When the market starts heating up, it can be incredibly frustrating because you'll see these stocks that make big moves and yet you'll still manage to lose money on them. And I know exactly how that feels because I have been there. How is it possible that a stock could go up 100, 200, 300% and I could still lose money on it? What is wrong with me? What's wrong with you simply is that you're not adapting to the current market. So in this class, I'm going to walk you through exactly how I've done that in my own trading and I'm GNA give you some tips and tricks you can Implement in your trading today.

So let's go ahead. and Dive Right In We've got a lot to cover, so if we look at this stock right here, this is Vvos. This stock went from $4 a share to over $48 a share in one day. That was yesterday.

This was a crazy move. 1,00% Today we had another stock that went up 1,000% All right. So right now we are in a hot market and for a lot of you, this may be the first time that you've seen this type of momentum. You may be accustom trading in a colder market.

We've been in a cold market for quite a while and now things are starting to heat up the overall. Market The S&P 500 is doing really well. you know, economic events. Right now all the economic data has been really positive.

so we're seeing sort of that lift that Rising tide in the overall market. And now what we're seeing is that The small cap Market is getting a little bubbly, a little frothy. You're seeing these little pops here. This is a sign of things heating up.

One of the reasons that a lot of beginner Traders lose is because they're not good at scaling up when things are hot. So I had a Trader recently who said to me they asked a question they said Ross Why do you even bother changing your share size on each trade that you take? You know if you look at all your data I've taken 24,000 trades. What if I just took 10,000 shares on every single trade for that whole you know that whole period. Regardless, wouldn't that make more sense just to take the same amount of size CU you know your accuracy, then it's easy to plug in how much you'll make.

And I said well, if I did that in a cold Market I would be trading far more aggressively than I should I'd probably in a cold Market lose a lot more money than I need to and in a hot Market gosh when it's hot I need to put the pel of the metal I would be leaving so much profit on the table if I don't try to scale up and trade bigger size when it's hot. so there in sort of Lies one of the secrets to becoming a profitable Trader Learning how to sort of Ease on the throttle when it's hot and how very importantly to ease off when it's cold. This is something that I struggled with as a beginner and as a beginner. Trader I also struggled to trade these stocks going up 1,000% or more which you know is typical of a hot Market not typical of a cold Market But the reason I struggled with them was because I would constantly feel like I was chasing and I didn't feel like I could manage risk.

and then next thing you know the Stock's going high Higher and Higher and Higher and Higher and then you know what I end up doing and so many Traders you know are with me on this: I end up being you know the schmuck that's buying this thing at $48 a share? you know what happened I capitulated I gave in I Finally say you know what I'm in. This thing keeps going I can't I can't bear to just watch it from the sidelines anymore. You press the buy button and then all of a sudden the rug gets pulled, the bottom falls out, and now you're the guy who's in at the top I Can't tell you how many times I did that I did that enough times where I basically trained myself to not even trade stocks that were making these big moves I said you know what these are. These are not my bread and butter anyways and in fact, they're They're so volatile that I'm screwing it up so I actually saw a Trader yesterday post and this was probably at like 10:30 in the morning that they were down $99,000 on Vvos and you know I felt terrible because I thought oh man, you know this is this is kind of that classic.

um you know that that classic move of you miss I think he might have missed the beginning of this move. The stock makes this this nice move and then finally sort of gets in like way up here and then it flushes and I swear like it wasn't 10 minutes later the stock is back at like the new high and I'm thinking oh man, so what what happened here? Essentially what happened is we're used to trading stocks as day traders that you know are volatile I mean we we like volatility. You know, high level in order to be a A Trader we need at a minimum, uh, some level of volatility and I would say stocks up? Uh, 10% At least we need at least a 10% move because that type of move is going to give us profitability. You know if a stock is only going up 2% H how much profit could you possibly capture on a 2% move? So as a side note, a lot of people who trade Futures are trying to trade these 2% moves.

and you know how they make money by using 50 times or 100 times leverage. So they're leveraging their account So they can make more money on a tiny little move. But the problem is if their timing is wrong and all of a sudden you know economic news comes out, the market could flush and they're they're in. They've now leveraged their account.

They're going to get their account blown up. So rather than using leverage to try to profit from tiny little moves, What? What I do is I try to focus on stocks that I think have the potential to go up at least 30 to 40% Because then my goal is just to capture a sliver of that move. But a sliver of 30 to 40% is a lot more than a sliver of 2% right now. So on a typical day I'm looking for a stock that I think could move up 30 40% And that means typically I'm going to be looking for a stock that's already up at least 10% as a minimum.

So that means what it's essentially done. Um, I'm going to draw these bands. so this is. this is a standard deviation right here.

So this is plus 5% This is minus 5% 99% of stocks are going to trade inside this range. If a stock breaks out of this range, it's worth taking a look and figuring out why. So once it's up 5% once it's up 10% Now it's time to understand what's going on with this stock because this stock is now part of the 1% today. this is the 1% of stocks, maybe less that's making a big move.

And so then what we do is we look and we see. All right. You know what? this stock has just as I suspected News: It's got a news Catalyst And you know it could be Um with a lot of these Uh stocks we've been trading recently. these have been um, bio, um, Pharma stocks.

