How To Start Day Trading in 2026 (full training) transcript

In today's episode, I'm going to teach you how to start day trading. And I'm going to break it down into nine simple steps that you can begin implementing in your own trading starting today. One of the things I've learned over all my years in the market is that success in trading does not come from trading everything that's moving. It doesn't come from trading every market where there may be some opportunity. In fact, success comes from finding your niche, your little pocket of one market where you've got a setup and a strategy that may not be super exciting, but man, it is consistent.

And that's what has worked for me. So, what I'm going to share with you in today's class is the strategy that I've been trading every single day. For those of you guys coming back, you know, we're about to jump into a full length training. So, I hope you hit that thumbs up. For those of you guys who are brand new, let me introduce myself. My name is Ross Cameron. I'm a full-time trader and I funded my first account in 2001, 25 years ago.

Now, when I first got started, like a lot of beginner traders, I didn't have any success. I lost money and I lost money because I didn't have a strategy. I didn't have a set of rules of how to approach the market and I didn't know what my niche was. So, I tried a little bit of this and a little bit of that. An inconsistent approach to trading yields inconsistent results. It took me a lot of time and trial and error before I developed the strategy that I'm going to teach you here today.

So, if we jump onto the screen share, I'm going to start by presenting you with some data. This is over $20 million of verified trading profits. I put my broker statements on my website at the end of each month, and you can see them for the last 10 plus years right on our website, warriortrading.com. So, everything that you learn today, it's not just my opinion of what I think works. It's actually based on my historical data.

So, what I do is I actually take my data and I've got this tool that I use for reporting and analyzing all of my metrics. And then when I tell you the time of day that I'm going to focus on trading, it's not just because I think that's when I make the most money. It's because it's when I actually make the most money. When I share with you a setup or the type of stock that I like trading, it's not just my opinion of or my my my theory of I think this is the right type of stock to trade.

It's actually based on hard facts. It's based on data. So, I want you to know at the beginning of this episode, my results are not typical. My experience in trading is not typical. However, what I think makes a lot of sense is if you're going to start trading that you at least start a starting point is a strategy that someone else is trading that's profitable, that works for them. It's not a guarantee it'll work for you, but it's a heck of a lot better than just going through years of trial and error.

So, what I'm going to teach you at the beginning of this class is to begin your trading in a simulator. These are the nine steps of how to get started trading. And step one, we call the alpha phase, and it is in a simulator. The nice thing about using a simulator is that it simulates real-time market data. You have the same charts. You can trade the same stocks that someone else is trading with real money. So, it's not a simulated experience.

It's the real market except that your orders execute with pretend money. And this is really good proof of concept because if you can't make money in a simulator, you're not going to make money with real money. But if you can make money a simulator, then that's the justification for flipping the switch and going live. So, as I break down these nine steps for you, these are the nine steps to help you get ready for day one of trading with real money.

And if you go through these nine steps and you do not produce metrics that support trading with real money, then you're not ready yet. It doesn't mean you're never going to get there. It just means you've got to keep gaining experience. Okay. So, as we jump back onto the slide deck here, to accompany this class, I have a series of PDFs that you guys can download. The link is pinned at the top of the comments. you'll be able to download my small account trading plan, my small account worksheet, and the trade log that I want you guys to use as you begin practicing in the simulator.

So, I want you to track your trades carefully so we can analyze your data and that'll help you understand when you're ready to go live. So, the link is pinned at the top of the comments. You can download those PDFs and those are going to accompany everything that you're going to learn in today's class. So, let's begin with step one. Step one, the alpha phase of sim trading. So, the alpha phase is about gaining a lot of experience.

Now, I am a big advocate of using a simulator. Some of you will decide not to do that. You're going to choose to trade with real money, and I can't stop you. But what I would suggest is that if you are set on using real money, at the very least, trade with tiny share size. How about just one share? Now, you say, "One share is not enough. How about 10? How about 20? How about 50?" Just keep it really small. It's okay to trade with real money when you're doing it to gain emotional conditioning to experience loss.

It's not okay when you're doing it to try to make money starting right now because then you're approaching trading from a place of desperation and scarcity where you're saying, "I need to make x amount of money by the end of the week or the end of the month." And anytime you approach something as complex as trading with that mentality, you set yourself up to fail. So, I want to set you up to succeed, not to fail. And that means you really should use a simulator.

But if you use real money, at least use such small positions that the amount that you're losing is negligible. You can totally handle it and it doesn't create emotional pressure or stress because that's going to interfere with your ability to follow the rules of the strategy that I'm going to share with you. So in my opinion, using a simulator is better than using real money because you you can learn the same experience.

You can have the same experiences, but the cost is so much lower. Yes, you will spend a little bit of money on real-time market data. So if you use a simulator, if you're using a commission free broker like Weeble or Charles Schwab, they give you a simulator for free. It's not a fantastic simulator. Doesn't have all the bells and whistles of their life platform. they really would rather use real money because that's where they're going to make money off of your order flow.

But it's it can work and it's good enough. So again, whether you use one or two shares with real money or you use a simulator, the alpha phase is about gaining a lot of experience to maximize your learning while keeping the cost as low as possible. So for instance, right now you could pull up that platform and I'll just pull up my platform just as an example and I'll just pull up for the sake of it Ford. So right here you've got shares of Ford and I could go ahead and I could buy 10 shares of this right here on the open market and this is real money.

But by buying it and executing that position and seeing that show up there in my order window, I'm beginning the process of learning how this software works. And the software, like anything else, has a little bit of a learning curve. So, if you start by just getting your hands in there and taking some trades, all of a sudden you're going to realize, well, wait a second. You know, what is what is this edge X mean? You know, what is that?

What is this? What is this? What is this? And of course, I'm going to walk you through that a lot of this in today's class. But as you get your hands into the software and start practicing, you're going to start to become you're you're going to become immersed in learning the language of the financial markets because I think learning to trade should be thought about in a similar way as learning a language. When you learn a language, you want to surround yourself with people who are speaking the language, right?

It's always going to be easier. And so the sooner you jump in and you start actually trading, you're putting yourself kind of you're immersing yourself in the environment where you're forced to learn. So it's like jumping right in the pool and you've got to figure out how to swim. Now, of course, we're using the simulator, so the downside risk isn't drowning or losing real money. You know that there's really no downside risk of using a simulator.

So most days there are enough stocks experiencing some degree of volatility throughout the entire day to give you the opportunity to put in time studying level two, studying your ability to read the tape, studying your ability to read candlestick charts, and even studying your ability to choose and find these stocks that are volatile. All of which you're going to learn a lot more about in today's episode. So step one is start practicing. just start getting your feet wet and getting in there because a lot of the things that you might have of theory of how trading works, how it works to buy and sell.

A lot of those questions are going to be answered just as you begin pressing those buy and sell buttons. Step two, I want to talk about risk management. We know that trading is risky. I'm not going to sugarcoat it. It is. Here's the reality. Most beginner traders come into the market and they lose money. And what happens is their very first trade, which was the case for me when I got started, is a loss. And so what happens after you have that loss is you immediately feel frustrated and angry and disappointed.

