How to Grow a Small Account with ZERO Experience (Full Training)

[Music] If you've been struggling to figure out the best way to grow a small account, in today's episode, I'm going to walk you through my exact stepbystep strategy of how I would grow a small account if I were starting over today with just $2,000. And better yet, I'm going to put my money where my mouth is. This is episode one of my brand new small account challenge. I have reset my account to $2,000 to commemorate a pretty big milestone. I just crossed $20 million of fully verified trading profits. Now, as part of this new small

account challenge, all of the profits that I make will be donated to charity, and I'm going to give you the opportunity to help me double that donation. I'm going to do a match. So, for every person that hits the thumbs up on this episode right here, or becomes a subscriber to our channel thanks to this episode right here, I will add an extra dollar to that match. And let's begin this episode with a pop quiz. All right. So, we're going to start right here on the screen share. You're looking at a chart and I'm Going

to ask you right here. Should I buy? Should I buy right on this little spot right here? Now, many of you would look at this pattern and say, "Look, the price went up, it went sideways, it went up, it went sideways, it's gone up, it's gone sideways. I should be a buyer right here." And you would be dead wrong. Here's the problem. This is pulled back just a little bit too much on this dip. And this technical indicator down here crossed from being positive to negative. That crossover right there tells me that this is not

going to work. Now, if you don't know about that indicator yet, don't worry. You're going to learn all about it in today's class. Let's do another pop quiz. What about this one here? Now, once again, we've got this nice rally up, but based on the last pop quiz, you're probably looking right here at the MACD and thinking, "Nope, I should not take this trade." And you would be right. That is not a good trade to take. This told us to stay out. That crossover right there. Now, what about this chart? In this case, you might

look at this and say, "Well, wait a second, Ross. This indicator looks positive to Me." And you would be right. And if you took this trade, you would lose money. Hm, what was going on here? In this case, there was more selling than there was buying. So, the imbalance was to the sell side, and the pattern therefore did not resolve in the right direction. Now, all of these are examples of big volatility. We don't make money as traders buying things at $5 and selling them at $5. We'll make money buying something at five and selling

it at 10, 15, or 20. And it's crazy, but we see that kind of momentum nearly every day. So, what about this pop quiz? Should we be a buyer right here? The answer is no. We've got higher volume to the sell side. And the MACD, although it's still positive, this technical indicator, it is getting right across into the negative, which means even if it bounced, the bounce would be short-lived and it would continue selling off. How about this one? Well, now in this case, I like what we're working with here. We've got a nice rally

up. We've got nice green volume bars. the MACD is positive. I would say this is the type of trade I should be taking in my small account. And sure enough, If I had gotten in that right there with even just let's say 500 shares, this could have produced a profit of more than $500. This went from 5.40 up to 640 all the way to $7 a share. In fact, a 500 share position could have produced over $750 on this trade. And this is the type of trade that I'm going to be looking for on day

one of the small account challenge. Now, what about this setup right here? This one is a little tricky. You can see that it made a big move earlier. And so, there might have been some opportunities in there to trade it, but now it's been going sideways. The MACD basically flat. The volume profile, a lot of selling. This is not a setup that I'm going to be trading on day one with a small account. It's just not worth it. What about this one? Here we go. This is something once again I can wrap my head around.

We've got a nice rally, a pullback, a squeeze up, high volume buying with those big green candles. This technical indicator is positive. This is a trade that I would take. And this is a trade right here that would have produced some really nice profit. An entry at $45 with an exit up around $650 or 7. That's over a Dollar a share. Those are the types of moves that we want to be catching. And I'll give you your last pop quiz right here. Once again, we've got a nice rally up. We've got some good rate of

change. We have a pop here. Nice volume. So, what's the volume telling us? There's more buying than there is selling. What's this indicator showing? It's positive right here. We're in the green. And so, this is an entry where I would take a trade and look for a rally through the new high. This ended up working out very well from 580 all the way up to 6, 650, 7, and a little higher. Now, just because I'm trading with a small account doesn't mean I'm going to trade penny stocks. In fact, that would be a mistake because

the the stocks each day that I have found are the most popular are not penny stocks. They tend to be stocks priced between generally at least $2 on the low side and anywhere from there up to about $5 or $20 a share. Now, many of you know this is not going to be my first small account challenge. The small account challenge that I'm probably best known for is when I fund an account with less than $600. It was $583.15. And in the first 45 days, I grew the Account to over $100,000 of fully verified and

independently audited trading profits. That was just 45 days. Now, I continued to grow that account all the way to the big profits that you've seen in all of my recaps. In fact, that's the same account that I'm continuing to trade in every day prior to this reset back down to $2,000. So, in that challenge, if I'm going to be honest, the most exciting part was the first month. That first, even the first couple weeks of trading with such a tiny account because once the account was more than $25,000, it wasn't a question of if I

could turn it into a million bucks. It was just a matter of how long it would take. So, I thought the the part of the small account challenge that will be the most interesting for you will be these first few weeks. And so this reset back to $2,000. It's not with the intention of growing it to five million, 10 million or higher. I've already done that before. This is really just to demonstrate how to trade in those first few weeks, maybe the first month and a half as you're building your cushion and gaining momentum because

that's where it's really critical. So during this challenge, I'm going to be doing something a little different. resetting my account to $2,000 as you already know and I'm going to be documenting the entire process with daily YouTube recaps, PDF resources, and live trading archives for members at Warrior Trading. So, I'm going to put a link right here where you guys can download the documents for my small account strategy worksheet and the day one trading plan. These are PDF worksheets that you can download, you can print them out, and you can utilize them in your own

trading. to follow along in today's class. Make sure you download these PDFs, put them on your desktop or print them out, whatever you prefer. And let's go ahead and get started with step one, beginner mistakes to avoid. The first is trading without a strategy. Over all my years in the market, I've come to learn that traders will fail generally for one of two reasons. The first is because they come into the market with a lot of enthusiasm. They're excited. They fund an account with real money, and they start just buying a little bit of everything.

Maybe they hear about a cryptocurrency or they hear about a hot stock, They buy a little of this, a little of that, and they may have some beginner's luck, but they don't have a system. They don't have a strategy. They don't have a set of rules that they're following that dictate risk, reward, when they should buy, when they should sell. So ultimately, that beginner's luck will run out. Now, the good news is that shouldn't be any of you after today's episode because during today's episode, I'm going to provide you with an actionable strategy that you

can implement in your own trading starting today. But the second leading cause of failure is a little trickier. The second leading cause of failure comes from traders who have learned a strategy, but they lack the discipline to follow the rules of the strategy. And so, this is what I'm going to tell you. I'm going to give you the strategy, but you need to bring something to the table as well. You've got to bring the discipline to follow the rules that I'm going to give to you. Now, you might think, Ross, why would I ever break

the rules? This is a strategy that works. It produces profit. I'm going to follow the rules. And I hear you saying that, And yet even myself from time to time break the rules of my own strategy. Why does that happen? Unfortunately, it happens because of emotion. Emotions get the best of us. Now, we're going to talk about emotional conditioning in a moment, but first, I want to remind all of you that if you're learning this new strategy, you should practice it in a simulator before putting real money on the line. The benefit of sim trading

is that you get to actually test out these new strategies and techniques that you're learning. And if you lose money, no harm, no foul. It's no big deal. And if you make money, that becomes your proof of concept that maybe you could justify trading the strategy with real money. So, I'm just going to tell you brutally honest truth. If you can't make money in a sim, you've got no business putting real money on the line. So, please pay your dues and take it slow. And I should remind you, my results are not typical. I've been

doing this for a long time. For those of you guys tuning in maybe for the first time, my name is Ross Cameron. I'm a full-time trader and I funded my first account in 2001. That's more than 20 years ago. And I Was interested in the market trading essentially in a paper trading kind of simulator in the late 1990s. So, I've been doing this for a really long time and that does give me an edge. Now, what I'm happy to do for you is share with you as much of my edge as possible. And while I'm

trading in real time over at Warrior Trading, I'm giving you my market commentary. So, I'm helping translate what I'm seeing into plain English that you can understand because I'm at a place where I've got a lot of educated intuition from all of my experience. so I can see sort of the subtle hints and and cues and clues at what might be about to happen and it takes time to develop that. So I want you guys to practice in a simulator before putting real money on the line. And when it comes to the best stock market

simulators to use, there's really three that I'm going to lay out for you. Think or swim. It's totally free, but it doesn't give you your metrics. So you have to use other data to generate your metrics which will tell you your accuracy, your profit to loss ratio, the time of day you make the most money, the price stock you make the most money and things Like that. So Thinkorswim with Charles Schwab does have a simulator. It is free, but it's not ideal. Weeble has a simulator that is pretty solid. It's pretty decent and it's $9.99

a month, but also doesn't include metrics. At Warrior Trading, we have a simulator as well. It's not free. We have to charge market data for all of our members. We will aggregate all of your data. So, it's included. And we include this simulator as part of your Warrior Pro membership for free for 90 days. So, it gives you guys a chance to test it out. But between these three simulators, you can make either one of them work. Any of them work. It's really your choice. But, I'm going to be a big advocate of practicing in

a sim before you ever put real money on the line. Number three, emotional conditioning. So, as I said at sort of the beginning of this little section, developing that discipline is one of the biggest skills. Now, one of the things that I do here on YouTube is I upload my recaps every day, whether it's a red day or a green day. So, you can see this playlist I have of my biggest losers of all time, starting with the biggest red day I ever had, which was $275,000 in the red. And I'm knocking on wood as

I say this because I certainly hope not to exceed that with an even bigger red day. But to me, if you're a trader and you're trying to never lose, it would be like trying to be a skier who never falls down. There's nothing wrong with falling down when you're skiing. In fact, if you don't fall down, it probably means you're not pushing yourself hard enough. The same can be said for trading. If you don't have losses, you're probably not trading at the edge of your comfort zone and you're not growing. So, it's okay to have

losses. Now, how do we reframe the way we think of loss to not be devastating and painful and something that causes a big emotional reaction? Well, the secret is becoming a really good loser. So, I'm an excellent loser. I'm a huge loser. I'm a massive loser. Well, over the course of my career, I've lost a millions and millions of dollars, but I've made millions and millions more. So, the best way to become a really good loser is to start with small size in a simulator. become comfortable experiencing loss in a trading simulator. Then once you've

produced enough profit In the simulator that you can sort of understand that the strategy you're trading is working, it doesn't have to be producing millions of dollars, but it's producing a little bit of money, 10, 15, $20 a day. You want to transition early on to trading with real money, but super small size. That could be one share, could be 10 shares, it doesn't matter. just really small size so you can once again start to become comfortable with experiencing losses. Except this time it's real money. When you trade at the edge of your comfort zone,

that's where you'll see the most growth. And so you'll see during certainly a hot market that when you watch my recaps, you'll see me have really big green days, 100, $200,000 green days. And you'll see me have pretty large red days. And some traders are like, "Wow, you're being, you know, what's happening with these red days?" And I say, "Yes, red days will happen. $10,000 red day, $25,000 red day. What's important for me is that I never lose more in one day than I can make in one day. So, I cap my losses, but if

