How I Find Stocks as a Retail Trader transcript

What's up everyone? In today's episode, I'm going to break down the formula for success as a retail trader. I'm also going to share with you my trades from today. My name is Ross Cameron. I'm a full-time trader and this episode is really about helping you understand the type of stocks to trade, where to get in, where to get out, and how to avoid the rookie mistakes that end up knocking most beginner traders out of the game long before they had the chance to see any form of success.

So, when it comes to retail trading, we are well, the little guys in the market. And so it's really important for us is that we make sure each day when we're trading that we're trading the most obvious stocks in the market. I'm going to help you understand what obvious stocks look like and how you can find them in real time. So let's go ahead and jump in to today's episode. So something like TOPW that's moving up nicely up 60% 6 million shares of volume.

If all of a sudden we start seeing huge sellers on the ask, then that's telling us, all right, either there's some big short sellers out there that are comfortable taking the risk of shorting a Chinese stock. So, what do they know that I don't know? Or is the company selling shares right on the open market here to raise money? So, if they end up selling, you know, if they tried to sell 5 million shares today, that currently would be like almost all of the volume.

So that would push the price down really quickly. So, you know, when we see a stock that, for instance, has just done a private placement. If they've just done a private placement, then we're not going to be as worried about the company selling shares on the open market. So now that eliminates that kind of, you know, potential um well, I don't know what you call it, but that potential variable in the supply demand imbalance.

So, you know, we understand what creates demand. Typically, it's a stock that has news and it's moving up and, you know, we has tend to have higher demand in a certain price range. When you have a stock that's got news that's moving up that's like $200 a share, h people don't really, you know, retail traders like us don't really gravitate towards it. It's too expensive. But when it's lower priced, then it starts to be in focus.

So now, I mean, even without news, the very fact that a stock is up 50% can be enough where traders say, "I like it. It's up. I'm going to try to see if I can ride some of this momentum." So sometimes, even without news, they go higher. Um, but the supply side is, you would think, fixed, right? The number of shares is the number of shares. But what we know is that a lot of these companies will take the opportunity to do reverse splits, put out news, and then secondary offerings, right, to try to raise money.

So that's the one thing that uh is sort of the biggest uh issue and biggest risk for us. And then of course when the news comes out of the offering, usually the price drops pretty quickly. And so then you've got short sellers who are almost banking on I really want to see this company do an offering because then the stock will drop and that's how I'll make money. So the fear of the offering or the risk of the offering can create more uh you know more resistance in the form of shortselling and I suppose could reduce the amount of buying.

So, you know, at the end of the day, it's it's the imbalance between supply and demand. And one of the things I try to focus on is trading the stocks each day that feel the most obvious because then the patterns are being watched by more traders. So, the more traders collectively that are looking at a stock, the more likely it is that it'll respond in a predictable way. as long as we don't have that variable of the companies selling shares on the market.

So like if I traded a really obscure stock that's not on the top scans, you know, I I don't think that other traders would really recognize that and see it as an opportunity. So, you know, I Yeah, that's where I think for me, I found the most success trading what I feel is obvious. And it's not just what's obvious to, you know, you guys here, but it's what's obvious to pretty much any retail trader who's trading small caps.

That's what's important. Let me look at that screenshot. The sizes seem very large. Oh, well, this is a buyout. It's a buyout. So, yeah, that's why that's why the or those orders are so big. So essentially, and this is so you'd be like, I mean, so what's the actual mechanism that makes these orders this big? It's got 14 million shares of volume, but it's not moving. This is a great opportunity for highfrequency trading algorithms to make money across the spread.

So, if I place an order here to buy a 100,000 shares, let's just say I do a 100,000 shares to buy on the bid and I let my order display, I'll get paid $300 for adding liquidity or maybe it's 250. And then I turn around once I've bought those shares and I put them on the ask at 396 and I do it again. So each time I buy and sell, I'm making 250 bucks because I'm adding liquidity. And so the highfrequency trading algorithms that route their orders through exchanges that give them rebates are going to love a stock like this because it's going to be pinned basically at the same price because it's been bought out.

