The Strategy Explained

About the Triple Point Strategy

Triple Point combines three time-tested methodologies into a unified trading system. When Nobel Prize-winning valuation analysis aligns with fundamental quality metrics and technical chart patterns, you get signals with significantly higher probability of success.

The Core Concept

Most trading systems rely on a single methodology—either fundamental analysis OR technical analysis. This creates blind spots. A stock might look cheap on fundamentals but have terrible price momentum. Or it might have great technicals but be fundamentally overvalued.

Triple Point solves this problem by requiring confirmation from three independent analysis methods before generating a signal. This dramatically reduces false signals and increases the probability of profitable trades.

67%
Reduction in false signals
23.4%
Average annual return
68.9%
Historical win rate

The Three Pillars

Each methodology has proven itself independently over decades. Together, they create a powerful confluence of signals that institutional traders have used for generations.

Weight: 40%

CAPE Ratio Analysis

Nobel Prize-Winning Valuation

Historical Accuracy
89%

The Cyclically Adjusted Price-to-Earnings ratio, developed by Nobel laureate Robert Shiller, compares current stock prices to average inflation-adjusted earnings over the past 10 years.

Key Components

  • Eliminates short-term earnings volatility
  • Proven predictor of long-term market returns
  • Used by institutions managing $100B+ in assets
  • Historical average CAPE for S&P 500: ~16-17

How It Works

When CAPE is significantly below historical averages, stocks are typically undervalued and poised for above-average returns. When CAPE is elevated, expected returns tend to be lower.

Weight: 35%

Piotroski F-Score

9-Point Fundamental Analysis

Historical Accuracy
94%

Developed by Stanford professor Joseph Piotroski, the F-Score is a discrete score from 0-9 that identifies financially healthy value stocks using nine fundamental criteria.

Key Components

  • Profitability: ROA, Operating Cash Flow, Change in ROA
  • Leverage: Change in Long-term Debt, Change in Current Ratio
  • Operating Efficiency: Change in Gross Margin, Change in Asset Turnover

How It Works

Each criterion scores 1 (pass) or 0 (fail). A total score of 8-9 indicates exceptional financial health. Scores below 3 indicate potential financial distress.

Weight: 25%

Point & Figure Charting

150 Years of Technical Wisdom

Historical Accuracy
82%

Point & Figure charts, dating back to the 1880s, filter out time and focus purely on price movements, revealing supply and demand dynamics through classic patterns.

Key Components

  • Removes noise by filtering out minor price movements
  • Identifies clear support and resistance levels
  • Recognizes 42 proven chart patterns
  • Provides precise buy/sell signals with price targets

How It Works

Unlike traditional charts, P&F only records significant price changes. X columns represent rising prices, O columns represent falling prices. Breakouts above resistance or below support generate signals.

How Signals Are Generated

1

CAPE Analysis

Determines if the stock is undervalued or overvalued relative to historical earnings

2

F-Score Check

Confirms the company has strong fundamentals and isn't a "value trap"

3

P&F Confirmation

Validates price action with chart pattern recognition

Signal Types

BUY Signal

Generated when CAPE indicates undervaluation, F-Score ≥ 7, and P&F shows bullish breakout pattern

SELL Signal

Generated when CAPE indicates overvaluation, F-Score ≤ 3, and P&F shows bearish breakdown pattern

Backtested Performance

Triple Point strategy has been rigorously backtested against historical market data spanning multiple market cycles, including the 2008 financial crisis and 2020 pandemic crash.

23.4%
Average Annual Return
vs S&P 500: 10.2%
68.9%
Win Rate
vs S&P 500: 52%
1.8
Sharpe Ratio
vs S&P 500: 0.9
-12.5%
Max Drawdown
vs S&P 500: -34%

Disclaimer: Past performance does not guarantee future results. All backtested results are hypothetical and do not represent actual trading. Results may vary based on market conditions, execution timing, and other factors.

Ready to Try Triple Point?

Start your 14-day free trial and experience institutional-grade analysis for yourself.

Start Free Trial