All right everyone. Hey, you guys all right. So we've got a live class for today and the topic is three trading strategies for beginners and um, what I'm gonna do for you guys today is I'm going to lay down three potential paths in front of you three potential paths that you could take as day trader. I would say three of these paths I'm going to share with you are pretty much guaranteed to result in you losing money and I share them with you because I want to make sure that if you're on one of those paths right now, you're trading one of those strategies right now that we get you off that path as quick as we can and then I'm going to share with you the strategy that I've been Trading for basically my entire career.

It's the only way that I've ever known and the only way that I've found to find any degree of success. Now there's no guarantee that that is going to work for you, but it is a proven strategy and it's worth learning. So you know if you're out there trading right now, I'm going to ask you a couple questions. This is going to be an interactive class because we are I am teaching it live so thank you guys who've tuned in.

Uh, so um, and I'm going to give you guys some resources that you can download you can print out they can pin near your desk to help you as you're working through that process of trying to have the discipline to follow the strategy that I'm going to share with you every single day. So we've got the Whiteboard here and um, we're going to be talking about the three beginner strategies All right, So hit the thumbs up if you haven't already. And let's go ahead and Dive Right In And By the way, today's a day where I traded, Um, the strategy that I'll share with you towards the end of this uh class. I'm finishing the morning up four thousand, four hundred, eighty dollars and Nine cents.

That's a good day. It's not my daily goal, but it's a good day now. Those who are tuning in, maybe for the first time I want to remind you that trading is risky I'll put up my disclaimer and that my results are not typical. so make sure you practice anything that you learned today in a simulator before you put real money on the line.

All right, let's go ahead and put push this to full screen. There we go. and um, these are the topics for today and what I'm going to really lay out are the three strategies that I see most Traders are trading and like I said, the first two are losing strategies that will not lead you to success. I've never seen someone find success following the first two, but you need to know about them because many of you may be inadvertently on one of those strategies right now in that phase and you need to develop the self-awareness of what you're doing is not working.

I Gotta get you back on a better path. So I'm also going to give you guys some free resources that you guys can download my micro pullback strategy lesson, pre-trading checklist, small account worksheet, my how to day Trade ebook bestseller, technical Analysis series, and a couple of more episodes a live trading archive, and a Fomo Friday episode on holding losers too long. So I'll put a link down in the comments where you guys can check that out. So here's the first question: Are you currently trading profitably? Are you currently profitable? Fix the typo on that a second.

All right. You tell me in the chat if you're currently trading profitably. Um, oops. Okay, there we go.

All right. So I'm seeing some yeses and I'm seeing some no's. So if the answer is yes, my question is how long have you been consistently performing? What is your accuracy and what is your profit loss ratio? You should know these things about your trading I Know them about my own trading I Can see them right here I Always am tracking my metrics I upload them at the end of each trading day each week I'm checking my metrics I Could see my average winners, my average losers I Can see my average percentage of success 68.9 percent right now. So these are things you have to be looking at as a Trader if you answered no.

Then again, I would ask you what is your accuracy and profit loss ratio. You're obviously if you're answering no, you're producing losses. but we got to figure out why. So Stanford who's logged in here? He says no and accuracy is 40.

Mark says 50 year to date. Someone else says not yet. Uh, yes, but in the simulator so that's fine too. Another uh person on YouTube is saying 50 accuracy with a two to one profit loss ratio.

Five months Profitable. Those are good metrics. Now his accuracy is only fifty percent, which you might think is low, but is able to make money because he's got a good profit loss ratio. So this is what I would always focus on.

I'm going to jump back here over to the Whiteboard so you've got I would say sort of Three core components. Uh, to profitability. All right. So I'm gonna go like this.

So number one right here is accuracy. So that's the percentage of success, the percentage of the time that you're right and wrong. And then you've got over here to profit loss ratio. So you add up all your winners.

So add all your winners right here and all your losers and you take the average. So if your average winners are 100 bucks and your average losers are 200, you've got a one to two profit loss ratio. That's a negative profit loss ratio. You would need to be right 66 percent of the time just to break even with that kind of ratio.

Now let's flip that the other way. Let's say you're trading the way This student is who's just commented in the live chat where his winners are. He's got uh, two to one, so his winners are 200. For instance, as losers are a hundred, the dollar amount doesn't really matter.

it's really the ratio two to one. And for him, he only needs to be right 33 of the time in order to break even. So at 50, he's profitable. Now, if you're at exactly one to one on a profit loss ratio, 50 becomes your break even, and then you want to be closer to sixty percent in order to be profitable.

So I Look at these three core components of profitability. Number one is accuracy, number two is profit loss ratio, and then number three. Over here is number three. Consistency I'll just abbreviate it.

All right? So consistency, and the question here is over. Uh, the course of six weeks. How many weeks are you green? Because what can happen and this happens to a lot of Traders is you'll have a stretch where let's say you have nine green trades in a row and you've got good profit loss ratio. You're making money, and then that 10th trade you end up having a huge loss.

So you could be a Trader who has 90 accuracy but is still losing money because on the 10th trade you lose ten thousand dollars or whatever it is. and if that keeps happening once a week, then you're going to be a losing. Trader Now, if you can maintain good accuracy and good profit loss ratios for one week, that's great. Can you do it for two weeks for three weeks? For four weeks? for five? Six Eight weeks.

So out of the last six weeks, how many weeks you've been green? So you guys tell me in the chat out of the last six weeks, how many have been green? I Don't expect it to be green. Necessarily six out of six, you're gonna have red weeks. It happens. I Have read weeks too, so you might even have a red month.

It's not great, but it can happen from time to time. The real question is, if you're able to be consistent, then you can start scaling your strategy. If you're not consistent, what which is it? Is it your accuracy or is it your profit loss ratio? So what I would focus on is accuracy. That's what I'd Focus on first.

