Trading Champion: I Built THIS Trading Strategy To Beat Wall Street

This guy achieved over a 500% return in the US Investing Championships in both 2024 and in 2025. He traded in the $1 million real money division.

This was a 300% move. I'm here playing the risk-reward game. It has the tendency to be able to make big moves in a short span of time with a tight stop or one unit of risk. You're getting multiples of your reward.

And one thing I noticed, this isn't like an overcomplicated strategy. I would say 30% anticipation and then 70% Clement now is a professional portfolio manager, and in this episode, he covers the entire price cycle in the markets.

It's bunching up like a launch pad. You have volatility contracting, but then there are 2 ways you can kind of buy it. So the first way that I do it is by buying on strength. We're at a technical spot where I think risk-reward is good, the stock is set up, then I go for it. Buying on strength is one entry tactic. The other entry tactic that I like to do is—

He takes us step by step how to identify the bullish cycle and the trading Setups within bearish market cycle and how to identify setups on the short side.

People would be inclined to want to buy this high-take flag, but then instead of breaking out, it breaks down. This is when I have it on my radar. That's the first step that I'm looking for. When a stock does this, I am demoting it into my breakdown watchlist. And what I will look for after that is—

Welcome back everyone to Chart Fanatics, the go-to channel for all of the very best strategy and concept breakdowns in the world with some of the greatest traders in the world as Well, talking of which, today Chuffinax is in Hong Kong and we are here with an incredible trader who has traded in the US Investing Championships. In 2024, he did over 80% return, and last year in 2025, he did over 140% return in the million-dollar division. You know who it is. We just shot a podcast and now we're going to break down his go-to long and short strategy. Clement Ang.

Thank you, thank you, Riz. Okay, so I guess we'll go straight into it. Yeah, so, you know, like in the podcast, like we kind of spoke about some of the influences of my trading, and Oliver Kell's price cycle is one of the ways— like, it's one of— well, it's the main way that I kind of view price, the entire price cycle. So we'll go through our long setups first. So I kind of like to view price on— well, you could call it the right side of the V. Lance likes to call it that. But in Oliver Kell terms, it is the wedge pop, and then, you know, the EMA cross back, and then the base before the breakout. So it's kind of playing a continuation setup type of thing. So you imagine, like, I'm going to represent price by a, you know, a line.

Yeah.

Line chart. So you have a stock that is trending, right? So it's on an uptrend, it's forming higher highs and higher lows. The red line here is your 200-day moving average, so sloping higher. And then at this point, you have price kind of begin to pull back, right? So pulls back, it starts to form a base. And within this base building process, you have, say, the blue line, which will be the 10 EMA. So it kind of Follows closely. And then you have the green line, which is your 20 EMA, also kind of following closely, mirroring, you know, the stock's price. So within the context of the uptrend, price has begun to pull back. And then what happens is price will wedge pop and break above the moving averages. So let me kind of extend this a little bit. Here. So that's a 20, and this is your 10. And so price wedge pops and breaks above the moving averages. And when we look at volume, so this is your 200-day, and then volume, as it wedge pops, you'd see like a big volume bar relative to the rest of the volume bars. Okay, so that was your first sign of demand and a change in the stock's character within the context of the uptrend, right? And so ideally this happens, you know, as the stock corrects, it's in the context of, say, a market correction, right?

Mhm.

And so then at the end of the market correction, you want to find stocks that have shown relative strength and is, you know, potentially going to lead as the market turns higher. So kind of going back to the wedge pop, what you want to see is price begin to pull back, right? And so this is your cross back into the moving averages. Um, so this is— these are the MAs. And essentially what I'm looking for is price to test the 10-day and the 20-day exponential moving average and then begin to base. So like, you can imagine it's some sort of consolidation. You can very easily like draw a horizontal line to demarcate where the breakout level is.

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And along this consolidation period, you start to see volume recede. So, you know, you have your wedge pop on volume. As it pulls back, it's showing receding volume. So volume just, you know, becomes a trickle, which signifies that there isn't a lot of supply coming into the market, right? And so at this point here, price is right above the 10-day and the 20-day exponential. It's bunching up like a launch pad. You have volatility contracting, right? And ideally, throughout this period of volatility contraction, it is also continuing to show relative strength to the market. So say, for example, the market, you know, pulls back a little bit, but this goes sideways.

