Mr. Market trading strategy is based on an AI and systematic trading algorithm. The algorithm-based trading bot selects alpha equities using live financial asset fundamental data and technical signals, which can consistently stick on the trading behavior and avoid selection bias due to human emotion. The strategy is validated with 14 years long backtests with sharp ratio 1.49, Compounding Annual Return: 45.8%, Beta 1.11, max drawdown is 39%.

The Mr. Market trading algorithm consists of two parts:

• Mr. Market selection system (Alpha signals)

  • We follow Warren Buffet and  Terry Smith’s asset value evaluation principles to synthesize in-house alpha singals to find under-appreciated assets.  

• ML-Based risk management system (Beta signal)

  • We develop an LSTM machine learning model to predict SPY trend signal

  • We use VIM & VIM3M index to estimate the volatility of the market

  • The risk management system uses above trend and volatility signals to synthesize the beta signal.  

  • The system dynamically selects top 3 low volatility ETFs from our 30 defensive ETF assets (TLT, XLU, GLD, IEF, SLV, USMV, HDG, etc..) to add to the final selected assets when it foresees upcoming risk (high beta).