Q+T Stock Trading Strategy



Background

 

In the traditional investment research, they have fundamental analysis, technical analysis and quantitative analysis. However, none of those approaches can systematically find out the high probability winning stocks. They are strongly relied on the experienced analysts. Therefore, any personal or investment bank’s benefit may override the actual analysis results. So the founder of QplusT Limited want to find out a systematic trading strategy which can have high probability to win without human interaction.


Theory Foundation

 

We believe that the stock movers drive the price movement of any stock. The stock movers may be the institutions, the retail investors, or a group of people. They should have their own strategy to move the particular stock to their target. Therefore, if we can develop a method to follow the stock movers’ strategy, we should have the high probability to win. Q+T Uptrend Trading Model is a strategy to follow the stock movers to buy or hold the stocks until the uptrend direction is uncertain. 

 

Methodology

 

Different stock movers may have different strategy for their particular stock. So we formulate different model for different stock. Therefore, each stock is needed to go through the following process to generate its own unique model.

 

Step 1.             Find out all the uptrend periods from a data range.

 

Step 2.             Find out all the common effective factors and criteria for those uptrend periods.

 

Step 3.             Generate the preliminary uptrend trading model.

 

Step 4.             Optimise the model by Q+T optimisation method.

 

Furthermore, all the stocks will be optimised periodically in order to fine-tune the models. The optimisation algorithm is a learning process that can maximise the return and minimise the risk based on the pricing data from a data range.

 

For Example


HKEX(388) has 66283% re-invested return and 95% profitable ratio from July 1997 to December 2018.


Click the image to enlarge the graph


Click the image to enlarge the graph


Click the image to enlarge the graph


Click the image to enlarge the graph


Pros

 

Q+T Uptrend Trading Model has the following benefit: -

 

1.         It is an AI computerised model, which generates the trading idea automatically without human interaction. So they are the truly objective ideas instead of the subjective ideas from the normal advisors.

 

2.         It has the learning capability. Therefore, more and more data will generate better accurate result.

 

3.         The trading idea is to buy or hold the stocks during the uptrend period until the uptrend direction is uncertain. Therefore, the stock holding period will be minimised in order to lower the risk.

 

4.         The trading frequency is minimised with the purpose of lowering the transaction cost.

 

5.         Everyday the users of this model only need just a few minutes of time to get the trading idea. Thus they can concentrate on their own career without wasting time to do unknown result analysis.

 

6.         The trading ideas are supported by the simulation results which list out the re-invested return, profitable ratio, annualised average return, return on risk, etc.

 

7.         Every stock has its own unique model. So the retail investors can choose their preference stocks to get the idea. 

 

Cons

 

The major philosophy of the trading model is to follow the stock movers’ strategy. However, when the stock movers of the particular stock change from one to another one, the strategy may be different. For example, when a retail investor based stock change the ownership to attract the institution investors, the stock movers will switch from a private investor to the institution investors. Thus the original model will need to be optimised based on the new data set.

  

 


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