Follow the Money: Ariel Hernandez’s Path to Millions

when I scan the market I'm always looking for relative strength the reason that they are showing relative strength is because institutions are the people who are getting involved in these things once the technicals turn you can now start to give yourself all the fundamental reasons why it's great and this is one of my favorite kind of entries is these earnings Gap [Music] UPS hello and welcome to the Traders Journey for investors underground in this episode it's an honored to get to share some of my recent conversations with Ariel Hernandez also known as real simple Ariel

Ariel is highly regarded throughout the trading Community for his swing trading and ability to spot inflow and outflow of money through sector rotation group strength and identifying changes in Market cycle Ariel is a true student of the game and his passion for trading is undeniable during this set of conversations we'll discuss 's early lessons in trading where he finds Edge in the markets what his scanning and routine looks like and just how important discipline and risk management is not just for his trading but yours as well I hope you enjoy these set of conversations Ariel

thank you so much for being here oh of course anthy happy to be here yeah absolutely I've been wanting to talk to you for a while I've seen you on a couple of the other videos uh on investors underground channel so really excited that you're here when we get to talk yeah absolutely and honestly I've had a awesome time doing those with Chris whether it's Sunday scan or you know with Sam uh he's honestly another great host too and he's awesome it's become a good friend of mine you know doing these videos and IU has

become you know like a home uh for me so you know it's it's great to just be able to do these videos and kind of get some content out to people as to what I'm doing and and you know kind of how I be markets yeah awesome and I definitely want to dive into that during this episode and I usually start out by asking you know how did you first get interested in the stock market and trading because that's that's where it all begins right yeah um well you know as everybody knows 2020 um was

Co year um and there was so much going on within the markets I mean we were just coming out of this big correction a violent correction at that and some of my closest friends were actually doing really well in the markets and I started to get interested in how it was that some of my friends were get getting some of their success and prior to that I really didn't have any Market knowledge other than just pick one of your favorite companies um and hold them in perpetuity right whenever you can invest invest um but then

I started to realize that there's really a whole another side of the market and that's like the Trader part of the market right thinking about compounding those gains getting in and out of positions being in things for shorter periods of time um and I did uh start out as a day trader um and now I've transitioned into swing trading but you know just the the Allure of and you know you see big people posting 50,000 100,000 10 I couldn't imagine anybody seeing that and not wanting that for themselves and so obviously the Allure of the

fastpac the being independent working for yourself working from home making big money and 2020 and 2021 really provided that so that was really my attraction to the market was for finding something for myself it's been a really crazy Journey uh for myself just kind of getting to where I am today but I've loved every second of it and kind of the steps that we've had to take to get here yeah yeah and in 2020 was a huge change in the market bringing a lot of opportunities for for people to learn about the market or experienced

Traders finding a lot of opportunities to take advantage of their expertise in the market and so you know what was that first year like for you do you remember some of the early lessons that you learned some of your first train you know what was your first kind of taste of the market did you paper trade at first were you just trading life capital from from day one what was all of that like yeah so I won't actually ever forget it um I started trading a cash portfolio right away and there the problem really with

2020 and 2021 was it instilled a lot of bad lessons in everybody there wasn't a dip you couldn't buy there wasn't a stock not gapping up overnight so that especially for a new Trader you get to taste like really early success and do really well but the reality is is that that didn't translate well into a rough Market into 2022 so if you were a new Trader like myself you know you're taking bad habits with you into a now changing environment and I didn't know I didn't recognize the change into 2022 so just like everybody

else who was a newer Trader effectively what they call a boom and bus Trader I also struggled in 2022 but it was the losing of capital that kind of took me away from day trading and said you know what changes do I need to make to my own trading my own learning my own tool belt to adapt there's a lot of lessons to be learned um in 2021 some of my most successful trades were really sympathy plays right I wasn't so good at getting myself into the lead Runner per se the the leading stock of

a certain group a certain sector but it was recognizing that Traders were always looking for that next one so kind of allowing that lead Runner to develop and go crazy because it would do it without me right I wasn't good enough to like get in and capture that move and hold it a a GameStop you know from from 12 to 500 right like once it kind of had come up from the depths it was then just now everybody's every time Game Stops moving Here Comes Your AMC right when you had your nft names and you

had tat going Here Comes Your dlpn when you had Tesla going you know Here Comes Your lucid and your rivan and your candy and your solo so it was like recognizing that sympathy play and not even trading the lead Runner but just leaving the lead runner on my screen and then trading that that backup name um and and that really was some of my more more memorable trades because they were some of my most profitable and in really the market was rewarding them where in 2022 it stopped rewarding that um and so again a hard

lesson to learn in real time and even recognizing that that stopped working you know was kind of an eyeopener uh for me so and and what was that experience like when you realized the market or maybe you didn't realized that the market had shifted and you felt some pain some loss of capital do you remember that mindset what what you were feeling and and how you got out of that well actually what it ended up happening uh with me was I was trading on Charles Schwab at the time it was TD Mar trade and I

was really taking advantage of them providing liquidity um and so when a lead Runner was moving and then I was just like looking for that sympathy play I was able to just take Market orders take Market orders and not really have to fill at a worse fill buying B ask effectively um and then as Market participants because there was millions of us sitting at home with covid money you know the stocks would begin to kind of take off and I had a better average with the market fill um because they were providing liquidity and then

as soon as something would begin to move I would almost be begin to get out right away um because if you had bigger size on or just big size for the portfolio you were trading you're being rewarded instantly um so that was kind of but then because I kept doing that and kept doing that and kept doing that at the time TD Mir trade was like okay they they gave me a call and they were like this is toxic order flow and we don't like you taking this many Market orders and it okay that's fine

and they gave me a twoe ban then they you know let me back on their platform after my twoe ban and I didn't know another way to trade so when tat would be running I would be hammering away at the LPA and eventually you know they they kicked me off their platform so when I got over to another brokerage who wasn't providing midpoint liquidity I started to struggle and I was just like they're not providing me that midpoint fil they're not providing me that liquidity and so you know when I would take 10,000 shares and

and I would pay four or five cents higher than what I would normally get on the market I would instantly be red because if I wanted to get out I would be basically marketing out and they would be filling me on the bid so if there's a spread there I'm basically getting in at the top and then looking at instant red and then getting out at the bottom if I wanted to get out so that's when I kind of knew the what I was doing doing in the past although it felt like free money and

it and it kind of was I needed to make big changes and then that's when I really started to dive into some of the people that I appreciate most even to this day and started to like tailor my trading around people who had had decades long of success trading the markets and I wasn't trying to invent anything by myself I wasn't looking for some silver bullet that I was like that's my aha moment right I I just came up with this and you know that's my Edge right it was what is the edge of the

gentlemen or the women that came before me that allowed them to have 20 and 30 years of success that I can like take from their game and apply it to what I can do and then obviously through repetition through studying historical chart patterns technical chart patterns how fundamentals align with that did I really start to find my groove within the market and even as early as 2022 when the market was difficult and I had already made that transition right around mid to 2021 I considered myself a swing Trader and I I found some success swing

trading energy stocks because that what was hot in 2022 in particular in the beginning you know you had the whole Russian invading Ukraine Energy prices going up and so therefore oil stocks were going up okay so I found that and even sympathy plays worked then too right you had Indo going nuts and then you had husa and inpp and op and all these ener new stocks following right behind behind the the leaders which was Exxon cobal and Chevron Etc and and if you go more granular to small caps you had Indo going from like 7

to 70 and then you had you know mxc and husa imbp Etc so some of the things that I did learn in 20 and 21 still worked in Spurs but when the market kind of turned and mega caps were getting beaten up uh I was struggling right buying breakouts wasn't working that was the only way I knew to enter trades uh buying earnings Gap UPS wasn't working because there were no great tech companies giving big earnings Gap UPS right that just wasn't the environment and I didn't recognize it so 2022 I still put my head

