Stock alert glossary

What we scan for

Low float

A stock with a small number of shares actually available to trade.

Float is not the same as shares outstanding. It is the portion that is genuinely tradeable once insider and restricted stock is set aside. When that number is small, ordinary buying pressure has nowhere to go, so the price can travel much further on much less volume than a large company would. That sensitivity is why low float names move fast, and it is also why they are dangerous: the same mechanism works just as well downward.

Float

The count of a company's shares that are free to change hands.

Shares held by founders, insiders and locked up early investors are excluded. A company can carry a large market value and still have a tiny float. Float is the one measurement that most reliably separates the names that can run from the names that cannot, and in this book it does more predictive work than any composite score.

Small Cap book

The faster of the two books, built on low float names.

It holds smaller, more volatile companies, aims for larger moves, and accepts that most positions will not work out. Its entry rule is the Foothold and its exit rule is High Water.

Large Cap book

The slower book, built on well known companies after a sharp fall.

It looks for quality businesses that have dropped hard and are starting to turn, rather than small companies breaking out. Both its entry and its exit come from a single rule, Second Wind. It is a co-lead book, not a junior version of the other one.

Coil

A stock that has gone quiet and tight after a large move.

Price stops swinging, daily ranges shrink and volume dries up. A coil is interesting because the stock has already proved it is capable of moving, and the quiet stretch often ends with another move. A coil is a setup, never a promise.

Re-ignition

A second run in a name that already ran once.

Same company, same float, fresh catalyst. It is worth watching because the conditions that allowed the first move have not gone away.

OTC and Pink sheets

Off-exchange venues this service never trades.

Stocks quoted over the counter rather than on a major exchange are excluded permanently, with no exceptions. Many cannot realistically be bought and sold at the price shown, and an alert nobody can act on is not a track record. Applying this rule cut the scanned universe roughly in half. That reduction is the rule working, not a fault in it.

How a position is opened

Alert

The message sent when the scanner finds a qualifying setup.

An alert names the stock and the price at the moment the setup confirmed. It is a notification, not an instruction. Nothing here tells anyone to buy or sell.

Alert price

The price at the exact moment the alert went out.

It is recorded once and never revised afterwards. It is the honest starting point for measuring whatever followed, because it is the first price a subscriber could possibly have acted on.

The Foothold

The Small Cap entry rule: half the position at the alert, half on the undercut.

Rather than committing everything at a single price, the position opens in two parts. The first half goes on when the setup confirms. The second waits for the undercut. Splitting the entry lowers the average cost when the stock dips first, which it frequently does, and it stops a full position being set at the worst price of the day.

Undercut

The second half of the Foothold, added when price dips below the alert.

It exists only as part of the Foothold. Tested on its own, as a standalone signal, it was measured and rejected. The undercut is the add, not the trade.

Second Wind

The Large Cap rule, covering both entry and exit.

It looks for a well known stock that has fallen hard and is showing the first genuine sign of turning back up, then holds it against a moving average that tightens once the position has earned it. Entry and exit are two halves of one rule, not two rules that happen to sit side by side.

Entry price and basis

What was actually paid, which is what every return is measured from.

Basis is the cost a position is measured against. Where an entry was split, the basis reflects both parts. Returns are always calculated from basis, never from a more flattering number picked afterwards.

Slot

One place in the book that a position can occupy.

The book holds a set number of positions at a time, and a slot is a place in it. The slot count shapes how capital is spread. It is not a limit on how many alerts can be sent.

How a position is closed

High Water

The Small Cap exit rule: hold measured from the highest point reached.

Instead of a fixed profit target, the exit follows the best price the position has seen and closes once the stock gives back too much of it. A winner is allowed to keep running for as long as it genuinely keeps running, and it is closed when the run actually breaks. This is the only Small Cap exit rule there is.

Flat stop

A fixed downside limit on every position, in both books.

