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Rosscoe62 said:
This cycle is uncanny, it has predicted the cycles over the last 200+ years - two years from now of the cycle before the bust!
Click to expand...

Cycles and phases are common in trading, much like in other areas. Patterns and probabilities form the foundation of technical analysis, which helps us capture and make sense of these patterns. Your thoughts on this matter are intriguing and worth considering.

When thinking about the drivers, China comes to mind. President Xi Jinping’s recent statements reflect China’s desire to reshape the international order and assert itself as a formidable global player. This ambition is evident in China’s expanding military presence, with bases in strategic locations.

China’s strategic pursuit of power in our region has been ongoing for some time, and international re-ordering may be next. While predicting the future is challenging, a significant downturn within the next two years could be influenced by geopolitical tensions, among other factors.


Skate.
 
now one potential wrinkle to this cycle theory , is the offering of 40 year mortgages

now i will refrain from expressing my ( very unkind ) opinion of such offerings , BUT will longer and longer mortgages alter the effectiveness of the theory
 

"Fundie vs AI: Who is the better stock picker?"
Yesterday's post focused on "income" stocks. Today's post examines "growth" stocks.

The Article by Chris Conway of Livewire Markets
The article, (hyperlinked below) inspired this exercise, which highlights the evolving capabilities of (AI) in stock picking. As (AI) technology continues to improve, it will be interesting to see how it compares to humans in finance. This is a theoretical investment exercise pitting Google's (AI) Gemini against Tobias Yao from Wilson Asset Management in selecting five "Growth" stocks for the next 12 months.

Fundie vs AI: The best ASX growth stocks for the next 12 months

We've seen the income stocks, now we're looking at growth stocks in this edition of "Fundie vs AI: Who is the better stock picker?"
www.livewiremarkets.com

Results after 33 weeks
We recognise this is nothing more than a fun, but important, "thought experiment" as ultimately, (AI) will likely become a tool that all use to make more informed decisions, across a broad range of topics.




At times, outliers can distort the overall picture
Removing these outliers often provides a clearer view of returns. For instance, Life360 (ASX:360) is one such outlier. Even after excluding this outlier, the results over 33 weeks remain respectable.



Skate.
 
just goes to show one stock can make your reputation ( and profit )
 

Patterns and Probabilities: The Foundation of Technical Analysis
When it comes down to it, trading relies heavily on trends, and spotting these trends can be challenging. I’ve always maintained that getting into trends is the easy part, but as we all know, not all trends are created equal as some trends are stronger than others. This makes filtering trends crucial. Timing your entry is a critical component of seeking profitability. While using an “Index Filter” is better than nothing, I believe there is a superior indicator. One such indicator that I use and discuss in this thread is the percentage up buy filter. In layman’s terms, if the majority of an index is advancing, that’s the time to buy.

When Do We Exit a Trend?
This is the riddle that needs solving. Exiting too early or too late can render all the effort of getting into a strong trend futile. Over the years, I’ve noticed a recurring pattern where a position in a trend runs out of steam, or as I like to call it, “the position goes stale.” Recognising when a position stagnates is the time to consider exiting. Relying on a “trailing stop” often means exiting too late, giving back open profits, which can be painful.

Skate.
 
Skate said:
When Do We Exit a Trend?
This is the riddle that needs solving. Exiting too early or too late can render all the effort of getting into a strong trend futile.
Click to expand...

Another exit - "Take Profit Stop"
All my trading strategies incorporate a “Take Profit Stop” feature. This is designed to secure profits once the price reaches a specified target level. The Take Profit Stop uses a multiplier based on the Average True Range (ATR) - a widely used metric in trading - to calculate the profit target. Not everyone favours this style of exit strategy, but when tuned correctly, it tends to be successful more often than not.

A “Take Profit Stop” is a valuable tool in a trader’s arsenal
This exit method helps lock in gains and manage risk effectively. When combined with other exit strategies like trailing stops and stale stops, it creates a robust and dynamic trading strategy that adapts to market conditions and enhances overall performance.

Skate.
 
Skate said:
A “Take Profit Stop” is a valuable tool in a trader’s arsenal
Click to expand...

