584%+ Return Swing Trader Reveals His Winning Strategy

Okay, welcome back everybody to the Trend Podcast. I'm your host, Richard Moglin. This is brought to you by D as well as the Ultimate Trade Guide as a part of TL University.

Joining us today is someone who I've really been looking forward to speaking with, and that's James Haynes, the top leader currently in the US Investing Championship with a return of over 300% through July. And he'll be sharing his setups, his ideas, his strategy for swing trading. Really looking forward to this. James, thank you so much for your time. And, uh, yeah, looking forward to diving right in.

Yeah, thank you, Richard, for your time. And you got the, uh, the last name, you pronounced it correctly. I tried. I tried. Yeah, I'll do my best.

No, perfect. Well, it's great to have you. And, you know, I always like to start things off with a little bit of context. So, if you don't mind, would you kind of share, kind of your background, how you first got interested in the markets, and, you know, start placing your first trades?

Yeah, really, my first interest, and I was thinking about this, is kind of like in grammar school, like sixth, seventh, eighth grade. One of the classes I was taking, there's a, uh, trading competition, like a simulated trading competition. That's when I first got exposed to it. And, you know, ever since then, it always piqued my interest. But I didn't really take a deep dive into it until, you know, I was about, uh, 18 years old. My first trade was, um, I want to say right out of school. So I was about 20, 22 years old. Was 22 years old. And it was actually, I was actually working at a, uh, futures brokerage firm at that time, small in Chicago. And, you know, my mentor, I guess, my senior broker, he convinced me to put a trade in this speculative, uh, you know, healthcare stock. And, um, obviously, you would can tell the results from that, that, uh, you know, I got smashed in that position. Luckily, it was a small position. But that was my first trade. And then, you know, I got, uh, exposed to William O'Neil's book, "How to Make Money in the Stock Markets." And that's, you know, where I really got into the gist of things. You know, reread that book a couple of times.

That's crazy that in sixth grade, they're doing stock competitions. What kind of school is doing that? That's awesome.

Yeah, it was, uh, it was my middle school in Niles, Illinois. I'm sure you're not familiar. But, you know, it's something, you know, that, um, I was lucky, fortunate, I guess, to have and get, get exposed to. And then, yeah, I don't even know. I don't even remember the results. What happened? But I just remember, you know, it was fun. And, you know, it's almost kind of like gambling. Yeah. But, uh, and it was also very competitive. You know, I'm a pretty competitive person, so I liked that aspect of it too.

Yeah, you caught the bug early for sure. Walk me through, kind of, the progression after you read "How to Make Money in Stocks." What were some of the resources that you went to, um, and how did your trading kind of evolve, you know, up until, you know, this year when, when you joined the contest?

Yeah, so I would be trading on the side. Like, I'd save my, you know, 30% of my paycheck and put it into the stock market. I would just strictly utilize William O'Neil's strategy, you know, the, uh, CAN SLIM. The fundamentals had to be there. And, um, you know, definitely the, uh, the technicals. I would just focus on cup with handles and high-tech flags. And I was fortunate enough to catch, I think it was Arrowhead Pharmaceuticals, ARWR, 2019. Was that 2019? It had a good run. Yeah, some somewhere around. Actually, yeah, I think that doubled like that year. And, um, you know, I just put my whole account on that. It would just, you know, keep funding it. And, um, so, you know, I got lucky kind of with that position. But, what had happened is I started, uh, to, um, you know, do some swing trading after that, you know, pretty actively. And I would do short-term, uh, options calls, um, you know, monthly options. And I've still, you know, utilized the CAN SLIM, uh, strategy and focus on those type of stocks. But this was just before, you know, COVID hit. Yeah. So, you know, before like December, you know, January. And COVID was in March 2020. You know, I was seeing spectacular results. Got pretty cocky. And, uh, you know, with with options, especially when you're doing the short-term call options, with a delta under 50, like, uh, out of the money, there's really no risk management strategy. You know, I was putting my whole account into, uh, these, uh, positions and having like a maximum of three positions on at a time. So, um, you know, I basically blew up my account then. And, what had happened is I started, um, you know, having to rebuild my account back up from scratch. And, you know, I came across this, this guy, Mark Minervini, just from, uh, seeing a couple webinars on Investor's Business Daily. And, you know, really sharp guy. And I liked the, you know, everything he was saying. And, you know, he really emphasized risk. And it's kind of more of a, more detailed approach of the, uh, William O'Neil strategy. So I decided to, uh, sign up for his program. And, um, you know, after work, you know, every day, you know, he's got his video recordings. There's countless of video recordings. I mean, he records like every week, Q&As, and, you know, on different topics, like different strategies. He had, you know, pullback strategies, one of them. Different, as, you know, different types of strategies. You know, every day after work, I spent at least three hours, you know, watching this. I probably have like, hard 50-plus notes on, uh, his recordings. And, you know, also just seeing how he traded in the, uh, live market environment for a year. And then also, he has recordings from back when he was in the USIC in 2021. And he, he definitely traded differently for the USIC. He's more aggressive, more of a, you know, um, I think he says, like, you know, everybody else, it's kind of uses the analogy of like, everybody's on steroids in the competition. So, you know, you gotta kind of adjust your strategy. And, you know, 2021, I think was more of a, you know, you got to get in and out pretty quick, right? Just seeing him. And, you know, he would even comment, they got archives of his comments, you know, every day, he would even comment on the market. And I didn't even get through the full year of that, you know, um, I went through the first half because there's so much information. And I would look at every trade, and there's tons of trades he did, and look at the graph and why he picked that, uh, you know, uh, point, buy point, and, you know, his risk management strategy, and why he was doing this, what the market conditions were. So that really, you know, helped me a lot. And then, you know, I've done other programs, man. I've been everywhere. You know, I did, um, another guy that really helped me out was a trader, Stewie. He's on Twitter. He does more of, um, really short-term trading too, like, you know, three to five days. And he does some day trading too. And I came across him, I don't know how, but on Twitter, I saw him post charts. And, you know, every trade he posted, you know, the next two or three days, or even that day, the stock would shoot up 10%. And, you know, I've learned some of strategies from him and Minervini. And then also Dan Zanger, which I've done, signed up for his program too. And, um, also a little bit of, and I did some of PREP too. So it kind of made my strategy what it is today, and what I've been utilizing at the USIC. So, um, you know, and I current everybody to do that as well, just, just to make your own strategy and just try to, um, you know, find somebody who's doing, doing well, and also look at different other strategies as well. And, you know, just try to make it your own, um, and test it out, test out different strategies. And, you know, everybody has different, um, um, way of doing things, right? This is a, you know, this strategy I came up with is all, all from them, and it fits what, you know, fits my, uh, personality, personality.