So if you're a Trader Who said no? I'm not profitable I Would say you need to focus on accuracy first. If your accuracy is only 40, you're just not good at picking stocks to trade right now. Are you not good at picking the right entries? I Mean that's just the truth, right? So we've got to get your accuracy higher. Once your accuracy improves, you know what follows accuracy Then you've got confidence.

That's the track record. That's how we do it. So you've got your calendar and you know this. Let's just say this is a calendar right here.

and we'll just do yeah or just do five days. So when you start having green green, you know, maybe a small small red day? Whatever. A small red day here. Small red day, and then green days.

Green days. Green days. One red day a week, but mostly green. right? As long as you're mostly green and this is what your month looks like, this creates a ton of confidence.

This is where confidence comes from. Now, if you're a Trader right now, who's red red, Red Red Red Red red. You're basically red. Every other day.

It's hard to feel confident. I Get that. Start with accuracy. Focus on accuracy first.

If you focus on accuracy, usually what will follow is your profit loss ratio will get better. Because you're gonna by focusing on accuracy, you're going to be starting to avoid some of those unnecessary losses that just you know, draw down your profile loss ratio. That's what I found in my trading and then that in turn, that confidence. That consistency.

That's where you start to build a good track record. So here's another question: Do you have a real strategy? You're trading right now? If yes. good. Even if you're not making money, having a real strategy is important.

If no I want You to begin writing out a possible working theory for a strategy that you could adopt. You could use inspiration from me or from other profitable Traders But you need to have some type of written strategy. So now we're going to take the Whiteboard. We're gonna do something crazy.

We're gonna turn it like this because we're going to start working on strategies strategy All right. So there's a lot of different ways that you can day trade in high level, but the reality is most people fall into one of two Gap categories: momentum or Counter trend. Tell me here: Are you a Momentum Trader or are you a counter Trend Trader Momentum Trader Is someone who's buying stocks going up like this. You're going to be entering most likely right in these areas on pullbacks to sell higher counter Trend Trader is going to be waiting letting stocks go up like this, waiting for them to reverse and it's gonna be Trading short side to move back down right down here.

Now some Traders may also be buying a counter Trend Trader Maybe buying something that's weak for the move back up by trading right here. I'm going to talk today a lot more about Momentum Trading because this is a strategy that I've been trading for more than 10 years and it's not to say that it's necessarily Better or Worse. Some of it is personal preference, but this is a strategy that I'm a real expert on. So this is what I'm going to be talking about.

All right. So now, I Also want you to ask this question: What's separating you from those who are doing better? And let's really think about this for a second. Can you identify the differences in strategy, execution, of strategy, emotional disposition, or otherwise that separates you from those who are successful? What do you think is different from maybe a Trader that you know who's been very successful, who's made a million dollars or something like that. Now you might say some of you might say, oh, he's he's you know, got a bigger account, but don't use, don't use that.

That's not. That's not a real. That's not to me a real reason. Account size.

That's not a real reason. There's something more than that. Account sizes. You could trade with a small account.

You're not going to make as much, but you could still produce good profit loss ratios. You could still be consistent. You could still grow that account. So is it that the actual strategy is different? The way they're trading the stocks they're trading.

Are you trading the same stocks? You train different stocks? You could compare yourself To me: Are you trading the same stocks that I'm trading each day? Or you trade different stocks? Now, if you're trading a momentum strategy, you'd probably be trading a lot of the same stocks. Maybe not every day, but a lot of days. because most Momentum Traders are trading obvious stocks each day. Are you giving in to Fomo? Are you having a hard time following your rules? Are you getting you know, falling into these? Revenge Trading Cycles You see another Trader who's very disciplined and but you're not there.

That could be a part of it. That's emotional disposition. The reality. The reason I ask this question is because if you were doing everything that that other Trader was doing, if you're doing everything, they were doing the same way, exact same way, you would expect that you would have a similar result.

And so if you're not doing everything the exact same, then there's going to be a problem now. I Want to be very clear that I don't want you to make an assumption or make a leap that you're going to be able to achieve the same result as me because my results are not typical and I have been doing this for a long time, but any difference in outcome has to be related to a difference in execution. A difference in the execution of the strategy and that can be from a share size perspective. It can be from a risk tolerance.

It can be a little bit from account size and tools at a certain point. But Ultimately, my suspicion is that you are most likely in a place where you might see setups, but you're hesitating so you're missing an entry that a more seasoned Trader is taking. Therefore, if it turns into a winner, you're missing that winner entirely. That's the result of a lack of confidence lack of experience.

Good news is that gets better with time. The more time you have in the chair, the better you get it. Learning to anticipate those setups because a lot of trading is pattern recognition, right? We see these same patterns again and again. The stock squeezes up a little pullback and then move higher.

Stock squeezes up, pulls back, pops up, doesn't make new high dips again, starts to curl and then breaks out right. These are patterns that we know so well, so learn to recognize these patterns in real time. The better you get are recognizing these patterns. You would be doing yourself a disservice not to be buying it right down here before it breaks because you know this pattern so well.

but when you're a little bit newer, you may lack the conviction to take the trade. so you wait for it to start to pop up and maybe it dips for one second after it goes and you get it up here. That's fine, but you're going to pay a little bit of a higher price than a more experienced Trader who got in down here, and if it ends up doing a false breakout, you might lose. Whereas this Trader's outbreak even and all of those can add up, those very subtle differences in execution can add Up to fairly significant differences Ultimately, in total profitability.

Now you might ask yourself, uh gee, how do I know? Uh, you know, how's Ross know what he's talking about? Well, this guy, uh, you know he's got a great beard, but that's that's not everything. How does he really know what he's talking about? So I'm going to share something with you that I share Not to brag by any means I Really, it's not to brag at all. It's to show you that I'm qualified to talk about this I turned less than six hundred dollars into over 10 million dollars day trading and that was with real money. I My results are not typical I'm not your typical Trader I uh and I'm proud of that.

I've been able to do really the um, what is very rare which is not only find success, but find a pretty extreme level of success as a Trader Now there's definitely Traders out there that have done far better than me. But this isn't bad. That's 10 million dollars in real profit. so you're doing yourself a favor to ask when you're learning from someone.

