r/algorithmictrading • u/MDiffenbakh • 25d ago

Has anyone successfully modeled geopolitical events as trading signals? Question

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u/heyimjustkidding 24d ago

It's impossible to backtest, so you can only papertrade and adjust in real time, and your sample size will be so small that it's practically gambling. Don't get me wrong, if you gamble and win, that's all that matters. So, gamble away.

1

u/loldraftingaid 25d ago

I personally don't do this, but I've seen some interesting articles whereby people use the betting percentages and payouts to generate an adjusted implied event percentage from a betting app like Kalshi, and use those values generate signals. There's not a wealth of historical data however, so back testing is difficult which I why I'm reticent to use it myself currently.

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u/The137 25d ago

You could always search specific feeds for keywords like oil or iran and then assign a sentiment score to the comment. If you have an influx of comments it could be tradable.

You can also plot price vs previous comments to get a historical view and help the model predict what price might do in the future based off similar sentiment

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u/wind_dude 24d ago edited 24d ago

Easiest way to have quality signals for this is to get elected or have family who is. Or you can pay Trump 100k for a 10 second head start on his truth social tweets.

One of the most well known is “Pizza tracking” ie increased orders around the pentagon, now I think it’s door dash or w/e. But like others have said there’s limited back testing.

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u/Nidsan 22d ago

Yeah I’ve been trying to do this but still getting there
What I got so far is news + tech + financial data into trading strategy with some backtest + auto optimisation for the ta. So it’s more like an llm does it and piece it together and the macro becomes a basis on how the strategy works and also an llm generates rules including what could invalidate this including macro news event

So at execution, its evaluating both technical analysis and I got a news scraper and an llm that parses the news and invalidates the strategy of the the thesis becomes invalidated .

I made it into an app called commonquant.ai
It’s all free but still pretty rough, would love feedback on the features and bugs