How to Make Money Buying Small Cap Breakouts (Full Guide)

If it may help keep a couple shorts safe on some setups that they have been you know losing on then great this is the life cycle of these stocks they pump the stock they dump it goes all the way back to zero they do a reverse split so that they can stay compliant with NASDAQ and get back over a dollar just understand that you want to be playing more chess more chess and less [Music] Checkers hey everyone and welcome back to another episode of trading takes we have a special guest and a special episode today

uh Roland wolf is going to be joining us to talk about all things small caps on the long side so Roland uh we've been wanting to get you on the show for a while you're a master at this kind of stuff and a lot of people I think struggle on the long side with small cap so welcome to the show and we're going to talk about a bunch of Great things today so H how are you doing hey man thanks for having me uh you know we've never got to speak until literally right now and

it's kind of always a unique experience like this but I as I was mentioned and I've watched any episode that on I always watch it and it's always uh a lot of great value and different guests that I've been learning from you know um kind of almost into a decade into my career but every single day I kind of step to the markets And and hopefully learn something and it's cool you know watching programs like yours at the moment where you're kind of diving into some other stuff and it's not quite so surface level you

know so it's kind of cool and uh yeah thanks for having me on you know absolutely and I appreciate you saying that and that's what really what we're trying to do we want people to be able to to watch these episodes to learn from people who do this for a living who Are professionals and to be able to apply that to their own trading so uh that's all what we're going to do in today's episode so just as kind of a you know to to get us going this episode is a solution to a problem

and the problem is this a lot of people they try to trade small caps on the long side and it goes something like this they'll look at the large percent G gainers on the day they'll uh find something that's running has a lot of volume they'll go to buy a Breakout on it the breakout immediately fails they don't really have a risk level underneath it they'll stop out for a big loss and then they do that time after time they get super frustrated the account's going down and that is the problem with going long on

small caps the way that a lot of people do it so what we're trying to do is basically show the solution to that of how to actually go long small caps properly and you have made you know you're a seven Figure Trader you've done very very well doing exactly that going Along on small caps you've taught other people how to do that so to just kind of kick things off for us you know what is the mindset going into this because you are you describe yourself as like a short biased long Trader and so you

know that these companies are crap you know that they're just vehicles that are trying to raise money you know that they use news to do that so what is the mindset that you Have to be able to go along small caps and do it successfully yeah so first off I guess you kind of have to understand that uh the way I went about the game of small cap well from a mathematical standpoint obviously massive percent gainers right um and you know like we've got something up you know I don't know how many thousands of percent

today um they're outliers obviously your chsn but um but at the same time I saw that and I always Said you know okay so there's and every single day you know there'll probably be especially in a hot market like we have this year you have three to 500 you know 150% Runners at the moment um but at the time all the traders that I really looked up to were short sellers you know almost almost exclusively and in fact there wasn't anyone really saying that you could make money long in short cap in small cap um

due to all everything that you just said they're Really really scammy you know and you get into it and you know you think you're going to trade breakouts and someone tells you to trade breakouts or uh whatever else we're wired to trade that stuff like all that that situation that you mentioned where you come in and it goes through high day and you buy it and then it gets slammed and you're taking a big loss and you're really frustrated that's how we're wired you know it totally makes sense that's That's the first my in my

initial and that's only because everyone I know is like that but myself like when I got in dude I could not wait till it got through high day I could not wait and you know what there was no trade until then you know for me I was like that's the moment where you know what it's going to break out of this and just keep going up and um I didn't have I had no you know semblance of risk reward but at the end of the day I didn't know what I Was trading you know what

I mean I had no clue what the big picture was uh so yeah small Cap's really a scam people say that all the time oh it's a scam that's why I don't trade it but actually I have found that because it's a scam it's more tradable than anything that's what that's what I think I think once you understand what is happening if you can stay out of the way of the scam and you can actually profit from the scam to the long side that's that's that's how I Feel I call it kind of the life

cycle of these stocks they're only tradeable a few times a year for the most part uh any ticker and uh so so that's really what that comes down to but we're I think we're kind of getting away from what um from what the question was sorry you might have to edit this but what what was the question here yeah it was basically just what's the mindset you know going into trading small caps yep no so we're we're Still on track cool uh mindset the mindset is is that of what you said earlier so you know

at the time it was Tim gratani man when I was really getting into the game so my initial goal because I didn't have that much Capital uh and and I realize you know what I can't be at any of the short Brokers you know the specialty short Brokers not going to get shares to short and then by the time these things are shortable uh hopefully they're extended and they Higher price and stuff like that I can't afford to short anything really at the moment um nor did I you know was I great at trading so

uh I but I looked up to people like Tim grani so my goal was was to at some point I realized holy crap well where I'm buying cuz I breakout stopped working well didn't really work for me like the high of day breaks um but I saw you know near these highs where I got really excited to buy is where all the best short sellers were You know in including Tim grani into resistance into multi-day resistance where I'm looking for a breakout he's like a shark just waiting for it to fail so that he can

destroy it or even into that resistance you know Gap UPS into those levels um so I realized holy crap I gota realiz like if I want to be long I also have to sell here right because this guy's doing so well and uh not just him but all the good short Sellers and then along the way with that I actually Learned what small cap was right which are a bunch of really terrible companies uh that need money but they have bad earnings so they're price is not going to go up and they get really really

bad loans essentially I mean that's really what it comes down to is that they need cash and the only way to get cash is to dump shares onto us so that so it's it's kind of a conflict of interest because they're putting out a PR and if you look at every single one and and I felt Prayed to this for a long time where they put out the pr and I would fall in love with the stock too like not not forever but right then and there I'd be like oh my God that's amazing you

know what I mean I would get so excited I'd be like they cared what like oh they just need six you know one more year and probably I I would didn't know it at the time but like 50 million more dollars to get through to phase three and then they're still probably going to not cure Cancer so that to me was the whole uh you know it's there are a lot of traps um and and once you realize at the end of the day it's just a vehicle that's why they go back down that it's

a supply and demand issue and it's not going to overcome it I don't care what the pr is the pr is designed solely uh to create action within the stock so that they can put money in their pockets you know what I mean and that's that's solely what we trade every single day and sometimes Years like this year it's spectacular you know they get amazing pumps they do a really amazing job so that is how I look at it and and so it's all you know garbage to me at the same time um even intraday

price action when it gets towards highs through pre-market highs especially early in the mornings you know um I get weary um I just understand and you know I have a lot of friends who are just amazing short sellers I just understand where they are and how they How they are and I just never really made the full jump over to the dark side I guess is what I is what I'm trying to say and and I really have enjoyed um kind of guiding people away from that high of day beginner mentality but it's not the

thing is it's not just a high a day like beginner mentality that's what everyone does teach you know kind of universally like even if you ask chat gbt like what's a good St like that's that's probably what chat gbt would even Say so it's like um it's kind of like a universal thing I guess that people do that I don't know but in small cap it's specifically doesn't work in my opinion because of what you just talked about they have shares to dump and if I've got millions and millions of shares to dump I need

liquidity and when that liquidity comes in I will dump it and the most liquidity comes in when where when you get through highs a day in the morning and you get those short sellers covering And you get Longs piling in and then it gets stuff there you know and it's like it doesn't mean it can't squeeze later in the day but there in the moment you know from a price action perspective and big picture perspective I like to be careful and you can always go back and match it to some fundamentals speaking so in other