Exactly. How would you kind of define yourself as a trader? Obviously, you've taken in different inputs from all these different, um, teachers and top traders. How do you kind of define your own personal trading style? Are you more in the swing trading end, position trading end? Because it seems like you kind of started with CAN SLIM, which is much more position trading, you know, looking to hold for months. Has it kind of shortened up a little bit based on, you know, you know, the resource, the resources that you learned from?

Yeah, it's definitely, uh, shortened up, um, a lot. Um, I would call, I would call myself maybe, I would call primarily a day trader now at this point. And the, the longest I would hold a position would maybe be, I don't know, four or five days, I would say. So it's very short-term trading. And, um, very concentrated as well. Yeah.

Perfect. And you, you talked about all the resources that you learned from. Were there any kind of key aha moments that you had? Obviously, um, dealing with 2020 and the aftermath of that seemed like, you know, it reaffirmed that, hey, you need to really go out, look to learn, manage risk, all of that. But were there any kind of key turning points in your trading that, you know, really turned your performance around?

Yeah, I would say, uh, the biggest turning point was, um, I mean, there's a lot, but the one that sticks out is, I think, well, Dan Zanger's, one like he wants to be in stocks that are moving. I don't want to be in stocks that are, you know, not moving or like turtles or, um, you know, they may break out. Like, uh, like bank stocks, for example. Like, I, I won't touch those. Those don't move. No, I'm focused on tech, technology stocks, um, um, you know, healthcare, biotech, stuff like that. But also another one is, who's the gentleman that won the championship last year? Over Gohan? Yeah. I, I utilize his strategy too, intraday VCP. Mhm. And, you know, I always thought, um, when I was trading, just, you know, buying and holding, and I'd see these, uh, stocks skyrocket, like 70% every day. I'm like, how, how do? There's got to be a way to get to play these. And, um, you know, Mark Minervini would always, um, emphasize, you know, stick with your own strategy. You don't want to do too many different strategies. And, you know, obviously, I stuck with that. But then, when I, uh, got exposed to PREP, he said, like, you got to go on your own, do your own deep dives and stuff like that. So I took a deep dive into, you know, kind of these small caps and, you know, how to enter into these type of positions and how to manage the risk. And, um, going through Gohan, and a lot of the aspects, strategies he learned were from Minervini as well. And it's just, I'm just putting it in a smaller time frame, right? And, um, you know, that's another aha moment. And another one is traders doing with the earnings gaps, the power earning gaps. Yeah. You know, I'll just have a watchlist of those. And, um, I'm just focused on those stocks too, for, if I, I can't find anything, uh, in the pre-market, I'll just have a watchlist of the, the power earning gappers and, uh, see, you know, which ones are close to breaking out after, you know, obviously, that, that earning gap, and then they correct a little bit, and then, uh, set up for a quick swing.

Yeah, I think we'll, we'll take a look at, uh, some examples later on. But first, kind of from a high level, you've mentioned power earnings gaps, you've mentioned kind of more stocks in play that, you know, are, are showing huge volume and movement and pre-market. Are those kind of your main two types of setups and and trades you make, or are there other kind of major categories that you like? There, there of course might be variations in those, but are any other kind of broad categories of setups that you like to trade?

No, I would say those are the, the main ones. Yeah, just the, the pre-market movers, I call them the stocks in play. And, um, you know, the earnings gaps, uh, especially, um, on the day of the earnings gap, too, there's a lot of opportunity there, for sure. And, um, you know, if I could catch an earnings gap, um, from like a big cap stock like Nvidia, yeah, or, um, a gap, I could, uh, utilize my intraday margin, which is four times. And, um, you know, that, it's going to give me a bigger return. So, yeah.

I definitely want to touch on your sizing because it sounds like you're pretty aggressive with it. So we'll, we'll come back to that for sure. Um, but but first, you know, taking a step back, um, I want to hear a little bit about, uh, your story in terms of entering the USIC this year in 2024. Was it just kind of to challenge yourself? You mentioned, of course, you're, you're pretty competitive. What kind of led to the decision to to enter the contest and what's that been like?

Yeah, I mean, uh, the decision, you know, I wanted to, um, you know, this is what I want to do for a living, right? And, um, you know, I want to get my name out there. And I thought it was, um, you know, a position to, you know, finally pursue it. And I was confident in pursuing the USIC. And, you know, Minervini is always, um, um, pushing us, uh, students to, um, get into the USIC. And, um, you know, I actually entered in late. I entered in in February. Yeah. Um, in January was probably my biggest month. So, but yeah, that's what led to me into entering into the USIC.

Yeah, perfect. And what's it kind of been like? Do you feel like it's added more pressure on your trading, or you kind of thrive under the pressure? I, I know you've got a Michael Jordan quote on your Twitter bio, so I imagine it might be good motivation too.

Yeah, it's definitely, I like competition, uh, for sure. And, you know, healthy competition. Yeah. And it's, uh, it's like, it's another thing that I could focus. It just, it's fun for me, you know, um, it just gives you that, um, increase in energy into focusing on something. And, you know, it's, uh, I feel like it's almost over, but it's only been six months. So.

Yeah, well, it should be, it should be fun to watch the rest of it for sure. Um, coming back to your trading style a little bit, uh, you started, of course, with, kind of the CAN SLIM system. Do, do fundamentals still come into play into your trading decisions, or is it more about the technical aspects now? And if you do consider some fundamentals, maybe, you know, of course, like growth numbers, earnings growth, sales growth, how much of that is the pro part of your process versus the technical setup, you know, what's going on in the charts?

