Ultimate Beginners Guide to Candlestick Patterns, Support/Resistance & Technical Indicators | Ep. 4 transcript

in today's episode I'm going to teach you how to read Candlestick charts and how to use specific technical indicators to predict the future that's right as active Traders we are ultimately trying to make an accurate prediction of what's going to happen next with the price is it going to go up or is it going to go down we use a combination of educated intuition plus pattern recognition to make these predictions now if we're right we will make a lot of money and if we're wrong we will lose money now as you may know I am more often than I'm wrong I have more than $10 million of verified and audited profits under my belt that back up the strategies that I'm going to share with you today and although my results are not typical they are with real money now I am currently in the middle of a small account challenge I funded an account with 1,000 bucks to see how quickly I could grow it today is day 10 and so in this episode I'm going to use the live trades from this challenge to demonstrate the Candlestick patterns and the technical indicators that I'm using to grow this account so let's go ahead and jump on the screen share what you're going to see is a pattern and this is called the whole dollar half dooll entry something that's really important to understand is that stocks especially but this is also true with uh cryptocurrency and certainly true with Futures and commodities the they trade with respect to psychological areas of support and resistance these are half dollars and whole dollars this is especially true when the price is lower anytime we have something that's trading below a dollar when it comes up to a dollar that level is a huge psychological area of resistance and the reason is because a lot of people say ah I'll hold this and you know what I'll put my sell order at a dollar or maybe someone's like going to be a little cute they're like you know what I'll put my sell order at 99 Cents put it just under a dollar so people put a lot of sell orders right around these psychological areas they're just logical and so the result is that as the price approaches these areas it often slows down as it comes into this heavy upside wall of sell order resistance so if we jump onto the Whiteboard what we usually notice is that as the price comes up the price comes up here comes up here and let's just say this is a psychological resistance level of $2 what's very common and one of two things will happen number one we break through it and then we come back down and retest the level this is a retest and if the price holds here then this previous resistance is now support this is fine the second thing that happens this is scenario a scenario B which is also very common is that the price will come up right here and it'll stall out right underneath that level because there's so many sell orders right here it then pulls back just a little bit and then if it has a strong amount of volume right here it can bust through all of those sell orders and surge higher I like both of these setups but what's important to know is that if you're just looking at the candlesticks alone without regard for the price you may be missing the reason that it's stalling out at these areas price is a very important component so let's go ahead and actually look at my very first trade from day 10 so as you may know on day 9 I had a profit but we've got to take off the fees and commissions from Day N so that's going to give me a starting balance today of $2,314 I am just getting in my first trade right here at $26 let's pause this for a moment and jump back to the Whiteboard this is the example right here number the first one uh example a where the price broke over it pulled back and it's holding $2 this is the example right at $2 it is holding psychological support so what I do is I actually press the buy button right here as it's starting to move back up my stop is about 99 as long as it holds $2 I'm going to hold but if it comes down there's a lot of selling at too and it looks like it's going to break too I'm going to get out this has become psychological support and it must hold so with this trade right now I am in and my risk is 6 cents per share sh I'm in at 206 and my stop is $2 that's not bad I bought 1,000 shares of this stock now one of the things that has been tricky with this challenge is the fact that although because I'm using an international account I can day trade with as little as well $500 but I set it up with $11,000 I cannot use leverage on any stock under $5 a share the way leverage works is that when you deposit and I'll get on the Whiteboard here and just show you really quickly for those tuning in for the first time when you deposit $11,000 this broker gives you six times leverage which means you have up to $6,000 of buying power yes it is still a $1,000 account because that's how much money I deposited but the broker offers leverage this is also offered in the US however in the US you need a minimum of 25,000 to have leverage and you only get four times leverage but that would still give you a $100,000 max amount of buying power so in this account the main problem that I have is that lower price stocks well I can't use any leverage so on this one here I can buy 1,000 shares because I have $2,314 of equity all right so I bought it and my target here is that this squeezes up to the next level of psychological resistance psychological resistance here would