words fundamentals right fundamentals it's it really does Drive in a major way what's going on and um and kind of the conversation for me the Way I look at it 100% And I I know that you've talked about in you know other interviews that you are looking at like what are the areas that they're able to dump at uh and so a lot of times it is around like high a day breaks or it could be around you know key levels or something where it looks like it should go all the liquidity comes in the

shorts are covered the Longs come in and it's like bam that's when the Insiders are like you know we have to sell this when We're able to not when we want to so that's when they they really slam down those Pockets so you know now that we've kind of laid the framework of a lot of these small caps are not very good companies a lot of them have shares to sell uh so you know kind of given that we need specific conditions in order to be able to actually go long them so what are a

couple of the things that you are looking for like what needs to set up in order for something to actually You know be a potential long other than just being a big percentage gapper Yeah and that's so and that is the golden question right that's and that's the question that I've been chasing um sometimes more successfully than others obviously because the markets are always changing but but mostly successfully um for like the last eight years is that uh that obviously changes all the time the markets they're always changing uh the nature in which They're moving

or not moving is always changing we're either for I always look at it as we're either in a fader Market or we're in a squeezer Market um and I like to think of it in my mind is a you know and generally throughout my career you know 60 80 to 80% of the time we're in a fader Market maybe even more than that you know and certain years like 2022 for example almost the entire year was a fader Market you know I I don't I maybe just tiny pockets of time where There was momentum so

so it is still going to be Market dependent which um we can talk about later if you want but but um ultimately what I'm looking for is the small pocket of time where they are going to be running volume through the thing that's all and and it it does come down to volume and and any any ticker that we end up going through you'll see that it's just a blip of volume and then it goes away and within that blip of volume there's usually a bigger player Controlling action um and if you go to the

sites of the bigger players who are the ones controlling action they tell you they're controlling action it's not even like a secret you know a lot of people on internet and on social media spe especially uh like the overall markets you know spy and people who trade Futures and stuff talk about algorithms a lot and like the algorithm but but it's kind of more obscure I guess you could say in this case they Tell you like they specialize in providing liquidity and liquid stocks and uh and and doing that without moving without affecting price basically

they're able to dump shares without affecting price too much by driving liquidity through it they say it right that's what it says on like HC Wayne Right website and um and it's pretty interesting to see that okay you know everyone's talking about algorithms that come in and you see the absolute Astronomical amount of volume that will come in at times and it's like there it's that's actually is happening you know what I mean so there's there's a couple Dynamics in play and and for me it's it's understand that all those big players understand what retail

Longs do what what shorts do what the institutional investors are doing and there embedded with the stock thems right so my goal is to find when when the institutional investors and the Stock the people who are running the stock you know the people in charge of the company are going to collaborate to push their price up as high as they can and to dump shares I mean that's really what it comes down to at the end of the day and then I try and then within that I mean that can it can all line up

but it can be a crap Market we're not in a in a in a squeeze Market Per Se and those are the times where you can still get great like this year for Example right we're in 2024 where we got one quarter left uh this year has been marked but for me by Massive gappers all year almost all year and then it's a matter of are we going to be in a squeeze Market this week or are we going to be in a fader Market because some of the markets have been spectacular for shorts in

terms of like if you're shorting pre-market or near the open or when pre-market highs rejected it's been very very fruitful but then when the Outlier trade hits and and we can talk about this later too in terms of like how to adapt to this stuff but but that's really what I'm looking for in terms of of the overall markets or small cap for me like if things are slow I'm not going to be going hard in the paint to the long side um and when I say things are slow I mean gappers fade all day

you know what I mean and there's not really any meat on the bone after the open because all all pops get just sold Into um and those markets I tend to just do certain you know things a little bit different ly but but in terms of what I'm looking for yeah I'm looking for the one part in the life cycle of the stock where there are where they are actively pumping it that is it and then for me it's just the first few days of that move if I can specifically the first three to four

days right now um and and as you'll we we'll talk about in a little bit um I've actually gone a lot Away from day trading over the last six months or so because some of the Swing opportunities have been so great but yeah yeah that is fantastic and so to kind of you know summarize some of what you're saying you at least one strategy is to look for a market where there's follow through where you know things are actually getting bought where there's widespread demand and liquidity and then looking for something that is basically on

the front side of a move and you have You know either institutions or something like that trying to run it up to you know for the eventual dump of shares and so you want kind of the market going in your favor and you want to be on the front side of that move while you have the institutions or whoever else are still churning it and bringing it higher so basically everything that a short seller is trying to avoid or kind of wait until that's done you're still on the front side of That move trying to

get in there and so in order to actually participate in that runup and to not get chopped up along the way you need uh you know once you have a setup you need a good entry and so you are huge on this and you're one of the most vocal people kind of who trades small caps on the long side to really focus on this of you know wait for a a dip that you can use to to you know participate on the long side because your uh reward to risk ratio is Better and so even

if you still only had a 50-50 chance of being right on it because your reward to your risk is much higher than someone who is chasing breakouts um you know you can have vastly better results than someone who is doing it basically at the worst reward to risk uh ratio and so you know hopefully we can uh pull up a chart in a minute but uh is that a a fair and accurate representation of how you're going about about participating in these Yeah absolutely I mean um it's what I I'd like to describe it as

like I got as far away from Tim grani as possible who does a lot mostly like I I think a lot along now for the most part which is awesome um I remember the first time I met him we were at dinner and and he told me he didn't think that it was possible to like be long because at that time he was only short selling and uh and like I said and there weren't anyone longing really like and you know it was Kind of it was interesting but but and to see now like his

biggest trades be long and and what he's done and on to the long side's really cool but uh but that was initially it and it still and it still is uh very much that way a big part of this too has to do with um well yes risk reward but obviously um when we have your HC way rights or any algorithmic uh entity pushing liquidity through our tickers um It's not just about dumping through highs to me in in my opinion and and how you and when you watch these things go from lows to highs

to lows to Highs at times uh if if I if I have more shares to dump I still need liquidity so that that to me is what is kind of what I'm talking about is retail going to be there and then uh do they have shares to dump if so sometimes just I mean just because they have an offering and you're above the exercise prices and stuff does Not mean that they're not going to keep running it in fact they'll make more money the more they can run it with more volume the better obviously right

if we're working with math here and um not that they really care at the end of the day they're just trying to get rid of you know they're dumping I mean they're dumping them so uh but why not if they can also sweeten it and make some more money and and the way I look at is like at lows if they want if they need more Liquidity if they want to turn let's get them back to highs then you know let's why not suck in some more suckers uh why not bring in more liquidity back

at Highs but to do that you got to turn it back towards ties you know what I mean and then you play the game of all right well now you're going to have shorts shorting like backside here going into the afternoon as it gets to vwap you're gonna have shorts as it gets to the next level you know the next uh previous uh Lower high from earlier there are shorts and every con consequent level all the way up to high day right where the all the shorts are now if it's going to be get to

up get up there and then maybe it squeezes so that's kind of the principle um and it can happen in really small time frames or big time frames um but yeah I'm a big advocate of that and and you know kind of the lower the better for me I guess you can say at times especially in a market like this Things that look dead in the water inaday or on you know on a multi-day level end up squeezing and breaking out when we're in the squeeze portion of the market that I was mentioning you know

what I mean so one of the things that I think a lot of people struggle with is differentiating you know a dip along a higher Trend versus you know the Stock's dipping and it's done it's failing and now you're on the back side of the move and I think that that's what scares a Lot of people from buying dips in small caps is that they're like if this is going down you know it's probably got bag holders in it now it's probably you know they the The Insider dumped and now I'm buying a dip on

a stock that's failing so how do you differentiate between you know I'm buying a dip along a trend higher versus I'm buying a dip on a failing stock and are you able to to do that in markets yeah it's uh it differs at times Um yeah and and really that is the scary question and to me though you know at this point I've been I've rewired myself to where it's kind of the opposite question you know to me it's always like um you know when I'm buying through highs it always gets slammed every single time

