The Profit Column: An A.I. Trading Win Streak to Celebrate
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It crunches together all the key technical datapoints of a stock, showing you which direction the stock is most likely to go over the next four weeks.
Subscribers of Predictive Alpha get two targeted recommendations from our analysts per month, plus they can search for projections on any ticker they can think of a few times per week…
And members of Predictive Alpha Prime get even more, with unlimited searches and four trade recommendations per month…
Now, no system is perfect. But the curated recommendations from Predictive Alpha Prime went on an impressive win streak recently that’s worth noting.
From Nov. 15 to Dec. 22, the system generated recommendations that batted 5-for-5 with an average return of 7% and an average hold time of just over two weeks.
This quick-hit style of trading will become crucial if volatility rears its ugly head again in 2024, so I wanted to make a point of putting it on your radar.
I recently sat down with John Jagerson, one of the analysts behind the Predictive Alpha services, for a quick recap of the recent win streak… and what he sees coming next for Predictive Alpha Prime subscribers.
The Profit Column: An A.I. Trading Win Streak with John JagersonMichael Salvatore, Editor, TradeSmith Daily: John, thanks so much for getting together today. I know you’ve been plenty busy keeping up with everything the Predictive Alpha algorithm is spitting out.
John Jagerson, Senior Analyst, Predictive Alpha Prime: It’s been crazy to kick off this year, Michael…
Predictive Alpha is churning out so many great trading opportunities, it’s honestly been difficult to try to pick out the best ones for our subscribers.
A.I. isn’t perfect — but what we use here at Predictive Alpha Prime is pretty darn astounding.
Not only can our A.I. project which direction it sees a stock moving over the next 21 trading days…
It can also see by how much… and what your potential dollar gain per share could be.
And in a market that has whipped us up, down, and sideways like the world’s worst rollercoaster over the past two years… having an edge like Predictive Alpha is a huge help.
Michael: Right, I definitely want to get into that in a bit. But first, we have to talk about this win streak.
Over a span of about four weeks, Predictive Alpha churned out winner after winner… And really, some of these stocks are not what you’d call hot-trading tickers.
You were in and out of a trade in Atlantic Union Bankshares (AUB) for a 6.5% win in a single day… made another 6.5% win in Cushman & Wakefield (CWK) in just under a month… and then 9.3% in Valvoline (VVV) in just over two weeks.
Some solid hits there.
What would you say put Predictive Alpha on this win streak?
John: So, Predictive Alpha is constantly being updated with fresh data from the markets, much like the major hedge funds do to power their own A.I. models.
The model flipped decidedly bullish in a broad sense, back in early November. You might remember that was right when markets were coming out of that early fall volatility.
We weren’t going to fight the trend. If a stock had a strong bias to go up, we were going to trade alongside that bias.
You mentioned Valvoline… Here’s the chart we sent our subscribers along with the trade recommendation back on Dec. 6.
And almost exactly on cue, the stock rose as high as $38.46 on Dec. 26 before starting to drop. We secured our gains well ahead of that, though, on Dec. 22.
Michael: I must say, I love how you help your readers manage trades, too.
With new recommendations, you sometimes advise putting in a good-till-canceled (GTC) order. These orders stay open and get automatically filled when the price reaches a certain level.
In this case, the price was $38.09, which is how you were able to get out so easily before the stock price dropped again.
John: When you’re trading with an A.I. system, it sounds almost silly, but you have to think like an A.I.
An A.I. wouldn’t second guess when it was time to take profits. It would just take them and move on to the next trade.
So when conditions are just right, we set up our subscribers to do exactly that. No emotions, no greed… just letting the A.I. decide the price we want to buy and sell.
Of course, there are sometimes exceptions to this rule — but that’s only when the data changes.
Occasionally, when the momentum is strongly in the stock’s favor, we either advise not setting a GTC order or canceling it, to capture more of the gains. But again, this is only when the data backs this up.
But no matter what, we never hold a trade any longer than we have the data to support it. At the time we put on this position, the algorithm had a forecast through Jan. 5. So no matter where the stock price was, we would sell on or before then.
It was the same thing with First Financial Bankshares (FFIN), a small-cap bank stock.
This type of stock was absolutely hated earlier in the year, after the Silicon Valley Bank collapse shook things up.
And at the time we put on this trade, FFIN was actually around its lows for the year. It was about as low as it’s been since the pandemic crash.
But Predictive Alpha saw the tide turning for FFIN. Here’s the chart we sent our subscribers on Nov. 16.
The algorithm predicted a 7.5% bullish move in FFIN shares through about mid-December. So, we recommended buying the stock for about $27.
Based on what we were seeing in the financial sector at that time, we felt it best to let this one ride and close out early with a GTC order. We did, however, recommend a stop loss of $23.69.
That turned out to be the right move, as FFIN exceeded Predictive Alpha’s forecast. It rose as high as $31.25, and we sold shares just above the forecast, at $28.96.
Michael: It’s a very robust system, John. Seems like it makes for the ideal trading companion.
And speaking of that, Predictive Alpha Prime just recommended three brand-new trades just like these, is that right?
John: Yes it did, and we just published them earlier this week in a special report called Accelerated Income Generators.
These three trades are much like the ones above. They’re three of the top recommendations the Predictive Alpha algorithm is showing right now – and each of them is projected to rise substantially over the next 21 trading days.
As of right now, while we’re talking on Friday, Jan. 26, these trades haven’t taken off just yet. So any current subscribers reading this who haven’t taken part should go check them out.
Michael: Awesome, thanks John. I think I’ll do the same.
Appreciate you taking a few minutes to catch up today, John. I’ll let you get back to it.
John: Thanks Michael, talk soon.
A.I. trading is here to stay, and TradeSmith was one of the first to bring the power of A.I. to our readers.
That means, as the technology develops, Predictive Alpha will only get better and better over time.
Like shared on Friday, using tools like these is important to level the playing field between you and the Wall Street elite.
Especially now, as the technology that powers their tools also advances.
To your health and wealth,
Editor, TradeSmith Daily