be 250 however sometimes lower price stocks like this will also struggle a little bit around 225 the quarter okay so right now I'm up about $63 but it's already starting to stall out and that's not great when I got in with a 6 Cent stop psychologically I knew that I wanted to try to make at least 12 cents a share that would be a 2:1 profit to L ratio I call that the golden ratio all right so that means I'm going to risk a dollar to make $2 so in this case I'm risking 6 cents to make 12 cents now that's sort of the minimum I need in order to justify the trade obviously if I can risk 6 cents and make 40 cents that's terrific but if I can't then it is what it is so in this case I decided to sell the position because I got in expecting the stock would continue to squeeze up and it stalled out I locked up $13.8 before fees and commissions that's not a big winner for my first trade but that is okay and the risk to reward ratio on this trade made sense just because I'm risking 6 cents doesn't mean I'm going to hold until I either hit my Max loss or I hit my profit Target I will get out sooner if the price action starts to stall out one of the philosophies that I have is called breakout or bailout so if it's not squeezing and it's just sort of stalling out I'm going to get out of the way you know what maybe my timing was wrong maybe I have the right idea but I just don't have quite the right entry or maybe for whatever reason a new round of sellers have come in at Kind of a Funny price and it doesn't really matter because if it's not going up it's not worth me holding and hoping because what I would suffer is exposure risk the longer you're holding the more you're at risk of catching a a quick flush down and getting stopped out it's much better just to cut your losses and get out break even and then try again a little bit later okay so I do end up taking another trade but before we get into that trade let's talk a little bit more about the individual candlesticks all right so we're going to jump back on the Whiteboard here so when I was showing you this um sort of little diagram here of price right around areas of psychological resistance we see we come up we pull back just a little bit and then we surge higher all right and it's very common that this will either be right underneath the level or right over it so this area here is an area I want to pay really close attention to this is going to happen at half dollars and uh whole dollars so 2 250 3 3504 Etc but let's look at the actual candlesticks for a moment okay so if we're looking at the actual candlesticks and we'll just we'll keep it on this side for now all right so we're looking at the actual Candlestick right here this Candlestick is communicating four pieces of information the open and the low now in this case this is the open right down here that's the open this is the low that's the high right up there I'll put it h and this right here is the close so on this candle right here the price opened it dips down just for a moment it surges up to a high and then closes right here I would look at this candle and I would say this is a pretty strong candle this communicates a lot of strength now if we look at the chart from the last trade you'll see that the price on this was basically going straight up especially if you look at the 5-minute chart it went from 150 160 straight up up to like 207 so what you ultimately have is a giant green candle so let me show you here if we have a big green candle like that what is that telling us what is that communicating that's communicating strength the price is going up that's exactly what we want to see well what if we have the inverse what if we have a big red candle what if the price goes like this obviously that communicates weakness right so we've got strength and we've got weakness okay those are two extremes let's look at something in the middle what about something like this now this to me communicates indecision the price went up and then went down and then kind of closes you know in the middle it it's sort of like there was a little bit of tug-of-war here so when we see something that's moving higher and it has you know three really nice big strong candles in a row like this and then this final candle up here looks like this I consider that to be a warning that the trend may be about to change and the reason is because this is showing a high degree of confidence and really strong sentiment in these green candles and this right here is showing indecision it's not good to see any indecisiveness at this point in a rally this is like the equivalent of indecisiveness you know as the uh as the bride's walking down the aisle this is not the time to be indecisive you know what I mean like you want to be nothing but confident in this moment so when we have the price squeezing up we want to see confidence otherwise the stakes are so high that if we see any degree of weakness you know what's going to happen people are going to start executing sell orders what's that going to mean sell sell sell you're going to start to see that first red candle come in you see a second and who knows you could see a third and it could come all the way back down it could do a full retracement now we don't know whether or not it's going to do just a small pullback like this and do the next leg up or if it's going to do that full retracement so in the moment since we can only see what is currently happened what we need to do is we need to attempt to visualize the other half of the pattern