[Music] In today's episode, I'm going to teach you how I was able to make over a million dollars day trading in just 51 days. And I'm going to break this down into really simple, easy-to-understand steps.

The first is, I'm going to teach you the day trading strategy that I've been implementing every single day. Number two, I'm going to teach you the secret to how I've been able to maintain such a high level of accuracy and such a high level of consistency. In fact, I just finished a 76 consecutive green day hot streak. Wow! In the last 9 months, I've only had seven red days. That's not by coincidence. It's not by accident. It's because I've been implementing a very specific strategy that you're going to learn about today.

And the third thing that I'm going to teach you in today's episode is how I was able to scale up my strategy from a daily average of $100 to $150, $200 a day, all the way up to nearly $20,000 average daily gains.

For those of you guys returning to the channel, I hope you hit that thumbs up. You know that we're about to jump into a deep dive episode. For those of you guys who are brand new, I hope you hit that subscribe button. And let me introduce myself. My name is Ross Cameron. I'm a full-time trader. I funded my first account in 2001. In 2017, I embarked on a small account challenge. I funded an account with $583.15 and I set out with a goal of seeing how quickly I could turn it into 100 grand. I did that in about 45 days. By the end of 2017, the account had grown to over $335,000. By the end of 2018, I was up over $800,000. And in 2019, I crossed over $1 million of profit. Today, I have grown that account to over $12.5 million of profit. And that profit has been independently audited by a third-party CPA. Now, I share all that with you not because I want you to assume that my results are typical, but because I want you to know the person that you're going to spend your time learning from is credible, qualified, and knows what the heck they're talking about. So let's go ahead and jump out of the screen share and dive right in.

So how was I able to make over a million dollars in just 51 days? Now, first of all, let me just say that this just happened. I just crossed over a million dollars just last week. And this is my progress on the year so far. So I started in January with the goal of seeing how quickly I can make a million bucks. 51 days. Boom. Done. All right.

Now, what I'm going to walk you through here is, of course, a strategy that I'm trading every single day. And I think what's helpful for you to know is that this is a strategy that is currently working in today's market, but it is the same strategy that I've been trading for more than a decade. So I'm trying to present this in a way that's going to be super easy for you to understand. So as a beginner trader who's coming to the table saying, "All right, tell me how this whole thing works." I'm going to describe my strategy in sort of three parts.

The first is how I approach risk management, because we know that day trading is risky. So our first order of business is to reduce that risk as much as possible. Like anything else, risk is on sort of a spectrum. There are strategies that you could trade that are going to be very, very high risk, and then there's strategies that are going to be significantly lower risk. But the lower the risk, typically the lower the reward. So it's trying to find that sweet spot where you can stomach the risk and get the reward that you're looking for.

So once you understand risk management, then I'm going to dive into stock selection. In fact, for me, stock selection is a form of risk management because by choosing what I perceive as the strongest stocks each day, I'm reducing my risk of unnecessary losses.

And then number three, once you understand how to manage risk and how to choose the right stocks, the question is, where the heck do I actually buy and sell? So I'm going to walk you through my favorite chart patterns, candlestick chart patterns, which I use for for actually buying and selling, for my entry indicator and for my exit indicator.

Okay. So once I've walked you through my trading strategy, then I'm going to share with you my secret for consistency. I have, uh, in the last nine months, had just seven red days. I'm a very consistent trader. I just finished a 76 consecutive green day hot streak, which is pretty unprecedented. And I did that by implementing a very specific approach for how I start trading each day. This is something you definitely want to learn.

And then number three, I'm going to walk you through how I was able to scale up my strategy. Now, at the end of this episode, I'm actually going to provide you guys with some recommended reading for those of you guys that want to keep learning. So you'll see my stack of books here. This is all coming soon at the end of today's episode.

Okay, so let's dive in with the first part. 51 consecutive green days, which produced over a million dollars in profit. As you can see right here, this is the real equity curve starting on January 1st and crossing that million-dollar mark right there in March. March, uh, March 17th, March 18th. So during this challenge, I was able to grow my account very quickly, and it took 936 trades in total. All right, 936 trades, and I maintained accuracy of 71.4%.

Now, there's a couple of things that I think are interesting here. Of course, the accuracy certainly interesting. The total number of trades interesting. The average winner, a thousand bucks. Uh, is the average, the average gain per trade $1,000? The average winner was $1,800, and the average loser $761. My average winner was 3 minutes long. My average loser was 2 minutes long. So something that you're going to learn is that a big part of my strategy is actually sitting and waiting for the right opportunity. And then when I see it, I strike. So I know exactly what I'm looking for each day. I have a very specific trading plan that I follow. I follow that plan to the tee, and I'm able to produce profit.

So for you guys who are tuning into this episode, some of you guys may be to this channel for the first time. What I'm going to do is I'm going to put a link. I'll pin it to the top comments and I'll put it in the description as well, where you can download a set of PDFs that accompany this class that I'm teaching today. These PDFs will walk you through the following.

Number one, I'm going to give you my trading plan. You can print it out and you can start implementing it in your own trading. But as always, I encourage you to practice it in a simulator before putting real money on the line.

The second thing that I'm going to give you is my stock selection criteria. This is the filter set that I use to take from 10,000 stocks and whittling it down each day, typically to three to five that I'd be willing to trade. There are very specific criteria that I use to establish whether or not a stock is worthy of trading. We're going to talk more about it, of course, in this class, but the PDF you can have as a resource that you can use forever.

And then the third thing that you're going to get is my actual small account worksheet. This is the worksheet of how I grow small accounts. I've done this many times, and so this is a tried-and-true system of how I grow small accounts. So those PDFs are all available for you guys to download. Um, the link again, pinned at the top of the comments and in the description.

So this day trading strategy, we got to start by talking about risk. We know that day trading is risky, and therefore risk management is key. So this is how I think about risk. I don't want to take a trade where I don't stand to gain at least twice what I'm risking. So we call that a profit to loss ratio. So two to one is the target.

Now, if you average $2 on every winner and you lose only a dollar, what's your break-even point? In fact, it's only 33%. Which means if you were right just 33% of the time, you'd be break-even. If you're right 50% of the time, you're profitable. And so you may wonder, how is it that someone could make money trading and be right only 55 or 60% of the time? It's going to be based entirely on the relationship between their average winners and their average losers.

So this chart right here shows you, uh, in more detail, how that relationship works. If you make a dollar on average and you lose a dollar, so your profit loss ratio is 1:1, 50% is your break-even point, right? That makes sense. But as I said, if you, uh, risk a dollar to make $2, your break-even point is only 33%. Whereas if you risk $2 to make only $1, now your break-even point is 67%.

So when we look back at my metrics there, what was my, what was my accuracy? So my accuracy was 71.4%. But what was my profit to loss ratio? Well, the average losers were 700, almost 800, and the average winners were 1,800. So it's, it's more than a 2:1 profit to loss ratio. It's close to 3:1. Uh, so what that meant was that basically, if I was right 25, 30% of the time, I would have been break-even. But since I was right 75% of the time, I was well into the profitable zone.

So this chart shows you essentially what your accuracy needs to be to be unprofitable. Now, unfortunately, what happens to a lot of beginner traders is they find themselves trading in this zone right here, where they are unprofitable. And it's the result of a combination of a poor profit to loss ratio and poor accuracy.

So here's the thing that I'll say about both. First, accuracy gets better with more experience. The longer you trade, the better you get at identifying good setups and avoiding false breakouts and setups that are likely to incur unnecessary losses. In other words, your intuition, your gut feeling, that little voice that says, "Ah, I don't know if this is going to work." It gets better and more refined the more experience you get. So one of the things I often say about trading, this is certainly a career of statistics, but it's also a career of "survive till you thrive." The beginning phases of trading is just about keeping your head above water so you can accumulate all of the knowledge and experience without taking unnecessary losses. That's why I always encourage people to practice in a simulator. So during those early months and even years, potentially, although probably not years, but early months, you're gaining that experience. You're gaining a lot of education, but you're not losing money in the process.

Now, when it comes to profit to loss ratio, what happens for most beginner traders is that they fall into the habit of having losers that are bigger than their winners. And this is what it looked like for me when I was getting started. So my average winners on average were well, one, and my average losers were two. So it was an exact inverted profit loss ratio, which means in order to be profitable, I needed to be right 66% of the time. But guess what? My accuracy was more like 50%. And so what was happening? I was losing money.

Now, the problem here was that invariably with these losses, when I would take a trade, if I'd be in a position and it was a winner, I was so afraid of that winner disappearing that I would sell instantly. The result of selling instantly was that my average winners were really small. But if I had a losing position, I would hold it and I would just hope and pray that it would turn around. And so the result of holding and hoping is that by the time I finally cut the loss, it was bigger. And so in actual cents per share, which is typically how active traders think about it, I was, uh, making on my winners only about 10 cents per share. So I wasn't making a lot on my winners. In fact, it was often less than that. Um, but I was losing closer to 20 cents per share on my losing trades. And so that gave me this negative profit loss ratio. So it doesn't matter whether you're doing this with a 100 shares or you're doing it with 100,000. This is not going to be profitable unless your accuracy is at least 66%. And for me, it was not.

So the accuracy gets better with experience. But the profit loss ratio, that requires a real concerted effort at cutting losses faster and, and ultimately being a bit more picky about the type of stocks you're willing to trade. But having the discipline to follow the rules of your system is one of the most challenging parts of trading.

So I'm going to say something now that you might not like to hear, but I'm going to say it anyways. There are two leading causes of failure, as best as I can tell, when it comes to day trading. The first is that a lot of beginner traders come into the market with no strategy. They shoot from the hip. We saw this during, certainly, the dot-com bubble, during which time I first got interested in the market. We saw it again during the pandemic. A lot of people came into the market shooting from the hip, buying a little of this, a little of that, you know, sometimes large caps, sometimes small cap, sometimes trading options, sometimes trading GameStop. And you know what? Some of them had some, well, beginner's luck. They made some money, but their luck eventually ran out. It was either when they just started taking poor quality trades, or when the, the strength of the market sort of softened after the.com bubble burst, the market softened. After the pandemic, interest rates were hiked up, and the market softened. And so during those periods of softening markets, that's when your true strategy is going to reveal whether or not you make money, whether or not it's luck, or you really know what you're doing.

