I couldn't believe my eyes.
Upon analyzing my performance data for the past year, it couldn't be clearer.
After a year of battle testing, the algorithm has earned its stripes. I started posting it at the top of every newsletter and Trade Alert, and will continue to do so in the future.
Once I implemented my proprietary Mad Hedge Market Timing Index in October 2016, the performance of my Trade Alert performance has more than tripled, from a 19.99% annual rate to 46.70% (see chart below).
As a result, new subscribers have been beating down the doors trying to get in.
Let me list the high points of having an algorithm looking over your shoulder on every trade.
- Algorithms have become so dominant in the market, accounting for up to 80% of total trading volume that you should never trade without one.
- It does the work of a seasoned 100-man research department in seconds.
- It runs real time and optimizes returns with the addition of every new data point far faster than any human can. Image a trading strategy that upgrades itself 30 times a day!
- It is artificial intelligence driven and self-learning.
- Don't go to a gunfight with a knife. If you are trading against algos alone you WILL lose!
- Algorithms provide you with a defined systematic trading discipline that will enhance your profits.
And here's the amazing thing. My Mad Hedge Market Timing Index correctly predicted the outcome of the presidential election, while I got it dead wrong.
You saw this in stocks such as US Steel, which took off like a scalded chimp the week before the election.
When my and the Market Timing Index's views sharply diverge, I go into cash rather than bet against it.
Since then, my Trade Alert performance has been on an absolute tear. In 2017, we earned an eye-popping 57.39%.
Here are just a handful of some of the elements of the Mad Hedge Market Timing Index analysis real time, 24/7.
- 50- and 200-day moving averages across all markets and industries
- The Volatility Index (VIX)
- The junk bond (JNK)/US Treasury bond spread (TLT)
- Stocks hitting 52-day highs versus 52-day lows
- McClellan Volume Summation Index
- 20-day stock bond performance spread
- 5-day put/call ratio
- Stocks with rising versus falling volume
- Relative Strength Index
- 12-month US GDP Trend
- S&P CoreLogic Case-Shiller US National Home Price NSA Index
Of course, the Trade Alert service is not entirely algorithm driven. It is just one tool to use among many others.
Yes, 50 years of experience trading the markets is still worth quite a lot.
I plan to constantly revise and upgrade the algorithm that drives the Mad Hedge Market Timing Index continuously as new data sets become available.
It's All About the Inputs
Thank You, Mr. Algorithm!