Yeah, I would say, uh, in the earnings, like, if during earning season, when I'm looking for, you know, the gap ups in the morning off of earnings, fundamentals play a huge part. And I'm looking at, you know, their sales growth, obviously, their earnings growth, the sales surprise numbers, their earning surprise numbers, their guidance. And then also, um, you know, the, the theme is a huge, um, aspect of my strategy as well. You know, every stock that mentioned AI in their earnings call was shooting up a couple months ago. Um, so just because of the theme. And then also technicals, obviously, is a huge aspect. And I would say is number one for me. But fundamentals, you know, give you that extra boost, extra conviction. And, uh, that's where, you know, I like sizing up, you know, in the earnings gaps, like Nvidia and stuff like that. Um, and also, I, I'll look at analyst price targets too. So, you know, short interest to see if there's more juice on it, what the float is, and stuff like that. So I would rank them for, you know, technicals, theme, and fundamentals.

And where does market environment come into play too, in that list? When I, when I'm doing the stocks in play, you know, fun, they don't, they don't, they don't matter. Yeah. And, uh, where does kind of market environment come into play here? Is that, is that part of that equation as well?

Yeah, market environment, uh, is part of the equation. I would say, um, not as much as, um, I would say other traders emphasize it because I'm not holding for short term. I'm very short term. But yeah, I'm definitely paying attention to, you know, S&P and the Nasdaq, and where it's at. But, uh, in terms of, uh, you know, market environment and theme is kind of very similar. Yeah.

So, coming back to your sizing, um, and and how you size positions, what, what's kind of a typical position size that you will take? And if it is pretty large, how are you managing risk at the same time to make sure that you're making sure, you know, you're keeping that in check so you'll have a positive expectancy and, you know, make sure that you you hold the profits and and hold your preserve the most of your capital if you do end up taking some stops?

Yeah, so with the, the intraday trades, like the stock in play, the VCPs, how I manage risk is, I'll just put a stop at the low of the candle. And I'm not taking more risk than 10%. So it's kind of like, if it hits 10%, like let's say the low of the candle is more than 10% from the entry, and, you know, I'll max it at 10% right. And then my position sizing, you know, with those type of moves, I'll put half my account into the position. And then I'm selling on the way up. Like, let's say I'm forcing up to catch one of the moves, I'm selling around 15 to 20% gain. And then I'm moving my stop to break even. Mhm. And then, you know, I'm just managing that position. Um, I'm looking for any signs of exhaustion. Like, U, you know, typically at the end of the move, you'll see the most volume. And then I want to sell into that. The rest of the position, sometimes I'll sell another half. So that means I'll have a quarter left. It just, it just depends. And also where you at on the time of the day. Like, if it's close to market open, and I'm trading pre-market, typically it'll fade. You know, I'm trying to get everything out before market open. And also depends when the news comes out, right? As well. But, um, with the earnings gappers, you know, um, the best moves is when they start fading before market open. I'm sorry, when it starts going up before market open, and then it starts dropping, uh, right at open. And then I'm looking for that reversal play. That, that's when I'll use a two-minute time frame. And, um, I'll try to, you know, catch the reversal and just put my stop at the low of the day. Right. The way I'll manage risk is, you know, same, very similar, selling on the way up and moving my stops. And then also, I'll use, um, moving averages, the five moving average and the 13 moving average. And this is for the last portion of my position. If that crosses on a five-minute time frame, then I'm out of my whole position because that's, to me, that means the momentum is swinging down.

Gotcha. And, um, I've got some more trading style related questions, but I know you, you've got some examples that you want to share. So maybe we can talk through those questions as you kind of walk through some charts. So, if you don't mind bringing that up.

All right, perfect. And actually, before we get into this, um, I, I know people always like to hear, kind of, um, what people's kind of batting average is, average hold, gain average loss. Do you have a sense of those numbers and, and how often do you kind of calculate those, if you do track them?

I was tracking them earlier in the year, um, I think it was through April. And, um, you know, it's just tough, you know, I take a lot of trades now. And, you know, some, and I'll take a lot of, um, day trades like on Nvidia and, like a Dell or something like that, if I don't, if I don't see anything in terms of the power earning gaps moves and the intraday VCP moves. But, um, through April, I think my batting average was about, uh, 55% roughly around there. And the average gain, I would say, was about 15%. And average loss was about, say, six, six percent.

That's excellent. Yeah. Perfect.

So, yeah, taking a look at your setups. I don't know if you want to run through some trade examples that you have. I know you've got some screenshots there, because, because one of my questions is kind of what stocks move the needle the most this year? So maybe this kind of answers it, but feel free to take it however you'd like and we can dive into these examples.

Yeah, so this was, uh, this is one of my biggest winners here. Um, this is that, you know, kind of that small cap during pre-market, VCP type of moves. So what I found, you know, just taking a deep dive into this, is the best plays are when they come out, like at around the news comes out at around, you know, and I'm in Chicago time, so it's like 6:45, 7:00 AM. So Eastern, like 8:00 AM. So you'll see on the left side right there, it's kind of like a, it's a flag, almost. And, right, you see it comes out, does like, kind of this mini, mini VCP right here. It just tightens up. But you could see there's no selling, barely any selling. And this is the eight, I use the eight moving average. I like it when it's tight above the eighth. That gives me even more conviction. And the volume is drawing, drawing up. You could see on the bottom here, you could see it. I put a trend line where the volume's dropping off. And then you finally see buyers coming back in, right? So I'm buying right here at that circle, just because I saw volume coming in. And I wanted to buy before the breakout, because obviously with the breakout, and I'm not buying too far before the breakout or too ahead of the breakout, but still, like, when the breakout happens, it, it happens big. Like, um, so I kind of always want to try to get in before. And then I'll set my stop loss on either the low of this candle right here, or low of this candle, because if it falls below that, and if it falls below, below the eighth day, you know, that's the probabilities of it going lower, very high. So like I said, you know, really, the first sell, I'm always selling at 15 or 20%. I'm selling half because I'm taking big positions. And, uh, you know, I know a lot of people, they pyramid into positions, like they'll buy a quarter of a position, they'll do a quarter of a position at the next buy point, you know, low, cheat, the cheat, and the handle. I, I kind of do the opposite. I want to put my full position with a tight stop in the beginning, and I want to get rid of, get rid of it pretty quickly on the way up. So, um, you know, I took half off here, 289. I bought at 243. Then, uh, my second sell was right here at 368. Um, and you could see you got, you know, you got like a, kind of like a doji candle where it's, you know, it doesn't know which way to go. So, you know, play it safe. I think it was like a 50, 50% return, matter of, you know, 15, 20 minutes. So might as well just take it off. It goes without me, so be it. I got, you know, 50% in the bank. And then, um, I actually had a third sell because I, I thought it would keep going up. And I wanted to, you know, just keep a little portion in there, just for to keep my mind right. I don't, I don't like seeing it go without me, kind of getting that FOMO. So I just put a, keep a small, smaller size on. And, you know, I took off the last part right before the open. And you can see at the open, I mean, the open is just, uh, it's crazy. First 30 minutes, you know, it's just everyone's just trying to get in. And, you know, they play tricks. I just don't want to be a part of it.

