TradeSmith Terms Glossary

Oct 27, 2020

Use this guide to learn about the TradeSmith terminology.

 

 

 

Adjusted Entry Price The purchase price per share adjusted by all corporate actions such as dividends, splits, and spin-offs.
Alert Description A description of the alert type and parameters that have been added to the position.
Alert State How a position is performing according to its alert.
Asset Allocation The Asset Allocation tool provides an overview of how your portfolios are diversified over different industries and sectors in the market.
At Risk The amount of money at risk for the position. Calculated as: At Risk = (Latest Close – Stop Price) * Shares.
Average VQ Average Volatility Quotient (risk) for a position over the past 30 years.
Bottom The security is at its lowest point in time-cycle analysis and could potentially begin to head higher. This pertains to our Timing by TradeSmith product.
Calendar Within Timing by TradeSmith, this helps subscribers visualize upcoming tops and bottoms for specific investments, funds, commodities, and markets.
Conviction Level A conviction level in Timing by TradeSmith shows just how much of our analysis is in agreement toward an asset making a certain move in the market, like a top or a bottom.
Crypto Analyzer The Crypto Analyzer lets you research a cryptocurrency before you purchase it with our proprietary indicators and stop loss strategies.
Days Triggered The number of consecutive days the alert has been triggered.
First Time Triggered The date an alert was first triggered.
Growth Stocks Growth Stocks are a strategy inside the Ideas Lab inside Ideas by TradeSmith. These investment ideas identify stocks with strong growth potential based the stock’s current health, our algorithms, and industry best practices to measure each stock’s fundamentals.
Health Indicator This indicator represents the life cycle of positions. It provides simple green, yellow, and red light indicators to help understand the health of a position based on how it’s moving in relation to the Volatility Quotient.
Health Indicator Early Entry Signal The Early Entry Signal was developed as a more aggressive manner to time entering a position ahead of the traditional Entry Signal.
Health Indicator Entry Signal The Entry Signal was designed to answer the question of when it’s safe to get back into a position that was previously stopped out by its Stop Loss. It has two basic components. It tells you when the trend is with you and when the position has had a strong bounce in the desired direction.
Health Indicator Green Zone The Green Zone indicates when a position is in a healthy state. Positions can move from the Yellow Zone to the Green Zone and from the Red Zone to the Green Zone. Moving from the Red Zone to the Green Zone is considered an Entry Signal.
Health Indicator Red Zone This zone indicates that the position has corrected more than its VQ% below a recent high. The position is not behaving in a way that is usual based on its historical market trend. When using the Health Indicator as a stop-loss strategy, this is the exit point.
Health Indicator Yellow Zone The Yellow Zone indicates that the position has corrected about halfway from its listed VQ from its most recent high but has not yet been stopped out. This indicates caution when using the Health Indicator as your stop-loss strategy.
Health Trend Each position has its own Health Trend. The math behind the Trend is complex but the concept is simple – find the moving average that was: (1) The best support for longer term trends and (2) that provided the biggest bounces when price came down to touch support. The Trend indicator was originally developed as a core component of the “Re-entry Rule (Entry Signal)” – the signal that tells us when it’s safe to get back into a position that had been previously stopped out.
Kinetic VQ The Kinetic VQ strategy looks for stocks with current Volatility Quotients that have greatly exceeded their average VQ. When this condition occurs, it’s as if the stocks have an extra store of energy to push their prices higher as the VQs return to their normal averages.
LikeFolio LikeFolio analyzes social media data, specifically Twitter, to accurately predict shifts in consumer spending behavior before it becomes news on Wall Street or in the corporate boardroom. Please note that LikeFolio is forward-looking and will not always match TradeSmith’s indicators.
Low Risk Runners The Low Risk Runners consist of investment ideas that have already started solid uptrends and then pulled back in price but still may have room for price to move higher. These are stocks whose Health Indicators have moved from the Yellow Zone back to the Green Zone.
