The StockTwits® Edge: 40 Actionable Trade Set-Ups from Real Market Pros

CHAPTER 25

The Birth of a New Trend

Ivaylo Ivanhoff, @ivanhoff

Ivan just keeps getting smarter faster than most. He is working harder than most as well. He integrates earnings and price momentum in order to find stock ideas one after another. He approaches momentum in a sophisticated way that is soundly reasoned and deliberately modeled, so I have come to trust his judgment. His work on the StockTwits 50 is unparalleled in terms of weekly trade idea generation for those who want strong stocks with the best odds of moving higher.

Reaction to news is more important than the news itself.

—Todd Harrison

THERE IS NO SUBSTITUTE FOR EXPERIENCE

In the summer of 2010, I joined StockTwits Inc., where I helped create the StockTwits 50—a proprietary momentum algorithm that ranks stocks based on relative strength, earnings and sales growth, earnings surprises, industry relative strength, and many other factors that historically have proven to precede big price moves. The purpose of the StockTwits 50 algorithm is to catch the next move in an already established trend. In this chapter, I reveal how I spot the beginning of the trend—what happens before a stock becomes a momentum stock.

My path to stock trading was an unusual one. I was born and raised in a country where stock market culture simply does not exist, a place where almost no one keeps their money in equities, as the local market is underdeveloped and most people know nothing about publicly traded companies. I was just out of high ...