So, you actually, it sounds like you almost prefer to trade pre-market. That's kind of interesting.

Yeah, I do because, uh, the news really comes out in the pre-market. And that's where, uh, um, I feel like the VCP in the pre-market is higher probability, just because there's not as many players, if that makes sense. Like, it's not as efficiently priced.

And how did this one come on your radar? Were you looking for high volume screens pre-market, and that's that's how you found it, or was it based on the news catalyst that you were paying attention to that this this got on your radar?

Yeah, this got on my radar. Um, I use a screen every morning. Uh, it's a basic screen. It's just, you know, stocks that are moving up 1% on a million or plus volume. Um, and, you know, this was one of the stocks that was moving the highest. And, you know, I kind of sorted from a percent gainer, what's gapping up the most, and I saw this was gapping up the most. Pulled up the graph, you know, it's took a quick look at the news. And then another aspect that I wanted to show, too, is you got to take a look at the daily, too. You want to make sure on the daily that there's no bag holders on the left on your entry. So I'm buying at 243, right? So if I look at the, the daily, I don't see any volume here, no, no volume at all compared to like, this volume is huge. Yeah, compared to that. I mean, the first, the only bag holder I could possibly see is from 2023, like in the beginning, beginning of the year, January. And that price is at about three all the way to, you know, $4. And you can see that's why, look at this candle right here, during the day, it just sold off there. I bet you it's because of all that supply. And another reason I had conviction on this is tied into the theme of the market, which, you know, was AI. A company, NVIDIA Technologies, that received an order from Laser Town, big defense contractor. So, and it was part, it was for their semiconductor division. So, you know, semiconductors, AI, tied into the theme. It was tightening up above the 8-day and VCP action. There was supply from only supply from about two years ago. So that just gave me conviction to, uh, take that position.

Is there anything else on the daily chart that in particular, in particular, you look for? Um, like, uh, I know, you know, neglect is something that a lot of people who trade big one-day moves are looking for. Is that something you do too, or is there, are there other aspects, characteristics that you, um, always, you know, try to find on the daily?

Yeah, I mean, for these type of stocks, too, they're always trading at their near their all-time lows. So you could see like this stock is, I, these are garbage stocks. This stock got demolished, demolished. U, and at some point, it's going to turn up, uh, and it just needs some sort of catalyst. And that was the catalyst. And I over here, I marked the big resistance at around 25. So I, I'll take a look at that too, just to be aware of it. You know, just that something I do out of habit, just marking, marking the charts too.

Yeah. Could you go back to the intraday time frame for just a second here, um, because I think I had a question here, um, yes, that's, that's where the big resistance is right here, right? So once it clears that, that, that even gave me more conviction because that, that was a big resistance level that, uh, it's been stubborn. And, you know, the more you test those resistance levels, the higher probability it is to crack. And you, you add a catalyst, uh, to it, and that's going to give it the power it needs to get through that level. And then obviously, all the other traders that do this every day as well, you know, trade pre-market, they, they all, they all see this.

Yeah, that's why I try to get in a little before. And you mentioned that you usually either put your stop at the low of your entry point candle or the low of the previous candle, which is kind of the low of the consolidation as well. Um, what, what, what kind of makes that decision for you? When would you do one versus the other? Does it depend on, you know, how far away that the low of the previous day is, or the shape of the overall pullback, VCP? What kind of, what kind of decides it for you?

Yeah, it's primarily just what the amount of risk. So if it's, um, like, let's say this candle right here, the, if I entered, you know, at 243, and the risk, the low of the candle was 8% away or 10% away, then I'm going to put my stop there. But if the stop, if I could increase my risk, let's say this candle is, you know, instead, this candle is 10% away from the, the entry, no, I'm going to give them more room to, uh, to, uh, play out.

That makes sense. Yeah. And after a breakout like this, say this didn't work, what would be some warning signs that you're looking for that would, you know, put you on guard and make you, you know, be more defensive and and looking to sell early, cut your loss early? Um, what kind of, uh, characteristics do you look for for a failed breakout move like this?

Yeah, I would say, you know, like, I, I said, if it, if it fails the, the 8-day moving average, and typically below the VWAP too, it comes below the VWAP, um, those are kind of warning signs. And then if I see, uh, you know, bigger selling volume compared to the green volume, um, then that's another warning sign as well, uh, while it's failing. I mean, um, for example, like here, let me give you an example. Sure. I'm just using this as an example. Like the volume bars here, you see how the red volume, yeah, overwhelms the green volume. Mhm. And then I also have this indicator that tells me the exact amount that's selling. So here is 2 million 600 shares that have been sold compared to this green candle here, which has 1 million 630. So I mean, that's, yeah.

Let's pretend like those candles are here, like, uh, this red, great, this red candle was there with two million shares and the green candle before was 1 million something shares. I mean, that means there's a ton of sellers up here. And, uh, I, I don't want that's going to tell me to get up and maybe look, because you could always re-enter. Yep. That's what, uh, you know, I'm, I sometimes have a tough time still to this day, um, realizing you could always re-enter, but it's a fact.

Yep. And you mentioned VWAP. How do you kind of incorporate that into your, into your process?

VWAP, like I kind of like it to be above VWAP. It just gives me more conviction. Doesn't mean I won't take a trade that's under the VWAP. It just, um, it just, uh, it kind of resembles the trend for me. Like, if it's, you know, above VWAP, that means the trend is high, you know, it's up. If it's below VWAP, that means the trend is down. And, um, if I'm taking a trade below VWAP, I'm going to have a really tight stop. It's above VWAP, I can have, you know, a little bit bigger a stop, bigger risk.