I'm not taking risk, if I'm not pushing the edge of my comfort zone, I'm never going to have the big winners That come along when things work out the right way. So, if you become emotionally compromised, it's really important to recognize that and to stop trading immediately. If you continue trading after you've become emotionally activated, you're very likely to begin a downward spiral. So, what does a downward spiral look like? Well, for a lot of traders, it begins with a poor track record. So, in the example that I gave at the beginning of traders that

lose money, a beginner trader comes into the market, maybe has a little beginner's luck, and the next thing you know, loses 10 grand. And that may be some of you watching this class right here today. In fact, it was me. It was probably almost all of us. We come into the market a little overconfident. We lose money. So now the experience of losing money and I'll jump onto the whiteboard here to kind of draw this out a little bit more. So you lose money and then what happens? You feel sad. You might even have a

couple tears coming down. You might even have tears on both sides of your face. You're very sad. Now just because you have some tears um it doesn't mean the world's ending, but in the moment you're Very sad. So when you feel that sadness, what's your instinct? You want to make that sadness go away. Now maybe you're feeling anger, frustration, but you feel a strong emotion and you want that emotion to go away. So the fastest way to no longer feel angry, sad, disappointed, whatever, would be what? Well, to take another trade and to make money.

So what you're going to do to make the money is to take more trades. But because you don't have a strategy in the first place, what's going to happen is you're going to lose more money and then you're going to be even sadder and then you're going to trade even more and then you're going to lose even more and next thing you know what's happened? You blow up your account. You're gone. It's the death spiral. And I don't want to see that happen to a single one of you watching this episode. So developing an awareness

of this downward spiral is really important. So if you see it starting to happen, you realize what's going on. Now, the opposite is a positive feedback loop. And I'm going to teach you a little bit more about that later on in this class. So success as a trader means separating emotions by using A trading plan. If you're following a trading plan and you're being very systematic about it, then a loss becomes less emotional because it's not any fault of your own. It's well, I followed the rules of the plan. The plan has proven over long

stretches of backtested trading data that it is profitable 70% of the time. So this loss is just part of the 30% of the time that it loses and that's acceptable. It's there's nothing wrong with that. Uh number two, build emotional intelligence and awareness. You can do this by analyzing your own performance and by journaling on your reactions and the emotions that you have while you're trading. So putting words to the way you're feeling. I'm feeling pretty angry right now. I feel like I'd like to flip my table upside down. I feel like I'd like to

throw my laptop out the window. Just say it. Because if you're feeling that strong emotion, it's better to put it out there so you develop that awareness of is this the moment that I should continue taking high-risk trades with real money because the answer is definitely no. But as a beginner, if you're not aware, then you'll just keep trading and then That's when this feedback loop just gets bigger and bigger. Number three, focus on high accuracy. By focusing on the highest quality setups, and for me, the highest quality stocks, my accuracy goes up. Higher accuracy

improves self-confidence. So, when you have greater self-confidence, you'll feel confident trading more, but for good reason. And you'll likely feel confident taking a bit more risk, and you'll likely see more profit. And number four, you've got to make sure you're using the right tools. I can't tell you the number of traders who have come to me and said, "Ross, I'm struggling with trading." Da da da. and I'll say, "Well, what what broker are you using?" I'll just ask a general question like that and they'll give me an answer and I roll my eyes. I think,

well, there you go. That is part of the problem. Okay, step two, setting up your trading account and using the right tools. So, we're going to start with choosing your broker. Okay, so when it comes to brokers, there are dozens and dozens that you can choose. And in some ways, you could say out of all these brokers, they must all be fairly similar. And although you're right That generally speaking they are, they also have some really substantial differences. And if as I look at this list right here just on the screen share, there are at

least two of these brokers that I would never ever use. So, do you know which ones those are? You might not. Now, the good thing is I have done fulllength platform demos and broker comparisons on all the major brokers out there. So, if you're struggling to figure out the best broker to use, there's more content that I've already got that answers those questions and will be kept up to date even months and years in the future. But generally, what to look for in a broker is number one, a platform that's reliable and is popular among

big money traders. So, if you look at big money traders, I guess I would say I'm a bigger money trader. Um, you know, in the sort of grand scheme of things, there's certainly people that are bigger than me, but nonetheless, um, you know, what what's the broker that I'm using? And then you look around at other traders. What are the brokers that they're using? And if you are choosing a broker and you don't see any really successful traders using that broker, that Should be a red flag. So use a trading platform that has been vetted

by traders who are far better than you because that's a good indicator that it's a broker worth using. Number two, you need fast order execution. Fast order execution is the latency between when you place your order and when it actually comes back from the market. Number three, you need full level two market data. This is market data which tells you all the buyers, all the sellers, and every transaction that occurs on the market. It takes a little bit to get used to how to read it, but once you know how to read it, it's a

critical tool for you. It will give you an edge over traders who don't use it. Number four, it's important to have hot keys for rapid order execution. So that means with on with a hotkey, you just press buttons on your keyboard. You can have a separate keypad keypad and when you press those buttons, they're immediately going to execute orders. That means you can get in faster and you can get out faster. It's important. You can have a winner, but it's not a winner until you sell. So, if you're fumbling to figure out where to press

the sell button and how to enter the Number of shares, next thing you know, that winner could turn into a loser. And then number five, it's great to have a broker that allows simulated trading so you can practice before going live. Okay, so these are the basics of what to look for in a broker and then you've got to learn the trading platform once you've selected your broker. So I have again platform demos where I walk you through how all of these platforms work and I've done platform demos for all the major brokers out there.

So if it's a broker that I would consider to be worth trading with, there's a really good chance I've done a platform demo on it. So in those demos, I teach you how I would set it up. I often share with you my exact layout so you can use the platform the same as I do. And I've also got my broker comparison sheet which I usually highlight during those episodes where I rank the best brokers and I'm I don't hold back. I share with you the brokers that I don't think are very good. And I'll

tell you right now, just so you know, I have no affiliate relationship with any of these brokers. So, it makes literally zero difference to me from a economic standpoint Which broker you use. But it makes a difference to me from a moral standpoint because I don't want to see you using a broker that I think is going to set you up for failure. So, I'd like to see you guys using the right brokers. But I just want you to know that there's not a conflict of interest here because I don't get paid. I have no

affiliate relationship. So, use who you want to use, but watch these episodes and you can look them up right here on my YouTube channel to have those deep dives of platform selection. So, learn the trading platform, choose the broker, and then program your hotkeys. So, the hotkeys are fairly simple to script. This is my keyboard right here. And the way I have this set up is shift is always my buy button. So, shift 1 2 3 4 5 etc. is for buying shares. So, 1,000 2,000 3 4 5 6 7 8 9 10,000 shares. So,

just like that, I can be placing my buy orders. So, shift is for buying. You've got to hold it down and then press the command. And then control is for selling. So, for me, control Z is my panic button. I press that to sell my full position. Ctrl X is to sell half. Crl C Is to sell a quarter. So you you want to learn how to set up those commands. You want to set them up, of course, the right way. You've got to make sure you test them out, but those are going to be

critical for you to be able to move in and out of the market quickly. And this was setting up your hotkeys. And this is sort of the example of some of the hotkeys that you could set up. I also have standalone episodes uh specific to setting up your hotkeys for those of you guys that want to really do a deep dive there, but I'm a big advocate of keeping it simple. Don't add, you know, dozens of hotkeys all at once. Start by just memorizing the simple necessary ones. Buying, selling, and cancelling orders. So, these are,

let's see, right here, we've got one, two, three, four, five, six. Buying a thousand shares, 2,000, selling full, selling half, selling quarter, and then canceling all open orders. And maybe for you, you change this to just buying one share or buying two shares. That's fine. It could be 20. You could change that how, you know, and I'll show you how to do it. But you set up your hotkeys, you keep it simple, and then as you gain More experience, maybe that's when you decide to add some of the more complex hotkeys. All right, so number

four, it's time to fund your account. And this, of course, would be after trading in a simulator. Funding accounts with most brokers is super easy. You can link your account, your bank account to your trading account, and you can fund electronically and it goes through immediately. So funding the account is the easy part. The hard part is choosing the broker and spending some time learning the platform. Okay, so now that you've chosen an account, you've got to decide well and chosen a broker, you got to decide how much money do I want to start with.

So when it comes to account size, I have a goal that on a good day, I can grow my account by 10%. That's on a nice green day. So funding this new account with $2,000, that means for me a good day is going to be 200 bucks, right? So the question for you of how much should I fund my account with will be based a little bit uh that so that' be 10% um plus 10% one day will be a little bit based on what your daily goals will be. Now look if if you're going

to say Ross my daily goal is you know $20,000 so I'll just set Up a couple million dollar. Don't do that. Don't do that. Start slow. Start with a $2,000 account. Start with a $1,000 account. Whatever. Start small and build up. But in terms of what is realistic for me, that may also be quite different from what is realistic for you. So if I have a daily goal on a good day of growing my account by 10%. I'll hope to have two to three really good days each week. Okay? So then my account's up 20

to 30% each week. That's great. Well, wait a second. Let's not forget that red days happen, right? Just like skiing. We can't pretend that'll never happen. You'll fall skiing. You'll have red days trading. So, I'm going to expect one red day per week. And I'll also expect one smaller green day. So, that means my weekly goal is really the daily goal times three sort of minus one, right? Because I got to figure a break even day and a small red day. So, I'm going to figure if I can grow the account 25% per week, that's

going to be really, really solid. Now, that will compound for the early part of the challenge, but I'm not going to be able to do that indefinitely. So, how was I able to turn less than $600 into $10 million? Well, I did it trading thousands and thousands of trades. And my average share size was 8,000 shares. So, if I had started with $5,000 with a goal of turning into a hundred million, well, I would have had to have traded on average with 80,000 shares on every trade I took. If I wanted to start with 50,000

and turn it into a billion, I would have had to have traded on average with 800,000 shares. So, you can tell there's a limit to scalability in the market. And that's why, you know, someone like Warren Buffett, he may produce and other big investors in the past, you know, can produce really great returns, but as their total portfolio and the assets under management grow, the returns generally diminish because, you know, you can't move a billion dollars in and out of the market just like that. So, with a small account challenge, generally a good day will