Are they qualified to speak on this topic? What do they really know And I can tell you based on my own profitability and I keep my audit right here. You could check it out over on our website now the Warrior Trading website but I Always have my audit right here. This is the Audit of my broker statements. so that's all real money.

So you know now that you're learning from someone who's actually qualified well, you know what? What do my students think of me Because of course I'm a teacher over at Warrior Trading. My students seem to like me. Also, 92 percent of over 2 000 students gave me a five-star rating. They said I'm an excellent teacher that feels pretty good.

but it's not just my students. Business Insider and Investopedia both ranked Warrior Trading is one of the top classes for learning how to day trade. So I say all of that to encourage you to watch to the end of this episode because you're learning from someone who is qualified both in their own trading, but also as an educator. And I put this class together today.

Really, for those of you who've been tuning in on YouTube asking me questions about strategy and I've recognized that a lot of you are in phase one. Strategy One, Blind Incompetence. How many of you know what I'm talking about here. Blind Incompetence.

Unconscious incompetence. This is where most Traders begin. This is where I began, but it's also where most Traders end to where most careers end. Blind incompetence is boldly trading.

with no strategy. You're trying a little of this and a little of that, but with no written rules dictating how to trade and with no historical data supporting trading with real money, you're shooting from the hip and yet I Can't totally blame you because this is unconsciously incompetent. You don't know what you don't know as a new Trader when I came into the market I didn't know I I knew almost nothing I mean I knew the very Basics But I did not know what I was doing and yet I funded a real money account, started punching the buy and sell buttons, and I was trading in the market against traders who have been doing it for 10 years or or more. you know? Certainly, I was trading against much more experienced Traders And you know what happened I lost money.

This is where most beginner Traders find themselves. So I would say this is kind of phase one and like it's you could call it a strategy. Um, it's a strategy for lack of having any, uh, more formal strategy. It is a strategy.

So um, this is a strategy where you are trading and so this is gonna be an eyeball and your eyes are closed. That's the. that's the, that's the eye close. This is blind.

You just don't know what you don't know. It's blind incompetence. Blissfully ignorant. Except not for long because when the real losses stack up, you're going to start to develop a real sense of frustration and disappointment in yourself.

The problem is the last two years. it's almost a joke to be incompetent, right? I didn't hear no Bell this is what Traders are joking about over on Wall Street that's all the time. Ninety percent on entire portfolio loss since November it's a joke. it's become a joke.

It's become bragging rights of how much people lose. and this is. this is a real sign of a just kind of a a bad mentality that a lot of people have. These people who are making these posts they obviously know there's Traders out there that do this for a living.

Some of the Traders are trading with, you know, hedge funds big big institutional Banks Goldman Sachs you know whatever and others are trading for themselves like I do I trade for myself I trade my own money and you may have a question of Ross You know, if you're really such a great Trader why don't you start a hedge fund? Why don't you? you know, move up the ladder. Remind me to come back to that I I I'll answer that in a few minutes. but the problem is in this first phase of blind incompetence. Uh, it's it's become a bit of a joke.

How many Traders just carelessly lose their money? gambling on lottery ticket type of Trades hoping to have the next? Game Stop And that's not. That's not a strategy. Buying lottery tickets is not a strategy. Let's be honest, that's gambling.

And so what a lot of Traders experience is. Perhaps if you're lucky, you get a little beginner's look I Got a little bit of beginner's luck in my first year of trading. My first year of trading I made some money but overconfidence, sad and quick I then became stubborn frustrated and I was watching my account get smaller and smaller. In fact, I was going into the negative I was experiencing a drawdown and this is where phase one I suppose ends for a lot of Traders this is where Traders are exiting, they're leaving.

they're like, well, that's it I lost x amount. For some people, this might be a thousand dollars or some it might be ten thousand. For some it might be a hundred thousand. For some it might be a million or more.

This is the place where Traders give up. They give up here. They give up here. they give up here.

This is where they head for the exit. They just say that's it I'm done and unfortunately, they never get to get to these uh, phases of trading where obviously all the rewards are found To reap your rewards here, you've got to pay your dues And that means you've got to spend a lot of time studying and a lot of time practicing and you've got to develop your own track record of success. ideally in a simulator, but with real money, you know, perhaps with small size will be fine. Some of you may be in various states of this Equity curve you may be in The Beginner's luck phase.

maybe beginner's Luck came for you in 2020, 2021 or 2022 and now you're in this phase here of you're drawing down, you're trying to figure out what can I do differently? What? How do I change things and um, I'm going to share with you of course. um, what's worked? uh, very well for me. but this is a phase that a lot of Traders find themselves in. So if you're in this phase I want to reassure you on the one hand that I was there at 1.2 and I was able to push through it.

but I also want to warn you that some people and many people don't make it through and part of that may be because they don't take the time to really figure out exactly what they're doing wrong and what separates them from traders who are more successful. So I want to show you through this class. I'm going to show you a couple of short little videos. This next video is a video of some of our students talking about their golden rules and I think it's always helpful to hear from Traders other than just me.

so let's hear about some of their golden rules. like Golden Real Estate is more of a mindset that I have to keep moving on the laws is that I can't dwell on it. The only way that the wrong creators look at it and learn from the different report one of my oldest is good habits will make much more Rich than any single day piano. My golden rules would be not to have too many wolves I Found that oftentimes my rules would really put me in a box and you traded and I would be afraid to break these walls to be able to also make me a crate to take some trades.

My golden rules are to keep my birthdays to a minimum and to keep studying the markets. I Really put a really big emphasis on studying the markets every day to stay up to date which in turn helps let me keep my rent days down to one minute. My golden rules are less is more. Stick to your strategy and know that every day is progress.

Even losing days are a learning opportunity. That's my biggest rule is to live for another day. I Always cut my losses super quick and always just want to give myself tomorrow to be better. Thank you! So these are traders who in their golden rules.

