How a Statistical Edge Can Help You Win on Wall Street

Editor's note: The right statistical edge can drastically boost your profits in the stock market. And according to Keith Kaplan, CEO of our corporate affiliate TradeSmith, that's the idea behind one tool designed to give investors an advantage, no matter what the market is doing. In this piece, adapted from a recent issue of the TradeSmith Daily e-letter, Keith explains how this tool works – and how it can change your view of the markets.

In 1961, Ed Thorp took a $10,000 stake from legendary gambler Manny Kimmel – and more than doubled it in a single weekend at the blackjack tables...

Wearing a fake beard, sunglasses, and a hat, Thorp wasn't easy to recognize.

That was the point.

This Massachusetts Institute of Technology researcher, leading probability theorist, and part-time investor wasn't in Vegas to gamble.

He was there to test a theory he'd developed by running thousands of simulated blackjack hands on an IBM 704 mainframe computer at MIT.

What he discovered was revolutionary.

By keeping track of the cards that had already been played, you could tilt the odds in your favor.

And it worked.

He walked away with more than $21,000 – at a time when a university professor's annual salary was roughly half that.

To avoid detection by casino bosses, Thorp used various disguises: fake beards, out-of-town accents, and drugstore glasses. He wasn't cheating – he was just trying not to get thrown out for playing smarter than everyone else.

And blackjack was just the start.

Thorp later applied the same kind of statistical edge to the stock market. And he built one of the most successful hedge funds of all time.

Between 1969 and 1988, his Princeton Newport Partners fund earned annualized returns of 19.1%. And it had only three losing months.

Thorp didn't just beat the house. He beat the market.

And he did it without taking wild bets, swinging for home runs, or trying to predict headlines. Instead, he found repeatable patterns that put the odds on his side. Then, he traded accordingly.

It's that kind of pattern-seeking logic that powers the "green day" trade ideas from our TradeSmith seasonality tool.

Over our 18-year back tests, these green-day trades have delivered total returns of 857% – more than twice the return of the S&P 500 Index over that time.

Even in 2007, the strategy's worst year, it delivered an annualized return of 37.9%.

So, today, let me show you what green days are... the science behind this system... and the gains it has produced.

Once you understand how these statistical patterns work and how they can boost your profits, you'll never look at the market the same way again.

Stocks Have Their Seasons, Too

To the naked eye, stocks trade erratically – soaring one day only to plummet the next.

But when you comb through troves of past stock-price moves with pattern-spotting software, you find something you can't see with the naked eye.

Some stocks trade so consistently – rising or falling during specific windows, year after year – that you can map out a year's worth of great trades.

Turns out, stocks have their own "seasons" to rise or fall. There's a type of summer... and a type of winter, too. And it repeats year after year.

Being aware of those seasons provides a powerful edge over most investors.

We call the days when a stock tends to rise green days. By spotting and trading upcoming green days, you can stack the odds in your favor.

This isn't about trying to predict the future... or pretending we can guarantee returns. It's about discovering patterns that tilt the odds in your favor – then acting on them with the kind of cold, calculated logic that Thorp is famous for.

It's not 100% accurate. No system is. But some stocks have hit their green days 80%, 90%, even 100% of the time – including years when the market as a whole was falling.

It's fair to be skeptical. Surely, if these patterns existed, they'd be common knowledge.

But there's a reason why stocks' green days remain hidden to most investors...

It takes a ton of data to identify seasonality trends in stocks.

So, even folks who recognize the power of seasonality can't be specific enough to pinpoint exact days to buy and sell.

But our algorithm runs 50,000 tests a day to analyze every stock in the major indexes and zero in on the ones with the strongest seasonality trends.

That's what it takes to point out the best opportunities, down to the day.

Here are some recent examples of how spotting stocks' seasonal windows has paid off.

Seasonality Windows in Action

Let's start with e-commerce giant Amazon (AMZN)...

Over the past 15 years, it has gone up 100% of the time between May 24 and July 13 – with an average return of 10.2%.

This year, it has performed even better. If you traded that seasonal window in 2025, you'd have made 11.9%.

Or how about toymaker Hasbro (HAS)?

Our seasonality tool shows that the best time to own this stock is April 14 through April 27 – returning an average of 6.7%.

As you'll recall, April wasn't exactly a settled month for the stock market.

President Trump had just announced a raft of tariffs on imports entering the U.S. And the S&P 500 fell as much as 12%.

But folks who trusted seasonality and bought Hasbro made more than 13%.

And as you can see, Hasbro is in another bullish seasonal window now...

But it's not just stocks that show seasonality patterns.

We've also uncovered seasonality cycles in stock market indexes like the S&P 500 and the Nasdaq 100, and even in currencies and commodities.

And this is the type of information we at TradeSmith are putting in the hands of everyday investors. That's how we've built one of the world's most successful fintech companies.

All the best,

Keith Kaplan

Editor's note: Keith is unveiling the biggest investment breakthrough in his firm's 20-year history. It's a powerful new way to handle your cash this year... by using a simple online calendar. And this year alone, it could have already doubled your money six different times.