And you don't want to feel that way anymore. And so the best way to no longer feel angry, frustrated, and disappointed, you take that first trade, you lose money. Now you feel sad. So how do you make yourself not feel sad anymore? The fastest way to not feel sad here would be to make back money, right? To go green. So, that's going to encourage you, this emotion, to take more trades. But since you don't yet have a strategy, what's actually going to result is you're going to lose even more money and you're going to get even more angry and then you're going to take even more trades.

And you see where this is going. And this has happened to countless traders. It is a negative feedback loop. It is created with a poor track record, poor self-confidence, increased losses, and a degree of emotional hijack where you become hijacked by your emotions of frustration, disappointment, and desperation. And I've been there. When I got started trading, I wasn't in the financial place that I am certainly today.

I was in a place where I really needed the money that I had thought that I could make in the market. And when I was coming up short, I was getting angry. I was getting frustrated. And that all led to more erratic trading which resulted in even more losses. So how do we break this cycle? Well, I think number one, developing an awareness of the tendency to fall. And this cycle is probably the first step. The way to break the cycle is interesting.

It's by focusing on highquality stocks. Now trading highquality stocks to me is one of the best forms of risk management. And you might not think of that initially as a form of risk management. it. Shouldn't risk management just be choosing to risk less money? Well, sure, that's one way to look at it. If you risk less money, you'll you'll lose less, but it doesn't mean you're going to necessarily make money when it when it works.

So, the first element of risk management is trading aquality stocks. Because let's think about this for a second. If you have a system, if you've got that niche, right, of I know that when I trade these types of stocks, I'm right more often than I'm wrong. 65% even if it's just 51%. You've got a slight edge. Then you focus on just trading those stocks. But by just trading those stocks because you've got this track record or because you know that this is a strategy that's proven profitable by others, you're going to see a higher profit loss ratio.

Then you're going to see improved consistency. And this creates the positive feedback loop. So now with a positive feedback loop, you every trade you take is is just encouraging you to trade with greater size to be more aggressive. So you begin the process of scaling up. But you can't do that if you don't have the track record. So here's the blessing and the curse of the market. You could spend years struggling to make $10 a day.

That's the curse. That's terrible. That's what it was like for me when I first got started. I was showing up every single day. I was I had modest goals. I wasn't trying to make a lot of money. I was living in Vermont. Cost of living was low. I was in my 20s. I was single. You know, life was pretty pretty mellow in those days. And so, for me, if I can make $100 a day, that was phenomenal. So, I wasn't setting the bar high at all, right?

I wasn't trying to drive a Lamborghini or fly in a private jet. I was just trying to make $100 a day, $200 a day. That was it. And I couldn't do it. I'm not being greedy. What What's the challenge here? What's the issue? Well, the issue is you're not going to make $10 or $100 a day consistently until you've got a consistent strategy. Yes, you may make it a couple days out of the week and then you lose $50 on Thursday and Friday and you finish the week in the red.

But here's the blessing of the market. Once you found that niche, once you've discovered that little strategy that works, even if it's boring, it's not exciting, but it's consistent and you're doing $10 a day. The only difference between 10 and 20 is increasing your position size. And then 20 to 40, 40 to 60, 60 to 80. So early on in my career, I was trading a much smaller size naturally than I am today. That's what's allowed me to scale up my trading to the level where I've had multi-million dollar years in trading profits.

I never would have imagined it, but that's the blessing of the market. So your job right now is to focus on getting yourself on this positive feedback loop. And it begins by focusing on high accuracy. Now, there is the reality when it comes to trading that there's a relationship between winners and losers. So, you've got your profit to loss ratio. This is something that we talk about quite a lot. So, with a profit to loss ratio, if you on average risk $2 to make only $1, you know what your break even break even percentage would be?

Your break even percentage is that you would have to be right 66% of the time just to break even. If you lose $2 for every dollar you make. On the other hand, if you make $2 when you're only risking a dollar, you only need to be right 33% of the time. Now, naturally, one to one is 50%. Right? So, if you risk a dollar to make a dollar, you've only got to be right 50% of the time. But I'm going to encourage you to focus on this area here where you risk a dollar to make $2 because you only need to be right 33% of the time to break even.

In other words, you're setting the bar really low. Even if you're right 40% of the time or 50% of the time, you're not just breaking even, you're making money. So now what you've done is you've put statistics and odds in your favor by understanding that whenever I'm trading, I need to look for an opportunity that gives me the potential to double whatever I'm risking. So if I'm going to risk a dollar, it's because I have the potential to make $2.

Now, in order to really understand risk and reward, you've got to be able to understand the language of candlestick charts because that's where we actually look at support and resistance and identify that well, you know, how far is my current entry from support because that's my risk and then how far away is my next profit target because that's my reward potential. Now, ultimately, we never know how much a stock will go up, but we can concretely control how much we're willing to risk.

And so, always ask yourself that question before you take a trade. Does this give me the opportunity to double whatever I'm risking? Now, sometimes people will inadvertently think of risk as, oh, I put $5,000 into this position. I'm risking 5,000. That means I need to make 10,000. Well, hold on a second. If you put $5,000 into Ford Motor Company, you're not risking $5,000 unless you're planning on holding until it goes to zero.

No one's going to do that, right? So, what you're actually risking since you own an asset of value is the difference between your entry point and where you would sell it for a loss. And so, you might say, I own $5,000 worth, but if it goes down 10%, I'm going to take a loss. So, I take a $500 loss. and that's the most I'd be willing to lose and then I'll get back my $4500. So in that example, if you made $1,000 on that trade, you bought $5,000 worth and you sold it when it was worth 6,000.

Some people would say, "Oh, you made a,000 but you risked 5,000." And I would say, "No, no, no, no, no. You were risking 10%. You were risking 500 and you made a,000." That is a 2:1 profit to loss ratio. And I would take that trade every single day, especially if you could do it within the confines of of a day trade. You know, if you could be getting in and getting out with a 10% return or or more, a 20% return in a matter of 15 20 minutes or an hour, that's phenomenal.

And what you're going to learn as we continue on in today's class is that those are the types of stocks I'm trading every single day. It's pretty incredible. So, while it's certainly important to understand the relationship of profit to loss ratios, we've got to really start talking about stock selection because this for me is the way I reduce my risk on any given day. So, what you're looking at here is a stock scanner.

And what this is doing is it's giving me a list of the gainers, the percent the leading percentage gainers in the entire US stock market. Now, I trade stocks that are on the US market. This is a little kind of niche strategy that's been really consistent for me. It's not to say that you couldn't apply this to other markets. I know traders apply a similar strategy to cryptocurrencies, focusing on the leading gainers. So, you could do it with futures or forex or or crypto if you wanted to.

But for me, I'm trading stocks. And one of the things I really like about trading stocks is the liquidity. So right here for instance, this stock um right here that's up 109%. It has 300 million shares of volume today. It it's it looks like 301,000, but they abbreviate it. This is 300 million shares. Ford has 48 million shares of volume. Now Ford's not up right now today, hardly at all, but this stock is up 110%. We like those types of moves.

That's a huge move. So what I'm focusing on each day are the stocks in the US market that are making the biggest gains. And so on this particular day it was GLTO. Now when I look at this scanner, this is a piece of software and it's an app you can use on your phone or you can also use it on a computer. I use it on a computer, but I check it on my phone as well actually. And and what it's doing is it's sorting the leading gainers in the entire market from the percentage gain.