They're all talking about different ways to be disciplined right now. Phase Two: Strategy Two: This is the emotional trading strategy and I want to share this one with you because this is a strategy that uh, I've certainly traded on many days in my career. This is certainly a long phase in my career, but even now there are times where I fall into this emotional trading strategy. So an emotional trading strategy is a style of trading where you may or may not have a written strategy.

but even if you do, instead of following the rules of that strategy, you give in to emotions. and You Begin trading erratically. the path to losing is comparing yourself to others. when you start comparing yourself to other people.

that is a quick as a quick ticket to losing money. and I'm going to talk about that more in just a minute. But it then makes me think inversely is the path to success about keeping your head down, pacing yourself, setting modest goals for yourself, striving to hit them consistently, and not spending time looking at what this person or that person or the next person is doing, but just comparing yourself to yourself, trying to do a little bit better each day. This is something that I learned early on when I was earlier in my career.

I was I had really oops, I'll switch to this one. uh no, it's fine. I'll switch to this one when I was earlier in my career. I Remember trading a a penny stock and this is one of the worst losses that I'd have.

um in my first two years of trading and there were all these traders who were talking about they're like, you know it was just like GameStop In a way you know everyone was talking about buying this penny stock, buying it, it was going to go. You know to the Moon it was going to go to eight. ten dollars a share and people were like don't sell, don't sell Hold Your Position hold the line, hold your positions and and I held and I kind of got caught up in everyone talking about how much this stock go up and this and that and instead of follow my own gut and follow the rules of my strategy which was to take a small profit off the table when I had it, I just held the whole thing and of course it was a winner and then it turned back to break even. but I didn't sell it.

No, this is just a short-term dip. the corrections coming. it's going to roll back. It's going to come back up.

As soon as it bounces off this moving average, it's going to come back up. It starts going lower and lower. Next thing you know, I ended up losing fifteen thousand dollars on this stock which at that time was uh I mean that was that was more than half my account. It was gone and I realized that rather than just keeping my head down and doing you know what was good for me just chipping away at a small winter.

small winter, small winter. I got caught up in comparing myself to how these other people were trading and as soon as I was thinking about other people and not my own trading that it allowed me to lose appreciation for what I had I was just thinking about what could be what could be what could be And I know so many traders who have done that on. GameStop on AMC On Bed Bath and Beyond you know who bought and who had profit. who could have should have would have taken profit off the table but kept holding for that bigger move because you know everyone else was too.

So this emotional trading strategy? how many of you can resonate with this? how many of you maybe right now feel that you're on uh, currently trading in a phase where you're trading an emotional trading strategy. Let's talk about some of the emotional triggers: comparing yourself to others. Let's say you're up 100 bucks. You see somebody else is up a thousand, you know? Today I showed you how much I'm up 4 400.

So let me ask. how does that make you feel? Do you immediately feel fomo frustration? You start telling yourself that you're an idiot for being up only a hundred because that's a quick path to losing money. It's a bad attitude now. it happens to me too.

Yesterday I had a pretty good day. I was up 8 500. I saw another Trader post that he was up a hundred thousand A hundred and one thousand dollars in one day. Now that's a pretty fantastic day.

I've had days like that before, but it's been a while and immediately you know what. What's the first thing you feel I don't know what some of you are better than me you say I'm happy for you I'm just really happy for you, good for you. You're probably just saying that I don't even believe you. Uh man, now maybe I'm a little too competitive I'm certainly happy for anyone that achieves success I don't want to knock anyone down I want to be careful about how I say this I'm not trying to knock anyone down I Want to see I love seeing my students outperform me I love seeing them do well.

However, when I see people doing really well, it makes me feel insecure. like I haven't done enough I'm capable of doing better I should be doing better I beat myself up. Now that's that's competition, you know, and trading is. It's not necessarily that we're competing against each other, but you know you see someone else doing better.

Someone who's got a lot of Drive wants to do better and that's a natural response. The problem here in in this industry is that everyone is posting their P L's on YouTube on Twitter and most of them are only posting when they're green. so you're inundated with a flood of all of these people talking about how much money they're making. Now occasionally, if you go on Reddit you'll see people bragging about how much they're losing.

But aside from there, collectively, people put out a much Rosier picture of themselves than is true and that can be very difficult for beginner. Traders because it creates a sense of everyone is doing well except for me. Everyone is doing better than me and this is what I've realized: When you're no longer appreciative of the profit that you've made, it's extremely easy to be Reckless And to give it back, it's very easy to be Reckless and give it back. Now it is definitely motivating to see someone who's made fifty thousand or a hundred thousand or a million dollars or more.

But when you're in a place where you're not happy with your trading, you feel like you could be doing better. And then you keep seeing all these people around you throwing down really big numbers, really big numbers that can create this emotional response. So for me, okay, let's think about this: I have that emotional response I feel fomo I feel frustration. so that's that's an emotional feeling.

How does that does that create action? Well, the next time I see a stock moving up, Maybe that's the one where I take a bigger position I'm now overcompensating right? So now I'm sort of giving in to this emotion. Now the emotion is actually starting to dictate the way I'm trading my strategy I'm becoming an emotional Trader I'm taking maybe a position size that's way too big. Maybe I have a base hit I'm up 15 20 cents a share and I don't sell it now I'm looking for a home run. Maybe I add to the position Maybe I take a massive position and you know what? Maybe it ends up working Is it.

Is it really a success? If it worked because you emotion pushed you to this place? I don't think so. And what's worse is that that could be the one trade that ends up. you know popping up a little bit and then jackknife dropping and then you take a massive loss. and the only person that you're with at the end of each day is you.

You know the person who made the 100 or the 200 or whatever it is. they're not sitting next to you, the other people who say they're still holding GameStop or still holding Bed Bath and Beyond or AMC. You know they're not sitting next to you. It's you.

You know when you can't pay your bills, it's you. You're the one that you know has to pay those bills. So you have to do what's right by you. And I think that if a path to losing is comparing yourself to others and the path to success is keeping your head down, keeping your head down.