Gotcha. Perfect. Did you have another example you want to share here? Maybe on a kind of power earnings gap or, or whatever you'd like to share as well here?

This was my, uh, biggest trade, uh, to date, biggest winner. Nice. It, it was on Gap. And this is pretty recent. This is pretty recent. Yeah, May 31st. Um, so Gap, so like I said, how I take an order is the technicals. So you can see you have this trend line right here that it's gapping above. So that's, that's one good thing. Then this is all-time highs up here, okay? So I'm marking that. And you have this gap right here previously. So that's going to be a big, a big area, this, this zone. And, um, with with Gap as well, or with the power earnings gaps too, like this is on a downtrend, kind of, um, you know, it's kind of neglected. And then also, I, I think two days before, Abercrombie reported earnings, and they, they crushed it. Kind of the theme now was, we were moving more from the AI tech, more into, kind of the retail, retail had a moment, in, in earnings. And I think it's because they're going for the more of the value plays. They had really low PE values. I, I put that in, um, right here. The PE was low for, kind of the retail stocks. And I think, you know, the big players were, you know, kind of doing, kind of like a minor, uh, rotation and going for more value plays. But like I mentioned earlier, what I'm looking for in, uh, the earnings play is, you know, the earnings growth, the sales growth, earnings surprise, sales surprise. And what I want to see is triple digits from one of those. Um, and I'm getting triple digits on earnings growth at, as astronomical, uh, level, 999%, you know, how Market Surge or Market Smith does that, it's not the real percentage, but it's actually higher than that. Um, and then the earning surprise, this is, it's crazy to have the 192% earning surprise. Um, so those, you know, I only look for one out of those four to have triple digits. And I got two out of four. And I got the technicals, and I got the theme. And we're going to add juice to it because there's 18% short float. Okay. And then really, what I look for is three price target raised. And I'm getting seven price target raised. And, uh, I always want to see the, kind of, the important ones for me are City Bank, Goldman Sachs, and Morgan Stanley. So that's why I marked, you know, City and Morgan Stanley there. Um, you know, their guidance, I think guidance is one of the most important things in earnings. And they're, you know, guided up higher. So I mean, this was a very high conviction play for me. So with Gap as well, is another one that you could use, you know, four times leverage intraday to trade this. And so how I entered into this position. So like I said, in the beginning, like with the earnings gaps, like this already gapped, I think they released it after the market. So, you know, gapped up post-market. And then pre-market, you see it's still kind of doing a little run. And then it's, you know, fading big time. And that goes into the open. And this is just me from doing, kind of, deep dives into power earning plays, earnings winners, that, you know, I've noticed that they kind of, you know, fade pre-market into market open. I think it's people just taking profits off of, you know, post-market, pre-market action. But then, yeah, so I'm waiting for this. I'm waiting for the dump. Um, I'm waiting for it to turn, waiting for that turn. So I'm seeing this red candle right here, and this is on a two-minute time frame. I'm using. Is you're seeing kind of like a bullish candle, almost, because you see how this wick, this means there's buyers right here, right? And then this candle develops, this candle takes the high of the previous candle and also has that wick. And look at the volume, right? So, you know, that tells me that's this is where I was entering right here.

Were you entering through the high of the prior green candle, or what was, what was kind of your reason for entry right there?

I'm entering right through this high. Gotcha. And it's because it has the volume. And I, I actually entered when this candle was developing, and I, I saw it was going to be an expansion candle and there's more volume coming in. So, and then I put my stop at the low of the day. It's a pretty tight stop.

And then, yeah, for this one, what was kind of, how did you manage the position once you got in?

So for exits, I switch over to a five-minute time frame. And so I remember I have all those zones marked up. I have that gap, that gap from the daily. Yep. Right when I, when it's at the five-minute, I see, you know, this no problems, it's sliced through, sliced through that zone. And then right here, I took, I took half off because it's the first red candle. And five minutes, longer time frame, in two minutes, that's still pretty short time frame. But, uh, you know, you, what you'll typically see in the morning, like especially around 9:30, I want to take off a portion of my position. And mind you, I have four times leverage on this. So I'm trying to take off half. Then I move my stop to break even. So I'm locked in pretty big portion. And then with this, you know, I'm letting this run. And the reason I let it run is because I remember Abercrombie, when they reported earnings, it was just a smooth sailing channel the whole day on a five-minute time frame. And I was like, I think Gap's going to do something very similar. So I let, I let that play out until right here. They kind of get a little sell-off. This is at all-time highs. So I'm seeing, you know, people, traders, or sellers coming in. And I want to give it the benefit of the doubt to kind of make a turn back. And it did, kind of, later. But, um, this was also on a Friday, too. You know, and this is like my biggest trade, uh, to date. So I just, like, I'm just going to lock in these profits and log off. And, uh, so, yeah, I mean, the return was 27 and a half percent for my portfolio overall. So that's pretty good.

Yeah, that's a crazy trade. So, so you went, your full account with four times margin in this one, is that correct?

I did. Yeah.

So, let's talk about managing risk right now and kind of mindset with that, because obviously you're taking much more risk than maybe the typical trader. Yeah, I guess what do you think enables you to do that, or do you plan to kind of continue to do that throughout your whole career, or, as your portfolio grows, or whatever you plan to kind of scale it back a little bit and still trade aggressive, but maybe not take out, take as much risk as as you're doing now?

I think I'm going to be as aggressive until, you know, at, I'm at at a level where, you know, it's tough to enter and exit positions and I don't know liquidity was. And that's why kind of like Minervini's program, I think is more tailored to that. But, you know, the technicals are still the same. It's just that he does more like, um, entering a quarter or half at this point, and at this point, because he can't. That's what the some of the benefits of having a smaller account is, is I could do this type of thing. And and then when I'm in the USIC, you know, this is, I'm trying to, yeah. And, um, I kind of have the mentality like, um, you know, I like playing big, I like being on the edge of my seat, and I like those moves. And, um, you know, I'm able to handle, I, big losses too. Like, this is not all winners. Time, yeah, I take some big losses. And it's just something I'm able to deal with. And I think having an experience with the options early on, I think that was the only benefit of trading those options back then. And, you know, playing big, or I don't know, maybe it's something in my bloodline, who knows? I don't know. It's just, because I know traders do have a tough time with risk, but if you want the big returns, this is, you know, you got to, you got to trade with big money. And, you know, I have confidence. And this is what a big thing I learned from PREP is, you got to do those deep dives and look at the winners. And that's just going to give you more conviction when you see it in live market environment. Like, I've seen this 100 times, and I know how this, I know the probability of this is going to work out. So I'm going to, you know, put in this big position. But also, you know, you, you still got the tight risk. It's not like you're going to lose all that, that money.

