r/stockmarket
How I Improved My Algo With Chart and Data Analysis and AI
Author claims 84% win rate and 995% simulated returns using an AI-enhanced momentum/mean-reversion algo on Alpaca.
- The strategy combines momentum filtering with mean reversion (RSI) to optimize entry points.
- Integration of multi-factor data (sentiment, volume, fundamentals) aims to reduce noise and improve signal quality.
- Live paper trading results show a 33% gain in one month, suggesting short-term efficacy.
- The average loss (-6.8%) is more than double the average win (3%), requiring a very high win rate to remain profitable long-term.
- A 995% simulator return over a short period often indicates overfitting or look-ahead bias rather than robust edge.
- Lack of verified live track record with real capital raises skepticism about execution slippage and psychological discipline.
After 6 months of live trading alerts, my algo has an 84% win rate and I'm improving that with chart formations and data analysis.
At the end of last year I started running my algorithm on live data and trading the alerts with much success.
After 6 months here are the stats:
- Win Rate 84%
- Average Win 3%
- Average Loss -6.8%
- Average Hold 3.5 Days
- Performance Simulator 995.4% Return
- I've gained 72% manually trading the alerts
- I started auto trading paper in Alpaca and gained 33% in 1 month
My algorithm capitalizes on the Momentum Effect by updating a list of high performing stocks every 2 weeks and monitoring RSI for oversold - a mean reversion strategy. I split the stocks into 3 categories based on their momentum and performance.
I also started overlaying as much data into each alert based on dynamic information at the time of the alert. This data includes things like:
- Time of day
- Price
- RSI
- News Sentiment
- Analyst Price Target
- Analyst Sentiment
- Support and Resistance Level - Sentiment
- Chart Formation - Sentiment
- Volume - PACE Direction, RVOL
- Beta
- Distance to price target
- Distance to man reversion
- PEG Ratio
- Performance thresholds achieved
- Stock Score that considers 8 data points
I store all this data and then use AI to perform statistical analysis on all of the alerts and their outcome to determine how to best modify the strategy as well as place a rating on each alert to instruct the algorithm on how to trade - which alerts to favor, etc.
The data analysis allows me to extract this kind of data to tweak how the algorithm works moving forward.
https://preview.redd.it/ut53gl4lnr5h1.png?width=1578&format=png&auto=webp&s=2bc64e00e3fb7330c0e22c1ffeffdb77e54531b0
[](https://cf.preview.redd.it/how-i-improved-my-algo-with-chart-and-data-analysis-and-ai-v0-veneikqdjr5h1.png?width=1578&format=png&auto=webp&s=01e4dfaa7d45e1829d55fe81e8028fb883dbe13f)
Essentially, I've greatly reduced the amount of data from THE ENTIRE STOCK MARKET to only THE DATA OF MY ALGORITHM. With a smaller set of data, I have insight into very similar numbers, but can separate outliers or focus on where Alpha lies.
Let me know what you think of this approach of using statistical analysis on Algorithmic data.
So when can we buy your course, ebook, seminar or whatever it is that you're going to sell?
So why are you posting this on reddit? Now more people can copy the strat and reduce your margins when you basically have the cheat to become one of the richest persons on earth in a couple of years.
That's really nice of you I guess.
I never understood why people think that if you have an edge that you should horde it and hide it from others. That’s f\*cking selfish.
This strategy isn’t secret, it’s mean reversion from oversold on some of the best stocks.
Just because I share it do you think other traders will stop buying oversold stocks because they’re at a bargain? No, of course they’re not. Traders will continue to buy.
Because trading is a zero sum game. If more people do what you do, your winrates and margin will diminish.
If you had a winning strat in the first place.
But trading isn’t always a zero sum game. Value is created through trading and that value can be passed to traders without another trading losing.
Sure, it happens, but trading isn’t strictly a zero sum game. If that were true prices wouldn’t rise as much ad they do less people would participate and not much value would be created.
Economies grow because of efficiency. Making the same products more efficiently gives a company an edge so they compete better which makes investors want to huge stock and drives up the value of stock. This is where the money comes from - value.
This is why I can buy a stock at $10 and sell it to a swing trader at $12 who holds it for a few weeks and then sells it to a day trader for $13. No one lost money. Everyone made money. Value increased and some of that value taken as profits.
Economists have studied this extensively.
SMH was only up 52% YTD at the time of your post. The 72% I cited was in half the time. That’s my point.
