All language subtitles for 3. Daily Charts

All right, guys, so welcome to Part 3 of Chapter 4 to answer a couple straggler questions

from the last part where we were talking about the best indicators. Andrew's asking if I

use CCI, the commodity channel index, and the answer is no. I don't use that. I don't

use money flow. And if I back out of here just for one second, you know, the indicators

that I use, and this isn't a good chart as an example, we can look at, what was it,

PRAN today, just at least a stock that had volume. So the only indicators that I'm using

are my moving averages, volume, bars, and then the VWAP I have on here right now. But

if I click on my indicators and I go to click plus to add an indicator, built-in studies,

I'm just going to show you the number of built-in studies there are. These are all

different indicators. And this is only really a fraction. I mean, there's so many more.

There's probably, I mean, and you'll get the add-on studies. There's tons of add-on studies.

I mean, it's just, it's crazy the number of indicators you could possibly use. These aren't

going to help you, for the most part, make better decisions. I mean, they're just not.

So you know, if you, like I said before, if you keep it simple, you'll be better off.

So focus not on having the perfect combination of technical indicators or the most technical

indicators or the holy grail technical indicator, instead focus on the chart patterns. The holy

grail on the market is reading chart patterns. That's how I make my money. It's by buying

the first pullback. Now you can see here on PRAN today, this was an example, a perfect

example of the first pullback. And I'm a little annoyed at myself because I just got

distracted. I looked away for a second and I just, I missed it. But this is the pullback.

The stock popped up. It pulled back here at 316. The entry was 316. That was your apex

point. So your entry is 316. Your stop is the low of that candle. This candle is sometimes

also called a trigger candle because the high is your entry. The low is your stop. So your

stop here is 12 cents, 10,000 shares. That's 1200 bucks. So, you know, $1,200 stop. That's

not too bad. Maybe get in here at 316 and there's a move all the way up to a high of

458. I mean, that's like a $14,000 move with 10,000 shares. Now, you know, obviously that

would be being pretty aggressive, but the fact is this was a really good setup and it

wasn't a technical indicator that predicted it. It was a chart pattern. So focus on the

chart patterns. That is the most well-respected indicator that there will ever be. It's a

universal language. Every trader sees it. You can't, you can't, a trader cannot see it,

cannot not see it unless he's not using candlestick charts. And a very, very few day traders try

to trade without candlestick charts. Okay. So just to wrap up there on part two of chapter

four. So now going into part three of chapter four, we're going to start dissecting the

daily charts and I'm going to get into showing you how to identify the gaps and the windows

and the pockets of safety. That's essentially what we're looking for. You know, pockets

of safety where we have, you know, some really just home run opportunities. Okay. So the key

levels learning to anticipate the breakout levels is a really critical skill for any

trader. Now we can learn to anticipate breakout levels on one minute charts, the way we just

did on pran at three 16 or on five minute charts or on daily charts. So right now we're

going to talk about daily charts. We're talking about the big picture and then we're going

to start focusing in over the next few classes. So by anticipating these levels, we can have

our orders ready to buy just before or just as the volume starts pouring in. So as I watch that

candle on pran, I could have set up my order to buy at three 16 or maybe I could have bought it

or set my order at three 17 or three 18 to allow a little offset for a little bit of slippage, but

I could have been in there and ready to go. By being ready to go, I'm able to get the max profit

with the minimal amount of waiting time and the minimal amount of risk. Now key levels are based

100% on technicals. And again, they're only valid on the right type of stocks to trade. The stocks

that meet our six criteria, the stocks with the low float, with the high relative volume, with the

strong daily chart, with the history of being a former runner potentially with a good catalyst

and with mystery number six, I can't think of off the top of my head. All right, so daily charts. Now

some traders believe that you must have a strong daily chart in order to trade a stock. And you know

what, I did used to believe that, that you couldn't trade a good a chart if you couldn't day trade a

stock without a good daily chart. But then I kept seeing that stocks with really strong catalysts

could override a bad daily chart. And so that's when I realized that the catalyst is perhaps more

important, the catalyst, the low float and the relative volume. But with that said, the perfect

storm, you know, the perfect setup has all six criteria, which includes a strong daily chart.

Okay, so let's talk about how to identify a strong daily chart and how to differentiate it

from a weak daily chart. And I'm going to show you lots of examples. And if you have some stocks

that you want me to look at, I can look at those as well. Okay, so whenever a stock pops up on my

scanner, one of the first things I look at is the context I look at the daily chart, what is the big

picture on this stock? Okay, so what makes a daily chart strong? All right, number one, the price

should be above the nine, the 20 and the 50 moving average exponential moving average. Now,

ideally, the price will also be above the 200. But as we've seen, there are some times where

the price will be above the 50 and has a lot of room up to the 200. So the 200 may be resistance,

but we have room from the 50 to 200. And that alone is a big enough window, we call it a call

that's a window, a big enough window for potential profit. Okay, so ideally above the 200, but at

least above the 920 and 50. Ideally, there is a daily flag pattern, which is a pullback or

consolidation after a recent breakout. So just a moment ago, I showed you that example on APOP.

Let me pull this one back up here, APOP on the daily chart. Let's see.

And you'll see how we got this quick move up and then the pullback. So this is a little bit

of daily consolidation, which is a good daily chart. This is the type of daily chart that I

really like. Myos, I'll show you this one. Through this area, we're watching this because we're like,

okay, look, it's curling down. It's starting to move higher. And on this day, it moved all the way

up to four. It didn't hold that level, but it was still worth watching. Curling down and then

squeezing higher. So it kept kind of breaking out of consolidation and surging higher. AUPH,

another one on the daily. Let's see. A little bit of a pullback right here. And then guess what day

we bought this? We bought it on this day right here. And I said, guys, this is an awesome daily

chart for an entry over $8. And right there, we get that breakout. A strong daily chart, a pullback

to the nine moving average. So this is a stock that's above the 200, above the 50, above the 20,

above the nine, pulling back after a period of, you know, after a big move, a little bit of a pullback

entry. So that's one type of entry. Now, we traded our GSE. This was a couple months ago,

and this was a little bit of a different setup. I mean, it was a very weak stock. It had been beaten

up for a long time, and then it suddenly reversed off the lows. So you can see here how all of a

sudden in two days, you had this big reversal. Now, this one was kind of interesting because

it did run into these moving averages, but it had a strong catalyst. And that was enough for

it to power through. And because of the way it had been sold off for so long, it was kind of like,

you know, this squeeze off the bottom, which is not a bad setup. I'm trying to think of another

one that we've been looking at. IMUC is an interesting one. This is one that's been in this

kind of period of consolidation for a long time. And it's gotten to the point where it's been

flatlining. And notice how it's started to get above the 50 moving average. Now, back in this

area, I would have been like, nah, I don't like it because it's going to run into the 9 and it's

going to run into the 50. But here, it started to base out. It started to flatten out. And now,

it's been kind of like looking interesting for a possible spike higher. And you've seen how it

started to squeeze up. So the first area of resistance that I look at on this one is that

200 moving average. Because we're above the 9, the 20, and the 50. They're all kind of

coiled together at the bottom. So that's a decent setup as well. All right. Now, so ideally,

there's a flag pattern on the daily, a pullback, or consolidation after a recent breakout. But

really, just as good could be a long period of consolidation with no nearby resistance. And

we're going to, of course, talk about what resistance looks like in a moment. Number four,

ideal entries are often at half dollars and whole dollars. And the reason is because of the crowd

mentality. Half dollars and whole dollars are psychological areas of resistance. So when traders

see stocks coming up to, you know, 4, 45, they know there's the half dollar there. And once you

break over that half dollar, you start at, I mean, once you break over the half dollar, at that

point, the next dollar is kind of like the logical spot. It's kind of this like this magnet towards

that whole dollar. And once you break over the whole dollar, you break over that critical level,

it's kind of like a magnet up towards the half dollar. And so stocks keep going in these kind

of whole dollar, half dollar increments. Now, some stocks will also find resistance at quarters.

So 25 and 50, 75 and the whole dollar. So those are kind of like slightly smaller levels of

resistance and support. And breaking over them is significant. But when I'm looking at a daily chart

setup, like AUPH that I just showed you, the entry was $8. Even though the high was 806, I knew as

soon as it broke over that critical psychological level, we would get a move up higher. And that's

exactly what happened. All right, so often finding the entries at half dollars and whole dollars.