be growing the account by 10%. Now, I'm not buying lottery tickets here. I'm not trying to triple the account in one day or potentially lose it all. I this account, it's important that it grows, but it's also important that I'm managing risk. So, that means if my goal is to grow it by 10% on A good day, I don't want to lose more than 10% on a bad day, right? So, got to think about upside, but also have to think about the downside. Now, if I started with, let's say, $100, my optimistic daily goal would

be $10 a day. And many days might be closer to $3 to $5. But if I could finish the week with, you know, 25 bucks after a red day, I'd say that's pretty solid. And you might say, well, geez, Ross, I'm not going to spend all this time learning how to trade just to make $25 a week. And I would say, well, I don't know about that because I've got a lot of students that I've worked with very closely, including one who's just earned his million-dollar badge, who focused on just hitting $10 a day for

a long time because that was laying a foundation. Because heck, if you can make $10 a day with a strategy that is consistent. The only thing stopping you from scaling up, going from $10 a day to 50 to 100 to 200, is taking more risk. So, how do you get comfortable taking more risk? It's trading at the edge of your comfort zone, right? So, if you want to stay kind of stagnant, you could. But if you want to grow, then you start to push yourself a little bit harder. All right. So, now you know how

much money to start with. And once your account is ready, is funded and ready to trade in, it's time to find something to actually trade. So, now we're getting into some of the exciting stuff. Step three, how to find the biggest winners each day. Simple versus complex. What we're going to talk about here is scanning. So, what are scanners? Scanners are one of the most valuable tools that traders use. A scanner is a p piece of software that searches the entire market in real time for stocks that meet certain set of criteria. Now, most brokers

will offer some basic scanning technology. More advanced scanners require more technology, and not all brokers have the money to invest in it. But a simple scanner could be something like just your leading percentage gainers on the day. And that's a list that will come back and it'll tell you all of those gainers. The stocks are up the most each day. So, while scanners can be simple or complex, I think we should start with simple. Now, both of these windows that you're seeing right here are scanners that I've developed. So, I actually hired a development team

back in 2017 to begin building This trading software that I use every single day with my own money. and I'm thrilled to use it. I'm thrilled to share it with our members who use it. It's really great software. I mean, it really is fantastic. We started building this at a time when day trading was still pretty niche and there weren't a lot of platforms out there that really catered to active traders like myself. And so, I thought I'm going to start developing something that is like the ideal version of what active traders need. And this

is what we now have today. So, if we start with simple scanners, number one, will give us an edge in the market. Why? They help us find stocks moving before other traders find them. So, what I've done is I've programmed my scanners to look for the type of stocks that I make the most money on. Now, I'm going to share those criteria with you right here today. So, when a stock hits my scanner, I immediately analyze the alert details and I already know because I program the scanner that this is something that is probably worth

considering. So now I think to better understand how it's possible for a stock to go up 100, 200, 300% in a single day, We have to have a discussion of supply versus demand and how it pertains to the active trading markets. So imbalances between supply and demand are what create big moves. So demand is volume. So when a stock and it could be a cryptocurrency or something else, but when a stock has a lot of volume, that means there's a lot of demand. And so that's the demand side. Now on the other side, we have

supply. And supply is the number of shares that are available to trade. So when a company does its initial public offering, they they release a fixed number of shares onto the open market. And that's the number of shares that are available to trade unless the company does a buyback, sells more shares, or does a stock split. So the number of shares available to trade for the most part are are fairly fixed. They're not trading on a daily changing on a daily basis, but the demand can change considerably and it can it can move very quickly.

A stock could have very low demand, very low interest, and then suddenly it has incredible demand, incredible interest. And so I'll pull up um my So let me actually jump onto the whiteboard. Let me let me give you a Little bit of a scenario here. So let's do kind of a little table. So, we're going to talk about volume. We're going to talk about float, which is the number of shares available to trade. And we're going to talk about percentage change because this is sort of the table where I get really focused. So, let's say

we have a stock that has a float. And actually, let's use an example from today. So, let's pull up um and by the way, I'm recording this um a few days or even it might even it's going to take me probably a week to edit this video to get it really nice for you guys for YouTube. So by the time some of you guys are watching this, these, you know, the charts and the stocks will be a little bit different, but that's okay. All right. So, uh, so VNCE, so this stock right now is up

114%. Okay. Oops, sorry. So, this is at the top of our scan right here, up 114%. And how much volume does it have? It has 78 million shares of volume. And the float is 3.75 million shares. Okay. And by the way, this is a stock that I traded today and I locked up $36,000 on it. My total profit today is $169,000. Now, I'm still trading in the big account until Day one of the small account challenge. And that first day will come the day after I upload this episode for you guys to watch. Okay. So,

VNCE. So, we had we're just going to round this off. So, we're gonna just say it's a we're round up to a four million share float. The volume is um 80 million shares. will round up and the percentage change is 115%. So what if it had had 160 million shares of volume? Remember this is demand, right? This is supply and then this is the rate of change. So if it had double the volume with the same amount of supply, we would have expected a 230% gain. Now if we had had the same amount of demand

but we had double the supply we had 8 million shares of sha shares available instead of four million then it would have been you know more like um you know 60%. We'll just round it but 60 60% gain. So there's an interesting relationship that occurs between supply and demand. So, we don't know how many shares a stock will end up trading by the end of the day, but we do know the total number of shares available. And we know a few other important facts that will help us determine the likelihood of This volume and this

demand going up or at least staying strong. So, if I pull back um this, let's see, let me hide this for a second. So, let's look at this again. So right here, we're looking at a couple of different characteristics already that create demand. So demand is going to be the result of a stock that is in favor. It's popular. Why would a stock suddenly be popular? Well, let's start breaking it down. This is step three or step three, part three, the scanner criteria. So number one, a stock for me to consider has to be up

at least 10% on the day. And we're going to start noting these down for you guys. And this is all, by the way, included in the PDF worksheet. So if you haven't already downloaded those, make sure you guys download them. So um, so we're going to be talking about criteria here. All right. So criteria number one, up 10%. So if the price is not already up at least 10%, I'm not going to be interested. Now, this isn't just my opinion. This is actually all of my trading data put in right here telling you that I

make far more money when the stock is up at least 10% than when I consider trading it either when it's down or when it's up Only a little bit. Not that that hasn't been some profit, but far and away I make more money when the stock is up at least 10%. Okay, so we're just going to start jotting down these facts and then I'll start to talk about the rationale behind why this is the case. Uh number two, uh stocks between $2 and $20 clearly are producing outsized profits for me. They offer larger percentage returns

for account growth. A stock going up 50% from $2 to $3, from $2 to $4, 100%. Those moves happen every day. A stock that's $40 a share going up 50 or 100%. That doesn't happen every day because they're just too expensive. So they're not as likely to go up that many dollars per share. It just doesn't typically happen. So the area in the market where I've historically done the best is trading stocks between $2 and between $20. Have I made money on stocks below two? Yeah, some a little over half a million dollars. It's not

nothing, but it's not the area I'm going to focus even for the small account challenge. And what about stocks above $20? Yeah, I've made some money there as well. uh GameStop and some other stocks when they got more expensive, But that's not the area I'm going to focus either because it's not where I make the majority of my profit. And with a small account, it's really not going to make sense. So, for the small account, we're going to focus on stocks price between 2 and 20. However, I'm going to put a little parenthesis here and

say that 3 to 8 is the sweet spot. So, that's the sweet spot where I'm probably going to see the most account growth. That's that's the area right there to really focus in on. Okay, so next slide. Stocks with five times above average volume. So this right here, trading stocks with five times above average volume for me produces outsized profit. So that you you might kind of question like what what does that even mean? So this is a measure of the 50-day average volume. So, if a stock on average trades 10,000 shares a day, right?

10,000 shares a day and then today trades 50 million shares of volume, the relative volume is so so so high to its $10,000 daily average. I mean, it's thousand it's thousand plus relative volume. It's huge. And so, how do you get big high relative volume like that? It's going to be the result of a stock having breaking news. Stock had no news yesterday. No one was interested in it. And then today it's got breaking news and boom it skyrockets. It goes crazy. That is what creates the volume. So then the next slide is just period

stocks that have higher volume. And this is true that I do make more money on stocks have higher volume. But this is also true. So, if I showed you just this slide here that I make more money on stocks with higher volume, you might run a scan and you you could pull up a scan like this and say, well, I I just want to see the scan of um large cap stocks with the highest volume today sorted by volume, right? So, you know, here we have some stocks that have a ton of volume. And while

it's true that these do have a lot of volume, 155 million shares, 100 million shares, it would be a mistake to think that this is where I make the most money because where I make money is when it's the combination of high volume and high relative volume. So the relative volume is very important. Just trading something that has high total volume is not enough. And the reason is because the relative volume is what tells us that something special is happening Today. And something special happening today is what's going to give this stock more attention. So

that's breaking news. So when you've got the stock with breaking news, that's when exciting things happen. So now these are our characteristics of demand. All right. So oops, let's go back here. We got to update this. So number three, we need five times relative volume. Number four, high uh total volume. Number five, breaking news. And these are all indicative of demand. A stock isn't up 10% without a lot of demand. Now, a stock between 2 and 20, that by itself is isn't going to create demand, but when you've got news and it's starting to move,

it's going to have more demand than if that same stock was $200 a share. So, this is really like these are all very important criteria, and you really need to have pretty much all of them. So, what I would say is that an Aquality setup is going to meet all of these criteria and a Bquality setup will meet all except for one. I'll trade Aquality, I'll trade B quality. During a small account challenge, I don't know if I'd be willing to trade B quality setups. I'd have to be really confident. The one Criteria that will

sometimes not be there, but the stock goes up anyways, is breaking news. And it doesn't make sense because if there's no breaking news, why is the stock even up 50% or 100% in the first place, right? It's shouldn't be possible, but it happens and it can be the result of a short squeeze. It can sometimes be the result of news in the sort of greater market or in that sector. So, I'm going to caveat that it's going to be higher risk if I consider taking a trade with something on something that doesn't have news. U

and and it'll be case by case. I'll have to think about whether or not I'm going to do that. So these are our criteria for uh demand. But then what about supply? So supply is uh float. That's our number of shares available to trade. And I would always prefer a float 20 million max. It cannot be above 20 million. Lower is better. So in fact under under five million and even even under two million a 2 million share float is going to be better for the small account challenge because oh we lost this one but

that's okay. So, when we're talking about volume and float, let's just say for a second in percentage change, let's just say For a second we've got a 10 million share float that had, you know, 10 million shares of volume and went up 100%. Now, that same stock with 10 million shares that has a 1 million share float, you're talking about 1,000%. All of a sudden, this is big. Now, you've got 20 million shares, you're talking about 2,000%. You got 50 million shares, you're talking about 5,000%. And I'm not speaking out of turn when I say