Mm-hmm.

That's relative strength already. And so then there are 2 ways you can kind of buy it. So the first way that I do it is by buying on strength, which is, you know, if price breaks above the horizontal line, which is your breakout level like this, you're buying the breakout level and then you're setting your stop at the low of the day, right? Or the prior low of day, right? So say this is your stop loss. And so then you're risking this amount for, you know, I don't know, however much reward the stock Gives you. So say that amount. So then, um, you know, with a tight stop for 1 unit of risk, you're getting multiples of your reward, right? So this is like a sort of a continuation breakout pattern within the context of an uptrend.

What time frame would you be observing this on?

Right, so this will be on the daily time frame. Uh, with regards to my entry tactic, I would look at it on a 5-minute time frame.

Oh, gotcha.

Right, so just, we can do it on the side here, right? So on a 5-minute chart, so let's just say this is price and this is time. What I'd be looking for is, you know, say this red line is the breakout level, right? So when price breaks above this red line, I'm looking to buy. So like imagine like a big bar like this to open the session. And then, you know, you see huge volume, right? Volume comes in. This is your volume bar. I'd be buying through the red line, and then I'd place my stop at the low of the day. So, you know, low of day minus, say, 10 cents, for example, to allow for—

Low of the current day or previous day?

Low of the current day.

Gotcha.

Yeah. So you could— so it depends on your aggression level. You could either do low of the current day, or you could do low of the previous day. Yeah. And so I kind of adopt both methods. They work.

And is the take profit, as you mentioned, whatever the stock gives you? Are you— I know you mentioned on Words of Wisdom that you have a certain ATR, was it, that you would scale some out of every position? And then from there, do you just scale your stop loss and trail it along?

Yeah, that's a good question. So with regards to trade management, how I would approach it. So in a trending market environment, so say I've bought through that breakout level. And say, you know, the average daily range for this stock over the last 20 days is, say, 5%. Okay. And so the moment my unrealized profit is at 10%, so double the ADR, I'll take a third of the trade off, right? So then I'm left with two-thirds of the trade. And so then kind of going back to this example, we'd imagine that the MAs start to trend higher. So I'm going to remove this. So the MAs start to trend higher, and then the 10-day would begin to expand. And the moment price— so I've taken a third off, say, you know, at this point. So I've taken a third off here. I'm left with two-thirds of my position. When price begins to pull back now, say it breaks the 10-day. If this stock has shown historically to respect the 10-day, the moment it closes below it, I'll take the position off.

Okay.

Right? Or if it, you know, has shown tendency to respect the 20-day and it breaks below the 20-day, I'll take the position off. So that's one scenario. Another scenario is, say, like before the violation, it's kind of gone somewhat parabolic and, you know, it's extended. Um, a general rule of thumb for me is if price is about 8 to 10 times, um, ATR multiple from the 50-day moving average, I'll take another third off.

Okay.

And so then I would be kind of scaling the position into strength 2 times before the last violation, which is on weakness, right, which is a violation of the moving average. Um, so that's generally the, the the long setup that I'm looking for. And buying on strength is one entry tactic. The other entry tactic that I like to do is, you know, when I do notice that breakouts have a tendency to fade. So maybe although we're in the context of an uptrend, but then it's become more choppy, perhaps because, you know, the market itself is somewhat extended. I have a preference as well for buying on weakness. And so what this looks like, again, on the 5-minute chart, So rather than buying on strength through the breakout level, I would buy in anticipation, say, into a moving average. So what it would look like on a 5-minute chart again is, say, price kind of opens, it gives you that first initial pump, and then it starts to fade, fade, fade. And then on the daily chart, you have your, say, let's just say 10 exponential moving average, right? So this blue line here is your 10 exponential moving average. So it would move like somewhat in a stair-step fashion in the intraday. And so what I'm looking for is for price to kind of touch it and then start to turn higher.

Okay.

And then so what I would do is I would buy that pullback, right, into the moving averages. So say, you know, I buy it as it turns right here, and I would set my stop loss at the low of day or below the moving average. And so, um, I quite like buying pullbacks in the context of an uptrend because it gives you a very, very tight risk-reward, much tighter than buying on strength. And kind of especially like if you think about This year's market, to begin the year, buying on weakness has been rewarded rather than buying on strength.

