Stock market risk algorithms are awesome! Right now I'm not discussing high frequency trading or black-box trading. The stock market risk algorithms I am talking about is utilizing a PC to choose what shares to buy and when. Exactly why is this so great? It altogether eliminates the aspect of feelings from your stock trading. The algorithm tells you when to acquire and when to sell based mostly on the movements of the stock. In this particular scenario, you are reacting to what the marketplace is doing as an alternative to your own feelings, emotions, and biases. One can find a group of rules and those rules are always applied. Greed and fear are superceded by objective rules and mathematics worked out by a computer that doesn't have any prejudice. What I do not like are stock market risk algorithms that are kept secret or concealed from the trader. Because of this situation, investing using them results in being more an emotion of "hope" in the system than in the computational potential of the algorithm as it is applied to correctly predicting future price motion in a stock or market. This kind of black-box algorithms are flavors of the month that appear and disappear as enough traders ultimately depart from that losing technique. You need to always know what a computer algorithm is doing due to the fact you have to know what changes must be made to the algorithm at various times when it stops performing as expected. When you are not aware of what feature of the algorithm is faltering, how can you make the modifications needed to bring it back into line? My favorite stock market risk algorithm employs a point system and calculates: the last hour close relative to the 5 hour moving average, any 3 day lows or highs made, the last price relative to the 20 day moving average, any 3 week lows or highs produced, any 3 month low or highs made. The algorithm then turns into a time saving device only, which is the right arrangement to have between stock trader and algorithm. Basically, you could do the calculations for yourself but it would take much longer. You could do 10 stocks a day, or use a computer algorithm to do thousands of stocks every single day. In this video, you will look at my favorite algorithm called Smart Scan. Employing Smart Scan, you can readily identify winning stocks, futures, precious metals, and currencies that meet one of 24 preset scanning criteria, which includes uptrends or downtrends. As stock traders we have 3 potential positions we can take at all times: (1) We can be long the market (2) We can be short the market (3) We can be on the sidelines and out of the market. Utilizing the Smart Scan algorithm, you can discover some of the genuine diamonds which are out there.