So if the first group of traders fail because number one, they don't have a strategy, why did the second group of traders fail? Now, my hope is that you're not going to be part of the first group, certainly not after today. Even if you've already been maybe part of that group in the past, you won't be after today because now you're actually learning a strategy, one that I trade every single day. That doesn't guarantee it's going to work for you, but certainly a better starting point than just shooting from the hip.

So the second group of traders fail. They know a strategy, but they lack the discipline to follow the rules of the strategy. And this is something that is a big issue. Now, I'll be honest, even a trader like myself, that's been doing this for so long, every now and then I fall into that group on an individual day where I don't follow the rules of my strategy. Maybe I get frustrated, I feel FOMO, the fear of missing out, I feel angry, whatever the emotion is, usually there's a big emotion, and it causes me to override the rules of my strategy. But for beginner traders, the fuse can be so short where suddenly you become triggered, and next thing you know, you're trading purely out of emotion. At the end of the day, you'll look back and you'll say, "What in the world was I thinking?" And the truth is, in that moment, your logical brain wasn't doing the thinking. It was that, you know, reptilian fight or flight response in the amygdala that, that was doing all the thinking for you. You were completely hijacked. Losing money creates that hijack. Some people say, "Well, Ross, what's the worst part about day trading? Is it, you know, kind of working all by yourself in an office? Is it sitting at a desk all day long?" No, the worst part is the losing of money. That's definitely the worst part of trading. And it is hard. It's hard to get good at losing. But I'll tell you, the better you get at losing, the more money you'll make. And I become a pretty good loser. I'm not the best loser, there's probably better ones out there, but I become pretty darn good at it.

So day trading is risky, and we have to understand that. And the way we manage our risk is before we take a trade, we ask ourselves, "How much am I risking on this trade?" Asking that question by itself is what separates a trader from someone who is simply speculating or, dare I say, gambling in the market. If you're gambling in the market, you're only thinking about your profit. You're not thinking about your risk. So it's very important to ask yourself, "Before I take a trade, how much am I risking?" So if I put $100,000 into a trade, that's going to seem like a lot of money. And some people would say, "Ross, you're risking a hundred grand on one trade? That's crazy." But I'm not actually risking a hundred grand. Let me show you.

So right here, we're looking at a candlestick chart. This is a stock that went up over 700% in a matter of a couple of days. It was really incredible. But as it squeezed up right here, it popped up to this high and it pulled back. And let's say, just for the sake of argument, that this was the spot where I was getting dialed in to buy. This would be called buying the dip. You have a stock that's been very strong, it pulls back, we buy the dip, we look for the next move up. Now, of course, there's times to buy the dip and there's times not to buy the dip. We'll get into that in a little bit more detail as we go through this class today. But whenever I buy a dip, my stop is the low of the pullback. My stop means that's my max loss. That's the place where I'm going to sell and bail out and just accept the trade did not work.

So the max loss on this position looks like it would have been around $6.50. All right, so let's put that on the whiteboard. So $6.50 is approximately our max loss. So what was our entry? Well, my entry down here is usually the first candle to make a new high, which looks like it was right around maybe almost $7 a share. And my profit target would be a retest of the high of day, which was around $8 a share. Now, that's actually great. So $7, $6.50 stop, $7 entry, $8 is my profit target. So that means my profit target is $1 per share, and my stop is 50 per share. So we've got a 2:1 profit to loss ratio.

So if I took this trade with, well, let's just say I took $100,000 worth. Let's just say, let's just say I took 15,000 shares of it. 15,000 shares. It's a little over $100,000. That's a pretty big position. So my profit target here would be plus $15,000, and my max loss would be minus $7,500. Now, these are big numbers. You could take the same trade if you wanted with 150 shares, and your profit target would be $150, and your max loss would be $75. You could take it with 15 shares. It doesn't really matter. It's really, it's really up to you how much you're willing to risk. And this is something that we're going to talk about as we continue on in this class today, is the scalability of trading.

So the strategy that I trade, I will often take 25,000 shares of a starter. I might go up to 50,000 shares, maybe even 75,000 shares of a stock. I mean, that's a big position. But if I have the account size to do it, the, the balance in my account, the buying power, I may take that trade, recognizing that I'm, I may be buying $100,000 worth of stock in this instance, but I'm not risking $100,000. I'm risking the distance between my entry and my max loss because when I buy $100,000 of the stock, I now own something of value, and I can turn around and sell it on the market at any time that I want. So the question really is, how little am I willing to sell it for if it starts going the wrong direction? And I'm quick to cut my losses. I say, "No, I better get out. Don't want to keep holding this." So I cut my loss. So although I'm putting, uh, $100,000 into the trade, this is sort of, um, it's the, the capital is, um, well, it, it's, it's capital that you're using as a tool, in a way, almost as like leverage. And this is how much I'm actually risking, the difference between my entry and my max loss. So if I could do it with, uh, 15,000 shares, for instance, there's no reason that I can't do it with 15, with a thousand, 10, I don't know, 10,000 shares, 5,000 shares, 1500 shares, 150 shares. You can always scale a strategy down to smaller size, and the numbers will get smaller. You cannot always scale a strategy up, which is kind of interesting.

And so let me show you kind of what I've discovered in my career. So when you're trading, you can, you will see that you'll make more money as you increase your share size, but you will reach a point of diminishing returns where, in fact, if you try to increase your share size beyond a certain amount, you will actually make less money. So this is making, you know, I don't know, it doesn't matter, X amount, X amount, X amount, X amount, X amount, but at a certain point, when you increase share size, you know, to 200,000 shares or 500,000 shares, you're going to find that you'll actually make less money, and that's because there is a limit to liquidity in the market. So the ideal spot to trade is to kind of find this sweet spot right up here, where you scale up your strategy pretty much to its peak. And then once you've maxed out on your strategy, where you're making as much as you can on that strategy, that's when you go ahead and add a second strategy to diversify.

Now, what I'm teaching you today is what I think is one of the best strategies for beginner traders because it's easy to understand. It's, it's easy to understand the entries. It's easy to find the stocks. And so it's a simple strategy. It doesn't mean it's guaranteed profit by any means. It's not. You still have to work at it. But as far as learning how to trade is concerned, I think this is a really good starting point.

So this is what I would look at is the three core components to profitability. You have number one, consistency. Number two, your accuracy. And no particular order. And number three, your profit to loss ratio. So we've already talked about accuracy and profit loss ratio. You need a minimum profit loss ratio in order to be profitable. Just, you know, practically speaking, if your losers are bigger than your winners, it's very, it's possible to be profitable, but it's harder. So the, the better your profit loss ratio is, the easier it is for you to make money. So if you could have your profit loss ratio 2:1 or higher, like I have it, then that's going to make it a lot easier for you to be successful. It takes the pressure off accuracy. However, if you can maintain accuracy above 70%, that's even better.

And then the result of a strong profit loss ratio and high accuracy is what? Consistency. So consistency is the byproduct. So a trader will look at their performance and they'll say, "I'm losing money. I don't know what to do. I need to make more money." Well, profit is the byproduct of a successful strategy, not only a successful strategy, but a trader who successfully follows the rules of that strategy. So what we really have to focus on is really your accuracy at the very, at the very beginning of the day, it's focusing on your accuracy, and then focusing on your profit to loss ratio.

So that creates what I call a positive feedback loop. So if you're a trader who has struggled in the past, in order to press the reset button and to break what is potentially a negative feedback loop of you losing money and getting emotionally fueled and in a downward spiral, we break that negative feedback loop by focusing on high-quality stocks. So when you focus on trading higher quality stocks that meet all five criteria that I'm going to walk you through in just a moment, you're invariably going to reduce your exposure to pump and dumps, to low-quality stocks, to stocks that are choppy, where you're just going to take unnecessary losses. So your accuracy improves. Now, you know what also improves when your accuracy improves? Your profit loss ratio follows. Because as your accuracy goes up, you're taking fewer losses, which means there's fewer opportunities to make these big mistakes that are drawing down the profit loss ratio. So as accuracy goes up and profit loss ratio improves, consistency and profitability, those are the byproducts. They follow. And with consistency, we take the leap over here to you now having a strong track record. A trader with a strong track record has strong, higher self-confidence. And when you've got more self-confidence, you're going to feel comfortable taking bigger share size, increasing the quantity of the trades that you take each day. And that, in turn, creates increased profitability. And this is a positive feedback loop. And it all goes back to focusing on high accuracy and therefore high-quality stocks.

Perfect segue into how I manage risk by only trading what I consider to be the right stocks. What are the right stocks based on my metrics? And so all of the trades I've taken, well, actually for nearly the last 10 years, I've been aggregating into this software that gives me these reports and tells me exactly where I make the most money. So from the million dollars that I made over the last 51 days, this is the type of stock I made the most money on. I made the most on stocks that had five times higher volume on the day I traded it than its 50-day average. Now, let that soak in for a second. Five times higher volume on the day I traded it than its 50-day average. How does that even happen? We'll talk about that in a second.

Number two, I made almost all of the profit on stocks that were up more than 2% in pre-market trading, which means before the opening bell was even ringing, these stocks were up. So why would a stock gap up? Gapping up means it's moving up in the after-hours or pre-market session before the bell rings. Why would a stock be gapping up, moving higher on five times above average volume? It's because of breaking news. It's because there is a catalyst. That's what brings in the volume. That's what drives the price up.

What I've also learned is that I make more money trading stocks between $2 and $20. And the reason is that this price range can offer larger percentage returns where you can grow an account. Well, you can, let's just say, for for instance, we'll jump on the whiteboard. You could buy a thousand shares of a stock at $2 a share. So you're putting in $2,000 of cash. The stock goes up to $3 a share. You're pulling out a thousand bucks of profit. All right. This is a 50% plus 50% in potentially a matter of hours or even minutes. Now, we were looking at my average hold time a moment ago, or at the beginning of this episode, and you saw the average hold time for winners was just 3 minutes long.