right this hasn't happened yet so how do we visualize what's going to happen next well in this case the only thing that we can do is we can recognize that this right here is last strength now there's indecision and what we know is that typically when we see that happen it is a warning or caution sign it's a signal it's like an orange light on a traffic light it's likely that it's going to then give us confirmation of a reversal and the confirmation of the reversal will be when that next candle goes red now it's also true that sometimes sometimes we will stall out and we'll have this candlestick here which um is called a dogee when the open and close are basically at the same exact price like this when it has a small body it can be called a spinning top it kind of looks like a little spinning top here that kids would play with um and and there's a couple different shapes this candle can have if it has a body like this with a long topping tail that's called a shooting star this is a very strong indicator of a reversal coming back down and if it looks like this right here that's a hanging man so the price opened it dipped down came back up enclosed here but it shows that weakness is starting to come in on this so any of those candles are potential weakness so and again I want to emphasize that it's weakness in the context of something that's moved up quickly in the context of something that's going sideways these candles don't mean anything indecision when the price is going sideways who cares yeah it's indecisive the price is already going sideways it's only a problem to have indecision when the price is really really extended to the upside or really extended to the downside that's when it's a situation that's when it's a problem so we've got a spinning top we've got a standard dogee we've got a gravestone dogee sorry we've got a hanging man we've got a gravestone dogee and then we have um the shooting star right here so these can be no matter what color they are red or green they're not good when they take place at the end of a strong move up okay so I just wanted you to be aware of that really quickly so when we see something that's made a really strong move up this is really strong this is very bullish this is what we like to see but we know that inevitably we will have a pullback the question that you may be asking yourself is how do I know if it's going to pull back and go all the way back down or if this pullback is a dip that should be buying that is a great question okay so let's jump back up on the Whiteboard because I have a good answer for that one of the things that I have noticed is that when when we have one of these big moves to the upside so we have this nice big squeeze up then we have a little bit of a pullback this is fine now the question is are we going to pull all the way back down here and go all the way back down to here or are is this just a little dip for the next leg up we want to look at something uh down here I'll make this candle a little smaller which is called the volume profile okay so this is volume and this is price all right so we'll separate these like this so the volume down here if we saw this volume profile I would have a pretty strong belief that this is going to continue to sell off you know why high volume selling high volume light volume move up and high volume selling almost always results in a decline in price so the Candlestick alone yes the Candlestick shape if if we have a nice little dogee up here would have indicated the possible reversal coming back down but this by itself is not going to tell us whether or not we're going to drop all the way back down we're going to come back up we need another indicator and so this is the first of the indicators that I want you to understand volume now some people say volume's not really an indicator but well it is of course an indicator and it's an important one that it's easy to underestimate I want to see high volume on the move up and then light volume on these pullback candles and this candle fine here so this volume profile tells a very different story what this volume profile is telling us is that the price moved up on high volume the pullback is on light volume yes there's some profit taking maybe there's some short selling but it's not like a light volume squeeze up and then just tons and tons of selling so there's a very different psych uh very different sentiment and and Market psychology associated with each one of these unique volume profiles so in this volume profile we would then want to see the stock move back up however let's look at our next indicator our next indicator right here is the 9 EMA this is the nine exponential moving average I like using exponential moving averages because they react faster to changes in price so when the price starts moving up very very quickly the exponential moving average moves faster because it weights more recent price action more heavily than the older price action a simple moving average will move a little bit slower because it's not waiting uh recent price action more heavily a perfect pullback will come down right to the 9 EMA it'll almost tap it it'll almost just give it a gentle little kiss and then boom we come right back up so this 9 EMA is psychological support as well now the trifecta perfect scenario is when you have all of this plus this right here is $2 a share or let's say let's say this right here is $7 a share let's use this and I'm going to be foreshadowing my next trade all right so let's say this