Weekend Thread

Hope everybody has a safe weekend

Friday afternoon

A handy checklist for evaluating a potential trade

Trend

On your primary (or higher) timeframe - is the trend up, down, or sideways ?  (the technical term for a sideways trend is “junk”, lol)  It is much easier to trade with the trend than against it.

Void

Is there a relatively empty area on the chart (i.e. lacking in nearby support or resistance) for price to move into ?  Price moves easier when it has clear areas to travel through.

Entry

What is the entry signal ?  For instance, trading outside of the previous bar, or perhaps hitting an obvious support or resistance level.

Stop

Where is the natural stop-loss point ?  For instance, the prior pivot low or high.  If the stop is too wide, the trade should be avoided.

Target

How far is the stock likely to go if it moves in the trade direction ?  This would generally be the next support or resistance level.  If the ratio of target size to stop size is too small, the trade might not be worth taking.

Market internals

Things like A/D ratio, $TICK, up/down volume, $VIX.  In a very strong market, shorts have lower odds of paying off.  In a very weak market, longs have low odds.

Friday Morning