The value has been determined. So there's not really risk of it dropping. So now the orders have filled in super thick because the market makers are essentially competing against each other to make the market to make that $250 for every 100,000 shares that goes through. So now you've got 14 million shares that's gone through so far since the buyout. So you know and and there'll be people that keep trading this all day long because they've been in the position for maybe, you know, months or years and they're like, "Oh, sweet.

I want to get out." So they may want to sell 50,000 shares or or a million shares. Who knows if they want there's 32 million shares in the float. So you would presume that there'll be 32 million shareholders or individual shares that will go ahead and get out at $4 a share. And so there's an opportunity to collect a rebate for adding liquidity for all of those shares. Now the only people that would be buying would be people who are covering a short position.

So, uh, but then at the end of the day, even if you accumulated all these shares at 395 and you're a high frequency, you're a market maker essentially, well, if the company's being bought out at four in an allcash deal, then you'll get the money through the buyout and you'll make another 5 cents a share. Now, that's not a lot, but if you've got enough money to work with and you don't mind tying up that money for a little while, then that's another 5 cents a share.

Now, the only risk would be if there were um a potentially, you know, a regulatory inquiry that was trying to block the acquisition, you know, sometimes like fair trade practices and stuff like that. So, that's that's a that's a that is a risk um withholding and waiting for the actual buyout. And that risk pretty much is what creates the difference between this price and the actual buyout price. So the bigger this spread is between the price it's trading at and the actual buyout is the bigger the perceived risk of something could happen.

So in this case, if the buyout's at $4, and I didn't read the headline exactly, but um let's just say the buyout is at four, then um let's see. Yeah, it's $4 a share. Then it's only it's basically not being perceived as pricing a risk for that happening. So, INZY, yeah, no trades on that. I mean, it's a huge buyout, almost 200% premium over yesterday's trading price, but um there's nothing for us to trade. CAPS, you know, this is a stock that went up really quickly.

So, what's the phenomenon there? Well, it came out with news. We're in a hot market. So, as soon as this stock started hitting scanners, people started buying it. Right now, there are some shorts that might have started shorting it early and then all of a sudden we're like, uh oh, this thing's going higher and had to cover. So, then they had to buy back shares. Um but, you know, we're definitely in a market where traders are jumping on things very quickly.

Now, on to TPW, that first pop right here, I didn't trade that because I was like, I don't know, that's it just moved really fast. Well, actually, I think I tried to put an order out, but I only filled 50 shares. So, anyways, then it drops down, but it was on the rally back up right here that I broke the ice and got a trade. I think it was like $7,000 that I made on that. And then, you know, it pulls back, breaks below VWAP, caps popped up at about the same time.

So, the collective attention shifted. So, you know, I don't know how many active retail traders there are. Um I saw a statistic recently from JP Morgan that retail traders from Fidelity or was it was like five brokers uh but not not all brokers it was just from like five big ones um contributed something like 30% of the volume in the market over the last year or something like that uh which is a huge amount of volume for retail traders to uh to be generating. it was the highest uh that it had been since the pandemic.

So, and it was back to basically the same level. And I thought, well, geez, but that's not even including brokers like dozens of other brokers, you know, that was only including Schwab and maybe Robin Hood and, you know, a few of the big ones for sure. They're big. But I thought, gosh, if you added up all the others, that has to contribute at least another 10%. And some of those others like Lightseed are traders with big money.

So you know I mean a thousand tiny traders versus you know a 100 huge traders I mean they might contribute the same amount of volume in the market. So so I think it's possible that we're in a place right now where we're seeing some of the highest levels of retail trading activity. Uh and I think you know so what we notice is that retail traders can be very fickle. They experience the fear and greed emotional swings in a big way, much more so than institutional traders.

So retail traders will market into stocks squeezing higher and then bail out of stocks dropping and then jump to the next stock and then abandon that and jump to the next stock and just sort of chase volatility around the market. That's the behavior that we see and that's not new. This is the behavior of retail investing. You see it in the crypto space, but you've seen it for for decades and decades across different markets.

