Today we're going to be talking about the five stages of a stock market bubble and how to trade all five of those stages. So hey, everyone be sure to like subscribe and ring that Bell on the YouTube to get notified as soon as we drop a new video. We've done a ton of stuff here, including live. If you ring that Bell And subscribe, you'll be notified as soon as we go live.

So let's talk about those five stages of a stock market bubble. And what's great about the stocks we trade in small cap land, medium Cap and Momentum large cap stocks is there's always a bubble. You know a lot of people when they think of bubbles they think of like some 20-year cycle where you know you go back to like the 1987 crash and then you go all the way to 2007 2008. Nah.

I mean there was no sure. Overall markets there was a 20-year period. but when we're talking momentum stocks, there's always a either a building bubble or a popping bubble. I Mean you see it kind of right now with the FTX scenario and all of the crypto stuff.

I mean crypto was one already kind of in crypto winter, but now FTX happens and SPF and now it's just over. You know that bubble is over now. I'm no I'm no Basher of crypto especially Bitcoin and Ethereum long-term believer. But when it comes to like momentum, big moves in the trades, it's over.

It's ruined because people always ruin everything unfortunately. mainly Usbf Bernie Madoff all these sketchy people. But anyway, there's always a bubble. Whether it be electric vehicle stocks or weed stocks or low float stocks like we're in the middle of right now about a month ago.

True penny stocks. If you were trading back in late summer 2022, you know every single day it was all these one cent 10 cent 12 cent stocks. Nobody cared about any of the mid-priced ones we had. Cosm, Cosm went from eight cents to a dollar in the matter of two weeks.

Then they did a reverse split. Reverse split goes from four dollars to like 15 or 20 dollars in the matter of a couple days. So that reverse flip bubble is also happening. So that being said, EV There's always a bubble.

There's always a building bubble. We see it with low floats right now. So let's talk about the cycle and how it works. When we start that cycle with the area of consolidation.

And you know, if you've been on a lot of the pre-market prep, the live videos I always do the hand gestures I Always do that kind of bracketing area and that's where we're in that area of indecision. Where stocks in that sector you know, they Spike up a little bit, they pull back, they Spike up a little bit pull back. But they're basically building a range and typically that's around those whole dollar half dollars as well as 52-week breakouts and previous days. Uh, areas of of technical support and resistance.

So consolidation is very technical driven, but we love to see that base. Then the next level is when the news starts to hit. You know, one of my favorite uh, hot sectors of all time has been electric vehicles. It's been a repeat hot sector about three different times over the last few years and actually in 2023, I expect it to be one of the biggest hot sectors as well.

So what you'll see on your scans every day, all of a sudden you look and there's like you know if there's 15 big gainers, five or six of them are in that sector. Again, let's use EVs and as an example. So now you get that Euphoria uh and the break out of the upper end of that range. Now we look for volume confirmation, which we use Vpa volume price analysis to gauge whether or not this is a real breakout versus a fake Bank out.

And we also love to see the big name big mover that head of the snake as we call it. One of the reasons EVS always run so much is because of Tesla When Tesla's moving, everybody piles into the small cap. Uh, electric vehicle plays. So you start seeing Tesla moving a couple percent a day which we're like, hey, whatever couple percent that'll move the small cap ones 20, 30, 40, 50.

So now we start seeing them start to go vertical. Those are the areas where we day trade them around the key levels. previous days, closed, previous days highs. Uh, bounces off of V-wap that first green candle.

All these patterns I talk out about every single day in stocks to trade advisory. but we trade them off of those key levels. but we have realistic, small expectations. You know, maybe we're trading with two to one or at best three to one risk to reward.

The next phase is the Euphoria phase. Okay, and it may sound funny, but the best way to detect this is when your friends, your neighbors, uh, your, your buddies from college or high school start asking about these stocks I call them civilians. Okay, and um, you know when I say that it's people that are outside of us that are in the trenches every day, day trading every day. So you know you're entering the Euphoria stage when your uncle's like, hey, what do you think about this 10 cent electric vehicle stock That's a red.