this can happen. In fact, it happened uh just this past week. So, I'll show you just as a sort of example of this. Um we had a couple OCTO uh Oh, no, sorry. Uh yep. So, this is the one. Uh this one went from a low of about $2 a share all the way up to $84. This was in one day. This had news. The news was that they were um they were starting they got a private placement to begin a investment in cryptocurrency which is kind of crazy but it's a theme that's been working

really well. So this went up uh I think it was 5,700%. It's unbelievable. Then we had another one CWD. Uh this one went up very quickly but it did come back down. Uh I think this one went up about 3,000% which is I mean it's it's still really crazy. And this is going to be Actually an important note is during any challenge and and really for any trader. Uh this is awesome. This is amazing. And okay, it falls does a false breakout up there and it starts to pull back. I want to focus on trading

this part of the move and I do not want to trade it back here. So, we're going to talk about the indicators I'll use to help me stay focused on trading here and not trading on the backside as it comes back down. Now, you can make money short selling, but shorting also creates the risk of infinite loss. And I don't want an infinite loss during a small account challenge. Now, I'm going to show you a scanner. Uh this is this is a screenshot of a scan uh just from the other day. And on this scan,

it's a top gainers scan. So, it's searching the entire market for the leading percentage gainers. So, the total percentage gain is the first criteria, and we're sorting based on that column right here. And so in this case, just look at the float. The float is the number of shares available to trade. The float on all of our top 10 leading gainers except for one is less than 10 million shares. And this one was a buyout. The company got bought out. So I mean, a buyout happens and it got bought out for a 60% premium over

the current trading price. Um, but nonetheless, this one is a buyout. So you wouldn't trade it anymore because the value has been determined. So all of these other ones that are big percentage movers are all sharing a few common criteria. They have very low floats, less than 10 million shares. The relative volume, all of these have relative volume of the lowest is 80. I mean I said five is the minimum, but most of these have relative volume that's greater than 80, which is incredible. What about the prices? Most of these are priced between two and

20. Now you've got one down here$1.56. This one was perfect. Great price range. This one's a little cheap. Don't love it. This one's a little cheap. I mean, a couple of these are a little on the cheaper side, but these are And what's interesting is that a number of these were higher priced at a earlier point in the day and then sold off a little bit, but in any case, you kind of get the picture that all right, the type of stocks that I should be looking for. And certainly when it comes to our leading

percentage gainer sub 1 million Share float with 2 million shares of sorry 200 million shares of volume and up over 700%. 2500 times relative volume. This with this f this flame means breaking news. So this is the type of stock that we want to be paying extra close attention to. Now all of this is well I guess assuming a momentumbased strategy but maybe I shouldn't make that assumption. So there's really two approaches when it comes to trading. You can either be a momentum trader or you could be a counter trend trader. So if you've saw

the movie The Big Short, talking about that big investor who was shorting the housing market and expecting it was going to reverse, the housing market was going up up up and he was betting that the opposite was going to happen. And so he took the positions and so he was wrong as it kept going higher. But then when it rolled over he was right. So, the problem with counter trend trading, selling and shorting something that's weak, that's really strong, hoping it drops, or buying something that's really weak, hoping it reverses, is that you're trading against

the trend. You're trading against what everyone else thinks is going on. You might be Right, but as a retail trader, we're probably not right. So, trying to be a counter trend trader, as a retail trader, is very difficult. So, I don't like to short strong stocks and I don't like to buy weak stocks. It carries too much risk of going red before I go green. And with a small account, I really can't afford that risk. So, instead, I'm going to focus on trading momentum, which is when I look for something that has a strong trend

and I look for the nearest levels of support where I can get in with a minimal level of risk and then ride the momentum of that trend as long as possible. So, momentum trading is my strategy and that is the strategy I'll be using for this small account challenge. And I'll be specifically focusing on trading momentum on breaking news that comes out between 7 a.m. and 10:00 a.m. Eastern Standard Time. Trading breaking news between 7 and 10 a.m. means I'm going to rely heavily on the scanners to alert me to stocks that are beginning to

move. I'll quickly need to check to confirm that they do indeed have a news catalyst and then I need to do a quick review of the details of the alerts and then I'll pull up the chart and begin looking For a pullback entry. I'm going to be showing you this pattern in a lot more detail in just a moment. Now, when I talk about time of the day that I trade, it's not just my opinion of when I think I make the most money. It's actually based on my historical data of when I have made

the most money. This is just true. It is proven. And so for a small account challenge, am I going to focus on trading between, you know, 2 p.m. and 4 p.m.? That would be crazy. Why would I do that between 4:00 a.m. and 6:00 a.m.? Not a great idea. Between 7 a.m. and 10:00 a.m., yeah, that seems like that would make a lot of sense. So, I definitely have an advantage when it comes to doing a small account challenge because I have all of my historical data that is supporting a strategy. it's already back tested

and proven and specific types of stocks, specific times of day, and so on and so forth. So, what I've done is I've programmed my scanners with the following criteria. They will be running from 7:00 a.m. to 10:00 a.m. daily. Well, they'll actually continue running throughout the day, but I'll be using them from 7:00 a.m. to 10:00 a.m. to Look for stocks in real time that are moving quickly. So, the next question, number four, is how to read those scanner alerts. So, if you guys want to hit the pause button for a second, you could sign

up for our twoeek trial at Warrior Trading and then when you get logged in, you can actually open this window side by side with me and we can program these scanners together. So, what I'm going to do is I'm actually going to open up a uh a new scan. It's going to be the top gapper scan. And I'm going to pop this out into its own window. And I'm going to minimize this one uh in the background. So, what I'm going to do here is create just a brand new window and we're going to start

breaking this down. So, and actually I'm going to switch from top gappers to top gainers. So, I went to scanners and then top gainers right here and the top gainers scanner came up. Now, I'm going to pull up a couple other scanners. This one's small cap high of day momentum. And I'm going to pull up my running up scanner right here. I'm going to pull up my halt scanner down here and we will save pulling up charts for a few Minutes. We'll pull up charts and get into that in a moment. Okay, so let's start

with the top left right here. So this top gainer scanner is the first scanner that I look at every morning. So even when I'm still laying in bed, I grab my phone and I check these scans on my phone. So you can log in on your phone and check the scans. And I have them always sorted by leading gain. And this is the percentage change from the close. So sorted by the percentage change from the close. You can see as they get kind of to a smaller gap, which is the change from the previous day,

the color of green gets a little bit lighter. So the brighter the color, the bigger the percentage change. This is the symbol. This represents the ticker of the company, the stock ticker. this green arrow or the red arrow will tell us if a stock is moving up or down our scanner. So, if all of a sudden at 7 a.m. I see a stock that's uh right up here has taken this place, it'll have a green arrow here and everything that was below it is going to have a red arrow because it just jumped positions. So,

when a stock jumps positions like that, I'm going to want to pull it up and Take a a close look and understand what's going on. So, one other window I'm going to open up here is the stock quote window. I'm going to open up my stock quote window and we'll just put it right down here in the middle. So now these windows are all linked together with the same color. See in the top corner they all have the same color. So they're linked together. So now if I click this uh leading gainer up here of

VNCE, this is going to update my stock quote window and it's going to show me the news headlines. So I can see what is uh driving this, what's pushing it higher, which is really helpful. So now I can understand the catalyst. So, what I do is I check to see the percentage change. I look at the ticker. Now, sometimes when I look at the ticker, I'll already be familiar with a company, but sometimes I'm not. So, if I'm not familiar with the company, I go over here and I check a couple things. What is the

sector? Consumer discretionary spending, apparel, and luxury. Okay. And what's the country of origin? And this is a United States company. Okay. Very good. No problem with that. What about this one? Oo. This is uh and it's listed On the New York Stock Exchange. This is a Chinese company. CN is for China. You you can always just copy this and Google the the country code. So that's China. Consumer discretionary spending, retail discretionary. Okay. Then let's look at another one. WLDS. This is Israel IIL. It's a technology company listed on the NASDAQ. So we go through this

and I get a sense of all right, what is this stock? What is the sector? And I learn a little bit more about what's driving it higher. Now, what I know is that there are a handful of sectors that usually show bigger percentage gains than others. And those include biotech, Chinese companies, and any company with a headline right now on the current theme. And the current theme right now is cryptocurrency. So, anything that has anything to do with cryptocurrency seems to get an extra boost. But that theme changes from year to year, but currently it's

the crypto theme. So, I get a little more information. And I do all of this without even pulling up the chart. I haven't even looked at the chart yet. This is just sort of researching the surface of this company. And this is what we would call due diligence. So, Um, my wife says she likes she likes men that take risks. I was like, I buy stocks without doing any due diligence. She's like, okay. But I do a little bit of due diligence. You see, the thing is, I don't I don't open the quarterly filings. Now,

I can show you how to do that, and I I do occasionally, but I don't read the fundamentals of these companies. The way I approach it is if the stock is moving higher right now, the market is telling me what they think of it. Why am I going to try to second guess that? So, if the chart is going straight up, that's really all I need to know. There's a news headline. Do people like it? I don't know. The stock's up 700%. I think they might like it. So, I try not to over complicate it.

So, then I look at the the total volume, the total number of shares traded today. I of course look at the price and I look at the float. Now, in this case here, I would look at this stock with a 667 million share float and I would say, I'm not even going to look at the chart. I don't even need to cuz that float is too high. Or maybe I'd look at this one at 56 cents and say, it's 56 cents. It's too cheap. I'm not even going to look at It. Or 50 million share

float. That's a little too high and it's a dollar a share. Probably not going to bother. So, sometimes on my phone, just looking at this scanner, I know that generally I only want to be trading the most obvious stocks each day. So, they should be in the top 10 of this list. And so, VNCE, MOGU, uh, you know, open, but no, that one's out. This one, by the way, only has 33,000 shares of volume. So, that's not going to work, right? So, very quickly, I can start ruling things in or out. This one, by the

way, the relative volume on open is only 2.5. So, the relative volume is pretty low, whereas the relative volume on this one and this one super high. So the columns of volume are colored where the it's white. The color white to me is like I don't I don't care about it. I could just ignore it. Like it's it doesn't stand out. It doesn't pop. It just blends in. So white for volume I don't even think about it. But the color gets darker and it's more noticeable. So now here white for float I don't even notice.

