Active trading is the buying and selling of securities within days or weeks to capitalize on short-term price movements. In general, active traders use various forms of technical analysis to identify buy and sell signals, as well as set stop-loss and take-profit points.
By planning the development of the Inch (https://datascollector.inchcapital.com/index.php) platform, we designed a system that would allow those who are usually employed in a job other than trading to operate on the markets autonomously and dynamically with the support of effective tools based on technical and quantitative analysis.
This week’s example is an Australian stock Stockland Corporation Ltd (isin code AU000000SGP0 AUD) (https://en.wikipedia.org/wiki/Stockland) which is a component of the ASX 100 index. To analyze this stock we have followed these steps available by means of the Inch platform tools (https://datascollector.inchcapital.com/index.php)
- Selection of all the Blue Chips of the world that are in long position for trend / momentum DSS (automated technical analysis of over 1600 blue chips)
- Selection of only new buy signals on stocks in Long position based on the last daily data in the time series (technical analysis)
- List in table view of all positions characterized by a benefit / risk ratio greater than 2.5 calculated based on the quantitative prospective analysis at twenty sessions (quantitative analysis).
Therefore, we started from a technical approach making then a quantitative selection. At the top of the list, as shown in the chart below we find the Australian stock Stockland Corporation Ltd (isin code AU000000SGP0 AUD) with a reward / risk equal to 4.08.
InchCapital Platform – Table view reward/risk April 30th, 2018
This ratio means that for every Australian dollar risked I expect a return of AUD 4.08 to twenty trading days, i.e. within a calendar month. After making this selection, just click on the name of the title to access the detail report from which the following situation emerges.
Stockland Corporation daily closing 4.14 AUD – April 30th, 2018.
The stock in absolute terms is a buy signal with today’s daily closing of 30 April. The first obstacle represented by the simple 55 day moving average has broken out and is about to test the 200-day moving average at 4.29 in the next trading days. The first technical target is at 4.24, while the level of protection is present at 3.9790.
The cyclical positions are favorable as shown by the short and medium / long-term trend stage periods set out following.
The twenty-day pattern prediction calculated by means of the quantitative analysis every weekend and therefore at April 27, 2018, propose a maximum decline of 1.41%, a maximum increase of 8.54%.
Stockland Corporation – Pattern Prediction – April 27th, 2018.
The relative spread analysis with the ASX 100 index indicates first signs of strengthening, while the securities compared to the risk do not offer the same favorable operating framework for Stockland Corporation read more. The stock is therefore automatically in the ideal conditions for the purchase starting from the opening of tomorrow, May 1, 2018.
This is an example of the ARC method applied for active trading purposes, for all investors who need to operate with objective tools, containing risk and limiting trading exclusively to the best reward / risk opportunities offered by the liquid financial markets.