Yeah, 100%. And, and this year, what's kind of been your steepest drawdown off your peak? If you can remember?

It's actually recently. So yeah, this is, uh, this is embarrassing to say, but July 1st, I took a short, four times leverage on Nvidia. I was, I was a little early. But, and, uh, I took a, I took a massive hit. I lost, um, I don't know, percentage wise, but I lost over $40,000 on that. And it's just like, it's just an ego thing. And, you know, I really thought it was going to go down. I was just looking at it today because I was, yeah. Do you want to bring it up? And that's why I don't like shorting, man. It's tough. Shorting is so hard. But, you know, especially shorting and during, um, you know, holiday week or short week. I feel like a lot of the short weeks are more, more, uh, the stock, you know, stock, the market goes up. Like all the serious traders are gone. And it's just like, you're leaving the kids alone, you know, right? So I took the short. Right here, you could see, see how this has this massive wick? That's me getting stuck in this wick right here, because I saw it falling. You see these red candles? Like, this is an outside day. This is a massive outside day in the daily, right? So I'm saying, okay, this is running out of juice. It hit that trend line. Let me see if I could decrease it. Hit this trend line right here. And then the next day, you know, keep selling off, keep selling off. And this is the 20-day that I use. And it sold below the 20-line. This is all on big volume. So these are not, you know, small people exiting. And obviously, it's going to.

chop around. It's not just going to straight down. And then I saw it in the morning. Morning, the market open selling off really hard. I was like, this is it. It's happening right now. It's going to take off this, this area right here. But, uh, it didn't. They bought the dip. And yeah, I got stuck with it. And my ego kicked in saying that, you know, it's going to go down. There's no way it doesn't go down. And I held it overnight. And I exited right here, somewhere around here. Yeah, it was not a fond memory, but it, it'll be a good lesson that you'll, you'll take forever. So, it, it, it's, it's valuable in that way, for sure.

Is there something you do after a big loss like that to kind of reenter yourself and kind of bring you back down to neutral?

Yeah, I mean, um, it's not like a set routine I have, but, um, you know, I do meditate every morning for market open. I think that helps with, you know, my big positions as well for about 20 minutes. And, um, you know, after a big loss like that, it's just, um, the only thing that's really going to help you is, uh, time. This time going by, uh, you know, it's, you're going to forget about it, the loss in a couple days, through a week. But, uh, you know, I don't have like, U, you're not going to be instantly in a after the loss. It's just, it's just going to take time. And you just got to keep putting one foot in front of the other and moving on to the next trade. You got this. In this trading business, you have to have, you know, kind of a short-term memory and move on to the next. And obviously, I'm looking at what went wrong after that and said, I can't believe I did this, but, uh, you know, listen to rules, all that stuff. But, uh, I kind of, it got, it kind of get, get you more focused and more motivated, like, you know, this is not going to happen again. And get you more focused to find the next opportunity, right? To lock in even more. So, you know, a lot of trading is like sports. It really is. You know, after a loss, after a big loss, all I can do is watch the tape and, uh, move on to the next. And it's already, what's done is done. And you got to go to to the next and try to, uh, learn from it and, you know, take the positives out of it.

Yeah, for sure. Do you have a sports background?

Just, yeah, know, just in high school. Yeah, just high school. Nothing crazy. Yeah, yeah, yeah. No, I, I, I also think there's a ton of parallels, uh, for sure. Um, you know, I played baseball and when you, when, when you make an error, you know, third base, I played third. You make an error, the next ball is going to be smoking hot right back at you. So you got to be ready, for sure. Uh, no, that's great. Um, did you have other trade examples that you wanted to run through?

Yeah, I did. I wanted to show you a loser.

Yeah, perfect. The small cap since we're on that topic.

Loser. Yeah. Well, it, it's, that's the reality of trading. So it's good to, it's good to show both sides. I mean, that gap trade was awesome. So this is one of the small caps in pre-market. MH. And this one, um, you know, you got the news, like I said, coming out right here. And then it comes, comes back down. Almost back down. Like this is going to be a perfect VCP going into the open. You see this like tightening here, tightening here, tightening here. And then massive volume right here. MH. And I bought over here like an idiot. But, uh, that's where I bought. Um, and this is where, you know, like you said, you learn. And, um, what I've learned is like, like at market open, there's going to be a bunch of, bunch of tricks, especially with this type of play, with the VCP, especially with something that's already gapping up a lot. And, um, and I mean, I'm never going to buy in this type of candle again. This, this candle is massive. Like this is an, I'm buying to where people are selling. And, um, like I said, I take a maximal stop loss of 10% because obviously the low of this is higher than 10% for sure. Right. And then, um, this is where I got, this is where I started looking at the daily. I learned from this trade that, um, you see this, um, resistance line right here? Yep. This is massive supply from the daily. And that's when I started looking the top made to start looking at dailies, um, at the, at the, the bag holders on the daily, not just the resistance level, but also try to find, uh, the big bag holders. It up. So this one, it looks like you also kind of bought a lot further from the VCP pivot than, than the other, the other winner that you shared with the LASC, I think.

Yeah, I bought, um, I bought 219 C. The high. Yeah, it was hard, hard to get into this. Yeah, obviously I wanted to get in right here. Yeah, I bought it. It was just, it was bad. It's bad. Yeah. So, and this is recent too. MH. Massive supply. Look at all that volume here. You got that long wick over here. And it's not a coincidence that, uh, once it hit that level, that, uh, it fell right away. That is, that is another loss I learned from. And this one, I, I had one other question. Um, oh, yeah. So with this one, um, and just in general, do you have a, a certain amount of liquidity that you're looking for? Are you filtering at all by that, or just, you know, on that day, it has to be moving on a certain amount of volume?

No, it's got to have daily average of about over a 100,000. MH. Shares traded. Then, like I said, I do want to see a million traded at the time I'm looking at, at least. MH. I'm afraid of. So we got both those checked off there. Yeah, perfect. Uh, let's see. Uh, were there any others that you want to run through?

