What the Rubik’s Cube Taught Us About TradingVIEW IN BROWSER
In the spring of 1974, a 29-year-old architecture professor in Budapest set out to solve an engineering problem – and accidentally created one of the world’s most fiendish puzzles. Erno Rubik wanted to see if he could move a set of interconnected blocks independently without the whole structure falling apart. He built a prototype from wood – 26 small blocks, held together by a rounded core inspired by the smooth stones he'd noticed along the banks of the Danube. Then he scrambled it… and spent the next month trying to put it back together. His cube had 43 quintillion possible configurations – the result of 6 faces, 54 colored squares, and every twist reshuffling their relationships. What eventually cracked it wasn’t brute force. It was the discovery that certain specific sequences of moves produced reliable, repeatable outcomes – every time. For example: Turn the top layer clockwise twice, rotate the right side up, turn the top layer once more. Done in the right order, on the right pieces, that sequence always produced the same result. It didn’t matter what the rest of the cube looked like. The outcome was entirely predictable. What we’ve discovered at TradeSmith is that the stock market has its own version of this problem… and its own solution. Each stock’s trajectory is shaped by thousands of variables simultaneously – price history, momentum, volatility, economic data, sector trends, and hundreds of other obscure factors most analysts would never think to connect. That's the principle behind a new AI-powered trading system our engineers spent the last 12 months developing. By evaluating 2.09 million potential trades every day, it's found something striking. When certain combinations of factors align, they point to trade setups with 90% or better historical accuracy. These alignments don’t just happen once or twice. They repeat across bull markets and bear markets, crashes and recoveries. We call them “signals.” And in a one-year backtest, a portfolio of these signal-based trades outperformed the S&P 500 by roughly 3-to-1. I'll show you some examples of those trades… plus how to access a beta version of our software ahead of our upcoming launch event. First, if you don't know us already, a little background on TradeSmith – and how we got here.
Modern-Day ProspectorsWe’re a financial technology firm based in Baltimore, Maryland. As CEO, I run a team of 65 people, and an annual budget of $8 million, to develop hedge-fund-level analytical systems for self-directed investors. More than 134,000 people in 86 countries use our software to manage over $29 billion in assets. Inside our Research Lab, we’re like modern-day prospectors panning for gold – only we use data and computers, not pans and pickaxes. We’re constantly testing trading strategies, financial metrics, and data patterns to uncover profitable systems and indicators. That’s what’s gotten us featured in Forbes, The Wall Street Journal, and The Economist. Our risk management software, TradeStops, put us on the map. It takes the emotions out of investing by showing you the ideal time to sell your stocks. We’ve also created software that spots hidden seasonality patterns in stocks... finds undervalued options plays... and uses AI to forecast stock moves up to 21 trading days out. I’m proud of what we’ve accomplished so far. But I have to say – this latest system tops them all. Solving the Market’s Puzzle… One Unit at a TimeEvery signal in our new system is built from a specific combination of factors – technical indicators, price patterns, market conditions – that have lined up before and preceded big moves. When they all line up again, the signal fires. Take Invesco (IVZ), one of the world’s largest investment management firms. Two factors have to align for this signal to fire. The stock’s Bollinger Percent B and its Money Flow Index both had to exceed 80. Bollinger Percent B measures where a stock’s price sits relative to its recent trading range. The Money Flow Index tracks whether money is flowing into or out of the stock. This is the kind of pattern no human analyst would ever find. Not because it's complicated — but because nobody would ever think to look for it. But this IVZ signal produced an 18.8% gain in 11 days. 
For Lam Research (LRCX), one of the largest makers of semiconductor manufacturing equipment, two different factors had to align. The stock had to close above its 200-day moving average. And that close had to fall two trading days before a market holiday. That’s it. Nothing about the company’s earnings. Nothing about the semiconductor sector. Nothing about the broader market. Just a price condition and a calendar condition, lining up at a specific moment. After the signal fired on August 28, 2025 – two trading days before Labor Day – LRCX gained 11.4% in 15 days. The historical accuracy rate behind that signal was 86%. 
And we didn’t just backtest this strategy using historical data. In January and February, we also ran a live internal beta test using these same signals internally – led by TradeSmith’s Quant Strategist, Mike Carr. Seven Times the Market's ReturnMike started out writing code for the U.S. Air Force and working in cryptography for the Pentagon. He went on to co-manage mutual funds and high-net-worth accounts worth up to $200 million before joining us at TradeSmith. He also holds the Chartered Market Technician designation – a credential in technical analysis that's held by fewer than 5,000 people worldwide. So, he’s the perfect person to put this new system through its paces. Of the top 100 trades he posted, we saw a 2.6% average gain in nine trading days. Over that same stretch, the S&P 500 went up just 0.4%. So we’re talking roughly 7x the market's return. And keep in mind, that average 2.6% return happened over nine trading days. That’s the equivalent of a 73% gain across a full year. Not from swinging for the fences on a handful of high-risk bets. But from a steady sequence of short, high-probability setups, each one identified by AI the night before the market opens. And when we traded these signals with options, the results included:
- Caterpillar (CAT): 126% in 72 hours
- Nvidia (NVDA): 129% in 5 days
- Lockheed Martin (LMT): 365% in 30 days
- HCA Healthcare (HCA): 461% in 13 days
- Generac (GNRC): 1,082% in 33 days
It’s why I’m so excited to demo this new system at our upcoming launch event – and why I’d love for you to join me and test this breakthrough new system for yourself. Unlike Anything in Our 21-Year HistoryAt our AI Signals Trading Event, I’ll be sharing something I’ve never done before. Mike agreed to put real money into whatever stock our signals system flagged one morning, without researching the company at all. He didn’t look at the earnings… or check the news… or even look up what the company did. He just followed the signal. We recorded the whole thing, and I'll be sharing the result with folks who join us. At the event, I’ll walk you through exactly how our signals system works. I’ll also get into the factors it tracks… the trades it’s flagging… and why the weeks ahead could provide one of the most target-rich environments for signals trading we’ve seen in years. It kicks off Wednesday, April 22, at 10 a.m. Eastern. So, make sure to clear some time in your schedule and secure your spot. When you register with that link, you’ll also get immediate beta access to our new signals software so you can test it out ahead of the event. That way, you can explore the signals firing across 2,467 stocks for yourself before it airs. I hope to see you there. 
Keith Kaplan
CEO, TradeSmith |
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