So these are you know, coming out with FDA announcements, clinical trial results, things like that, And with that news, these stocks can go up big time. Now there's a couple other things that allow a stock to make a 30 40% move besides being um, you know, breaking outside of its standard deviation, the reason a stock is able to break out like that. Ultimately, you've got the stock up 10% At a minimum, you've got the news. And then number three.

Let's see number three. We're going to see the relative volume relative volume being five times above average. So what that essentially means is that when we look at a stock and I'll jump on screen share Here, let's look at Vvos. So Vvos Um, yesterday traded with 46 million shares of volume.

The day before it had I'm not kidding. 6,000 shares. How do you go from 6,000 shares one day to 44 million shares the next day? How do you make that kind of leap? Boom right there? News, right? It's the news. And so when you have big news that then creates high relative volume right here.

All right. So now you've got high relative volume allow Traders are going to be interested, especially retail. Traders And I found that stocks that are the most popular that make the biggest moves are priced between 2 and 20 Now number five. The float is the number of shares available to trade.

And so what's interesting here is that this company, Vvos has a float of 1 million shares. You could see right here. One million shares is the float. All right.

So this is kind of wild here. Um Now I Find these stocks using my scanners. These are the scans that I use by the way. So those of you guys that want to use these scans of course you could use them.

If you're Warrior starter Warrior Pro member you can now see them just over on Um Warriortrading.com these are This platform is called Day Trade Dash So I found a Bbos with a 1 million share float and it's squeezing up yesterday on news. So basically as soon as it hit my scanner and this was um, we'll go back into this chart here. This is the one we're going to look at first. So Vvos I'm going to switch this actually to a one minute time frame.

The one that we traded uh today was uh minm Also 1 million share float you know? So we're going to go over that One as well. So we've got a couple stocks to go over today and these are going to be, uh, good examples of trading this type of volatility. All right. So G To back this up here, let this load up all right.

So I was sitting here yesterday morning and I saw Vvos hit my high of day momentum scanner. so my high of day momentum scanner uh, by the way, is this one right here? So the stock hits my high of day momentum scanner just like these ones are. These alerts are triggered when a stock hits new Highs but when it also meets certain criteria including right here up 10% High relative volume price and Float I Like to see a float of under 20 million shares 20 million shares available to trade, that's the total. Because here's the problem.

When you have a stock. For instance, like you know, Fizer or Johnson and Johnson, you know they. They have sold so many shares onto the open market. When they have news and it pops up a little bit, there's a lot of people ready to take profit.

There's a lot of sellers stacked up and so you can have demand, but there's there's just so much liquidity that you don't get those big moves. so every move is is ultimately compressed. Now that's desirable for Pension funds. you know, for 401K mutual funds.

Things like that because they don't want to be investing in something that could go up or down a th% in one day. That's way too volatile. People don't want that and there's restrictions about investing in those types of Assets in for mutual funds and things like that because they're just too risky. But for active Traders like us now, that's exactly what we like.

So float is a really big um, uh, variable in how volatile a stock is going to be. The smaller the float, the more volatile it'll be All right. So we've got. um, so so back here on the chart.

let's see where was my other window? Um, here it is. So Vvos hits my high day momentum scanner and starts popping up and this thing goes real quick. from $5 to six, to seven, to eight and all the way up to nine and right in here. I Saw some people who said oh, I just bought it at 885 and I just stopped out when it dropped all the way down here to seven.

You know this was a big swing and this is the thing that a lot of beginner Traders will struggle with is managing risk on these types of stocks. So if we look at our whiteboard again here, let's see. Uh so one of the things that um, we have to recognize is that a typical stock. Let's you know.

let's say the typical stock that's going up. You know maybe 20 to 30% is going to trade in this kind of range here. So these are it sort of volatility bands. so it might be up and down.

You know it depends on the price of the stock. If this is a $3 stock, we go from 3 to 330 to 315 to 350 back to 330. So you know we're kind of like, you know, maybe 20 cents. You know, up and down.

And so if you're accustomed to trading with you know 20 cent ranges you might be like oh I can go ahead and buy. you know a th shares of this. Let's just say a th000 shares because even if it drops I'll only be down 200 bucks. But then when you look at something like Vvo hello, this has all this is now.

Amplified this is not 20 cents, It's $2 a share. That's $2 a share. This is $2 a share. So now you have huge swings where using your standard 1,000 shares you might get in right Here it drops down here and you're down 600 bucks.

Before you knew it right, you're down 600 and you're stopped out. You're at a Max loss or what happened with this person I Saw yesterday who took a trade kind of like this and all of a sudden it's down $9,000 but you know it ends up swinging right back up. It's swings right back up and it's like the problem for him was that he took too much risk relative to the volatility. So when you're adapting from a cold Market to a hot Market you have to be aware that you're that you need to reduce your share size to accommodate more volatility because these are markets very volatile.

And if you start slamming trades with the same share size that you're accustomed to during a cold Market you could incur some really big losses really quickly. So one of the first steps to being able to better trade these types of big momentum stocks is being able to Throttle Down and throttle back up in share size and level of aggression. So during a cold market during a cold Market you're accustomed to taking trades where, let's say, for instance, we have a stock that that, um, pops up on the highay momentum scanner. It pops up like this.

It pulls back. let me find my red. Oh, this is orange. That's close enough.

All right. So it pulls back here. and then you're taking your first candle to make a new high right here. A quick trade and you're out because you know that the these stocks tend to do.

you know, dogee and then a dramatic reversal and then sometimes come all the way back down. So you've trained yourself to get in and get out and book your Prof quickly. So yesterday when I saw Bvos pop up on the on the scanners, here was my thought. I was like, well right now I see it as it's popping up right here so we'll go almost to like real time.