I know that for a fact when I get to when so basically the concept for me ends up being where are shorts covering and if enough shorts are covering and then institutional Investors are going to step in or the algorithm um that they're running is going to T take it back to highs or towards highs and it's going to keep churning volume um and I'm short and I'm profitable then where am I covering you know that's that's always usually the the question to me and uh and so I'll just go back through pre-market levels I'll

go through whatever key levels I have from the morning and and find any areas of support right at the end of the Day where if I'm a short and I see certain levels hold maybe one or maybe twice you know or I might see it break down and then a higher low for the first time U maybe on higher time frames too you know um that's what generally what I'm looking for I'm looking for good areas where shorts are in the money you know and and backside or not you never know if I'm buying a

dip you never know you know if it's a backside unfortunately that's the case But the beautiful part is it also leaves me a big margin for error I don't need it to go back to high day and through high day to make money in fact it's rather the opposite I make most of my money on situps like that by selling back into vwap by selling into previous highs in the first place so every area where subsequent shorts are going to step in post when they they think backsides in I'm also selling some shares there you

know that's that's kind Of the concept behind it um generally speaking those areas are also it's sold off a lot you know what I mean it's not it's it's O almost oversold at times right that's kind kind of the concept behind it as well so um in other words I'm not just buying random dips it's not like the first dip of the day generally speaking unless that's what certain ideas call for which there have been some like kind of early morning ideas this year based off of pre-market action Which the pre-market action has dictated a

lot for me this year of what my market actions have been or not been so um it's been a kind of an interesting year where pre-market has been super super fruitful I have some you know students I've work with who have made asinine amounts of money trading pre-market this year and um and then to me it gets to the point where I'm trading really really overextended junk already right at the open you know not it's like uh straight Up you know tough kind of tough to tough to trade so so in other words the answer

to your question is that it differs right from Market to Market there are some markets where um specifically I find slower markets where the day ones can be a little bit easier believe it or not where it's just like kind of is a little bit concentrated um and if there's you know if they're going to dump they dump right into the morning pre-market and then it pulls and it kind Of gets back to some levels of support I can trade and then um you know and then I'll take some vwap Pro I'll do exactly the

process I just told you and there's a single and then it gets slammed and Fades the rest of the day and I'm gone you know so there's that and then there's markets like this where I'm trying to be there for bigger picture moves right and that's kind of the qu that's kind of the question are we getting multi-day movers or not because If we're not getting multi-day movers then I get back into that kind of day one you know Gap and crap wait for it wait for it to dump you know try to get my

position it gives me margin for error like I was kind of trying to mention which we can look at later it gives me good risk reward when I can locate areas like that um and and I know that that at least they're motivated for today to try to dump some more shares potentially um I know that volume's there so I know Shorts are there no shorts no squeeze right so all all of those things when they line L up it can be it can lead to some beautiful trading um but but it's still Market dependent

and then even for myself it's um uh will EB and flow based on how dialed my trading is at the time I guess you can say yeah totally and you know from what you're describing I know like an investors's underground there's a lot of people who short in there and you know Something that Nate hammers home is that like if you nail something off the open if it flushes into you know that support or anything that's where they're covering to avoid basically being stuck in a clear out move back up to vwap and so where

you know good short sellers are covering that's where you're thinking about potentially going long and then as that clear out move happens maybe you get a vwap touch and then maybe it goes past that and maybe you get you know the Next level maybe High a day where you're selling some more and then maybe it works out and you get a full breakout and you're able to hang on to some of it but you're basically participating in the clear out that could turn in to something bigger as opposed to chasing something uh you know that

could be okay you know but maybe you have a 20 % chance of it actually working through high of day and instead of something where you're buying a dip so uh if You're okay with it I'd love to pull up a chart and have you run through a couple of examples so that people can see you know what this looks like visually and what it looks like in uh you know the real world yeah sure absolutely okay great all right well this is this is the one we were just talking about because this is today

this is Chinese stuff so first of all we're in the middle of sector momentum right now Chinese sector momentum uh there Were some stimulus in the China markets they went nuts but then they also had had this break this two week break you know about this you know what's going on in China yeah with with the the holidays yeah so they have like a twoe holiday in the markets meanwhile you know you got we have um all of our Chinese tickers just and and I've been kind of watching Babas and some of their big capap

if you know as a gauge for me in small cap specifically uh but this is just you Know the recent move here on baba alib baba um and you can I mean that's it's getting extended you know it looks extended I'm sure short have been kind of chopping at the bit of this but obviously small cap is kind of my realm here's Duo here's a great example of a lot of things that we actually just spoke of fang D Network okay uh they did an offering today right in the midst of all this okay they

did an offering I underestimated uh this sector but but What happened here first of all just to kind of touch on a different subject because it's really really important to me this is how I grew my account early on and so so and is a really really really uh a sector momentum man you know groups of stocks that go up together and go down together to me was always a big deal um and and and that's kind of what we've been seeing this week any s any Chinese stock uh has been going up for the

last few weeks right um so we've got Duo obviously that that chmd I didn't really trade a lot of this stuff Chinese stuff is really sketch a lot of these uh was it chmd that's running right now no damn it I forget Duo uh chsn sorry there we go right like this is a Chinese pumping dump okay this is a CH look at that there's the pump and dump from December 2023 a lot of these tickers are like China room call room pumping dumps right where they have been driving price up And then literally dumping

shares just like this overnight um so that's a lot of the tickers obviously that we're that we've been looking at but also they'll they do crazy things with them right A lot of people and and I know you've got a lot of short sellers in your community and they're Pro and I feel terrible for pulling this chart up I'm really sorry but I mean it's I'm just trying to show like that they're really sketchy but they can do crazy crazy things and this Is one of the T Tops another one from I think earlier last

year maybe or uh May was that this may I don't think that that's this may that was last May right yep uh last May right top this is they haven't split since then so this actually went from 6 to 250 in two days um and dumped you know back down to two by the next week and and um so a lot of these I've been kind of struggling with like H I hate trading Chinese pumps I just do um they're sketchy and a liquid Generally speaking but but Duo okay for example this isn't this didn't

really uh it does fit the multi-day mold that I've been kind of talking about okay it doesn't really fit the inaday mold that we were talking about because if you go back to day one of their move which I'll show you real fast because we always like to give you that kind of context the way and and just to give you more context quickly just for your viewers but I have kind of a specific way of Looking at it we talk about the life cycle of the stock right are they in just dump mode right

just low volume um everyday crap where they're just going to fade as they dump and just uh dump into every dip or every uh Spike over time okay or are they going to be fresh for pump and I'm looking at volume um but what I was trying to show you here real quick sorry hold on is this is kind of the context of the Move for me is this would be a day one I call this just a day one gapper okay because just to classify it for myself what day am I trading in the