So, how do you how do you profit in that environment? And to me, the best way to profit is to know at any given moment which is the which is the I don't know what you call it, the flavor or the the stock that everyone is interested in. And you know, if it's caps, then I'm going to focus on caps. If it's TPW, I'm going to focus on TPW. Uh, and so I was focused on TOPW right here until this was 805. So, let's check the time of what was happening at 805, right?

So, at 805, 804, 805 was exactly when CAPS was popping up. That's not a coincidence. traders bailed out of TOPW and jumped onto this and shorts were like, "Okay, TPW is going to be out of focus because there's a new stock on the playground and so let's short TOPW because now CAPS is what everyone's focused on. So then shorts kind of push it down even further." But then as it turns out, CAPS pops up and then kind of sells off.

So it doesn't really hold up that well. And then after, you know, a couple trades on that, we see that TOPS or TOPW tapped the VWAP, pulled back and then came back up here and on the second attempt broke the VWAP and now all of a sudden this is back to being the number one stock. It's not going to be NZY. That's a buyout. It's CAPS is already pulled back too much. and AMST. Well, that one gave us, you know, a moment in the spotlight, but has also pulled back too much.

So, all of a sudden, attention was back on TOPW. And if you had been able to kind of know which stock is most likely to gain the attention after caps, I thought TOPW had a good chance of it because of the way it was consolidating right below VWAP here that if it broke this level and held, you know, we had a good chance of this becoming the stock that people would focus on again, especially considering the daily chart.

Lots of room on the daily. So that's, you know, part of the reason I was quick to jump back to it was because I was thinking about this psychology of what is the most obvious stock? What's the second most obvious stock? So, as we're sitting here right now with just a few minutes to the top of the hour, 9:00 a.m. we may see more news headlines come out. Now, we may not, but but we could. We probably won't because it's Friday, but let's just say maybe we will.

So, there's an opportunity that at the top of the hour, a stock that we haven't even looked at yet is going to hit the scanner, get everyone's attention, and no doubt people will, anyone that's still holding TPW will bail out on that as the new stock goes into focus. So, what'll happen? Stock hits a scanner, you pull it up, you do your due diligence. What's the news headline? How much is it moving? How how good does the daily chart look?

Where's the 200 moving average? You pull up your level two window. You type in the ticker. You're looking at the spreads. Is it easy to borrow? Is it on short sale restriction? And then just like that, you're jumping in if you like it and you feel you can manage your risk. And you know, so now you've got, you know, potentially millions of traders out there that are more or less going through this process. Now, you know, at the end of the day, um there's traders sort of on all spectrums of the um experience level, and it'll be the more experienced traders that are the best at jumping in early on strong stocks and knowing this isn't the one that I should jump on based on the due diligence process.

So, the ability to perform that faster and more accurately will become a benefit for you in the future. So, some traders out there who maybe are trading on their phone and, you know, just kind of dabbling, they might not even start trading till 9:30, 10 or 11 in the morning and they're just going to look at whatever stock happens to be up the most and maybe they'll buy 10 shares of it, hold it for a few hours and see what it does.

Now, they're contributing to the total volume of that stock by buying it. We had, what was it? Um, what was that stock earlier in the week? That penny stock that did 1.5 billion shares of volume. What was that ticker? IP something. Um, you know, that was exhl, you know, from all all around the world, people were trading this. It had 1.5 billion shares of volume and it went up over a,000%. This was the most obvious stock in the entire market.

Now, I didn't see did they put out news of an offering right here. Why did it drop there from about 90 cents all the way down to 33 cents? They put out news of an offering. So, the company raised capital. Not surprising. It's not surprising at all. These companies, most of them, if you look at their balance sheet, at the end of the day, look at their balance sheet. And and this, let's let's remember, first of all, this stock went up over a,000%.

So, if you decide, oh, I'm not going to trade this because they don't have a great balance sheet, right? What's their operating P&L? So, you could look at their um operating P&L. You could see that they're losing money. All right. Then you look at how much cash they have on the balance sheet and how long can they sustain those losses. Maybe not for another six months, maybe not even another three months. So, they're going to have to raise money.

