How Pro Swing Traders Find Leaders
Use Relative Price Strength | Edition 68
On days like the last few days, it is not the time to push the gas.
I already explained in detail when you should get aggressive and when you should get defensive in this post.
But here is the part that most traders completely miss.
The days when everything is selling off are critical.
This is when the market quietly separates the leaders from the laggards.
And I will show you exactly what to do so you are prepared to make a lot of money when we get back into an “easy money” market.
What relative strength really means
Relative strength is not just “the stock is going up.”
Relative strength means the stock is behaving better than the market.
For example:
If the index is down 2% and a stock is flat, that is strength.
If the whole market is red and a stock is green, that is exceptional strength.
If the market is bouncing and a stock barely moves, that is weakness.
The index gives you the context.
The stock shows you where the money actually is.
Why relative strength matters most on red days
On green days, almost everything goes up.
You do not have a real edge.
On red days:
Institutional capital does not disappear, it rotates.
Funds defend their best positions.
Weak names get sold aggressively.
This creates clear separation between leaders and laggards.
Your job is to study that separation.
How to spot leaders in real time
When the market is selling off, scan for stocks that:
Hold above VWAP or key moving averages while the index is breaking down.
Pull back on lower volume instead of panic volume.
Form tight consolidations instead of breaking support.
Get bought back quickly every time they dip.
A real leader resists the selling.
Here’s a recent example on DOICN
Often you will see things like:
The index making new lows, while the stock is making higher lows.
The index closing near the lows, while the stock closes near the highs of the day.
Here’s another example.
While the index did this:
These are your clues.
What to do with that information
The point is not to buy everything that holds up on a down day.
The point is to build an A‑list watchlist.
When the market turns back up:
Leaders are the first to break out.
Leaders offer the cleanest, smoothest moves.
Leaders attract the most volume and attention.
That is where the big money is made.
AND
Not in guessing bottoms.
BUT
In being prepared.
What weak traders do instead
Most losing traders do the exact opposite:
They keep buying dips in laggards.
They focus on what “looks cheap,” not what is strong.
They completely ignore relative strength and only look at price in isolation.
So when the market finally bounces,
they are stuck in the weakest names.
A simple plan for red days
On red days, your job is not to be a hero.
Your job is to:
Stop forcing trades.
Scan for relative strength.
Mark the true leaders.
Wait for confirmation and proper setups.
This is the real work of a swing trader.
The actual entries come later.
If you learn to think like this,
you will stop chasing moves that already happened.
You will be positioned in the leaders before the big moves start.
AND
This is exactly what we do every day inside the PRO community on our Discord server.
We constantly hunt for opportunities and share stocks with great relative strength with our members.
If you do not believe me, here is a message we got just this Monday.
If you are thinking about joining the community,
well, right now is the best time to do it.
The yearly plan is 49% off.
See you inside :)
Trade Setups of The Week
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“One trade closer to freedom.”
Vladislav