All right. So in this episode of Anatomy of a Trade, we're going to talk about a U R C. This is a setup that's a little bit different from, um, the last couple that I've done. uh well.

the last two Anatomy of a Trade episodes were both on reverse splits. This is a SPAC a special acquisition company. There's a number of different uh type, well, different setups that I trade of course, but there's a few that are really powerful. So the way I kind of think about it I Talk about this all the time.

But I when I teach my classes at Warrior trade in the Warrior Pro curriculum I Talk about the characteristics of a stock that I would say is like an A quality setup. So an A quality setup for me or an A quality stock is going to be a stock price between 2 and 20 generally with a float of under 20 million shares. Generally the Stock's gonna be up at least 10 percent today. Typically it's going to have some type of new, some type of fundamental Catalyst that that catalyst is what's driving the stock higher and then it's going to have high relative volume.

Those are the five characteristics generally that I look for in order to say whether or not it's a good stock, whether or not the stock is worth trading. Now that doesn't factor in the daily chart or the five minute intraday chart pattern. But even if you have a fantastic daily chart or a decent intraday chart pattern, if you don't have those first five criteria I usually won't even consider taking the trade. so just in terms of stock selection, those five are important.

But when you have those five criteria and then you have something like a recent reverse split on top of it, it's like a multiple. Factor Like all of a sudden, it takes all of this and that reverse split setup amplifies the potential. I Don't know what you know? Times: five times ten I don't know exactly what it is, but it amplifies it. So Recent reverse split setups I Read some reverse split setups um, special acquisition companies recent IPO breakouts Blue Sky Setups There's there's a number of them that just add a multiple and it's like a juice factors for for really strong momentum.

So Aurc: this is one that I traded yesterday I Finished uh today at Uh, ten thousand, three hundred Nine dollars On a recent reverse split setup, Aurc yesterday finished up just under five grand, just under my daily goal. Even though this made a big move, I didn't trade it as well as I could have and we'll talk about that. Um, but I thought you might find this interesting just because it was a really it was a pretty powerful setup and there were some people that were like Ross I Don't understand really why you know how you found this stock or why you even traded it. So first of all, I found the stock on my top Gainers scanner.

So this is a scanner. it's searching the entire market for stocks that are up more than five percent. And when I first uh saw Aurc it was sitting at about gosh it was like 13.. it was.

it was 13.85 or 88 cents. maybe 89 cents. Uh and on the bid it was like 12 50. it had a big spread so that was um kind of like right around here.

Okay so at this point it was gapping up. um the pre-market high was just under 15, it was at 14.88 and the previous day as you can see here was right around 10.. so it was showing. it was gapping up nicely.

I Mean this was this was a decent Gap Now this is a special acquisition company so special acquisition company. Uh the way these work is they trade at ten dollars a share. Um the the people that set it up are inviting people to buy in at ten dollars a share. So if they want to buy a million shares that's gonna be 10 million dollars ten dollars a share.

and then these are blank check companies. So what the company ends up doing um with this money is they go and they try to buy a private company and bring that company into the public market. So a SPAC could be used I Mean it could be used to buy a company like Warrior trading and then what happens is the company this the blank check company says Hey Warrior trading. We want to buy you for this amount of money.

Uh, you know, whatever and uh, let's say I say yes. Then they do a merger and all of a sudden Warrior trading becomes a publicly Trade Company It's a different way of becoming publicly traded from a traditional IPO And what we know about these specs is that in the last few years they've been, they've been hot and we've seen some really big moves on specs. And just like we've seen some big moves on recent reverse splits. in uh, recent days, we've also seen some big moves on, um, recent specs.

So Edtx was one. uh, recently. that was, uh, quite impressive. All right.

So it was trading at 10, then the day. Uh, right here. this is like day one. it goes all the way up to 44 bucks, it sells off, then it pops here from 12.