So, if this is the leading percentage gainer, then this is the ticker, which is the abbreviation for the company. This symbol right here tells us it's a flame if the stock has news. So, if it's got news within the last two hours, the flame is red. If it's within the last 12 hours, it's orange. And if it's further back than that, then it's yellow. It's got to be within 24 hours. This tells us the price of the stock. This tells us the amount of volume that's traded hands.

And this tells us the float which is the number which is the number of shares that are available to trade. That number is determined when a company does an initial public offering. They choose to sell a fixed number of shares onto the open market. That money is then raised. The company uses it to grow the company hopefully become more profitable and then obviously all the shareholders will benefit from that either from the price appreciating in value or potentially from a dividend.

Now, usually these lower price stocks don't pay a dividend, but one of the things that I want to share with you is um I I want to pull out some data points from all of my metrics, all of my historical data. So, all of this uh data right here, what I want to do is pull out a couple of key points that essentially tell you my strategy and then I'm going to articulate exactly what it means. So, this data point here says that I make the majority of my profit.

You can see right here on stocks that have 500% higher volume on the day I trade it than the instruments average volume over the last 50 days. So in layman's terms, this stock has five times above average volume today than its normal than what's average. So just take that right there is like something really significant is happening to this stock today to allow it to have that much volume that we know what is going on.

You're going to find out in a moment. But something significant is going on. And so clearly if I'm looking to find a stock to day trade, I should at a minimum look for a stock that currently has five times above average volume in today's trading session. That would be logical. That's what my data tells me. And I should also look for a stock that has high total volume today. Now, just because something has higher volume than average doesn't mean it actually has high total volume.

If the average volume is a thousand shares and today it has 100,000 shares, it's above average, but the the total is still very low. I don't do very well trading stocks with low volume. As you can see right here, I make more money as the volume goes higher. And that's because when a stock has more volume, I can buy and sell more shares. So if a stock only has 10,000 shares of volume, buying and selling 10,000 shares would naturally be impossible.

If a stock has 10 million shares of volume, buying and selling 10,000 shares is easy. In fact, you could probably buy and sell a 100,000 shares. And if you're taking 100,000 share positions, then all of a sudden, every penny you make per share is a,000 bucks. you make 10 cents per share, it's $10,000. So, this is where all of a sudden you start to see my average daily gain can increase very quickly. And it's because of the fact that I'm trading with bigger share size.

I wouldn't be able to trade bigger share size if we didn't have higher volume. So, if you look at my um profits here, this is showing um the last 12 months and my average daily gain is $28,000. $28,000 is a lot of money. But, you know, you might think, "Wow, I must be buying, you know, a position and it the stock is just going up a crazy amount." Well, what we're going to look at here, I'm going to do a little comparison of my winners.

And we'll just do year-to- date compared to my losers year-to date. And I want you to take a guess right now at what you think my average winners are in cents per share. My average winners in cents per share is only 18 cents. Only 18 cents per share. But naturally, if I took a 10,000 share position, that's $1,800. If I took a 100,000 share position, that's $18,000. And so, I don't take 100,000 shares on every trade I take.

But the point remains that when I take a bigger size, I can make more money. But averaging 27, $28,000 per day is not because I take just one trade a day. I'm at a point in my career where on a good day, I might take 10, 15, 20 trades. we might have that many really good opportunities each day. And through this year, as we can see, my average accuracy has been right around 71%. That's pretty solid. My average winner is about $3,500.

My average loser is 2,000. It's not to say, you know, this is perfect. I would prefer to have a perfect 2:1 profit loss ratio, which means my average winners here should be 4,000 or my average losers should be a little bit smaller. But this is the reality of where, you know, the dust is settled over the last 12 months. But I can feel good about this because my accuracy is high and naturally the total profit here of $6.3 million is significant.

So it's important for me to focus not only on stocks. that have five times relative volume today, but also on stocks that have higher total volume today. I also need to focus on stocks that are gapping up. Gapping up means the stock is moving higher than the previous day. When it's higher than the previous day, we call that a gap. So, in the pre-market session, it's already trading at a higher price than it closed the previous day, which is what's going to create the gap in the overnight chart.

So candlestick charts, as you're going to learn as we get into that in today's class, the daily chart, those candlesticks are based on the trading action that occurs between 9:30 a.m. and 400 p.m. However, as you may already know, many markets are actually trading 24 hours a day. But after 400 p.m. and before 9:30 a.m., the volume tends to be a little bit lighter. And so when we look at a daily candlestick chart, it's only factoring the price action that occurred between 9:30 and 4 p.m.

Now, I often start trading at 7 a.m., which is when we begin to typically see some good volume. And some traders will trade till as late as 6 or 7 pm, 800 PM is not uncommon. But generally speaking, uh although for me, the majority of my trading is in the morning, uh candlestick charts are based on the 9:30 a.m. to 4 p.m. window. And so that means if you have a stock that closed the previous day at $4 a share, and now at 7 a.m. they've put out breaking news and goes up to 678, then overnight it's gone from 4 to 8.

And so that creates the gap. And so I make more money trading stocks, as you can see, that have been gapping up at least 10%. So what I'm doing here is I'm going to break these down for you, and then we're going to put them into a list so you don't have to be writing them all down. They're also in the PDF. So if you guys have already downloaded the PDF resources that accompany today's class, then you'll have copies of this, and you can print it out and use it as you'd like, but I'm also going to list it for you in just a moment.

So focusing on stocks gapping up is very important. So why would a stock gap up with five times above average volume and high total volume today? And the answer is because the stock and the company have put out breaking news. So I am a volatility trader. That is my niche. I focus on trading volatility and the volatility specifically that's created by breaking news. Now, I also focus on trading stocks between $2 and $20 because they can offer larger percentage returns, which are great for account growth.

I focus on essentially a strategy that in its inception for me was based on how to grow a small account because that's what I had when I got started. Even though I've gotten to the point today where I don't need to have a small account, I still keep my account relatively small on the smaller side because I don't need all the extra buying power. There is a little bit of a limit of just total how many shares you can buy on some of these small cap stocks.

You can't buy 5 million shares of them. I mean, even if it has 50 million shares of volume, that would be a lot to buy and a lot to sell. And so, you know, in a practical sense, I've kind of reached the plateau of how much I can scale up my strategy within the small cap market without venturing into other markets. Now, I do that in a separate larger account, but that's not the focus of today's class. So, for today's class, we're focusing on the small account growth strategy.

And this is the triedand-true strategy that I've been using full-time every time I've done a small account challenge. So, what we're looking at here is a very specific subset of stocks. And these are stocks that typically have a float of under 10 million shares. Well, let's look at this. This is the top gainers scan on this particular day. And you can see all of these stocks 400% 200% 160% 58% 50%. All of these stocks clearly have huge gains.

And look at the float. The float on all of these stocks is less than 20 million shares. And these ones here, these top four, the float is less than 10 million shares. They all have higher volume, right? These are all priced under $20. These are the top four stocks that I would definitely be paying close attention to. But here's the thing, I would have known that this stock had the potential to make this big move even when it was up only 40 or 50%. because it shared the characteristics that I found really are the common denominators among the biggest movers that we see in the market.