down and continu to study some of the people who have had much longer longevity than I had at that point and continue to kind of like tailor my trading to what they were doing and applying it to my own real time trade how much could your trade improve if you had free access to all of the tools and resources inside investors underground well we're giving away 2 weeks of free access to a listener of the podcast simply comment below with your biggest takeaway from the episode and then send an email to me Anthony investors underground.com

we'll be selecting a winner to have two free weeks of full access inside investors underground you'll have access to the morning meetings all of the tools mentorship and every other resource that investors underground members enjoy we look forward to seeing you inside investors underground so you get kicked off your broker and so your strategy is now working and you realize that you have to make some changes which is definitely not a fun position to be in uh you know who were some of the names that you were learning from what were some of the resources

that you were you know either reading or watching to learn from and trying to adapt your strategy to you know evolve your trading so that you can get to that next step and eventually be where you are now first and foremost everybody should read how to make money in stocks by Bill O'Neal it's like one of the Godfathers of canum trading um and then upon his shoulders you have someone like a Mark minervini um upon his shoulders you have a momentum Master like Dan zanger um if you're focused on the short side which I started

to be in 2022 someone like Nate at investors underground right like to be able to capture that other if everything's going to be fading you know might as well go learn from some short sellers what the heck's going on and how it works and what to do so someone like Nate um some more shorting was from Gil Morales and then you know everybody's favorite is uh Christian kulam Magi because he put himself out there in that twitch world and he would just live stream himself and every time he would talk it's golden nuggets coming from

his mouth and you would be like well who did he learn from and he would credit d Zer Mark minini prip you know Bondi and it's like you got you got these guys who have had two decades three decades of success um you know traded the boom and buff cycle you know in the late 90s and going into 2000 and they're still here today 25 20 years later so I really just tried to take a little piece of using Progressive exposure um and volatility contraction patterns from Mark minini learning what momentum charts look like from

Adan zanger you know uh learning some shorting from Nate and and really just piecing it together and trying to trade in real time while still it being my only form of income right you know 2020 and 2021 were so great that it allowed me to take a bit of a butt kicking in 22 to like really plant my feet firmly into what they were doing and then have it work for myself what were some of the changes that you made to your strategy you know what's that Evolution look like you know what were you changing

about your strategy and how do you trade today what's your strategy today you know what where do you find Edge in the markets today where you might not have been finding it when you were struggling yeah first and foremost one of the things that I've become most proficient at in particular the way I do it now is I really want to look at the market kind of from a top- down approach so I scan the market really well and something that always stuck to me that Christian said is where is money going where's money leaving

right when you do your homework at night when the market is closed right and you've got a 90-day relative strength scan and you're just shifting through that I'm saying to myself what's been holding up best right what stocks have been and in particular at the ends of 22 right I would start to see stocks that were really strong and the market is still in this correction all the way into October so I stared to see stocks that were getting back above their 200 day while the market was still downtrending I started to see some stocks

you know try to make new highs things like that and so when I scan the market I'm always looking for relative strength the reason that they're showing relative strength is because institutions are the people who are getting involved in these things and so that became like my first light bulb moment and really even going back to early 22 something that we spoke about privately off camera was if you go back and you looked at the energy stocks um cop The XLE the ETF you know the F the X the oxy and you looked at these

names and you realized from a technical perspective they all look identical right they literally look identical even leading up to their breakout on January 3rd of 22 and so that was kind of like my first light bulb moment that okay if we're looking at a particular group are there other stocks within that group that look similar or that look strong and then it became okay the market has 197 industry groups and which ones are the strongest I didn't want to apply my knowledge because what minini and what Dan Zer weren't talking about is is the

sock undervalued right they were like what's holding up best in particular when the Market's going down and the market was going down you know into 21 and into 22 yet energy stocks were holding up the best okay so why was that institutions are involved here and so I was just trying to align myself with what they were doing and you know one of the things that I learned from Mark very brilliant was using Progressive exposure so if I had a full cash portfolio and seeing a breakout that was taught by him just a simple volatility

contraction pattern and you get that breakout sizing in 10% of your portfolio on a breakout and if that works and then you do your homework at night and you find another really nice good-looking setup and then that one works now you're 20% invested and then you do your homework at night and then you find another one and that one works that's the market screaming team that either you're on the right sector the Market's really healthy and it continues to pull you in it it it's attracting more and more of your money to get involved in

the markets and so those were like the little lessons that I took you know from from a Mark or learning a beautiful technical pattern from Dan zanger um and then on the flip side of that if I notice the market going up but you had stocks going down they're they're telling you that they're relatively weak so being able to play the short side and understanding what if baale to follow through setup looks like or a stop trending below its 200 right that's just institutions leaving they're not supporting the stop so I don't want to use

my own brain and say that's gotten too cheap I just want to say it's trending below the 200 if I want to be short that's where I need to be yeah at this moment I realized how powerful it would be if we can all sit down with Ariel at his desk so he could show us how he thinks about stocks and charts and a week later that's what I was able to do so let's see that conversation now I I realized when we were speaking just how powerful it would be to get you back onto

the screen so that we can talk about how you think about and find search for sectors groups and Market Cycles so I I'm really excited to get to to allow the audience to see how you you look for these these groups and and and ways to find the right stocks to buy yeah I think it's it's it's very important because you know one of the things that I always say is you know your prior leaders aren't always your upcoming leaders so it is good to kind of you know get and get to see exactly how

it is that I like to scan the market um you know try and figure out where money's going um especially if you're a swing Trader right I'm not looking at like past names and you know after they have already made this huge extended run and then you know they like crack and then say to myself oh I'm just you know those are the ones those are the ones that are going to you know and have this because the reality is that institutions are the ones that move your stocks and they also rotate their money from

you know theme to sector to Industry Group and it'll be good to see how kind of I think about the market in that perspective and how it is that I find some of these names and you know I'm excited to kind of go through my process with everybody so that should be a lot of fun so what does that process look like for you Ariel yeah one of the very first things that I actually like to do is I just like to start you know with um a three-month relative strength scan so as I'm scanning

and I look at this weekly of Visa right this thing has just been effectively a monster going back to 2011 right this thing has just been in a very steady you know there are periods where it pulls back but it's you know a move up a little pull back a move up a little pull back a strong move up now even on the weekly you could say go this thing's getting quite up there but then on the daily you know how are how am I locating my my personal setups but I just kind of continue

through my list right and I'll say over the last 90 days while the market has been struggling and the market for me for the most part is the the uh QQQ NASDAQ or the S&P 500 but often times if I'm trading gold miners the market for me will be the gold ETF F right so how does this you know down here when I talked about gold you know how did gold look down here beautiful move up long sideways base if you zoomed out it was a 10-year cup and handle and then as soon as you

started to break out at the ends of you know February into first week of March you know at this time when I'm seeing this breakout right I could have gone back and I remember the name you know like a.m you know and at the time it was also starting to get going breaking above its own 200 days so while gold is in a sustained uptrend your gold miners are working well right and and that's just kind of how I I really like to work but I'll just go through my 90-day relative strength scan and say

to myself is there a commonality between a few of these names right because that's what institutions are buying so as I'm scanning right the one of the the second name on my screen was Visa you know here's birkshire half away big breakout on the weekly you know beautiful you know consolidation and breakout on the day and I'll just keep going you've got a Costco a JP Morgan so right off the bat the first four names that I look at right at the top of my list and I sort them by Dollar volume right so I

like to just know what what's getting the most amount of money because those are the most liquid things for institutions right so right off the bat you've got a Visa you've got a birkshire Hathaway and you've got a JP Morgan so right off the bat I know financials are you know they're they're at the top of my screen whether you're a credit card company whether you're a conglomerate like birkshire half the way but they're an insurance financial company and JP Morgan and then even ma MasterCard C City Group you know the first handful of stocks

you know within the first 15 names on my 90-day relative strength scan I'm already noticing a pattern right because I know some of these names off the top of my head and the pattern is Financial stocks right anything to do with financials so I can go on my ETF list and I say the XLF which is the fourth most liquid at the moment ETF the spider ETF well this looks like it's about ready to make a new all-time high here right while the Market's been quote unquote struggling while your spy your your spider S&P 500