There's different ways they can do it, but ultimately they're going to have to sell shares to get that money. So, they could sell them to an institutional investor or they could sell them to retail investors. And when they sell them to retail investors, they're selling them right on the open market. when they sell them to institutional investors, the institutional investor will hold for a period of time, but then will turn around and sell those shares on the open market eventually or maybe to another institutional trader, but uh they'll sell them.

So, nonetheless, this company you it was somewhat predictable that they would raise money after such a big move, but you didn't know when would it keep going up higher? Would it go up to $150 to $3 to5 to $6? Or would it just reverse, you know, and right there on day two? We don't know. Now the only people who know are insiders of the company and of course they can't act on that information. So short sellers might start shorting it speculating the offering will come but thinking if I short something at a dollar the most I can make is a dollar if it goes to zero.

But if I short it at dollar and it goes to 2 3 4 5 6 7 8 9 10 then all of a sudden you're down 10x the most you could have made. So there's a lot more downside risk with shorting these hoping and waiting the offering comes. And sometimes the offering doesn't come. Here's a stock RGC that doesn't have a great balance sheet, has really no business even being at probably $20 a share, and yet somehow went all the way up to over $500 a share.

I've seen some people post uh I saw someone post they were in a,000 share short position at about $25 a share right here when it spiked up. They lost $250,000 on a thousand shares. That's That's really bad. The most they could have made is if it went to zero, 25,000 and yet they managed to lose 10x what they could have made because they just kept holding and thinking it doesn't make sense. It doesn't make sense. So they finally covered up here when it broke 240 or 250, whatever it was, 300.

So, you know, it doesn't make sense. And you can complain, but no, well, actually, there's no complaint box on Wall Street really. I mean, there's nothing you can do. I guess you could complain to someone, but but nothing's going to happen because, you know, this just these moves keep happening and there's no refunds on the market, so it doesn't make sense, but they keep going higher. Look at GameStop, you know, the move on GameStop, it kept going higher.

Look at Drug. This was a stock from last year um that blew out a ton of short sellers because it went from about 50 cents a share to $80 and it's still holding a year later at $30 a share. It's still holding. It's unbelievable. You wouldn't I mean, but it's still holding. So, so of course I'm not going to mess around with shorting these. And although I know that stocks like AMST and TOPW and CAPS may all be at risk of doing a secondary offering, they may all have that risk.

They may have warrants that they've sold to institutional investors that could execute on them. you know, they they may be in a position where they need to raise money. Does that mean I shouldn't have traded TOPW today? I'm sitting right now up $35,000 just on that stock. I'm up 47,000 on the day. So, if you drew a line in the sand and said, I'm not going to trade any any company that's operating at a loss. I mean, there was a period that Amazon was operating at a loss for quite a long time and it was still moving significantly higher.

Remember when Jeff Bezos was on like Jay Leno or something and Jay Leno was like, "So you're telling me your company loses money each year and your share price is like, you know, whatever." And he's like, "Yeah." So the market can be the market can be irrational, but the market also prices future value. And so even if a company is trading at a loss right now, its future potential and value is really what is being traded.

So for TOPW they had a net loss for last year. Okay, that's not surprising. All right, so total and total revenue decreased by 6.4%. From 18.8 million to 17.6 million. All right, so you know, a little bit of a decline. You could go down and look at the balance sheet. We got to scroll. Sometimes it's a little takes a second to find it, but you could look at the balance sheet. And when you look at the balance sheet, you would see how much cash the company has.

Um, uh, so you would see cash, you would see accounts receivable, and so their cash 2.6 million. Um, let's see. Their total assets are 6.6. And of course, they have some liabilities. No question about it. But, you know, is this a company that would benefit from selling shares on the open market? Yeah, probably. Why not? GameStop has been selling shares on the open market and they've just been doing it to put money in the bank, billions of dollars in the bank.

