Spot & Trade Market Bubbles with EXTREME Accuracy- Kyle Williams ($7.8 Million in Profits)

After even including the losses, I end up making around 150,000 or so people who don't maybe watch small caps. Like if you trade over a billion shares a day, it's pretty damn impressive. It's usually ones that are trading like under a dollar. And maybe I'm biased, but there's no other more I think dominant edge than you know, from taking a few thousand

dollars to now over $7 million in verified trading profits.

Close to a million dollars in profits

in December of 2025 alone. The one and only Kyle Williams.

People are looking at like the Nasdaq and thinking like a bubble happens every 20, 30 years, right? But imagine bubbles on a very smaller time frame. Like a bubbles that happen maybe once a week. When we are in the true bubble stage, there is no room for oh, let's consolidate like no, we are going either straight up or straight down. The basic minimum, what is what I'm looking for to even identify if we were even, even remotely in bubble territory

is in this episode of Chart Fanatics. Kyle goes through his exact favorite trading strategy. This is a plus of a plus setups.

You want to short the short squeeze and you can never tell when shorts are getting squeezed or when a squeeze is happening. But the best way to assume and maybe more times than not be right is like when you see this. For over the eight years now I've tried this setup like the 3, 2 to 3 days, 80 to 100% is like the minimum. Anything other than that like this, you open the door for more losses or subpar results because he goes through step

by step the exact process to identify and to execute and manage this short trade trading strategy.

What if the volume is in very big at the start and it just gets lower? So the higher it goes, it's almost like the less interested people are getting. The best way to know when a stock's going down is when it.

Welcome everyone back to Chart Fanatics, the

go to channel for all of the very best strategy breakdowns with some of

the very best traders in the world.

We're in LA for the first time

for Chart Fanatics, or Words of Wisdom for that matter. And you probably know who we're here for. We had him on Words of Wisdom at the start of the year. That episode did incredibly well. He's up close to over 2 million on the year so far.

He's a top five on the Kimfo

leaderboard for verified P and LS as well. It's the one and only Kyle Williams.

What's going on? It's A pleasure.

Thanks. Thanks for being back. As I said, we got to come to LA this time, so thank you for being our first guest here. But today we're going to go over one, your most profitable setup that you've done over 3 million on. And then we have two other playbooks and strategies that you utilize in the markets as well. Okay, where should we begin?

Let's go over the. I, we go over the first, the first main set of you just mentioned, which is like the first red day. A lot of people who trade small caps like I do are pretty familiar. I feel like it's like the, I don't call the poster child, but if, if you're in small cap, you over time probably get dragged into the idea of short selling or short sell yourself. And maybe I'm biased, but there's no other, more, I think, dominant edge than, you know, the first red day in small caps. And so the gist of it, I guess let's choose a green candle. We'll actually make the actual look, the, the candles actually representative of how they actually should look. So the way I want to conceptually position it for the viewers is like imagine, you know, we all know what a bubble looks or feels like, right? But maybe they don't always happen. Like if you look at the overall markets or you look at like one certain index or one certain sector, like, it's not like you're seeing bubbles frequently. In fact, people are looking at like the NASDAQ and thinking like a bubble happens every 20, 30 years, right? But imagine bubbles on a very smaller time frame. Like bubbles that happen maybe once a week, but no one cares because they just see a stock going up at hundreds of percent. But in the reality, from a fundamental perspective or which is how much the value company should be valued, they enter this euphoric bubble, like stage. And so that's what I look for. So, so the basic minimum, what is what I'm looking for to even identify if we were even, even remotely in, you know, bubble territory is I'll always say two to three green days in a row.

So we'll draw the little candles, we'll go like this.

That's one day. There's a daily chart. So two days and then, so two days is the minimum. It can go as much as it wants. It can do 3, 4, 5, 10. I've seen as much as like 7, 10 days in a row, but the minimum is 2. And the reason why I do that is because you're going to see a lot of days in small Cap where there's a bunch of runners that just do one day. You know, they just do this one candle. You know, these are different tickers. Right. And then the second day when they do something, the odds are more random. Like I don't know if they're going to go a second day or they're just going to drop back to where they came from. Terrible candle. Sorry, but the odds are too wishy washy. There's no setup or criteria enough there for me to really, you know, identify a bubble or identify a move that's extended enough to even give me something that's worth short selling.

So you say one day wouldn't really go into bubble territory.

Yeah, yeah. I mean there are instances where a ticker can run, yeah, 500%, 1,000% in a day. But those are the exceptions, not the rules. And even then when they do that, they're still not fitting. Maybe the framework of how I like the multi day runners to look. It's, it's, it's much more structure and like predictability around the multi day runners and the ones that just have one blow off day of insanity and then next thing you know, you don't want, you don't really know what's happening. But so two days is the minimum, 180 to 100%. So let's just say this move to the highs, you know, is 100% move.

Okay.

That would be the minimum. So again it can go three days,

four days, which is the longer it goes, the better.

Not necessarily. So let's say if this, and this is common mistake that people make when they do see this, let's say there is four days or let's say there's six. Let's just say it keeps going. Yeah, right. But over these six days it's not 100%. This is only a 50% move.

Okay.

Right. So it's a bit of mix of both where it has to be extended enough and have a certain amount of red days or green days because I can see something have 10 green days.

But if it's only up 30%, gotcha.

It's a more, that's more of a steady accumulation in some instances than a blowoff bubble. So we want like 100% minimum and if it does happen to go up, you know, six red or green days in a row and it's at 200%, 300%, 400%, that's where the scale gets good of like the more green is and the bigger it's up.

That almost a really strong visualization of euphoria. Yes, you want to see that euphoria. So to your point, this could be six days, but then only 50% up. It's not really going to create that euphoria now versus six days and even 100 or especially if it's 2,300% up, that's going to create that euphoria, that FOMO, which is what you're essentially trying to capitalize on.

Yep, exactly. And so those, that's, that's the minimum criteria. Like if it fits those two things where enough green days, another percent extension, then I know, okay, now we are, you know, in the, we've entered the room of like, okay, this is probably or could be a bubble. And that's the most systematic, systematic way I can go about it. But then after that there's a whole lot of discretionary. I like, you know, people like to compare it, whether it's an art or a science, trading in first red days or this setup. It's like it's a science up to this point.

Okay.

But then there's so much art to it after the fact to really dissect of like, okay, because you could have two tickers and maybe we'll later when we go in some examples where both might have the exact same percentage run up and the exact number of green days. But how they move, what the news is, how the volume is, the price action, it can make you, it can be entirely different, you know, outcome. So another, another thing to look for in that part of that discretionary look is, is this, you know, say this is a daily chart again, but this is kind of curling this way. Right. I've noted, you know, I've drew in it in a way where the green days are actually bigger from the start and get smaller as we go up. What gets better and what typically what bubbles will look like is if it gets bigger the higher it goes. Okay, so it would be the opposite. So this would be a pretty lackluster. If I saw this pattern where they actually get slower as we go up, I'd be like this, this is like red flaggish to me. This doesn't look that good. Versus if we do something like this where it's actually a little bit and then more and then more and then before you know it, we're off the chart and it's just going, you know, parabolic. It's going huge. Where every single percent day is bigger in percent and bigger in range. So this might be only be a dollar range, this might be two, this might be 350. And then all of a sudden we've gone, you know, this is some of the best ones that we ever will look at is like 1, 2, 3, 50. So we're at 5:50. This one will be like $7. The top day might be bigger than the entire run's range to just totally blow it off people's socks and like really enter, you know, what we've been calling, you know, bubble territory.

So again, it's like you want that visualization of euphoria towards the end. Yes. Because the nature of that first red day is the. It creates a catalyst.

Yes.

On the opposite side, Right?

Yeah. The way I like to say is in some cases like you want to short the short squeeze and you can never tell when shorts are getting squeezed or when a squeeze is happening. But the best way to assume and maybe more times than not be right is like when you see this, when you see the top of the move getting so insane range wise, you have to wonder either it's a, it's longs chasing like buying out of greed or fear of missing a move higher or it is shorts who are short from, you know, down here and they are now down 100% and they're like, crap, I can't stomach this loss, I have to get out. And then they, you know, cover and squeeze it higher. Could I kind of idea.

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That's one area to look at, but something we haven't talked about yet is like, volume. So we'll have this. Like, this is the chart bottom line, right. In this instance, this would be a perfect. Let's put it this way. This isn't always the case. So you can mix and match factors. So we're gonna have four factors here. We're have what the chart looks like that's poorly, what the chart looks like that's good. I'm going to show you what the volume looks like. If it's poorly, and what the volume looks like, it's good. But you can have both scenarios or mix match. Where the chart will look great, but the volume is going to suck, or the chart will look terrible, but the volume is actually good. And so that's where the sign, the art comes in. It's like you have to gauge and judge for yourself. Like, well, it has one indicator, not the other. And you have to realize, is it worth taking? Is it even going to be a bubble?

Is it going to have a big

red day down to the downside? So volume for when it would look really poorly is very similar to the daily chart. What if the volume is very big at the start and it just gets lower and lower and lower? So the higher it goes, it's almost like the less interested people are getting. Because volume, for me, is a gauge of how interested people are. If there's no volume, no one's trading it. Whether it's shorts or longs. And you have to wonder, is it really, you know, because bubbles, whether they're small and small cap or something as big as, like, gold, that we saw this huge parabolic run. And I'm not calling up gold a bubble, but it had a massive run. It's like, why is no one getting interested? It should. It should bring in the greed. It should bring in the fomo.

We see the lines for people trying to buy gold, and that's your indication, right?

Exactly. So when volume's going down and even though we're getting extended from a daily chart perspective, I have to wonder. No one cares, so why should I? Versus if it gets better, it will be the opposite. It'll almost look like a perfect, you know, like, cellular service bar. Right. It gets bigger and then bigger and then bigger, and then before you know it, it's very similar to how the top day is going to be. Almost the whole range. Yeah. You might see a volume candle just like massively Bigger than all the previous ones combined or not combined, but just significantly bigger to signify, like, hey, this is the interest is getting the most insane at the very top or towards the top, at least towards the top of the range. Um, and so that's a huge indicator for me as well. There are many times like if I see this kind of round out to daily chart with this kind of volume, I almost will never trade it.

Yeah.

Because it sometimes and it doesn't mean that red day can't work. It doesn't mean, you know, at the end of it all this can't still have a really nice red day that's worth shorting. But more times than not, it's not worth it. Yeah, I find most of my losses not most, but the win rate on something like this, even though both are first red days, the win rate on a look like this will be significant lower than a win rate of a first render that looks, you know, so like this got you, you know, so.

So add to your point earlier. If let's say this volume in its visuals is on this side with this visual here, what happens in that scenario?

Say it one more time.

So if the volume in terms of like picking up towards the end even though the candles are getting smaller, like what happens with that sort of setup is. Is there a different opinion on that?

So that, that's where with the art aspect of it, I will usually grade setups.

Okay.

And I don't necessarily say like every trader has to do that. I think the more beginner you are and the more or the less experience you have with seeing all these different examples, whether good volume, bad volume, good chart, bad chart play out and a mix of all in between. As a beginner you have to find out for yourself. So you probably are taking the same level of risk on every trade just to learn it.

Yeah.

But for me, yes, in this instance, I have, you know, five. I have A, I have a C, B, A, A plus. So for me, if I saw right this kind of chart, but with this kind of volume, I might be like, okay, the chart tells me something that's kind of a red flag. Like it's like a, you know, a dock against it. It's like one strike but the volume looks good. So it's okay. I might still give it a try. But I'm only going to risk like C or B grade risk. I'm not going to give it A,

it could go from like D of just the price. Yep. And then by having the volume, it goes, okay, this, it's like oh, go graded but only to like a CB like you say.

Yeah, yep.

But then there are other factors like you mentioned in terms of fundamentals. Is there FEMA play?

Yeah.

So these, all these elements then can shift 100% the sub. But again to your point, a beginner won't be really thinking along the lines because they're still collecting their data and being able to get used to, you know, the combinations that come into play when it comes to grading the setup and being able to be dynamic of your size. Yeah, but you get more experience, you have more of that data, you understand your win rate, your win percentage on say one element of it as we talked about. Then when you include another element, it could shift things ever so slightly. But at the end of the day, your main goal is to be able to get the A plus setup being you have the volume, you have the price, and then you have the other elements as well.

Yeah, 100%. Like when I, you know, year one or year two of me trying to trade the setup, I almost ignored volume entirely. And if it just had enough days or green days in a row, enough extension, even the volume was non existent with my small account, I thought, oh, me shorting 100 shares won't matter. And sure, maybe it worked, maybe it didn't. But as I grew in size, as I grew in risk level and risk tolerance and wanting to actually take some size where I need a decent amount of volume, I then realized the inefficiency of this kind of look with this kind of volume. I was like, okay, I'm just not going to trade anymore in most cases because it's going to lead to losses for me, you know, nine times out

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And you mentioned in terms of like, you need to have the percentage move and minimum of two days. Is there any other element when it comes to. Do you have to have some sort of fundamentals, do you have to have some sort of theme to be able to still execute on this setup or no?

Yeah. So obviously, fundamentally, if the company's bad, you know, more the better. The only thing I'd worry about when it's bad is that usually the. It's so funny. The trashiest companies will run the most ironically. You know what I mean? Yeah.

Which is so weird to me.

But it just is, it just happens. I don't know why it just happens. So, yes, if you see something that's really bad, okay, great, perfect. Like once the party is over and the bubble is popped, it's going to be great. But until it does, you need to be careful because it's use of the crappy companies that can do this massive move in the last day. And if you're just shorting it down here thinking, oh, it's so crappy, I'm not going to have to worry about risk or worry about it going against me. It's going to die like all these other companies that are terrible. Well, you might, you might be, you know, in for a rude awakening.

