Transcription
What's going on everybody? Welcome to today's video where I'm going to be recapping my month of June.
And I'm going to show you the setup that has genuinely made me over $300,000 in just the month of June, and I'd say it's probably responsible for over 60 to 70% of my career profits.
All right, so first of all, let me show you guys the P&L for the month of June. So if you go on TradeZella right here and you look at the last month, you can see that in the last month I made $398,000 with a 57% win rate, a 5.87 factor profit, and a 4.28 average win loss trade.
Now, my win percentage has gone down a lot this month and honestly, it's because of the fact that the market has been very choppy and I'm not fully really happy with the way that I performed. There's obviously things I could have done better. I said that in the last month's recap as well from the last month and I always think personally like there's something you could do better in trading every single time. Like even if you had a good month and you made money, you're never perfect. It's always good to review your trades, see what you could have done better, and also see what you could have cut out. A lot of times, you can make more money by cutting out some of the bad trades instead of just saying, "Oh, let's maybe take a different trade." You can just completely cut out the bad things and your P&L actually increase cuz imagine let's say if you did a ton of really good stuff and you cut out a little bit of the bad stuff, you'd actually have less losses which would add up to a better P&L. So what I like to do is review and see the things that I could have cut out in my trading to make my trading much better.
Now with that being said, you could see that the profits came in the beginning of the month and at the end of the month and this was done on purpose because the middle of the month was incredibly choppy and right here you could see I was sizing down incredibly. Like I barely took any size. My win losses were very, very small. Um I had a few days where I didn't even trade either and then obviously as the market kind of started to get a little bit more traction, I took a little bit more size and the same thing for the beginning of the month. Now you could see this correspond to exactly what the market was doing and you'll understand why I didn't take size around this period right here because of the fact that the market wasn't really doing anything around the middle of the month, right? So, at the beginning of the month we had a very nice strong push higher, which I took advantage of, and then from there we had a really, really weird kind of pullback and here I was supposed to liquidate a lot of my positions. We bounced off of this low right here, which I added a lot of positions on, but you can see how important it is to know what market environment you are in and when to press.
So, for example, I took some size and positions when we were at the low, but in the in-between when we were chopping, I was trying to, you know, minimize the amount of losses that I was taking cuz honestly, I wasn't having a lot of success in the middle of the month and I adjusted by taking less size and then when I started to gain a little bit more success and my trade started to work a little bit better, that's when I started to size back into stuff and take more trades.
Now, let's get into the pattern that made me over $300,000 in the month of June. A lot of my profits came from just a few different trades, but they were all set up pretty much in the same exact pattern.
The pattern that I'm talking about is the pennant base. This is the best pattern in the market, especially as a swing trader and a breakout momentum trader. If you could just look for just this one pattern in the market, I promise you, you're better off waiting for this one pattern to play out and set up than taking 10 other, you know, setups on mediocre setups.
So, here's how this looks. A stock will make a pretty strong move higher, maybe like a two or three day kind of push higher like this, then it will start setting up in a base like this and this is incredibly important because this is how stocks move. They don't go straight up and they don't go straight down. They move in a staircase like this. And the reason why this setup is so powerful is because when a stock sets up in a staircase like this, eventually it'll have to either break the high or break the low. And when it breaks either the high or the low, because of all this compression, you have to think about it as kind of like a spring. The more it gets coiled and coiled and coiled, the more that it eventually will make a massive move coming out of the base.
Now, with that being said, this is a setup that I took at the beginning of the month on the ticker Oracle. You can see it has the exact characteristic that I was just talking about. It's set up in this super nice pennant base, and it was consolidating very, very nicely at the highs of the range. Now, most people would just buy the stock as it's setting up in the range. That is not what you want to do. You actually want to buy it on what's called a breakout, and the stock must be breaking through a key level. That way you know that the stock is going to make a move up. Another thing that's going to help you a lot to know if the stock is going to be a stock that's going to actually make a move higher is looking at the volume patterns. You want to see that the volume is declining as the stock consolidates, and then when it does break out, the volume should be higher.