So let me show you just a couple examples from even today. So today, I'm sitting up over $14,000 on the day. Here's a stock that went from $2.50 to $5.50 in about 20 minutes. That's a huge percentage move. OSR. This is another stock from earlier today that I traded. This one went up from about $1.80 to $4.50 right here, and that did it in about 10 minutes. That is an incredible move. So these trades can happen very quickly. And naturally, retail traders, which are traders like you and I, we don't work at a bank. We don't work at a hedge fund. We're just trading our own accounts using discretionary trading strategies, which is essentially the opposite of using a high-frequency trading algorithm. We see a setup we like, we manually press the buy button, we manually press the sell button. We tend to focus on lower-priced stocks because retail traders tend to have smaller accounts. And so we're looking for those big percentage returns. We want a stock that can go up 40% in a day, 50% in a day, maybe 100% in one day, heck, maybe 300% in one day. And we've seen all of that happen many times before. This is a stock just the other day that went from, uh, well, we'll put this on auto. This stock went from, well, down here around $2 a share, up to over $20 a share over the course of two days. 1,000% return on news. Wow.

Here's the deal. You don't make money buying and selling a stock at the same price, right? You want to buy and sell shares of, let's just pull an example, Ford Motor Company. All right. So here's, here's Ford Motor Company. I'll just pull this, um, pull this platform up right here so you could just see. So this is Ford. All right. I'm going to do, just do, just show you real quick. I'm going to buy a position on Ford here using one of my hotkeys. So I'm in a thousand shares of Ford. All right. I'm going to sit here. I'm going to sit here. I'm going to sit here. I'm going to sell it. Lose five bucks. You don't make money buying and selling a stock that's going sideways. Ford is going sideways. 55 million shares of volume, nearly, and it's going sideways. People are buying and selling it all day long, but it's not moving. So who's buying and selling it? Well, it's probably mutual funds, pension funds, individual, uh, investment advisors buying and selling for their clients. They're buying and holding for the long haul. But day traders, what do we have any interest in trading for? We can't buy and sell it and make money. In order to make money, we need a stock that's moving. So a stock that goes up a thousand percent. Here's the deal. You only need small pieces of that move to have a really great day. You don't need to catch the whole thing, and you're never going to. So if you can find little pockets of opportunity in there, you spend a lot of time on the sidelines, sitting and waiting for your setup to form.

So when I look at a candlestick chart, what I'm seeing are very clear buy and sell signals. And that's because I've learned the language of the financial markets, candlestick charts. These are, these are a universal language of the markets. And once you learn to read them, you will see those same buy and sell signals.

Now, if we jump back into our slide deck here, um, most retail traders are going to focus on these lower-priced stocks because of that big percentage return. So what we're starting to piece together here are essentially my five criteria of stock selection. So number one, trading stocks that are up on five times above average volume. Number two, trading stocks that are up at least 2% in the pre-market session. Number three, trading stocks between two and 20. Number four, trading stocks with a float of under 10 million shares. 10 million shares. That means when the company did its initial public offering, they sold 10 million shares onto the open market. So from that point forward, that's the total level of supply. If you wanted to buy all the shares, you would, you would buy all the shares that are outstanding. It's only 10 million shares.

So how is it that a company like maybe this one here, IMTE, or maybe this one here, MLGO, could have 300 million shares of volume but a float of less than a million shares? So what ends up happening here is there's such a clamor to buy the stock that people are buying and selling, buying and selling, buying and selling all day long. All day long, and the volume gets higher and higher and higher. And essentially, there were only 800,000 shares, approximately, of shares outstanding before today. So if everyone that was holding the stock two days ago decided they wanted to sell it up 430%, they could have all sold it, and there were more than enough people to buy all of those shares. And then all of those people, when they were up 100%, then the next group of people could have bought it. So it's just this constant cycling. And that happens when you have a stock, typically you get that rapid rate of change when there's a huge imbalance between supply and demand.

So the four characteristics that create demand include, let me jump to the next slide. Oh, well, let me show you this first. So this is again, that example of MLGO, 300 million shares of volume, up 430%. This had billions of dollars of transaction value on this day that you had this big move. So these are the four characteristics that create demand. The stock already being up at least 2%, but 10% and higher is my cut-off. The stock having five times relative volume. The stock having a news event, because it's the news event that brings in the volume, the rate of change. And most traders prefer stocks between $2 and $20. So essentially, when you have a news event on a stock between $2 and $20, and the supply level, the number of shares available to trade, is less than 10 million, that's when things get exciting. And it's, and I'm telling you guys, every single day when I sit down and I pull up my scanners, I'm looking at the scan right here, and I'm looking at the stocks here that have the lowest floats. Now, occasionally, you'll have a stock that's a recent IPO or a stock that has warrants where the float will display as zero. It's not actually zero, but, um, it's typically very low, but it's not actually zero. But look at these floats. You've got 7 million shares, 3 million shares, 14 million shares, 300,000 shares, three, four, one, one, and then 30. So all of the large percentage gains in the market that have volume, these always have floats that are less than 20 million shares. And typically, lower is better because what that means is you're going to have that bigger imbalance between supply and demand.

So you should now have a pretty good idea of what the right type of stock looks like. The right type of stock should meet all five criteria, and it should meet each one of them pretty closely. Now, I actually use a system of stock scanners to search the entire market in real time. So I'm searching through every stock that's listed in the market, but I'm filtering based on these five criteria. And what I get each day is a list, usually of five to 10 stocks that I can get really zoned in on and focused on, and that's where I find my trades. I'll show you what that software looks like. We've already kind of previewed it, but I'll, I'll show you and walk you through it in a second. But first, let's talk about the right entries and exits.

So now that we've identified the type of stock we like, I continue to manage my risk by only trading the right chart patterns on the right stocks. So it's kind of layering here upon what you already know. This is how we manage risk. We just continue to take steps to reduce our risk.

So one of my favorite patterns is called the bull flag pattern. It's a candlestick pattern. And what it looks like essentially is this. Usually constructed of five to seven individual candles. The first one is a green candle. So what's typically happening here is just before this candle formed, the stock came out with what? Breaking news. So it could be quarterly earnings, if it's a pharmaceutical company or a biotech company, it could be clinical trial results or FDA, FDA approval, something like that. So they've got a news catalyst, and instantly the stock starts spiking up. So as it spikes up, goes up 5%, 8%, 10%, boom, now it meets my first criteria. As it's squeezing up, volume is increasing because traders are drawn to something that's moving. So now all of a sudden, it's got five times above average volume based on what it would typically have at this time of day on a typical day. They don't put out great news. It's more like, you know, one, a couple times a year. So it's having a big event. So now it's meeting a few of the criteria based on up 10%, five times relative volume. Now the stock has news, which is otherwise it wouldn't be moving in the first place. As long as the price is between $2 and $20, and the float's under 10 million shares, what's going to happen is I'm going to get an audio alert. Ding, ding, ding. So my scanners over here are searching the market in real time. Now, I actually have a number of different strategies on this scanner. Some of them have slightly different filters. So what these scanners are doing is they're searching the market in real time based on the instructions that I've given them. And this, uh, software and platform is called Day Trade Dash. So these scanners are searching the market, and as soon as a stock meets the criteria, boom, I get the audio alert, and then I pull up the chart.

So when I pull up the chart, this is typically what I see. The first two or three candles have already formed. The stock is squeezing up, but rather than just jump in kind of willy-nilly in the middle of a move, I wait for that dip. I want to buy the dip, right? So I let it dip down. I let it dip a little bit more. And then I'm looking for that first candle to make a new high. So the way this pattern works, the psychology behind it is that you have a stock that makes a really big squeeze, and then it's natural to expect a little bit of selling, some profit taking. People who were in just by good luck from before the news sell and take some profit. So the price dips down a little bit, and then what typically happens is, as long as the stock holds 50% of its initial move, it's still in net positive to the buy side. It's still what we would call bullish. And so this is where a fresh round of traders like myself are going to come in and say, "I want to buy this dip," and I'm going to buy the first candle right here that makes a new high.

So this red candle, if we back this up, what was happening here is it was still pulling back. And so if the next candle was red and pulled back further, I would never press the buy button. So what do I need to see? Well, we're kind of trying to time the waves. And so the best way for me to time this dip is to wait, not just to buy when it's selling, but to wait for it to actually start to curl back up. And that'll happen the first, the moment that first candle makes a new high. That is our entry. And so we know that price to the penny. We can know that because we can look at the time and the high of this last candle. So if that was, let's say, for the sake of argument, $3.50, then we know if this next candle breaks $3.05, the second it breaks $3.05 and goes to $3.06, it's made a new high. And that is our indicator to be a buyer. And maybe I'm willing to pay $3.06, $3.07, you know, pay a couple cents higher and be in the trade. And then what's my max loss on the trade? It's right down here. So let's say, for the sake of argument, that's $2.95. So now, if we jump on the whiteboard, now we're taking a trade where we're in at $3.06. Our stop is about $2.95. We'll just say $2.96. So we're doing 10 cents of risk. What's our profit target? Well, if we're going to risk 10 cents, it should be what? 20 cents at least. So now we're looking for a profit target of $3.26. Now, if I look at the chart and I don't think I can get $3.26, I won't take the trade.

So how do I know what I can get? Well, here's the interesting thing with trading. You can always control how much you're willing to lose, but you can't control how much you make. That's based on how the pattern resolves. So what I would say is my first target would always be a retest of the high of day. So if this was, in fact, $3.30, $3.40, or $3.50, then I would feel very comfortable knowing that this retest would give me the 2:1 profit loss ratio. If we were too close to this level, then I may be concerned that there's not enough profit potential before we hit resistance, which would be most likely at the high of day. So that's how I establish whether or not I think this even has the potential to give me my desired 2:1 profit loss ratio.

