Stock Forecast Toolbox

Transcription

1 Stock Forecast Toolbox An institutional-grade tool for the self-directed trader Overview The Stock Forecast Toolbox is at the core of our research platform. This toolset delivers highly accurate forecasts that are produced by artificial neural networks which constantly self-learn to apply nuanced algorithms to voluminous, chaotic market data. To give an example- our platform processes over 100,000 individual stock and index analyses each month. And this is just for the Stock Forecast Toolbox alone! We set out to build Tradespoon s technology with the purpose of putting institutional-grade tools in the hands of self-directed investors. It is crucial to know how to interpret the forecasting data. Topics: Section 1: Reading Prediction Data 1. Reading Forecast Windows 2. Accuracy Model Grade and Probability Figures 3. Chart 4. Predicted Data 5. Headline/Financial News Section 2: Understanding Company Screeners 1. Company Finder 2. Short-Term Forecast 3. Stocks & ETFs with Model Grade A and B 4. Vector Screener Section 3: Quick Steps to Finding Profitable Trade Ideas

2 2 Section 1: Reading Prediction Data 1. Reading forecast windows When first opening The Stock Forecast Toolbox, a Snapshot of the selected symbol will appear. The snapshot is comprised of Fundamental Data, Predicted Data, and a Chart, which can be viewed individually in the seperate tabs besides the snapshot. The Stock Forecast Toolbox provides three time horizons for forecasting: Intraday- This forecast generates price predictions for the next hour, segmented into 5 minute intervals. This data is refreshed every 5 minutes. 10 day- This forecast generates price predictions for the next ten days, segmented into one day intervals. This data is refreshed every evening after market close. 6 month- This forecast generates price predictions for the next six months, segmented into one month intervals. This data is updated on the first of each month. It is important to remember that prediction data reflects only the most recently updated market data. For example- in a 10-day forecast, the 5th day predictions are relative to the market conditions that were captured in the previous trading session. If you were to generate a forecast again the next day, that 5th day may be slightly different because the model is working with a different set of data.

3 3 2. Accuracy Model Grade & Probability Figures For each stock/etf being analyzed, you will be presented with several important figures which indicate accuracy levels and probabilities of the asset reaching estimated price changes. The Accuracy Model Grade is representative of the next day only, and is a relative score compared to our entire data universe. An A grade indicates the top 10%, a B grade is the top 25%, and a C grade is 50%. Occasionally you will see N/A, which indicates there is not enough market data to determine accuracy. The Estimated Change figure is an average of predicted prices against the average of previous real prices. This includes Low, High, Open and Close prices. The Probability of Change reflects the probability of determining the direction of the Estimated Change. The Probability L/H figure shows you the likelihood of the real close price falling between the predicted support and resistance levels (or Low and High levels). Today s Strategy signals Hold Buy or Sell based on mathematically predicted turning points and provides strategy for that specific day. The Trend meter gages Bullish or Bearish trends based on an average of all vector figures within a selected time horizon.

4 4 3. Chart The candlestick charts are a great visual representation of past and future prediction data for the stock or ETF you are analyzing. You can adjust time zooms, and drill down to tighter time windows in order to get a detailed look at how our past predicted prices compared to real prices. Each candlestick represents a price movement for an individual time increment within the selected time horizon. To select a specific time horizon either: A. Use the blue preset Zoom options found in the bottom right corner B. Type in a Date Range in the bottom left corner C. Use the Grey Sliding Bar directly beneath the chart to select range D. Click and Drag a specific area on the chart to manually zoom

5 5 4. Predicted Data The Predicted Data table will show a breakdown of all open, close, low, and high prices. Intraday trading charts will forecast one hour in intervals of five minutes, Short term trading will forecast ten days in intervals of one day, and Long Term Trading will forecast 6 months worth of data in intervals of one month. Vector Column The Vector column calculates the change of the Forecasted Average Price relative to today's actual price. The column shows expected average price movement "Up or Down", in percentages. Trend traders should trade along predicted direction of the Vector. The higher the value of the Vector, the higher its momentum. These figures should not be looked at as absolutes, but rather a guideline as to how a particular stock or ETF is predicted to move, relative to the current conditions. 5. Headline/Financial News The Headline tab gathers the most recent news on or related to the stock, ETF, or industry. Financial News gathers the most recent general financial news. This tab can be useful to gauge any overnight news or external events which may shock the market or industry sectors. Regularly check here before placing trades in order to monitor for any unpredicted movement.

6 6 Section 2: Company Screeners 1. Company Finder (Updated Monthly) The Company Finder is a comprehensive breakdown of annual projected growth rates for stocks and ETF s in the S&P 500 Index. The list is segmented into industry sectors, which you can then drill down into smaller categories and individual assets. Use Case Step 1- At the Industry Sector Level, look for Annual Return Vectors over 20%. Try to select the sector with the highest vector, and is most comfortable for you. Industry Sectors Step 2- In the Industry Sub-Categories, use the same rule- categories with Annual Return Vectors over 20%, looking for the highest. Sub-categories for Industry Sectors

7 7 Step 3- Now select a stock (or several) with the same criteria. Open the Stock Forecast Toolbox and search these ticker symbols. Companies in Industry Sub-category Step 4- Run a 10-day prediction and look for a Vector remaining over 1% for the next ten days. When possible, enter a position close to the predicted low. 2. Short-term Forecast (Updated daily) This screener is designed for short-term position holding and provides a daily list of stocks which rank highly in our prediction algorithms. The list is ordered by Vector- which represents the predicted magnitude of change for the next trading session. The Vector figure gauges the predicted direction of movement for one day, and is determined by the difference between the predicted average price for the most recent trading session and the average of actual prices from previous session. There is also a Confidence Level column, which indicates our model s confidence in predicting the trend in the past 30 days. Please refer to Stock Forecast Tool to determine predicted trend for today and next 10 sessions.

