Quality Over Quantity
Most AI stock screeners will give you a list of 20, 50, or even 100 candidates. That's not useful. A retail trader can realistically monitor and manage 5–8 active ideas at a time. Beyond that, position sizing gets diluted, attention gets split, and the edge of each individual idea erodes.
Investment Council deliberately targets 5–8 picks per day. Not because we can't find more candidates — but because quality over quantity produces better actual trading outcomes. The IC Formula is the filter that makes this possible.
The 5 Factors of the IC Stock Formula
1. Trend Alignment (20 points)
Is the stock trending in the same direction across multiple time frames — daily, weekly, and the broader market environment? A stock trending up on the daily but stuck in a long-term downtrend is a lower-conviction setup. True trend alignment means the trade is working with the current of multiple time frames simultaneously.
2. Momentum Quality (20 points)
Not all momentum is equal. A stock up 15% in two days on a single news spike has different momentum quality than a stock up 15% over three weeks on consistent accumulation volume. This factor evaluates whether the momentum is sustainable — looking at volume profile, rate of change, and relative strength against sector peers.
3. Sector Flow (20 points)
Sector rotation is one of the most powerful forces in equity markets. Money rotates between sectors based on economic cycles, interest rate expectations, and risk appetite. A technically perfect stock setup in a sector experiencing institutional outflows is fighting an uphill battle. IC evaluates whether the stock's sector is currently attracting or repelling capital.
4. Catalyst Clarity (20 points)
Does the stock have a clear, identifiable reason to move? A catalyst could be an upcoming earnings report, a product launch, an FDA decision, a sector-wide macro tailwind, or a recent breakout from a long consolidation. Picks with high catalyst clarity give you a defined window for the trade thesis to play out.
5. Market Regime Fit (20 points)
This is the macro filter. Is the current market environment conducive to the type of trade being proposed? A high-beta growth stock pick in a risk-off, VIX-elevated, rate-rising environment scores low on market regime fit — even if the other four factors look good. This factor helps filter out technically attractive setups that are swimming against the macro current.
The 70-Point Threshold
Any stock scoring below 70 out of 100 is automatically rejected — no exceptions. This threshold ensures that every pick on the IC daily list represents a high-conviction, multi-factor setup rather than a marginal idea that barely cleared the bar. On some days, the market conditions are poor enough that no stocks clear 70 points — and on those days, IC recommends staying flat rather than forcing trades.
Tracking Outcomes
Every IC pick is logged with its entry zone, stop, target, and score at the time of generation. Outcomes are tracked against the target within the designated trade window. The goal is an 80% win rate over rolling 90-day periods — and when the system falls short of that, the scoring weights are reviewed and recalibrated.