is $7 a share the price has squeezed up here to maybe about 725 it's pulled back just a little bit it's holding support at the psychological level this is a perfect spot to look for a dip entry now it's true that confirmation will come when this candle actually makes a new high and buyers start to come back in and volume begins to increase back up that's going to be confirmation all right so getting in anytime before confirmation I'll only use with small size but taking a starter down at this area right off of the psychological support and right off of the whole dollar and the psychological support of the 90 Ma what this can do is can give me a really tight stop but getting in at 725 or something like that for the move to 750 8 and 9 that's okay to let's go ahead and look at trade number two okay so we have a stock up right now about 15% now this stock just did a 1,000 to1 reverse split which is really crazy it was 6 cents the day before and because the reverse split is now trading at $6 a share the float is also 1 1,000th of what it was yesterday these are the types of stocks that can move very very quickly and this one's been beaten up for a long time so right here it breaks over seven and it dips for a moment and I end up punching this buy button I try to buy that dip I get filled a little higher I was trying to get filled right at 7 and I'm looking for the move up to 750 there's 750 and then 8 850 and now nine do you see how it's trading right at these psychological areas this is literally following those psychological areas to the penny it goes from 650 to 7 to 750 to 8 to 850 to 9 I lock up over $600 on this trade so this was an example of buying a chart pattern that I would call a micro pullback and it just so happened that this was positioned around that classic half dooll whole dollar area we see it time in time out again and again and again we see this pattern at these prices so one of the things that I'm doing while I'm trading I am watching my scanners so as I see a stock moving up the scanners I'm looking at the price very carefully and if I see a stock hit the scanners it's at like 702 and I see a big buyer at 7 you know what I'm going to think I can get in right here with a stop at 7 because I'm getting in right at psychological support now I will do that even if we have an example where the price is very extended right here I could get in if I just have the luck of the draw that I pull it up right at 701 I could get in right here at 701 I could set my stop at $6.99 or $7 and if this thing wants to keep going as you just saw sometimes they will and it wants to go straight up to 750 or straight up to8 or 9 I have seen candlesticks that literally went up $10 a share and sometimes people will say Ross I don't understand how you possibly manag to get in that you know all I'm seeing is one giant green Candlestick why did you buy where you bought half dollars and whole dollars buying around half dollars and whole dollars is one of my favorite ways to quickly get in something that's moving now the other thing that I really like is to trade what is called a micro pullback now what I want to do actually for this episode is uh if you guys look down in the descriptions and pin to the top comment pin to the top comment you will see a link to download my micro pullback strategy this is a strategy in a PDF you can download it you can print it out you can put it right next to your desk that is going to come hand inand with my technical analysis series which is also a PDF guide I want you to download you'll be able to download both of them and I want you to print them out put them next to your desk these are going to help you identify these patterns in real time because one of the biggest challenges for beginner Traders is that when you're looking at the pattern forming you only see half of it you don't see the full pattern until it's over so what I need to do for you is help train your eye to recognize the pattern when it's in half form and to be able to see the rest now you know if you see half a giraffe it's very easy for you to be like yeah I know what's coming next it has a huge neck giraffes have huge legs they have a huge neck that's obvious if I show you half a stop sign you know what the other side looks like your brain knows immediately but you're just now learning the language of the financial markets so for me I know immediately when I see half of a bull flag when I see half of a micro pullback when I see half of a head and shoulders or half of an ABCD pattern I know what's coming next now I don't know it with 100% certainty because even the perfect patterns sometimes will fail as you'll see in one of my upcoming trades but I have a high enough accuracy 65 70% sometimes higher and then that enough is enough for me to be very profitable so so I know with a high degree of certainty what's going to happen when I see this part of the pattern but again that part of the pattern has to be combined with volume profile and the right technical indicators so let's talk a bit about some of these technical indicators just for a moment so I already shared with you my first one which is volume so volume bars and these should be colored uh red or green I'm sorry I inverted that but green or red and then we want to see and this is going to be based on the the price of the candle if it's a green candle you want to see a green bar if it's a red candle it's a red bar it's very important then you want to see the 9 EMA and I use this on all time frames one minute 