Don't compare yourself too much to others. Now you know of course I do my recaps and things like that and I do that because I like to make sure that everyone sees you know what was moving each day. But I wanna encourage you when you're watching that to think more about the stocks that I'm trading. Are you trading the same stocks? Are you trading the right stocks? And don't try to compare yourself to me? If you want to, you know, be where I'm at.

Expect it's going to take at least 10 years because I've been doing this for a long time and even then there's no guarantee that you'll find the success. So you know I'm not your typical Trader Don't compare yourself to me, focus on what's right by you. So if you can chip away at 10 15 cents a day, let's do the math here, right? So let's so we're talking about strategy and let's say Daily Goal: Let's say 15 cents per day. And the goal is to eventually do that with a thousand shares, which equals a hundred and fifty dollars per day, right? I'm sure for a lot of you, that would be a modest goal.

that would be pretty nice. 150 a day? That might be, especially if you're only doing it in two hours. If you're on the west coast and you're trading from let's say 6 a.m until 7, 30, 8 A.M and then going to a regular job make 150 in the morning, 200 in the morning, then go to another job that would be awesome, right? So let's set just a smaller goal: 15 cents a day. So now we're looking for a strategy that's going to help you find 15 cents per share out of the market each day.

You'll do it with a thousand shares. Okay, look, we're not trying to get rich here. We're not trying to do anything crazy. 15 cents a day? That's all we're looking for.

But we want to try to do it consistently and we want to try to do it in one trade each day. All right. So let's think about this a little bit more. We're going to come back to the strategy.

I'm going to talk about another emotional trigger: being green and giving it all back. You hit your daily goal of 100 bucks and then you overstate your welcome and you went red. Now you're down 50. this can become a trigger.

It can be definitely a big trigger for me. Instead of accepting the relatively small 50 loss, you begin Revenge trading trying to recoup losses. This can then spiral into bigger and bigger risk taking and bigger and bigger losses. In hindsight, you'll ask yourself, why didn't I stop sooner But it's because in those moments you were emotionally hijacked.

Emotions got the better of you. So you might not have expected that trading would require such a close relationship with understanding your emotions. You know, essentially Am I Trading Um, Am I trading from a place that's emotionally fueled. or Am I trading from a place that's calm, cool, and collected.

Trading requires a very high level of emotional awareness. These are some of the emotional triggers that I've gone through: I'm gambling I'm chasing I'm blindly following I'm desperate I'm filled with fear, regret, frustration, anger I Don't know what I'm doing. These are all things I've told myself I'm afraid, can't seem to follow my own rules I can't trust myself I'll never figure this out I'm discouraged I'm helpless I'm deflated I'm angry. Have you feel felt any of those feelings while you're Trading I bet many of you have I think a lot of these are part of the the experience of being a Trader I Taught a class called Trader Rehab I Taught this with a Um licensed mental health worker.

Um. Ted And we went through this class. We were talking about these different emotional blocks. so this class was designed for Traders who have been going through a period of emotional hijack where you are unable to break the cycle.

You just keep digging the hole. deeper and deeper and deeper you're spiraling. and so when we're spiraling, that's when I say okay, it's time to check yourself into Trader Rehab. What does Trader Rehab? It's a trading plan that you follow that has very tight guard rails.

You have a very limited number of times you can trade each day, you have a limited number of hours you can trade each day, and you focus generally on just one trade a day for a period of time just to sort of clear the Slate Once you've had two weeks of that, usually Traders emotionally have come to way way down. It could be very difficult to pull yourself out of that trap of emotional hijack. It's like a magnet and it holds you there. It's really hard to break out of it, but if you can't break out of it, what's going to happen is you will blow out your account.

You will just keep spiraling and spiraling and spiraling and spiraling until you blow up your account. And then once your account has been blown up, you won't be able to trade for a few weeks. And then through that period of time, That's when you're going to start to decompress because you don't have a trading account. Well, by the time you decompress, you come back and looked at it.

You know, fresh perspective. It's too late, the account's gone. You're not going to be able to rebuild because you blew up the account. Maybe you can fund a new account and it might go well for a little while Unless this happens again.

you get sucked back into the cycle. So for me, it's been really important to learn my triggers and to do everything I can to keep myself emotionally even keeled. So I can come in each day ready to maximize on opportunities without dealing with the emotion of fomo or frustration or not following my rules or this and that. Trying to make it all back in one trade, right? You've got to learn to trade one day at a time.

and sometimes you take these big losses and you have to be in the trenches for a while while you while you recoup those losses. Phase three is the development of your own day trading strategy. This is the ultimate place that you want to get to. So there's a lot of traders that in these three paths that I lay it out in front of you.

The first path is the blind Trader This is the blindly incompetent guaranteed. Almost guaranteed that you will long term lose money if you're trading from blind incompetence now perhaps in an especially bullish Market you could have enough beginner's luck, but that's not going to be sustained over 10 years. The second strategy in the second phase the law Traders fall into is emotional trading. They may or may not have a strategy.

Sometimes they do though, because um, this. This the implication is that in Phase One there's no strategy and in phase two there's a bit more strategy. Whether or not it's really a working strategy is sort to be determined. But in phase two, you've got a strategy that you're trading.

but you keep getting hijacked by emotions. and so the outcome of your strategy is really inconsistent. It's erratic. The results are not predictable because emotions are coming in and throwing off the way you train.

It's affecting your entries, your exits, and everything else. And then you have the third strategy. If you can get through what phase one? phase two, then you get to phase three, which is the development of your own day trading strategy and the discipline to follow the strategy. A strategy should be back tested with historical data.

To prove profitability, you can create your own strategy, or you can adopt a strategy proven by somebody else. But if you adopt a strategy that someone else is like mine, you have to prove in a Sim that you can trade it profitably just because it works for someone else. You know. Look someone.

Let's just say someone has a dirt bike and could do a backflip. I Can get on a dirt bike. It's not going to guarantee that I can do a backflip right. You have to bring your own skills to that strategy.

