What's up everyone? All right? So we're gonna get started here and in today's episode I'm gonna present to you this class the Holy Grail Technical indicator I Would like to know I'm teaching this class Live! So uh, thank you for those of you who are tuning in here uh this afternoon. if you are tuning in and you are someone who's been looking for the Holy Grail Technical indicator I want you to type in the chat feed exactly what you've already tried because I want to get a sense of where you guys are at now I've been trading uh myself for a long time I took my first trade with real money uh when I was in high school in 2000 right around 2001 I had paper traded uh before that in 1997.98 during the.com bubble which is kind of crazy. So I have uh, grown up with uh from a very young age with an interest in the market and for a long time I myself was searching for the Holy Grail this is it had been kind of the the never-ending um hunt I was looking for uh, you know these certain combinations of indicators and so all of this is culminating. uh in what? I'm going to be sharing with you guys today and so I'm seeing some of you guys talking about uh, different moving averages Bollinger Bands combinations of B web macd um dohastics? uh TM squeeze RSI Okay, so I have looked at all of these and some more so why don't we go ahead and jump in and actually today, um I'm gonna show you you can see my P L on the screen right here up 8 530.96 this morning using the indicators that I'm going to share with you in this class right here today.

All right. So let's go full screen on this and I'll show you my charts and uh, we're gonna get into it I Want to try to also answer questions so if you have questions, um, feel free to put them, excuse me in the chat feed and I will try to answer all of them. Okay so um, the topic for today's class, The Hunt for the Holy Grail Technical Indicator Number One I'm going to share with you my journey for the hunt. Uh what? I Went through to figure out the combination of indicators that I'm using today.

Uh, that? I'm going to share with you the indicators that I'm using and number three. I'm gonna walk you through the three steps to my strategy around these indicator. I'm also going to give you guys a free copy of my best-selling book titled How To Day Trade So the reason that I want to give you guys a copy of this is because during in that book I had a section that I dedicated to uh, the Hunt for the Holy Grail Now I I wrote that book in uh, 2015 So that was uh, several many years ago at this point. But even then I was uh, I I was in the process of trying to figure out that perfect combination of indicators and I wanted to write about it and talk about my search because I knew that I was not alone in this hunt for the perfect combination.

So um, you guys I'll put a link right down uh in the description of this video, I'll pin it to the top of the comments and we'll put it right here for you guys so you can check out the link. You don't have to do it right now. You can do it at the end of this episode. Uh, but uh, this was in chapter one: Why do most day Traders fail and I Talked about the hunt for the Holy Grail and how for many Traders it is.

Um, it's one of these things that that perfect combination of indicators just stays just outside your grasp and you unfortunately are never able to sort of fill that. Gap And so you at a certain point just end up throwing in the towel and I've seen so many Traders get that go through this experience and end up giving up and failing. And it's not because they didn't try hard, it's not because they didn't spend a lot of time and a lot of money looking for this. Holy Grail They just were never able to finally grasp it.

By the way, those of you guys tuning in, can you tell me? is the resolution Okay, Are you able to hear me and see me? All right? I got myself, um, my green tea. So uh, hopefully this broadcast is coming through all right? Uh, all right. So this is something really important. Indicators are only helpful if they are used consistently.

This may be one of the biggest challenges that beginner Traders face. You see indicators, You may pop it on your charts, but then you're not using it consistently And so the result is. In hindsight, you look back and you say oh wow, look at that. This was an example where that indicator you know was perfect.

It gave me the exact right entry point or it told me exactly. You know where to get out and but you know in real time you neglected to look at it. So I think it was an indicator is something that I need to check consistently on every trade that I take in order for its signals to be helpful because if you're not checking it consistently then it may be giving you signals to buy or sell. but you're you know you're you're missing it.

You're ignoring it. So then that's doing you no good. You could have 20 indicators on your charts, but if you're not picking up on those signals, they're not going to help you. Um, so the hunt for the Holy Grail for me began very early in my trading career.

Um, this is something that, um, you know I I started basically as soon as I got into trading, I was looking for that indicator that would help give me buy and sell signals. That's what I was looking for. buy and sell signals I Want an indicator that I could put on my charts that would tell me with some degree of certainty that this is the place to buy this stock, right? and this is a place to sell it. So I was getting in before the Big Move I was getting out before the big flushes I really was looking for a bit of a kind of red light green light I unsuccessfully tried using Dohastics Bollinger Bands Adx average directional index Money flow RSI Relative Strength index Money Channel Index CCI Now I Also tried many combinations of these types of indicators I Also tried combinations of moving average Crossovers and you know what ended up happening is I ended up having charts that looked, uh, pretty insane I mean they were.

They were incredibly complex. Now one might think that these very complex charts it certainly made it look like I knew what I was doing. it made it look like I was really, um, dialed in and one of the more recent indicators I've seen a lot of Traders talk about bookmap, but that's just one. I've seen so many of these different indicators over the years that people put a lot of weight into.

They say this: this is the one. This is the one. It shows you exactly. You know where to get in, where to get out I Actually remember um, having a student early on.

this was one of my earlier classes that I taught in 2014. I had a student that was going through that class and he would send me charts that looked a lot like this one right here and he would be like no, no, I'm telling you I'm telling you, look at these spots. this is the entry, This is the exit. This is it and so what? I discovered and this is kind of, um, my journey to getting to this point you know I spent I spent years trying to develop this kind of figure out this perfect combination of indicators and you know what I was trying to do I was trying to automate my trading around those indicators.

so I was doing I set up a you know, um, like a bot, a robo trading type of thing where it would execute trades based on exactly what I told it to do. So I was looking for essentially this combination of indicators where when I looked on a chart, I had a formula and it would show this is the place to buy. So I'd be looking for a combination of things and I'll start to kind of lay them out for you here. So the things I was looking for um for reversals: I was looking for RSI to be below five super low RSI I was looking for five consecutive red candles I was looking for a price to be outside Bollinger Bands I was looking for a rate of change to be at least 50 cents or higher in the last five minutes and when all of those met and they didn't meet often when all of those met, that was a Buy Signal Now my target on this setup.