It's not a red flag, it's actually a green flag. So what that tells you is now you can even get more aggressive because we're heading into that vertical phase. Okay, now it doesn't mean you break your stop, doesn't mean you become a bag holder. But but you can start looking to be more aggressive, even overnight Because civilians love to trade overnight, they want to hold stocks overnight.

they don't. You know, most of them are under the PDT so we can really capitalize on those multi-day moves into that Euphoria phase. Now then what we're looking for is our blow off top. Okay, the blow off Top is easy to spot if you're familiar with chart patterns.

The best way to look at that is that hot sector that's broke out of that range and you have uh, uh, gradually increasing size of daily candles. Okay, so like say the first day, five days ago you had a 50 Cent daily range. and then you get a 75 cent daily range on those candles. The body of the candles.

I Don't look at the Wicks We're looking at the bodies for the open and the close. Then you get a one dollar candle. Then you get a two dollar candle. Then you get that blow off top and it's this stock that's gone from a dollar to eight bucks.

and now all of a sudden you get an eight dollar candle. Okay, it goes from eight to sixteen. You're at Max Euphoria At that point, it's the biggest candle in the move. You know everybody's going to be taking profits.

That's when you don't take overnight and then you typically don't trade these stock anymore stocks anymore. On the long side, because that's the blow off top. Now, if you're a long biased: Trader Like most of you are, those are the only three parts of the cycle. You care about the area of consolidation.

The break of that consolidation, which is the boom area. Then we look for the blow off top and sell into that. Now if you're short bias, you're looking for that same indicator and this is what's great. You wanna remember as a as a long Trader You want to be buying when everybody is buying as a short bias Trader You want to be selling when everybody's selling because remember as a short buy Trader You're selling to enter the position you sell and then buy to cover.

Okay, so if everybody's selling after the blow off top, you want to join that waterfall to the downside. So from the long side, you'll you avoid the profit taking phase, the despair phase. From the short side, that's where you hammer it. That's that backside area that we talk about.

Then you're looking to cover into the true Panic Which What's great about these momentum stocks is they all give back the move. Okay, and that's might be one of the biggest tips if you keep getting turned into a bag holder. If you overstay, they all give it back. Remember the number one product of every single penny stock.

Every single low float stock their product is selling stock. Once the blow off top happens. once the backside comes in, they're probably going to dilute. They're going to panic everybody out.

and the only people that stay in the stock are the bag holders. Don't be a bag holder. Trade that backside on the short side cover into the washout, Panic and then look for the next cycle. Okay, it repeats and it repeats.

And it repeats. Those are the five stages of every single stock market bubble. And again, what's great about these low price stocks? There's always a bubble and we can capitalize on that long short. Maybe both if you're in an intermediate.

or Advanced Trader you can trade both sides. All right Everyone, That being said, you know I know I talk really fast I Go really fast in these YouTube videos. But something we're doing right now at Stocks Trade is called Stock To Trade Live. We're doing up to four live webinars every single day.

early in the morning, midday, late afternoon, as well as in the evenings. Uh, my buddy. Matt Monaco has been doing a lot of these 9 p.m webinars. Now what's great about these? They're 100 live and they're a hundred percent free so you can just join the one that works for you.

Click that Stocks To Trade Live link below. Join them. Also, when you go to that link, there's a link to join our telegram. get telegram join that we're sending out treat Free Trade alerts.

um, chart. We also notify you when the webinars start. So check out Stocks Trade Live. Biggest reason: It's free four times a day and I think the coolest thing nights and weekends.

Okay, so I do what's called The Weekend Warrior Workshop Uh, midday on Saturday so live too! Okay so you can jump on that webinar. We go over the process for Monday morning we go over how we review our Journal how we review our trade logs and then we also do a Sunday night market prep all 100 free. Check it out! We'd love to see on those webinars.