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[INVX] Post-Earnings Announcement DriftWhat does this strategy do?
This Pine Script strategy implements the Post-earnings announcement drift (PEAD) strategy, which is a financial market anomaly where a stock's price tends to drift in the direction of the firm's earnings surprise for an extended period of time.
Ref: en.wikipedia.org
An earnings announcement is an official public statement of a company's profitability for a specific time period, typically a quarter or a year. It includes various financial metrics but the most watched figure is the Earnings Per Share (EPS). Analysts estimate the EPS before the announcement, and the actual EPS is compared to this estimate to determine if there was an earnings surprise.
An earnings surprise occurs when the actual EPS is significantly different from the analysts' estimates. A positive earnings surprise indicates that the actual EPS is higher than the estimate, while a negative earnings surprise suggests the EPS is lower than anticipated.
The script takes the following inputs
" Holding periods (bar) " : This input defines the number of periods (or bars) the script will hold a position after the earnings announcement.
" Surprise threshold (%) ": This input sets the minimum percentage for an earnings surprise, which triggers the strategy to enter either a long or short position. In essence, it represents the minimum deviation between the estimated and actual Earnings Per Share (EPS) that will trigger a trade. A higher threshold may lead to fewer, potentially more significant trades, while a lower threshold might result in more frequent, possibly less impactful trades. This parameter allows you to adjust the sensitivity of the strategy to earnings surprises.
Positive earnings surprise
After the earnings announcement, the script compares the actual EPS with the estimated EPS to identify an earnings surprise. If there is a positive earnings surprise, the script will enter a long position. A long position is a bullish strategy where the investor expects the stock price to rise.
Negative earnings surprise
On the other hand, if there is a negative earnings surprise, the script will enter a short position. A short position is a bearish strategy where the investor expects the stock price to fall.
In both scenarios, the position (either long or short) is held for the number of periods specified in the "Holding periods (bar)" input. This strategy is based on the assumption that the stock price will continue to drift in the direction of the earnings surprise for the specified holding period.
Disclaimer: The script provided herein is for educational purposes only. It should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. Past performance is not indicative of future results.
The results of the Pine Script backtesting are hypothetical and should not be considered as a true reflection of the results that might be achieved in a live trading environment. The backtest results are based on historical data and may not take into account certain factors such as actual transaction costs, taxes, or changes in market conditions.
Investors should consult with their financial advisor before making any investment decisions. All investments involve risk, including the potential loss of all invested capital. אסטרטגייה
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[INVX] SET Breadth IndicatorWhat is it ?
Market Breadth is a technical analysis tool that measures the overall direction of the market by looking at the number of companies advancing versus the number declining. It's like taking a pulse of the market to see whether more stocks are moving up or down.
The SET Breadth Indicator is a tool designed to help investors understand the overall market sentiment of the Stock Exchange of Thailand (SET). It measures the performance of all sector indexes within the SET to provide a broader view of market trends.
Why Set breath Indicator?
Market breadth helps investors understand the health and strength of the market. A rising market with strong breadth means many stocks are contributing to the upward movement, which is a positive sign. Conversely, a rising market with weak breadth (few stocks going up) might indicate potential weakness.
The SET Breadth Indicator is essential as it reveals overall market sentiment, serving as an early warning system for potential weakness. It informs investment decisions, confirms market trends, aids in portfolio diversification, and enhances risk management by monitoring sector performance. In summary, it provides deeper market insights, helping investors make better decisions.
How to use?
Trend Following - SET Breadth Indicator can be used to trade in trend-following style where you may enter long/short position when the indicator turns green/red, then exit position when the indicator crosses the zero
Reversion - SET Breadth Indicator can be used to trade in reversion style where you may enter long/short position as opposed to the market direction, for example, when the indicator is significantly high/low, it might imply that the trend is likely to revert soon.
Usage
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[INVX] Relative Volatility Measure (RVM)Many top performing traders often discuss the importance of identifying tightness in price action as part of their entry tactics. BUT! it is difficult to find and detect, RVM is created to solve this issues.
RVM – help trader to easily visualize and identify tight area , Save hours looking through chart to find price contractions.
What is it ?
It is an oscillator design to help trader identify tight price action area quickly
RVM make it easy to read a chart like a pro save hours to look through chart finding contraction area
How does it work ?
Compare current price action to previous price movement
The oscillator tell whether if the stock is expand or tightens
How to use it ?
RVM < 15 : If the RVM shows less than 15, it means that the price tightens; the closer to 0, the tighter it gets.
RVM > 80 : The price expand, the value increase to the maximum of 100
Why is it useful ?
Tight price action, paired with decreased volume, is a sign that buying and selling have reached an equilibrium . During this equilibrium, the stock becomes coiled, ready to expand quickly to the upside or downside.
Areas with tightness of price are evidence of institutional accumulation,
and create potential buy points to jump on a trend.
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