I Reset My Account to $2,000 (AGAIN) Robinhood Challenge Ep 1 transcript

What's up, everyone? All right. Well, I have just reset my account back down to $2,000, which means my brand new small account challenge starts right now. For this challenge, I'm doing things a little bit differently. Instead of using one of the offshore brokers that offers up to six times leverage and allows day trading with $500, I'm using a US brokerage account. The broker for this challenge is Robin Hood. During my last small account challenge, you may have tuned in and you saw that I was using Weeble.

And in that challenge, I was trading in a cash account, which meant I could take just one trade a day. I will be doing the same thing with Robin Hood. And my focus is to grow the account as quickly as possible with all of the profits getting donated as always to charity. Let's go ahead and jump on the screen share and start breaking down this brand new small account challenge. Okay, so when it comes to the brokers, there are dozens and dozens of brokers that I could choose from, and I've really been doing it by popular demand from you guys right here on YouTube.

When you've been saying, Ross, I want to see you do a challenge with Robin Hood, I've taken that into consideration, and so that prompted this latest small account challenge. Now, because it's a US broker account and although we know the pattern day trader rule, there's a proposal to change it from what is currently $25,000 to bring it all the way down to just $2,000. As of today, the pattern day trader rule is still in effect, which means the only way that I could day trade with a US broker is either to have an account with more than $25,000 in it or to trade in a cash account.

Cash accounts are not restricted by the pattern day trader rule. However, when you run out of cash at the end of each day, you can't take any more trades. So, essentially the way that works, if we jump onto the whiteboard here, is with $2,000 in the account right now, I'm going to be able to buy, for instance, 1,000 shares times $2 a share, and that would be a $2,000 trade. Now, if the stock goes up to 210 or maybe 220, whatever, I would make a h 100red bucks.

I'd sell the position for 2100. Oops. 2100 right here. And that would be my one trade for the day because my cash balance, I would have used all the cash on that one trade. And now what I have to do is I have to wait overnight for this trade to settle. And so then on day two, tomorrow, I'll be able to take another trade. So although I could take, you know, 10 trades with $200, that would be one approach. Or I could take one trade with a full 2,000.

The way I typically trade during these small account challenges because I'm still trading in my main trading account is that I don't want to miss too many opportunities in my big account. So, what I usually do is I just focus on trading what I think is the highest quality setup each day and I trade that one in the small account. So, that means I'm going to sort of consolidate all my attention to just looking for one really good opportunity, taking that full buying power, all the buying power I have on that one trade.

And if it's green, awesome. Okay, no more trades for the rest of the day. If it's red, it is what it is. Now, as you've seen from my last several small account challenges, if you've been tuning into them, I've been maintaining accuracy between a low of 74% and all the way up into the high 90s. So, I've been doing really well maintaining high accuracy. And part of that has been because of this commitment that I'm only taking one trade, but I'm going to trade the best quality setup each day.

Now, in today's class, I'm going to walk you through the small account strategy that I will be trading during this Robin Hood challenge. So, the first thing I want to do, however, is just touch base on where we stand with the fundraising goal. So, for all of these small account challenges, all the profit that I'm making is getting donated to charity, and I'm giving you guys the opportunity to help me double that donation with a dollar fordoll match.

So, every time you guys hit the thumbs up on episodes in these small account challenge series, I'm adding an extra dollar to charity. So, during the last three small account challenges, we've already raised over $197,000. The first challenge was back here. That was a big one. Then we had the second one here. The third one here, and this is Robin Hood now, the fourth challenge. So, the first one I was using a $2,000 account, but I had six times leverage.

The second one, I did a $2,000 account and traded it with no leverage, but I did trade as much as I wanted to on any given day. So, I traded it like a margin account, but without leverage. And then this was the Weeble challenge, and now this one here is the Robin Hood challenge. By the way, these are the different charities that I uh donated to over the last uh three challenges. So, and I really appreciate you guys giving me recommendations of different charities that you think I should donate to.

I check them out. I research them. And then, you know, for many of them, I've given them some money. So, this is a way uh that I'm able to give back and pay it forward. And at the same time, you guys are able to learn a ton about the market. So, I think this is really a win-win. Okay. So, let's keep raising some money for charity and learning how to trade in the process. So, here are the five topics for today's class.

How to grow a cash account starting right now. Step one, we got to choose our market, our time, and then set up the account with a broker that supports the market we want to trade. Number two, we got to set up our stock scanners. Number three, we got to pick the candlestick chart patterns that we're going to focus on. Number four, we've got to follow a trading plan, which means we need a trading plan in the first place.

And number five, we're going to have to analyze and have a strategy of how we're going to analyze our performance. So, when we're doing well, we know what we should be doubling down on. And when we're struggling a little bit, we know what we should sort of, you know, pull back and be a little bit more cautious around. Everything that I share with you is data driven. It's based on my own historical data. It's not just my opinion or theory of what I think might work in the market.

It's what I've proven actually does work in the market. For those of you guys tuning in perhaps for the very first time, my name is Ross Cameron. I'm a full-time trader and I funded my first account in 2001, nearly well at this point 25 years ago. I can't believe it. Now, when I first got into the market, I didn't really know exactly where to start, but I had one goal, which was to focus on trading stocks, and with the attempt of growing my small account, which started with about $1,000.

