You will make 0.5% profit 72% of the time, and lose 0.5% 28% of the time, from executing a single trade each day at market open with a stop loss/profit limit at -0.5% and +0.5% is that what you are saying?
0,5 % on volatile stocks is nothing . Iwould even guess that you would have the same result if you test buying high volatilty stocks without any signal. So it would be a good eye opener to test just buying 100 volatile stocks without any preselection. You will see that you have similar results. If you would change 0,5% to 0,1 % the percentage of "profitable" trade would increase from 72 % to much more than 90% .
This is called noise trading. Before you know MMs will be happy to execute your stop. If you have no stop in, HFTraders will force you to put one by moving the price erratically in the opposite direction of your position. If HFTraders don't get you, some other big player from whom you probably bought the shares in the first place will sell 10x more to scare you out. Worse, the next bid could be 3% or more against you. You must prove to the market you are a strong hand to be rewarded with profit. This is how the market works. It does not reward some algorithm; it rewards appetite for risk and power to win. This is how the market works. Obviously, you have never traded. You have pipe dreams. My comments are for your own good. Stay away, you have no experience to deal with this market, you will lose all your money. This market is deadly. I have been trading for 25 years and this is the worse I have ever seen. It is a market for very experienced traders. Noise trading is a mechanism of wealth transfer.
Mathematically speaking, what you said only becomes an issue with either low liquidity/volatility stocks or one purchasing extremely large amount of stocks at once and then trying to sell extremely large amounts. I don't have pipe dreams, I have numerical analysis and mathematics. You have been operating under the assumption that I said this WOULD work, when I said it COULD work given the unknown boundary conditions. I am aware and have made apparent numerous times that once additional boundary conditions are found, this very well could not work; but as I also said before, I am treating this in the very same manner I conduct scientific research where I've been very successful when people said something couldn't be done. Thanks for the criticism though
Open up a tradestation account and program the strategy into it. All you have to do is put up 2500 or 5k to open the account. Then just sim trade it. If it doesn't work transfer your money back out and close the account. 0$ loss, just a little bit of cash as a retainer basicly.
Or TOS which allowed me to paper trade for more than three months without funding my account. I was never informed that I had to fund my account to continue paper trading. Additionally, they have a wonderful GUI called Prodigio to build indicators and to even build robots. Even though I'm a software engineer, I find this method of programming easy to communicate to my trading students who are not as comfortable with programming.
whats funny is, program some hairbrained scheme and call it an Al Go Rhythm and suddenly it's a gold plated turd. before computers most of these methods would have been mocked immediately and not given another look.