move is very important for me uh this is a day two gapper right day two gapper to the upside this is a day three gapper so this is a 4 day gapper okay um five this is five technical Gap days for me I pretty much live in the first few days and if it's going to day two or day three I'm not trading to the long side Even if it's getting ex that's that's just personal preference um I've been living kind of in the day two and if it keeps gapping up like this there's just

not much for me this is different because this is driven by macro stuff right it's not just a r one Rogue ticker it was every Chinese ticker it was the whole Chinese market and then they took a break so like the Chinese market stopped trading and uh and our Market has left trading all These stocks over in China and I'm it's just really interested to see Duo obviously did an offering into it um which is smart okay they did this uh today okay they're holding up really well and they dumped shares it's what they do

um let me get into let's try to find a better context this is glmd from earlier this year it's also gives me a chance to talk about something else because you asked um you know so when do I trade these you know when is it okay To trade these if they're always piece of you know if they're always dumping well you can see it's not always they are they're dumping they're liquid most of the Year doing nothing fading right they're not doing anything most of the year that's the whole point most of these tickers are

doing nothing most of the year except for fading but you'll see little heartbeats like if you if I scroll out you'll see and glmd you can see one big heartbeat here but um um a Volume that's what I'm looking at you know any anytime where there's some abnormal volume and then what does it do then um in this case glmd is going to be a chance to show you something else which is oh they did a split too right they did a one for 12 reverse split this is the life cycle of these stocks they

pump the stock they dump it goes all the way back to zero they do a reverse split so that they can stay compliant with NASDAQ and get back Over a dollar and then they pump it uh to stay over a dollar right after they split generally speaking they're going to put a PR out and this is what I kind of what I was talking about also um when you understand the scam and when you understand the life cycle of these stocks you understand there there are a couple times where they're actually it's almost like insider

trading honestly there have been some grooves I've gotten and when hot when splits get really hot And when the markets are really hot there have been some grooves I've gotten in where you know every couple weeks I'm I'm long a ticker that that has a positive PR tomorrow you know or the next day so um position ing myself for a PR ahead of time which man when I got in the game and I was and I was watching PRS I'm like I wish I would know how that went well this is actually one of those

cases where and of course they can do offerings they can go bankrupt you Never know there's bad things that can happen to but but for me it just this is the one that really got me excited because there is an actual fundamental reason that they run during this period of time which is that they just did a split okay so they got to hold a buck for 10 days okay generally speaking that's it once they hold a buck for 10 days um they're they maintain compliance with NASDAQ so and I and I realized this back

in 2018 it became one of my bread And butter setups which was this the reverse split pump I used to trade it differently back in the day because liquidity was different and uh the way they traded was different uh back then I would wait for the pr to come out and then when the pr came out I would uh dip by it or try to trade it pre-market you know I would have alerts ready for it and then I I would just kind of day trade at the day of um I don't really do that

as much any anymore I I still will But my whole game now is trying to place myself somewhere prior of the pr that's always been the game but that game can get crowded right that game can get crowded now I'm not the only one who knows that happen so you'll see even glmd didn't really fade so much off of three they just kind of up ticked into a PR right so day one two three four five six seven eight nine 10 this is day 13 day 14 it's not an exact science obviously some days they

PR the same day Some days they PR day two or day three so it just depends sometimes they PR and it doesn't do anything you know often times that's the case too but um it's still it's still um a really amazing scenario to look into and it's a great scenario to teach you like hey it's not just buy through high day bro you know it's not just buy through high day it's um in fact that's the worst there that's Checkers you know there are some ways to take advantage of what I was trying to Tell

you that there are life cycles of these stock stocks there are only certain times to play them and posts spit is one of my favorite times um posts spit why well first of all they're a low float you know first of all they're a low float second of all once you start to dig in and we and we can kind of move on from this uh but once you start to dig into the scenario there are quite a few rules around uh post-split what happens and their float Size and their price and all that stuff

uh that can kind of dictate you know when and where to trade them a little bit more but really at the end of the day I don't start getting split heavy in my trading until I see a split become an outlier Runner like for the week if that makes sense yeah so basically what you're describing is that you know when you're thinking about Longs in small caps that it's it's an entire life cycle of Something happening so you can't just look at the technicals and say oh because it broke this level it's a good time

to go long but it's more about identifying you know why is this running you know what theme or what kind of H setup does this fall into and in this case this is like a reverse split kind of pump theme so now that you kind of know what you're dealing with now you can anticipate you know how does this kind of play out so if we could get like A more granular look at this like if yeah if you were to play this on the long side you know where would you be looking uh to

really get in you know could you show an example of like the dip that you might be interested in and where you'd be selling along the way yeah so so the interesting thing on on a chart like this the problem is is let's go pre-split pre pump right pre PR and here's the issue is that you can see this day and then Big Move day but for Me this is uh this is one where yeah day three day four when I get a base sub three on some of these if I can get a Bas

or a Green Day this wouldn't have really honestly if I'm if I were watching this uh because what I do is the second that every single ticker that splits the day of the split it goes onto a watch list for me all right so I start tracking it immediately there's no split that happens where I'm not already watching it and it's one of the things I Love about this is that I get to watch it first and we're going to kind of break this down this isn't actually ideal we and I you know I don't

know if we'll we'll kind of go through a few more TI maybe we'll find an ideal one um but but either way I'm looking day three day four for a base generally speaking I'm looking for a pullback towards towards a buck at times um and it's really going to be a little bit Market dependent though uh hot markets when Splits are hot and by the way when glmd ran there were some other splits that were running and that it was kind of a Hot Topic at the moment um but but at the same time this

is these are daily candles right so um getting into that this doesn't wouldn't NE necessarily set up ideal for me it's and they still did the pump right so I'll see these work at times the whole point is I like working off the idea that they got a hold a dollar but it's not always that it's not Always that uh let's get into like the morning action for that day because that's I if I don't have the swing I still look at these when they put the pr out and you can see here's their PR

okay this is here's their split right here right they just are very liquid is the issue post spit these things are a liquid so what I like to see personally is an a liquid fade okay because to me the whole premise is um the whole premise is is that as it gets down Towards a dollar they have to hold a dollar they're going to want to meaningfully move it away from there it's not always the case but but you know I I I like that idea in my mind so a lot of higher price splits