As of today, I've produced over $20 million in trading profits, as you could see right here. So, my commitment through this series is to document the entire process of how to grow a small account with a combination of YouTube recaps, PDF resources, and live trading archives. So, for those of you guys tuning in here on YouTube, I'm going to give you a link to download my small account worksheet and my day one trading plan PDF.

These are important res resources that you can download. You can print them out and you can begin utilizing them in your own trading starting today. So, let's start with step one. My area of focus is the US stock market and on stocks priced under $20. I will trade from 7 a.m. to about 10:00 a.m. in order to participate in the momentum um that occurs due to the early morning news cycle. I'm a volatility trader. And so, in other words, I need stocks that are moving very quickly in order to make money.

If I buy something at 10 and sell it at 10, I don't really make money. So, I'm looking for volatility. Now, in order for a stock to squeeze up, you know, 50% or 100%, generally it needs some type of breaking news. So, I'm paying attention to the market during the window when companies are most likely to put out breaking news. And this has really always been uh my my technique and my interest has always been in stocks.

Now, for some of you, you may be more interested in cryptocurrencies or you may may be more interested in futures and that's fine. One of the things that's nice about Robin Hood is you can trade these different uh financial instruments. But what is important is making sure when you are searching for a broker that the broker you're looking at supports the market that you want to trade. So for instance, for me trading stocks, it it wouldn't really make sense for me to go use um I suppose a foreign broker located somewhere in Europe that doesn't give you access to the US stock market.

That would that would defeat the purpose, right? So, if you're foreign, then you've got to make sure you're looking for a broker that will allow you to trade the US market. This can be challenging in some countries. However, the good news is a lot of the brokers that are really big in the United States are now international. So, they have offices in different countries in which includes Weeble actually. Weeble has offices uh all around the world.

Interactive Brokers is another one. uh you know so you have all these brokers out here that you can open accounts with that do now offer trading in the US market and one of the reasons is because the US market has so much volume liquidity and volatility that all means opportunity. So, for me, I opened this account with Robin Hood uh with the goal of growing a small account as quickly as I could. And it is a cash account, but one of the things I noticed when I first did the account opening process was um that they give you the option to enable stock lending on your accounts.

Now, stock lending means that if you own a position in a stock like Ford, let's just say Ford Motor Company. You own a position, you're holding it. Stock lending allows Robin Hood to go lend out your shares to short sellers, which means a short seller can short the market using your shares. Now, some people say shorting uh is uh I is is unpatriotic. It's unamerican. It's not right to be able to bet against these companies.

It's not good for the market. So whatever you feel about short selling um if you want to disable that you can disable it but you have to do it affirmatively because by default it's enabled. Now if you do have this enabled you will get interest because Robin Hood makes money by lending out the shares. So you'll get a little interest by doing that but it also allows for more short selling. This was a topic of conversation during the GameStop short squeeze because people said, "Go into your account and disable lending.

By disabling lending, you're going to force short sellers to have to cover their shares to give you your shares back because you're saying I'm not going to allow you uh to borrow, you know, against my my shares I'm holding." So, something to think about there. A little bit more uh abstract, but relevant u certainly on the topic of Robin Hood. Okay, so uh let's see. Let's jump ahead to the next slide here. Uh for me, the way I funded this account was with a transfer from Charles Schwab.

And it was very easy at Robin Hood. I was just able to log in, choose an account transfer, and then transfer part of the account. And then it says it'll be deposited in about 5 to seven days. So that for most traders is going to be fairly straightforward. You could do a wire, which would be same day, but then you've got to pay a wiring fee. So, most people probably do an a from their bank account or from another brokerage account, which is fine.

Okay. So, now we've made the decision, at least for me, I've made the decision that I'm going to focus on trading the US equities market, US stock market between 7 a.m. and 10:00 a.m. And I'm going to use Robin Hood as my broker. So, now we've got to set up our scanners. My scanners search for stocks that I've historically made the most money on. not the specific stocks, but the type of stocks. So, what I've been able to do in all my years of trading is analyze my data and draw some pretty uh firm conclusions about the type of stocks I make the most money on.

And I've actually laid out five pillars of stock selection. So, the stocks I make the most money on share these common denominators. The first is price. I tend to make the most money on stocks between two and 20. Now, during a small account challenge, realistically, even a $20 stock is going to be too expensive. So, for the small account challenge, I'm going to be focused a little bit more between around a $1.50 and usually about5 or $6 at the high.

I just can't afford the more expensive stocks. So, I'm going to be focusing a little bit on the cheaper range. Number two, I do the best when stocks are up at least 25%. So, we want to see a big percentage gain. Now, a stock being up 25% is obviously significant. Most stocks in the market don't go up or down 25% in a single day. Number three, I do the best when the relative volume relative volume is at least five times above average.

Relative volume is a measure of today's volume compared to what's typical for the stock. So, if the stock typically trades with, let's say, a 100,000 shares of volume, that's very light volume. People don't really pay attention to it. But then suddenly today, it has 10 million shares of volume. All of a sudden, you've got this extreme ratio of 100x. It's 100 times above average. So, that's what I look for here. And when you're looking at it on my phone, um, the relative volume is this column right here on the corner.

I'm zoomed in a little bit too much so it's harder to see, but it's that column right there. Now, the next thing that I look for is breaking news. So, the news catalyst is what creates the volume in the first place, the and what drives up the relative volume and what pushes the stock up at least 25%. But one of the things that's very interesting is that there uh in order for these stocks to make a big move, there needs to be an imbalance between supply and demand.