So in order for stocks to make a big move, they need to have ultimately an imbalance between supply and demand. Supply is the float, the number of shares available to trade and demand is created by a breaking news headline. However, demand is always higher on stocks that are lower priced and I and I really love the price of between five and 10. Like this is a real sweet spot for me where I can do extremely well. Stocks that are in a hot sector and this the sectors, you know, that are hot is sort of cyclical.

They can change from time to time, but crypto, biotech, AI, if the if the time is between 7 a.m. and 10:00 a.m. and then you get that high relative volumeing because so many traders are excited to participate in trading this stock where they see that it's got news. It's moving higher and it's giving familiar chart patterns that help us understand risk and reward. And so if I jump onto a chart here, this is the example of MLGO where even early in the morning here when it was up, you know, 75 100% I knew it had the potential and this thing just kept cranking higher all day long.

It ended up going up 432% on over 300 million shares of volume. This was very liquid. There was a lot of opportunity to trade this. It was a lowflat stock with very high demand and that's what resulted in this big rate of change. So if we're going to look at at it on a list, these are my five pillars of stock selection. The stock has to be already up at least 10% on the day. It needs five times relative volume. It needs to it needs to have news to be an aquality setup.

There are exceptions to this where we'll have um sectorwide catalyst that I will trade, but those are always going to be a little riskier. So in terms of a quality, we need to have news. Number four, the stock should be between 2 and 20, but between 5 and 10 is even better. And the float should be less than 10 million shares, but lower is also better. These five pillars are what I look for every single day when I'm trading.

And so I actually have a scanner and I'm using that scan every single day to show me the stocks that are worth considering. And so this is the software that I'm using. And this right here is my five pillars alert scanner. And this is showing stocks that currently meet all five pillars of stock selection and in this current moment right now are worth trading. So sometimes a stock will meet all five pillars, but then it'll sell off.

Like this one met all five pillars and then it reversed and it came back down. So at that point it was no longer worth considering. So it dropped off this scanner. So, the way that I find stocks each day essentially is I've told these scanners exactly what to look for and they search the market and they come back and trigger the alert and it includes an audio notification. So, now I'm getting the the the ding or the bell and I'm pulling up my charts and I'm seeing, okay, here we go.

It's game time. We've got a stock moving higher and I get it. it meets my five pillars of stock selection. And now all I have to do is pull up the candlestick chart pattern and start looking for that entry. Now, for those of you guys that haven't used stock scanners before, I will also put a link in the description for a twoe trial where you guys can use the software. It is $20. You've got to use um when you use the software, you got to pay for real- time market data, but you want real-time market data.

And this software will give you the charts, it'll give you the scanners, it'll give you the news feed. And so you'll really be able to have pretty much everything you need except for your broker. You'll have to execute it, you know, or a simulator to execute your trades there. So now if we jump back into the slide deck here, we're going to go ahead and jump into step four, which is understanding candlesticks. So first step is just practicing a ton in the simulator.

Second step is understanding risk management. And then obviously the what I said is the first step of risk management is stock selection. Now, if you found a stock that meets all five pillars of stock selection, you're not going to know where to buy or sell because you don't yet understand how to read candlestick charts. And so, let's go ahead and jump into it here. Step four, candlestick chart patterns. So, this is a reference, and this is included in the PDFs that you guys download.

So, you can print this out if you'd like and put it over on your desk or wherever you'd like. Uh so when we're looking at candlestick charts, candlestick charts are providing us the historical context, what it's doing is it's telling us everything that the stock has done in the past, how much it's gone up, how much it's gone down, and so we can see how it's traded, and we can see the amount of volume that each of those candles were trading on.

So when we look at the history of a stock, we pull up the chart, and we typically start by looking at the daily chart. So on a daily chart, every individual candle represents one day of price action. Now, typically when a candle is going up, it's green. And if it was going down here, it would be red. But just for the sake of doing it quickly, I just did it all in green. So if this was a daily chart, every single one of these candles would encompass all of the price action that occurred between what hours? the hours of 9:30 a.m. and 4:00 pm.

Right now, how are these candlesticks created? A candlestick is created with four pieces of information. So, if we jump on the slide deck here, the the four pieces of information that we're looking at, whether the candle is red or green, are the following. I'm going to draw it here. We've got the open, which was the starting price, and then we've got the close. Now, those are two pieces of information. Those are obviously important.

So, if the price opens low and closes high, those are two data points. There's two others that are valuable. The high of the session and the low of the session. So, let's say it opens here and the price drops down to this low point here, but then it surges all the way back up to a high point here, but then end up ended up closing about here. So the way we would draw the candle with these four data points is the open and the close are connected like this into what's called a candlestick body.

And the high and the low are connected just by lines which are called candle wicks or we sometimes call them a shadow. So a lower shadow and an upper shadow. So in this case what is this candle shape communicating to us? This tells us exactly what happened. The price opened obviously it dipped down. it obviously went higher and then it closed. Now if this candle was green then we know it opened at the bottom and closed at the top.

If the candle is red, it opened at the top and closed at the bottom indicating the price went down. So now what I want to do is I want to introduce to you the concept of what different candlestick shapes can communicate about market sentiment. So we're going to start with a longbody candlestick. A long body candlestick is a candle that has a very tall shape. And so if I draw this on a chart right here, we've got candles and they're getting progressively bigger.

So what does a long body candle like that communicate? This is a very bullish candle. Bullish means strong. Strong like bull. So very strong strong momentum. This is what we like. So a long body candlestick is very very positive. Those are plus marks. A smaller body candle like this, well it's a little indifferent. Now what if we had a stock for instance that had large body candles and then they started getting smaller?

Well, if they got small enough, we might almost think that the price is beginning to reverse potentially. And so the size of the candlestick helps us understand how strong the momentum is. Sometimes a stock will have breaking news like this. News comes out and the stock squeezes up and then it starts doing one of these. And the problem when it does this is that it feels like uh you know quite visually that momentum is just tapering.

It's getting weaker. We don't really want to see that. We'd like to see the opposite where the news starts and then the candles start getting bigger and bigger and bigger and bigger and it's ramping up. We'd rather see that ramping up action. But if we saw ramping up action, then we saw it begin to slow back down, you know, then that would also tell us, okay, and that's exactly what happens always with with price action. we have periods of exuberance and really rapid rate of change, fast movement, and we love trading in this area, and then it kind of cools off.

So, your job is to learn how to pick up the signals when you're looking at the candlestick chart to recognize, is the price about to pull away and start moving faster? Is the price about to slow down and potentially reverse? So when we're trading, one of the things that we want to pay really close attention to are the moments when the direction is changing. So trending up and then trending down and then back up and then back down and then back up and then back down and then back up and then back down.

So the changes if you were able to get in every time it changes from down to up and then get out right here, you would make a ton of money right now. Obviously, you would only make money if the underlying instrument that you were trading was r had range, you know, was going up 50% or something like that, which means it needs to have some type of breaking news catalyst. But if it had the breaking news catalyst and it was moving, then your job is to try to find these apex points, these pivots as as quickly as you can.

