The 7 Most Powerful Trading Setups and Edges (Professional Trading)

Summary

In the latest video by TraderLion, viewers are introduced to the fundamental trading concepts of edges and setups, which are pivotal in identifying high probability trading opportunities. These strategies are aimed at building an effective trading system. The webinar, part of a comprehensive series, focuses on recognizing patterns that offer statistical advantages, similar to how casinos operate. Highlights include understanding the high volume edges, relative strength, the N-factor, and aligning with market and group trends. Key setups such as the gapper, launchpad, and base breakout are elaborated upon, with emphasis on specialization and mastering a few setups to achieve trading success.

Highlights

• Learn the concept of an edge, providing a statistical advantage like casinos 🏦.
• Explore high volume edges and why they're critical for identifying potential stock moves 📊.
• Understand the role of relative strength in determining strong performers in weak markets 💪.
• Discover setups like the launchpad and gapper to find the right entry points 📌.
• Realize the importance of specialization and mastering a few setups for trading success 🏆.

Key Takeaways

• Understanding edges can transform trading success by providing a statistical advantage over time 📈.
• High volume edges and relative strength are crucial components that indicate institutional interest 📊.
• Specializing in one or two setups, like the gapper or launchpad, can lead to mastery and consistent trading 📚.
• The N-factor involves fundamental catalysts that redefine a stock’s valuation and potential 📈.
• Aligning with market trends and strong groups enhances the probability of successful trades 📊.

Overview

The webinar centers on defining an 'edge' in trading, crucial for statistical advantage over numerous trades, similar to casino odds. It underscores the necessity of thinking long-term and accepting losses while leveraging potential setups identified through edges such as high volume, relative strength, and industry trends.

Participants are guided on using specific setups—like the gapper, launchpad, and base breakout—to capitalize on marked trends and potential breakout opportunities. The gapper setup focuses on utilizing stock gaps alongside volume spikes, while the launchpad identifies early major trend signals. These setups allow traders to enter trades with precise tactics, maximizing gains while controlling risks.

Emphasis is placed on the concept of specialization, urging traders not to spread themselves thin by attempting to master every available strategy. Focus on a set of core setups and edges promises to enhance consistency and performance. Through mastering these strategies, traders are encouraged to cultivate expertise and intuition, leading to informed and profitable trading decisions.

Chapters

• 00:00 - 04:30: Introduction to Trading Edges and Setups The chapter delves into the concept of trading edges and setups. An edge is defined as a process that provides a statistical advantage, offering a winning expectation over time rather than on every single trade. The importance of considering trading performance over a series of hundreds or thousands of trades is emphasized. Despite the presence of an edge, not all trades will be successful, as randomness and market unpredictability play a role. Even high-quality 'A+' setups can result in losses, highlighting the inherent uncertainties in trading.
• 04:30 - 40:00: High Volume Edge In 'High Volume Edge,' the chapter discusses the concept of 'edge' in probability, akin to why casinos consistently make money over several random events due to favorable odds. It emphasizes that similar to casinos, traders should participate in every event to capitalize on favorable odds. The chapter introduces the 'high volume edge,' which involves identifying stocks that gap up from the prior day and examining the volume on the gap-up day.
• 40:00 - 52:00: Position Sizing and Multiple Edges In this chapter, the concept of position sizing and identifying multiple edges in stock trading is explored. The discussion highlights the importance of volume, noting that a stock reaching its highest volume ever is a crucial indicator of its price action. Relative strength is emphasized as a tool to identify leading stocks, which tend to outperform or recover faster than their peers during market corrections or rebounds. These stocks are potential future leaders when the market improves and should be monitored for potential trading setups. The chapter also provides a case study on Reddit's IPO, which initially formed a consolidation pattern, moved higher, but then broke below its moving averages. A particular range within this period is identified as significant for its analysis and understanding of future movement. Overall, the chapter underscores the importance of volume, relative strength, and chart patterns in determining trading strategies.
• 52:00 - 66:00: What is a Setup The chapter 'What is a Setup' discusses the importance of identifying setups in trading, focusing on the concept of relative strength. It highlights how during market pullbacks, stocks with strong setups do not pull back as much, showcasing relative strength. The chapter also introduces the 'N factor,' described as a game-changing catalyst, which includes fundamental developments such as earnings or revenue surprises that drive significant stock movements. Institutional accumulation is identified as a driving force behind these trends, as surprises make large funds reallocate capital.
• 66:00 - 88:00: Relative Strength Edge The chapter discusses how spreadsheets value stocks differently based on varying percentages of earnings growth, highlighting discrepancies between expected and actual figures.
• 88:00 - 108:00: N Factor Edge The chapter titled 'N Factor Edge' begins with a discussion on price consolidation, introducing it as an essential concept for traders. It sets the stage for a seminar from the Trader Handbook series, specifically the third webinar focused on 'Setups and Edges.' The chapter underscores its significance by highlighting that it is one of the most crucial webinars in the series, which, overall, consists of 13 sessions.
• 108:00 - 124:00: Bonus: Group, Theme, and Market Edges This chapter introduces a webinar series that aligns with the chapters of the Trader Handbook. It emphasizes the depth of concepts covered in the webinars, suggesting that those who enjoy the webinars will likely enjoy the book. During the session, a poll about pre-ordering the book was planned, but due to technical difficulties, the question was moved to the chat, where many positive responses were noted.
• 124:00 - 148:00: Q&A Session and Introduction to Setups The chapter titled 'Q&A Session and Introduction to Setups' includes a session where participants are thanked for pre-ordering a product. For those who haven't yet ordered, a QR code is provided to register for an interest list, which offers bonus information and a link to order from Amazon. The chapter continues to show the QR code, encouraging people to join the Trader Handbook waitlist for additional updates.
• 148:00 - 160:00: Launchpad Setup The chapter 'Launchpad Setup' focuses on the benefits of joining an interest list to receive free bonus materials such as sneak previews, exclusive giveaways, and webinars. It highlights the type of content previously shared, including a model book chapter preview, an article on opportunity zones, trading problem solutions, a guide to reading price action, and an upcoming edges and setups reference guide.
• 160:00 - 188:00: Gapper Setup This chapter is about the Gapper Setup. The speaker encourages new participants to register for the waitlist, assuring them that they will receive all previous material upon signing up. The speaker also mentions upcoming resources, including trade analytics logs and new valuable content. Participants can join and access all materials by scanning a provided QR code.
• 188:00 - 200:00: Base Breakout Setup The chapter titled 'Base Breakout Setup' focuses on a webinar discussion, emphasizing the importance of implementing effective strategies within trading. This chapter, part of the broader context of 'Edges and Setups,' delves into trading frameworks, principles, and how specific setups align with an individual's trading plan and system. It sets the stage for exploring how these elements form a foundation for consistent and successful trading outcomes.
• 200:00 - 206:00: Bonus Setup: Pullback to Support In this chapter, the agenda revolves around the Snipe framework and its components within a trading system, such as edges, setups, and entry tactics. The focus is on exploring key trading edges including high volume edges, relative strength edge, and the N factor edge, which is highlighted as a favorite. Bonus edges are also discussed. The chapter progresses into detailed explanations of various setups such as the Launchpad setup, gapper setup, base breakout setup, with an additional bonus setup as a culmination, encouraging readers to stay engaged until the end.
• 206:00 - 211:00: Specialization and Mastery in Trading The chapter delves into the importance of specialization and mastery within the realm of trading. It emphasizes the role of edges, setups, and tactics in developing a robust trading system. These elements are crucial as they enable traders to select the right stocks at the opportune moments, especially when anticipating significant directional trends that could yield profits. However, it's highlighted that while these components are vital, they are only part of the broader trading system.
• 211:00 - 216:40: Conclusion and Closing Remarks The concluding chapter discusses the basic components of a trading system, emphasizing the importance of managing both winning and losing stocks. The discussion highlights that finding stocks and entering trades are only parts of a comprehensive trading system. Future webinars will delve deeper into essential concepts such as risk management, stop-loss strategies, sell rules, performance analysis, and managing trades by selling into strength or weakness. The chapter underlines the necessity of these elements for successful trading.

The 7 Most Powerful Trading Setups and Edges (Professional Trading) Transcription

• 00:00 - 00:30 so what is an edge an edge basically provides a statistical advantage it's a process that gives you a winning expectation over time and not every single trade it's important as always to think about a series of 100 200 300 the thousands of trades that you'll make over your career and recognize that even if an edge is present in one or two that doesn't mean that they're going to be successful they're you know I I've seen many A+ setups that end up stopping me out the next day uh is just kind of part of trading part of the randomness of the markets that we have to deal with an
• 00:30 - 01:00 edge is nothing more than an indication of a higher probability of one thing happening over another why do casinos make consistent money on an event that has a random outcome because they know that over a series of events the odds are in their favor they also know that to realize the benefits of favorable odds they have to participate in every event and this is how you should be thinking about your trading so the high volume edge essentially looks for one is a stock has to gap up versus its prior day and second it's all about the volume the volume on the day that it gaps up if
• 01:00 - 01:30 the volume is the highest volume ever that the stock has ever seen for me that's the most important thing that a stock can do in terms of price action and volume relative strength reveals leaders stocks that hold up or rise faster than peers during corrections or you know after a bottom is put in often become future leaders once the market turns and you can watch them for future setups entry tactics all that this is Reddit it IPOed back here formed a consolidation moved higher broke below the moving averages and then this period this range is super important here and
• 01:30 - 02:00 is really critical and the reason being is during this period the market was pulling back hard the relative strength line was increasing because Reddit wasn't pulling back as much as the market and what happened after the market pressure lessened and we bottomed here this went on a monster move so the N factor is a game-changing catalyst catalyst it's a fundamental development like earnings revenue surprises or raise guidance that sparks a significant move in a stock and basically institutional accumulation drives a trend and surprises force large funds to reallocate capital because their
• 02:00 - 02:30 spreadsheets are then valuing a stock differently when it earned 100% earnings growth versus what was expected at 25% growth or even 40% growth so first things first the launchpad setup uh this is one of the core setups of Trail Lion it signals the start of a potential major trend it also helps identify leading groups because as groups are setting up together you'll see the the groups start to curl up the moving averages start to curl up under all the stocks in the same group and it's formed by moving average convergence the setup appears when multiple key moving averages converge beneath the stock
• 02:30 - 03:00 price during a consolidation all right we'll go ahead and get started so welcome everybody to the next Trader Handbook webinar uh we're currently on webinar 3 setups and edges this is going to be a great one one of the most important ones that we're we're going to go through um and you know just to lay things out and give some perspective again we're on webinar 3 of 13 each of
• 03:00 - 03:30 these webinars coincides with one chapter of the Trader Handbook and dives deep into the concepts and if you like these webinars you'll absolutely love the Trader Handbook uh so Ry I think you've got a poll for for folks to launch here uh we want to see if you guys have pre-ordered yet figure out the poll so we'll skip that this time but we'll have we'll just ask in the chat uh have you guys pre-ordered the Trader Handbook just yet we'd love to see yes pre-ordered Tom nice all right lots of yeses
• 03:30 - 04:00 perfect pre-ordered very nice awesome guys yeah thank you guys all to have pre-ordered if you haven't yet um you can scan this QR code and this is how you register for uh the interest list which sends you a lot of bonus information um and also the link to actually order it from Amazon is on this page so you can just scan this QR code and uh we'll show that QR code here as well but let's go ahead and keep on moving here uh this again is the QR code where you can join the Trader Handbook weight list we'll be sending a lot of
• 04:00 - 04:30 bonus articles sneak previews exclusive giveaways exclusive webinars as well uh so if you're not already on this interest list this is the place to be all the material is free you just have to join this list and we'd love to send you all that bonus material uh here's a little bit about what we've sent previously we've done a preview of the model book chapter we've written an article on the three opportunity zones common trading problems reading price action guide and then this weekend I'll be sending uh an edges and setups reference guide to go
• 04:30 - 05:00 along with this webinar and don't worry if you if you're signing up now to the wait list and I'll show the QR code in just a minute uh once again uh you'll receive all of the previous material so don't feel like you're missing out on anything you just have to sign up today and you'll get access to all of this and we've got a lot coming down the pipeline as well i know a lot of people are looking for trade analytics logs we'll we'll share a framework for that um and there's a lot of valuable stuff that we'll be sending out so definitely go ahead and join via the QR code which you can scan right over here uh so I'll
• 05:00 - 05:30 pause here for just a second to give you guys the chance to do that if you haven't already all right so diving into today's webinar again this is going to be one of the most impactful ones that we do we're on chapter 4 edges and setups discussing everything with regards to the frameworks that we personally use and taking a step further and talking about the principles and where edges and setups fit in your overall uh trading plan and uh system so here's a little
• 05:30 - 06:00 bit about the agenda today first we're going to discuss the Snipe framework which kind of introduces where edges and setups and also entry tactics fit into your trading system then we'll dive into the key ones that we use the key edges the high volume edges the relative strength edge the N factor edge this is one of my personal favorites we've got a few bonus edges in here as well uh we've got the then we kind of dive into our setups the Launchpad setup the gapper setup the base breakout setup and then we have one bonus setup also at the end so definitely stick around until the end
• 06:00 - 06:30 we've got a lot to cover today and hopefully it'll be immensely valuable to you guys all right so first a little bit of perspective you know where do edges setups and tactics fit into a trading system uh well you know in short they basically allow us to focus on the right stocks at the right time where we're expecting a large directional move and trend that we can profit from as traders but I think it's really important to remember that you know edges setups and tactics are just part of the overall
• 06:30 - 07:00 trading system and we'll talk about kind of where it fits in it and the reason I say this is because you know this kind of covers the buying part of the equation you know finding ideas and actually entering a stock but we all know that winners don't actually manage themselves losers have to be taken care of and there's so many other important concepts and parts of a trading system that we're going to cover in the future webinars risk management stop-loss management uh sell rules selling into strength selling into weakness analyzing your performance um all that is just as
• 07:00 - 07:30 important as edges setups and tactics but with that said I think this is a critical component simply because buying right and focusing on the right stocks at the right time can set yourself up for a lot easier kind of uh trade going forward because buying right is often the best defense buying where you know accumulation is present is evident and we can manage risk very tightly using the entry tactics and that's going to be the focus of the next webinar entry tactics and trade execution but again