This was one that I was trying to automate it I would automate this for reversal trades I would buy when these were met, I would set a 20 cent stop and I said a 40 Cent profit Target that's a two to one profit to loss ratio. Well, unfortunately, what I ended up discovering and I learned this the hard way was that even though there were some times that I got some fantastic trades with these parameters and there were a few others that involved relative strength and uh, the total, sorry, relative volume the total amount of shares trade on the day, what ended up happening is that sometimes I would buy into a stock that was cratering, flushing, and there was news of an offering or there was. if you're a bankruptcy, there was something else going on that was so much bigger and I wasn't able to successfully automate tying in those real world circumstances into my formula. Now also, for what it's worth, you know I'm not an MIT graduate who's working at, you know, a hedge fund with a bunch of other Geniuses in math to create these really big formulas.

So the fact is, I wasn't able to find success with this and I went through a long period of trial and error where I would create these formulas I would back test them. They would show that they would have been profitable over a period of time, but then when I automated them and tried to run them forward, they didn't produce profits or they produced profits, but they were a fraction of what they produced in the back test results. And you know what? I actually realized I was doing. I was essentially creating a formula and a set of indicators that perfectly matched a set of historical data.

So all of my hunt for the Holy Grail was about finding an indicator that perfectly matched up with a historical chart. And so if I pull up my charts right here just for instance, and I'll just I'll just have a basic chart um in front of me right now. so I'll just show this to you. So this chart for instance I could add an indicator on here.

Um, you know, let's just say CCI um, commodity Channel index and I could say oh, anytime you know this breaks below this area here you know it's an exit and I could go back and I can say yeah, that would have got me out right there or that's a short. Anytime it comes back inside the channel or anytime it breaks outside the channel, it's a long I could have been in it way back here I would basically apply an indicator to a chart I would be able to tie out Okay, this is where it works. This is where it works. But then when I'm moving forward in price action, what worked in the past was not consistent moving forward.

and so I came to discover that this hunt for the Holy Grail for me was a search for certainty I was searching for the Holy Grail because I was scared and I was in there I was afraid of losing more I was looking for a guaranteed indicator that could take the guesswork out of trading for. over the years, I have seen many Traders present what they think is the Holy Grail some indicator, some combination of indicator, some new suite of technical indicators I've also seen a lot of trading gurus out there sell and Market these indicators that are the perfect Holy Grail guaranteed to give you profits but to this day I have never seen something that has actually been consistent I've never seen someone who's been able to take blind Buy sell indicators from an indicator Buy sell signals from an indicator to become a millionaire I haven't seen it, not even So for those of you guys that are tuning into this live, I would encourage you to really take this in. you're watching this episode. You clicked on this episode.

maybe just out of curiosity out of Interest with the Holy Grail what is that all about? but some of you clicked on this because you are actually in the middle of your own search for the Holy Grail and I want to tell you I know exactly how that feels because I was there I was in the same position that you're in right now I know why you're looking for the Holy Grail I know all the things that you're going to search through. You know what? I know that you might not know already is I know exactly where that's gonna. you're not gonna find it because it does not and I don't want you to end this video right now and jump off because if you're here because you're looking for the Holy Grail I want to share with you what worked for me and I want to share with you how I was able to stop that cycle of desperation searching for the next perfect indicator, the next combination. grasping for straws How I was able to break out of that cycle and refocus on things that actually are working.

So bear with me. This is a big episode. This is something that I think is really helpful for you and I wanted to use the title of the search for the Holy Grail or the Holy Grail indicator because I knew that that would attract people that may be in this mindset. As like I said, the same mindset that I was in.

so I understand exactly where you're coming from. and My Hope right now is that I'm able to prevent you from giving in to buying some custom indicator that somebody is selling that you're able to say wait a second No. I Realize that's not real. Now there is something real about trading.

There is something real about momentum and and finding opportunities. but it's It's not going to come in the form of some indicator that's going to work 100 of the time. So I'm going to show you the indicators that I'm using use indicator I Do find them helpful, but as I said, they're only helpful if you can use them consistently. And one of the things that I have found is that when I tend to add a lot of indicators on my chart, I tend to ignore most of them.

and if you're ignoring them, they are doing you absolutely no good. In fact, they're even worse than having them on your chart because they reaffirm that sometimes they work, but those times they work, you probably weren't even noticing it. You weren't paying attention. So the majority of the time you know you're just totally ignoring their signals.

So they're doing you absolutely no good. So I would encourage you for a moment here just to step back. now. Um, this is what I would encourage.

Ask yourself. big picture: What are traders who are finding success doing what indicate are they using and I'm not talking about the people who are selling you indicators, but what people who are actually trading who are actually making money in the market? What indicators are they using? What are they doing that's different from what you're doing because you know I mean it just to State The obvious: If you were doing everything a profitable Trader was doing, wouldn't you in turn be a profitable Trader isn't that kind of how that works? So you're doing something different now I don't know exactly what it is because I don't know exactly what you're doing, but there's something there that you're doing a little bit differently. So we've got to figure out first. what do those successful Traders doing? And then you look in the mirror and you look at what you're doing and then you figure out what does it take for me to get from where I'm at today to where they're at Now Some of the actions that a successful Trader is going to be able to take will be based on things that you may not have.

Ton of experience that creates educated intuition, a gut feeling of when to slam that Bible order with bigger size than normal? Perhaps the gut intuition of when to jump out of a trade? The good news is, some of that can be gained. A lot of it can be gained with experience, so the more time you're in the market, the more you'll gain that experience, the more you'll develop your own sense of intuition. Some of the things that they have that you may not have at this point right now could be account size, buying power, things like that, but those to me are sort of secondary. It doesn't in my opinion, take a lot of money to be a successful Trader It's much more about having a disciplined approach to how you trade the market and being willing to follow the rules of your strategy every single day.