So I'll show you what I was seeing. so as it was popping up right here I saw it and I thought to myself I cannot buy this right here. This just goes all the way up from $5 to 650. But it does it on 8,000 shares of volume down here.

so there's really not a lot of liquidity, which means it would have been hard to get in and out on the next candle. It goes up to a high of nine bucks on now 35,000 shares of volume. There's not a lot of volume. then this candle is red.

This is called a hanging Man dogee. um not a not a nice name for a candle. Uh, it indicates a reversal. Uh, maybe coming.

The next candle is a big red candle and look at the volume profile. So two light volume green candles, two higher volume red candles I said I don't like this I don't think I can trust it. This is not a picture perfect bull flag for those of you that have studied the bull flag pattern. The problems with this particular pattern were that it broke uh two rules.

It broke the volume profile rule. This should have high volume on the green candle and light volume on the red candles and then high volume comes back in on the next Green candles. So number one volume profile was bad. number two: Um, this should not retrace more than 50% of the move.

So from five up to 9 is four points minus two. So H Gosh, it's really came right to that level. 50% retracement. Uh I say if it retraces more than 50% I don't like it.

This came right to 50% but uh, number three Rule Number three: Volume Weight average price. This orange line here is our Vwap and it broke below the Vwap. That's not good so I wasn't interested in it at this point. It comes back up here and I was like what kind of pattern is this You know this is this is not I can't trust this.

We have a little bit of a topping tail here. We've got this uh, hanging Man dogee this solid body red candle with high volume. this right now is too risky and the volume is too light anyways. so it comes back up and then it pulls back right here.

Now at this point after it pulled back right here, I said all right. actually. now now that I'm looking at this a little bit more closely, I'm noticing that we have ascending support and we're forming what is a little bit of an ABCD pattern. So an ABCD pattern is when a stock Uh comes up for the and forms a bull flag comes up.

Forms a bull flag does not make new high, pulls back and then it goes on the next attempt. Okay, so where's the trigger, Then the trigger on this? Well, there's two ways you could trade it. One is you trade it on the break of this level here which is 819. You trade that breakout and the other is buying the dip down here for the first candle to make a new high.

So let's watch what happened on this. So we get another red candle right there. It pulls back just a little bit more and then it pushes up. right here it goes to nine, Hits a new high of day, but now we've got a little bit of a double top and honestly on this one I still wasn't convinced that this was going to work I was like I don't know this, we've got bigger spread.

It's definitely volatile, going from 8 to 850 up to 9, but I'm just not sure yet. And then right in this area, it held over $9 a share. So this was our previous resistance level here and as it held over that level on the retest, this is where I started thinking okay I think we could start taking this seriously because it's holding the breakout price all right. Now what you'll see on this: You might have noticed this high volume red candle right here.

This was a false breakout and this is a spot where I saw some Traders say that they jumped in for that breakout because they saw the stock was squeezing up and then they got stopped out as it flushed down. but I said wait a second guys look at this yellow line. I had already drawn this yellow line here and I said this is support why would I sell this on Support? So here in lies the problem. a lot of Traders are misjudging how much risk they're taking on this trade.

They're getting in up here with 3,000 shares. it drops down here. they stop out with $1,500 loss. 2 minutes later it's all the way back at the high and now what they do give into a motion capitulate: buy here, then sell here and I'm telling you this is what a lot of beginner Traders do and this is a mistake that I made a lot in my early years.

I would keep chasing and then stopping out and then you know or right here look stopping out right again at Support. So that is sending support. Trend Line: I drew pretty early in the morning and you'll notice how the stock came down was sort of below it, sold off, came back, couldn't get above it, tried again and was below it. So I was like wow, this is really, um, a trend line that feels like it's pretty well.

Uh, it felt like it was pretty well respected in that area. So I did end up trading uh Vvos and I made some money on it. but I can also see how easy it. was for beginner traders to lose on it.

And the big issue there was that we had a lot more volatility than I think a lot of Traders were prepared for and so they weren't sizing accordingly. And and I think this is where there's a little bit of a challenge because on the one hand, when the Market's hot, you do want to size up. You want to be aggressive. You want to try to capitalize on this opportunity.

But on the other hand, you have to factor in that when we're having a stock that's going up 100, 200, 300, 400% or more, you're going to have bigger range is which means buying at the tops. It's going to position you with a lot more risk. So is there a better way to trade these than buying at the very top? So here's what I think is really important: I think if you can draw out your support and resistance levels on a stock like this, the closer you can get into support, the better off you'll be. One of my big turning points.

Um, that I had in my trading was during uh, the the the Covid Pandemic. When I started buying these extreme dips, the market was incredibly volatile and I kept seeing these stocks that would even halt down. But then what would happen is they would bounce off support And they would. They would bounce 50 cents or a dollar a share.

and I started taking those bounces buying off of support. and when I bought off support I could basically set my stop at break even because I was getting in at support. so I was getting in setting as either. So I'll show you on the Whiteboard when I get in off of.

this is what I look for. So let's say this is an ascending support trend line. All right. So the stock you know made the move up and then came back down.