It's great to have a blueprint for how someone else trades, but you still have to prove that you can actually follow that blueprint, have the discipline to follow the rules, and that you have the experience to execute it the way it needs to be traded, right to be able to punch the buy and sell buttons at the right time. And that's we're going to talk about here. So I'm going to share with you another uh clip of some of my students talking about their strategies. So I asked them what was their strategy so let's hear and then I'll share mine with you.

All right, let's welcome crater looking for front side moves I'll look for gifts that kind of go into wearing shorts and get squeezed and look for the biggest move hi Strategy: I would say is momentum based stretch. the Stock's going straight up essentially is Rock Springs I like small camp stocks I'm a small Castle Mental Trader My favorite strategy is going to be training the game in small caps and Along by its small cap and electric train. My strategy is small cat Momentum trading I Like fast loading stocks with high rate of change and high relative volume. the longer the range of the handle stick, the better.

I Like fast-moving stocks that have strong momentum intraday and a good daily charge. All right. So that gives you a sense of some of the strategies that a few of my students are trading and you can probably recognize that they're all fairly similar to the strategy that I trade. I Am a Momentum Day trader so I Want to share with you sort of the outline of this strategy: stock selection, entry requirements, and position management.

So let's start with stock selection, right? And we're still referring back to this goal here of 15 cents a day? All right. So we have a goal of producing 15 cents a day per share of profit. How do we do it? Let's start with the right type of stock to trade. Part of trading is managing risk.

and I think by choosing the right type of stocks to trade, you can significantly reduce your risk. Trading low quality bad stocks is going to increase your losses, so there's no question that trading the right stocks helps reduce risk. But what is the right stock to trade? Well, um, the right stock to trade is going to be relative to the strategy that you trade. So for me, as a Momentum Trader I'm looking for, stocks are going to be moving up quickly, right? We want to trade something that's going to be squeezing up, moving higher, Moving higher.

So all right, what is? Um, Uh, and I Just got distracted there by your comment. Yes, um, I'm talking about the average for average profit loss ratio. We're looking at the average of all the profits, the average of all the losers. So I'm looking at the averages, not the sum.

Uh, all right. So so let's continue. Um, so for Momentum trading, we're looking for something that's moving up like this. So what's the type of stock that's going to move up like that? Why would a stock and you call it out? For those of you in chat, why would a stock go up 50 in one day for instance? Well, typically it's going to have some kind of news, so we like to see that there's a news event driving the stock higher.

Now if we have news, and the news is positive, what's that going to do That's going to bring buyers into the stock That's going to create above average volume today. Now, if that above average volume, if the news is bad, then the Stock's going to be down. Not interested. But if the above average volume is to the buy side, the stock is going to be driven up.

So having above average volume at least five times higher than average and having the stock already up at least 10 percent are pretty much minimum requirements for me to be willing to trade a stock. Now you might say Russ This all seems arbitrary. Well, I assure you it's not. This is based on historical data right here.

This is all the historical data that supports what I'm sharing with you right now. see my performance right there. So what is that? Performance by instrument Relative volume 500 means five times higher. That's where I make money right there.

Higher volume is better, right? I Make more money on stocks that have more than 25 million shares of volume. This is where I'm gonna. Thrive Now this gets into something a little bit more complex that we'll talk about maybe a little bit later continuation. But then this is another one.

here. This is where the profit is. It's on stocks up more than 10 percent right there. plain as day.

Okay, so now we know that and there's no question about it. We just have to figure out how to find these stocks in real time. So we're looking for five times. average volume up 10.

We want to see that there's a news event most day. Traders Prefer stocks between 1 and 20. we can again go back to my metrics up here and I can show you my price. so price right here.

This is where I make the most money right? So between two and twenty now I do make a little bit over 20. I'm not going to say that's nothing I mean it's 12 percent up to 50. above 50, you know, five percent. So you know again, you can make a little bit.

What I'll tell you though is that when it starts to get more expensive, these can also be riskier you can have. Um, you can have some big losses when you get into this price range. it can be very quick to have those big losses. So for most beginner Traders Focusing between two and twenty two and ten, maybe two and twelve is going to be a little bit better.

And then on the supply side, you see here: Demand, Demand Demand Demand. These all are indicators of high demand, right? All of this indicates there's a lot of demand for this stock today, but there is a supply. Factor When a company does an initial public offering, they're selling shares onto the open market. So if a company sells, let's say 10 million shares onto the market.

in their IPO and they sell them at. let's just say I Mean we could say two dollars a share, That'd be super low. But well, it doesn't really matter. it's just for the sake of argument.

they would raise 20 million dollars, right? 20 million dollars right there. Now from that point forward, there's only 10 million shares available to trade. Now the company can do a couple things. They can do what's called a secondary offering.

if they have an S3 that's a shelf registration. they can do a secondary offering. so a year later, they could sell another 5 million shares onto the open market funds the company that money goes in the company. Now they've got a 15 million share flow and they could also do stock splits and stuff like that.

So the flow can change a little bit. But for the most part, on any given day when we're trading a stock, the float is fixed all right. So there's a certain number of shares available to trade and when that number of shares is limited, then this the price moves up very quickly as Traders are clamoring to get a piece of the action. This is true with anything else.

It's the housing market. It's supply and demand. It's you know, the car market. It's the caviar.

Market It doesn't really matter. It's A. These are all markets of supply and demand. except what's of course, amazing about the stock market is that these imbalances between supply and demand can create fifty percent, one hundred percent, two hundred percent intraday moves.

Which presents an incredible opportunity. Now we can look here. Um, let's see: I'll just show you for instance today. So right now today, our top gainers.

um, we have, um, this stock up 98. This one's up 70 percent. This one's up 55 54 50 I Mean every single one of these stocks are up more than 20 percent today. These are naturally the type of stocks that I would want to be looking at.

Now, they're not all going to hold up all day long. Some of them, like this one, you know, might make a nice move from seven to twelve and then come back down. Others keep going higher for multiple days in a row. It depends on the quality of the Catalyst it depends on Market sentiment.

