How Risk Radar Works: The ML Model Behind Our Strongest Signal
Risk Radar identifies stocks most likely to decline in the near term. Here's how the LightGBM model works, what it looks at, and why it's better at finding losers than winners.
Risk Radar Is Our Best Feature — Here's Why
Most AI stock platforms market their ability to find winners. We lead with our ability to find losers. That is not modesty — it is what the data shows.
In walk-forward backtesting from 2023 to 2026, our LightGBM model's strongest and most consistent signal is identifying stocks that will underperform. Bottom-ranked stocks declined an average of -3.2% over 5 trading days, and the model correctly ranked outcomes 81% of the time.
The Technical Stack
50 Engineered Features
Every trading day, for every stock in our universe of 7,700+, we compute:
These raw indicators are then engineered into 50 ML features that the model consumes.
Optuna-Optimized LightGBM
We use LightGBM (gradient boosting) with hyperparameters optimized by Optuna across hundreds of trials. The model is retrained monthly using walk-forward validation — meaning it never sees future data during training.
Two models work together:
The ML score blends both: 60% return percentile + 40% direction probability.
Market Regime Awareness
The model adjusts based on whether we are in a BULL, BEAR, or CHOPPY market (detected automatically using SPY data). In bear markets, the model becomes more cautious — tightening position sizing and raising signal thresholds.
How to Use Risk Radar
The simplest workflow takes 30 seconds every morning:
Risk Radar is not telling you to panic-sell. It is flagging elevated risk so you can make informed decisions.
Important Caveats
Steffen Fonvig
Founder & CEO, Fonvig Group
Entrepreneur and founder building companies across fintech, media, and health tech since 2013. Creator of Fillipio, an AI-powered stock screening platform. Based in Oslo, Norway.