5 minute daily all all time frames I use the 20 EMA what I find is that you have these sort two moving averages you've got the nine and then you have the 20 The Nine's always going to be closer to the current price so when the price moves up very quickly like this you're going to have the nine first so when it comes back down if it is not able to hold at the nine the next level that we look at is the 20 usually if it breaks the 20 it's all over but the confirmation that it's all over is if it breaks volume weighted average price volume weighted average price is a technical indicator I have it in my charts as an orange dotted line right down here and this is I I I call it kind of like slack tide this is the equilibrium of the stock on the current day it is factoring in the all of the volume that's traded and at the prices that each of those shares is traded at to give you the average price of the stock the volume weighted average price that's why they call it that it's brilliant it makes a lot of sense this is really helpful because if the stock is below it inherently the Bears are in control if it's above it the Bulls are in control so if it's above vwap it's bullish if it's below vwap it's bearish there are rare instances well where I will as a bullish Trader buy something that is below vwap with the expectation it's going to curl back up but it's very rare I primarily focus on trading above vwap and for most beginner traders that really is going to be the safest place to trade now the next indicator actually that I um forgot to mention but I'll I'll add right here is um let do it in Purple Mac D which is moving it average convergence Divergence indicator and so this is kind of an interesting indicator the way this works is I'll I'll erase this this is this is okay to erase so the way the macd works is it is an oscillating indicator so you'll have typically your chart will be in three panes you'll have volume you'll have mac D and you'll have price like this so your volume bars are going up and down right your candlesticks going up and down not going to color them but you know you get the idea of course and then you've got your macd so your Mac D is going like this and it goes like this like this so you have the moving average and then you have the signal line and I trade when the macd is above its signal line and when it crosses over right here from that point forward I expect the price action will be much choppier and I generally don't want to take too many trades and actually to be honest this is a Picasso because I did this perfectly this right here is about where you would expect the macd to cross over and it will cross back up as it's coming back up we'll just move that like that that's all right doesn't have to be perfect anyways so basically what happens the price is moving up and so your moving averages let's get the um the 9 EMA is coming up right here right like that and then you've got your 20 EMA that's down here so when the price is moving up the moving averages are converging they're pulling apart they're separating okay so this starts to open up and then once the price action starts to compress and consolidate those moving averages come back together so all of a sudden the macd or the uh the 9em curls back down and then the 20 starts to curl back down and some people actually trade just based on moving average crossovers you know like right in here when the 20 this is that one's gone when the 20 crosses the nine some people would take a trade right there and that's not something that I do uh but I do pay attention to the moving average crossover on the macd so when the macd crosses over right here I usually sort of Ste steer clear when it comes back up and goes positive I may take another trade and I will occasionally take a trade down here on the pullback but usually the cleanest price action is when it's open and this is specifically on a one minute and a 5-minute chart I don't use it uh particularly at all on the daily chart all right so now let me show you the micro pullback so the micro pullback occurs when you get a quick move up and then just a brief pullback you will visualize this actually better in the live trading recordings than really on a chart because it happens so quickly so we get this um this quick move to the upside I'll just erase this we get the quick move to the upside right here like that we just do it in blue it's fine and then we get a sort of just a moment of pullback and then the price so sometimes you might have like just a moment of dogee and then the price continues higher now it probably wouldn't be a dogee but this is going to be on like a 10c time frame it's a super fast time frame so the price moves up it pulls back it goes higher and so 10 seconds so you're going to have six candles like this in a one minute candle so 1 2 3 4 5 so let's say there's another one down here so the one minute candle would look like like this straight up right so Traders are going to say Ross I don't understand how you got in right here well you know what it probably was this micro pullback very good chance it was around a half dollar or a whole dollar so maybe this was seven on the top maybe it was seven on the bottom it broke above it held above it and then it goes or it approaches it it pulls back and then it goes whether it's scenario a or scenario B this is that spot where I'm often a buyer so right there in the middle of that pull back so I encourage you guys to download the PDF on my micro pullback strategy that