Number five, ideally, the stock has a history of being a former runner. That's overlapping with our

criteria of the right type of stock to trade. But when we look at the daily chart, it's something

that we can see the stock has a history like AUPH or like IMUC of having days where it goes up 50 or

100%. Number six, ideally, there should be large windows of no resistance. Now, this is something

that I'm going to show you in just a moment. And number seven, there should be no ascending

or descending resistance. And again, I'm going to show you that in just a moment.

Okay, so I wouldn't worry about getting in the habit of trying to build daily watch lists. I've

never found that to be a useful, a good use of my time. You know, some traders will put together

their watch lists at night of the stocks that have really good daily charts. But just because a stock

has a good daily chart doesn't guarantee in any way that tomorrow it's going to break out. It'll

break out tomorrow if there's a catalyst, right? If there's news, but if there's no news, if there's

no catalyst, stocks not going to do anything. It needs to have that, you know, that trigger that

sparks traders, you know, to jump in to see it and to see the opportunity. Now, once that happens,

the daily chart becomes incredibly important. But until then, it's just, it's not significant. So

for me, I don't spend my evenings trying to make a list of the, you know, top five stocks with the

best daily charts, because those aren't going to be in play the next day unless there's good news.

So instead, what I would encourage you to do if you want to do homework is to go study the charts

of the stocks today that move 20 to 30%. Because those are the types of stocks that, you know,

you need to study, you need to understand their behavior. So the next time one comes around,

you'll be better, you know, better prepared to trade it. All right. So, and again, remember that

when we're talking about the criteria for a good daily chart, we're only applying it to the right

type of stocks to trade as per chapter three. Okay. And again, number one, the moving averages,

we talked about this in a moment, the importance of those moving averages. So when you look at the

daily chart, we want to see the stock is above moving averages, or that it has a lot of room

between usually the 50 and the 200. So we want to look at the daily chart and see good potential.

Here's a stock where you've got the 200 moving average right here at 495. And you know, the stock

is kind of like hitting its head on that level. So it shows that you've got some resistance at the

200. But what it also shows is that this stock has a history of being a former runner. This stretch

here where it went from $2 all the way up to 22, and then pull back and then a big spike here,

a big spike here, here, here and here. It's a stock that has a history of making big moves.

So it's definitely one to keep a close eye on if it could break over 495. Now, this stock,

if I was looking at it and it was on the gap scanner at 480 with a really good catalyst,

I would think, okay, if it can break over 495 or $5, the whole dollar, there's a good chance that

once we're above that critical resistance level, that we're going to have a lot of room to go.

So once we break above this 200 moving average, where's our next point of resistance? I mean,

to me, we really don't have much. We've got lots of room on this. And what we see here is,

in these windows, these are what we call the windows, these big pockets with absolutely

no support or resistance. So this window is formed by this tall candle. And the entry would be right

here at 910. That's the bottom of the window. And the top is at 1365. And then you have another

window here from 1461 all the way up to 2175. So from 910, basically up to 2175, you have almost

no resistance. Now, in this area here from $5 up to 910, you could maybe see, well, they'll probably

just be a little resistance at like the whole dollars and maybe the half dollars. That would

probably be about it. You don't have any critical ascending resistance that's going to hold it down

or descending resistance coming down. Now, the descending resistance would be when we connect

this line and this line and this line. And that would create a line that sort of comes down.

But you can see that probably is cutting through right around here. We're probably already above

that. And an ascending resistance line would be going up like this. So you could maybe try

to connect this one, this one, and this one, these three candles. But again, these ascending

and descending lines are a little bit more arbitrary because different traders will draw

them differently. Some traders will say, oh, well, you don't draw trend lines from the top of the

candle wick, you draw it from the top of the body. So if you do that, suddenly you've got a different

different curve to the line. Or another person's like, oh, you never include the high of day,

you include the candle just after it. So because anywhere you have room for various

different trend lines, different moving averages, there's going to be an increased likelihood that

not any one specific price will be resistance. Except for probably the 200, which is one of the

most respected. So here's another stock. This one came down to the 200, bounced off that level,

came back up, came back down, bounced off the 200, showing some real respect at those levels.

So when I look at this stock, if I was looking at it right here, I would say this has basically

no resistance. Once it starts to break up here, I mean, there might be a little bit of resistance

at, you know, the half dollars and the whole dollars, but that's about it. We're above our

moving averages. And those are the critical resistance points that we usually see on daily

charts. Here's a stock curling up and running into the 200. That's a problem. So I don't like

to see that overhead resistance. Okay, so point number one is to make sure we have no resistance

of the moving averages. Or was that point number two? Point number two, sorry, price being above

the 200 moving average. Price number one was, sorry, let me back up here. Number one was the

moving averages and number two above the 200, which we've got. Number three is our daily flag

patterns. Okay, so the flag patterns offer, without a doubt, some of the best opportunities.

All right, like we saw in APOP, the stock that made the strong move up, a little bit of pullback.

Now, I recently had someone ask me, Ross, do you think I should buy the Snapchat IPO? And I was

like, well, here's the thing. The IPO, on the IPO date, the stock squeezed up like 50%. I mean,

from the IPO price. So I can't buy it up here at a 50% premium from the IPO price. I personally

would wait for the first pullback and consider that a possible buying opportunity. Now, I'm not

a long term trader, but you know, this is just, that's just my opinion in general of how I would

trade any stock that I thought was good. Well, again, multiply that by hundreds of thousands

of traders out there. And when you see a stock that made a really strong move, people want the

first pullback. The first pullback is the opportunity to get into a strong setup. Now,

here's the thing about a flag pattern. If a stock goes, you know, from $10 up to 20 and it

pulls back to 15, that's 50% retracement. That's okay. If it pulls back to 12, it pulls back to 11.

It's almost retracing the entire move. And that's not what we look for. We want to see stocks

usually holding at least the 50% retracement. And that's generally speaking. So when I'm looking

for a pullback, I'm thinking about a 50% retracement down to the moving average. Usually

it's the nine moving average, the first one it comes to, curling off that level for a move back

up higher. That's what we saw on AUPH. It's what we saw on APOP. All right. So these stocks can

have a technical breakout even without a catalyst because it's simply the first day to make a new

high after the consolidation and the stocks can still be kind of running off the strength from

the original catalyst, especially if the original catalyst was a really good one. Okay. Now, I

actually have a couple of scanners that I use in trade ideas to scan for daily stocks and to scan

for daily bull flags. Now, scanning for patterns is really hard. It's hard to teach a computer,

at least I found it hard to teach a computer, about the type of pattern that you really like

because these are very, they're very specific, but they're not the easiest to describe. You

know, you want a stock that in the last two weeks has moved up 50% and is now holding or it's moved

up 30% and is now holding 50% of the move and is above these moving averages and has this amount

of volume and has this level of float. So when you start putting together these criteria, it can

become a very, very fine-tuned filter set to the point where you only get one or two pattern alerts

a day or a week and those end up being ones that are kind of like false alerts that meet the

criteria from a technical perspective, but actually wouldn't be something you'd want to trade.

So generally, the easiest way to find flag patterns is just to sort of keep a list of a

couple of the stocks that were really active in the last week and just sort of keep checking those

each morning as part of your routine. You know, is this stock setting up a flag pattern? Is it

pulling back? Is it breaking the moving averages? Did they do a secondary offering? You know, what's

kind of the daily context? So you can see here, as I showed you earlier on NYOS, the stock that's

squeezed up from $1.50 all the way to $7, I didn't even trade it this day, and then it pulls back.

Now, this right here was probably a momentary opportunity for a bull flag to break up,

but it ended up coming down lower. But then here, we curled off our 20 moving average,

and we squeezed from $2 back up to $4. Right here, even though it doesn't look like a lot,

that's a 100% move. That's an opportunity. We pull back again, and then we curl up again,

this time from $2.50 to $6, so 300%, or almost 300%. And then the next day, we pull way back,

and then the following day, we break over $4, and we squeeze back up to $5.50. So it's like there's,

you know, right here, and even this day, from $4 to $5.50, you've got one, two, three, four,

five, you know, at least six days where you had the opportunity to make a lot of money on this stock

if you were watching the daily chart. And if, you know, you saw this stock, basically,

the way I would usually find this stock is either by having it on my watch, because,

you know, I was watching it, knowing it was a recent former runner. But the way I find my

intraday entry is by waiting for the stock to hit my high day scanner. And then once it hits the

high day scanner, I'm like, Oh, that's my OS. This is one that is a former runner I've had on watch,

I'm going to jump in on the first pullback immediately. So, you know, you kind of have

this mental list of stocks or maybe written list of a few recent, you know, former runners,

and then when you see one of them popping up on the scanner, you know to jump on it quickly.