This stock hit a high today of about four dollars. Yesterday it was at like a dollar fifty. So you know, multi-day moves We? That's not totally uncommon. Certainly, when we see it, it's um, it's great because that presents a wonderful opportunity.

Okay, so this is an example of stock selection. All right. So does this stock check all the Box Gfai on this particular day? So it's on our Gap scan it's up 42 percent. This is the software that my students use at Warrior trading.

I actually have a development team that built it out, so it's all also the same software that I use. So this stock is up 42. It is our second leading percentage gainer in the entire stock market. The relative volume right here is 7.18 Okay, so check.

it's up more than ten percent. Check. It's got relative volume of more than five. All right.

Does it have news? The answer is yes. What's the price? Is it between two and twenty? Yes, the price is 12.70 And what's the float? The number of shares available to trade right here is 1.28 And yet it has 24 million shares of volume. Which means people are buying and selling. Buying and selling.

Buying and selling. This one is being very actively traded. And look at the momentum. Look at the move.

This stock went from a low of nine dollars all the way up to eighteen dollars a share. That's a 100 intraday move. This presents a huge opportunity. That's the type of stock that we want to be trading.

Okay, so again, let's Circle back. What's the goal? 15 cents a day? All right. So is this stock the type of stock that can help us meet the goal? It's absolutely the right type of stock. And today I found several stocks were also the right type of stocks.

In fact, I find the right type of stocks most days that I'm trading. most days I'm able to finish in the green. So let's now talk about where to buy the right type of stock. And by the way, for those that are just tuning in I Hope you've hit the thumbs up.

Hopefully you're subscribed to the channel. It really does make a huge difference to our channel to have you guys subscribing and hitting the thumbs up. So I hope you do it if you enjoy this episode. All right.

So let's talk a little bit about entry requirements. All right. So we've let's let's assume that we've successfully identified what we believe is a stock that meets all of our criteria for having momentum and let's say it's already moving up. So we've already gotten a couple of nice green candles.

We've gotten one candle going up, another candle going up, another candle going up. Well, what do I do? Where do I buy this thing? You know it's already super strong. it's going straight up. Did I miss the whole move? So what? I'm going to show you here is one of my favorite entry setups and I trade many different setups, but this is one of my favorite and we'll hear from some of my students about some of their favorites in a few minutes.

So number one. Oops. Number one. The typical pullback will usually have two to three red candles, so a stock moves up and then you usually have two to three candles to pull back as you can see right here.

So sometimes it moves up on three or four green candles. Sometimes it's just one green candle. doesn't really matter, but usually following a move up is a little pullback. These are the waves and usually you get one and you get two that are really good.

Sometimes you get a third, but I don't count on it. So I focus on the first and the second pullbacks. That's what I focus on and that has been consistent for more than 10 years of me trading. This is what I focus on.

So I identify a strong stock and then I wait for the pullback. It can be called a bull flag pattern. There's different names for these patterns I entered during the pullback, either as close to the moving averages as possible that would be buying the dip in a way with a stop at the low or I can buy as soon as the first candle makes a new high which is right here and I set my stop. Oops.

I set my stop at the low of the pullback. So let me show you on the Whiteboard what this looks like. So the stock is moving up, we have one red candle coming down, we have another red candle coming down and now this candle is forming right here and we have a couple of choices. We use moving averages and so I'm going to make this dotted line here.

This is a 9 EMA That's an exponential moving average. so it's the average price of the last nine candles, but it's weighted so most most recent price action is, uh, more valuable which allows the moving average to move up faster when the stock moves up faster. I Have found that and this is an indicator I've used for a very long time that stocks will usually pull back to around the nine moving average before rallying back up. Now, sometimes if you have a stock that's incredibly strong, it won't pull back all the way to the moving average.

it'll just keep going higher. But this is usually a pretty safe spot to look for an entry. So as the stock is getting close, let's say this current price right here is nine dollars. Let's just say and the Nine Moving average? Let's say is it that blue line right there? Is it? You know, 880.

So if that's the case, I could go ahead and take a starter position at nine and let's say I buy. you know, 1 000 shares at Nine with a stop at 980. now I'd only do that if I thought I had the profit Target of 949.50 But let's say the high a day up here is 10 bucks so that's ten dollars so that would more than justify the return. and then as the stock starts to come back up here.

oops, this would be a green candle of course. So as the stock starts to come back up here, this is where we're getting resolution. And I'm going to show you a couple of these patterns that actually played out the more conservative way. And what a lot of beginner Traders will do is they'll wait, wait, wait, and buy the second.

This candle breaks the high of the last candle. That's this price right here. So that cross is your entry and that, let's say that's 9 20.. Now the advantage of that entry is you typically get immediate confirmation.

The stock immediately resolves and goes up. Or it or it drops. But you immediately get resolution. You don't have to sit and wait, and more often than not, this pattern resolves to the upside, which is why I like it so much so as a conservative Trader Looking for that 15 cents a day? a good entry right here would probably be about around 9 18.

To anticipate that this is about to break with a profit Target of like 9 30, 9 35 you lock up your 15 cents, you shut it down. You don't compare yourself to other people, you take the profit off the table. You come back, You do it again tomorrow. It doesn't matter if this thing goes up to 20 bucks, you did what you had to do for you and you're going to keep doing that every single day.

You do that For 10 days in a row, you try to get eight Nine green days. Now it might be one of those days. You get it at 9 20 and that drops back down to nine. You stop, you stop out, you take your loss.

You get out as quick as you can. I'm going to talk about exit indicators and signs of weakness in just a moment. So you want to get out as quick as you can. But as a beginner.

Trader Right now, your job is to build consistency. So that means get in, get green, and get out. and I don't want to see you until tomorrow. I Tell traders that all the time.

I Say get in, get green, get out. You don't go broke taking profit. So the entry here is as soon as this candle makes a new high right there and I just I dropped my green marker. but actually I have another one right here.

but it doesn't really matter. So the this is these are both supposed to be green candles. There you go. Okay, so anyways, your entry is at that sort of Mark right there.

