What the Stock Ratings (Grades) Mean

When viewing a stock's page or a scan results listing you'll see a rating for each stock. That rating will be A, B C, D or F. You can think of these ratings as basically a relative strength rating. The bot ranks all of the stocks according to a proprietary algorithm and then assigns A grades to the top 20%, B grades to the next 20% and so on.

snapshot of a stock scan page showing ratings

As of this writing, the algorithm only takes technical factors into account. I hope to fold in some fundamental elements into the mix in the near future. It's important to note that these ratings are *not* predicting any future actions -- they're backward looking.

How I use the Ratings:

I use the ratings as a quick way to see if a stock is strong or weak. I like to buy strength and sell weakness, so when I'm looking for stocks to buy I'll filter my stock scan results to only show me A's or B's (and maybe C's). Conversely, when I'm looking for short sale candidates, I'll filter the scan results to only show me D's and F's (and maybe C's).

SwingTradeBot about 9 years ago

This comment was originally posted by an Anonymous user on 2015-11-16 05:15:29.

Awesome work Mike. Smart thinking, smart programming. I am sure it will help my trading pretty darn soon. This site
blows a lot of big name sites out of the water.

SwingTradeBot about 9 years ago

This comment was originally posted by TraderMike (@mseneadza) on 2015-11-16 08:30:33.

Thanks Eric!

SwingTradeBot almost 9 years ago

This comment was originally posted by pete soukir (@petesoukir) on 2015-11-22 21:05:35.

Hi,
MIKE, SINCE YOU OFTEN YOU "A" STOCKS, COULD YOU PLEASE TELL ME HOW WELL THESE STOCKS DO IN YOOUR TRADING ACCOUNT? HOW DO YOU FOLLOW OR BACK TEST THEM? I AM NEWER TO YOUR SITE; AND I SUSPECT MOST OF THE STOCKS YOU GRADE "A" HAVE ALREADY REACHED THEIR TOP HIGH AND SEEMED TO BE THEN IN A REVERSAL MODE.
THANKS
PETE

SwingTradeBot almost 9 years ago

This comment was originally posted by pete soukir (@petesoukir) on 2015-11-22 21:08:58.

Hi,
MIKE, SINCE YOU OFTEN BUY YOUR GRADED "A" STOCKS, COULD YOU PLEASE TELL ME HOW WELL THESE STOCKS DO IN YOUR TRADING ACCOUNT? OR, DO YOU FOLLOW OR BACK TEST THEM? I AM NEWER TO YOUR SITE; AND I SUSPECT MOST OF THE STOCKS YOU GRADE "A" HAVE ALREADY REACHED THEIR TOP HIGH AND SEEMED TO BE THEN IN A REVERSAL MODE. BY THE WAY, PLEASE DISREGARD THE PREVIOUS POST SINCE IT HAS SEVERAL TYPOS.
THANKS
PETE

SwingTradeBot almost 9 years ago

This comment was originally posted by TraderMike (@mseneadza) on 2015-12-08 21:39:38.

That's such a loaded question. First, no, I don't backtest them. Your question basically reveals your belief in mean-reversion. I'd bet that one could create a system that made loads of money with that philosophy.

One could also create a momentum or trend-following system that bought the strongest of stocks and make a lot of money with that system. A trend-follower (or an IBD / CAN-SLIM fan) would point out that for a stock to make a 5x or 10x gain it's gonna have to have really strong relative strength (Grade A) for a good amount of time!

Likewise, you could lose a lot of money with both styles... And multiple people could try to trade the same strategy with very different results.

So I don't think me telling you how my trading is going would prove or disprove anything about the grading system or the alerts that the site produces. For one thing, a full 20% of all the thousands of stocks & ETFs in the database are A's at any given time. Ditto for the B, C, D and F grades. The stocks that's the highest A may look very different than a stocks that is the lowest A (almost a B). Stock selection (even within all the A-rated stocks), how tight you place your stops, when and how you enter the trade will all affect your results.

And perhaps the biggest factor in all of this is what the broader market is doing. If you're trying to use a momentum or break-out strategy in a trendless or bear market you're gonna have a really bad time!

SwingTradeBot almost 6 years ago

This comment was originally posted by an Anonymous user on 2019-02-09 19:49:57.

You could backrest them, but it would require posting technicals, news reports, important catalyst dates and a deep exploratory note on the PPS action and how market/options/calls then such played a roll in it.
It wouldn't be worth the time Pete.

SwingTradeBot over 5 years ago

This comment was originally posted by Brian Gordon (@disqus_43jd9WMyW1) on 2019-03-02 19:09:37.

Not really, Pete. It's your job as an investor to check the last ER (Earnings, you can get this on marketbeat.com (sorry about that) and many other websites..just Google Earnings Report) as well as for dividends, check for the Piotroski score and track/learn Japanese candlesticks.
Http://www.rttnews.com is a great place to check for new mergers (bottom of page) and upcoming FDA (or NDA) approvals.
To add: You can also look at what the big boys (multi billionaires) are investing in from around the world at http://www.gurufocus.com though, it's quite extensive.
I predicted the PPS climb from bottom of Ralph Lauren at 105.00 a month ago based upon dividend payout and Japanese candlestick readings.. up over 20% since then.

SwingTradeBot almost 4 years ago

This comment was originally posted by MAHEER KHANDOHAR (@maheerkhandohar) on 2020-12-01 19:19:14.

Some how...