Market Health A section within Ideas by TradeSmith. Situational awareness in the markets is critical to successful investing. Market Health provides you with a comprehensive look across major markets, sectors, and industries, based on our risk (VQ) and health (SSI) indicators.
Momentum Pairing The Momentum filter uses underlying price comparisons to find cryptos with extra potential to grow. It searches for three specific criteria. Resulting coins must be trending up in both Bitcoin and U.S. Dollars; they must have a reasonable amount of volatility for the crypto space (a VQ of 80% or less) and show a positive gain since CSI entry.
Momentum & VQ Pairing This strategy searches for coins in the CSI Green Zone for both BTC and USD with a VQ of less than or equal to 60% and trending up or sideways. In addition, it also compares the VQ for both underlying price options. When the USD VQ and the BTC VQ are close in value (less than or equal to 5%), we expect to see stronger results from the coins in this filter.
N/A Data not available for the position in TradeSmith.
Notes A customizable field on the Position Card Page and Positions & Alerts page. Notes can be used to help users remember specific information about securities.
Null The field contains no value in TradeStops.
Portfolio A portfolio is a grouping of financial assets such as stocks, bonds, commodities, currencies, and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded, and closed funds.
Portfolio % On the Portfolios page in TradeStops, this shows you the composition one portfolio makes up in Investment or Watch portfolios.
Portfolio Volatility Quotient Analyzer The Portfolio Volatility Quotient (PVQ) Analyzer can show you how heavily invested you are in low-, medium-, high- and sky high-risk investments based on their Volatility Quotient % for your overall portfolio.
Position Size Calculator This tool tells you exactly how much risk you’re taking in each position and the exact number of shares you could purchase depending on the risk or investment amount you’ve determined is right for you.
Pure Quant Portfolio Builder The Pure Quant Portfolio Builder puts our most powerful, proprietary quantitative algorithms to work to help you. After you select a data source to screen, our algorithms will build your optimized, risk-balanced portfolio.
Risk Rebalancer The Risk Rebalancer uses our proprietary volatility metric, the Volatility Quotient (VQ/Risk), to allocate more capital to less-volatile equities and less capital to your more-volatile equities.
Screener This is a tool within Ideas by TradeSmith that helps subscribers find investments based on user-defined criteria.
Search for Ticker This tool lets you explore TradeSmith’s proprietary indicators and stop-loss strategies on individual stocks, mutual funds, exchange traded funds, indexes, and cryptocurrencies.
Stock Analyzer The Stock Analyzer lets you explore TradeStops’ proprietary indicators and stop-loss strategies on individual stocks, mutual funds, exchange traded funds, and indexes.
Synchronization A means by which to import your holdings to TradeStops directly from your brokerage.
Tags Tags are a user-defined field within TradeStops. Tags can be keywords to help users remember important facts about their holdings, for organizational purposes, or for searching for a position.
Top The security is at its highest point in time-cycle analysis and could potentially begin to head lower. This pertains to our Timing by TradeSmith product.
Value Stocks A strategy inside the Ideas Lab within Ideas by TradeSmith. Value investors can now combine value stocks with positive momentum to narrow down their choices. Our Value tool shows you stocks that are in good health based on our algorithms and that match industry best practices, measuring each stock’s fundamentals.
Volatility Quotient (VQ%) The Volatility Quotient (VQ/Risk) indicates how volatile an investment is based on at least one year’s historic price action. This ensures the user takes the right amount of risk in any trade based on TradeSmith algorithms. We utilize the VQ to determine the trailing stop for our Health Indicator and VQ trailing stops for positions tracked within TradeSmith. The lower the number, the more stable the movement of that stock. Higher percentages indicate the stock is more volatile in its market moves over time.
VQ Ratio The current Volatility Quotient (VQ/Risk) compared to the average VQ to understand the built-up energy. A positive ratio is part of the Kinetic VQ strategy. A negative ratio can be ignored outside of the Kinetic VQ.

The VQ Ratio formula: (Current VQ – Avg VQ) / Avg VQ.

Whitelisting The practice of ensuring TradeSmith alerts and emails reach your email address. Most email providers will allow users to mark email addresses and domain names as “safe.”