COPY This EXACT Entry System to Become a Millionaire Trader

Someone who actually took $30,000 in 2020.

Has taken it to well over $10 million. We are with the one and only Real Simple Ariel, AKA Ariel.

This one was actually one of my bigger P and L trades. It's the most scalable way to trade. You can get to 50 million, 100 million, you're aligned with big money. You're aligning yourself with the best names that are institutional quality and sometimes you know their institutional quality because they all of a sudden on the large gap up day, it's going to trade 12.

Shares a day, right? That's not my Aunt Susie coming in to buy the stock. That's an institution. Then it becomes, how do I get involved in that? For people who are intraday, they should know what's called an open. You could literally say price is good above the horizontal line and bad below the horizontal line. And so for me this is called a flat based breakout. Now I know a lot of people, they like to wait for the retest. I personally don't like a retest because, you know, when you're in a period like this big gap up, you know, look at how separated these moving averages are. If you're just buying it up here just because you're getting fomo, chances are it does nothing for you. Don't I wish I just never sold some in the 37s and sold it all at 72? Yeah, I would have made double, but that's just not the reality and, and I'm okay with that. And obviously look at what happened afterwards.

Welcome everyone back to Chart Fanatics, the go to channel for the very best trading strategy and concept breakdowns with some of the very best traders in the world. Talking of which, today we are very excited to have a very special guest. Someone who actually took $30,000 in 2020 and has taken it to well over $10 million. Absolutely incredible. Today we're going to be going over how to remove FOMO and reduce FOMO and have your daily chart set up. We are with the one and only Real Simple Ariel, A K. Ariel, thank you for being here today.

I appreciate it. Thank you for having me.

My absolute pleasure. I'm really excited for this because you know, it's in five years to take 30k to well over eight figures. That's absolutely incredible.

Yeah, and really these last, you know, 23 and 24, if you were a trend follower, a swing trader, the market was especially forgiving and you know, it really was a trend followers dream. You know, when I got my start in 2020, it was a Scalper, day trader's dream. And coincidentally, that is how I got my start. And I kind of kept day trading in 2020, in 2021. And then the market actually got more difficult for me, and it was some tough lessons in 2022, and I started to make the transition to swing trading, and that was a swing traders nightmare. So, you know, because effectively, nothing was going up, and that's the side of the market that I had been learning. So when 2023 finally came around, 2024, you know, not only had I learned some shorting along the way, because that's what 2022 provided, but by the time 23 and 24 rolled around, it was really just dialing in on what are the chart setups so you can eliminate fomo. And. And oftentimes as a day trader, you know, you would buy something and scalp it for the day.

Yeah.

Only to realize a week or two later it was 100%, 200% higher. And, you know, that's like one of the things where it was like, all right, I got to learn how to get in these things and stay in these things. Yeah. And then, you know, how to use some moving averages to my advantage and then how to figure out, you know, what are the leading groups in the market. Because you're a leading group in the market because institutions are buying them. Yeah. They're showing relative strength when the market's going down, they go down the least or they go up or they go sideways. And then when the market goes up, they go up more than their peers, more than other groups in the market. So having that kind of base understanding is what really puts you in the right groups in the right sectors. And then, you know, that's how you catch outlier moves in your stock. So.

Absolutely. And that's where we're going to be beginning today, right?

Yeah. Yeah. We're going to talk about. And I don't know if you want me to get started kind of on the whiteboard, but I kind of want to touch upon the setups that, you know, we will talk about today. And a few of them that we will talk about is something that is just called, and some people know it as like an EP setup, so. Or an episodic pivot, so just ep. And really effectively, what an EP is, is a stock that has a large gap up on earnings, Right. Typically. And it could be a good piece of news, but typically, a good, really good piece of news is a beat on earnings and sales, a surprise beat on earnings and sales in particular on a Chart that was neglected. It doesn't have to be on a chart that was neglected. It could have been a chart that was already in a stage two uptrend.

Yeah.

And then it gets, you know, another gap up and you know, we can, we'll cover here Palantir on the screens in a moment.

Exactly.

Yeah. But that's effectively what it is. So I use simple moving averages on the daily. And one of the things, the characteristics of what an EP setup will have is if you just have daily bars and we'll just kind of use a line chart and this chart was just in a downtrend. Right. What'll happen is you'll have a gap on the daily chart and a line chart. It will just still look like it just kind of went parabolic in a way. But the volume. So if you had like, you know, this volume and every day it was like very similar volume. Right. Let's just say, you know, some days less than others. Let's just say it trades 4 million shares a day.

Yeah.

All of a sudden on the large gap up day, it's going to trade 12, 15, 20, 30 million shares a day. Right. That's not my Aunt Susie coming in to buy the stock. Right. That's an institution. And it could have been on an earnings beat. Um, and so one of the very first setups that I always like to mention is you have an EP as a setup. Yeah. Right. And so then it becomes. How do I get involved in that? Well, for people who are intraday, they should know what's called an opening.

Range.

Break.

Right. Or as some people call an orbit.

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Right? And an orb is just a simple. If you're looking at a five minute chart, it'll be like, here's your candlestick, right? Here's your. You could even have a little wick on it. So this is your close on your five minute bar. It opens here, right. It closes here. And your next five minute bar, your entry is over that prior high. Right. With your stop being at the lows of the day. That's your low of the day. Sometimes in the, in the morning, right. You'll get like, you know, it'll kind of go down first. Right. So like you'll get your candlestick where it opens, it washes out a little bit in the morning. Yeah. And then again you can have your entry right over that candlestick. But if you just right off the open get a candlestick that looks something like that, your entry is going to be over prior 5 minute bar with your stop at low of day. The nice part about an opening range break on an earnings gap up, for instance, is one, you already know what your defined risk is. And there are going to be times when you get stopped out at low of day, but then it re breaks that five minute opening break later in the day. And then this will be another concept that we touch upon. It's as a swing trader, proper position sizing. Yeah, right. In a really strong market on an earnings gap up, those the best stocks in the world, they go and they don't really retest, they don't come back, they like take off and, and they make it, they almost make it feel like you're chasing. Yeah. So knowing what your, the, you know, the distance from opening range break to low of day is helps, you know, to manage how to manage risk. And I typically dependent on a stock's average daily range, you know, I don't really ever buy more than 10 to 15 to 20% on one position. If it's a slower stock, right. 3%, it moves 3% per day. You could size it up a little bit. Right. On an opening range break. So you might be risking, it's $100 stock and you might be risking a dollar, like you might literally have 1% risk. You could put 20% of your portfolio there and lose 0.2% if you're wrong.