And so that the second example is still within the same areas where the first one was? Exactly.

Still within this area, but perhaps like I'm buying on that pullback rather than waiting for the confirmation of a breakout.

Is there any criteria that would be needed to get to this stage from a stock perspective in terms of whether it's liquidity or volume or, or anything along them lines? For you to even get to this point where it's within your criteria?

Right. Yeah. So there are a couple of things. Generally, I like to trade stocks that are fairly liquid. So, you know, an average daily dollar volume of at least kind of $50 million. So $50 million average daily dollar volume. The other thing that I want to see in terms of stock selection is the group. So is the group strong? I want to see group strength. So other than this stock that is setting up, I want to see stocks in that same group also set up. In terms of the volatility of the stock, I prefer stuff with more than 3% ADR. So on average, I want to see that it has the tendency to be able to make big moves in a short span of time.

Gotcha.

So anything less than 3%, so for example, like a bank stock, I'm not too interested, right? I want to see the growthy type of names. They usually trade with more than 3% ADR. And then the other thing is relative strength, right? So as the stock is consolidating, I need to see it show relative strength towards the market.

Yeah, perfect. So once those criteria are met, that's when it As long as this criteria starts to be met, that's where you can start looking for your entries and looking for that move higher in this case.

Yeah, that's right.

So is that the long setup covered?

That's the long setup.

Amazing. So now we're going to look over the short setup. Short setup, is this the criteria still, or is there a different criteria for that?

Generally, it's the same criteria in terms of the stock selection, because what happens is the watchlist that I have, which I track for long setups, When they begin to break down is when they begin to be my short sale candidates. Understood.

So it kind of transitions from long to short.

Exactly. So kind of following the price cycle again. So in terms of the short setup, what I'm looking for is what Gil Morales would call a late-stage failed base.

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Which essentially is, so you've got a stock in an uptrend. Right? And then it bases for a period of time, and then it tries to break out but fails, right? So let's just say this is your breakout level, it fails. And in the context of the moving averages, again, like, this is your 10 exponential, and then this is the blue— the green line is your 20-day exponential moving average. The other thing that I'm looking for is a violation of that 20-day exponential moving average. Ideally on volume. So say like, you know, it's been trending, this is the volume signature, and then on the day it violates it, it's on larger volume, right? So that's the first step that I'm looking for. And when a stock does this, I am demoting it into my breakdown watchlist.

Gotcha.

And what I will look for after that is, is what I would call wedging action. So what wedging is, is a stock tries to recover Right. But then it's weak and it forms like sort of a wedge.

Would this be daily timeframe again?

Yes. So this is the daily chart. So like you can imagine, like this is a little bit of a wedge.

Yeah.

And as it wedges, I want to see volume also kind of be very minimal, which tells me that, you know, the buying demand trying to push the stock higher is not there. Yeah. And what I'm looking for is kind of the opposite of my pullback buy setup. I'm looking for the turn, so I'm shorting that turn lower and then setting my stop just right above that high of day right here.

And so would that— would the entry be the breakout of the low, or would you be looking at the sort of turn and maybe a volume increase within the high that's Well, the lower high in this case that's being formed.

Yeah, so generally speaking, what I'm looking for is on the daily chart, the stock ideally kind of uppercuts the moving average a little bit.

Okay.

And then fails. So it's kind of like a failure type of setup. And then so on a 5-minute chart, what it would look like again is, say, you know, the stock kind of trades higher throughout the day, And then on— and then this green line is your 20-day exponential moving average on the daily. And so it uppercuts and then it starts to fail. And then so I am just shorting that round.

Mm-hmm.

You know, I'd probably like, you know, say somewhere here, and then I will put my stop right above at the high of day. And so then with shorts, it's great because this is great risk reward. And when what I would additionally, what I'm looking for is for the market to confirm. So say as the stock begins to fail, the QQQs are doing the exact same thing. It's going down. So I have the wind at my back as I'm shorting.

And in terms of, as you said, like sort of overcoming that EMA when it's doing so, if it was to close on a daily timeframe, above that EMA, maybe not significantly above, but above, would that then be sort of canceled out in terms of a setup? Or if it was to then come back below the next day and then start to sort of break down, would that still be a valid setup?