right is struggling right your XLF your spider financials looks pretty dang good from the ETF perspective right this really big move and it's funny because you can look at XLF and say well you know when was it even better well when it was even better was you know when this thing pulled back and on the weekly held the 200 weekly weekly weekly and some people love their trend line so okay you draw a little trend line and it breaks out of your trend line in November of 2023 and then if we literally just go back

and if you look at your JP Morgan right around the exact same time so if you were to say you know in November of 2023 your JP Morgan looked at the time fairly identical where you've got this little downtrend break you know some people and you know how you might draw it might be a little bit different for others but effectively a very similar looking chart and in November it has that downtrend line break and then it just takes off in a vertical rocket and it looks a whole lot like your banking ETF so first

thing is first I really like to just go through my 90day relative strain scan whether it's Visa birkshire JP Morgan MasterCard City group and I could keep going down my list and I'll see a few more financials right off the bat I know financials are acting well right and then inversely to that when I'm looking through my 90-day relative strength scan something that I may not be seeing are semiconductors so I'm not seeing semiconductors and if I looked at the SMH which is my semiconductor ETF you would then quickly realize why none of the individual

stocks are showing up on my 90-day relative strength scan because this is your ETF in that time this is what the daily looks like right it's not pushing out there is no real strength there right and so what does that tell me about interest institutional interest and appetite for Semiconductor uors right and AMD has lost 50 plus% of its value in the last year Nvidia is at the exact same prices as it was 12 months ago right some stocks like aehr have gone from 50 back to teens right some stocks like avgo and TSM are

kind of just floating maybe near the highs but not quite that well so if you looked at TSM right it's it's had this pretty nasty move down right the Deep seek move the bounce back up and the rollover right and and I could pull up more stocks just like that your vsts your deep seek move your bounce back up and your rollover right should your interest ever be in stocks that are all acting the same but yet rolling over or if you're a swing Trader should your interest be in stocks that are all near 52e

highs and your quote unquote underlying Market has been pretty much struggling right now there is rotation and the reason that the S&P 500 can hold up so well even despite he's doing nothing is because banks are also a big portion of the S&P 500 drug manufacturers are also fairly decent portion of your S&P 500 so it's like you've got all these other sectors within the S&P 500 who are acting well that when I just kind of go through my 90day relative strength scan I try to find a certain commonality and another one that we talked

about before we turned down the cameras was you know you can look at an ABY well an ABY here is and I'll just pin this and ABY here is at an all-time high right it's at it gaps up on earnings pulls back you know has a kind of a down day on its earnings day instantly reclaims that move right here's your earnings Gap up so it's still a green day even though it has a it's a red candle right kind of sold off all day on earnings but then instantly bought back up and then just

continues to Trend against its 10-day period moving average right and if we looked even further right and and on these scans here's Johnson and Johnson right underneath it right you get Johnson and Johnson reclaiming its 200 day moving average and continuing higher right and then same thing if we go a little bit further down on the scan we're going to see you know a Vertex Labs right reclaiming its 200 day moving average you're going to see an Abbot Labs you know bouncing right off the 200 day good earnings and continuing to push higher so while

other parts of the market are doing nothing there are stocks within the group or within the market doing really really really well and my own scans are pulling these things right up to the surface for me because they've got 90 days worth of relative strength to everything else and then I just sort them by how liquid they are right the more liquid they are the more institutions can put to work there and that doesn't mean that those are the names I need to own those are the sectors I need to focus on and when would

be the best time in your opinion to be buying stocks yeah without question the best time to buy stocks is after a market correction now what stocks do you want to buy you want to buy stocks that are already breaking out or near 52- we High 52- We highs and all-time highs is not bearish at all but if stocks are doing that when the market is going down it's even more of an eye opener like things that Gap up on good earnings when the Market's pulling back or things that hit 52- we highs when the

market is pulling back is such a powerful visual tool to see and a great example that I always think of is here's a great example was Netflix so this would have been in ends of October of 2023 the market was in a 10% correction and I guess it's good to see this from the market perspective so here we are this Market this is um your high in the summer basically July and you've got these like three little clean waves down right three little oscillations lower on The Daily one two three okay beautiful and now for

people who are unaware a market follow through day is the market will give you a bottom right down here but you don't know that that's the bottom right then you can get one day of of short covering two days of short covering by day three or day four you should see an increase in volume right right and that is buyers then coming in right it's not just like less and less short sellers covering their position on right it's you get this one day here's your bottom two your second day you know you don't know that

this is going to be your low your next day your third day and then an increase in volume right so on November 1st I view that as a follow-through day even more even better was on the was on the second when it here's a gap up over over the 200 and another big Green Day right and then another Gap up and now above the 50 now this is a v-shaped recovery but you know down on the first you should have a few stocks potentially on radar that are acting well if you do when the market

gives you that follow through day after a correction 10% correction do you have a few stocks that are buyable and I love this as an example because the best time to buy stocks is after a correction and if you look at for instance Netflix what did Netflix do it was going down with the market while it's doing its 10% correction and it gaps up on earnings right and this earnings day is October 19th so the market still goes lower for another 10 days effectively and what does Netflix do during that time does Netflix go lower

while the Market's going lower does Netflix go and see new lows like the market no it does not Netflix goes sideways and when you get to the market low which is the 27th here's that little pullback on the 27th you get a few little green days in a row just like the market and the market on November 1st in my opinion was your follow-through day coincidentally this is a inside day a very tight narrow range day so in the back of my mind I go okay this thing has a gap up on earnings it proceeds

to go sideways for two weeks or 10 days while the market still trickles lower right that's strange in and of its own it's not doing what the Market's doing anymore which is going to see new lows in fact we're back up above the 200 and for anybody knows stocks above the 200 is not bearish it's bullish right it's just a what's it doing over the last year right tried to break the 200 and nope it gapped right back up above on good earnings right it tried to come back into the 50-day moving average and wicked

right back off tried to come back into the 50-day moving average and came right back up right and then it has a really tight day on October 31st and the very next day the day the market gives you a follow through day Netflix should have already been on your radar from The Gap up another great example was AET right around this time so it comes back down it's still already above the 20000 day why because this thing was already in a nice steady uptrend with the 200 day having turned up and then what do you

get you get this kind of a nasty move down before earnings but then on earnings reclaims all of it right and effectively at that time if we were looking at this you know here's your highs for this uh anet and what did it do on earnings it made a new 52- we high right and this is on October 31st the day before the market gave you a follow-through day so effectively you now have stocks similar to you know some of these farma names now hitting New 52 we or all-time highs when the market is potentially

a Friday is the day you were like hey that feels like it could have been a turn okay that's fine and now you've got stocks already hitting 52 week or all-time highs here's an AET right and what does AET do well it goes from you know 50 bucks 49 bucks at the time and just Trends you know all the way to 130 so it does a 100% plus move for you Netflix does a 100% plus move for you now again would you have been taken would you have been knocked out a few times along the

way and maybe had to Reby it yes right but it's a good example of spotting that relative strength and the best time being after a correction to buy something another really good example and we can just give one more is this Deckers right so we go back to this uh October date right and here you go you've got the market put in a low on the 27 Anthony on the 27th the day the market put in a low look at this huge earnings Gap Gap up and this is one of my favorite kind of entries

is these earnings Gap UPS if you buy a 5minute opening range break on something like deck right you're buying this thing at you know 90 bucks and what does deck go on to do from you for you well just you know and again when stocks Gap up on earnings very good when stocks gap down on earnings very bad deck is a perfect example of that right and recently you know you had this nasty earnings gap down and you what's it been doing ever since and over here you had this beautiful earnings Gap up and what

did it do ever since right so you you get before the market even gives you a follow through day Anthony you get this beautiful Gap up and then it just continues to grind Higher by the time you get to 111 right this thing just continues and continues and continues why is that because it was already at a new alltime high the stock market was down 10% the stock market gives you a follow through which it's like a good analogy is like um you know you put your hands on a beach ball and you hold it

