So naturally I think you're going to have some questions for me like Russ how much money did you risk to make that or Russ how did you know that was a strong stock to buy? Or for those of you who have been trading for a while at Ross can you show me exactly where you bought and where you sold I'm going to answer all of those questions and many more in today's Deep Dive. All right. So we're going to start high level and then we'll drill in on all the details high level. This is the stock chart of the stock I Traded today.

It is a biotech stock, a pharmaceutical company and you can see my P&l right there on the screen. You'll also see a couple of arrows. These yellow arrows. The first one right down here is for my first entry which was at $33.79 and the second one was for my best exit which was at $781 All right.

So now you're probably asking yourself Ross how in the world does a stock go up this much in one day? All right. So take a guess why in the world would a stock go up 600% in one day? News: There was news and it was great news for this company. Now this is a pharmaceutical company and they've got Um clinical trial positive Topline results for a Uh PTSD drug a PTSD treatment. All right.

So this is something that um I actually just had an episode that I recorded uh, two days ago on a similar pharmaceutical company. That one was Sln that was a stock ticker and that one went up 400% on news again clinical trial Topline Results were good for a drug they're working on for the treatment of a rare genetic disorder. and I think what's important to recognize is that the purpose that a lot of these small publicly traded biotech firms serve is that investors investors put their money into the company. The company uses that money for research and development and they usually just have a couple of drugs that they're working on.

But if there's successful all of a sudden, it is a huge deal for that company Because now that company becomes a buyout candidate by the big pharmaceutical companies. Now of course the big pharmaceutical companies do their own R&D But when there's a small company that comes out with something that's really great, they can just swoop in and buy them up. So in the publicly traded markets, what we often see is when these stocks have good news, they can make really big moves and what I actually want to do here. Uh, again.

similar to we did the other day in my last episode is I Want to start tracking the list of criteria for a stock to make this kind of move? So the first one that we already know is news. This stock had news today. Now obviously there's companies that have news and put out news headlines all the time. I Mean there's news coming out every day and a lot of it.

The markets don't really respond at all. The markets are kind of indifferent. The stock doesn't go up or down. Of course, there's headlines where the stock goes down.

There's headlines where the stock goes up just a teeny bit. But how can you predict something like this? And the answer is truthfully, you can't really predict it. There's no way to really know when this is going to happen, but there are ways to spot it as it's starting to happen before it's already up 600% And that's exactly what I did. And that's why I was able to take my first trades on it when it was down here at let's see about $3.79 Sense.

All right. So let's go through basically. um, how I found this stock and what my game plan was on it. All right.

So each morning when I sit down and I usually sit down between 7 and 8:00 a.m. today I sat down. Uh, it was around 7:30 so this stock was already squeezing up. and the way I knew that was because I was using this tool called The Gap scanner.

it's called Ross's Gap scan for a reason. All right. Ross's top gappers and you'll notice that Bnx was on the top of that scan Now of course it is now because it's up 480. but even down here, it was already up over 200% and the second leading gapper was up 87% As you can see right here, So what I usually do with this scan this is searching the entire stock market for stocks that are up at more than 10% more than 5% actually and I sort it from biggest to to smallest in terms of gain and then generally what I do is I just look at the top the top couple.

So let me open um, my news window and I'm going to put this right up here and I'll show you what my process was today. So I saw Bnx on the top of the scan I have it. Uh, right here. these are linked.

These windows are linked and I see that there's this news. So the next thing I noticed is that this is a biotech stock I noticed that just looking at the headline that this is a clinical trial result. So when I first see it I don't know exactly whether or not this is a biotech or it's a you know, some kind of digital company, a crypto company I don't really know. The things I take note of are the percentage of the Gap how big the Gap is the price of the stock, the amount of volume, and the float.

Those are the things I look at first and foremost and I also check this column right here which is relative volume on the day. So let's break down each one of these in a little bit more detail. All right. So we've got the percentage gain on the day, which is how much it's up versus yesterday's close and then we've got the price.

now. One of the things that I know is that stocks that are priced between 2 and 20 tend to make the biggest percentage moves and that sort of makes sense because it's easier for a stock to to go up 100% if it's $2 a share from $2 to $4 is 100%. From 20 to 40 is also 100% but a stock going from 20 to 40 is is a lot more difficult. so we see these big percentage moves more frequently on the lower price stocks.

However, under $2 I find, we get into a a price range where the stocks become very thickly traded and and I just personally don't like trading penny stocks. That's a little bit of preference, but it's reference based on my own analytics, my own metrics which tell me that that's not the type of stock where I make the most money I make more money when it's a little bit more expensive rather than cheaper. So the 2 and20 price range is what I really like and uh, certainly Bnx was within that price. Now one of the other things that I like is when the relative volume is five times or higher.