Yeah. So if it manages to close above the EMA, then the setup is invalidated. And so then working from an Asian time zone, like by the time I realize it, I just work out, oh, okay, So then I have my stop loss there in place. And in the scenario that I'm not stopped out, I would look at the next day and see what happens. Okay. So as much as I can, I just stick to my stop because I've kind of predefined my risk for that trade.

100%. And then in terms of— this is the entry criteria. And then target-wise is very similar in terms of the— would the ATR be to the downside? Still the same premise.

Right. So it's slightly different in terms of how I approach my shorts. So short selling is a much more active endeavor for me because the downside that you get comes very quickly as compared to the upside. And when you're long, you know, kind of there's a saying, you know, stocks like to take the staircase up, but the elevator down.

Yeah.

And I guess, you know, gold and silver this year are very good examples of that.

Yeah.

And so what I would look for in terms of covering my shorts is I'm looking at prior lows. on the left side, left-hand side of the chart. So say for example, this was a prior low.

Yeah.

And we've drawn it here. Typically what stocks would do, like it doesn't just flush lower that quickly. What it would do is it would undercut these prior lows and then they would usually rally, right? And then if the stock continues on a downtrend, I'm going to extend this 20 EMA is the 20 EMA starts to slope lower, and that becomes a reference point to short it again. So you get these countertrend rallies into the EMAs, and then you roll over again. And so for short sellers, you usually want to cover your position when it undercuts a previous low and reclaims, and then wait for a re-short entry as it trades into the moving averages again.

So when you say cover, do you close that trade and then look for a reentry?

Yeah, I would close that trade. So for me, I typically like to just cover half. And then, you know, say if it reclaims the 10-day exponential, then I would cover the entire thing. So say something like you get this 10-20 cross, if it reclaims, I would cover and then I will look at the 20 again as a reference.

And you look for the same?

And then I'll look for the same setup.

Gotcha. Roger. Same with the— going back to the long just quickly, are there any sort of reentries you do there following a similar thesis, or is that just more of a one entry?

It's more of a one entry, but then with longs, then I would be looking for the next set of volatility contraction or consolidation.

So like that base?

Yeah.

If a base begins to form, that could—

Exactly. Yeah. So it could come in the form of like it forms a big base and then it forms that consolidation again. Or let's just say—

Is there a specific number of daily bars that you would consider as consolidation for you or a base?

So for sustained moves, typically what I found is for a weekly basis of at least 6 weeks, those are the ones that can give you the prolonged, you know, 2-3 week type of move.

Would you say that because like the amount of time that's taken, the amount of accumulation potentially?

That's right. Yeah. So like, you know, there's a saying, the bigger the base, the higher in space. So yeah, so I think you know last year I think gold was a very good example of that. Yeah, in September when it formed this huge consolidation, this was multi-week, and then the eventual breakout in September, it was like a one-month move. Yeah, one and a half months move, and then what you saw was another period of consolidation and then a breakout again. So I'm wait for the long side. I'm waiting for those period of consolidations to come again and then to. To re-participate.

Got you. Perfect. Should we go and look at the chart examples then of these setups?