So, in this example on the ticker Oracle, which I took at the beginning of the month, you could see it had this really nice setup. I was watching it for a break over this high at 197. Now, fast forward to the next day, boom, you could see it breaks this key level right here at 197, and the volume increases. Now, obviously, I'm taking my entry during the day, so I don't know if the volume is going to be incredibly high, but I do use the lower time frames to get my entry. So, after I have my level set, after I have the pattern discovered, after I have the trade planned out, now I go down to the lower time frames to get my entries. I like to use either the 15-minute or the 5-minute time frame.
All right, so coming down to the 5-minute time frame, you can see that this stock right at the open broke this key level of resistance right here, and this is theoretically where you're going to be entering the trade. Now, I personally didn't enter the trade until a little bit later down the line. The reason why is because I don't usually love to buy stocks right at the first 5 minutes. I usually like to let them and give them a little bit more time to work, and then buy these stocks. So, you can see this stock right here gapped up, and then it actually broke your key level. That could have been a nice entry. I wasn't able to catch it right at the open. It actually even gave you a retest as well, but even more so, it set up in a beautiful 5-15 minute flag like this, and look at the volume patterns. This is how you know a stock is going to have higher volume than the previous day. Notice how the volume was incredibly high as the stock was getting bought every single time it was getting bought like this, and the volume was very low as the stock was consolidating. Very, very high as the stock was going up, very, very low as the stock was consolidating, and that led to a massive move higher.
Now, I took my entry on this trade right here as it was breaking through the high of day. This could also be like a 30-minute or 1-hour orb, and then I put my stop loss at the low day. I do this for every single trade. Some trades are not going to work out. Again, I have a 50% win rate for the month. That means half of my trades are actually not working out, but I keep my stops so tight that if I do lose, it's a very small loss. But if the stocks end up running, like this one for example, it's a massive, massive win.
So, going back to the daily setup, you can see that's where my entry was right here on this ticker. So, let's mark this as entry, and this was the low of day stop loss right here near the lows. Now, most of the time what I'm looking to do is when I get into a trade, I'm looking to target a big key level of resistance on the left side of the chart. The reason why is because this is where the stock is probably going to reject, and sellers are going to come in. So, for example, this was my first target on the trade. You can see on the first day, it actually did not hit first target, meaning I did not take any trims on this.
Now, the next day opens up, and it actually opens up above my first target. So, right at the open, I did take a trim on this trade right here. And then from there, I was targeting the full gap fill because that was the next level of resistance on the left side of the chart, and you can see it hit that absolutely perfect.
Now, with options, usually after I take my first two trims, so you can see I have one trim and then a third trim, I usually take profits only when the stock breaks under the 8 EMA, which is this blue line right here. The reason why I do this is because a lot of times good stocks will break out, will give you two or three good targets, will start consolidating, and then the moving averages will catch up, and they'll continue to go higher. So, you can see the next day this stock ends up gapping up again, making a big, big move higher. But, I actually didn't take much profits on this day right here. I did take a small trim, but I was waiting for the 8 EMA to catch up because I thought this was going to make a massive move higher from here with the 8 EMA.
Now, fast forward, you can see this ended up kind of pulling back in, and then on this day it did hold the 8 EMA, and I actually thought it was going to set up a nice little flag. I was even considering adding to this, but eventually it broke under the 8 EMA and closed below. And this is actually when I closed my full position. So, obviously I could have made more money selling the full position here at the highs, but at the end of the day, nobody knows when the top is actually going to be. And this is why you have to use a repeatable exit strategy that has high probability to keep you in the best trades.
