Hedge funds manage risk first at the strategy level, then at the position size level. Only you can control your position size, so PatternCast manages risk for you at the strategy level by discovering setups based on multiple non-correlated strategies that generate high probability outcomes.
The reason for finding outcomes based on non-correlated strategies is that it creates a hedging effect, so that your total positions and portfolio are guarded against unusual moves in the market. Drawdowns are reduced and profits are additive, reducing volatility of returns. We call this an anti-fragile effect where increased market volatility actually results in better performing trades with less volatility in your trading.
What the AI Does
The PatternCast algorithm embodies a great deal of knowledge, patterns and intelligence. The system has been trained with hundreds of strategies, chart and candle patterns, volume patterns and technical abstractions (currently over 400 and growing). All these parts are like “phonetics” or a kind of alphabet that is used to create words and narratives that the AI sees as patterns. It can recognize, enumerate, categorize and rank these patterns and then deliver them to us.
The AI searches decades of data across multiple datasets in seconds, finding patterns and filtering them based on criteria such as timeframes, expected moves and probability. We are then presented with high probability scenarios that are setting up. These setups are what we publish as PatternCast setups to members.
Sample PatternCast Setups
How to Interpret and Use the Setups
All “Entry” signals are good ONLY for the current session during which they are generated. Futures sessions start at 6PM on Sunday through to Thursday, and end the following day at 5PM. If an “Entry” has not triggered by 5PM then it should be ignored and discarded.
We use “Entry” price as the first price we enter a trade. It may not be the only entry we take. It is just the first price we believe is statistically relevant. For example, if we find a BUY entry of $2966 on the ES, we will plan for a position at $2966, AND if the price continues to move lower we may add one or more new positions.
We use “Exit” price as the MAXIMUM price (for a buy) or MINIMUM price (for a short sale) we would use to vacate open positions. We may move out of a position before that price, but we will not hold PAST it.
We will hold positions – unless reported IN ADVANCE otherwise – for no more than four full trade sessions. So this does not include market recognized holidays and weekend days.
These signals are not “predictions.” They are not “guarantees.” They are prices the system finds to be statistically-relevant and historically offer trade potential. These signals are based on past data, but that does not guarantee future results. In fact, we know there will be losers, and we know there could be many losers in a row. That’s how numbers work. We believe, over time, these signals offer a statistical edge, but we do not look at them as predictions. There is a difference. We understand that difference. And, you must do your own due-diligence before you make any decisions about your trades.
We do not fully understand why these signals work. These are generated looking at data in ways that include thousands – if not millions – of possible permutations. We believe it would be a fool’s errand to try to guess why these signals seem to work. We believe we found something rather than created something. And treat these with respect and we are honored to find them. This endeavor is about the universe, things we can’t see with the “naked eye,” and the potentiality of outcomes we cannot truly understand.