Tim Sykes and Penny Stocks Part IV

I have spent many more days working on trying to understand the intricacies of Lean (Quantconnect’s back testing engine) and appear to be making some progress. I wish I could say the same about my venture to understand Timmay Sykes and the business he has built around Penny Stocks. 

At the time of my previous post, all I had managed to do was to test buying stocks at the open today and selling at the close today if yesterday at the close the stock had risen x% from the previous day’s close.

I then reverted to reading more of the wondrous works of Timmay and considered the fact that he appears to spend his day glued to a screen watching a watch list.

Therefore the idea of momentum must be intra-day momentum. Obs. I constructed a back test such that if a stock rose intra-day x% or more above yesterday’s close on sufficient volume you buy that stock. Or indeed sell it. Instead of waiting to exit the trade at the close, I built in both a stop loss and a profit taking mechanism. 

The long side is still an unmitigated disaster. The short side less so but hardly a bonanza.

Several things may be happening here. 

  1. I have botched the code. Nothing more probable and I will continue to work on it.
  2. The idea of buying (selling) penny stocks on intra-day momentum is flawed.
  3. I have misunderstood Timmay.
  4. A combination of the above.

Regardless, so far I am not impressed by the concept of Penny Stocking.

I posted my code on the Quantconnect forum so others may marvel at my ineptitude and come to my rescue.

I have sent a Tweet to Mr Sykes and offered to help him back test and codify his strategy. I believe that would be mutually beneficial.

 

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