Methodology
Built on research, not gut feel
Think of our score like a report card for stocks. We check six different things about every stock, add them up, and give it a grade from 0 to 100. Here's what we look at.
Think of our score like a report card for stocks. We check six different things about every stock, add them up, and give it a grade from 0 to 100. Here's what we look at.
Imagine you're buying a used car. You wouldn't just look at the paint job — you'd check the engine, the tyres, the service history, and whether it's been in a crash. We do the same thing with stocks. One check isn't enough, so we run six.
A stock might look great on a chart but be running out of money. Or it might have great financials but nothing exciting happening. By checking six different things, we catch problems that any single check would miss.
Every score is calculated by a computer using the same rules every time. No guessing, no hunches, no favourite stocks. Run the numbers twice and you get the same answer — that's how you remove bias.
We use Australian data that global screeners miss — ASX announcements, ASIC short-selling data, and local market sources. Australian small caps have their own quirks, so we built tools specifically for them.
Every stock gets checked in six different ways. Each check scores 0–100, then we blend them together into one final score. Some checks carry more weight than others — the balance is calibrated by years of backtesting.
This is like reading a stock's heartbeat. Is the price going up or down? Is it overbought or oversold? Are lots of people trading it? We look at the chart patterns and trading volume to spot good entry points — especially setups where a quiet stock is about to make a big move.
Is the company actually making money? How much cash do they have left? Are they printing too many new shares? This check looks under the hood at the financials — like checking a company's bank account and spending habits to make sure it's healthy.
A stock can look great on paper, but if nothing is happening to move it, it just sits there. This check watches for big news — takeover bids, trial results, contract wins, regulatory approvals. Recent news counts more than old news, and we check whether the market actually reacted to confirm it matters.
Is this stock on a roll, or is it fading? We measure how strongly a stock has been moving over the past year, and whether that movement is backed by real trading volume. A stock drifting up on no volume is suspicious — one accelerating with heavy buying is much more interesting.
Are people talking about this stock online? Is interest growing or fading? We monitor forums, social media, and Google search trends to spot where attention is building. We don't follow the crowd — but when lots of people suddenly start searching for a stock, it's worth paying attention to.
This is the safety check — like a bouncer at the door. Even if a stock looks amazing everywhere else, if it's running out of cash, insiders are selling, or it's at risk of going under, the Risk Gate pulls the score down hard. It carries serious weight because our testing showed it's one of the best predictors of which signals actually work.
Why these weights? We tested our scoring model against years of real ASX market data to find the balance that best predicts winners. The exact mix is proprietary, but we continuously test and refine based on real results — not theory.
The score tells you how strong a signal is. Scout State tells you what stage it's at — is it just getting started, peaking, or cooling off?
Think of it like weather forecasting for stocks. Every signal is automatically classified into one of five stages based on its score, momentum, and risk profile. Same data always gives the same result — no human guessing involved.
The signal has appeared recently or its score is holding steady across scans. Volume may be building but momentum hasn't confirmed direction yet. Most signals start here.
Score is improving, the signal has persisted across multiple scans, and key dimensions are aligning. This is the regime most associated with follow-through — the engine sees strengthening conditions.
The signal still scores well, but momentum is declining. Score-over-score trend is negative even though the absolute score looks fine. This divergence often precedes a larger drop.
The signal has persisted for many scans but is now losing steam. Momentum has been declining for consecutive periods. Volume may be fading. Historically, this is the stage before a larger correction or exit from the signal universe.
Conviction has dropped below critical thresholds, or a sharp score decline has occurred across consecutive scans, or a funding risk flag has been raised alongside declining momentum. This regime flags elevated caution.
Three supporting metrics accompany each regime: Confidence (how certain the classification is, based on dimensional agreement and data depth), Stability (how likely the current regime persists), and Hazard (risk of adverse regime transition). Together, they give you a complete read on a signal's trajectory — not just its current score. Available on Pro.
This runs automatically up to 6 times every trading day. No human picking favourites, no cherry-picking results.
We grab every stock on the ASX and immediately remove ones that are too small, too illiquid, or suspended. About 1,400 pass this first filter.
Every surviving stock gets scored from 0–100 on each of the six dimensions listed above. Each check runs independently — the chart score doesn't influence the financials score.
The six scores are combined using our proprietary weighting into a single conviction score. Stocks with serious risk flags get capped — the Risk Gate has the final say.
The top signals appear on your dashboard with reference levels and risk indicators. Every signal is tracked from the moment it's published — we can't hide the bad ones.
The system only works if we're honest about it. These rules can't be bent.
Every signal is tracked from the moment it's published. We can't go back and remove the ones that didn't work. Our track record shows every signal — the wins and the losses.
Run the scan twice with the same data and you get the same answer. Nobody picks favourites. Nobody overrides the algorithm. The maths doesn't care about stories.
We show you the numbers — we don't tell you what to do with them. SmallCapData doesn't hold an AFSL and doesn't give financial advice. Every score is a starting point for your own research.
The methods behind our scoring have been tested by universities and published in academic journals for decades. We didn't invent new maths — we adapted proven frameworks for Australian small caps.
Every signal on the dashboard was produced by this process. Check the track record for historical performance, or explore the latest scan results.