The Ultimate Day Trading Guide for 2025 (Full Training Chapters 1 - 10)

[Music] in today's episode I'm going to teach you how to start day trading and I'm going to share with you a trading strategy that you can Implement in your own trading starting today this is a strategy that I think is one of the best for beginner Traders and the reason is because the rules of this strategy that dictates the type of stocks to trade where to buy where to sell and how to manage your risk these rules are simple and easy to understand so here's my goal for you today through this class you will learn

all the basics of how to start trading how to perform technical analysis how to find strong stocks to trade and at the end of the class you will walk away with a strategy you can Implement in your own trading starting today I ask you one thing to practice this new strategy you're learning in a simulated environment a stock market simulator that way you can test yourself and see if you can actually trade it profitably before putting real money on the line and don't worry I will show you not only how to use a stock market

simulator I will give you a couple suggestions of ones that you can use some that are free others that you pay for depending on what works best for you so let's start this class by jumping into the slide deck I've got a whiteboard we've got a slide deck and we've got a lot to cover and I want to begin with a little quiz to set the stage and kind of see where you're at at the beginning of this class we will do another quiz at the end of the class so you can see how much

you've learned here today so here's the question should I buy this stock right now now you may look at this and already feel a little over your head and don't worry I'll fill in all the blanks of what's going on in this chart but let's just see where you're at so we have a stock right now this clearly moved up quite a bit we've got some nice big green candlesticks then it pulled back it rallied up again and now it's pulled back again so what do you think it's going to do The Logical answer probably

is that it's going to Rally up one more time oh boy you're dead wrong no that's not what's going to happen here hey look that's okay that's why you're in class so this chart actually gave me a signal that told me it was not going to go higher that signal was very subtle but it was clear as day on the chart for me and it was this indicator right here Crossing into the negative when that blue line crossed right there that told me this stock most likely was not going to move higher and in fact

it did not it sold off so something that I find really interesting is that there was a clear sell signal there you didn't see it yet because your eye probably hasn't been trained to to pick up on those subtle cues this is the language of the financial Market is the language of technical analysis and as you immerse yourself in a community like here on YouTube of people that are speaking this language you will learn it it takes time just like reading any other language or learning another language but to me it's fascinating and the reward

for learning it is tremendous if you can really get it dialed in because something you're going to learn is that the trade traders who make the most money are the traders who are able to nearly see into the future they can predict what's going to happen next on the chart so let's look at this well now I I bet you know the answer probably the first thing you checked was right down here and you see that this is negative good job all right so if you answered this is going to fail you were correct let's

look at another example so now you're probably saying oh this is going to work look the macd is open wow wrong again okay all right no look it's okay it's okay this we all earned somewhere so so here I tricked you and I did this because I want you to know that there's another indicator that we have to check and it's the volume right here so this had a different warning signal the warning signal was that there was high volume selling on these red candles and that means in total there were more people that were

selling the stock than were buying the stock these are two of the of the indicators that I look at before I take any trade and if just one of them say no I don't take the trade they both have to say yes for me to take a trade so the volume said no even though the macd which is an indicator you'll learn more about through this class said yes so the answer was no one no means no now here's another example this one I think you can already guess the answer the macd is coming down

it's still positive but it's coming down but the volume is going to tell us go and that's correct now let's look at this finally we've got something to work with or do we is there is this another trick well let's see let's look we've got high volume and the volume is on green candles the macd is positive is there anything telling me no I don't think so this is a good entry I should buy right here and therefore look at that squeeze right we get that nice squeeze these indicators were giving us positive signals they

weren't saying no we had light volume selling the macd was positive and the entry is right here as that first candle makes a new High versus the high of the last one that's the setup I'm going to teach you as we go through this class now what about this uh this chart here so this one uh to me is a pretty clear no the issue is the mati is flat and there's a hide candle so this is not a good setup we wouldn't take that trade one of the reasons a lot of beginner Traders lose

money is because number one they don't have a strategy they're following so they're just shooting from the hip and number two they're not trading the right stock so they get themselves sidetracked trading stocks that don't have enough volume they don't have enough volatility and they just get chopped up trading stocks in the wrong places let's look at this one here should I buy here well macd is positive I don't see any warning on the volume uh bars here so the answer would be yes this is a trade that I should take every trade carries risk

and what we're trying to do is we're trying to manage our risk where we can take a position where the amount that we're risking is as little as possible the amount we can make is more than what we're risking and where we feel where we've got an 80% chance of this working even the perfect setup occasionally will not work so I'm going to tell you right now there's no such thing as a strategy that works 100% of the time but if you have a strategy that over the course of 100 trades is giving you profit

60% of the time 70% of the time that can be enough to be a very profitable Trader as long as you learn to cut your losses quickly I'll teach you how to do that today all right so now you've looked at a couple examples of a few different chart patterns this is also going to be a yes we've got a nice volume profile macd is open so everything about this looks good all right so what are the topics that we're going to cover today we've got 10 big topics we're going to cover and this I

sort of picture this as helping lay the foundation so because I want to keep this class concise and make sure I give you as much value as I can for your time I'm not going to go into a huge amount of depth on each one of these topics but they're pillars of the foundation this is your starting point and as you learn all of these Concepts what we can do in additional classes that you can watch here on YouTube and or you could uh watch it where you're trading is we will fill in more depth

around these so you're going to learn that this each one of these topics can be expanded upon with a lot more depth but of course rather than starting with a tremendous amount of depth and overwhelming you I want to start with laying a solid foundation of making sure you understand the basic concepts necessary to be a Trader okay so let's go ahead and you know what I I want want to start by just saying one thing there's a lot of people out there on YouTube and on social media who talk a big game and I

want to thank you for tuning in to this episode right here but you may be wondering what does this guy know about trading in a small account what does this guy know about growing a small account and so I'm going to show you in 2017 I funded an account with $583 15 with the goal of seeing how quickly I could grow that account to 100,000 bucks at the time I thought it might take me a full year in fact I did it in just 45 days and so since I achieved the goal so quickly it

was only March I decided to just keep trading in that account by December I had grown the account to $335,000 the next year I made almost half a million dollars the year after that I crossed over a million dollars and during the pandemic the stock market boomed and I ended up crossing over $10 million in fully verified trading profits now I'm one of the few Traders out there that's actually had all of my trading profits subjected to an independent third-party accountants audit so I'll show you the audit results in just a second but for those

of you guys who are considering trading in a small account I want you to know that I've put my money where my mouth is I actually traded the strategy that I'm going to share with you with a small account and this is the small account challenge I'm best known for but I've done more small account challenges than I can count I just set up an account with 500 bucks or a th000 bucks I'll grow it spend a month doing it you know it's a fun Challenge and then I'll do it again 6 months later whatever

the case is so you'll notice if you look at the calendar that each one of these days I only took two trades two trades two trades two trades two trades I keep it focused and this was just the first uh the first month the first month of uh first maybe first 20 days so these are the audit results right here uh this verifies that I started with $583 15 and by the end of December in 2023 my account was at 10,719 th000 now 2024 it's been a fantastic year the account is currently sitting at just

over $ 12.3 million of verified trading profits the 2024 uh trading year will be audited in early January of 2025 so if you want to learn how to trade what I'm telling you is that you've come to the right place not only do I know how to day trade I know specifically how to grow a really small account so as we begin this class I'm going to give you some PDFs that you guys can download you can print them out you can put them on your desk you can use them in your own trading and

you can follow along through this class with these PDFs so I will have a link it'll be pinned at the top of the comments and Linked In the description where you can download my small account worksheet so it's my small account strategy worksheet and where you can download my trading plan this is the plan that I want you to implement in your own trading but in a simulated environment to prove that you you have what it takes to trade my strategy here's something I'm going to tell you I will share my strategy with you I

have no problem doing that I'll put it all on the table but success will only come from traders who have the discipline to follow the rules of the strategy so that's where the ball is in your court all right so this is very important now I'll teach you some tips and tricks to being a more disciplined Trader all right so hopefully you guys have already downloaded these PDFs these worksheets there'll be a selection in uh the download so I'm going to give a bunch of them to you for free and you can utilize them and

Implement them in your own trading and follow along through this class with those PDFs all right so topic number one your choice of platform there are literally dozens and dozens of different trading platforms out there and it can make it a little overwhelming for a beginner Trader to know which one to use now one of the things that I said early on is that I want you to trade in a simulator before you put real money on the line so that means first you need to figure out which simulator you're going to use now if

you set that as sort of your first goal what is ultimately going to happen is you're going to eliminate another a number of these Brokers because they don't even offer simulated trading so for instance Robin Hood they don't offer a simulator so boom they're off the list now to me you might think it's crazy why don't these Brokers offer a stock market simulator so their clients can practice practice the market and of course if they practice they're probably more likely to be successful long term and therefore be successful clients who are then making the broker

a lot of money the answer lies in asking the question of how do the Brokers actually make money in the first place and the way commission-free Brokers make money is by selling your order flow to institutional trading firms so the institutional trading firm actually buys all of the order flow from that broker and what they do is they they essentially scalp every trade that the clients place for a fraction of a penny just a fraction of a penny and so what happens is you're able to get free commissions because you're losing a fraction of a

penny to that institutional trading firm on every single trade that you take and the broker they get a cut of that and this is to the tune of billions of dollars per year but here's the problem if you're trading in a simulator there's no order flow to sell so they make no money if you're trading in the simulator so when you're in the simulator you're using real-time Market data which costs them money you're using their platform which has server loads and everything else you might even be emailing customer support they're making no money off of

you so a lot of Brokers just simply don't offer simulated trading but you know what's even more annoying is the Brokers that do offer simulated trading a lot of them don't include include the same features that are offered when you trade with real money man that is annoying so let's talk about what to look for in a broker high level if you're going to trade the strategy that I trade every single day which is a momentum trading strategy meaning I'm looking for stocks moving higher I like to buy those pullbacks and sell as they squeeze

up to the next level what I need is a reliable trading platform that is fast and I think it's great if it's popular among Big Money traders because I like to see that other Traders out there six figure seven figure maybe even eight figure Traders are showing that this is a platform that they like and that they're comfortable using to make good money so if you look at an obscure platform and you don't know of anyone else that's using it that by itself itself kind of makes me question whether or not that's the right platform

to use so a trading platform that's reliable and is popular among Big Money traders number one number two you need a platform that has fast order execution which is the time between where you press the buy button and when you get your shares filled now in this day and age with highspeed internet it should be almost instantaneous and it is for a number of Brokers but there are other Brokers that for various reasons for the way they've set up their platform and this and that their order routing is slower and unfortunately that means you'll be

slower to buy and you'll be slower to sell and that's not an advantage when you're trading so we've got to make sure you're choosing a broker that has fast order execution you're also going to need full level two Market data you may not know what that is yet but you're going to learn about that in today's class you're also going to need a broker that offers hot keys for Rapid entries and exits hot keys are when with the Press of a button shift one shift two you can buy 100 shares or buy 200 shares this

is an old keyboard that I've used and you can see it's gotten used quite a bit and the way I trade is by pressing shift 1 shift two and then if I want to get out of a trade I press contrl z contr x contr C I've pressed that one a lot contrl C is to sell a quarter of my position so these hot keys are incredibly important because they allow you to move into the market just like that you don't have to point and click you don't have to type in the share amount or

the numbers or the price you just press a button and your order is in or it's out easy and you want it to be easy number five you really want a platform that allows Sim trading so you can practice before going live when you're learning how to drive you want to learn how to drive on the car that you're going to take your driving test on if you can right now if you take your test on a car that's totally different from what you're training on the day you're taking the test and you've got a

parallel park imagine you learn how to tra or you learn how to drive on a tiny little car and then you take your driver's test in a full length SUV parallel parking it's completely different so why go through that transition with trading that's unnecessary learn to trade in the same software that you're going to use with real money that way it'll translate right that's the right way to approach this so that means it's really important that we choose a broker that does allow simulated trading a stock market simulator okay so I'm going to narrow it

down to what I think right now are the three best stock market simulators thinker swim Weeble and Warrior trading Warrior trading does have a simulator now you're going to think I'm biased and I I am a little bit on this but for my strategy I really think it's a great platform but thinker swim and Weeble are pretty good as well but here's the thing that I find really interesting about both thinker swim and Weeble at so so right now the Market opens at 4:00 a.m. and it closes at 8:00 p.m. that's the full trading day

but at think or Swim their simulator doesn't work before 9:30 a.m. it only works starting at 9:30 and that's a problem because there's a lot of stocks that are moving early in the morning 7: a.m. 8: a.m. 9:00 a.m. you can't trade them in their simulator why I have no idea and then Weeble on the other hand their simulator doesn't allow you to use hot Keys you can use hotkeys with real money but not in the simulator why I have no idea and what makes matters worse is that both platforms and I've tested them both

side by side when I press the buy button in Weeble I have to wait one two I'm just waiting and waiting and waiting until finally the order fills I did the same thing at thinker swim I I open the platform I press the buy button and waiting and waiting until it finally fills so if you want to use either thinker swim or Weeble there is a workaround both of these platforms are commission free which means if you fund an account even just with a couple hundred dollars you could trade with one share you're trading low

price stocks that are $2 $3 a share so you could take tons of Trades one share per trade and ENT ually you are simulated you're doing simulated trading you're doing it with real money but you're only doing it with one share now the broker likes that cuz now they get to sell your order flow but they're not going to make much money on you when you're only trading with one share but they unlock the instant execution both Weeble and thinker swim your execution is a lot faster when you're with real money you don't have to

sit and wait it's it's like night and day their simulator is slow and then real money is fast so thinker swim and Weeble you can use them with to you can Sim do simulate trading there quote but it's really you have to fund an account with a couple hundred dollar and trade with one share if you do that with thinker swim then you'll be able to trade extended hours so let's look at these seven kind of bullet points of of my comparison and I'll hide my video here for you for a second so uh so

the first question is is the platform better with real money and the qu the answer is yes it is with thinker swim yes it is with Weeble and Warrior trading we're not a broker dealer so we don't have a real money platform which so by the way we don't have payment for orderflow the way the big Brokers do because we don't we're not a broker dealer so the only way that we make money on the simulator is by selling it as a software selling it as a service so we do have our simulator that we

sell but it's not free because we don't make money on the payment for orderflow the other Brokers do so just as a heads up on that but thinker swim um is better with real money and so is Weeble extended hours no with the simulator on thinker Swift but yes with with the real money account and Weeble does offer the simulator uh in in extended hours but it's still better to use real money there in my opinion all three offer level two data uh only Weeble and Warrior trading offer Advanced hotkeys and again with Weeble you

only get those Advanced hotkeys asteris when you fund a real money account now thinker swim does not offer Advanced hot Keys even with real money halt lels you're going to learn about HAL level halt levels today and thinker swim does not display them but Weeble does with real money and the warrior trading Sim does as well resumption quotes you won't get those with thinker swim but you can with Weeble and you can with Warrior trading trading metrics you don't get them either at thinker swim or Weeble but Warrior trading does have them now in terms

of price The Thinker swim uh simulator is totally free and if you fund it with real money it's also free you just have to put you know a couple hundred dollars in so you could take one trade uh one share of every trade you take Weeble cost $10 a month and that's a sort of a discounted rate but it is $10 a month the warrior trading Sim is uh free for 90 days for warrior Pro members which we think is enough time for you to use it but then after that it's $100 a month so

we have to cover our Market data costs our server costs and all of that stuff because we don't have the commissions and pay for order flow that would make up for it uh however if you wanted metrics you'd have to pay $50 a month uh at with thinker swim or Weeble and you would be using the platform right over here that I use which is Trader viiew so this platform is $50 a month however at the warrior trading Sim we integrate that type of data and Reporting inside our platform so it's included so at the

end of the day I think your best bet if you're on a budget is going to be Weeble right down here and you really need your metrics and I'll explain why as we go through this class but this is going to be your best bet so you're about $60 a month the warrior Trading s it's going to be $100 a month but free for the first 90 days so it's up to you if you trade in it longer than that but I do want you to make the commitment to sim trade only and with the

asterisk that if you trade with one share of real money I would consider that the equivalent of sim trading and it would be acceptable so I want you to do simulated trading only until you've proven that you can be a profitable Trader now as we go through this course I'm going to show you examples of students at Warrior Trading who have followed the trading plan that I'm going to share with you then sent me their p&l of their calendar showing sort of like how they performed in those that first month of following the plan and