underwater right that's the market and then you take your hands off and that beach ball pops up right there are stocks that start to pop up before the market takes its hands off that's how powerful they are but when the Market's hands come off anything that wanted to pop up to the surface does so right and it does so right before or on the follow through day or immediately after right once you start to get the market ripping and roaring for four five six weeks and I've got some good examples for that too those setups

are no longer as powerful because now you're buying something in a more extended Market versus buying something immediately after a correction and I'll just give one quick example I remember this estc right so the market gives you a follow through day um right here on 11 on 111 so what does this estc proceed to do right it it it just finishes consolidating right it has this Gap up on earnings but then just go sideways for a really long time it gaps up in December so a month after on uh December first a month after the

market gave you a follow-through day right but then what does estc really do it just kind of lingers and chops and if you bought it on its earnings Gap up you know it really you know fine 20% move but then you get quickly knocked out and and it just chops and chops and chops and chops why because buying something immediately after the market follow through day or on the market follow through day and noticing its strength before the market has a follow-through day are all very important factors as to what your newest leaders can be

which is why I love Corrections which is why when I see the NASDAQ where I see the S&P 500 pullback how it has recently my eyes start to say what are the things that are holding up best it's financials it's some reats it's some Pharma names it's not semiconductors it's not nuclear names it's not AI data center names that's the reality you know but people are so in love with what has happened in the past that they think that that's what's going to continue to happen in the future and that's not how that works you

know and we'll touch upon here in a few minutes other groups that have moved together just to really get a good visual of groups really do move together so when we see a bunch of financials holding up well together or when we see a bunch of Phan nams holding up well together there is a reason for that and when no semiconductors show up on my screen there is a reason for that and I'm not here to argue and look for the reasons right I I forget who said it but somebody said if if you go

outside and it's 20° outside do you go looking for the reasons of why it's 20° outside or do you just put a sweater on and I forget exactly who it was that said that and I just like he bright I don't want to look for the I don't need to know the every why as to like I don't need to know the why the Market's selling off right it's cold outside I put a sweater on the Market's selling off I I maybe not in those positions anymore and I go looking for that sweater to put

on you know that relative strength so knowing the having to know the why of everything is not the best way sometimes right it's just this is what it is and that's the reality let me go get my sweater yeah yeah and how do you think about identifying different Market Cycles or shifts in Market Cycles yeah I think just very easily it's just through your ETFs right it's like not everything on my ETF list is going to look good right it's just the reality we can look at SMH and just say this is super choppy could

it break to the upside of the range it could but all this thing has done is just head an increase in volume every time it goes down it's had a decrease in volume every time it goes up every time it tries to breach the upper half of this range it fails to break out fail to break out fail to break out fail to break and now you break below the 200 right it's just your own eyeballs have to and and if if you just stick a 200 day moving average on something and you objectively say

above it is good below it is bad and you don't argue with it because if you studied a gazillion charts in your life you would say how do stocks act above the 200 day moving average well you could look at very simply an Nvidia and you can come all the way back over here coincidentally this is the area that I bought it and it breaks over its 200 day and we're talking the in o or in January of 23 right this thing is you know the ends of or the beginnings of 2023 and this thing

doesn't even with the 200 day moving average again until recently right now it yes it's tried to reclaim it here again most recently and this is just from a EMA perspective but your SMA is still a little bit higher at 126 but your EMAs effectively you know reclaimed to 200 EMA but below your 200 SMA it's still below that level and and it'll be easier to see on this side because I do keep smas over here um and so just very objectively just throw a lagging moving average on there it's lagging for a reason price

is good above it's bad below and when you scan through you know 20 other stocks within the group you could see some are okay some are terrible some are okay some are terrible inversely financials since March of 2023 they've almost all been really good right we had the the financial we had the banking crisis where uh Silicone Valley Bank blew out and um you know you you had like these catastrophes in in these banking names well like you just said by when there's blood in the streets right at that time that's not normally how I

like to buy a swing setup per se but that is where stocks will bottom is when it's the absolute most catastrophe for that group and that's what it was and then they bought them and then they you know finally got accumulated went back up you know they had a nice little tight setup and you know this banking crisis happened in March and I was looking at JP Morgan and I thought looked good in November right so you're talking seven eight months later of them being accumulated by institutions and by the way you're not late to

JP Morgan if you buy it in November right it's it then went on to go on for another year plus so it's not like you have to be the first in the pool so at least for my perspective and then again on the inverse side of this you know you get an Nvidia kind of starting to you know it broke above its 200 day way down here in the $16 pre-split or post-split and then you know now all of a sudden you're you're kind of starting to live below the 200 you know over the last

few weeks and that's not good right I I'm not saying that Nvidia is going to die but if it establish itself below the 200 I can just step back and say Nvidia being your biggest semi is starting to live below the 200 I don't I don't I don't want to be involved in those right I want to be involved in the things that are above their 200 and kind of understanding that everything has its turn under the sun right and and I remember you know we talked about this um with energy names right it was

that moment where I saw those energy names and I realized how similar they all looked that I was just like okay they look similar because institutions are buying them and they then these semiconductors look similar AKA breaking below their 200 cuz institutions are selling them and try to not argue around those lines too much yeah I've heard you say you know birds of a feather flock together flog together and and it definitely makes sense when you see it on the chart and you're able to look at all of these different names and speaking of the

chart you know while we're looking at the chart you know I'm seeing a lot of lines on your on your charts and I'm sure people are wondering you know yes there's the 200 day yes there's the 50 there's the golden crossover maybe some people might be looking at but I also noticed some other lines so what are some of the technical indicators that you look at and or keep on your charts when you're looking to maybe get into a stock or maybe to even sell something yeah so actually you know something like this is just

a simple flat base right where it makes this big gap up on earnings and then you know pushes a little bit higher but then proceeds to go sideways for five months and right before we break out you know you're building these higher lows where every time it comes down it's not coming lower right every time it comes down it's being supported at a new spot and you're coming right up to this breakout area now I remember this uh day right in here and it was getting back up above the 20 and the 10day and the

moving averages are very very tight meaning Nvidia moves you know about 4% per day and at this point here you know we were 2 and a half% above its 50-day moving average so relatively tight right we're only like one average daily range away from the 50 and I remember I bought this thing on5 and yes you're still within the range but then I ended up buying some more on 18 as it was breaking the range and at the time it was like 40 or $492 or 494 bucks and then buying some more for the breakout

of 500 right and what does Nvidia do by that day end an increase in volume a big push from 49 to 52 and then you never turn around for me I like to wait for three to five day pushes and then trim some into strength and then just Trail the rest on this ascending 20day right so as long as it's trading above the 20-day I don't care what it's doing if a stock trends for a month effectively above my 20-day and has given me a 20 30% cushion and the 50-day has caught up to my

spot then I like to use the 50-day right a stock has to earn the right for me to hold it longer if you're a slower name or sorry a faster name like 8 10 1280r like a one of these Quantum names most recently right I don't want to give it wiggle room like even you know hims I was in HS right once this thing breaks out and and I mentioned it in IU uh as a potential swing setup I thought that this breakout over 29 bucks looked pretty good right you kind of have this little

flat base so above 29 and above all of its key moving averages above the 50 above the 20 moving averages are very very very tight so I'm not coming into HS up here and being like Oh I got to own it at 50 when it's you know at this point it's 50% away from its 50-day moving average right I don't want to own it when it's 50% above its 50-day moving average I was looking to buy it you know when it at the time you know we're looking at uh 7% 6% away from its 50-day

moving average so if I'm going to jump out of a window I want to jump out of the first floor right that's what kind of what stock trading is you it's it's such a place where there's so much uncertainty that yes the chart may look good from a technical perspective but if I'm going to try that setup and I'm going to jump out of a window and take a leap of faith I want to know that I'm on the first floor in case I'm wrong right and I don't break any ankles but if I jump