24 to 100 in one day, pulls back. Then here it goes from 14 all the way up to 80 a share. Now this ended up getting halted on a T12 Hull So this is halted pending review by The Exchange I Think they're trying to figure out why it went up as much as it did on this day and I'm not really sure exactly what the story is with that, but on Aurc, this was on the scanner so that's how I first saw it. It was on the scans I looked at it and as I looked at the chart I knew immediately it was a spec and of course I know specs have been hot.

So just like today I looked at Abvc and recognized it was a recent reverse split and that's how I made the 10 grand on this one I knew it was a spec and I was like okay, this is interesting. So what I was looking at on it I pulled up the level two and when I pulled up the level two, you know you could pull up the level two on any stock and you'll see a spread. and so the spread that I saw was about 1250 by 1380. it was kind of a big spread and I was like oh boy I can't you know? can't I can't buy it with that kind of spread.

it's that's just too big of a spread. but I kept the level two up I wasn't There wasn't really anything else that was interesting. Um, yesterday it just was kind of a slow day and then all of a sudden. uh, the spread tightened up so it was like 12.75 by 1380.

Then it was 13 by 1380, Then it was 13, 15 by 1380, 1330 by 1380, 1340 by 1380, 1350 by 1380. So now all of a sudden as a spread is compressing and getting tighter, what is that Telling me someone is putting out orders to buy and they're not getting filled so they're moving their order higher and higher and higher and higher so as the spread got tighter. That also reduced my risk because all of a sudden I got to a position where I was able to get in at if I wanted to 1380 and now my stop instead of being 1275 is 13.50 so 30 cents stop and so it ends up all of a sudden breaking right here over 14 and I press the buy button I got filled on a I think it was a 2000 or 2500 share order I got filled 700 shares on one of the orders, 700 on the second order and I think 1700 on the third. So I filled about 2 800 shares Less Than 3 000 in total on three orders, partial fills on all of them and I was in at like fourteen dollars and I don't know 25 cents.

So I got in a little higher than maybe I wanted at 13.80 but it started squeezing I'm thinking this pre-market high of 15. so it goes up here to a high it hits 15. it goes up to 15.50 as it broke through 15, uh, 15 it went up to 15.25 I was like I'm gonna take some profit off the table. that's almost a dollar a share.

So on that first trade, I still was in relatively small size, but I got green I think maybe 1700 on the first trade, but then you've got this red candle. So I'm like ah man, that's tough I don't know and this is the case with these stocks. I mean you've got bigger spreads they can whip and I think at this point people were like I don't know Ross I don't know if I see what you're seeing but I was still thinking well this is a spec it's a recent spec and as choppy as it is right now I still think it has potential and let's not forget it ended up going up to over thirty dollars a share so I was I was early on this I had absolutely the right idea I was a little early. Okay so it ends up popping up again, it moves up there to 1580, drops down, and then at the open we get this squeeze right here and what I ended up doing on this, you know between this trade here 1700 you know took this trade here I think made another thousand bucks I was up like 2700 or maybe 3 000 something like that.

Got another trade somewhere in here so I got myself up about three four grand and I was sort of feeling like I don't know it's it is struggling to hold up. it keeps kind of popping up and dropping and some of you guys you know have been sort of tuned in here. So I was trading in Europe for almost a month trading with relatively small size and just telling myself listen, if you make 2 000 bucks, 3 000, be grateful. no reason overstay.

You're welcome, get green and lock it up. So I traded this opening range but I was sized down I was like I'm only gonna trade 250 share blocks I'll start with 250 I'll add 250 I'll go up to 500 a thousand maybe. Uh so anyways I I traded this with small size. it halts up it gaps higher.

It goes from 14 up to twenty dollars a share. I'm in it with small size. of course it pulls back. it comes back up right here.