8 8 Use Case Step 1- There are two ideal criteria to look for: a Vector closest to or above 1%, and a Confidence Level near or above 70%. Short-term Forecast List (Top) Short-term Forecast List (Bottom) Step 2- By selecting a stock, you will be brought to the Stock Forecast Toolbox with that stock selected for analysis. Step 3- Generate a 10-day Prediction and look for a Vector trajectory toward and above 1%, remaining throughout the prediction window. Step 4- Whether you re favoring bullish or bearish movement, enter a position at the predicted low or high when possible. *An Accuracy Model Grade of A or B, coupled with a consistent Vector over 1%, indicates a very high likelihood that stock will close under predicted resistance, or above predicted support levels.

9 9 3. Stocks & ETFs with Model Grade A and B (Updated daily) This screener is designed for short-term position holding and provides a daily list of stocks which rank highest in our platform s Model Grade ranking. Our Model Grade ranking defines a relative accuracy score for predicting high and low for stocks and ETF s. An A grade indicates the top 10%, a B grade is the top 25%, and a C grade is 50%. Occasionally you will see N/A, which indicates there is not enough market data to determine accuracy. The ranking is valid for the current day s predicted lows and highs and is compared to our entire data universe of over 3,000 symbols. Confidence Level determines how accurately the model predicted trend in the past 30 days. When confidence level is 0.00% there is not enough data to accurately predict movement/trend. Please refer to Stock Forecast Tool to determine predicted trend for today and next 10 sessions. The list is ordered by Vector- which represents the predicted magnitude of change for the next trading session. The Vector figure gauges the predicted direction of movement for one day, and is determined by the difference between the predicted average price for the most recent trading session and the average of actual prices from previous session. Use Case Step 1- Identify stocks or ETFs which produce a Vector close to or above 1%. This can be either positive or negative, depending on the trading strategy you are considering. Model Grade Screener (Top)

10 10 Model Grade Screener (Bottom) Step 2- By selecting a stock, you will be brought to the Stock Forecast Toolbox with that stock selected for analysis. Step 3- Generate a 10-day Prediction and look for a Vector trajectory toward and above 1%, remaining throughout the prediction window. Step 4- Whether you re favoring bullish or bearish movement, enter a position at the predicted low or high when possible. 4. Vector Screener (Updated monthly) The Vector Screener analyzes all stocks in S&P 500 and ranks them by the predicted percent of growth, according Vector figures. This screener analyzes long-term prediction data and presents Vectors for a 3-month time horizon.. This screener is updated on a monthly basis (first of each month).

11 11 Use Case Step 1- Identify a short-list of stocks in the upper tiers of growth vectors- over 20%. Step 2- Open the Stock Forecast Toolbox and search these ticker symbols. Step 3a- For short-term trading, run a 10-day prediction and look for a Vector remaining over 1% for the next ten days. When possible, enter a position close to the predicted low. *An Accuracy Model Grade of A or B, coupled with a consistent Vector over 1%, indicates a very high likelihood that stock will close under predicted resistance, or above predicted support levels. Step 3b- For long-term trading, search the symbol in in the Probability Calculator, and hover over the Trend Rating. If 3 out of 4 time periods have higher predictions 75% of the time on average, stock will spend at the price levels higher than on the day the model ran (Model runs each Sunday for long term predictions). Use 10-day prediction to gage optimal entry point, preferably entering position close to the predicted low.

12 12 Section 3: Quick Steps to Finding Profitable Trade Ideas Step 1- After identifying one or several ticker symbols for analysis, generate a prediction based on your particular trading style- Intraday, 10-day or 6-month. Step 2- First, determine the Accuracy Model Grade - you want to look for an A or B grade for the strongest accuracies. You also want to look for forecasts which maintain Vectors at or above 1% for the duration of the time horizon. Step 3a- Attempt to confirm long-term signals with our Proprietary Equity Research suite. You can search the ticker symbol in the search bar, and choose either the Probability Calculator or the Seasonal Charts tool. Step 3b- For long-term trading, search the symbol in in the Probability Calculator, and hover over the Trend Rating. If 3 out of 4 time periods have higher predictions 75% of the time on average, stock will spend at the price levels higher than on the day the model ran (Model runs each Sunday for long term predictions). Use 10-day prediction to gage optimal entry point, preferably entering position close to the predicted low. *An Accuracy Model Grade of A or B, coupled with a consistent Vector over 1%, indicates a very high likelihood that stock will close under predicted resistance, or above predicted support levels. Please let us know if you have any thoughts or questions by contacting our dedicated support team at support@tradespoon.com! You can also schedule a quick call with a Product Specialist to review our tools and services at any time. Schedule a call To your success, The Tradespoon Team