I think that that'll be inspiring for you to see so I really want to encourage you not to put real money on the line until you've proven you can make money in the Sim how much money do I need to start with so most retail Brokers at this point do not have minimum deposit requirements could fund an account Robin Hood or Weeble with a 100 bucks a 10 bucks doesn't matter but here's the thing if you're trying to grow an account you have to be realistic with the amount of money you're starting with so I'm

going to what I'm going to do is kind of talk about profit goals and how that relates to how much money I would start trading with in my experience in a cash only account I can realistically grow the account by 10% on a on a really good day so that means if I had an account with 100 bucks in it I could grow the account by $10 on a really good day although most days would probably be in the range of $3 to5 now some of you will say Ross $3 to5 obviously not enough to

cover my cost of living and I get it but one thing that I'll tell you is that one of my students his name is Danny I recently did an interview with him and that interview is published here on YouTube he traded um for about 6 months with a daily goal of $10 but what he knew was is that if he could consistently make $10 a day with small share size that the only difference between $10 a day and $20 a day was increasing his share size but he wouldn't do it until he first had proven

that he had a track record of being consistent of being able to trade profitably so he was able to scale his trading from what was initially a daily goal of $10 a day he's scaled up and he's now at about $350,000 on the year that's incredible and it started with a $10 daily goal so I don't want you to be too um you know dismissive of oh $3 to5 a day is not good because if if that's your proof of concept and it's part of the plan that you're following then I think that that's fantastic

now realistically starting with a $100 account is is a very small amount of money while you could do it you would have to be content with making very small progress so naturally if I start with you know $1,000 or 10,000 my daily goals would scale up but I also would caution against saying oh well I'll just start with $100,000 because that's too much money to start with you start with a lot of money like that and what's going to happen is you're not going to believe the emotional response you're going to have to having both

big Winners but certainly big losers and that emotional response can sort of send you into a spiral where if you take a big loss next thing you know you're feeling anger frustration disappointment and that feeling is so strong that you seek to get rid of it as quickly as possible and so the action that you take to to make that emotion go away is to take another trade because your your mind is thinking if I take another trade and I can make back what I just lost I don't have to feel terrible anymore unfortunately as

a beginner Trader when you get into that place of being desperate you go into a downward spiral so it's always better to start with a small account and build it up slowly as your track record supports so if you start with $1,000 and you trade in that account for a few months and then you're doing well it's like okay okay I'm going to add a couple more ,000 I'm going to go up to $3,000 I'm going to go up to$ 5,000 and of course you're making a little bit of profit along the way and then

you make your way up to$ 10,000 to 15,000 and we'll talk about different account types uh that you can use for this challenge so I would start with a small account I think that that's the best way even if you have a lot of money I think it's better to start with a small account okay so the account types include cash uh only accounts which are probably going to be the most popular accounts for most of you guys tuning in uh to this episode when you open a brokerage account there are two types that you

can open it's a cash account or a margin account a cash account will allow you to trade with the cash that you've deposited but once you've traded all the available cash you have to wait until the trade settle before taking additional trades and trades don't settle until overnight so that means if you deposit into your account let's just say for the sake of argument you have $100 in there and then you take you you trade a $1 stock um so it's a $1 stock and you buy one share of it so you could do that

times a 100 you could take a 100 trades in one day you've used up your $100 and so now you've got $ Z available that's left but you had 100 trades And1 $100 worth of trading the next day that'll reset to 100 and it'll be plus or minus your profit or loss so the nice thing about a cash account is that you can day trade in it but you will run out of of of cash eventually so if you're going to try to day trade and make a lot of money and use big positions you

probably wouldn't want to use a cash account but as a beginner getting started I think a cash account is terrific now the big thing that changed this was within the last year um we had a change in the settlement time to being overnight it used to be three days so if you traded on Monday you couldn't trade again until um Thursday and then they changed it to two days so it was Wednesday and now it's just changed to one day so it's Tuesday so now it's fantastic because you could trade every single day but when

you run out of cash you're locked up until the next day now the margin account is is what I use at this point and most traders who have accounts that are larger will use margin accounts so a margin account uh allows unlimited trading you don't run out of cash you could just keep trading and trading and Tra you could trade a million times in one day if you want to but there's a rule that you have to have at least $25,000 in the account that has to be your minimum cash balance now it can be

a combination of stock Holdings and cash but you have to have at least 25,000 in your account now this is only for us broker dealers International Brokers do not enforce this minimum balance requirement so it's only for us Brokers and US residents so if a US resident opens an international broker account which would be some do it's kind of a workaround but if let's say you had $110,000 say I'm going to go open an account with a broker in the Bahamas and there's a bunch of these offshore Brokers that cater to us Traders you could

actually have margin uh even though you're under 25,000 so some people will do that and and that's fine it's a it's kind of a risk reward ratio decision for you does this make sense for me to open this account do I need that additional ability to buy and trade more frequently and I think you do if your metrics support it but if you're a beginner that's not the right place to start at this point thanks to the T1 settlement time so at this point it makes more sense just to fund an account with a US

broker if you're us resident and just focus on a cash account and growing it slowly through proof of concept and just slowly grow that account that's the right way to set to sort of lay a solid foundation if you're an international Trader opening an international account yes you would be able to trade more frequently but that's not necessarily a good thing I think it's good to take it slow okay so the minimum amount of money you need to start an account to open an account I mean it the fact is there's really no minimum it's

just the most that you can kind of put in and feel comfortable with because you know trading is of course risky and making sure that you do have enough buying power where you could trade every day all right so now um number two so the real goal here is focusing on consistency prove that you can be consistently profitable in a simulator again whether it's trade uh thinker swim or uh Weeble and you're using just one share or you're using the warrior trading simulator that's fine as well but you want to focus on this being your

proof of concept period it's not about making a lot of money you don't need a lot of money in the account just build your track record that's what's important right now so this is how I analyze performance for uh for Traders for certainly a student Warrior trading and and certainly for myself I use this software Trader view where I can actually import all of my trades now if you're using the warrior trading Sim all of your we aggregate your data for you so you can see similar reports but if you were using Weeble or thinker

swim then you would want to import your trades um into a platform like this or in fact Trader viiew itself now I'll just say I don't have by the way any affiliate relationship with Weeble thinker swim or Trader viiew so if you use them use them if you want if you don't want to it doesn't make any difference for me I I don't need the money to have an affiliate relationship with these platforms so I just am sharing with you what I think really are pretty much the best uh tools out there and Brokers that

are available right now for the Strat that I'm trading now I will also say that uh the broker that I use on a day-to-day basis is Light Speed trading which is a broker in New York and it checks all of the boxes with the exception that they charge Commission on every trade you take they're not a commission-free broker and so for that reason it's not appealing for beginner traders who are wanting to take one trade a day or you know one trade with one share because you're going to you're going to lose money in commission

so it's it doesn't really make sense for beginners but it can make sense after you've traded for 6 months or a year with a commission free broker and you want to unlock some of the features that come with a a bit of a more professional platform like light speed okay so when it comes to analyzing metrics what I focus on for anyone that's going through the trading plan that you're going to be following is first and foremost what is your net profit now the reason we look at net profit even with one sh I want

to see that you're green so if you're not green then that by itself tells me all right you got to keep studying you got to keep getting experience so we look at your net profit what's your profit right up here the next thing I look at is the relationship of your average winners and your average losers you can see that mine are about even they're within like $19 $18 of each other so $1,300 average winners $1,300 average losers and that means that I have to be right 50% of the time in in order to break

even so now I want to check to see what your accuracy is and right here my accuracy is showing at 66% which is why I'm up $12.3 million If I Only Had 50% accuracy this wouldn't be there if I had 75% accuracy or 80% accuracy that number would probably be bigger but nonetheless it is what it is so I look at these metrics because these tell a story they paint a picture of what you're trading so first we look at the total profit your average winners your average losers and your accuracy that's the first tier

the next level down is getting dialed in at what's the price of the stocks that you're trading what is the time of day that you're trading and are there some patterns or hints or clues that we can gleam that would tell us what we could do to to be even better so let me show you an example of a month that I didn't trade very well so this was um March let's see so we'll do the the whole month of March here I'm going to go apply so this was a month where only only made

10,000 bucks this was not a great month for me you can see my average winners were $10,000 sorry um my average winers were $700 my average losers were $11,000 my accuracy was 61% and when I looked at um price and volume I noticed that I was losing money on stocks I was trading above $10 now that's not typically the case for me but it was the case during this period so what do you think I did in April in April I said all right based on this data right here I need to to make a

change I need to change the price that I'm focusing on and so going into the month of April I told myself focus on stocks between 2 and 10 that's where you've been doing better so in April I made $36,000 it was a better month and look at the profitability it's all on stocks between 2 and 10 I traded a couple of stocks that were more expensive but not much I really stayed focused on the price range where I knew I was doing better so if you're a beginner Trader and you maybe have been trading for

some time and you don't know your own metrics that to me is a huge mistake you've got to learn your metrics because there will be hints and clues in those metrics at what you're doing that works and what doesn't work now let me tell you a story when I was learning how to trade I went through this long process where I didn't have someone like me that I was able to learn from I was in Vermont I'm self-taught so I had to figure out everything the hard way now this was also in a period of

time where the accessibility for Education like this just wasn't the same as what it is today so it is what it is but that was the situation that I was in so I spent my first year learning how to trade experiencing a little bit of beginner's luck and maybe it was the market maybe I don't know what it was but I made some money in my first year it was remember it was 25,000 or 30,000 it was right in that area which was not bad and then what happened in the second year was I lost

that amount of money I went down $30,000 so I had made 2530 and then I gave it right back in the second year and in August of that second year I had this this this terrible experience where I on the first week of the new month I lost $5,000 and that put my account where I couldn't take any more trades unless I added more money into it and I was devastated this was a time in my life where I was broke I didn't have another job I I needed to make money from Trading to pay

my bills and so I was so devastated I was so frustrated I I couldn't trade and I I remember at first I just went outside and I was chopping wood I had this wood shed had a wood stove in my house and I was just like so frustrated but I got some energy out and then I came back inside and I said there has to be something here if you've seen that movie Apollo 13 there's a scene when they realize down at Command Center okay we got to figure out how we're going to save these

astronauts and they said this is what we have we've got to just figure it out and they start trying to figure out you know how to get the oxygen working again quiet down let's work the problem people let's not make things worse by guessing and I kind of did something similar where I went up into my little area where I was trading my little desk and I looked at all my trading records and I printed them out and one thing that I had been really good about was I wasn't using software like this back then

I was using an actual um Excel sheet so in Excel I was tracking each trade I was taking but I did that and so I printed out and then I started on the computer sorting the data by biggest winners biggest losers and I was trying to find a Rel relationship you know something like a hint of what might help me get out of this funk and get back into the right direction and I actually discovered that all of my big Winners had a common denominator they were on a very specific type of stock and these

losers I was taking these outlier losses the these were just unnecessary trades that were outside that kind of core of what was really working for me and I realized well you know actually over the last 18 months if if I had eliminated all of these outliers I'd actually would have been doing really well so then I thought well what if I can do that starting today and moving forward so I then began the process of selling stuff in my barn to fund my account so I could trade in it again and then when I had

the account back up and running I was so disciplined that I would only trade these setups and ultimately the setup that I'm going to share with you today is that setup that was my turning point it was that big that even now all these years later I still trade it so been collecting my metrics I wouldn't have been able to figure out what was actually working for me I just would have been overwhelmed with the losses and had nowhere to look so that's why it's so important for you to track your metrics and and it's

it's worth the $50 a month to do it number three let's talk about how to manage risk we know that trading is risky and it's especially risk risky because anyone can open an account and begin trading the barrier to entry is very low but just because you can open an account doesn't mean you have the skill or strategy to produce consistent profits as we well know most Traders come into the market they fund an account with real money and the inevitable happens what is that they take a big loss they don't know what they're doing

they lose money and the loss of money creates emotion so now they're emo they're all upset and that creates desperation which actually increases the quantity of bad trades and what does that result in losing more money and when they lose more money they get more emotional and then they trade even more you can see where we're going here this is a death spiral and this is what happens to a lot of beginner Traders they go into this downward spiral they come into the market and then they are quickly escorted right out and you know what's

sad is that a lot of those Traders might have had the potential to actually become successful If Only They had slowed down and approach this the right way so let's learn from the mistakes that these other Traders have made before us and for you right now set a commitment that I'm going to focus on learning this and learning to do this the right way and that means learning a strategy and trading it in a Sim before you put real money on the line so that's the first step to managing your risk of course but um

so we trade in simulator until proven profitable and and I always ask what is my exit price on this trade so if I'm going to take take a trade if I don't know what I stand to lose then in my opinion that's a gamble that's not a trade the only way it becomes a trade is if you're managing your risk against your reward so the way I like to trade is that I'll risk $100 to make a reward which is a risk to reward ratio of 200 oops whatever 200 so risk to reward 200 uh

100 200 which would give us a ratio of a profit to loss profit to loss ratio of 2: one and this is this is important because if you have a 2:1 profit loss ratio you actually only need to be right 33% of the time in order to be break even one to one is 50% so I would like you to look at a trade and say all right this is how much I'm going to risk and the amount that I stand to gain is at least 2x what I'm risking and if you could do that

on every trade then you're thinking about risk and reward the right way as a beginner your intuition is going to be p because you you're new and that's okay it's to be expected that means your accuracy is going to be lower so you're going to take trades and you're going to have losers but you're looking at the right things and asking the right questions when it comes to profit and loss ratio and risk versus reward so you've got to monitor your metrics and understand your average winners and your average losers in dollar amount and you've

got to monitor your accuracy so you know what percentage of the time you're successful you have to analyze your metrics to begin to understand the type of stocks you trade the best and the worst and at that point you focus on the winning stocks and you avoid the type you lose on so this ties into the importance of having this uh these metrics the downward spiral of many beginner Traders begins with poor accuracy poor accuracy creates a poor track record which creates poor self-confidence and increased losses and it just keeps going so how do you

break this downward spiral now hopefully none of you are in this downward spiral but let's just let's just say maybe maybe one of you right now is in this downward spiral how do we break out of that downward spiral we break out of it by understanding that the cause of this downward spiral is an emotional response and that in fact one of the most important keys to success in trading is having the right mindset mindset is so important so how do you cultivate the mindset of success especially if you're a beginner Trader who is not

yet successful well first of all we bring the stakes down big time by trading in a simulator that way if you lose money in a simulator it doesn't trigger an emotional spiral that's important so number one trading in a simulator number two we focus on accuracy that's how we break that negative feedback loop so what it means is that by focusing on accuracy you're Trading high quality stocks now remember today I'm going to share with you the five pillars of stock selection the five pillars of stock selection are also in the collection of PDF resources

that hopefully you guys have already downloaded but if not the link is pinned at the top of the comments and in the description so you have to trade a quality setups by trading a quality setups you won't eliminate your losers but you will reduce the losers because you're trading the right type of stocks so a quality setups increases accuracy accuracy going up will improve your profit to loss ratio because a poor profit to loss ratio is typically caused by a few outlier trades that are huge losses that drag down your entire profit loss ratio and

it's devastating but that's the reality so by increasing accuracy you'll increase your profit loss ratio and that then leads into consistency more green days more green weeks now you have more green days more green weeks what does that mean now you're building a strong track record a strong track record increases self-confidence increased self-confidence means you're going to increase the total number of Trades you're taking you're going to feel confident increasing your share size and that means increasing profitability and now you're on a positive feedback loop this is the right way to start so let me

tell you this if you've already traded with real money if you've already been on the negative feedback loop I was there too and I was able to break that cycle it is not easy you have to be incredibly disciplined so the step to Breaking the cycle is putting yourself into what I call Trader rehab Trader rehab is when you bring your share size all the way down so you're trading at a level that does not trigger emotional response when you lose you bring it way down now if you have to go in a simulator that's

fine or if you're trading with real money you go down to one share or 10 shares or whatever basically is is right at the point where you're not feeling an emotional response but you also are treating it like real money and and taking it seriously you focus on doing that for a minimum of 10 days 10 days that's two weeks two trading weeks right so you do that for two weeks and I'm telling you if you could do that for two weeks you will feel like a different person at the end of it even if

