Over the past month, we discussed the Positions sub tab in TradeStops. We recently touched on the Newsletters section as well. In both areas, we give you information on the portfolio management tool, Stock State Indicator (SSI), which provides data for all of your stocks.
But what is the SSI, and what is its purpose? The SSI serves as a lifecycle for your stock. It lets you know, at a glance, the current standing of your stock, relative to TradeSmith’s proprietary algorithms. The SSI makes it easy to know whether or not it is safe to be in a stock.
We’ll review the SSI today.
Getting Started
Once you have entered or synched your positions into TradeStops, they will be available on the Positions and Alerts tab. If you haven’t entered your portfolio yet, you can review how to do that here.
Regardless, if you are using an SSI alert on your positions, we will give you the SSI data for your stocks. That column is just to the left of your ticker symbols. Make sure to be on the Positions sub tab to see the data. There will be a blue line under the word “Positions.”
In that SSI column, you will see the red, yellow, and green SSI blocks. These simple blocks provide you with a wealth of information.
What do the colors mean?
The stock is performing well and has not hit its SSI Stop Loss. If a stock has not yet hit this price, it is still on an uptrend and safe to keep holding it.
The stock pulled back into the Yellow Zone but is still trending upwards. This indicates that the position has corrected somewhat below a recent high, but it has not yet hit its stop price and is trending upwards.
The stock pulled back into the Yellow Zone and is moving sideways. This indicates that the position has corrected somewhat below a recent high, but it has not yet hit its stop price, and it’s neither trending upwards nor downwards.
The stock pulled back into the Yellow Zone and is trending downwards. This indicates that the position has corrected somewhat below a recent high, but it has not yet hit its stop price, but it’s moving downward.
The stock has hit its SSI Stop Loss and is now in the Red Zone. This would indicate that the stock has corrected more than its VQ% below a recent high, and this is a signal that the stock is not behaving in a way that is usual based on its historical market trend.
That’s a lot to take in all at once. The easiest way to remember the SSI color scheme is like a traffic light. Green means the stock is good; it’s a go. Yellow means the stock is correcting itself; take caution. Red means the stock isn’t doing well; stop!
Momentum is a key component of the SSI system. A stock changes from red to green in the SSI system only after it has already gone up a healthy amount (its VQ%) and has started a solid uptrend.
You might be stopped out on stocks you have just purchased. Our best recommendation in cases like this if you want to still hold the stock is to use the VQ trailing stop from your entry date. This would allow you to stay in the stock longer.
What do the letters and numbers mean?
You might have noticed some letters and numbers inside the colorful SSI boxes. These letters and numbers tell you how long the stock has been in that current state. It is not dependent upon how long you have held the stock. This timeframe is based upon how the stock has been performing in the market independently.
D means Days. W means Weeks. M means Months. Y means Years. If you see a + sign to the right of any of the letters, it means that the stock has been in that state a little over, say, 4 months but not quite 5 months.
My Stock Doesn’t Have an SSI; Now What?
If you see N/A in the SSI column, this means that your stock does not have any SSI data yet. A stock requires 521 public trading days before an SSI can be calculated. You should also notice that options do not have an SSI. Again, this is due to the number of trading days.
For stocks with no SSI, you can always add a VQ alert. You can review the VQ alert here.
For options, we have special alerts that you can use instead. You can review them here.
If you have any questions about these other alert types, you can always contact our Customer Success Team at 866-385-2076. They are available Monday – Friday from 9:00-5:00 PM. Please just keep in mind that they cannot make calculations for you or advise you which alert to choose.
Can I Organize the SSI?
You can organize your stocks based on the SSI. This is particularly good to do if you have many stocks. TradeStops will quickly group all of your stocks together based on their SSI status. To do this, click on the column titled SSI when on the Positions subtab.
Once you do that, all your stocks will be organized with the Green SSI on top. If you would rather see the Red SSI on top, just click the column title again.
Take note of the little downward pointing triangle to the right of the SSI column title. If the triangle is pointing down, this means that the Red SSI will be on top. If the triangle is point up, it means that the Green SSI will be on top.
Check Out the SSI Today
The next time you log into TradeStops, check up on how your stocks are performing according to the SSI. Remember, green is good and red is stopped out. Yellow means take caution. This at-a-glance info could help you make more while risking less.
Best wishes,
Customer Success Team