Oops. Sorry. White for float. It's like again same same theme but the bright color we notice a lot. Now high volume is not like Oh my gosh I need to be like 800 million shares of volume. High volume doesn't really once it's above 10 million shares it just doesn't really matter. So it's not super important. It just makes sure you're not trading something with 7,000 shares of volume. And then the float well the the low floats. I make that a bright color that I can't miss because if a stock has a float of less than

5 million shares, I should pay attention to it. Once it's up to 11, 15, 20, and then higher, start to be like not as interested. Same thing goes for um the gap and then the short interest. All right, so these are all colored with a gradient just to help you kind of better understand what is significant. All right. So it the the goal is to draw your eye to the things that are important and the volume or sorry the float is important. The volume is important and then the total percentage change is important. So this

is my top gainer scanner. This is the scan that you will see me using every single day during the small account challenge. But the other scanner that you'll see me using is this high of day momentum scanner right here. So on this scanner, I'm going to show you an example. So we're going to roll this back. So I'm going to scroll just scrolling down using my trackpad. you you've got a little scroll bar, but I just used my trackpad to scroll down. So, I'm scrolling way way way way back here um to earlier part of

the day. So, you can see these are very colorful. The idea is the color pops. Gets your eye looking. So, if it's not colorful, it's probably not important. So, what is this one? It's big magenta color. It's a 52- week breakout. That means this is the highest price this stock has been in a year. That's significant. the relative volume. I mean, 500,000 times above average. That's crazy high. It's a 2.65 million share float. I mean, this thing was just crazy. So, but SLKN, all right, so SLKN, this stock hit our scanners this morning at 7

a.m. right here. And so, the first thing I'm doing is I'm looking at the stock. I see that it's got a float of less than a million shares. It's already got 343 times relative volume, even though the total volume is very light. So, I'm kind of skeptical, but I'm like, "Okay, well, why is it up right now already 85%. Why is this thing moving?" And so, naturally, this thing had a green Arrow and was moving up the scanner and it was at 85%. Which made it one of the leading gainers on in the market in

that moment. So, when I pull up the stock quote window right here, uh, this gives me all the latest news headlines. Now, it pulls it shows you the last three right here. But if I click on the ticker, it'll open up our website over at Warrior Trading. And I can check to see uh what the headline was that was at 7 a.m. So, at 7 a.m., we had this headline right here. Um, reports positive pre-clinical data demonstrating reagent activity in major pancreatic cancer. So, you know, you get a headline like that, that's a strong headline

for a biotech company. Now, also worth noting. So, what was the sector? What was the location? It's a US company listed on NASDAQ. It's healthcare biotech. All right. And then they've got that type of headline. So I pull up the chart and this is just going to get on the chart just for a second. So I pull up the chart and what do we have? It squeezes straight up here from $5 to $18 a share. It pulls back and I bought right here. So I was a buyer right there. Now, in total, I made $49,8653

Getting in right here for that first candle to make a new high and selling as it squeezed up to this high of 30. Now, we'll talk about those exact entries and how to use candlestick charts in a moment. We're not there yet. Right now, we're still just talking about scanners. So, the first thing is it hits the scanner and because of that lower float and that big rate of change and the relative volume, I pulled it up and I started doing my due diligence. I started trying to figure out what was going on. Now, it

kept lighting up the scanner, and that's because I have a couple different scanners that are running at the same time. Lowflat former momentum stock. That means this is a stock that in the past went up over 100% in one day, and that's in the recent past. Lowflat volatility hunter. It's a lowflat stock, sub 1 million shares popping up. It's a squeeze alert. It went up 10% in 10 minutes. So, now you have this stock hitting multiple alerts at the same time. Now, on this scanner here, these are all the different strategies that I have built

into this window. And some of them, I create an audio alert. So, I click to turn on the audio alert. And then boom, you can hear the dog bark. You know, if you want the dog bark, you can have the whatever chime you want, you can set up right there. So, I keep my speakers turned up. And even if I walk across the room, grab a drink of water, whatever the case is, if I hear a ding, I will run. I'll knock over a toddler. I will come running to my desk so fast cuz I

don't want to miss what's happening because look at how fast this went. This went from $8.30 at 7 7:00 and 42 seconds. Less than a minute later it's at $14. 2 minutes 3 minutes later 3 minutes later four five minutes later it's at 30 bucks. So that was a $49,000 window. It was 7 minutes long and that was the peak. Now in other cases we'll have stocks that continue moving higher. So sometimes they do and sometimes they don't. So anytime a stock hits a scanner, the first thing I do is I look at the details

of the alert. I look at the color scheme and is something here popping. And then I click on the ticker. I check the sector. I check the location of the company and I look to see what's the catalyst, what's the news? So the small cap scanner right here, This is the one that'll be running every single day and I'll be relying on that. And then this scanner right down here is called a running up scanner. the stock is squeezing higher. So this morning I had a really good uh trade on VNCE. So VNCE was kind

of interesting because the place that I took the trade on it uh we'll switch to a five minute time frame here. The place that I took a trade on it was actually uh it was right here. I got in right there. So the high of day was 550. So a high of day scanner is only giving you an alert when a stock makes a new high which means you would not get an alert until 550. Whereas the running up scanner tells me when a stock is squeezing up right now even if it's below its high

of day. In fact, it has to be below the high of day. Otherwise, we'll put it on the high of day momentum scanner. So this that scanner alerted me to V VNCE on the running up scan and I bought right there on that little pullback which was a great setup. So the running up scanner, the high day momentum scanner and um the top gainer scanner are the three scanners that I'll be using pretty much every day. Now the halt scanner will tell us When a stock has been halted and there are times that stocks will

get halted on news and that is something for us to pay attention to. The charting is what is going to come next. So, let's back this up for a second. Let's get back over here. Now, you guys know how to find the strongest stocks each day in real time using scanners. Hopefully, you've already signed up for a two-eek trial at Warrior Trading, so you can use the same software I'm using every single day. But, we got to get onto the charts because we need to know where to be a buyer and where to be a

seller. So, this is step four of me breaking down my small account strategy for you guys. Again, if you have not already downloaded the PDFs that are linked in the top of the comments for my small account worksheet or my trading plan, make sure you guys download those. You can print them out. You can utilize them in your own trading starting today. But as always, I want you guys to practice in a simulator before putting real money on the line. Now, by the way, if you guys are really enjoying this episode, if you're learning a

ton, let me remind you that I'm going to donate 100% of the profit that I make During the small account challenge to charity at the end of the challenge. And I'm going to give you the chance to double this donation. And here's how it's going to work. Every one of you guys that hit the thumbs up on this episode right here or subscribe to the channel thanks to this episode right here, you will add $1. So, let's do this together. Let's keep learning. Let's keep raising some money for charity and let's get back into this.

Okay. Step four, how to choose the strongest candlestick patterns every day. I'm going to break this down beginning with number one, a a quick anatomy of a candlestick chart and a candlestick shape. So, I use candlestick charts. That's what you've been looking at every time I've pulled my charts up. So, each of those individual shapes are called a candlestick. And a candlestick chart is the most popular chart today in the financial markets. And it doesn't matter if you're trading crypto, forex, futures, or you're trading stocks, you're using candlestick charts. They've been around for hundreds of

years. They were created in Japan to track the price of rice futures. So each individual candlestick communicates four pieces of Information. You've got the open price that's and this is based on a period of time. Let's say this is one minute of time. This candlestick represents one minute 60 seconds. At the beginning of the minute, this was the open price, the bottom of the candle. This was the low, the bottom of the candle wick. This was the high, the top of the candle wick. And this was the close the top of the candle body. So

those four pieces of information come together to create a candlestick. This is a green candlestick. This is a red candlestick. So that's the anatomy of a simple candlestick. Now there are simple candlestick shapes and patterns you also need to be familiar with. I have videos that are dedicated hour plus long videos just to breaking down the nuance in and out of candlesticks. So, we could spend a lot of time on that. What I want to do here is kind of go through it quickly just to make sure you get enough to be able to really

comprehend everything I'm about to share with you when it comes to the entries and the exits. But if you want to dig deeper, by all means, you should check out some of those classes or during your twoe trial at Warrior Trading, you'll also Have some access to classes that are membersonly content, which you guys will really enjoy. So, we've got longbody candles. And a long body candle is what we were seeing on SLXN where the stock goes straight up. You want to be in a trade when it's having a long body candle. That's great. Then

you've got short body candles. Those are the little candles with smaller bodies. And then we have candles that have these longer upper candle wicks or long lower candle wicks. These candle shapes are called dogeis. This is a gravestone dogee. Opens and closes at about the same price but has that long upper candle wick. It is a bearish signal. In fact, anytime you have that big upper candlestick, it's bearish. Why is that? Well, let's think about that for a second. So, we've got the price going up. We've got a couple green candles here. It's going up,

going up, and then all of a sudden, it starts to go up and then sellers pull it back down and it closes right here. So, the fact that sellers were strong enough to push it all the way back down shows you that sellers were in control. So, anytime you have this upper candle wick, it tells you that buyers were Like, "Oh, I want to buy it. I want to buy it." And sellers said, "No, you don't. I'm pushing it down." So, they were stronger. This is weakness. Now, on the flip side, we'll do a couple

of red candles here coming down. You have a couple red candles here. And then this could be red or green. It doesn't matter. You've got this shape right here. Is this bearish or bullish? It doesn't really matter that it's red because the open and close is basically the same price. This is actually bullish because the sellers tried to keep pushing it down and the buyers said, "Oh, no you don't. I'm buying this. I like it down here. You know, for whatever reason, I think this is a good level of support. I want to buy the

dip." And so, this is a bullish indicator for a move back up. So, long body candles are bullish and short body candles are kind of communicate less sentiment. So, sometimes we'll see a pattern that looks like this. these sort of small body candles, don't think a lot of them and then they start getting bigger and bigger and bigger, right? So the bigger the candles, the sentiment's getting stronger, but then let's say they start getting smaller again. So what's this telling us? This tells us the trend is kind of getting exhausted and then we have that

final candle wick like that. The seller, that's a very clear message that we're about to see a drop. So we see a small drop and then maybe a bigger drop. Long body, long body and then we start seeing some shorter body candles. The trend is kind of getting exhausted back down and then we see that dogee and then all of a sudden off of that level we see the reversal come back in. Right? So this is very common that this is the way the price action works. Which means you've got to be really looking for

these indicators that the trend is about to shift because the places to be a buyer is down here when the trend is shifting. The place to be a seller is up here when the trend is about to shift. So we've got to pay attention to candles that indicate the trend may be shifting. And so that's why I wanted to focus on those candle wicks. So upper candle wicks um that can be in a dogee or a lower candle wick are really important to pay attention to. Hammer candles also have a bottoming tail. This is considered