Okay, here's APOP. And of course, this was, you know, is now setting up for another daily bull

flag, which is definitely worth keeping an eye on because, you know, there's a good chance that,

I mean, I'm not sure, but I think that there's a good chance that when this one breaks the high

of the previous day, volume is going to come in. So, you know, it ended up squeezing like right

into the close, which was kind of interesting from 850 up to 907. So we'll see if that

continues tomorrow or pulls back and then we get that kind of second move. No resistance on this,

really back up until, you know, 10, the whole dollar of 10, 11, 12, it's got potential.

All right, number four, entries at whole dollars and half dollars. So it's important to note,

as I've already said, that almost all stocks, especially stocks under $10,

will have small triggers at whole dollars and half dollars, which are psychological areas of

support or resistance. So usually a stock at 399 or 499 or 599, we'll see a lot of resistance at

the whole dollar. In fact, we saw it today on the trade I took on PRAN, and I'll jump out of this

again to show you this live example or this example from today. So on PRAN, I jumped in this

for the first five-minute candle to make a new high on the five-minute chart. Okay, so my entry,

oops, pull this back here a little bit, we had one, two, three, four candles up, one, two, three

candles down, and I bought on the first candle to make a new high. So as soon as this five-minute

candle broke over 390, I got in at 390. Now if we look at the one-minute chart on this, let me

pull this back a little bit, you'll be able to see my entry. So I jump in here at 390, and we come up

and notice how we could not get over that whole dollar. We came up first to 97, and then we dropped

all the way down to 78, and then we came back up and we hit $4, and we couldn't get over that level.

We saw lots and lots of buying, thousands and thousands of shares of buying, and there were

just too many people selling at the whole dollar. It was resistance. Now if that resistance point

had broken, what would our first target be? We talked about this the other day, and we'll go

over this in a lot more detail coming up soon, but let's see if you guys can answer the question.

If we break over 390, what would our first target be?

First target, $4. Yeah, we definitely, I mean that's definitely the first target. We would want

to see a break of four, and then we would want to see a move back to high a day. High a day,

Karine, exactly, you got it right. So we want to see the bull flag resolve and go back to high a day.

So in the entry at 490, the typical stop would either be the low of the candle, which is your

trigger candle, but in this case that's 34 cents. So I would probably use an arbitrary stop at 380,

and I would say, you know what, I'll just stop out at 380. Why is this not? And if it doesn't,

you know, if it doesn't go, I'll just get out at 380. I'll lose 10 cents. I'd rather lose 10 cents

than 34. I can always get back in. So obviously in this case we would have, we know we would see

resistance at 340, or sorry, we know we would see resistance at $4, and we know we would see

resistance at the half dollar of 450. That's, I mean, we know that because of psychological

resistance, but our target is always back to high a day. In this case, since high a day is just over

a critical resistance level, we would probably sell a little bit at like 45 as we were approaching

that level, just to take a little profit off the table. The fact that this couldn't get over the

whole dollar of $4, you know, that by itself, it ran into that first little spot, hit its head,

and came back down. So in this case, my entry was 390, which was the correct entry because that was

the first candle to make a new high. But then we came right into resistance and we couldn't break

over it. There are other times where I will take entries right around whole dollars simply because

I know that when the stock, I know number one, the stock is squeezing up, and I know that if it

can break over that whole dollar or half dollar because it has volume, there's a good chance it'll

hold above that level. So let's look at this IMUC that I traded the other day. So I got in this one,

actually, I got in this one in a funny spot. I got in this one first on this little one-minute

pullback. We hit a high of 330, and then this is actually like a micro pullback if I do like a

30-second chart. Oops, 30, 30-second chart. Sometimes even the one-minute chart when you're

day trading is just not quite tight enough. So let's see. So we had the high there of 40. We pulled

back for just a second on this candle, and then I got in for the break over 40. And then you can

see how we had resistance here at the half dollar. It just came up and hit that half dollar. It was

like tap, tap, tap. And then the next one is it broke over that level. I added for the break over

that half dollar, thinking that from there we might go straight up towards four. And I was aggressive

because I was looking at this daily chart and I was like, look, we've got room all the way up to 479,

the 200 moving average. Lots of potential. The problem on this stock is that we didn't have a

catalyst, but we had really strong momentum. We had low float, good volume, good daily chart,

and we were in a really strong market where we were seeing other stocks making 30, 40 percent

moves. And that's when you can start seeing kind of the rising tide lifting all ships where other

small caps start to get strength. So in this case, it didn't work, but there are times where when I

see a stock come up to a half dollar like this and tap just for a second, I'll just go ahead and

jump in there. And I'm going to set an arbitrary stop of 10 cents. So it's going to have to be a

tight stop, like stepping out on a cliff when you're halfway up. It's risky, but just keep your rope

tight. Make sure if it doesn't go right, you stop out quickly. Okay, so that's point number four,

the half dollar and whole dollar. Now we see this a lot pre-market. A stock that's coming up and has

pre-market consolidation under that resistance level. So this one right here was holding

resistance at 650. This is a pre-market flag. Consolidation with a flat top at 360, or sorry,

at 650. So this is absolutely a place that I would want to get in. And what I would do is I would,

you know, in my speed trader, I would go in and I would say, okay, I know that the level two on this

is 650. So I'm going to put my order. My entry would be 650. You know what? I'll give myself

maybe a two cent offset, a thousand shares, two cent offset. And now all I'm waiting is for the

bell to ring. And if I start to see lots of buying going through here, like at 48, 49,

I'll jump in. I'll jump in with a thousand shares, jump in with another thousand. And as soon as it

pops up, I can either press control P to put my stop out up 10 cents, or I can go press control K

to put my shares on the ask, or I can just sell on the bid. You know, I've got a lot of flexibility

with those hotkeys. But what I'm expecting is that when we break over that resistance level,

because there's that psychological resistance when we break, we'll get a snap. Now, if you know that

there's a psychological resistance at half dollars and whole dollars, wouldn't it make sense if you're

sure that you say, you know what? I'll hold this until it breaks seven, or I'll hold it until it

breaks 650. If it breaks 650, I'm just going to get out. I'm going to bail on it. Right? So a lot

of traders that put stop orders at 651, 652, or they put them at seven or 701 or 702, as soon as

the price crosses over that resistance level, those stop orders start triggering, and they're

going boom, boom, boom, boom, boom. They're firing off, and now all of a sudden, if they're firing as

a market order, the stock is quickly, with all that extra buying, going to pop up to 710, maybe 715,

or 720. And that's when just getting in at a half dollar or a whole dollar can sometimes give you

that 10 to 15 cent pop. So that's capitalizing on, really, it's capitalizing on what you think

other traders might be doing. So it's that collective trading mentality, and you being

able to anticipate that another trader who's short would cover this over 650, and that makes it an

even stronger long setup. Obviously, though, the best setups are, of course, when you first have

the pullback, you come up, you hit the level, the half dollar or the whole dollar, you pull back,

you consolidate under it, maybe forming a flat top or forming a bull flag, and then when that

pattern is breaking out, you have two setups in one. The first setup is the break of the whole

dollar or the half dollar, and the second setup is the break of the bull flag pattern or the

flat top breakout pattern. So two patterns in one, that's an even stronger setup that more traders

are going to recognize. So then you'll have, most likely, even cleaner follow through. And again,

guys, if you focus on these types of trades and you only take them two or three times a week,

you can do really well. You don't need to over trade. In three days this week, I made,

well, two days this week, I made just under $10,000, and the remaining three days, if I don't make

anything, that doesn't matter, $10,000 a week is $520,000 a year. Hopefully, I could be that

consistent all this year, but you don't need to be over trading. It's looking for these A quality

setups. So when we're looking at daily charts, you have to be mindful, and this is not just daily

charts, this is also getting into intraday charts, which we'll get into more tomorrow or in the next

class, but this is also talking about just the importance of those half dollars and whole dollars,

whether it's daily or intraday. So here's APOP popping up to $750 after hours,

pulling back, popping back up, consolidation. So I know that $750 level is critical. I know it's

in play. We've already hit that as resistance once, pulled back. So if I got in pre-market,

or I wouldn't get in pre-market, but if I got in as soon as the bell rings,

looks like it's almost $930 here. So if I got in here, maybe we pull back.