Boom boom boom. So it sells off right there and I'm you know it, it goes. Let's say it goes up again and then comes back down a second time. And now because we've connected.

um, this spot and this spot I'm like okay, this is where I want to buy. So what I do is for a dip trade I call this dip trading but it's buying off of support in this case. So so I'm buying down here and usually often times these levels uh will be relatively close to whole dollars or half dollars, 50 C or half or whole dollar marks. It just tends to be typically the case.

So what I'll end up doing is as it pulls back I'll take a starter position at you know, let's say $6 down here and if it breaks immediately I cut my loss I get out at 580 I'm like all right there my 20 cent stop I'm out of that trade if it holds and remember I go in with a starter position. If it holds that level then what I'm looking for is that bounce back up that spring back up and now as it goes back up. what can I do one of two things. Option one: I could sell I could take my profit off the table.

Option two: I could just keep holding with a stop you know Trail my stop up and option number three I could add to my position and that's what I do in a hot market. So I get in with a starter at six I then add in this area and move my stop up just a little bit more and then as we break the high I'll add again move my stop up more and then as we go through new high of day up here this is where I'm doing a sell order sell to take profit, taking a little bit of profit and so this is a very fluid trade and this for me is how I maximize on these volatile stocks. Now a different way to trade this in a colder Market in a colder Market I'm not as confident that dips are going to get bought up, so in a colder Market I'm waiting for confirmation and I'm getting in for that first candle to make a new high right here. and rather than adding into the high of day, I might be taking profit and taking profit That's my cold Market Strategy in a cold Market I Have to be a little bit more conservative because the fact is, if I keep buying down here I'm going to keep catching flush, flush, flush and I don't want that to happen so in the cold Market What I end up doing is I do end up focusing more on breakout trading.

so cold markets I Like breakouts because I'm not confident that dips are going to hold, but in a hot Market that's when I want to start buying those dips and this is where I make a lot more money because I get a starter position down here at six and a starter for you might be 2,000 shares or 1,000 For me, it might be 5 ,000 now. I scale up to 10 to 15,000 shares here and if this thing squeezes $7 a share all of a sudden I'm locking up. You know, 105,000 of profit, You know? Case in point, you can see right here my P&l today: $1,674 47 I Felt confident sizing up today because I was able to get in on some of these dips. But here's the problem when you switch from Hot Market to cold Market in if you apply the cold Market strategy of just doing the breakout trade, getting in here is fine.

That's fine, but if you're just doing a trade where you're buying at the top for instance, what we sometimes see and I'll draw this um over on this side. We saw this uh quite a bit yesterday and we saw it today as well. So stock pops up see so two candles of pop up. it then pulls back a little bit and because it made such a big move when you get that first candle to make a new high, it's not going to go back up to the high because this is still really extend off of what level the nine moving average.

The nine moving average is way down here. So now let's look at the chart and let me show you what I mean by that. So if we Zoom back in here to the beginning of this move on Vvos the nine moving average. where was it? I mean this.

The nine moving average was way down here. So your nine was down here and we like to see the stock has support at the N9 moving average. That's support. So when support's way down here, it's just too far away.

That's not a good entry. all right. So when you have stocks that basically go straight up a lot of times they don't give you a good bull flag. The first C to make a new high is a little choppy.

The ones that do the the that first pullback the best are when it's a little more orderly it's a little. it's just not as exaggerated which is great for typical markets. but in a hot Market You know we start getting moves like this and then let's see. So this right here is a good example of, um, that kind of chop.

So this candle right here. so that was on at 980 today and let's see, um, be able to find another one here that we had yesterday. No, let's see. Um, let me show you this one from today.

This was what was this. Um CH I'm going to switch to a one minute chart. We had a couple of really dramatic, um, false breakouts on the stock today. Mi NM So like, look at this one right here.

So this and here's the thing. so this stock I mean this is this stock made a 1,00% move and I started trading it early this morning and I had some good trades in it, but it showed that it wasn't afraid to have some pretty big topping tails and some nasty reversals right here. right here, right here. this candle right here and again right here.

So this stock was displaying that it was not trustworthy to buy at the highs right if you were doing High a day break on this type of stock like right in here. Not good. high day break with an entry right there. not good.

high day break entry right there. not good. This stock I think I think there's a couple of factors that, um, kind of play into why it was trading like that, but uh, you in? I guess in in summary: I Think that one of the issues is that when you have a stock that's up this much and it's not on short sale restriction, you'll have short sellers that hit the bid. So if we look at the level two on the stock, this is the bid right here.

and this is the ask. So if you really want to, you know, pound the stock into the ground. The best way to do it would be to execute a you know 300,000 share market order and you're not going to do it when it's at the bottom. You're going to most likely do it when it's coming up to the high.

What that's going to do is it's going to sweep the book. It's going to create a flush. That big order would create a flush. and now all of a sudden Traders Panic out as those Traders Panic out.

Now you go into profit and now what a lot of these big short sellers will do. And we know all these you know big hedge funds that do this too is now they'll start putting up big orders on the ass. 50,000 shares, 50,000 share sell order 100,000 share sell order Because now they're trying to scare people away from buying it so they can hold on to their profit and you know that'll work for them. Sometimes it's a aggressive game that they play, it's not going to work all the time.

In this case, it it worked. Uh, on Vbos yesterday it worked until it did it. The problem though is that as a retail Trader it means buying up at these levels you're going to be fighting against. Um, you've got a bit of a headwind, especially when you have a stock that's on short sale restriction, which we did in this case.