So the way these companies sell shares, so GameStop, GME, is they'll have a shelf registration. So they do a registration here. It's a for an offering to sell more shares on the market. So that's very common. Uh but again uh I think you have to you kind of have to understand as a trader our mindset is different from an investor. And some people might criticize that. Some people might say you know traders don't serve a good purpose in the market.

You know investors are holding for long-term value. They're value oriented. you know, this and that. But what we know about companies is that companies have a very short-term focus when they're publicly traded because they're always trying to appease their investors and investors want to see returns. So companies end up doing sometimes what's in the best for the short term even though it's not what's in the best for the long term of the company because of that short-term bias.

And the shorter the time frame, the the more you kind of focus on these very immediate catalysts that could affect the company. So all of a sudden, you know, a trade war uh with China and the entire S&P 500 drops 21% in 3 weeks. Now that's very short-term outlook because over the course of 10-15 years probably a more balanced trade relationship would be good for a lot of the US companies but in the short term the pain would result in lower earnings lower profitability and so even short-term investors and certainly traders end up panic and selling and so you get this very rapid selloff.

Now, for us as traders, essentially, we are we we are in the business of arbitrage. We're buying something that we think will be worth more potentially to someone else a few minutes later. And so, we're buying and we're selling. We're buying and and selling and and we're just doing that all day long. And what we're using to establish whether or not something will be worth more in a few minutes is technical analysis. We're looking at specific chart patterns.

We're trying to understand what the catalyst is that's driving the price higher. Where are places that we could get in where our downside risk isn't that much, but the upside potential is higher. And if we're trading stocks that truly are obvious, possibly one of the top five leading percentage gainers in the market, then there's going to be a continued market of other people interested in buying the stock. We may be happy to sell it at $10 and someone else will look at it and think, well, I I don't know.

I think maybe this thing could go to 11 and that's fine. Maybe they're less sophisticated. Maybe they're more sophisticated. Who knows? Maybe they have a different risk tolerance. Doesn't really matter. But there's a a market of people that are buying and selling, buying and selling. And so we're kind of it's I don't know. It's arbitrage almost. Um, it's not like, you know, it's just this this sort of buying and selling, buying and selling and being a trader essentially.

And in this current market, you know, it's so liquid that you can buy, sell, buy, sell, you know, a thousand times a day, a thousand times an hour, all day long for 12 hours pretty much if you wanted to. Um, now, of course, I don't do that. I have found that I do the best during certain windows of time on certain types of stocks, certain price range stocks. So, for my specific strategy of how to extract profit from the market consistently, I've been able to narrow it down quite a bit to what I'm willing to trade and what I'm not willing to trade.

And that is probably what gives me my edge um more than anything. I've got my strategy. I've got my system. It is back tested. It is proven. I know that it works. And uh this is, you know, just for what it's worth. So these will be my metrics for the last just about 10 years. Um this is 10 years of historical data. So you could do all the back testing you want, but this is actual real money trading over 10 years. 16.4 million accuracy 68%.

And certainly over a 10-year period, there's been different uh sort of uh windows in that time frame where my accuracy has fluctuated or the type of stocks I've traded has fluctuated a little bit, but generally speaking, it's remained pretty consistent. So, um you know, day of the week, price of the stock. So, I do the best trading stocks between generally two and 20. You know, over 20 I can do okay. GameStop was in there.

Um but generally between two and 20 is where I do the best. Um you know instrument in terms of the the specific type of stock uh I know that stocks with floats of less than 20 million shares I do better on. I know when it's got more than 25 million shares of volume I do better on it. I know that um higher relative volume which means there's something happening today that's significant is where I'm also going to do better.

Five times relative volume and higher is sort of my threshold. Uh again, this is generally speaking. It's not every single trade I do, you know, you know, there's some variation. It's a a a curve, but but in any case, this is where I've really sort of gotten my edge. Now, for me, so so for what so for what I do is, of course, I teach you guys the strategy I trade every single day. And you know, the more people that are in the market trading, I I suppose the better for all traders because it's going to be more volume, more liquidity, and that's not a bad thing.