Yeah.

Vice versa. First read, this can also happen well on fundamentally good companies. But you might need to adjust the extension level.

Okay.

So like if, you know, there's a company that's really, really good or they've got really good earnings or something like that, you know, I might say, you know what, I'm not going to short this till this is up at least 300%. Like, it might only be up 100%, but if it's got really good earnings, I'm like, you know what, if it can go up another 300% in two days from now, you know what, I'll be. It's. It's getting too good, where I can't ignore it, no matter how good the company is kind of thing. So it's. It's a.

It's a gauge.

The. The other major technical part, though, beyond just fundamentals is, you know, we drew two daily charts where it's pretty straightforward, where it's Green day, Green day, Green day. The biggest mistake people will make is, well, what happens if. What if it's just got. What if it's got one of these? It goes, you know, green, green, but then we have, you know, small red to where you probably would have given this a shot or I would have. But guess what? Maybe it worked, maybe it didn't. But then all of a sudden, it keeps going, you know, and then maybe even small another, not even a red candle, but like a little like doji. It like kind of goes. Kind of doesn't go. It doesn't really know where it's wanted to go. And then finally the big blow off, right? Or even worse, it just keeps grinding, right? Then we do, we know, do another like a gap up and then it closes down. And then we do like one of these. It's like as the day goes on or as the run goes on, you kind of every day is like new information. And so what it once might look really good, maybe turn into a win or two or loss, who knows? And then it goes again. And then you might immediately want to try it again at some point, if it's not a smooth run like we saw here, sometimes what these small, like days will be will be like reset days to where, you know, yeah, maybe this has gone from like $1, right, to I don't know, maybe seven up here. But resetting itself at three bucks here might mean, like, hey, you know, I'm gonna need. Even though we are up 200% from 1 to 3, the fact that we kept going and saved ourselves after this first, you know, quote unquote, red day, that really wasn't that good. Or it actually supported ourselves better than we thought. It might reset my criteria of like, okay, I want to see another a

hundred percent from three.

Okay, go, you know, to where? Because at some point, if it consolidates enough, you know, stocks can go on thousands of percent runs over weeks. But I'm looking for where's that. Where's that explosion? Back to this sample. Where's that real expansion to the upside.

So even if that was to come, say even up here, that would still then play into. So let's say, for example, reset wise, it happens up at the at the highs here, you've already seen it run.

Yep.

You essentially would need to see, say the same rules again. So, like, two minimum days, 100% almost.

I mean, not entirely, but like it. And this is where the art gets. Because there's no exact mathematical criteria I

can give you, but that euphoria element.

Yes. That really has to be. That's a big one. And then, yeah, it's like, now I'm trying to look at, okay, where's the. How much is the euphoric part of it? And how much are we entire in terms of the entire big run? Because, yes, there could be more difficult, like, setups that still can be profitable, that you can still capture as a short seller, but you then have to look at the one.

The.

The euphoric part.

Yeah.

But then also the entire move as a whole. And we might see some charts where. Yeah, at first it wasn't anything interesting, but by the time you get to the end and then you include the entire move in itself, it's like, okay, this is pretty damn extended. Yeah. And so that's the art of it. There's no correct way to look at it, but you get enough examples, get enough chart experience, enough to know what it actually is or isn't, you then can kind of build the entire synopsis of putting everything together. And like, yep, this is good. Or this is not so great.

Is there any element of. We've talked about volume. We talked about price action in terms of that euphoria, as we mentioned about gold. Gold is a good example. We were able to see, you know, pictures of people actually being in line for gold stores to purchase gold, even though it's at all time high.

That was a crazy video I saw on X. I was like, no fricking way is that to buy gold.

And then the classic that you normally see with crypto, right. Is, you know, someone who. A family member or some random person start talking about crypto should never really be talking about it. Right. Y. So, for example, when gold literally had its first red day the day before, alongside those videos, my. A family member of mine had reached out, or it was actually a family member of my wife. Sorry, Reached out to be like, oh, could you buy me a gold bar? I was in Dubai.

Wow.

And I was like, well, this is going to. This is going to happen. And the day after is. And we had the first red day. So just as a question, we talked about this element. But another element of that euphoria, an indication, if you will, do you look at anything in Terms of noise on social media about, you know, people trying to hype this company. Do you look at, you know, whether there's reports about coming out? Is there any of those sort of external factors that come into play to try and highlight the euphoria?

Yes and no. Because I totally notice, like, when you see those things, I do pick up sentiment like that. But I wouldn't say I ever make take action on it.

It's an added benefit.

Yeah. And because the only reason is like, I can think of just as many other scenarios where I did get a sentiment read. And yes, it was a sign of bearishness or was the sign of the top being in, but it wasn't the right timing in terms of the shark. Yeah. So it's like a friend could, you know, for example, like Bitcoin back in 2017, I barely had known about. I was just now kind of coming to the realization of what it was. And I remember one of my friends was at the time was like, oh, I just, I just bought some of this coin at, at $3,000 a coin and I look at the chart and it's gone up from like a thousand to three thousand, like, you know, couple months. And I was like, he bought the top. You know, I was, I wasn't able to short sell bitcoin or I probably would have. I was too, too immature of a trader at the time. Still new, but then it goes to 20,000, you know, and like, I looked at my friend like, you know, nothing about this, you know, but that was him and he got, he was actually early. So you, you never know who you're actually talking to and how lucky or unlucky that person might be on the, you know, so I don't, I will take into account, but I don't necessarily take immediate action if I do see it.

That's good to know.

Yeah.

Cool. And then before we move on to the actual chart examples, should we just go over in terms of the execution, you know, when we're looking at. To enter.

Sure.

First red day and then also, you know, the management side of things.

Yep, Yep. Before we actually. This talks to a good segue because so quickly when we look at the daily charts. Another reason why this might be really much more ideal than this is because part of the execution on the intraday, which we'll go over in just a second, is if it's never gone red every single day, every single day it's gapping up or going above previous days close. And there's really no sign for anyone who's long to feel scared.

Yeah.

There's no reason for anyone to think that they're going to give back their money or that this stocks are going to go down. They think their stocks can go up forever. Once it does shift, it makes it much more clear of a sign when to get short than if it does this because who's to say if the first. If the first red day finally does come. Let's say finally this thing just collapses 20 in a single day. Well, from an entry standpoint intraday what makes me any sure to get short up here on this day than here on this day.

Exactly.

Or here on this day, you know, so you either. And that's why I might. I like these much much more because sometimes I will just actually totally miss this red day because I'm not willing to try it on either of these days. You know, they're just not. It's. It's too unpredictable for me. Oh. And. Or I don't have the emotional willingness or stamina to want to give this 10 tries of course, you know, versus this one. It's like I know I'll give this three tries in one day because one that's showing me signs that it's never shown ever in the entire run up. It's like I'll keep going for it, you know. So that makes a big, big difference. It makes it much more easier, harder depending on what daily chart we're looking at. But in general the same train planning is the same which we can go into the. The intraday and in terms of the

A plus setup, this exact examp here, this is the one you will size more on, right?

Yeah. This would be like the A plus.

Exactly. So like even with these ones, even if you're not sizing, you know a hell of a lot, it's still decent size and to be able to, you know, take a. Take a potential loss or just be in the the emotional turmoil of the highs and lows of seeing PNL swinging and then having to try it again. Having to try again and then thinking you're going to execute flawlessly at the high. Yeah. For the right one, you know it doesn't. But as a prime example or question should I say this A plus setup in comparison, how often would you say this sets up on a regular basis or not Versus seeing some of these other examples that we talked about.

Good question.

Let's.

We'll do like a little. Let me like do like a. Like a little graph like a chart. So we'll have. We have A plus A, B, C. Right. I. If you think something even a D or an F, I wouldn't even, don't even bother. Right? I almost don't. I. The longer I've traded, the more I or the less I've even bothered with C's got, you know what I mean? Like, it's like these are, you know, maybe you make money here, there. And I think a reason why a lot of traders will stoop down to this level is because there's FOMO of like, well, what if it does work? Yeah, but you got to think in terms of large numbers of like, you know, this is where your, your odds of winning will actually be negative over time. So there's going to be times, you know, I'm never going to sit here and say a D set up or C setup won't work. There'll be times where they work and you're like, damn, if I just shorted, I would have made money. But you're thinking not today, you're thinking tomorrow, you're thinking a year from now.

That's the trick.

Ten years from now.

The trick is when they work. Because then you think, oh, I should keep doing this. Yeah, I'm miss out.

And then you try again and it ends up being a loser. So you're thinking about over the long scale of things. And so C setups or C first rate. I mean, yeah, you're going to see these happen, I mean, once a week, you know, so let's say in terms of a year, you might see this happen 50 times a year at least, you know, because they're very common. You're going to see a bunch of 12 days in a row and might have a little bit of this or some kind of volume. Yeah, lower volume. Yeah, you're going to see them all the time. B, this is what I would consider average. So B trades, terrible writing there. B trades I think are average. I think that's going to happen. It's going to happen less. But I would say, I would say once every two weeks. Let's call it 25 times a year. Right. The A's is where we get even more great. So this is going to be like, it's better than average, but it doesn't have everything. So if this has everything you want, this has got like, you know, there's 20 things up first rate. It needs to be perfect. It's got like 15 of them. You know, it's got, it's got 12, it's got 16, it doesn't have all of it. But it's got enough of it to be okay. This is better than average. This I would say happens once a month. And it's funny, I keep dividing it by perfectly half but let's just say it ten times a year. Right. The first red day though on an A plus that's where it gets pretty damn rare. I would say that happens. It may be in a busy year. Once a quarter. I'm trying to think of this year like so last year we had MSTR that was really damn good. Earlier 2024 we had SMCI that so that we had like two really good A pluses that year. This year bynd just happened that was big. I would say open op e n ticker when I ran from 50 cents to 5 bucks that was pretty damn big. So we've had you know, two or three in the last year. You know. So let's, let's say at most like four. But don't be surprised if you only get like one.

Yeah.

You know, so that kind of idea.

And would you say that in terms of the 3 million ish in profits that has come from this particular setup, how would that be distributed? Would you say, would you say the bulk is coming from A plus?

You know that makes me actually want to really look into it. But without even knowing the exact numbers. 100% I would say just from like a basic Pareto, you know, numbers like the 8020 rule. I would guess 80% comes from, you know, this half and 20 only comes from this bottom half.

For sure.

Yeah, for sure.

So that's why you were saying like even getting to a point where you're not even maybe looking at the seas, you might.

Yeah. It just might not be worth my time, you know, especially when I know so much more. I rather some traders will do this and I haven't necessarily gotten good at this but I would rather almost, you know, if let's say for a C grade setup I was risking 5k per C grade. Yeah. And I miss all of them. Some traders would be insane enough, you know what, since I haven't taken the 5k risk on 50 trades, let's take all 250k. $100. 100 250k dollars that I would have risked on, on, on these 50Cs and just risk all of it on this one. A setup that I'm going to find next time like they'll, they'll save the risk and put it. I don't necessarily think about it that way or like to do it because I'm not really comfortable risking 250k on a single trade, but I am willing comfortable with it risking 50 or 60 and I save that or 70 and I save that for the a pluses big time.

That makes sense.

Yeah.

And would you say, you know, we talked about how Ds and Fs for example, a lot of traders still take them because of the FOMO and yf, but would you say another element is that they don't actually have the data, they haven't collected the data 100% looking at these numbers in this way. Because would you say that by having the data it just allows you to make more informed decisions, but then also have a lot more confidence, which can be good and bad? Of course, have a lot more confidence behind upping the size on an A plus, for example, or not taking the DNF in particular, but also even the Cs getting to that point where you've collected enough data, built your experience to enough of A level to then start to say, okay, you know what, it's actually costing me more these Cs in terms of psychology element, right? That mental capital as well as potential losses versus saving that mental capital and the actual capital itself, as you mentioned, for the A plus or the A accordingly. So, you know, collecting that data, so, so important because I know a lot of traders who've been trading for years, years even, and probably even more years than yourself, and yet they still haven't connected the data. And then they wonder why the results aren't replicating.

They're taking everything and they're getting all this in there. Yeah, 100%. I would almost even argue D's and F's would look like the setup aren't the setup. And a perfect example of this is like, and I see this all the time because then I kind of hate

the name the First Red Day because

it's so it comes off too self explanatory where they'll think, oh, just the first red day, like duh. But what if, like what if this is only up. What if we, what if it has two green days? Well, what if we do do this? We go like this, right? And, but this is only a, you know, 60% move, right? From here to here, right. I can't tell you how many traders will then get a red day here and they're like, oh, the first red day. And yeah, objectively you're not wrong. It is the first red day in a three day run up. But it's not the first red day setup that's made me over $3 million. Right. Because more times very similar to like the one green day runs that I don't know what happens after. There's so many times where, yeah, I'm drawing it nice how it looks here. But this could, this could be like this. This could just kind of be like a crappy red day that would unto a loser or a crappy green day that turn, you know, that may gap down but then actually run higher.

Yeah.

Right. So so many traders will give these, you know, setups that kind of almost meet the criteria. They just look at the two red days, they don't look at the extension, or two green days, they don't look at the extension and they'll give it a shot. And it's going to end up in this realm of edge or profitability.

Yeah.

Because this isn't meet the actual criteria that at least I have. Again, everyone can do their own back testing or find out what works for them. But for over the eight years now, I've tried this setup like the three. Two to three days, 80 to 100% is like the minimum. Anything under that, like this, you open the door for more losses or subpar results.

Yeah.

Because it might be a red day. It's not the setup first red day, you know, so it's very, you know, I hate the name, but it's very. It's very important to have like that detail, of course.