• 07:30 - 08:00 just want to emphasize that although this is a very important part of a trading system it's just one single part of your overall process uh but you know in general edges setups and tactics are a template that helps create consistent actions we've talked a lot about the importance of consistency in the previous webinars that allows us to improve over time check-in create feedback loops and improve our trade execution and improve our trading you know identification all those different components we need consistent actions in order to judge the outputs and I think
• 08:00 - 08:30 this is really important routines will be tailored to find your chosen edges setups and entry tactics everybody's going to be a little bit different and today we're going to present kind of our edges and setups and what we use but you might be a little bit different you might be more of a swing trader mean reversion trader your edges and your setups might look entirely different to ours you know if we think about success in the markets and who's proven that over time Warren Buffett his edge is being able to you know read through financial statements and find all these
• 08:30 - 09:00 great bargains or or discounts that's not how we operate at all but it works for him and obviously it's worked fantastic for him over the long term our edges and setups are much more technical focused uh because that's how we trade and operate in the markets but again for you you're going to have to kind of decide for yourself you know what edges are you going to focus on what setups are you going to focus on what entry tactics are you going to use to enter those setups and um again yours are going to look entirely different and you know you only have to pick a few edges
• 09:00 - 09:30 and you know one or two setups to have tremendous success over your entire trading career i think that's a point that we're going to emphasize over and over you don't have to feel like you have to master everything in the markets just specialize focus on you know a few edges one or two setups and you can do tremendously well throughout every market cycle and that kind of gets us into the snip framework this kind of ties in ties back into where edges and setups fit into a trading system so you know first and foremost here is what the framework is it's basically an acronym
• 09:30 - 10:00 that we developed um and by the way Snipe was chosen on purpose because it's kind of fits into that theme of specialization focus you know focusing on you know just a few setups a few edges and that's really important but here's what it stands for and edges and setups kind of lines up with the first three components here uh the first component is search and scan which is how we look for current opportunities of course we're going to have an entire uh webinar dedicated to routines screens we use all of that uh but we will share a bunch of screens actually today that we
• 10:00 - 10:30 use to identify the edges and setups that we use then the next step is narrow and this is focus your attention only on the stocks that fit your system and have strong potential i think narrowing your focus as we probably talked about is one of the most difficult things a lot of traders have come to us and say you know I go through my screens i've got hundreds of stocks that you know fit my criteria how do I fit down to 100 then 50 then 10 then one or two that I really want to focus on and we're going to discuss that uh in today's uh webinar as
• 10:30 - 11:00 well as in future ones as well uh the next step is identify which is even more filtering out of your your potential stocks and finalizing your watch list and analyze each opportunity looking for the edges and setups we're going to talk about today and this is kind of where we're going to end um today's webinar in with regards to uh the snipe framework and then the next webinar is much more about the entry tactics the planning the trade using an entry tactic to manage risk and actually execute uh your entry
• 11:00 - 11:30 um and this this is critical this is kind of complements the first three components and each of these points is really important to think about as you're defining your trading system all right so what is an edge an edge basically provides a statist statistical advantage it's a process that gives you a winning expectation over time and not every single trade it's important as always to think about a series of 100 200 300 the thousands of trades that you'll make over your career and
• 11:30 - 12:00 recognize that even if an edge is present in one or two that doesn't mean that they're going to be successful they're you know I I've seen many A+ setups that end up stopping me out the next day uh it's just kind of part of trading part of the randomness of the markets that we have to deal with this is really important risk management is essential even strong engines will fail occasionally so protecting against large losses is critical and this is part of the entry tactics that we'll be talking about uh next webinar where we'll get very specific about where to place your stop how to set your expectation about
• 12:00 - 12:30 what happens next so you recognize whether a stock is you know working or it's acting abnormally next and this is also a really important point edges can become obsolete market dynamic shift uh which can make once reliable edges less effective or obsolete and importantly it's not just a negative as market dynamic shifts there's actually new edges that come into play for instance before uh you know there are regulatory things with earnings reports you know stuff would just kind of come out naturally now
• 12:30 - 13:00 we've got these gaps that we can actually take advantage of in the markets because of how market dynamics shift and changes in regulations over time and you know you hear about changes that are maybe coming in where we're 247 markets again that might change things but there'll be new ways that we can profit from you know those new dynamics so don't feel like this is a negative it's actually a positive because we're always learning in the markets we're always trying to get better and develop new edges and we've got actually I think one of the last webinars is talking about how to do studies and find new edges so that will be a lot of fun uh
• 13:00 - 13:30 and yeah that kind of leads to the next point adaptability is crucial traders must stay fluid and responsive to what's working in current conditions to obtain their edge because not only do some edges become obsolete but during different periods during a market cycle during different market cycles you know one edge can be you know the most amazing thing and then an edge that's been very reliable in the past might just be out of favor uh you know there's times where gappers are extremely prevalent in the market there's times where relative strength is the key edge to focus in on you know after a market
• 13:30 - 14:00 correction as after we bottom and come up strongly that's when relative strength is really critical or during a short-term correction that's also when relative strength is very critical so you want to think about you know what is the most important edge that has been working well right now or in recent weeks and that's probably the one to go to and focus on in your trading all right so here are a few quotes from Mark Douglas uh that are excellent an edge is nothing more than an indication of a higher probability of one thing happening over another why do casinos
• 14:00 - 14:30 make consistent money on an event that has a random outcome because they know that over a series of events the odds are in their favor they also know that to realize the benefits of favorable odds they have to participate in every event and this is how you should be thinking about your trading and you know just to summarize how this applies to trading specifically we are looking for price and volume characteristics that appear again and again before and during the moves of historical winners again this is a really important point that you guys all should be taking notes on we are looking for price and volume
• 14:30 - 15:00 characteristics that appear again and again before and during the moves of historical winners and I also want to kind of uh generalize this it doesn't have to just be price and volume characteristics your edge like we talked about with Warren Buffett could be diving deeper into the fundamentals identifying the theme that is working really well in the markets it could be looking at increasing sponsorship which we have in DFW uh in terms of number of funds it could be looking at net profit margins whatever kind of um similarities
• 15:00 - 15:30 occur in many of the best historical winners in the past anything that you can distill and kind of create a blueprint for yourself about winning stocks that can become an edge that you can use in the markets uh Ry I want to throw it over to you uh with regards to these quotes anything else that you want to emphasize here uh based on what Mark Douglas said yeah I would say uh the most important here is um if you guys have an edge in the markets maybe throw a comment uh in the in the chat of what your edge is and how you execute it i think it's a it's a
• 15:30 - 16:00 very important question to to answer to have many traders and state you know like we spoke about in uh the boom bust phase um and you know anything before the consistency phase don't have a clear edge written on paper or what they know to be an edge in the markets that they can repeatedly execute again and again so if you're operating without one it's a it's a good time to pause and be uh you know take a step back and look at your trading and likely you know u if
• 16:00 - 16:30 you can't you know explain it to someone else in a very clear you know one to two words it's likely you're confused yourself you've confused yourself as to what an edge is in the first place so it's very important to know what it is and how you identify it and then today we'll cover some of the you know our playbook at uh Trader Line and what we call edges and setups and how they play um a big part in being uh a swing trader or a position trader yep i see people
• 16:30 - 17:00 listing their edges and I actually asked that question later so we're jumping the gun here but can some gap ups um post earnings trend convergence of MA is nice the launchpad setup is kind of that nice uh I see Gary says "My edges def." Thank Thank you you know we built in a lot of things to make us find help us find our edges a lot faster all right let's keep going here we did want to touch on a little bit this concept and and Ry I
• 17:00 - 17:30 definitely want to hand it over to you because cuz I I think you explain this really well go ahead position sizing we'll we'll dive deeper into into that and the mechanics of it but I it's important to to cover um an approach that is not talked about enough or uh folks are not looking at the markets this way so let's say we have an edge in the markets and we know that um a a gap up in the markets or something that happens or characteristics like uh oops
• 17:30 - 18:00 reversal in the market has a a favorable probability if we execute it over uh the next 50 to 100 trades while the market's in an uptrend a very simple system right um now how do we position size based on our edges a lot of people tend to uh not bridge those two concepts together uh and what this slide essentially speaks about is the more edges that you see on a single chart be it a technical edge a fundamental edge a newsbased edge
• 18:00 - 18:30 catalyst whatever the case might be you have these particular edges that you've studied and mastered if multiple ones are showing on the same chart there's no reason for you to size up you know not for there's no reason for you to not size up that particular chart A which has multiple edges versus a chart that may have a single edge that you've mastered in the markets so building your position sizing system based on the number of edges that show on the charts will allow you to get into the winners
• 18:30 - 19:00 with heavy size and get into the ones that don't exhibit many winning characteristics or edges at the same time with lesser size and what happens is the math plays out and naturally over a you know as you execute your system you you're the the biggest performers in the market will get the highest amount of size so you know position sizing boosts your performance we all know that you know if you put on a 25% position in a market leader for that year like APS
• 19:00 - 19:30 or some of these other ones Uber etc and they move up 100 plus% you if you versus if you only have a 5% position it's pretty clear which one's going to move the needle more edges equals more conviction so if I see a high volume edge it's showing relative strength it's in the right group right and the market's behind me there's no reason for me to sit there with a 3% position size and feel happy about myself right we want more position size in stocks that
• 19:30 - 20:00 are showing more potential that doesn't mean that they might not fail if they do you know we take that loss and move on to the next one but most likely the ones that show multiple edges will outperform the markets a lot more and you want to have higher size so using a system based on just that alone plus you know uh adapting to each market cycle uh as well will allow you to really get into you know a Tesla last year where it moved uh
• 20:00 - 20:30 and and broke out and moved you know 50 to 60% in 3 to 6 weeks had a lot of things going on at once so people size that up you see a huge move and then when the market goes bad you get stopped out it allows you to sit there and do nothing right you sit in cash you're more patient because you know that when your edges start to show on the charts you will again start to act um in the in the markets so uh this concept you know very powerful but the the first step again is you have to know you have to
• 20:30 - 21:00 have multiple edges in the market so that when they correlate your confidence goes up and your conviction is really there uh at the end of the day yeah just to add you know two of my best trades last year ALAB and Reddit I sized higher because I saw multiple edges and they really contributed to a strong end to last year for me and you know if I had kept my normal size it just wouldn't have had the same impact and when I have more conviction I adjust my position size just like we we show in this
• 21:00 - 21:30 example incrementally more based on the number of edges that I see um and that allows you to just take advantage of the best highest conviction trades um I've talked to Christian Flanders the top one of the top performers of the US investing championship last year um he he uses this pro you know this process in the strongest uh setups like Nvidia and SMCI of last year he size higher and they really made a difference in his performance and obviously you have to tailor this to your experience level your ability to manage risk we never
• 21:30 - 22:00 want to take outside risk so within your parameters you know say you've got a max position size of 20% like like we show here you know you don't want to you know size higher than that if it you know puts you outside of your parameters um even if you have a lot of edges you know present just in general we want to be sizing higher when there's a higher probability of a high of a really strong risk reward setup that's kind of the uh the main point we want to hear and maybe if you're be you know starting out you
• 22:00 - 22:30 might only add one to two 2% 2 and a half% for every additional edge you just want to tailor it to your system and how you approach things but I think this is something that will dive a lot deeper in into the risk management portion where we'll also talk about position sizing and we'll give a really clear framework for uh traders of all experience levels you know what should be your base position size when should you size up how does that change based on market conditions how to use progressive exposure we're going to dive all into that this is just kind of introducing this base
• 22:30 - 23:00 concept all right so getting into the meat of it here what is a setup while edges signal opportunity setups define structure around that a setup builds on edges to form a larger recognizable trading opportunity and pattern a setup is repeatable it's a pattern that consistently presents a favorable reward to risk ratio and these formations these patterns are created because of supply and demand accumulation by institutions they're not just things that we memorize they're created because of market
• 23:00 - 23:30 dynamics and the factors at play uh strong accumulation and risk appetite by institutions all of that they're again they're just not we don't just want to uh memorize what a cup and handle looks like and just say "All right these always work everything's in context everything is based on how the market is currently presenting and and developing." And all that is going to form the setups that we see um edges are a component of a setup a good setup incorporates multiple edges that align in a cohesive structure and edges are also how you identify uh strong high
• 23:30 - 24:00 potential stocks to identify those setups as the next step setups also include entry tactics which will be the focus of the next webinar they don't just show opportunity but also outline how and when to enter a trade while managing risk you know we at Trader Line and and how we trade we focus so much on tight and logical entries where even if we think a stock is the the best opportunity out there we're not going to ignore risk we're going to manage it tightly and look to enter at points where we can know very quickly if we're
• 24:00 - 24:30 right or wrong exit with a small loss if if we are wrong and but get on get on the train get on the plane whatever you want to call it when the stock is really taking off and developing and maturing as a setup and looking to make a strong directional move and trend uh the strength of a setup lies in confluence this is kind of what we were getting at with the previous slide with increasing position size based on number of edges the more aligned edges and patterns within it the more powerful the trading opportunity uh you know just looking at the best stocks in recent history um Tesla in 2020 showed relative strength
