We’ve talked a lot about the new strategy, Kinetic VQ, recently. There’s a lot of new information to take in and learn, but it could help you succeed in the markets.
Kinetic VQ is based off of two very important factors:
- Stocks with a higher current VQ than the Average VQ
- Stocks in the SSI green zone
How does the Kinetic VQ strategy work?
The Kinetic VQ acts like a dog, sniffing out its target. But, rather than hunting a literal scent, the Kinetic VQ hunts for constructive changes in volatility.
TradeSmith has recently written several educational articles describing this new strategy and how profitable it can be. If you haven’t read them yet, we encourage you to go to our blog when you get a chance.
To become true candidates for the Kinetic VQ strategy, the stock must meet four conditions:
- The Average VQ must be less than 40%
- The underlying stock must trade more than 100,000 shares daily
- The current VQ must be at least 20% higher than the Average VQ
- The Stock State Indicator (SSI) status must be in the Green Zone
Where can you find the Average VQ?
There are three places in TradeStops where you can find the Average VQ of a position.
- In the Position View
- On the General Statistics Tab on the Position Card
- If you are a Lifetime member, in the Pure Quant results
Finding the Average VQ in your Positions View
To add the Average VQ to your Positions View, navigate to the Positions section of the Positions & Alerts tab.
Make sure you are on the Positions Tab not the Alerts Tab
The Average VQ column is a custom column in TradeStops, so you may not see it immediately. You can add the column to your position view. Just click the Pencil on the right side of the page in your Position View name.
From the screen that appears, you can add the Average VQ column. Once you save your changes, the Average VQ column will always appear for your customized view.
To determine the Average VQ for a position, we take the VQ% over the past 30 years. You can compare the Average VQ to the current VQ to look for stored “energy” in a stock. You can look at the photo above with INTC and V as an example.
How can you check your portfolio for Kinetic VQ candidates?
Remember, only stocks that are in the green can become part of the Kinetic VQ.
On the Positions View section of TradeStops, you can organize the data that you see based on column header. If you click the SSI column, you can sort your positions based on the SSI state.
Now that the SSI has been organized, we can eliminate any gray, yellow, or red positions. Next, we could eliminate any stocks with an average VQ more than 40%. Then, we can quickly analyze the potential green candidates by comparing the current VQ to the Average VQ.
You could look at Frontier, FTR, with a current VQ of 43.3% and Average VQ of 25.77% as an example. Remember, you’d also need to check the daily volume traded to see if FTR meets the criteria – the underlying stock must trade more than 100,000 shares daily. Most exchanges can provide you this information.
How else can you check for Kinetic VQ candidates?
If you are one of our TradeStops Lifetime Members, the Pure Quant tool also shows you the Average VQ for positions. The Pure Quant can include positions from newsletters, your investment portfolios, and your watch portfolios.
After entering your criteria, the Pure Quant will return the results for you.
Just like with your Position section, you can click the column titles to organize the data. You can look through the results to see if any candidates meet the Kinetic VQ requirements.
We hope this guide helps
We hope that this guide helps your understanding of the VQ in comparison to the Average VQ and Kinetic VQ strategy. Once you master it, the data could help you succeed with your portfolios.
If you’d like to learn about an automated way to find new stocks that match the Kinetic VQ strategy, feel free to reach out to our Customer Success team at 866-385-2076. Ask them for more information on Ideas by TradeSmith. They’re happy to help you Monday – Friday from 9 a.m. to 5 p.m. Eastern.
Until next time,
Customer Success Team