So the indicators that you can see on my chart here I have Candlestick charts I'm using my nine EMA Exponential moving average I've got my 20 EMA I've got my 200 EMA which is really a daily level but I do use it on my intraday charts I use the volume weighted average price and I use volume bar. Those are the two four six indicators if you include candlesticks as one of them that I have on my charts. Now there are times that you'll see me add Macd moving Average convergence Divergence into I Do think there are times when that can be helpful, especially in a choppy Market because it helps you better realize and visualize whether or not a stock is on the front side of the move or it's going into a consolidation period. That is an instance of an indicator that can be a little bit of a red light green light because it tells me is the stock on the front side of the move or is it in consolidation now I Can also visualize that simply by looking at the chart, but it does take a bit more time to be able to recognize that.

And so sometimes it is helpful to have an indicator that just gives you a bit of a red light or a green light in terms of context and of the current price relative to where the stock has been. So I'll show you an example of that specifically on Macd. But for the majority of my careers Trader these are the indicators that I've used. Now you might ask yourself and and this is a fair question you might say um, Ross Um, how do you know what you're talking? You know, how do I know, um, as a viewer that anything Ross says is legitimate.

So this is a very valid question and someone who's come in here with the possible who's in the middle of the search for the Holy Grail Uh, maybe a skeptical person and you may very likely ask this question. You may also feel a little disappointed because this video does not contain a Holy Grail indicator. It does contain a lot of what I think you know. Of course, in my just my opinion are some really valuable lessons on trading.

But let me let me rest your um, your mind in terms of credibility. It is important to ask about the person you're learning from and so what I can tell you is that I turned an account with less than six hundred dollars into over 10 million dollars of profit. My results are not typical. They're not a guarantee by any means that you'll achieve any type of success whatsoever because most Traders don't find success, the average Trader is not successful I'm not the average Trader You probably already know that by now.

So take all of this with um, the disclaimer that my results are not typical but they are real and I always have my uh, my audited trading returns right here. This is the audit of my broker statements. My broker statements are on my website, so if you ever want to check them out, you can certainly check them out. And you might say Okay Ross Okay, all right, you're verified profitable.

You've made over 10 million dollars trading. All right, good for you. Well how do I know that anything that you're going to share with me today is actually helpful that any anyone has ever found it helpful? Well, I'll share this with you. 92 percent of my students this was over 2 200 students said that my my uh what I teach them is helpful.

They gave me five stars, 92 gave me five stars you might say. Okay, well so all right so you're verified profitable. You've got some students that seem quite happy with you, but what is Business Insider and Investopedia say about you I'm glad you asked. Uh, I am on their top list.

Both of them for uh, top best rated day trading courses for both Business Insider and Investopedia. Okay, so hopefully that puts your mind at ease that the person you're learning from is actually credible. So let's go ahead and talk now about the three steps to my strategy. So the three steps to my strategy are based on choosing the right stocks to trade, buying on pullbacks, to moving averages with a stop below moving averages and taking profit at the first sign of weakness.

All right, this is going to give you a bit of the blueprint, not the entire blueprints. This class is not long enough to give you the entire blueprint, but it is going to give you a very good sense. High level, big picture of the strategy that I trade every single day and I'm going to share with you the indicators that I'm using that help me with understanding whether or not I should press the buy and sell button. So let's talk first about stock selection.

This is possibly the most important thing. Um, this is something that's so easy for people to underestimate. Uh I see Traders all the time. Who will say Hey Russ I Had a student just today who said hey, Ross why don't we just trade Tesla today.

You know Tesla's no doubt gonna move in price today. it'll probably go up a little, probably go down a little bit. It moves enough every day. Why don't Why don't I just trade Tesla Why don't you know any of us just trade Tesla every single day So well I've tried that I tried to be an expert at trading Apple I Thought that perhaps and this was when I was still on my search for the Holy Grail that I could find buy and sell signals and I could just trade Apple every single day because Apple has volume, it's expensive enough stock that it moves and I could probably buy a hundred shares or maybe even a thousand shares and make some money on it every single day.

And you know what? I found. This was my own experience. I found that I was not able to develop Edge wasn't able to find consistency. Yes, some of the indicators that I used would show buy and sell signals when I look back at them on a chart, but when I was moving forward and using those indicators, I did not find consistency I found that I I felt that I was trading trying to trade against uh, high frequency trading algorithms and I think that I probably was.

We know the majority of volume today is generated by high frequency trading algorithms. So what? I ended up realizing and I discovered this through pure trial and error. A ton of trial and error. and at the end of all that trial and error, I had a ton of data that I was able to go through.

So this was all of my own historical data. Anyone, if you can do this, you could trade for the next two years, three years, however long you want. and you can trade a little bit of everything but trade. Tesla You could trade Apple the way I did the way I tried to.

Well, not Tesla at the time when I was eating. But anyways, you could trade whatever you want, trade a little apple, trade a little. Tesla You could trade some small caps. you could trade some mid caps.

You could trade some penny stocks, but you could trade some options. You could trade a little bit of everything, do that for two or three years, and then take all of that data and begin analyzing it. That's what I did I analyzed that data I looked at my biggest losers I asked myself what was I doing wrong there. In fact, a lot of the biggest losers were for me, were trading on impulse.

When breaking news came out, it could have been trading CPI numbers the moment they came out trading the Vix or trading one of the S P derivatives. It could also been trading a large cap stock. the moment earnings came out, those were wild card, essentially lottery ticket gambles. I had some winners, but I had some bigger losers.

so I realized I had to eliminate those I also found that I when I looked just at Mid cap and large cap stocks that I was not very consistent I didn't have good accuracy. it was hit and miss. I had winners I had losers I didn't have an edge I Discovered based on where I was making the most money that this was on the screen. Right now is the type of stock that I traded the best.