Benefits of the "Take Profit Stop"
#1. Secures Profits
By locking in gains when the price hits the target, it prevents the trade from reversing and eroding profits.

#2. Reduces Emotional Decision-Making
Having a predefined exit point helps traders stick to their plans and avoid emotional decisions.

#3. Enhances Risk Management
The "Take Profit Stop" complements other exit strategies, providing a balanced approach to managing trades.

Measuring Effectiveness
Measuring the effectiveness of each exit strategy is critical to staying ahead of the game. By regularly evaluating how well each strategy performs, traders can make informed adjustments to optimize their overall trading approach.

Skate.
 
Richard Dale said:
You have no statistical validation or backtest results. Apart from recent (3 month results, in a bull market no less), none of your so-called strategies can be tested or proven.
Click to expand...

Measuring Effectiveness
By regularly evaluating the short-term performance of each strategy, you can make informed adjustments to your overall trading approach.

Here We Go Again
Displaying a recent backtest over a short, confined date range allows you to continuously assess performance, whether it’s a bull or bear market.



Skate.
 
Skate said:
Measuring Effectiveness
By regularly evaluating the short-term performance of each strategy, you can make informed adjustments to your overall trading approach.
Click to expand...

The Effectiveness of the Exit Strategies
The section highlighted in yellow in my previous post represents a condensed appraisal of a few important metrics:

#1. Profit Take Trades: 8
Average Profit: $1,308.55 (13.26%)

#2. Trailing Stop Trades: 9
Average Loss: -$207.20 (-2.07%)

#3. Stale Stop Trades: 9
Average Loss: -$57.97 (-0.52%)

Combining Exit Strategies
These three exit strategies adapt to market conditions and enhance the strategy’s overall performance.

Skate.
 
DaveTrade said:
@Skate is just presenting an idea to newbies as a way forward into trading.
Click to expand...

Backtest Report Summary
The backtest from the 1st of January 2024 to the 16th of May 2024, (shown above) displays the performance of a trading strategy with a notable net profit and annual return during the backtest period. The risk-adjusted return is solid, and there is a good balance of winning and losing trades. Drawdowns are within acceptable limits, and the recovery factor suggests the strategy can effectively recover from losses.

Using different exit strategies (profit take, trailing stop, and stale stop) provides flexibility and helps manage risk. The expectancy values indicate that the strategy is profitable on average per trade during the backtest period.

The All Ordinaries Backtest period
Below is a "Daily Chart" from the 1st of January 2024 to the 16th of May 2024. Opinions may vary on whether this trading period was ideal.



Skate.
 
The key to using a trailing stop successfully is to set it at a level that is neither too tight nor too wide.
I tend to widen my trailing stops in bullish conditions and tighten them in bearish conditions.
There are three types of trailing stops … 1. Discretionary 2. Percentage Based 3. ATR stops …
A trailing stop doesn’t work like clock-work every time. That’s where taking profits and/or cutting losses come into play.
I also only allow around 2 months for the stock to get going, the last thing you need is to be holding onto a time-waster.
There are bigger fish to fry!
The game is to ride those trends for much bigger digit gains (preferably triple digit) rather than making 10-20% and looking back wishing you’d held for longer when the stock cuts loose to the upside.
You only need a few on your team of stocks to run past the triple digit gains to be well out in front.
I limit my portfolio to 20 stocks, something that I’m comfortable with …
 

@divs4ever in my opinion, generative AI has made significant strides in generating excitement in the world of trading. What I find particularly useful is that AI serves as an excellent substitute for a trading buddy. You can ask it any question, and it always has an answer. If the first answer doesn’t suit you, it will generate a different one. This ability to run alternative ideas and bounce strategies around is incredibly useful for evaluating different approaches.

Skate.
 
personally i prefer multiple scans to produce potential targets ( and THEN research each one )

but i only need a few good buys each year

traders and managers need several good opportunities a month/week

similar issues with using AI as with index investing .. ( nearly ) everybody trying to board the same train

but time will tell
 

The article by Chris Conway of Livewire Markets, which inspired this exercise, highlights the evolving capabilities of (AI) in stock picking. As (AI) technology continues to improve, it will be interesting to see how it compares to humans in the field of finance.