If I, you know, it's not the cleanest setup, but if this pulled back just a little bit,

so it's a little more consolidation, maybe a little bit of a bull flag. If I got in here,

you know, the first spot I'd be watching is what's going to happen when we hit $750.

Are we going to see lots of buyers coming in? Are we going to see the break? And then anyone who's

short covering as we squeeze up to $760, $770, are we going to go straight to $775 and $780,

and then up to $8, you know, or are we going to have a really big seller, like a $50,000 share

seller sitting at $750, just saying, nope, this is a ceiling. The stock's not going higher.

Okay. Now, number five, former runners. This is something we've always talked about. So when

you're looking at the daily chart, you can scroll back and get a sense of whether or not this stock

in, you know, the recent past three, six months has made a 50% or 100% move in one day. These

stocks often develop sort of like a cult-like following because traders know, if I want to make

some money, this is the type of stock I should trade, you know, DRYS. The big move was in

November. You know, it was months and months ago, but traders are still talking about it. There's

traders who are trading it every single day. Now, I don't recommend doing that. I think you should

focus on the stock each day that's in play. But the fact is, any time DRYS has news, traders go

right back to it because they're like, look, last time it went from $2 to $100. Maybe today it'll

go from $2 to $6. Maybe it'll only go from $2 to $4. That's still 100%. That's an opportunity.

So when we're looking at the daily chart, we can scroll back and we could see, okay,

here's the stock cone. On one day, it went from like $1.50 up to $10 a share. And again,

we'll see this again and again and again. You see stocks doing this on a weekly basis.

These are the ones to trade. These are the stocks at extremes. But here's the thing,

since this one did it in the recent past, look at this day here. All of a sudden, it's gapping up.

It's got a little bit of news, a little bit of a headline, and we go from $5.33 up to

$6.53. So that's a nice 20% move. I mean, that's really not bad at all. 20%, 30%.

This fits our criteria. So it pulled back. It had a little bit of an issue being below the 20,

below the 9. It was kind of bouncing off the 50 though, and it popped back up.

Here's another one, SPU, a totally separate chart. They're just kind of touching here.

SPU, the squeeze up from $2 all the way up to $21, a really sharp pullback.

Back down, bouncing off the $200, and then from $575 up to $795. So again, 30% move. This is a

stock that had news. The volume came into it. It was a former runner. And so even though the daily

chart wasn't perfect, the catalyst plus the low float, that was able to override the less than

ideal daily chart. Now, you're not going to be able to override a less than ideally chart if you

don't have this type of thing going on. If you don't have the former runner status, the low float,

the good catalyst, the high relative volume. But if you have those things, you can break through

these moving averages. I mean, it just takes volume to do it, but it can happen. Here's another one,

HMNY. This one's been a favorite. One day from $2, and then second day, three days, all the way

up to $16 over three days. Huge potential. And then the pullback, and then this day here,

this was a breakout. First day to make a new high, it failed. Still, right in that spot,

right in there, it was an opportunity to make probably 20, 30, 40 cents per share. We pulled

back, and then on this day, we broke out. But notice how this day we were kind of floating

up above the nine. And by the time we got to this day, we were kind of at the support of that nine

moving average. Traders recognize that as a safer place for an entry, a little more consolidation.

So some traders kind of jumped the gun here. Maybe some short sellers got faked out. They

covered. Some long bias traders jumped in. We pulled back, consolidated one more day,

and then boom. From $10 all the way up to $14, 20% move, and that'll do it. And the thing is,

this is a 20% move on a $10 stock, which, I mean, that's a lot of potential. That's a lot of room.

We usually are looking for 20%, 30%, 40% moves on $3 to $6 stocks, which is for them to move

basically $1 per share, maybe $2 per share. But here we go. This is a $2 per share move

on a stock that's still relatively affordable. And so then here we go. This is the day here

where we went from $8 to $16, a stock that was a former runner. It's at this point kind of bouncing

off the $50. It had to break through the $9 and the $20, but it broke through and it squeezed all

the way up. It wasn't able to hold those levels. A couple of days later, it came back down,

but for a short-term opportunity, this was the right type of stock to trade.

NYOS, again, I've shown you this chart a couple of times, former runner status,

that's why it's worth watching. So number six, daily windows. Now, this is kind of getting into

some of the more complex stuff. So the daily windows are pockets with no support and no

resistance. So it's kind of like, you know, when you've got a pocket with no gravity,

I mean, it's just you have this potential that since there's nothing holding it back,

it could just take off. Now, a window on a chart is always formed by either a really tall,

long-body candlestick or a gap when the stock opens much higher or gaps down and opens much

lower. A good window has the average true range of the stock in open area. And I'll show you what

that means in a second. The best setups have several windows lined up. So you see, as you look

at the chart, that there's just basically several levels of potential, that as soon as you get to

the top of one window and see a little resistance, that resistance is actually just opening the door

to the next window and to the next one and to the next one. So let me show you an example.

Each of these green lines is the opening of a window. Okay, so this green line here at 1176

has no resistance up until 1366. And so when we look to the left and up,

the top of this candle here, we look left and we have this big red candle. So this is a tall

body candle. Okay, so we've got room here all the way up to 1366. And then above that, we have room

all the way up to this red line, which is 1583. And then above that, we have a little red candle

a green one, a couple candles here, a couple candles here. So nothing significant. I mean,

we don't have a gap or window. But then from right here, the top of this green candle,

we have another window from 1892 up to 2009. So these are showing you some of these little

windows on the chart. And in these windows, you have absolutely no support or resistance.

So if we get into this window, there's no reason the stock can't go to 1366. It doesn't mean it

will. But it just shows you it's much better than stock that has resistance levels. So when

I look at the daily chart, I start to map out these levels, you know, how many windows do we have?

If we continue looking to the left and up, you see here from 2009, we've got room on this red

candle all the way up to 2151. No resistance. And then we start to have some small little candles.

So if we drew lines at all those candles, we'd have tons of little lines. And you don't necessarily

see lots of resistance at the high of every single little candle. But the places that lots

of traders will notice are big windows on the daily chart. And we have this, well, we have

something called gap fill. And I'll go into more detail with that in a second. But that's when a

stock breaks over this trigger and fills the gap. This window here was formed by a gap. And so when

a stock breaks over this level of 3064, often there's really nothing stopping it from filling

the gap. It's just like this natural magnet to get back up to the top of the gap, which in this case

would be 3479. Okay, so this, again, is getting into the more complex stuff. So I'm going to show

you a bunch of examples of it. So you can really understand what these mean. Now, the reason some

of these lines are green and some of them are red. Green is considered a trigger, opening up

a window. So this opens to a window, this green light opens to a window. And the red line does

not open to a window because the next nearest high is too close. So we would have to draw a line

there. It's too close. We're looking for a space that has at least the average true range of the

stock. Okay, so what is the average true range? The average true range is the average price range

of a stock on a typical day. Alright, now some stocks trade in very narrow ranges, meaning on

an average day, they may only move 15 or 20 cents. Alright, so let me show you an example of that.

Let's see, here's a stock. This is Siri. Alright, the average true range of Siri. This is a technical

indicator right down here, but it's more of, I mean, it's not telling you when to buy or sell,

it's only giving you the metric, the data point of how much this stock moves on an average day.

And this stock moves an average of 10 cents a day. Today we opened at 5.15 and we squeezed up

to an incredible high of 5.21, 6 cents. With 10,000 shares, you would only make 600 bucks.

So this is a stock that, and this stock traded incredibly 13 million shares of volume.

So who do you think would be trading this stock? High frequency traders? Algorithms? Yeah,

most likely, and that's about it. So we certainly wouldn't trade a stock like this,

we wouldn't day trade it. But the fact is, we're looking at the ATR. So on this type of stock,

you can see right here, I have this line drawn automatically from 5.22 up to 5.34,

because from the high of this green candle, there's no resistance when I look to the left and up

until we hit the high of this candle here. So we have this little window here. Now granted,

it's only a 12 cent window, but for this stock, that's big enough. This indicator,

called Warrior Windows, is available in eSignal as an add-on study under Day Trade Warrior.

