How to use Relative Strength to find Market Leaders

I share my exact scan and process I use to find market leaders

During market distribution days like we saw today, I prefer to utilize my time by cleaning up watchlists and rebuilding my 'Leaders List', then to fight with the market.

Relative Strength is one of most important ways to gage how strong a stock is. The trick when creating these lists is to ignore if the stock is “setup” or not. The idea of building a list of leading stocks is to make a list of the strongest stocks, not a list of stocks near buy points.

Using TradingView Scanner 2.0, I will run the following scans:

I add them to 1 Watchlist

Now I will add a relative Strength Indicator on my chart: TraderLion's Relative Strength Line

Now I will go through all the charts and will move stocks from my “bullish work” watchlist to my “leaders” watchlist that have an RS rating of 90+ or has had a recent EP or “game changing” catalyst.

This new watchlist is not a “ready to buy” type of watchlist. This list should be used to gage market health. If a stock in this list breaks down, they should be removed, and if a stock from this list starts to trade near a buy point, it can be flagged or moved to a “ready to buy” type of list.