at the end of it you're green only four of the days all of a sudden you're going to feel this weight off your shoulder like wow I brought the temperature down so much and now when the temperature comes down you're able just to focus on building your strategy building your experience taking the highest quality setups and everything else kind of Fades it's it's incredible how much those emotions stay with us like if you have a big loss today then tomorrow the next day the next day like it just it takes a week it could take

two weeks for it to kind of go to the Wayside but it needs to so you can reset your brain and get focused on building that positive feedback loop it begins with accuracy highest quality setups improve profit loss ratio improv consistency improve confidence and that's where it begins you've got to be thinking well gosh Ross how do I find the right stocks to trade let's get let's get into it right so I'm going to teach you how to set up scanners because stock scanners are one of the most valuable tools that Traders use this software

searches the market in real time for stocks that meet certain sets of criteria now you choose the criteria and you tell the scanner to look for it most Brokers offer some basic scanning technology a simple scanner such as the leading percentage Gainer on the day we'll give you a list of the stocks that are up the most on the day and in fact I get these notifications all the time from Brokers telling me which stocks are up the most today why are they doing that why are they pushing these stocks because they want you to

have little fomo they want you to trade them because they make money when you trade the payment for orderflow model so now the stocks are up the most each day they do get a lot of attention they have a lot of people paying attention looking at the charts and trading them and that gives them more volume which can be a good thing so I'm going to give you my scanner criteria and this this is going to introduce the concept of supply and demand as it pertains to active trading so what we look for is an

imbalance between supply and demand that's what allows a stock to go up 50% 75% 100% in one day I mean these can be absolutely incredible moves now let me show you just as an example here um I've got a stock here that is up uh about 139% right now so it's 139% that's a huge move it's impressive and so how did this stock go up that much now this is my platform here we haven't we haven't really gotten into charts too much yet except for the very beginning but you can clearly see that this is

a stock that's up a lot so what happened with this company was they put out breaking news this morning it was right down here they put out this breaking news headline the news came out that they were launching a satellite with SpaceX and immediately the stock went from 350 all the way up to six bucks it pulled back and then it rallied up to eight it pulled back and it rallied up to just under nine so this company put out news that was so strong every Trader that saw it more or less was like I

want to get a piece of this AC and so what happened was it began with number three which was a news Catalyst there was a news event that the company put out and that immediately brought in volume so the way it starts is the news comes out early traders who subscribe to data feeds that give them the news and I'm one of those Traders see it and immediately read it and are like wow this is strong and the stock almost instantaneously when the news comes out the news comes out and the stock almost immediately starts

squeezing up right here so as it pops up right here it begins triggering my alerts that my scanners use so all of a sudden the stock is up 10% let's just say in 5 minutes so my scanner is telling me hey Ross even if I haven't seen the news yet my scanner is going to tell me hey Ross there's a stock right now up 10% in 5 minutes you should check you should check it out pay attention to it es and that's going to be especially true if the stock is between the prices of 2

and 20 now we know 2 and 10 is a little bit better but 2 and 20 so if it's in that range and it's spiking up my scanners are going to tell me with an audio alert bing bing bing bing bing and they're going to show me the stock and I'm going to pull it up I'm going to see the news and I'm going to realize this is why the stock is moving higher so that that's how we find these stocks so what I know is that when a stock has a news event when it's

priced between approximately $2 $320 that it's already up 30% on the day that it has five times higher volume than average that these are the common denominators among my biggest winning trades so this is the profile of the type of stocks I make money on and that's not just opinion that I I think that I actually know that I know that in my data this is over $12 million of trading profit well no not right here we've got to filter it we were in just a month of April but we'll go back to the total

so um so right here we'll go to um so we know the price uh we can go to instrument and this is loading a lot there's thousands and thousands of trades in here um but this is going to show me that I make more money on stocks that have higher volume that I do better when the stock has five times relative volume now why would a stock have five times higher volume today than what is average for that stock it's the news catalyst so all of these um these items in green here are indicators of

high demand a stock between three and 20 is going to have higher demand than a stock at $300 a share it just is it's more affordable more people are going to trade it a stock with news event is going to be more uh in demand a stock already up 30% people are going to be attracted to it I know it's up a lot but people are like it could go higher and we've certainly seen that a stock with high relative volume has got high demand so these are all of the elements and characteristics of demand

but what about Supply so there's only one element of supply and that is the float the float is a term that means the number of shares available to trade so when a company does an initial public offering they do an IPO they sell shares onto the open market so let's just say a company decides to sell 10 million shares they sell 10 million shares as an in their IPO and the IPO is just priced at let's say $8 a share so at $8 a share I'm going to change my marker here they're going to raise

how much money 10 * 8 $80 million it's a lot of money all right so they're raising $80 million in their IPO and from that point forward the stock begins trading at $8 and they have 10 million shares that are available to trade that equals the float and so when we see a stock that has 10 million shares available to trade we know that the amount of shares is relatively limited so to give you context a company like Bank of America has a float of I think it's 10 billion shares 10 billion shares why have

they sold so many shares they had to sell shares in order to build out the company in order to build all of the banks all the locations in order to have the capital to do all the lending they needed that money and so they sold the shares in order to raise that money smaller companies will sell fewer shares to raise money they don't need billions of dollars and they wouldn't be able to raise that money even if they wanted to because investors would be like wait what do you need all that money for what are

you going to do with it the it just wouldn't make sense to value a tiny company at the amount of money to raise you know that kind of that kind of cash and so what ends up being the case is that most of the stocks between 2 and 20 not all of them but a lot of them between 2 and2 the lower price stocks also have relatively lower floats the number of shares available at trade is limited and so when we have the initial public offering that's the IPO these are the shares that are available

from that point forward that's the shares that are available to trade unless a couple of things happen one is a buyback so sometimes a company will do a a buyback and they'll say you know what we're going to buy back 2 million shares so if they did that their float's going to go to 8 million or they could do what's called a um a secondary offering so a secondary offering will sell more shares onto the market so a secondary offering this is an initial public offering this is a secondary offering so here they sell another

let's say 5 million shares and that would bring their float up to 15 million and that's not uncommon they would raise that 5 million uh sell that 5 million shares and maybe they sell it $8 the same as their IPO maybe they sell it for Less depends on what the current market is for the company but they would sell those shares they would raise more money and then it would bring the total Capital raise to the new dollar amount and of course the hope would be that they take that money they invest in in in

the company and are able to make the company worth more that's not always the case with low price stocks they're usually lower price because they're underperforming um Market expectations in one way or another but that can also present an opportunity where you got something that's been really beaten up it's lower priced and then when they come out with some great news you could have the stock that goes you know 300% off the lows from $3 to $9 or $10 or 12 or 15 I mean we've seen it I I'll show you an example right here

of a stock uh this was just a couple weeks ago where we had a stock that literally came out with news and I can't remember what the Catalyst was on this but I want to say it was um a catalyst with Nvidia um but but I could be wrong in any case this this stock went in a matter of I mean it happened so fast it went from $6 a share to $50 a share in like 15 minutes now it came back down a lot but this was like an unbelievable move off the lows um

this is another stock drug that we um that I traded this year this one went up um couple th% from about $2 a share all the way to $80 it's still holding at 40 $40 a share it's incredible these are huge moves so these are companies it's got a 6.9 million share float so the number of shares available to trade is is pretty limited the company put out news it's a biotech company it was good news well received by the market and you know off it goes so now what I've done is I've taken the

data that again is not opinion but it's fact about the type of stocks I make the most money on and I have programmed that into my scanners so I created a custombuilt scanner to help give me an edge in the market this scanner uses the data from more than a decade of my own trading history to search for the type of stocks I statistically make the most money on when a stock hits my scanner I immediately analyze the news headline and begin performing a combination of fundamental and technical analysis and so this software right here

is what I'm using this is called day trade Dash and I actually hired a development team to build out this software for me I use it in my own trading every single day exclusively and members at Warrior trading my warrior Pro students they have access to it as well now people can also subscribe to it just on our website but this is a software that I use to search for stocks that are moving what I love about the software is that our goal was to create a UniFi dashboard that had the charts the scanners the

news feed the chat room everything in one place so you don't have to go toggling between four or five different platforms so we tried to make it pretty easy I think we've done a pretty good job of that so I don't need that up so all right now let's go ahead and um jump in here to oh well let me show you this so when I have the scanners um coming up each stock that hits the scanner right here this is my top gainers scan so I'll just do it on here it's a little bit

more clear so this top gainers scanner is showing me the top leading percentage gainers in the entire market and the flame is telling me if it has news a red flame is hot hot hot that means the news was in within the last 2 hours the orange flame the news is uh between 2 and 12 hours and the yellow flame is between 12 and 24 hours so I like to see stocks with red and orange Flames which means I'm hopefully trading the very beginning of a breaking news squeeze and I'm I'm in it on the

early side now in real time this scanner called the small cap highay momentum scanner will trigger audio alerts when a stock meets the criteria that I've trained the scanner to search for so it's almost like radar in real time going bing bing bing this stock meets the criteria and what I get is the time of the alert the ticker for the stock the price the the amount of volume the stock is traded today the float the number of shares available trade the relative volume the stock is currently experiencing so wkey had relative volume of 96

that one traded 96 Times Higher volume today than its average which is huge um and then we also it tells us how much the stock was gapping up and how much it was up from the previous day's close which was um 66% actually has Peak and the these are the names of the different scanners that I have and then I can set the audio alerts to which scanner I want to trigger the Bell that way I only hear the scanners that I really like and the running up scanners the similar uh scans slight variation of

that so this is the tool that I used to find the best stocks to trade and in the PDF handout of the Five Pillars of stock selection you will have um you will have access to each of those criteria and some expanded uh definitions and and um details about that let's talk about how to set up your charts once you found a stock you like on the scanners you need to know how to analyze that chart so we have a stock and we'll just use the example of wkey it hits the scanner boom there it

is on the scanner so now we're pulling up our charts all right so I click on the stock it'll update the charts it'll update the news feed and everything else so now we're looking at the charts and this is where we're getting into the language of technical analysis which is the universal language of the financial markets all right so you found a stock on scanner that you like how do we analyze it let's go ahead and jump in here this is the basics of candlesticks now some of you may already be familiar with this and

this will just be a quick brush up but for others this is brand new so the candlesticks are uh the type of chart that we use and if we look at um the the actual trading software up here or the day trade Dash platform you can see that each one of these charts has these shapes and these are called candlesticks and these are therefore called candlestick charts Candlestick charts have been around for uh well over a century they were developed um in Japan to trade rice Futures and they've become widely uh adopted and used by

Traders of all different markets and they're the most popular type of chart today in the financial market so Candlestick charts are the type of chart that we use to view historical price action and that's really what the stock chart is it's showing us what has already happened and then we use that information to try to make a prediction of what we think is going to happen next so stock charts create context for us to help us better understand the current price because if you said hey this stock is currently at $5 it it's like well

what's that relative to is that a good thing or a bad thing you know it's a good thing if the stock was down here and it's come up it's a bad thing if the stock was up here so the chart creates the context to help us better understand current price all right so the individual candlesticks that create these charts are very important these are the building blocks for this language of the financial Market each individual Candlestick has four pieces of information it communicates the open price the Clos price the high price and the low price

for that period of time so when we're looking at a chart each one of the charts represent for me a different time period so this chart right here says 1D and that means it's a daily chart so each one of these candles represents one full day of time and so if a candle represents one day of time and it communicates four pieces of information we have the open price which was the bottom of this candle and this also happens to be the low so the open and the low share the same price it open and

it never went down it just went straight up so that's the open and then the top of the body is the close and that's the high of day so although there's only three different prices that create this candle it's actually four different pieces of information the open the low the high and the close the open yeah sorry the high the low the open and the close all right so now if we jump back onto our uh slide deck a green candle opens low and closes high and that's why it needs to be colored differently so

you can understand which direction it went a red candle opens high and closes low so that we color it red so we understand that the price went down the upper line here is called a wick a candle wick so it's candle wicks also sometimes called Shadows an upper lower shadow I like to call them candle wicks generally so these are upper and lower candle wicks so a stock that has um let's say looks like this would have a large uh bottoming tail or a lower candle wick the same shape with the candle wick on the

top we would sometimes call that a topping tail and in the certain a certain context we might even call that a shooting star candle I'll show you what that looks like in a second so the each individual candlestick communicat Ates information to us the way I think about it is that each Candlestick shape is like a different letter in the alphabet so we have these different shapes and then when you have just like letters you have multiple letters together they form a word and the words that we're looking for is buy and sell all right

the these are the very key words that we're trying to pick up from the chart and we actually can get that so the first candle that I want to teach you about is called a dogee a dogee candle is a candle CLE where the open and the close are more or less at the same price and so here we see a stock that moved up and at the very top has this funny shaped candle that's a dogee the open and the close are at the same price which is why there's a flat line right down

there but it has an upper candle wick so the four pieces of information here the open the close and the low all are the same and the only one that's different is the high so that's an unusual candle but that that can happen now this is called a gravestone dogee and the reason is because if you have a stock that's been very strong showing large green candles and then at the top of that run this candle forms it's an indicator of a potential reversal why is that well let's think about how that candle was actually

created so we had green candle green candle green candle and then this final one right here so the price opened and usually the open is more or less at the same price is the previous close sometimes they Gap up but usually it it closes and then the next one opens closes and then the next one opens so it closes and the next one opens and it starts moving higher so we're like okay this is looking great and in this moment it would actually have been a green candle so wouldn't have just had the line it

would have actually been a green candle at that second and then all of a sudden sellers came in and push the price back down and so the price dropped down so then we had the high which was this candle wick but the body was getting lower and lower and lower until finally at the close of that period again doesn't matter if it's a one minute chart or it's a f minute chart or it's a daily chart by the end of that period all we had was this little body right here and so what this tells

us is that there was weakness the stock squeezed up but ultimately sellers were stronger and they pulled the price all the way back down in fact this could even occur where the candle ends up closing red they were so strong that the whole candle goes red and it's got a small body and I'll show you that's there's a a specific name for that candle but right now we'll just stay focused on this being a doy so the open and the close are the same and in this case the low is also the same so that

is a candle of indecision it means the reversal has already begun and the next candle is likely to go red and continue the pullback no one who really understands the language of the markets would buy directly following that candle because this is a very clear cell signal so you learn it's a sell signal in this context now if this wasn't occurred in the context like this where you had just a bunch of small kind of little dogee candles like this maybe one like this and they're kind of gaing a little bit what would this tell

us this would tell us that this is a stock that more or less is just going side sideways and if a stock is going sideways it's already exhibiting indecisiveness so there's not really anything significant communicated by a candle that has a topping tail the Stock's already indecisive it's already going sideways it's only when a stock is showing a strong Trend and then shows this indecisive candle that you worry that whoa we might be about to see a change in Trend so a gravestone dogee is a bearish candle bearish means going down bullish means going up

the next candle is a dragonfly dogee now dragonfly dogee is a candle that occurs at the bottom of a selloff so you've got you know a few red candles doesn't have to be three it could be more it could be less but the bottom of a selloff you have a candle that opens and closes at the same price dips down but then comes back up so this is the exact inverse of this and so would this be bearish or bullish the answer is that this is a bullish pattern because the candle shows that the buyers

came in and pulled the price back up and that the reversal may already be starting it then is confirmed as the next candle is green and moves higher so when you look at a chart like this you're always like well clearly that was the low yep and then so when it's happening in real time as you're seeing that bottom form with that bottoming tail or you're seeing that topping tail form you learn to recognize here we go it's happening right now and this is where it gets pretty cool because the better you get at this

you're actually starting to visualize in your mind what's going to happen next so it's like you're you're seeing in the future but you're visualizing okay I've seen this pattern this many times when this happens this follows right that's the relationship and the pattern recognition that we're working on here so you're learning the language we've got the gravestone dogee we've got the dragonfly dogee and now we've got the long-legged dogee a long-legged dogee is just simply a dogee where you've got a long upper Wick and a long lower Wick it's not it's it it's still indecisive