So Warrior Windows right here. Now this automatically draws these windows. And again,

this is a helpful tool for students, but you can also just simply look at the chart and look for

areas where you have large candles or big gaps. And I'm going to show you more examples of that

in a second. So generally, as a day trader, we're looking for stocks that have larger ranges,

because that means we're going to make more money. So one of the things that you could even do,

if you wanted to, is go into your scanners, into trade ideas, and you could do a scan where you're

actually saying, let's just back this out for one second, you're going to actually look for stocks

with the biggest ATR. So let's do a top list window. And we'll say, let's see, these are the

pre-built scanners. So let's do ranges. Actually, that's not really it. So let's just go, let's just

do our custom one. So we'll do stocks between 1 and 20. And then I'm going to create a ATR leaders.

So these would be stocks with the biggest ATRs. And then we're going to go into the properties

and configure this. Let's see, next, advanced, oops. All right, so we'll go into advanced,

and we're just going to set a simple filter on this, that we want to look at stocks with,

let's look for filters. So average, true range, add the filter. And we're going to only look at

stocks that have an average true range of, let's just say at least 50 cents. So 50 cents is pretty

significant. And these are stocks between $1 and $20. So average daily volume, 150,000 shares,

volume today, we could say is 150,000 shares. All right, so we'll press OK. And for columns,

I want to make sure that we add average true range, so we can sort the results based on this

data point. All right, so let's see, show column. Okay, ATR leaders. All right, now here we go,

this is our scanner that we just quickly put together. And I'm going to look for my column

ATR, average true range. So stocks with the biggest ATR under $20. These are stocks with

the biggest range under $20. So AQMS. This is the, and this isn't the type of stock I've necessarily

trade, but this is the stock that makes the biggest moves. So it's $1.29 ATR, it says here $1.56.

So let's see if we've got any windows on this one. No windows nearby. Let's look at drip, DRIP.

And this one has a couple windows. All right, so on this one, the average true range is $1.20.

And if we break yesterday's high, which is $17.90, there's no resistance until 1936,

the high of the previous candle. And if we break that high, there's no resistance until 2066.

Now, if we break 2066, according to this, you know, the next resistance spot, if we look to the

left and over would be, I guess, the low of this candle right there, which is not that far away,

really. But, you know, I guess at that point, see at that point, though, the ATR of the stock

was $2.06. So the ATR was higher at that point, and it's not $2 of range. So this formula keeps

looking at the current ATR on the day in question. It's not applying today's ATR to all the way back,

because, you know, when the price changes, this used to be a, you know, $300 stock or whatever it

was. Today's ATR is going to put too many lines on it. Okay, so the general, you know, the general

takeaway here is that stocks, we're looking at stocks that have bigger ranges. Those are the

stocks that we're going to want to day trade. Usually the stocks like APOP, you know, this one

has an ATR right now of $1.06, and it's an $8 stock, which is a fantastic range for such a low price

stock. CBIO, this one right now is got a range of $2.15, and it's a $9 stock. That's a huge amount

of range, right? Now, if I added another filter for this, I could say, I could bring this, you know,

tune this in even more if I really wanted to, and say, let's bring up, let's see, let's search for

the filter of float. Float. And we will show the column, and we will add this, add the filter,

and we'll say, I only want to look at a float that has, you know, not more than, let's say,

10 million shares. And we'll see if there's any on here. Okay. And suddenly, we've just dropped

down our scanner, you know, tremendously. So, CBIO is the leader. CBIO. And then what's the next one?

HTGM. Okay, this is the type we want to trade. And then what's the next one? ZYNE. ZYNE. Now,

this is kind of just telling us stocks that, you know, have big ranges. And for the most part,

any of these would be worth trading if they had a catalyst, you know, if they had news, etc. Short

of news or catalysts, they're not going to be worth trading because they won't have the volume.

But the fact remains, when we're day trading, we're looking for stocks that have big ranges.

So, a stock like Siri or a stock like, you know, Bank of America or Sprint, these are stocks that

pretty much just go sideways. So, we don't care about them that much. All right. So, that's a

definition of the average two ranges, the range of a stock in an average day. Okay. So, when I look

at daily charts, not chats, when I look at daily charts, I'm looking up and to the left. So, I want

to see what is the nearest candle. As I look up and then I look to the left, is there nearby

support? Is there nearby resistance? You know, where are we going to have issues? When I'm

shorting, I would look down and to the left. Okay. So, anytime I see a large space, I'm going to mark

out that space as being a small window. And again, those spaces are formed either by long-body candles

or by gaps in the chart. So, what is then a trigger? We talk about triggers. These are the key

price levels. A trigger is the price right down to the penny where the window or the gap begins.

Okay. This is where massive breakouts can occur. This is where a big volume can come into the stock

if people are watching it. So, if a stock is on our scanners with high relative volume,

with a low float, with the headline, and it has this type of daily chart, it can be an explosive

setup. That's the important thing to recognize. This is me breaking down the anatomy of a

home run daily chart. Okay. And you don't need to overcomplicate it. So, what's the difference

between a trigger then and resistance? Well, the interesting thing is that triggers and resistance

can almost be the same, right? Because when a stock comes up to a half dollar,

on the one hand, if we break over it, it's a trigger. And on the other hand, if we just hit it,

it's resistance. So, these are lines in the sand. And we know that when we break over these lines

in the sand, it's significant. But if we can't break them, then the line in the sand kind of is

resistance. So, generally speaking, half dollars and whole dollars are triggers that can also form

resistance. On daily charts, the gaps are triggers that can form resistance. Other types

of resistance points are sometimes not leading the way to triggers. They're just one resistance

with another point right above it. Say you have the 50 and the 200 stacking against each other.

Those are just kind of two resistance points back to back. I mean, yes, if you can break over it,

then I guess it was a trigger. But it can be a little arbitrary whether you call it

resistance or a trigger. To me, a trigger is when, you know, if we break over that level,

we have lots of potential. Okay. So, the Warrior Windows, as I already showed you, is an eSignal

indicator that looks for windows on the daily charts. Now, as you guys know, I've done a lot

of work with different companies with eSignal, Benzenga, Interactive Brokers, and Trade Ideas.

So, with eSignal, I've done some seminars with them, and I was able to work with one of their

developers to build out this indicator. And so, it is featured in the latest build of eSignal,

and you guys can install it, which is pretty cool. So, breaking down the daily chart. So,

these green lines are the triggers. Okay. So, this stock here, this right here is a gap.

That's the green line. The bottom of the gap is $3.66, and then the top was $15.83.

So, a trigger must have the ATR distance to the next high or low, and in this case,

the ATR was $0.75. So, the average true range of the stock was $0.75. That meant it needed to have

at least $0.75 in order for this to be a really substantial window. Now, that's,

$0.75 is a little arbitrary. I'm saying $0.75, and I'm saying the ATR because it's an easy,

you know, it's an easy way to measure the size of a window. But really, just visually,

we want to look and see that there's a large gap or a tall candle. So, you don't need to draw lines

at every single one of these places. You just want to highlight the large ones. That's really

all I'm looking for. You can see this is the biggest one here with the gap from $30.64 up

to $34.79. Realistically, right now, it's of zero relevance because we're at $10 a share.

But for the sake of just breaking down your charts, if we were coming up right now to $30.50,

I would be looking at this, and I would say there's a trigger at $30.64. And if we break that,

when we start to get into the gap, we've got no resistance until $34.79, right? That's a pretty

big deal. So, you know, that's kind of the back of my mind, you know, that's the process, my thought

process that I'm going through, that if we break over this level, we've got lots of room. Now,

let's see. So, the top of the window is red resistance line unless above the top of this

window is another $0.75. So, in this case, you've got one green line, and then this one's not red

because there's another $0.75 above it. So, you've got one green line, a second one, and a third one.

So, you've got one window, two windows, and three windows stacked up on top of each other. So, yeah,

above $27 is actually, you know, room to $30.30, and then to $34, and then up to $36, potentially.

This is just breaking down the daily chart. It doesn't mean the stock is going to go that far,

but it's certainly better to have a stock with this type of daily chart than a stock that's,

you know, running into the 200 moving average, or that just simply has lots of candlestick resistance.

This right here is an example of a big window on the daily chart. We knew that the gap area was

$15.56, and that gave us room all the way up to $18.21. So, if we could break over that level,

it would be significant, but we had the 20 moving average right here, and the stock just wasn't

quite strong enough to break over this level and get into that gap. Now, one of the reasons is

because Pandora is not a low float stock. Pandora has a float of 174 million shares. So, even with

really good news, it just wasn't quite enough to take this one to the next level, which is fine.