And this is how it's kind of like building a foundation of knowledge. First, you need to understand risk management to be able to understand whether or not a setup is truly viable, because whether or not you should take it is going to be based on your risk-to-reward ratio. And of course, obviously, whether or not it's even going to work is going to be based on the underlying stock. How strong is that stock? And what I learned through years of trial and error is that the stocks I was making the most money on consistently met those five criteria that I already shared with you. So we're not going to apply this pattern to Ford Motor Company or a stock that's not moving. We're not even going to look for it. We're only going to be looking for it on a stock that is actively right now squeezing up, which therefore is why you have these big green candles.

So we get the pullback. We got the first candle to make a new high. So now we've bought right here at $3.05. We're in. We got our max loss here at $2.95. Now, again, it doesn't matter if you're taking 10,000 shares on this, which would be a $30,000 position, you're taking a 100,000 shares of it, which is a $300,000 position, or you bought just a 100 shares of it, which is a $300 position. Doesn't matter. It, it's up to you. So you decide how much you're willing to risk. But what's important is that the ratio is two to one, and that you're trading this strategy ideally with at least, well, I mean, as long as you got two to one profit loss ratio, even if you're only right 50% of the time, you'll be break-even. So you could be wrong half the time and still make money, which is good. But you always strive to do a little bit better than that. So as long as your accuracy is above 50%, you'll be doing well. And then if you could do well with 100 shares, you could scale up to 150, to 200, 500, 600, 800, 1,000, etc.

So we're in this here. Our max loss is the low of the pullback. So with 10,000 shares, we're risking a thousand bucks. Not the full $30,000, just a thousand. And the profit target is high of day. And boom, there you go. Now, of course, this is a little animation that I made, so it's easy to make it look good. Let's look at some real examples. But you're going to see there it is. Right. Now, all of a sudden, that's plain as day, right? You can see that right there on the chart. Now, even at the beginning of this episode, you might not have recognized that that was a bull flag and that was a buying opportunity, which means just in the last 30 minutes, your, your ability to read candlestick charts has improved.

So what we have here is a stock that squeezed up. It pulls back, and we get that little dip in volume. This is normal. So you like to see higher volume on the move up, lighter volume on the selling. And then that first candle right here that makes a new high was where this white arrow goes right there. So the moment that that white arrow candle broke the high of this candle here, which is like a little T, that was your entry. Now, we actually call that candle a dragonfly doji. That, that specific candlestick shape has a name. In fact, a lot of these different candlesticks have individual names. These individual candlesticks are almost like letters of the alphabet, and when they combine, they form words. The words that I'm reading is buy or sell. Those are the most clear, but they also communicate sentiment.

So for those that need a crash course in how to read candlestick charts, I'm going to put a link at the end of this episode.

That's actually a full training on how to read candlestick charts and how to perform technical analysis the right way, which is important because most people are doing it the wrong way.

But each candlestick, based on its shape, is communicating a message. Naturally, a large green candle is communicating strong buying sentiment. A red candle is communicating selling sentiment. But a candle like this one, with this large candle wick right here, is showing a battle between buyers and sellers. It opened, it dipped, it went back up, it closed. So, it's a real tug-of-war.

Now, we expect to see a tug-of-war when a stock is going sideways because it's already sort of indecisive. But when a stock has just made a rapid move up, seeing a tug-of-war indicates that maybe the trend is getting exhausted and we're going to reverse and come back down. So typically, when I see a candle like that, I'm going to be a bit cautious about continuing to hold the position. And that I'm going to use, actually, as one of my exit indicators. We'll talk more about those in a moment.

So, here's another example. All right. Okay, so we've got this squeeze up here. All of a sudden, the volume, uh, ramps up. Then you've got a little decrease here in volume. Little lighter volume on the selling. First candle to make a new high is right there. So that's the moment you're buying. The entry here looks like about 4.20. Max loss just under four, so about 20 cents of risk. This case, you need about 40 cents of profit potential, and it goes from 4.20 all the way up to 5.40. A $1.20. That's fantastic. 5 to 1 profit to loss ratio. So if you took that setup, you'd only need to be right 20% of the time to break even. Easy. I mean, actually, it's even a little bit less than that. So it's really solid. This is what you love to see.

So now, let's look at the next one. All right. So here we have this ramp up. Two, four, six, seven candles in a row. Little pullback, little pullback. First candle to make a new high, right there. That's your entry. Max loss at the low. And look at the volume that comes in as it makes a new high. This goes, uh, entry about 4.86. Max loss looks like 4.80. Pretty close. Six cents of risk. This thing goes all the way up to 5.70. That's fantastic. It's a, it's a 10 to 1 profit to loss ratio. So again, factoring in fees and commissions, your break-even is so low on this, in terms of trading this setup, that you could do really well.

Now, the fact is, when I say my average profit loss ratio is 2:1, we'll pull this back up here. Um, well, this is a, I think this might be 52 days or something like that. But in any case, sitting here just over a million dollars. Average winner is about $1,700. Average loser, $761. So this is how it averages out over the course of nearly a thousand trades. So while there may be a few trades that are 5:1 or 10:1, there'll be others that might only be one one, or maybe some trades that are even less than that where it didn't realize its full potential. But hey, it's better to sell it for a tiny winner than end up taking an unnecess, potentially unnecessary loss, right?

So here's another example. And I've got, um, this, and then we're going to do a couple of pop quizzes. So we've got this nice ramp up, the pullback, the ramp up, the pullback. And so this basically is giving you multiple bull flag patterns. The stock continues to give these opportunities. Dip, dip, dip, dip, dip. Little momentary pullback. That's not a good one. And then a bigger one right here that leads to this really nice resolution. And meanwhile, the stock goes up over a, over 100%. It peaked at a thousand percent the next day. So it just continues to build momentum, which is exactly what we like to see.

So you ready for a pop quiz? All right, let's get into it. So here we go. We've got a stock that is squeezed up. Is this right here a place where you should be a buyer, or should you wait? So as I look at this right now, this is doing our proper pullback. We've got the nice squeeze up. One, two, three, four green candles. A pullback candle. Another pullback candle. So what we know is that we're not going to buy right here, just guaranteed. We're going to wait for the first candle to make a new high. So if the next candle goes green, then we're buying the second it makes a new high. If the next candle goes red, we're gonna keep waiting. But the second we get that first candle to make a new high, we're going to buy, as long as we're holding the 50% retracement of the move. And there you go. You get one more red candle and then boom, it squeezes. So our stop is at the low of the pullback. Our profit target is a retest of a high of day, and our entry is right there in the middle. First candle to make a new high. That is a really nice bull flag.

Here's the next one. So we've got a stock that's been squeezing up here. A ton of green candles in a row. Volume has been increasing, and now we're getting a little bit of a pullback. Where do we buy? We're looking for the first candle to make a new high, which means we're going to buy right there. If that candle, the next candle, does break the high. Now, in this case, do you notice that bottoming tail, that lower candle wick? What does that tell us? It tells us that the stock opened, it sold off, and then it came back up. And by the time it closed, it closed right there. Still closed as a red candle, but had this bottoming tail. A bottoming tail is bullish because it tells us that although the stock sold off, the buyers rallied it back up.

Now, by the way, we're on a one-minute time frame here, which means each one of these candlesticks represents one minute of time. You could trade this pattern on a one-minute chart, you could trade it on a five-minute chart, you could trade it on a 15-minute chart, you could trade it on a 10-second chart. It's really up to you what time frame you want to trade it on. As long as the stock meets all five criteria for stock selection, if you're seeing this pattern at the beginning of the move, when the stock is first moving up on breaking news, your first pullbacks are usually the strongest. So the first pullbacks on the lower time frames like 10-second, one-minute, usually work well. Your first five-minute pullback usually works well, and your first 15-minute pullback typically works well. So the first pullbacks are typically the strongest. That's your best opportunity to buy a strong stock.

So now, what do we do there? There we go. We buy. That first candle goes green, and this squeezes from 3.60 all the way up to 4, 4.20, up to 4.60. Then it squeezes up to 4.90 and even higher.

I've got another example for you. All right. So here we go. We squeeze up. We pull back. So we already got the first pullback. We missed it. All right, bummer. Can I take a trade anyways? First pullback and second pullback. I'm willing to trade the first and the second. By the time we get up to the third, I usually try to be a little bit cautious. I don't want to overstay my welcome. So this was the first pullback. That was the second. Same exact pattern. It continues to ramp up. And typically, what you want to see across those two pullbacks is volume is increasing. So it's higher and higher and higher. That tells you that people are getting more and more interested in this stock.

So now, let me walk you through what my daily routine looks like. So each day, I sit down, and the first thing I'm doing is what? Checking my scanners. Day trade dash. So I'm pulling up the scanners. I pull them up on my phone early in the morning, and then I pull them up. So this morning was no different. I pull up the scanners right here. I saw OSR was our leading gainer at that time with volume and with news. That orange flame means it had breaking news. So I traded it. And how much did I make on OSR? $12,227.82. Boom. My work is done. I traded today for 30 minutes. That was it. So my daily routine is to sit down and look at my scanners.

So on this particular day, the leading gainer in the entire US stock market was ATNF, up 564%, 58 million shares of volume. Now, when I first pulled it up early in the morning, it was the leading gainer. Now, by the way, let me just make a side note. Some of you guys are watching this, you're tuning in from other places in the world. Of course, leave us, leave me a note in the comments of where you're logging in, where you're watching this from. So we have a lot of traders that trade the US market internationally. And the reason they do it is because the US market is so volatile, especially in the small cap market of low-priced stocks, and there are so many brokers, so many tools like the software here that cater to the US market. So although you could trade a local market if you live in a different part of the world, you may not have the infrastructure built around it to support active trading, and there may not be enough volume to support active trading. So a lot of traders, although international, actually trade the US market, which is an interesting fact.