whether it occurs at the top or the bottom of move it's still showing indecision it often leads to a temporary correction and so it's maybe not quite as ominous as a gravestone dogee it's not quite as strong as a dragonfly dogee it just shows that there's a real tug of-war going on up here between buyers and sellers okay so these are three types of dogee candles that are important to be aware of and you may not always refer to them as a gravestone dragonfly long-legged dogee you could refer to all three of them as a

dogee and and no one would give you a hard time for that so now a Candlestick that occurs specifically at the bottom of a selloff can be called a bottoming tail so this is a stock that has sold off again doesn't have to be three candles it could be more it could be less and at the bottom you had a candle that bottomed out and then the buyers came in and it sent it back up and it actually closed green which indicates the reversal has already begun this C handle is also called a hammer it's

hammering out the base so this is the base the low is the base that becomes support as long as a stock can hold above support this is confirmed to be the base and the low so what often happens here if this is a red candle it still communicates a reversal is likely starting but when it's a green candle it confirms the reversal has already begun and then the next candle continuing green confirms that even further so usually when people take a trade in this area they're going to be buying not the first candle they'll buy

the second candle here as it confirms the trend by continuing to move higher so that would be the same in these examples here where if you were selling it your final exit would be when this candle second one goes red if you're buying your entry would be on this candle here as it goes green and if you were selling here your exit would be down here all right so this is a bottoming tail also sometimes called a hammer this is a topping tail so now I've got stock that's been squeezing up and instead of forming

the dragonfly dogee it actually has or sorry the gravestone dogee it actually has a body here um however that topping tail is ominous it indicates that although there were buyers the sellers were stronger by the end of the candle and brought the price back down this could also be called an inverted hammer or a more appropriate name is a shooting star a shooting star comes back down to earth so when you have a shooting star up high it indicates the price is likely going to come back down and so the exit on this would have

been on this candle here when it confirmed by going red and breaking to a new low so you notice these candles keep making new highs they're sort of stair stepping up and as soon as we have a stock that makes a step down that's the exit indicator now a step up Step Up step up sometimes we'll go down to flat and then come up again and that's okay but when we make the full two sort of steps down that we have to get out so it's basically when you have two candles that go lower and

lower that we get out so when I'm looking at my charts I do use technical indicators and at the beginning of this episode we looked at the macd the macd is one of my one of my favorite indicators and I didn't use it for a long time um however during the bare Market of 2022 I began using it and I found it really helpful um in in helping me avoid false breakouts so let me share with you the indicators that I use I'm a big believer in keeping your charts simple you can over complicate them

by adding dozens and dozens of technical indicators and unfortunately what some Traders will do is they'll add a lot of indicators hoping to find the perfect combination where the indicators will tell them where to buy and where to sell and they will never lose money and that desire to find that comes from a deep fear of loss a deep aversion to L and I understand not wanting to lose money nobody wants to lose money but this is trading you will lose money being a successful Trader doesn't mean not losing it means being good at losing

which is cutting your losses quickly and then focusing on winning trades adding to Winners not to losers you'll learn about that more as we continue on with this class so in an effort to keep it simple this is what my charts look like I have moving averages on my charts and a moving average is the average price of the stock over a set period of time there are two types of moving averages exponential and simple I use exponential because they move a little bit faster so they adjust faster to the price and I use the

9 the 20 and the 200 so over on my charts here and whether you use um you could use any platform you want I mean you could use think or Swim you could use U day trade Dash you could use Weeble it doesn't matter what you use I'll pull up my Weeble account here just um I think I have my thinker swim account up as well um well I can log in but in any case doesn't matter which platform you use you can set up your technical indicators on your charts now this is the Weeble

kind of light layout um but let's just change this to um wkey so we're looking at the same stock so on Weeble right now I've got a moving average on here that I don't even think I added because I don't really this is sort of you know I have it set up for doing demos and stuff like that little small account challenges but I don't use this on a daily basis for me uh but over in uh our platform what you can do is um you can click the FX button and the FX then you

type in moving average and I do the exponential moving average I click that it'll then add to the chart and then I can actually hover over it and either double click it and it'll pull up the data about it and when I double click it I can change uh some information about it so let's see so this is the 9 EMA uh it's based on the close price which is correct there's no offset it's an EMA and then under style I can change the color I could make it Bolder I could make it less bold

I could change the color so I have my 9 EMA in Gray I have my 20 EMA in blue and I have my 200 EMA in purple or magenta and I think that that for me works just great so I've kept it that way for years and years and years so I always know what that looks like and I use the same exact act indicators on my 1 minute my 5 minute my daily chart and even my 10-second chart so these are different time frames but they're the same exact indicators now over on um thinker

swim I recently did a think or swim challenge and on thinker swim I kept my charts very simple uh but you can go into studies you could do add a study you can go down to um moving average oops moving average and then you go to um let's see where is it moving average exponential right there there it adds it right there I can click on it I can it's currently the nine I'll change that from that cyan color to my gray color that I prefer and um I think that that's fine just like that

so I'll click apply and then I would just do the same thing I would go to studies I would add another study I would add the next moving average which is the the 20 and so on so forth once you've done that then you can save your chart you can save your layout and then you can duplicate that for a 1 minute and a 5 minute uh and a daily or the 10-second depending on how many charts you want to set up so I use these three moving averages the 9 the 20 and the 200

and then I also use the volume weighted average price you can see that's this orange line right here the volume weighted average price is like a moving average except it also factors in the amount of shares traded and so in other words if you had a stock that traded let's just say um just for the sake of argument those would be sort of odd numbers but let's just say it traded at $1 a share and it traded a 100 shares and then it traded at $10 a share and it traded um a th000 shares a

simple moving average would show the average price of five it would just say it's five it's right in between uh an exponential moving average would also just show the price is right in between but the volume weight average price would say well wait a second there was 10 times more volume up here at 10 so the vwap would actually price it way up here closer to probably 9 something so the volume weight average price tells us the average price of the stock today including all of the volume that was traded at each of the different

prices and so what it gives us is the true kind of equilibrium of this is the most average price of the day so if the stock is trading above it it's bullish if it's trading below it average it's bearish and generally I like to trade stocks that are trading above the volume weight average price certainly a stock like wkey for most of the day was trading above vwap it did dip down below it just for a moment um at a couple points but certainly in the afternoon it was trading well above vwap so it was

definitely bullish definitely strong if it came back down to vwap was below it and held below it I would feel that the stock was in control by uh the Bears or perhaps the sellers right because it's clearly not holding this level that is important now the next indicator and I'll just go based on the chart here is the volume so the volume is communicating the number of shares that traded in that period and so it just Auto scales where the highest volume candle will be the the top of this sort of panel here and so

then you get a sense of okay was this a high volume candle relative to the others it's colored based on whether the actual candle was green or red right so whether the actual candle went up or down the volume will be colored to match now there are some ways that you can uh change this to to attempt to show the actual number of orders that went through that were buy orders versus sell orders but I don't find that to be particularly helpful this is the style that I've always used for volume and and so that's

I've kept it now the last indicator is the macd the macd is the moving average convergence Divergence indicator and we've got to get on the Whiteboard for me to explain this one because this is an important one so we have a stock that has been um generally strong so let's say it squeezed up and then I'll just keep this in green even though this would be red pullback it moved higher and then pulled back and then it moved higher and then pulled back and then right here it's kind of going sideways all right so if

we had the 9 EMA here the 9 EMA and let's just say this um you know had already made a move up here and then pulled back again before that move so our 9 EMA is always the average price of the last nine candles so it goes nine candles back so you know 1 2 3 4 5 6 7 8 nine so the average price is somewhere like here so we're just going to kind of draw this like this now that's the 9 EMA the 9 EMA so now and I should well it's fine so

we'll do the 20 EMA in brown it's not what I typically would do but it's fine so the 20 EMA the average price over the last 20 candles is actually going to be lower because it's including candles from further back where the price was lower so what ends up happening is the 20 EMA is a little slower to catch up it does move but it's a little bit slower and so what ends up happening is when a stock starts moving quickly you have these periods where the moving averages are diverging they're moving apart and when

they're moving apart quickly that tells us the price is going up they only they only move apart because the price is going up but when the moving averages begin converging coming back together here it tells us that the price is compressing we're going into an area where the price is kind of going into a tighter range and what I have found in my Trad and this was very consistent especially during the bare Market was that when these moving averages when the macd actually crosses right here that signifies the end of the front side of this

move and more times than not any attempt to break out will reject and the price will end up selling off the very fact that the stock went sideways for this long going sideways for this long unfortunately it just sort of killed the chart it it the Traders gave up on it this is a stretch where it had strong momentum it's moving quickly but then it kind of goes into this range where people are no longer as enthusiastic and so the trend is ending the strong trend of momentum so this is the place here where you

have to be really careful and during the bare Market I kept finding myself buying some of these trades and then catching this reversal which is when I started to say you know what I got to pay more attention the moving average convergence Divergence indicator the macd because this is telling me right here that it's a it's a very clear signal that I should wait this out so those are the five well the four indicators that I'm using the moving averages the vwap the macd and the volume bars on Candlestick charts and that's it I really

keep my charts super simple and so the way I do it um is I have um I well so and I'll go over this in a second but I have four charts for one stock so each of these charts are a different time frame so we've got the daily chart down at the bottom and I keep that the smallest because once I've looked at the daily chart I'll expand it I'll look at it I'll see oh okay yeah so recently so this was a level back here where it came up to 1045 all right so

I Mark that level out I just do a trend line I click on that trend line tool I click on the chart and if I press my control button it'll actually do a magnet to the top of the candle and I just click that and then I might look to the left and up and say oh well is there any other nearby resistance so I look left and then up oh low of that candle there all right so what was that that was 12 and I kind of look to the left and up and oh

there's a couple candles there so what was that 1640 I'll sort of Mark out a couple of those levels so then once I've done that the levels are marked and they're on my chart and I don't really need to sort of look at it anymore so now at that point I've analyzed my daily chart for areas of support and resistance and now I'm getting into focusing on my 5minute chart if the 5-minute chart looks good meaning the price is above vwap you know I'm not seeing any big exit indicators or any big issue then I

get focused on the one minute and on the one minute is where I actually use the macd I don't use the macd on my five minute or my daily chart I don't find the signal to be as helpful but I do use it on the one minute and then the 10-second chart I usually use more as a teaching tool to show people sort of in very tight ranges what I was seeing uh it's a little fast for trading but you can use it if you'd like to the macd on the one on the 10c is

too fast so I don't use it down there either so I have basically four time frames all for the same stock these are C four different Candlestick charts but they're all for the same stock but of course the 10c is just a essentially like a zoom in of the one minute the one minute is zoom in of the five minute the 5 minutes is a zoom in of of the daily so it's sort of like just you can look for the patterns on multiple time frames and in fact we often will you'll look for a

pattern on the five minute and then you look for the corresponding pattern on the one minute and the best the best trades are when multiple time frames are aligning and giving you positive signals to buy that that's kind of like the best case scenario that doesn't always happen I will take trades that don't have multi-time Frame Alignment but it's nice when you get it now when it comes to important in resistance most stocks will have support at the volume weighted average price so when the price comes down to the vwap most stocks will will show

support there at least for a moment now if there's a lot of selling they might break through that level but the stock will usually at least try to bounce the vwap they also usually have support at the moving averages the 9 the 20 and the 200 and this is true on all time frames the 200 moving average is a great level of support on the daily chart and then we often draw trend lines and draw lines around previous prices as I did on this daily chart on wkey to sort of help understand context right so

okay there was a little bit of resistance at the high of those candles so that c now if it gets above that level and holds above it we might say that that actually is going to become support and that's very common that prior resistance once the stock can break above it becomes support and then when a stock is below any of these levels it has resistance coming back up into them so when I do my f length classes on technical analysis and how to read Candlestick charts we go into a lot more depth of analyzing

all of the different chart patterns that I trade the very specific ways to draw ascending and descending support and resistance trend lines how certain levels on the daily chart are are particularly uh well respected and so there's a lot more depth that we can go into it but as I kind of said at the beginning of this class I want to lay a foundation of the key Concepts that you need to understand and then when we come back to it if you continue taking classes watching either here on YouTube or taking classes at where you're

trading you'll you'll like you'll get okay right we already covered on that and now that I understand that we can take it sort of a step further it's kind of I mean it is like learning a language you got the 101 then the 2011 the 301 we kind of keep progressing higher and higher but we need to First lay that solid foundation and at the end of the day as active Traders we're focusing on pattern recognition that's what we're doing so we start to learn when this happens this happens when this happens this happens when

this happens this happens so the better you get at developing your own internal database of patterns the better you will be at trading so what I want to do now is I want to teach you what is my favorite pattern and this is the pattern that I would encourage you to practice trading of course in the simulator as you're following the trading plan that I've laid out for you well the the trading plan has been laid out for you in the PDFs which hopefully you've already downloaded but we're going to we're going to I'm going

to go through that uh in uh in just a moment okay so this is the chart pattern so we're still on we're still on chapter five here part five on how to set up your charts so this is this is my favorite pattern but this is how it looks when it's forming so the stock starts squeezing up it moves a little higher on the next candle so in these moments the stock would be hitting what it'd be hitting our scanners we'd be getting the audio alerts ding ding ding stock is moving higher that would give

us the chance to pull up the chart to look for the news to try to figure out why is this thing moving up what's it doing and then once we figure out why it's moving and what it's doing at that point I'm watching the chart and I'm waiting for a pullback one of my favorite ways to buy a strong stock is to wait for a pullback because here's the problem if I bought this right here what would be my Max loss well I typically would say my Max loss is where the stock just came from

so it just came from down here so my Max loss is really far away how much my profit Target have to be two times that that's that's kind of unrealistic and so it's better for me to wait for the stock to pull back and and I always say look there'll be another train that comes around don't worry about missing this train or jumping on while it's leaving the station just wait for the next one so this starts pulling back we get our first red candle we get our second red candle so now we've got a

confirmed reversal which is fine and I'm not factoring in right now volume or the macd we're just going to focus on the candlesticks so let's just assume the volume and the macd are favorable we have this pullback here and then we begin to bounce right here right so now we have kind of a double bottom so this becomes our new low so if I bought right here my stop would be the low of this pullback now this this is a more manageable level of risk this could be $100 of risk and then this up here

is a $100 of profit 200 of profit 300 of profit you know maybe 400 or higher If It Moves if it moves further and so what we're looking for is that first candle to make a new high so our entry is right there at that cross this is the place where we're buying as that first candle makes a new High versus the high of the previous candle that's our entry spot the low is our Max loss our profit Target is a retest a high a day so we always want to retest a high a day

so when I'm asking myself what I'm risking I know my stop is the low of this candle when I'm asking myself how much I stand to gain my target is high of day because when this setup works it goes to the high of day now sometimes it hits the high of day and then pulls back so I want to make sure just to high of day without breaking is enough profit for me to justify the risk of taking the trade all right so now we're back on a little bit of a quiz here all right

so now I'm going to back this one out and I'm going to let's see I'm going to do this one a little bit differently I'm going to move this to the left and right so we're on a pullback pattern we've got a stock that's made a nice rally up my question for you right here is what do you think is going to happen next well if we look at this chart right now we've got how many green candles in a row we've got 2 4 6 8 10 12 14 15 green candles in a row

we're pretty extended and this candle has a little bit of a dogee it's got a a bit of a bottoming tail a small topping tail so clearly it's extended and it's starting to show some of that indecision can we buy here the answer is no we have to wait for a pullback is a pullback coming it might be and let's see we start to get the pullback fine all right so we get a pullback and we get another red candle that forms but notice here now we have a bottoming tail right so when I see

this pattern with light volume selling relative to the green and the macd being open I know it's compressed and kind of hard to see but it is open I would say this is now a spot we should be looking for an entry Max loss is low of this pullback profit Target initially is right here in truth this is probably close to a one to one profit to loss ratio but this ends up making a pretty big move now if we look at this stock here the price was 460 so this went from about a low

of$ 340 up to $495 this is a really big range when you have a stock that has big ranges like this I will sometimes take the risk of taking a trade even if it doesn't offer The Perfect 2 to1 profit to loss RTI ratio but still nonetheless the pattern there looks pretty good all right so now let's look at another one all right so here we've got BNF this stocks um actually wait is this no just this very similar um no looks like did I grab the same pattern twice um oh this is why so

