the portfolio automatically, resulting in risk decrease. While in one asset trading this is not the case.
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.
| 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 denote losing months. Blue columns denote winning months. As the cited data show, SmarTrading cannot guarantee that you will earn profits continually. SmarTrading provides for your appearing among those who win more frequently.
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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