Rule glossary
Every term the app uses, defined in our own words with a worked example. Definitions are plain-English wordings of publicly documented concepts; any ratings shown inside the app come only from data you import from your own Leaderboard subscription. Inside the app, these rules are applied to your actual portfolio — on the entry checklist, ticker pages, and Summary. Educational reference, not investment advice.
Stock ratings
Section titled “Stock ratings”Composite Rating
Section titled “Composite Rating”A 1–99 blend of the other IBD ratings (earnings, relative strength, sales/margins, accumulation) — the single-number screen for overall stock quality. 99 is best; growth buyers typically want 90+.
Example — a stock with a Composite Rating of 95 outranks 95% of all stocks on the combined measures.
RS (Relative Strength) Rating
Section titled “RS (Relative Strength) Rating”Ranks a stock’s 12-month price performance against every other stock, 1–99. High RS means the market is already voting for the stock; leaders usually show 80+ before big runs.
Example — a stock with an RS Rating of 90 has outperformed 90% of all stocks over the past year.
EPS Rating
Section titled “EPS Rating”Ranks earnings-per-share growth (recent quarters plus multi-year trend) against all stocks, 1–99. Sustained earnings acceleration is the fuel behind most leadership runs.
Example — a stock with an EPS Rating of 97 has earnings growth stronger than 97% of all stocks.
SMR & Acc/Dis Ratings
Section titled “SMR & Acc/Dis Ratings”SMR grades Sales growth, profit Margins, and Return on equity from A (best) to E. Accumulation/Distribution grades recent institutional buying (A) versus selling (E) in the stock itself.
Example — an SMR grade of A means sales growth, profit margins, and return on equity are all in the top tier.
Buying
Section titled “Buying”Pivot (proper buy point)
Section titled “Pivot (proper buy point)”The price level where a stock completes a sound base and breaks into new high ground — the lowest-risk moment to start a position, because overhead sellers are exhausted.
Example — a stock forms a base topping out at $142.50; that high is the pivot. Clearing it on volume is the buy signal.
Buy zone & extended
Section titled “Buy zone & extended”The narrow window above the pivot where a breakout is still buyable (the app’s default is 5%, configurable). Beyond it the stock is extended: the expected gain is smaller and a routine pullback to the pivot would exceed a normal stop.
Example — with a $100.00 pivot and a 5% zone, the buy range is $100.00–$105.00. Above that, chasing raises the odds a normal pullback stops you out.
Slot sizing
Section titled “Slot sizing”Divide the portfolio into a fixed number of equal slots and size every position as a fraction of one slot (¼, ½, full). It standardizes risk per idea and makes add-ons and trims mechanical instead of emotional.
Example — a $100,000 portfolio split into 10 slots gives $10,000 per full position.
Invested percent
Section titled “Invested percent”How much of the portfolio is deployed versus in cash. The point of tracking it: exposure should follow market health — pressing hard in confirmed uptrends, cutting back as distribution mounts.
Example — with $63,000 deployed of a $100,000 portfolio you are 63% invested. Heavier exposure belongs in confirmed uptrends; corrections argue for raising cash.
Selling
Section titled “Selling”Stop-loss rule
Section titled “Stop-loss rule”Sell any stock that falls a fixed percentage (the app’s default is 8%) below your cost, no exceptions. Small losses are the cost of doing business; the rule exists because a 50% loss needs a 100% gain to break even.
Example — buy at $100.00 with an 8% stop and the sell trigger sits at $92.00. Taken without hesitation, it caps any single mistake at a recoverable size.
Profit-taking zone
Section titled “Profit-taking zone”Take most profits when a winner is up 20–25% from the pivot (unless it earned a longer leash by gaining that much in under three weeks). Three such singles compound to more than one round trip.
Example — most sound breakouts advance 20–25% before building a new base; taking most profits there compounds faster than waiting for the occasional monster run.
Market health
Section titled “Market health”Distribution day
Section titled “Distribution day”A decline of 0.2%+ in a major index on volume heavier than the prior session — a footprint of institutional selling. A cluster of them (five or more in 25 sessions) is how uptrends die.
Example — if the S&P 500 falls 0.2%+ on volume heavier than the prior day, that session is a distribution day. Five in 25 sessions signals institutions are selling.
Follow-through day
Section titled “Follow-through day”The confirmation signal that a correction may be over: on day 4 or later of a rally attempt, a major index gains 1.25%+ on volume up from the day before. Not every follow-through works, but no bull market has started without one.
Example — after a correction, day 1 of a rally attempt is the first up day off the low. A 1.25%+ gain on rising volume on day 4 or later “follows through” and confirms a new uptrend.
Market outlook regimes
Section titled “Market outlook regimes”The four-state summary of market health used across the app: Confirmed Uptrend, Uptrend Under Pressure, Rally Attempt, and Market in Correction. Exposure rules key off this state, not predictions. See the market regime classifier for how the app computes it — an algorithmic proxy of the published methodology, not IBD’s official call.
Example — the four calls, from most to least invested: Confirmed Uptrend → Uptrend Under Pressure → Rally Attempt → Market in Correction.