wow it just kept going higher oh my goodness it went all the way from four all the way up to five to six to seven to eight to nine to 10 and so the the caption here if I cap my losers not my winners I want to cut my losers quickly so if it goes down to that Max loss point I get out I sell I don't hold I don't hope this is a big mistake a lot of beginner Traders make but we've got to just cut our losses we've got to get out so I

get out I bail on the trade but when I'm in a winner I want to hold as long as I can so that means I don't want to sell ultimately until I see an exit indicator SO waiting to sell until you get an exit indicator can be very difficult for a beginner Trader but it is super important so what does an exit indicator look on a like on a Candlestick chart on a Candlestick chart the exit indicator will be either let's go on the Whiteboard so exit indicators on a Candlestick chart specifically because there are

other indicators that we'll get um from another place I I'll teach you about in just a moment so the first is high volume red candle right if we have a high volume red candle we know that's a reversal indicator and an exit indicator if we have um Mac D crossover now if we have a macd crossover or a high volume red candle the reversal is in a way already begun like this is not great that we're still in but it's definitely at this point an exit indicator that we've got to be getting out number three

topping tail a topping tail candle and you know slash ad doe a do certainly topping tail and doe would indicate a possible time to exit so these are the most obvious number four certainly break of vwap going down and number five break of 9 EMA again going down okay so now let's look at the next one all right so here we've got a stock that is popped up right we've got a nice little pop a little pull back and we're looking for that first candle to make a new high first candle makes a new high

boom we got to squeeze back up to the high now we're going to wait for another pullback all right so if you took that first trade right here if you took this trade at this um white arrow that was a great trade and then if you missed it you look for the next setup so the next setup boom we get another pullback and what's often the case is that these stocks will give us multiple opportunities it'll give us that first pullback it'll give us a second it might even give us a third my rule of

thumb is I always like to trade the first and the second pullback and if the stock keeps going higher I'm very cautious continue and trade it third and fourth pullback it can be a little too risky so as a beginner I think it's a good idea to focus on the first two pullbacks now I have a book here called thinking in bets by Annie Duke she wrote this book about her experience as a professional poker player and she talks about learning to play poker from her brother and he told her that when you're learning to

play he gave her a a sort of a set of these are the hands that you should play he said don't play anything else just play these and she said well I don't understand cuz I'm seeing other people playing other hands that you're not that are not on your approved list so what's the deal with that and he said yeah they've been doing it for a while you're a beginner you need to trade the basic setups and I think that's kind of the same with trading right take the setups that are the bread and butter

that have the highest probability of success so that's first pullback and second pullback don't overstay your welcome so this is a set up that I call the micro pullback so inside that re that P that Suite of PDFs that I gave you that's in the the link that's in the in the description and pinned to the top of the comments one of the downloads in there is that micro pullback strategy PDF and this documents this exact setup it's one that I trade pretty much every single day and it is the strategy that the it's the

individual setup I would have you focus on trading if I were getting started that's what I would do it's I would focus on trading this pattern on stocks that meet all five pillars of stock selection and this is where we're kind of combining all of the different concepts that we've already learned so far now we've we're only on uh step five here but we're combining stock selection understanding how to manage risk and making sure we're trading the setups that have the highest probability of working the reason these setups work is because we have a stock

that's moving up quickly with a catalyst and other Traders see it moving they're getting notifications from their Brokers that this stock is moving higher the broker wants them to start trading it and they're they're thinking themselves where can I buy this stock where I'm taking the least amount of risk possible and the answer is by waiting for a pullback so it pulls back and then as it rallies higher you get that extension into the move as Traders continue to buy a stock that it's just moving super fast all right so let's look at another one

here uh in this example we've got high volume green candles nice we've got a red candle what do we think is going to happen next probably a little bit of a pullback right so we get a little pullback here we dip down light volume pullback and then it rallies back up this is a nice looking trade there's nothing to complain about here this is a trade that I want to take every single day and this is a trade that's going to work the best when it's occurring on a stock that meets all five criteria for

stock selection stocks that are obvious are the ones that trade the best so if we look at um wkey and this is a stock that I did trade and did quite well on I finished the day up about $116,000 um it's a stock that is the number one leading percentage gainer in the entire Market it is the most obvious stock so the days I do the best are when we have a stock like this that is super obvious it's got a ton of volume everyone's focused on it and there's a ton of exuberance people are

just excited this thing is strong it's got great news and it just keeps going higher and I mean I've seen stocks go up a th% in one day it's it's insane how high they can go when you've got a really good Catalyst and you've got that imbalance between supply and demand which comes from a good Catalyst with on a stock that has a relatively low float all right so let's see um so when it comes to finding the trades I'm using the scanners to find the stock that's moving higher right and then I'm doing my

D diligence pulling up the chart to perform my technical analysis and it's really it like I don't want to make it like oversimplified but at the same time keeping it simple is important trade the right stocks and trade just the patterns that have the highest probability of working so now you've got to know where to actually buy and sell and and how to execute that trade so I want to show you using um this platform right here how I actually set up my orders and take trade this is a day where I made 98,6 $54.39

and if I haven't said it already I want you to know that my results are not typical I have been doing this for a very long time I don't show this to you because I want you to assume that you're going to be able to do the same thing it's important that you know that I'm credible and that this is real money but but more important for you is that you focus on building your own track record and that you know that this is a strategy that other people are trading it's a real strategy it

does work for other people it's not a guarantee it's going to work for you I'll give you the rules of the strategy but remember you've got to follow the rules right that's the most important thing all right so let me show you how I actually execute these trades and whether you're using thinker swim or you're using Weeble you're using the warrior trading Sim or perhaps you're using a different broker this is going to translate to pretty much all of them because the the buttons are more or less the same the they might be located slightly

different places but the features are the same so number one um there are different types of orders that you can use to buy and sell stocks so we have Market orders and a market order only works from 9:30 a.m. to 400 p.m. a market order is when you tell your broker I want to buy this stock and this number of shares and I don't care what price I get filled at now you know what the price is so if you looked at a stock like this one right here you would see it's trading at$ 891

by 903 that's the current market for this stock so the last last price went through at $9 so it's $9 a share so if you press the buy button for a market order you would probably fill well not at 9 You' probably fill maybe at 9903 which is the current lowest price seller and and that's called the ask I'm going to show you how that works just a second uh but with a market order the problem is you're not telling the broker the most you're willing to pay and so the broker can take advantage of

that a little bit so I instead like to use limit orders and you can use it from pre-market all the way through regular hours and into after hours with a limit order you're telling the broker I want to buy this stock but this is the most I'm willing to pay and so I could put a limit order to buy this stock at 905 and they'll get me shares and they'll probably get me my full order uh but if it goes higher than 905 I won't pay anything higher than that price so I'm not going to

be surprised to suddenly be filled at like 947 or something kind of crazy my order just wouldn't fill because the price went above my limit so limit order is something that active Traders use to manage risk and to control how much they pay for a stock they're buying or how much they're willing to sell a stock that they're selling now between 9:30 a.m. and 400 p.m. which is regular trading hours we have Market orders and we also have stop orders a stop order is an order that you put in and it will trigger if a

certain price is hit so the way it works is if you were if you owned a stock let's say you own this at $920 and you put a stop order at $8.75 if the stock comes down to$ 875 the second it it trades at 875 your stop order will execute because the price of your stop order was hit and what that will do is it'll immediately sell your full position it's gone you're you're out and Traders like to use stock orders to manage their risk so you can get into a trade and say I'm going

to buy at $9 and set my stop at 975 or whatever price you want and then if the price goes down to that level you're out of the trade just like that and while that that's nice there is a problem Brokers can see where your stop orders are and it is known well known that Brokers will engage and market makers will engage in stop hunting where they'll actually try to move the stock price down to get people to stop out so they can buy their shares at a low price and then let the stock rally

back up that is frustrating and that feels unfair but these big institutions can subscribe to that level of data we as retail Traders cannot so I can't see where other people's stop orders are but the market makers can now currently you can't use stop orders pre-market and you can't use them after hours and I actually do a lot of trading during the pre-market session so let's jump onto the Whiteboard here and and just make sure we're all on the same page about the hours of trading SO trading begins at 4:00 a.m. eastern standard time it's

then pre-market until 9:30 a.m. which is when uh the official Bell Rings 400 p.m. is the closing bell and then 800 p.m. is the end of after hours trading extended hours now there are some Brokers that allow 24-hour trading in certain securities butr currently 24-hour trading is not particularly popular for momentum Traders because volatility is limited in fact they don't allow trading on stocks that exceed certain volatility parameters so most Traders right now would not trade during the 24-hour market we're only trading during um from as early as pre-market until as late as 800m but

within this window most retail Brokers like thinker swim don't allow trading before 7 a.m. so what we see with volume is there's a little volume early and then all of a sudden at 7:00 a.m. there's a lot of volume and then at 9:30 there's even more volume and then it kind of goes down and then at 400 p.m. there can be a little burst if there's a stock that maybe has breaking news after hours which sometimes happens and then it just kind of dwindles until 800m so the windows right now that I find the safest

to trade is actually right in here so I kind of trade from 7:00 a.m. until about 10: a.m. and that's where I can capitalize on what is Peak volatility and Peak liquidity I can get in and out easily there's good volume in the market now when I am in Europe and I I do travel quite a bit I will sometimes start at 4:00 a.m. because I just will sit down it's early in the day there and I I can but I don't do that when I'm on the East Coast um when I'm on the west

coast I just wake up early I don't trade later in the day I don't find that that is particularly profitable for me so the worst time zone for me is being in like Hawaii or uh Japan just because of the the time zone but I know that there's a lot of traders that are on those time zones and they they make it work so um so that's that so that's sort of our Market hours now the reason I brought that up was to make sure number one we're all on the same page with Market hours

but number two um so that you know that from 9:30 a.m. till 400 p.m. we have what um stop orders so we have stop orders we have Market orders and we have halts so at the beginning earlier in the class I mentioned circuit breaker halts so I'm going to talk about this for a second we don't have um circuit breaker halts before 9:30 we don't have them after so that's this window so that means between 4:00 a.m. and 9:30 and 400 p.m. and 8:00 p.m. limit orders only so limit only no stops and no halts

and also no options there's no options trading early and no options trading so now you have options and I'm not trading options but then and then this is the same as here so just double that okay so what are halts so in order to prevent flash crashes in the market we have these mechanisms called circuit breaker halts and what a circuit breaker halt will do is it'll pause trading in a security that trades outside a standard deviation there's a range that it can trade and that's fine it can be volatile but if it trades outside

that range all trading is paused for 5 minutes and no one can buy and no one can sell this happened a lot in 2021 when Gamestop went up like you know all the way to $500 a share it kept getting halted and people were saying why is the you know why are The Regulators doing this is this the big funds what are they doing that they're cheating the system and these halts are a mechanism that have been around for a long time it was nothing that someone was doing like they weren't pressing a button the

stock was exceeding a certain standard deviation and was automatically getting Frozen from trading for five minutes so this is the way these halts work and they are important to know about because they slow down trading during regular Market hours because these stocks will start getting halted but it doesn't exist pre-market it doesn't exist after hours which means right now we actually see the biggest moves between 4:00 a.m. and 9:30 and then between 4 P p.m. and 8:00 p.m. generally there are some exceptions to that but typically that's what we're seeing so the way these halt

levels work and actually we'll just we'll do it on this page or this side because I want to do something else on that one in a second so the way these halt levels work um is they're called circuit breaker halts and they're also called L LD which is stands for Limit Up limit down and so if you have a so the way it works is we look at the prior close so the prior close and let's just say um is below 75 between 75 cents and $3 or above $3 these are our three tiers so

a stock that had a prior close yesterday below 75 cents the bands will be uh 15 cents in all practical there is another threshold here but that doesn't generally apply so 15 cents and then the bands here for a stock between 75 cents and $3 are 20% and the bans for stocks above $3 10% from the RP what's the RP reference price so if this stock goes up 15 cents from the reference price then it'll be halted for a period of a minimum of 5 minutes so the reference price is calculated as RP equals average

price over 5 5 minutes and it updates approximately every 30 seconds so if over the course of 5 minutes you had a stock that you know went from a dollar to A110 a5120 you know well it whatever whatever however much it moves doesn't really matter the average price over the last five minutes is let's say a125 so in that case if the stock was above 75 cents on the prior day's close it's going to Halt if it goes up 20% % so a125 plus 20% is uh 24 25 so that means its halt level up

would be a $150 so if it went up to a150 basically instantly within like 30 seconds or a minute it would get halted because if it went to $150 slowly then by the time it got to $150 the reference price will have changed right because the reference price will include the average of the last couple minutes and so the reference price will keep climbing higher and so at all times beginning at 9:30 a.m. and ending at 400 p.m. all stocks have a band around them and it's constantly moving up and down based on their reference

price of the last five minutes and if the stock very quickly squeezes up to the top of that band trading will be paused for five minutes you can't buy you can't sell if it quickly drops to the bottom of that band and stays at that level it'll be paused for 5 minutes so it has to go to the bottom or top of the band hand and actually stay at that price for at least 15 seconds in order for trading to be paused so once trading is paused nobody can buy and nobody can sell now I

have scanners that will alert me when a stock has been halted so I can pull it up because often it means something just happened and that's actually exactly what happened on wkey so wkey was halted on um basically on on a volatility trading pause where the stock pretty much instantaneously we can look at the 10-second chart went up um enough that it it was at the top of that threshold so this is a stock that was trading above $3 the previous day so the halt level was 10% so the average price must have been you

know around 330 uh 340 and it went straight up to 370 and was halted so it went up about 30 cents is was halted at 370 I saw it was halted I pulled up the scans to try to figure out what the story was I saw that there was news with SpaceX and as soon as it resumed trading it squeezed up here to 520 and then it halted a second time but you might look at this chart and say wait a second I thought when a candle closes it usually opens at the same price and

then goes and you're right that is typically what happens but when a stock halts and stops trading while the stock is halted you know what's happening behind the scenes there's an auction going on and so behind the scenes while the stock is halted there are people saying I want to buy this and there's other people saying I want to sell this so the stock halted initially at 370 but while it was halted people who had a sell order at 375 and you know 390 and 415 whatever they realized wait a second this stock is halted

and it's on good news I'm canceling my sell order and there were people that had buy orders at 370 and they're like oh shoot I didn't get in I'll put the order at 4 screw it I I'll get in you know what 4 45 425 I don't care someone else is saying I'll put it higher I'm going to jump above you I'm going to put it at 455 I'm going to put mine at 485 and all of a sudden there's people clamoring to buy and so behind the scenes during the halt there's an auction going

on where buyers are lining up and sellers are lining up and if a stock is halted going up and the news is good then typically it opens at a higher price so it ended up opening all the way up at um $4 and 85 cent no $465 it dipped down for a moment and then ripped up to five now I saw the news and I actually bought it at 497 uh I knew the news was good and I liked the trade and I took the risk and bought it at 497 this is a little bit

more of a complex trade uh like Annie Duke's brother might have said not a trade for beginners but a trade that I would have been comfortable with with my level of experience so it ends up opening going up to a high of 640 so it halts and then during the same thing happens again you've got a halt and during during the time it's halted there's an auction people are buying it pressing the buy button to get in and it opens at a higher price so the thing is if this news had come out pre-market there

wouldn't have been any halts these just would have been green candles so you could have continued to trade maybe there would have been a pull back here and then another green candle higher and so what I've generally found is that the price action is typically cleaner when the move occurs pre-market and so we could look at a stock that um had a decent move pre-market let's see um wasn't perfect but it was it was decent so this stock here um went from 540 up to 596 pulled back went up to 650 so that's certainly far

more than 10% and there was no halts because it was pre-market so not a perfect chart but just as an example so pre-market we don't have any halts and that does make it appealing what's also appealing about trading premarket is that as a volatility Trader and a momentum Trader which I am and probably you will be as well as well if you look around at the other traders who are really profitable in the market this is more or less the way they trade stocks and companies put out breaking news during pre-market they don't usually put

out news during regular trading hours it's kind of a thing where you're not really supposed to pre-markets okay after hours is okay but not so much during regular trading hours now that one company was an exception but we don't see that very often often so news typically comes out pre-market and that's when we see these big moves now in order to trade pre-market you do have to change your time in force on your orders so at thinker swim right here your day order has to switch to extended hours you could you could press the buy

button for a day order nothing's going to happen it's just going to sit there so you have to actually switch it to extended hours same thing over at Weeble uh if you go into Weeble and you set up your hot keys so I go to uh hot keys right here we'll go to hot keys and then go to settings I have my hot Keys here to buy for trading and let's see um buy ask 5,000 shares so just for example so on this one um and actually I should change the title it's thousand but nonetheless

the the time and force here you can have as good till cancel or day and extended hours you can say yes or no so you turn on extended hours and you actually leave it as a day order I know that's inconsistent with thinker swim but that's that's the way it works there and actually that's also true over at the platform that I use generally on a day-to-day basis a day order here does work pre-market so anyways um we're going to use limit orders I'm not going to use stop orders because the market makers can see

them so I'm going to use limit orders no Market orders just limit orders pre-market primarily trading with extended hours turned on if necessary depending on your platform and um then the market we can actually choose our destination with some platforms with um with thinker swim you cannot choose your destination because remember they route your order to The Venue that gives them the payment for order flow same thing with Weeble you can't choose your destination but at light speed you can so at light speed I could choose to send my order to NASDAQ or I could

choose to send it to a different Market maker now it doesn't really matter which one I send it to the fact that I'm not passing my order through an institution who's going to scalp a fraction of a penny off my order is going to be better for me it's better when you're trading with larger size which I do when you trade with smaller size during your proof of concept phase it it doesn't make a difference but when you start trading bigger size it'll make a bigger difference so I choose my symbol I enter the shares