And the sooner you get in, the better off you'll be. But of course, you don't want to get a false breakout and then oops, catch another drop back down. So obviously this is simplifying it to do it consistently requires that sort of nuanced uh ability to recognize the difference between a pivot here that is bullish and is going to reverse higher and one that is uh bearish weak and is going to continue lower. So long body candles are our favorite.

And anytime I see them, I mean it's a good thing. It means the stock is moving. Even if I'm not in the position already, it's still okay because at least the thing is moving. So short body candles, nah, I don't like them as much. I mean, they just don't communicate as much strength. But what's even worse than a short body candle is a dogee candle. A dogee candle is a very interesting shape. As you can see here, it's when the open and the close are at the same price.

So, isn't that funny? What we have happen is we open and close at the exact same price. Then we have a high and we have a low which is connected by the line. So what ends up uh forming is this just this sort of funny shape. So depending So there's a couple things here. Number one, if the price is already going sideways and we're in a rangebound market where it's only up and down, you know, 2%. Then dogees are not really that significant because what is a dogee?

A dogee is a candle of indecision. Well, the price is going sideways. It's already indecisive. So, we don't really care about dogeis in that context. What about this? We have these long body candles. It's looking really good. And then all of a sudden we have that candle. Now that means something. Really bullish sentiment and then a candle of indecision. That means that for some reason the buyers are not as confident as they were.

This next candle is going to open at approximately the same price as the close and we're going to worry about a reversal back down. And if we get a red candle, then it's very likely another red candle will follow as people begin to exit their positions. But what if that happens? Well, now we've got a candle of indecision at the bottom. And so what you're going to learn is that these candles of indecision often mark the pivots right here.

So look for these candles of indecision before buying and selling. Before buying when you're looking for the reversal back up and to consider selling when you're seeing it at the top of a move. So a dogee candle can come in a couple different varieties. We've got the dogee that's called a gravestone dogee. A gravestone dogee has uh the open and close and then it has a larger upper tail like that upper candle wick. The dragonfly dogee is a little uh top like that and then the lower wick.

And then the longlegged dogee looks like this where it's got the top and the bottom. Spinning tops are kind of like dogeis. They have a little body but they also have that upper candle wick and lower candle wick. And so they communicate pretty much an equal amount of indecision when we see them in the context of a trend. A hammer candlestick in the context of a downtrend is bullish. Why is this bullish? Well, the stock dropped to this low but then was able to rally back up and close in this case green.

It's called a hammer because it's said to be hammering out the base. Now, candlesticks are Japanese in origin, and so the names of the candles often um are designed to communicate the sentiment that we're supposed to interpret from the shape. So, this is a shooting star right here. We've got the shooting star. So, that's the body with that longer candle wick. And shooting stars come back down. And so, a shooting star is indicative of a potential reversal.

This is a tweezer top. So, these tweezers here, it hurts if you get pinched by a tweezer, I guess. I don't know. Um, but you've got this rally up here and then the tweezer top is bearish. That's not good because you've got not just one topping tail essentially. It's almost like two backto-back shooting stars and that's not a good thing. Now, a tweezer bottom could be indicative, however, of a reversal back up. So, in that case, inverted it, it's it's a positive thing.

So when I'm looking at these candlestick shapes, the individual candlestick shape informs market sentiment. Now when we have multiple candlestick shapes together, they create familiar candlestick chart patterns that I utilize to time my entries and my exits. So I'm now going to share with you step five, the one simple pattern. This is the niche. The whole idea here of this class is to just teach you one simple pattern, one simple strategy that you can begin implementing today.

Even if you even if you only take a couple trades a week, it's not about taking a ton of trades. It's about quality over quantity. This can be your life raft. This can be the setup that you trade in the simulator and you log your trades and you prove that you can actually do it profitably. So, the simple pattern that I want to teach you, this is when we have a stock that first starts surging up. I'll hide my video here.

We find the stock on my scanner. So, the scanner's right here. I'm getting the alert. Boom. UPXI hitting the scanner. It's got the news. Uh, it's got news. It's uh got a very low flow right now. It's got lower volume total, but it's popping up. So, we pull it up and we see the stock's got news. We then look at the candlestick chart and I'm not looking at the daily chart here. In this case, what I'm looking at actually is the one minute time frame.

So that means each candlestick represents just 60 seconds of time. So this is a very fastmoving chart. Now we still have the daily chart. We look at the daily chart and I'll show you I'll tell you what we look at there. But then we set the daily chart aside and focus on the intraday chart pattern because as day traders we're getting in and out so quickly the daily chart no longer is once we've set context and we understand what it looks like then we focus on intraday time frame.

So now we're on the one minute chart I let the stock squeeze up. I can't just buy it right here. This well there are some advanced techniques that you could use but this would generally be very risky especially for a beginner. It's going to have lower probability, higher risk. So, I let it squeeze up and I let it pull back. This is the moment of truth. If this stock is really strong, if the news is really good, it will hold here.

If the news is bad, it's just going to keep going lower. So, what do I look for in this moment right here? I'm looking for a change in trend. Now, a change in trend could be indicated initially by what? A potential dogee candle. So, a potential dogee down here could give me the indicator that the price is beginning to bottom out, that buyers are buying it up off the low, which is creating that bottoming tail. However, a very obvious sign of the trend shifting would be number one, a candle that is green in color because it's closing higher than it opened.

And number two, the first candle to actually make a new high versus the previous because these candles are going down. They're going down. They're going down. So the first candle that starts going back up is making the pivot. So right in this moment right here, the second this stock breaks the high of this red candle, I'm a buyer. Where's my max loss? It's at the low of this candle. The low right here of the pullback.

So, let's just say that's 10 cents of risk. I'm risking 10 cents per share. So, multiplied by the number of shares I bought. And my profit target, my first goal is a retest of the high of day. So, I want to make sure I can make at least 20 cents between my entry point and the high of day. If I can do that, I have a 2:1 profit to loss ratio and I'm going to take the trade. And so, what I want to see is that rally. And if it pushes even higher, that's great.

Just because it hit my profit target doesn't mean I need to sell the whole position. In fact, I don't want to do that. I want to cap my losers, but I don't want to cap my winners. So, I want to hold my winner until I get a valid exit indicator. What does a valid exit exit indicator look like? The first candle that closes red. The first candle that closes red. Now, obviously, if the next candle opens and begins going red, I can be watching the time.

So, one of the things that's nice about trading is while you're trading, we know that these candles, if nothing are consistent about the time that they open and close. So, they open and close naturally at the top of each minute. So, if I'm watching and I see that there's only 20 seconds left of the current candle, then I know that the shape that it's currently appearing to be will likely become the shape and and become a permanent record of history.

Now, when it's the first five or six seconds of a candle, there's still the potential that it could go from red to green and it could change. So, I like to give it a chance and I like to hold. Obviously, there's nothing wrong with taking profit when you have it. And if you've got your hit your target and you wanted to take half of your profit off the table, that's fine. There's nothing wrong with doing that. But it's also generally a good idea not to cap your winners and to wait for a valid exit indicator before selling the entire position.