Yeah, of course. Perfect. So an example of a setup that I would look for would be— so Affirm is one example. So like this was in 2023, right? Affirm kind of went through a bottoming process. And then I remember At this point, the market was on a three-wave down correction, and of course, Affirm kind of went down together with it throughout this period. So, for example, like if we go back to the QQQs, the QQQs in 2023, it was somewhere here, right here. So this period here, this three-wave down correction, you know that we we experienced. Towards, I think it was the 2nd or 3rd quarter of 2023, from July all the way to October. And so Affirm was taken down with it, but then as the market turned higher, Affirm began to show signs of life, right? So at first it kind of gapped and gapped above. So just for context, this red line here is the 200-day simple moving average. This light blue line is the 50-day. Okay. And then these two lines here, the top one is light green, is the 10-day exponential, and then the 20-day exponential is the purple line. So it began to gap above, and so then there's evidence of the wedge pop taking place, you know, as per Oliver Kell's system. And so here, the realities of trading is you get the wedge pop, and then it pulls back to retest the 10-day and the 50-day. But, you know, you couldn't have taken a position here because Earnings was, was enforced. And so then, you know, it was a binary outcome. You don't want to take risk without cushion into earnings. But then kind of look what it did afterwards. It continued to go higher and started to go sideways. So this would be what I would consider a base before that break. When a firm was moving sideways, you notice that the candles got increasingly tight. as the 10-day exponential moving average was catching up. At the same time, the top bar here, this is the relative strength line of Affirm. So clearly, you know, as the market, you know, was digesting, Affirm was digesting, it was showing much more strength versus the market. And throughout this consolidation, it came on low volume. So, you know, the volume kind of trickled down to almost nothing compared to the previous bars. And so then that was telling me at the time, okay, this stock was showing relative strength, it's consolidating tightly, and, you know, volume was not coming in. So there wasn't much supply coming into the market. And so what you could have done is if you look at this inside bar right here, very, very tight doji, you could have set a buy stop, you know, but through these highs. So say this, this orange line is your entry, you could put your stop at the prior low of day here, right? And so then your stop loss would be the red line. And so what your risk is, you know, for your risk is about 4%. And this is for something that moves, I think, I think it was like 5-ish percent. So let's go for replay. Right here. So before the breakout, and let's take a look at how volatile this stock is. Right, so it moves, so it's 7% ADR, the risk is 4%. So it's, you know, slightly more than half, which is a decent risk-reward proposition. Because you imagine, like, if it follows through for one day and it moves 7%, you're up 2 to 1 already.

Yeah.

So very quickly, you know, you're able to de-risk your trade if you need to. And so buying through prior day high, you know, through prior day high, it followed through. Volume wasn't really there yet, but then it also never violated your stop, right? And then thereafter, it finally breaks out and continues, right? So, you know, for an approximately 4% risk, it moves out from the starting gate. And very quickly in 3 days, you know, you're up 20%. And so then, you know, invoking my 2x ADR rule, you know, like the stock's 7% ADR, I'm up, you know, 14%, I'll take a third off. So within 2 days, I'm able to take a third off the position. I'm shifting my stop loss up now to the breakeven price. So then, you know, the worst-case scenario for me now is a small win.

Yep.

Right? I've de-risked the trade. I've improved my worst-case scenario. But it was so strong on the breakout that it continued higher, right? And then if you see all these green dots that are flashing, this happens when price is more than 10 ATR extensions from the 50-day. So by definition, it's considered extended to me. That's when I'll take the next third off. And so my next third would be, you know, I'm up 50% on the trade. Now I have a third left. I am able to kind of just let it trail, right? And so it keeps trading, keeps trading, and then on a violation of the 10-day, you know, I'll take the entire position off for a win. And so this is the setup that I'm looking for. Another example would be, you know, Palantir of last year. I think this is a decent example to look at. Like you notice at this point, the beginning of April, Palantir was still trading above 200-day. So kind of what we spoke about in the podcast earlier. If you look at what the QQQ was doing, it was right here trading below all the relevant moving averages. So very subtly, Palantir was telling you that this was going to be a leader. And when you're kind of studying this trade, the very first way you could kind of have gotten an entry was, you know, we were talking about short selling, right? Um, undercut and rally areas. So this Palantir gap down together with the market, and it quickly reclaimed the prior left side low because, you know, shorts were covering. People who are trading this undercut and rally setup would, you know, would be buyers. And this was actually your very first entry if you were nimble enough. But then, aside from that, watch what Palantir did. It began to wedge pop above the 10 and the 20-day.

Hmm.

It put in 2 days sideways. So I guess you can consider this your mini crossback and base and break on a very small timeframe. It continued to go higher even more. So it gapped. I remember this day it was on news. And then it began to base and break again. So you notice here in this particular consolidation, it began to show immense relative strength to the market, even though it already was doing it. It confirmed it at this point. And then volume was not too, not too much. It was somewhat drying up for a stock that was this big. And so then this is another example of where I would buy a pullback.

