Universe to match Investor's Business Daily 50.

To help 'Fred' create a filtering approach that emulates the IBD50 list ethically, we can leverage QuantConnect's universe selection capabilities. Here's a step-by-step guide to setting up a universe selection model that uses fundamental data filtering:

1. Set Up Universe Selection: Use the AddUniverseSelection method to define a universe selection model. This method allows you to add a new universe selection model to your algorithm. You can use both coarse and fine selection to filter stocks based on fundamental data.

2. Coarse Universe Selection: Start by filtering stocks based on liquidity and price. For example, you can select the top 500 stocks by dollar volume that are priced above $10. This ensures you are working with liquid stocks.

   def coarse_filter_function(self, coarse: List[CoarseFundamental]) -> List[Symbol]:
       sorted_by_dollar_volume = sorted(coarse, key=lambda x: x.dollar_volume, reverse=True)
       filtered = [x.symbol for x in sorted_by_dollar_volume if x.price > 10 and x.dollar_volume > 10000000]
       return filtered[:500]
   

3. Fine Universe Selection: After narrowing down the list with coarse selection, apply more detailed fundamental analysis. For instance, you can filter stocks with high earnings growth or strong sales metrics.

   def fine_filter_function(self, fine: List[FineFundamental]) -> List[Symbol]:
       filtered = [f.symbol for f in fine if f.valuation_ratios.pe_ratio < 20 and f.operation_ratios.roe > 0.15]
       return filtered[:50]
   

4. Backtest and Validate: Implement your universe selection model in a backtest to ensure it aligns with your expectations. Adjust the criteria as necessary to improve performance.

5. Ethical Considerations: Ensure your model uses publicly available information and sound analytical techniques, avoiding direct replication of proprietary methods.

6. Iterate and Refine: Continuously refine your model based on backtesting results and market changes to maintain its effectiveness and relevance.

By following these steps, you can create a robust and ethical universe selection model that serves as a starting point for your trading strategies.

Sources: Key Concepts - QuantConnect.com, Fundamental Universes - QuantConnect.com, Legacy Fundamental Universes - QuantConnect.com, Fundamental Universes - QuantConnect.com, Fundamental Universe Selection Algorithm