So [snorts] now, let me give you a little pop quiz. So here we have this actual chart. This is the real stock right here. it pops up and we're going to assume right now this stock meets our five pillars of stock selection and has breaking news. So we we like it from all of those perspectives. So now right now what are you looking for? You're going to be looking for that first candle to make a new high, right? So right there it happens.

The first candle makes the new high right there. So that's your entry point. Right? Now your max loss in this case is the low of the current candle because it made a low and then reversed back up. So that's your entry. That's your max loss. Your profit target is right here up at the high. And there you get that squeeze through the high. Now, what you're seeing down here are the volume bars, which represent the number of shares that traded hands in each one of these candles.

So, we saw increasing volume on the green candles. And then the volume decreased a little bit on this red candle. And then the volume came right back in on the next green candles as it surged higher. And that's the type of pattern that we like to see. So, a candlestick chart is not just about looking at the individual shapes of the candles and the patterns they're forming. It's also noticing the volume profile, the profile and distribution of the buying versus the selling, and observing some of our technical indicators like this one right here, which is called the MACD.

When the MACD is positive, the blue line is above the orange line, this is typically a more bullish place to be taking a trade. When they're inverted and negative, it's typically more bearish. Now, for those of you guys are saying, "This is a lot. There's a lot of details to follow here." One of the things that I will share with you is that every single day while I'm trading, I run a live audio video broadcast right into my office.

So, you can watch over my shoulder. You can see my screen share. You can see my position window. You can see my orders. You could see everything. And you can hear me talking because I provide my market commentary. So, I share with you what I'm observing. Now, I've been doing this for a long time. And what I've learned is that this is a real value for beginner traders because as you're immersing yourself in the market, you want to surround yourself with people that are speaking the language.

And I speak the language of the market and I'm fluent in it. And so by listening to me articulate what I'm seeing in real time, it makes it easier for you to pick up on these subtle cues because there are on these charts there are clear buy and sell signals. I see them. Your eye may not yet have been trained to see them. So here we have another stock that's rallying up. This is a fantastic move. So of course the stock is hitting our scanners.

It's moving quickly. Then it pulls back. We've got this bottoming tail candle. Then boom, volume comes in. First candle to make a new high and it rallies back up. So our entry is right there. Now this is a stock that would have been on the scanners. So as it hit the scanners, I would have been saying, "Okay, guys, I'm watching this for the first pullback. I want to let it pull back because I can't buy it in the middle of this move.

It's too risky." So I'm going to let it pull back. I'm going to let it base out and I'm going to give it a chance to fail. And if it comes all the way back down, there'll be no trades on it. But after it pulls back, I'm looking for the first signs of strength to come back in. And on a stock that has fresh breaking news, the first pullback usually gets bought up. It works more often than it doesn't, which is why it's become my little pocket of consistency in the market.

The fact is, when a company puts out breaking news and the market's receiving it well and the price is going up, the first pullbacks, people are excited to buy it. So here's another example. Now, this one's a little different. So here we see this rally up, we see the pullback, we see this push higher, but you probably already, your eye, I bet, caught this higher volume selling. So right here, the subtle cue that I'm getting is that there's more sellers than there are buyers and therefore this is not a safe place to take an entry.

Now, in fact, there already was a little entry right here, but I'm just showing you the second pullback. And in this case, it didn't work. The selling was too heavy. Now, what about here? Is this something we should trade? The answer is no. In this case, there might have been opportunities back in this area, but now it's more or less going sideways. I mean, this range could be 50 cents a share, could be a dollar a share, but it's generally going sideways.

It's not trending in a strong enough way. So, a trade in that area wouldn't be predictable and it wouldn't be worth touching. What about right here? Same kind of thing. Yes, the price has moved up, but now it's selling off a little too much. And then this indicator right here has crossed into the negative combined with that higher volume red candle. This is not an entry that I would take. It's not a good trade. Higher volume selling.

You can see it right there. First thing you see, that's not going to work. Sometimes a stock will pop up on news and it just gives off give the gains right back. Sometimes news can sound good. Um, but ultimately market participants realize that this isn't in fact very good news. And so the initial move gets reversed. So that's fine. If that happens, I don't take the trade. There was no setup on this. So it's not a loser.

It's just not a trade at all. Now, in this case, we've got high volume buying, a little higher volume selling on that candle, right? So do I take an entry up here? It's a little riskier, but in this case, it worked. So, we would have to evaluate in that particular instance given that higher volume red candle, how good is the news on this? How low is the float on this? Now, this has a float of 300,000 shares. That's a very, very small amount of supply.

So, with a good news headline, if this was the most obvious stock in the market today, we might see good follow-through. The most obvious stock in the market is something that's important because one of the things you'll recognize is that active traders, it's they they trade what's obvious, what's right in front of them. It's kind of like everyone clicking on page one of a Google search. You just you gravitate towards it.

It's just obvious and it's it feels like this is the most credible thing today. The stock is up 300%. This is the thing I should be focusing on. It's got a lot of volume. It's got a a lot of liquidity. And so traders gravitate towards that. Here we've got this nice pop up sideways consolidation. Our MACD is open. The volume profile is not bad. A little heavier selling there, but the float's pretty low at 2.5 million shares.

And there we get nice follow-through. A little micro pullback, a push higher, another little pullback, and a push higher. Another little pullback, and a push higher. So, you can continue to trade these beyond the first pullback. But usually, you know, as you see here, as they get a little more extended, they can start to get choppier. Eventually, the MACD will cross negative. that creates more risk in trading to the long side, but then another crossover and another rally back up.

Again, being successful is not about taking every single possible trade. It's about trading the highest quality setups. Quality over quantity. So, if you if you trade that one simple pattern, the way to execute that trade is by using level two market data. The level two market data is something you could start practicing. If you're in a simulator, you can start practicing trading today. So, level two data is telling us all of the buyers and all of the sellers that have orders posted on this stock.

In the old days, level two data was sort of um essentially what was created on the floor of the exchange with a market maker. A market maker was a a broker that was essentially a buyer and a seller of stock. So, they would both post an order to buy and sell. So, if you wanted to buy or sell stock, you had to go through the market maker. So, you would say, "Oh, I want to buy." And he'd he'd say, it was always a he in those days.

He'd say, "Yes, I'm willing to buy at, let's say, $10." And then you say, "Okay, that's great. Um, you sell him your shares." So, he buys them at $10. And then someone else comes along and says, "Hey, I want to buy those shares." And he's like, "Oh, I'll sell them to you, but I'm going to sell you sell them to you at 11." And so he's making a profit on the difference between what he buys them at and then what he sells them back to people at.

So he profits from he creates a spread and it's basically he's kind of scalping. He's just sort of buying selling buying selling all day long and he's making the market. So in today's world where the markets are electronic all the individual traders out there, you, me, everyone else, we put our orders in and our orders sit basically in a line. People willing to buy, people willing to sell. So, at any time there's people that in this case on SLRX up 212% uh 45 million shares of volume.

There's people that are selling this right now at 490. And if you wanted to get in instantaneously, you could buy from one of those sellers at 490. You could you could buy from one of them right away, but if you want to get a better price, well, you'll have to sit on the bid with the other buyers here at 482. Or you could put your order at 483. You could move it up a penny if you wanted. You could there's a spread here of 8 cents.

