After 11 years’ Bullish market and peaked in Feb.2020, USA Stocks have been significantly impacted by COVID-19. We are entering a Bear market like in 1929/1987/2008. The objective is to establish a systematic stock trading mechanism to execute daily trades by picking the right stocks to sell, to buy or to exchange by setting the bid price and qty. The “stock index” metric is derived based on three Z-Standardized algorithms over 2015-2020 stock data period to determine the relatively high/ low situations: (1) within the same stock , (2) the ratio to the QQQ stock, and (3) comparison among the 32 Stocks monitored. JMP Outlier Platform can help identify the best trade candidates. Quantile Outlier and Robust Fit Outlier options are compared to handle skewed or non-Normal distributions. PCA-Model Driven Multivariate SPC platform is utilized to monitor the stock market trend. T2 Contribution Pattern, Heat Map, and Score Plot are analyzed to affirm the best stocks to be traded. A 10-level ladder bid system for each stock is established to set the “bid price” transaction based on stock index level. A cash% index is derived to determine the bid quantity, trade amount and manage the Cash-to-Stock Ratio. This comprehensive stock trade system has been fully integrated in one JSL Script to minimize error due to Human Factors. In trading days more than 3% Stock modulation, >70% trades of the highest and the lowest transactions happened in the first hour or last hour of trading (>95% confident on 1-Proportion Exact Test). This stock model has outperformed the QQQ index by a 5% margin during 2020 Feb.-Apr. COVID Outbreak period. The methodology can be easily and broadly extended to the other investment portfolios such as: Real Estate, Gold, Currency, Oil ETF, Retirement Plan management, 529 Education Fund, and AI-Driven Finance.
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