Methodology

Bottom Finders is a technology created to identify market bottoms and tops for swing traders. Once a week, Bottom Finders will publish its list of potential bottoms and tops, and throughout the week do minor updates like status and new additions. We’ll also Tweet out this information as well so be sure to follow us on Twitter. Our analysis is 95% data crunching and 5% human eyeballs. The data driven part is the secret sauce, but the eyeball review process is to ensure the algorithm is not triggering false positives like gaps and volume spikes. This also gives us an opportunity to filter out anything that looks suspicious or scandalous. We are not perfect so that leaves YOU to do homework before executing trades.  We try not to signal on sub-penny stocks, SPACs, and foreign stocks that look like scams, so the risk is entirely on YOU and you need to know what you are getting into.

In some cases, signals are squeezes in one direction or the other, and in others cases it is a reversal that takes days like a big ship turning around in the middle of the sea. The typical trade will last 1-15 days, and the opportunity to exit may be a short period of time, so it is up to YOU to keep an eye on it. A stock can spiked and squeeze, and some have big wins and some have losses, so knowing how to manage the trade and when to enter and exit is on YOU. We believe our technology can signal when buyers and sellers “appear” to be drying up, however, how the stock materializes is on the forces of the universe, and everything else is on YOU.

Just another technique you say? Not this time. While we value trendlines, support and resistance, and channels, these things are created by market makers to “Shepard the herd”. Technicians who turn charts into chicken scratch with a bunch of lines and channels are simply reselling the smoking mirrors put there in the first place by market makers. The concept of buyers and sellers doing business is simple, but because of all the misguided information on the web mixed with a limited supply of money normal people have, things become infinitely complicated. What new traders do not realize is the mixture of bad information (techniques taught on the web) and the psychology of trading is a catalyst for missteps leading them to get fleeced. Trading is a methodical, systematic, and requires discipline to succeed. Bottom Finders removes the confusion, get back to basics, and focuses on principles like supply and demand, buyers and sellers, inventory and margins, and that is why we are not like everyone else. As a matter of fact, we do not use any technical indicators in our algorithm. Want to learn more? Read on and you’ll find out but be sure to follow us on Twitter and sign up for “The Bottom Finder” newsletter to receive updates.

 The approach we use to identifying bottoms and tops is quite simple - supply and demand. Well, its not that simple, but the concept is straight forward. If you are fuzzy on supply and demand in macroeconomics, here’s a chart to confuse you further. 

Continuing on the idea of getting back to basics, imagine the stock market is a large mall of shoppers, and each store represents a stock. In channeling the great teaching of Jim Dalton, the godfather of market profile, each store (or stock) has buyers and sellers, and price gyrates based on the availability of stock. Consider paying $5 for 1 roll of toilet paper during the pandemic. The reason this happened is because inventory just wasn’t there. Similar concepts happen in trading markets, sometimes organically and sometimes not, but it’s there. Do you ever consider when you buy the merchant is selling and vice versa, and the merchant will chop the market to scare everyone out of their positions at a lower price, and then does it all over again in a wash rinse repeat manner? Whether you want to believe it or not, this is exactly what is happening. Why not buy when the market maker is buying, and sell when they are selling. To succeed, you have to think like the merchant because by design he/she will win at the end. If all this sounds like an epiphany to you, you probably need to do a lot more learning, and being a part of Bottom Finders is a start!

With a background in engineering, trading stocks, and a college course in macroeconomics, we developed a model capable of detecting when buyers and sellers are drying up with a high degree of probability. To an experienced trader, that means a reversal is coming. Similar to the store concept, when there are no more sellers (oversold), what happens to the price? It goes up! We are not going to reveal much more than this, but do know that while this homepage is bland, academic, and uninteresting, there is a lot of data modeling and crunching at work and we are providing it to the you for free, for now. We have tested the model internally and are now in BETA release ready to bring it to the world. As with every other pundit out these giving stock picking advice, be sure to do your due diligence on everything you see on this site. In the interest of a disclaimer, we are not financial advisors and we do not recommend you buy or short any stocks you see on this site. We are simply sharing signals of “potential” bottoms or tops on stocks. Everything else is on YOU. 

We are in process of developing a community of traders for education, comradery, and to make money. Bottom Finders can be found on this website, Twitter, and Facebook, and we expect to launch an interactive community on Discord very soon. At the moment, our stock list is focused on the NASDAQ exchange and we’ll be adding NYSE exchange very soon! Other exchanges will follow as we scale up. We are also looking at futures and forex for potential areas to expand in, but that is still undecided. For now, it’s a free service and hope you will find Bottom Finders insightful.