Overview
A neural network trained exclusively on price and volume data for market timing. Pure technical analysis approach—objective, rule-based, and fully backtestable.
Data Sources
- Historical price data (OHLCV)
- Trading volume patterns
- Price-derived indicators
- Chart patterns and formations
Technical Indicators
- Momentum: RSI, MACD, Stochastic
- Trend: Moving averages (SMA, EMA), ADX
- Volatility: Bollinger Bands, ATR
- Volume: OBV, Volume Profile
- Pattern recognition: Head & shoulders, triangles, trends
Approach
The system learns to identify market psychology and timing purely from price action. It ignores fundamentals entirely, focusing on what the market is actually doing rather than what it "should" do. This makes it objective and scalable.
Backtest Results
The AI strategy significantly outperforms SPY (S&P 500 ETF) buy-and-hold over the test period. SPY serves as the standard market benchmark—consistently beating it suggests the model is generating alpha (excess returns beyond passive investing).
Monte Carlo simulations show the AI strategy outperforms approximately 99.7% of random trading outcomes. This suggests the results aren't attributable to luck alone and may reflect genuine predictive edge.
Risk Considerations
While returns are promising, the strategy exhibits higher volatility than SPY buy-and-hold—sharper drawdowns and faster gains. This raises important questions about risk management and position sizing. A complete evaluation would require risk-adjusted metrics like Sharpe ratio (return per unit of risk).
Additionally, real-world factors such as transaction costs, slippage, taxes, and liquidity constraints are not fully captured in backtesting. Whether these results hold out-of-sample remains to be validated through live testing. Past performance is not indicative of future results.
Status
Backtesting complete with promising results. Currently developing the automated execution system for live trading validation.