Your Seventh “Lesson” In TradeSmith: Follow Big Money and Market Signals for Quant-Powered Potential Profits
Following the trend – also known as “momentum investing” – is one of the world’s oldest investment disciplines. As the old Wall Street adage goes, “the trend is your friend!”
The idea is simple: stocks with upside momentum in price, volume, and profits are more likely to see further upsides in price, volume, and profits moving forward.
In other words, just following the leaders can lead to a winning stock portfolio… at least until the trend stops or sees a major shift, anyway.
But here at TradeSmith, we don’t like to take things at face value. And through our research into market trends and market momentum, we discovered that there is an even more basic building block at work here.
What is it that powers price, volume, and profits?
The answer is simple: MONEY!
And if you follow that money, and start studying the way it moves through the market?
Well, that’s how you end up on the road that led TradeSmith Senior Analyst Lucas Downey – and his long-time partner Jason Bodner – to develop the Big Money Index. Charted below in yellow, the Big Money Index (or BMI) calculates those money flows to read their overall impact on the market:
Investment money flowing into a stock or an index can push share prices higher on a wave of higher trading volume. And companies earning more money and raising profits consistently powers individual stocks – and the entire market – to new heights.
Last week, we explored how MegaTrends and Earnings Season Pass give investors an edge in the market by cataloging consumer tastes, consumption, and feedback from across the internet.
In today’s issue of Inside TradeSmith, we’re pointing our cutting-edge analytic tools in a different direction for the latest part of our “TradeSmith 101” series – as we follow the trends across Wall Street… and front-run the big moves for bigger potential profits.
Crunching The Numbers With Quantum Scores
The Big Money Index is a powerful tool with a simple idea behind it: It makes sense that by simply following the money flow into and out of stocks, you could get a tremendous edge over other investors. Buy low as flows increase, sell high as flows decrease.
But, as always, there’s more to the market than just money flows – and when it comes to factoring in all the little details that could impact a stock, TradeSmith’s got you covered with our exclusive Quantum Scores.
Members with the appropriate subscriptions can easily access Quantum Score data on their TradeSmith Finance Dashboards. Once you’ve logged into the platform, simply scroll down the Dashboard page and you’ll find an easy-to-use Quantum Score tool as shown below:
If you don’t see this tool in your platform, but you’d like to, simply give us a call at (888) 585-5829 to learn more.
Developed by Lucas Downey and Jason Bodner, Quantum Scores consider both fundamentals like sales & earnings growth, profitability, and debt levels alongside more traditional technical indicators including price, volume, new highs, and institutional buying, to create a single score for each of the thousands of stocks we track.
Every stock we follow gets ranked daily on a simple, intuitive 0–100 scale, just like grade school:
- 100 = Head of the Class – the best stocks to buy …
- 90s = Excellent (A-grade)…
- 80s = Good (B-grade)…
- 70s = Above average but not “ideal…”
- And a score Below 70 = Caution is advised.
TradeSmith’s proven Quantum Score data can give you a big edge when researching stocks on your own, by letting you know when market conditions favor – or don’t favor – your favorite stocks.
But there’s an even better way to aim for profits from big money flows: Just let Lucas Downey be your guide!
Getting The Quantum Edge With Lucas Downey
When following the money and the market’s movements, the best way to unlock your maximum profit potentials is by paying attention to Lucas Downey – and especially Lucas’s dedicated trading service Quantum Edge Pro.
Quantum Edge Pro not only incorporates Quantum Score analysis into its trading, but with Lucas at the head the service also tracks the big institutional money that flows into and out of the market.
Every trading day, Lucas uses the market-scanning system developed around the Quantum Scores, Quantum Edge, to find the market’s best upside potentials. With the Quantum Score, Lucas can track markets, sectors, and individual stocks – all to find trades that can dramatically outperform the markets.
Here’s a recent trade example…
In mid-April, Lucas spotted semiconductor equipment supplier Onto Innovation (ONTO) thanks to its exceptional at-the-time Quantum Score of 91.9.
At the same time, the Big Money Flows were absolutely off the charts:
The Quantum Edge system picked up on 25 Big Money buy signals (the green bars above) in the last eight months, including three straight buy signals the week prior to Lucas adding ONTO to the Quantum Edge Pro portfolio.