So my, the way that I combat that is by focusing on buying as much as I can off of dips and then catching the pop back up. So if we look at our whiteboard here, what's very common during these, um, these hot markets when you have these big moves is you'll get these sort of false break breakouts where it'll pop up double top and then has a dramatic drop back down. you know, and then it comes back up and then it's the same kind of thing you'd say, Oh, this is a nice clean pattern and then what ends up happening. It comes up here and then all of a sudden what goes through a giant cell order and it flushes it right back down.

And we see this all the time. That's a game that we see all the time. and then what sometimes happens is it slowly climbs back up and then it goes. Go through that level.

So case in point, let's look at um, this. So that's what happened right here on this move right here That's what happened. It pops up, it flushes down, and then it slowly grinds back up and goes through the high. So in this case, there's two areas.

uh, to focus on. Number one is to watch for dips, and number two is to recognize when the stock is no longer worth actively trading. And this is something that I think a lot of beginner Traders struggle with as well. You want to trade stocks that are obvious? that's there.

There's no question about that, and this is. this was the obvious stock today. Bvos was the obvious stock yesterday. but it's not enough just to trade the obvious stock, you have to trade the obvious stock.

At the right times, you'll have a window. and those windows for me are when the stock is basically making new highs. So rather than trading it during the period where it's kind of going sideways I Want to trade it when it's really moving quickly. And the challenge with this is that by the time it's moving quickly, you may feel like you're chasing it all right? So I want to be trading basically sort of these first leg, the first leg up right here.

and then when it goes into this period of being sideways like this I don't want to trade it at all. Then when it comes back up when it first breaks out, I'm still a little hesitant about whether or not it's going to hold, but if it holds, then that first pullback. I'm watching for an entry off of support for the next leg higher. So let's look at uh, these charts from today.

So today or well, we can look at yesterday on Vbos. So Vbos for instance I wasn't interested in it in this area here because this area here was below the high. we had a topping tail red candle I wanted to see if it could prove itself once it proved Itself by holding the highs from this point right here I was like okay, this is something I'm interested in trading so then I actively trade it now in this area. Here we're more or less going sideways, right? We're below the high.

The high was 13. We came back up to 14, but we weren't able to hold that new level. Okay, so now the level in play is, when can this stock hold over 13? Okay, so now let's move forward. None of this is interesting.

This is not interesting. None of this is interesting. This is where it got interesting. The problem of course here is that it halted up almost instantly.

But still, this is where it started to get interesting once it was able to hold over 13. Okay, this area again it starts to get choppy when the stock is going sideways. This is where a lot of Traders get chopped up. This is where market makers going to make more money.

You're turning shares. You're not generating a profit in order for you to be profitable. The stock needs to be moving in a predictable way and needs to be moving up if you're trading to the long side. So finally here we break out and this is a really challenging area because it just basically in two orders.

probably two huge orders. Boom it's halted up. so now on resumption you could do a dip and a rip but that's pretty high risk. goes up here, pulls back and then really choppy in this area before starting to pull away.

which is why I say it's easy to look at this and say oh, I would have made so much money, could have would have should have because in reality this was on lighter volume than what we had earlier in the day. right? There's a window each day and the window window for me is from about 7:00 a.m. until about 11:00 a.m. That's when I tend to make the most money.

And this isn't just me saying you know, this is what. I I Think about my trading. You know this is based on actual data. This is based on.

Let's see how many trades do I have here. Um, 24446 trades based on 24446 trades I Know that the day of the week that I make the most money is on Wednesday and Thursday and the time of day that I make the most money is between 7:00 a.m. and 11:00 a.m. I Just know that.

So knowing that for me, uh, Vbos, even though it made this awesome move in the afternoon and it's great to see this for me. even if I had been sitting here trading, I could have seen how I would have been able to talk myself out of taking any of those trades. So being a profitable Trader long term certainly requires a high degree of discipline, but it also requires you to know your metrics, your strategy, and to lean in on that. So what I know about my trading is that when the market is hot I need to put the pel to the metal and be more aggressive.

and when I say be more aggressive, it doesn't mean necessarily that I'm going to trade all day, it it just means that during the window when it's hot, I'm going to take a little bit more risk and that risk can mean taking larger positions on dips instead of selling into a breakout, Adding into the breakout and looking for that bigger extension, I'm trying to anticipate that we've got more volatility and that means anticipating both that my losses could be bigger if I get in too high, but also that my winners can be bigger if I can get in low and I can add into that high of day for that extension. and if I can do that well, then I can really capitalize in a hot market. So I think now. It's probably easier to understand why a lot of beginner Traders will lose money even in a hot Market Because of the heightened level of volatility, it actually requires a a higher degree of uh, awareness about how much risk you're taking because you could get in and all of a sudden you're down2 $3 a share.

Certainly, if you were trading Vvos up here in the 20s or the 30s I mean this would. this could have been catastrophic for a Trader These are individual candles that are 5 points8 Points in size. The low of this candle is, let's see. Um, what was it.

The low of that candle right here is $39 and the high is 48. That is nearly a 10-point candle. That's $20,000 with 2,000 shares. That's 100 Grand with 10,000 shares.

That is a big whip. So unless you can afford that kind of whip, you shouldn't be trading with that kind of size at that price. But it doesn't mean you couldn't trade with smaller size if you, if you really liked it. Uh, but you know, just to come back to sort of focusing on some of the basics here.

