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SYSTEM TRADING

Nowadays, it is possible to send automatic orders to the market by writing trading strategies on many data terminals that are used to monitor price movements in the stock market. In this article, we will examine the returns of a trading formula written on the matrix on BIST-100 stocks. I will not share the contents of the formulas because everyone's understanding of maturity, trading style, stop level is different.

Below you can see the returns of 3 different systems on BIST-100 bills.

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Let's take a look at what are the 10 stocks in each system in turn.

The top 10 stocks in 11-ERK_STRATEJI that provide the most return;

The 10 most returning stocks in a stock strategy;

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Top 10 shares in Aldata-2 Strategy;

When we look at the shares in these different strategies, we see that their common features are trends. When stocks trend, their return rates are high. However, despite these successes, we see that the purchases are closed with a loss when the stocks are corrected or when they enter the horizontal market with buy signals. Sometimes it happens that it can be seen that the transactions that are closed with the damage seen here take 3-4 months.

Let's look at the returns of ASELS stock according to ALDATA-2- strategy; The summary of the system results is as follows.

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The places where the system produces buy and sell on the price chart are as follows.

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On the data series, it is seen that the price is trending, but the yield curve has decreased due to the purchases made in the horizontal market, the sales made in the decreases in the correction levels, and the purchases made during the periods when the price reacts. The period when the yield curve declines is approximately 3 months. If you had started to comply with the system at the beginning of this 3-month period, you would probably have left the system at the end of the 3 months due to the meltdown in the portfolio. The meltdown here would affect you psychologically.

Another consideration is the PARSN stock.

Since I know the story in Parsn stock, I chose this stock as it would make a good contribution to the subject. A trading to be made by following the strategy written in pure form, ignoring the basic data, includes the negative consequences I have described above.

Now let's evaluate the PARS stock according to all three strategies and see what kind of result will come out.

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It is observed that the yield curve for Parsan shares also declined in some periods. But not as much as aselsan, which I shared above. It is seen that the price movements in the stock remain in a certain trend, the movements are not hard and volatile. By volatile movements, I mean movements that do not generate trades and sell enough to change a trend that has already begun. This is effective on the yield curve providing a certain stability.

The strategies written here are written with the help of indicators derived from price. Indicators can be written with some or all of the 6 data obtained from the price. Each indicator has a different spelling. The indicators you use while creating the system have an effect on the success rate. The period of the indicator you use, which family it belongs to etc. are important at this point. Indicators written using RSI, medium-range trend indicator or moving averages, trading volume, showing overbought RSI, show your trading strategy. This was the technical side of the business. I think these systems are more successful especially in stocks selected according to basic analysis criteria. Now, according to the parsan basic data, I think the trading strategies on this stock are successful because it contains a solid stock and many expectations. The deterioration of the basic data of the stock in the future will adversely affect the system used.

The story happening in the plot;

- The company's field of activity; steel forging and machining. Axle and gear production used in the automotive industry. Production of forged parts used in landing gear for the aircraft industry. Production of heavy medium light trucks, tractors, construction equipment, forged and machined steel parts of the defense industry.

- The company operates on 28 thousand square meters of land in Pendik. The factory, which is a new investment, is 100 thousand square meters in Dilovası.

- Production share in automotive industry products 70% defense-mining-textile 30%

-80% of production is exported. (It is important to which countries you export, you can learn the details from the annual report and the company's website)

- It provides 10% of the electricity it uses from solar energy.

It is estimated that the number of personnel, which is currently 650, will increase to 1800 when the new factory becomes operational.

The new factory is estimated to be operational in 2020.

- After the investment, it will be Europe's largest facility in axle and shaft production, and Europe's third largest facility in other powertrain and engine forging parts. Turkey, meanwhile, will have the largest rolling mill.

- The investment amount of the factory is 160 million EURO.

As you can see, what has been written here is only the story, the expectation part of the company. There is also the financial analysis part of the job. For example, as of the writing of this article, stock prices seem high compared to the historical average of market multipliers and equity profitability. The strategy we are currently considering has not yet produced a sell signal. It still continues at the al location. When the sell signal comes, the stock will be sold anyway. Don't get it wrong. I am not saying that this feeling will fly and fly. PARSN is just an example here. What I want to explain is that the expectation is that the systems on healthy companies will be healthier according to their basic data.

If we are so healthy then a question may arise, why are we not buying and selling long term? In this way, a strategy can be followed. The important thing is what you want. Do you earn 3% a week? Carrying company papers for 8-10 years by taking their papers every fall? Buying and selling in the session? Here, it is intended to emphasize the use of basic data and system strategies together.

Ali Erkan TANACIOĞLU

AUTHOR:

“Investment information, comments and recommendations contained herein are not within the scope of investment consultancy.

Investment consultancy service; It is offered within the framework of an investment consultancy agreement to be signed between brokerage houses, portfolio management companies, banks that do not accept deposits and the customer.

The ratings contained herein are based on comments and personal opinions. These views may not be suitable for your financial situation and risk and return preferences.

Therefore, making an investment decision based solely on the information contained herein may not produce results in line with your expectations. "

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