That's sometimes the case, but then here's an example, AQXP, of this stock, and look at this.

We broke over this level of 381, and what was the resistance point? We had no resistance until 655,

and look at how we came and tapped that almost to the penny. I mean, that's pretty impressive,

right? So, let's back out of that. What's the float on AQXP?

AQXP has a float of 9.49 million shares, okay? So, this is the type of stock that's more likely

to break through those levels and to go parabolic. I mean, it went almost 300% in this one day,

so it had a lot more potential. So, when we're looking at the daily chart, we're really only

dissecting the daily charts on stocks that have lots of potential. Now, if it had broken over 655,

then what? Well, you know, it has room to the high of this red candle here, and then what about when

it breaks over that level? Is it really going to have resistance at this candle or this candle or

this candle? Probably not. If it's a really strong stock with a really good catalyst, it might just

keep going, but just recognize that, you know, any one of these bumps could eventually catch up to it

and, you know, sort of be the line in the sand. Picture yourself pushing a car uphill. Now, you

know, if you're pushing a car and, well, let's say you're pushing the car on a flat, you're pushing

the car and it's nice and flat, you get some momentum, you're going, you start to go uphill,

you're going for a little while, but then you start hitting, you know, a little pebble here

and it slows you down. You hit another little pebble, it slows you down a little more. You hit

another one, and these are all little pebbles, and kind of eventually you just run out of steam

and you start rolling back a little bit. Sometimes you roll way back, sometimes just a little bit.

In this case, we came all the way up to 655 and then we just couldn't get any further and we

pulled back. So let's see. So that's a great example of gap fill, and, you know, we see this

on a fairly regular basis. Here's a stock with a huge gap from 322 or 323 all the way up to 858.

Is it possible that that entire gap could get filled someday? Yeah, it's definitely possible.

I don't know if it will, but it's possible. This one will have the added issue of moving averages

kind of blocking the way, which wasn't the case on this one. We were above those moving averages.

Now this right here, we're looking at this particular green candle. So pretend today is

this green day, and we look to the left and we've got the high right here, and then we've got the

low here. So this had a big gap down, but the gap got half filled. It filled up to here, but it

still remained that we had this window, this gap. So we came back down, sold back off, and then we

came back up, and we squeezed up, and then we came back down just below the gap, and we closed just

below 8266. But we knew when this was gapping up that above this level here, there was really no

resistance until here except for maybe this issue with a 200 moving average, but it ended up not

being a problem. So look at this stock, for instance. We see this stock squeezing up, and we

look, and we're kind of looking at the daily. Are there any pockets on the daily? And we recognize

if we can break over 372, we've got no resistance until 396, and that's interesting. You know, it's

kind of a little spot that we would note. This is a little window. Now from $3 up to 374, you know,

there weren't, there wasn't anything, I mean, there were little bumps, you know, kind of a little

bit here, a little bit there, a little bit at the half dollar, nothing crazy significant, little

points of resistance, and then we sort of get into this trigger. But at the same time, these levels

that become more marked out can also become resistance, where traders see, look, there's a

big window here. I don't know if we can get through it. I don't think the news is strong enough.

It's probably going to sell off, and so sometimes that ends up happening.

Here's a stock where as it starts to curl up, we've got this line formed, this window is formed

by a long body candle. It doesn't matter if it's green or red. 877 right here, and then this gives

us room all the way up to 1950. So that's a huge window with definitely lots of potential.

SSH, as this one starts to curl back up, you know, it's just not a great daily chart. You've got

the 9, the 20, the 50, and this is at 577, and these are causing issues all the way up to 9

dollars and 94 cents. So to me, this one has too much resistance from these moving averages.

You've got the 200 way up here, so you've got lots of room from the 9 to the 200,

but not until you get over the 10, or 10 dollar spot. Until then, you're going to have an issue.

So this would be okay if it was opening at 980 or 995 right under that level, but if it's

gapping up to 7, to me it's gapping into resistance, and it's probably going to fade off that level.

Here's another kind of tricky daily chart. This is gapping up, but we know we're going to have

resistance right here at 344. Now this has a window from 349 up to 433, and another from 433

up to 531. The first one formed by the top of a long-body candle, and the second one formed by a

gap, but you know, because of the 200 moving average here, it's probably going to be an issue.

This is probably going to end up being a trigger that holds as resistance. This right here is

another example of a bad daily chart. We've got no windows, and we have moving average resistance.

So this stock, you know, even though it's three dollars, it's the right price range,

it's a relatively low float, it's gapping up into resistance, and we have resistance all the way up

to 396, which is our 50, and then the 200 is up here at 485, but as we know, traders who use the

60 will have a line here. Traders who use the 70 will have a line here. The 80 will be a line here,

the 90 here, the 100 here, etc, etc. So you've got all these lines stacked down, stacked up,

so as you come into it, you're just continuing to hit your head on resistance. So unless this has

an incredibly low float with incredibly strong news, it's probably not going to do much.

You know, it's probably going to hit these resistance levels and then fade.

Here's another example of a bad daily. So it's $1.89 or $1.70. We're gapping up,

but we're gapping up into resistance. The pre-market high is $2.50. So part of me,

if I was just looking at this pre-market chart, I would be like, I like this for a long over $2.50,

but then when I look at the daily and I see that $2.50 is here, it's right at the 50 moving average,

and if we break over this, if we're able to, you know, we've got a little window from $2.60

up to $2.94, but then we have the $200 pretty quickly over $3. And of course, anyone with the

60, 70, 80, 90, 100, 110, 20, 130, 150 moving averages are also going to see all of that

resistance. So it's just not really the strongest stock in terms of a daily setup. Now, if you've

got a really good catalyst, it can override that, but generally we try to avoid those.

This is another one, KTOS, where you have it gapping up. This was the day it was gapping up,

but it's gapping into resistance. Usually when stocks gap into resistance, they just sell off.

You know, they hit that level and they just kind of fade or they hit that level and they're choppy.

You know, some traders like beginner traders decide to jump into them and buy it, but,

you know, most experienced traders look at it and say, no, I'm not interested.

And when you, you know, multiply that by thousands and thousands of traders,

that means less volume, less buyers, less interest in the stock and less resolution.

Okay. Now, in addition to the resistance that we'll see from Windows, we see ascending and

descending resistance from trend lines. And so this is when you connect candles that are

moving up or moving down and you extend out this trend line. When you do that, you can form these

little channels or you can form a resistance that's ascending, moving up or descending,

coming down. And I'm going to go, when I finish with this, I'm going to go back and show you more

examples of the windows and gaps. But right here, this is an example of a descending channel.

So as this stock, you know, comes up, it keeps hitting its head on this trend line.

So what I usually do is I try to connect two lines. I connect one in a second. And then if I notice

that that lines up pretty well with one, two, three, four, at least three taps and ideally

four or five taps, that tells me that this trend line is fairly well respected. Other traders have

probably drawn a similar trend line and are seeing resistance at these same points. But this isn't

the type of resistance. This is the type of resistance I usually look at that carefully. So

I almost I really draw this these types of lines very, very rarely. So I wouldn't stress about

these, but you could just be be mindful that they exist. So when it comes to how to draw a trend

line, my rule of thumb is really just that I want to see the lines connect in as many places as

possible. If you if your line only connects in two places, it might not be very valid. So let's look

at a stock, just a daily chart, for instance, here. So we'll look at first solar. So let's say

I connect these two lines, you know, I've got one connection, one connection, and it sort of touches

here, kind of came back up here. I don't know, maybe that's valid. I'm not sure. What if I connect

this one and this one? You know, not sure. I might be there might all are these two. If I connect

these two lines, how many people do you think drew that same line as me? Probably not very many. It's

a pretty strange line. So it's probably not valid lines that have many taps become more valid. So

you know, you kind of it can take a little bit of time to sort of get the sense of, you know, where

is a valid line, but you know, kind of like that, that's starting to see some some taps. So if this

stock was gapping up on this next day, we might think, well, might have a little bit of an issue

here. But because you can't really dial in this resistance to like the penny, the way you can with

moving averages, they're just always a little more arbitrary, they don't always carry the same type

of significance. So you know, I draw from the usually from the low of a candle, the candle wick,

the bottom to the low of another one. So that this trend line is like meaningless. This one, not a

lot of meaning. This one, oops, right there was a little bit more significant. So that was from that

trend line to this one here, I think. So this one was maybe a little more significant, because it

kind of tapped it a couple times. But I my strategy doesn't really involve buying off trend

line support. I don't do that type of trading. And if we have an overhead trend line, you know,

it's something we could be mindful of, I suppose, but it's not usually something I'm super concerned

with. I want to see to think of a good example. One of these former runners maybe has something

we could draw. So like this one, you know, you could draw a line here, or here. I don't know how

significant it really is. You could draw a support line, you know, somewhere in this area. Not super

significant. I had one, when I draw these types of lines, typically, I'm drawing them on the intraday

chart. So like APOP, I had these lines on this one the other day, I was kind of like, okay, well,

it seems like it's kind of holding the support level, you know, so if it can hold this level,

that's interesting. And then I was sort of looking at this area here. And I was thinking, all right,

well, you know, kind of towards the end of the day, it started to break out of that consolidation.