I could show you, um, another earnings gap winner.

Yeah, that'd be great.

So this was ARM in February. So ARM, another thing I look for is, uh, you know, recent IPO. And OB, it's, it's tied to the theme, the AI theme, semiconductor. And you kind of got like this VCP minor VCP base right here. Um, you know, all-time highs. And then another aspect I'm looking for is, uh, in the pre-market, it already traded equivalent to its daily average. So, and that's just pre-market. So I know there's a lot of juice on that, right? And, um, you know, this had kind of a low float. So that kind of equates to having high short interest. Um, and we're in an early stage of the bull market too. We're in February. And then I got eight price targets raised, uh, from analysts, one being City Bank. So I have a lot going for it, for sure. And then, um, for this one, I just, I just entered right market open. MH. And sometime I'll do, do that on early stages of the bull market. Like, for example, a week ago or two weeks ago, if there was earnings, uh, gaps, I'm looking for reversals. I'm not looking to enter in right away because we're kind of like late stage or like, you know, anticipated corrective stage, right? The market. Um, so more in the early stages of the market, you could, you know, get away with entering in, um, right at market open. Usually what I like doing is, uh, buying at the, the one-minute opening range breakout, putting my stop low. And, um, you know, you couldn't have, uh, had a better trade here. I bought it right here. And then I took, I didn't even take any anything off. And I rolled this all the way up to when it started turning down on this big red candle. So you saw the red candle kind of reversing lower and also volume coming in. That's kind of what led to the, the sell there, right? And, uh, it was also, it was a big red candle. Obviously, with these type of plays, you're not gonna, you're not going to get the top. And you just got to live with that. If you get the top, you got lucky, to be honest. And, uh, so I'm, I'm just looking for, I'm trying to get the most juice out of this. So I, I'm fine with selling a little below the top. And I'm selling right at this big red candle here. MH. So, yeah.

Well, you got the juice out of it. 65% portfolio gains. Not too bad. So, yeah. And this one, I, ARM, I was able to use the intraday margin. Yep. Well, also four times. So just, you know, taking your time and researching and, you know, doing the deep dives. And then also researching what are the numbers, the analyst price targets, the, the fundamentals, the technicals, what's the theme of the market? And just being really like tied into the market, what's been going on, what's been working. And, um, you know, lay, you're just putting layers and layers together to increase your confidence. And that allows me to be, to be able to confidently put in that type of size. So, yeah.

I, I really like that list of basically, as you said, like layers, layers of edges that, you know, are, you know, increasing the probability of that trade working. I think, I think that's a great thing to have on your charts right there to kind of remind you. That's perfect, right? Exactly.

Then I could show you, let's see. I got one more.

Yeah, let's do it. I'll show you an earnings gap loser. This, this, this ticker, man, has caused me so many problems. Coinbase. Coin. Yeah, I know it's caused a lot of people problems. But this one causes so many, so many problems for. But anyway, you know, they had stellar earnings, 142% sales, incredible. 52% earning surprise was 5,200%. Sales surprise, 16%. The crypto theme, 10 price targets raised, 10% short interest. And, uh, you know, that I took big size. The only downfall of this is probably it was running up into earnings. That's what I was thinking. Yeah, yeah. Um, but then I was also breaking all-time highs. And that's what Coinbase does. Like the only way you could get into Coinbase is on the pullbacks. You know, you can't get in because this is what it does. Just go, it goes up, shoots up the right side. Every time you got to get in somewhere here and be creative. But, um, you know, I, I got into this position, um, um, let's see where I get in. Yeah, so it, it broke out out that all-time highs at 190. So, you know, I, I just buy the breakout. And I got stopped out immediately, uh, you know, about 5%. Uh, it's just the trade that didn't work out. And I mean, can't win them all, like you said. But, uh, yeah, the earning gappers, you don't win all of them, even if you have all the layers. But the probability is you're going to win if, if you're doing it correctly and putting all the layers together. But, uh, just want to show you that you, you're not going to win them all. Yeah. And like you said, maybe it's, it's something to do with the, um, personality of coin specifically, why, you know, this one didn't work out. It already moved up the right-hand side so much. And that's another aspect too, that it's a great point that, uh, before in part of your research, what, when you're going through the numbers, the fundamentals, you want to look at the personality of the stock, which I made a mistake here, not looking at the personality. Is and also how it reacts to previous earnings, like, and what their numbers were like. Um, I know for example, today, TSM, like they had, I, when I was reading the numbers, it was pretty good. They had good guidance, not like eye-popping anything, but, uh, I, I was really surprised that it, uh, didn't at least go up at least 5%. It went down. You know, I think it was more than 5% gapped up and then reversed. But that also ties into the, the market environment where we're at. Yeah. If you look at TSM's how it acts, how it's acted on previous earnings, it, it always, you know, shits the bed, sorry, yeah, my language, but that's what, just, that's what it does. Yeah.

Uh, I wanted to ask you, you know, you, me, you've kind of credited deep dives as well for really building that conviction. What did you specifically do to to go back and and study these setups? You know, you know, build up your layers, and and like you said, that just kind of gives you more confidence. What, what kind of process did you follow to do all those deep dives?

Yeah, I mean, I, I go pretty wild on them. And like, here's my Google sheet, like for the stocks and play. MH. Like, um, so I'll go on the ticker, I'll mark like, one of the news come out. Did they come out during the day? Was it post-market? Was it pre-market? Is it a penny stock? ATL means, was it at all-time lows? What was the short float? You know, what was the catalyst? What was the industry? Um, was their supply on the daily? And then just to get confident on the entries, you know, like for this type of move, this stock went up 62%. The risk would have been 9%. You got to get out in 36 minutes. And I'm just looking for similarities between all these types of, uh, you know, catalysts. And, yeah, also, you know, you could, you could dive into this so deeply that, like, there's so many different variables that come into play. I'm just trying to find something general, lock into that. And, uh, you know, I'm still developing, learning as well, and adding more conviction. But it only comes with experience. But this is the type of things I do, man. I go through, go through it pretty in depth. And, uh, try to figure out how, how to get a good entry and good exit.

Yeah, that's excellent. Is there, do you have a favorite type of catalyst that you've noticed for your trading seems to have, you know, better success?