And then going back to what we were just saying, then we'll move into, of course, the execution side of things. It's like if you don't have the data, you'll start that way. There's no problem starting that way, making those mistakes if you not having that insight right into the data. But that's the whole point of being able to go back and reflect and say, okay, I took a loss or break even, even maybe. Or, you know, maybe you got out with a small win. But even with the wins on a bad setup, you have to reflect to go back and say, okay, I got lucky here, but over the long term, this is not worth me doing.

Correct.

Yeah. Yeah, I love that. And then also, you know, going back to, as you mentioned, the, that scenario we had mapped out just a moment ago, where we have a red day, but then continue have a red day again as part of the euphoria, we talk about the euphoria and the fomo, but equally, it's almost the pain in the market. Right. The more that happens, it's more people who are getting trapped short, which then creates that euphoric, the actual euphoric moment you're looking for. So that's almost in some moves, it might even be necessary and you still get the A plus out. But later because of that, people have, you know, taken a, taken a loss or they're trapped in. Taking a loss and get trapped in and then it gets to a point where it blows off the top. And then you see this move.

Yep, 100. I almost, I almost. I can never prove it, but when you talk about trapping people or positioning in a way that it gets to this move. Yeah, that's why I like multiple green days than just one or two. Or again, why five? If, if there's a runner that goes up five days in a row, but 500 versus two days row and 100%, it's like regardless of the percentage engine, I'm always going to like the multiple days in a row because, you know, we talk about trapping shorts or trapping longs.

I like where longs are building up.

It's like, what if that volume's getting. What if we can, what if we could perfectly quantify how many new holders of a stock are we, you know, like, I know we can do that with crypto because it's very open and transparent. But like we can't do those stocks. But if we could, it's like, what if we knew, you know, 100 new people bought on the first day, but then now 300 total people are in and then 500 and then a thousand. It's like now, you know, the overwhelming majority of people are going to be on this red day or this top day. So that when the red day comes, they're immediately all underwater. And, and I hate to say it, but like when a short, when a stock goes down after it goes down 10% or more is when SSR is triggered short seller restriction, meaning if you're a short seller, you can't hit the bid anymore. You have to be on the ask and get bought in. Like someone has some other buyer or, or short who's covering has to hit your order to fill. So after a stock has gone down 10% of the morning, they. For it to go negative 15, negative 20, negative 30% a day, you need genuine long spot sellers to sell it down to make money. So that's why these, these types of moves can be so good. Because you want the most amount of longs at the top who are going to sell and take losses on the actual red day that you short in. Yeah, exactly. Exactly.

We've done that in so much detail, but I think it was so Good, because it makes it so clear in the different scenarios to look out for, how to manage those sort of decisions, how to identify A plus setups versus, you know, B or C or what's not even worth taking.

Yep.

And the reality of like if you are going to be quite new to weather trading or whether it's the sell, that it's okay to essentially start by making mistakes. What more what an expert would class as mistakes. But as a newbie, that's normal. Like you have to go through the reps and the process to actually learn. Like, you know, I'm sure, no doubt in the beginning you probably took some D or F trades and didn't actually have them identified in that way at the beginning. But in terms of then the execution side of things, what does that look like? What are we looking for?

So a big level that I always want to keep track of is the previous day's close. And the reason why at such an important level is because you have to think about the basic long buyer. Back in that example, the 300, 500, a thousand people who bought. The example I love to give is think about them as like the average Joe Schmo who doesn't trade, who barely invests, dabbles on the side, doesn't really have any charting software, but they check their stocks app. You know, they have a favorite broker or app or whatever. They check and they're working at their 9 to 5 and they say they bought a stock at a dollar and it closed at $1.20. So all they see right here, if this is like the previous closing line, if this is this whole thing is an intraday chart, right? Yep. And this is 120. We'll do 1 20. Okay. They're earned from one. All they know. They don't nicely see that how much they're up. I mean, they'll look at their P and L, of course. Right. But because the stock closed, say on a Monday at 120, all they know the next day is if the stock is up or down based on this 120 level. So it's at 110, it's gonna be down 10 cents a day. If it's up, you know, 130, it's going to be up 10 cents a day. So the previous day's close is huge. And I say that because so many people want to use the opening price. So if the stock gaps up from, you know, 120, let's say 150 up here. Right. Well, someone could buy it at 150 it can trade down like, say it's like a spike. It tries to go but it all also ends up 130. And someone who bought might still think they're up because it's still green of the day. Yeah, it'll just show them, oh, up 10 cents. They like, oh good, I'm up. But if they bought at 150 and the stock is still technically green, it

doesn't matter, they're down 20 cents.

Yeah.

So I want to know when is

it actually going to show people on their software regardless of their position. We are red on the day we are trading below, you know, the previous closing price, which is huge. So in terms of knowing that we'll keep the, we'll keep the, we'll get rid of 120, will keep the actual prices here.

Right.

So real quick I want to, I want to show it as if like we're going to look at two intraday charts. So let's look at like this is like down the middle, this is like the top day and this is the, you know, first red day

in terms

of that blow off move.

Yeah.

Right. You know, if we're thinking about, if we want to know, if you want to get confirmation that like we are in a bubble or the bubble is happening, the expansion is going to be huge. So in terms of volume, let's also try to maybe draw some volume. Right. Volume is going to be massive. Like you're going to see candles that are upwards of millions of chairs, candles a day maybe gets lower after the first opening session. But then it spurs, it has all these kind of, it just, it's a big all day long. Right?

Yeah.

Versus the first red day, you're going to notice the volume is significantly lower. Like some of the biggest tells or the quickest tell I should say before I look at any price action is if the volume is much, much lower than the first top day. Because again we talked about on an ideal setup that volume is kind of going up perfectly like an AT&T or a cellular service bar. Well on a red day, not always, but a lot of the times the volume will be lower than the top day. Sometimes the top day isn't the biggest volume, but there's, there's no way to tell if that's going to happen or not. And again this volume isn't like the full signal. Like oh, I'm just going to get short because of the volume. But it can be, it can be, it can be a tell in some cases. So instead of starting up like millions of Shares of the open, it might only be a few hundred thousand. You might immediately tell like, well, we're way lower. Just by looking at a broad picture view of both intradays together. You might know, wait a second, we're way lower. So then by the time the first hour of the day gets in, we're way down here. We're already significantly lower with the demand being lower than.

You're taking that into account with the fact that we've already had this, you know, really power.

Exactly, exactly. So in terms of the price action, you know, the top day or the bluff day doesn't have to go parabolic. Sometimes, sometimes you will see days where it just kind of trades out the open, you know, dips, goes, then it keeps going and all of a sudden times you'll see this massive blow off move, A huge blow off move. And sorry, we're drawing the red day. The previous close there, we'll draw in a second, say the previous day's close or this day is down here. It gapped up.

Yeah, right.

Say 10% here and then just blows off, but then keeps just going and then it just explodes.

Right.

We just go parabolic, maybe do a few halts up. Volume gets huge here.

Right.

People are kind of either chasing or squeezed. Shorts are getting squeezed. And sometimes when it, when it goes, blows off like that, you know, usually by the end of the day it will have pulled back a significant amount. Right. Maybe it bounced a little bit. But we are, you know, off the highs enough to some degree. Right. Okay. Going into the next day, you know, I will be watching this significantly because the best, I mean, it's like duh, Kyle when I say it, but like the best way to know when a stock's going down is when it can't go high up anymore. Which is like no, no crap. But like looking at that in the chart as it's happening is how you're going to structure your trade plan. So for me, you know, I can try to be fancy with it and risk some special level to get a better risk reward. But the end of the day, the highest odds or the least, the best risk level to show whether my thesis is right or wrong is going to be the all time high of that run. Just, just flat out like if I'm going to have any chance of the stock going lower, it has to stop going higher. Well, the highest point's ever been is that, is this, you know, let's call this seven bucks. Got you randomly just seven. You know, that's the price I have to watch because if it can't go higher that day, we, you know, let's say the run started four days ago, down from like a dollar. So we're up 700, 600%. I have to trust that if that's the high, we're up so much. We're, we're in straight up or straight down territory. There is not going to be this oh small green day or oh, small ready like we talked about that, that more poor, piss poor example. When we are that parabolic, that blow off kind of ideal. When we are in the true bubble stage, there is no room for, you know, oh, let's consolidate like no, we are going either straight up or straight down. So when we are in that period and if that's how the period plays out now the previous close is right here. Right. So if it's going to work, we are probably not going to break these highs and we are going to make new lows on the day. You know, typically depending on how extension, how much extension there is, I think a minimum first red day to work. Well in most cases, at least in the small cab world, you know, you're looking for negative 10. You know, in other instances, like if we do look at gold, gold was such a massive, such a massive asset. Like when I was shorting first red is our gold's first red day. I was looking for like 2 or 3% because it's such a different asset, such a different vehicle.

Yeah.

But when we're trading some, some penny stock or some stock goes one from seven. Yeah. This could be down 30 in the day. You know the, the tricky part though here is sometimes you will get candles that maybe they gap up. So they start trading here.

Yep.

And they do go up and so you do have to cut your loss there some and most will probably keep going. But some are tricky, some might fake out. So part of the, part of the hard part is you might have to be willing to reshort if it ends up, you know, dying and going lower. But I would say in most instances using that high is going to high as odds example. But regardless how good you think the setup is, you're going to be wrong. Sometimes it's just going to happen.

Yeah.

So an ideal, in ideal world this might gap up, might gap down, doesn't really matter. Let's say it goes a small gap up, starts trading here and it might try, it might try to spike, but it just can't get above this. Resist this previous day's level and so

then it's going to fail.

You know, maybe it tries to bounce again, maybe it tries to do whatever, but eventually it's going to make it have a momentum shift. And so that's going below the previous day's close for the first time, let's say, if it's perfect sense, a dollar. So now you back to that Joe Schmo example. You're now giving the average person who's long a reason to be fearful. So it depends on how aggressive you want to be. If you want to be aggressive, thinking, hey, we're going to die today before we are red on the day, you might want to take a starter short here, risking these highs, you know, it might be a lower odds play because it could just rip right over you.

Yeah.

But if you want to have a good risk reward but lower win rate idea, you might start in say, hey, you know what? I'm going to get short at, you know, 650. Let's say this is 650, risking seven. The highs at seven.

Yeah.

Right. Then you see a crack and maybe this is making a new low a day.

Right.

This is like just barely makes a new low a day there, but is still green in the day. You might then say, hey, all right, that's the first time it's done that. It didn't do that yesterday. Yesterday just ripped and never even touched low a day ever again.

Got you.

Here we are making new lows, you know, in the first 20 minutes of the day. Let's take another entry or another starter. Right. Maybe it bounces on you, but who cares if you're willing to take a trade plan that says, hey, I'll add more here and either A, still keep your risk level on seven being meaning you're going to take on more dollar risk with the loss. Or if you want to be even more aggressive, you say, you know what, I'm going to move my risk to today's high of day.

Gotcha.

The risk is again, that might not be the move. It might actually hold up instead of cracking. It might actually hold up and then go, you know, and now you're in a difficult position where, okay, I have to cut here. But the entire thesis of whether it's going to die or not hasn't broken yet because that's up here.

Yeah.

So I get caught a lot of the times wanting to be fancy like that. Wanting to push risk reward or push size with a tighter risk level. The problem is you open the door to a lower odds idea where you could still stop out, but the trade plan might show you and then it comes back later, you know, but in the example, let's say, let's say you are. Whether you're fancy or not, it doesn't come back.

Right.

And then it does actually die. This ad for me would be the final confirmation spot where I say, okay, I've got everything I need. It's now trying to attempt to have this first ready. That's the last instance I can because some people think like, okay, it's having first ready. Why don't you wait for the stock to actually close red and then try to short the next day?

Well, the problem is if it actually

keeps going, let's just see how over the course of the day it keeps going. Like, am I really going to short down here? Yeah, you know, like, sure. Sometimes in the second day, if we do a third intraday, sometimes, yeah, they do gap down and go lower. But the, the, the perfect mix of getting a good win rate while also getting good reward is going to be somewhere in this territory.

Of course. Yeah.

You know, and maybe you're late, maybe you do miss this whole move. The latest portion I would even think about is maybe there is some kind of bounce where you can get short. Either risking the previous day's close or you get sure you're still risking one of the highs. Yeah, you know, risk reward is worse. But at this point your win rate might be higher because it is already red on the day.

Yeah, it's still close and you're expecting that move down within that range, you

might, you might expect a second lower

versus you could say, oh, this is great confirmation. Right. Because you've had that red day, now it's closed. But then where's your stop? Where are you going to put. Yeah, there might be some micro highs here, but then so easily could swipe out and.

Or yes. Or go ahead.

No, that's fine.

Yeah.

And more importantly, if you're shorting here, you have to then take it overnight. You know, you don't know if we're gapping up or gapping down. You know, there are sometimes where it is worth shorting overnight, especially if you are short from. Let's say you're short from 650 and this closes down at 5, you know, then yeah, you're already up a dollar and a half a share. Maybe you've covered some by the close. Yeah, it's not a big deal in most cases to take overnight, but if you're entering here.

Exactly.

It's like you put yourself at a much bigger risk.