This is where I found the most profitability and so this in turn decide. you know. This in turn led to me deciding that this was the criteria for a stock being something I would trade. So these are the five criteria: Number One: the stock should have five times relative volume.

Now that's that's what I prefer. Uh, I am willing to take make some exceptions to that, but my preference would be at least two times relative volume now. I'd prefer five times relative volume. So this is calculated by looking at the average volume over the last 30 days and then what's the volume today? We want it to be five times higher than the average.

Number two: the stock should already be up ten percent today or higher. That indicates that it's moving higher. Other Traders are interested in it. It's a stock that's going to be on Gap scanners.

It's going to be on people's watch list. It's got to be up at least 10 percent. When I trade stockster down two percent. Five percent, they're up two percent.

Three percent. This is where I Just get into Chop. These are not stocks making big moves. It doesn't matter what indicator you use on those types of stocks, you will not find consistency.

Certainly not if you're trying to be a day trader that is not the place to be focusing on. So all of this is going to give you an edge no matter what indicator you're using. So this is stock selection. It helps you find the right stocks to trade each day.

The stocks have the potential to make big moves. They're really for five times relative volume up 10 on the day we prefer that there's news, the news is what gives us the Catalyst That's what bringing the volume in. That's why the stock is squeezing up. Yes, it's true.

There can be some exceptions to this. You can have stocks that have a technical breakout things like that. I Would be cautious about making exceptions to this rule as a beginner. Trader As a beginner Trader You need a very firm set of rules for how you trade.

These are your guard rails that keep you safe. Once you've gained more experience, you'll have the intuition to know that this is a time where I can make an exception that comes with educated intuition that requires experience. Don't try to do that yet. So again, Number One Five times.

Relative Volume Number Two Up ten percent of the day. Number Three: There should be a news event moving the stock higher. Number Four: Most stage creators prefer stocks between one dollar and twenty dollars. Some will trade stocks at 50 cents.

That's fine too. Some will trade stocks a little more expensive, but the only problem with stocks are a bit more expensive is that you'll usually see there's less volume because they start to price out a lot of retail Traders A lot of retail Traders Trading small accounts, so when you get an expensive stock they can't buy that many shares. many of them will just say it's not even worth it I'd rather to focus on something cheaper, but those that do trade it will trade it with smaller size. That results in less volume.

But less volume will also mean the Rel average relative volume uh, will be. The relative volume today will typically be lower, which means it may not be able to exceed ten percent. so it would only be really interesting if an over twenty dollar stock has lots of volumes up a lot. Otherwise, it's not interesting.

Number Five Supply We'd like to see that the number of shares available trade are less than 10 million. Less than 20 million is fine. Less than 30 is okay, less than 50.. Now it's starting to get a little a little more thickly traded usually.

But there are also times when we'll see a two or three million share float that is thickly traded because for whatever reason, high frequency trading algorithms have gotten dialed in on that stock. That tends to happen more on lower price stocks for whatever reason below two dollars and fifty cents. So as they start to get a little higher between 250 and 10 20, that's when we start to see them thin out. And that's when we can start to see some bigger moves, Which naturally is what I'm looking for.

So these are the five criteria that I'm looking for. And listen, these are all in my book that I wrote in 2015. So I wrote that book eight years ago and none of this has changed significantly. In all, in all those years of trading, I'm still trading based on generally speaking, the same criteria.

Yeah, there are again some exceptions that I make based on gut intuition things like that, but for the most part, this is the same. So you could have read my book eight years ago when I first published it and you would be eight years ahead of you know someone today who's just learning how to trade. But you can't change what you did in the past. So the best thing you could do is get started today and start absorbing experiences starting to learn about the markets.

I Actually saw an article in um, Entrepreneur about how Americans on average are losing eighteen hundred dollars a year due to financial illiteracy because they're financially illiterate. That's what they said. They make bad financial decisions, but day trading could be considered a bad financial decision if you trade with real money and you lose money. which is why of course I encourage people to practice in the simulator.

But this class by itself is an opportunity to try to improve your own financial literacy by learning a little bit more about day trading and about the market. So this is a stock selection. example Gfai on this particular day and this is the one that I traded today as well. Today up 8 500 on it.

But Gfai a couple days ago and I grabbed a screenshot was up 42 percent. It was our second leading gapper had 24 million shares of volume, which made the relative volume 7.18 that exceeded five, which is good that was above our goal of five. Float on it was 1.28 Million shares. so it traded almost 20 times the float in one day.

That's called float rotation and this is a stock that went from about seven eight dollars a share up to eighteen dollars a share. So regardless of what you might think about me or about my strategy, or about the indicators that I'm sharing with you I think we can all agree that this is the type of stock you would probably want to be Trading am I wrong I Mean wouldn't you love to be trading a stock like this that goes from eight dollars to eighteen dollars? Ten dollars a share. These are huge moves. This provides a ton of opportunity.

Whether you're trading with 10 shares, you're trading with 100, you're trading with a thousand, You're trading with ten thousand. This is a lot of opportunity. Now today, we didn't even see this big of a move. Today we saw a move from 18 to about 25 dollars.

Twenty eight dollars a share. Uh well. I Guess it's still 10 points, but at higher price. These are the types of stocks that most active Traders are going to be interested in.

That's why I had 24 million shares of volume, right? This is now this is an AI stock it was in. It's in a hot sector right now, so that certainly gave it some extra momentum. And it had news, right? So these are the reasons why this is the right type of stock to trade: Okay So we've talked about stock selection. Now let's talk for a moment about entries on pullbacks.

Moving averages right? So if you've have gotten the first first, uh, step out of the way, you understand the right type of stock to trade. I would say you're halfway there. That by itself is is huge. Now you're dialed in on these types of stocks each day.

the types that are making big moves. So today, just for instance, um, we had this nice move on Gfai which is still holding up relatively well. This was where I traded it today, which I can show you in more detail. we had Celz today.

