Introduction
VolatilityMarkets Trend Following Trade.
According to AQR the quantitative hedge fund and Yale University, over the past 100 years markets moved in trends. Trends are successive upwards and downwards movements in price that occur at a greater frequency than would be predicted by randomness alone. The following trade idea is a trend following trade idea which takes the assumption that the market will continue moving in the way it has over the previous sessions. Trend Trading, however is different than scalping due to the time horizon of the trade as trend following trades will take a week while scalping is done on a daily or intraday basis.
Market summary
Price
Coca Cola last price was $ 63.46.
Trend analysis
In the short term Coca Cola has been decelerating higher. In the long term Coca Cola has been decelerating higher.
Value analysis
Over the past 20 days, the Coca Cola price increased 16 days and decreased 4 days.
For every up day, there were 0.25 down days.
The average return on days where the price increased is 0.4388%.
The average return on days where the price decreased is -0.4135%.
Performance
Over the past 20 Days, the price has increased by 5.49% percent.
Over the past 20 days, the average return per day has been 0.2745% percent.
Trade Idea
Taking into account the long term trend decelerating higher, we propose a long trade idea with time horizon..
Trend trade idea
Buy $ 258,301 USD of Coca Cola, take profit at $ 63.7053 level for a $ 1,000 USD gain, stop out at $ 63.0634 for a $ 1,000 USD loss through a one Week time horizon.
Intraday predictions
Coca Cola trend analysis
Coca Cola last price was $ 63.46. The long term trend decelerating higher is stronger than the short term trend decelerating higher. This trade goes long when the price was moving higher but decelerating over the past 20 days.
Coca Cola value analysis
Over the past 20 days, the Coca Cola price increased 16 days and decreased 4 days. For every up day, there were 0.25 down days. The average return on days where the price increased is 0.4388% The average return on days where the price decreased is -0.4135% Over the past 20 Days, the price has increased by 5.49% percent. Over the past 20 days, the average return per day has been 0.2745% percent.
Coca Cola worst/best case scenario analysis
Within 1 week, our worst case scenario where we are 95% certain that this level won’t trade for Coca Cola, is $ 62.299, and the best case scenario overnight is $ 64.621. levels outside of this range are unlikely, but still possible, to trade. We are 50% confident that $ 63.0634 could trade and that $ 63.7053 could trade. These levels are within statistical probability.
Expected range
Within 1 week, our worst case scenario where we are 95% certain that this level won’t trade for KO, is $ 62.299 , and the best case scenario overnight is $ 64.621 . levels outside of this range are unlikely, but still possible, to trade.
We are 50% confident that $ 63.0634 could trade and that $ 63.7053 could trade. These levels are within statistical probability.
Probability Vs Payout Chart:
This graph contrasts the percentage payout of holding a position vs the probability that the payout occurs. The red and green columns represent the probability of stopping out and taking profit and their associated payouts.
Key Takeaways:
-
Price today $ 63.46.
-
Over the past 20 days, the Coca Cola price increased 16 days and decreased 4 Days.
-
For every up day, there were 0.25 down days.
-
The average return on days where the price increased is 0.4388%.
-
The average return on days where the price decreased is -0.4135%.
-
Over the past 20 Days, the price has increased by 5.49% percent.
-
Over the past 20 days, the average return per day has been 0.2745% percent.
-
Over the past 20 days, The price has on average been decelerating: $ -0.0142 per day higher.
-
Over the last session, the price increased by $ 0.14.
-
Over the last session, the price increased by 0.2206 %.
-
Over the last session, the price decelerated by $ -0.13 .
Comments are closed.