Hey hey: what's up my friends, so in today's episode right i want to share with you a simple trading checklist that you can use to help you better time. Your entries, so first thing first number one. The thing i look for is relative strength. So, let's say, for example, you you trade stocks, okay, so so what is relative strength? So this simply means right.

You know how strong is a stock right relative to the index, so let's say stock abc this year right, it has, you know, reason 50 percent, whereas the s p 500 has only went up, let's say 10. So, in terms of relative strength, you can see that stock abc is stronger than the s p 500, and in this case right you want to look for buying opportunities right like stock abc because they have, you know, proven themselves right that they are strong right. The reason in recent months, okay, so same thing for currencies. If you don't you trade, a basket of you know currencies you want to buy the strongest currencies and sell the weakest one.

So if you look at the currencies, one way to go about, it is to use the relative strength indicator. Sorry, the rate of change indicator and what you want to do is just plot out the rate of change of a currency pair. Let's say over the last 15 weeks over the last 50 weeks right depending on the the type of trader, you are how long your your trades hold. So usually i go with the last 15 weeks of roc value.

I rank the currencies from you know strong to weak those with the highest roc value right. I rank at the top. So those are the currencies that i want to be buying right right and those rank at the bottom are the currencies that i want to sell. So this gives me a idea, a sentiment right to know which currencies are strong and weak and i can find the ones with a higher probability of the market moving in my favor.

So that's for you right if you are trading fx right. This is a tool that you can use and again the concept can be applied to stock as well. Can you find out what's the stock roc over the last, let's say over the last 50 weeks, all right compare that against the s p. 500, if the roc value is higher than the s p 500, those are the stocks that you want to focus on.

Basically, the higher the roc value. It basically means that it's stronger okay, so that's the first thing that relative strength want to be buying the strongest markets out there and selling the weakest ones. Number two: the trend right: the trend is your friend right, so pretty uh common sense. So you want to be: let's say if you want to look for buying opportunities, that, needless to say, you want to be buying in an uptrend right, so make sure the market that you're trading, you know, let's say it's above the 200-day moving average above this a Long-Term trend following indicator: all right, that's one way to define the trend.

You want to make sure that you know you want to buy in an uptrend and sell in a downtrend. So that's the second thing right, uh, looking at the trend, the third thing is what i call the area of value. So so this could simply mean right. You know where, could you know potential buying pressure step in so? Yes, just because a market is in an up trend, right doesn't mean you're going to buy immediately because the market could be.

You know going up for the last. You know five six, seven eight days in a row right, so what you want to do is to let it come to an area of value, and this could be things like support. This could be things like a trend line. This could be things like a moving average right where the market could potentially find buying pressure at this area.

So this is what i mean by you know, looking at the area of value number four entry trigger. So this is what will get you into the trade right? What is the thing that you're, looking for to kind of you know confirm that hey the market is about to reverse or go into my intended direction. It could be simple things like you know: uh candlestick patterns, if you're familiar with like a hammer, a bullish, engulfing pattern. Okay, that's number four and number five proper stop loss because you can have the best entry trigger out there, but if your stop loss is crap, like you know, a five pip stop loss 10 pips stop loss when trading off a daily time frame.

Then you're asking for trouble, so your stop-loss right must be placed at a level where it makes sense. So, let's say, if you're buying at support the price comes into support. It forms a hammer and bounce up higher. You go long on the next candle open.

Where do you set your stop-loss so, ideally right, your stop-loss should go below support, because that is an area of value. You shouldn't exit your trade right until that area of value is invalidated until that area of value is destroyed, so where, or rather when, will the area of value get destroyed? Well, if the price breaks below supporting you know, it tells you that something's, a miss, the area of value is not holding up and you better get out of the trade. So your stop-loss should go below support like, for example, one atr below the low of support right. So that's how you would go about setting your stop loss and one final bonus tip that i have for.

You is what i call uh stack levels. So what i mean by this is that let's say you enter your trade on the four hour time frame. Maybe you you buy it support. Okay, there's a hammer you buy it support market is an app train, yada yada, and that is not the only thing going in your favor because on the daily time frame right, you happen to realize that that the area of support on the four-hour time frame right.

It's also coincide right with the daily timeframe - let's say an upward trend line on the daily timeframe. So this you can see that there are multiple. You know area of value coming together the area of value on the four hour time frame, and then you have another area of value on a daily timeframe, coming together at a similar area, and that really makes the area much more powerful and where you can expect A stronger reaction, so this is what i call stack levels and when you i mean it's not possible to have every trade, no have a combination of stack levels, but when you identify those traits where multiple confluences come together, those are really the traits right that can Move uh quite a bit right in your favor, so pay attention to that as well. Okay, so with that said, let's do a quick recap: number one, uh relative strength unit buy what's strong and sell.

What's weak number two uh trade with the trend: number three trade from an area of value number: four. Now look for a entry trigger to signal to you that you know the market is about to you know, move into your intended direction. Number five set proper, stop loss and number six are. The bonus tip is to you know, stack levels right where multiple area of value from different time frames come together right at a similar area.

That's where you can expect a stronger reaction in the market. So with that said, i wish you good luck and good trading. I will talk to you soon. You.