⏱ 7 minute read

Meet trading’s newest technical indicator

The Zesty technical indicator is the only tool that finds the best hour of the week to place a trade. No other company or financial service provides the actionable information found by our new software tool. The way a surfer or sailor knows the time of the tides, we believe you should know the predictable ups and downs of the security prices you follow. The Zesty technical indicator checks every possible combination of buying and selling in a given time period. It reverse-engineers the patterns created by the automated trading of hedge funds, brokerages, and other entities. This unique insight into price patterns will give you a definitive edge in your trading.

Daily-Fresh Sample Data:

An added dimension to your trading strategy

Use the dimension of time with your next trade. With our unique data you will find weekly patterns in the prices of stocks, indexes, ETFs, commodity futures, currency pairs, cryptocurrency, and even treasury bill prices. Of the dozens of technical indicators currently used by analysts and traders, none incorporate the element of weekly price patterns which we offer.

Features of each dataset:
(Click a column heading to see more)

The best hour of the week to open a trade, and when to close

We provide actionable information that can be used alongside any other trading strategy you are currently using. Our strategy can even be used by itself.

What we offer is a novel technical indicator that shows the best time of the week to buy or sell a given security, and also how well that strategy performed historically. The information is presented in a way that shows the weekly price gain that was achieved using our strategy for a given security, and with compounding how much could have been gained overall during a given time period.

This is done by implementing an iterative backtest on time series price data, to find inefficiencies in weekly price patterns that can be exploited for profit.

Improve your trading performance

This information service will prove invaluable to you every time you place a trade. On any given day, there are typically over 100 stocks whose weekly gain is over 5%. Every trade you place will expose you to an edge of several percent, compared to placing the trade at a random time of the week (which many people do, unfortunately). There is a tremendous advantage to anyone acting on the information provided here, whether you trade large or small, often or rarely.

Working principle of the technical indicator

This strategy operates on the physical principle that distance traveled is always greater than displacement. You may recall from math or science class that distance measures the length of a path from point A to point B, while displacement is the shortest line between point A and point B. Our strategy represents the distance that a security price “travels”, while a buy-and-hold strategy represents the displacement that a security price “travels”. Capturing the weekly oscillations of a security’s price will result in more gain than a simple buy-and-hold strategy.

ETFs Sample:

What causes these weekly price patterns

The financial markets are complex, dynamic systems of interrelated components consisting of both human and machine actors. Although we are not entirely sure what causes these weekly price patterns, Blackrock’s Aladdin computer system might hold part of the answer, as it is responsible for a large portion of automated trades. There is also the “weekend effect” on equity prices, which is a subcategory of the “calendar effect”. Some trading platforms, such as Robinhood, automate their clients’ asset purchases, and this buying (or selling) might happen more often at certain times of the week. Finally, some have speculated that the patterns are caused by market manipulation. But again, we do not know. If you have any ideas on this topic, we would love to hear them. Please reach out to us on our contact page.

How the data is presented

The column labels include the “Action”, the “Day”, and the “Time”. Taken together, these three pieces of information constitute the action and time.

The next four columns indicate the historical results from the action and time. For example, if the “Weekly Gain” is “2.45%”, “Weeks” are “52”, “Total Gain” is “252%”, and “Buy & Hold” is “-86.6%”, the meaning is as follows: if you performed the action at the stated time, you could have made a 2.45% gain within 5 business days every week for the past 52 weeks. With compounding, this strategy gained 252%, while a simple buy-&-hold strategy lost 86.6% during the same time period.

Gaining 252% in 52 weeks is impressive when we consider that the average annual returns of the U.S. stock market for the past century are only about 10%. This might seem unreasonably excellent, but our proprietary technical indicator finds many such opportunities.

Cryptocurrency Sample:

How the information is used

One of the most common ways of using the Zesty technical indicator is to buy (or sell short) a stock at the time indicated, using a market order. Immediately after the order is filled, you would place a limit order to close the position, using a limit of the “Weekly Gain”. For example, if the Zesty technical indicator recommends buying stock XYZ at 11:30 am on Wednesday, you would place your market order at that time, for the quantity of shares you choose to allocate. This opening order fills typically very quickly for a stock with moderate to high volume. After the order has filled, you can place your order to close, using a limit order. To continue the previous example, if you bought stock XYZ at 11:30 am on Wednesday and your fill price was $100, you would multiply $100 by the “Weekly Gain %” to find the limit order price. If the “Weekly Gain” had been 4%, then you would enter the limit price as $104. Based on historical data, the limit order price should be triggered within 5 business days, and your limit order should be filled to close the position.

An example use case

Let’s look at an example for selling short. If the Zesty technical indicator recommends selling short stock ABC at 14:30 on Tuesday, then you would place a market order to sell short at the indicated time, then after the order fills you would place a limit order to buy to close at a lower price. If you sold short ABC at $1000, and the “Weekly Gain %” is 7%, you would place the limit order with a limit price of $930, which is 7% lower than the price you sold short for, or $1000 – 7% x $1000.

Many stocks are hard to borrow, which means it is difficult, expensive, or impossible to sell them short. In this case, you might instead consider purchasing a put option of the underlying stock.

Speaking of options, you could use call options instead of purchasing the stock itself. When the Zesty technical indicator states “Buy” or “Sell [Short]”, it simply means adding delta or subtracting delta from your position in the underlying stock.

Commodity Futures Sample:

Where there are no discernible weekly patterns

For some stocks, the “Total Gain Compounded %” is less than the “Buy & Hold” value, which means that the Zesty Data algorithm did not find a weekly price pattern with a discernible advantage over a simple buy-and-hold strategy for the given time period.

Probability that the trend will continue next week

The more weeks of historical data that are used, the more confident you can be. For example, if you act upon data that are taken from the past 52 weeks, you can lump the next week into that number of weeks, meaning that, all else being equal, there is a 52/53 chance or 98% chance that this pattern will hold. On the other hand, if you take a shorter time interval, such as 12 weeks, there is only a 12/13 change or 92% chance that the pattern from the past 12 weeks will continue into the next (13th) week. The default time period is 12 weeks, or one financial quarter, but we can provide longer or shorter time periods upon your request.

An example on how the patterns are found

The algorithm checks every possible hour of the week, for the given time period (13 weeks in most examples), to see if the target price was hit in the next five business days. If so, the algorithm increases the weekly percent gain, and checks again. It repeats this process until the price target is not hit within five business days, then it rewinds to the last weekly percent gain value that did hit every week within five business days. In this way, the algorithm maximizes the weekly percent gain. It does this for both “Buy” and “Sell”, checking for maximum repeatable weekly troughs or peaks in the asset price.

How to access data

Enjoy a fresh glass of healthy data goodness, every time you trade. Join other members who have access to data for over 4800 stocks, subscribe to our Premium Membership for only $3/month. Sign up or cancel your membership at any time. If you are less than elated with your subscription, we will gladly refund your most recent membership fee. Before you sign up, you can view samples of data in the other categories to see if this subscription is right for you, to see if the juice is worth the squeeze. All data is pre-sorted in descending order by the “Total Gain” column.

fighting scurvy on the financial seas since 2018. © Zesty Data, LLC