So the first order of business is finding the stock squeezing up. The second order of business is, well, we got to make sure it meets all five criteria of stock selection, right? So price, uh, well, start, start at the top. So up 10%, relative volume five times, has a news event, is priced between two and 20, has less than 10 million shares available to trade. Then we're checking to see what's the catalyst. What's the news event that's driving the stock higher? So this is a biotech stock. It has news out. And just like that, we're like, "All right, we've got a catalyst. That's something that I'm willing to trade." And I'm looking now for the first pullback. So now I've got to wait patiently for the pattern to form. And since my average hold time is only two to three minutes, these trades can be very short. I have to be patient and wait. I let the stock squeeze up, I wait for the pullback, I buy the dip right there, first candle to make a new high. I could be in and out within two minutes, and I can make $5, $10, $15, $20,000 in as little time as that. It's pretty crazy.

This is a day on ATNF, uh, where I made $80,000 on that stock. Finished the day up $98,754.39 in one morning day trading. Now, let me remind you, as always, my results are not typical. I've been doing this for a long time. So what's the difference between me making a h, $100,000 a day and a beginner trader making $100 or $1,000? The biggest difference is position size. So while I might feel comfortable trading with 30,000 shares, which is putting a fair amount of money into the trade and taking maybe $10, $15,000 of risk on a trade, and with a potential to make $20 or $30,000 or $40, depending on the setup, a beginner trader will ramp all of that down to maybe trading with only 300 shares, and their target is $300 or something like that. So you bring everything back down, but you can do that. You can scale it down. I've scaled it up, and there's, in fact, people that have scaled it even higher than me, which is fine. So you kind of find your sweet spot based on your account size, your risk tolerance, and where you're at in your learning curve in terms of your educated intuition and your experience and your skill set.

So now, part two, what's my secret to being so consistent? My secret to consistency is in position management. So what do I mean by that? My position management strategy is a technique that I use to decide how many shares to buy on a particular stock. And this is very important as a discretionary trader. Again, a trader who's not using a high-frequency trading algorithm or computer to decide how many shares to buy or sell in any position. I have to manually make that decision. And while some people would say, "Ross, if you know that you know, you pull up your, your metrics here, you know that your accuracy is 74%, 72%, whatever it is, you know your average winners are $1,700, your average losers are $767, $761. Shouldn't you just trade the same exact share size on every single trade across the board?" Well, that would be an interesting conclusion to draw, and you would be completely wrong. No, I should not.

Here's the deal. What if it's very obvious that the market is cold? Probably I should size down. I should reduce, reduce my share size, right? That would be the logical conclusion. And what if the market's really hot? If the market's really hot, wouldn't I be selling myself short by not increasing my share size and being more aggressive? I would. And this is very important. When the market's cold, you got to ease off the throttle and slow down. And when the market's hot, you want to increase how aggressive you're going to be and how much, how much risk you're going to take if you want to fully maximize on your profitability.

So now, let me take a moment and share with you a book. This is a book called "Quit" by Annie Duke. So I'm going to put it right here on the screen, share so you can see. Um, the power of knowing when to walk away, quit. In this book, Annie Duke, who's a professional poker player, talks about trying to solve the question of when is the best time to walk away in trading. Obviously, this is a question we have to ask ourselves every day. When should I walk away? If I walk away too soon, I feel like I'm leaving money on the table. If I overstay my welcome, I'm giving back profit. And in fact, you're always going to do one or the other. Give back profit or leave money on the table. Which one are you more comfortable doing? I have learned I'm more comfortable leaving money on the table, as long as I'm walking away with profit in my pocket. Now, I don't mind giving back a little bit of profit, but I really don't want to overstay my welcome too much.

So in this book, which I really recommend you guys read, and you can listen to it on audiobook if you prefer, she tells a story about taxi drivers in New York City. And the story goes that taxi drivers in New York City, when they lease a car, a taxi cab, they lease it for 12 hours. So they have a full 12-hour shift. And she said what they typically do is they drive until they've made their profit target for the day, which covers the 12-hour lease, gas, and then gives them actually essentially their paycheck. And so she said on a slow day, when there's not many people calling for a cab, they'll just grind out the full 12 hours, and they still might not make enough money to even cover their lease for that 12-hour shift. But on a day when people are clamoring for for rides, as soon as they make their goal, even if it's in only an hour and a half, they turn the car in, they're done for the day. And she said, "That's why. Is that why wouldn't you on a day when people are clamoring drive longer? Wouldn't you make money? And then on the other hand, what if on the day that it's cold and people aren't, well, probably when they're cold, they're more likely to take a ride, but on a day where it's snowing and maybe people aren't even leaving their apartments, wouldn't you be, uh, wouldn't you be better off just quitting early and not grinding out the full 12 hours when you've got nothing to show for it?" And the answer, in fact, based on data, was that they would make more money if they did exactly as she suggested. I can't remember if it was 10% or 15% more money, but it was, it was not an insignificant amount.

And so I thought about that same thing when it comes to trading. On a day when the market's cold, now I have my hot market daily goal, which is $20,000 per day. So on a hot market, my goal is 20 grand. And you know what? In a, on a really hot day, I could make that in 30 minutes. Does it mean I stop trading? No way. I would never have a $98,000 green day. My best highest green day I've ever had as of today's date is $475,000 in one day. In one morning. Wow. That's pretty wild. Now, if I had stopped when I was up 20 grand, I never would have got that. So by all means, if the market's hot, I keep trading. But on a day where we're not getting a lot of action, that $20,000 goal, I might not make it even if I stay here all the way to the closing bell. And in fact, I'd probably look back and think that wasn't worth it. On a day that's hot, I could make that money in minutes. On a day like today, I'm going to sit here all day, I'm not going to get anything to show for it. I'm probably better off walking away. And in the case of trading, the longer you sit here, the more you expose yourself to the risks of decision fatigue and then trading out of boredom. And that's a problem. So I find that to be really interesting when it comes to trading.

And so I had an experience in my own trading where I had a big loss, but I want to tell you about it because that big loss became my own turning point. And in fact, this has been true at several different times in my career that a big loss has been the catalyst for me kind of, you know, going back to the drawing boards, throwing everything on the table, and just asking myself, what am I doing that's working? What, what am I, what am I even doing here? You remember that movie Apollo 13? When the astronauts are up in space and they're down there, Houston at headquarters, um, in Texas, and they're like, "All right, everyone, you know, we, they're running out of oxygen up there. We got to figure out how to create a, um, like a scrubber to purify the air." So they're like, "Put everything that they have in that space shuttle right here on this table." And they, they throw out all these things, these like hoses and, you know, a sock and all these different, whatever they have, and they say, "We've got, this is what we have. This is what we have to solve for." And they just start messing stuff around. And for me, I do the exact same thing with trading. And it's always in that moment where it's like, things are real, where I've just taken a really big loss, and I'm like, I need to just take a breather, take a step back, and ask myself, evaluate, what am I doing right now that's working?

So my first turning point, where I went from being more or less a break-even trader to actually becoming consistently profitable, was because of a discovery I made after a big loss. But I had another turning point, and this happened just about a year ago, not quite a year ago, where I had a couple of big losses, and I felt exasperated. I felt so frustrated. I was like, I cannot keep doing this. I honestly felt like I was on a roller coaster. So what, what happened with my P&L? Is I would have, you know, a couple of nice big green days, and then a big red day, and then, you know, I'd make the money back, and then another big red day, and I'd make the money back. And, and each time I had these drawdowns, in the days that followed, I'd be angry, I'd be frustrated, I just, h, it was so difficult. And I said, I just, I don't want to be on this roller coaster anymore. I would trade that for this, even if I don't make as much money, just to be able to be more consistent. So I, I really had to take a step back, throw everything on the table, and ask myself, what am I doing right now that's working?

So what I decided to do was, I dig, I decided to dig into my trading metrics and I discovered something about my red days. My accuracy on my red days was at that time only 46%, whereas on my green days, my accuracy was closer to 70%. So I asked myself, is there a way that I could know that today is going to be a red day sooner so I can stop trading? So just like the taxi driver driving the car, how soon can I know that it's not happening today so I can just call it quits and and say, "Look, this isn't the day to push it." And then I guess on the flip side, the same question would be, how soon can I know today's a day that I can squeeze a lot out because the market's hot, because things are moving, because people are needing, needing the rides? So, so when do I make that call? And so this is what I kind of discovered.

What I was typically doing on an average day is I was starting the day with big positions. So I would step up to the plate, first trade, right out of the gates, I would swing hard. I would swing, and if I connected, I'd be up $10, $15,000 in that first trade, right? So if I'm right, I'm starting the day with a big winner, and I'm feeling great. Now, this is me trading with 10,000 shares, getting a full dollar or a share out of the market. Maybe you're doing something similar, but you're trading with a thousand shares. So your first trade, right out of the gates, you're up, you know, a thousand bucks or whatever it is. That's fantastic. You feel great. But what happens when we're wrong? When I'm wrong, I take a big loss on the first trade, and then I start revenge trading. How many of you have heard of this concept of revenge trading? So what happens here is this is the beginning of a negative feedback loop, and it starts, uh, you know, typically with a losing trade. So you lose money, minus dollar sign, and that immediately produces what? An emotion of sadness. I'm going to put a couple of tears here. Um, so this is a very sad face. You've lost, and you're sad. So feeling sad is not fun. Now, I'm not speaking out of turn when I say that I think we can all agree, feeling sad's not great. So when you feel sad, you want to alleviate that emotion, right? How do you alleviate that emotion when it comes to trading? The fastest way would be to make money. So we're going to do a little bit, plus dollar sign. That's the fastest way to feel better is to make back what you lost. Then you'll have a big smile on your face.