Okay, so now let's look at the charts. So here's an example of this happening all right. So this is a stock and this is a five minute time frame. But you can trade this on both five minute and one minute time frames.

Either one is fine. So we're looking at the stock squeezing up. We've got one, two, three, four, five green candles in a row. We can't just Chase it in the middle of this move, we have to wait for a pullback and you know what if it doesn't pull back I Don't care how high it goes, it doesn't matter.

I Don't even feel Fomo because it never gave me a good entry I Can only trade it if it gives me a good entry. Now this one's giving an entry the blue line or sorry the Gray Line right here is our nine moving average. It comes down. It starts to get close to that level and now like I said, you have two choices.

You can either be a buyer near the moving average in this area in the middle right in there or you can wait for confirmation and get in right there as that first candle makes a new high which is nine, uh, sorry. 4.24 cents. In this case, this is a lower price stock, so the difference between getting into the bottom and the high is only six cents. so it's not really a super significant difference.

And in this case, you get to move back up to 450 which would have more than um, covered your your 15. Target In terms of taking profit as a beginner, Trader Trying to build consistency, you take the profit when you have it. When you hit that goal, you take the profit, You lock it up and you come back and do it again tomorrow. Once you've gained a little bit of confidence, you start holding longer until You see an exit indicator.

This is another example where you had a momentary short pullback here, which does qualify. It's not picture perfect, but it works. We resolve to the upside and then there's another pullback here. Remember what I said about trading the first and the second pullbacks? The third pullbacks I don't like to trade so I leave those alone.

So first and second pullbacks. This one right here. You could have taken an entry as the first candle made the new high, or you could have bought near the nine moving average with a stop just below that moving average. Now, the only problem is sometimes it could stop out and you look back on the chart and you think gosh, I didn't have any confirmation to buy and that's true, but you only took a starter.

You set a stop and you let it work. That's a little bit more advanced because when you're focusing on just getting 15 cents, you're not scaling in and scaling out. You're doing one entry and one exit. so you're not going to really be getting into taking starters and then adding that's a bit more advanced.

Here's another example: nice big squeeze up a pullback. First candle makes a new high right here and then pulls away right there. Second pullback: Three red candles. First candle makes a new high right off the nine moving average.

pulls away right here. Third pullback fails, right? But that's okay. We already knew that was a possibility and I didn't trade it because the uh, the success rate on third pullbacks is not as strong as first and second. Here's another one: Stock squeezes up, pull back, stop at the low squeeze is higher sideways.

A little bit of a dip down to the nine moving average squeezes up, pull back to the nine. dips a little below it. But remember, this is the third pullback right here. so this one carries risk.

Now this is an example where the third ended up going, but a bit of a topping tail. dips back down, goes a little further, pulls back, goes a little further. Now, this is a stock that went from six dollars to 14.. when a stock is this parabolic, there's so many people watching it that sometimes it can be a little irrationally strong.

A stock that's only up 15 or 20 percent. You're probably not going to get these types of third, fourth, and fifth pullbacks, but when you have something that's really strong, it will sometimes work. Okay, so now let's let's talk about taking profit. I Want to take profit at or before the first signs of weakness.

If I'm focusing on this 15 cent per day goal, you just want to get in and get out. Get in and get out. So when I first take the trade I Want to see strength. What does strength look like green on the tape? What is the tape? So the tape is right here.

so this is the tape. This isn't uh, like a super super actively trade stock right now, but this is the S P 500 and this is the tape. So these are the tape are actual orders going through. Those are green orders.

So I want to see green on the tape that shows me buyers are coming in this: I'm seeing red on the tape. so if I got in and I saw red on a tape I wouldn't be super happy with that and I'd think no, that's not great I want to be seeing green on the tape and I'd like to see the price moving away quickly from my entry point because that's going to put me in the driver's seat as soon as I can set my stop to break even I'm in the driver's seat I'm no longer taking real risk in a way because my stop is break even I could be holding a thousand shares with a break even stop and if it goes up a dollar a share I'd make a thousand bucks I'd also like to see bid support of buyers on the level too now level two windows. What? I just showed you on the S P 500 Drma Uh let's see I'll just see if I see any big buyers on any stocks right now. Um, Cxai has a 5000 share buyer at 65, a 7400 share buyer at 70.

you always add two zeros to these. Uh, they just abbreviate it so one is a hundred, five is 50 is 5 000.. So in any case, you can see that there's a little bit of bid support there. So I would like to see some nice bid support that's always going to give me a little bit of conviction.

We've got. some buyers are stepping up to the plate. Now, on the other hand, when I see a sign of weakness, that's an indicator. Take profit if I haven't already.

if I get into a trade and I don't see any signs of strength. That by itself is an indicator of weakness. So we want to see signs of strength, but assign a weakness would be a big seller on the level two right where I got in or just a few pennies higher, the obvious appearance of a hidden seller. It's a little bit more complex, but that's when you see green on the tape.

but the ask isn't budging. A large burst of red on the tape indicates a surge of selling and selling pressure or possible false. Breakout Initially a pop, but then dramatic reversal. so pop and then flush.

That's not fun. We don't like that that's a false breakout. and I don't like entering on a red candle, so if the candle turns red while I'm in the trade, that indicates weakness. Now, if I've just taken a very small starter position, that may be okay if I'm accumulating your nine moving average.

but I still have to be a little bit careful because it's just not. it's not ideal. So again, whether or not, so it's kind of so So There's two things when you're going through this trading plan and this is the trading plan. Well, this is a very, um, sort of a summary version of the trading plan that I teach I'll just pull this up here.

So in my Warrior Pro class, um, I teach in chapter 14. I'm just going to grab this in chapter 14. This is the class that Investopedia and Business Insider ranked as uh on their top list for best day trading courses. So creating a trading plan this right here is where I actually give you my full trading plan I put the whole thing on the table.

This is how I trade. Whenever I'm doing small account challenges, this is the Back to