HOW STOCKODDS WORKS
Stockodds calculates the odds that a stock traded on the AMEX, NASDAQ, or NYSE will go up. New odds are calculated following the close of the market each trading day. The odds are based on 13 variables objectively determining the mathematical probability the closing price 60 trading days from now will be higher than today's closing price. Our software was successfully back tested on 2.4 million 60 day trades. Scores: 50.1% and higher is positive. 49.9% and lower is negative. Scores will range between 38.0% and 64.0% depending on the overall market strength.
Daily Fundamental Scores
Stockodds calculations begin by focusing on a variety of fundamental technical factors that are easy to understand. For example, short trends in stock price movement reverse more often than long trends. The complete list of factors is presented in the section below titled "Fundamental Factors."
Stockodds employs the fundamental factors in a proprietary way to produce a fundamental score for each stock daily, as long as the stock has traded for at least 60 days. The logic does not review a company's financial status, management, products or services. It is not a subjective "opinion" about the future. Stockodds evaluates only the technical action of a particular stock in determining the daily fundamental score for the stock.
Daily Stock Odds
Once a new daily fundamental score has been determined for a stock all of the previous instances of stocks having statistically identical fundamental scores are considered. Based on our objective repository of over 20 million historical scores and associated stock price data points, we determine the exact mathematical probability that a stock with the same fundamental score will close higher 60 trading days later. This rigorous process yields a new stockodds result every trading day for every stock.
Looking at the way the process works behind the scenes, we know that higher fundamental scores usually result in higher odds a stock will go up. But that is not always true. Our historical data proves that stocks with fundamental scores that look very strong are frequently subject to price corrections. The stockodds calculation of probabilities accurately reflects this fact in a mathematically rigerous way to present accurate odds.
Comparison with other Stocks
In addition to calculating the odds a stock will go up, the Stockodds application also compares stocks with one another based on their odds of going up. This comparison allows stocks with the best odds of going up to be identified from their fundamental scores. We produce a list of today's top 50 stocks based on this analysis.
For individual stocks we also identify how their odds of going up compared with the odds of other stocks. This enables us to determine the odds a stock will fare better or worse than other stocks in addition to the odds the stock will go up itself.
The calculation of fundamental scores is based on a variety of technical factors. These factors include:
Short trends in stock price movement reverse more often than long trends.
Short trends backed by increasing volume reverse less often than trends with fading volume.
Short trends backed by the overall market reverse less often than trends against the market.
These three factors are easy to understand. The proprietary algorithm used by stockodds transforms fundamental scores based on these technical factors into mathematically rigorous odds.
Stockodds was invented by Adam White and Pat O'Neil to provide investors a simple way to evaluate stocks without being overwhelmed by too much data. For more information about the Stockodds app, its history, and its inventors visit www.stockodds.com.
Require Android 2.3.3 and up
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