And that's created by u the demand here breaking news and the supply here which is the float. So the float shouldn't be not more ideally than 10 million shares. And for a small account challenge where I'm looking for stocks that have potential to make the biggest percentage gains and where I'm focusing on taking just one trade a day, I'll probably end up focusing on floats between uh well probably less than 5 million shares in most cases. we'll end up seeing as we end as I end up taking trades during this challenge, but I suspect that the stocks I'm focusing on will typically have floats of less than 5 million shares.

So float is the supply and then everything here represents uh the potential for demand. Now certainly the stock being up 25% reflects demand. High relative volume is literally the demand because it's the volume that's taking uh that's trading hands. The news is what creates the demand and a stock priced between a$150 and $6 will have more demand when you think about all the traders in the market that currently have smaller accounts.

So, as you may know, FINRA, the regulator of the US financial markets, has just proposed a rule change to the pattern day trader rule. The P the PDT rule, as it's been known, was put into place on February 27th, 2001. and it stated that in order to day trade using margin, a margin account, you need a minimum of $25,000. This is a rule that came out of the.com bubble. A lot of traders were burned, losing money that they were trading on borrowed money, and then a lot of brokers lost money from clients who went bankrupt who weren't able to pay them back.

So to protect and stabilize the market, the PDT rule was enacted. Now, in the discussion to amend the PDT rule and reduce it down to just $2,000, one point that was brought up was the fact that there are millions of trading accounts of people that have cash accounts just like this new account that I have set up right now. And we are restricted to only trading our cash balance each day. So, the benefit to the overall market in this proposal of reducing the the pattern day trader rule to just $2,000 is that it'll increase liquidity.

It'll increase trading activity. It'll increase volume. More volume. This all means more money of course for the brokers. So, you can imagine the brokers are proponents of this rule change. But it is good for us too because it allows us to trade actively if we want to even with a smaller account. But it doesn't mean we should forget about the fact that trading can of course be risky. And one of the biggest risks with trading for a beginner trader is that you jump into the market with no strategy.

So the biggest uh the the biggest words of wisdom that I could share with you is that before you ever put real money on the line that you should first practice the techniques you're learning in a simulator. So naturally, you might say, "Well, that's great. I'm going to set up a simulator with Robin Hood. Well, unfortunately, that's not going to work so well. So, a lot of brokers don't offer simulators, and this is very frustrating.

They don't offer simulators because they don't really make money with when you trade in a simulator, right? If you're trading a simulator, how much money does the broker make? They make nothing. So unfortunately, even though I would love to encourage you to set up a simulated trading account at Robin Hood using Robin Hood Legend or even using your mobile app, they don't have a simulator right now. But you know what you can do and this is kind of the next best thing and of course it's a big win for you know the brokers is you could trade with real money but restrict yourself to only trading with one share because remember it's commission free trading.

So if you trade with just one share, you're effect essentially paper trading because the amount of money you're making and losing is complet should be completely negligible. But you do have the opportunity to actively trade and so you get the chance to learn to gain experience in the market to test out your strategy without risking a lot of money. And then if you can prove profitability with just one share, well this of course is the blessing of the market.

The blessing is that if you're consistently making money, let's just say 10 cents a share, 10 cents per share, and you're doing it with one share, the difference between making, you know, uh I guess, you know, well, in this case, um it would be 10 cents and 10 cents, but the difference between making 10 cents and making a dollar or you know, $10 or $20 is starting to increase your share size from one share to 10 shares to a 100 shares to well, I guess if we're just gonna Well, at 10x doesn't matter to a,000 and then eventually, you know, to 10,000.

And so, you don't just jump from from a 100 to a,000 and a,000 to 10,000, but you slowly scale up in these increments over the period of uh weeks and months. And it may even be years before you get up to 10,000 shares. Now, for those of you guys who recently watched my um my annual uh year in review, you may have noticed that my average share size in my main account is about 20,000 shares. So, trading with about 20,000 share average position size.

Obviously, during this small account challenge, I'm going to be uh really reigned in with the biggest limitation not being my risk tolerance or my willingness to take a big trade, but simply my account size. But going back to setting up scanners. So over at Robin Hood, they do have a few different scanners that you can use. They have um and this is on the Robin Hood uh mobile app, but they show you your the top movers each day, both in the crypto markets, but also in the stock market.

And they also have screeners showing you, for instance, your daily price jumps. Daily price jumps, as you could see right here, show us a list of the stocks that are up the most in just in this trading session. of 47% in one day, 34% in one day. Now, this doesn't have the level of detail that I personally uh look for in a scanner, but it it's not to say you couldn't make do with this. Now, one of the things that they also show you when you look at a stock is um stocks that people also own.

So, based on the portfolios of people who own this stock that you've looked at, this list is generated using Robin Hood data, not a price recommendation. These are other stocks that those people are holding. So that's kind of interesting. That kind of helps you get a sense of, you know, what what people are looking at. And this again is uh for Robin Hood. So I program my scanner to look for the following. I'm looking for the stocks that meet the five pillars of stock selection.

Relative volume price already up 10% at a minimum. News event between 2 and 20 and less than 20 million shares. But I filter that down a little bit for this small account challenge. So I can focus on the type of stocks that have the highest likelihood of making a big move. So if we look at my scan right here, this is the scan uh just for today, which shows us that our leading gainer right now is up 184%. It's priced at a $128.