off the 12th floor right I might break my neck and so there is a difference or my likelihood of success of Landing safely isn't so good and so again even with HS I bought some at 29 I sold some off at 37 so literally on this day here you got this fairly big push and then we started to get a little extended even from the 5day the 10day and I was like all right let me take some off did I know it was going to go to 70 of course not otherwise I would have held

the whole thing right but my crystal ball doesn't work that well and so I take some off at 37 and I allow the rest of it to work and then the way I like to manage my trades and I've mentioned this in other videos with Sam before is when something gets extended from the 50-day moving average and for instance HS moves 12% per day so when HS is 60% away from its 50-day moving average right I know that we're five times its average daily range away from the 50 right the further you get away from

the 50 so like at these highs you're 118% away from highs from the 50-day moving average you're almost you know 12 time or 10 11 times its average daily range away from the 50 I know that into these pushes I should actually be trimming and definitely not consider buying I don't like to buy stocks more than four times their average daily range away from their 50 because then we're just there's not enough meat on the bone and that is one of the things that I like to consider when I buy anything you know am I

buying something that's extended right just because it's strong that's fine but if it's extended it's no good you need to recognize that strength before it gets extended and you know even relating to a simple chart like ABY you know gaps up on earnings and those are the only exceptions where you can buy something that gets a little extended from the 50 because institutions are building positions for a few month but even something like Abby if you know you're buying a break over you know this uh this little high of this earnings day and you're buying

on any one of these days here you know you're looking at something that's only 6% away away from its 50-day well it moves two 2 and 1 half% a day so it's like 2 and 1 half or 2 and a qu times its average daily range from the 50 it's not very extended at all right so it's very safe to buy this thing on 212 or to buy this thing on 218 as it's finding support and Rise it has a rising 10day a rising 200 day and it's not the only stock within the group at

the time I I noticed and I mentioned it on Twitter Johnson and Johnson look good RIT Labs look good now you got vrtx looking good you've got uh like all the evidence there that you need that these things are going down while the market the S&P 500's just chopping around institutions are telling you something by that whether they're defensive stocks to the market or they're not or whatever you know come up with all the gazillion reasons you need to tell yourself as to why they're going up the fact is is that they're going up and

they're going up in a market that's going down there's a reason for that and when the market releases its pressure when it takes its hands off right now all of a sudden ABY isn't fighting the market at all right Johnson and Johnson won't be fighting the market Abbot Labs won't be fighting the market because if Friday was your low well look at this beautiful day that Abby has I to pick up in volume now are we starting to if you bought this thing down here and you're starting to get you know 12% extended from its

50-day right now do you start to say to yourself hey when this thing gets 16 18% something like that do I need to start to consider to peel some off yes and then know that hey this thing could very well go sideways and I don't want to hang out with my full position in something like that so kind of the way I think about it yeah no thank you very much I I appreciate because I think it's important for listeners to know you know where you're thinking about taking those profits because especially in the world

of social media today you hear everybody talking about things are going to go to the moon or this is the next you know big thing and it's really easy to hear way too often that you just hold something forever well Anthony that sounds like quum Computing right just a few months ago they they were the new and biggest and hottest and the greatest things ever the newest PE I mean I found it laughable and again this isn't to disrespect anybody but anybody who thinks that a company like anq whoes doesn't make real revenue is going

to be the next Nvidia that's you it's like the book The 48 Laws of Power you're playing on people's fantasies right and so it sounds good right it's like and now if I talk about AMC for instance there are so many people who were wrong on that right like and they bought it in the 40s and the 50s and the 60s and the 70s and then you know they've done a bunch of splits since then but you know and then once it starts you know getting crushed and it's down 50% said if I start talking

about institutions are manipulating it and it's going back to the moon and it's going to be a $5,000 stock and I'm playing on people's fantasies those are fantasies that's not reality reality says that market institutions rotate their money from one place to the next to the next to the next to the next and everything has their chance Under the Sun that's not to say that stocks can't come back to life but if Anthony you've traded long enough you remember the weed stock in 2021 you remember the shippers with dries and tops and ship right you

remember even these Quantum stocks with now retti and IQ and qubt a stock goes from 1 to 27 a stock goes from 80 cents to 20 in two months right even these nuclear names like I you know I I um don't hate on Sam mman just to hate on Sam Alman but he is like The Golden Child of Wall Street kind of in a way with open Ai and now being invested into OKO and you know being part of OKO the reality is that they don't make any money so if you don't make any money

would why would the institutional appetite stay there one of the reasons that institutional appetite stick around is because a company pays a dividend and their dividend only hedge funds that they can only buy if they pay a dividend or they make money and a company can buy back shares over time right and so you're piece of the pie if you hold it for 20 years only gets bigger because there's less shares in the market because the company has bought those shares off the open market so it's like if you make money great if you do

not you get a run it dies off but if you're a great company like an ABY who does make money who does pay a dividend well then what ends up happening they make a run they consolidate for a really long time and then they continue higher and then they consolidate again and then they continue higher and they consolidate some more it's like why a company like um O'Reilly Auto Parts or a auto parts or or even like a uh Old Dominion Freight Liner right it doesn't look good right now right this is very choppy very

ugly very whatever but if you looked at like a you know like a 20year monthly chart and you looked at Old Dominion this thing has effectively been going higher for the last 17 years right but you get this extremely large move up and now you're just kind of going sideways even on a monthly chart right but that's exactly what leading charts do they may be of favor in some moments versus others but the reality is is that money goes into a sector and it makes a nice beautiful run nobody knows how long it's going to

go for and then it they sell off and then they get accumulated they go for a run nobody knows how long they're going to go for and then they you know they might go sideways and and it just happens over and over and over but people majority of people 90% of people who tend to lose in the market in particular retail they buy buy when things are too euphoric they sell when things have gotten really bad right instead of buying things as they're coming out of a tight consolidation first they give you that little leg

higher and then they consolidate quickly for a few weeks and then you're going to see the evidence in the other stocks within the group and this might be a good time you know to maybe even look at a few of those energy names and that was like my aha moment with with how these things move thank you so much yeah and I I think it's important for people to understand that you know in in trading the the profit is only hypothetical until you take the actual profit and that's right you know to to your point

we we've lived through so many of those sort of temporal darling stocks you know it's might be Sam Alman today but not too long ago it was Sam bakman freed and you know was on the cover of magazines or to to your point with you know the marijuana stocks canopy growth was going up up until the point that it wasn't anymore or yeah till another one yeah another one and they all do the same and even you know when we talked about the mem stocks right or the nft names right it was n it was

uh teat and dlpn or um when when it was EVS it was your Tesla's your leader and you've got rivan right behind it and Lucid right behind it and then you've got companies who've gone bankrupt right like your terrible ones your Mullins um your fiskers right it's like they're not even around but in a very hot environment where you have your leaders right it's like Tesla is your leader right you then get your midcaps that follow your your rivan and your lucid and and they're still around but their price doesn't act as well especially when

a Tesla hasn't acted all that great for the last few years either in spurts it's it's done all right and and Tesla even did all right you know when when Trump got inaugurated but the reality is is that you know it's it's a it's a car company whose margins are decreasing and they've got a lot of competition and they don't do oid robotss yet so price is down almost 50% right all while the Market's down 5% so it's like you have to have something that gets you out of these extended moves you have to have

something that gets you out of a breakdown um because you can't live in fantasy land now if things want to continue higher and just Trend above their their 50-day God bless and you can be in that but when they break a 50-day or they break a 200 day or they break a 20day depending on your entry your risk tolerance your thesis for it your position sizing all these little nuances then what moving average am I using but once it starts to break below you don't argue with it it's a lagging indicator to begin with right

so now price has broken below a lagging indicator you know you've already now held a chunky pullback right so and again those profits aren't yours until you take some off the table so having something in place to also allow you to trim into that strength just to not be holding something for a third right if I just held HS and said I'm going to hold it on the 20 so I have to hold it a 40% pullback without getting rid of any before I finally get rid of some no no no no you got to