I'll kind of Miss if they do pump them um that being said morning of yeah this is another one so this this is this is not perfect either this is this is actually categorized for me under um a early morning Spike kind of idea like it Doesn't really fit in is this it that's the balance okay so first of all uh here's that pump sorry about that here's the pump okay that put the pr out after hours and it started climbing from four it got up to the fives here's pre-market at 400 a.m. pull back

to the fours got up to the sevens okay so that would have triggered pretty much everyone um it's it's it's a gapper it's a big big gapper that day uh my morning setups for morning Spikes have all been sub vaps Pools sub vwap and this in this specifically by the way and this is good for my short seller Friends by the way if you're watching um and you may have already experienced this and you may have already adjusted but this year specifically when we have tickers so this is actually is a good example because it's

still a reverse split split pump okay they put the pump out but uh it's also one of these tickers that goes sub that over seven pre-market right This has been a big deal for me all year long by the way um I have a stupid name for the pattern I don't know if we even need to talk about it but it's a it it's got over seven right from 234 has been kind of a trigger for moves to 10 if they can hold the fives that's been the premise of that trade fives or sixes um

because it's super extended right it shouldn't go it shouldn't be that extended um if it goes to seven it should be your shorts are GNA step in Shorts are already in okay when when things do like this right shorts are in I I got an emoji for y'all I don't I do you short at all I don't I I do with options but I don't with Equity okay cool um well all of our friends then you know this is this is uh the way I look at charts like this man you know literally I like

that's how I see that okay I see um I see what it is there's so much meat on that bone to the downside right um and Then they're going to Pile in generally speaking and I and and I mentally that's just kind of how I'm looking at it right this is going into high a day over here from pre-market highs um so I literally throw y'all not you but short sellers in my mind that's where they lie right so I keep that in mind um and let me see so in other words you have people

in sevens who are going to be banking when it's in the fives okay you've got kind of going up on higher Time frames is how I like to look at pre-market when you get a full pre-market and after hours on these things um but here's that glmd move again right here's that push to through seven and then here's that five hold which has also happened to be some resistance earlier in the morning and after hours previous day maybe have some after hour shorts or something like that I don't know but but this is uh this

one was crazy the thing about This move uh as well is that it also dictates what my favorite swings have also been so there's reverse split pump this didn't set up exactly how I would have like to do it but but they it certainly did um they've got that pre-market action through seven the ones that go through seven and pull back generally speaking I've seen push to 10 almost all year long um outside of a small handful of times um I I've traded it not so Successfully because it's still to me the lens and which

I trade it's extended you know what I mean it's extended even if I understand that they're taking these things to 10 all year long I've kind of had trouble capitalizing just on extension because I don't like trading extension we've already kind of discussed that so what do I do instead on stuff like that if I miss these I I don't mind I've actually really appreciated uh sitting on the sidelines On day ones this year because the the hand starts to play out for me right they're going to squeeze it and fade it day one or

uh they're going to fade day one it doesn't really matter because I don't have to get in the way either way and then what I've been looking for are day threes man day threes day threes or day or a first Green Day bounces those are the two setups this year for me and for a lot of the people I work with that have been uh the most fruitful and the Most Dependable all year long um outside of the pockets of time where multi-day stopped so that looks something more like this we're going to go for

me all year my trading process has been a lot like not caring of missing glmd going into 20 you know I zero fomo because I was going to trade it anyways it didn't set up for me um but then watching those key levels from day one for potential day three bounces right so uh you can see day one kind of getting back to Those key areas from day one okay and we're not even getting into fundamentals right now and there and there are some right there are some here's that day one I was talking about

okay um if we zoom in I'm sure let me see here right so here's a day two a week day two and and it it seems obscure and it is obscure to a certain degree because it's pre-market action for me um but levels like this I'll go back you know On kind of bigger picture time frames and I will look for any little bit of spot uh from the day one that might coincide with a level for a bounce um and then I've been looking for the swings okay this is what I call Third Day

surge this one isn't um isn't perfect there have been a lot there have been a lot of these this year okay and I think because glmd got so extended day one but um I'm trying to think off the top of my head W hlr just did a reverse Split pump right now there's their splint there's their split uh one two three four five six seven eight day fade down to six from 20s okay from the 20s uh and then they run on a PR from 7 to 20 the last few days right it's reverse split

pump for sure little bit higher price like I was mentioning but a big fade uh also I think if you go to the filings they're very dilutive as well um ffi remember that one that was a spectacular one this year uh this one Didn't really set up the way I'm trying to show you but but generally speaking what I've been looking for are the Fades on day two on low volume and then getting those liquidity traps for day three which have been really prevalent this year in my opinion um for for large portions of the

year and then when we get and and when you look and you see all these chunks of multi-days three four five moves those Third Day surge moves for me here's uxin uh day two was Kind of strong day three it took a couple days for this thing to break out and it's it's doing more stuff now um so it's not exactly perfect but it's another Chinese play first of all so it's another part of this Chinese sector I missed that and ended up playing for example KX okay I played KX this is a good example

of that actually this is a cheaper one though so this is a sub dollar okay this is a sub dollar which I I consider consider specifically tickers that come from 10 cents to be bottom bouncers and specifically 10 cents because there's actually um some laws around maintaining 10 cents for these NASDAQ plays to stay listed so it's another one of those kind of fundamental areas where you will see a lot of pumps off 10 cents also any ticker that's trading off 10 cents or below is almost certainly there because they've been dumping shares um in

a toxic fashion Usually right they've been dumping and dumping and dumping and anything that they pump into any pops they dump into so generally speaking they're also going to be bigger floats right um so I keep that in mind but also generally speaking when I trade them I trade them with like hundreds of thousands of shares and so does everyone else well not everyone else but a lot you know it's it's less expensive to take advantage of a of a stock that goes from 10 to 15 cents and Moves 50% I need to take more

shares all that kind of stuff uh so it's kind of a different environment but it doesn't really change um the move itself if we look at it and granted this also is driven by macro because KX had uxin uh pushing without it um kx's Chinese right and it's a Chinese auto company they were kind of moving just with all the China momentum they like to move in this case I was buying up some KX here and I sold some into this uh last week I think It was um that Monday was that this Monday huh

yeah maybe it was uh either way it's been a long week but uh so so that uh yeah so this is one let's get into that real fast so you can see this is a this is a little bit different like I said because it's sector momentum with Chinese plays it is dilutive actually uh according to when I looked at it last they had dumped most of their shares but they had been dumping for a long time so here's their Day one okay I was buying it on this day um because of uxin okay so

literally right up in here um I was going to make a video about it soon but anyways that because of uxin running and then they got a nice pop right so I sold pre-market the next day in the 16s it went to the 30s I was kind of but hurt but it's is what it is here's the point uh this is the day one push okay here's the day two and on specifically for bottom bounce plays and I'm just kind of like giving out all the Playbook here but so for for 10 cents is that

all right I hope it's all right so for 10- Cent plays if they go from 10 for me to 30 um generally speaking the move is to wait till they get all the way back to 10 okay and this is yeah this is discretionary I you know when we talk about what we were talking about earlier um you know how there's a certain life lifespan of these tickers that's why data says don't ever long These you know what I mean and the and I and I don't know if there's a I'm sure there may be

a way but I to me that's why but the data also can't account for this to me I guess you could say maybe it can but the discretion that's involved with the experience of understanding that there and and the fundamentals and the supply and demand that's involved of okay well they're pushing volume through and they need to dump shares so they are going to move it And that's supply and demand too right it's not just that they're dumping shares is is it's not just excess Supply they're creating demand they have to create demand to keep

the volume going anyways that's so so this is a little bit different too because Chinese momentum kept going but I see this pattern I see this pattern all the time I've been seeing this pattern all year long and before this year I was seeing it last year not in 2022 but I used to See it in 2021 um 10-cent plays they'll pump them to 30 cents generally speaking there's an offering there from earlier you know generally speaking if we go back on kxi there's probably some kind of resistance up in that area uh probably here

right uh you can see they ran on some volume back then there looks like they dumped here as well so there's obviously some stuff up in there right and that's how I look at these charts I just look back I Look at volume I'm looking where and the lifespan are these stocks these days I'm liking to play day twos this is a bottom bound so I would usually wait for them to get all the way back to 10 cents not the best idea uh so it's not the best example I'm trying to find a really