It's got 35 million shares of volume. The float is 4.78, so right underneath that 5 million uh share float cutoff. Uh, and the relative volume is 13,000 times higher than average. This is incredible. And so, this is no doubt the type of stock that would be very interesting for the small account challenge. I mean, I'm not going to put all my money into this stock and just hold until it goes up 184%. My focus is always going to be taking base hits.

So, now that you have an understanding of certainly the markets I'm going to focus on, the time of day I'm going to focus on, the broker I'm going to use, and the type of stocks that I'm going to trade and and how I'm going to find those stocks each morning in real time, which is using my scanners. Let's talk about where to buy and where to sell. This is based on my strategy. And you've got to you got to pick a candlestick chart pattern that you like.

Essentially, this pattern is going to be the way that you manage your risk. Everything we're talking about right now ultimately is about risk management. Choosing the right market, the right time of day, choosing the right broker, choosing the right stocks in my case. These are all techniques I use to help mitigate my risk while acknowledging the fact that of course trading is risky. So I want to reduce my risk as much as I can.

Now, what I know about trading in all my years in the market is that technical analysis is the language of the markets. And technical analysis can be viewed through candlestick charts. And so, when we're looking at candlestick charts, there are certain familiar patterns that resolve in a predictable way. Let me give you an example here on the whiteboard. So, if we jump onto the whiteboard here, I'm going to show you a stock.

I'm just going to draw a chart and let's just pretend that it is 8 a.m. and boom, we have breaking news on this security called ABC. So ABC is breaking news and instantly it starts spiking up. It's often highfrequency trading algorithms that drive that first spike up. So that candle squeezes up instantaneously and then what ends up happening is after that first pop, there's two things. Number one, some short sellers look at a stock that just squeezed up 30% in one candle and think that's too extended.

I'm just going to automatically short it. And there's some people that do this with highfrequency trading algorithms. And so they short it immediately. But then as it pulls back, other traders have the opportunity to read the breaking news and they see that wait a second, this is a stock that is a biotech company, let's just say, and has just come out with news of clinical trials, positive clinical trials, phase three clinical data on a cancer treatment, and this is a big deal.

And so all of a sudden, those people say, "I'm going to buy it right here." And the stock starts squeezing higher. And as it squeezes higher, those early short sellers cover. As it dips again, some short sellers add in and some people who bought down here are taking profit. And then there's another round of buyers that come in right here and send the stock higher. So the technique that I focus on is looking for the areas where a stock is going to change directions.

So it's going up. Well, I can't buy it at the top here because my risk would be all the way back down to here. So I let it pull back a little bit. And then if it just keeps pulling back and fades all the way back down, there's no trade. But if it pulls back and then changes directions, as it did right there, that's where I'm a buyer. And my max loss is the low of the pullback. And then I stay in until it changes directions again, which can be the first candle going red, or it can be if we run into an area of potential resistance up around here.

We let it pull back and we give it a chance to sell off. And if it doesn't and it pushes higher again, then immediately we get another trend change back up and we're back in for the next leg higher. And what typically happens is when a stock is very strong, we will see multiple opportunities to buy it. So pullback patterns are my favorite and especially when it's right after the stock has come out with breaking news.

So this is the pattern you will see me trading during this small account challenge. It's the same pattern I've traded during all of my other small account challenges. If you guys download the uh the two resources, the small account worksheet and my trading plan PDF, which the the links are pinned at the top of the comments and in the description, you will see this broken down in a bit more detail, showing exactly where I buy and where I sell.

So, we see the stock initially squeezing up. We're going to assume it's on breaking news. It pulls back and right now it's it's selling off. So, if this next candle goes green right here, I could be a buyer. And we would consider this to be a micro pullback because it only had one candle of pulling back. A micro pullback is when there's only one candle. But this one gives us two candles. So, right now, we don't buy. We didn't get in here and then we're red on it.

We just don't take a trade at all because we're still waiting for what to happen? The first candle to go higher than the last candle. These candles right now are going lower. So, we're looking for that first candle to make a new high. didn't happen there. Could it happen here? So, right there, the first candle makes a new high. And so, that right there is my entry. I'm not waiting for that candle to close to be a buyer.

While that candle is still forming, I buy right there. So, if I pull up my charts here just for a moment, um, and I'm just going to show you a 10-second chart here. What you're going to see is that every 10 seconds a candle closes and a new candle opens. And so right here, we've got this candle that's forming. And if the next candle, this green one that's forming right now, if it breaks over about a $1.29, technically it would be making the first high versus that previous candle.

So what we're looking for is the second the candle makes the new high, the second it makes the new high, I'm a buyer. Now, this is an example of a trade that I would actually take because it's later in the morning and this is uh kind of this is not a setup, but I'm just want to demonstrate how we look at these candles. So, the moment that first candle makes a new high is when I'm a buyer. And you can see here it's just going sideways, going sideways.

So, we're waiting for it to break over that 29 level, 30 level, and then we would look for a squeeze back through the high. That's how that pattern works when you're applying it at the right time of day to a stock that also has a relatively strong chart pattern. Uh, and that's where the stock is trading just uh underneath its high of day. So then we look for that continuation higher. So let me give you an example right here.

Is this a place that you should be a buyer? And I'm talking about right here at this moment. So, I would argue that when the stock first popped up, it went sideways and then that first candle to make a new high ended up giving you a nice entry. That was a good trade. Goes all the way up to here. It then pulls back, kind of pops up for a second, pulls back a little lower, pops up again, pulls back a little lower. Kind of not really behaving nicely.