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Now let's get back to the episode. Would you say as well, there are even occasions where you achieve the first red day, which is the, the name of the setup and what you're trying to achieve, and then the next day could still even continue higher? It could doesn't matter because you've gone for this, the whole A plus setup, the whole thesis is around the fact that this has had the parabolic move, the increase in volume, all the other factors. And then you've had that, that move fail, move lower, you've had everything you've looked for, it's had then the move down. So even if, let's say the next day you try to hold on to more of the size of the trade because yes, we're at $7, maybe down here is five, and there's still free $1 from a target, the likelihood of that happening is maybe there. But in terms of the actual A

plus, the actual thesis of the trade

is to get the first red day, right after that, it could do whatever. It could even just run back up again and have another parabolic move and set up another first red day in a week's time, two weeks time or months time even. But it might not even be the same probability because you already had one, for example. So it's understanding what you're going for because I think a lot of the time people have some sort of plan, but then they allow the emotions or the market itself to trick them, if you will, in real time. So, like, they will see this and go, oh, my God, I can now get a trade with extra confirmation, $5 and get to one, hold a lot of this size, enter some more. And that's happening in real time versus the thesis. The whole plan of the trade was just to get this move.

It was right there. Yeah. And more times than not, you know, and I struggle with this where, you know, as aggressive as I want to be here, I'll be aggressive and I get the same motions where like, okay, maybe I locked in a good profit, but now down here, now I really think it's dead. And yeah, I will think, oh, well, there's still four more dollars of downside. And sure, you know, we're dealing with small caps. 90% of them will go back to where they started, but it might not be in three hours or six hours. You might have to be short for three weeks. Yep. So there is an edge there.

Totally.

But it's amount of how much time do you want to put in and actually have capital deployed and the risk you want to take for how long you want to take it. Like, I'd rather take a bunch of risk here, make, you know, as much as I want to make in six hours of time versus trying to put on the same amount or even more to catch another move. But it's going to take, you know, three times or five times or ten times as long in terms of time having to play out to catch the same amount of percentage of the downside.

So we go, yeah, what's the setup?

So a couple other ones that I think, well, there's one that doesn't happen often and is the riskiest, which is a parabolic short. It's. It's almost like, you know, we talked about a bubble going parabolic from a daily perspective to give you the first red day. I would argue a parabolic short is like, it's almost as if you can

get the first ready all in in two hours.

It's almost like just the intraday version of it. That happens much less. It's also I think a bit more riskier and we can go into kind of why. So I would say that is an edge I have but doesn't make me a whole lot of money but does add to the bottom line. It is worth me taking when I find it. The other setup would be like how I treat breakouts from a day tuner perspective in small caps. That setup I think is the second best setup to my profitability. However, I'm not as profitable with them because one, I just, I, I, I naturally am better a better trader at short selling when it comes to small cap. So I kind of not go all in but I always put more time and energy there versus in another world.

Let's say short selling was legal, let's

say short selling just loses all its edge. The next best thing I, I would go to would be like a small cap breakout interest. In terms of, in terms of, I think there is absol edge there. It's just, it's a, it's a total opposite spectrum of strategy. So like shorting in general regardless of the market I find is a higher win rate idea but a lower risk reward. So I might win 50, 60, 70% when I take short trades but my risk rewards only going to be 1 to 1, sometimes 2 to 1, 3 to 1. Rarely will I get trades that are like 4 to 1, 5 to 1 versus longing. You know, I only might only win 20, 30, 40% of the time but when I do win it's 5 to 1, 10 to 1, 15.

Interesting.

So it's a full flip. Both ways are profitable but how you go about it, how you get to those results is massively different. So we'll go over the, the parabolic short because that's probably more straightforward. But I will say there are misconceptions with it.

Just like the first.

Ready. So we're only going to look at intraday because you don't, you know, the daily chart is almost irrelevant most of the time. So let's just say this is previous close, right. And the problem is with this, this could happen on any ticker any day. You never really know. You kind of have to either have a scanner for it or you if you're in a chat room like I, I am like most people know I like them so like they'll start calling them out like oh thank you. Like I wouldn't have seen this if you know the, the benefit of being around, you know, a community of traders that always have thousand eyes on everything, right. But you Know, most parabolics will happen, I would guess somehow happen out the open, but most happen at least a couple hours in because it. The best parabolics to me build up into it the same way I like multiple green days.

Yeah.

You almost want some kind of build. And the biggest mistake people make and for those who don't, we're talking about a parabolic is like going back to math class. A parabola.

Right.

In terms of a graph, you want a perfect little chart that just gets more insane as it goes up to where it gets so insane. Trade up that it has in terms of price action. It has to eventually stop. Timing is very difficult. But you want that parabola, you want a perfect little trend. And then it just goes too much, too soon. And so from an intraday perspective, you know, maybe it starts going out spikes and it goes down.

But then all of a sudden you

just keep see going and then it just keeps catching wind and catching wind and all of a sudden, oh my gosh, we're just going for it.

Okay. Right.

The biggest mistake that people will call. I see it all the time. People will call something a parabolic. And it didn't do this. It just went like this, you know, and sure, sometimes spikes can get so insane. But it doesn't, it doesn't. There's no buildup.

Yeah.

You know what if there's news? You know, it might be halted because of news or volatility. Halt up. But the news might mean it could go up another 50%.

Yeah.

Just because it's gone up too much too soon in your eyes doesn't always

make it a parabolic.

Because sometimes, a lot of times it'll spylace and they'll just start doing this. It'll digest the news and it'll start doing this. That's not. Where am I going to make money short on that. You know, you want something that builds up so much that again, back to the volume just. It just starts trading. It goes up, it goes down.

Right.

But then all of a sudden and it starts to pick up, pick up, pick up, pick up pickup. And all of a sudden you're getting the biggest volume candles at near the highest.

Gotcha. Right. So it's a similar process, but in terms of like the two examples you've drawn here with this example as well, it's bringing in sellers consistently. Yeah, bringing them in. And you need that again. Pain. You need that euphoria and both sides to. To be involved in the move to then create. Yeah.

Possibilities to get enough. Enough longs to chafer enough, enough longs to chase or enough shorts to be off guard short. And then you get this blow off move and then it's a matter of almost the same thing as a, for a. From a red day perspective. But in intraday it's like then you're looking for the first real big shift down.

Okay.

And the problem is where this gets much riskier is because when we were dealing with a daily chart or our first red day for example, right. We had that $7 level to use. So we had, I had a full six hours of sleep on it. I had a full hour pre market to game plan my day trade. I had much more time to watch this thing play out and plan my first red day trade plan with parabolics. And why it's so risky is that like you got to get short if you want to be aggressive. Some people are aggressive as the front side's happening. I used to do that. I've learned my lesson. You don't never know how. I mean we're drawing because the whiteboard ends but I mean this could, this

could keep, just keep going. Yeah.

So you never know how it wants to go. So I never really want to do that. The most aggressive I'll get in this is if sometimes I will try to read level two and read tape, which is very difficult to do. But there are sometimes you can tell in the tape when the, the buying is actually slowing like that very second or five second interval. So the most aggressive I will be is if I see that tape shift, if I see the velocity of all the volume coming in and all of a sudden the start of that next candle, there's immediately less volume and obviously the minute's not over.

But I'll start seeing, hey, there's so

much less volume coming in. It's not going to get to as high as before. So it might be very similar to the first red day where I might start getting short pre or not prematurely, but trying to actually time the top. Yeah, I don't recommend for that because again you're never going to get the top. But I'm going to try to get the best risk reward and get short. And now I'm immediately having to put my risk on that high a day.

Yeah.

So it's very difficult because sometimes I might try here like oh, the turn the tape or the, the, the, the shift is happening there and then it keeps going so I have to cut it and then, oh, it's happening again here, then I have to cut it. So some of my bigger losers with the strategy, I've given something like seven tries, but it doesn't tap until the eighth try. So now I have a rule. I don't give more setups anywhere from three to five tries. And if I'm giving something five tries, it's because I really like it. Like it's really worth it. So I've given it a hard rule of like, hey, if I'm on try three here, I have to really ask myself, is the fourth try really going to make my money back? Because there's been so many times where I'll give something five, six tries. And by the time I'm eventually right, but all I end up doing is being break even.

Yeah. You know, all of that is not worth it.

So you have to end it. In worst case, if you do end up winning, if the six try is still a loser, now you're down, you know, six times more. Arguably in the worst case scenario. Well, not one of the worst case, worst case scenarios, you don't cut it all. You just hold it and go. Blows you up. Right. But in this example, let's say I do nail at the third try. This is the top. Right. That would be the most aggressive way to get to it. But I think the safest way would be eventually there's going to be a higher low trying to be made. There's going to be some kind of bounce to get people to attempt to make a new highs. Sometimes it will, sometimes it will just keep going and you need to cut it very similar to maybe on a micro scale of these two examples. Yeah, but if I didn't get short, here is the most riskiest point. Trying to get short on the first bounce. Lower high would be the next guess because then usually there's a second leg lower.

Right.

It would bounce and then lower. Now in terms of how I would cover, usually there's like vwap.

Let's like a, like a orange line. Right.

View up. Maybe starts here.

Yeah.

It can dips under view up. Then it keeps going and eventually it gets so parabolic that it starts deviang much more away from vwap.

Showing you the average.

Right? Yeah. The average price paid to the stock or traded out that day. So I might then look for a pull to vwap.

Right.

Or roughly 2. It doesn't have to be right to it. It might be a little bit above it, might be a little below it. But in general I'm looking, I'm looking for a general target to that area. Yeah, exactly.

In terms of time frame wise, just to go back to the first red day time frame when we were drawing out entry. What sort of time frame are you looking at in terms of the candles?

This is all one. I usually even on the daily chart gives me the best picture for the first red day. But almost every setup I have, I am entering and exiting on the one minute.

Got you.

Yeah, yeah.

So then even with this, like you say, that's a lot of, you know, execution speed, having to really be dialed in and focused when it comes to you having to handle, say, a couple of losses, maybe gets that free for level mark in real time. How do you kind of center yourself or ask yourself that question of is this really worth it? Is this, you know, something I should continue to look out.

It took me a while to develop that level of like self awareness during the trade because it's so easy then to get tunnel vision and you like lose sight of whatever you're doing. And then finally once you've stopped out, like all the storm and it just blows away, and then you get to see it clear, like, what on earth was I doing? Right. It almost feels like you're in a tornado. And then the moment you get out of it, you're like, wait, what on earth? So, like, you almost have to be able to turn off that tunnel vision as it's happening and be able to immediately reflect and be like, hey, you've just taken three losses. And this might.

When I might also be like, let's.

Let's reflect not just on how I've traded it, but the ticker itself. Because sometimes there are some tickers that will look like a parabola because it is showing that the extend. Extended move up.

Yeah.

But the action or the characteristics about it are just not worth it. You know, like the. One of the worst ones you can possibly see. If we have another small example, like this is a whole other day would be like on a shorter timeframe because it's smaller. I board here. But like, what if there's like ones that halt up so they kind of. They got going and holds up, right? And all of a sudden maybe it gaps down and then it has a small red or small move.

Oh, no, keep it. Keep it. We'll keep it.

Line charts. Maybe it halts down or gaps down off the hall and it holds down, right? So now you have all these gaps in it and then all of a sudden it holds up and it keeps going, right? And then it's all. It's all wickety and it keeps going. And then so it's like it ha. It'll. It'll have that parabola move, but it's going to be so choppy and wicky.

It's like.

That is the. The nightmare of a parabolic short. You like you. Most times the parabolic shorts that are good are like, super liquid super. I wouldn't say crowded, but it's like you almost can feel with experience if there's enough sellers to get trapped. Yeah, right. Versus here, where it's like, super wicked. Halting up, hopping down, but still finds a way to have this curve just as much as this has that curve. But this one's going to be way more of a headache. And so if I've given it, say, both three attempts, I might look and take a step back of like, hey, this one's still very smooth. It's very liquid.

There's not many halts.

There's not much erratic action. Whereas this is like, oh, my gosh. I have gotten stopped out three times because I've gotten halted up once and then halted down second. Like, it's all over the place where it's like this. I would give up on probably even before three tries. Like, if I give it two and I'm like, getting halted up on out of nowhere. I'm like, okay, no, no, we're done. Yeah, yeah, exactly. So cool.

I think let's go over the charts.

Okay, Go into it.

So now that we've gone over the setups on the whiteboard, of course, now it's time to go through actual chart examples of trades that Kyle has taken, I think, recently and, you know, probably over time as well. Which one do we have first?

So this.

I would consider this an. A first red day for Bynd. So this was a. Or is still a. Like a. A fake meat company. The ones that, like, make, you know, like, burgers out of, like, soy. And I don't know what else they put in there, but, I mean, this was actually a super hot payout. And that's something that maybe we didn't mention. That I will typically look at is like, if. If a chart can build a story, if I can understand the story of the company or where. What situation it's in, that can help.

It doesn't.

Doesn't mean sometimes I know nothing. Sometimes I literally just know the four letters in the ticker, and that's all I ever know, you know? So sometimes it could be like a really big story that maybe adds to the thesis or it's just a technical pattern and I'm, you know, I go in and out In a day. And that's it. But bynd I remember, I know. Well, one, because, because I just, I know who they are as a company. But then two, I remember this being a really hot IPO way back in the day that really kind of kept running. And you never really have a really good first right day here. I mean, this one's okay, but it gapped down so big it, the risk word makes it pretty tough.

Exactly.

But it was such a hot IPO

that goes from, you know, 50 to 200 plus. Like it was very. I remember a lot of people talking

about it up here.