So you could be anywhere in between the spread, but you would have to wait for someone to come and sell you shares. If you want the best price, you would do that. But if you want the shares now, you'll buy from a seller. So what I do when I'm trading, when we've got a stock with breaking news that's moving quickly, I don't have time to sit and wait for someone to come sell me shares. I buy from someone who's selling because in those moments, what I believe is that this stock is going to go a lot higher and if I don't get in quickly, I'm going to miss my opportunity.

So, I pay the higher price and buy from a from a seller. However, as the stock starts squeezing up, what I like to do is I also like to put my order up on the ask and let someone come and buy my shares. So, I try to sell at the best price if I can. Now, if I don't get anyone that buys them, I can always turn around and sell to someone who's posted a bid right here to buy, in this case, at 482. So, learning how to execute trades is not just about becoming an expert at reading candlestick charts and those subtle signals that we see on the charts.

It's also about learning to read the flow of orders right here on the level two. So, if I pull up my actual um you know live platform right here, we we'll do YCBD. Um but in any case, you'd put your order here to buy whatever number of shares you want to buy and your order there it is. So, NASDAQ, it's sitting right there at 122. So, my order is sitting there at 122. And if I if someone wants to sell me shares, I'll buy them.

Now, if I wanted to get in instantaneously, what I would do is I would just press shift one here. Or that's my hotkey, I could just go ahead and click the buy button, and boom, I'm in. Just like that. Instantaneously, I now own 1,000 shares of the stock at 123. I want to get back out at 123. I put my order on the ask at 123. And now I've got to sit and I've got to wait for someone to come and buy those shares for me.

Might take a few minutes, might take longer. I might not have the patience and I might say, you know, I just want to get out and there's someone here that's willing to buy. So, I'm going to go ahead and sell to that buyer. Boom. The shares are gone. And I lost 10 bucks there. Real money, but it doesn't really matter. So, in this case, you're interacting with the market. You're buying from sellers. You're selling to buyers.

The simplest way to trade for a beginner is to create a simple hotkey on your keyboard. And so if I switch over to the whiteboard here, this is the way I set up my hotkeys. I have one button for buying and one button for selling. Shift one right here. Shift one. I press that and I buy a thousand shares. Control Z. I press that and I sell my full position on the bid. Whatever my position is, doesn't matter if it's a thousand or if it's 5,000. it sells the whole position on the bid.

And I use those hotkeys because they allow me to get in and out of the market very quickly. Now, I have more advanced hotkeys for selling on the ask and taking half off the table and so on and so forth, but as a beginner, one button to buy, one button to sell, easy. Keep it super simple. And I use limit orders. So, the limit order that I use is I say I want to get in at 23, but actually my hotkey is going to send the order a little higher than that.

So, I'm going to send my order at 33, 10 cents above the ask. That way, I allow myself a little bit of slippage in a fastmoving market. I'll do that for myself in on a stock that's moving quickly, and I don't mind doing that. And then I turn around and sell. I'll sell 22, but I'll take away 10 cents to give myself a little offset coming back down. Now, I don't intend to lose 10 cents on every buy order and every sell order.

But if I wanted to sell 10,000 shares of this stock right now, there's not 10,000 pe 10,000 shares that are being bought on the bid. So that means I would sell the to whoever's buying at 22 and then I'd also have to be willing to sell to whoever's buying at 21 and maybe 20 and maybe 19 and 18 as well. Hopefully not all the way down to 12, but it but it could happen with bigger positions. Now, when you're trading with small size 100 shares, you're not going to see slippage.

So you don't really need to use those offsets on your orders. you could just buy the ask and sell the bid. But nonetheless, it's a good habit to be in. It's also important to know that if you're trading pre-market, you cannot use market orders. You can only use limit orders. A market order is an order that sends your order to the market and you get filled at any price. But this order here, it's going to it's not going to execute because it's after hours.

It'll say, "Nope, sorry. Doesn't work. You've got to use limit orders." So, I use limit orders in my trading. And you can do that and and trade pre-market uh with with all of the big brokers out there. it's not a problem. So, when it comes to executing the strategy, this again is where we're getting into those sort of subtle details. And so, you'll hear me commenting, "All right, guys, I'm buying on the ask at 490, right?

My profit target is 525. I'm looking for that squeeze." And on a good trade, it'll go up to that level. It'll take my I'll take my profit off the table by using my hotkey to sell. It goes a little bit higher. I sell a little bit more. It goes a little higher. I sell a little bit more. And then maybe I say, "Oh, I'm seeing an exit indicator. I see a big seller on the level two. I see, let's say, for instance, we saw right here a 1 million share seller at 490." If we saw a seller that big, that tells us that obviously there's someone out there that's selling a lot of shares.

So, I would be uh bearish on that position. It's nice to be able to see all the buyers and the sellers because you can now draw more conclusion about sentiment. If you see that big seller, you know we're not going to have the green candle go any further up. You already know what the candlestick's going to look like because that seller's in the way. Or if you have a huge buyer, a 1 million share buyer, all of a sudden they create a tremendous level of support and that's very bullish.

So the presence of big buyers and big sellers on the market help educate you as to the sentiment and the strength of a stock. And so when I'm trading every single day, this is one of the thing, these are one of the things that I'm paying very close attention to. Number seven, it's very important to understand your metrics. And so one of the things that I'm doing whenever I'm trading is I'm tracking all of my trades. Now, there's a couple different ways that you can track your trades.

So what I do for all of my trades is I use this software right here. And I can go and I can import my trades right here. And you'll see you can import trades from dozens of different brokers. Warrior Trading is on here. We've got our Warrior Trading simulator. You can import from that for those of you who are using our simulator. You've got E- Trade. You've got Interactive Brokers. So, you import all of your trades. And then once you've imported your trades, you go to the reports.

And now, this is where you can start really getting dialed in at what am I doing that's working? And this I I'll give you an example. So, I had a month um this is going to go back, let's see, this is going to be March of 2024. So, I remember this month I traded um poorly and I was really frustrated. I made uh $20,000, which for me is not a good month. My accuracy was a little lower. My average winners were only $742 while my average losers were $1,100.

And I just felt like I wasn't trading well. Now, I looked at my details and I saw that I was trading poorly on Mondays and Tuesdays. So, you could say, "Oh, well then just stop trading Mondays and Tuesdays." Okay, maybe. Now, it could be that Mondays and Tuesdays are bad. It could also just be that this is a set of data where in this period of time, Mondays and Tuesdays were bad. I I don't know, but it's a hypothesis that we could we could uh think about.

I looked a little bit more closely at this next category though of price and volume. And here I noticed that I was losing money on lower price stocks and losing money on higher price stocks. And this is actually a more consistent trend for me over longer periods of time. It's very easy to make bigger mistakes when the price is higher and take losses. And on lowerpric stocks, they typically don't move enough for me to make a lot of money.

And so I get in, I get out, I get in, I get out. I don't have much to show for it. And then I just I end up with small losses. So the area where I was doing really well, however, was between $2 and $10. So I said, you know, if you want to have a better month in April, what if I focus really on just trading in that price range, right? And oh, there was one other thing that I observed on the days and times. I observed that I was I'm not doing well early and I was not doing well later.