It pushes higher here. It dips for a moment and then higher here. And now it's pulled back a little bit more. It popped up. It failed. It come It's coming down lower. This is not a place that I would be a buyer. Unfortunately, this is an example of a stock that has already exhibited a little bit of weakness here with these kind of false breakouts. Um, in this case, we can see that the MACD also crosses into the negative.

That's a technical indicator that I use. So, this unfortunately is a stock that in that position is not a good entry. What about this one? So, this one again shows you that it's had a history of some nice little pullbacks kind of rising higher. This was a nice pullback right there. First candle to make a new high worked very well. This was a nice one right here. But now you have a topping tail up there. That's an upper candle candle wick.

Now, for those of you guys who haven't tuned in to one of my full length trainings on how to read candlestick charts, I can put a link to it at the end of this class. It then dips down, but the MACD is about to cross negative. This is not a setup that I would want to trade. This pop is short-lived. It doesn't go all the way back to the highs. I want to be trading with something has the potential to move significantly higher right here.

This is pulled back too much. The MACD is negative. This is not a good setup. What about right here? This unfortunately has too much selling volume. So, you can see each day when I'm sitting down, I I look at a ton of stocks and I'm able to quickly talk myself out of trading most of them. I say, "No, that doesn't look good. I don't like that setup." One of the things that uh you guys uh get to enjoy, especially those who are members at Warrior Trading, is that you're able to actually watch over my shoulder while I'm trading.

You can see my positions window. So, you could see when I'm buying, when I'm selling. Now, you can see right here, I don't have any trades um as of yet right now today, but you could see this is where you would be able to watch me trading. You see this whole screen and you can hear my commentary. So, you're not completely on your own, which is really helpful when you're a brand new beginner trader. So in this case here, we'll jump back onto the slide deck.

So here we've got this rally up. We've got this pullback right there. And the MACD is positive. We've got a nice volume profile. The float is 1 million shares right here. This is an interesting looking setup. And this ends up rallying from about $450 all the way up to $7 a share. That's phenomenal. That's a nice move. What about this nice rally up two candles red? We're looking for the first candle to make a new high.

Our MACD is positive. Yes, we do get the resolution as it squeezes through the new high right there. And this ends up going from 360 up to 460 and then pushes even higher, which is really nice to see. So then here we've got another one, this strong move up, first candle that's red, and then we're going to look for the first candle to make a new high right here. The MACD is open and that rallies higher. That's good resolution.

That's what we like to see. Now, here again, this goes back to that same example. So you should be able to see already the difference between some of the examples that were a little bit stronger and in this case where you've got that topping tail and it's a little bit weaker pulling back and it just doesn't quite look right. So step number three is to make sure you're trading the right candlestick chart patterns. But it's not enough to just trade the right candlestick chart patterns.

You've also got to make sure you're trading them on the right instrument. If you try to trade these candlestick chart patterns, but you're trading something that no one's paying attention to and it's not moving, you're not going to get a predictable response. So, what's important for me every day when I'm trading is that I'm focusing on trading one of typically the top two or three leading percentage gainers in the entire market that have volume.

So, these two stocks both have over 40 million shares of volume. They're really obvious. People are paying attention to them. This is what I want to be trading. I don't want to be trading a stock that nobody's looking at. If you're trading a stock nobody's looking at, there's not going to be any liquidity. There's not going to be any volume. And typically, it's because there isn't a strong enough catalyst. When you have a good catalyst, like breaking news, that's what brings in the volume.

That's when we get really good follow-through. So, step four is to follow a trading plan. And this is the small account trading plan that I'm going to use and that you guys can download in the PDF resources. So, my focus is trading momentum. So, I'm focusing on trading stocks that are moving quickly, and I want to trade them on the front side of the move. When the MACD is positive, I'm going to trade between 7 a.m. and 10:00 a.m.

Eastern Standard Time. That means I will be trading pre-market. I'm going to focus on stocks between 2 and 20, float of under 20 million shares, up at least 10% certainly. But for the small account challenge, I'm going to kind of rein that in a little bit more. What I know is that in order to see the biggest percentage gains, I'm probably going to need to see either extremely high relative volume, like a 100x, or if we have really low floats, we're going to have a bigger imbalance between volume uh and the and and the and the supply, which is going to create the bigger move.

So, let me give you a little demonstration of what that looks like. So, let's say we have two stocks here. The first one uh we're going to do, let's see, float. We're going to do um percentage change and we're going to do volume. Okay, so stock number one has 10 million shares of volume. It has a 10 million share float and let's just say for the sake of argument that it's up um 100%. Now, that's kind of an impressive move, but let's just let's just leave it at that for right now.

So, what would happen for instance if we changed two of these variables? So these two variables, if we change them, we would assume would produce a different rate of change, a different percentage change on the day. So what if we change the volume from 10 million shares just to 1 million shares and we still have the same level of supply? We would presume that we would get onetenth the move. We have onetenth the volume, one/tenth the move, the percentage change.

What if we go to 100 million shares of volume with the same 10 million share float? This is where we would start to look for something like a 1,000% move. Now, the fact is 100 million shares of volume is quite a lot. There's no question about that. Well, let's think about this a different way. What if we had 1 million share float and we had 10 million shares of volume? See, now we've got the same 10x ratio, so we're back to a thousand.