• 24:30 - 25:00 it showed tight price action it showed uh power off the lows all those came into play and showed you that it was really under accumulation by institutions and after that it went up another 500% after showing all those different edges and winning characteristics so that's really really important always look for confluence and multiple reasons why a stock or trade uh has high potential so what is the entry tactic this This is kind of the final layer and we we've touched on this a little bit it's the last piece of the puzzle after identifying the stock uh
• 25:00 - 25:30 with edges and setups uh they allow us to control risk tightly tightly and logically they help traders enter positions with precise stop levels and risk control they enable proper position sizing based on that amount of risk that you're taking and welltime entries allow for putting on enough size while still managing risk this is kind of what I was getting at when I said buying right is often our best defense because if we buy properly from a mature setup with a proper entry tactic um we are basically it makes a trade a lot easier because
• 25:30 - 26:00 you're not taking outsized risk you know quickly if it fails or if it's going to work and you get that quick feedback in the markets uh they're also execution focused entry tactics are where the trade execution actually happens and this is going to be the topic of the next webinar we're going to get really in-d depth into the entry tactics that we personally use and how we actually execute our trades you know where do we set early alerts um how do we prep orders all of that is going to be covered in the next webinar this is kind of creating the overall framework edges and setups again allows to identify
• 26:00 - 26:30 promising uh opportunities so this is a very simple but I think effective graphic to kind of uh summarize how edges setups and entry tactics fit together um here of course we've got an uptrending stock you could say that this is showing very strong relative strength it's a really strong prior uptrend maybe it doubled during this period this is kind of the edge that gets it on your radar you know stocks that double like to double again then the stock begins consolidating forms out a base goes through a nice mature basing process this is kind of the longer term setup the the larger
• 26:30 - 27:00 pattern that says you know you know it might be set up for another leg higher to resume the strong trend that it showed with these edges uh then you know the last piece of the puzzle is how do you actually enter and execute within this larger pattern the setup and that is the entry tactic here we've got a consolidation pivot breakout breaking through the short-term line of resistance managing risk maybe at this higher low or at the low of the day as it breaks through and this is this component is the last layer as we talked about the entry tactic so again the edge
• 27:00 - 27:30 gets it on our radar the setup is the larger pattern that suggests strong accumulation and entry tactic is how we execute our trade enter the position set our risk parameters set our position size it's the last piece of the puzzle uh so I think this is a good kind of summarizing uh and simple graphic um Ry anything you want to add about how edges setups and entry tactics kind of fit together uh to to you know create a strong trade an edge has to be visual in nature right a setup forms over a span
• 27:30 - 28:00 of time right an edge can show on one day on a particular day on the charts right could be high volume relative strength it's there it's visible it's you can see it there's no subjectivity to it there's no opinion to it it's there on the charts um when it comes to catalyst or newsbased there must there might be some of that but when you refine all of your edges they have to be crystal clear that hey I see relative
• 28:00 - 28:30 strength i see high volume i see a stock in a leadership group and the market is in a uptrend right we can define those very mathematically or numerically or visually on the charts and they show up second is a setup a setup essentially forms over a span of time so these patterns that we speak about either be a candlestick patterns that for eventually form a setup or the volume bases which eventually form a setup these are things
• 28:30 - 29:00 that take time and the structure on the charts is built through price action and volume which we spoke about in our previous webinars the entry tactic essentially is saying where within the setup can I define my risk as soon as I can define my risk I have an entry tactic because if I have a 2% you know let's say stop loss or two and a half percent risk on this particular position I I know where I'm going to enter i know
• 29:00 - 29:30 where I'm going to get stopped out and my thesis is invalidated that's essentially what an entry tactic is so these three mechanisms should play out in each trade right uh I have a watch list that only tracks track tracks my edges for example uh I can have a relative strength watch list right then as I'm tracking uh you know when I have my relative strength list I'm tracking for setups to form on that list when many setups form within the same group
• 29:30 - 30:00 for example that's an additional edge right you want theme a theme to back up you know a particular stock could be AI based or uh semiconductors or software wear or things of that nature and then the last part how do I enter this thing i know that these things exist but if I can't define my risk it's all it's a wash out you know it doesn't matter uh so at the end of the day risk management always comes first traders always say I know exactly where I need to enter and I
• 30:00 - 30:30 know exactly where I need to exit because if if I don't then other things come into play and you become an investor and not a trader right so that's how I think of edges setups and entry tactics and why we built this whole framework to get traders to think systematically and to to think visually and not you know take again the randomness out of what they're doing um through this particular uh framework edges setups and entry tactics yeah and I liked what you said there you know
• 30:30 - 31:00 edges can happen on one day you know there could have been a huge gap on volume within this uptrend that gets it on your radar um there could have been a huge high volume day that gets on your radar relative strength as the overall market was correcting so there's many different ways that a stock gets on your radar but those are kind of what your edges are then within the setup we highlighted this particular entry tactic but I want to be clear you know you don't have to use a consolidation pivot breakout there's traders who prefer to trade the the mean reversion extension down recovery phase right here to find
• 31:00 - 31:30 their risk at that low and finding specific spots there's people who maybe trade this first high or low all of these are valid entry tactics if you study it if you can manage risk and if it's repeatable over time uh you just have to develop kind of for yourself what are the edges you want to focus on what are the the larger setups and patterns that you want that uh show high probability for how you like to trade and then what are your entry tactics and set of entry tactics that you can use to execute within that setup and we'll kind
• 31:30 - 32:00 of complete the link next webinar by talking about the different entry tactics we use for the different setups that we present today uh but this is just kind of an overall example a very high level example of how these three fit together all right so getting into the edges here this is kind of the trader line playbook these are the main ones that we use uh we've got number one the high volume edges which Ry will dive deep into number two the relative strength edge number three the NF factor edge which is also the N in can slim the
• 32:00 - 32:30 new factor uh and then number four we've got a bonus the market thematic edges because we know that the market has a huge impact on the success of a trade we also know that the theme that the stock is in and if it's a strong theme or a weakening theme has a huge impact on whether a particular setup will will be successful so these are the main four we're going to cover today with examples and screens for each of these and you know I I personally this is probably the the number one that I focus on the
• 32:30 - 33:00 relative strength edge also incorporate a lot of the N factor edge and number four while Ry you know favors the high volume edges this is his bread and butter uh so he focuses more on those so for whatever whoever you are as a trader you have to come up with a list like this of the main ones that you use that you are confident in that you've studied gone back and studied previous market winners and uh you know know identify the strongest potential stocks for your style so you should kind of develop a list for yourself um and let's dive into number one the high volume edges uh Ry
• 33:00 - 33:30 I'll hand it over to you and may definitely uh explain what these acronyms stand for yes so um one of the things that I look for in the markets is a very simple representation of demand uh or something that happens in the market that spurs momentum to the upside and results in stocks eventually uh having the the the market forces behind it to double and then some thereafter so
• 33:30 - 34:00 the high volume edge essentially looks for uh a couple of things one is a stock has to gap up versus its prior day and second it's all about the volume the volume on the day that it gaps up you know if it's up 22% 20 22 to 25% on a on a particular gap up if the volume is the highest volume ever that the stock has ever seen for me that's the most important thing that a stock can do in
• 34:00 - 34:30 terms of price action and volume right i want the the the bar on that day i want the price to be as close and closing near the high of the day as possible and I want the volume on that particular day to be the highest volume that the stock has ever traded that to me is the most important volume signature that exists in the markets and what it tells me is there's a sudden shift in dynamic or something has happened it's always news
• 34:30 - 35:00 earnings catalyst uh something that the company did uh to to catch everybody offguard or or you know something amazing that causes that price action uh and volume to happen uh the second one is the HB IPO which essentially stands for the highest volume since IPO week now the highest volume since IPO week again is based on studies which we'll cover near the end of this webinar series on how you do studies and all of
• 35:00 - 35:30 these are essentially observations that were made and then turned into an edge for me in the markets right so the highest volume since IPO is when a stock gaps up and it's the highest volume it's seen since the you know the first time it IPOed in the markets and was listed publicly that particular volume signature is something that I noticed in Facebook's and you know Spotify and things of that you know uh Twitter when
• 35:30 - 36:00 it actually traded uh publicly and many many companies exhibited you know some of this uh this particular volume signature so I added this as kind of the second you know most successful uh volume signature that I see on the charts the third one is the highest volume in a year and now this quantific ification of highest volume in a year is also based on stocks hey I was seeing the highest volume ever which is the most obvious thing that you can see on the charts i was seeing the highest volume since IPO but I was still missing
• 36:00 - 36:30 some momentum names uh that you know uh which we'll cover in the next few slides here that again doubled but they weren't on my radar because I was only looking at the highest volume ever or the highest volume since IPO so that's was the third edition the highest volume in a year and that kind of completes everything that I look for under the high volume edge it's very visual in nature there's no second guessing i can see on a single price bar if this has happened or not and then I can get into more you know uh more
• 36:30 - 37:00 analytics of of why it happened and what's happening and things of that nature so catalysts on these particular names do matter uh if a particular company is let's say uh being driven by like a GME type of name with the highest volume ever is that something that is of high interest to me and I think that GameStop has now changed uh as a company overnight likely not right so analyzing why it happened has it matters a lot
• 37:00 - 37:30 more now especially in the past four years four and a half years uh since 2020 since retail volume has come to the market as well um the HV edge is a representation of institutions coming in and being interested right essentially it's huge volume on the charts it's liquidity there's something amazing that's happened uh and institutions show that by participating and participation in the markets shows in volume right and price so um a good
• 37:30 - 38:00 you know a very simple screen we've built all of these into deep view if you're if if you use that it's you know you could scan for each of these characteristics the HVE the HV IPO uh the HV1 they're all present uh and scannable uh we've built those into the platform um and I think we could cover Richard a few examples to really dive deep into uh this as well so I'll start annotating let me know if you guys can see my annotations but essentially when
• 38:00 - 38:30 we say that we're looking for the highest volume ever it's a you know on the daily chart that's f uh first and foremost that's a time frame uh for this particular edge we're looking at the highest volume ever on the daily charts and this particular chart iss right now as a downtrend had no nothing going for it essentially it was below moving averages there's nothing uh of interest there's you know in this particular way
• 38:30 - 39:00 you know there's no way I could have entered here and caught the gap that's not of interest to me in the markets what's of interest to me is what happens on this particular day right this particular day the stock gaps up it's it has a strong close right it closes right near the high of the day so the closing range which we covered in the first two webinars is very high which is constructive price action and then second it's the highest volume that the stock has ever seen and that to me it becomes that's the edge component of it
• 39:00 - 39:30 right now we've identified a visual thing on the charts it's the edge that I see now we look for a setup and then followed by a entry tactic so essentially the stock apps up there's couple entry tactics which we'll cover in the next webinar that we'll do in this case the HVC was the most effective one uh or the prior high of day was the most effective one as well so the stock comes in holds the HVC in the prior day area but again it goes up and rallies it
• 39:30 - 40:00 goes from essentially $3 to $22 but how did it all start it started with the highest volume ever if you scan for these on a daily basis what we're trying to teach you is a simple framework for you to become a swing trader position trader in the markets and to see things visually without you know guessing or opinion and things of that nature so it then gaps up again on another partnership announcement that's the catalyst and once again we see the
• 40:00 - 40:30 highest volume ever now this is the second time the stock has seen the highest volume ever in a short span of time does this happen on every single stock no but if you missed it on this particular gap up now we have another you know strong closing range which we spoke about strong price action followed by the highest volume ever it's visual it's on the charts you can identify it you can place this name on your watch list to then track for a particular setup in this case the best entry and I remember this was the volume support which we'll again cover very in depth in
• 40:30 - 41:00 the next webinar also the HVC area right here and the stock then consolidates and then again even if you didn't catch it from the initial $3 mark you're now it you know the amount of time that uh you see that stocks that gap up into this the the$1.7 area it's again about entry tactics um this happens quite a bit where they go from seven and a half to $20 and plus uh again and again but what's most important for today is for
• 41:00 - 41:30 you guys to visually master an edge in the markets and walk away with you know this could be something that you potentially look at on a consistent basis in the markets as well which is the high volume edge learn to identify these learn to look at the markets you know look at charts this way and place these names on your watch list and over a span of time you'll start to see how successful these are especially which will get into when the market is backing
• 41:30 - 42:00 the the market cycle is positive it becomes a lot easier there's a lot more momentum risk is well defined and you get a lot out of it it's the it's the only you know it's the primary edge for me in the markets that I look at on a consistent u basis so Richard I don't know if you want to add something or we could go to the next example you're on mute mute there we go yeah just to double click on something that I think is really important these signatures the
• 42:00 - 42:30 high highest volume ever is what gets it on your radar after it's on your radar then you can apply your particular setup or your particular entry tag to execute on the name you know Ry Ry has his HVC setups i actually trade this in the high tight flag setups from inside days over here much later than you know many other opportunities back here but these edges are what gets a high potential stock on your radar um I'll add that basically this was part of a leading theme