But if it's a faster mover, like a smaller mid cap and it moves 8% per day and you've got, you know, 8, 9, 10% risk to the low. Right. You might only want to have a 10% position. Right. Because then you might be risking a whole percentage point on your portfolio. So kind of understanding your entry tactics, which could just be a Very simple opening, range, break, and then you're buying, you know, the next candlestick that goes through that level. Right, right. And so there's your entry, effectively with your stop at low of day. Yeah. And so this is effectively the first type of setup that I like to trade. Now, one of the characteristics of.

One of the characteristics of an EP setup is the very large volume.

Yeah.

Right. So when you get this daily, now this will look like on the daily candlestick. Here's your daily candlestick. And it might even still have that little upper wick. So this is how it closes on the daily, for instance. And you've got this large volume that came in. Another setup that we like to talk about is the delayed.

H, V, C. So a delayed high volume close. So you've got a high volume close. Right. So. So the massive volume comes in. It's much larger than the prior days. And sometimes what will happen is you'll have this, you know, 20% gap up. Right. You know, it just have gapped up 20%. And instead of you wanting to be like, I'm not going to chase that, it feels a little too extended on the earnings day. What you can do is you can wait for it to break the close. So you can use. This is your closing price. And I just would draw a line on my chart, right. And going all the way back, and you would just be like, okay, here's your line effectively. Right. Or, you know, it could look like that. And here's your close, your hvc. And you're not entering this stock until it breaks the hvc. And you would say, good above the high volume close. Because if institutions just came in and it's really good earnings and sales, the idea is they love this stock potentially to build a position in over the next quarter or two or three. And really, when you're on an earnings winner, that's how long they can move for. Right. A real earnings winner in a healthy market can actually move for six to eight quarters. Right. So 18 to 24 months. So ideally, even if the next candle that came in and paler will be another great example for this, Sometimes the very next day could put in an inside bar.

Right. And so you're still not involved in the thing. And on day two, if you, you know, had you kind of chased this thing and then in the morning it kind of gaps down a little bit and then just ramps back up.

Yeah.

You could have maybe shaken yourself out. Yeah. Right. But then the following day, right. It'll give you an entry where it breaks that high Volume close. And again, you've got two options. Either you can use the low, which I don't really love. That might be too far away. What I would prefer to do is always use the low of the day. Right. And then that always, you know, is where you dictate how much sizing you can take. And again, this will be what your daily looks like. But then what does your more granular entry look like? What does a five minute entry look like? And again, it could just be that 5 minute opening range break or as simply as you've got that line on your chart where it closed on the high volume day and then that being your entry.

Exactly. So, you know, just to kind of recap, what we're seeing is the volume really pick up. You're seeing a move that's pushing as much higher. And then what we're doing is saying, okay, here's the close. We're getting some, a bit of a rest for the next day potentially where then we're expecting more orders to come in.

Yep.

And once we close above, that's where we're then entering.

And not even a close above a just break through that level. Right. So I'm not. Some people might wait for confirmation, but the problem is, is when you break through that high volume close, it might go too far. Then now all of a sudden you're chasing it again. So I will literally just enter as we're going through that high volume close and take my entry and set my stop at low of day.

So you go for low of day of the actual day.

Correct.

Okay.

Got the day that I, that I choose to buy. Yeah. And again, depending On a stock's ADR, right. If it's a slower moving name, maybe 15% of my portfolio. If it's a faster moving name, maybe 10 to 8%. And then the key is here, you have to always keep in mind when you're scanning the market and when you're looking at the markets in general. If this is a tech name.

Yeah.

Right. I want to know how the Qs are doing. Right. If this is a gold miner, I'm not interested in what the Qs are doing. I'm looking at what gold futures might be doing. I'm looking at what GDX you might be doing, which is like the gold miner etf. Right. So it's like I always want to be aligned with what the sector is doing because that's how you like I always say this. People are always looking at a stock and you know, they're like, oh wow, this is moving really nicely. But the market's going down. Right. The likelihood is if the market continues to go down, it's going to put pressure on your stock. But if you buy a stock when the market's pushing higher, you give your stock the absolute best chance of working. Yeah. To push away from your average, which then allows you to hold overnight. Right. It's like, I don't want to go into any stock that I buy and then the market's just kind of rolling over and the stock closes really close to my average. Because if it closes close to my average, what's to stop it from just gapping down overnight? And then it's hard to manage my risk. It's much easier to manage risk when you're bright green on the trade. Right. But if you buy it, you know, on a day in which the market's going higher, all of a sudden, the worst case scenario for you is maybe it gaps down and stops you out at low of day. But if it finishes up 4 or 5%, 3% from your entry. Right. More times than not, it could just be a flat trade. And as a swing trader, the most common trades that I take, you know, is a small red, small green, flat trades. And then, you know, I never take big red because I know exactly where my stop is going to be. Very few cases does the market just like blow past my stop on an overnight gap down. It can happen. It does happen. You know, if anybody was trading the deep seek thing this year, a lot of people got caught in that. But the reality is, is that, you know, the three small red, small green, flat trades are the most common. And then the home runs take care of themselves. Yeah, right. And that comes through patience and proper sizing. Because if you buy a 10% position, the stock has to move 50, 100 more. Right. To really move the needle on your portfolio. And they do. So this is a delayed high volume close. The reason it's called delayed is because you're not buying the earnings gap up. You're kind of waiting. It's like a delayed setup. You're waiting for it to maybe pull back in a little bit and then get back through that high volume close. And then that high volume closes is your entry.