perfect Third Day surge example for you but let's check out this one apld D this is a good one recently did really really big volume and a big move they're actually in the midst of uh some Continuance on that move right so uh but this these are the days I'm interested you can see most of the days they're not really trading much much volume um but on this day here they did 160 million in early September I remember this move actually um this will illustrate two things right now uh well you can see kind of

the multi-day this has been a common occurrence this year are bigger multi-day moves where if you look back 2022 and then even a big portion of 2023 And small cap a lot of these would be one or two day moves and that's it so um so we can get into that let's get into the one minute real fast or let's see yeah we can do the one minute that's fine just to show you kind of the morning action what that ends up looking like on apld uh right here right here's that push right there right

so these are the days I'm trading a PR came out right a PR came out um a lot of volume came in in the morning so this is at 8:30 a.m. Eastern um and you get a push immediately from three to the fives that then holds in the fours right we got a little hold in the threes here so immediately for me I'm starting to watch kind of this area I'm watching for dips pre-market and I'm watching for support levels that may potentially hold later in the day um or in the morning if I'm going

to be looking to dip by right so that's all I do when we're getting into the pre-market action I start to um you Know I'll check filings and stuff like that and see if they have shares and what their share structures are and there's a lot more that goes into it right than just this but but at the end of the day just from a technical analysis standpoint and what I'm doing chartwise in the morning um I'm going uh and I'm going to chart out little areas like this um for myself just areas where listen

if it gets back towards highs and then they pull you know maybe they hold It okay that's exactly what I'm doing right then I Mark and I'm always kind of starting with um High a day pre-market highs what are those pre-market highs you know post PR where are those highs okay um if we're o if we're opening into those highs I I need to let it pull and all I want to do is see it pull to some previous levels it's kind of simple right and I keep it that simple in the morning and then

what it's going to look like to me are there Going to be two potential tra like when I look at this chart I see two potential morning trades okay um and if it doesn't set up that way for me then I don't trade them and it's really that basic and it's either going to be this right it's either going to look something like this and this is just from a risk reward standpoint and this is kind of what I was talking about if I'm just buying through highs I don't really have a semblance I mean

I can risk the last dip I can do a lot of things but the risk reward is not necessarily going to be great there oftentimes and this cuts across almost everything I do um here's that high day right so I'll use that as Max so I have two trades here once the Market opens for me uh it's either going to look something like this here here's your pre pre-market highs here's your high a day too okay uh the open price in this case because it just dumped out the gate um so generally speaking I end

up With something that looks like either this and why I like when they actually fade more in the morning is because I can if I can get this in the morning a big Panic it's even better right I end up with more reward I guess you could say and kind of less downside okay um so that's that's how I look at all these trades and when I'm trading them in the mornings uh you know I'm that's what I start to work off of okay that I don't I I watch tape when it gets down to

levels Like this and I get excited when it gets down to these levels that I map out for myself in the mornings especially when the markets are fit for them you know and then at the end of the day what I'm doing is uh price targets end up being vwap high a day pre-market highs so in this case I end up with just a few price targets here's my high a day right okay love you buddy sorry my son that was my son um all right out bud okay I'll be right there right when We're

done I'll be right there in like an hour um okay quickly so we've got high a day we've got pre-market highs and I've got vwap generally speaking those become my targets all right and I keep it pretty simple like that um and that's kind of what I was saying margin for error so if if the trade sorry I accidentally copied two of those too if if the trade doesn't materialize vwap I you know I'm basically Break Even every single time By that point it's just you know I like to take shares off there um same

high a day I take shares off at high a day and if it gets two and through pre-market I'm taking shares off so that's you know that to me has been the biggest game changer on how I play day ones and and that's Universal you know that's basically how I play them there there are definitely some um so there have been some nuances this year where have changed how I played them and even I've Played them less but but it when I play them it's still the same and the idea is that listen man when

when old me was just going to buy it and just getting excited to buy it and when all the noobs are getting excited to buy it here you know I'm taking profits there you know it's um an absolute rewiring of how I think about things okay and and because of that I found find this Mar like this margin for err for the people I teach this to it it helps them it helps them Understand that listen you're not make a billion dollars all the time you know but you can definitely make a living doing this

you know you can make a living buying the dip correctly and then selling it into into subsequent levels um without greed you know and and and becoming basically as mechanical with this process as possible that's what I want I don't want too much bias I don't want too much like it's going to anywhere crazy I want my perspective to Match what I'm doing and then I can make money you know what I mean and and I just want I want I want to know that listen yeah okay so if I take profits in the vwap

and then it goes to you know all the way to premarket highs yeah it would be nice but the rest of the time it protects me um and it's the selling into vwap like in this instance um you know if you're buying kind of the high or low or something like that for me it's the selling into the vwap that Would allow me to wait into the pools where shorts or reshoring that so I call it on this setup and across all my setups buying patience and I'm buying patients by selling with the short sellers

into the high into new highs and then I get to sit through the dips as they are going through their emotional thing and I'm just you know these are the I'm at profit Target levels you know and and that's how I like to look at it too you know people will be resorting it And then I get to use their volume for the you know now when they squeeze now I'm on that on that side of the trade where I'm long and I've been long and and I look at that as bonus for for doing

the right thing throughout the rest of that trade and then really at the end of the day I'm playing a game now of how many shares and and um and how much to size out into each level and and that come and that you know that is uh Market based and setup to setup based And all that good stuff and how extended is it what's the float you know how dangerous is my entry and all that good stuff there's all sorts of factors that go into it but the spirit of what I do has to

do with the fact that we talked about earlier which is like you know short sellers will be here and on something like apld they'll be here and absolutely they'll be there and you'll 100% be here and you're going to be here and here and here right that's kind of The mentality but along the way when it gets back towards certain lows they're going to have to cover too right at a certain point and then at a certain point if it goes through highs they all become demand and it's just a matter they're they're at the

will of whoever's running the thing or not you know so that to that to me is how I looked at it um apld ended up being a nice mold today so so here's what's great right so we get these key levels from day one well I Like to let them especially if I'm missing day one moves what was the high here look at the high the high and even look at this day one for example the range on this if you look at the range through high a day right it I mean you had another

50 cents or so there uh but the meat of the bone here was all sub High a day you know I was kind of trying to mention that like I use the range that's given and then just try to sell into the Highs on that range and when I can do that I'm generally speaking making money you know um here's day two for me watch this right here's day two and this is what I've been trying to tell you about this year specifically um why I've been doing what I've been doing on the swing ideas

which are day massive volume day one right on apld specifically on these it's got to be 100 over 100 million in volume and there's got to be range and I'm talking About the swing trade idea now because we just talked about the day trade idea which is the dip byy based off some support from pre-market or you know ideally maybe you know days before or something there's some you know you can go left and find something for the ones that I can't and I don't hit the day one and even if I do hit the

day one these days I don't stop it doesn't end up I don't end up in fact I'm more excited for it um and I and I hope they run Without me when I'm wrong because I want them to have more range and more volume all day so if I miss that morning trade these days I don't even care you know I and in fact I'd rather um at times not get in the way of that and wait for this idea which is uh the third day surge idea okay uh Third Day search idea and generally

speaking they're gonna have a drop on day two and um or or some sort of fade on lower volume okay and you're gonna have a ton of Volume on day one okay um and the idea is to find that base hopefully it's going to base at a meaningful level from day one or in or around that and I can and I can play the same game Sorry that I play on that five minute time frame and that one and 15 minute time frame on day ones in the morning I can take that idea on to