So, some people are saying, "Why would you even share your strategy?" And it doesn't hurt me to share it. Although you have people, you could say, who are competing against me to trade the same stock. There's there's just there's so much volume and volatility already. It doesn't seem to hurt. And I don't think more people trading is a bad thing. I I I don't see that as a bad thing. So, you know, could there be a point where there are too many people trading a stock and it's untradable?

I sometimes see that on the lower price stocks because um people are competing to make just like one penny per share. But but on the higher price stocks, I don't think that that's the case. And there's, you know, especially when you get into higher price stocks, there's so much room for more people to be trading them than there currently are just based on the spreads and the liquidity. It wouldn't be a bad thing if there was more traders.

So I have no problem sharing my strategy with you and but the things that you need to learn are not just the system of these are the types of stocks to trade at least for my strategy this is where I get in where I get out but then there's some skills that you need to master in terms of how to read candlestick charts how to read these scanners how to understand all the things that are happening on these charts and then you know you pull up um a ticker AMST and you pull up the level two, how to read the level two, and how to understand the relationship that's happening between this window here, which is your time and sales window, and the actual change in the shape of the candlesticks.

So that's where that's that's where it's like on you to go through of course all the educational content that I've put together for you and to really understand the technicals because as traders we're focusing on technicals. Now, if you were a disciple of, you know, Ben, uh, Benjamin Graham or Warren Buffett, um, or Peter Lynch or something like that, one of these big investors, maybe, I don't know, you know, one of the big big investors, um, the things that they would be telling you' be totally different from what I'm saying, you know, they'd be telling you how to read financial statements, how to understand and perceive value, how to understand what companies have an economic moat. um you know that that really will allow them to weather all the ups and downs and you're doing a totally different form of learning.

Now that learning is not a bad thing to to have and to do but I have found that when I tried reading books on Warren Buffett's investing strategy that it didn't feel relevant to me because I don't have a billion dollars to invest. I certainly didn't when I was getting start I don't now but I didn't when I was getting started either. I had a far less than I have today. So when I was funding my first account with a couple thousand bucks, the Warren Buffett method of buy a company you like, Coca-Cola, Netflix, whatever, and just hold it, while it would have produced better returns than the S&P 500, if I picked a good company, uh it wouldn't have allowed me to live off of that account.

So, in order to have a $1,000, $2,000 account and be producing $100, $200, you know, $300 a day, you need to be increasing your risk. And you need to be trading things that are very volatile, potentially using leverage. And that's what got me into being a day trader and trading the technicals. So for this strategy, yeah, you really need to be able uh to understand technical analysis, how to read level two, and then there are those skills of how to be disciplined because I often say there's two leading causes of failure.

The first is traders who come into the market with no strategy. So they're shooting from the hip, doing a little of this and a little of that, and they're inconsistent in their approach and they're inconsistent in their results. So they typically lose money. And then the second group of traders have learned a strategy that other people are trading profitably and yet they still lose. And that's typically because well there there's a couple.

A it's because they're still early in their development and their educated intuition is not really refined yet and they just need to gain more experience. Uh or or B that they have these emotional uh impulses that they're unable to control. and they cause them to sell their winners too soon and hold their losers too long and to trade from a place of emotion instead of following the system that other people are trading successfully.

And so the the emotional component is the one that is is the bigger struggle because it's you know it's it's relatively easy I think to learn some of the mechanical aspects of trading how to use the software the order types you know as long as you're I think reasonably intelligent and have some critical thinking skills and are good at learning new things these things are fairly straightforward but it is training yourself to uh not react on emotion that can be very difficult.

It doesn't mean you don't feel the emotion because I still feel the emotion of anger and fear and disappointment but it's uh saying like recognizing that I'm feeling that but I'm not going to allow myself to act on it. The problem is emotion can be just like a direct sort of neurological pathway to an action. I feel really angry that I just took a loss. The best way for me to not feel angry is to no longer be in the red.