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Do you know in terms of entry wise, are you market executing when.

Yeah, I'll just take market orders. Yeah, because if you're trading stocks that are liquid enough, you know, and this is the reality for probably all of your listeners and even still myself, unless you're trading with 100/4 million dollars, you're not going to. If you're trading $100 stock and if, let's just say you're trading with a $10 million portfolio. If you're trading $100 stock, getting 1 million do on isn't that difficult if the stock is trading $500 million a day. Yeah, right. That's just the reality. Now if you're trading like a small cap, you know. Yes. You have to be way more conscious of the position sizing that you're taking. But a market order will do. I mean I'm not too concerned like knowing that I only have 10% of my portfolio there if my order was 5, 6, 7 cents higher. Yeah, right. Like Again, if you have a hundred thousand dollar account and you're buying $100 stock, you can only buy $10,000 worth. Yeah. Right. So it's like 10 extra cents on your average isn't going to be the make or break. Right. It's like more so being in alignment with a healthy market, being in alignment with a healthy group, those things are, you know, when the market is just flying, it seems like everything's going higher. Yeah, but how do you have the conviction in what's going to go higher? What has a better chance of working for longer? And to answer those nuanced questions, it's be in the stocks that are in the best groups in the market. Right. And there's a lot of groups in the market. There's 177 industry groups. And so if you just said to yourself, I'm only going to trade the things in the top 30, those are the stocks that go down the least when the market's going down and go up the most when the market's going up. Hence the reason they're in the top 30.

Yeah.

So that's a high volume close. Another one is so sometimes you'll get price kind of going sideways right. In a consolidation range and you'll have like a flat top. So essentially you can just draw a horizontal line. And so this right here, I like to call it just a simple flat top breakout where you just have a horizontal line. And part of the reason that I don't like down trending lines is because they can be too subjective. What I mean by that is when you're looking at candlesticks and not line charts, some people draw them at the top of the wicks.

Yeah.

Some people draw them at the close. Some people have like wicks going through the upper part of their camp, through their line. And so it's like it becomes too subjective for me and I prefer horizontal lines. Right. So where you could literally say price is good above the horizontal line and bad below the horizontal line. And so for me this is called a flat based breakout. Now I know a lot of people, they like to wait for the retest. Yeah, right. I personally don't like a retest because the strongest charts in the world don't retest. Yeah, right. The momentum, there's momentum there. Institutions are buying them. In fact, if it retests, it's actually not as strong as you think. Yeah, right. The best stocks in the world break a flat base. And I took an awesome trade like this on Nvidia when it was breaking 500 which we'll cover. And it didn't retest. Right. There's no retesting. The best stock in the entire stock market. Yeah. Every retail trader, every institution wants in this thing. So a simple flat base breakout. The longer the base, I'm sure traders have heard this, the higher in split in space. So you've got a flat base, flat base breakout.

So are you waiting for a close on this one or is it again once they're above.

So normally what will happen is if you're looking at it in terms of daily candlesticks and I use moving averages. So one, when I'm using moving averages, sometimes what will happen when price is going sideways, the 10 day will begin to hug Price really closely. The 20 day will just be lagging a little bit behind it. Trailing the 50 might have been coming up from a little bit lower. Right. And so price will be really tight to that moving average. And normally right in here you'll get a, will erase some of these. You'll get like, if these are candlesticks, you'll get like a really tight day. Like the candlestick will be much more, it'll be much more narrow than prior days. Yeah. And again I'm always looking. It's not really a breakout unless it's over prior day high. Yeah. Right. So I'm always looking at my entry over prior day high. If it's a really narrow candle, I'll set my stop at yesterday's lows. If yesterday's candle was a little bit wider than I would like, maybe it's got like a lower wick, then I'll look for, I'll, I'll use still break over prior day high. But my stop will then be the low of the day that I'm buying.

And so again, very simply, if this is my entry, you know, we'll use this one or your green one, if that is my entry right there. Yep. The, the very next day, you know, I'm buying a break over prior day high. And if it's coming through this flat base, even better. Right. It's like not only am I getting in there, maybe even a little bit before that flat base breakout, then as soon as you get that move over the flat base breakout, it's like another ad spot if you wanted it. But that's where you would expect not only you to see it breaking over a horizontal level, everybody else is seeing it break over that horizontal level. And then again, really as a swing trader, you know, the job is if you get, you know, something that looks like that where you get three, four days in a row. These moving averages, you know, this would be your line chart, but your moving averages are starting to come in from the bottom like that, you know, and starting to come in. There's the 20. Here's your 50 day.

Yeah.

Right. I'm looking for three to five day move. Right. I pay myself into that. And again, there are instances where I want to hold it for longer, but I want to get paid. Right. Treat it like a business. So three to five days, you get paid a little bit into that strength, and then you just trail the rest on an ascending moving average. If it's above the 10 and the 20 or in some cases the 50, leave it alone. Right. If it's, you know, and sometimes I even brought up an example of like, Toast, I love the company.

Yeah.

And I bought it when it broke through the 50. I got stubborn. I didn't trim. And I then ended up using the 200 day because I was like, I love Toast. I love this company. I'm going to hold it as long as I can. And I ended up giving a huge chunk of my gains back, you know, like 75% of what I was up on it. I gave it back. Now, it was still a green trade. But sometimes, you know, when you look at 23 and 24, you say to yourself, like, man, these things are monsters. If you look at Abercrombie, for instance, and you trailed the 50, you would have been buying, you know, an earnings gap up in the 20s or low 30s. And you're not. You're not even stopped out until, you know, a 400% move until a close below the 50 day. So I always am a swing trader first. But if the stock has the strength and it's in the right group and it's proving itself through price, I become a position trader. Yeah. Right. But I don't just say, oh, this is going to be a position trade. I'm going to hold it for four months. No, the stock has to prove that with price, and then I'm happy to.