a hammer. It's hammering out a base. The low Becomes support. Inverted hammer or a shooting star. When you've got it upside down like this, this is a reversal indicator. Coming back down again. You've got that topping tail. So the really important thing there is seeing that large topping tail. So again, to read candlestick charts, we can get into a lot more detail on it. But what I really want to spend time focusing on is my favorite candlestick chart pattern. So each of those individual candlestick shapes come together to form patterns. So in my Warrior Pro

classes, which include strategies and scaling, I cover all of the intraday chart patterns, the daily chart patterns that you'll see me using in my trading. Now, if I jump over here for one second, I'm going to switch this to a 10-second chart. So, when this is a 10-second chart, each one of these candles is opening and closing every 10 seconds. So, currently, the price on this is kind of going sideways. It's not super super active. So, you can see these candles are just basically like flat lines. It's a 10-second chart. You know, it's sort of

slow, but nonetheless, in this case, every candle is 10 seconds of price action. If we switch to the one minute chart, every candle represents one minute of price action. So it takes a full minute for this candle to to form. And this candle becomes a permanent historical record of the price action of this stock. The five minute chart, every candle is five minutes. The daily chart, every candle represents one full day of price action. This is a full day. And so when you're looking at a daily chart, you can get kind of big picture perspective

of where the stock has been, where maybe it's going. But ultimately, if you're a day trader, you're going to want to get zoomed in to the one minute or the five minute. Okay. So now we're going to talk about my favorite, hands down favorite candlestick pattern that you will be seeing me trade during this small account challenge. All right. What does it look like? So this is a candlestick pattern which is what I call a pullback pattern. So, initially you have a big burst higher as you have right there. Then you have the pullback right

here. And then I'm buying that first candle to make a new high. This is exactly what I showed you on SLXN where it had squeezed all the way up to $18 a share. It pulled back for a moment and then I got in as it broke over 18 for that move back which ended up going to 30. So, one of the things I really like about this pattern is that it's easy to see. And why is it easy to see? Well, remember we're relying on scanners. So, in the case of S SLXN, I'll pull this

back up again here on this other chart. So, SLXN comes up on the scanners, uh, right here. So, it hits our scanners. This was at 7 a.m. this morning, right? So, boom, boom, boom. I'm getting the audio alert that this stock is moving higher. So, it's very easy. My my dog could find the stock because she hears the sound. She's got ears. So, all of a sudden, boom, boom, boom, you've got this stock squeezing higher. So, it's very easy to find the stock and then all we're doing is waiting for the pullback. Now, if you

bought it right in the middle of this candle, that would be a problem. Now, as a very experienced trader, there might be times where I would do something like that because I read the news and interpreted it quickly and understand understood how good it was. But it's going to be risky because if you buy right here, Where is nearby support? Remember, gamblers think only about profit. Traders think about risk. What's my risk and what do I stand to gain? And as long as I stand to gain at least what I'm risking, I'm going to consider

the trade knowing that my accuracy is 75% 70% over the course of the last, you know, few months. So, it's all about risk and reward. So, here, if I bought at 10, supports down here at five, I'm risking 50% on this trade. Now, could it go up another 50%? As it turns out, yes. But I don't want to take that kind of risk. So instead, I'm going to let it go sideways and wait for that pullback. And there we go. We get the pullback. So we do have that topping tail candle right here. So it

pulls back, but then we've got a little bottoming tail right down here. And so now we're looking for that first candle to make a new high. And the second the price broke over the high of this candle, that was confirmation entry right there at 18. And this went straight up to $25 a share. It then pushed up to 30 28. Then it dipped down with one red c one red candle. Then it pushed up to 30 right there. Then it dips down a little bit more. So the best entry on this was right Here. This

little pullback didn't really work out as well. It pushed a little higher, but it was by that point a little bit more extended. We really like focusing on the first pullback right here. The first one is typically the strongest. So let's look at an example of what that looks like. There's another one right there. So a big green move. So long. So, it's kind of a short body, medium body, long body, little shorter, really short red candle, bottoming tail. This is a pullback. So, right now, you've got a stock that's currently up what, you know,

50%, 60%, maybe more. No, let's see. This went from $3 to six bucks. It's up over 100%. It's pulling back. And this is our first lowrisk opportunity to buy a strong stock. So, I'm a buyer right there. And what's my max loss? Right down here. And I'm looking for a squeeze through the high of day. And this thing just keeps going higher. Now, we'll talk about exit indicators in a moment. And we're not right now, we're not talking about where to sell. We're really talking about where to be a buyer. So, what's the psychology of

why this pattern works? A rapid move up attracts traders. So, the stock Is hitting scanners. I'm not the only person using scanners. So, a lot of people use scanners. A lot of other brokers are using scanners. So, they alert their clients to stocks that are moving. And now, why is that? These brokers that are commission free only make money when you're trading. So, they're going to have the flashing lights. They're going to show you what's moving, what's moving, so you trade, so they make money. So, a rapid move up attracts traders. This is especially true

when a move is driven by breaking news. Breaking news will get some coverage. The first pullback is formed by profit taking from people holding before the news came out and possibly some early short selling. So, we get that first move up and then we get a little profit taking, which is when it dips down. If it holds at least 50% of that first move higher, long biased traders will begin buying the pullback. Shorts will cover at high a day and the price will make a second push higher. I will typically buy the first pullback and

the second pullback. After this, I don't want to overstay my welcome. I'll trade the first and second pullback on the one minute Chart and I'll trade the first and second pullback on the five minute time frame and then I'm done. I leave it alone, especially when it comes to a small account challenge. So, here's an example of sort of an animation of what this looks like. Big big squeeze up here. So, what's happening right here? Stock is squeezing up likely on breaking news. It's hitting our scanners. We get the audio alert. Now, it pulls back.

And where are we buying? First candle to make a new high. That'll be right here. And that's the entry. Now, if this ends up going higher, that's great. If it ends up stalling out once we see an exit indicator, we get out of the position. This is an example with two red candles. So, it squeezes up, pulls back for one candle, where do we buy? Right here. if this candle makes a new high. It doesn't. It pulls back a little bit more. So now we're a buyer right here. If this candle makes a new high,

and it does. So I'm in. And my max loss is the low of the pullback. That is support. We look for that squeeze through the high. That's nice resolution. So the strong surge up followed by the dip and then that push higher. That's the setup That I'm taking every single day. So we're buying that first pullback. Now, when it comes to risk management, where are we setting our stops? At the low of the pullback. This is important. This is why we need the pullback because it establishes a level of support. The stock sold off and

it didn't go lower. It stopped going down right here and it began moving back up. Therefore, that is support. That's where there are buyers clearly that are coming into the stock to hold it up. So, we set our stop at the low of the last pullback. When it comes to position sizing and trade management, for my small account challenge, I will only take one trade at a time. I will not buy two stocks at the same time. During each trade, I will use as much of my account as I can without risking more than a

10% draw down in the total account that I don't want to lose more than I can make in one good day, right? I'm comfortable with that. Now, you may not be comfortable with that. You should trade within your comfort zone. If I were a beginner, I would only take one trade per day. As a more experienced trader, I'm going to focus on getting one really good trade each day. That might mean I have a Couple of kind of false starts, a couple of break even trades or even small losers before I get that one really

good setup that I can nail. My plan during this small account challenge is to really focus in, if I can, on one solid trade a day. Once I've taken that one trade in the small account, I'll trade in my main account for the rest of the day. So, first things first, growing the small account, but I don't want to overtrade in the small account. I don't want to take 15, 20, 30 trades. I really want to focus on, you know, quality over quantity. Trade the best, leave the rest. So, number four, I need to avoid

overtrading. Less is more. And number five, I need to build my cushion each day. and in the account as a whole. So remember, right now we've got this proposal for the change in the PDT rule to come down to $2,000. So a $2,000 PDT rule times four times leverage equals $8,000 in buying power. That would be on day one. So if I can grow this account to $3,000 over the course of a few days times four with this PDT rule, the new PDT rule that's being proposed, I would have $12,000 buying power. So each, but

the here's the thing. The buying power doesn't change until the next day. So it doesn't change in real time. If I make $300, I don't just have more buying power. Buying power resets overnight. So that means each day I need to focus on making as much as I can, taking as little risk as possible. Get in, get out, grow the account so I can come in tomorrow with a little bit more buying power. A little bit more buying power. A little bit more buying power. So, you know, if we map this out, day one, $2,000

account, goal is 200 bucks. So, next day it'll be 2,200. Goal is 220, right? So, then next day is um 2420. So, then that then that goal, you see what I'm saying? So, now we're looking for 24 uh $242. So, then the next day, the account's up at 26 uh you know, what is it? 60 62. So, as the account grows, I just need to keep stacking that up so that by the end of that first week, I can get that that account, you know, if possible up towards that $2,800, maybe $3,000 mark. And then

all of a sudden, my buying power has gone up considerably versus day one. Now, there is always a discussion of account type and trading in a cash account versus trading in a margin account. For this challenge, I'm going to use a margin account as if this new $2,000 PDT rule has taken effect. So, I'm going to be using a $2,000 account and trading it with leverage and margin as if that new rule was in place. Now, we're not sure if it's going to get approved yet. I think there's a really good chance it will get

approved. It's to be determined, but that's sort of the basis for using the $2,000 number. So, that does mean if I see something that looks really good, I could take one, two, three, four, five trades on it. I'm not going to be limited to just taking, you know, $2,000 worth of a position in one day, my cash account. Now, I have to wait for the settlement overnight to take my next trade tomorrow. So, I could cycle the money and trade more, but I've got to be careful. And so, the main issue here is emotion. This

is the biggest challenge. So when we're talking about emotion, I want to bring back this slide that I showed you earlier about the downward spiral of many beginner traders. What did we say it starts with? It starts with a loss, right? That loss, losing money, feeling of disappointment that leads to poor self-confidence, Increased pressure, desperation that leads to reckless trading, increased losses, which leads to even more of a poor track record and even more emotion. And it's this downward spiral. So for the small account challenge, I need to be on the positive feedback loop. Where

does it begin? It begins with focusing on highest quality stocks. So even if I don't have the perfect entry as long as I've got a really good quality stock, I've got a much better likelihood that it'll work. So high quality Aquality stocks, those are stocks that meet all criteria of stock selection. It's going to result in fewer unnecessary losses, which means my accuracy goes up and some of those losses might have ended up being pretty big, which means my profit to loss ratio is going to go up. So the profit to loss ratio is the

comparison of average winners and average oops, average losers. So, if my average winners are $200, which would be great, my average losers cannot be 600 bucks. If this was the case, I would have to be right like 80% of the time in order just to break even. So, what are my average losers going to look like? Well, I don't want them To be bigger than 200. I'd rather have them more like a 100. So, I've got a 2:1 profit loss ratio. If I have this ratio my break even so one one oops sorry one one