So here's the problem. In this emotional state, a trader is searching for any opportunity to make money, which means they're going to increase the quantity of trades they're taking, increase the total position, number of shares they're trading, and typically decrease the quality standard from being A quality to maybe B or C quality. Now, I rank a setting or a setup based on how closely it meets all five criteria of stock selection. If a stock meets all five criteria, it's A quality. If it meets four out of the five, it's B quality. Three out of the five is C quality. So if you're starting trading C quality setups, you can't expect to have 70% accuracy. Your accuracy declines as you reduce your quality threshold. Now, it's true that in a hot market, you can get away with reducing your quality standard a little bit and still making money because the market's so hot. But in a cold market, which it probably is because you just lost money doing that, what's it going to do? Most likely not produce what you're hoping for here, but instead produce more losses, which means now you've got more tears. In fact, you've got a little puddle of tears forming down here. And this fuels increased trading, which fuels increased losing, which creates what? A downward spiral, a negative feedback loop. And this is something I've seen happen to so many traders. But you know what? It's happened to me too. Takes one to know one. And in this case, boy, I've been there. This is a day I lost almost $40,000. That's not so fun.

All right. Now, I've had worse red days than that. And, uh, I, and by the way, I do a recap every single day. So those of you guys who have not already subscribed to the channel, I hope you do. Hit that subscribe button, hit the thumbs up. But I do a recap every single day, whether it's a red day or a green day. The biggest red day of my career, there's a recap for it. You go back and watch it if you want. It was February 4th, 2021. I lost $275,000 in one day. Um, you know, but my biggest green day, $475,000 in one day, is also a recap. So it's all out there for you guys to see. I try to show you really, uh, very transparently what it's like to be a trader. The ups, but also the downs.

So if I take that big trade on the first, uh, that big position on my first trade, and I'm wrong, I'm down a lot. The problem with being down a lot on the first trade is it triggers that emotional response. So now I'm having a big emotional response to the loss. Here's the problem. I sp, I start to spiral, and next thing I know, I'm, I'm deep in the red, and I'm thinking, "Wow, I wish I had walked away sooner. I overstayed my welcome. What's wrong with me?"

So I proposed a change. I asked myself, is there a way that I could test the water before I go all in? What if I take small size on the first few trades, just to get a feel for the market today, to get a sense of, is it hot? Is it cold? What's going on today? And see really if I can build a profit cushion on the day? And if I can't, I don't size up. But if I can, then at that point, I go big. Now, this is going to deviate a little bit from the taxi driver story because I don't know that there's a super effective way for them to quote, go big. But if I can't build up my cushion, not only do I not, will I not size up, I'll be more likely to walk away sooner. But if I can build a cushion, I size up and I trade longer.

So starting small, what does that mean? I cap my share size at one quarter of my full position size until I've made one quarter of my daily goal, which is typically achieved in one to two good winning trades. So whatever your daily goal is, if your daily goal is, well, $20,000, then $5,000. So once you've made $5,000, if you can make $5,000 on your first couple of trades, you're in pretty good shape. Now, for you, your daily goal might not be $20,000. Maybe it's $200. So once you've made your first $50, then you've got a cushion. And from that point, I then size up to my full-size position, but only after having built this cushion. If I never cross one quarter of my goal in profit, I stay with the one quarter size for the entire day. But I don't trade all day long. I, I eventually just say, "Listen, it's not happening." And once I haven't taken a single trade in about 30 minutes, I just give up. So the taxi driver, once they haven't picked up a fare in 30 minutes, call it. Say, I mean, I'm, I shouldn't, I don't really know if that's the exact thing that would work for a taxi driver, but in my case, if I haven't picked up a trade in 30 minutes, then I say, "I'm calling it. It's not happening." So I will be patient, but at a certain point, I just accept that it's not happening for me today.

Now, if I give back my cushion, if I make the profit and then give it back, I size back down to quarter position or I stop entirely. And my max loss, by the way, on the day is the same as my daily goal. But here's the thing. Essentially, if I sit down and I lose on my first trade, I'm losing with only one quarter of full size. So essentially, I would take, well, I, I could take four pretty significant losses before I'm even at, and that would be if the loss hit a quarter of my daily goal, which it probably wouldn't because I probably cut the loss sooner, but I realistically could probably get four or five losses in a row before I actually hit my max loss with quarter size. So what essentially I'm doing is, if I'm losing on those first few trades, it's at the rate of one quarter size. The losses are small. I start the day at zero. So I lose a little bit on the first trade, a little bit more on the second trade, but it's not so much that I'm emotionally hijacked, right? I didn't go and lose $10,000 on the first trade and now I'm immediately revenge trading. I'm down $2,000 on the first trade. I'm down, or $1,000 on the first trade, $1,000 on the second trade. I'm down $2,000 total. So all right. It's like, okay, so what? I know I can make that back easily in one good trade. Now, if I don't get that good trade, eventually I give up. I say, "All right, it's not happening. It'll be a small red day. No big deal."

Now, uh, what I've learned is that on the days when things go right, those first couple trades, I make a little bit less than if I've been trading with my full-size position, but I size up quickly. And on really good days, the market gives us a lot of opportunities. So this is the result. I'm trading at full size on my hot days, typically within my first one to two trades, and I'm trading with small size on cold days, and I'm walking away sooner. So more often than not, this is what my days now look like. I sort of slowly increase my profit till I've got my cushion, and then I pull away. Slowly increasing profit till I've got a cushion, pulling away. Slowly increasing profit, then pulling away. But on days that I go red, I go slightly red. Not a big deal. I slowly recover, and then once I've got my cushion, I can pull away. Go slightly red, recover. Once I've got my cushion, I can start to pull away, or I might just stop. Or on the day where I'm actually red, I go red, I go a little further red, a little further red, and I say, "You know what? That's it. I, I think I'm good with that."

Now, since this change, I've only had seven red days in the last nine months of day trading, including a 76 consecutive green day hot streak that produced over $1.6 million in profit. Talk about consistency. And I have a theory that I should never have another red day. What do you think about that? Now, that is if I can maintain 68 to 70% accuracy and a 2:1 profit to loss ratio. Because as long as I can always take 10 more trades each day, if I can always take 10 more trades each day and maintain 70% accuracy with a 2:1 profit loss ratio, I should always be able to finish the day green. Well, that is true. And yet, I still have had seven red days in the last nine months. So how do the red days happen now? Well, they happen if I run out of A-quality setups. If there's just not enough A-quality setups. There's, there's some stocks moving, but they're not A-quality. I could reduce my quality threshold, but that's probably not a good idea. Number two, if I simply run out of time. In other words, the market closes, or I come to the end of the time when I make the most money, in which case continuing to trade would be exposing myself to unnecessary risk. Or number three, if I give in to the emotions of FOMO, frustration, desperation, greed, and anger, and thereby deviate from the rules of my strategy. I've had all three of these things happen to me. And you would think that, gosh, someone who's been trading for as long as me, why would I ever deviate from the rules that have made me so much money? Well, we're all human. And unfortunately, there are moments where we think we know better, or we get stubborn, we get frustrated, and I've had that happen to me, and that's what ended my 76-day hot streak.

Now, in truth, what ended the hot streak really was just bad luck. I had one bad trade, but rather than just walk away after that bad trade, as I approached the time when I was running out of time in the day, I gave in to desperation and I took a few Hail Mary trades, hoping for a big recovery, and I doubled my loss, confirming that it would be the end of the hot streak.

So I want to go back to this concept of creating that positive feedback loop in your trading. So where does that begin? How was I able to have only seven red days in nine months? That 76-day hot streak, it, it was certainly a byproduct of being very confident in my trading. Where does that all start? It starts with high accuracy. Trading the highest quality stocks that produces a higher profit loss ratio. And then the byproduct of that is profitability and consistency. When you're more consistent, you've got a strong track record, you're going to be feeling more confident. When you're feeling more confident, you will be more likely to have the conviction to trade with bigger share size. Bigger share size is scaling up your strategy, means making more money. And now you're on that positive feedback loop.

Now, the, the 51 days this year where I made over a million dollars. Let's take another look at that. So I had to take 936 trades to get there. 936 trades to make a total of a million dollars. Just over a million dollars. Now, on those trades, my average winners were actually only 11 cents per share, 11 cents per share, but I produced, uh, about, well, $1,800 of profit. So we'll calculate out my share size in just a moment on that. But on my losers, I lost only 8 cents per share, but the losses were only $760. So if you're doing a little bit of math here, you're recognizing that, wait a second, my winners are larger than my losers. Not just because of, uh, making 11 cents on the winners and losing only eight cents, but clearly to make 11 cents and be up $1,800, I've got to be taking like 17,000 shares, right? This is a big position. But if I'm losing, uh, on the loser, 8 cents, oops, sorry, eight cents here, and I'm losing, uh, less than $800, my position is like 9,000 shares. So how is it just, is it just by chance that all of my winners have 17,000 shares, but my losers only have 9,000? How's that work? Well, as part of my strategy, I don't size up on any given day until first I've got that cushion. So that means this is not likely to be a red day. Remember, on red days, my accuracy is only 46%. It's very low. I have a lot more losers. So that means on days where I'm losing more, I'm trading with smaller size because I never broke that profit cushion. That's the first thing. Then the second thing is, on the days when I'm green, when I'm in a trade that's working, once I'm up a little bit on that trade, I typically double my position, which extends the profit of that trade. Now, it takes risk and a willingness to take risk to do that. But once I've already got my cushion on the day, I feel comfortable taking that risk.

So the secret to being able to have only seven red days in the last nine months is adding to winners, not to losers, and only increasing share size once I have a profit cushion. Adding to winners is a big deal. A lot of beginner traders do the exact opposite. They add to their losing positions. The stock starts dropping, and rather than just cut the loss, they add to the position to reduce their cost basis, thinking, "All right, well, if it turns around, it doesn't have to go all the way back up to where I got in. It only has to go halfway back up, and I'll get out flat." But then it goes deeper and deeper into the red, and you're just adding to your loss. Well, what I do is, I don't add to my losers. I cut my losers ruthlessly. I let them go, but I add to the winners. So when I have a winning position and it's working, I scale up. I double that position.

