Never Place A Trade Without Knowing
The Health of the Market Environment
Is the market healthy?
Do we have momentum in our favor?
How much exposure should we have on?
These are important questions we as traders need to figure out and ask ourselves every day.
But instead of spending time piecing this information together, we thought it would be better if we could have the heavy lifting done for us.
Which is why we created an easy to use, fully rules-based, market health dashboard.
The dashboard shows us exactly what is going on in the market and sets our expectations for the days and weeks to come.
This allows us to focus our time and effort on things like:
- Trade execution
- Finding quality setups
- Mapping key technical levels
- Life outside of markets
We believe there are 3 primary factors that matter when
measuring the health and direction of the stock market:
We evaluate Trend and Momentum using 3 major averages:
- S&P500 (SPY)
- Russell 2000 (IWM)
- Nasdaq 100 (QQQ)
Breadth is derived from our unique cycles indicator which is based on NYSE data.
We compute a score for each factor, on each index, on 2 time-frames, add everything together, to give us our aggregate market outlooks.
Everything is weighted and computed systematically.
It's this market context that becomes the foundation for all of the trade decisions here at The Trade Risk.
Let's take a look at a look at market health dashboard itself:
The Aggregate Outlook is what we care about, however, we can easily see how each factor: Trend, Momentum, and Breadth is performing and contributing to the overall score.
Notice we also distinguish between two different time-frames:
- The top row is our short-term, 1-week market outlook.
- The bottom row is our long-term, 1-month market outlook.
Our notification center is continually growing in "intelligence" and the purpose is to direct our attention to events and statistics that may impact the market outlook or our trade decisions.
The following video discusses possible applications of the dashboard and how we use it in our own trading:
Trend and Momentum are fairly straightforward to determine, but it's our proprietary breadth cycles that really add a third dimension to market health.
Our breadth cycles are covered in detail on this page, but very simply they aggregate a handful of different market internal readings into a single actionable Bearish, Neutral, or Bullish outlook.
They're great at spotting divergences and sniffing out potential distribution.
Add Some Consistency To Your Process.
Test Drive The Dashboard Free Today!
If you have any questions at all, please contact me directly and I'll get back to you as soon as possible.
If the dashboard seems like something you could benefit from, I encourage you to take advantage of our free 2-week trial.
Frequently Asked Questions
Q: How do I access the dashboard?
The dashboard can be accessed directly on The Trade Risk website via desktop, tablet, or mobile. When you register on the site, you'll be given a username and password. Logged in users will be directed to the dashboard homepage by default every time you visit The Trade Risk.
Q: How often does it update?
The dashboard generally updates several times throughout the trading day and then one final update after the market close. There is a time-stamp at the bottom of the dashboard associated with the latest data.