It double tops and it rejects. It breaks but it doesn't break and go higher. it pulls back and then I had a meeting at 11 am so I was like oh shoot I got a meeting at 11 A.M All right I gotta go So I'm setting up the zoom I'm logging into the zoom and I see this I see it squeeze up into the hall and I was like God ah man, that is a nice setup. I Like that it's a break right there.

right over that 2039. it halts up and it opens and it goes right to 28. So you know I missed this trade and this was actually the best trade of the whole day. I mean this was good at the open but the volume was still light.

wouldn't have been able to get full size. I I was getting partial fills on all of my orders but this one the volume was higher at the time and I missed that trade. It ends up pulling back, going a little bit higher, pulling back, going a little bit higher again through 32. That could have been a great scalp trade, but you could see these whips I mean this is a one minute candle here that had like a five point range.

so you know if you're someone that traded it and you finished the day red I wouldn't feel too bad. These ones can be really volatile and it can be frustrating because you're like oh my God I can't believe how much it's up. It's up over 50, 70, 80, 100, I'm and I'm red on it. but these can be tricky.

So I actually would say I generally prefer recent IPOs or recent reverse splits, but recent specs uh can give some big moves, but typically they when they start to get a little more expensive, the spreads get bigger and it can be harder to manage risk. You know when you've got a one point spread all of a sudden you need two points for a two to one ratio and that's not. That's not usually realistic. So anyways, aurc it was a recent reverse split and basically as soon as I saw it on the scanner as a recent reverse split moving higher I knew I was interested.

It would have been nice if it went straight to 22 or 25 pre-market but it didn't It kind of stalled out here, got a couple small trades on it, then it goes and my biggest problem on it was I sized down a little too early. but on the other hand, um, that's about Capital preservation and you know you can make three grand and then you can give the whole thing back by getting caught in. you know one of these nasty rejection candles like up here. You know you size into something like this and then you catch a five-point drop and you could be down 15 20 grand with three thousand shares.

So you know again I can't I really can't complain. it was a green trade, made some good money on it, lived trade another day. That's what it's all about. I'm the you know I This year I felt I felt kind of just like the turtle like I'm just you know, chugging along small wins, small wins.

not a lot of Victory like big excitement. It's not like the big big Winners I was having um in previous years, but this Market the overall Market is doing really well. but remember that the overall market right now is being led by a small number of tech stocks that are doing really well. so that's great for your 401k and your Roth IRA or whatever.

So I'm I'm grateful for that too because you know I turned 583 dollars at 10 million and that money is still in a IRA Roth IRA and it's still in the market so you know it's not I'm not day trading it. but in any case, so I'm happy the Market's up. But if we look at Iwm which is the Russell 2000, this is an index of small cap stocks and you can see that this is lagging behind the S P 500. So you know again, there have been one-off opportunities like you had on Aurc or Edtx or Pwm.

You know we've been having these pretty regularly, but the small cap Market has not been as hot as it was in previous years. So this is a time to study to be a little bit patient and you know, kind of pay your dues and just be grateful for your base hits a lot. Lock up. Those base hits, gain the experience, try to be consistent and know that when the market does pick back up for small caps in a bigger way that you just want to be positioned so you can capitalize on it.

You don't want to blow out your account before the market heats up, that's you do not want to do that, so just keep yourself in a position where you gain experience and you're on your toes. You're ready for when things pick up because it can happen pretty quickly. Last year the best month of my whole year was in August and I didn't see it coming at all. it just it came out of nowhere and it was like whoa.

That was crazy. So you never know when things will start to pick up. Uh, so you just got to show up every day and keep trading. Keep studying, keep learning.

So I hope you guys have enjoyed this Anatomy of A Trade on Aurc. Uh, questions? Comments: leave them down below. As always, I'll remind you that trading is risky. My results are not typical.

so manage your risk, train the simulated before you put real money on the line, and don't try to blindly follow me or anyone else. Take it slow. DeMarco will be here for you so you've got to pay your dues. I've been doing this for a long time.

if you want to check out another Anatomy of a trade. I Did an episode on Abvc today, so I'll put the link for that right up here in the top corner. You guys can check that out. That was a recent reverse split setup, so a little bit of different setup.

uh than the SPAC setup, but another one of those setups where it was like the stock was the right price, the flow, the relative volume. it had everything. and then that recent reverse split is like that juice Factor the multiple that just gave it more potential. So I hope you guys check that out and I'll see you for the next episode real soon! foreign.