is pinned to the top of the comments and Linked In the description print it out on your desk so you can have it so you can study it and start to memorize this pattern this is the micro pullback pattern and I love trading it now let's look at my next trade and this is actually going to be my trade for day 11 so day 10 finished in the green Big Green Day and then I come in on day 11 well I end up trying to trade what's called an ABCD pattern and I'm going to show that to you in just a moment but let's look at the trade first okay so on this trade I'm getting in anticipating a break through the high and I bought amly 600 shares why did I buy only 600 shares well I think you know the reason it's because the broker that I'm trading with doesn't offer leverage on these lower price stocks and one of the things I said in my last episode is that I really should just avoid trading this price rage entirely because I can't buy enough shares and when I can't buy enough shares I'm not going to trade the the position the way I normally would so what I would normally do on this particular trade it's an ABCD pattern so let me show you on the chart what that looks like in an ABCD pattern you have the first leg up you have a pullback it comes back up but on the second leg up it doesn't make a new high now one of my favorite chart patterns is a bull flag in the case of a bull flag we have the move up up we usually have two or maybe three candles of pullback now typically this all will correspond with half dollars and whole dollars the pullback is going to come down kind of close to the nine moving average and then what ends up happening is as the first candle makes a new high it hits resistance and it is unable to break through the top and so it pulls back a second time it pulls back a second time and then when it comes back up for the uh for the I guess the third time at this price price this is where we're looking for that resolution right there so this is a classic pattern it is a it's a bull flag and then it becomes an ABCD pattern it's typically a failed bull flag that then resolves as an ABCD pattern in fact a lot of times the reason it fails is because this is so extended so as it's forming it doesn't actually hit the 9 moving average until it pulls back at the second point right here so this is very common and this this is a 5 minute pattern and it's also a 1 minute pattern okay so in this pattern typically the way I would trade it is I'll either buy right down here off of support which is a dip trade but this is a little too risky for the small account so I'm not taking that trade instead I'm buying basically as it's approaching the high and I'm looking for that squeeze right through the high I'm looking for breakout now I don't end up getting it but I don't follow my breakout or bailout rule I end up holding it because my position is too small the problem here really comes down to position because I was holding only 600 shares when I was up 20 cents a share from 415 up to 438 I didn't take any of the profit off the table to only $100 is what I was saying to myself I'm looking for this to break $450 and go up to $475 and up to five I usually don't swing for that big of a winner which is you know 20 nearly 25% move but in this case because I could only buy four or 600 shares I was being a little bit more aggressive with that profit Target well let's look at the result the result on this is that I end up holding way too long and the price begins to come back down so right now I'm in at $415 we're at 418 420 the high of day is $429 there's 420 on the offer already you can see it's a little heavy it's got a little bit of resistance here it's not breaking as well as it should you may also note on this chart pattern that blue ascending support trend line that I drew these are very very common during ABCD patterns if we look at it briefly on uh the chart we might connect the low here and the low here to create this kind of support line okay so we're still at about $412 this is a point where right here it would have been perfectly acceptable to get out of the trade based on the breakout or bailout philosophy it didn't go right away there it goes up to 438 and did I take it off the table nope I could I'm up $85 I'm not taking any of it off the table I'm holding I'm holding and hoping for a bigger move and this is a mistake and then when it comes down to break even and that happens very quickly all of a sudden I'm a deer in the headlights uhoh I'm break even I put out the cell order try to get out with a little profit and then I don't get filled and now it's 410 now it's 402 380 look at that drop now I'm down $150 on this trade this is not a good example of good risk reward management ultimately I end up losing over $300 and I didn't stand the chance realistically of making 600 on this trade I didn't and you know what I had $100 of profit and I didn't take it off the table now if you notice right here it comes down to this blue as sending support trend line which is why I held right here instead of selling just yet but I shouldn't even still be in this trade I should have first of all I should have gotten out for profit when it hit 430 but I really should have gotten out sooner when it was just going sideways so here day 11 I took one trade I go in the red $349 43 and just like that I hit my Max loss so now I'm at Max loss for the day the fact is with a small account and I came into the day with just under $3,000 of equity so I had said I really don't want to be risking