But now, you know, years later, we have just bled back down to sub a dollar, 50 cents at the low. And what started this run, I think

it was this day, into this day,

so October 17th into the 20th, was they like restructured some debt, some notes because they're, if they don't, they're practically on their way to going bankrupt. I still think they're on their way to going, being bankrupt. I haven't really done my due diligence, so I can't confidently say that. But it got some volume and some attention because restructuring that debt maybe delayed the inevitable, at least pushed back them going bust. And I don't know why I, I never really looked into it, but I just saw a bunch of chit chatter or on social media about like Wall street bets getting, you know, this becoming a meme stock. And the only reason why I believe that was because the volume is massive. I mean, on the way up here, we're trading, you know, 1.2 billion shares on the day, on this top day or one of the top days, we're trading over 2 billion. And so for people who don't really watch small caps, like if you trade over a billion shares a day, it's pretty damn impressive. Of course, it's not an anomaly. There are plenty of tickers that will do it, but it's usually ones that are trading like under a dollar. You know, when you get over 2 billion, not even 1 billion, but 2 billion in the dollar plus range, it's like now you, now you have to know, you do the rough math. Like, okay, billions of dollars are flowing through this company and it's barely worth a couple billion dollars market cap. So like it is, there's a lot of attention here. So when we talk about the technicals, when we did in the whiteboard, it's like, okay, day one, we go from, you know, scalt 60 cents to a buck 50, right? So technically, from a percent perspective, yeah, that meets the criteria. We're already up 100% plus. Yeah. But again, it's only really one green day.

Some people would call this a green day, which you could.

It technically is a green day from

the previous day in terms of percentage wise.

But in. Yeah.

And the gain, the move hasn't really started yet. Again, two days is minimum but you want 3, 4, 5, etc. So by the next day we're now gapping up from 150 to 230. Huge gap. And then we go to 350. So in terms of that extension like we talked about, I mean this has what, you know, 50 cents a range. This day has then, you know, almost a buck 50 of range, buck 30. And then all of a sudden we're gapping up from 360 to 620. I mean the gaps get bigger, the range gets bigger. And of course this is the day it finally died. But I mean, gosh, the range is

from 770 down to 2.

I mean we had the entire run in the, you know, obviously we talked about on the, on the way up for the, in the, in the whiteboard. But like this is, this is that example of where on the top day, whether it is going higher or is putting the top actually in the morning

in this case, like the range is massive.

The volatility gets just bigger as we go. And the actual volume was the highest on this actual, you know, first red day. But the tough part about this, which, it's still a plus but it's why I harped on it being a, or an art so much than a science because we just went over example where we saw all these or when we drew on the chart of all these green days that are so perfectly up with no really big gaps. And then there's red day. Well, the tough part about this one was like, well, it's capping up. It's gapping up like 80%. How do we, how do you even anticipate getting short anywhere up here to then catch a move all the way red? Because by the time you short when it's actually going red, you've missed your dollars of share of downside if you were getting short up here. So that's the difficult part. And for me I was getting a little bit caught off guard. I made my own mistake that we talked about. I started shorting this up here. So I'm not up here but down here in the twos thinking that like I knew the company was crappy. It's already now is up from, you know, $0.60 to 230. We're starting on the third day, technically, right. Or second or third day, depending on. You want to look at it.

I was like, you know what?

This, this shouldn't really, you know, I wasn't thinking there was much as hype around this as it was like restructuring your debt.

Who cares?

Like that doesn't. That doesn't mean this goes from.

From 50 took on a very strong euphoria very quickly.

Very quickly. Very quickly. And so I was short biased this day. If we go into the intraday to

give us an idea, let's go way back here,

right.

We'll zoom in. It was this day, right?

So this is that and I shall zoom in so you can't see the rest of the day just yet.

Oops. Whoa. Why are we losing it?

Still trading.

So I think it ticks every time it trades a little bit. But.

So this is that first day, right. So we close around what the close was? Yeah, like the 150s, 160s. Yeah. We're gapping up to two 30s. And you know, we try to spike, right. We're trying to get higher. We end up like double topping here and we roll over. So I'm getting short in like the 220s. Two tens. Thinking we roll over sub two and then we do go down to the 170s. 160s, 150s. Unfortunately, we somehow find support or find a bottom at like the 190s. So as aggressive as I was, I was way too then greedy on the covers and wasn't thinking about covering. That was obviously. It's easy to say in hindsight because at the time I was thinking it was going to go much lower.

It doesn't.

It kind of finds its way back, makes newer, higher highs on this bounce and all of a sudden breaks over the highs. So I have to cut it all by here. Okay, so that was a loss.

Let me keep going. And then starts parabolic.

So this is where this is. This one actually had a parabolic short in the process of having the first red day. Yeah. And so then I actually remember once we get later in the day, it starts having this, this, this parabola. Right back to the kind of what we showed in the, in the, in

the charts where it starts off slow,

but then the build up, like if I can have a whiteboard again and dry, like, see how this kind of curls up into it? Yeah, right. The volume is also doing it.

It starts but then it.

The top. And it doesn't shock me that the top Candle is also one of the biggest volume candles on the day. Not the biggest, because the opening was actually biggest in this case. But it doesn't shock me. The volume kind of really starts. It picks up. So I remember shorting this. I remember shorting some. I. I think I took a couple. A couple stabs at the same idea. Like, you might think that's the top, but it's not, or that one's the top, but it's not. So took a couple stabs and paper cuts on the way up and then finally got short. The issue with this one, again, not all parabolics are going to just die on you. This one held up pretty darn well. I was expecting. And vwap down here, I was thinking at least a pull back down to like three bucks, you know, between three bucks and vwap, it didn't happen. So locked in something, but then had to cut as it kept holding up and ready to go even higher. But that's the thing about parabolics. And the downside to it, depending on

when I look at it, well, it's

now going parabolic again. That parabola, you know, almost extends itself from going from here to then from.

To here. And so I gave it another try.

This one actually works. So again, if you didn't want to try it here, you could have waited for that lower high level you talked about.

Yeah.

And then you get that second leg lower to cover.

The good part is, is that. Well, the good and the bad part is that I covered a lot down

here in the mid threes.

I made back most, if not all

of my money and losses from the

first few attempts on the, you know, the first ready idea. And then the, the first parabolic.

The problem is because it died.

I'm like, okay, this is the. This is it. Like now it's dead for good. And we're up from 50 cents. I'm trying to, like, be too patient, thinking like, okay, now let's let. Let's stay short something to catch a move the next day to like sub three or two. And so we bounce. I add back some shares, right? Then we keep going. And I'm like, this shouldn't you know this right when this move makes another high and now almost doubles high. Like, this should have rolled over. Yeah, this should not have come back. So by the time and after hours when we close, I think to myself, I can't short this overnight. There's no way I hold this overnight. It's holding to the highs. No part of it is rolled over. It's almost like this action. Is this action where yeah, it had

a good pull but now it's coming

back and holding way too well.

This is where you're able to decipher between someone who's experienced and understands the nature of the setup itself, like what you need to see versus I can imagine someone who maybe isn't at that level yet or isn't doing that sort of awareness slash breakdown of their data. In that scenario they may have taken those paper cuts going into another trade, been able to cover those paper cuts, prices going against them. Now they start adding more, starting more. They go, I'll hold overnight. This is the one. Especially because the market rewarded them a bit to cover those losses. And then look at that, you know what happens next.

Next day, early pre market gaps up and then I was actually asleep for this. If I could do this over, I wish I was awake because I would

have loved to have been here.

I probably again like this, like the other previous parabolics, I probably would have taken some paper cuts, taken some losses. But once it really puts in the

top, I mean this was a really good pull very quickly.

But I didn't wake up till about here about 8 Eastern. But so I wake up, I get to my desk, I see that it blew off to nearly $9 and now we're off the highs.

And so the tough part is it's

like okay, I took losses thinking that was the high, now we have a new high. That's the tough part about you know, having that maybe emotional capacity or emotional your mental capital is like, well how many times are you going to give a try with the name of the thesis of the all time high of what you're looking at is the tie the risk off of. And that's the tough part, right? It's easy on the whiteboard to say hey, just we use seven and it worked. But in the moment as it's happening, it's like how many times are you going to give this thesis a try before you give up? So the big part of it is like not getting too exhausted on the front side. How I traded on this day is okay. But I will admit if I didn't do it and I was much more prepared here, it would have been a better trade, right? Because there has been times where I've taken too many tries and by the time it's the time to actually be there, you get exhausted, you don't want to take it on a loss, you've run out of energy. Some people run out of money, right? And you don't want to really be

there for it anymore.

So this then, now we're going into the open, and I'll do it before we actually die. We roll over here. So this is the opening here. And I remember thinking my trade plan was it's like a mix of, okay, the parabolic put us in what might be the top. We don't know what's the top yet. But again, I have to use that risk as an idea or as the part of the thesis. And I'm thinking, okay, if I want a decent risk reward, if I want a spot to feel good about, I probably want to get short anywhere between, let's say seven bucks and like eight bucks.

If the risk is like, let's call

it nine, you know, there's all these now lower highs being set from here, here, here, here. Like from just from an idea perspective,

if this is going to fail today

and getting a good, decent risk reward, getting short in this range, risking the highs is what I want to do. The problem is, and what I really screwed up on it was I didn't really think about, well, how low could it go before then testing that level. Because there's a world that might not test that level.

It does.

Just because I want to get short here doesn't mean it's going to happen. And so when we go into the open flushing from, you know, seven to down to five, I immediately, like, throw that trade point out the window. Yeah, I like, totally, like, I let FOMO take over me and I'm like, screw waiting for seven. We need to be getting short in the fives or the sixes here because this could just roll over, you know, back down to threes. And so I guess I start getting short. I think I start chasing some of this weakness. I think I end up shorting more of this weakness when it rolls over again. You know, tried to make a new higher, a higher move, but failed still under vwap. Even tried to bounce here for this one candle and then tries to go another lower. So I remember adding here, all in

all, it's all it's doing is it

making lower highs, but then also higher lows. Like, I'm not a big fan of drawing wedges per se on an intraday basis, but here we are kind of

making this, this wedge.

And so when it breaks over, I cut most of my shares. I did have a little bit of shares risking like this pre market high.

So like 7:30.

So by the time we just grind and zombie back, I'm cutting the rest right around 7:30, taking a, you know,

a loss I'm willing to accept, but

like a loss and I'm like, damn, like this. I was hoping to put this much risk on and be right.

Yeah.

Not necessarily be wrong. I'm okay taking it. I lost like I think around 80, 90 grand, which for a plus for me, like I'm willing to, to lose that amount of money. But it's never a good feeling when you like thought you had nailed it and now you're like, wait, what just happened? So once I covered back to that tornado example where like your mind's all just like flustered in tunnel vision. Once I covered it immediately hit me of like, wait a second, it's doing what I wanted it to do from the initial idea.

Yeah.

Like if I just wasn't. So have so much FOMO or so much willingness to want to just get short. Well, here's the spike to the 7 to 8 range that I wanted.

And so once it hit me like

that, that's what gave me the confidence to give it another try. Now again, because I lost a little bit too aggressive here. I didn't shorten nearly as much as I want. I started back in with like a

tenth size just to get comfortable again.

Yeah.

Not knowing if this is the top, but just saying, hey, if I wasn't short already, I would have been shorting into this move. So let's just get our feet wet again.

When I move up higher though, especially because it took out that previous lower high, you know, is your thought process that it's bringing in more buyers, you know, and taking out sellers essentially who are early. So therefore it's still, you know, fitting the thesis and if anything, maybe adding a bit to that thesis.

Yeah, I would, I mean again, I wouldn't, I didn't know it in real time, but once it died so quickly after it almost gave the confirmation of like, hey, this move here was like its last push. Probably squeezing out people like myself who were getting squeezed and probably chasing and getting people who were long or who wanted to be long to say, oh my gosh, we're gonna, we're going to go over nine and go to 12, you know, so this definitely, I think caught enough people off guard on the both side to really, I mean again, in hindsight actually put in the actual top. Like, and obviously we know this was the top in pre market, but when

you look at the daily chart, this

770 or the 760 something, whatever, the exact high 769, like is the all time High of this run, it just, you don't know in the time. So. So I'm getting start. I'm starting in short again. And as it's working, this, this action to me felt a little bit better and different than this action.

It wasn't straight down, then straight up, then straight down, turn straight up.

It kept trying to come back on multiple different kind of candles, but kept just bleeding slowly.

Right?

There wasn't this like massive erratic volatility. It was like there was this steady selling pressure, you know, even here, right. Tries to bounce off, vwap. But then still rolls over. And so once we really cracked here, that was like the first sign of like, okay, you know, it's like almost adding it all up.

The steady selling the top to the 7 and 8.

So I go wanted. And now we're actually having some big serious red candles. Really. Arguably the. I didn't realize this at the time, but looking at it, this is the biggest range sell off candle of the entire morning. Sure, we have some big ones here,

but this one's big.

This one I think actually halts down because we, yeah, we halted down or halted down at 1104 and it reopened at 1109. So there was a five minute volatility halt here. And so once this bounces here, this

is usually what I like to call

the last gasp, right, where it tries to bounce. And now it's a matter of do we bounce and just kind of get back into the range. But if we don't, I mean, these lows are coming up next. Yeah. You know, and so what do we know, we try, we roll over and then it just really falls apart, right? We start halting down we go from, you know, the high fives to a matter of low fours in just a few minutes of actual action. But all these are halts, right? You see these little gaps here? Those are more volatile. The gap of the, the space and the volume is some of the halts as well. You can see that there. And so, you know, I'm pretty much now full short with like a, you know, like six low sixes average between adding like here, I think it added some there and then really adding some on the bounce there or sorry, on the last bounce to then fail. And so now it's a matter of, you know, at this point I can either risk the highs, but then because I'm adding into weakness really puts my risk word off and I'd be taking a pretty big loser up there. So eventually as I'm adding, I'm lowering my Wrist. So I move my wrist to 770 and then I lowered it to this last little pounds attempt to like six or seven practically. And by the time I added all my full size on this, I'm pretty much moving all my risk to this 635high. Right.

So yeah.