One of the things that I'm always going to be thinking about is 2: one profit versus loss. So that can be risking 200 Grand to make 400 Grand or inverse. So profit a profit of 200 Grand versus 100 Grand of risk. That's fine, or it could be $2 $2 $2 of profit versus $1 of risk.

It's that the ratio is 2:1 because if you're working with a 2:1 ratio, you only need to be right 33% of the time in order to break even most Traders Oops, wrong whiteboard. Most Traders are going to find that um, they're not going to be able to Main Main Uh 2: One and most people hopefully are going to strive for better than Um than than 33% You got to aim for more like 50% 50% is is obviously better I Prefer to be trading Um with 50% or higher accuracy because psychologically I find it demoralizing when I'm losing 70% of the time. So I focus on high accuracy because it makes me more confident. But when you focus on higher accuracy, typically your profit aeration will suffer a little bit because instead of letting a winner potentially turn into a loser, you're going to start taking the profit off the table a little bit more again though in a hot Market That's one of those sort of finetuning adjustments that you make to calibrate yourself to the market you're in, you know it's These things can be so subtle And Yet when you think about if it helps, if if these slight subtle adjustments of buying on dips off of support uh of adding into a breakout instead of selling, you know if those help you make an extra 5 cents.

10 cents on every trade You take and you multiply that over hundreds of thousands of shares during a hot Market You're talking about tens of thousands of dollars of additional profit that you wouldn't have otherwise, so these small adjustments really can add up over time. The only way to know is to be actively tracking your metrics and to be journaling, uh, while you're trading. So so VVS we've talked about quite a bit. This one was yesterday and um, it was my biggest winner yesterday.

I traded it um, quite well, but I did not overstay my welcome on it I I didn't want to I was Greatful to be green and I didn't want to overstay my welcome today on Minm I uh I wondered I already have it on this side I Wondered if um I was going to have a tough day today because sometimes the day after a big uh momentum stock the the day after can be a little choppy. but we actually had a really good follow through today. um um, although we had some false breakouts up here pre-market it was really clean and I think this may be one of those times where um, you know we we're faced with uh V Vos we're faced with uh, a red Candle on the daily chart here on Min Minm you know it just was so extended premarket it wasn't able to hold those levels vvos Yesterday was a big green Candle on the daily I don't I don't know, it's It's possible we still have a lot of time before the close. Um, but right now we're kind of at volume weight average price.

We've had a couple of nasty flushes so it feels right now that the Bears are in control on this uh stock. So for me on this one this morning, um so this is what I said uh when it was down around $2 I thought it was trading pretty thickly uh in this area Here it makes this initial move up right here which is a pretty big move. It goes from a doll to 240 and so it's pretty extended off its 9 moving average. It pulls back from 236 down to a low of 184 which is a 50c pullback which is a lot for a cheap stock.

It bounces up, but that bull flag naturally does not resolve right. It doesn't make sense that it would because the top was featuring three topping Tails so we knew it was having a hard time holding this level. It comes back down and is finding support around volume weight average price. It then breaks down right here.

it breaks vwap and that is a small bear trap that leads to to a reversal. back up it squeezes back up micro pull back here and then it moves up to about 250 240. What was interesting though is when it came up to this 240 250 level, it was still pretty heavy on the level two. So heavy on the level two means I'm looking at the tape and look at how stacked this is right now.

I mean this is really stacked on a level two. This is like serious satellite radio, you know. Sirus satellite radio has a four billion share float. Minm.

uh, only has like, well this is shares. Outstanding. The float says it's a million shares so it's a small float but it's getting really stacked up. 56 million shares of volume.

but even pre-market it had a lot of volume. So I was sort of like I don't know about this. It hits a high of Uh 53 right here and then it flushes down to 222 and then it comes roaring back up right here. and I said all right.

look at our daily level. On The Daily level, the 200 moving average is at 33 35. That level needs to break. If that level can break and it may be able to, then I'm interested if it can't.

I'm not going to buy into this clear and obvious resistance level because then it's just going to fade back down. So it comes up to that 35 spot and I'll show you right here. It just blows right through it. So this gave a micro pullback right here.

on the one minute chart, it hit a high of 50. three it pulls back. That was enough to buy a dip for a rip up here to $4.50 We're breaking the 200 moving average so that was a solid trade. but then again, this first pullback.

here. we have a topping tail. another topping tail. So buying the tops is getting risky and now it's about looking either to trade it when it's going parabolic on micro pullbacks or waiting for the entire thing to reset for entries off of support, entries, off of support and for dip trades.

And this ended up just continuing to go higher and higher and higher. It was really, uh, we got some really solid trades on it today I was I was quite pleased with it so I actively traded it on this whole move up and then, uh, coming into the open, we had a little bit of a struggle up here around eight. As you can see, we had this double top right here. so I don't usually like to see that that looks like a bear.

All right, Double top? No good. but then it comes back up, it reclaims and as it held this level that provided an opportunity for a trade from 850 up to 950. I did take that trade and then at the open I took a dip right down here. I bought at eight.