So what ends up, what that ends up looking like generally speaking is, we've got the bull flag here. So we've got the pop, we've got the dip, right? We've got our little pullback, our bottoming tail here. And I take my starter position right here. That's the, that's the correct place for a beginner trader. Boom. That's the entry. So I'm taking a starter right there. This squeeze is higher. And you know what? You might be doing right up here, you might be saying, "I'm going to sell. I'm going to sell this thing here" because, you know what? Look, I've got a winner. I'm feeling good about that. I want to lock up my 20 cents per share and take that profit. There's nothing wrong with doing that. I would never discourage you from taking profit when you have it. But you know what I might do is I might say, "Gosh, this thing is going strong. I like it. I'm going to go ahead and buy more." I buy more and I look for that squeeze even higher. Now, it takes a little bit of risk to do that because what I do is, if I double my position instead of selling, I buy. I double my position. So I start with 10,000 shares. I add another 10,000. Now I've got 20,000 shares. My average cost is right here in the middle. Right? So my max loss, which was initially down there, well, I've got to move it up. Now, if I add right here and my average is right here, typically I set my stop at break-even, which means what am I sacrificing? I'm sacrificing just taking the 20 cents per share off the table, and instead risking this position could go back to break-even. But on the other hand, now I've got a 20,000 share position with a stop at break-even, which makes me feel like I've got a 20,000 share position and I'm risking nothing. Now, that's not exactly the case, but that psychologically is the way I process it and the way I think about it. What I'm really risking is that I didn't take the, the 20 cents off the table. So that could have been $2,000 of profit that I didn't take. So you could consider that risk. But if my stop is break-even, then worst-case scenario is I sell and I'm at zero. Well, I was at zero before the trade anyways. And if this trade ends up working and it goes up here, now another 10 cents, 15 cents, 20 cents, and I end up getting 30 cents a share on the full 20,000 share position, I'm up $6,000 on that trade. Boom. So $6,000 is three times more than if I had just taken the base hit at 20 cents.

All right. So now, this is where we start to add some fuel to the fire. This is where it starts to get exciting. And this is the type of stuff that allows me to squeeze the most that I can out of a hot streak and out of a really hot day in the market. So let's talk about how I scaled my strategy from $200 a day to making a million dollars in 51 days. Because back in 2017, when I, when I started that first small account ch, actually it was the second small account challenge, but when I started that small account challenge in 2017 with $583.15, it took me 45 days to turn that account into a hundred grand. Just 100 grand. In 51 days here, I made a million bucks. So I've proven that I've been able to scale this strategy up.

Now, when I did that first challenge, my profit loss ratio was very similar. I'll actually show you the metrics of that challenge. Let me pull them up. Hang on one second. So in 2017, took $583, turned it into over $100,000. Took about 45 days to do it. During that challenge, my accuracy, 72%. Wait a second. That's very similar to what I just did in the last 50 days, right? So my average, uh, winner, $1,300. My average loser, $1,200. How many trades did I take? I only took 154 trades. So I took fewer trades. That makes sense. So I took fewer trades. I was being a bit more disciplined with how many trades I was willing to take. And that was the right decision at that time. If we look at the calendar here, um, we'll go back here to 2017. So you could see green, green, green. But I was trading relatively conservatively. So $156 day one, $220 on day two, $213 on day three, $219 on day four. These are two trades a day. That was what I said. I'm only going to take two trades a day while I'm focusing on growing the account. So in that first week, I made $800 after starting with $583. So the account was now up already over 100%. In the second week, I was doing two trades a day until here on day eight, we had a stock that was really squeezing, and I was like, "I got to be more aggressive." I made $1,900 on that day. And then right here, $930 on this day. But if we just look at these metrics, just high level, what's the accuracy? 72%. What's the profit loss ratio? $1,300 winner, $1,200 loser. So about a 1:1 profit loss ratio, and just fewer trades in total.

Okay, so now let's jump back up to how I was able to scale up this strategy. So we're going to go right back here. So a million dollar in 51 days. So what was different about this challenge here, which was, uh, began in January? So in January, I had to take, well, 936 trades. We already looked at that number, but the accuracy was basically the same, 71, 72%. All these years later, trading the exact same strategy. So we already know the average winners were 11 cents per share, $1,800. And we know the average losers were 8 cents a share, $761. The average price that I traded was $6.56. That was the average price of the stocks I traded. So now let's do the math. $6.56 times 16,000 shares equals 11 cents a share equals $1,800. All right, so 16,000 shares. That was the average position size on winners, but the average position size on losers, only 9,500 shares. So again, highlighting that I was more aggressive on my winning trades. And it wasn't just because at the very beginning of the trade, I knew it was going to be a winner. It was because during the trade, as it worked in my favor, I responded accordingly and added to the position. This, by the way, is one of the things that's so great about being part of a community of traders. What, whatever community it is. Now, of course, I'm biased because I have a community at Warrior Trading, and in that chat room, when I'm, when I'm actually trading, I'm live broadcasting. So you guys can see my position window. You can actually see me trading, and you can hear my market commentary in real time. So you can hear me saying, "Guys, I like this. I'm going to double. I'm going to double my position. I'm increasing my size." Or, "I don't know, this isn't really working." So you get that real-time market commentary of what's happening.

So now let's talk about sort of, well, two things. So obviously, on the losing trades, I rarely add to position, but on the winners, I typically double my position. But let's talk about the dollar cost of these trades. So my average position dollar, dollar-wise, was $107,000 on my winning trades, and my average losing, and my average position was about $62,000 on my average, uh, losing trades. So on average, I was taking relatively big positions during this challenge, which means during the, the bulk of the challenge, I needed at least $100,000 of buying power. As the ch, as I grew my account, I had more buying power later on. So there were some trades that were well into the six figures in terms of taking 200, 300, maybe even

$400,000 positions using a lot of buying power. So I'll say that I was being pretty aggressive.

Now, I started at the very beginning, pretty much like, "I'm going to be as aggressive as I can. I have a goal of trying to make a million dollars as quick as possible." Now, my reputation's on the line. I'm not going to just throw a Hail Mary pass and potentially risk going deep into the red. I'm still going to focus on everything in my strategy that I teach every day: the five criteria of stock selection, the right entries, the right exits. But I'm going to trade with max positions on pretty much every trade.

A beginner trader isn't going to do that. And so there's definitely a bit of a disconnect here that's worth commenting on between my performance and the performance of a beginner trader. So what I want to kind of do here is slow it all down. Let's scale this strategy back down one-tenth. Let's bring it down to 1,600 share average position on the winners. Now you're talking about $10,000 of buying power, right? $10,000 of buying power.

Now, so when it comes to buying power, if you fund an account with $25,000 times four times leverage, you've got $100,000 of buying power. You you've got $30,000, which is what most traders have, $30,000. And usually the reason is because you want a little cushion off the $25,000 minimum. Boom, you've got $120,000 of buying power. And just like that, you'd be able to have taken the average trade. Now, there'd be some that are a little more expensive, some that are a little bit less, but that would be the average. $120,000 would be enough. So certainly, if you had $100,000 times four, you've got $400,000 in buying power. And after a few big green days, you're going to get that pretty quick.

But with the offshore brokers, there's a lot of offshore brokers. And I used these during my small account challenge in 2017. I funded the account with $600. Well, $583, but we'll just use $600 just to make it easy, the math easy. So they gave me six times leverage, which means I had $3,600 in buying power. So on that first trade, I was able to buy 1,000 shares of a stock at $3.60. Now, that wasn't actually exactly what I did on the first trade, but just as an example.

And so what was my goal? Well, let's think about what the setup was. All right, so let's just get rid of this for one second. So the setup was: stock popping up, breaking news, letting it pull back. We're waiting for that first candle to make a new high, buying right here. And I said, "I need my 20 cents. I'm going to buy and I'm going to sell. I'm not going to double the position. I'm taking the 20 cents off the table." That's $200 with 1,000 shares. Boom, get green.

Why did I want to do that? Because what I knew was that when I would come in the next day, now my account would have $800. Eight times six, right? Oops, sorry. Eight times six. So now we've got more buying power. And then on that next day, I could buy 1,000 shares all the way up to, you know, a $4 stock or whatever. So now, boom, another 20 cents, another $200. On the third day, I've got $1,000 in the account. Now times six is $6,000 buying power. And so then I'm buying a $6 stock with 1,000 shares. It goes up 25 cents, I'm up $250. The next day is at $12.50 times six, right? So you're doing the math. You're seeing how quickly this is this is racking up.

Now, I want to say once again that $6,000 I'm putting into the trade is the vehicle I'm using. That and I now own something of value. I can choose to sell it at a loss when I don't want to own it anymore. In a liquid market, I can jump in and I can jump out. So just like, um, you know, this example that we did earlier on Ford Motor Company, the market is liquid. So if you want to jump in, you want to jump out, you could do that.

So here's Ford Motor Company. So this one's dropping down here a little bit. I'll just go ahead, just as an example, and I'll just buy 7,500 shares. So there's 10,000 shares. That's $100,000 in that trade right now. All right. So I can just jump in just like that. And when I want to get out, $100,000 back in my account, just like that. So did I use $100,000 to take that trade as demonstration? Yeah. But in that moment, I owned $100,000 of Ford Motor Company, of something of real substance and value. And so the question really wasn't that I'm risking $100,000. It was how long am I going to hold this before my max loss is reached? And that's the same way I approach trading and day trading of any any stock of any kind, really, as long as it's not an over-the-market, uh, penny stock or something like that.

So to ramp down this strategy, here's the thing that's kind of interesting. You can scale a strategy down, and that's not a problem. You cannot always scale a strategy up. I find that really interesting. So if you want to trade with one-tenth of my position sizes, just as an for instance, that would be 1,600 shares, and I could have easily done that during the entire challenge. Instead of producing a million dollars, I would have produced 100 grand. That was more like what I was doing in 2017. I was trading with smaller size, well, slightly smaller size, and I was trading, uh, less quantity because I was being much more picky. You could trade with 1/100th of my positions, and you're trading with 164 shares, and that's fine too, as a beginner. $18 winners. There's nothing wrong with that. This is about building proof of concept. You you don't get to graduate to this size or all the way up to the size that I'm at until you've been doing it for a while.