• 42:30 - 43:00 potential leadership group as well rklb was acting well there's a lot of positive catalyst about SpaceX which wasn't traded um on the markets obviously but this theme was in favor uh during this time and that all kind of amplified uh the power of this trend and I love how we had the highest volume ever and then even higher highest volume ever and this is very rare to see this backtoback uh Tesla back in 2019 had it as well after it reported profitability for the first time uh but this this signature the highest volume ever is
• 43:00 - 43:30 really key and can be gamechanging it can completely turn around a stock uh Ry there was a question uh in the chat um does it matter if it's below the 50 SMA the 200 SMA when this occurs what ideally you know is the situation that that you see HVE i uh for for me it it's a whole reset that happens be it below the 200 below the 50 etc not often not many times you'll see a HVE below the 200 but I if it happens it
• 43:30 - 44:00 doesn't matter where it happens on the chart as long as it's a it's a gap up of sizable amount there's a really good catalyst like a partnership announcement or a theme or something that's happening to back it up could be earnings right that's that's the biggest one um and it doesn't matter it's a it's a reset you know when when I look at this I'm not sitting there saying there's overhead resistance i should be careful no there is new volume there's new interest there's new people there's something that's happened on this particular day
• 44:00 - 44:30 that negates all of this price action to the left because it's a it's a huge reset it's something's happened that's completely separated the stock from its prior action right it's it's you know it's something new so I don't look to the left and say "Oh it's run into resistance oh this is where I expect it to stall." There's a lot of negatives that you will find in these highest volume ever when you look to the left but there's no reason to do that because the volume is plowing through anyone and
• 44:30 - 45:00 any anybody that's kind of short the stock at the moment and it the story the catalyst the earnings the sales the news the announcements whatever the case might be it's a great reset and you know all of this does matter to the left yep and Eton in the chat pointed out you know some great things you know this is an excellent chart to study and it's in the the model book chapter of our book in terms of price and volume action pullbacks on low volume tight areas inside days right before the breakout
• 45:00 - 45:30 everything we talked about in the previous webinar you can see really apparently respecting the 21 EMA this is a great case study to look at in terms of studying price and volume action how it all comes together you know expansions after tight areas right here another tight area expansion up tight inside day expansion up what's that happening on higher volume so this is a great stock and and uh chart to study in terms of price and volume action um the other thing I want to talk about is this wasn't this isn't a hindsight trade i
• 45:30 - 46:00 actually was recording a video for DU looking for gaps up gap ups like this on the day that this occurred and you can you can watch it on YouTube and as is the example that I shared in terms of a promising gap up that get that then gets it on your radar and we've got a few screens um later on that show how to catch uh these gap ups and how to fit it into your routine because it's not just about having a screen that looks for gap ups if it doesn't fit into your routine and you don't actually look at it to find these potential setups so we've got a few screens to share uh later on uh
• 46:00 - 46:30 here's another example with Arlo Ry yes so I I see a lot of questions in the chat you know does price matter does it matter where it happens um you know is is four or $5 way too low uh so I added this example just for that just to anticipate some of the questions that would come through so Arlo is the same situation uh the stock back in I believe 2023 or 2022 uh gapped up on uh amazing volume right uh so something that happened you know was not known here not
• 46:30 - 47:00 known here and the stock just purely gaps up and on that gap update we see huge price action with a really amazing closing range right so constructive price action and the highest volume edge shows on the charts and when that shows our it's our job to you know to then take a look at the charts place it on our watch list and start to look at the setup that is about to form one of the things that we'll cover in the next webinar but also I'll cover here is that the fact that when you have the highest
• 47:00 - 47:30 volume edge show up on the charts and it's right around a whole number and that whole number is five or $7.50 you'll you'll tend to notice that it creates additional momentum in the stock so again you identify a visual edge you scan you know the Snipe framework you search and scan for this particular edge in the markets you place it on your watch list and in this case the entry tactic was a whole number plus the HVC area and the stock goes from $5 to $10 in a matter of less than 3 months
• 47:30 - 48:00 right so this is an another example for you to you know take a look at it's very visual you can place it on watch list there's follow-on follow-through volume there's consolidation the stock is supported right at the HVC and the$15 area it then rallies and then it catches another uh gap based on earnings so you get additional momentum and then you get into the dollar 10 range so this stock actually continued uh quite a bit higher but uh this right here is again based on
• 48:00 - 48:30 the HV edge so there's another example we could flip to Richard uh that I added yeah before you do that there's a question from Fred um about you know do edges all have to happen on one day uh no but a single edge can happen on one day like the HV the HV edge here this happened in one day and then this edge is valid throughout this uptrend as being an HVE so you want to look at recent price action the past month the past few months within that same trend
• 48:30 - 49:00 what are the edges and character and winning characteristics that you're seeing recently in the stock so hopefully that clears that up Fred uh all right here's the next example pltr pltr is a really good example of u you know a very well-known company right uh that was in a downtrend uh and couldn't you know catch a bid and something happens on earnings where it gaps up on that particular day and now you have you
• 49:00 - 49:30 know this was a company by the highest volume in one year right so on this day the company gapped up they announce a couple of things as well we see that there's a prior downtrend uh prior to you know earnings and something happens where the catalyst is big enough to justify not only a price gap but really constructive action on the day it gaps up as well accompanied by which is the most important part the high volume edge that we defined a couple slides ago right you you will see this in uh Roku
• 49:30 - 50:00 back in 2019 if you pull up the charts Roku was down 20 sessions in a row uh it couldn't catch a bid reported earnings got a huge gap everything reset on the charts thereafter and it also catched anyone that's short on the you know when you look to the left so that creates additional momentum in that particular day again it all starts with the HV edge you take a look at the volume and you take a look at the gap you place it on your watch list in this case the the entry tactic that worked well was the
• 50:00 - 50:30 volume support the HBC area and also the dollar10 mark uh so there were three layers of entry tactics which we'll cover in the next webinar really in depth as to how the setup formed and how we can define risk at each of those areas and what happened uh PLTR this is what started PLTR to go to where it is% by the way so um that's why it's it's very important to track these names and track you know why they're gapping up or
• 50:30 - 51:00 what the catalyst is you'll start to see patterns in in in the catalyst that you see if a company is reporting good earnings the first time they're being profitable on an earnings per share basis or revenues jumped quite a bit or they've announced a billion dollars that they're now allocating to buying back shares from the market to reduce their float things of that nature when they all align that's what happened over here which created the cocktail for a 100% increase from 10 to 20 and then you know
• 51:00 - 51:30 this is this will remain on your radar for many many many cycles all the way up to $150 right so that was the I think the third example that I had yeah and by the way I saw some questions about what HVC stands for hvc is the close that's what the C is in HV of the high volume days so high volume close is HV so and this becomes a very relevant level in the market you'll often see stocks pull in respect it rally up from it we've got
• 51:30 - 52:00 an example later on with ELF it loved to gap up send it HBC it would trend and then pull back to it HV it did that like five six times it's amazing um and I think this is a great example because Ry you talked about volume support here being kind of your first entry tactic here i trade differently than you and you know I I would have looked at this very tight day right here which basically is like a inside day in spirit i'd be set a pivot above that high which also lines up with the HVC and then that would be my buy on strength on that so
• 52:00 - 52:30 you your entry tactic tactic is different than how I uh you know how I would enter and use my entry tactics but it's all about finding the edge first that gets a high potential stock on your radar and then I would trade it how I trade it you would trade it how you would trade it and everybody watching would have their own individual setups and edges uh and entry entry tactics that you could use to then apply to this stock so I think that's a really good example there's a couple of you know questions in the chat like can I use the open range high as the entry tactic on
• 52:30 - 53:00 that particular day can I do um you know does the stock have to meet the 52- week high when it uh gaps up on the HV day so all of these questions do I look at them i don't have to look at them but if if you find it valuable uh and you see more success uh in those then you go ahead and use those what we're trying to do is give you just a framework of how you can operate in the markets which is edges setups entry tactics and this is one of the edges that I use uh in the markets
• 53:00 - 53:30 to show you the application of that system you know the edges setups and entry tactics so you could use open range breakouts you could use the ones that we'll teach you in the next uh webinar you could use none of those entry tactics and come up with your own right it's all fine as long as you could define risk right and as long as you could identify using the snipe framework uh you know you're going through that framework and and consistently repeatedly identifying edges setups and entry tactics in in a loop or in a
• 53:30 - 54:00 repeatable way it will make you an amazing uh swing trader yep go back study history see if it works right see if it works for you in the moment too that's what you got to do all right we've got uh Uber here we got one more uh let's let's do one more example so this one was Uber uh this one I traded so uh again the same thing uh there was a lot of I would say pessimism or uh you know the stock was in a downtrend coming into earnings uber then reports its f first profitable quarter uh uh in you
• 54:00 - 54:30 know since becoming public that creates a a gap up uh on this particular stock the stock outperforms the market you know is now outperforming the markets the market trend was amazing as well and there was years of frustration coming into this particular gap up that this company's not going anywhere just like Airbnb these days that stock is all over the place has done nothing since IPO but something changed on this day and that was you know it was the first profitable
• 54:30 - 55:00 quarter for Uber and what happened was it spurred an amazing run in that particular stock again the point of this is there's a really visual edge on the charts this was the highest volume in a year that Uber has ever seen it was in a downtrend coming in and it gapped up the the closing range on that particular day was clo in the 90% the DCR was in the 90% and the catalysts were there for this new tight price action to start showing on a company that would trade
• 55:00 - 55:30 really poorly uh prior to this gap up so there's a character change there's a new catalyst uh institutions were more confident that this company can now be profitable things of that nature they all play a role but all of that shows in volume that confidence that conviction from institutional side retail trader side what have you all comes in and shows up on the chart as a visual edge which is volume and it was the highest volume in a year so that was the last example
• 55:30 - 56:00 great so getting into the next one the relative strength edge this is probably something that you guys already use maybe or or is pretty common out there but it's one of the most empower power powerful edges that you can apply um you know relative strength reveals leaders stocks that hold up or rise faster than peers during corrections or you know after a bottom is put in often become future leaders once the market turns and you can watch them for future setups entry tactics all that uh key relative strength signals include the RS line
• 56:00 - 56:30 making new highs outperforming on 62 and a half% this is a study that Ry did uh looking back on relative strength days um so on 62 and a half% of down days if a stock outperforms it could be a leader after the market turns holding above moving averages when the market is below them and otherwise showing strength during market weakness are all ways that you can identify the relative strength edge and we've got a lot of examples to show you know different ways to define uh relative strength and why does this happen the reason is because institutions you know this is the
• 56:30 - 57:00 driving force between behind market leaders and behind relative strength during a correction during weakness institutions are going to look to add shares in their highest conviction names names that they're still aggressively trying to add to and that you know demand supports a stock better than the rest of the market so strong RS stocks attract capital during pullbacks and as institutions add to high conviction positions exactly what I just said and on the flip side if you see very weak action during a correction those are names that are being distributed uh by
• 57:00 - 57:30 institutions as they try to hold on to their strong stuff and get rid of the stuff that they want to sell anyway the RS line is the key for identifying the relative strength edge the relative strength line is basically plotting uh the price of the stock divided by the price of the SPY um and it basically gives a day-by-day measure of whether a stock is outperforming or underperforming if it's rising the stock is you know increasing relative strength if it's declining it's decreasing relative strength so the RS line as I mentioned here compares a stock's price
• 57:30 - 58:00 relative to the market index likely the SPY and shows trend based outperformance not just momentum and I want to be really clear here because a lot of people get confused by this the relative strength line is different than the RS rating the value of the relative strength line because it's just a ratio it's just the stock's price on any given day divided by the price of the spy that is just a ratio the value itself of that ratio does not matter it's the trend of the line that matters the RS rating compares the relative strength over a
• 58:00 - 58:30 period to all other stocks in the market and then creates a measure and percentile score for that stock we have both in DFW and both are very useful and both are measures of relative strength but they're not related there there the RS rating is not going to be the value of the RS line they're different metrics so I just want to make that clear and here are a few really good scans that we have presets in Deep View to help find relative strength and each of them kind of look for different things here so first things first we've got one I called relative strength phase a
• 58:30 - 59:00 relative strength phase is when a stock is trending above the relative strength line of a stock is trending above its signal line the 21 EMA and basically this this screen right here is looking for a stock that is liquid uh over $10 in price rising above its 21 EMA above its 200 day moving average it's a common stock or ADR and it's in that RS phase so it's trending above its relative strength line then here we've got a Oliver Kell uh preset one of the key screens that he looks for uh and uses
• 59:00 - 59:30 during down days and this is when the market you know is is down 1% 2% 3% very similar to the action Friday and these days are actually great for identifying relative strength because they get they kind of show you what's obvious what stocks are being supported what groups are being supported on a day where everything is getting taken to the cleaners and one thing I really want to make clear about relative strength is it's not enough to show relative strength on one day or at the beginning
• 59:30 - 60:00 beginning of a correction what's really important is to see sustained persistent consistent relative strength day after day especially after the market seems to have put in a bottom the stocks that show relative strength over the course of the correction consistently are the names you want to focus on not a stock that showed one day of relative strength and gapped up early in a correction and then got taken to the cleaners that's just relative strength on one day we're looking for consistent relative strength over the course of the the whole correction to show that consistent accumulation by institutions that
• 60:00 - 60:30 support by institutions so this screen right here basically looking to see you know is a stock up on a day when the market is down is how you can determine if a stock on that day showed relative strength and then you want to keep track of what Ry and we call a relative strength list and say on March 29th these stocks showed relative strength have a list here then the next day you you have another relative strength list if especially if it's a down day and then you look for the common stocks that show up again and again on those relative strength lists for each day and