That’s a sign of heavy institutional buying – the sort of buying that’s powering a sustained uptrend in ONTO even now.
As of yesterday, the stock was already up over 18%, in just a few weeks.
Members with a subscription to TradeSmith Platinum or Quantum Edge Pro can access all of Lucas’ Quantum-powered service emails and trade recommendations from the My Services page of TradeSmith Finance, as shown below:
You may also have access the TradeSmith Investment Report, as shown above, depending on your subscription level.
Lucas Downey is the editor and lead analyst of this monthly service, using the same proven Quantum Edge system to find the best stocks with strong fundamental and technical scores – and favorable readings from the all-important Big Money Flows, too!
However, the TradeSmith Investment Report features a stock portfolio that aims for longer holding periods than many of our other services, as it looks to generate even bigger gains.
Digging Deeper With Market Signals
In addition to working with the Quantum Edge system, Lucas Downey is also our go-to expert on market signals.
In a recent issue, we sat down with Lucas to discuss our latest development in that space, Signals by TradeSmith… but we’ve been studying and trading market signals for longer than you might realize!
With Lucas at the head, TradeSmith launched the Alpha Signals trading service last year. With Alpha Signals, Lucas uncovers unique market “anomalies” through his personal market research – and shares trade ideas based on these anomalies that you can aim to profit from.
For example, an Alpha Signals study might ask “if the S&P 500 goes up 10 days in a row, what happens next?”
Or it may explore the question “how does Nvidia (NVDA) stock perform after it crosses its moving average?”
Occasionally, these studies will reveal an anomaly – extreme or incredibly unusual market events that rarely happen. But when they do, those anomalies often flash a signal that can give you a massive edge in trading.
Because whenever these stock patterns have lined up in the past, it’s led to consistent, profitable moves.
And as we covered in our interview with Lucas, our TradeSmith research and development team has taken the signals research at the heart of Alpha Signals to a whole new level.
Just a few weeks ago, we launched Signals by TradeSmith – a fully-automated software tool that scans the markets each day, alerting you to new stock signals and potential trades on a daily basis!
Our Signals platform is built around a database of over 170 different market anomaly patterns.
Each morning, the Signals algorithms run an extensive search across hundreds of stocks, matching their movements to almost 200 different possible entry rules and dozens of exit rules, scanning through years of trade data to uncover the most significant and reliable trade signals.
When the system finds a potential trade based on this search, it delivers the data directly to the Signals Dashboard – right on TradeSmith Finance.
These are short-term trading opportunities, typically running from a few days to about one month in length. But the Signals system doesn’t just provide you with trade setups – with our powerful Signals algorithms tell you what’s likely to happen next:
By producing a reliable “Signals Event Path,” Signals by TradeSmith helps you identify the trend stocks typically follow after a given signal flashes – so you can stay prepared.
Mike Burnick’s Bottom Line: Here at TradeSmith, we do more than just follow the money. The Quantum Edge system at the heart of Quantum Edge Pro and the TradeSmith Investment Report track big money inflows across the market to discover trades with great profit potential.
Led by Senior Analyst Lucas Downey, these services are go-to resources for any investor looking to make the most of market momentum.
And with our all-new Signals by TradeSmith software, we’ve taken quant-powered trading to a whole new level! By building on Lucas’ research at Alpha Signals to create a system that provides you with daily signals on stocks likely to make significant – and reliable – moves over the next month.
Good investing,
Mike Burnick
Senior Analyst, TradeSmith
P.S. Signals by TradeSmith is our latest major breakthrough. This cutting-edge trading system analyzes hundreds of stocks to uncover their hidden trading patterns – helping you turn them into high probability profits!
It’s one of the most powerful tools we’ve ever released, and it’s our latest effort to put hedge fund-level analytics at your fingertips.
Two weeks ago, TradeSmith CEO Keith Kaplan went live to reveal that new tool – as part of the AI Signals Trading Event. During the event, Keith shared all the details about Signals by TradeSmith, how everyday investors can use Signals to secure hedge fund-level profits, and how advanced trading tools like Signals could help you navigate the market’s next major shakeup.
It’s a development we’re incredibly excited about – and we want to make sure as many investors get a chance to use Signals as possible.
Just don’t wait: This offer won’t be available for long.