About Ricochet Trader
At Ricochet Trader, we have developed complex algorithms to detect patterns in stock data. When a pattern is detected, our algorithms then search through gigabytes of past stock data to find other stocks that had a similar pattern. We call these stocks "reference stocks" and use them to build a probabilistic model of the pattern. By counting the number of reference stocks that increase or decrease in price, we can quantify very accurately the probability a stock will move up or down in price, and in what time frame.
We perform this analysis on any stocks that trade at least $500K per day, as stocks that trade less than this amount are too difficult to buy or sell. Our algorithms start fresh every day, and due to this, they can quickly detect new patterns that may emerge or discard ones that breakdown. Unlike traditional technical analysis, we do not predefine patterns and then go looking for stocks with that pattern (see Wikipedia Chart Patterns). We believe there is an infinite number of patterns (but a lot less than this on any given day) and we are not interested in giving any of them flashy names -- we only want to know if the pattern has a statistical advantage, meaning it is likely to go up or down in price.
The analysis from our algorithms, and the probability a stock is likely to move up or down, is presented on our Analysis Forecast page, and it provides a great deal of information about the potential movement of a stock. Nothing in life, including the stock market, is a sure thing, so it is important to quantify the risk and reward. Our data explains the probably of the stock moving up, and down, in price, and both directions are important. By balancing the upward move potential with the downward movement potential, we can use the data to measure a composite net return for any given stock.
The data on Ricochet Trader has been used to trade real money since 2002, and since this time it has never had a losing year. This does not mean we are always correct, but it does demonstrate that our system performs very well. We have extensive past data on our web site, allowing you to see a recommendations in the past and to see what the stock actually did relative to the forecast. While our past information is very useful, we still recommend that you paper-trade stocks to get a feel for our system and the levels of volatility in some of the stocks. Once you gain confidence in our system, then it is up to you to decide whether or not to trade with real money.