AI Stock Picking Algorithm Will Strongly Support TD Ameritrade Investors

This TD Ameritrade stock picking article was written by Erica McGillicuddy, Analyst at I Know First.

(Source: Wikipedia)

Summary

  • The amount of trades through TD Ameritrade has drastically increased as a result of the pandemic
  • Combining intel from TD Ameritrade and I Know First will help educate TD Ameritrade’s large base of beginners
  • I Know First’s customizable forecasts allow users to double check TD Ameritrade resources and advisors’ recommendations

TD Ameritrade Overview

(Source: Investopedia)

TD Ameritrade is a stock market broker company. It provides an online trading platform where users can buy and sell a variation of assets including stocks, options, ETFs, futures, Forex, bonds, and CDs. Some of the company’s core features include stock overviews, customization, stock charts, stock screenings, bond wizard, and daily reports. TD Ameritrade’s services are primarily available in the US, China, Hong Kong, Malaysia, and Singapore. It is also accessible in countries outside of the ones previously mentioned, however the process is more difficult.

TD Ameritrade is very flexible in its ability to serve both beginners and experienced investors. For beginners there is a lot of support and resources for their education and improvement. On the other hand, for more experienced active traders TD Ameritrade offers a more customizable platform called Thinkorswim which includes advanced features and high-level analysis. The company is also flexible in that it is useful for investors with a variety of goals through different types of accounts.

TD Ameritrade has been a broker in the business for over 40 years. In November of 2019, Charles Schwab announced that it is acquiring TD Ameritrade, however due to the magnitude of both companies this merger is not expected to be completed for a few years, so for now it makes sense to examine it separately.

What Makes TD Ameritrade Unique

One of TD Ameritrade’s strongest features is its research tools. It boasts more research offerings in stocks, ETFs, mutual funds, and options than Interactive Brokers, E-Trade, and Merrill Edge. TD Ameritrade also offers free screeners for those assets as well as bonds. On top of that, TD Ameritrade’s charting features are some of the best in the industry, with the ability to include hundreds more indicators on a chart than its competitors.

TD Ameritrade has also recently prioritized developments to its mobile presence. Thanks to unlimited real-time data streaming and the option to trade from charts, the entire trading process can be completed on your phone. There are no limitations as the TD Ameritrade app allows trading of any asset that can be traded on the website. Due to all of the identical features and similar platform set up to the website, the mobile app will feel very familiar to website users. It has a simple one-page set up that can be used to quickly check in on your account and stocks.

(Source: StockBrokers.com)

Finally, TD Ameritrade has done a great job of making itself appealing to beginner traders. TD Ameritrade accounts boast a zero minimum which offers beginners the chance to open an account and learn about investing through TD Ameritrade’s educational tools prior to investing. Education is TD Ameritrade’s priority, and it excels through teaching of basic investing strategies as well as the most complex concepts, depending on what the investor requires. It offers education in-person, on the website, and through the mobile app. As you can see below, TD Ameritrade dominates the beginner features, specifically through frequent webinar offerings.

How TD Ameritrade Users Can Benefit From I Know First

TD Ameritrade’s DARTs (daily average revenue trades) increased from 1,028,000 in Q1FY20 to 2,102,000 in Q2FY20. This speaks to an increased amount of people investing and an increased amount of investments by each person. The increase in investors is in large part due to TD Ameritrade becoming more popular with beginner traders. While TD Ameritrade does offer a wide range of educational resources, having only one point of view is not always optimal for beginners. As a new trader it is highly beneficial to look at as much information as possible and make an informed decision based on total understanding. If beginner traders at TD Ameritrade choose to supplement their knowledge with I Know First recommendations, it will enrich their education and maximize the accuracy of their trades.

(Source: Investopedia)

One of the TD Ameritrade’s features is managed portfolios which are created based on recommendations from professionals. However, there are only three portfolio options which is hardly enough to accurately capture so many individual traders. The company does offer a personalized portfolio which is created specifically for your financial situation by a financial consultant, but is only available to those who make a minimum investment of $250,000. I Know First offers a wide-range of forecasts that are much more financially feasible and vary based on preference and type. It accounts for risk tolerance, type of asset, size of capital, length of forecast, price of stock, and country. I Know First also shares many insightful articles regarding past and current predictions, which are valuable for educational purposes and for understanding how the forecasts are determined. All of these options allow for any trader to find the forecast that is perfect for their trading needs, which can be used to aid information from TD Ameritrade or an advisor which may be less specific and personalized.