Explanation - Fundie vs AI: The best ASX "Income" stocks for the next 12 months
This is a theoretical investment exercise pitting Google's (AI) Gemini against Dr Don Hamson from Plato Investment Management in selecting five "Income" stocks for the next 12 months.

Fundie vs AI: Who is the better stock picker? (and 10 ASX stock ideas for your trouble)

AI is getting better, faster, & stronger. Will it ever be able to pick stocks like a human? We take a step towards answering that question.
www.livewiremarkets.com

Results after 34 weeks
We recognise that this is nothing more than a fun, but nonetheless important, thought experiment. Ultimately, (AI) will likely become a tool that all use to make more informed decisions, across a broad range of topics.






Skate.
 

"Fundie vs AI: Who is the better stock picker?"
Yesterday's post focused on "income" stocks. Today's post examines "growth" stocks.

The Article by Chris Conway of Livewire Markets
The article, (hyperlinked below) inspired this exercise, which highlights the evolving capabilities of (AI) in stock picking. As (AI) technology continues to improve, it will be interesting to see how it compares to humans in finance. This is a theoretical investment exercise pitting Google's (AI) Gemini against Tobias Yao from Wilson Asset Management in selecting five "Growth" stocks for the next 12 months.

Fundie vs AI: The best ASX growth stocks for the next 12 months

We've seen the income stocks, now we're looking at growth stocks in this edition of "Fundie vs AI: Who is the better stock picker?"
www.livewiremarkets.com

Results after 34 weeks
We recognise this is nothing more than a fun, but important, "thought experiment" as ultimately, (AI) will likely become a tool that all use to make more informed decisions, across a broad range of topics.




At times, outliers can distort the overall picture
Removing these outliers often provides a clearer view of returns. For instance, Life360 (ASX:360) is one such outlier. Even after excluding this outlier, the results over 34 weeks remain respectable.



Skate.
 

The article by Chris Conway of Livewire Markets, which inspired this exercise, highlights the evolving capabilities of (AI) in stock picking. As (AI) technology continues to improve, it will be interesting to see how it compares to humans in the field of finance.

Explanation - Fundie vs AI: The best ASX "Income" stocks for the next 12 months
This is a theoretical investment exercise pitting Google's (AI) Gemini against Dr Don Hamson from Plato Investment Management in selecting five "Income" stocks for the next 12 months.

Fundie vs AI: Who is the better stock picker? (and 10 ASX stock ideas for your trouble)

AI is getting better, faster, & stronger. Will it ever be able to pick stocks like a human? We take a step towards answering that question.
www.livewiremarkets.com

Results after 35 weeks
We recognise that this is nothing more than a fun, but nonetheless important, thought experiment. Ultimately, (AI) will likely become a tool that all use to make more informed decisions, across a broad range of topics.






Skate.
 

"Fundie vs AI: Who is the better stock picker?"
Yesterday's post focused on "income" stocks. Today's post examines "growth" stocks.

The Article by Chris Conway of Livewire Markets
The article, (hyperlinked below) inspired this exercise, which highlights the evolving capabilities of (AI) in stock picking. As (AI) technology continues to improve, it will be interesting to see how it compares to humans in finance. This is a theoretical investment exercise pitting Google's (AI) Gemini against Tobias Yao from Wilson Asset Management in selecting five "Growth" stocks for the next 12 months.

Fundie vs AI: The best ASX growth stocks for the next 12 months

We've seen the income stocks, now we're looking at growth stocks in this edition of "Fundie vs AI: Who is the better stock picker?"
www.livewiremarkets.com

Results after 35 weeks
We recognise this is nothing more than a fun, but important, "thought experiment" as ultimately, (AI) will likely become a tool that all use to make more informed decisions, across a broad range of topics.



At times, outliers can distort the overall picture
Removing these outliers often provides a clearer view of returns. For instance, Life360 (ASX:360) is one such outlier. Even after excluding this outlier, the results over 35 weeks remain respectable.



Skate.
 
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