For example, this is another trade that I got into a little bit earlier in May right here as the stock broke out of this big trend, and you can see that I could have guessed on any of these days it would have been top, but then I would have sold a little bit too early. It was actually only top or the stock only started to roll over when it broke under the 8 EMA. And you can see it was right here when the stock broke under. That's when it started to go lower. This is why it's so important to have a repeatable exit strategy because yes, you can always go back in hindsight and say, "Oh, I should have taken profits here." Or this is where I should have taken everything off, but you never actually know when the top is going to be unless you're using key moving averages.
So, going back to this Oracle trade, this made me about $50,000 on the month on this one trade. And yes, it could have made me more. Yes, I was up a little bit more at the highs over here, but this is why you have to use a repeatable exit strategy because later on, this one actually ended up coming all the way back down. And that's something you don't want to do. This actually ended up being a really, really big mover to the downside. And if I would have held it because I thought that I was smarter than the market and this was, you know, a right, you know, trade, it would have absolutely taken me out. So, take your profits. Use this setup to make money very quickly, especially during this big move because, look, you literally caught a 30% move in 3 days. What more do you need? Obviously, you know, we want the stocks to trend higher, but if they can't hold the moving averages, you're likely not ready to go higher.
All right, so the next trade that I took was on the ticker ARM. Now, this was at the end of May, but most of my position actually sold at the beginning of June, which counted for June's P&L, so I'm still going to go over it, but you could see the setup is exactly the same. It's a massive pennant setup. The stock waited made a big move up. It started to consolidate and then build this base, and you have a clear level of resistance for the stock to break above to take your entry. This is all you need to make a ton of money in stocks. You could either use this level right here, or you could use this level right here, whichever one makes more sense for you. I used this level right here.
Now again, remember, after you have your key level, all you have to do is you have to go down to the lower time frames, and then from there get your key level entry. All right, so coming down the 5-minute time frame, you could see that this one made a massive breakout through this key level right off the first 5 minutes. This one I was actually able to catch beautifully off the first 5 minutes. Usually, you want to be a little bit careful trading the first 5 minutes, but if it's set up you have conviction in, like this one right here, then it's something you could definitely trade, and as long as you have a very tight stop loss, then that is all that matters.
So again, stop loss goes to low of day. This is going to be our entry right here on the break of this level. And again, as long as the stock continues to trend and hold strong, there is no reason to sell until it hits our left side of the chart targets. Now, going back to the left side of the chart, you could see that this right here was a key level that I was looking at for a target. So right here was my first trim. Now again, with options I used two trims, so one right here, and because this stock was at all-time highs and there's no levels that I could use for trims, I actually used something called a Fibonacci level for my trim. So what I do is I measure the low to the high of the base using Fibonacci's, and from there whatever the Fibonacci levels are, those are my next targets. So I had it right here, and then I had it right here as well. So on the same day I actually trimmed this one twice because it gave me such a big move, and I was able to catch a massive push higher.
Now again, I don't sell the full position even if I'm taking trims, it's usually about 10 to 20% of the position. So, I still have about 40, 50, 60% of the position left by the end of the day even after two trims. And you'll see why that's so important because as the stock started to push higher and higher and higher, it actually went almost parabolic out of this base and made a massive, I mean, I'm talking a massive, massive move higher. When it hit 284, I took my third trim right here as well into that target that we talked about with the Fibonacci. So, right here into this Fibonacci level. And from there, I just let this thing ride and again use my 8 EMA for my exit strategy. So, it made a massive move up here as well, right? Insane push higher here. And even when it made this gap up, I didn't even really trim much because at this point, I'm down to like 30, 40% of my position. So, I'm just using the 8 EMA to manage.
Now, when it closed under the 8 EMA right here, that's when I took most of the position off and I was able to capture a massive move using this pattern right here. And you can genuinely see how strong these patterns actually are in the market. If you can look for these pennant patterns, you're going to catch some absolutely insane moves.
