For the past few years, I've been obsessed with trying to get AI to produce accurate trading signals. The main challenges I found with AI trading models are lack of consistency, context window bottlenecks, hard to backtest, and high cost.
Asking ChatGPT "Should I buy Bitcoin today?" doesn't work well because the LLM doesnt have a set trading strategy to opperate from. In addition, the small context window makes it challenging to fit enough historical data into. Not to mention it gets very expensive as well.
My solution is a hybrid approach. Instead of having the LLM make direct predictions, I use AI as the "conductor" in the system that has the ability to run a series of backtesting simulations on high thread count AMD EPYC servers.
The AI then processes the results, identifies optimal parameter changes, and can self-optimize after every trade (as needed) to adapt to changing market conditions. This setup uses LLMs for high-level reasoning and CPU cores for what they do best.
I should mention that TrendFi is designed as a trend based model. It's not for day trading or catching every small market fluctuation. Its goal is to accurately identify major trend changes and provide clear alerts for those key moments.
Check it out: https://trend.fi
– Michael
In other words, markets have varying scales of information and are certaintly not efficient despite what academia has you believe. Trend following works precisely because there can be underlying reasons for the trend, and traders piling on just reinforces that trend. Where profitability of the signal depends finding robust trend changes as early as possible.
Trend based models are different. The "secret" isn't a secret at all. Think of a trend based trading strategy more as a disciplined methodology. Trend based models follow price and attempt to identify as early as possible when an asset flips from bearish to bullish.
Therefore, selling our model wont destroy the underlying trend, especially in highly liquid assets, such as: SPX, BTC, etc.
A potential argument is that these signals are only applicable to a certain bracket of portfolio sizes (e.g. larger AUM funds would not be able to trade this strategy) -- but you are sharing this with folks presumably in your range of portfolio size.
The person buying the secret will pay less than the long term profit as a fee for them giving you the money upfront now.
But if you have rights to resell the secret multiple times you will earn money far quicker, perhaps more than the secret’s long term value.
This is why Wall Street is able to hire talented young traders, some of whom will develop profitable systems. Over time, some of them are able to amass enough savings and the track record necessary to get investors. But at t=0, somebody has to pay the rent.
If your performance is correct and you're getting 200% per year, why sell the sauce for $20 a month?
I would just post the historical and open trades. Charge a subscription if you want to get exactly when you're selling them, otherwise release them on a few week lag to incentivize subscription. But give the rest away for free as you want others to pile in to your trade.
The best model I tried was from The Technical Traders. They offer a trend based model for SPX/QQQ and they consistently outperform buy and hold for 10+ years now.
We were inspired by their service and wanted to take a modern spin on trend based models with a more affordable price point (they charge $2500yr).
Trend changes don't happen all that frequently. Therefore, they wont disappear immediately either. Timing trend changes correctly can make a huge difference.
It would be trivially easy to build an algo that beats the market 90% of years but 10% has huge losses. Just construct a slightly levered portfolio, with some protection against minor losses, but totally exposed to big losses.
If you sold that, it would appear like its working for awhile and you'd probably have lots of trusted customers by the time it fails.
(I'm a bit cynical, I worked in finance briefly, and I realized the fund we were selling to investors was essentially this)
- Has that been independently verified?
- Have they only been trading for 10 years?
- How do we make sure this isn't a case of chance + survivorship bias?
I stand by my statement - your product is false hope and is a scam, as all of these systems are. Some sucker who doesn't understand that the best move is to just buy the broad market an hold reads your marketing, buys it, and pays you. What you've sold him is certainly not the ability to make more money. You and I know he won't do that unless by pure luck. What you've sold him is a sense of hope that he will make money, and the ones who often fall for this do so because they've gotten themselves into financial problems with trading and want to believe that this is the system that will fix it all for them. That hope is a very addictive drug that will last as long as he can hold on to the lie.
If you're ok with that being your business model, that's your right. It isn't illegal. In my opinion, however, our society is completely overloaded with people who take advantage of others while adding zero value.
So I moved on to the next step. There’s an industry that generates hundreds of millions of dollars in ad revenue from blogs and videos on how to trade. For several months, I tested each of these strategies using a backtesting library, vectorbt. People had blogs and videos about using XGBoost and LSTM with other deep-learning libraries—every single one failed.
There’s so much BS in the industry, and I got sucked into the rabbit hole. At least I’m honest enough not to take advantage of other people. Maybe I’ll start a YouTube channel where I backtest every strategy to show everyone that they all fail—and explain why.
Have you researched trend or stage analysis? They're slower strategies and dont offer the get rich quick hype, but they do have far better success when done well.
Pretty soon AI won’t be optional, it’ll be the only way to run a profitable quant shop.
Now, imagine if you could trade on the information when they do.
Because TrendFi is a trend based model, the signals are not for HFT or day trading. Instead, we identify major market shifts that play out over weeks or months. This long timeframe means the signals are less vulnerable to the immediate front running or spread manipulation that plagues short-term signals.
Also, the AI's ability to self optimize after trades means the underlying parameters are not static. If external players were to try and consistently game the signals, the system is designed to adapt to those new dynamics.
If you exclude all the crypto related stuff (a lot of people here don’t want to touch that) the 2024 average individual trade return was a bit over 7%, strongly boosted by 3 outlier trades. Hard to calculate the fund performance for that subset though. Meanwhile if you bought and held MAGS over the same time period you would have gotten about a 1.67x return with long term cap gains tax benefit - probably a better total play than this model even with the crypto trades (especially if accounting for crypto trade fees).
Also there is no indication of YTD 2025 performance, which would be more indicative of model strength due to the March-April dip and slowdown in crypto + AI bull markets. I’ve been burned before by services like this and am not in a hurry to do so again.
Does this use standard indicators that already exist?