This also made a big move. Now this one a little bit lower priced at a dollar. Let's see. it started at 50 cents.

It went up to a dollar forty. Still went up almost 200 in one day. That's a big percentage move. A little choppier.

You can see a couple of nasty candles like right there on hybrid volume right there. Not super surprised because it's lower priced. but you know again, these are the type of stocks you want to be looking at. Maybe you decide, No, I'm not going to trade that one because it's a little too cheap.

You focus on Gfai instead. That's fine. That's totally okay. You know by all means you can have some.

There's some room there to filter some out and focus on others instead, but this is what you want to be looking at. Now the question is, where do I get in and where do I get out? And this is where you were Perhaps looking for that Holy Grail indicator. You're looking for a chart that you know you'd populate the chart and it just has, um, you know, a buy button there and it has a cell button right here at the top and then it has another buy button right there at the bottom and then another sell button right here at the top and then another buy button right there at the bottom and another cell button right here at the top. And you know I've seen people try to sell indicators that look just like this and they look great.

In hindsight, in hindsight, it's easy to put those on your chart. but in real time when you look at all the different stocks that they're algorithm is putting the indicator on, it's in. it's always. It's always the same.

It's been like this every time I've looked at these indicators. In hindsight, it looks great, but in real time. by the time you're actually getting the indicator, maybe it's at the end of that five minute candle. Well, great.

That's super helpful. It's five minutes late. so now, yeah, you see the cell indicator, but it's five minutes late. We see the buy indicators.

Five minutes late. Stocks already moved a lot. So yes, I Understand, this is the indicator everybody wants, but it doesn't exist. So all right, since that doesn't exist, what can we do? So this is how I'm looking at these stocks.

I'm looking for entries on pullbacks. now. there's different forms of pullbacks. The typical pullback will have two to three red candles and it can look like a bull flag.

This is again, I outline this in my book so if you haven't checked it out, please check it out. I Have a free E-copy that you can download. You can read it today. So the bull flag? Okay, a couple and I'll just draw this.

draw a picture of this for you. All right. So this is a typical bull flag candle. A couple candles up doesn't matter, they're red or green.

these I'm just drawing it. So then a couple candles of pullback like this and then right here starting the next leg higher. So this is a pattern that we've seen a million times. perfectly.

This pattern will come down to your nine EMA your nine exponential moving average right here. So right in this area it's coming down to the 9. EMA That becomes a level of psychological support. So the perfect entry on something like this with confirmation is entering right here as soon as the first candle makes a new high with a Max loss at the low of this candle right here.

So that's your stop. Now this candle. You know if you have an 18 stock, this could have gone from 18 to 19 back down to 1870 and this entry here is at, you know, 18.95 So this could be a 15 cent stop. It could be a 25 cent stop.

It could be a 50 Cent stop. Could be a three cent stop. We don't know. but whatever the size of that candle is, that's your stop.

This is your entry with confirmation. Your target is a retest of high of debt when it comes back up to re to retest High a day you have two options. One is to sell it right here, the other is to hold well I guess. and the third option is to add to the position.

When you add to the position, you increase your cost basis from an average round here to an average round in the middle. And then when you get that extension through the high, you're getting a bigger winner without increasing your risk. Because you moved your stop from down here. As soon as you added you moved your stop up to right here.

So now you have a stop at break. Even so let's say you took five thousand shares here with a 500 stop. Now up here you have another five thousand. Now you're holding a ten thousand share position with a stop at break even.

The only thing you're risking is that the 500 or the thousand dollars that you are up ends up going away because it comes back and stops you out in a hot. Market This is a scaling strategy that I use to add to winners. If you're interested in learning more about scaling, I Will put an episode at the end, a link at the end of this episode. Scaling All right.

So scaling specifically. So this is going to be how to scale how to scale in and out of momentum and you'll see a picture of me right here. All right. So I'll probably be pointing right there.

So this is, uh, an episode I'll put at the end of this class. So that's on scaling specifically. So now let's look back at this pattern. All right.

So here we have this pullback to moving average and what you can do is you can take a starter before you have confirmation. Now the only reason that I do that is if I'm getting in so close to support of that moving average that it's essentially a no-brainer to take a starter because my stop is like three cents away. So I might as well just take a starter. I'm only risking three cents a share.

and then when we get confirmation, I can add there. So when you're doing that, your starter position becomes maybe down Here you add you know, a thousand shares or two thousand shares, your stop is at the moving average, it comes up for confirmation. you add another 2 000 shares there. So now your average price is like right in the middle right down here.

and then when you add, maybe you even add a little bit below the high a day to anticipate it, you add right here. Now your cost basis instead of being here is like down here you've got a better cost basis. When you get that squeeze through, you can take a little profit off the table up there and you're locking up your winner. I Know this looks complicated, but in reality this is a fairly simple method of scaling in and out of.

Trades It's a fairly simple method of buying a stock that's strong You're simply looking for pullbacks. That's what we're looking for. So this right here is a pullback. and then you get the move higher.

So enter during the pullback either as close to the moving average as possible or as soon as the first candle makes a new high set your stop at the low of a pullback or near that support. So let's look at a couple examples of So this is an example right here of a stock that starts squeezing up. It goes from three dollars and seventy cents up to a high of about four thirty five, four forty. That a nice 10 move that's great.

We like to see that almost 20 percent Now volume is pretty high on those candles moving up high volume bars right here. You then get the pullback. candle starts to pull back and this is where a lot of Traders will struggle. So a lot of Traders What they'll do is the stock starts squeezing up and they just buy it right here.

They're just like the stock is moving higher. I'm buying it. This is called chasing. This is giving into Fomo.

