Methodology
Signal model and risk notes
This page explains what drives BUY/SELL/HOLD outputs and where the model can fail. Use it as context, not as a substitute for your own due diligence.
1. How signals are produced
The model computes momentum and macro regime features on daily bars, then classifies each day as BUY, SELL, or HOLD using threshold rules. Confidence reflects signal strength, not certainty.
2. Main inputs
- Price momentum from split-adjusted daily candles.
- Macro context from FRED series (rates, curve, inflation, labor, recession).
- User-selected controls: lookback, sensitivity, horizon, and smoothing.
3. Risk controls in backtests
- Take-profit and stop-loss percentages.
- Maximum holding window before forced exit.
- Direction-adjusted win rate and average return on closed trades.
4. Important limitations
- Backtests can overstate future performance.
- No transaction costs, taxes, or slippage are modeled.
- Liquidity, spreads, and portfolio constraints are not included.
- Provider outages or stale data can affect outputs.
- Model parameters can drift as market regimes change.
Not investment advice
Market Ahead provides research tooling and model outputs for educational use. Any trade decision remains your responsibility.