to one break even would be 50% right so 2:1 is 33% well 33% is the actual number 33%. So 66% if you're inverted where it's two to one. So I really want to be focusing in this area here where at least I'm one one if not 2:1 in profit to loss. So that means focusing on high quality stocks and then trading my favorite pattern. All right, I do that on day one. I'm going to grow the account. I'm going to build confidence. I'm going to feel good knowing I've got a little cushion. Day two, I

might take a little bit more size. I get another green day, I feel good. Day three, and it starts to build that positive feedback loop. And that's why as a beginner trader, trading with real money for the first time, it's a really good idea just to take one trade a day. Just one trade a day. Don't break the ice and take two, three, four, next thing you know, you've taken 15. One really good trade a day. And that is my goal for this challenge. As I said, I want to find one really good trade a

day. And I am quite confident That I'll be able to maintain emotional composure even if that first trade doesn't work out and it's like a $25 loss or a $50 loss. I get in, it doesn't look right, and I get out immediately. So, I'm going to utilize a a strategy called breakout or bailout. If I get in and the stock does not continue going higher immediately, it means I timed it wrong and I got to jump back out. So the idea is that as a momentum trader, we're buying at places where we are expecting from

dipping the stock is about to squeeze higher, right? So we had this big move up, we pulled back, first candle to make a new high. So if we get in there and that doesn't happen, I got to get right back out because I mistimed it. Now, it's true that as long as I'm choosing the strongest stocks, I should the trade should be more forgiving and I should have more room for uh profit even if it's not perfect perfectly timed. But I really don't want to get into the habit of holding losers. So, what is a

trick for improving accuracy during this challenge? Well, I'm glad you asked. During this challenge, I'm going to use a handful of technical indicators. These indicators will help me improve My accuracy. And then what I'm going to do is I'm going to show you some practical, realworld examples of these indicators on my charts. So, I have four technical indicators that I check before each trade. volume bars, exponential moving averages, the volume weight average price, and the moving average convergence divergence indicator, also known as MACD. Technical indicators when combined with candlestick charts on a quality stocks will

give traders an edge at predicting price action. The result is improved accuracy. So, volume bars tell us the story of whether the stock is being accumulated or distributed. Are people buying it or are they selling it? And when there's more buying than selling, the price continues higher. But when selling overtakes buying, the price moves back down. Selling overtaking buying, the price moves back down. So in the case of SLXN this morning and that $49,000 winner, there was a lot of buying. The buying was stronger than the selling. So that's what we like to see. It's

really as simple as that. The color of the candle is based on the color of the color of the volume bar is based on the color of the candle. So, what I like to see is increasing buying and then when I see a big red candle, I get nervous. Big red candles, I don't like that. I want to see building volume. This looks great. Building volume and that's when we get those really big moves. So, this is the study of volume profile. It's the profile that the volume is taking form of. So, here we have

a volume profile that is bearish. We had one candle that's green and now a lot of selling. So, this is more of a distribution. We're seeing people are just unloading the stock. It's not bullish. This is not good. Yes, we also have a topping tail, but the biggest issue here is are are those red volume bars. Here we go again. Higher volume selling. That's a problem. Now, this is just not going to work for me. So, if I see a chart like this, I will not trade it. Doesn't matter that the float's 1 million shares.

Doesn't matter the price is perfect. It's perfect, but this is a major issue. The volume is telling a different story. People are selling. So number one is volume. Number two are moving averages. Moving averages display the average price of a stock over a set period of time. And a moving average becomes A level of support. They are very well respected. Most active traders use the 9, the 20, and the 200 exponential moving average. They're faster moving than simple moving averages, and that's why they're more popular for day trading. So those are the moving averages that

you're going to see me use. It's the nine, the 20, and the 200. And I'm going to have them on all time frames. Now, what's important to note is that the 200 moving average is a level of resistance and support, especially on the daily chart. So, if a stock is below it, it's resistance. If it's above it, it's support. Right here, it is resistance. Right here, it is resistance. Right here, it is resistance. And a lot of these small cap stocks are trading below the 200 moving average. So, we always want to pull up the

daily chart and check the position of the 200 because we want to know if we're getting close to nearby resistance. Now, the nine and the 20 EMA on intraday charts provide levels of support. So, if we have our pullback pattern and it just so happens to dip right off the support level of the 9 EMA, that's going to give me even more conviction that it's Going to bounce right here. So, I'm going to use these moving averages to help me time my entries, thereby improving my accuracy, buying the first candle to make a new high,

especially when it's a dip right off the 90 EMA. This case, it's a 90 EMA and a volume weight average price dip. Now, the volume weight average price is another technical indicator. It's an indicator that is like a moving average, but instead of just looking at the average price, it also factors in volume, the number of shares that have traded. And so it gives us the true equilibrium price, the true average price, factoring in each share that traded hands. So I use standard volume, weight, average price settings without any uh bands. It's just a standard

center center uh center line. Some people use uh bands on either side, but I don't use those. Now, what you'll notice is that right here, the stock is trending above the volume weight average price because the price is moving up rapidly. As the price moves up, the orange volume weight average price moves up as well. But then eventually some sellers come in and the sell the price Actually goes below VWAP. Comes back up to it, resistance, can't break it, comes back up to it, and here it snaps through it and rips all the way from

$450 up to $9 a share, which is incredible. This can be a really strong pattern when we break through a resistance level as we did right there. So volume weight average price when the price is below it, the shorts are in control. The bears are in control. When the price is above it, the bulls are in control. So all is well and fine. The bears are in control. They're feeling good. And then when you get that sudden snap, all the shorts have to cover and the longs jump in because control has shifted. So a break

of VWAP is very powerful. A dip off of VWAP is dipping off of a very wellrespected level of support. So, I really like taking that trade. Now, the moving average convergence divergence indicator is a little bit different. It compares the relationship between two moving averages. A fast moving average, which is the 12 period, and a slow moving average, which is the 26. The signal period is the nine. These are all the standard MACD settings that would be standard on pretty much any platform. So, If we back up over here really quickly, um we'll just Oops.

I'll move this over here for you. So, what I'm going to do here is I'm just going to close this and I'm going to open up a brand new chart. So, when I open up a new chart here, you can choose a couple different things. You could choose to use one of my layouts. So, over on this arrow, I can load a layout and I can load Jess has layouts. I have layouts. I've got, you know, there's a number of different layouts, but you can load load one of the layouts that are saved. And let's

just say Ross 5 minute 2024. That's fine. So, I load this layout. I click the auto button in the bottom corner. And we'll link this up in group here to yellow. So, it's going to link up to SLXN. We'll link it to Vince instead. VNCE. Okay. So, this now already has the indicators added. It's got the orange volume weighted average price. It's got the 200 moving average. It's got the 9, the 20, and then the only thing we've got to add is our MACD. All right, so I'm going to add the MACD, and I'm going

to pop it right down here. Now, you if you needed to add other indicators, you could go in here and you could add moving average, Exponential, and you could add them all. Once you've added them, you can go in as needed and change the colors, change the style. But this is how I have it set up. So, we make it really easy for you guys. Now, this is chart number one. So, what you could do is you could say, I want to save this layout. All right, so I'm going to save that. Then you go

ahead and you open a second chart. Then you go into your layout and you load the layout that you just saved. Now, what you're going to want to do if you loaded um a second chart is well, you'd have to find your layout. But then what you would want to do if let's say you want this one to be a 10-second time frame is you link it up. That's fine. Link it like that. And then you click um let's see save layout right there. So then make a copy. You can also make a copy of

a layout. So this is going to be save saving uh one minute time frame. The important thing here for you guys to note is that you have to save uh oops one minute time frame. You have to save based on the time frame. So when you save a layout, it saves everything about the layout, including the time frame. So if you opened Five versions of this five-minute layout, you'll just have five five minute charts, and that's not what you want. So if we jump back into the slides here, what the MACD is doing is it's

comparing the relationship between two moving averages. So, if we have the price moving up very quickly, so we have this rapid rate of change right here, and let's just say we've got a little bit of a dip and then we get a couple more big green candles going up. If we had a uh a 12 moving average, the 12 moving average is going to be trailing very closely behind the price, whereas the 26 moving average, because it's the average price over the last 26 candles, is always going to be a little bit behind. And so

the result is that as the price begins moving up quickly, these moving averages are diverging. They're moving apart. And when the price begins going sideways, the moving averages will come back together and they'll converge. So the MACD is showing us in a very visual sense how the stock is trending. Is the trend moving up? Is it moving quickly? Or is it beginning to uh weaken? And so what I pay extra close attention to are areas like this Where the MACD crosses over where it crosses from positive to negative. So this is what I really look

at. Now here we see in the beginning of the move right here the MACD is positive right the blue line is above uh the signal line and then right there it crosses over right there and we go into this period of consolidation and then we go back to positive right here and then we cross over again right here. So, as a rule of thumb, I only want to trade when the MACD is positive. When the histogram is green, and when it's red, I don't want to trade. And when it's sort of waning and it's about

to go red, I'm assuming that it's going to go red, and I'm usually going to stop trading. When it's waning from green from red here and getting ready to go green, I will consider that sometimes as a crossover trade, but that's going to be a little bit higher risk. I'm not sure if I would do that during the small account challenge. I I expect that I probably won't. So, this was that example that I showed you during the pop quiz. That nice rally up right here. Moving averages are great. We're right near the nine. The

20's down here. VWAP's down here. And this is our MACD. Nice and open. Great volume profile. This is a fantastic place to be a buyer. Now, remember, where's your max loss? It's at the low of the pullback right down there. Once again, MACD is positive. Nice rally up. And then the candles get kind of smaller. It sells off. Then they get smaller and it kind of rallies back up. Little pullback here. During this pullback, should we buy it? MACD is positive. We've got a great volume profile. So, the answer is yes. The float on this

is 1 million shares. I believe this is a biotech stock. We could pull it up, but it doesn't really matter. All right. This is another one. MACD is positive for this whole stretch. So, all the way to here, we are buyers on pullbacks. Once the MACD goes negative, we are hands off. I am not trading it. Here's another one right there. Rally up, pull back. MACD is open the whole way. We're buying those dips and trading the next leg higher. So now let's talk about some of these practical realworld examples. So we're going to combine

chart patterns with confirmation from technical indicators on a quality stocks. There is a there is $127,000 of profit trading The leading percentage gainer on the day. What is the volume? 22 million shares. What is the float? 700,000 shares relative volume 250,000 times above average price $8 a share up 150%. So this was the leading gainer in the entire market. It started to pop up right here. It pulled back. I'm watching this pullback. I check my indicators. Good volume profile. MACD is positive. I buy the dip. It goes from 650 to 9. Then it pulls back.