Rather than predict, you're reacting to the price action itself.

Yes. And I want to get paid for seeing the initial setup.

Yeah.

Letting it hit me with that initial momentum burst, trimming some into strength, and then just trailing the rest on an ascending moving average and letting it work.

So, like, just to visualize, if we're pushing and we're aggressive, we're just trailing along. Is there something along them lines?

Yeah. As long as price doesn't close below my desired moving average, it can Come right back and retest the moving average once, twice, three times. But every time it retests and it bounces off, then I kind of have like a new little level where I can mentally bring up my, my mental stop loss. So even if it comes down again and breaks the 10, as long as it holds that prior pullback low, I'm okay holding it. So that would be a flat base breakout before. Sometimes you get a flat base breakout, you'll have like this sideways consolidation. And every one of these little oscillations, they might be what's called a higher low. Right. So every time it comes down, it can't come down quite as far. So people build like this little. Right. Like a tightening wedge. Well, sometimes what ends up happening is you'll get this sideways consolidation. And as, as it's building higher lows. Let's just say you had a low like down here, right. And let's just call this like 16 bucks or something. Yeah, right. What will happen is sometimes price comes back to that level. Undercuts, it rallies. Right. And sometimes. This is one of my favorite entries. This is called an undercut.

And rally.

Right. And so very similarly, if this still has kind of like a flat based breakout. And I actually brought some examples of this and really in this market, you know, and, and you know, we're making this video in April and everybody kind of have seen what's happened in the market. Yeah. Some of the very best stocks in the world, like a Netflix that just went and saw a new all time high.

Yeah.

Well, guess what? It did an undercut and rally. It didn't get crushed with a bunch of other stocks and break that March low. It actually came right down to that March low. It undercut it and it rallied right back through. What else did that Palantir, what else did that hood, what else did that crowd strike? And it's like. So once you learn the setup, sometimes this becomes your very best entry. And then what becomes an add on entry is once this thing oscillates some more. Right. The breakout of the. And it allows you to pyramid up into that position. So you've got an average cost basis at 16 bucks. And then all of a sud, you know, you're adding at 20 on the breakout. Right. And, and every time I buy or I add, I'm still treating that brand that new position. As Lance would say, if that has high expected value, I don't just add just to bring up my cost basis. I want to make sure that when I add one, I'm still Managing my risk in real time on that new entry. Yeah, I'm still keeping my 16 cost basis. But if I'm going to double up the position, right. And now bring my average up to 18, it's not just some random spot at 20. I'm buying. I'm buying because I understand the, the setup. I'm, I'm buying because the expected value at this spot in a healthy market, in a good group, it's breaking through 20. And so I've got good expected value at buying the $20 flat base breakout. But this is an undercut and rally and we will touch upon, you know that as well. And then very similarly. And I won't draw it up too much because it's got a ton of lines. But if you could think about that undercut and rally visually, right, where price comes back and just kind of re breaks that low and starts to rally. Sometimes you get something like this, but on a moving average, right, because the moving averages are starting to move up. Sometimes if you miss the price point, sometimes what'll happen is price will then begin to rally back through the moving average. And as long as you have a more granular look and again you're aligning yourself within the strongest stocks in the market. The strongest group in the market, yeah, those are the most likely to hit still an ascending moving average and then be able to rally back through. So I absolutely love these kind of setups. They make it very, very easy. And then so effectively, you know, I might only be trading six or seven different types of setups. And so again, you've also got a moving average, you and R. Let's take.

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So you've got an undercut, a unr, a moving average undercut and rally, a delayed high volume close, a flat based breakout, an EP and sometimes off of like an episode. What you'll get is you'll get, for using a line chart, you'll have like that consolidation period, you'll have that big move up, there's your ep. Right. You might have a period where it doesn't really do much, it breaks through that high volume close.

Yeah.

Right. And then down the road it just consolidates again. Yeah, Nice and tight. And this is called a high tight flag. Right. And so you get that three to five week consolidation, Right. In a nice tight, you know, chart pattern. Yeah. And then again, very simply a breakthrough, the upper half of that range could just be another chart set up. And every trader has heard of a high tight flag. Yeah, Right. Every trader has heard of a earnings gap up, you know, some of a flat base breakout. So these are, some of, these are very, very common. But what you can't do is you can't just watch price go up and then just get fomo. Like you've missed your entry. Right. So it's really important that you, you know your entries and you know your entry tactics. And if you, again, if you're aligning yourself within a good group and a good market, you know, really the, the.

World'S your oyster, definitely, it's proven and obviously the results that you've, you've generated yourself, but you Know, really, really clear breakdowns here, and I'm excited to see them on the charts as well. But just before we do that.

Yep.

The, the sort of pros and cons of. Of what we've gone over so far as a strategy, and as I always say, cons wise doesn't mean it's bad. It's more so like something to be aware of, something that could be a hurdle, something that could be a slight struggle when learning or implementing this sort of thing.

Yeah. Well, the, the cons for specifically, if you're buying a breakout and you're not in a healthy market, the cons are that you're going to get shaken out a bunch. Yeah, right.

Yeah. So the, the pros of. Yeah, the pros of the setups, in my opinion, are one, scalability.

I think that's how you spell scalability.

Don't worry about it.

Okay. Yeah. So scalability, meaning if you've bought a breakout and it's working, and then you're noticing when you're doing your homework at night that you're coming across a few other really nice setups.

In a similar group. Right. So if, like, you're onto tech names and all of a sudden, you know, some cyber security names look really good and you bought one and it's working, and then all of a sudden another software name looks really good and you bought it and it's working. Right. You're now starting to get all of your money to work for you in a good environment, in a good market and in potentially a good group.

Yeah.

So scalability is absolutely one of the pros. One of swing trading, but two of like, you know, knowing your setups. Right. It allows you to get all of your money to work.

Yep.