• 60:30 - 61:00 that's how you find the next potential leaders so hopefully that was helpful to you guys and I I think that's a a key thing we want to get across here then on this uh this last scan here is another one that looks for relative strength on a particular day but instead of just seeing if a stock is up on the day it's using daily closing range and we talked about that in the previous webinar um over 50% suggest accumulation this actually looks for over 75% on a day that's very negative so if the SPY has a closing range of 3% a stock that has a
• 61:00 - 61:30 daily closing range of 75% is definitely something that you want to review and potentially add to that relative strength list uh to to basically take note of uh Ryan anything you want to add about looking for relative strength over consistent basis or any of these screens uh in particular so the the gist of it is stocks that outperform the markets are showing greater relative strength or when a stock outperforms let's say the NASDAQ is up 1% and the stock is up 3
• 61:30 - 62:00 and a.5% that could be a mechanism of it's beta right and how it trades in the market but it's also outperforming the market it's stronger than the market itself that's a form one form of relative strength the second is the biggest one and a lot of questions in the chat you know is RS only when the market's in corrections i'd say no so if if the NASDAQ is down 3% right and that that same stock is only down let's say
• 62:00 - 62:30 half a percent that's relative strength right it's down on the day but it's down much less than the markets or much less than what we would expect let's say a stock of with a beta of two right the second question that I saw in the chat is what is beta beta is a stock's performance relative to an index and you could define that index depending on which where you are in the world as in the United States we define beta versus
• 62:30 - 63:00 the S&P 500 that's the benchmark right and if you're outperforming the S&P 500 your beta is above one if you're not out you know you don't tend to trade more uh than the S&P's performance your your beta is less than uh one so relative strength is all about it's it's again the second visual edge for you in the markets stocks that consistently outperform the markets be it on up days or down days will cons you know those
• 63:00 - 63:30 are the ones that you want to be in you want to be in market leaders market leaders show relative strength that's it you know that that happens every single market cycle and that's a guarantee because there's no way you can hide on the charts to let's say you know be down 50% the next day that that doesn't happen they always show relative strength consistently um and we have a stat somewhere that in a correction if a stock is outperforming the markets 62 or
• 63:30 - 64:00 60 let's just 60% of the time the the chances of it being a market leader on that next uptrend are very very very high and you'll see that in every single market leader if you go through our model books that that we make every year that statistic will be will stand true and that statistics was was created based on our model books and the studies that I've done as well so it's very important if you want to be in stocks
• 64:00 - 64:30 that have the potential right some some show relative strength but then fail when the market turns there's no absolutes when it comes to that but many stocks or if any stock is up 100% it's shown relative strength right and that's that it will show on the charts for you so that's why it's important yeah and what I want to add here is these are just three examples of screens that you can run in deep view to help find relative strength but there are many different ways to find relative strength somebody I think Alberto said
• 64:30 - 65:00 Ross Habers's RS new highs screen is great that's a great one to use as well and actually how I look for relative strength changes depending on kind of what the market is doing if the market just broke below the 21 EMA and is is very negative I might run a screen that looks for stocks above their 21 EMAs because it's holding above a moving average that the market is doesn't um if the market has looked to you know put in a sustainable bottom and we're five days away uh from that bottom where we we rallied for five days I might run a
• 65:00 - 65:30 screen or uh sort my columns of my other screens by 5day% change to see what stocks bounce the fastest off that local bottom and that's actually a golden nugget I learned from Eve Bob uh you know if the market has bottomed a month ago run a screen and and see what stocks have performed the best over the past month and likely you know they're they're still going to outperform because they've been accumulated the fastest off the market bottom as the risk appetite you know improved um and you know just wait for that next setup
• 65:30 - 66:00 they might not be set up actionably that day or or the next week but wait for a moving average pullback wait for the next base breakout so I think my point is there's many ways to to to scan and and look for relative strength find the way that makes you know makes a lot of sense for you and you can definitely use these screens as kind of based filters and we've got other presets in DFW that help identify that relative strength um and actually here here's a good example uh this obviously last week uh ended on a very negative note everything was down
• 66:00 - 66:30 you know 2 3 4 5% here I just have the DU leader screen another preset that kind of is a great general screen i review it every single day and I've simply sorted this screen by percent change today and look for what stocks were up on a day that the market was down two 3% and these are showing relative strength i've also got the daily closing range here as a column and I'll sort by that as well to see what stocks had 100% closing range 75% closing ranges uh I'll also you know
• 66:30 - 67:00 sort by percent change from the open what stocks showed strength off the open if there was a gap down that's a way that I like to look for relative strength um also one last column here i've got price percent change for the 50-day uh you know we're below the 50-day right now clearly on the on the on the indexes you know what stocks are holding above their 50 days so depending on where we are in this particular situation like if there's a gap down I'll look more at percent from the open i'll use these different data points that we have in deep view to look for relative strength and build that relative strength list and I've also got
• 67:00 - 67:30 the industry column here so I can see not only what stocks are performing well but what are the commonalities among the stocks showing relative strength and this is how you identify leading themes and what showed up on Friday metals and mining biotechnology utilities oil and gas metals and mining biotech capital markets biotech this is how you spot the leading themes before everybody else is you're looking to see what stocks are outperforming and what themes are they a part of and this is a really clear way
• 67:30 - 68:00 to do it in DVW so definitely recommend kind of adding this to your toolkit and super easy to add these data points you can just clear this click this gear icon and uh you know search for whatever data point you'd like uh Ry anything you want to add with um you know using columns or or how you look for relative strength on a day-to-day basis yeah there's there's a great question um you know there's two forms of relative strength one is when you wait the calculation for recent performance right um and one is when you just look at pure performance on a time
• 68:00 - 68:30 frame so we have both capabilities um in deep view which we call the absolute strength rating and the relative strength rating so absolute strength is just purely looking at you know from January 1 to today what are some of the best stocks in the market rank them versus themselves and give me a rating of 1 to 99 so that's a pure performance and momentum based uh rating whereas relative strength does the waiting of you know one month and the three month span merges them together etc so I like to look at uh the absolute
• 68:30 - 69:00 strength a little bit more especially on a one month horizon and the three month because I don't want those numbers to be blended i just want to know what's outperforming the markets in those two time frames um another thing is you know in in the first webinar we covered that you know when Nvidia was pulling back it's closing ranges were really nice as it pulled back during a correction so adding the WCR column during corrections is a powerful way for you to compare hey
• 69:00 - 69:30 the market closed at the lows of the week what didn't close at the lows of the week right uh that's a form of relative strength and then and how bases uh build up potential uh demand and how bases form out into a cup or a flat base etc is that those weekly closing ranges are always you know better than the market closing ranges and that potential builds out over a span of weeks and what we call a setup is forming a setup a base
• 69:30 - 70:00 is forming for you to then eventually find an entry tactic for so I think in corrections uh using the weekly closing range column is important um another one that I use is the number of relative strength days as a percentage so I want to know how often the stock is outperforming the markets during a correction right so if it's outperforming the markets 60% of the time I'm very interested so there's a particular scan we have in deep view
• 70:00 - 70:30 just for that if you search our presets for 62 and a.5% I think that is an important metric it gives me a lot of conviction that I'm looking at the right names with the highest potential when we're coming out of a correction um as well so those are some of the some of the ones um a very subtle one in deep view it in former relative strength when you're running your screens while the market's pulling back the industry group that's highlighted be it biotech or uh whatever it is on the day let's say
• 70:30 - 71:00 you're running the DP leader screen or the up on volume that is giving you signs that this is the most popular industry group that is consistently outperforming the markets so in the back of your head those blue highlights kind of build up and give you hey I should be looking at biotech or I should be looking at oil and gas i should be looking at oil and gas right so if you did that over the past two weeks you would see oil and gas a lot more you'll see gold miners a lot more you'll see China names a lot more and those will highlight blue in the industry column so that's how I use um
• 71:00 - 71:30 DPU to kind of look for relative strength there are many different ways again what Richard said is right on right on uh define a way it could be as simple as looking at 52- week highs in a correction right every stock that is going to go up is going to make a 52- week high uh at at some point so that's a very generalized screen that you can look at you don't need to highly specialize or look at some of these stats we're speaking about but at the very minimum have a way for you to spot relative strength yeah and the last thing I want to want to say here is just
• 71:30 - 72:00 cuz a stock is up on a day where the market is down you also want to consider the overall context of the chart you know if it's an absolute destroyed stock that's just a mean reversion bounce off lows that's not necessarily relative strength but you know if that shows up again and again and starts forming a trend then it's more of a stock to take note of um and also I just want to highlight here you might see uh for daily closing range we actually have a nice visual here which is awesome that actually allows you to see the closing range without even bringing up the chart
• 72:00 - 72:30 so here's PGR it had about a 83% closing range you can see it's almost a full candle here and it was up 5% on the day so even without looking at the chart I can tell it was showing relative strength on that day what theme is it in insurance just like Ry said keep track of what what groups are highlighted in blue or just showing up again and again here uh this one um ONC it was up 10 10 and a half percent but look at its closing range 22% so it may or may not be showing relative strength of the day so I like to combine the price percent change with the closing range uh
• 72:30 - 73:00 especially using these visuals which are also for weekly closing range um and that helps you identify closing uh relative strength that much easier all right so let's get into the examples here i mean the examples um this is the relative strength line here when it's highlighted with an area in blue it means it's above the signal line the 21 EMA this is the chart of the spy a line chart during the same period and then this is the stock chart with price and volume action and what we want to point out here is what we call an RS phase or
• 73:00 - 73:30 when a stock is outperforming the markets and we want to watch it for that next setup that next opportunity uh this is Reddit it IPOed back here formed a consolidation moved higher broke below the moving averages and then this period this range is super important here and is really critical and the reason being is during this period the market was pulling back hard the relative strength line was increasing because Reddit wasn't pulling back as much as the market and what happened after the market pressure lessened and we bottomed
• 73:30 - 74:00 here this went on a monster move and I I got involved early in this area because of this relative strength here um and it's really easy you can just plot RS line here spy up here and then look for divergences where the RS line is increasing as the market is pulling back and that is what an RS phase is um and Ry jump in if you have any um thing to add here but here's root recently uh this was another correction the choppiness that we saw root was rising in terms of relative strength you can
• 74:00 - 74:30 see during actual price action really tight at the bottom of this base what happens when the market pressure lessens a little bit this went from 85 to basically 120 it doesn't look like much of a big move here because this is a high ADR stock but a really strong trend in here what happened as the market pulled in again i actually don't have this marked but it's another good example the relative strength line wasn't increasing as the market was pulling back and this has you know gained about 40% in the past you know month or so as insurance and and this
• 74:30 - 75:00 name in particular has done really well another example that I also didn't have marked here is here the market's pulling back during this you know 3-day period the market really pulled in hard root actually increased with a gap up and held firm and this let you know this got it on your radar again edges get stocks on your radar that then you could swing trade from this tight area and profit from this trade but this relative strength edge right here shows up clearly just during this two-day period so it can happen really fast and one thing I want to point out here is you
• 75:00 - 75:30 know this is a little bit complicated watching for divergences and all this and it might be a little bit difficult for newer traders we made a RS phases indicator which highlights in blue when this characteristic is happening when the market is pulling in and the relative strength is increasing so this is when we're in RSphase this is when we're in RSphase during the short two-day period this is when we're RSphase so this indicator can be a nice way to visually indicate when we're seeing this divergence especially if you're a newer another example BABA
• 75:30 - 76:00 we've all heard about BABA recently but it was showing relative strength way back in here way back in this area as the market was pulling in the relative strength was in a clear uptrend and this is when it really started its really strong phase and this is getting getting involved a little bit later uh you know it actually did show relative strength during this area as the RS line continued higher as the market pulled in but we'll see how this base develops uh and just to show this isn't hindsight this is what I was watching when I put it on the trade lab report right in this area so this is back in this flag this
• 76:00 - 76:30 is what I saw and what I was looking for and why I considered adding this to uh you know my focus list is because it's showing relative strength when the overall market is pulling in and it had just started a nice uptrend and was forming a really nice tight area you know tight area on low volume that's kind of my bread and butter and we gap up and have a nice strong trend before this base so this isn't something we're talking about in hindsight this is something we actively look for you know every single day in the market especially when the market is choppy and corrective this is a great edge to use
• 76:30 - 77:00 to try to identify swing trades and position trades when the market pressure lessens uh Ry anything you want to add on uh relative strength this is another example of AM recently obviously miners have been strong the market was choppy pulling back relative strength line and in increasing we pop above the moving averages start this trend then back in this base look at this this is so clear market pulling in relative strength line increasing and then after you know the market lessens a little bit this breaks out and begins a nice trend from uh the
• 77:00 - 77:30 the low 90s all the way to uh you know over 110 so this is a really powerful edge that is definitely worth considering ryan anything to add on how you look for look for this on charts and and use the relative strength line maybe yeah I would say you know there's no way a stock can hide and outperform the markets without showing relative strength and that's you know that that's it um there's nothing technically it could do that is sneaky