I can choose the price I could choose the market it's a limit order um this you don't really have to worry about right now certainly a small size um the time and force and then I can just click the buy button or click the sell button now of course if I want to take that a step further I will actually create a hotkey to do that but I'll teach you how to do that in just a moment so the first depth of the market is called level one of Market data level one market data is

the first row right here that's in green so this tells you the bid on the left which are the B buyers these are the people bidding on the stock they want to buy but they're only willing to pay up to the highest price so the highest price bidder right now is 8.91 and the lowest price seller on the offer they're on the offer they're offering shares for sale or they're asking shares for the sale price so they're on the offer also called the ask is 903 now if you wanted to buy right now you could

just buy from this person selling at 903 and that's typically what I do I say I want to buy right now and I'm just going to go ahead and buy from the person that's selling or if I want to sell I just sell to the person who's buying but other Traders might put their orders here and let it sit and that's fine but that's not typically what I'm going to do especially during a time of peak volatility because if I wait and wait and wait I just won't get filled on my order at all and

then that's not going to work so we've got the bid we've got the ask and the spread is the difference between the two prices so right now we've got a 12 cent spread 8.91 to 903 ARA bats edx NASDAQ these are the broke these are the actual market makers or the ecn that are on that are uh that are sending the order to the market so this is kind of like an island and each one of these different um institutions are the ones that are actually um sending the order to the market sort of on

behalf of the client that's the number of shares that are being bought or sold or offered or to or to buy and and you always add two zeros so instead of saying um 20 shares it's actually 2,000 shares they just abbreviate it just to make it easier to read so one is not one share it's 100 shares and that's level one market data now what I use is level two Market data which is why you can see all this extra data so this is level two data and level two shows you the depth of the

market what's helpful here is that you can see if there's a big seller lined up on the offer if there's a big seller you could see the big seller you could see like 100,000 shares you could see it right there if there was a big buyer you could see there's a big buyer so you could see it as plain as day big buyers and big Sellers and I find that really helpful and what you can also see is the L Limit Up limit down price now let's go back to let's just jump back one second

all the way so we're on slide 99 so we're going to go all the way back up here to this slide 65 do you remember when I said halt levels halt levels thinker swim does not display that lld quote Weeble will display it but not on the simulator only when you pay the N9 $9.99 and are trading with the real money Warrior trading Sim does display it and the resumption quotes thinker swim does not display it but Weeble does and Warrior trading does so remember when we talked about how this stock was halted at 370

but resumed it it was 365 or sorry 465 so while it was halted at thinker swim you just saw 370 as the the last price traded but what I saw was that the current bidding the current market is pricing a 465 resumption that's the resumption price wouldn't it be important to have that data I think it is I think it's critically important to have that data and that's why the Thinker swim uh platform as a simulator isn't really great and even for real money it's kind of lacking the data that I think is important for

retail Traders especially if you're trying to trade the way I'm trading so Weeble is okay um except you have to fund an account with real money and the warrior trading Sim is good as well some people will use the warrior trading SIM for data but they'll trade on thinker swim so I mean that's fine if you want to do that um it's how you know whatever works for you is fine so what's helpful about the level two is when I first pull up a stock I can see how many buyers there are I can see

how close they are to the current price sometimes they're 1 cent away we have 8.91 890 but then it goes down to 886 8862 856 sometimes they are spread out like that a little bit more same on the ask side 9003 9004 then 911 917 920 947 so now you could see if 10,000 shares of volume went through this might actually go all the way up to 947 because there's not a lot of sellers here so this is a stock that could potentially move fairly quickly and so I can understand how fast a stock will

move in part by looking at the actual chart because that gives me the historical context right so if we see this pullback forming I could think okay we're looking for the first candle to make a new high and a retest a high a day but then I can also look at the level two and recognize oh you know this is a stock that is more thinly traded and a more thinly traded stock can move very quickly so then that gets me a little more excited right next to the level two is this little window here

which is the time and sales the time and sales is a record of every transaction that has been placed green are orders that occur at the ask price red are orders that occur at the bid price and white are orders that occur in between the spread and so I constantly am looking at the level two and the time in sales to watch the order flow and this is called tape reading I usually have my eye right here on the ask I glance at the bid to see how big the spread is and to see if

there's any big buyers I glance at the off at the time in sales to see the burst of green or the burst of red but I mostly Focus right here on the ask price that's where my eye tends to be now I don't take a trade without first looking at the chart but if I first pull up the chart and I like the chart then I'm looking for my entry and once I take my entry from that point I glance at the chart but I'm really looking at the level two remember the the chart is

formed from orders that go through so the orders that are going through are right here the orders that are about to go through are showing right here they haven't gone through yet but they're sitting there on the market so if I'm looking at a chart and I think it has the potential to make a big move but based on the chart pattern right we see our our picture perfect chart pattern and just to reiterate it's going to be a pattern where we've got that first green candle second green candle third green candle we had a

little red candle a little red candle and now right here we're at this moment we're looking for that first candle to make a new high and then a move higher but we pull up the level two and what do we see right here is a 250,000 share sell order so now this is kind of interesting even though the chart may have said the pattern looks good when I actually look at the real orders they're sitting on the book there's such a large sell order that I now know that that chart will never do what I

thought it might have done that data is telling me it's not going to happen so I need to see that data because that can help me make my prediction of where this stock is going to go now when it comes to actually taking the trade I can point and click which is what most people would do at think or swim at think or Swim because they have very limited um hot Keys available you mostly buy through point and click Buy Ask sell bid that's it but you have to type in the the shares that you

want to buy manually so if you buy twice you buy 50 shares and then 50 shares you want to sell 100 you've got to come in here and change it to 100 or sell 50 twice so they do have some hot keys under application settings but they're very basic and and they to me are not adequate uh Weeble is better Weeble does have really nice hotkeys that you can set up pretty much the same with thinker swim and with Weeble you can also um use buttons so you can go on under even if you're under

paper trading but un real money too you can use these buttons so you can click a button buy market sell bid and that's fine um there's nothing wrong with that what I tend to do is this is not moving what I tend to do is I like to I like to enter my orders to buy down here in my order entry window so I type in the shares I type in the price I'm willing to pay and then I keep my hand my mouse right here and then I just click the buy button the moment

that I kind of feel like I'm ready to buy and usually I buy just after I see a big buy order go through on the time in sales because that tells me someone else is starting to to jump so I kind of wait for someone else to jump and then I I follow usually I'm sort of like I I wait to see like are other people liking this and then if I see buying I'm like okay people like it I thought so and I'm now I'm sure of it I don't like to usually be the

first because maybe I'm wrong it depends on how confident I am on the stock but anyways so I like to enter my order in this order entry window and then just click the buy button and I might click it two or three times to go up to you know a starter position up to a half size and then up to full size but I don't like to sell right here I find it too clumsy to come over here and sell and so what I like to do for selling is I like to use my hotkeys

so that's where in a platform like Weeble or like light speed or like the warrior trading Sim you can actually go in and you can create your own custom hotkeys so under um go to settings under hotkeys here for trading you can go hotkey settings and then you can create click the plus button right here to create your own hotkey so you could say buy 2,000 shares we had to do this anyways so it's going to be a buy button going to create it's going to be a single order a limit order it's going to

be quantity 2,000 shares based on I'm going to do ask price and I'm going to give it a little offset I'm going to say I'm willing to pay 10 cents above the ask if the stock is moving nicely time and force it's a day order that's fine extended hours yep turn it on hotkey let's make it shift two I've already used something on shift two let's replace it boom shift two is done all right we just created a hot key now all I have to do is press shift two on my keyboard and we're done

shift two and I'm in the trade just like that 2,000 shares instant now I may want to go and turn off my uh notifications so I'd have to turn off my order canceled order modified not notifications and I think they have a confirmation here um that I have to turn off as well order preferences so I turn off the order confirmations and then with that turned off I can be jumping in and out of stocks with the click of a button buying and selling I want to be a little complicated I want to do an

order to sell half so we go into the hot Keys we go into the settings again we say New Order we're going to do a sell half at the ask price let's be a little aggressive sell half at the ask price so I'm going to change the quantity to percentage I'm going to change it to 50% ask price no offset yes extended hours script it to a hotkey and then just like that you're done so now you can easily create these hotkeys and the only ones that I think are really necessary for a beginner is

the buy um the sell and the cancel orders so this is what I do uh and this is what I did when I was getting started I took a little note little sticky pad just like this and I said all right so this is going to be um 1K so this is going to be a buy order for 1,000 shares I cut it kind of like that I use scissors you know make it look nice take a little piece of tape it's already sticky but I'll put a little Scotch tape over it and that's my

1,000 share button to buy and maybe I'd make it with a green sticky note and then this is um sell half so then I got a button for selling half so we're going to take that and we're going to put that over here now you could put it wherever you want I put mine over here just easy and then you do a button for cancel so the Q button will be cancel all cancel all orders so now I put a couple of these on my keyboard shift one buying control um control is always selling so

contrl z contrl x contrl c sell sell sell half full quarter sell half full quarter on the ask control Q cancel all orders right all of a sudden now I'm empowered that as quickly as I could type I could pull up a symbol and I could shift one shift two shift three boom I'm in out of a stock so that is what I absolutely love you can't do it with um with thinker swim unless you use a third party integration there's a platform kind of like Weeble that you can subscribe to that's about $175 a

month and you can link it to your thinker swim account it's called Das Trader Das uh t r a d r so DH Trader is software that people will use to execute orders through Charles Schwab so they don't even have to use thinker swim but $175 a month so Weeble you don't have to pay the 175 a month you just the platform works so I kind of like Weeble versus thinker swim for that reason um and our Warrior trading Sim gives you the same hotkey functionality okay so now you're prepared to move in and out

pretty darn quickly so I like to buy that first screen candle after a pullback we get the squeeze up we get the dip I can enter my order in the order entry window or I can just press shift one and jump in the second I'm seeing that first candle going green okay so now let's talk about kind of the combination of combining charting with order entry all right since I know I want to buy the first green candle I can look at the high of the previous candle and let's say it's 95 and then I

pull up the level two on my order entry window I get my order ready if I want to and I look to see is there a big seller here and I watch how the price reacts as it's approaching this critical level is it thinning out does it look like we're going to squeeze or is there a big seller holding it back if it's looking good I'm going to punch it I'm going to go ahead and jump right in so the way I have my computer set up here and you can kind of see this better

uh on the camera is this this is actually all powered by a desktop I've got nine monitors here um well this is a laptop it's actually just its own computer but anyways um I have this set up so one monitor is my trading screen and that's this monitor right here it's my main monitor almost like my laptop screen so that's my trading screen where I've got my level two windows and my order entry windows and I usually have them up for four stocks so I can watch up to four stocks at the same time I

then have my warrior trading chat room room right here with one scanner from day trade Dash and then up on my first monitor here I have two stocks that I'm watching one and two remember that there's four charts because each stock has a 10sec 1 minute 5 minute and daily chart so stock number one is right here stock number two is right here or you could do it vice versa doesn't matter and then this is the monitor that you guys can see when I'm uh screen sharing for warrior Pro members you see my p&l windows

you can always see what positions I'm in and you can see the chart where I'm doing my technical analysis and dictating kind of talking like all right guys this is what I'm looking at give you my commentary um of the the stock I'm currently trading so this is the stock I'm focusing on that one's kind of zoomed in I've got the news feed I've got my scanners here and then I've got my my layout so for me three monitors is kind of the the the the perfect number um obviously I have more monitors right here

I do sort of stretch out when I'm at home I've got a fourth one right here so this has I've got uh one two stocks and then three four so I can watch a couple more right up here um and then over here I have YouTube uh these are monitors you can't see from this view but I have my the YouTube channel up here so I can check comments and then I've got emails here and then I've got my streaming settings and my um audio video mixer like right here so these are more kind of

like other stuff but this is more my trading area and then this one up here when I'm doing a Weeble challenge or a thinker swim challenge you know I'll have that platform up there and kind of jump up and down between the two so this is to me an ideal setup and look I mean it cost some money to set this up but there's some tax benefits that you can get here this is all equipment this is your overhead these are reasonable and necessary purchases that you made in order to make money as a Trader

because day trading can be a small business all right step seven Max loss and profit targets it is critical for Traders from beginner to experience to cap losses while still allowing the winning trades to reach their full potential so setting a Max loss on each trade and on each day is mandatory profit targets are calculated as two times the amount that was at risk and the amount that is at risk is the difference between the entry to the max loss so just to be clear if you buy a stock at $3 share some people would

say all right I'm in at $3 a share times 1,000 shares equals $3,000 and some would say okay I've got $3,000 at risk that means I need to make 6,000 on this trade needs to go up to $6 no that's not realistic you're not really risking 3,000 yes you're putting $33,000 of capital into this trade but you now own a stock at $3 a share so what you're really risking is the difference between your entry and where you would sell it for a loss let's let's say that's $275 that's minus $250 so that's how much

you're actually risking can you make now a move up to 350 that would be your 2:1 profit to loss ratio and even that's you know that's kind of a big stop for a lower price stock but just as a better example this is the way I think of risk and reward and this is the way most Traders think of it now I know traders who do option trading and are buying you know the stock the options that are expiring today will think of it more in total Capital put into the position because that position can

expire worthless but that's not the case with trading small cap stocks I mean yes they can go down of course they can be volatile but you there's no logic in I'm going to hold this until it goes to zero so it wouldn't make sense to use your entire uh cost basis as your your risk on the trade so the way I think about it is when I look at the chart my stop is the low of the pullback right so that's what we know we're looking for a stock and this is going to be you

know I just want to make sure we're 100% we let it pull back it moves back up stop is always the low of the pullback entry is first candle to make a new high profit Target is high of day maybe we get an extension higher that's obviously ideal that we would so this is 1x this is 1x this is 2x this would be 3x and 4x so we want to make sure we're keeping relatively tight stops right down by getting in close to a pullback instead of chasing a stock as it's extending away because then

we're in too high and we can't manage our risk if we get in that high now I'll tell you something um so so there's two things as a beginner Trader as you as we continue through this class as I teach you my strategy and continue to learn more you're going to start wanting to trade this strategy in a simulator and you're going to wonder how much should I trade should I do be you know taking just like one trade a day or like should I trade a lot and this is what I'm going to tell

you as a beginner Trader trade as much as you can because you need the experience you need the experience getting into trades getting out of them testing your hot Keys getting a feel for the relationship between level two and the chart and how they they work together so you want to trade a lot and during that time it's not about making money it's just about getting getting experience learning the ropes so then after a period of time once you start to feel like you're getting a little bit of a feel for it which could be