Yeah, Obviously we're going swing trading, but also, as you mentioned, you know, from the offset in terms of fomo, again, you got to be patient to allow yourselves to complete. If price is already moving, you just gotta wait for the next setup to form. Right?

Yeah. And if you're onto a. Like I said, if you're onto an earnings winner in a good market, they. They move for six to eight quarters. Yeah, right. That's just what they do. You go back and look at Nvidia, go back and look at Palantir, go back and look at Abercrombie, Go back and look at VST Celsius, you know, Sedge, when it made its move. Mph, when it made its move. This is how stocks move. Yeah, right. They move for six to eight quarters. You know, acls. I mean, there's countless of said avgo. Like I can ramble off 100 names in my head that this is what they do. So you can't ever feel too much fomo. Like, I initially bought Nvidia as it was coming back through its 200 day over two years ago at 167 bucks. And yet the size, the, the setup that I had most conviction on was when I was buying a $500 breakout. So the stock was 300% higher. Yeah. Right. I mean it had literally gone from what? And I bought 167. I had add ons. You know, it was like 163. I had add ons on a higher low setup, which is another, another setup that, you know, we could easily cover.

And the setup that I thought was best was after it had gone sideways for five months after a 3,300% move because you're like, it's done nothing wrong. This is what the best companies in the world do. They go up, they go sideways and consolidate and then they go up again. Right. They break out of that long term base. And again, when you think about Nvidia, was it just Nvidia or did a few days later SMCI take off right behind it? And if you looked at smci, it was identical looking chart. So yeah, obviously for me, one of the pros is scalability. Another one of the cons is, you know, maybe a ton of little paper cuts. Right. Like maybe not being periods where you see no progress. Right. And for people as scalpers, you know, for some people, even day traders is like, you might not see progress. Yeah.

And with that said too, you know, people do have to remember there is another side of the market. You know, these setups do actually take place in a weak market. To the downside to which I also brought some examples that we will cover. So.

So pros really is scalability being able to use all your money.

Yeah.

And, and really just you're aligned.

With big money.

That's what I was gonna say. Yeah.

The big names, you're aligning yourself with the big, the best names that are institutional quality. And sometimes, you know, their institutional quality because they've got really good earnings and sales or they're just outperforming the market. When the market's up, they're up more. When the market's down, they're down the least. When the market is down there, they might be flat. Right. And all of a sudden why isn't a stock going down when the market's getting hammered, Right. Like a Netflix for instance. Why isn't it breaking March's lows and going way lower. Well, because big money is not selling. And as soon as the market starts to kind of get its footing, it's the first one to turn right back around. And now it's the first one of all of the big companies in the world to be at brand new all time highs. Right. And with no surprise, it all starts with an undercut rally, then a moving average undercut and rally, then like a little flat based breakout, then an all time high flat based breakout. And that'll be a great chart to cover for everybody.

Yeah, I can't wait. Let's go straight to it just to.

Touch upon some of these, you know, just as an example. So this is actually where I bought Nvidia the first time. So kind of treating it like a higher low setup. So this thing had been pulling back and after really it. It had bottomed. All right. And so it had made its nice little move up, rejected the 200 day, put in its low, perked up just a little bit, got back through moving averages.

Yeah.

And then it goes even on an hourly chart. It's a move up and it moved sideways.

Got you.

So that was really nice. And I ended up buying it as it was taking out the little range. Right. And then a few days later, Right. You get a pullback. Right. And this is effectively a higher low setup. And I rebought more right through there. And so again, hindsight, I would have held the whole thing. You know, I was selling some like right in here, like 230 bucks, I believe it was. And then what did it do? It gapped up on earnings.

Yeah.

You see the volume, Right. You see the volume come in. And then if you wanted to use the close. Right. So your close here is 2366. So you're effectively buying 2366. Now, obviously, look at how choppy it was around that level. Yeah. But once it had built a longer base, so effectively a flat base breakout, look at how tight it got back. Above all moving averages Y and then it breaks out. And then effectively you're off to the.

Rate and you are entering about the. Once we break. Once we're breaking the level.

Once we're breaking the level. Yeah. Right.

Then would stop, go below today's high. Or in this case, you can, because.

It was so tight, you could use previous day's lows. Right. I mean, when you're talking about a stock like this, you know, that's 230 bucks. I mean, effectively you're talking about three and a half percent risk from your entry to low. So even if you had a 20% position, even a 50% position, you're risking 1.75. Now again, you wouldn't put 50% of your portfolio on any one stock, but a 10% position effectively becomes a 0.4% risk on your entry. So, and for me, I actually thought, and this is where I, where I bought it, is this thing went sideways for months on end. Yeah, Right. And when this thing actually started to reclaim its daily moving averages, this was my first entry in the 48s. Yeah.

And then the very next day, the 500 breakout. So I pyramid it into this thing twice and my first day's risk was low of day, so absolutely nothing. And look at how tight the moving averages got.

Price begins to surf. These moving averages gets tight because it goes sideways, you know, when you're in a period like this big gap up, you know, look at how separated these moving averages are. Yeah, right. If you're just buying it up here just because you're getting fomo, chances are it does nothing for you. And, and you know, maybe it does go a little bit higher, but effectively you were in a period of nasty chop.

The problem is as well. Yeah, exactly, the chop. Because if you're buying out of fomo, you're already emotional. And then when that chops happening, even if it is moving, edging higher every time it's coming back down, you're getting way too emotional.

You're second guessing the position completely going.

To come, you know, for a deeper pullback. You know, should I get out, should I get in? And you know, normally what ends up happening, as you can imagine, is just people go, then it goes up again, they get back in again.

Exactly. And now you're just paper cutting yourself to death.

Yes.

And by the time the trade actually goes on to work for you, all you're doing is making back gains. You're not making any new money. You're not. You know, if you just drew down 3, 4, 5, 6% on your portfolio paper cutting yourself to death on Nvidia, by the time it actually goes. Right. Yeah. You might still make some money, but. But you first have to get your money back. Yeah, right. And that's the, that's one of the things where it's like you have to eliminate the fomo.