TD Ameritrade does a great job of offering abundant resources and information to its clients. Even though the company website easily channels a user to market research, the vendors for this financial analysis are still third party companies. TD Ameritrade is not providing investment advisory to its investors. Instead, they have a referral program which sets their clients up with outside independent registered advisors. Although TD Ameritrade is not yet referring I Know First as part of this program, it is definitely a strong second-opinion solution that adds up to an advisor, or could serve as support-decision mechanism for professional and private investors. The biggest downfall of advisors is unavoidable, and it is their human subjectivity. As a human it is impossible to 100% remove opinion in comparison to a computer algorithm. I Know First’s AI is constantly updating and accounting for much more data than is humanly possible. For these reasons, I Know First’s forecasts are highly valuable in replacing or double checking an advisor’s judgement.

How I Know First Stock Picking Algorithm Works?

stock picking algorithm

The picture above illustrates how I Know First stock picking algorithm works. Based on the daily stocks data, including relationships between different financial assets and the latest market information, the algorithm uses AI and Machine Learning to generate stock predictions for different time horizons. The database used is 100% historical data free from human derived assumptions, and the prediction generation process is constantly evolving with newly added data. The algorithm is used to forecast a wide range of assets including stocks, ETFs, options, indices, commodities, currencies and cryptocurrencies, adding up to over 10,500 assets. The I Know First System models the future money flow between markets by learning from its previous forecasts and is continuously adapting to changing market situations. This self-learning feature makes it particularly valuable for an unpredictable time like COVID-19. The algorithm is able to cut out all of the irrelevant information and falsities, so that the information that remains can be used to construct the most accurate trend predictions in a constantly changing market.

I Know First Successful Stock Picking for TD Ameritrade Popular Stocks

I Know First boasts a wide variety of stock picking forecasts for investors with different goals. For clients with smaller investment objectives, I Know First offers forecasts for stocks under $5, $10, $20, and $50. For example, in the following April 12 3-month Stocks Under $10 Forecast, Overstock.com, Inc. (OSTK) saw an outstanding return of 555.24% over 3 months. This demonstrates I Know First’s commitment to aid all investors, regardless of the size of their investment goals.

stock picking for long positions chart
stock picking for long positions

I Know First also generates forecasts that only includes companies of a certain capital size. This is one of the many attributes that I Know First uses to customize forecasts. In the following June 12 1-month Megacap Stock Forecast, 10 out of 10 predictions were accurate. This exemplifies I Know First’s ability to give accurate predictions over a variety of time horizons.

stock picking for long positions

During June 2020, TD Ameritrade users were net buyers, and one of their most popular stocks was Wells Fargo and Co (WFC). I Know First’s May 31 14-day Sustainable Investing Forecast agreed with this, and they were both correct. WFC experienced a 6.57% increase over that time period.

stock picking for long positions chart
stock picking for long positions

In June, TD Ameritrade users also bought Boeing Co (BA). In an effort to adapt to the current times, I Know First has added a Coronavirus Stock Market Forecast, which covers stocks and assets which have been most strongly affected by COVID-19. In the March 10 7-day Coronavirus Stock Market Forecast I Know First accurately predicted a 45.35% drop in Boeing Co.

stock picking for short positions chart
stock picking for short positions

Another popular buy for TD Ameritrade users in June was Norwegian Cruise Line Holdings Ltd (NCLH). Despite the net buy by the broker’s users, NCLH experienced a loss over the month of June. I Know First was able to accurately predict the drop, shown by the June 24 3-day Best Stocks to Short Forecast. Over those 3 days, NCLH dropped 15.25%. This is a situation where TD Ameritrade users would benefit from I Know First’s forecasts, and possibly make a different decision about investing in NCLH.

stock picking for short positions chart
stock picking for short positions

Conclusion

TD Ameritrade provides many tools to help its users learn and succeed. If its resources are combined with I Know First’s forecasts, users will be able to benchmark the stock picking information that they receive from TD Ameritrade and their independent advisors to enable making informed stock picking and investment decisions. As seen in the above examples, I Know First forecasts can be used to confirm what advisors have recommended or to make the user second guess the recommendation they received. Our stock picking algorithm’s self-learning ability gives it an edge over advisors and other algorithmic forecasters, which allows our investors to be confident and leads to increased success.

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Please note-for trading decisions use the most recent forecast.