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Right. So we'll do a rewind at this point here. So here it was. It came to retest the 50-day, the 10 and 20-day. So somewhat it was somewhat bunching up. If you look at the 5-minute, Here it was. So at the open, you know, you get your first candle down and then it began to reclaim. So it reclaimed intraday VWAP, it reclaimed the shorter-term moving averages. I use the MACD as a sort of a momentum indicator as well. So, you know, you would see it flushed lower, began to build, go sideways, and then it breaks the 5-minute opening range high. So you could consider this as some sort of a pullback buy. You buy on this confirmation as it turns higher. So it's still, you know, on a daily chart, it's a pullback. You see the volume come in and you set your stop at the low of day. And so, you know, you're risking, you know, approximately 2%.

Wow.

For something that is trading, I don't know, this is, I think back then it was like a 4% stock. It was an 8% stock, right? And so then It follows through and it keeps going. I remember I took this trade last year, and basically what I was doing is I sold into strength as it approached the prior left side, just because earnings was coming up.

Yeah.

Right. And so then, you know, I didn't want to take that binary earnings risk, you know, risking having size in this name and then, you know, just kind of—

Giving it all back.

Giving it all back. Yeah. Which, you know, it did gap down. Which was an opportunistic kind of pullback buy as well, because at that part of the market cycle you were just emerging out of a correction.

Yeah.

And so a lot of relative strength. This is a leader. This is in fact something you would want to position trade and perhaps trail along with a longer-term moving average. Yeah.

Is that because of it being such a leader and sort of leading the market in that sense?

Yeah. So number one, it was a leader, and number two, we were just emerging out of market correction. So we had the necessary feel for a prolonged move higher in Palantir. So if you trail the 50-day moving average, you would have gotten a double until the violation in Palantir. Well, I sold out way before that. So this was a learning point for me last year as I was studying this stock. Yeah.

Amazing.

Yeah. With regards to the short side, I think like another name that was quite popular last year is CoreWeave. So I think a lot of people participated in this initial IPO run. Right? It just like, you know, it corrected together with the market, and then it began to turn higher. This was a 300% move. Also one of the leaders, I would say. You know, it showed immense relative strength coming out of the April bottom correction and then into that May run. And then notice what it began— it begins to do after it breaks the 20-day exponential. So right here, well, first of all, it begins to lose relative strength to the market, right? So a lot of people You know, they would look at— let's just rewind. They'll look at this and they're like, wow, this is a developing high tight flag, right? So people would be inclined to want to buy this high tight flag, but then instead of breaking out, it breaks down, right? So it breaks the 20-day exponential, and this is when I have it on my radar. And what I'm looking for is a wedge. So notice that it begins to kind of wedge slightly into the moving averages. On this day, it gapped up. And you notice that it's on no volume at all, right? And so then what you could do here, if we look into the 5-minute chart now, so right here, this green line here is the daily 10 EMA.

Hmm.

The purple here is the daily 20 EMA. And you'll notice that at the open, CoreWeave uppercut the 10 EMA and then began to fail. So like it was just choppy. And so then, you know, if we have taken— if you would have taken the trade on the loss of an intraday VWAP, you put your stop at the high of day, you would have gotten close to stopped out.

Yeah.

But then eventually it began to unwind. And if you look at— if we go back to the daily chart, you're risking, I think, sub-1% for a move like this. Right. And so then the first cover point would be on this kind of mini, mini low right here, which is undercut and rally area, right? And indeed it did undercut and rally. But then, you know, as it again trades into the moving averages, uppercuts, and it fails. And so then from CoreWeave, you would have gotten in a pretty extensive downtrend all the way, you know, using the moving averages as your guide to short sell.

Yeah.

So at this point when it began to reclaim all these EMAs and moving averages, then the short side is out of play.

Well, it's like you were saying when we were on the whiteboard that the short side in terms of targets, you were more aggressive. You look to cut a lot more than you would on the long in terms of holding and maximizing the gain from that trade. So in terms of when it hit that undercurrent rally area, would you look to scale out fully or is that where you would take out Just 1/3 again, or what does that mean?

So typically I like to take half the position off. So I'm much more aggressive with taking my profits off the short side. I have experimented in the past just taking a 3rd, a quarter off, and then trying to swing the rest for a duration move. But I find that it doesn't work for me too well psychologically when I have to see the position kind of go back and I'm giving back P&L much quicker. And so then I was more comfortable with just taking a larger piece off, and then if it really, you know, reclaims the moving average, then I'll take the rest of it off.