And more than likely in that scenario you probably miss the move, the actual trade at the end.

Yep. Yeah, exactly. Because you're just exhausted. Yeah, you're just exhausted. And, and then you look for the next one that you think, and you get FOMO on that one because you're like, oh, now this one's going. Yeah. And by the way, these are emotions that day traders know exactly what I'm talking about. So it's no different from swing trading. The difference might just be that when you're day trading, you size something up to make to take advantage of a smaller percent move. When you're a swing trader, it's like you're really going for a potential home run. And again, you don't know that it's going to be a home run. Let the moving averages take you there. Yeah, just make sure that you're, and I repeat it, you have to align yourself with the strongest groups in the market. So I do have some examples of this and I did go ahead and clip some of, you know, my screenshots and my entries on an Nvidia. So we'll kind of go over those in a moment.

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But essentially 15 was my first entry. 18 was my second entry. And I didn't have trims on this thing until what I thought was a first red day. So, like, I remember looking at this up here and going, that's kind of a nasty topic. Tail. Right. And so that's the day that I trim some off. And then, of course, you get this little gap down. But then look at what happened again on earnings. You get a gap right back up. And then I was out completely on this nasty, nasty, you know, bearish reversal day. And I was done again. My crystal ball wasn't working. I wish I would have held on for longer because look at how much further this thing went again. I would have had to have held some more. Pain.

Yeah.

A break below the 50 day on a pickup in volume. You know, maybe this knocks you out and I'm selling it even lower than where I did.

Exactly.

But then, obviously, look at what it ends up doing, you know, once again.

And that's just the reality of trading. You know, you will never know exactly what's.

What the high is going to be. I wish I did, because then I'd, you know, we might be billionaires by now, but, yeah, that's just the reality of trading. I don't ever really know how high something can go, so it's not something that I, you know, try to worry about. And this is a perfect little flat base, what I consider a flat base breakout. One of the setups that we actually didn't cover is what I kind of call these low cheat setups. And what I mean by that is, effectively, it's not really a clean flat base, but it is working itself across above all moving averages. So, you know, this wick here actually got me interested. And what I can do effectively is you can just draw a horizontal line where you say, is this. Does this somewhat resemble a flat base or not? And I remember the prior day, I was like, hey, over 29 bucks, I'm interested in this thing. Why? Because moving averages are very tight. Right. It had already shown me that it does have some momentum. Right. I mean, this thing went from 13 bucks to, you know, in the 20s. So it had already showed me that it has some momentum. And then, you know, these moving averages are a little wide here. But then as we went sideways, everything started to really tighten back up in here. Yeah. And so again, I'm wrong often, but I ended up taking my entry at 29. My first trims at 37. Right. I was like, okay, nice. Push, get rewarded, take it off. And then one ended up happening. You get this outsized move all the way to 73. Now do I wish I had just held my whole position to 73? Of course, who doesn't? Yeah. But the reality is is you don't know when I got this outsized move. I believe it was on this day here, this, this wick. Yeah. I sold some more and then I had like a remainder of like a quarter of my position and I sold the rest on this gap down. Do I wish I had sold top tick 72? Yeah. Who doesn't? And, and this is kind of when I really started to dial in more my selling tactics. Using the 50 day and the extension from the 50 day as like a selling tactic that I use now like even more stringently just to make sure that I am selling it was part of the reason that I sold some in the 60s. But again, don't I wish I just never sold some in the 37s and sold it all at 72? Yeah, I would have made double. But that's just not the reality and I'm okay with that. And, and obviously look at what happened afterwards.

We came all the way back down.

Yeah. So if lower than what my average is. So, you know, you just don't argue with price and you get a gap down like that on what increased volume. So it's just good to never argue with price.

We're here in terms of the time frame, do you just stick to the daily time frame?

I just stick to daily. But when I'm, when I'm at home and I'm at my screens and I've got five monitors surrounding me, some of the things that I'm obviously looking at is, you know, like I'm looking at futures markets just to see how the general market's acting when I'm going to buy. Because if I'm going to buy a gold, name a gold miner, for instance, I want to know that the gold futures are pushing up on the day or at the very least not getting crushed on the day I'm looking to buy.

Yeah.

So I'm always trying to align my buys within the a healthy group that I'm trading. And then finally, because what the why.

I mentioned that was simply, you know, moving averages, you're very powerful, powerful stuff, you know, very simple to try and use and you know, concept is easy to understand. The one thing I think that a lot of traders kind of get chopped up on is that they'll have moving averages, have a plan, but Then they'll be skimming through time frames. So then the moving average is, is working in one way on a daily.

And then on a 15 minute. Right. It might be, it might be like pulling back on a 15 minute you'd be like, oh, it's pulling back, it's dumping, like. Yeah. But on the daily. Yeah, it's just still going sideways. Right. And so I only focus on the daily to get the bigger picture. And then I look at a five minute to get my granular entry. Right. Because I might like an opening range. Break, break. I might, you know, use what's called a 620 setup, which is effectively when your six period turns back up above the 20.

Yeah.

EMA on a five minute. And that's just to get a more granular entry. But the reality is my brain is always like, what is the daily look like? What's the. And I will have a daily and then right next to it a five minute.

Yeah.

And that's it.

Exactly. That's, that's what I was going to say is that you only have those two.

Exactly.

Like I said, a lot of traders will go in between all of those two, you know, and a lot of the time is because they have a bias. I say they have a long bias and then. But the daily is not really showing that or the five minutes not. So let me find the time frame that shows me that long bias.

They'll find it. Yeah, they'll find it. Or similarly, you know, with, with, with traders, they'll align themselves with the people who are saying the thing they want to hear. Right. You know, if a chart's going down and you're bag holding, you're going to find the guy who's telling you how awesome this company is. Yeah, it, that's how it is all the time. One of the examples, you know, as a losing trade that I had was I kind of thought crowdstrike was breaking out of what I thought to be this little flat base right here.