And so, this is why you'll see me focusing on these lower floats because these are the ones that typically make the biggest percentage gains. Again, if we look at our scans just from today, it's not a coincidence that the top five leading percentage gainers all have floats of less than 20 million shares. So, yes, 20 million shares is certainly a good cutoff spot. And for my big account, yeah, that makes sense. But for the small account, I'm going to trim that down just a little bit more.

So, let's go ahead and actually do that right here. Let's change the float to less than 10 million shares. Let's change the price to between$1.50 50 and $6. Okay. And we're going to say at least 25% up on the day. We'll keep the relative volume at 5x. I think that's okay at a minimum right now. And it should definitely be in the top three leading percentage gainers. I'll underline that. Okay. So now the technical setup.

I'm going to focus on buying the first pullback, which often times will be a micro pullback when the MACD is positive. So, I'm going to find these stocks typically right here on my scanners. I'm going to see them first on the high day momentum scanner and then I'm going to see them moving up the top gainer scanner. As soon as I pull it up and I see the stock moving, I'm going to check to see what's the catalyst that is driving this higher.

My daily max risk and my daily profit target are both 10%. I'm willing to risk losing 10% of my account in one day, and my goal is to grow the account by 10% in one day. Since this is a $2,000 cash account, that means my goal is $200, at least here on day one. Now, for those of you guys that have been tuning in for my Weeble small account challenge, and let's see, I'll just pull up my metrics on this right here over on my other screen.

So, the growth since day one, and this was um as of uh day eight, but I'll just pull this up here. So, as of day eight, we were at um 87% uh gain in the account, and my average daily gain was $219. So, I took eight trades focusing on one trade a day. So, over the course of those eight days, um was averaging $219 a day. So, it'll be interesting to see how I perform at Robin Hood compared to Weeble. All things being the same, it's the same type of account.

Both are cash accounts. Both are with the exact same amount of money. So you would figure I should probably perform similarly. One variable with commissionfree trading is something called price improvement. Price improvement is the way the broker essentially gives you a profit share a percentage of the profit that they make from selling your order flow to high frequency trading algorithms. So these big big institutional traders buy the order flow that comes off a number of these commission free brokers and that's why the brokers are able to make money even though they don't charge a commission.

It's because they're selling all of your order flow to these big institutional traders. The institutional traders, the institutional firms are wholesalers. So they're essentially able to give you what is considered a little bit of price improvement on your order. And so I noticed that with Weeble that oftent times I would buy and let's say on the ask just for example I saw a price like $3.70 and I would fill at $369.5.

So I would get in with half a cent of what's called price improvement. Now on a th000 shares a half cent is $5. $5 obviously isn't going to make or break this challenge, but over the course of certainly dozens of trades, hundreds of trades, and eventually thousands of trades. Last year, I took over 3,000 trades, you know, every penny does add up, so it can make a difference over the course of time. Uh, but nonetheless, my focus will be growing the account, ideally $200 a day, although it'll be more difficult at the beginning of the challenge to achieve that type of growth. uh but certainly when the account gets a little bit bigger that'll be uh more manageable.

Share size for me will be a calculation of the stock price, my buying power and my ability to keep my risk under less than a 10% draw down. There will be some stocks for instance like a $15 $20 a share stock where I look at it and I say look I can only buy on this you know 100 shares. So in order for me to make $200 it would need to go up $2 a share. $2 a share. That's not realistic. In fact, if we looked at my metrics, and for those of you guys who have been following along uh with my trading for a number of years, you'll already know what I'm about to share with you.

My average winners over the course of the last 12 months, I I want you to just take a guess. How big do you think my average winners are? Well, you might think that my average winners are are huge. You know, I'm I'm making many of you have seen my recaps. I'm having some really huge green days. And although it's true that I am having some really big green days, my average winners are actually not as big as you might imagine.

So, I recently did an episode where I talked about my average winners in 2024 versus 2025. And they are currently at 18 cents per share for 2025. 18 cents a share with about 19,000 shares. That's it. So, 18 cents a share is the average per share gain for my strategy. Now, if I only take one trade a day with a th000 shares, 18 cents will be 180 bucks. That'd be fine. Now, in my main account, where I'm not restricted by the pattern day trader rule, I could take dozens of trades a day.

And with an average share size of nearly 20,000 shares, producing $3,500 on each winner. 10 of those winners is a $35,000 green day. All right, take away, let's say, eight grand for losses. It's still a $27,000 green day. That's really solid performance. And that's the scalability that I've been able to see in my own trading in the market. Now, there is a limit to scalability where you'll see diminishing returns, but that's going to depend on the strength of the market and uh and the type of instruments that you're trading.

Nonetheless, since my average gains are 18 cents a share, it would be unwise for me to try to set a goal of making 50 cents a share or a dollar a share on every trade I take in the Robin Hood small account challenge. Why would I be trying to outperform the performance and the strategy that I've proven is so successful over the long term? In fact, the only way I can grow this account is by consistently showing up every day and locking up those 18 cent winners.

And if I can have the good fortune of the first three or four days being green trades and making 18 cents a share, then I'll be able to grow the account, you know, hopefully $180, $200 a day, and all of a sudden the account will be up from 2,000 to 2600, 2,800, 3,000. Next thing you know, I'm up towards 3500 and 4,000 and I'll, you know, be doubling the account. That that's kind of the trajectory that I'm going to look for.

But the only way to do it is to show up every single day and focus on the base hits. When you get yourself fixated on trying to hit a home run, you're going to get strikeouts. So, when I focus on small winners of only 18 cents a share, it's easier to predict a stock going up 18 cents. Therefore, it's easier for me to have a higher degree of accuracy. But what does high accuracy do for you as a trader? High accuracy, when you've got high accuracy, you take trades, your accuracy is higher.