So kind of like we talked about it doesn't necessarily mean my odds of succeeding are the best because there is a world this. I mean it would be an extreme case but I can't rule it out that this would have held and then stopped me out. But because I took such a big loser here, I knew if I was going to have any, any decency of, you know, not making my money back, I don't want to have the, the gambler's mindset. Oh, I just got to make back my loss. But yeah in terms of if I want to really capture an opportunity after already having off a bad foot, I had to kind of scale into it and, and and be okay with a lower odds win to get that win rate to work for me. Unfortunately, you know, if I do it all over again, obviously this beginning part was that was, was making it tougher but. But yeah, so it collapsed, had a few bounces. Now something to know is that we talked about the previous closing price.

Yeah.

Unfortunately the chart only shows the previous closing price on the day it's closing. But again we can look at it. The previous closing price was like 6360 somewhere around there. And so it doesn't shock me that sometimes when stocks gap up too big, they actually will sell off into the closing price and be support. So this bottom being like right at the previous closing line doesn't shock me which is why I'll try to get short before because sometimes if I in the name of waiting for the previous close to go down to finally get short, I'm short in the bottom here.

Yeah.

So it's very difficult to time and that's where the art comes in where if you just take them a one size fits all approach, you wouldn't short any here and wait for the first three to close to short and you're like you're really shorting the lower. So that's the tough part. But I'm, I'm actually in this case in this trade. I'm actually covering some between you know, four and threes here.

Yeah.

Tries to bounce. Honestly I was expecting a bounce closer to view app like kind of get into the fives maybe couldn't. So when another leg lower I reshorted small once it kind of started making new lower lows again and then covered a bunch into the threes here and

then that ended up being put the

low for the most of the day. But this is just end up being really weak. Like when you get again when you get this massive volume, this massive Wall street bets, this massive like a mem stop craze sometimes when they die, I mean they just really die. And we never got to bounce back to these fours or fives like ever again. Even to this day. Again if we zoom out and go just keeps going. It just keep and then we're you. You get some moves right. But like these as much as bullish these bounces looked in the moment like they were even more permanent tops than where we are yet to now. If we just zoom in the whole time. I mean we're at 150 now, right.

It just. Just keeps bleeding. You know.

We never got that bigger bounce which I did think it could happen but it just never did. You know.

So so after you know all in all P L wise what did you take from that trade?

So in total after even including the losses, I ended up making about 150000 or so. And again great money. I'll never knock 100,000 just from a. From a. From a performance. Like if. If this was a sport and we're reviewing our performance taking that loser like I talked about when it pushed to seven I think really hindered it because if I could have used that level of risk on the time it was actually right. Yeah I think it could have done a lot lot better but and you know I'm never going to knock being able to make my loss back and then you know make that kind of money. So that's, that's in total. But the good part is and we talked, we really briefly mentioned where we talked about getting short again but you either your risk words worse or you take some more time to make the so you know making 150 grand in. In two or three hours of the sell off is great but there are other opportunities here where I wouldn't call it the first red day but it's kind of just like not cherry picking but it's just like still being there for more downside. Yeah and so I actually was getting short this in the threes realizing that hey this is just not bouncing like every balance is a lower high and if we can break these lows of of like 250 or 270. I almost call this like a breakdown trade. Like not a breakout but a breakdown and so once we broke down, I did short some more here and ended up covering that, you know, around two bucks over the course of, like, two days. So instead of two hours or three hours, I had to be short for about two days to get, like, the same. A little less of a move, even. Like, you know, $4 a share here, only a dollar a share from 3 to 2 here kind of thing. So there's opportunity, but it's. It's now looking and shaped differently than getting it on the first top day kind of thing.

So that's great.

So this is also where, as much as we went over the science, like, so many green days in a row and so much percentage in a row, that comes with a caveat that we're dealing with maybe small caps. Because when we deal with a $20 trillion asset like gold, you know, gold going from. Or GLD, in this case, the ETF going from 316 to 400, I mean, that's only 33%. So some of people look like, Kyle, that's not even up enough. You're right, it isn't. So this is what was tough and why I really never looked at it. I didn't look at it until we had this kind of, you know, parabolic move.

Right.

Like, none of this interested me. Like, you know, even if we had, like we talked about earlier, this is, what, six green days in a row? But it's going from 310 to 330. Like, who cares about a 10% move? You know, not even. So it wasn't until we kind of really sped up to where finally when we got up here into 400, I thought, okay, this isn't that great, but it's worth giving a try.

Yeah. You know, gaps, obviously in the volume.

Yep. Yeah. Volume slightly increasing was with gold.

Was there any nature of. We saw those videos coming out literally around the top or not really.

I.

So that's the only problem. I don't remember if I saw those

videos before, after I shorted. I just remember seeing it. I was like, no freaking way.

People are lining up at a store.

But for me. So when it gets parabolic, I'm thinking, okay, I have to give this a shot. Okay. The difficult part is it's like, well, there's a red day here, there's a red day there. It's like, how will I know this move was going to come? And the truth is, I don't. I just have to be willing to risk. And so for me, I was only going to risk, like, an A or not. A like a B grade setup because I just don't know.

It's not, it's not the one I

think is going to drop so easily. There's a lot of choppiness. There's a lot of bigger players than I am obviously in something like gold. So I wasn't that risky on it, but. And also because gold is such a slower mover, you know, I was like where can I get the maybe just a little bit better of return for my money? So I actually shorted UGL which is a 2x leverage ETF of gold. So if gold's going to go down 3%, all these get 6% off UGL. So this was my vehicle of choice shorting it. But they follow gold, it follows gold exactly. Like to the, to the tick, it just, you know, 2% versus 1%. So the idea here was, well, same idea. I was still looking at that previous closing price.

Like if we're going to have a

red day, it's clearly going to be below the closing price. Yeah, right. So something that really caught my eye on the day that it went that high.

Where is it? Right here.

So you know, we're blowing off. We're having one of the bigger green candles in terms of range on that daily chart look. And then in after hours we're even going higher. I mean we just keep on going. So when I see that, I'm thinking, well in pre market if it's going

to keep on going, it should just

continue this trend higher. Like we should have gapped up around what it was like 58.

The price of 58.

Yeah, where it was in after hours. But then we come into pre market and we're actually gave all those gains back. In fact, we actually were red in pre market for a brief few minutes. So my idea was, okay, previous closing price is around what like 56,45,630. This pre market low is 5610. I'm thinking like 56 to 56.50. Should be a general area of like, hey, if we're gonna hold below those levels or go below those levels, I need to be okay giving it a shot and risking either the after hours high or the high of day in this instance. Because for me, because I knew gold is going to be either really choppy or straightforward giving how big of an asset class is. I said, you know what, let's just give it the tight risk. Either it's going to work right away or I'm just going to like ignore it. Like if we, if we Started shopping around, then coming back to highs like, okay, it's not ready yet. It's going to do more of those awkward small green or red days. Like we're not, you know, is it as parabolic as gold was, I wouldn't call it straight up or straight down territory because it's not something that went from one to seven. Yeah, you know, it's, it's only up, like we said, 33% from 300 to 400. So I kind of gave it a more tighter risk. And I did get short as it was breaking this, this pre market low. So now I'm getting short, let's call it 56, you know, risking 57. So risking a buck a share. I covered very small in the 55s, not because it was the price target I wanted. Like we're barely down what a percent and a half or 2% at this point. But I thought to myself, if this is all we got again, I'm still thinking in my head like this might be a choppy mother effort for the day. And so if it is, let me at least lock something in. And so if I stop out, it won't either be as big of a loss or I'll say, hey, at least I, at least I locked some in

and felt good about it.

Right. And it bounced. So that idea was originally right, but then I really liked how it failed vwap. It tried to bounce twice here and just kept rejecting view up here. And then the real flush came. So I covered some more, bounced again, still a rejected vwap. And at this moment I don't, I don't do this very often, but when a stock is choppy and I don't have a general idea again, I'm thinking, I'm thinking gold to solve 2, 3%. So that means UGL should be down 4 to 6%. But I don't know if it's going to be 5 and a half percent.

I don't know if it's Going to

be 4 and a half percent. So I start trailing it with like a, like a 5 or 15 minute high. So if we go to like a, I think it was 15 minute, I'm doing right. I might look at, I might look at this panic and say, hey, the first time it breaks the previous 15 minute candles high, I'll just cover it. So when we start selling off now, it's like every new 15 minutes, I'm just putting my stop in. And so right when we break it over at this candle right here, I'm like covering the rest in the low 4054s and locking in that way. So I don't normally will do that for small caps. But again, on something as big as gold, with very less predictability than I have with gold, I'm just going to trail it as best I can with a. With a previous, like bars high kind of thing. And this is where it gets even more tricky because, okay, that was the first ready.

It worked.

But then we go even higher the next day. And I.

That was the Monday, right?

Yeah. And so it keeps going the next day. So I'm thinking to myself, like, if this goes another two, three days, again, I might have to give this another try. The problem is it gapped down. And that was now the official high. And then it sold off even more. And now we're where we are with today. So I haven't touched it since this first day. It's probably gonna be the one and done. Like I'm not. Once it happens, I probably will never look at gold again.

Really.

You know what I mean? Like, that's all I need. I just came in, did what I need to do, and left. Yeah, you know, I don't need to watch this anymore. It's not going to go parabolic. And if it does, great. But like, the odds are, I think, slim to none kind of idea, at least for right now. So that was that one, Right.

Very, very unique.

Different asset class that.

That doesn't usually show it.

So back in my office, we have some more time to go over some more examples for you guys.

Uamy was a very recent example of

a really classic first red date or a.

A variation of a first red day, which a lot of people call the overextended gap down. And we'll. We'll talk about why it got that name in a moment. But like. Like, we have been going over previous examples.

Let's look at some of just the

basic indicators of why it would be going parabolic, why it would be having this kind of a bubble move like we talked about earlier.

So, you know, volume is expanding.

Right. That's a good sign. The chart starts off a little bit slower, a little bit choppier, but then gradually starts to go parabolic.

Right.

We every single day is a bigger gap up, and every single day is kind of a bigger range candle to the upside. Now, the actual top day is a red candle, but a green day. It does go red on the day. It does go below the previous day's

close, which I will show you in

a second how it actually screwed me up along with how this day happened. But technically this isn't and doesn't end up being, you know, the first red day set up only because as much as it could have offered you a profit if you got short early enough, which will again, we'll go into the intraday in a second. But the reality is you didn't even have to really be here for this day. You could have then actually gotten short the next day on a gap down, which what a lot of people call it overextended gap down.

Right?

It's still extended. It just hasn't even really fully had its flush out lower in terms of a actual red day below the previous day's close and held there. But in this day, gapping down for the first time after gapping up, I mean, gosh, what we gapped up once, twice, three times, four times, five times, six times, seven times, right? So on the eighth time, it's not a gap up, it's actually a gap down. You have to wonder from, from a, again from that. Think about the Joe Schmo long psychology. It's like, wait a second, I'm going to my job, I'm checking my apps, my, checking my, my stocks app or my brokerage account and all of a sudden my stock is gapping down, not up, right?

So it's a little bit of a shift in terms of that also too.

You'll notice again, this is a little bit of a hindsight, but at the end of the day the volume is lower, so it went straight up, kind of parabolic. And then you can almost get a glimpse of this even just after this one day that, hey, the volume is going to kind of come back down. So it doesn't shock me that, you know, now we're significantly lower. I wouldn't have guessed it would have gone to seven this quickly. But the volume dwindling, right. Doesn't shock me that all the highest volume is kind of when it's putting in these top candles that are roughly well above the range of how high and low it went. So anyways, how did I screw this one up, right? I was trying to short it this day, but it dropped very quickly, almost so fast that I kind of had to chase it if I wanted to be a part of it. The problem is I chased it a little bit too late and I put on size a little bit too late that the sell off was over. And then going into the next day, I was very busy this day. I actually had a wedding that day,

so was trying to only trade the

first hour or two, very weird.

The wedding was on a Wednesday.

But nonetheless, it just.

I didn't, I wasn't focused, I wasn't there.

I did not want to get short and try to be short all day long. But this was a great overextended gap down that, that worked beautifully. Right, and so we'll go into intradays. Let's pull it up real quick, right? We go back far enough, it's been what, two or three weeks now? So. So right here, zooming in.

So this is that top today, right? We're open.

And right when it opens, I mean, it just collapses again. This is a one minute chart. So unless you had some level of conviction of getting short immediately out the open on a gap up, which again, remember we looked at the daily chart the past seven days, it had been gapping up and then only to go higher. It's like, it's kind of hard to go into this day thinking it's gonna gap up and then just give it all back within what, the first 10 minutes of the open. And so I didn't start chasing it short, I think down here until the 17s, and then even adding a little bit more down here in the 16s, ultimately only going as low as the 15s. And then I had to start thinking about if I'm going to get short any more size, it's going to be into this bounce. The problem is if I get a shorter bounce, you have to wait for a second leg lower to really kind of get paid out, right, to get actually a profit on this trade. And that is not what we did.

Right. We literally just, you know, grinded back

the rest of the day and pretty much held up near these highs to show a picture of the trade that I actually took. Where is it? Right here. So zoom in. Sorry, the picture is a little blurry. I'm not sure why the screenshot is coming in blurry here, but you could

see the arrows, right?

You see that, that huge pull didn't get started. Getting short to like the high 17s added some in. The high 16s thankfully did cover a little bit, get into that pull, but ultimately it bounced some more. So I covered some more. Then this is that reshort into that bounce, thinking, hey, if we're gonna roll over lower, like that's what's gonna happen. And unfortunately it just doesn't. So I cut the rest, you know, right there on this pop up over now making a new higher high in this bounce. And again, like I just mentioned, it just doesn't go any lower. So this unfortunately was a loser. Even though it offered, you know, if you were early, if for a reason

anyone had conviction of getting short the

open, which I would guess nine times out of 10, I wouldn't, at least in this particular scenario.