That's when you could sort of see this as a channel, we're bouncing off the lows off the highs.

So when it breaks out of that one way or another, you know, it could be significant. In this case,

you know, it kind of broke to the downside of the channel right here.

Some traders like to do make duplicate lines. So your channels are exactly parallel, like this,

and they just sort of draw them like that, that they're exactly parallel channels, which,

you know, again, it's somewhat arbitrary, because some people do it, some people don't.

So the lines just aren't going to be as well respected as things like trend lines, gaps,

and windows. So, you know, that's why I wouldn't, I wouldn't put a lot of emphasis or be super,

super concerned about drawing ascending or descending lines. But when it comes to the

windows and the gaps, those are definitely more significant. Let's see, I'm trying to remember,

I know we had, I don't remember if it was Siri. Now, not that this is a stock that I usually trade,

but I know there was a stock we had. Yeah, I mean, this one did a bit of a gap fill,

this might be the one I'm thinking of. So look at this, look at Siri here. We had 614 was the bottom

of this gap, and the high was right here at 716. Isn't that interesting that we came up and filled

it to the penny? We came right up, we came actually to 715. So another gap full on the daily.

Now, by seeing the daily that you had this gap, if you were trading this on this day, you would know,

well, you know, the top of the gap is 716. That's kind of that magnet. Once we get to there,

you know, what's, what's above that? I mean, yeah, sure. I guess we could go to the high of this

candle, which is 748, maybe a little further, but these windows are pretty well respected.

So, you know, the first kind of target as you get into the window is the potential to get to the

top of it. And so some traders who have swing trading strategies would be looking to enter down

in here to hold until the gap is closed. But as we saw in the case of FSLR, or no, maybe that was

trip advisors, sometimes the gaps are not filled all the way, you know, sometimes the gap starts

to get filled and then it, you know, we sell off again. So I don't remember when that was on trip,

maybe I'm thinking of a different stock, but, you know, oh, no, I think it was this one where we

kind of, in any case, you had this big gap here, you start to get into the gap and then look like

three days later, it was back down, you know, 30% or 20%. So, you know, I'm not swing trading,

so it's not the strategy that I'm going to apply. But for me, when I'm looking at, you know, the

daily charts, you know, I'm looking and I'm thinking, okay, well, this stock has this big window.

So this MRNS stock has this big window and it got not all the way into it, you know, the windows from

$2 all the way up to $5.25. But we knew that this is, you know, we still, even as of today,

have room up to $5.25. We have this big window. It was this tall, then it got a little shorter,

and now it's a little shorter. So is it possible that at some point, this stock will have a day

where it squeezes? Sure. And if it breaks over to $2.73 right here, traders are going to be watching

that level, especially if they're short thinking, okay, if it gets over this level, I better get out

of the way because this has room all the way up to, you know, $5.25 or whatever it is. So that's kind

of the thing to be mindful of when you're looking at these windows. So what I'll do here for a

second, do you want me to, is there any stock you want me to look at for the windows? We'll do,

obviously, the FAQ section separately, but pertaining specifically to windows,

CBIO. All right, sure. I just want to make sure that there aren't any lingering questions on this.

So, CBIO, on the day that we gapped up, right here, and I'll take off my windows indicator so

we can just look at the chart. So on the day before this gap up, you know, we're gapping up,

what would I be looking at? Well, the thing I was really looking at was the 200 moving average,

right here at 1453. And I wasn't really looking at any of these windows. I mean, I see that there's

this one here from 1483 up to 2189 or 2129. But none of these are that significant. I mean,

you could maybe say you've got the ATR from here to here. So maybe above 1150 is kind of significant.

You know, that's kind of the first spot. So as we start to squeeze up, you know, those would be the

levels I'd be watching. Yes, this is a doji candle. Absolutely. This is a huge doji candle.

But that doesn't really matter. I mean, it showed indecision on the daily chart on that day. We

squeezed up, we sold off, we closed about in the same in the middle. But it doesn't change the fact

that this is still a really big window. So I guess when I said a long body candle, this is

this is just as good. I mean, it's a tall candle with a tall, tall upper and just a large range.

So now that that candle has been formed, these these large candles, we can delete this one,

because now that spot right here is no longer valid since this candle broke it. So that's gone,

this guy's gone. That one's still there. And now we have the high of this candle, which was here,

1888. We have the high of this candle, which is 1810. We have the high of this candle, which is

1258. So if this pulls back for a couple more days in curls, there's a good chance the first

day it makes a new high, we could get a 10% pop or 15% pop. And that would be a good move. But,

you know, right now, it's probably going to fade for a while or at least need to consolidate

after that crazy move. Okay, so let me look at the next one. Ronald wants me to look at ADM.

So ADM, this is a little bit of a higher price stock. So when I look at this, you know, right

now, you're getting a little extended off your moving averages kind of moving up. But let's see,

we could say there's, you know, above 4650, the half dollar kind of has room here up to 4742.

In that red candle, just about above that level, maybe has room up to this level.

So you know, those are kind of spots to watch. Now, you know, again, it really comes back to

the catalyst, the flow and stuff like that. But if we looked at those areas on the chart,

and then we saw the stock was getting really extended as it came into one of these areas,

that might tell us that, okay, this is probably going to be resistance, the stock is like squeezing

into this level. So if we look, flip back to CBIO for a second. And we draw, we put back in this,

this line here, whatever is close enough, and this line here. Now let's switch to the five minute

timeframe. And these lines will be see how they're overlaid inside the five minute chart. So if you

switch the same timeframe, the same chart from five minute to daily, those lines will be inside

your chart. So now on this day that we were squeezing up, we could be like, okay, well, you

know, we might have a little bit of an issue at these are areas on the daily chart, you know,

we could have a little resistance at 1149, we pulled back blew through it. All right, next one,

1258. No problem. Next one, 1349 doesn't care. Next one's 15 pulled back for a second doesn't

care. Next one's 1810. You know, so this one's one that pretty much just blew through those levels.

You know, it didn't have a lot of a lot of problems. This high of 1888 is the one that I had

already drawn. That was the high of day, we didn't have any resistance on really on the daily at that

point until 2129. So let's see, let's look at you want me to actually look not at ADM, but AMD.

So AMD is and you know, I'll just also while we're at it, AMD, check the float float on AMD

837 million shares. Okay, so we know this is a very big float, right? Let me just scroll back up.

Let's see.

Do, do, do, do. Sorry, I just want to make sure I'm looking at the right stock.

This is the one you want me to look at, right? AMD.

Yeah, okay. So AMD. So on this one, you do have maybe a little bit more of a well defined

wedge here, because you can kind of see its tap. It's like, you can sort of see that you sort of

visualize, okay, it could see a little bit of a triangle in this area. And I'm not going to draw

it to the penny. It's not, it's not precise, but you sort of see that we're in a little bit of a

wedge. So it kind of looks like maybe we're going to break out of it. But of course, sometimes they

just end up continuing to go sideways. To me on this one, I don't really see any clear windows

nearby, because we're kind of like pretty extended. If I, if I go way, way back here,

actually, I don't even think I can go that I mean, there's nothing really there. So there's no upside,

there's no windows going up. You know, if you're looking at windows coming back down,

you've got, let's see a trigger there. That's not anything. The only one really is this big one

right here, from 1204 down to 1081. So you know, if this had a really weak day, a big selloff,

maybe we would see, you know, a possible bounce at the top of the window, support maybe, or if not,

it could flush down through to 1081. You know, that's, that's possible. I know, I think Mike was

trading Lulu today. You know, this one, obviously a huge gap down. And I guess even on this one,

I'm not sure if there's any real windows that he was looking at. You know what, maybe there was one,

let's see, the low of this candle here was 5132. And there wasn't any support until 5135.