You're inevitably reducing some of your losers, right? So you take a 100 trades, you've got 70% accuracy, you've got 70 winners and 30 losers. Someone who's got lower accuracy might be 6040. And some of those losses might have been outliers. They might have been really big losses. The more losses you take, the more you subject yourself to the risk of having one of them be really big. So the the result is that you can have a inverted profit loss ratio where your winners on average are a dollar but your losers on average for instance are $2.

In order to make money with that kind of ratio you your accuracy needs to be 66% in fact just to break even. 70% would be just kind of scratching into a little bit of profit. And so what I want to encourage is focusing on a profit loss ratio where your winners are two to one. So you're doubling whatever you're risking. And it's easier to do that with high accuracy. High accuracy improve profit loss ratio. And this now improves your track record.

So now your calendar, you're showing all these green days. And that's going to improve your confidence, which is going to increase you to take more trades, which is going to just as you take more trades, you're now building a positive feedback loop where you're increasing your profitability. It all starts with accuracy. And accuracy comes back ultimately to trading stocks that meet all five pillars of stock selection and following the rules of your strategy.

So, I'm gonna tell you something. Over all my years in the market, I've come to learn that people who fail at trading fail generally for one of two reasons. The first is because they come into the market with no strategy whatsoever. They don't have a plan. They come in seeing stocks trending on Reddit or Twitter X, whatever, and they just buy a little bit of this, a little bit of that. They follow Jim Kramer. They buy a little of this, a little of that.

They have no technique. They don't know where their max losses are. They just buy thinking that they'll just go up. Essentially, they're gambling. It's just speculative. It's just putting a little on this, a little on that, but there's no system. And so, they end up ultimately losing money because it's just you don't make money in the market like that. So, they give up and they lose money. Now, the second group of traders who fail, they learn a strategy, but they don't have the discipline to follow the rules of the strategy.

So, I'm going to give you the road map. I'm going to give you the rules, but you have to follow them. And that is ultimately going to determine whether or not you're able to find any degree of success in the market or you become a statistic for another trader who failed. Your ability to follow the rules is critical. Your ability to be disciplined. This is the hardest part about trading. It's not hard to make money. It's hard to avoid losing money.

Avoiding trading on red days. Having the presence of mind to know that this is not the type of market where I should be taking risk. That's what really makes a trader. So cash accounts I would say are risky in an interesting way. The regulators thought of them as being less risky because you can't trade on bar on borrowed money. And while that's true, the risk um that they do carry is that you feel you have to trade every day because you only have this limited amount of buying power.

And in order to grow the account, you're not going to grow the account if you're not using the buying power. And this is a problem during my Weeble small account challenge because I would have some days where I took a trade and it ended up being break even. So that $2,000 of buying power, I used it all and I made nothing. And then I felt like, you know, darn it, another trade comes along later and I don't have the buying power to take it.

So now I feel FOMO. I feel frustrated. And on the other hand, there were days I was saying, I'm going to wait. No, that setup looks good, but I'm going to wait because I don't want to blow my buying power on a lowquality setup. And then nothing better comes along. And now I wish I had taken that trade. And so this restriction of only being able to trade with your cash creates a real psychological obstacle that prevents you from trading in flow state.

It prevents you from just trading the market because you're constantly thinking about how much buying power do I have left? Should I use it on this trade? Should I not use it on this trade? The second problem and the second reason it's risky is because you can't really scale into your trades, especially when you've got a small account and you can't scale into the day because you just run out of buying power. So you feel like you kind of have to be all in and all out.

And because you don't want to blow that one trade on a break even position, often you'll end up holding your losers a little longer. So you end up holding losers a little longer hoping maybe this does work out because if it doesn't and I sell it and then it works, I'm going to be furious because not only did I lose my one trade, I it worked. So I had the right idea, I just timed it wrong and now I can't get back in. And all this leads to FOMO and emotions that can be very overpowering.

And this is the real challenge that that I'm going to face in a cash account. So, it's not just that the account is smaller. Yes, having a smaller account is obviously um you know, I mean, the the smaller account isn't really difficult, though. The smaller account just means I'm taking smaller positions and I make less money. It's the cash account and the pressure of having a limited amount of buying power. Essentially, it's like you're going out to hunt, but you're only given one bullet each day.

And so now you're like, I don't want to miss this one shot that I have, but on the other hand, if I wait all day and I don't take it, then I'm bringing home nothing. And so, I am very excited that FINRA has decided to amend the pattern day trader rule. And the reason I've been doing these small account challenges at $2,000 is to demonstrate the different ways that you can trade with 2,000. And so when this PDT rule change takes effect, um I'm sure a lot of traders will come into the market and you'll be able to look at these videos as sort of a resource of different ways people trade with 2000.

You can treat it as a cash account or you could treat it as a margin account where you trade as much as you want but don't use any leverage or you can use leverage. These are varying degrees of risk that you know you have to match to your risk appetite. So for me the one trade a day challenge it's going to be get in, get green, get out, don't overstay my welcome. Obviously, I could cut the buying power in half and take two trades a day.

I'm sure some of you are thinking that's the logical solution to dealing with this sort of emotion related to um you know, missing opportunities. But the problem for me is that um if I end up focusing my entire day on the small account, it could be at a detriment of an average winner of $3,500 per trade in my big account. So, I'm willing to do small account challenges to demonstrate for you guys how it works, but I'm I'm only willing to sort of focus so much attention on it because of the sacrifice that comes with my main account.