Yeah.

And I had took it right on this day, if I'm not mistaken. And I've got my prints, I believe it was this day here. And then the very next day stopped out. So yeah, 415. I had like, I want to say like a 386 or something like that. It was this coming 388. I can, I have the prints. But you know, took this trade here, thought it was moving higher, you know, didn't close all that. Fantastic. And then I stopped myself out the very next day. You know, look at it. Come down and then totally rip. And then I actually rebought it at 400. So. And then as it's really going through the flat base and you know, there's your. One more day and I will peel some into strength.

Yeah.

And then I'll continue to hold. And it could very well be that this one, for instance, ends up playing out a lot like a Netflix.

Right.

Where it's like an example of like just take a paper cut. Wait.

Yes.

Confirmation comes back back in.

Yep, exactly. And. And similarly, you know, with the Netflix, it's like you had this little flat base right here. Yeah, right. And then you had this all time high breakout right there. Right. And so I remember. But your very first setup is your undercut and rally. So your first setup is right here.

Right. So. And then here is your undercut and rally. And I actually saved some just good to peek at. So what day would this have been? Right, so Netflix, this would have been on 4 8, right? For. On 4 7. I posted, you know, to some of the fellows in Discord on 48 for Tuesday's watch list. What are we watching? Netflix 8:54 24. Under cut and rally. So. So it's like, you know, just recognizing the setup, knowing it's a setup that you like to trade and then, you know, being here to execute. Now obviously this day here, I, I posted about it on, you know, 48 or 47 the very next day, obviously slam. But again, I left it on watch as a. Was it. Was it. What day would this have been? Let me see. Oh, so a higher low setup. Did I mention it one more time as an undercut and rally. What day was this? So four eight. So it would have been. Yeah, four eight. Yeah, it would have been on this day that I was watching it for an undercut and rally. Of course, I didn't take it on the day that it goes 12%, but I effectively left it on watch as a high volume, close setup. Yeah, right. I left it on watch as a 951 higher low setup, which we talk about. And this was on 413. So in here I'm looking at it as, you know, this thing is building higher lows. So I was just looking at for it to break this little neckline. And it's like if you just understand your setups right as it's breaking through the. If you just understand your setups, you don't have to FOMO in just because it's up 12% on one. Just because the market's up 12% on one day and you like Netflix. Like I missed it, I got to just chase it, you know, up here only to, you know, wick yourself out the very next day. Yeah, so it's a really good concept of know your setups. Avgo was a short that I actually took. You get, you know, a move effectively going nowhere, breaks down, does this very clean bear flag. And instead of a high type flag, right, it's a low tight flag. So it's a bear flag instead of a bull flag. And I remember I shorted, excuse me, shorted this thing 188 bucks. It's very simple concept.

MU was another one, you know, it just kept rejecting, kept rejecting the 200 simple moving average. And then on earnings, right, you get a gap down on a pickup in volume. So I actually get, I shorted this thing at 98 bucks and then just using the descending five day moving average initially and then as soon as it started to roll over, you know, use your 10 day moving average.

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A Grrr. Very simple concept. You know, you tried to push out before earnings, you completely fail the next day. And just a simple break of the moving average. Yeah. So effectively the trade now is another one that I got some prints for. You get this big gap down on earnings pick up in volume, you go sideways. Right. And the inverse works. This works the exact same thing on the long side. A great example of just a breakdown. Bear Flag shorted as it's coming out of the consolidation trail with your moving average. And I've got some prints on this. I covered this like near the 200. I covered this a little bit lower and I covered the rest as it gapped up on high volume back above the 200. So I can't argue with that. Yeah, I just got to cover the rest of my short. No big deal. We move on with Life and Palantir. This one gave us, I mean, exceptional amount of setups. So first thing you get on a Palantir, the chart was fairly neglected. This thing is back in the seven, eight dollar range.

Right.

And you get this gap up on earnings. What do you notice about the volume bar? It's a pickup in volume. So you can use a 5 minute opening range break. Really, you know, if you're looking kind of at this left side, you know, peak, you would basically say a breakthrough. Well, it's funny, you also get the retest, right, but then you've got the high volume close and the close ON this is $9.55 effectively right there. And then what are you doing? You maybe get stopped out the very next day, a few days later, but then you get a very tight bar. And then on the on 5, 17, 23, you get the break through that high volume close and what, you're off to the races. The stock effectively doubles in a very, very short period. So the high volume close. So not only do you have an earnings gap up, and if, if you don't want to chase it. You've got a high volume close as an entry. And if you want to wait also for a flat base breakout, you can do something where you look at your left side and you say to yourself, here's a flat base, right. And you're breaking through your flat base. So if you didn't take it even on 517, well, guess what? 518 could also be an entry tactic. And this subtle gap up just continues to show you how much interest there is in this thing overnight. So it's like retail's piling in, institutions are buying it, and even you get this little subtle gap up and it's still off to the races exactly three to five days. Trim some into strength, continue to trail your moving averages. Let it work. And this one actually way up here towards the end gave us a beautiful. Another one delayed, high volume close. So it's like. Or a delayed reaction. So you get this gap update on what a big pickup in volume. Right. And you've got your close of 103.83.

And this was like, you know, a perfect example of what we covered on the whiteboard the very next day. What do you get? Like a very tight inside day. Yeah, you know, where it's like just underneath that level. And then what do you get? A ramp right through a stop at low of day and a move from 103 to three to five days. You could be trimming some 115, 118, you know, a nice little 10% move on your money. Trim some into the strength, continue to trail. This was the day that Pentagon news came out. Should have recognized that as fairly negative news. And again, if you're at 125 and now you're closing at 111, it's probably good to sidestep, you know, and just go ahead and take your money off the table. But you know what ends up happening. And again, even on the flip side, this is now a name that I reown at 100 bucks. So just a very simple. If you look, if you thought about relative strength in the market, you got first your undercut and rally.

Yeah. I was about to say, yeah, you've.