Now everything I'm going through here. This is the same stuff I was talking about in my episode on uh Tuesday of this week when Sln the other biotech stock made that big move. um on news this is the same criteria and I'll also remind you that what I said on Tuesday was that if you missed this move, don't worry. don't get Fomo.

Don't get frustrated. Study it. Learn from it. Understand the ingredients that led to this type of move.

The setups that experienced Traders like myself were focusing on and try to apply all of that. So the next time we get a setup like this, you can capitalize on it. Well we got a setup just like it two days later today. So if you're watching this today and you're like man, oh, can't believe I missed it.

Don't worry, there'll be another one around the corner. Study, study, study. And like I said, you know I started trading when I was 17. Well, I was I was in high school when I took my first Real Money Trade 17 years old.

So this was a really long time ago. It learning to trade is an incremental process of just gaining a a little bit more information with every month and year that passes. So it's not a Sprint it's a marathon. Okay, so with that said, let's go back to the screen share here.

So Bnox Um was certainly bucking the trend this morning with the big gap. The price was fine. the volume was fine. There was a lot of shares traded.

The relative volume was 487. Now that's as of the end of the day, so that means it traded on 487 Times Higher volume than average. It's a ratio of 487 to1. That is a huge ratio and that is what we like to see.

Those big ratios are what generally lead to big moves in a stock. So the fact for me I set these uh ingredients as kind of the minimum criteria we like to see News we like to see between 2 and 20. Ideally you know sometimes a little under or a little over is okay at a minimum. I'd like to see the relative volume be at least five times and number four before I'm willing to trade it.

The stock needs to be up at least 10% because that tells me it's breaking essentially the standard deviation of what most stocks do. So you know most stocks on any single day have these volatility bands of you know, plus 3% or minus 3% So when you have a stock that is breaking and is up here at 10% on the day, it honestly is one of probably 30 stocks in the entire stock market to be up that amount. It is a very small handful of stocks, and of course Bnx. Not only was in that handful, it was the strong leader among all those stocks.

So I Like to see the stock is up at least 10% as a minimum and then number five. I Like to see that the float or the number of shares available is less than 20 million. So when the company does its initial public offering, they sell shares onto the open market and I like to see if the total number of shares available to trade is less than 20 million. This right here represents Supply This is the supply and you know what these represent Demand: I'll just put the D there for demand.

These are all indicators of demand. News: Price Price at a price is going to be attractive uh, to retail Traders High Relative volume indicative of demand up 10% indicative of high level of demand. So what are we looking at here? We're looking at an balance between supply and demand. All right, this is what creates and allows these big moves to happen.

And in this particular case, the company having really good news was what brought the volume in in the first place. So you know it's the chicken or the egg. what comes first. What comes first is the news.

Catalyst That's the first thing that happens is news hits the wire and then algorithms and Real Money Traders in and institutional traders of all levels start getting involved and today they started buying it up and from that point forward the stock started to populate on the stock scanners like the ones that I use and then more and more Traders become aware of the opportunity that's forming in real time. Okay, so now I think I've walked you through pretty well. How I found this stock and why I believed it was a stock that was worth paying close attention to. it was the leading gapper in the entire stock market to today it was the leading percentage gainer in the entire stock market today.

So this is this is a pretty big deal. Okay, so well that's great. We've figured out that this is the right type of stock to trade and for you as an aspiring Trader someone who's maybe been doing it for a while. The process of building a watch list is fairly straightforward, but obviously understands uh requires understanding those five ingredients that I just shared with you right? You've got to understand those ingredients to be able to build a watch list.

And each day your watch list is going to consist of the stock or stocks that most closely meet those parameters. All right, those are the ones that are going to have the most potential. And today it was BX So I knew this stock had potential. The question from that point was where do I buy it So now I can close my scans I can close my news because now I found the stock that I'm wanting to focus on and what you'll see here was this stock.

uh, had a pullback. It came up it pulled back and although it might have been nice if I had bought the bottom of this pullback right down here. which would have been closer to support what I instead did on this stock was a breakout trade I bought as the stock was breaking through the resistance of the high a day. This is a little bit of a riskier setup.

It doesn't work on every single stock. Um, in in fact, most of the setups I trade won't work on most stocks, they're only going to work on the stocks that are bucking the trend of the overall. Market Market because we need all that volume to create those really extreme moves. so in this case the stock had already squeezed up.

these are just pretend those are full candlesticks it had pulled back and then it's coming back up to the high. and this level right here is our resistance level. So there's two ways to trade. This one is to buy as it's breaking right here, the other is to wait for it to break retest, hold support and then take trade.

I actually did both. I Took a trade right here at 379. that was my first entry. It broke, it went up to about 385 390 it pulled back and then I added right there for the break over four which was the second trade.

