Greed and Fear - Daily trading signals based on mathematics and software, no opinion, no emotion, no ego.

For a long time now there's the word 'Tradebot' on this website, but there's actually no serious content related to that subject. And with this posting it's not going to change much, except for a sort of preview. The development for a first release is in its final stages and it probably won't take long before it goes live.

As regular visitors know, every day a daily indicator is posted on this blog, known as the Greed and Fear Indicator. It is a global prediction for the next trading day (higher, lower or neutral). After the signal is posted, it doesn't change until 24 hours later. And despite absolutely astonishing test results, the actual performance in recent months does not live up to the expectations. That can still change, but for now, that's the (disappointing) situation.

Meanwhile, the development of a mechanism that's more closely following the markets continued to move forward. This resulted in the Greed and Fear Tradebot. The tradebot does not call predictions for the next day. It does predictions for the next maybe 30 minutes. To do this, the tradebot will receive a live stream of market data. As it 'studies' the flow of data, it will take a position in the market or close one without human intervention(!) This is unlike the daily indicator, which always required a human decision of when exactly to enter or close a position intra day. With the tradebot, that's no longer an issue.

For example, yesterday (Thursday, July 21st) the Greed and Fear Tradebot executed these transactions on the S&P Futures, E-Mini contract September 2011 . Too bad it was only on a paper trading account...

Tradebot was started at 8:00 AM. After 1 hour it was ready to take the first trade. Timestamps are in CET.

9:03:13 AM - Open long at 1327.25
9:11:27 AM - Close long at 1325.0
10:09:54 AM - Open long at 1321.5
10:36:19 AM - Close long at 1320.25
11:19:53 AM - Open short at 1317.5
11:56:30 AM - Close short at 1318.5
12:19:56 PM - Open long at 1317.0
10:15:00 PM - Close long at 1342.25

20,75 points in 8 transactions

Maybe this particular day was too easy for the tradebot to deal with, but the difference with the daily indicator is obvious. An unforseen sudden change in market sentiment will likely be picked up by the tradebot so it can trade along. A daily indicator will be wrong the rest of the day.

If the performance of the daily indicator does not improve, it's likely that it will be suspended for an undetermined amount of time. Maybe the Greed and Fear Tradebot will step up, we'll see. Cut your losses and let your profits run applies to many things in life ;-)