It just dropped too fast, too quickly

to really have me catch that leg. But again, like I said, to start that off the chart, you don't have to short this day at all. Really the best risk reward idea is kind of avoiding all of this day and just coming in on the first gap down again. The first gap down day, after seven days of gapping up, like a trend shift like that usually will lead to further weakness given the trend change was weakness. So again, going to the previous closing price was what, 1750s, mid 17s gapping down to 16. Now the thing with overextending gap downs

is that you have to be wary

of how much they're gapping down.

Because again, like we talked about, or

like I talked about with Ruth Rizzo,

it's like I want to look for

something that pulls down 10, 15, 20, maybe 30% on the extreme case. But if we're gapping down 10%, well,

the way I view it is like,

well, that's, that's downside that I should have captured, but I'm not because it's opening at that price versus selling off into that price.

So I'm very picky and particular with

gap downs because I want to make sure my risk reward is still decent. I don't want to be shorting a stock down 10% when I should be covering it down 10%. Right. And so it's a little bit of a gauge of taking an extra step to look at the risk reward and to see if it's still worth it. So when this is opening up at 16, I don't love it there. But when we can pop and try to spike to 1650, I know it's

only 50 cents, but it can make

a world of a difference when, if I'm risking, let's say 1750, right, in one instance I'm getting short at 16.50, risking a buck, the other is $1.50. And I know that might not sound like much, but forever, for every penny

you are adding to your risk, you're taking it away from your reward.

It's a double edged sword to both ends.

So in a hypothetical scenario, if I

could play this back perfectly, it's like I wouldn't want to get short of

16, I would want to get short

at 1650, giving myself a 10 or 50 cents of extra possible reward, 50 cents of extra of less risk. And now the risk word makes sense because you know what, I've covered down at 13. No, I'm not going to time the top, I'm not going to have the bottom. But given how the daily chart looked, it's like, hey, this was pretty extended from, you know, like five or six bucks or whatever it was. And now we're at 18, like 17, 16, like to get another dollar or two a pull down to 15 or 14 I think is well on the cards. So getting short 1650, risking, you know, the previous closing price of let's again 1750 just for round number sake and covering, let's say even 1550 isn't the best risk reward. But you'll find a lot of red days don't like we talked about earlier, you're only going to get 1 to 1, 2 to 1, 3 to 1 in most cases. But again, if you were patient and you did say cover, you know, 1350, it's like now the risk word is becoming positive, right? It's not just one to one, it's one and a half to one or almost getting two to one. Some traders I know might even want to swing something like this. I mean, gosh, if you, if you had the conviction to swing this, which again, more times than not, I don't getting short 1650s and covering, let's say in two days later down to 11, it's like now your risk word really made sense, right? And you're making, you know, 4 to 1, 5 to 1 in some cases, you know, more. But it's hard to tell, right? It's a little bit more difficult the further it goes. Not having a bounce back or, or some kind of green day after so many red days, your odds get less. So you better have pretty strong conviction of why you would swing something, right? And the only thing that I could have gotten a conviction from is that again we are up from five, from

six, you know, we're still hundreds of

percent up even after having what is a pretty solid overextended gap down, you know, in the form of first red day.

So there's that one good example, missed

that one, but another, you know, and I wouldn't call this A plus, you know, let's call it, it was pretty, pretty much an average first red day attempt in my opinion. But an A plus for me or what should have been A plus was op e n here. Now ignore this, this big old chop and we'll talk about this run for a little bit, but the main run I want to talk about is right here. You know, if we zoom in just to get, keep you guys focused here. Going from 50 cents to 5 bucks in a matter of two weeks is pretty darn good. Especially in the fact that really we grind it up to like 70, 80 cents and then in 1, 2, 3, 4, 5, 6 days, you know, we

are just green day after green day.

Yes, we had a red candle, but again this is still a gap up and a close above its previous closing price. So this is still a green day. I know it looks red because it is a red candle. It's closing below its opening price, but it's closing above its previous close. Therefore, Joe Schmo, checking his stocks app, sees that it's still up on the day. And so the momentum continues. And then we really blow off again.

We go from, you know, mid twos

to five and we just went from 50 cents to mid twos in about of a week. So the top candle pretty much doubles the range of the run and it doesn't or it doesn't surprise me. The volume also well over doubles.

Right.

We, we increase from what, 200 million volume shares a day to about 600 million. But then by the top day we're at almost 2 billion. I mean we really extend and expand ourselves in this blow off.

And so the best part about, I

like it beyond those things is that it has a huge wick to the upside. So now going into the next day, I have a ton of resistance as a short seller to potentially play off of. And so that's going to be super key going into this day because you'll see here the where it ends up topping or where it actually gets gapping up and then fading is at a major resistance point that got set the day before. So let's go into the intraday real quick. 721 and 722. I gotta,

like I said the previous

day, this is the top day. So this is when it goes from mid twos to as high as 5. And you can see how the wick on that daily gets formed. It absolutely collapses very, very quickly. I mean in a matter of what, 30 minutes we go from five back

down to high twos.

Why this happened, I forget why.

I'm not sure if there was a news event or just just being.

Sometimes you don't even need to know why. I know a lot of traders, a lot of truth I meet or come across over the years want to know exactly why every move happens. The way it does sometimes you don't have to know, right? You just, just know that it's up from 50 cents up to 5 bucks. Like eventually some kind of hard backside is going to come at some point. Nothing goes straight up and nothing goes straight down. But once it happened, and I want to zoom in real specifically, just so you can see it here, pulls real hard bounces and then the bounce tops out at four bucks, like almost perfectly. It just can't for whatever reason get over $4 and then has a secondary pull and puts in the bottom for the day. So having this four resistance at a real like a ton of volume, again, more volume than the rest of the day for the most part. Putting in that top at four is very key. Going in the next day, again, I don't know this at the time. I'm trying to kind of give it in real time as best I can. So going to the next day, I

have no idea if it's going to

go to four or not. But in my brain, like if it does go to four, you know, let's watch and see if that's going to be a good resistance level because if it is, it's going to be a great spot to get short and then use it as a risk level. And so going into the next day, right, we end up gapping up because what we close and the previous closing price is important. We close at what it's like three twenties somewhere in there. Again, just for round numbers sake, let's call it 320. Right? So next day we're gapping up.

We're not opening at 320.

We're not opening below 320. We're opening up at like 393 80s. Okay. And what do you know, it tries to spike just, just barely out the open. And the high is like 399, right. If we zoom in, right? What is this high right here? The very, very opening candle. 399 is the high. Again, coincidence, you know, from like, what is the Incredibles movie coincidence? I think not literally the you almost. I mean it's not never going to be that perfect. Sometimes it could like wick over four briefly and then come back down, you know. But this is, this was perfect. This was literally like almost to the penny. And I remember noticing that in real time. And so once that happened, I started shorting all up in here. Got a poll, definitely covered some into this poll, then added back on this bounce. I remember adding on this bounce pretty early. This is a pretty big move. All green Candles straight up from, you know, 280s straight up back to 370, very big bounce. And so I remember this bounce actually kind of spooking me out thinking, hey, we might not get a pullback to these lows. Surprisingly, we actually did. Right by the end of the or later in the day we actually do go lower. So this really kind of threw me off. I did end up getting reshort, but again, this big of a bounce definitely gave back some profits by not one, reshorting more aggressively, but then two, not having the patience to think that it could go lower when it eventually does.

Again, to show you the actual trades, here we go.

We gotta zoom in. Again, apologies for the blurriness, but again, here is me shorting a little bit like I'm starting in pre market. I'm starting in after that opening candle. But once four holds, that's when these extra candles come in. And then finally it rolls over cover summing in this white line like I've been drawing on the chalkboard or not

chalkboard with the whiteboard with Riz, you

know, that's that previous closing price line. And so I am covering some just to make sure it doesn't hold that as support. And it doesn't. So then I cover some more. This is me again shorting that bounce, thinking it should top out right around there.

It goes much higher.

That member spooks me out. So then I cover something again on that red green level, thinking it might become support again. It does briefly, right? It does bounce back, but then we go even lower and this is me kind of chopping myself up thinking, oh crap, are we going to roll over? We bounce some more, then we roll over again.

So I do get re short cover

some, but ultimately we kind of pop

back here and I cover the rest

for not much more of a profit between, you know, these, the small losses and then this small gain back. So really, you know, 95 of my gain came from this move right here. And you know, again going looking at

the both days together, right. You know, that's kind of the sequence

of the top getting put in. And honestly very similar to uami, right? Or uamy, where you don't have to be there for this first pull. You can let the top get put in and then sometimes there's a secondary attempt or a secondary opportunity that's honestly much safer and sometimes much better risk reward. Right.

Trying to get short at 4 here,

not knowing if 4 is going to be the top. It's like where are you risking? You probably have to risk somewhere up here in the high fours or at the all time highs of 5, whereas here, once it fails 4 pretty heavily, you know, have this really good double top of resistance where you could use 4 and not have to use 5 on this actual first red day.

So something to consider there now a

more unorthodox first red day, but still on open would have been this one right here. And, and the reason why I say it is because it's not a perfect green green candle. It's not. You don't see the true blow off in terms of multiple green candles, but you do see a grind up and then all of a sudden a massive green candle at the top, right? So this wasn't necessarily as smooth going into it. Clearly we were having some consolidated red days before into it. But then when we get a big huge move where this candle's up like 70 or 80% and again it's up 70 or 80% after already being up from like the twos all the way up to sixes. So we're already up 300% in a course of like a month from this grinding up higher. But then we have a huge again the volume, right? It doesn't, it doesn't really gradually increase. But then the, this one day where it's 80% up on the day has this huge kind of miniature blow off volume if you can call it. And so going red on this day doesn't shock me. And I actually did short this.

Now this is another again version of

an overextended gap down. It isn't as clear cut as uamy because again, uamy gapped up seven times in a row. It couldn't have been more perfect for

the eighth time being a trend change

this time, you know, it only has one big day and you kind of have to just take it for what it is.

That hey, it's a gap down.

And you know, maybe it works, maybe it doesn't. But that's, that's trading like you have to, it's the game of odds. You just have to trust the odds. And so thankfully this wick to the upside did try to spike it.

It did hold the pre.

It didn't even get close to the previous closing price and ended up selling off about a dollar or so a share and so on that intraday to show you. So pre market is gapping down.

So again, I'm already thinking that going

to the pre market I'm like, hey, this is an overextended gap down. We should be using, you know, that previous day's close. That's the white line right there. You barely see at the top of the chart, like, hey, if this is

going to have a red day, it shouldn't be able to kind of go

against and above that previous closing price. And so it gives a couple spikes, right? I get short pretty much out the open thinking fairly convicted. It's just going to roll over, but it doesn't. It actually gives you a spike to like 10:30. Gives you another spike to like 10:25 Technically puts in a lower high, but after those two strong attempts, then the rollover actually happens and so I actually end up covering all mine in the low 30s. A shame I wasn't patient enough for sub 9. I say low 30s, low 9, 30s I should say. Sorry, wasn't patient enough for sub 9. But again, you can never get the bottom. I'm pretty happy with this.

This trade, you know, made what I

was risking maybe like 40 cents a share and made about like a dollar or so a share, maybe a little less.

So like a good two to one.

I'd call it two and a half to one at most maybe almost three to one if I was perfect, right? Covering it like the high eights. But again, very solid trade.

Not your pick and not your picture

perfect, you know, straight up green day. It kind of was a grind into it, but then once it got to the end, you still got enough blow off to justify, hey, you know, we might roll over. And that's what we did.

So now to give you guys an

example of a ticker that might not work well, or a first Friday that maybe thinks it's simple but is not, and you might have to be willing to give it a couple tries is something like Qs here. Okay, this move on QS definitely fits the criteria, but the problem is not all things work out perfectly.

Again, some of the charts we're going

over examples of are very smooth, very clear cookie cutter for shred days. This one's a little bit tough because it's not gapping up every single day. In fact, it's actually going below its previous day close every almost like again,

we did it here, here, here, here.

Don't do it here, do it again here and then don't do it here,

but do it at the top day. So it's very irregular.

There's not this perfect gap up every single day. But we do go higher every single day. Again, we have a ton of green candles here and the volume is still expanding. It is still blowing off and yes, towards the top, two candles we are starting to speed up. There is more range. So it has enough of it, right? Like it's got enough of it to

say, hey, there's going to be some kind of backside here.

But when I give it an A or an A plus, probably not. I'd probably give it a B. And I even more and more, not to mention very similar to Ume. I took a loss on the top day thinking we were going to go red because technically what we do and again, this is, this is to me, this is kind of the extension blow off day. This is where the range really expands itself. So I'm thinking like, hey, if we go red, I have to, you know, as much as it's faked out run before, that's also, that was also much lower on price and now we're, you know, almost double that. Like, I have to, I have to trust it. And unfortunately it was a loss. That's what happens in this game. Like, you have to kind of trust the stats, trust your, trust your setups, and not all of them are going to be winners.

And so it was a loser here.

And unfortunately, very like, very similar to uamy. I did not have then the conviction to chase this gap down and short this day because again, my brain was saying, oh my gosh.

So I tried it.

I was wrong. Here it's gapping down. What's stopping this gap down for being any one of these previous gap downs and just coming right back again. That was the mistake. I didn't trust the odds of a, hey, we're much, much higher now. We have much, much more blow off kind of price action.

You, you have to just give it a shot, right? Whether you think you're going to lose

or not, you have to trust that.

And so going into the intraday on

the, the top day here, this is when I did take a loss to show you. Right here, right. Zooming in. Right. So it actually went red out the open, thankfully. I mean, ironically, looking back on it, I don't remember why it wasn't short. I don't think I was looking. I think I got distracted with a couple other tickers I was, was watching. But then it ramped up and then kind of gave back this entire spike

and we were headed towards red green.

