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Explanation of how the Insights system works?

Hey guys, I wanted to just ask if you could explain how QC uses alpha insights to make trades? I understand each insight emits a long or short or flat signal and that each insight can contain confidence. Can you walk me through an example of how QC uses an insight to make a trade and when to close it? For example, does QC close a positive insight stock after the signal is no longer there?

In addition, what is the point of adding a time delta to an Insight? For example, if I had an insight based on news sentiment and I gave it a 10 day time delta, would this imply that this long signal is good for 10 days (then the stock is sold?). I was wondering if you could elaborate more on these aspects of the AlphaModel.

I am looking to start using the AlphaModel rather than coding my algos in classic formatting, so I would love to get more familiar with this framework.

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Insights can be viewed as a representation of expected returns for the asset, and this level of abstraction is most useful for algorithms or funds that systematically combine multiple Insights together. The duration parameter is basically: we'd expect the stock to go up after 10 days - afterwards there's not much more we can say about it.

As for how Insights are used to make trades, ultimately this depends on the portfolio and execution models. Many of the default built-in ones liquidate after expiry, but you can change the behavior as desired.

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The material on this website is provided for informational purposes only and does not constitute an offer to sell, a solicitation to buy, or a recommendation or endorsement for any security or strategy, nor does it constitute an offer to provide investment advisory services by QuantConnect. In addition, the material offers no opinion with respect to the suitability of any security or specific investment. QuantConnect makes no guarantees as to the accuracy or completeness of the views expressed in the website. The views are subject to change, and may have become unreliable for various reasons, including changes in market conditions or economic circumstances. All investments involve risk, including loss of principal. You should consult with an investment professional before making any investment decisions.


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