3 pages

Investing

Backtesting trailing stop-loss strategies with Python and market data

In January 2024 I wrote about the insanity of the Magnificent Seven dominating the MSCI World Index, and I wondered how long the number can continue to go up? It has continued to surge upward at an accelerating pace, which makes me worry that a crash is likely closer. As a software professional, I decided to analyze whether using stop-loss orders could reliably automate avoiding deep drawdowns.

Are AI language models capable of doing financial forecasting?

Considering LLMs are basically massively big statistical machines, a logical assumption would be that they should be well suited for predicting how the economy and the stock market develop. Let’s conduct a small test to see if that holds for the largest generic LLMs of today.

When everyone else is wrong

The stock market is a powerful globally distributed forecasting system. Last Friday it was forecasting a rosy future as the MSCI World index got to a new all-time high. But it does not make sense.