• 77:30 - 78:00 or delusional or it's trying to mask itself somehow it can't it doesn't happen this edge has you know ever since the beginning of time especially with charts and everything getting more digital it's there you you you visualize it you see it you track it you look at the setup and then when it when the risk is there you enter that right above the pivot or right you know as it goes up the right side so every correction there are a list of stocks and a list of
• 78:00 - 78:30 themes that come about that have shown relative strength that then trend oil and gas just didn't start an uptrend overnight it was a 3-w weekek process when everything in the markets was pulling back oil and gas miners China all of these that are trending this year were showing relative strength right so when you were screening when you're the the first acronym of the snipe framework when you're doing that and you're looking for relative strength you'll start to identify it a lot faster you'll
• 78:30 - 79:00 identify the next one that we'll cover which is themes a lot faster when you see a theme in China all these you know China names will go up at once you want to be in the best one the best one will have the highest relative strength and maybe the high best volume signature as well right when you combine those two that one will outperform every other China name that is in that particular group and you want to be part of that because then you have two edges at play you'll have higher conviction you'll have a higher position size when you combine that you will outperform your
• 79:00 - 79:30 portfolio will outperform the markets um just naturally so yeah and I see some questions you know why with BABA are we using SPY versus KWEB it's because we're trying to identify what's stronger than most stocks in the market and and the spy is a good reference point we're trying to identify relative strength and using a relative strength line of Baba versus Kweb can show whether it's outperforming KWEB but it's not helping us identify where the strength in the
• 79:30 - 80:00 market is we're trying to set a baseline which is SPY and then look what's outperforming SPY in that moment that's why we're using uh it as kind of the the the comparison for all these stocks plotting the relative strength line of uh Baba versus Kab will tell you that Baba is the top name within K web and nothing else right um and plotting it versus the market will tell you that it when the market pressure was on and the stock was supposed to go down it didn't
• 80:00 - 80:30 go down right and when the market pressure suddenly lifts or we have an oversold rally or we consolidate sideways for a few days it will use those opportunities ities to then rally up the right side right so those are two different pieces of information both key but uh the one worst is the market tells you that it's about to outperform the markets right it's one of the top stocks in the markets for a reason so yep all right let's dive into the N factor edge
• 80:30 - 81:00 this is a really awesome one and fun one and goes a lot with what Ry was talking about with the HVE the reasons behind a move so the N factor is a gamechanging catalyst catalyst it's a fundamental development like earnings revenue surprises or raise guidance that sparks a significant move in a stock uh and basically institutional accumulation drives a trend and surprises force large funds to reallocate capital because their spreadsheets are then valuing a stock differently when it earned uh 100%
• 81:00 - 81:30 earnings growth versus what was expected at 25% growth or even 40% growth it completely changes how these these funds have to operate and they might have to decide all right we need to buy a million more shares over the next month now because of our mandates based on you know what we are as a fund uh so that's what kind of creates the accumulation and trends after an N factor edge um N factors can emerge at multiple levels company specific events it can be industry-wide regulatory shifts technological breakthroughs these can
• 81:30 - 82:00 all qualify strong growth is key the most effective N factors are tied to accelerating earnings sales typically 25% or or more quarterly growth and ideally triple digits um and you know this this is this is key because again the expectation of future earnings is what stocks are valued on and strong you know catalyst that completely change how a company is valued maybe they release a new product that is extremely popular uh maybe a regulatory change allows them to
• 82:00 - 82:30 become more efficient as a company all these changes completely um alter how that stock needs to be valued by institutions which drive you know buying and selling pressure in the markets um and you know there's examples that illustrate both sides netflix as we'll show reinvented itself multiple times with new products completely changing their business and almost business models is a positive example while Tesla's autopilot you know hasn't worked out yet despite it you know being a gamechanging changing revolution uh ro
• 82:30 - 83:00 robots maybe in the future in five years when uh you're watching this uh robots are everywhere but right now they're not a reality yet so they could be an end factor in the future but right now they're not there yet ai was supposedly an an edge you know a factor 5 years ago but it hasn't materialized until 2022 2023 2024 so it's when these end factors actually contribute to revenue and earnings growth that they be they start to matter and we can see when they start to matter based on price and volume
• 83:00 - 83:30 reactions um so here's the example with Netflix i love this example this is a monthly chart um and this shows the different phases in the business and the different model book moves that happened in Netflix as a result uh this is when they launched streaming and transitioned away from uh DVDs and and uh I remember ordering the DVDs uh and it was a lot of fun but you know once we started streaming it just opened up you know the ability to have many different watch many different shows watch many many different movies and this contributed to
• 83:30 - 84:00 this very strong growth they also expanded internationally during this period but then that growth slowed and we experienced obviously more of a corrective period it entered stage four decline and then we started a new stage two uptrend and the cat callous behind it was they shifted once more from just streaming to original content this was the release of House of Cards obviously there were many other shows that came after it but this is when they doubled down on original content and this drove this tremendous market move that really lasted until 2022 when again they
• 84:00 - 84:30 entered a stage war decline and didn't really come out of it until they changed their business model and launched an adup supported tier so this is kind of a great uh example of on a high level how changes to a business and changes to business models can lead to new invigorated trends that then we can profit from as investors as position traders as swing traders during this move that this catalyst creates um so I hope I hope this is a good example for you and uh yeah hopefully you guys like
• 84:30 - 85:00 this i really like this uh Netflix example uh next up we've got AS we've already talked about this so I won't spend too longer uh too long here but this is kind of labeled the the catalyst that we talked about breakout on earnings as well as a AT&T partnership here uh they also announced an additional partnership with Verizon here so again they're they're expanding their business by partnering with these major players already in the cell phone space uh they launched their first five satellites that led to this breakout here um during this earnings report here which had a really nice tremendous move
• 85:00 - 85:30 they mentioned advancement in tech and larger satellites their their next generation is ready for production so all these catalysts help drive uh the growth of the business and we're just watching for price and volume action in response to uh those different catalysts uh here we've got Nvidia another great example here obviously AI is what really drove the tremendous tremendous growth that we saw here in its move again about a,000% move and these are the catalysts that happened right near the bottom before and during the development from a
• 85:30 - 86:00 stage one to stage two here is when their next generation H100s entered full production down here then the first H100 ship right at the bottom here during this period then we've got chat GBT where you know AI started really becoming apparent to everybody during this period then it transitioned to stage two they announced their generation after the H100's Blackwell GPT4 was released right in this area and then look at the trend that has led to this with AI and Nvidia driving everything because they are the supplier
• 86:00 - 86:30 of the best chips and so they're going to profit from this theme that was the end factor back in this area so I think this is another really good example to show how timing of catalysts drive the moves and the longer term trends that we see because every growth fund has to completely re-evaluate uh what they're seeing with all these new catalyst these all all these different factors that are increasing Nvidia's business triple digits quarter after quarter they have to revalue it completely accumulate more shares and that's what creates the dem
• 86:30 - 87:00 demand that drives this overall move all right so here we've got a bonus theme we've talked about this a little bit uh we just wanted to really highlight how important the group theme and also the market um are on you know the trend of a stock it's going to be really hard for a stock to make a model book move when the market isn't a correction and bare market so here's what's really important stocks move in groups market cycles are often led by a few strong industry groups and we call them potential leadership groups PLGs group strength boosts individual stocks
• 87:00 - 87:30 it's an amplifying factor even average stocks and strong groups can outperform top stocks in group in in weak groups external catalyst uh drive PLGs remember this is Nvidia but there were so many other AI related names that made modelbook moves we had um other manufacturers um you know AVGO um you know all all the chip manufacturers we also had uh related stocks the energy names all this was driven by that same AI theme uh ALAB with uh the data centers so all of this is kind of
• 87:30 - 88:00 related and part of the same kind of theme um so again external catalyst drive PLGs regulatory changes technological breakthroughs like AI or economic shifts can strengthen entire sectors uh market trend alignment matters even strong stocks and strong groups can underperform in a weak overall market and what's really important is to trade with all three trends maximize success and probabilities by aligning with the trends of the market the group and the individual stock that's really really important and just to show that again we're talking current markets right right now as an example but just think
• 88:00 - 88:30 back in history in terms of what were the strongest stocks uh in you know that went on,000% moves 3,000% moves 10,000% moves they were the companies that were growing the fastest based on shifting dynamics in society and the market you know going back way in history it was the steel stocks as we were you know developing the country and and building rail railroads then it became rocket ship stocks then it became internet stocks whatever is the shift that's taking place that's driving tremendous
• 88:30 - 89:00 growth is going to be the leading theme that you should be focused on as traders and if you identify it early and and also notice price action because price action can lead you to the theme that's going to you know completely change your your your perspective on things and can really improve your performance by finding these trends and leading themes earlier in their moves so you can then find the setup find the entry tactic and profit from these super strong trends uh so Ryan anything you want to add on either the NFA edge or the uh group
• 89:00 - 89:30 theme market edge plgs the the group theme market edge is um one it it's another important thing to track during corrections when a group of stocks for example semis AI uh miners oil and gas um anything as a whole are all um acting really really well or not going down as much as the market is going down um that leadership group you know
• 89:30 - 90:00 knowing Those leadership groups will allow you to position size in those groups a lot better uh and give you more conviction to you know double down on an Nvidia because you see it as one the clear leader second the whole group which is the semi-roup is all behind that particular move right and there's nothing better than that combine that with you know when a group is holding up it's like again it's relative strength at the end of the day which is one of the edges that we spoke about so um you
• 90:00 - 90:30 have to combine some of what we are speaking about in segments uh at the moment as kind of one analysis that you're doing of the situation right if a group theme is acting really well it qualifies as a potential leaders group what's the top stock in that pot you know that leadership group especially when the market's correcting you identify that stock right is that stock is likely showing relative strength and some of these other factors then you really focus in on hey this is you know
• 90:30 - 91:00 the one or three stocks within this group that I really want to focus on to make sure I catch the move when the market pressure lifts or we go into an uptrend if and when we do uh for the markets so combining you know group theme and market edge with uh relative strength and then identifying the top potential stocks will essentially get you there uh with the highest positions size for your system yeah perfect so a little exercise for you guys uh here
• 91:00 - 91:30 live and then also on YouTube i want you to list in the comments what are the top three edges you use to identify slashjudge is a stock worth considering and if it's one that we've talked about definitely list it as well i think relative strength will be pretty common but let's see let's see what people say so what are the top three edges you use to identify slashjudge if a stock is worth considering has high potential let's see what you guys say uh RS HV and stages nice uh relative strength a lot of relative strength volume theme change
• 91:30 - 92:00 relative strength yeah so a lot of relative strength big volume with strong uh PA uh breaking out of base uh high quality VCP that's more of a setup versus an edge um respect for EMAs nice launchpads technical RS volume okay so it looks like you guys are on the right track here uh we're going to take just a brief pause here to make sure we've got some questions answered we're not done we've got all the setups to cover as well so definitely stick around uh but let's see if we've got any some key
• 92:00 - 92:30 questions and also if you haven't you know bought the the or order ordered the Trader Handbook just yet if you're finding this helpful you're going to find the book immensely helpful if you like this you're gonna love the book and we dive even deeper into the book and have you know all all the different chapters that we're talking about covering different aspects of building a trading system and you can scan right here to pre-order yours again we've we've already got hundreds of people who have pre-ordered uh so definitely pick up your copy right here let's see um Preston asked "What's an effective method to find the NFA stocks?" I think
• 92:30 - 93:00 just stay stay aware about what the shifts are going on around you um you know AI has been everywhere since Chat GBT uh came out so stay on the cutting edge of new technology uh see if it actually helps you that's a great way is to actually try out the new technology i know people were actually trying out Teslas and um self-driving you know way back in 2020 to see how how it was a gamecher and so experiencing a product can be a great way to see you know is this valuable is this going to be growing tremendously fast uh over the
• 93:00 - 93:30 next few years um and then also again the technicals can lead you to the theme as we showed with sorting uh by looking for relative strength you know right now the leading groups are miners biotech insurance names that aren't traditionally growthminded but that's what's showing relative strength so the technicals and what's showing relative strength as a whole can point you towards uh the leading groups as well um all right and I see a question i missed the first two classes where can I get those classes uh they're on YouTube so we'll we'll be creating a playlist for this uh but just go to traderline do uh
• 93:30 - 94:00 you know YouTube uh.com/traline and you'll be able to find uh the first two webinars and as well as all the webinars going forward all right so let's dive into the main setups we're going to cover today uh we've got a bonus one at the end so stick around until the end uh but these are the main kind of segments that we that we want to talk about first we've got the gapper setup which really goes handinhand with the HV edges very similar uh and that's kind of the main setup that we use with the HV edges uh then we've got the traditional base
• 94:00 - 94:30 breakout and this could be an entry up the right hand side of the base or actually at the traditional pivot like with this example and then we've got the launch pad which is more of an early entry as a theme is developing and getting underway uh this might be the start of the strong move and then a continuation might be a base breakout or a gapper so these kind of go hand inand they happen at different times during a stage two uptrend and uh these are great ones and great frameworks to to learn and again to be a successful trader you might only need to master one of these
• 94:30 - 95:00 or two of these you don't have to go out there and and memorize every setup you want to specialize and focus and become an expert at just a handful one or two setups and that's kind of our recommendation uh for you guys here today so first things first the launchpad setup uh this is one of the core setups of Trailer Lion uh it signals the start of a potential major trend it also helps identify leading groups because as groups are setting up together ross says this you know so much uh you'll see the the groups start to curl up the moving averages start to curl up under all the stocks in the same