Why did I buy at eight? That was the previous uh resistance level right here and I thought it would hold a support. So I took a starter at eight and then as it comes up I added it about 850 for the first candle to make a new high and this thing went all the way up to 10 and I took profit at $102 which was a uh I think that was the top tick high of day so um yep I can see my uh trade right here. this one was at um $10 128 sold a th shares so that was a really good exit. but then after that this area not interested because of this big topping tail I said no I can't trust it I'm not buying this, it sells off it comes back up to here I was like NOP can't trust this either because it already did this here.

not trustworthy un unless it can hold over $110 and again if it can hold over the level that had this previous issue then it's game time. but uh it was not game time for minm as the market opened and it's continued to be uh pretty difficult from here so there were some really uh, solid trades on it earlier but then it got you know as as you could see it just started to get a little bit choppy. So I think that as a beginner Trader when one of the things that I recognized was that I was making money without trading these super high-risk stocks so I was like you know what if I can make money without trading these high-risk stocks that's fine because how often do you have a stock that goes up a th% in one day? Well not that often. But when it happens and then you get two back toback, you do start to feel like gosh.

I should really probably try to figure out how to make a little money on these because clearly even if it's not your bread and butter, there is some opportunity there. And then what ended up happening for me was because I got so good at buying dips off of support that allowed me to start to size up with bigger positions. and during hot markets make an incredible amount of money. I mean it blew my mind how much money I was able to make by trading like that during a hot market.

So much so that when the market cooled off I when we went into a bare Market I started to feel like gosh, you know I'm only making a couple thousand dollars a day. I was averaging 15 to 20 ,000 a day making 1,000 2,000 3,000 a day. This feels so insignificant. But the problem was if I was trading breakout setups I was already getting in a little too high.

it was good enough to hit a couple thousand dollars, but not not enough to really size up in a big way. And what would happen to me when I would try to size up in a bigger way is I would be catching these. Um, you know I'd be catching these trades of buying right here. adding as it would go higher and then Jack knife it drops down and I'm taking a loss with you know, 20,000 shares I'm taking a good siiz loss.

So I realized you know for me I had to um I really had to scale down I had to reduce my share size and that was the right thing to do during a cold Market reduce my share size and be a little bit more careful on buying dips because buying dips were not holding as well and uh, just be content with you know, scraping buy with smaller winners. but knowing that when the market picks back up that skill I still have all I need is the market right? So now Rambo back out and I'm ready to take some big size and be aggressive. but just as quickly as I'm aggressive for a couple of days, I can cool right back off when I recognize that things are getting choppy and things are getting slow. That is such an important skill to learn the ability to take your you know foot off the gas quickly because what I used to do is I would have you know a nice green streak and maybe I was trading some of these stocks or I was trading with whatever and then the market would sort of cool off and it would change and I would have one big red day The next day I would come in and I would try to recoup those losses.

Second big red day now I've got two back-to-back big red days coming. The third day and I'm like it's all right. I can still third red day. Now what's happening is I am just capitulating I mean I'm buying everything at the top and then I'm selling at the bottom I'm doing everything backwards.

Four five red days in a row and now I'm down 30, 40, 50, $100,000 in 5 days. now. for someone who's made Millions trading, that's not as much as it would be for someone who's not done that. but it's still a lot of money.

and now I have this problem where gosh darn it. I didn't ease off the throttle soon enough Now I've dug myself a huge hole and what do I do So this is something that's really important being able to manage. Draw down Some of you guys right now may be in a draw down from the cold. Market The market was cold.

You were still trying to be too aggressive. You're getting stubborn. Rather than trading the Market you were in, you were trading the market you wanted to be in and you dug yourself a bit of a hole. I Think of draw Downs as sort of.

There's a few different types. There's the type of draw down where you have one or two red days and then you self-correct and you recoup, and you you're back to whole within like a week or two. That's not too bad of a draw down, All right. And then there's a draw down where you have two or three red days, a small green day, then you have two or three more red days, another small green day, and then two or three more red days.

Next thing you know, you're not just on a red week. You're on a red month. Maybe Two red months. and now you're getting more and more emotional, more and more frustrated, more and more stubborn.

And that's making your trading even worse. And now this becomes an extended draw down. This is something you really want to avoid as much as possible, but if you're in it, this is what you do. You take a step back and you tell yourself I need to look at what I'm doing right now, that's working and what's not working.

My turning point when I was in a situation like that was hitting rock bottom: I hit rock bottom in the sense that I couldn't trade in my account anymore until I added more money into it and I had accumulated $30,000 of credit card debt and I was struggling just to pay the monthly minimums and I had no income because I wasn't making money trading and I didn't have another job. So I hit rock bottom. Now, if I had had an additional $100,000 I don't think I would have had a turning point. I think I would have kept making the same mistakes I was making until I hit Rock bottom.

Hitting rock bottom became a catalyst for me to take things more seriously. It's sad that that had to happen. Uh, but that's what was the case for me. So then just like you know, when you present someone with an intervention and I've watched the TV show intervention, they say we're going to bring Rock Bottom to them.

So if so, for instance, in this Scen Scario um, you've been enabling someone and so they're living in your house, this and that so they're not on the street or things like that. you say you either go into intervention or you know rock bottoms coming to you because we're kicking you out. So now all of a sudden things get real. So with trading, what if you said I'm not going to add another Penny to my account I'm not g to add another Penny to my account.

you know that's it. I Either figure this out right here or I'm done. Bring Rock Bottom to you. Now things are getting real.

You've got to figure this out And a lot of beginner. Traders They won't force that rock bottom or when that Rock Bottom does come Now the emotions have gotten so big that they can't even see strength and that's a terrible place to be. So instead say I need to bring Rock Bottom to me and I need to do an audit of my trading I need to figure out what I'm doing right now that's working and what is not working. Eliminate what's not working and your metrics will show you.

