How to Use StonkRose Forecasts
Welcome to the How It Works guide. This page explains the recommended workflow for using StonkRose forecasts, introduces the Momentum Strategy, and provides tips on filtering stocks, planning trades, and managing risk.
1. Understanding the Workflow
- Review daily forecast lists on the Dashboard (Day 1, Day 2, Day 3, and cross-day lists).
- Focus on strength groups highlighted by recent accuracy and return rates.
- Study simulation charts and determine whether you prefer day trading or multi-day swing trading.
2. The Momentum Strategy
The Momentum Strategy is the recommended approach for using StonkRose forecasts. It builds on a common trading principle: buying into strength and momentum, not dips. Key points:
- Use the previous day’s close (Target Entry Price) as your stop loss.
- Enter trades when a stock shows strength early in the session (typically between 7 AM – 11 AM).
- Look for entries on small dips or support levels, but avoid waiting for a “perfect” entry.
- Pay yourself by taking profits at clear levels: chart resistance, psychological price levels, or estimated returns.
- Cut losers quickly — don’t hold and hope. Move on to the next setup.
3. Navigating Forecast Lists
- Strength Groups: prioritize groups with high recent average accuracy and returns.
- Understand that estimated accuracy may sometimes be higher than recent averages — this is normal and reflects changing market conditions.
- Column descriptions for lists are at the bottom of the Dashboard.
4. Filtering Stocks for Research
Before entering trades, research potential picks to eliminate weak candidates:
- Review fundamentals and risk/reward balance. High float and high market cap stocks tend to move less and slower but can carry less risk.
- Check recent news and market sentiment.
- Study technicals: MACD, momentum, bullish vs. bearish chart patterns.
- Avoid bearish setups such as double tops, topping tails, or bull traps.
- Be cautious with stocks under $1.00 — watch for reverse splits or capital-raising events.
5. Trade Execution
- Watch for strength and volume as the market opens.
- Enter on strong setups — not dips or weak price action.
- Set stop loss at or just below the previous day’s close.
- Plan exits ahead of time — take profits at reasonable targets and use the forecast time horizon as a guide not a rule.
6. Why the Momentum Strategy Works
Dashboard charts show two lines: normal lines (all stocks in the forecast list) and executed lines (stocks that traded below their Target Entry Price). Most positive performance comes from the normal lines, while executed lines often trend negative. This demonstrates that:
- The majority of gains come from stocks that never trade below their Target Entry Price.
- Using that price as a stop loss helps maximize forecast effectiveness.
- Momentum trading aligns perfectly with short-term (1–3 day) StonkRose forecasts.
For additional explanations, visit our Services page or watch tutorials on our YouTube channel.