a few a week it could be two weeks could be a couple months whatever feels right for you where you're like okay I'm starting to catch some winners this is starting to like click then what I'll do is I'll put you on a trading plan that you will follow and when you follow that trading plan the number of Trades you take and the strategy for When to Walk Away each day is going to be totally different from that first phase where you're just trying to gain a lot of experience so I just want you to

be aware of that right now you don't have if you're trading in a simulator you don't have to follow a Max loss if you're trading with one share you just trade as much as you can just gain experience you're trading with one share we're not talking about big money but once you transition to making an attempt to go live and prove that you can actually be profitable in the simulator to justify going live that's when you've got to tighten it up and get focused on really keeping tight losses on trades and a Max loss on

the day but no doubt even with one share you can know what your max loss is on a trade and you can cut that loss and you certainly should do that so that's really important just to understand that we're working within a context of always having the potential to make twice whatever we're risking and that means if we're right even just 33% of time we can be profitable Traders and that's awesome we're setting the bar in that way relatively low okay number eight let's talk about creating that trading plan so again if you have not

already downloaded my small account Trading uh my small account worksheet my small account strategy worksheet or my trading plan the links are posted in the top of the comments and in the description so you can download that that will give you something you can print out you can take away today you can start implementing that in your trading and again always in the simulator first so this is the overview of a trading plan it has to have a detailed description of the strategy the time of day you'll trade the type of stocks you'll trade the

technical setups you'll trade and the daily Max risk and daily profit targets so this is going to be all outlined for you based on the strategy that you're focusing on so if you're focusing on trading my strategy then you put in the details of my momentum strategy right in here so you would say I'm trading momentum I'm looking for stocks moving fast that meet the five pillars of stock selection between the hours of 7: a.m. and 10: a.m. I'm trading uh the first pullback and the second pullback I've got a daily Max loss of x

a profit Target of X and you establish that now as a beginner Trader if you're trading in the simulator with one share then your daily Max loss and daily profit targets at that phase are not as are not as important those are going to come into play as I said when you're getting ready to to transition from SIM to real money when you're getting ready to kind of step it up a little bit more okay so this is going to be a simple trading plan all right so we're focusing on trading momentum between maybe you

refine to the hours of 8:00 a.m. to 10: a.m. which is a fine sweet spot but you kind of choose the time that you feel like work well for you the type of stock price between 1 and 10 float of under 10 million shares stock has to be up 25% with news relative volume of 10x that's awesome finding stocks using the scanners the stop stock has to be in the top three leading percentage gainers that means it's obvious and other people are watching it too that's important the setup is buying the first pullback on a

bull flag potentially when the macd is positive daily Max loss and profit Target daily Max loss 25 bucks daily profit Target 25 bucks let's just say and this would be if you were trading with 100 shares with 100 shares that would be how I would set it your daily profit Target's $25 now I wouldn't say you should stop trading if you hit it or stop trading if you hit your max loss because the first phase is just gaining lots of experience but this this would be a sample plan and you could trade this way with

real money and that would be fine too if you've already proven you've done it in a Sim with good metrics so share size would be starting with 50 shares and then scaling up to um 100 shares once I'm already up over $10 so this is a strategy that I've implemented where um on my first trade I use generally um half or quarter of full size on the first trade so first trade of the day and so now we have let's say first trade is winner so if the first trade is a winner then what I

probably have done is made approximately 15 to 20 cents per share with quarter size if it's a loser then I've lost 15 to 20 cents with quarter size so let's say we're doing um we're doing the 50 share starter so that means 50 shares here I would be down um $5 $10 so I'd be down sorry it be up $10 if it was a winner I'd be down $10 if it's a loser now because my daily goal is $25 $25 is a daily goal if I I made 10 on the first trade then on trade

two I would go to full size because now I would say I've got a cushion on the day and I'm moving in the right direction but if I had a loser then on trade two I would stay at the same half or quarter size so essentially that means that I could have a maximum of three losers in a row and then I would be done for the day at you know $25 to $30 in the red and three losers in a row follows the same philosophy of three strikes you're out all right so you've got

three strikes you're out try again it is what it is you had a bad day your accuracy was poor now if you're in the Sim then you keep practicing you keep gting experience but with real money you would say three strikes I'm out that's it I hit my Max loss I'm done I'll try again tomorrow and that would be the right decision if you have a winner on the first trade and then you have a winner on the second trade then pretty quickly you're coming up within the first three to four trades up to your

daily goal and then you can begin to scale down to protect this profit and not risk giving it back if on the second trade you have a loss then because you've dipped back to below $10 on the day you go back down to quarter size so this is kind of and I still want to keep that so I'll just erase this so this is a strategy that I've used to help me determine whether or not today is going to be a red day and if it's going to be a red day to keep my size

small what a lot of Traders do is the exact opposite they have a loss on their first trade and they went in with full size and now because they've taken a big loss on the second trade they take even bigger size to try to recoup the loss but the very fact that they had a loser on the first trade indicates their accuracy is a little off something's not right today and often they have two losses in a row now they're deep in the red they start to get emotional they start to get desperate and a

third big loss and then they have a big red day and it's like oh my gosh how could I have done this differently and so I'm a big believer in kind of testing the water with that first trade to see if I can just get green can I build a cushion am I moving in the right direction how's my accuracy today how's the market today so if that first trade was smaller Siz as green I build a little cushion and then now I feel confident can take a second trade with a little more risk I'm

moveing the right direction it's usually a winner right now again sometimes a loser and if that's the case I just bring my share size right back down if I can't get myself up towards my daily goal within the first few trades that by itself indicates today's a difficult day because usually within my first few trades I'm able to hit my daily goal and I'm and I'm in great shape so that's like the best case scenario so this is a strategy um of scaling into the day that is designed to help keep the red days smaller

that's what it's really about is keeping the red days smaller now I have to say it's very important when you're getting started that you have guard rails on your trading um guard rails are kind of like TR training wheels and no one's going to win the Tor France with training wheels on but I want you to learn how to trade in a safe environment where you can prevent getting wrecked and so to protect yourself these guard rails these training wheels are very important so guard rails are basically these are your cues to walk away there's

another book that I have here um also by Annie Duke called quit the power of knowing when to walk away and both of these books by her thinking in bets and quit are are a good read for an aspiring Trader because it really does help you think about risk and reward in in a in a good way so some of the guard rails that I think could be really helpful for a beginner Trader is certainly if you hit your max loss walking away again this is going to be depending on what phase you're in so

phase one phase one is Sim and it's all about experience trade a lot so so just trade as much as you can phase two is Sim um and it's um it's like the trial for real money and then phase three is real money oops real money and this is where you repeat the trial that you just did in the Sim except with small size with real money so this is where you're doing typically 100 shares and then you're going to do the same 100 shares here here you might still do 100 shares and again if

you're using thinker swimmer Weeble and you're just doing one share then that's fine you're doing one share and then one share but you you just do the same shares but here in this phase phase one you're just gaining a lot of experience so when I'm talking about these guard rails these are really for the phase two period where you're actually and certainly phase three where you're actually trying to make an effort at going live and making this thing work so if I have three losses um of x amount or bigger or three losses in a

row I'm done for the day if I give back half of my profit on the day after being up more than x amount I walk away so if I'm like at my daily goal or close to it and then I give back half I need to walk away I just need to preserve the profit I want to be aggressive on the front side and then completely abandon a stock and and leave it alone when it fails to keep going up this is so important you've got to be just totally ruthless about saying nope I'm done

I'm not going to look at that stock anymore I'm going to wait for the next one you've got to be able to make honest assessments of the market sentiment and an honest assessment of your emot emotional disposition today you've got to try to hold a piece until that Final Exit indicator and remember to survive till you thrive because small green days are good now I want to go back here to these exit indicators because um the ones that I wanted to add here was um number six level two big seller that was the one that

I wanted to add level two big seller or burst of red on the time and sales so these are these are this is just one additional one that is an exit indicator that is not derived from the chart but comes on the level two but is just as valid um and it's very important to keep an eye on so I just wanted to make sure we add that before we forget all right so with your guard rails in place um it's important that you approach trading with a track record that you have a business plan

so in order to be a successful Trader you treat it like a business and you don't trade real money until you've got that track record so this is that this is where in the simulator you build your track record and you create that proof of concept so phase one is about gaining as much experience as possible and just trading as much as you have time for all right phase two is the proof of concept phase so in phase two this is what I'll have you do I want you to take one trade a day for

10 days and the goal is that by focusing on just taking one trade a day you're going to focus on the highest quality setup remember we're going back to the beginning of that positive feedback loop which started with what accuracy right so focus on the best setup high accuracy I want to see that in turn create a good profit loss ratio and create nice calendar of consistency so over those 10 trades those 10 days what I would want to see is that that you're green on at least five out of out of five of them

five out of 10 of them now ideally you could be higher like six or seven but five is okay as long as you've got a good profit loss ratio where your losers are small and your winners are bigger you'll be profitable I would then look at your metrics at what total profitability your average winners your average losers and your um uh let's see so and your accuracy sorry so and your accuracy these are the key metrics I would look at on those 10 trades and then could also get dialed in on the actual price of

the stocks you trading time a day and things like that so the reason to focus on one trade a day for these first 10 days is because so many beginner Traders when they go live they end up having a loss and then overtrading and I want to prevent that from happening so we prevent it from happening by only allowing you to take one trade a day and so you do this phase two and this is all in the simulator taking one trade a day the positive result six winners or more that's great accuracy 60% net

profit from those 10 trades good profit loss ratio a negative result would be you know four five I mean again like I said it it a negative profit loss ratio is going to be a problem that's the biggest one lower accuracy not ideal and if you're n negative if you're negative then clearly what you're doing is not working so if you have a good result on phase two proof of concept you have 10 days where you create a 10-day streak you have profit over those 10 days then you go into phase three these are students

who sent me their calendar of doing the phase one uh one trade to-day Challenge and this is what I want to see you don't have to trade every day but I want to see you try to get 10 10 trades and if it's you have a couple Green Day a couple red days that's okay but I want generally to see that you're pretty consistent so some traders who trade a little bit less that's okay you want to try to find at least one trade a day this is good this person did take a little bit

of um you know artistic license and traded a two day two trades three trades a little bit more frequently which U this one this student was a little bit more disciplined with one trade a day for most days so this is generally what I would want to see a calendar like this 10 days and if you do it for 20 days that's fine too that would be a full month there's five five trading days in a week so 20 trading days in a month you could do it for at least two weeks but for a

month it's fine and prove that you know what you're doing that you can produce good metrics if you can do this it's time to transition to real money and phase three is just repeating phase two except with real money you do the same share size you do the same type of setups you change nothing you make the transition as seamless and POS as possible you almost try to trick yourself as if you haven't done anything differently you just stay exactly focused on what you've been doing if you do that successfully for 10 days now you

are ready to begin scaling up so step nine when to scale up if you've been following this trading plan you've gone through phase one phase two phase three then you're trading with real money now you're at a place where you're like building confidence you're feeling good you've done it with 100 shares now you're going to 150 you go you do that for 10 days you go to uh 200 you do that for 10 days you go to 250 you go to 300 and there will be a point where you'll have to make a decision of

do I keep increasing share size or do I stay at this share size and now go to two trades a day and I go to three trades a day and so there's different ways that you can slice it my feeling is that because it's such a slippery slope from taking one trade a day to suddenly taking 20 trades on a red day and just spiraling it's better to build that early track record of consistency with one trade a day and here's the way I would do it I would trade one trade a day so one

trade a day slowly slowly slowly you start here with 100 shares then eventually go to 200 you go to 300 you know you get to 600 you get to a th000 you get to 2,000 so you start getting a little bit more profit but at some point in here you are going to have a a little bit of a a red streak you're going to have some losses and so when you have that first loss period and then you recover from it and you make new highs that loss and Recovery is such a pivotal moment

that's when you know that you've got it all you have to do now is stay focused you've proven that you can go through a draw down and recover and here's the thing when you go through this draw down you know what's different between you right here and every other beginner Trader who goes through a draw down you have a track record of consistency you have it that began in the Sim and that was what gave you the confidence to go live with real money in the first place so if you went live with real money

and you struggled you would look at your track rate and you say well I am making money in the SIM do know what I'm doing I just need to either go back to the Sim and gain a little more experience or continue to stick it out with small size with real money because I know what I'm doing I just had you know these first 10 days were tough so you keep yourself in that really safe area of small size once you prove consistency you slowly scale up because when you have a loss the first thing

we ask ourselves is was all of that just beginner's luck what what's going to happen next for me and so when you realize that I can have a loss and then I can recover then that's when you know you've really got it so then from that point increasing to two trades a day and then increasing next to three trades a day so I I would cap yourself at two trades a day for a stretch and it could be weeks or it could be months based on your comfort level and then I would cap yourself at

three trades a day for a stretch and then once you've again gone through a draw down and a recovery with these quantities at that point you could take the that final guard rail off and go to Trading more frequently but what you have to know is that you will eventually have a day where you succumb to emotion you overtrade you get overconfident you make these mistakes and you're going to be sitting there with with a with a bigger loss and so at that first setback it's important to immediately reduce share size to avoid spiraling I

cut share size usually down to a quarter of full size after a big loss and continue trading with that small size until I've recouped 50% of the loss so that means if I had this rally and then I had a big loss here cut my share size down to one quarter and slowly recoup losses until I've made back about half of the loss here and then I go back to full size the reason I don't keep trading full size after the loss is because I don't want to have another loss like this I don't want

to make it bigger so I want to just cut have it stop right there and go with small size because if I go with small size but I continue to lose well at least the loss is smaller before it comes back around because it could be that I lost because the market has shifted a little bit and we're going into a colder market and look that happens that's part of trading there's going to be hot markets there's going to be cold markets but you want to learn to ease off the throttle when it's cold and

then put the pedal in the metal when it's hot and that's something beginner Traders struggle with beginner Traders chronically keep their foot on the gas even when things are slowing down they dig themselves a big hole and now they've dug a hole and the Market's cold which means it's going to be hard to recover those losses until it heats up again and when it does heat up again they'll make money but they're recouping the the losses from when it cooled off so the better you can get at getting your foot off that gas really quick

the better off you'll be and then once you've had these recoveries those are huge confidence boosters that you know what you're doing and you're on the other side and you just have to recognize that there is an e and a flow the market has hot cycles and cold Cycles it's easier to be aware of these when you're trading in a community like at Warrior trading you can see hear comments from other Traders you know when it's cold you got to reduce your risk and when it's hot I like to size up so I I push

my comfort zone and my risk tolerance when it's hot to maximize profits and I rain it back in when it cools down and so I'm constantly going through that expansion and then contraction the expansion the contraction in my own trading so now you're at a point where we got to talk about day trading and taxes now I know it's not a fun topic but it's actually pretty interesting here because let me put it to you this way you could have two traders who the exact same amount of money in trading profit but one keep substantially

more money in their pocket because they've implemented some very specific tax planning strategies and so what's more important being more profitable or being more tax efficient well if you're more tax efficient you could actually be net more profitable than someone who made more money and gross profit because you're thinking smarter so let's work smarter not harder so most day Traders are overpaying on their taxes due to number one paying short-term capital gains tax on all the profits number two by facing higher income due to wash sales disallowed I'll tell you what that is in a

second number three because they're limited to writing off only $3,000 in losses against income number four because profits cannot be used to contribute to retirement accounts and number five because they're unable to write off expenses related to trading this is a problem so being more profitable versus being more tax efficient you want to know how to pay zero capital gains taxes on all your trading profits there are two ways to do it now you might not like the first one it's move to Puerto Rico now I'm not in Puerto Rico right now I have been

to Puerto Rico my so I hired after I had some made some really good money trading I hired a great CPA and he said all right Ross you're paying a lot in tax um I'm going to throw out some ideas for you you just tell me where they land how do you feel about moving to Puerto Rico and I was like well I don't know it sounds nice maybe I don't know tell me more he said Puerto Rico is part of the United States right so if you move to Puerto Rico you're not giving up

your US citizenship but if you move to Puerto Rico they have something called act 60 it's an incentive to encourage us residents to move to Puerto Rico and the incentive gives you a well what it is is it gives you a 100% exemption on all capital gains taxes so you have no capital gains taxes if you're a US resident who moves to Puerto Rico now the hitch with this strategy is you got to move to Puerto Rico and you got to live there for six months and one day so I went down to Puerto Rico