So I said, what if right between 7 a.m. and 10 a.m. I'm a little more aggressive. We stick with trading every day, but I just focus on trading stocks that are, you know, well within the price range that I historically have tra traded the best. So I did that and as I did that, we'll go to 30 there. Um, in April, I made twice as much money. I ended up doing well on Mondays and Tuesdays and Fridays were a little slower, but I did well during the window.

I traded a little outside the window, lost a little. And in terms of price, I really didn't trade stocks that were more expensive. I just stayed right within this window. And so your historical data has insights. You may not have looked at it yet. If you've been trading for some time, you should definitely import your trading history because in your trading history, you will find insights. Those insights can help you make conclusions or draw conclusions or a hypothesis, a thesis about what you could do differently.

And for me, it was plain as day. And I suspect for many of you, when you import your metrics, if you haven't already, you're going to you're going to see things in your trading that you wouldn't have expected. Your accuracy, your profit loss ratio, the price of stocks you do well on, the price of stocks you lose on, time of day. And so for me turning the corner, a big part of it was through this long period of trial and error, I realized that, you know, I had all this historical data.

And so naturally, there were some trades in all of that data that were that were winners, right? And there were a lot of trades that were losers. But I asked myself, are there things that the winners have in common? So what if I only look at stocks that are between $50 and 100? You know, is that subset better? No, it's even worse. Well, that's good. It's worse. So, what if we cut them out? Okay, that's that things are looking better in total profit over the last six months.

What if we take more stuff out? What if we take out anything above 20? It's even better. Great. What if we take away everything below $2? Even better. Okay, now we're getting a sweet spot. What if we narrow this sweet spot down into just between 7 a.m. and 10 a.m.? And so, approaching developing your own strategy is kind of like being a scientist. you're sort of you've got all this data and you're trying to figure out a puzzle uh solve the puzzle for profitability.

Now, it's not going to work for everyone. You could have a lot of historical data and there's not a profitable strategy in there. That's certainly possible for me. There was a diamond in the rough. There was a strategy, a subset, a niche that was working. And so then it was just throw away everything else or at least put it on the back burner and just trade this one setup that works. And that became the turning point.

So now let's talk about the beta phase with the alpha phase where you're going through and you could do alpha phase through every all the steps I've just shared with you. You're trading a lot. You're trading every day. You're trading as much as you can even less than perfect setups just to gain a ton of experience reading the level two, watching the chart patterns. But what you're going to start doing is you're going to start getting to a point where you want to track the trades that might actually like you feel like would work with real money.

And so there's this transition from simulator to real money that we're going to talk about more in just a moment. The alpha phase is the the period of just gaining a ton of experience and you're not really trying to make money. You don't even really care if you lose money because this is just about especially in the simulator just trading a lot. And then the beta phase is what I call the dry run for going live with real money in phase one.

So in the beta phase, what I want you to start doing is taking one trade a day that is your like quote unquote real money trade. Still do it in the simulator, but track it separately from all the others. So basically, you're going to keep taking a lot of trades to gain experience, but you're going to be looking for one really good setup, and you're going to say, "This is the setup that I would take with real money." And I want you to do that one trade a day for 10 days.

Now, the idea here is that by taking just one trade, we're keeping the guard rails on. Your quality standard is going to be very high. You're not going to take anything that's not phenomenal. Now, if you track this one trade a day over the course of 10 days and you're green in total over the 10 trades, number one, congratulations. That's phenomenal. Number two, it means you're ready to transition to real money. And so, when you're tracking all of those trades, this is the sheet that I want you to use.

And this is also available in the PDF download. So, you download this PDF, print out 10 copies of it, and start filling it out every day for the one trade you take. You're going to record the time, the profit or loss, the profit and loss in cents per share, whether the stock meets the five pillars of stock selection, and then outline the price, the percentage change on the day when you took the first trade, the relative volume, the float, the news, and also note what the catalyst is.

The time frame you took the trade on, 10-second chart, one minute chart, five minute chart. You're probably going to use the five the sorry, the one minute, which is the most popular, but just just throw it out there. The intraday candlestick pattern, you're just going to focus on that one pattern. patter I shared with you and I call it the pullback pattern. And then you're going to note your hold time. You're going to print a screenshot of the chart right here or just staple it and take some notes about your trade.

And what I want you to start building is a stack of aquality trades. This is going to become your north star. This is the strategy that you know when you follow the rules of it, it produces winners. And so once you've done that, this is when step nine, you're ready to transition to real money. And so for all of our members at Warrior Trading, I put them on this same plan. Now, alpha phase is gaining lots of experience in a sim.

And then the beta phase is when you're taking that one trade a day. And if you've got 10 days like this, or if you're green, you know, you don't have to be green every single day, it's okay. But as long as you're green over those 10 days, you're in good shape. If you're not, just keep trading until you have a 10day window where you're doing well and then it's all right, time to graduate and transition to real money. So, when you're transitioning to real money, what changes?

Absolutely nothing. Your first day, your first 10 days with real money, you're taking the exact same share size you took during the dry run. You're trading with a 100 shares, tiny size, because this is not about making money to pay your bills this week. Remember, we're not coming to it with that perspective. This is not about making a ton of money. This is about proof of concept, that you understand the strategy, that you're able to follow the rules, that you have discipline.

Because if you could do it with a 100 shares, that's what's really exciting. That's again the blessing of the market because now it's time to start to scale up. By trading with 100 shares with real money, you're minimizing your risk of having a big loss. The last thing you want to do is have a great track record in a simulator. Fund the real money account, lose money on your first trade, be absolutely livid, furious, and then just abandon everything you know and start trading just to make back the money.

Because then you'll end up oops losing more money. and the spiral begins. We don't want that to happen. So that means we have to actually expect that on trade number one, that first trade you take with real money, you're going to lose. Let's just put it out there. Let's just embrace that this is a this is a fear we have and that it's actually going to happen. So how much are you genuinely okay losing on day one? One trade a day, 10 bucks.

Then trade with 100 shares. You can trade with smaller size if you want, but just take risk that is that is appropriate for how much you're totally comfortable losing. And if you say, look, I don't mind losing, you know, a thousand bucks in my first month of trading with real money, then you might that that's where you're at. Look, everyone's in a different place when it comes to tolerance for loss. But what you will learn is that the reason that we're starting with small size is because you have to build your emotional conditioning to experience loss without getting rattled.

It is really hard for beginners. It takes time. So, this is that ninth step. This is where you transition to trading with real money. And we want to make that transition as seamless as possible. This is where it gets exciting. If you guys have not already downloaded the PDF resources that accompany this class, I hope you check them out. If you want to trade sidebyside with me, please check out our twoe trial here at Warrior Trading.

I hope today you have learned a ton about what it takes to start trading. And if you have, I hope you subscribe to the channel. I hope you hit the thumbs up. And I'll remind you as always, trading is risky and my results aren't typical. So, please manage your risk and always practice in the simulator before putting real money on the line. And if you want to learn a little bit more, a deep dive into technical analysis or a deep dive into level two.

I'll put some more episodes here that you guys are welcome to check out. Thank you guys as always for tuning into this class and I'll see you for the next upload real soon.