MACD goes negative. I don't trade it during here. It curls back up right here with a big volume. Well, a decent volume spike here. The MACD wanes from negative to positive. And right there, we get that break to a new high. I take that trade as well. Here's another example. This is $79,000 of profit trading BCTM cryptocurrency stock. Leading gainer up 300% with news $10 a share, 36 million shares of volume, 6.69 million share float, 84,000 times relative volume. It meets all criteria. Now the entries. Every time it dips while the MACD is open, it

pushes higher. It dips, MACD is open, it pushes higher. Dips, pushes higher. Dips, pushes higher. Now right here, it goes a little lower. MACD flips negative. I don't take a trade on it. It goes back to positive. It swings up. That would have been a high-risisk trade because at the time, MACD was negative. But then this first pullback right here. Back to feeling good about that. Now, here is $51,000 of profit on the leading gainer, which was LCFY. It was up 294% uh with news. $10 a share, 21 million shares of volume, a million share

float, 381,000 times above average volume. Holy smokes. Every pullback while the MACD is open with its good volume profile gets bought up and it keeps going higher. So, this is an example of a stock that during the small account challenge, I would probably take each one of these trades. One entry, one exit, one entry, one exit, one entry, one exit, and then once we had a MACD crossover, I would stop trading it entirely. And I probably wouldn't take any more trades on it at all. $29,000 on this one, up 100% on the day, $8 a

share, 7 million shares of volume, 500,000 share flow, 31,000 times relative volume. Pops up, MACD's open, buying this dip right here for the next leg higher. It's a standard setup. It's the setup that for me has been the most reliable this day. $235,000 of profit. This stock IR leading Gainer 179% on the day right there. $16 a share. Only 2 million shares of volume. It's a lighter volume stock, but it's got pretty low float right now and it's obviously moving quickly. So, we're bullish. The first pullback got bought up and then that gave me the

faith to buy the second pullback here and then that third pullback that pushed just a little bit higher. And this had a big range. So with this type of range, 10,000 shares, you know, $7 a share, next thing you know, you're up 70 grand. So it adds up really quickly. Now, this is another example of scanner alert. So stock is in the scanner, PTIX. It pops up. I see that it's got news because it's got the flame. It dips down for a second. I buy that dip right there. It surges from about $4.20 up to

five all the way to six up to $7 a share. Incredible. So, $32,000 of profit, $35,000 on the day. Here's another one. This is the one that I've shown you a couple times. That pullback right there and that squeeze higher, $73,000. So, these are the setups that I'll be trading during this small account challenge. You get the idea. And the profits on some of the trades I've taken this year, I mean, these have Been unbelievable. But the strategy is the same as what I do during a small account challenge. The only thing that's different is

I'm taking much bigger positions because my account is larger and I'm taking a lot more trades because I'm not worried about, you know, having kind of like if I lose money on day one of small account challenge, it's upsetting. So just as soon as you're green, it's like lock it up and get out. But once you've been trading for a long time, you just keep trading until the market's no longer giving you return. You just have to be careful during a small account challenge not to get in the habit of overtrading. So during this pattern,

you'll see me trading these setups starting on day one. Now, the next episode in this series is going to be day one. Now, when it comes to exit indicators, there are a few really important things that we need to be on the lookout for. So, when I get in a trade, I'm buying that first candle to make a new high. That's our standard setup. We love it. But where do I sell? So, if I see a large sell order on the level two, that for me is an exit indicator. So this is what the level

two looks like right here. And I've got standalone episodes that go into a lot of depth on how to read level two. So you can spend a lot of time watching those and learning more about this if you don't already know how to read it. But what the level two is showing us is all of the buyers and all of the sellers. So, if suddenly we see like a 100,000 share seller, I'm going to recognize that that's a very large sell order and they're creating overhead resistance and the stock's going to have a hard time

moving higher until that sell order is gone. So, I can wait for the sell order to move, but more likely the best thing to do is just to get out of the trade, just to sell the position. So, if I see a large sell order on the level two, I'm going to exit the position. Now, what's interesting about that indicator is that it's not based on a candlestick chart. the candlestick chart will not show me that seller. That seller comes from looking at the actual depth of the market right here, which is why it's really

important that you're using the right tools. Now, the second indicator that I'll look for is a large topping tail. This is something that we would see On our candlestick chart, right? So, we know that those topping tails, we all of a sudden have, you know, this nice rally higher. So, let's see. We've got the nice rally up, nice rally up, and then suddenly right here, we've got that big topping tail. Remember this is called a shooting star. So shooting stars come back down to earth. So boom, drops back down like that. That's we would expect.

And then right here, what do we have? A hammer. A hammer is hammering out the base. And we would look for that next candle to make a new high. So we want to pay extra close attention to topping tails in the context of a move up. Now, if the stock was going sideways, these candles are not as significant because sideways price action is already indicative of an indecisive market. People are sort of, you know, neither bullish or bearish nor bearish. But, uh, in the in the context of a strong rally, seeing that topping tail is

a problem. Now, if you didn't notice the large sell order on the level two and you didn't notice the large topping tail, hopefully you'll at least notice when we've got a high volume red candle. because if you're still Holding and we got a high volume red candle, the stock is turning around and you should not still be in that trade. So that's a problem. So that's a definite exit indicator. And then number four, this one's a little bit trickier. The stock is no longer obvious. So what does that mean? The stock's no longer obvious. Well,

one of the things I can tell you is that in a hot market, we often see momentum will shift from stock to stock. So news usually comes out at the top and the bottom of the hour. So 7 a.m. news comes out and a stock has news and it squeezes up. 7:15, 725, it's moving higher. And at 7:30, another stock comes out with news. And the news headline on that other one is a little juicier. And maybe the float on the other one's a little lower. The price is a little better. And for whatever reason,

that one starts moving and it's moving quick. And so now stock number one, people abandon that completely and switch to stock number two. So you got to be really careful if you're holding a stock that is no longer obvious or is no longer the most popular stock. So, those are really my four most critical exit indicators that will help me get out of Trades before they go the wrong way. And I suppose the fifth one that I could add, which I already mentioned, is simply breakout or bailout. So, if it doesn't work immediately, I got

to jump out of the position. I don't want to keep holding if it's not going up. I got in with the expectation that this was going to move higher. So, if it's going sideways, that's a problem. Okay. Step five of the small account strategy is sharing with you my trading plan. So the trading plan is very simple and again I want you guys to download it so you can print it out and you can have it. You can utilize it in your own trading. It's my trading plan plus my small account worksheet. I'm going to

walk you through how I would set it up. So we've got the detailed strategy description, the time of day you'll trade, the stock criteria, the technical setup, and the daily max risk and the daily profit target. So this is my trading plan. Momentum trading the leading percentage gainers on the front side of the move. That means before the MACD has gone negative and the stock has retraced. The time of day will be between 7 a.m. and 10:00 a.m. The price of the stock between 2 and 20, but We know between 3 and 8 is going

to be a little juicier. Float of under 20 million shares hard cutoff, but we know under 5 million is going to be juicier. up at least 10% but we know 50 or 75% is better with news with relative volume of at least five times but 80 times or 100 times is better. I will find stocks using scanners and it really has to be in the top three of the leading percentage gainers in order for the stock to be obvious and for me to feel comfortable trading it. Now my daily max risk is losing 10% of

the account and my daily profit target is growing 10% of the account. My belief is that I will be green far more often than I'm red. So even if I'm well, I guess if I'm 5050, then I would be break even. So if I was green half the time and red half the time with this profit loss ratio, I'd be break even. But I know based on this year that I've only had a few red days. So I'm averaging more like one to two red days a month. And I'll I'll allocate one red day a

week, but I think I can do better than that. So I think even with this daily max risk and daily profit target being one to one, I still have a good chance of being able to grow the account by 25 to 30% a week. I will calculate my share size by looking at the price of the stock, my buying power, and my ability to keep risk under 10%. And the goal is to continue continue to focus on 10% growth in one good day as the account grows. Once I get up over $25,000, you know, 2500

in one day, certainly achievable. Will it happen every day? It might not. Once I get up to 50,000, 5,000 a day, you know, again, that's going to be a little harder. It might happen if I've got the right stocks, but it might not. Getting to $100,000 and 10,000 a day, it's starting to be a little bit of a stretch. So, it's going to be easier to exceed those percentage growth numbers early in the challenge and they're going to kind of wayne a little bit as the challenge goes on. So, that's going to be the outline

of trading plan and the guard rails that will keep you safe and it will keep me safe as well. If I hit my max loss, I have to stop trading. If I have three big losses in a row and you determine what big feels like for you, I have to stop trading because of the risk of becoming emotionally compromised. If I give back half of my day after crossing my daily goal And you're you you fill in the daily goal, I have to stop trading to preserve profit. It's no longer about having a big green

day. It's about making sure I don't go red. I've got to be aggressive on the front side of the move, then abandon the stock when it fails to keep going higher. Be ruthless about cutting losses and letting a stock go when it's no longer giving you profit. I have to be able to do an honest assessment of market sentiment each day and an honest assessment of my own emotional disposition. Am I calm? Am I cool? Am I collected? Am I centered? Is this a day where I can fire, you know, on all cylinders? And I

want to try to hold a piece until I see a final exit indicator. I'm going to share those with you in just a moment. And I have to remember, survive till you thrive. Green days are good. Small green days are okay. Small red days are okay. It's just about keeping my head above water and making sure I don't blow up my account here at the very beginning of the challenge. So, the small account strategy, it's a growth strategy focused on trading momentum between 7 a.m. and 10 a.m. using that 10% riskreward parameter with target accuracy

Of around 75% growth target each week 25%. That's kind of what I'm going for. Some weeks will be bigger, some weeks will be a little slower, but this is where kind of I'm at for this challenge. Now, remember at the beginning of this episode, I said that all of the profit that I make during the small account challenge will get donated to charity, and you guys have the ability to double that donation. So, here's how it's going to work. If I make, let's just say, $100,000 during the small account challenge, I'll donate all of that

to charity, and I will match that an additional $100,000. And the way it's going to work is for every one of you guys who hit the thumbs up or subscribe to the channel from this episode right here, you'll contribute an extra dollar. So that means I'll donate up to $200,000 from this small account challenge. It'll be a combination of me trading and you guys hitting that thumbs up and subscribing. So let's donate some money to charity and let's learn how to trade in the process. The next episode in this series is going to be day

one of the small account challenge. It's going to be pinned right here and I'm so excited for it. Make sure you guys don't miss it. And let me give you that final reminder as always that trading is risky. So please guys, practice in a simulator before putting real money on the line. [Music]