Definitely adding a new custom, new customer. Usually on the tech side. I mean, and then also if it's, um, like a recent IPO type of stock, I like those as well. Or it has like a massive short float. Like I'm talking about 70% short float or higher. Anything that has that with that type of juice, those could get you massive returns. Like I'm talking about triple digits in a day. Um, and I like when, you know, the tech companies get a new customer. But also when they sometimes they show the dollar amount of the amount of new revenue. Sometimes they don't. It just depends on, you know, the size of a company and how much, you know, that's going to affect the revenue when they report earnings. And obviously, another good one is like what SMCI did earlier this year, right? Is they, uh, reported, uh, earnings before the earnings dates are kind of adjusted. Guidance, we're gonna report massive earnings, by the way, in a couple, in a week. Yeah. So, and then if that ties in with coming out of a base, like that's actually another example I had. I called the SMCI move. Was that what led to the strong January?

Yep, exactly. Yeah. I mean, this is like a picture-perfect. I'm sure you've got, you've seen this chart many times. Yeah. Just, just a few traders. But, uh, yeah, it's picture-perfect. I'm just drawing these trend lines just to draw the how the contraction gets smaller. MH. Smaller and tighter. And then you even get the shakeout here, which gives it even more power, because you're exchanging weak holders to, you know, serious holders. And, uh, just shot up here. And, uh, a beauty.

What made you sell here?

Just, just capturing the, the quick move. Yeah, I just wanted to, I mean, it was a, it was something, uh, that I wasn't used to, like a 50% move, I think in a day. Something that I'm, I'm just going to sell it all. And, uh, I'll reenter. And I day-traded all the way up. Like I would day trade SMCI in a video, like every day. And that also helped me out a lot, you know, during the early bull market. It was, uh, pretty easy. You know, it would, uh, if, if I got, if I saw a market open that went red, I'm looking for a reversal on SMCI in a video. And, uh, I'm having tight risk and I'm putting a big position on. Yeah, I'm just trying to get, uh, a couple points.

Yeah, excellent. Was there anything else chart-related that you want to share with everybody today?

No, that was it. That's all I had.

Yeah, perfect. No, this, this has been excellent. Um, just kind of a few, um, closing questions. Uh, first, is there any kind of, um, exercise or homework, uh, that you, you would give everybody watching today? Uh, you know, put, put some work on their plate, uh, that you think would help them develop as a trader and, and you think would just kind of help them improve?

Yeah, I mean, um, if it's a new trader, you gotta sign up for one of those programs. You got to sign up with one of the professional traders. I would sign up with MPA for sure. And do all those videos and, uh, read his books. And, um, I mean, that's where you're going to learn the most. And plus, you get to see him trade in a live market every day and get to see his comments. He does a Q&A every week. And I'm not getting paid for this, but I'm just saying that's, uh, that's what helped me a lot. But also, you know, try out different other other guys as well and try to make your own strategy off that. But, uh, you know, I would start off with, um, going into one of those programs. And it's going to be well worth it. It's going to, I don't know, 100x your money, 100x plus your money. It's an investment. And, uh, you just got to be patient. And you got to be determined. And you can't just put it off. And you got to do this every day. Make it a habit. And also, you know, after you get the gist of everything and all the strategies, that's when you could, um, you know, start getting creative with different entries and different exits. And, uh, you know, I would also take a deep dive into the, you know, the big, biggest winners over the past at least 10 years. Um, and they all have the same pattern. It's, it's crazy. And it's all the VCP and it's up with handle, you know, stuff like that. And, um, I wouldn't get too overwhelmed with, you know, double bottoms and stuff like that. Just try, try to figure out how to buy correctly and how stocks move. And stocks, they don't just go straight up. They come out of a, a consolidation and they break out and then they come back a little, break out again. And, you know, that's where, that's where I would start off. Is definitely getting into finding a mentor and, you know, just paying the price. That's an investment. Yeah. And obviously working hard with the deep dives as well. Top dives definitely helps a lot too. It gives you more confidence. Um, but first, you got to know the style. You could still do the deep dives, um, but it's awesome when you know what you're looking for. And then you know what you're looking for. But then you also find other things because you kind of, you know, you got a, a nice background from what you've learned from your mentor. And then you can get creative with other things as well. I just, yeah, just keep doing deep dives as you, you can do both simultaneously.

Yeah, perfect. And do you have any other bits of advice for people, people watching? It could be trading related, it could be life related. Any kind of last, last bits of wisdom that you want to share with everybody?

Yeah, I mean, um, you know, I think in order to be successful, uh, in trading, is, uh, you gotta, you gotta blow up your account, unfortunately. Or you got to take a big loss. And I, I think, uh, everybody has done it. Or most the successful traders have done it. And, uh, that's not a something that's going to happen overnight. You know, it's going to be incredible trader the next day. I mean, it took me, I don't know, and I don't even consider myself because the year's not even done yet. And, uh, I still have a long way to go. But, uh, you know, it's, it's to, it's taken me since I was, you know, 23. I'm 31 now. So I had a good year last year for sure. But, uh, it's going to take, you know, six. And you just gotta learn as much as you can, man. You got to love it. And that's, you know, with anything. And be passionate about it. And, you know, I watched a lot of videos, dude. I watched so many of your interviews. And it's, I've taken a lot of stuff from bits and pieces from everybody. And MVini interview with you, I've watched Kless at times, I've watched Pep interview with you, I've watched, you know, Mark Richie. I've watched every, I've watched so many videos of you. So what you're doing is incredible for for the trading environment. So that's off to you for sure.

Well, thank you very much. And and James, this has been a real pleasure. Um, I especially, I I really liked going through the trades with you. And, uh, yeah, wish you the best through the end of the year. It's going to be, it's going to be a fun contest to watch. So, so wish you the best.

Yeah, appreciate it, Richard.

Yeah, well, well, thanks again, James. Uh, ter watching. I hope you guys found this really, really valuable. Uh, I'd highly recommend re-watching this a few times, especially going through the charts. Um, and, uh, you know, really taking note of what James is saying and the fine details. There's a lot of gold nuggets there. Um, but hopefully you guys enjoyed. Please leave a like down below if you did. Subscribe to the channel if you haven't yet. And, uh, we'll see you guys for future videos. Take care.

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