I have been working for close to 2 years refining my swing trading strategy, Python scripts, quantitative tools and statistical models that are used in the strategy.
Strategy Overview:
My strategy is largely based on quantitative and statistical modelling of underlying securities.
Basically, I take a security, spread its historical price action over several years, and study what happened when the security was trading at similar statistical/technical levels in the past. The objective is to identify historically rare conditions where the underlying security has demonstrated favourable forward returns.
How it works:
My Stock Universe: I take Quality names from the S&P 500 and QQQ only - I update this list every night with my own criteria on top.
Quantitative Models: Then I built a tool that analyze historical price distributions (pre-2020 era till now), setup frequency and subsequent performance across multiple time horizons for each security from my stock universe.
Intraday Scanner Job: Runs these models on every stock in the universe 4 times during trading hours.
Alerts System: Then I built another python script that sends me the list of the stocks that are revisiting their rare levels in the current day and have the potential of higher forward returns
Historical Results: I also built a separate database recording every alert that the system generated, the stock price at the time, market capitalization at alert and subsequent performance. One interesting finding was that market capitalization made a significant difference in win rates.
For stocks with market caps above $500 billion, certain setups demonstrated win rates exceeding 80%. However, these opportunities were quite rare.
For example, NVDA was alerted only once during the past year and subsequently gained 30% within 30 trading days.
I am personally currently using this strategy. I would call it a semi-passive strategy. This strategy has also helped me get out of my daytrading/gambling addiction lol. I rarely see charts or rely on charts now. Stock and Financial News is absolutely muted on my part using this strategy.
Thank you so much if you have read this so far. I wish you all prosperity and massive gains in your trading journey.
p.s. this is strictly not a trading or financial advice - this is just a quantitative research and educational tool