A hard rule with no exceptions. It is important to be clear about what a stop is and is not. It is a resting order, not a guaranteed fill. A stock that gaps or moves violently can trade straight through the level, and positions in this book have done exactly that many times. A stop limits intent. It does not limit outcome.

Peak

The highest price a position reached while it was held.

Recorded to show how far a move actually travelled. A peak is a measurement, not a result, and nobody is credited with having sold at it.

Post-exit peak

A higher price reached after the position had already been closed.

Shown on purpose rather than hidden. If a stock kept climbing after the exit, the record says so plainly. Leaving it out would make the exit rule look better than it is.

Hold days

How long a position was actually held, entry to exit.

Reported because a return means very little without the time it took to earn it. The same percentage is a different achievement over three days than over three months.

Drawdown

How far a position or a book fell from its own high point.

It answers the question a headline return hides: how uncomfortable was the ride. A book can finish well ahead and still have been deeply underwater on the way there.

Reading a track record

Win rate

The share of closed positions that made money.

A high win rate is not the goal and a low one is not a failure. What matters is win rate together with average size. A book can win well under half the time and still do well, provided the winners are much larger than the losers. Quoted on its own, win rate is one of the easiest numbers in this industry to mislead with.

Doubler

A position that at least doubled from its basis while it was held.

It has to be held through the double to count. A stock that doubled after the exit does not qualify.

Open position

A position still held, with no final result yet.

An open position shows a mark, which is what it is worth right now. A mark is not a result and never enters a closed-trade average. Mixing the two is the most common way a published track record flatters itself.

Closed position

A finished position, with a fixed and final result.

Once closed, the result is frozen and is never recalculated later. Going back to re-derive old outcomes was built here, run, and then deliberately rejected: a record that can be rewritten afterwards is not a record.

Survivorship bias

Judging a strategy only by the trades that worked.

It is the standard trick of this industry: publish the winners, quietly drop everything else. The complete record here, including the positions that went nowhere and the ones that lost money, is public on the track record page.

Rotation book and flat book

Two different ways of measuring the same set of trades.

A flat book puts the same amount into every position. A rotation book reuses capital as positions close, so money freed by one trade funds the next. They answer different questions and produce different figures, so any comparison has to state which one it is using.

Paper trade

A position tracked and published but not traded with real money.

Where a book is on paper, the site labels it. It is stated rather than implied, because the difference matters to anyone reading the numbers.

Market terms worth knowing

Halt

A temporary freeze on trading in a single stock.

An exchange can pause a stock when it moves too far too fast, or when news is pending. Nothing trades during a halt. When it lifts, the price can reopen a long way from where it stopped, which is one of the ways a stop order fails to protect a position.

Gap

A jump between one session's close and the next session's open.

No trading happens in the space between. An order resting inside a gap does not fill at its price, it fills at the open. This is the main mechanical reason a stop can be exceeded rather than respected.

Short interest

The number of shares currently sold short.

When short interest is high against a small float, rising prices can force short sellers to buy back, which adds fuel to a move. High short interest raises volatility in both directions. It is not by itself a reason to buy anything.

Moving average

The average price over a recent window, recalculated each day.

It smooths daily noise so a trend is easier to read. The Large Cap rule uses one as its line, and tightens which line it uses once a position has proved itself.

Catalyst

The news or activity that starts a move.

Earnings, a contract, a filing, an approval, or sometimes nothing identifiable at all. The scanner reacts to price and volume behaviour rather than trying to guess which headline will land.

Why these definitions are worded this way

Two things are done on purpose here. There are no numbers, and there are no claims about how any of this has performed. A number written into a definition freezes on the day it is typed and then quietly goes stale, so every live figure stays on the track record instead, including the positions that lost money. The rule definitions describe what the rules actually do, including the parts that are unflattering, such as a stop being a resting order rather than a guaranteed fill.

Nothing on this page is financial advice. Low float and micro-cap stocks are among the most volatile securities in the market. Total loss is possible and past performance does not predict future results. Full risk disclosure.