So when we were heading towards that level, I thought to myself, I was

trying to be fancy.

I was like, oh, let's get short here, anticipating it's going to go back red because it did it once here and then we just gave back the entire morning Spike move like you Know what are the chances that this just rolls right over to me in my. In this moment? Ironically, as wrong as it was, I

thought was high, I was like, okay, great. Like, let's. Let's get short here.

Okay.

Clearly not the case.

We bounce right back. We come back over vap, which is this yellow line here. Thankfully, it wasn't too bad of loss. I didn't. I didn't say stubborn and like waiting for it to go higher because clearly it just, it just did. So kind of a crappy trade plan on my part, chasing it. But again, it's one of those things where if I didn't short here and I was watching it there, I probably would have given this a try and would have stopped out just as quickly, right? Just one of those ones that have a little bit more strength. And in this case, it wasn't until about big enough gap down, let's call it to die. But again, I had already kind of written it off. I thought to myself, this doesn't make working. Doesn't make much sense. You know, it's doing what it did

down here, up here, which it shouldn't.

And so unfortunately, I missed it. Right? But even if you missed it, it's like there were still more downside for those who are wanting to be aggressive or have some level of conviction that I don't have for a swing trade. You know, it rolled over pretty well, right? It went from fourteens down to. To 10 to nines in a couple of weeks. But again, not all of them do that. But. But when they do, you know, they look pretty good in hindsight, obviously.

So another last one I want to

go over Fannie Mae. A really good history of red days, at least not.

Not of recently.

It's kind of become too big of a ticker and a market cap. But a lot of previous days, and specifically this one was a really good red day. I mean, for those who don't know

my story, I. I've come from OTCs. Like, I started, I got profitable with

OTCs, so it wasn't me until like years in that I really got good with listed stocks. So OTCs are kind of like my bread and butter. They're like where I.

They're like my warm, happy place to be silly about it, right?

It's where I learned to be profitable

with them or with trading.

And so very similar, right? When this starts the run from 250, you know, has these small red days, and someone might hang in, a newbie might look at me and say, hey, Kyle, did you Short Fannie Mae. On this red day of, on January 6th, when it, you know, dropped from 520 down to 430, you know, I would say no. Well, why? Because we only run from 250 to 450.

Sure.

On the top end of this candle, it touched five. So it got up to 100%. But it didn't close at 100%. It didn't, it didn't have, you know, every single factor. Sure. It's extended. Ish. Right. It is approaching up 100%. But just because it was up 100% at 5 doesn't mean I'm just going to blindly short it.

And just, it just happens that this

rolled over that day. Right. So even though this is a red day, this is not the first red day setup.

Kind of what I talked about with

Rizz earlier, it's very easy to look at this move and think, oh, of

course that was, that's the first rate

of setup to me. No, it's not. You know, arguably you could argue this isn't even up 100%. This went up from 250 to 350, consolidated for two days and then broke out. You could argue the run isn't, isn't even from 250 to 5. It's only from 350 to 5. So even in that instance, we're not even close to being up 80 or 100%. So this day, although, again had a red day, it is not the first red day setup that I would have profited on or to even try to short.

I didn't try to short.

I didn't touch this at all today on this day.

So.

But you want to keep on watch because just because it has a small red day doesn't mean you can't keep going. And that's exactly what happened. Another small rule of consolidation. Day, green day, green day, green day. And then explosion, right? The volume kind of starts to pick up, the extension and range starts to pick up. And now we are approaching over seven bucks. So now when you look at it

as a whole, you can look at

it two ways like we've been talking about. You can look at it as a run from 250 to seven. Well, up over 100%, almost 200%. Or you can look at it from the breakout of 350. Well, 350 to 7 is still 100%. And we are getting this expansion of

green days towards the top and price action expanding.

So now, now we are setting up for a first rate day and so it doesn't shock me that once we roll over, we have a much bigger range to the downside than this day. I mean this day only went down like what force four smits fours to. I mean it didn't even go down 10%, maybe barely 8 or 7%. This day went down, you know, almost 20%. Like it went down like 16 or 17%. So doesn't shock me that, that, that has a big difference because this is when it started to set up. Not here.

And so to show you the intraday of that trade. Right.

Pull it up again. Sorry, apologies. Blurry. Why it bugged me now and I'm trying to figure out why it's blurry. But stars tries the morning spike almost has like a little fake out.

You barely see that wick.

But it tries to spike and then rolls over. And so once this broke the low of day, that sometimes can be an indication for me. Hey, let's, let's get, let's start in. You don't take a full position but let's take a, you know, if you want to pyramid it or like slowly add into positions like let's, let's start in on that idea. So that's why you see the couple arrows there. Then you see me adding on the previous close. I forget why there's a green candle here. I don't really care to have covered any in this instance. Maybe it was me just downsizing to get like even shares. Maybe I filled like you know, 20,115 shares and I'm like, why do I have the extra 115?

I just kind of COVID it.

I'll do that sometimes just to get to an even 20,000. Right. So I add some size. Now this, this I will say just because it goes below the previous day's closing price doesn't always mean it's a sure thing, right? In this instance and like other examples, it actually did support itself initially. It did actually bounce back these little

wicks to the upside.

Ignore those, those were misprints. It never actually bounced that high. It only bounced to as high as like 4 or sorry, 7 like 37, 40. Chopped up for like 5, 10 minutes. And then the real wash came. And once we started going back to red green, I then added more size, getting confirmation like, okay, we're going to try to break it again this prime. This time it's probably going to actually work. And what do you know, it flushes, I cover some. I add that size back into the bounce. It then respects and fails the previous closing price. You Notice that. Notice how it's support here breaks it a second time and then becomes resistance here, and then finally panics for real. Cover the rest, you know, in the sixes and. And locked in a really, really great trade. This is one of my favorite trades because again, it's very smooth, very predictable in my opinion. You know, I find OTC price action much more predictable than listed. But yeah, just a really good first red day.

So that's some examples in terms of some other parabolics.

BSLK was 1 on August 13th of this year. Where was that? Yeah, right. On this day, this was a big day. Again, this goes from threes all the way to as high as 17s. I mean, we're talking hundreds of percent. It's not every day you get 100% plus move in small caps, but every so often you will get.

You will come across a runner that's

up 3, 4, 5, 600%.

And it gets kind of nuts.

But on this day, because it got so nuts, it did offer some parabolics. Right? If we go into that day Again, this is 8, 13, zoom in or zoom out, I should say. So this is the whole intraday.

Okay, now you might.

Before I even tell you, you might ask, actually, before I tell you, I want you to guess where the parabolic is just based on what me and Riz talked about of the look, I like a parabolic to look like. Can we guess where the parabolic is?

Okay, if you guessed here, you are incorrect. I'm sorry, it's not.

Yes, they are spikes that pull back. But again, many, many traders make the mistake of just wanting to short anything that spikes. This. All this did was spike for five minutes. All this did was spike for three minutes. All this did was spike for one big minute. That's not a parabolic, guys. That's just a spike, right? You want something that again leads its way into it, right? And so if you look again, this is the parabolic, right? This led its way into. Didn't just trade sideways and then go straight up, right? This traded sideways, straight up. It's not a parabolic. This grinded up and then sped up. Okay, so this is the parabolic I shorted and actually did make some money on.

Now, I will say this did not

die as much as I thought I could. Again, most times I'm trying to wait for vwap. This time it didn't even get close. In fact, it supported, you know, the high sixes very well. In fact, so well that I'm sure

anyone who was over who Was short

and overstayed their welcome, you know, is part of this squeeze. They probably got squozen out, squeezed out and took some losses but leading into it. Right. I like the fact that this had so many green candles in a row. And yeah, I will pull up the trades in a second. I don't think I gave this a shot because again, this isn't that extended. But once we really kind of double, you know, very similar to a daily chart almost when we really double the extension of that move into here. This is when now putting in a red candle gives you a good chance to say, hey, let's start getting short, you know, in the, in the low eights risking this 880 or modal like I guess the best risk you could have got was like the best entry was like 8-30s. So if you don't, if you miss the top candle you can get short these lower highs at 8-30s. So you're risking at least 50 cents a share. Not terrible. But then it does roll over down into seven. So risking call 50 cents to get a buck 30 if you're perfect. Pretty decent risk scored.

And then to show you the, the

intraday here, this is me.

So I am getting short very quickly

after that kind of stuff candle. I am covering some into that first pull once we then pull spike and then pull back. I actually, I didn't anticipate it would hold so well, but I didn't like that it was holding so well usually and again not always, but usually if it's going to trade pretty sideways like this, it should just keep rolling over. You know, it shouldn't have this spike up.

So when I remember when I had

the spike up, it kind of spooked me out and so that's why I covered in on this dip.

And if I hadn't covered there, I definitely would have noticed that we've doubled

bottom now and we did it again. So at that point I probably would have covered on this like higher high and it would have put in the high there.

But again, less than an hour later it actually goes. So that was some maybe early tell

signs of like, hey, this isn't, isn't

as weak as it should be.

But again, thankfully I was getting short

early and so that allowed me to,

you know, have some, some decent size and, and catch this nice rollover.

It was a good profit. Good profit. So there's that another one is from earlier this year. Cur

this happened, I believe in January. Yeah, this day right here. All right, so again, another big runner goes from two Bucks to as high as seven in a single day. So very, very big.

You'll notice that with parabolics, like, for

a sock to even go parabolic, it, you know, it needs to run at least 50, 100, 200, you know, plus percent to really get that build into it in parabolic, right? Plenty of stocks can spike 50, but

if they do it off news in

five minutes like we've been talking about, you know, that's not a parabolic. That's just a big spike like you want. You need time for it to build, build into it.

And so going into that chart on

1 dash 8 and pull it up, right?

It's a build into it.

So it doesn't just. It doesn't just spike out of nowhere, right? It actually tries to spike pulls, keeps going pulls, keeps going pulls. And then you keep a little pull.

Like it's like almost like every pull is less, right? That's how you kind of gain that

parabola where there will be pulls, but every pull, every, you know, extended pull is less and less and less until

it just reaches straight up kind of territory.

So this is a perfect example, right?

Up, up, bigger pull up, less, bigger

pull up, small pull, smallest pull one, barely one candle and it's not even immediately absorbs itself and then just goes right again. It almost doubles the extension from the

first kind of move.

Volume getting bigger. It's not the most extended volume, right? It isn't as big as out of the open candle.

But you do see a general trend.

It is kind of uptrending and getting bigger. Not the biggest, but bigger. So again, same thing. Like, you don't have to be shorting at the highs. You can wait for a bigger pull and a bigger two red candles like this. And then once it kinds of puts in these higher highs that clearly can't, you know, it's not another one of like these polls. And then straight up or this many pull, and straight up, it's a pull. Tries to continue, fails not once, twice. 3, 4, 5, 6 candles, 6 candles. It tries to push these high sixes and just can't do it. Can't get over seven.

So these are really good spots to get short.

And then you get a pull.

You kind of have this like, you

know what, 15, 20 minutes support line getting built in around six. Finally it breaks down. You get a pull. You can go drop a dollar share all the way from six to five, very, very quickly. And that would be pretty much most of the move. Again, I always say view out, but I'm never holding it for it or below it. I'm just getting it as close as I possibly can. And so when it gets, you know, when we're at five bucks and VWAP is only at like 460, you're getting in territory where if you're not covering some here, you're being a little greedy. You know, in this case, this one did go below V up.

So you could have been patient.

But again, if you looked at other examples we like, we looked at, they

don't always go below vwap.

So I'd rather, I'd rather be consistent and catch most of the move, not

be aggressive on all of them and

only catch, you know, have to stop out because some go higher versus catching maybe a bigger move on ones that do go lower. I'm pretty sure I traded this. Yeah, this is, this intraday. Now I will say this was a different set of mine.

I was actually already getting short this

thinking it was going to roll over. Once it didn't and once it was going higher, I then cut it. But because now I cut it and then it's going parabolic, it's like it, it is all one trade, but it's two different setups. So it's like unfortunately, and that's just how my broker statements give it to me. It's going to give me all these trades combined into one. But there were two different setups here. I was shorting it to kind of fall over. It didn't. So I cut that loss and then now it immediately turned into a bear parabolic very shortly after. And so then this is me shorting on that first red candle. This is me adding on one of those lower, those six minute lower highs there that, that just couldn't go higher. And then this is me covering it all into that pull.

You know, if I was really fancy,

you know, it actually wouldn't have been that bad of idea to reshort these highs. Now that I've locked in profits, you can almost use those profits as like house money and short here, risking the resistance up there. And yeah, you would have got a secondary pool.

I wasn't that convicted.

I wasn't that sure of it going that lower.

But it is a scenario that you could have, you could have been a

part of, you could have done that.

So I think that's it. You know, we went over Bynd's parabolics with Riz. So those are the two First Fridays and parabolic shorts.

Right. They're very similar, but different enough to

be, you know, you should want to

have attention to detail to them because one is very intraday based and another one is very daily based.

But clearly no matter which one you're looking at, both end up having you know, entry styles on the one minute right? So anyways hope this was informative. Hopefully you know you appreciate or learn some more examples beyond just what we

did in the studio. But yeah thanks so much.

Well there you have it everyone. Incredible setup. First red day and then we had the parabolic short as well. Plenty of trade examples to go through and look at. You know Kyle, thank you for showing in detail each and every setup. Not only just the setups but even on the whiteboard section as well. Everyone at home drop a comment with

your biggest takeaway from this episode and biggest lessons as well.

If you have any questions throw them in the comment section below, but links for Kyle will be in the description as well.

Other episodes are on screen and this

has been chart for next until next time. Take care.