But the small account challenge really is one trade a day. This is something that I lay out for Warrior Pro members in chapter 14 and chapter 15 of our day trading courses. That's where I talk about uh how to start trading in a simulator and then how to transition from simulator to real money. And so I asked students who completed this uh one trade a day challenge to send me their calendar showing me how they performed.

Now some of the students took a couple more trades than just one trade a day, but many of them did uh really well with this. And so this is uh the different phases of trading that I uh lay out for you guys in chapter 14 and chapter 15. The first phase I call the alpha phase and it's where you're just trading as much as you can. you're gaining experience and you're acknowledging that this is not about making money right now.

It's just about being very active in the market. And then after that, you go into the beta phase where you're actually trying to show proof of concept. And this is where you're taking one trade a day with real money and you're seeing whether or not you can be successful. And if over the course of 10 10 days, 10 trades, you can prove profitability, you you switch at that point from sim to real money and you keep it going.

And so these were traders who were getting ready to transition from sim to real money. And these are really fantastic calendars. Now, this was not someone who started day one. This is someone who's already been trading for a number of months and then got to the point where they were ready to challenge themselves to see if they could go live. And this is the best way to test that out. So, one of the things I would say to those of you guys tuning in, especially for those of you guys thinking about, you know, the change in the pattern day trader rule is that you're better off paying your dues right now and using a cash account and trading even in a simulator.

So, when this rule change takes effect and you actually could day trade with just $2,000, you're already going to have a leg up because you've gained all this experience in the interim, right? So, I I would encourage you just to start gaining your financial literacy as soon as possible. And again, if you guys want instant access to these PDF resources, the link is down below where you can get my worksheet and my trading plan.

Step five is analyzing your performance. So, the only way you can improve as a trader is if you look carefully at what you're doing wrong and you seek to eliminate those mistakes as much as possible. Nobody's going to be perfect. Trading is not about success, but is about being right more often than you're wrong and about cutting your losers quickly. And so, one of the things that I do is I look at my critical metrics dashboard.

What's my accuracy? What's my profit loss ratio? What's the price range where I trade the best? What's my average hold time? What's my performance by float? What's the percentage gain? But my typical percentage gain stocks I make the most money on. What's the relative volume where I do the best? and what's my performance by share size. All of this data is available to you. Well, well, now it depends on what platform you use.

I use Traderview to import my trades. And by the way, I should say I have no affiliate relationship with Trader View, with Robin Hood or with any other broker for that matter. So, what I share with you is just my opinion of what I think is the best. It it I'm not getting compensated for any of this. So, you choose whatever you might like. But I have been using Trader View now for more than a decade. I like the platform.

And this allows you to import your trades from dozens of different brokers. And you can just import them. And then once you've imported them, you can start looking at your metrics. And now all of a sudden, you can see, you know, what day of the week do I make the most money? What time of day do I make the most money? And as you look through that data, you're going to draw conclusions that, oh, you know, this is when I should focus or these are areas of the market or of the time of or of, you know, whatever the case is, the day of the week that I should avoid.

So, you really want to pay close attention to this. Now, for members at Warrior Trading who are using our simulator, we aggregate your data so you have all of that right at your fingertips. So, you can see what you're doing that's working and you can see what you're doing that's not working. So, I measure performance daily and then each Friday I perform a week-overweek comparison and I make notes about areas of improvement.

Each month I perform a month-over-month comparison and then certainly each year I perform a year-over-year comparison. And I ask myself, how do I position myself in today's market? Is this a day to be aggressive or is this a time to be more conservative? If you knew that tomorrow was going to be a red day, you wouldn't show up to trade. But what's the earliest that you can figure out? Is the market hot or is it cold?

Because then you can position yourself accordingly. And the goal for traders of any skill level is to always be improving. This is your current reality, whether it's being a break even trader, a red trader, or a slightly green trader. And this is where you want to be. And I'm on this journey, too. I'm still trying to improve my own trading. There's certainly people out there that make far more than me. I know that I could improve my accuracy.

I know my average winners could be a little bit better. That's the fun thing about trading. There's always room for improvement. Now, for this challenge, I will be using Robin Hood Legend. Uh, you could use the Robin Hood mobile app. I may test that out a little bit, but I'll primarily be using the desktop platform. Uh, as of right now, I'm waiting for the $2,000 to settle. They said it was going to take 5 to seven days.

And as soon as it's settled, the next episode you're going to see in this challenge will be day one of trading in a $2,000 cash account using Robin Hood. Those of you guys that want to watch me do this challenge in real time, make sure you check out our two-eek trial right here at Warrior Trading. It's two weeks for $20. I'll put a link in the description for that. And let me remind you as always that trading is risky.

My results aren't typical. So, you got to manage your risk and always practice in a simulator before you ever put real money on the line. Now, for those of you guys that wanted to watch that full length episode on how to read candlestick charts, I'll put a link to that right up here. I'll put a link to another popular episode uh right down here in the bottom corner. I hope you guys check them out and I'm looking forward to getting started on this small account challenge and I'm looking forward to seeing you guys in the chat room side by side with me.

So, let's raise some money for charity. I hope you guys hit the thumbs up. Still going to honor the dollar for-doll match during this small account challenge. And I will see you for the next upload, which will be day one of trading with $2,000.