Even in this case, it would still be from there, wasn't it?

So you get 28% if you're risking 1-2% on the move. It's 1 to 10.

Yeah, yeah, phenomenal. And one thing I noticed, I don't know what your sort of opinions are, is like how this isn't like an overcomplicated strategy. You're just piecing together quite simple, uh, technical aspects, some indicators, and just the general overall market sentiment and positioning, layering it into a thesis, and then just having to act accordingly. It sounds easy when I put it that way. Obviously, you know, the execution, the trade management, the psychological aspect obviously all steps in.

Mm-hmm.

What I'm getting at is like, I'm sure you probably come across so many complex systems Right. Like, what are your thoughts when it comes to keeping things simple versus, you know, all these complexities?

I think with complexity, it comes with analysis paralysis. So in the past, like, well, when I was in the beginning stages of my trading journey, I used to have a pretty complex chart layout. So I would have, you know, the price bars, the moving averages, volume, and then I'll have a MACD, RSI, stochastics, money flow index. And so I have like many panels on my chart. And what that led to was analysis paralysis. Like I'd see something, but then there were so many conflicting signals, I did not dare to pull the trigger. And then gradually I just decided I had to remove all of that and find something that is simple. It may not work 100% of the time. My historical win rate is 30%, but it's good enough because like I'm here playing the risk-reward game, right?

Yeah.

And so simple is better. You keep things objective. You know exactly where your out points are when the trade invalidates. And so for me, like, simple is better.

Would you say, do you trade from your laptop usually, or do you have like multiple screens?

Oh yeah. So my setup is I have a laptop which I wire up to one screen. It's like a 27-inch screen, and that's all I do. That's all I have.

Not the 10?

I don't have 10 screens.

No, no, I was just wondering because I know obviously Again, we were talking about simplistic in nature, but sometimes obviously having certain relevant information might be needed. I know for like order flow futures traders, for example, right, having, you know, maybe 2 or 3 screens or one of those super wide ones makes sense because they're looking at, you know, multiple things and they're usually scalping as well. So, yeah, um, you know, very different in that nature. Although, you know, when it comes to the implementation of these, is there anything that really stands out as, you know, things people should be aware of? as we talked about on Words of Wisdom, of course, that this is how you observe and this is what you look at. Um, of course, you know, people probably make it their own to a degree if they're looking to implement something like this. But when it came to you implementing this yourself, were there certain things that, you know, were maybe a bit of a hurdle or something you had to overcome, uh, when getting to a point where you could consistently see it? Or maybe something that you had to train the eyes a bit more before you could get more comfortable with it?

Yeah, for sure. I think, well, number one, like training your eyes, you know, to your point, is quite important just to spot the setups. And so then, you know, the first step, you know, kind of going back to our conversation, was to really study all these past big winners, right? Like, and so on a year-by-year basis, I'm studying all these biggest winners. Let me zoom up a bit. And I'm looking at the daily chart. I'm envisioning how my entry would be. I'm also looking at the index. On an index perspective, what does it look like as I was making the entries on these names? And just going back in history and studying all these—

And you put all these together?

Yeah. Just studying all these big winners. With regards to these charts, there are many resources out there where you could take their work and study it, run it through an LLM to understand the context. and just drill it into your mind. And so you have all these examples, right, like of how these stocks look like before they make big moves. And so in real time, this allows you to be able to identify it as the market is trading. And then the other thing is like in terms of the execution is then experimenting with what works for you, right? So one of the pitfalls that I've kind of encountered Just to give an example with regards to short selling is I run very tight stops with short selling. So it's very easy for me to get wicked out, right? So to kind of go back to the example, if you would have taken that short, you would have gotten pretty close to getting stopped out if your stop is at high of day, right? So say your stop is right here.

And then you put it exactly there, or do you normally put it—

I put it like high of day plus 10 cents or 20 cents. And say like you enter at the violation of the VWAP, right? So in terms of the trade risk, this is about—

Would the VWAP be from the start of that day?