• 95:00 - 95:30 group and it's formed by moving average convergence the setup appears when multiple key moving averages and these are the ones that we like to use the 10 SMA 21 EMA 50 SMA 65 EMA and 200 SMA converge beneath the stock price during a consolidation so the stock's been consolidating quite a bit it then starts to move up the right hand side all the moving averages have converged together and then expand upward as the stock breaks higher and begins that strong trend uh group confirmation add strength the SEAP is most powerful when several
• 95:30 - 96:00 stocks within the same group form launch pads at the same time suggesting a sectorwide groupwide move this is what I was just talking about here uh this typically emerges after corrective bare markets this pattern often forms as stocks bottom out following major corrections or downturns and a good example is Nvidia in 2023 uh Nvidia formed a launchpad in January and rallied 400% uh demonstrating the explosive potential of this setup so we've got a lot of examples here this is how you can scan for it uh we've got a data point launchpad in Deep View this example screen that I created Launchpad
• 96:00 - 96:30 uh data point yes uh dollar volume over a base amount uh over the 200 SMA percent off 52 week low uh two two week lows we've got a criteria there so this is kind of how you can scan for it or you can just kind of go through um a major screen a general screen manually and see and look at the moving averages and see how they're converging under price and look look for it manually as well uh so here is the Nvidia example we've been in a long-term corrective phase then you can see how all the
• 96:30 - 97:00 moving averages get bunched up here this is what Ross Haber likes to circle here this is the launchpad this is the supporting mechanism that will bounce the stock and create that strong stage two uptrend and you can see we break higher and obviously we all know what happens next we go on this tremendous move uh with uh Nvidia and uh you know you see tightness below during the base below this uh it respected all the moving averages this is why it's a great place to get involved because this will be all these moving averages will be supportive of the price action you can
• 97:00 - 97:30 manage risk against them and you know use entry tactics uh during this using this setup to then profit from the strong trend here's another example recently of AM obviously the miners all kind of show them you can see all the moving averages bunch up and then we expand higher as uh miners break higher then you could trade the first pullback uh range breakout here uh the base after this uh but after the launchpad that's the overall setup that can kind of set this in motion we've got another launch pad here that leads to a trend but not nearly as strong you can see we fall
• 97:30 - 98:00 back into the consolidation but this is another really good example of all the moving averages just bunched up this is what we're looking for in terms of the launchpad uh then here is IBITS uh back in October of uh 2024 uh look at how all the moving averages got really tight here compressed and then what happens we expand higher and there are many different entry tactics that you could have used to enter during this time and profit from I think this 70 80% move in IBIT after the launchpad another example we've got BABA this has been of course
• 98:00 - 98:30 an emerging theme launch pad right here against the 200 day moving average expansion up and then you could have traded this next tight area and profited from this move um as well so again you're looking for all the moving averages to converge under price uh and that's what we're looking for here all right the gapper setup Ry I'll hand this over to you because it really ties into the HVES yes so the the gapper setup so first is we identified you know a visual characteristic now how do we form you know how to form a particular um setup
• 98:30 - 99:00 on on the charts right uh what you want with the gap ups that you see especially the high volume ones is they have to be really early uh in the stocks uptrend those ones have the most potential and the second thing that you're looking for is that the closing range on that particular day again this edge is on the daily time frame there's a lot of questions on which time frame it's the daily time frame that we're looking at
• 99:00 - 99:30 the stock has to close you know uh if you take one that closes with 0% closing range and um on that particular HV day and you take one that has more than 50% on that particular uh HV day the one with 50% or more will have higher success and higher probabilities right there are many many examples of the gapper setup which is essentially you know the high volume edge showing on the charts and then then forming you know uh a consolidation coming into volume
• 99:30 - 100:00 support a pivot of sort but the most important thing is the closing range on that day has to be really good and the earlier it is in that particular uptrend the higher the potential um that the stock continues to have become a serial gapper over the next couple of quarters here uh a good example of this is ELF uh if you pull up the charts for 2022 and 23 you'll see that the whole run started from the HV1 and then we got every
• 100:00 - 100:30 earnings cycle this thing gapped up and up and up and up um and the way to identify these particular stocks really early in their trend is to is to you know look for the HV edge and this setup to form so that you can you know you can catch one of these serial gappers where it moved from about you know the 20s to the 120s in a span of uh 8 to 11 8 to 12 months so uh that's the the gapper setup
• 100:30 - 101:00 there many examples uh I we could likely create a whole model book i think in the book we have hundreds um tens I would say of examples at the end of the book that we've included of this and it all starts from actually you know looking at it on the charts making sure that the daily closing range is as high as possible on that particular day and we're early in the trend the Arlo example the Uber example um the WG WGS
• 101:00 - 101:30 if you guys pull up that chart and scroll to the left that example that stock moved 280% last year um any of these the the earlier in the trend they are the more potential that they have to increase and then some yeah I think ELF was kind of an outlier with the the number of gaps it had that kept going right we like to focus on the first one or two or maybe three in specific cases uh to then look for an entry tactic after it um in DFW there's some really easy ways to scan this again today we
• 101:30 - 102:00 want to give practical systems to find these setups we're not just talking about these systems uh setups theoretically uh this is how you can screen for them pre-market um this was a screenshot before the quantum stocks recently had a really nice one and and and a few day momentum move and in pre-market there were so many Quantum names gapping up on over 10% of their average daily volume that's the kind of metric I look for so we can measure
• 102:00 - 102:30 basically the pre-market volume versus the average um the average volume for a particular day and when that's over 10% that to me is significant and suggests that it may have the potential for a nice one day uh gap or setup opportunity and then on post market so you can look at the day before as well i like to see a stock have you know over 30% of postmarket volume uh versus the average or you know even better 50% or here with Octa which led to a nice I think 20% move very shortly um this is a
• 102:30 - 103:00 screenshot from uh the trade lab again we're talking about real time here we're not talking theoretical here octa the day before it had it started its nice 20% move it had over 100% postmarket volume compared to normal these are the type of numbers we're looking for to identify the outliers which lead to strong gapper setups and strong strong opportunities going forward uh so that's kind of how I like to look for these gapper setups as well as HV edges is uh pre pre-market looking for over 10% uh average volume with a gap and then post
• 103:00 - 103:30 market the day before uh looking for over 30% by ideally 50% or even higher in terms of volume post market compared to the average uh on a daily basis uh so here is that elf example this is highlighting in DFW you can hover over any of the earnings reports and see the surprise this is what led to these gaps is again company uh institutions have to completely re-evaluate um ELF because it's beating earnings expectations every single quarter and revenue revenue
• 103:30 - 104:00 guides are higher so it has to completely reevaluate and then they have to allocate more size and that leads to the trend that we see here in um in ELF and this one this last gap here you can see this was sold into so this is what can happen to gaps later on in a trend is they get sold into this led to a correction and eventually recovered but we like to focus on earlier gaps which uh present just higher uh reward to risk opportunities uh here's a good example and this is actually a uh sneak preview of the model book chapter of um of the
• 104:00 - 104:30 traders handbook where I mentioned we include examples of these these moves this is Tesla back in 2019 before its climax run and this is the catalyst down here that I talk about um the this Tesla gap started um its model book moved from 2019 through 2021 the gap was on the highest volume in over a year so it's showing that edge and then the next day surpassed that once again so highest volume in over a year HV1 the next day another HV1 uh Tesla had reported a surprise profit and they had announced
• 104:30 - 105:00 that execution of its expansion of new factories and new vehicle models was ahead of schedule again we're looking for growth in future earnings and that's that fits that bill exactly the key cast key question with Tesla up to this point was whether it could become consistently profitable and this earnings report was the turning point to answer this question that's what led to this big move and that's the that's the edge that we're looking for um and here's kind of a quick blurb about it early in a stock's uptrend or even just to start it
• 105:00 - 105:30 gap ups can be an excellent opportunities to build a position with strong momentum and accumulation behind you the catalyst behind the gap is also very important the best news catalyst are complete gamechanging for the company a huge partnership announcement a breakthrough in technology that leads a big EPS and sales growth uh an incoming new seller CEO you know uh AMD is a great example of a CEO completely turning around a company surprise profitability regulatory changes all of these can lead to strong gaps that lead to strong trends we want the catalyst to completely change how institutions value
• 105:30 - 106:00 the stock leading them to have to add to or start positions creating the trends that we can ride and I label a few of the different entry tactics that we can use again we're just talking about the setup and edge here and that's just identifying this part here the second part of the equation is how we actually enter and execute and that's the focus of the next webinar i see people asking about stops and stuff we talk about all that stuff in the next webinar where we specifically set our stop losses how we manage risk all of that and how we enter after identifying these edges and setups
• 106:00 - 106:30 uh and uh Tesla you know set up a lot of good ranges which would be kind of how I would enter and uh respect for HVC through right here those are just some examples of entry tactics you could use for this example here's uh Reddit again uh this is kind of a quick note about this uh gap here again it had a huge surprise profit uh it was profitable for the first time uh EPS surprise 322% these are the type of numbers we're looking for uh and they also uh indicated more
• 106:30 - 107:00 daily active users than was expected so again these are changing how institutions are valuing the company and that's what leads to strong price changes and trends that we can profit from as traders uh here's another example alab they announced new technology here that led to this gap along with a profit target raise i usually don't like profit target raises induced gaps but this one also had a new technology involved with it uh and it ended up working well and then this earnings gap again was led to a 31% um
• 107:00 - 107:30 surprise in terms of EPS indicating a lot of future growth expectations and leading institutions to have to re-evaluate how they're analyzing the company so this is some good gapper setups um you know I trade this one bought day one added here as it reconfirmed higher trade this from this tight area so all these entry tactics that we'll talk about uh in the next webinar those are the things we apply after identifying the edges and setups that we're talking about here uh in this webinar next up we've got uh this is PLTR the same earnings gap up we talked about uh previously uh Palunteer on uh
• 107:30 - 108:00 this this earnings report achieved its second consecutive quarter of gap probability again that was the key question and often with recent IPOs that are you know just focused on growth that's the key turning point uh that that profitability is the turning point that leads to their second major move in the markets is when they prove to institutions that they can be profitable and their business model works uh they also announced here an AI platform introduction uh that helps um companies integrate large language models this was
• 108:00 - 108:30 very early on in the AI boom and again this was the catalyst this earnings report that led to the a thousand% move over the the next two two and a half years so this type of um news around an earnings report or just around a gap is what you want to pay attention to and PLTR is an excellent excellent example all right then we've got Tesla again we've got an earnings gap starting this recent trend but then we also had the election as a catalyst for this move so again catalyst can come in different shapes and forms and this led to a nice
• 108:30 - 109:00 70% move uh before it obviously has started correcting since but this led to a lot of tradable opportunities during this area so uh that's all I want to kind of say on the gapper setup ry anything you want to add um to to kind of close things out with I would say that the more you look at these the more that you will identify uh and different entry areas or if it's already part of a theme right so or uh a PLG in the markets especially with the ALAB gap that we saw
• 109:00 - 109:30 right it was a newer name in the markets related to the semis but the semis were actually doing really really well at that point right with things just were using AI as an excuse or the semis was using AI as an excuse for you know there's a lot of demand there's things of that nature a lot of stocks piggy back that run and doubled in that point in time so you combine the the gap up with the relative strength obviously each of these showed relative strength but then you had a a leadership group in
• 109:30 - 110:00 the markets to back all of that momentum combined with the market itself was in a strong uptrend right when you those three or four factors all align these stocks moved up you know the the eight labs the Nvidia moved up you know 80 to 100% in in a matter of 6 to 8 weeks um so yeah that's all yep and then we've got a surprise giveaway for everybody who's stuck with us so far uh for a
• 110:00 - 110:30 chance to win a Trailerine master class uh scan this and share that you're enjoying this series on Twitter we definitely appreciate uh the support as well and uh you basically are entering to win a Trailine Master Class i'll announce the winner tomorrow um and then everybody who does tweet this out I'll DM them a $50 gift card so even if you don't win the master class you'll get a $50 Trailine gift card for participating so I'll pause here for a moment to see if there's any questions and uh definitely take advantage of this and uh we've got great master classes at
• 110:30 - 111:00 Trailine of course um that can help expand the edges and setups that you're using in the market let's see here in your regular market updates you use two different postmarket screens what the What's the difference between them uh I don't use two different postmarket screens uh Shane uh so maybe shoot me a DM and and see what exactly you're you're looking at there um all right let's keep on moving because I know we're getting close to two hours
• 111:00 - 111:30 here all right the base breakout setup so this is kind of my bread and butter this is probably the one I trade the most and it is basically a continuation setup the base breakout is a continuation setup that follows a prior uptrend and forms after a multi-week consolidation typically at least five weeks distinguishing it from a trend starting setup like the launchpad or new stage two uptrend uh we're looking for tight price and volume action within the base um it can often happen near the lows uh suggesting accumulation but also
• 111:30 - 112:00 also as a stock progresses up the right hand side that's when we want to see it because it's really indicative of institutional accumulation uh we're looking for early entries up the right hand side we've got many entry tactics we'll talk about next week oops reversals as well as consolidation pivots that allow us to enter up the right hand side of the base manage risk um you know very tightly and logically and get us in before the true breakout because the true breakout of a base is often you know as a stock is almost it appears extended and there's often a re you know a pullback after the breakout
• 112:00 - 112:30 that will shake you out if you just buy at the pivot so you want to buy tightly and logically early up the right hand side um after a strong breakout we're looking for a clean move up on increasing volume suggesting institutional involvement um and there's often and this is something that Ross has noticed more and more in these markets there's often after the breakout a pullback to the pivot or a pullback to the 21 EMA there's actually an additional actionable setup uh where you can buy as it reconfirms higher after that pullback so if you miss a breakout
