The Pure Quant Portfolio Builder puts TradeSmith’s most powerful, proprietary quantitative algorithms to work to help you create a fully optimized, risk-balanced or low risk portfolio in just a few clicks.
Accessing the Pure Quant Tool From Your TradeStops LifetimeSubscription
The Pure Quant tool is found in the Research section of TradeStops. In the top menu, click Research. Then, click Pure Quant. This will make the new tool display for you.
Make sure that there is a blue line under Pure Quant. This blue line means that it is the active tool you are working with. If you don’t see Pure Quant for some reason, try refreshing your Internet.
Using the Pure Quant Tool
There are two sections in the Pure Quant tool you must fill out before creating your new portfolio.
In the first section, you must choose a portfolio. Use the drop-down box to select the portfolio that you want to analyze. You can select one of your investment portfolios, a watch portfolio, or even a newsletter that you are subscribed to.
Just click on a portfolio that you want to analyze.
Take note of the bold groupings. Selecting one of these groupings will select all the portfolios or newsletters contained in that group.
- All would analyze all investment, watch, and newsletter portfolios.
- Investment would analyze all your investment portfolios.
- Watch would analyze all your watch portfolios.
- Newsletters would analyze all the subscriptions in all the newsletters that you subscribe to.
- Newsletter Titles would analyze all the subscriptions in that newsletter.
If you don’t want to look at all of them at once, you can select certain portfolios. Just click on the title of the portfolio to select it. This makes the portfolio appear in the box at the top of the screen. In that top box, click in the white space to make the portfolio list appear again. Then, you can easily select another portfolio.
In the second section, you can designate how much you want to invest and how many positions you want in your new portfolio.
Simply click in the boxes and enter the amounts you want to invest and/or the number of positions that you want in your new portfolio. This will be the number of positions we run the risk rebalancer on for equal risk based position size.
Note: We do not take into consideration the effects of commissions or taxes when running the Quant Algorithm. It is based solely on mathematics and the activity of the stock in the market.
Once you have picked your portfolio and entered your position information, click the green “Run Research” button.
Sometimes after clicking Run Research, you might get an error message. The Quant Algorithm removes all positions that are not in a Green SSI state, have an average VQ of over 40%, and have had a negative gain since SSI Entry.
SSI entry is defined as the reference date when the stock changed from the red zone to the green zone, triggering an entry signal. A negative gain is defined as if the stock is currently trading below the SSI Entry price.
You will get this error message if the portfolio you chose has met some or all the criteria. To remove this error message, simply select a different portfolio.
We use these parameters so that you are invested in the safest stocks and so that you have the most potential to capture large gains while risking less. These parameters cannot be changed or edited.
Please also note that if one of your newsletters tracks something that TradeStops does not support, such as bonds, you will not be able to use the Pure Quant tool on that newsletter. Options are also not supported with this tool.
After you click Run Research, a chart will display. It will list the top 100 positions that matched the Pure Quant Algorithm. It will also tell you the current SSI state, how long the stock has been in that state, the VQ of the stock, and much more.
In the last column we tell you how many shares to purchase to take equal risk per position based on the information provided in section 2. This ensures that the risk is properly balanced and that you are not too heavily invested in risky stocks or too lightly invested in safe stocks.
If for any reason you do not want to include one or more of the top results simply uncheck the checked box next to the position.
NOTE: Make sure after any changes you select update results at the bottom of the page.
If you would like to add one or more positions from the results list, check the checkbox to the left of the desired position. Don’t forget to update your results!
Once you have made all desired changes, you have three options. You can save the portfolio (1), export (2), or print (3).
Note: Data is exported in a spreadsheet format (.csv).
Saving your portfolio is especially helpful if you perhaps want to watch and see how this portfolio would perform. Simply click the green Save as New Portfolio button (1). A pop up will appear.
You can name the new portfolio whatever you would like. For Type, you can keep it as a Watch portfolio if you don’t plan to purchase the shares yet, or you can change it to Investment if you plan to purchase the shares.
Note: Adding the unchecked positions is only available when saving as a watch portfolio. This is because the unchecked positions all have zero shares. Investment portfolios require the number of shares for a position to be greater than zero.
Make sure to click the green Save button once you are done. The portfolio will then be saved to the Portfolios tab in TradeStops.