Your model gives predictions for 5, 10, and 20-day windows.
But each has a different reliability:
- 5-day = Quick signals, lower accuracy (~60%)
- 10-day = Medium confidence (~70%)
- 20-day = Strong signals, high accuracy (~80%)
Let’s create a system of tactics based on this.
Think of it like traffic lights: red, yellow, green.
1. Define Prediction Strengths
| Strength Label | Model Confidence | What It Means |
|---|---|---|
| Weak | <60% | Small edge. Treat like a maybe. |
| Moderate | ~70% | Good edge. Worth a tactical move. |
| Strong | 80%+ | High probability. Trade decisively. |
2. Strategy Matrix
| Timeframe | Signal Strength | Suggested Action |
|---|---|---|
| 5 Days | Weak | Skip or paper trade only |
| 5 Days | Moderate | Small size swing trade |
| 5 Days | Strong | Fast trade with tight stop-loss |
| 10 Days | Weak | Only take if supported by technicals |
| 10 Days | Moderate | Swing trade with 2:1+ reward/risk |
| 10 Days | Strong | Full-size trade, consider options |
| 20 Days | Weak | Wait for confirmation or skip |
| 20 Days | Moderate | Position trade with partial sizing |
| 20 Days | Strong | Build position confidently, use options |
3. Real Examples — How It Plays Out
✅ Strong 20-Day Signal
Your AI predicts MSFT will rise from $310 to $340 in 20 days.
Confidence: 82%.
Playbook Move:
- Full-size position trade.
- Consider using LEAPS or longer-dated call options.
- Add to position on dips.
- Hold through minor volatility.
⚠️ Moderate 5-Day Signal
Prediction: TSLA to rise 2% in 5 days.
Confidence: 68%.
Playbook Move:
- Take a small position.
- Tight stop-loss (1–2% max).
- Exit fast if it doesn’t move after 2 days.
- Don’t hold through news or earnings.
❌ Weak 10-Day Signal
Prediction: AMZN to fall slightly in 10 days.
Confidence: 55%.
Playbook Move:
- Do nothing unless confirmed by bearish price action.
- Watch for double tops, lower highs.
- No real edge = no real trade.
4. Use This “Signal Strength Compass”
High Strength (80%+)
- Big confidence = take action.
- Use full size or leverage (with risk management).
- Let winners run.
Medium Strength (70%)
- Moderate size.
- Only trade if chart supports it.
- Aim for 2:1 reward/risk or better.
Low Strength (<60%)
- Don’t trade it. Watch only.
- Maybe set alerts for confirmation.
5. Add Risk Control Rules
- Never trade more than 3–5% of capital per position unless it’s a 20-day strong signal.
- Always set stop-losses based on volatility (e.g., ATR or % of price).
- Review past model performance by timeframe — know your AI’s sweet spots.
6. Bonus: Combine Timeframes for Strong Conviction
If:
- 5-Day = Bullish
- 10-Day = Bullish
- 20-Day = Strong Bullish (80% confidence)
→ That’s a Triple Align = go bigger.
Stacking all three means:
- Trade direction is supported at every layer.
- You can size up with confidence, or layer entries over time.
Final Word:
Your AI gives you a probability edge — this playbook helps you trade it like a tactician, not a gambler.