have something in place that allows you to take some off the table before a 40% pullback yeah so very important a Absol absolutely and and that's one of the things that we touched on a little bit in person in New Hampshire was you know this idea of risk management no one to pay yourself when to trim and then you know keep your your risk management in check and so I I definitely wanted to you know talk a little bit about that just to you know kind of highlight again some of that discussion you know how

important is risk management for you and you know your future in trading but also to the listeners as well yeah I mean it's everything for a swing Trader it is by far the most important part because as a swing Trader I'm wrong 70% of the time right it's not that I can't find the groups where money is going but it's I'm trying to hold this thing for a bigger picture move at the very minimum 3 to 5 days so that I can catch some of that momentum burst right it's like I like to look for

that quote unquote coiled Spring right so that when I buy it coming out of that tightness I can get that 3 to five days pay myself into that and then allow those now what were tight moving averages to be ascending and then just use them as my lagging indicators for how extended something's gotten away from that moving average and then when I'm down to my final piece allow it to Just Surf or use that moving average to say hey if we break below the 50 I'm done with it right and you know there's a chart

that I own now I own toast right this is one of the names that I own right I bought this thing as it was getting back above the 50-day moving average and it worked beautifully the very next day and I like toast I like them as a business you know we were in New Hampshire and I realized how the East Coast toast is everywhere right and then and I don't know how it is over by you but even here in you know Illinois they're growing like a weed so I like them as a business I've

known them as a business for a while and I size myself in right and then what happens I get this steady little Trend away from my average I get a gap up on earnings right and now all of a sudden I love the business so I say to myself I have it trimmed at all but I won't be leaving until it closes below the 200 day right and so now if you look at it right it's just building its own new base but even from my entry which is sub 25 and the 200 day is

now at 31 but price is at 38 almost 39 bucks I don't care what it does as long as I'm positioned well so that I know no matter what it does as long as it's closing above the 200 day it can do whatever it pleases right but I'm wrong you're wrong so often in swing trading because you're looking for that not that instinct gratification you're looking for that bigger move right and and it's a few of those rocket Labs it's a few of the toasts it's a few of the alib Babas it's a couple of

HS that I might catch a year that make the entirety of my year right I only need 10 12 15 20 trades that go in my favor to be a really really great year because when I'm wrong like buying an ABV where I'm risking you know 2% of a drop is my stop but you know I could have 20% of my portfolio in there or 10% of my portfolio in there if I'm risking you know even if I had 100% of my portfolio in there if I'm wrong I lose 2% right it's not like you

couldn't overcome that if you had 50% of your portfolio in there you'd be losing 1% right so it's like if you size properly and most of my positions dependent on average daily rate range you know I typically like to do 10 to 15 to 20% on the the the biggest right so like on something like an Nvidia it was even a little bit bigger because I bought it in two pieces and my risk was really really tight so like I remember I had like a $496 average and I was risking like three bucks a share

on the day that I bought on a 400 and some odd dollar stock so it's like you're risking a percent and a half right on upon your entry like if if and then it goes on to work and then I take another entry the next day when it's breaking out of the big base and then it really pushes away from my average right it's like at that point I've got like a 497 average and by the day's end it's at 5:15 my stop could go to Flat right it doesn't even have to be at the

lows of a pivot anymore and that is one of the things that I think is really important as a swing Trader I take a lot of flat trades I take a lot of small little red trades I take a lot lot of small little green trades but I'm always working to improve my worst case scenario if the stock gives me that 3day push I trim a little piece to that a third a half right dependent on how fast it's moved away from my from my average and then I just keep the rest on the ascending

daily moving average and my job is done if you're looking for ways to take your trading to the next level investors's underground has something to offer you'll have access to courses and mentors to learn from some of the best technology available for scanning stocks and breaking news and access to the chat rooms we'll find a Vibrant Community of focused traders who share their trade ideas in real time each day investors underground members have access to the morning broadcast where the IU moderators share their trade ideas for the day ahead during the pre-market session members have

access to the midday study sessions with Stan the midweek study sessions with Sam webinar moderator watch lists and all the tools and resources that investors underground has to offer listeners of the Traders Journey can access exclusive membership deals available at investors underground.com journey and now back to our inperson interview with Ariel Hernandez how much do you focus on the fundamentals because you might find like you mentioned a stock that technically looks like it's in a good position maybe you're thinking about trading it you know if something looks good at a technical level do you then

go look at the fundamentals and try to find out if it's the the best in terms of fundamentals within that group you know how much do you factor in fundamentals with the technical setup that uh that a stock is showing you fundamentals are that thing that make you patient within a good-look technical chart right the institutions are what's driving and so if technicals or if fundamentals get better over the course of a year right institutions are very bright people people millions of dollars to do this sort of research and they could see the growth coming

for this company and fundamentals change quarter over quarter over quarter as companies report earnings so if a company or if a stock is not acting well on a technical level then I don't care about fundamentals at all that's diluting my brain to believing that I think that these fundamentals are good when the reality is is that they might be good but institutions don't care about that right now hence the reason we don't have a good technical pattern or we're in a bad environment right we're in a bare market and Technical or fundamentals might be great

but the technicals look bad for a reason MH versus you have a strong market right just look at the market objec say is the 200 days sloping up or is it not and then does this is this stock in a top 40 group or is it not and then once you have a really clean technical pattern and the stock begins to push out then all of a sudden I love those fundamentals because it's the thing that makes me patient within a beautiful looking chart well it looks great because institutions are buying it but it's now

when you say to yourself well they've got accelerating earnings in sales they're in a top 40 group and they've got that nice technical pattern and they're going to have a 50 billion or 20 billion or 100 billion in invidious case of free cash flow so if that's the case right I just want to sit there and do nothing and Trail a lagging moving average and see how far institutions want to take this thing right because I I once I take my position I'm not buying more and buying more and buying more like they are quarter

over quarter over quarter I take my good entry and I just sit tight and I'm manage my risk from my good entry but fundamentals to me do not matter at all in a downtrending chart a lot of great companies have good fundamentals but they're downtrending right some home builders might actually have free cash or we can talk about um the Chinese stocks some of them trade at low pees and tons of cash on the books tra have a you know a third of the of their market cap in cash all those things might be like

well that's attractive to an institution but for a long period of time they were unloved until recently right and then once the technicals turn you can now start to give yourself all the fundamental reasons why it's fre and on the flip side of that you could have small cap companies who don't have fundamentals at all and they just strictly fit into the momentum category if that's what you like to trade and you're not going to marry this thing while the fundamentals are quote unquote bad that's okay trade it from just a technical perspective because they're

in a good group and they're got hot momentum so yeah that's how I view it with fundamentals yeah I think that's helpful from your strategy perspective say you find a stock that looks good you are thinking about entering the position what's that process look like is there particular Catalyst or news that hoping for is there a particular Gap up that maybe you're looking for in that name or in that group in that sector you know can you walk me through sort of what your mindset is like and your perspective on on what you might want

to put some risk on and enter into a trade yeah and that's a that's a great question I um earnings Gap ups for instance are some of my favorite trades right they Gap up on good earnings and that's like a sign to you that there is underlying demand and if it's got a really nice technical chart or it's breaking out of a multi-week multi-month base and it's got good earnings one of the things a very simple setup might be buying the five minute opening range break right so the Market opens it has a FIV minute

bar that five minute bar closes and then I'm looking to enter over that five minute Hub with my stop at the low of that five minute now that might not always be a successful trade but as long as you're taking a you know proper position size and that's so you know a topic on its own you know 10% of my portfolio on a trade with 4 and a half% risk if I'm wrong I'm going to be losing four point4 to 0.5% of my portfolio right something manageable to overcome right nothing lifethreatening you know that you

just oh man I just took a 10% hit no it's it's a very manageable loss but it is a very repeatable setup you know if you just study what earning Gap UPS look like um you know continuation setups just something that's gone up and gone sideways for three to five to seven weeks and gives you your famous Bill O'Neal three weeks tight setup and then just buying as you're breaking out of the range right in an already strong grute right and it's just a continuation pattern now often times you know the market is ever changing

