Garch
Technical Model (GTM) tracks S & P 1500 stocks and uses a scan engine to identify stocks that meet specific technical patterns into a daily funnel. The stocks in the daily funnel are then run through a Garch custom chart system for a visual review and shortlisting into a watch list. The watch list is then truncated into a "Garch Interest List" based on the study of the stock's price, volume and relative price performance against a set of pre-determined cohorts over different time periods.
At this point, Garch establishes an Investment Thesis for the "Interest List" setting a target entry price, a stop price and a price objective. These price levels project a Gain/Loss ratio going into the trade which has to meet certain specs. Upon buying the stock at the target entry price, the full position is built up, with further validation of the thesis, in 3-4 tranches. This process of getting to full position could take between 3-6 weeks.
Garch manitains the position's intraday, daily, weekly and monthly charts to check for convergence with the thesis and inform its trade decisions. Care is taken to watch for potential false positives and false negatives, by relying on the valuable insights gained from the application of the Wyckoff Method. In situations where the study is inconclusive, action is taken to reduce the holding and revisit this position at a later time by placing it back in the watch list.
The process also tracks closed positions to validate and learn from past trade actions and record any learnings on the charts as a potential improvement opportunity. This closed loop process has helped in an ongoing development of the knowledge base and in the persistence of performance.