You're just pressing the buy button and then you're adding here and you're adding here. But there may not be any Rhyme or Reason to that. Other than the stock is moving and I'm chasing it. That's not a great strategy long term because you'll find yourself buying these tops and catching these flushes back down.

or you may find that you know you finally bought it right up here. And then when it's pulling back, you're now in the negative. Now it needs to come back up to here for you to get out, break even. And that's where a Trader with a little bit more experience like me may be taking profit because we waited for the pattern to form.

Having the discipline and having the patience to wait for the patterns is really important. So this is almost the best indicator of all. It comes in the form of the chart pattern. You see the stock squeezing up, you wait for it to pull back, and then what? I Look for the first candle to make a new high? Is that confirmation that the tide is changing and we're moving back up so we're swinging back up.

These are Ebbs and flows. You'll see it on a million charts. This is a chart from 2018, but it's the same exact pattern that you'll see on a chart. From is the same exact patterns.

These are the ebb and the flows. Why does this happen? This is reflecting sentiment. People get it really excited. they buy it up.

then they get a little scared. they sell. there's some profit taking and then more. Traders come in next leg up, then a little bit of profit taking next leg up.

This is how it goes. Usually we see the first and second pullbacks are the best and the third is where it gets choppy. That's exactly what happened here. None of this is new.

These are patterns that happen again and again and again. They've been happening for years and years and years. Your job is to learn them. So let's go back here to this example.

So you could have started to take an entry down here, Or you could have waited for the first five minute candle to make a new high and the choice is yours. You're going to pay a slightly higher price for that confirmation, but you're getting in with confirmation, which is typically better than getting in. When there's no confirmation, you have no confirmation. It's a little bit riskier.

It requires a little bit more intuition, a bit more experience, but you could have gotten in here with a stop around this gray moving average which is the nine exponential movement. And then you get the move up here and you can do one of two things. one entry, one exit, book your profit, get green, Get out. Do it again tomorrow.

That's something you want to do if you're trying to build consistency. if you're a newer Trader or if you'd like, you can hold the whole position and wait for your first sign of weakness, which might keep you in the trade a little longer up until about here. Or perhaps you get aggressive and you add to your position, you double your entries here. 20.

Uh, 424. You double the position up here. So now your cost basis is here and when it goes up another 10 15 cents, you take it off the table for a double size winner. That's okay too.

The decision of whether to add sell or you know, just hold until an exit indicator will definitely be based on Market sentiment, market conditions, and your current um, your own profit targets and where you're at on the day and whether or not you have the cushion to take this risk. Here's another example. So this is an example of a chart from 2020. So we have a stock that's at 24 a share.

it's a little bit more expensive, a little bit more similar to Gfai. Today, it squeezes up and then it pulls back right here. That right there gives you that first pullback. and to pull back right to the moving average moving average pullback.

It squeezes up first candle, making a new high is your confirmation. It pulls back again. You get first pullback right here. second pullback right here.

So this is what we look for. the first pullback next leg up. Second pullback gives you an even bigger leg up. Third pull back.

This is where I get cautious. it goes a little higher, but I wouldn't have taken that trade. So I'm a buyer here and I'm a buyer here. So in this case, what are all my indicators telling me? Well, the nine moving average is showing that it's holding a support.

The volume weighted average price isn't showing a whole lot because the stock is simply above it. The stock is also above the 20 moving average. It's no doubt above the 200 as well. So there's nothing really that those indicators are saying that's telling me not to take the trade.

But they're not red like green light. necessarily. You could I mean I don't usually trade if a stock is below them, but if they're above them, then that's fine. If a stock is below the nine moving average, that is a place to be cautious As I'll show you in an example from today, the moving at the volume profile.

the volume is good. You've got high volume green candles light volume red candles High volume green light volume red. That's great. That's what we like to see.

There are times where you'll see slightly higher volume on a red candle and the stock still goes. but we do prefer to see higher volume on green. This was a little higher on the red right there. so that does happen sometimes.

But again, use your um, discretion. This is an example of a higher volume red candle and note how this resulted in a longer, more sustained pullback. So this one did pull back a bit more. It wasn't as clean and it wasn't as clean because there was a lot of selling.

But that's sometimes what happens when a stock goes from a dollar up to a dollar seventy in one candle, basically in two candles. That's a huge move, so it gets a little bit of a pullback. There's some profit taking it flushes on this candle. It bounces back up off those lows and then it starts to base out here.

Now, if it had started to squeeze right here, that would have been premature because the price is well above its moving average. so it had to kind of come back down to the moving average. And then it pulled away. so it pulled away there.

and then it gives you a nice big green candle. another higher volume red candle. It pulls back this time to the moving average a little faster and another leg higher. What do we notice here about the first, second and third pullback? The first worked, the second worked, the third failed.

This was from I. Don't actually have the date on this chart. but so when I'm looking at this one just today, it doesn't surprise me that we have the first work, the second work, and the third fail. This is a pattern that you have to learn that right there is more valuable than any individual indicator.

It's a pattern of price action. This then becomes a head and shoulders pattern, which is a technical chart. There's the head, there's the shoulder and then that sells off right there. That's predictable.

So you're You're beginning to learn a language here. It's a visual language of pattern recognition recognizing patterns. These patterns happen again and again and again. They're more likely to happen on certain types of stocks.

This becomes muscle memory, you know? And I mean this is something that that can be learned, but it takes time. I Understand that some people would prefer just you know, a black and white. Just give me a text message. just tell me to buy and I'll buy and I wish it was that easy.

I Was looking for the same thing unfortunately I haven't found that even in all my years of trading. I haven't found anyone that's been able to actually send out text messages and have you get them fast enough that it's actually helpful. There's people that sell those alerts. don't think they're useful I Really don't I'm sorry to say, but I don't think it's helpful I Think the best thing you can do is learn through experience.

Study Study study watch videos like this. Take classes if you want to, but just gain experience. So again here. First pullback, Second pullback.

This one ended up working and that's not common. This one came back down. It held this level. It kind of flatlined here, and then it started to pull away again.

