Jeff’s note: Today, we’re hearing from our newest analyst, Brad Hoppmann. Brad is an algorithmic trader who specializes in predictive analysis. It’s a computer-based method of looking at millions of points of data to pinpoint the market’s next move.
Brad’s traded the markets for over 30 years. Most notably, he has worked at many of the top publishers with legends like Louis Navellier, Jim Cramer, Porter Stansberry, and Steven Sjuggerud.
These days he produces trading algos for his boutique research firm, creating strategies that thrive in multiple market scenarios. Now, he’s bringing his knowledge and insights from his analysis to Market Minute… So, stay tuned every Thursday for a new essay from Brad.
Today he shares how you can use predictive analytics to become a better trader…
Today, I’ll explain one of the most powerful tools in finance.
It’s one I’ve used for over 20 years both professionally and for my own trading.
Put simply, it’s about using statistics to forecast the future. And it can uncover insights and opportunities that even the experts can miss.
Leading hedge funds have used these strategies to make billions:
Renaissance Technologies’ secret Medallion fund gained 66% annual returns over 30 years. That would turn an initial $100,000 investment into over $75 billion.
Two Sigma produced 37% returns during the 2020 COVID crash. They now manage over $60 billion.
D.E. Shaw uses data models to find market inefficiencies. Founder David Shaw is worth around $7.3 billion.
Bridgewater Associates ‘Pure Alpha’ method has made over $46 billion since starting.
The great news is that it isn’t just big hedge funds that can use this strategy.
Regular folks can too. It’s called predictive analytics.
Trading with predictive analytics can be very profitable. But like most things in the investment world, Wall Street has kept it a secret from you.
My goal is to change that.
See, I’ve been developing “predictive” models since before most people knew what an algorithm was.
Over the years, I’ve built various models using costly software and computers that most investors can’t access. I’ve worked closely with teams of mathematicians, data scientists, and programmers. They’ve helped me develop institutional-level data models for different scenarios.
Using what I’ve learned, I can now analyze millions of data points in less than a minute to find actionable trades.
My latest algorithm called “SPY Hopper” scans the S&P 500 to determine which areas of the market will benefit from the movement of money and predicts “hops” upward.
The algorithm looks at 10,299,341 data points and pinpoints where the money will flow.
Here’s a chart of how it has performed since 2019:
The top half of this chart represents the account balance over time – with candlesticks highlighting where the account closed lower (red) or higher (green). The bottom half of the chart represents how much money was made or lost during that month.
So, if you started with a $100,000 portfolio, you would now have $241,147, or a 141% gain just trading ETFs.
Now I want to make this powerful technology available to regular investors like you. The big guys have had this advantage for too long.
Each week my models will sort through the data to find high-probability trading ideas. We’ll use this to identify potential entry and exit points for trading opportunities right here in Market Minute.
For example, by analyzing historical price data, news events, earnings reports, SEC filings, alternative data feeds and more, my models can “predict” short-term price movements across stocks, futures, and options.
Free Trading Resources
Have you checked out Jeff’s free trading resources on his website? It contains a selection of special reports, training videos, and a full trading glossary to help kickstart your trading career – at zero cost to you. Just click here to check it out.
This provides you with the same advantages that large firms pay millions to access.
The way I look at it is like this: let the algorithms collect and analyze the data around the clock… then use it to “predict” where the best and most profitable trading opportunities are. Meanwhile, you will be free to focus on living life.
Sounds like a good trade-off, right?
Stay tuned over the coming weeks. You’ll learn how predictive analytics can improve your trading and investing returns. The potential is limitless!
Leveraging data for you,