• 112:30 - 113:00 don't don't be too worried because there's often a pullback opportunity shortly thereafter where the stock will tighten again and uh then reconfirm higher so that's a little bit about the base breakout setup uh here's an example about uh finding base breakouts right now there's not much to talk about in terms of base breakouts and just in general during a corrected period in the markets uh base breakouts are almost to be avoided especially standard base breakouts because institutions will use that liquidity to sell into but during a strong uptrend what we're looking for
• 113:00 - 113:30 and what I do is I look at the day view leader screen sorted by relative measured volatility uh from high to low so zero is the low volatility very tight action and then 100 would be expansion and I look through the tight stocks first and look to see how they're setting up within bases if there's a stock forming a clear consolidation pivot clear range uh with tight R&V maybe had inside day the day before that's how I look to find and enter base breakouts before the true base pivot which would be up here um so this is
• 113:30 - 114:00 just kind of a way to look for it uh using RMV which is a a real time saver to find actionable base breakout setups um here are some examples this is a classic one app again this isn't hindsight i uh mentioned this in the trade lab the day before looking at these two tight days nice breakout textbook volume action after this this is a beautiful base to study and uh a nice uh you know reversal extension at the bottom off the moving average reclaimed the moving averages tried to break out and then this is a good example of the pullback to the 21 EMA
• 114:00 - 114:30 and then that that is really what takes um app to the moon and uh led to a really nice trend uh you know I think it doubled shortly after uh this move here's another example qin in the China space different type of base here a nice tight action then uh undercut of all these lows and then rally then it actually broke out with a gapper so you can kind of combine this with a gapper setup and this led to a really nice trend then you have an additional opportunity against the 21 EMA here as it formed a tight range and then it was
• 114:30 - 115:00 off to the races and of course the China stocks have trended really really nicely i love how on this pullback and tight range here look at the volume here this is what we talked about in the previous webinar constru constructive price and volume action breakout on high volume pullback on lower volume expansion up again on higher volume so that's really textbook uh then we've got uh Nvidia this is a great textbook base to study um contracting from left to right uh getting tighter and tighter respecting the moving average the day you know before the actual true breakout that's a
• 115:00 - 115:30 golden nugget that you want to look out for in these bigger bases if a stock which previously didn't respect the moving averages begins to respect them like here it's supported at the 50 SMA here it tries to pull back again support at the 50 SMA that is often an indication that it's getting closer and closer to being ready to have a breakout just like this so look for respect for the moving averages within a base after it previously undercut and rallied and didn't really care for them this is a sign that institutions are really accumulating the stock on any pullback
• 115:30 - 116:00 within the base and this led to a really nice breakout on an an increase in volume here's another sneak preview of uh one of the model book uh chapter stocks from the traders handbook this is GEV a really nice uh base setup here again uh in a leading theme at this time we had the extension down strong close at that point we're watching for the 21 EMA reclaim and then tight ranges really near the pivot and we point out a bunch of inside days and entry tactics here oops reversals um but here is the
• 116:00 - 116:30 breakout here and then you've got a follow- on breakout right here that leads to a really nice trend in a matter of days and weeks uh and then I point out here the low volume during these tight areas constructive price and volume action so definitely study this chart and uh you'll be able to study it in the trader handbook uh once that's released um so one more here we've got another example from the traders handbook model book chapter AMD this is a different looking base than um than GE we have a more gradual pullback breaks below the moving averages pops above it
• 116:30 - 117:00 pops above this downward trend line as well but then sets up a nice tight range higher low here and then this is the early entry point here you can add more through this short-term range add more on the oops reversal and uh you know profit from this really nice trend before it broke below the 21 EMA so on a longer base this is a key thing I want to say here you can use a downward trend line to judge when the stock is ready to move up the right hand side like we saw here with AMD and I love this tight range on low volume that's exactly what we talked about in terms of winning
• 117:00 - 117:30 characteristics uh last webinar so that is the base breakout setup ry anything you want to add on uh base breakouts hey in in current markets and how things have changed base breakouts act as continuation entry points not initial entry points and Ross who um made you know a model book at William O'Neal was a portfolio manager at William O'Neal uh etc developed uh what he calls consolidation pivots instead of base
• 117:30 - 118:00 breakout pivots right consolidation pivots are earlier up the in the in the right side of a of a base uh whereas base pivot entries that used to work 10 15 20 years ago where you simply wait for the base to finish and you buy that day are less likely to succeed g you know in in current markets so that's how traders you know come up with new entry areas new methods as we go up the right side it's important to see base breakouts today in today's market at the
• 118:00 - 118:30 pace of play you know having completely changed as it you know it wasn't like this 20 years ago but it is like it this now so we have to adapt to it right so base breakouts do they work yes but they should always be treated as secondary or continuation type of entry areas where you're adding to an existing position u can you start a brand new position at a base pivot yes you can uh in certain markets it is forgiving uh especially if
• 118:30 - 119:00 it's the top leader in the markets and it's completing out you know a multi-year base uh it can be forgiving in those but in recent times it hasn't been so you know adapt like we said your edges can fade with time they can become obsolete but then you have to adapt and be fluid to the situation and how the market's trading today uh as well so my Yeah just my two cents is uh treat them as continuation setups add to your
• 119:00 - 119:30 existing positions yeah that's exactly why we point out the main entry area here is this early consolidation pivot tight range here and then it's not a surprise that look at these two bars right near the base pivot it's not a surprise that they fade and lead to a pullback it's because traders who purchased right right here or institutions who purchase back in here are using that liquidity to exit at this base pivot and then the next really good entry is actually after that shakeout
• 119:30 - 120:00 finishes and we get a strong oops reversal so we don't want to really trade near the base pivot we want to trade up the right hand side before it happens and then shortly thereafter after the pullback and it reconfirms that strength so Ry I think that's that's well said all right so we've got a bonus setup pullback to support support levels can be you know key levels it could be a base pivot after a breakout slightly before it could be a moving average such as the 21 EMA or 50 SMA or another relevant level and although we're saying level what we
• 120:00 - 120:30 really mean is an area because stocks aren't going to respect a level to the scent all the time it's really as it approaches you know plus minus 1% is what we're looking for in terms of looking for respect um again this is more of a continuation setup after you've kind of built up an initial position um the pullback set to support is a great way to add and you know if you establish your core position at 15% you could add 5% when it next pulls back to the 21 EMA um and what we're looking for is a constructive pullback not a sharp break lower in one or two days
• 120:30 - 121:00 going from all-time highs down to the 50 SMA we're looking for a drift down on lower volume uh because the healthiest pullbacks occur gradually with little signs of intense selling and what we're looking for is a riskreward entry advantage here because what's great about pullbacks of support is it's really clear where the line in the sand is to trade against and you can put your stop loss after it shows support for it and rebounds up right below that key level allowing you to manage risk tightly and logically um which is a
• 121:00 - 121:30 great which is what you're looking for in terms of setup and entry tactic so here's a quick thing on scanning for pullbacks in DFW uh this is it might be hard to see but this is basically a screen that looks for stocks right around their 21 EMA this example I ran it this morning looking for strong stocks pulling back to the 21 EMA there's a preset called the power 21 a powerful move higher and then a pullback to the 21 and then we're watching for respect against that level maybe a range to form an oops reversal some type of entry tactic if you're interested in
• 121:30 - 122:00 looking into the stock for other edges and other reasons um regardless of the the 21 EMA pullback because it's a good good example of how to scan for uh strong stocks pulling back to their 21s um so now we've got another exercise for you guys list your setups down below in the chat or in the YouTube comments what are the top two setups that are kind of your bread and butter that you use for trading definitely be interested in hearing what you guys have to say all right so let's see what people have my probably main ones are base
• 122:00 - 122:30 breakouts up the right hand side and then pullbacks all right we got uh pullback to the 21 EMA pullback to the 50 SMA HVC and pullback nice vcp launchpad VCP base breakout nice so we're kind of on the same h page here low cheat that's the same thing as the upper right hand side range breakout that's great nice still figuring it out that's that's a good honest answer great ema crossback nice pull back to 21 EMA perfect so you guys we're on the same page here that's excellent all right um
• 122:30 - 123:00 Ry do you want to take this slide i think this is something that you get across really well yes so um a lot of what you guys will see or saw today was us discussing multiple edges and multiple ways uh and multiple setups in the markets right so it's very important for you to not try to you know get all of this and apply it on Monday morning um all of that will take quite you know time and through repetition and failure
• 123:00 - 123:30 and uh success as well you will get to learn to see what setup or what edge or how you see the markets and how you see risk uh and what appetite you have for yourself at the end of the day what fits you best out of these right if you take anything out of today is take the framework of what we gave you and apply it to any system that exists out there that's our biggest focus what we're trying to do with you know showing
• 123:30 - 124:00 examples and uh really particular edges that we do is that we're trying to show that the framework that we put together is you know can can work it does work and it's a really great way of thinking about the markets but all of that aside I think traders tend to not focus in on one particular thing and really master that right um if you don't specialize you will never be the best at that particular thing if you're trying to do too much in the markets and you have 10
• 124:00 - 124:30 indicators trying to align at once for you to have an edge it becomes infinitely harder for you to do what you need to be doing right so if I were to pick a particular indicator it would be the relative strength line that I want to look at it's the only indicator that I use outside of price and volume uh at the moment right so pick one setup pick one style and deeply study that particular style it will get you to stage three and four that we spoke about in webinar one uh and two a lot faster
• 124:30 - 125:00 than you trying to be a fundamentalist a techn technic tech you know a technical trader a day trader on some days and a swing trader on another day um specialization essentially allows you to build intuition intuition is you know your your second nature kind of kicks in and it helps you you know this is a good HV this is not a good HV this is a market leader this is not a market leader and that comes through specialization you narrowing down your
• 125:00 - 125:30 focus repeatedly looking at you know when I look at a HV gap and I look at you know CRNC gapping up to 27 and a half I knew that thing's going to blow you know blow its tires and completely pull back that's intuition that you develop over a span of time through experience right um don't try to master the the third point that I have is don't try to master everything at once again that speaks to the same thing if we try to do one thing well you will get better at it and at the end of the day the market is you know if you execute that
• 125:30 - 126:00 one setup or that one entry tactic really really well you will become a stage three trader right away because you're in the consistency phase right you're being consistent with that one thing that you know works for you and you patiently wait for that thing to show up again and again and again right so pick that one thing and then you can you know expand over a span of time it takes about 10 to 12 years to have multiple things that you're really good at in the markets but what traders do in
• 126:00 - 126:30 stage one and two is they try to master all of it uh while not really being good at any of it right and that leads to them being in stage one two and eventually quitting and not getting to three and four so become an expert at one blueprint that could be any system could be stage analysis only right stage analysis still follows the framework of seeing an edge seeing a setup form and then getting an entry tactic uh perfected right uh you could apply the snipe framework that Richard discussed
• 126:30 - 127:00 at the beginning of today's call to stage analysis or Leslie Mark mini's method of SEPA or can slim as well all of these things all fall under the frameworks that we discussed today they they all have an edge that is visual they see it on the charts or it's a newsbased they all have setups which are in Villian Monito's case bases that are forming and then he has really specific criteria on when you can enter right his criteria was on the day of the breakout
• 127:00 - 127:30 the volume has to be a certain amount the uh price has to close above and not pull back more than 7% right for me to stay in so those were his entry tactics that he spoke about so um specialize because that will lead to mastery if you do if you try to do too much as a stage one two trader you'll leave yourself confused you're not really good at anything that means you're not consistent at anything and if you're not consistent you'll never reach that stage
• 127:30 - 128:00 three and four the phases that we spoke about so I think with that we are done for the day yeah uh today but you have a webinar yeah i got one more uh no this is great um hopefully you guys found this really helpful uh I saw a question you know which which setup should you start with i think up the righthand side of um a base I think is a great one to to study first and foremost um that that's kind of my bread and butter uh but you could pick a gapper if that appeals to you pick pick that one and
• 128:00 - 128:30 just master it study study model books study the one that we're going to put out um and just build that intuition build that uh second sense second nature around that setup uh here's what we recommend for for DFW we showed a lot of applications of DFU today how it can help speed up the process finding relative strength um you know identifying tight areas all of this uh so definitely check this out analyzing earnings and sales growth sponsorship all that um so definitely check this out if you haven't already at dw.com i saw a lot of DU members already in here in
• 128:30 - 129:00 here that's great uh then also if you haven't yet go ahead and pre-order the Trader Handbook again if you found this webinar helpful you're going to love the Trader Handbook it provides a clear framework to build your trading system and if you've already got one how to refine it and uh there's so much detail in here that we haven't even touched on uh yet so definitely check this out if you haven't already you can scan this QR code the link will also be in the description of uh the YouTube video so you can go ahead and order it that way we've already had hundreds and hundreds of people uh who have told us they've pre-ordered uh and thank you guys so
• 129:00 - 129:30 much for your support uh this is a resource that we've worked incredibly hard on over the past year and we're really excited to share it with you guys so definitely go ahead and order it if you haven't already um and uh with that I think we can pretty much close things out let's see if there's any last questions here um that we should answer uh and I see a lot of questions on entry tactics that will be the subject of the next webinar so if you haven't registered yet we'll be sending out the links and email uh in an email uh later on uh this week uh of to sign up for the
• 129:30 - 130:00 next webinar which will be uh next weekend so definitely look forward to seeing you guys there thank you guys all for the nice uh messages appreciate it and uh really we want to from the bottom of our hearts help you guys build your system and we really hope that this webinar was uh helpful uh towards that goal so thank you guys all for tuning in and we'll see you guys at the next one cheers