That makes sense, especially if the strategy is selecting relative strength and only looking for a small mean-reversion bounce. A bear filter can protect the left tail but also cut out the best snapback periods.
The part I would still isolate is whether the Sharpe is coming from many small clean wins or from a few regimes carrying the whole curve. I would compare raw vs filtered by drawdown depth, recovery time, turnover, and what happens after the first failed bounce in a bearish tape.
The same stocks are used but it's limited to 20: APLD, ARM, BE, BW, CAT, CIEN, COHR, GEV, GLW, GNRC, LITE, MRVL, MU, NXPI, PL, RKLB, SNDK, STX, VRT, WDC.
At least for now, updated every 2 weeks. There's also a negative trend in 3 months indicator that filters stocks on the way down from a big run up.
The strategy is a mid range RSI reversal. If RSI crosses below 50 and then reverses, the alert signals but much of the rest is manual. But it also includes an RSI Reversal after crossing RSI 70.
It also alerts on a 5% drop from the previous days close. Again, after you're in, you can either wait until the RSI reversal after crossing RSI 70 or just scalp manually.
The other thing I do on any of the alerts whether it's an oversold alert or a mid range, or the 5% reversal, is alway scalp on morning volatility before exiting completely.
I also use the RSI Oversold alerts for DCA and long term buy and holds.
This is a well-thought-out system honestly. The mid-range RSI reversal at 50 is underrated — most people only watch oversold/overbought extremes and miss the cleaner entries in the middle of the range where the move still has room.
What you’re describing with the RSI 70 reversal is essentially an exhaustion signal — the same concept a pattern scanner I use flags automatically: 3+ consecutive accelerating bars in the same direction, volume spike on the final push (last buyers piling in), then a reversal wick showing rejection. The RSI just quantifies what the price action is already showing. I’ve found that having both the RSI level AND the candle structure confirming at the same time is when the reversal is cleanest — reduces the whipsaw trades where RSI reverses but price keeps grinding. The scanner runs that on all 5 timeframes simultaneously on whatever watchlist you load in, so for a tight list like yours it’s pretty focused.
The morning volatility scalp you do on every alert is actually the part where a real-time scanner earns its keep — that opening range on a stock already on your radar from an overnight signal is exactly the setup where seconds matter. That’s a separate tool but it pairs well with the pre-market setup work you’re already doing. I could send you the link to both, if you’re curious.
This, what you wrote, sounds very interesting as a way to algorithmically time intraday scalp / day trading strategy - either for manual or automated trading:
"What you’re describing with the RSI 70 reversal is essentially an exhaustion signal — the same concept a pattern scanner I use flags automatically: 3+ consecutive accelerating bars in the same direction, volume spike on the final push (last buyers piling in), then a reversal wick showing rejection. The RSI just quantifies what the price action is already showing. I’ve found that having both the RSI level AND the candle structure confirming at the same time is when the reversal is cleanest — reduces the whipsaw trades where RSI reverses but price keeps grinding. The scanner runs that on all 5 timeframes simultaneously on whatever watchlist you load in, so for a tight list like yours it’s pretty focused."
Awesome feedback. You're a seasoned trader. I am curious and understand knowledge is valuable so, yes, please send the link, I'll check it out. Send it to my profile or drop it here, up to you.
I've been investing and swing trading in the market for years. Day traded and scalped heavily a few years ago, but settled on swing trading, long term buy and hold and scalping the same positions I swing and long term. Now I'm trying to port as much of my knowledge into a trading platform.
My next feature is a morning scanner for up gappers and high volume anomalies on the stocks in my Algo universes. So, actually, this is very timely.
Here you go: aistockscanners.com — the watchlist scanner is the one most relevant to what you’re building toward. It runs at 8:30 AM ET, scans 12,000+ tickers, scores each gap across five factors including a live AI catalyst check, and has a separate section for high-volume anomalies on low-float names. The whole thing delivers before the open in under 90 seconds. There’s a 7-day free trial, no card needed.
Given what you described — porting your own knowledge into an algo and now building a morning scanner — you might find it useful just to see how the gap scoring and catalyst classification is structured, even if you end up building your own version. Sometimes seeing someone else’s implementation clarifies what you actually want yours to do.
The A+ setup scanner on the same site would also fit your RSI reversal work — it tracks the exhaustion and pullback patterns we were talking about, runs them across 5 timeframes on whatever watchlist you load in. Might be a useful reference if you’re formalizing those signals into your platform.
Good luck with the build — would be curious to hear how it goes.