this 30 minute time frame now right we got the P the highs to 570s a day two pull in the morning um and then a hold all day on low volume compared to Day one right key levels holding very nicely and that and that same thing right so same risk idea from day one basically becomes risk idea from day two um some support hopefully and this is the third day Surge and what you end up with is a lot of short volume that may not have be able to cover or waiting for this thing to

you know get slammed all the way um you're going to have shorts step back in right absolutely you have shorts stepping back in here on day Three when it starts to pop up on lower volume right just based off these highs from obviously the fives from uh previous days so you get this Dynamic right and for me it becomes the same game of how do I sell there does that make sense how do I sell there and then these days um at times we get upside down shorts and then you get nice squeezes right so

so to me um these are the two setups right now for me well there are more you know and there are More ways to factor in and for example like this could also have been a reverse split pump and then it does this right so what's the biggest picture that I use the daily for that okay what's the biggest picture on the setup I usually use the daily for that um you know even you go back on the daily this is the weekly you'll see it's running you know up in here it's going to running

into something right something you better go see what that something is but but That's it man that's that's pretty much the gist of you know there's a lot there are so many nuances to this obviously but but the gist of where I like to play is that and hopefully they're going to be pumping you know that so you know a lot of reverse splits um some of the 10 cents stocks like I mentioned whenever there's sector momentum like we see like Chinese stocks go off you'll start seeing Chinese stocks PR more um all that good

stuff you know So yeah that's that's fantastic and I think that that you know the visual of just showing like your risk versus the reward a lot of these you know day ones they have a press release or something and it's like what is a good time to actually try to get into those and you know you can see like with something like uh apld even though it never really broke the uh you know it didn't get too much above like the the high of days or like the pre-market highs you could Still have a

lot of you know gain in there by being patient by waiting for that morning dip and then you know basically uh where like the initial round of shorts are covering that's where you're entering and then you're looking at your targets through vwap through um was it pre high up days and then pre-market highs or those are your three levels yes sir I keep I keep it pretty basic like that you know and and then at the end of the day we're in a Game of maximizing our trade so if I find myself too often I'm

you know where I'm like damn I took too much off I scaled out too much too soon I just adjust and then when I find myself being too patient with shares and I'm giving back gains and then I adjust and that's kind of for me the cool part about how I play day one gappers is that you know obviously there's discretion involved and what's the pr and what's you know everything else that goes down but in And of themselves like I let the results kind of guide me a little bit for myself right like oh

man we're in a squeezer Market or we're in a fader market and that's what I'm trying to find out um which yeah so so you know hopefully that was a little bit of a you know what what the main part for me which I realize over time and the more I got into the filings and the price action and the shorts and everything this is why I got into Trading okay I used to play Blackjack and I used to play Blackjack to get that little tiny bit of edge over the house and I would count

cards and do all that crap only to get this still one to one one you know on my trades and they all end up looking like one to one basically and I'm either going to make 10 today on this hand or I'm going to lose 10 outside of blackjacks and whatever else or you know 20 or 50 or 100 at a time and to me the the thing that attracted Me to trading was the ability to figure out ways to risk smaller amounts to make bigger amounts you know and and specifically with all the chips

that are stacked against Longs and especially on day ones for me um when I'm trading them but um it's if my trades don't look like this every time I don't like trading them you know I'm not going to especially when I know they're dumping and stuff like that I need that if I know that uh especially Because listen this setups like this when I trade these I swing about 50 to 60% some months much better some much some months I can't hit these at all bro like like just being real that's reality there are some

months where I'm just laying off of them because I don't really have a good feel of how they're running them or if they're running them or you know all that good stuff and and uh um and that's fine you know that's same for all my setups but but when They're dialed that's what that looks like and I need it to look like that because when they're not dialed or even when they're dialed and I'm and I'm batting 60% you know it's very profitable when when I can have uh profiles like this and and to me

it's just been one of the biggest game changers ever you know in terms of my trading was to be able to look and and just this is how I look at it in my head you know what I mean but but just to Understand that's what's happening and um um is a big deal if I can make all my trades look like this it not only gives me margin for error within my trade but it gives me margin for ER over the next thousand trades if that makes sense yeah yeah definitely and so just to

to kind of get into a little bit more of this just uh you know for the audience and for myself so you know day one Gaper something that's still holding up the move is not done yet morning dip you're Looking for maybe that the volume to to change a little bit from you know the sellers to basically run out for it to stall a little bit you're using a a pre Market level um you know looking left and so basically that's where you're trying to position into that and then you know where are you wrong

where do you stop out is it you know if it's underneath that level or are you looking for certain type of action under that level where do you stop out so it Depends on the thesis behind the trade but generally speaking on this it's literally when that when this line crosses I'm just done and I and the thing is I sit there and I will also watch that level to see if they're going to trap especially if it's especially if it's uh still extended and stuff like that and I feel like it's going to be

a shortable level like if it snaps I'll watch for traps there um for example say like this low is pulling this low is at Four uh or maybe a little bit higher and I watched it you know trap into actually four or like a whole dollar level or something like that and I see a low snap into that and I get stopped out I'll watch for a re-entry but most of the time that you know the thesis for me is well there's the low they're going to push it back towards High day you know and

um and I just don't really ask too many questions I don't like I don't like to Um I like to keep it very very simple for myself the whole beauty of this and to maintain margin of error I have to maintain this because if I do this every time and I start to let this slip every single time or I want it to test or I or I'm playing one to one all the time or one to you know three even for me is not good enough oftentimes um it just it it just isn't it

for me over time I can't I can't I can't enjoy the benefit from the upside as much because I'm leaking so Much the 40% of the time does that make sense so like I I make sure that um I like to look at it like if this Line's broken and I think low of day has been set and the higher low and this should be low of day then I'm actually wrong the second it goes through it right so that's the way I've always looked at this trade that makes perfect sense and yeah so basically

your your thesis is that this is the low of day and I'm using That as my risk level and if that breaks you're out and if it sets a new low of day then maybe you'll try the trade again maybe the problem is a lot of people will get sucked into that especially if and just this is my experience teaching this as well people will get they'll be like yeah that's amazing they get away from like chasing through highs and stuff like that um they want to dip by lows and sell it the way that

I've been describing um and They're literally just the first thing and I did this too when I started trying to dip I was like the first dip I'm just trying to get in on the first one minute dip you know the the biggest advice I can give to help for this is like get on a f minute time frame maybe you know if it's not reversing on that that kind of time frame um you know I mean the one's okay but 10 15 minutes in you know generally speaking is is what I like to give

these things the morning pools These days it again this is going to depend on strength of Market too right when we're in really strong markets the pools are not going to be as great oftentimes the danger is is like buying every dip on a fader it's it's not that's can be that's generally speaking so that's why I say I want to know if I'm in a squeeze Market or if I'm in a fader Market because if I'm in a fader Market yeah you know what and I don't mind actually I don't mind fader markets At

all and all that I'll adjust okay all that I have to end up adjusting across the setup is I'll take this like this watch I'll that's the setup then that's just the setup for me when we get into fader markets we do that and then maybe I'll get one of these bad boys right if if that breaks down and I have a two-level kind of kind of chart like this where maybe I only have two ideas for the day on it um but generally speaking I like to let things sh and sit Low and I'm