So trading is a career of statistics. If a strategy works with 16,000 shares, it will work with 1,600, and it'll work with 160. But for me, it doesn't guarantee it's going to work for you because you have to learn the strategy. So you can always scale down a strategy, but just because it works with 16,000 shares doesn't mean it'll work with 160,000 shares or 1.6 million shares. Do you think you could day trade 1.6 million shares buying and selling Ford Motor Company? Well, Ford Motor Company currently right now has 1 million shares of volume. Oh, sorry, 100 million shares of volume. So you probably could on this stock buy that big of a position. Um, OSH or OSR from today has 83 million shares of volume. I mean, you could certainly scale it up higher than 16,000 share positions, but there is a little bit of a a ceiling in the market. And the ceiling of scaling up is based on liquidity in the market and how quickly you can rapidly buy and sell such large positions. And at a certain point, you get diminishing returns as an account gets very large. So that is to be expected.

So now I'm going to answer a question I bet a lot of you are asking: How should I start this journey of learning how to day trade? So this is how I would do it if I were starting over. Okay, so as we know, trading is a career of statistics. No question about it. What I would do if I were starting over: number one, step one is I would learn a proven strategy. A strategy that other traders are trading in today's market profitably. It's not helpful to learn a strategy that someone was trading in the 1990s successfully. I've got a couple books over here. I'll share you some recommended reading with you in a second. But trading, learning an old strategy that worked in the 80s or the 90s, that's not going to be helpful. You want to learn a strategy that people are trading in today's market with today's tools, today's algorithms, and everything else. So step one is to learn a strategy that is currently being traded profitably by other people. Is it a guarantee it'll work for you? No, of course not. But it sure is a better starting point than either beginning with just basically reinventing the wheel of trying to figure it out totally on your own, or taking a strategy that someone used decades ago that might have worked then, but market started change and it might not work today.

So now, step two. Step one, you learn the strategy, which is to learn everything you can about the type of stocks to trade, where to get in, where to get out, how to manage risk. And this is is easier said than done, no question about it. Learning a strategy takes time. But I'll tell you something. One of the reasons that I created Warrior Trading as a blog in 2012 was because I wanted to organize everything that I was learning about trading into one unified place, essentially like kind of a little archive or database of everything related to trading. So when I would learn something from some obscure corner of the internet that was about trading, I would pull it in and put it on my blog. And then over the years, I started adding videos. I created my YouTube channel here in 2013, and the blog got bigger and bigger and bigger. So one of the things that I learned was that a lot of traders over the years have learned learned strategies from different people, but typically the common way that people teach is by showing a lot of trades they've taken and how much money they've made. And traders are left kind of scratching their heads with like, "How did you pick that stock?" And that was what I struggled with too. I would see people that had these trades, but I was like, "How did you choose that one versus a different one?" I couldn't understand the system. So when I taught my first day trading course in 2014, my goal was to fill in all those gaps that I felt other educators were really leaving out and to walk you through from the very beginning all of the nuanced details of exactly how this strategy that I trade works, from stock selection, how I choose the stock, where I get in, where I get out, all the details. So I say that because it's just important that you know who you're learning from, that they're a good teacher, they're actually verified profitable, and you know that people feel like they can learn from them.

So now, step two is to sim trade that strategy for at least 90 days. The the purpose here of trading in a simulator is that you will make mistakes as a beginner. All beginners do. So why not make those rookie mistakes in a simulator where you're losing no real money? That makes a lot of sense. Now, there are certain things that you just have to do with real money and kind of experience the hard way. And that's why when you transition to real money, you'll start with small size. So step two is to trade in a simulator for 90 days and prove that you can make money trading this strategy. Now, if at the end of the 90 days, or even at the end of 30 days, you're saying, "Well, geez, I'm not making money at it." Then there's obviously a disconnect. You're doing something different. If you're doing everything exactly the same, then you should be making money. So what's the disconnect? Are your entries not quite right? Are you holding losers too long? And your metrics will tell you exactly what you're doing wrong. That's why I've been using, um, you know, this software here, which by the way, I don't have any affiliate relationship with this platform or with any brokers. So if you use them, it's fine. If you don't use them, it doesn't make any difference to me. Um, but I've been using this software now for nine, over almost 10 years. It's got over $15 million of trades in it. And as I go back and I, you know, analyze, you know, '25, '24, '23, '22, '21, '20, '19, '18, '17, '16, I could see all of my data. And if I look at a particular period of time, I could go in here and and just for instance, I'll just pull up, um, March of 2024. And let me show you something that you might find interesting. Let me see if you can figure out what I was doing wrong during this month. So during this month, I didn't have a very good month. I I didn't think it was very good. Um, my accuracy was a little bit lower than average, 64%. My average winners were only $700. My average losers were $1,100. I only made $20,000, which for me was a pretty bad month. And let me show you, um, a couple of things. Um, I'll, this is the one I really want to show you. So look at the profitability by price. So if you were looking at this, these metrics, and you were going to give me one piece of advice, what's something you might say? "Hey Ross, how about you stop trading stocks below $2 and above $10? What if you just focus on between two and 20?" Now, you could actually do that. You could say, "All right, well, what if I just focus on stocks between two and 20?" You can go into the advanced here. So you say, "I'm just going to focus on, well, I'll do between two and 20 just for this time period." And then you look at the data a different way. So now with this data sorted, you can start to better analyze. Well, hm, when I do trades between two and 20, what's my accuracy? 66%. All right, that's a little bit better. It would have been $39,000 of profit. Now, I still would have lost on Monday. Maybe on Mondays I had, or, you know, a couple Mondays that month, I had a really big loss. But then let's try applying this lesson that we learned from the metrics. And for the month of April, let's try just for the sake of argument, only trading stocks that are within this range. So I'll just change this. Um, I don't know if I can delete it. So I'll just do like one cent to $1,000 just for now. So then for the month of April, this is what I did. I traded primarily stocks between two and 10. I was like, "This is my sweet spot. This is the adjustment that I need to make." And I had $45,000 of profit, double the profit that I had the previous month. So your metrics will point you in the right direction, and they will highlight your weaknesses where you're struggling, and also show you what you're doing well at that you should double down on.

So after a period of trading the sim and tracking your metrics and trying to hopefully build a track record of profitability, at that point, fund an account with real money. Now you have a choice. You could fund a cash account with a US broker dealer, and you could day trade as much as you want in a cash account, but when you run out of money buying power, you have to wait for it to settle overnight. Or you could use a margin account with a US broker dealer, but they require $25,000 to day trade on margin. You could use a margin account with one of the international broker dealers, and, uh, that's fine too. There's a number of them that accept US customers and Canadians and things like that. They don't enforce the PDT rule. You you find a broker that's the right fit for you.

And then step four, you take your first 1,000 trades with an average position of about 160 shares. That's how I would do it. About 160 shares. Now, there's a reason I'm choosing the the 16. Then we're going to go 16,000, uh, 1,600, and 16,000, right? Because I'm doing the math of trying to build my way up to my first million. But let's just say 160 shares. So on day one, your first of of a thousand trades, you're not taking 160 shares. On day one, you're taking only 10 shares. And then at the end of the first week, you go up to 20 shares. End of the the next week, you go up to 30. Then you go up to 40, to 50, to 70, to 100, then to 150, then then to 160. So you slowly scale up over the course of weeks until you get up to about 160. And then you continue scaling up from there. So as long as you're producing profitability during this stretch, that first thousand trades with about 660 shares should produce $10,000 of profit. Now, it took me about, you know, 50 days trading days to do 1,000 trades. So, you know, it's a couple months. A couple months. All right.

So then step five is to take the second 1,000 trades with higher share size. So now you start to increase from here. So you go from 160 shares as you're getting close to like 900 trades, you start moving it up to 250 shares, and then to 500 shares, and then to 750, then to 1,000, then to 1,500, and then to 1,600. So now for the second thousand batch of trades, you're up at around 16,000, 1,600 shares. Your goal here is about $100,000 of profit. Again, that's for me would take another 50, you know, it would take another 50 days to produce 1,000 trades. And based on my metrics, that's this is exactly kind of where I would line up.

And then I go up to step six, which is take the third 1,000 trades now with 16,000 shares. And this would be my path to working my way back up to about a million dollars. This is how I would do it if I were starting over. Now, obviously, this is me with a lot of experience. As a beginner trader, your learning curve is going to be a bit more extended. It's to be expected. It's going to take time for you to build educated intuition. But remember something I said at the beginning of this episode: Survive till you thrive. The longer you can keep your head above water, the better off you'll be. Because learning how to trade is about gaining educated intuition. So every day that you show up, you gain experience.

Now, here's the cool thing. You don't have to do this by yourself. Every single day while I'm trading, I'm also live broadcasting to all the members in our community at Warrior Trading. So you can listen over my shoulder. You can watch over my shoulder to my market commentary. You can see my screen share, my position window, when I'm buying a stock, when I'm selling it. You don't have to do this on your own.

Now, those of you guys that do want some recommended reading, I've got some books you could check out. Now, this is going to be a shameful plug for "How to Day Trade: The Plain Truth." That's a book that I wrote, which you probably already know. Here's another one by Andy Duke called "Thinking in Bets." This is a great book, "Making Smarter Decisions When You Don't Have All the Facts." That sounds very relevant to trading. Here we've got "The Happiness Advantage" by Shawn Achor, a book on trading psychology called "Trade Mindfully" by Gary Dayton. And then you already saw the book "Quit" by Annie Duke.

Now, those of you guys that want to continue learning, I'm going to put a link to my full-length training on how to read candlestick charts. It is a deep dive in learning the language of technical analysis. I encourage you to check that out. I'll put a link to another episode here. And if you want to learn really from me at Warrior Trading, I'll put a link to a two-week trial. You can do a two-week trial for $20 and get a sense of what it's like to be part of our community. I hope you guys enjoyed this episode. If you found value, I hope you hit the thumbs up. I hope you're subscribed to the channel, and I'll see you for the next upload real soon.

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How I Made $1,000,000 in 51 Days of Day Trading (Full Training)

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