Best Choice Software

Short Term Ratings

To get to here, click the Program Options button on the upper toolbar, which is the second
button from the left. Then click the Short Term Ratings tab.

The button has looks like a grid with buttons and switches, and is labeled "Program Options"

Overview

This screen allows you to make changes to how the short term stock ratings are calculated in the Best Choice program. The Best Choice program has four specific ratings that it uses to describe stocks; Excellent, Good, Marginal, and Poor.

When you first install the Best Choice program, the defaults for the ratings are as follows: Excellent stocks are stocks that have averaged two dollars or more per trade over the time period shown on the current chart. Good stocks have made an average of between one dollar and one dollar and ninety nine cents per trade. Marginal stocks have made an average between one cent and ninety nine cents. Loser stocks have lost money (less than zero).

One thing we have noticed about this ratings system is that it tends to favor the higher priced stocks. So to make it less biased, we have created this screen to allow you to change these settings.

Getting Started

When you first open this screen, you will see the settings for Excellent stocks. If the program defaults have not been changed, then you will see for Excellent stocks the Average profit per trade should be at least $2. That has a check mark next to it, which means it is enabled. If you would like, you can change the number to 3 so that the program will not label a stock Excellent unless it has made an average of $3 per trade or more.

If you would like to use a percentage instead of a specific dollar amount, you can click on the box next to "Avg profit per trade should be at least %", so that there is a check mark in that box. You have now enabled the percentage rating. You cannot select both a specific dollar amount and percentage. It must be one or the other. The default percentage for Excellent stocks is 10 percent. You can change this if you want to be whatever you like. Don't be afraid to try different settings. You can always restore everything back to the original default settings.

There are additional settings you can add to each of the ratings.

Win average profit should be at least (3) times average loss.

This item tells the program that the average amount won (profit) for each trade for the current stock should be at least 3 (in this example) times the average amount lost for each trade. The default for Excellent stocks is 3. Again you can change this to be a different number.

Avg Win/Loss should be at least (2) times the average risk.

First, lets give you some information on how the program defines risk. When you are looking at the short term charts, you have seen the two hash marks on a decision day. The difference between these two hash marks is the risk. Because on the day we enter the trade, one of these hash marks will be our entry stop, and the other hash mark will automatically becomes our exit stop. So this is the total amount we will be risking on this trade.

If you select this criteria as part of the rating, then you are telling the program that the average amount that you have made per trade should be at least 2 (in this example) times the average risk per trade. If this is not so, then this stock will not be labeled an Excellent stock. Please realize this takes into consideration not just the winning amounts, but both the wins and losses. We want to compare your total average profitability verses the average risk.

This is a good idea. You should never want to risk more than one dollar to make two dollars. Always strive to try to at least make twice what you are risking. More is even better. If you can make three dollars for risking one dollar, go for it. Anything less is really not worth it when you consider commissions and slippage.

Win percentage should be at least (60)%

Please notice that this has been changed in the program since we created the picture above. In the above picture, it says "# of trades win/loss ratio shoud be ..." The program (and on your current screen) it will say "Win percentage should be at least (60)%.

This is an important one as well. Lets first talk about win percentage. What is it? Well, specifically it is the percentage of the number of trades that you made money on. Here is an example. Lets say you have made 10 trades this month so far. Lets also say from those 10 trades, you made money on 6 of the trades, and lost money on 4 of the trades. You had 6 winners and 4 losers. So your win percentage would be 60 percent. You made money on 60 percent of your trades.

Saving Your Changes

Once you have made all the changes you would like, click the Save Excellent Rating button.

Selecting Different Ratings

You have now made changes and saved these changes for the Excellent rating. To make changes for the Good, Marginal, and Loser, click the drop down box that currently says Excellent and select one of the other ratings, such as Good. Now all the current settings for the Good rating will be showing. Go ahead and make any changes that you wish for the Good rating and then click the Save Good Rating button.

Reindexing The Database

It is very important to realize that you have now changed the way the program works. The ratings are different, so you will now have to reindex the database before you use the Wizard to do a short term search. If you don't plan to use the Wizard in the near future to do any short term searches, then don't worry about reindexing for now, but you will need to reindex before you decide to do a short term search using the Wizard again. Changing short term settings will not affect long term searches in the Wizard. Click here to learn more about reindexing. If you haven't read this before, it would be a good idea to do it now.

Please realize that reindexing only affects the searches in the Wizard. Reindexing does not affect what you are seeing on the charts. The information on the charts is only affected by what you have chosen to see.

For example, lets say you are looking at IBM on a short term chart. Click here if you are unfamiliar with the short term part of the program. The default time period when you select the short term is three months. Lets say right now on the right side of the screen the Legend is saying IBM is "Good". That means for the last three months IBM has met your current conditions to be a Good stock. The program has actually gone through the last three months of price data and actually "traded" this stock with the current methodology that has been selected under Program Options / Short Term Methods. The results are on the tabs 1 - 4 in the Legend on the right side of the screen.

Now, lets say you wanted to look at the last six months of price data on your chart for IBM instead of the default three months. So you click on the Time Frame drop down box at the top of the screen that currently says three months, and you select six months. Now, IBM may only be showing "Marginal." Why is that? Because now you have selected six months of price data, and now the program has gone through and "traded" the last six months of price data. Now, during the last six months, IBM has not met the criteria to be a "Good" stock. But it has met the criteria to be a "Marginal" stock.

Restoring the Default Settings

If, after you have played around with these settings, you wish to restore all the ratings settings back to the original program defaults, you will have to click the restore button separately for each type of rating.

First click on the drop down box at the top and select the Excellent rating. All the values for the Excellent rating will be showing. Now click the "Restore and Save Excellent Rating Default." This will return all the Excellent settings to their original default values.

Next you need to click on the drop down box again, and select the Good rating. Now, all the values for the Good rating will be showing. Now click the "Restore and Save Good Rating Default.") This will return all the Good settings to their original default values.

You must do the same for the Marginal and Loser rating settings. Once you have done this for all four, you will be finished. If you wish to return all the program options in best choice to their original default values, click here to find out how.

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