right where we are within the market cycle so try to understand how long earnings winners can move for and what your entry tactic is depending on the the market right if the Market's just ripping and roaring a simple breakout will do right if the Market's a little bit choppy maybe buying an undercut and rally where you just look at the daily and it comes into a level of support maybe undercuts it begins to Rally zoom in on the five minute get a little bit more granular take your entry as it's things are turning back up

you know as Lance would say the right side of the V right and and he's somebody else have you know learned something from another great and said what what is it that he he does and you get like the kind of capitulation into a prior level of support stock begins to turn up you know you kind of get the right side of the V and as it starts to turn up you you take that into a few dream bars and then you set your stop up a low and that low on The Daily is a

support level right so a simple undercutting round and so entry tactics definitely change based on Market environment but you know kind of learning those as time goes on right not everything is going to be a perfect breakout not everything's going to be a perfect earnings Gap up and not everything's going to be a higher low on The Daily where you just enter in right over prior day's High yeah that is how I take most of my entries right and I like breakouts but you're not breaking out if you're buying it within yesterday's highs right it

has to be above yesterday's highs above yesterday's channel for it to be a quote unquote breakout and even still you could be buying over yesterday's Highs but it could still be at the lower part of the range as an undercut and rally and you have to understand that the stock might still have to churn through a little bit of apply within that range to really be a breakout but if you get the undercut and rally maybe you can also be adding over the breakout level right to be increasing your quote unquote risk without and you

may increase your cost basis a little bit but you're not really adding risk to the train you're just adding a little bit more size and maybe scooting up your stop a little bit so yeah and and I definitely want to talk about risk management because one of the things I think that's interesting that that you've spoken about is that you will take one position and so you know how do you manage risk to make sure that you're you know losing a manageable amount if the trade isn't favorable and will you reenter into the position will

you try three tries and and you're out kind of thing how do you think about managing your risk you know do you do you try again the next day do you wait for the setup to try to play out all over again how do you think about you know risk management overall but then how do you think about risk management for your style and what what works best for you yeah I think that the simplest answer is really position sizing right if I go and buy a breakout but I have 50% of my portfolio in

there with a 4% stop and I could be losing 2% of the whole account just on being r that one time but I really do a good job and I implore everybody to position size properly right and use what Mark minervini teachers called Progressive exposure so when I go and and I'm sitting on a full 100% cash and the market gives me a follow through day off of a correction you know I'm looking to buy that breakout or buy the higher low setup or the undercut rally depending on you know my style my technique of

entry and it'll be with a 10% portfolio position and I don't ever really like my stops to be more than 7% away because then I'm just my timing would be off right if I had to Wi not my stop that much and if I did I felt like I did I would size down even more be a 5% position and then look to add later but one of the things that uh that will happen is you know the first 30 minutes of the day tend to be the most volatile so you know and I might

be looking for a breakout over yesterday's highs where I buy that breakout and my stop will go to low of day could be 3% away could be 4% away depending on how volatile the name is another thing that people might need to consider is how much rain as this particular stock have right a stock like IND Didia moves three and a half 4% per day you know a small cap like bbii is moving 12% per day so if I'm buying a breakout over yesterday's highs is my stop 10% and if so do I just need

to maybe get a 5% portfolio position on versus an Nvidia with a 3% risk you can even get to a 20% position on so and then from there obviously thinking about situational awareness Ness if I'm buying a NASDAQ stock how is the NASDAQ looking on the day that I buy am I giving my stock the best opportunity to work when I buy if the nasdaq's getting beaten up and I'm buying a high highly correlated Market name right the likelihood that my stock has the best chance for success is going to happen when at the very

least the nasdaq's going up right and so trying to align my buys with what the underlying Market that I'm trading is doing so that's very important and if I get stopped out it's a manageable loss and I'm absolutely willing to try it again so if I buy a breakout over yesterday's highs from a clean technical pattern and they've got good fundamentals and then I I buy it and I get stopped out at low of day if I'm noticing at the end of the day the Market's really strong and closing towards the highs of the day

and my stock has you know stopped me out at low of day but then turns back around midday you know everybody comes back from lunch and you know that last 90 minutes of the day you're either going to get a strong close or you're not and so if you get that strong close and you break back over prior day high I would be very comfortable taking that entry right and and again even if that means that the low of the day now is a little bit further down that means either you change your position sizing

a little bit or you're cognizant of the fact that you know hey low of days is a little bit you know further down I'm still going to take the same size but I know if it's a 5% stop and I'm taking 10% size I'm now risking another half percent of my portfolio right so it's really being conscious of that but if you believe that you're looking at stocks within a top group in a healthy Market that have good fundamentals that have a very nice technical chart and all of the my little boxes are checked I'm

very comfortable trying it again um and yeah I I probably do have like a two strikes set I'm out kind of deal on the same day with a particular name because it it might just be that I try the break out and it doesn't work and I try it again and it doesn't work that the Market's actually feeding me some Clues as to what buying breakouts today might look like versus you know did that dip level did today's lows match up with a moving average on The Daily and maybe it's better to be looking at

that low and then the right side of the V kind of an entry or should I still continue to stick with a breakout of a prior day high and the Market's always giving you that feedback so it's just being a good listener as to what it is that's working this week more this month yeah and and based on the week or the month you might have significantly stronger sectors groups Absolut how and think about the rotation of what's working what's not you know how much of what's working at the moment might influence your decision to

stay in the stock versus start peeling some and taking profits how do you think about the profit taking part and watching what the market is doing and listening to the market kind of tell you when to take your profits how does that that work for you yeah that's another a great question um and that's actually a question that I've tried to touch upon with s um you know when I am viewing my own positioning and I take a breakout and it's working and then the market invites me and shows me another great technical pattern and

I take it and it's working I'm really still only looking for 3-day to 5day momentum bursts and that's something that's taught by prep this is how stocks breaking out of strong technical patterns look they make their move up they consolidate they get tight when they're breaking out of that tightness they go for three to five days right and my job as a Trader is to get paid on some of that right I did my job I scanned at night I found my setup I took my entry it moved for three days right I'm trying to

now improve my worst case scenario so I sell some into that strength and for me I typically like selling half right I don't have I don't have a uh crystal ball so I don't know what's going to come way down the road right but a great example was recently I bought hings at 29 and then it goes and I'm trimming some at 37 now yes do I wish I held the whole thing up to 70 that would be crystal ball talk right but I caught the move that I was hoping for because that's really what

trading is it's something's tight it's offering me low risk on my entry it gave me a move to 37 I peeled half and I love selling half because if it goes higher mentally I can say I still have half if it comes back and stops me up below a moving average I'll say at least I sold half right so like mentally I can live with that and then at that point I like to just Trail on an ascending moving average and again another great Trader that I'm familiar with is Jeff sun and he likes to

talk about extensions from the 50-day moving average so if a stock moves for instance 4% per day and now we're 28% above the 50-day moving average I would say that that's seven times its average daily range above the 50 and then I know even if I'm down to half my position I want to Trill uh trim 20% of what I have left and then you get eight times extended from the 50 days you have another Green Day I want to trim another 20% of what I have left and then nine times I trim another 20%

so trying to trim as much as I can into that strength and then you know part of me goes if something goes parabolic I start to think about the other side of the trade as a Trader um but ideally if you're in a company with really good fundamentals and you catch a parabolic move shrim off a portion that you're willing to say hey until I get a close below the 20-day simple moving average I'm not leaving right I'm now hoping for a consolidation and if it lasts a few weeks a few months it allows me

to maybe add to that position later but I want to keep a nice low cost basis with a trimmed up position to allow me to not feel angst over a 10 15% pullback because I'm out 80% of my total position right I've done a good job of paying myself and treating this like a business so selling into to the initial push and then trimming some as you get extended from the 50-day moving average is a really good way to manage your profit taking and then allowing the lagging indicator which is a moving average to say

if it's above the 20 doesn't matter what it's doing today right I'm trimmed you know it's not extended from the 50 can't trim more I'm only out half but if it just stays above the 20 who cares right if it's a smaller cap that moves a little bit faster maybe I use the tendit if it's Nvidia and earned the right to use the 50 maybe I use the 50 right and allowing the stock to dictate you know if it's going to get trailed on the 50 on the 20 on the 10 if it's a fast

remover but making sure you're paying yourself yeah absolutely which is a critical part of trading you got to make sure that you're you didn't pay at yes and in terms of technical indicators you know what are some of the moving averages and Technical indicators that you really favor that have a lot of influence on what you're looking at in in making decisions yeah the only really thing that I use are just basically lagging trailing moving averages right the 200 sets the objective picture is this thing in a bigger picture up Trend or not right the