Now, sometimes you'll notice that these patterns look maybe a little bit like a rectangle as well. This works incredibly well as well. The most important thing when you're looking for patterns in the market is for stocks that are consolidating and getting super tight. What I mean by that is like they made a super big move and since then, they're kind of just making a tight base like this and they have like a defined high and a defined low that they kind of keep compressing into. And again, remember the reason why this is so important is because the more these stocks consolidate and get tight, the more likely they are to finally explode when they come out of their bases.
Now, with that being said, this was a stock I was watching for a breakout and on this one, I was actually looking for a break of this key level right here, but I ended up missing that break. So, I used the break of these highs right here. So, that was my key spot. Now, again, remember we go down to the lower time frames to get our entry. Now, you can see this stock ends up opening up pretty strong in the morning and then it breaks that key level right here with some volume. This is incredibly important as well. You want to see high volume as a stock is breaking through your key level. That's telling you that buyers are getting incredibly aggressive and there's a likely chance that this thing is going to absolutely explode.
So, this is my entry right here. Again, my stop loss always goes to the low of the day. And then again, going out to the daily time frame, you can actually see that there is no levels on the left side of the chart because the stock is making new all-time highs. I actually do this and pick these stocks on purpose because when a stock is at all-time highs, a lot of people are actually scared to trade these type of stocks, but these are actually some of the best stocks in the market because when a stock is at all-time highs, think about it, it has no resistance above. There's no previous orders from sellers and no like, you know, supply up there at the high. So, that's actually the best time to be trading some of these stocks.
So, again, when a stock is at all-time highs, what you want to do is use the Fibonacci. So, you measure the low to the high and get some fib levels. You could see this day right here, it didn't end up hitting my first target. It kind of, you know, got close to it at the end of the day but didn't hit it. So, I'm always waiting for it to hit that spot.
Now, next day you can see stock ends up gapping up and making a pretty nice push, hits my first target right here. So, this is my first trim. Now, remember after first trim, what I always do is move my stop up to break even. That means as long as the stock stays above the price that I entered, I'm going to continue to stay in the trade. But if it comes down to the price that I entered, I'm taking the trade off at break even, meaning I basically have no risk after I take the first trim.
So, on this day right here, you could see this stock ends up gapping up, making a strong push and hitting my second target right here, which was a super, super nice trim. And actually, if you see how the stock closed out, this is a perfect trim. And why it's still important to take profits on stocks and not only just, you know, continue to hold because a lot of times a stock will hit a key level of resistance and then reject and come back down lower. So, you at least want to get some profits on this thing.
Now, moving forward, you you can see this kind of continue to try to build a nice little base here, and the 8 EMA was actually catching up. The issue that this thing ended up happening having was the market obviously, you know, kind of rolled over a little bit and pulled back. So, on this day right here, I ended up getting stopped out break even on most of the trade, especially as the stock got below the 8 EMA, but just this kind of move right here, 20% move out of this base made me one of the biggest gains on the month on the stock. Just considering the fact that it was breaking out of such a big base and making such a strong move. And again, this is the power of the setup because a lot of times stocks don't really move much within their range. Like they'll move, you know, 17, 15%, and then within a few days, they'll move 20, 30% coming out of the base because they've been consolidating for so long.
Now, this has been my biggest recent trade of the month so far, and I'm still in this position. Actually, this is on the ticker Tempest, and on this, I want to teach you guys two different things. First of all, obviously, the pattern is the same. It's going to be that big pennant base like this. So, not really making any new highs, not making any new lows, continuing to compress, and you can see the volume is getting lower and lower and lower, which is telling us the stock is ready to explode.
Now, the next thing I want to teach you guys is rotation in the market, and what this means is a lot of times, you'll see that stocks and specific sectors are going to be really strong. So, for example, recently, semiconductors have been the strongest sector in the market. They've been leading the market higher. What happens when semiconductors get so extended that institutions, hedge funds, and even retail traders need to start taking profits on those because they've just moved up so much. Money's going to start rotating and kind of pushing from one sector to another and finding the next kind of stock that can make the biggest moves. And this is why I ended up picking the stock 10 right here is because it's in the genomics and biotech sector, which is one of the strongest sectors or has been one of the strongest sectors in the market, and money was rotating into the sector. Combine this with a strong base like this, and you have an absolutely money-making machine.
