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PART IV: Swing Trading > CHAPTER 25: The Birth of a New Trend
CHAPTER 25
The Birth of a New Trend
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.