50-day I really use for judging extensions away from you know where current price is at to judge if I have to peel some more um and then the 10 and the 20 is usually what I use to just stay in the thing right if it's above the 10 and the 20 you just hang out um so just lagging moving averages again I I learned that from everybodyy saber Trader Christian and it's just a very simple objective way to say it's above I'm not doing anything with it so I I don't have I don't like to

use RSI or macd or you know Binger bands or anything else per se to over complicate my own decision-making right I want to just simplify everything as much as possible so that we're we don't have conflicting indicators and then I have to now dig into my own soul and be like like is RSI lying to me is m d lying to me is should I just tra my moving averages I don't want to get caught up in that and I think the more you simplify it and the more you find what works for your personality

and your daily routine and your life I think is really important awesome thank you so much oh man absolutely yeah and and for the last part of our interview and our episode I'd love to go through just a liking round set of questions if that's okay yeah absolutely so first one would be what do you consider to be your greatest strength as a Trader I personally think my Traer strength is uh my adaptability and my willingness to continue to learn although I might be profitable and I've done well almost over the last five years it's

recognizing when others are doing something that you know intrigues me and then being willing to set us apart some time to continue to study right although I am a profitable Trader it's going and still learning from someone like Lance right even though I might say you know know I'm doing fine on my own I don't need to learn anything else no still being open-minded to learning more what's one area of your trading that you hope to evolve even further just mentally being comfortable with scalability right um being comfortable with pushing more size and I I

truly believe that that's just a matter of where everybody is in their trading Journey right as the the larger portfol you get the more aggressive it might look like you're getting but just doing more of the same but with bigger exercise and being comfortable doing that and are there any areas of your trading that you're still working on to improve particularly for this year 2025 yeah execution um I think that you know every cent in the market maybe not so much for a swing Trader but when you're really trying to put on big size it's

like making sure that you're doing that at the right spots and eliminating that sense of fear of missing out right even sometimes I get that like I saw beautiful C I didn't have my eye on my alert box so when my alert triggers and I set six seven eight alerts the night before and a few of them trigger at the same time you know don't go and look at that chart that is now extended away from the lows of the day it's up more than one average true range away from you know from the lows

and just say I got to get in right and so just like eliminating the fomo and knowing that there's always another opportunity right around the corner is there one myth or misperception do you think people have about the world of trading or the stock market in general you know we've all been told that only 10% of people succeed within trading I think having perseverance you know having that Faith within yourself that it is doable and that with enough studying and studying the people who came before you and did you know what it took to survive

for two decades and just being a copycat in kind of kind of a way right and saying I don't need to reinvent the wheel the wheels already been invented and you know just kind of being willing to learn from the graes behind you what's the best piece of training advice you ever got from another Trader someone more senior than you about trading never stop learning always be adaptable and then focus on the things you can control don't focus on past results focus on the tomorrow and and do things even during your knock trading day that

would be conducive to better trading tomorrow whether it's get good sleep eat a good meal get some exercising you know have good awareness that you know if you've got something going on in your personal life to maybe pump the brakes within the market because it's never going anywhere so you know and I've heard that from many of great Traders you know when there's something going on in your personal life maybe just back up a moment and you know just let let your body settle let your mind settle and come back to the market with a

fresh mind and if there's someone who's out there listening that's having a hard time with their trading maybe they're going through a draw down just had a big loss they're considering quitting trading now what advice would you give them in general yeah don't quit size down believe in yourself know that it can be done and don't stop learning you have to review those big losses right you have to review what it was that I did wrong was I oversized was I trading the market in a with a certain bias you know was I long bias

on a group that was going down did I stay stubborn did I add to my loser there are a lot of little nuances as to why you could have had a big draw down that need to be studied and the only real way to get better is to be honest with yourself and and do that deep dive and answer the hard questions for yourself right you know I I always I took a big loss even though I had veps um thesis ever and I was on the right theme a year early with nuclear names you

know I I ended up getting aggressive on ccj well before the technicals aligned with my fundamentals or should I say with with my thesis the technicals weren't aligned yet and so I was still buying a stock that was below its 50 you know hugging the 200 effectively and they ended up doing an offering and if you're getting in if you're in an offering on something that's in an uptrend it's it's pulling back to ascending support you know but if you to get an offering in a stock that's in a downtrend there is no support um

and so being early is still being wrong and I had to do like that internalizing and and learn that hard lesson for myself and so what would you say is maybe the lowest hanging fruit that a Trader can do in order to improve their trading that maybe they're not even thinking of I mean if as Sil as it might side is get good sleep right that is the lowest hanging fruit and focus on the things you can control right if if you don't get good sleep for instance how are you going come to the market

with a clear mind and then do the homework the night before the best idea is don't just typically unless you're a day trader right some of the best ideas can Sprout out midday but some of my very best ideas come from the night before right of doing that homework and figuring out where's that money going where is that money leaving and seeing it for yourself within multiple charts gaining that conviction that you understand what it is that you're seeing what's one thing that you do outside of trading that you think helps you as a Trader

I've been trying to play a little bit more pick ball with my fiance so being a bit more active right getting out of the desk right um I try to distract myself with with friends you know with my family with my dogs who I love dearly so just decompressing and kind of stepping away from the market and again realizing that the Market's always going to be there right when it's time to scan you take your 30 minutes in the evening and figure out what's going on but just knowing when it's time to kind of rest

your eyes and back off and when it's time to kind of step on the gas and how important is it to have a great support system you mentioned fiance dogs family you know how important is that to have as a Trader rather than just being in isolation just training all day every day yeah you need a great support system right there's absolutely nothing about trading that is easy until you have done all the hard work on the front end but in the meantime while you're still learning while you're still studying while you might be struggling

while you're not recognizing the market change um you know having people to lift you up having people to say don't worry about it it's going to be fine just keep your head in the game you know don't worry about it everything's going to be all right um and I've had that in my career um I've had great mentors along the way guys in IU personally other Traders and then surrounding yourself with a pod of Traders whether it be like-minded people and and better still people who aren't like-minded so you can get the other side of

you know the the coin um where you might say this is a great setup and then you have somebody be able to explain themselves why it might not be right um thoroughly and so you know how doing that great pod around you is is very important and having a strong support you know group whether it's your your family or your loved one or even your dogs right and it's like you know they're always there for you and you you know just being able to just kind of step away and know that hey no matter what's

going on I've got somebody that's dependent on me and totally unrelated from Trading and you know that is very important yeah absolutely great great advice great answer and last question for those listening would love to learn more about you or how you trade maybe even contact you how can they do so yeah I'm on Twitter uh real simple Ariel I'm also in IU and you know I'm I'm always dealing with and talking to the traders in there and anybody who reaches out to me uh DMS you know I try my best to make sure I'm

getting back to people diligently and again on X and real simple Ariel it's a very simple way to get inceptioning awesome well Ariel thank you so much for being here and doing this episode long time coming really really glad we got to do this thank you so much I appreciate it yeah thank you we hope you enjoyed this episode of the Traders Journey we have additional episodes we believe you might also like so don't forget to subscribe you'll be notified of upcoming releases the moment they're available thanks for tuning in