So now let's talk about this. Um, let's talk about two things first: I want to talk about uh, how much risk I was taking on these trades and then I also want to share with you basically what my game plan was for today. So when it comes to risk, you might think that Ross in order to make $20,000 you, you had to have been risking a lot of money. And that's really not the case.

The 20 $22,000 that I made today was not the result of one individual trade with one entry and one exit. it was the culmination of a number of Trades that added together. So on my very first trade today, when I got in at about $379 I was risking about $1,000 I was taking about $1,000 of risk on that first trade. And so in a sense today I took $1,000 of risk because that's how much I could have gone red on the day, but I I went green on the first trade, added more on the second, added more on the third, and from that point forward I kept adding profit to the day and so I risked going down a thousand and then once I had profit, I just kept adding to it as I kept taking more and more trades.

So ultimately, today the most I was risking going red on the day was about $1,000 Now, it would be hard to risk a th000 and make 20,000 if you were trying to do that in one single trade, but when you're doing it through the culmination of of multiple trades, it's certainly possible. As you can see here today, So this was my first trade down here for the break of four. Uh, we got this squeeze as you can see here all the way up to five and then a rather dramatic pullback and then it curls back up and it breaks through. and I got another trade as it broke through the high but on this one.

I Bought it when it was a little bit lower and I want to show you? Let me, let me show you a chart that gave me some inspiration on this particular trade today. So I'm going to show you. let's see. Um, I'm going to show you the chart on Sln and this is a chart from uh, just the other day.

So let's see. So so we're going to look at this. We're going to look at this and I want you to look at this pattern. Being a Traer is about pattern recognition.

Do you notice this pattern The Squeeze up the drop and the curl back up That looks really familiar compared to that pattern right there. In fact, it's it's. It's almost identical. It's really the same exact pattern, right? It's It's just so similar.

So when you start seeing these patterns repeating themselves your memory you you learn to memorize it. And when you see that pattern forming in real time, you're thinking this is an opportunity. The the memory really holds tight to it because this pattern produces profit. So a pattern that produces profit is a pattern that you're going to remember.

A pattern that produces loss is also a pattern that you're going to remember. So what I'd like to do is uh, show you guys a couple of uh the trades that I took on this. Uh, showing the the actual entries and exits. Um, but before I do my game plan on this stock Today as soon as I saw that we had a leading gapper that was up over 100% and that it was a Biotech stock, this immediately felt like wow, this is really similar to what we just saw two days ago.

So that was pattern recognition and then the way it was actually trading was very similar. So now they kind of are like a mirror image and Traders are they're really projecting. What happened on this stock is probably going to happen on this and their entire day traded very similarly from pre-market to selling off at the open. they were both so similar.

So my game plan was all right. it's the right type of stock. It meets all the five criteria. Uh, which means I think this stock has a lot of potential to make a big move.

And now the question is simply where can I buy it and sell it in order to capitalize on the opportunity and minimize my risk. So at that point I was Switching gears and focusing on the chart and focusing on my level two and which is reading the tape and that's where I found my exact entries. Okay, so we're going to be looking at the live recording of my trades from this morning. I Upload these for my warrior Pro students.

but I'll show you this uh clip here right now and what I want you to focus on is the level two. So this is what I say about Level Two. I Think of it. Imagine driving a car.

Your charts, your stock charts are your what's in your rearview mirror. It's what's just happened. And we look in our rearview mirror. we check our rearview mirror to see what's going on.

It's not a Perfect Analogy but it's close enough. we look in the rearview mirror. we want to check what's just happened. But what do we really want to be looking forward out the front of the car and that to me is the level two.

The level two is the road ahead because here's something interesting. What you won't see on the charts are these orders. So right now you can see on this stock and this is the stock. I Trade today at $44.50 you can see that there's a couple of sellers.

Well, you can't see that on the chart. This is this. This is the chart of the stock at that same moment. but you can't see those sellers on the chart.

So there's a little bit of a disconnect between what you see on the chart and the orders that are lining up in the market on the book. So level two to give it a sort of another analogy. uh I I Think of it actually sort of like, um, it's sort of like an island. It's an island where all the buyers who want to buy the stock and all the sellers who want to sell the stock come to exchange their shares.

And so on the left side here we have all of the buyers. those are all the buyers and they're on the bid and on the right side we have all of the sellers and they're on the ask that they're on the offer the ask. So they're asking $4.50 for for their shares and what we have in between the two is a spread in this case of 3 cents. So I look at the road ahead because this is telling me what's going to happen.

Now the chart is giving me a good indicator of what's probably going to happen. and in this case, this is the uh, the pattern that I was looking at before on Sln where we had that squeeze up on Sln, the sell off and then it curled back up through the high. So I was sort of thinking that was my game plan that I thought something like that was going to happen again. Uh, on this uh, stock here today.