You know if I pull up my metric right here This: these are metrics that are very much focused on I mean this is years of trading. so obviously this, um, you know I've I don't trade much in the afternoon because I know I lose money in the afternoon. but if I zoomed into a small window, you know we maybe we would see something in that window like oh gosh, that day of the week is not working for me or you know that price range stock is not working for me. You know I need to stop trading stocks that are under $2 a share, right? We would figure something out.

so we would look at where's the red and stop doing what's red, Stop doing that. That's that's first of all and then look at where you have some success and lean into that. Now if you're someone who everything here is red, you should not be trading with real money. You should be in a simulator and that's the harsh reality.

You should not be putting real money on the line. Okay, so if you've been profitable, but you know you've gotten yourself into a draw down, you've got to look at what you're doing that's working and stop doing what's not working. And then I Suppose the most extreme type of draw down is someone who's been in multi- years of being in the red where you're just losing and losing and losing and losing. So what I do when I have that first red day to tie this back to being able to Throttle Down or throttle up to have that subtle sense of what's happening in the market and be able to respond in real time before you dig yourself a hole and you're in a draw down.

So what happens to me is I have that first day that's red second second day red Third Day red Okay, things are things are now going in the wrong direction usually For Me 3 four five red days at the most and I'm like, okay, clearly what I'm doing is not working. So what do I do I change what I'm doing I start trading less I reduce my share size and I tell myself that until I have recouped 50% of my loss, I will not increase my share size So This Is My Equity curve here So then I dig myself a little hole right here. All right. So let's say this was 100 Grand up at the top 100 Grand and now I'm down at 70 grand I gave back 30,000 All right.

So now I'm going to say until I've made back 15,000 I'm going to keep myself for this period of time in Trader rehab and I'm going to focus on a quality setups A+ setups. It has to be the best I'm going to focus on Lower risk entry points like buying dips, buying off off of support and I'm going to focus on the highest quality stocks I'm going to trade by doing that I'm going to trade less trading less means my accuracy is most likely going to increase. Increasing accuracy is going to help me build some confidence and I'm going to need it because of what just happened here. By the time I've made back about 15,000 I'm ready to put put the P to the metal and start to step up to the plate with some bigger size.

So now let me show you in uh the last two weeks what that's looked like for me. So in the last two weeks here Let's see we can go to overview and go down. you can see I had these three large red days in a row I lost 5,000 6,000 and 4,000 So I came back here with uh, this was the day actually no, it was this day right here which is a $27 Green Day where I implemented my uh, my Trader Rehab program a short-term Trader Rehab program to slow down and cap my share size. cap my share size at 10,000 shares which for me is um is small So that was my cap and first day I made 27 bucks.

All right, that was a break even day, didn't didn't make any progress, but didn't go further into the red. The next day I made $4,700 and as soon as I got into the green I said that's it I'm walking away because it's so important right now mentally to have a win I cannot afford to be up 4700 and then go to Red and make it. you know, another big red day. So I've got to take the profit off the table.

So I take the profit off the table I come in the next day and I make $6,500 That's we had a stock that was moving looking good. Awesome coming the next day. 2,000 bucks a small win. It's not a lot, but now what's happened is I've made back 50% of my loss right up here.

So now I'm coming right back up towards the high of this you know, 30-day uh, window or whatever it is and then from there got myself back up to the highs. yesterday with yesterday's Green Day and now today $122,000 of profit. Boom sends me up here to New highs. So this is a chart where gosh, we sure should have been buying this dip and you know what? You buy the dip and if it pops up and then makes a new low you get the heck out.

But as a Trader we're going to do everything possible to make sure we don't go on that multi stair step down. We don't. We don't want this to happen. We do not want this to happen, but it can if you don't intervene.

So you have to intervene Right in this area. and when the market is hot, you need to be able to step up to the plate and be a little bit more aggressive. So want a stock like Minm? I Had a couple trades on this where I got in on a dip and I said my instinct. My instinct right now is to sell.

So I got an on dip and I'm up like 30 cents a share. you know on 5,000 shares I'm like this is500 bucks was a nice train I said hold off on that instinct to sell and so what do I do I'll tell you what I do instead of looking at the ask price instead of looking at the ask price right here. I start looking at the bid price I start looking at the bid price because rather than looking at you know how much the ask is at I just start looking at sort of like what's my trailing stop. So if I got in this at six rather than staring at 653 and 56, I say all right, 650.

So as long as this stays above 630, I'm going to still hold. and if it doesn't go down to 630, I'm not going to sell. Now if it goes up to 675 680 690 maybe at that point I say all right I'm gonna take half off the table or it goes up to 675 and I say I'm GNA go ahead and add I'm G to double my position from 5,000 to 10,000 shares. and I'm going to move my stop up to 635, you know, And this this is where you're sacrificing some unrealized profit.

But in a Hot Market this is where leaning in and being aggressive can produce some really big profits. So I think um, the moral of the story here is if you want to be able to scale up as a Trader you have to get really good at recognizing the difference between a hot and a cold market and you've got to be able to transition and adapt accordingly. I Hope you guys really enjoyed this class here today. And um, for those of you guys that have some questions, uh, throw them, throw them out and I'm going to hang out here and answer them.