Frequently Asked Questions
1. What should I do when the color changes?
When a stock or exchange-traded fund's PowerRatings are upgraded from blue (4, 5, 6, 7) to green (8, 9, or 10), it means that stock, exchange-traded fund or leveraged ETF has moved to a level from which it has historically made significant short term gains. The higher the number, the greater the historical gains. This is based on quantified backtests involving thousands of simulated trades going back to 1995 in the case of stocks and 2003 in the case of exchange-traded funds.
When a stock or fund's PowerRating is downgraded from blue to red (1, 2, or 3), it means that stock or ETF has moved to a level from which it has historically failed to make significant short term gains most of the time. Stocks and ETFs with PowerRatings of 1, 2 or 3 are stocks and ETFs to avoid or to sell short.
2. When do I enter and exit?
Trading stocks and exchange-traded funds with PowerRatings can be summed up in the phrase, "buying the selling and selling the buying." PowerRatings provide a quantitative way for traders to buy stocks and funds after they have pulled back and to sell them into strength after they recover. Our research shows that in the short-term, short term lows outperform short term highs, and the conclusions of this research have been embedded in PowerRatings for both stocks and exchange-traded funds.
There are a wide variety of ways to trade PowerRatings stocks and ETFs keeping the key principle of "buying the selling and selling the buying" in mind. The most important rule is to only buy markets with PowerRatings of 8 or higher and to avoid - or sell short - stocks and ETFs with PowerRatings of 3 or less.
To learn more about specfic types of entry and exit strategies short term traders can use to trade Stock, ETF and Leveraged ETF PowerRatings stocks and funds, click here to read:
- Lock in the Gains: How High Probability Traders Exit Trades
- Moving Averages: ETF Trading Strategies for Short Term Traders
3. What is the difference between Platinum and PowerRatings?
The Platinum PowerRatings service comes with an additional resource for short term traders, Nightly Signals. Nightly Signals include the top Stock PowerRatings for the upcoming day, with specific entry range levels. These specific entry range levels help short term traders take advantage of what Larry Connors calls "intraday weakness" which can provide a significant additional edge when trading stocks after they have pulled back. Learn more about this important concept of "intraday weakness" in Larry's article here:
4. Why are there separate packages for Stocks, ETFs, and Leveraged ETFs? What is the difference?
PowerRatings come in four different packages to suit short term traders of all types. Short term traders who exclusively trade stocks or only trade leveraged exchange-traded funds (ETFs), may opt only for the Stock PowerRatings or Leveraged ETF PowerRatings strategies. The Ultimate PowerRatings package includes all three strategies for stocks, ETFs and leveraged ETFs, and is an excellent option for short term traders who want access to the complete range of potential PowerRatings trading opportunities in stocks, exchange-traded funds and leveraged ETFs every day.
5. How do PowerRatings compare to other products on the market?
PowerRatings are unique for a number of reasons. Most important is the fact that PowerRatings are based on quantified backtesting and support a consistent, professional and data-driven approach to short term trading.
Our research has revealed a short term edge - 5-7 days or less - in which stocks, exchange-traded funds and leveraged ETFs can be traded successfully in a high probability fashion. This quantified and on-going research is what drives PowerRatings, and provides traders with a consistent, data-based approach to short term trading just like those strategies successfully used by quant-based market makers and professional traders.