I brought my laptop and my couple of travel monitors and I checked it out and I thought it was okay but you know my my family is here my wife's family is here and and we just can't move to Puerto Rico right now now my attorney uh my my CPA really tried to convince me he said Ross think about how many flights you could purchase they could fly back and forth all the time with all the money you'd save on taxes and I said I know I know it does sound I you know I I

can't I can't disagree it sounds like good idea um in fact I even pulled up the um Dorado Beach real estate listings just to check it out and I noticed that oh my goodness property's expensive down there $42 million this is where um Jake Paul lives the guy who fought Mike Tyson uh $40 million properties I mean this is insane but there's a lot of very wealthy people that move to Puerto Rico because of the tax incentives so that's your first option you might say Ross uh that's not going to work so well for me

all right I get it didn't work for me either tax strategy number two day trading in a Roth IRA so if you create a Roth IRA and you trade in it your profits and distributions are 100% taxfree you have no income tax on your trading profits or your distributions the only hitch is you've got to wait till you're 59 and a half years old to take money out of the account o that's a tough that's a tough one too but there's a couple ways to think about this so the way I thought about it I

trade in Roth IRA now so my profits are 100% tax-free and I thought that right now I think I can do that now I've written my book which of course is a best seller on Amazon I have a copy of it around here anyways I get royalties from my book I've got the software at Warrior trading I make some money on the software so I figured I could trade exclusively in a Roth IRA I could protect that profit I could let it grow and I'm okay with not touching it right now right now I'm in

a high income bracket in the future Maybe slows down maybe I decide to retire early and I'm not in a higher income bracket I could take money out of my Roth IRA I would pay a penalty and I have to pay income tax on it but if I was at a lower income bracket maybe I wouldn't mind paying the tax so that's kind of the way I thought about it day trading is one of the few ways that you can rapidly grow a retirement account it's kind of it's kind of incredible so if you set

up a Roth IRA you do have a Max annual contribution limit currently of $1,000 and you've got a max income for a direct contribution of under 40 146,000 if you're a single filer or 230 for joint filers now when I made my contribution to the Roth IRA I was above this income level and so I did what uh most people do which is a traditional IRA and then at any time you can convert a traditional IRA to a Roth IRA you do the conversion and from that point forward you're in a Roth IRA so the

way it works is with traditional uh Ira versus a Roth with a traditional IR let's say you make um just for example let's say you make $50,000 salary and you contribute $7,000 so your taxable income would be 43,000 with a traditional IRA because the contribution comes off your total taxable income so you pay less tax initially the government is incentivizing you to make this contribution but then this account grows you know 7,000 and then it grows in the future and when you take money out you pay income tax on the distributions with a Roth IRA

you make $50,000 you have $77,000 in contributions you still pay income tax on the full 50k all right so you pay a little more income tax but the 7,000 now grows taxfree and the withdrawals the distributions are taxfree so the Roth is the preferred strategy for a retirement account okay so this is the second way to grow an account uh and have zero capital gains taxes the Brokers that allow day trading in a Roth IRA and also offer settlement margin which means you can day trade in them as much as you want as long as

you're above 25,000 include light speed trading Charles Schwab and interactive brokers interactive brokers is not great for people that like to trade stocks under $5 so I would not recommend them if you have a Roth IRA that's like $10,000 or lower you would just trade it as a cash account where you would take as many trades as you could take take until you ran out of buying power and then it would reset and you could trade again the next day and that would be fine as well so if you're thinking well Ross you know for

some of you you might already have other income you have you have W2 wages or you've got a 1099 you you know you you're a freelancer so if you can keep generating that income and make all of your trading be in a Roth IRA you're giving yourself a huge gift for the future I mean think about it so for me I grew this Roth IRA to what was started with $188,000 in contributions that was three contributions of $6,000 which was three years of contributions I have now grown that account literally to over $7 million in

trading profits $7 million in fact I've grown it even more than that because I reinvested that money into long-term investing so that's invested longterm and that account is growing on the side so in addition to my trading profits the long term is still growing so it's like it and and I'm young I still have more than 20 years before I can hit 59 and a half years old so when I get to the age of of being able to take that withdrawal $7 million over the course of 20 years it should be it could be

easily $20 million by that time so that's kind of incredible because it's going to keep growing compound interest uh taxfree and then continue to trade so if you're able to do the Roth IRA I highly encourage it it's a great way to grow your account if you need the money for covering your cost of living which I did when I first started trading so I get it because I was there too then tax strategy number three is to use Trader tax status and Mark toar Market accounting so you can maximize your deductions and allow wash

sales all right so the IRS code says under topic 429 that if you're an eligible Trader in Securities you can deduct all necessary and reasonable expenses related to producing your trading profits and that would include Education costs so you're a warrior Pro member you paid for the cost of your education boom you write that off you've you're a uh you you go to seminars related trading you write that off you do uh you have software subscriptions for scanners for charts for you know whatever a news feed something else you write that off you buy computers

you have monitors that's a deduction you do your you've got your internet connection I mean I look around right here and this this whole whole Space this whole building is my office so everything related to this building is an office expense for me so there's the electricity for the building for this space there's the the heating the cooling there's the equipment cleaning I mean everything you know if I go to the grocery store and I have to get things for you know for the office all of that is a deduction so you know you you

should always consult with a CPA I'm not an a a tax uh attorney I'm not a CPA so you should consult a CPA to make sure you're doing it the right way but there's a huge opportunity to deduct the necessary and reasonable expenses related to producing this income so it's a no-brainer in order to be eligible for your Trader tax status you got to meet all the following conditions you must seek to profit from daily Market movements done your activity must be substantial but they don't really quantify exactly what that means you must carry on

the activity with continuity and regularity so my view on this is that if you're trading every single day and you're making an effort of learning this craft and trying to become a Trader that you would be eligible again confirm that with a CPA um now while you can write off expenses related to trading you would continue to Face Wash sales and you're continued to be limited to the max of a $3,000 um deduction on your Capital losses unless you enroll in marketto Market accounting so let's talk about wash sales so wash sales originated from investors

who would sell entire positions at a loss in December to write off that loss against other gains and then they would buy back basically the same position in January the IRS said no you can't do that so if you take a loss on a trade and then buy back a quote substantially similar position within 30 days you're disallowed from writing off the initial loss disallowed wash sales have the result of increasing your taxable gain beyond the amount you actually made so I've known traders who you know let's say let's just say for instance they made

$100,000 in trading profits they knew that's how much they made they had $25,000 in their account at the beginning of the year they have 125,000 at the end of the year they made 100 Grand but then on their $ 1099 it shows that they're they made $130,000 and it says under this line that they have $30,000 in wash sales that are disallowed and so what that means is that they had losses to the tune of $30,000 but they're not allowed to write them off against their gain because they occurred within this 30-day window where they

bought back a substantially similar position so now all of a sudden they're sitting here thinking are you kidding me I have to pay tax on $130,000 even though I only made $100,000 what is the deal that doesn't make sense and it doesn't make sense and rather than revise the the code um or the rule on wash sales to not um you know to not be valid on uh day trading positions they instead they that's the the only work around is to do Mark tomarket accounting so a mark tomarket accounting is um is is a change

in accounting method where you become completely exempt from wash sales you'll have no wash sales which is great and it does something else it means you can write off off all losses against income you're no longer limited to a $3,000 Capital loss now some of you guys are saying Ross I I'm at the beginning of my learning curve I'm not even making money yet but let me just put it you this way so let's say you made um $50,000 from a W2 wage or whatever other income doesn't matter and let's just say this year you

um you did trade and you lost 15,000 so you lost $15,000 trading and you also spent $5,000 on you know set up and all that stuff so how much money did you really make this year Well you made 30 grand right you've got $330,000 that that you earned but because of the um $33,000 max that you can deduct against your losses you would actually only be able to take $3,000 and you wouldn't be able to take the 5,000 if you hadn't enrolled if you aren't considered uh eligible for Trader tax status so that means you

would actually pay tax on $47,000 and the remaining 12,000 so you had a $115,000 loss you could take $3,000 a year for the next you know X number of years and you have to just do 3,000 a year so what if let's say let's make the numbers a little bit bigger let's say you had a year where you made $200,000 in income from W2 wages but you just you lost $200,000 from Trading it's insane but it happened so now you're zero on the year well again not if you don't have Mark to Market accounting you'd

only be able to write off $3,000 of that loss even though you lost now you got another 197,000 that you can deduct over like the next 30 Years so you're going to pay income tax even though at the end of the year your net worth is unchanged you're going to pay more in tax so Mark tomarket accounting is um something that Traders will do that will exempt them from wash sales and it allows them to write off the full amount of their loss so now you're actually able to write off that full $200,000 that you

lost all right right so at least make the loss worth something in offsetting other income and if you say well I don't have other income then what you end up having is a carry forward loss that you can apply to future income so you know how Trump didn't have any income tax for like 20 years it's because that big loss that he had on that casino he had such a big loss he was able to carry it forward and offset future income so this is something that is in the tax code and that people do

and you again like I said you should consult a CP but a good CPA will tell you that you've got a carry forward loss and you should utilize it just like every other wealthy American does so in order to um in order to switch to Mark to Market accounting you have to file form 3115 and notify the IRS of your change in accounting method under Section 475 F and you've got to do it by there's a deadline of April 15 the tax due date of that year so right now if you're watching this and you

didn't already and it's December and you didn't already do your mark to Market accounting for this year it's too late you could file it now and immediately after filing it what do you do you got to notify your broker that you've done a change in accounting method and they'll change your um your accounting Style on your tax report so you'll no longer have wash sales and then all of next year you're good you can't do form 3115 retroactively it only works from the date you file it and notify your broker moving forward now the trader

tax status if you've been trading all year you haven't filed your return yet then you could say I was a Trader all year I made this money or lost this money and I have these reasonable expenses your only issue is that if you had a loss you're limited to the $3,000 that you can write off this year in that loss because you're not on Mark tomarket accounting so the best thing is Trader tax status and marketto Market accounting you'll get the benefit of the losses and you can write the reasonable expenses related to producing your

trading profits you just have to remember the deadline for the marketto market accounting and you want to make sure you consult with the CPA to make sure that they agree with um with this idea and that you do it the right way now if you want to really take this to the next level tax strategy number four is incorporating your day trading as a business so this includes the trader tax status it includes marketto Market accounting you got to do both of those things but if you trade in an LLC or an escorp and the

LLC if it has S election then you can additionally make contributions to a solo 401K of up to $69,000 per year and deduct that against your income and you can also deduct Health premiums against your income so that's kind of like the ultimate is creating the LLC or the corporation which is an es Corp which is these are passed through entities so it's not double taxation you pay the tax on your return you open a bank account you open a brokerage account and you open aedit credit card in the name of the business you segregate

all the expenses related to the business into the business account and you then do your contributions to a 401k that gives you retirement savings yes it's deferred tax because a 401k you'll have the income tax when you take the withdraws later but right now you're in a high income bracket if you're making some money and so this is kind of the final level now getting to this level I probably wouldn't do this part unless well I guess two things unless number one you do have Healthcare premiums that you want to deduct which is possible health

insurance or you're at a place where you're producing enough profit that you feel like it's worthwhile the the the the sort of in between is just doing the um Trader tax status and the marketto market accounting because that works even if you're trading in your personal name you don't need to be trading in an LLC to itemize your deductions related to trading you could still put that on your schedule D is it schedule c Schedule D so that's that's kind of the way I would approach it now is this all necessary like I said you

could try to be more profitable or you could try to be more tax efficient or you could do a little bit of both and I think that there's a happy medium here and it depends on your comfort your risk tolerance what you want to do and what your accountant Fields makes the most sense for your personal situation so as always consult a CPA on this now let's talk about some of these beginner mistakes to avoid I want to tell you that most beginner traders who lose will lose for one of two reasons the first is

because they trade with zero strategy whatsoever they don't know what they're doing so they jump into the market with real money shooting from the hip buying a little of this buying a little of that chasing stocks that are talked about on you know Mad Money Kramer CNBC whatever and following stocks on Twitter Reddit and they lose money it's no surprise and then what happens is after the big loss emotional response desperation fuels the downward spiral and they're gone they're out of the market now there's a second group of Traders well and first of all you're

not going to be in that first group of Traders you shouldn't be because now you know the outline of the strategy that I'm trading every single day and you've downloaded these PDFs you've got resources so you should be smarter than those Traders out there they're just throwing money on this and that all right so the second group of traders who fail they've been given the strategy but they lack the discipline to follow the strategy and this is where I said the ball's in your court I'm going to give you my strategy and you'll have the

full strategy if you become a warrior Pro member over at Warrior trading so the ball's going to be in your core can you have the discipline to follow the rules of this strategy I'm going to share with you some tips to improveed discipline number one keep share size well within the Lost Comfort levels to keep your emotions in check follow the strict loss guidelines outlined in the trading plan consider activities that require discipline such as meditation or exercise journal and track your metrics this helps gain perspective take notes on potential triggers that cause you to

become emotional develop a list of triggers to be on the lookout for and to stop trading the moment they occur and don't spend your time comparing yourself to others keep your head down keep grinding keep learning and keep trying to gain experience so now we've got a final quiz that's coming up if you have not already downloaded the small account strategy worksheet and my um small account trading plan PDFs make sure you guys download those their links uh pinned at the top of the comments and in the description and now let's what kind of progress

you've made should I buy here what's the answer yes or no you know the answer it's no the macd is open but the high volume selling is a red flag and if one of those two say no the answer is no we don't buy that position more selling volume indicates weakness what about this one it's the same the answer is no high volume selling we can't buy that what about this one answer is no high volume selling we can't buy that we as soon as we see those high volume bars we know it's a noo

what about this well we've got a high volume red candle right there and the macd is negative one of them is saying no definitely they're both saying No this is a no we don't take this trade good next one same issue macd is positive volume profile it's negative you've got too much selling we can't take that trade that's a nogo now what about this is open volume profile is not bad you've got a couple topping Tails maybe I take this trade with slightly smaller position size just to be careful because we do have a couple

of topping Tails here and a little higher volume on this candle but still pretty good maybe small position it works not fantastic but it works wasn't a hard no I will say that generally as a beginner if it's not a hard yes then it's a no what about this one now that's a hard yes this looks awesome this is a really great pattern open macd strong volume profile that's a hard yes from $5 to $7 a share in two candles we love that cadl what about this one well this one this is a yes the

macd is open it's coming down a little bit but the volume profile is good and the stock is up a lot this is a stock that has a potential the potential to keep going because of how much it's already moved especially if it's a number one leading Gainer people are going to be watching it it's obvious this one went from $10 to $14 a share what about this one macd is open volume profile looks good we should take that trade what about this one macd negative the volume profile is not a problem but the macd

is negative this is no good we can't take that trade as a beginner Trader something that's great is being able to listen over the shoulder to hear the market commentary of another Trader to hear where they're getting in where they're getting out why they like certain setups what they don't like because you're able to piggyback on all of their years of educated intuition and that's exactly what you guys get as a warrior Pro member I stream while I'm trading every single day but it's only for members that are part of my course for students I

want you to understand that my stream is an interactive classroom it's an opportunity where I'm putting my strategies on display where you can learn from me it's not designed for you just blindly follow me that's not the goal the goal is for you to learn the strategy so you can become an independent Trader that is what success looks like now if you want to take the leap and do a twoe trial I'll put a link I'll pin it to the top of the comments I'll also L it link it in the description where you can

check out that two-e trial you can watch over my shoulder you can use the scanners use the software use the charts the news feed be in the chat room you can start going through some of the classes that are part of my curriculum and see whether or not this is the right fit for you I think the best way to learn this language of the financial markets is to fully immerse yourself in a community that speaks the language and you'll find that here at Warrior trading so I want to thank you guys for tuning in

if you enjoyed this episode and you got value out of it I hope you hit that thumbs up I hope you're subscribe to the channel and I'll remind you again as always trading is wi my results are not typical I've been doing this for a long time so there's no guarantee that you'll find success whether you trade with me or you learn on your own so I encourage you to take it slow and always practice in a simulator before you put real money on the line thanks again for tuning in I'll see you for the

next episode real soon [Music]