So remember just a moment ago when I was talking about those uh, support and resistance levels. So right now, this stock has tapped 450 several times. All right. So it came.

so we squeezed up. Um, obviously we sold off quite a bit. and then we came back up and we've hit a couple times. right under 450.

All right. So this green candle? these are all right underneath this $4.50 level right here. All right. So that's kind of that upside resistance.

It's actually this white line on the chart. um, which is representing that. It's a psychological level of resistance. half dollar, whole dollar.

And so on this trade, the stock is going to break 450. It's then going to come back down and retest it and in this case, it holds it. And I see that there's some nice buyers on the bid at 450 and I press the buy button myself and I get filled at about 465. approximately $465 which is a little higher than I might prefer.

but my Max loss is about 4.49 which isn't too bad. It's only about 14 16 cents away, right? So it's a pretty tight stop. That's my Max loss on the trade and my profit Target is a retest of the previous High which was $5 So we've got 35 cents a profit Target about 15 cents of stop. That's a good 2: one profit to loss ratio.

And remember, with that kind of ratio, I really only need to be right 33% of the time in order to break even with a 2 to1 profit loss ratio. So that's the golden ratio that I always aim for. Okay, so let's watch this live trade. Okay, so the stock is uh, squeezing up here.

Uh, we've got. you can see: 445 on the Ask: 443, 444, 449, 450, 460 Okay, it breaks, but can it hold it? Let's watch as it comes back down. There's 451 on the bid. This is the chance right here where it could have broken.

it could have flushed right back down to like 440 and if it had done that, it would have proven it wasn't strong enough to hold that psychological resistance. Resistance did not become support. but in this case it does. And so because it does now I'm feeling confident to press that buy button and I press it and I get filled a little high to to get detailed on the order type.

You can see how I'm entering my order right here. Uh, the type of order that I entered and I am able to trade pre-market and you can trade premarket with any broker dealer Robin Hood Weeble Thinker swim doesn't matter. The broker that I use is a broker that really caters to professional institutional Traders but also uh, day traders that are very active like like myself and I am entering a limit order. So there are two types of orders.

We have Market orders and limit orders. Market Orders don't work pre-market and this was a pre-market trade. so Market order just wouldn't have been an option. All right.

But uh, the limit order was fine and so notice that my limit order is at let's see what's that. Um, my limit order is at 472 right now. All right. So let's just move this forward a little bit.

All right. So my limit or is at 472. So I press the buy button and I fill 3,000 share increments. I pressed it three times and I filled.

Uh, nothing higher than 472. I would never fill higher than the top of my limit price. but I fill up to that price and I fill instantaneously as you can see. So now I'm in at 472 or sorry 465 and I'm looking first for about 20 cents of profit.

if I can get a 1:1 ratio. that makes me feel pretty good. Now in this case, notice what I just did there I moved my order up to $510 and I added another 3,000 shares. You might say Ross why would you do that? You just had 9,000 shares.

It's a pretty good average. You add another 3,000 and now your cost basis has gone up by 8 cents. You're right, it has. But what I'm doing right here is I'm adding to a winner.

This is something that I like to do and it's been really a huge I Mean this is like one of these things. Tips and tricks for beginner Traders add to Winners Not to losers. So many people add to losers by averaging down. they're in a losing position and then they add more shares as it's going lower.

I do the opposite. Okay I Cut losers ruthlessly I Get rid of them I let them go I don't care. Stock is dead to me, all right, but on a winner I add and add I I add into it because clearly it's already working. This trade is working really well, so on my best trades usually: I Say to myself I wish I bought more shares so rather than wishing it I actually do it I bought more shares.

So I bought another 3,000 shares to anticipate the break through the psychological resistance of Five. Now I suspected it would break because of the amount of strength that we just had in. you know, the last like 10 seconds and again, this is the type of thing where reading the tape and seeing these all of these orders going through in green. That's what helps me better understand this price action.

So let's see, we just back this up for one second. So lots of green on the tape I Add it 96, it breaks through five and right as it breaks through. I press my sell button I take my profit off the table I get filled right there at 507 and I lock up $4,000 right there. $4,000 in really less than a minute now.

I Ended up trading this as I said a bunch of times today. One of the things that I will also tell you is that a big part of trading is being patient, sitting and waiting for these opportunities to present themselves. So a lot of today and this is true of any day, but a lot of it is doing my watch list, creating my game plan, looking at the chart, and then asking myself where can I get in thinking about those patterns. So sometimes I'll be watching a pattern like this forming here for you know 10 15 minutes until I finally start to get comfortable and I think okay, this is the spot where I'm going to get in and so on this one you know this is where I punched it, it was at um, you know what? so whatever it was at 450 and we got a move on this all the way up to over $5 a share.

And the thing that I want to encourage beginner Traders but even experienced traders to think about is the importance of capturing even just 10 cents out of the market each day.