not going to be just dip buying and dip buying and dip buying for no reason you know I don't like getting stuck into that um but if it if it does you know then we're play it's the same sort of thing that's what I like to do I'll I'll just adjust my expectations across the trade and still just bad a single and that's kind of how I look at it you know it's either I'll take away all the other price targets man when I'm struggling and I'm on my dip buys too I'll do that and

then I'll actually do one of these bad boys and I'll cut that in half sorry I'll actually arbitr barely cut whatever my price Target is in half and take some off there so like just to get the ball rolling for myself these are just little tricks um for myself that I've used over time and that have helped some other people I work with you know yeah definitely and then it was also super interesting how you know this is your kind of day one Process if you're looking for a dip Buy on a name that could

potentially move higher or at least you know you have some mean reversion back up to vwap or something but then you also talked about you know this is kind of like the first start and then you know uh you can get uh the volume on day two to kind of dry up and you can get a liquidity trap on day three and a lot of people and investors underground are familiar with the liquidity trap setup so it's just Nice to know that you know even if you weren't able to get the dip byy on that

first day that there still potentially might be an opportunity there in two or three days or something where the volume dries up um you know then it starts to creep back up towards the highs you have the volume come back in you have some shorts upside down and you can have an entire other setup there so yeah those those first day uh dip buys and then the liquidity traps those seem to be like Some of your go-tos and then you know as long as you can control your risk reward uh and you basically have a

pretty tight stop on that then it seems to really work out a lot and this so this real quick before we kind of get move on but that's this is just the way I contextualize the third day surge idea in my head and first green day balce too so if this were a red day and another red day maybe the first red day only faded to five and then we got another Red day you know and then we're having a first Green Day same context to me a little bit different because I like this three-day

move that they're doing but but same thing man so I'll take whatever the levels were from day one of the move and those become price targets um any any you know meaningful levels of support like I look at this and I look at like five right as as a level that may now act as some resistance um it was some support on day One on the 30 and pre-market and all that good stuff at a whole dollar level here after hours right it's reacted to it um pre-market the day it ran all that good stuff

right so I'll look at levels like that too and that becomes a price Target that becomes a price Target and then and and really this is kind of how all my trades end up looking like you know if I'm playing a first Green Day balance or whatever else it is I'm going to use what's been given to me I'll Hopefully there's some more juice in it and there's good macro and I'm in a good Market uh to do this sort of thing you know because if we don't if we don't get good day ones we

don't get good day threes right we don't it's not it's if they're not good day ones it's not everyone kind of suffers the shorts and the Longs right um so it's we're in an amazing market right now where I where these are viable ideas and um there are going to be markets I'm sure very soon Where these are not viable ideas so I'm just trying to hit them while they're here you know yeah and I know that earlier you brought up like you know the ideal kind of day ones it's something with either a catalyst

uh it's something with you know tens of millions of volume something that is like an outlier day it's not just like a random pop on a PR with a million you know shares traded you're looking for something where it's like this is one of the the hottest Names of the day it's going to attract the most short sellers the most longs it has you know an institution uh you know possibly playing something in there so like you have all Market participants in on this and that's how you get a good day one and then those

are the names that turn into good liquidity traps is if the volume dries up and then it comes back in is that correct 100% yep that's an excellent excellent description excellent description especially I mean You look day two you have the morning Panic uh that's pretty much the most volume then it died off uh day one same I mean that's a $ 30 million you know 30 minute candle and 30 million share I'm sorry first few candles of the day it's a lot of volume the basic the basic profile of that is over 100 million

shares for me 150 depending on the price of the stock and then on day two I want to see that decline to usually sub 20 million usually sub 20 you'll see them Drop down to three five million they'll go from 150 to three million the next day you know so I've seen some of those and and that is the kind of the meat and potatoes of that but between those two ideas you know I think it kind and then the reverse split pump should give the viewers a pretty good sample size of just some of

the many things that I do but those are kind of the meat and potatoes from a bigger picture level of how I like to look at risk and um and This that this obviously there's more not getting into like reading tape and level two and um and and then the fundamentals themselves obviously which um we could talk about you know obviously all day but but but this is the meat and potatoes in terms of the technical analysis and it still gives the big picture ideas of what of what I'm leaning on there so so that

was just incredibly helpful for people to see uh you know someone who is a long biased Trader in small caps that's how a professional is approaching the market dayto day of you know looking for these big uh you know first day Runners things with a ton of volume things with a Reason to Run they're attracting the attention of all the market participants and then if they get a a dip in the morning you're looking left you're looking for the volume to change and you're using that low of day as your risk to be able to

basically trade it up Or participate in the move or the clear out move up to uh vwap high of day pre-market highs and you're locking in at those levels and so even if the stock never ends up breaking high of day you can make money whereas someone who's just kind of stumbling into the market waiting for that high of day break and that gets rejected they're losing money on the exact same stop so that is just incredibly helpful uh for you to walk through that and then uh also if you Have those names on watch

but you don't end up trading them the first day they can be on watch for two or three days later when the volume dries up when they kind of go sideways or they dip and then you have basically it starts to creep back up again the volume comes back in and those shorts who were basically nailing it from day one and maybe some other people they now have to cover and like you said those shorts now become the demand for possibly the next leg up And you could trade that so those are real world strategies

that work those are ways that people can uh actually trade small caps in a professional way so Roland just thank you so much for coming on for explaining all that and do you have anything to to add before we uh wrap up today hey man yeah no absolutely thanks for having me on hopefully that helped some people out there just uh give them maybe some different ideas and maybe some short sellers can help keep Them safe because you know a lot of people are like shorts versus Longs I don't ever look at it that way

you know we're all kind of retail brothers and sisters here and and I and you know if if if it may help keep a couple shorts safe on some situps that they have been you know losing on then great um and and for the Longs yeah just understand that you want to be playing more chess more chess and less Checkers at the end of the day you need more uh to your system You need more variables to look at you know the fundamentals understand what you're trading in the first place I know that's Nate's always

been a big advocate of that you'll hear say know what you're you know know what you're holding know what you're trading absolutely if you don't you got no chance you know for the Longs especially in my opinion you got no chance because the the odds are stacked against you these things go down all year all the time you know there's Nothing there's nothing more to it they go down all year so I'm so for the long side but when they do go up they can be absolutely explosive right they can be amazing so so the

idea is be there when they're pumping be out of there when they're dumping and that's the case right uh be in with the shorts when they're covering and be out when they're when they are also shorting um all that good stuff I want to be there when they're covering I don't want to be There when they're short selling I don't want to sell with them and get out of my positions in the right areas and um and really you're being contrarian you know you're taking your what you thought was right is wrong in my opinion

what at least for me I couldn't couldn't make it work to buy through high days and buy breakouts thing couldn't work for me and um and I think that there's a really well I don't think I know there's a huge fundamental reason why why it doesn't Work because they dump there like and if I had millions of shares to dump I dump there too right and sometimes I have millions of shares you know because I buy them and that's where I sell them too so like you know specifically obviously the cheap stocks but but um

but that's it man I I love your guys' show and what you're you're doing and I appreciate you having me on and hopefully we help someone out today I I know that we did help people out and I Think that people are going to get a ton of value from this so Roland thank you it was a pleasure to have you on and we'll talk soon Hey Brother appreciate you we'll catch you soon thank you for tuning in to this latest episode of trading takes don't forget to hit the like and the Subscribe button and

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