more than 5% On Any Given trade and I don't want to be going down more than 10% in 1 day well I just went down a little more than 10% in one day that's not great but the good news is I did just have a really big Green Day on day 10 so I'm still positive between day 10 and day 11 and now let's look at trades from day 12 so coming into day 12 I have $264 92 had to take away the fees and commissions from day 11 and my first trade here is on the break of a whole dollar $1 I'm in a18 my stop is a dollar which means I'm risking 8 cents a share the immediate imately this stalls out and when it stalls out this quickly I am getting out of the position I'm like no I I don't trust it anymore this should have immediately ripped up to 115 125 when we have a break of $1 a share it needs to break with some real conviction for me to be willing to keep holding it so I'm in it with 435 shares I took a little off the table I got a partial fill at 110 and now I'm I'm pretty much just trying to figure out you know is this going to pop back up through 110 very quickly so I can get out on the offer with some profit or am I G to have to just hit the bid and bail so it comes back up to 108 110 uh it looks like there's 110 on the offer 110 on the offer I I've got a130 of realized profit on it because of the uh 65 shares that I sold but right here you know it's the stock is up 55% on the day it's got volume it's moving but it's just I'm I'm it's not really working so anyways locked up that trade a $130 of profit nothing to be that excited about but I do end up getting back in for a second trade okay so on my second trade it's grinding a little higher and I'm like all right I'm going to give this a try I'm going to use 1,500 shares I put in for 2,000 and I'm like now I actually I think I I press it I don't get filled too much buying I not enough buying power too much share size reduce it to, 1500 shares I get in right there sort of a slow fill but I'm in at 120 I'm looking for the break of 125 and then I'm thinking all right maybe this will speed up here to 135 140 on the bid we do have a big buyer there at 120 but once again it feels like it's kind of stalling out so we've got 122 on the offer 121 on the bid I'm up one penny a share now with 1,500 shares that is $15 but uh you know it's this thing is really testing my patients there's 124 it's just not giving me the big win I was looking for and so on this I end up bailing out hitting the bid and now I'm up uh well about I can't tell if it's $15 or $658 and the reason that I can't tell is because well my monitor is still broken so uh as you know as part of this small account challenge every time you guys hit the thumbs up you are getting me one thumbs up closer to unlocking my new piece of inventory every time we cross over 10,000 thumbs up in this series it helps me unlock a new piece of inventory for my trading station and the next one that I'm going to be getting is a trading a new a new monitor I'm going to replace this one which is broken when I began this challenge I started with a old laptop with three broken keys and this monitor that had been dropped on the ground and is broken sort of on the side here and and on the bottom here so by the time you guys are watching this episode which will probably be about a week from today I actually think there's going to be a really good chance I'm already over the 10,000 thumbs up Mark and at that point I'll be using a new piece of equipment so as of the moment just before we upload this episode this is where we at are at on thumbs up and subscribers now I also said once we cross 10,000 new subscribers I will reset my account back to $11,000 and we we are getting close so thank you guys who have hit the thumbs up thank you guys who have been subscribing once I get that new monitor my next piece of inventory will be another monitor there's actually a rule of thumb the more monitors you have the more money you make I'm almost positive that science and I will have 100 monitors in here if we get enough thumbs up so help me hit my next goal hit the thumbs up and let's go ahead and look back now at the next trade all right so in this trade we have a stock that's squeezing up right now and has news and it came up just under the whole dollar of $2 so what I do on this is I buy a dip as it dips down I buy the dip for the curl back to 190 this ends up being another trade that doesn't work out very well so it dips down right there actually it's kind of lucky that I got filled where I got filled CU I pressed the buy button before it dipped that much then it pops up and I was like well you know what I think I just going to get out of this thing cuz I wasn't expecting it was going to dip that much you can see the candle is a big red CLE candle at that moment what I was looking for was just a little bit of consolidation right underneath that whole dollar so we had the initial pop up to about 190 a little pullback just for a second and then I was looking for this breakout I pressed the buy button right here the moment I pressed the buy button was a red candle and my order miraculously filled down here so it pops up a little bit and in this case well it's a small winner uh about $12 so I'm three trades into the day on day 12 and although uh some would say I'm making progress relative to losing $349 on day 11 it doesn't feel like very meaningful progress and the fact is each time I'm trading with 1,000 shares I'm risking 60 to maybe $100 so to risk $60 or $100 and only make 12 or 15 or whatever that's