Feb

StockScores and Analyzing Stock Picks

Written by Neil Galloway

I recently attended a StockScores seminar here in Calgary. Was a very interesting presentation put on by Tyler Bollhorn. Basically, it is a sales pitch for an educational program he offers on teaching yourself to buy and sell stocks effectively.

I was very impressed with the seminar and I would recommend anyone to go check him out when he is in town. He does free seminars in Toronto, Edmonton, Calgary, and Vancouver.

His company has a website called StockScores.com. On this site you can utilize their instructional material and technical analysis tools.

Underlying Principles

There are some underlying principles that he outlines. You need to attend a seminar to here them in a clear manner. He gives good examples as well. Basically he outlines a couple of things that I agree with.

The Market Is Efficient - There are events that will happen to the business and the market will reflect these quickly and efficiently. If it is good, it will go up. If it is bad, it will go down.
Be Prepared to Lose - Set stop losses. Don't be afraid to get out of a bad stock. You should plan on losing on trades, but by a small margin.
The Market Is Not Fair - Yes. There are people out there with more privileges to information and can react before you can.

I especially like the last one because it reflects that you can't predict where a stock will go before everyone else.

Sentiment and Signal

There secret tool are two indicator values that are calculated for a stock every hour. The Sentiment and the Signal. Basically it is a formula that calculates the given Sentiment (market's mood toward a stock) and Signal (abnormal behaviour toward a stock). When these values pass 60 and 80 respectively, it indicates a stock to watch.

The Sentiment, in my opinion, was basically if the stock was rising in price and the Signal was if the stock has greater volume than normal. The Signal might indicate that people with more knowledge about the company are buying (or selling) the company.

Chart Patterns

If a stock hast he 60/80 values for Sentiment/Signal then it is time to look at the chart patterns. This is basic technical analysis. You can read about this in any technical analysis stock trading book or research it on the web.

Picking a Good Stock With Their Method

Referring back to the principles, the method basically tries to identify stocks that have just begun to react to events in the market and will be increasing over the near/long term. Then you must look at the stock and try to figure out the risk and reward. Is its upward possibilities going to be better than its downward possiblities.

I am not quoting him word for word, but as close to what I understood as possible. The criteria is as follows:

Sentiment Score is Greater Than 60
Signal Score is Greater Than 80
Good Chart Pattern
- The price breaks through an "resistance" that it hasn't been able to overcome in the recent past.
- The stock had low volatility in the recent past.
- The was abnormal activity when it broke through resistance (high volume compared to normal).
- There is optimism. The stock price is going up and the chart follows a recognizable pattern that indicates possible appreciation in value.
Reward Outweighs the Risk
By looking at the chart, what is a reasonable expectation for the price to rise to and go down to. If the downside is greater than the upside, then you should walk away.

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Category: Investing

2 Comments

Matthew Says:
2007-04-15 14:48:30
Hi Be nice if you put the course cost or ballpark cost with the review. Spreadtradesystems.com has a mentoring program as well. It has a very friendly approach but isn't cheap. Stockscores is Canadian

Simon Says:
2008-10-21 20:19:25
Stockscores Pro is an awsome program. The video on stock chart patterns was worth the price of stockscores pro program alone. The biggest 'aha' i realized was that chart patterns have nothing to do with the underlying stock... it's all about human psycology and the way humans react predictably in the market during various situations.

FYI, you can get his program for free by opening an account with disnat direct. Just visit www.stockscores.com for more info, i'm sure he has a link there.