Now something that we probably would have noticed here was that the Macd was open and then went negative during this period. Right here because we came into a period where look at the moving averages, they're converging right here and then they start to pull away again as you set up another. Breakout So that does happen from time to time now. I Want to show you this episode it's a short clip and then um, I'm going to show you.

Um, well actually, you know what? Let me. uh, let me let me skip this because I want I want to show you something else here just for a second. So let me just skip this. I'll just I'll just pause this so I want to show you this chart here first.

I was going to show you a video and but and I'll show that to you in a second. But let's just look. let's look first at this. So gfai, we're working with a five minute chart right here.

Okay, so on this one this morning, let's look at a couple of things. Let's take this indicator off because I was just putting that on as a joke. Uh, we can go ahead and we can add Macd. All right.

You want to see Macd, so let's go ahead and add that. All right so you can see how the Macd has a crossover right here. So the way I use Macd is if the Macd is above the signal line as it was all through here. I Consider the stock to be on the front side of the move and I'm interested in trading it when we're on the back side during a bear.

Market I Do not want to be messing around with it so I wouldn't have been interested in any of these possible trades in this area. Not that you really see a lot, but sometimes you'll find traders that get kind of tunnel vision on stocks and they're still trading them when they're really not clean. So this is a helpful reminder of is a stock on the front side of the move or is it coming into the back side where it's getting Consolidated So I focus on the front side now. right here.

We've got high volume green candles. We do have a little bit of a topping tail on this candle here and it drops down. lighter volume candle. We're going to pull back first candle to make a new high right here.

This is a pullback. pretty close to the moving averages close to view app and it rips. Very nice squeeze. It pulls back again here but notice a little extended off the moving average.

It has to go sideways a little bit and then it starts to pull away. It creeps back up to the highs and now the moving average just pushes it higher and it breaks through that level of highs and gives you that really nice parabolic move up to 28. that marks the top. and this this is a very high volume candle.

It's a big green candle and that's extension that's a parabolic move. Really, it went from 24 to 28. That's four points in in five minutes is a very nice Move It Was Then followed by a fairly significant pullback. A bounce back up.

Now we know because of this pullback, we're going into the third pullback because of that red candle and this is where Traders have that pattern recognition and they say nope, this is going to be too risky a place for me to be getting in and so they end up most. Traders with experience are going to say nope I'm not going to go for it and in fact, short sellers are going to say here's the place to start to get in. Now we're getting confirmation stop at the high it breaks here. Macd crossover Yep this is this could be the back side.

You get an immediate flush, it does rally back up and it's been holding relatively well. So all things considered, it hasn't been a big victory. For short sellers, it's still holding up quite well. Now notice the Macd here as it's starting to come back up.

Could we get a crossover back to positive hood and that could give you a brand new opportunity for a trade back up to the highs? I Am cautious about that in the current market that we're in because we've been seeing really nice moves in the morning consolidation midday, and we've been seeing at. Power Hour Breakdown: It fades so that's what I'd be more inclined to see because that's been the current pattern. but you know it's not impossible that you could see a move going the other way. Okay, so now let me jump back into the slides.

So I'll skip this for right now. Um, and let's talk about um, taking profit. So take profit at or before the first signs of weakness. So when I first take a trade I want to see strength.

So what does strength look like? All right? So you've chosen the right stock. It's a stock that's already made a big move. It's got a high relative volume, you've gotten it in on a little bit of a pullback near a moving average, and now you want to see some strength that looks like green on the tape. The price moving quickly away from my entry bid.

Support buyers on the level two and number four. You want to feel like you can reasonably adjust your stop to break even fairly quickly right? so adjust your stop to break even and then you're taking risk off the table when I take a trade, as soon as I can adjust my stop to break even I'm in the driver's seat because now I can let it work. My worst trades: I Get in and they immediately go lower. So if I'm just seeing red on the tape as soon as I've gotten in immediately, that's weakness.

If I get in and the price is just sort of going sideways or I'm only up like two or three cents. That's not strength, that's weakness. If I get in and instead of seeing bid support, I'm seeing huge sellers on the level too. That's weakness, right? So if we if we if we understand strength, it's very easy to then understand what weakness is right.

But let me Define it. so I see weakness. if then that for me is an indicator to either take profit. If I've been holding the whole thing sometimes I'll hold the whole thing and I'll wait to see a sign of weakness and then the second I see it I press the sell button.

However, when I'm using my scaling strategy and I'm being aggressive about adding, adding, adding, adding, adding, then what I'm more likely to do is take profit even if I don't see weakness because I know I'm being aggressive and sometimes what will happen is we'll have a stock that's moving higher. It's moving higher, moving higher, moving higher. and maybe you, you know whatever. this was the first leg up, it pulled back and you know you added here, you added here, you added here and then you might have added a little bit.

here. You're being pretty aggressive. This is a scaling strategy, so you're going to say I better start taking profit here and here. I Haven't seen an exit indicator yet, but I know what could happen is it could do a topping tail and then do a big pullback.

and if I haven't been able to take profit going up because I've now created a share position that's four times my initial starter because I added if I have to sell when it's flushing, I'm going to get slippage on my exit, so it's better for me to take a a quarter off here. another quarter off here, a quarter off here. So I'm reducing my size and then when I finally have to hit the bid and assign a weakness, I'm not going to get a ton of slippage on that exit. So a sign of weakness can be a big seller appearing on the level too right where I got in or just a few pennies higher.

The obvious appearance of a hidden seller buy orders are going through, but the ask isn't budget. A large burst of red on a tape indicating a surge of selling and a possible false breakout is coming. Initially a pop and then dramatic reversal. This will form a topping tail or a false breakout candle.

and I don't like entering on a red candle. So if the candle turns red while I'm in it, you know I first got in and it's green, but then it drops and it's red. That's a problem that indicates weakness. That's going to be a further indicator for me to get out of the trade again.