just not very good risk reward so unfortunately this is a day so far that's already showing me that there just doesn't seem to be a lot of things that are moving and they're holding up okay so now my final trade for day 12 we've got ptpi another stock with news squeezing up it currently has a high of a160 and right now it's doing a micro pullback under this level I put the order to $150 but I hesitate just for a moment then there's a 30,000 share buyer on the bid it goes to 55 52 54 55 back to 53 with an 8,000 share seller this is analyzing the tape which is also known as the level two I see that seller 53 and I'm like I'm getting a little unsure about this I don't know then it goes 56 58 58 on the offer 58 on the offer and it stalls out again 59 60 5,000 shares 62 63 64 65 now I'm thinking uhoh all right shoot I kind of missed this opportunity should I get in here 6667 so I put the I moved the order up I press the buy button for 62 and I don't get filled well I was being a little trying to get filled on a dip did not get filled move the order up to 68 watching Green on the tape no fill I don't have enough buying power gosh darn it now I've got to change my share size so now I'm starting to get into a little bit of a chasing situation goes up to 178 182 it's just moving higher and I'm watching the price so right now in this moment I'm actually watching the price more than the candlesticks I'm watching the order flow I'm seeing the green on the tape I'm seeing all these buy orders and that's telling me that obviously people are coming into this they really like it and so I'm watching this dip right here we get another dip down to 177 so now we're at 180 181 on sort of Moment of Truth here this is another micro pullback on the 10-second chart we can see the green candles up the little bit of pullback here I've got my order loaded for 1,200 shares and I'm looking for the break over two so in this case what I'm actually doing is I'm going to take a trade right here in at 93 and I'm looking for the squeeze through $2 because there's so much strength what I am thinking will happen is that will break over two now this is little tricky all right we're right at that half doll whole dollar two on the aler 202 204 time to take some profit I'm taking a little off the table this ends up being a a small winning trade a little under $100 of profit you know it wasn't great it would have been a lot better if I had gotten filled earlier but the micro pullback at about $185 worked so this was a again a combination of trading a micro pullback that corresponded with price action around the half dollar and the whole dollar which in this case was resistance at the half dollar or resistance at $2 which I thought it would be able to break over and I was correct in this trade I lock up $984 which puts me up $127 125 on day 12 so this is a week where I focus on some basic Candlestick patterns I utilize my indicators including volume moving averages volume weight average price and of course macd and I was able to get some nice trades around half dollars and whole dollars on micro pullbacks with bull flags and first pullbacks and ABCD patterns as it turned out the ABCD pattern that I traded wasn't the most impressive it was sort of disappointing that we got that pop and then that rejection that is going to happen and that was an example that really highlighted how with a regular account I would have made made money on that trade because I would have taken my profit but because I'm in a small account I Chang the way I normally trade instead of taking the Basit off the table I held for a bigger move so once again I'm in the situation where I'm asking myself why am I trading stocks where I can't buy at least 1,000 shares buying 600 shares really it cost me $350 obviously that's how much I lost and it was an avoidable loss because I got into the position with 600 that 600 shares I was sort of um doomed from the start because I was already positioning myself with such small share size that psychologically I would feel like the win wasn't big enough to make up for the commissions and it wasn't even worth taking the trade so going into day 13 day 14 day 15 I need to continue to focus as much as I can on stocks that are going to be within my real sort of sweet spot for this small account challenge that's going to be stocks between 5 and 10 it's just so happened to have been the case that these last 12 days 13 days so far 12 days most of the stocks that have been really active have either been too cheap or too expensive which means at this point in the small account challenge the best thing for me is to be patient and be disciplined and be really okay with not trading every single day if you have not already downloaded my micro pullback strategy PDF check down in the comments pinned to the top and in the description you can download the micro pullback Strat stry as a PDF print it out you can use it in your own trading today but I want to encourage you as always to practice new strategies in a simulator before you put real money on the line cuz my results are not typical when you download the micro pullback strategy PDF you'll also get my technical analysis series guide which gives you a written breakdown of the way I use technical analysis in my trading and I want to thank you as always for tuning in I hope you hit the thumbs up help me unlock the next piece of inventory and if you're not already subscribed Channel hit that subscribe button and I'll see you for the next episode real soon