Yeah, the intraday VWAP. So this would have been about 2.8% risk. It's relatively tight. And there will be occasions where like when I'm short selling, the stock would kind of rip through and then reverse and unravel the big move. And so then what I'm very aware of is I have to find a way to be comfortable with re-entry. And so I would re-enter sometimes. So with shorts, it could happen like, you know, I stop out and then I re-enter a second time and it finally works. But then I have to be aware of revenge trading and tilt.

Do you have like a rule set of a limit?

Yeah, so anything more than 3 times is when I give up on the ticker. Because then like, I would end up clicking the button too many times and be attached to it.

Yeah.

So these are the pitfalls that you have to kind of be aware of, you know, trading in real time, understanding, you know, as you execute the strategy, what will be your psychological, you know, blunders or walls that you have to overcome, and then devise ways to kind of protect yourself from it.

Yeah.

Yeah.

What would you say the bridge is between all that research that you collect and all those charts you collect to then using that knowledge and, you know, what you're taking away from that in real time? Like, what is the— is it just the characteristics that you're trying to take on board and sort of remember and sort of ingrain inside so that in real time you can try and recognize that?

Yeah. So market context is one. So understanding as a stock is like beginning to set up, what is the index doing? And so, you know, we kind of spoke about going back to studying William O'Neill, right? Like, and all the stocks, like, you could— you study the chart and you realize that all these base building patterns occur at market corrections. So then now you have the market context at the back of your head. If we look at the market right now, you know, we're in a correction. Price is now trading below all the relevant moving averages. We've chopped sideways for 5 months and then we're finally unraveling. This is, if anything, probably the beginning, unless we see some sort of panic. In the back of my mind, I'm thinking, okay, I need to look for stocks that are showing relative strength right now and resisting this entire decline. I turn my attention to something like SEDG. Look, it's a completely different shape, right? It's showing so much RS. When the market was slaughtered yesterday, it was up 13%. And so then you now, okay, you have this stock on your radar, you're stalking it for another entry, you know, maybe on a pullback.

Understood.

You can now with AI utilize, you know, the LLMs to do deep research for you. Why is SEDG going up? Is it because of perhaps, you know, the need for energy and we need alternative sources of energy given that the Strait of Hormuz is closed? Is this why it's going up? You know, or things like that that can help you build conviction for when the correction does end. This is going to be a leader. So studying, you know, the past, it gives you a lot of that nuance and, you know, why a stock is going up. You'll see, like, for example, with the memory boom, it's a supply and demand equation, right? We need more memory chips for AIs, and we don't have enough of them. We're capacity constrained. And, you know, all these names like Micron and SNDK go on big moves. And so very quickly, when you kind of study the past winners and you understand the context, is it like— that's when you can react quicker and take advantage of the situation. Whereas a newer trader would probably look at a setup and They just buy the setup.

Yeah.

So then there's work that needs to be done to identify what is actually a good setup. It's not just the chart pattern itself, it's the entire context that makes it such a big winner.

Definitely. I absolutely love that. And just a final question for you in terms of what we've talked about so far, even on Words of Wisdom as well, like how much of trading is actually, rather than predicting, it's just reacting to what the market's showing you?

Yeah, that's a good question. For me, I think it's more of, I would say, 70% reaction, 30% anticipation. So the 70% is more of like, I'm looking at the screen as the market trades, and I'm just trying to go with the flow, right? Sometimes I may come into the trading day with a certain opinion, but then when the market starts trading, like, my opinion is completely refuted. So what does that mean? Like, market's telling me something, And then if we're at a technical spot where I think risk-reward is good, the stock is set up, then I go for it. So just trying to flow with the market and not to impose my opinion on it. And then 30% anticipation goes back to the studying. So kind of understanding where we are in terms of the environment, where we are in terms of the cycle, and then kind of thinking ahead, like, what should I be looking out for? What should I be preparing for? Um, I think that's very important as well.

And that's how we make our luck.

That's right. You've got to put yourself in a position to be lucky.

That's it. Clement, really appreciate you going through your setups today nice and clear. And, you know, I'm sure everyone at home agrees as well. But any questions you have, throw them in the comments section below. Let us know, uh, if there's anything that you thought of or something that you want clarity on. We'll be checking that out for you. But links for Clement is in the description below, so make sure you check those out. And well, this other episodes are on screen. Hit like. Nearly forgot that, didn't I? But until next time, this has been Chart Fanatics. Take care.