In addition to standard tools, AIQ TradingExpert Pro has some unique features that nearly every user would find beneficial. In this article, we’ll demonstrate the benefits of creating industry groups specific to your trading needs.
TradingExpert comes with two industry group structures, the Standard & Poor’s structure and the AIQALL structure. The software also has the ability to create new industry group structures. Those who use standard analysis tools may think creating industry groups is unimportant, but we’ll show that almost every user can benefit from AIQ’s industry group tools.People who perform a top-down analysis obviously find AIQ’s group analysis capabilities very important. These people first analyze industry sectors and groups and then pick stocks within the attractive groups.
Most people, however, are bottomup traders. They screen a broad database of stocks trying to find attractive trades. The group analysis feature in TradingExpert Pro is important for bottom-up traders as well.
By creating AIQ groups you can crate your own index and control which stocks comprise the index and you can see volume data calculated from the stocks in the index. A similar analysis can be done on the stocks in your portfolio. By creating a group of the stocks your trading system selects, you can see when the system outperforms the market indexes and when the system struggles. It helps tell you when you want to be active in your trading and when you should sit on the sidelines.
Groups can also be created to track mutual funds. By creating industry groups based on the 10 largest stock holdings of the mutual funds, one can analyze these surrogate groups using both price and volume-based indicators.
To create a surrogate mutual fund group, first build a list of the 10 stocks and then create an index for this group of tickers.
Step 1. Create a list name. In the Data Manager, click List and then New. Enter a list name and click OK.
Step 2. Create a group ticker. In Data Manager, click Ticker and New. Enter a ticker for the new group. Make sure the ticker symbol isn’t the same as an existing stock’s symbol. Click Group and then OK. Drag the group name to the left side of the Data Manager and drop it on the list name.
Step 3. Enter the stock symbols that comprise the group. In the panel on left side of the Data Manager window, single-click on the group ticker symbol which appears just below the list name. With the ticker highlighted, click List and Insert Tickers. Enter the ticker symbols that you want in the group separated by semicolons.
The next time you download data, indices for the groups will automatically be calculated. You can also calculate the groups by going to the Data Manager and clicking Utilities and Compute Group/Sector Indices. Highlight the list name and click OK. I repeat, having the ability to create industry groups or an industry group structure for your specific needs is a valuable tool for AIQ users. Whether you use the group feature to spot the rotation of industry groups or whether you use the feature to track the performance of a set of stocks, performing group analysis helps you to better understand the market environment.
