Using the Pre-Trade Checklist

Chaikin Analytics is a dispassionate, rigorous quantitative model that can help you with both your entry and your exit points. While the Power Gauge Rating is the most important data point, other indicators are included in Chaikin Analytics to help you get a more complete story. By taking a weight of the evidence approach, you can skew the odds further in your favor before entering any position.

While there is no substitute for reading patterns and trends on the chart yourself, the Pre-Trade Checklist is designed to be your guide to the Chaikin Analytics charts. The indicators are designed to be used in conjunction with each other. They are: 

Strength

1. The Power Gauge Rating (What does our model say about the stock?)
2. Rel Strength vs SPY (What does the market say?)
3. Industry Strength (Will this stock get tailwinds due to an overall industry lift or the opposite?)

Timing

1. Overbought/Oversold (Is it time to enter from a short term perspective?)
2. Long Term Trend (Is this stock in a sustained technical uptrend?)
3. Chaikin Money Flow Persistency (What does “Smart Money” say?)

If all of the checklist indicators are green, the weight of the evidence points to the likelihood this stock will outperform in the coming months. The fewer indicators that are green, the less likely for a positive outcome. 

The Power Gauge Rating and Rel Strength vs the SPY are the two most important indicators, but do not discount the importance of all six working together. Your preference should be for all six indicators to be green.

NOTE: The Pre-Trade Checklist is designed for Bullish investments/trades only.