Whether or not you hold the whole position until you see a sign of weakness or your selling sooner is going to be based on where you're at in your career. One of the things that I talked about in chapter 14 of My Warrior Pro class is: I I broke down for you guys my trading plan and this is a trading plan that I used when I did my small account challenge. So I'll show this to you just real quick here. So chapter 14.

Uh, creating a trading plan. This trading plan right here. That is the full blueprint. That may be the most valuable part of the entire course.

I Suppose it's only valuable if you're able to understand and you probably need the rest of the course to really understand it. but that is the blueprint. so it's that is sort of where the rubber meets the road of. this is how I'm finding the stocks, the tools I'm using to find them exactly what I'm choosing.

This is exactly where I'm getting in and this is where I'm getting out. This is how many times a day I'm trading. This is the hours of the day that I'm trading. So that is the the plan that I would give myself if I was starting over and it's the same plan I've used every time I've done a small account challenge like when I funded my account with 583 dollars.

Focusing on one trade a day? That's it. Looking for 10 to 15 cents a share? Being very disciplined? One entry, one exit. Why? Because you don't want to take the risk of adding and losing the base hit, you want to lock up the base hits. So you get in and as soon as you're green 10 15 cents a share you get out.

You do that for a week to build a track record of consistency. If you have green days six or seven out of those 10 days in the first two weeks which is 10 trading days going into week three, you start to increase your share size. You continue increasing share size. You will only have 60 70 accuracy if you have first gained experience trading in a simulator before you're actually jumping in and trading.

Chapter 14: You know with real money to get in and take profit initially. As soon as you hit 15 profit Target and then once you've gained a little confidence instead of taking profit the second you hit your target, you wait to take profit until you see an exit ending that teaches you to hold longer but be quick to bail when you see an exit. The next level of trading is to start adding not just one entry, but you take an entry, you double your position and then you take half off The table as you get a breakout and go back to your core position. So now that's trading around the position and that's what I do to maximize profitability when we're having a stock like Gfai that's squeezing up this much.

So like here: I Took my starter. Well, it was about 18.50 so it's about it. was in the middle right here and I took profit as it went to 20.. And then I added back because look, it hit a high right here.

and this is the five minute chart you could say. Russ Why would you even sell there? Well, let's look at the one minute chart. just for a moment. here.

The one minute chart is going to show you that this is a stock that's squeezed up, but it also dipped back down. So this right here. This was like one five minute candle. This was another five minute candle.

and this is another five minute 15 minutes. At the open, you just have three green candles going up. But remember, inside each five minute candle, Our Five One minute candle. So here we had one, two, three, four, five candles.

It was green, but it pulled back a little off the top of Twenty dollars and twenty five cents. In fact, it dipped all the way down to 19.16 That's a full dollar a share off the top. It was absolutely the right move to take some profit off the table. There were signs of weakness here and those were visible on the level two.

They're also visible on the one minute chart. And then it made sense to add back as it came back up here for a retest. First, one minute candle to make a new high right there and it moved back to the high, then to take some profit off the top as you had another red candle Farm and then to get back in through this area as it squeezed back up to the highs to 24. And then a micro pullback right there, which could have been a quick scalp trade.

This is where we started to get a little bit of chop. and then right here was where we got the next breakout. right there through 24 up through 20.. So as a beginner Trader your focus has to be on building consistency.

You need to build a track record of confidence now. I Did an interview with a student um, just yesterday. sorry. Well, I did two interviews this week.

I did one yesterday and I did one on Monday I'm going to talk about the one on Monday first. So the interview that I did with student on Monday that'll be added Um for warrior students to classes. With all the other interviews that I've done with traders who have verified profitability. so this particular Trader has verified over a million dollars of profitability.

We've got a million dollar batch. No, his results are not typical. neither are mine. There's no guarantee that you'll find success.

Reminder of my disclaimer which you can see over at Warriortrain.com Disclaimer: But what I want to share with you is that he traded uh I believe he said it was for eight months I think it was eight months. He traded a simulator a simulator for hunts. That's a lot of patience. That's a lot of discipline.

That's what we like to see. We love to see someone exercising that level. He gained a lot of experience creating a simulator and then he flipped the switch and started trading real money. I Talked then yesterday with another student and he's got his 100K badge and he traded not in a simulator but with really small share size with TD Ameritrade he was using like 10 shares so he was using what you could say is a negligible amount of money, but he's trading with very small share size because he wanted to have skin in the game.

he wanted to trade real money. You wanted to experience those emotions and he did that for about I Think it was um I can't remember now if it was six months or a little bit longer, but he did that for quite a long time as well. So he paid his dues. This is really important to pay your dues.

the market is going to be here for you. And what I would really encourage is that you spend this time, especially because the market has been a little colder. Spend this time gaining experience practicing in a simulator, studying the charts, beginning to develop your own sense of pattern recognition. And that pattern recognition.

It goes from understanding the patterns of candlesticks, understanding the patterns of volume profiles, the volume bars, understanding patterns perhaps around the use of Macd if you want to use it and you're willing to use it consistently understanding patterns around how stocks trade above and below V Web understanding the pattern of why certain types of stocks tend to be so volatile and provide so much opportunity. So let me pull up this again just for a moment. So in chapter eight: I talk about a couple of setups: Recent Reverse split setups. Why are reverse splits so powerful? Maybe someone can answer in the chat.

Recent IPO Setups Recent IPO Setups are powerful for a similar reason: Blue Sky Daily setups Spax, Beespacks, Recent specs Back mergers Low volume parabolic stocks There are a couple of stock types that you'll learn can make incredible moves, and so when you start to see them in real time, you would be doing yourself a disservice if you didn't learn to recognize them. Those are huge opportunities. Those are the types of stocks that have made the biggest moves. So once you learn to recognize those, then you start to get better at knowing when is the time to step up to the is