So, I'm gonna just go and take another trade. And all of a sudden, you've made a decision to take more trades, not because the market calls for it or because there's a setup, but just simply because you're feeling sad and you want to feel happy. And so, you know, that that can that creates that that cycle. It can create that downward spiral. And so what I want to help cultivate in all of you is a positive feedback loop where we focus on high accuracy.

We focus on trading in the sim before ever putting real money on the line. Building a track record of consistency. With higher accuracy and more consistent trading, you typically will have a better profit to loss ratio because you're eliminating a lot of those big losses that were emotional uh the result of an emotionally impulsive trade. So, you've got a better profit loss ratio. So, then you're typically going to be more profitable.

And as you're more profitable, you're going to feel more confident. And as you're more confident, you'll start feeling comfortable taking larger share sizes. And then this begins this positive feedback loop where your trading gets better and better and better. And that all goes back to focusing on the best quality stocks each day. So to go full circle, uh at the beginning of this sort of long tangent that I've been on or this lesson, u someone asked Ross, you know, when you're trading the most obvious stock each day or when you're trading, you know, a stock, um isn't it doesn't it seem like all traders are kind of ganging up on that one stock at the same time? everyone's trading at the same time.

Um, and is are retail traders just sort of, you know, pushing these stocks around? And I think to a certain extent that there's truth to that that retail traders are very dominant in the market. And we saw that during the GameStop um short squeeze, but it's always been the case that when there's a stock that is obvious that people, traders, even investors will gravitate towards them. And so at any given moment asking yourself, what stock right now is most obvious?

What stock is capturing the attention of all the other traders out there? Because that's probably the one that I should be trading. The patterns are going to be more predictable. When it breaks out, more people will be buying that breakout. More short sellers will be covering. So, we've got to really be thinking about, you know, where is the focus? And so at this moment right now, there actually isn't a stock that is capturing everyone's attention.

And in fact, that's often the case. I spend more of my day sitting and being patient than I actually spend uh trading, sitting and waiting for a stock to come out with breaking news. And then suddenly there's a flurry of attention and momentum because that stock has put out a headline and traders like it and it's squeezing. And because it's squeezing, people like it even more. And then you get that self-fulfilling prophecy that it starts making these big moves.

And what we have seen in the last few weeks um have been a lot of catalysts in the space of um cryptocurrency. So UPXI kind of began this cycle back here when the stock squeezed from about $2 a share up to $22. Now it sold off during that day, but two days, three days later, it rallied all the way back up to a new high right there. And so the catalyst that gave this stock a big news, traders started saying,"I don't want to miss the next one." Man, I didn't think that stock would go from two all the way to 8 to 10 to 12 to 15 to 20 and higher.

So the next stock that had that similar headline, people jumped on it really quickly. And then we had about 10 more stocks like it. And TPW, that's got the same headline, Bitcoin Treasury, and the stock goes up 65%. So, we're continuing to see that this headline right now is producing outsiz gains because traders don't want to miss it, right? That's the whole thing. I don't want to miss the next one. And so, there is that um these cycles in the market where we go between uh fear and greed.

And I'd say right now when when we're in a bullish market, the spectrum or the kind of you know barometer whatever is more on the greed side. that people are more aggressive and shorts have to be a little bit more careful. Longs are more aggressive and you go through these periods where the market is just going higher and higher and higher. We saw it during the pandemic like I said on Tesla and then we saw it over the last couple years with Nvidia.

And right now I think we're kind of in between which large cap stock is like the one that's um dominating. But part of that's been because of some uncertainty with all this trade stuff. So the overall market's been kind of that vehicle. Uh, but there'll be another one that comes along and I try to pay attention to to what's moving on the large cap side because those can be um, you know, really great opportunities. So, and this one right here.

So, kicks off a $1 billion Bitcoin acquisition strategy. Now, let's just let's just let's just question this for one second. So, um, um, BM BMG. So, they're going to buy $1 billion of Bitcoin. The float is five million shares and the price is $3 a share. That means if I wanted to buy the entire company today, it's 15 million bucks. So where are they getting a billion dollars? So let's look at that headline. So how are they going to get a billion dollars?

