What is the Daily Rankings Page
Posted: March 28, 2015, 11:35 a.m. by atanass
We know what you’re thinking. You log into WooTrader for the first time and you see a chart simply labeled, “Daily Rankings.” What are these rankings, how did WooTrader make this list, and what can I do with it?
We designed WooTrader with simplicity in mind. If you’re the type of investor that wants to see a list of recommended stocks without having to understand complicated screeners or analyze data, go no further than our top page.
The Daily Rankings page is a report based on the General Woo. Before we explain, look at this hierarchy:
WooTrader uses more than 192 screeners and 3 million data points with more added every day. Each screener resides in one of 15 Woos. For example, the Return on Assets, EBITDA Margin, and Effective Tax Rate screeners are all part of the Profitability Ratios Woo.
Each Woo has an overall score based on how well each screener reflected the performance of the S&P 500. If the EBITDA Margin screener accurately reflected the performance of the S&P, its weight in its Woo is higher than other screeners that showed little or no correlation.
Once all of the screeners within the woo are calculated, each of the 14 Woos has an overall score that reflects how well it correlated to the market. Finally, all of the Woos come together to form the General Woo. The General Woo weights all of the Woos again—based on how well they correlated with the S&P 500.
This graphic shows how the system works:
Here’s the exciting part. WooTrader re-calculates and re-weights all of its data every day. If you watch financial media, you know that the experts regard some data points as more important than others. For decades, investors have used the 50-day moving average and P/E ratio to analyze stocks with much less weight placed on other data points. But the markets change every day. The P/E ratio might be important today but the data may show that it had little to no correlation with the performance of the market over the past 90 days. Why would you consider that to be an accurate data point for shorter-term trading if it had no correlation to the market? Instead, you probably want to know which data points DID accurately predict market movements.
That’s how the General Woo works. It evaluates nearly 5000 stocks by weighting the screeners and woos with the highest correlation to the market higher than the others. The weighting is constantly changing based on the day’s new market data. We call this our dynamic weighing system. There is no set formula like other stock screening tools because the market doesn’t follow a set formula.
How do you use the Daily Rankings page? The chart displays the top performing stocks based on the General Woo. If you’re new to WooTrader, we suggest starting a virtual or “paper trading” account. Buy $1000 worth of each of the top 10 stocks and hold it for one month. After a month, compare it to the performance of the S&P 500. Or buy a certain amount (based on your portfolio weighting strategy) of our top rated stock and add it to your portfolio. Of course, we wouldn’t say that it will beat the market all of the time but we’re confident that your overall returns will improve. If, after one month, you’re not impressed, let us know. We’ll give you your money back.
WooTrader is more than a stock picker. It’s a place where sophisticated market pros come to view and analyze millions of data points. The great thing about WooTrader is that all of our data is out in the open for all of our members to see. After digging through our data, you might come up with a list of stocks on your own. Our goal has always been to empower investors with the data they need to make informed choices.