So, you can see on this stock right here, I bought it right as it broke through the key moving averages right here. You could have waited for it to break through the base. Sometimes I buy the stock a little bit earlier as it's getting through the moving averages or setting up to curl out of the base, especially when it has super strong volume. But, you can see on the next day as well, as it was coming out of the base, this was also a great buy, kind of taking the breakout trade and a break of this key level right here.
Now, with that being said, this was my entry through the previous day's high right here. And then, as always, my stop loss goes to the low of the day to keep things incredibly, incredibly tight, basically take almost no risk, and capture maximum reward. And again, what I'm looking to do is target levels on the left side of the chart. So, this was my first target on the thicker 10. And you can see, obviously, it kind of pushes towards that spot on this day right here, ends up tapping it, and I take my first trim. Now, my next target is right here at the 62 level. And again, until it hits that that level, I'm not taking any trims. A lot of people end up, you know, selling here early when they see a little bit of red or the stock consolidating. If you're swing trading, you have to look at the daily time frames and give stocks enough time to be able to make their big moves. Cuz if I would have sold everything early on this day and panic when the stock just had a small inside day and a small red day, would have sold it before it made its really big move up on this day today, and then I wouldn't have made what we get my second trim off at a very, very good price.
Now, with that being said, this is a trade that I'm still in, and this is one that you'll end up seeing the power of the 8 EMA. And when you're watching this video, you'll probably even be able to go back and see how the 8 EMA works really well. This stock will probably retest the 8 EMA or the 8 EMA will catch up, and then it will continue to go higher, and you'll see why I don't sell my full position all at the same time, and I scale out using the key moving averages.
And last but not least, I want to show you that the setup even works as a more so smaller version of the pennant. Yes, your goal is to look for the biggest bases in the market, but sometimes you'll see pennants form that are incredibly small and they'll still work incredibly well. And this is just the power of this compression setup. And this is the exact same setup that I took on this ticker MRNA right here as it was breaking out of its big base.
Now again, most people are going to be looking to buy the stock while it's in consolidation. My goal is to buy it right as it's breaking out of the base or at least reclaiming a key moving average. So you can see very clear nice setup on this one right here. It's also in the biotechnology sector, which has been one of the strongest sectors in the market and it's been showing incredible incredible relative strength.
Now that being said, you could see this was a really really nice setup. Now that I have my levels, I have my setup, I go down to the smaller time frames to get my textbook entry. So coming down to the 5-minute time frame, you could see that as the stock is breaking this key level, there's a lot of volume coming in as well, which is exactly what we want to see. Stop loss goes to the lowest point of the day right here. And it sets up for an incredibly beautiful risk reward trade. Again, when I go out to the daily time frame, when do I take profits? Not until the stock hits our key level of resistance on the left side of the chart, which would have been right here. That's my first trim and now I'm just sitting in the position pretty, just waiting for the moving averages to catch up and waiting for the trend to take me higher and higher and higher.
Now I hope you guys enjoyed this video and remember, if you can focus on just this setup, you'll make so much money, it's absolutely insane. The only thing is just be careful trading in between when stocks aren't set up like this because they're probably not going to make any big moves. You always want to be looking for these big bases and this is even some advice that I should personally take for myself. If you only wait for these big bases to form these really A+ setups in the best sectors and the best themes, you're going to make a ton of money and you don't need all these other little trades that are costing you these paper cuts.
Hope you guys enjoyed this video. Make sure you leave a thumbs up and subscribe and comment if you have any other topics that you want me to go over or any other video ideas for me to do. I'll see you guys all in the next video. Bye, guys.