That's my question. Uh the proposed $1 billion capital infusion will Okay. Well, but where's the money going to come from? So what I'm wondering is are they going to do like are has begun exclusive negotiations for $1 billion Bitcoin acquisition acquisition institutional investors and high net worth individual individuals who are influential in the crypto space to acquire a billion dollars through an innovative share swap arrangement.

Now, what would make this a more powerful headline is if they said they've just received a $1 billion investment from an institutional investor for the purchase of a billion dollars of Bitcoin because then that billion dollars is on their balance sheet right now. I'm not clear on where the billion dollars is going to come from and how this company would suddenly get a billion dollars on its balance sheet considering the value of the company is is really quite quite small right now.

Um so the so unfortunately towards the tail end of these cycles um you'll start to see more and more companies kind of jump on them and try to squeeze you know something out of it and it kind of works and works and works until it doesn't and then when they stop working entirely they'll stop even going up because longs are like no I'm not taking the risk and shorts are going to get more and more aggressive getting in earlier and earlier and earlier and these pops will get smaller and smaller and smaller until it's nothing.

And that means it's time for a new cycle. And we we saw this during the pandemic certainly with headlines related to testing and this and that vaccines. We've seen it during um I mean all kinds of different phases in the market where you know this is the this is the flavor of a headline that will send a stock up 200 300%. But that's what traders are looking for. We're looking for volatility. And whenever we see a stock that goes up 500% or more, we're all thinking about not wanting to miss the next one and how do I get in the next one sooner.

And so that creates that next round of momentum, but and the markets are self-correcting because it, you know, it'll kind of work and then it sort of stops working and then there's a new uh a new theme that begins. So that's the eb and the flow. But the question for me at any given moment is what is the obvious stock in the market? So, I think BMGL was obvious at that moment. It certainly got a surge of volume, you know, a couple million shares right there.

Um, but a maybe slightly more sophisticated trader like myself looked at it with a little more skepticism because I've seen this headline get played out quite a few times and in the last few days, I've been seeing more of these types of moves, uh, which has, um, led me to be a little bit more cautious. Now, TPW, initially I thought the same thing, which is why I didn't trade it at the beginning of the move when it popped up.

And it was only when it rallied higher that I was like, "Okay, all right. If it's going to go higher, then, you know, maybe this is a company that's not selling shares on the market." And maybe BMG is. Maybe BMG just, you know, we don't know. We We don't know exactly. But for whatever reason, this one popped up and pulled back. Now, if it popped up, held here, then I would have considered that for the next leg higher because the market is showing it's holding up.

But if it can't hold up, then I move out of the way or I just don't trade it at all. So, that educated intuition is something that takes a lot of time to cultivate and develop. And that's something that you guys get by being, you know, in a chat room here with me every day while I'm trading. U you know, and I'm not right on everything. I mean, I I have losses just like anyone else. But my accuracy has gotten better over time, and that's because of experience.

So, you know, the more time you spend trading, the better you'll get. And if you surround yourself with traders who have been doing it for a while, you pick up some of the things that they've learned over the years. So, I ended up finishing the morning with $47,474.78 of profit. Well, I'll put it up on the screen share here so you can see. So, this was the total for the morning here. the bulk of the profit coming from TOPW.

A little bit of profit from CAPS and AMST. This is a stock that I traded uh just before 7 a.m. Uh bought this pullback here, squeezes up, added right here, and sold into this uh move up to $5 a share. A really nice squeeze on a stock that had breaking news. And at that time was by far the most obvious setup going into the top of the hour 7 a.m. which is when most retail traders come online. So if you learned a lot in today's episode and you want to keep learning, I'll put links to a couple fulllength trainings right here and here that are on YouTube.

And if you want to do a twoe trial at Warrior Trading, we have a trial. It's two weeks for 20 bucks. You can watch over my shoulder. You can benefit from all the educated intuition that I've accumulated over the years. But let me remind you guys as always, trading is risky. My results aren't typical. So, please always trade in a simulator before putting real money on the