Got your undercut and rally. So effectively, here's your entry.

Yep.

You've got yourself a, a little mini bull flag. If you're paying attention. First you get this 50% move from the lows to, you know, your highs. You get a small little bull flag. Yeah, right. And then I bought this little. Now I had a little issue buying this Gap up because the market's still down, trending. So like, even when I was talking to some friends of mine, I said, hey, if we're going to take this, you know, let's make sure we're sizing it down a little. But then here is your flat based breakout. So again, know your dailies and then obviously this is toast. This one breaks my heart. I bought this thing, so what do you get? You had a move up, right. Then you had a nice long sideways base. I bought this thing as it reclaimed the 50 day.

Yep.

Right. And I, I kind of basically had like a market on close order. So I kind of chased this thing at the very top as it got through the 50 day. The very next day it worked well and it went on to work very well. Yeah, I didn't trim anything. I got greedy. I thought to myself, this is my, one of my favorite companies, everywhere I go is using Toast, their payment processing company. And they're everywhere. Right. You see them, you know, we just got done using it at the coffee shop. So I love them. But I got greedy and I didn't trim into any of this. And of course, where do I take my stop when it breaks? Below the 200 effectively at the lows. That's trading. That's why you don't get greedy. That's why you peel some into strength.

It was a good example of like, you know, because you felt confident about the company and it caught kind of not emotional, but like there was a bit more of a sentiment there personally versus the chart than usual based on all the other trades you showed us. That's where kind of those, those mistakes happen, you know.

Absolutely. And it cost me a, a fortune. So, you know, I didn't appreciate that, that I did that to myself. But now, again, what do we have? We've got a stock that's now done the undercut and rally right through the lows and now you've got a nice little clean flat base. So I think to myself, if we can get over this little clean neckline. And the market's up, trending. We've now held the 200 day. We're back above the 50 day. Moving averages are very tight. We've got earnings coming up here pretty soon, but not for another two weeks. And we just don't know if this thing will gap up and give us a high volum close. And then we're off to the races again on a, on a toast. So it's important, just know your setups don't get fomo, position, size, Properly. I tell people all the time, let the market pull you in. If the market is healthy, everybody's making money. So let the market pull you in and use progressive exposure. If one thing's working, you're allowed to buy yourself another if that starts to work. You can get more if that starts to work. And so you're trading your biggest when you're trading your best, and you're trading your smallest when you're trading your worst or the market's not being helpful.

I got you, Aero. This is incredible. And, you know, the beauty of it is the illustrations we did at the beginning.

It'S a lot. You know how I said to you, like, the illustration purpose is to try and give you that picture perfect. Right. And then we show the reality. And to be honest with you, the reality isn't too far off the picture perfect. You know, it's very clear in terms of those setups, and it's amazing to see.

And I ended up. Sorry to interrupt. I ended up, you know, clipping some of these so students can see. Kind of this would have been now where I executed and a few of my covers. And then again, yeah, do I wish I covered at 700? I ended up covering, you know, even higher than my initial two covers. Right. So not my very best execution. But the concept on the short was there. This was hims. Right. This was buying that little move over 29 trim into 37 trim right there, and then sold the. You know, sold the rest right there. Yeah. At 50. So, yeah, fit. So it's like, yeah, $20 high off the highs. I wish I would have done a better job at selling it.

I mean, that's the thing. Like every trader's dream is to be able to buy the bottom, sell the exact.

Yeah, that doesn't happen.

Exactly. And I think being able to accept that and say, okay, you know, yeah.

This was a toast. And I bought this thing really well, and then, you know, look at where I got rid of it. And this one kind of hurt. I'm happy to share the panel on this one. It was great. So, you know, quite a bit where, you know, almost half million bucks, and then, you know, you end up getting rid of it for 150,000. It's still a bunch of money.

Yeah.

But the reality is, is that, you know, you give away so much of your profit. Yeah. What other ones did I screenshot for us? Nvidia. This was my two buys coming out of this flat base. Right. I pyramid into this position, and this one, you know, I didn't get rid of some until that topping wick. And then I sold the rest on that very ugly, nasty red candle. And, and this one was actually one of my bigger P L trades and quite a bit, so pretty awesome. But again, it's just like I said, it's the most scalable way to trade, right. If you can get to 50 million, 100 million free month position. Yeah, exactly. Because I literally was risking $3 from my entry on 3,000 shares when I initially bought it. So it's like effectively nothing. And then it worked right away day one, and then it worked right away day two. And that's also because semiconductors are strong. It had a five month base, Right. It had all of the ingredients to be able to go and make a really awesome move. I, I might have saved a few more. So this was Spotify, right. I bought it and then the very next day I sold it. But just as an example, when you size properly, right. Your losses are much smaller. You're very fairly manageable. And same thing with this one crowdstrike. I bought it what I thought was breaking out over this little flat base.

Yeah.

And then I stopped it the very next day. And what was effectively a very manageable loss. Right. So it's like in comparison, yes, dollar wise, you know, you'd still be like, oh wow, you lost a bunch of money. But when you let your winners work, they end up paying you 10 to 1, 20 to 1, 30 to 1. And you keep your losses very small and you let your winners run is kind of the, the theme. And don't have fomo, know your setups, understand that it's the most scalable way to trade and that there are two sides to the market. You don't always have to be long, you don't always have to be short. Right. Don't have to have a bias. It's just a setup.

So yeah, man, it's been, it's been awesome to do this.

Absolutely awesome, honestly and especially. Thank you for, for showing us the screenshots as well. I think it really opens people's eyes, especially the duration of trades, as you say, the keeping the losses small. And then when you find the trade that you can hold and you can make it run and let it run, the power of being able to do that. And everyone at home, drop a comment of your biggest takeaway from this episode. Any questions you have, you know, for Ariel or myself, drop them in the comments. We'll check those out. But links for Ariel will be in the description below. So make sure you, you go check them out. Show some love hit subscribe hit like other episodes are on screen and this has been chart for natics Take care.