Methodology

Signal Ingestion

Fin45's intelligence pipeline ingests data from 50+ feeds across 11 signal categories. Every data point is normalized, deduplicated, and tagged with source metadata. The pipeline runs continuously during market hours and on a scheduled basis overnight.

Category	Sources	Update Frequency
Insider Trades	SEC EDGAR Form 4	Real-time (minutes)
Congressional	House/Senate disclosures	Daily
Options Flow	OPRA, CBOE	Real-time
Dark Pool	FINRA ADF	Near real-time
SEC Filings	EDGAR full-text	Real-time
Earnings	Transcripts, estimates	Quarterly + daily revisions
Macro	FRED, Fed, BLS	Scheduled releases
Research	arXiv, USPTO	Daily
Legal	PACER, SEC enforcement	Daily
Prediction Markets	Polymarket, Kalshi	Real-time
Sentiment	Social, news NLP	Continuous

Signal Scoring

Each signal is scored on a 0–1 conviction scale using a multi-factor model:

• Historical alpha: Does this signal type historically predict returns?
• Magnitude: How large is this event relative to baseline?
• Recency: How fresh is the data?
• Source quality: Primary filing vs. aggregator vs. social?
• Confluence: Are other signal types confirming the same direction?

Only signals scoring ≥ 0.75 advance to trade consideration. This threshold was calibrated on historical data to maximize the Sharpe ratio of the signal-filtered universe.

Position Sizing

Position sizes follow a modified Kelly criterion:

• Full Kelly: Calculated from win rate and payoff ratio
• Fractional Kelly: Half-Kelly used for actual sizing (conservative)
• Volatility adjustment: Position reduced if 20-day realized vol exceeds 1.5σ
• Correlation cap: Total correlated exposure limited to 30% of portfolio
• Maximum single position: 20% of portfolio

Risk Management

• Stop loss: Hard stop at -7% from entry (no exceptions)
• Trailing stop: Activated at +5%, trails by 3%
• Daily loss limit: -3% portfolio drawdown triggers pause
• Correlation monitoring: Position correlation matrix updated daily
• Sector exposure: Maximum 40% in any single sector

Trade Execution

All trades execute via Alpaca's paper trading API. Market orders during regular trading hours (9:30 AM – 4:00 PM ET). No pre-market or after-hours trading. No options. No leverage. No short selling in the initial phase.

Publication & Embargo

Every trade is published on the Blotter exactly 10 days after the position closes. This embargo prevents front-running and ensures no one can replicate trades in real time. The daily newsletter ("The Gap") provides signal summaries without revealing active positions.

Performance Measurement

• Primary metric: Total return vs. S&P 500 (alpha generation)
• Risk-adjusted: Sharpe ratio, Sortino ratio, maximum drawdown
• Win rate: Percentage of trades closing in profit
• Expectancy: Average win × win rate - average loss × loss rate
• Signal accuracy: Hit rate by signal category and conviction level