So you know, notice how we came down almost to the bottom of that window, that we came all the way

down to 5050. So you know, you can see again, how when you draw those, you can start to sense,

okay, these are possible spots where we might see support or we might see resistance. It doesn't

mean you will. But if you're mindful of that, it can help you kind of break down that chart.

For me, the most important areas of the chart are the moving averages. I mean, those really are.

But when we see a stock, and I'll check out IDXG for you, you know, when we see a stock that has

a big window, an obvious one, it's one that every trader is going to see. Now, this one has a pretty

obvious one to me from right here to right here. That's a big candle. So above 486, we've got room.

And then, you know, above that, it's kind of just lots of room back up towards the high. I mean,

a couple little spots, but you know, nothing's that big, you know, a little line there, a little line

there. So this one has a good amount of room if it started to get back up. BVXV. Let's look at that

one. This one was pretty crazy today. And I was thinking on this one, I knew we were going to gap

up above this level, but we had from 610 up to 740. The thing is, we had a pre-market high of,

like, $9 or something, 8 something. So I knew it was kind of way up in no man's land,

but just very weak. It wasn't able to hold those levels at all.

HTGM. So, you know, the day HTGM was gapping, I was like, yeah, this just has lots of room.

Any windows are so far back. I mean, they're not super, super relevant. Not many traders

are going to draw them. So for the most part, this thing is just going to go. It's just going

to be strong. You might start to see, like, small amounts of resistance. Let's see, who went up to

13? So, oops. So let's draw a couple lines in here and just see if they overlay anywhere on

the chart. So you might say, OK, well, there's a little bit there, a little bit there, a little

bit there, there, there, there, and there. I'm just drawing the highs, basically, and the lows.

OK. So if I go now and switch to the five-minute chart, and maybe I'll draw a couple more here,

there, and there. All right. So now let's switch to the five-minute chart.

Hmm. Switch back to the daily. Let me go to here. Switch back to the five-minute.

OK. So these were all those resistance lines.

So, you know,

maybe those are significant, even though they're a ways back. We kind of had a little bit of an

issue here in the 70s. We pulled back. We were strong. We were able to break over these,

squeezed up. We hit resistance in the 11 areas, pulled back, pulled back, kind of choppy here.

And then we finally broke through this window from 1157 up to 1272, tapping out at 1313.

I mean, those are just the layers or the levels that I saw on the daily chart. But you can see

how, in this case, they kind of did match up fairly well. Let me just scroll down.

Let's see. This should be the exponential. Yeah, these are the exponential, at least right now.

I'll check my five-minute chart also. OK. So let me just scroll down and chat, see if I missed

anything. OK. So let's see. We'll back out of this. Then we'll back out of that.

OK. So in any case, I think, you know, that's kind of those are, you know, the breakdown of a few

other charts. Any others you want me to watch, SRV or check? Well, this one seems like extremely

light volume. It's below its moving averages, coming back up. Let's see. Oh, CB Ray-Von is

what you meant, CB Ray-Von. OK. CNAT, you're using an acronym. OK. So CNAT. OK. This one's

interesting. It was strong today, for sure. So, you know, if we looked at today's chart,

we could say, all right, you know, this, I mean, what is the resistance? It doesn't really have,

you don't have any big windows, but just because you don't have windows doesn't

mean it's, I mean, it's better if you have windows, but not having them doesn't mean

the stock's not going to work. And this one, you know, went right to $6, but it hit the whole

dollar. So the biggest resistance on, you know, these types of stocks are probably half dollars

and whole dollars. So if you don't have windows, half dollars and whole dollars. But even if you

have windows, you still might have a little issue at the half dollars and whole dollars, but you

just know that more traders are going to see the potential because you have that big area with no

resistance, the big gap. CARA, this is one of those ones like up at 52 week highs are really

extended. You know, for me, I don't know really where I would draw the windows. Again, you'd have

to go so you'd have to go over a year back to get any windows on this. Looks like I did draw some

at one point. So we can look at those for a second. All right, so I draw it here and here

but also a small little resistance point at the high of that candle there.

So and then above that we've got a little resistance point right here and then up here.

Okay, so now let's go this way. So on one of these days, you know, you can kind of see how it was

making its way up into these levels. I could switch to the five minute chart on this day to

see where we ran into that one, two, three, those three spots. Just a couple days ago.

So we came up, we tapped. On this day we came up and tapped one of these levels. We pulled back.

Now this orange line here is my, today's open price. I'll turn that off just so it's not

confusing. So we came up, we tapped, broke through one level, tapped it, came back down,

broke through it, broke over it. I think that these lines aren't really, I don't want to,

I don't want to confuse you because these lines, I don't know that they're making a big difference

on these charts. I don't think that they really are. I think that the only time these lines are

valid is when you have a really, like just a really big window, a big gap. The small ones,

I just don't think they mean a lot. I think you could draw them in a million places and try to

think they mean something, but I don't think they do. So my strategy has always just been

to map out the really big levels, the big spots that I think other traders are probably also

going to draw. If I don't think other traders are going to draw it, then I'm not going to draw it

either. You know, I want to make sure I'm focusing on the obvious stuff. So like SPY, I mean,

this I wouldn't really, I usually wouldn't even think to draw windows on this, but

let's see. I don't really see any that are that big because the SPY doesn't usually have really,

really big, huge days every now and then, but not a lot. And I don't, I don't, I really don't

look at the S&P that much. I just have it up just like this as a daily chart and as a five minute

chart. And I just keep an eye on it. You know, I look over from time to time, is the market up

today? Is it down today? But beyond that, I just don't look at it too much. So, you know, I've had

a lot of people email me questions about windows. I don't really get them. I don't understand them.

I don't want you to get fixated on the windows. They're not that important. When you see a big

window, it's obvious. You know, when you look at a chart and you're like, okay, if this thing breaks

up above, you know, this level, 1075 has got room to 1350. That's all I want you to see. This is

big. This is obvious. You know, over $9, first candle to make a new high. It's significant. So,

if you're looking, if you're trying to draw teeny little levels, probably not a big deal. Now,

if this comes back down, we also have gap fill because it gapped up. It filled the gap a little

bit, but we do have room if this starts to fade back down here. And you better believe short sellers

are going to be watching this spot. If it starts to break here, they're going to be shorting. And,

you know, anyone who's along the stock probably is going to set their stop

now at the low of, you know, the pullback or something like that. So, anyways, that I hope

answers the questions specific to windows. And when it comes to the ascending and descending

support and resistance lines, again, I don't think that's something you really need to worry about

too much, especially on the low price stocks. I think it's more significant on the higher price

stocks than the lower price ones. And we're not going to really spend a lot of time on high price

trading strategies because most traders who are trading high price stocks have really large

accounts. And by the time you have a large account, it's usually because you built it up from a small

account and you don't need to take a day trading class. You're already doing a pretty good job. So,

we're going to focus on, you know, continuing to trade the small caps because here's the deal.

Most traders start with small caps because it's where you get the biggest percentage gains,

whether you have a $1,000 account, a $2,000 account, or a $25,000 or $30,000 account.

The traders with $500,000 accounts and more are going to be trading high price stocks,

but pretty much everyone below that they're focused on stocks under $10. Once you master

that strategy, once you master the low price range and you've built up your account to six

figures, then you'll inevitably start branching out most likely into some higher price stocks

because you have the money to do it and now you have the experience and the confidence.

But for right now, you know, let's stay focused on the low price range. And for those ones,

when you're looking at Windows, you just want to draw out the really obvious ones,

you know, the spots, the triggers that you think other traders would look at and also

recognize as being significant. With the ascending and descending resistance lines,

probably not going to be a factor on most of these stocks. When we trade the, when we talk

about the reversals, you will learn that you can apply some of the stuff, you know, to the high

price ones for that strategy specifically, but that's really not the primary focus right now.

Okay, so with that said, let's jump back into the slides here. So how to draw a trend line,

I showed you how to do that chart pattern. So tomorrow or in class five,

and it's actually not tomorrow to be on Monday, but for those of you who are watching the recording,

chapter five is going to be breaking down intraday chart patterns. So once we've looked at the big

picture, we're going to start to focus in intraday chart patterns, the bull flags and the bear flags,

the flat tops, the flat bottoms, the moving average pullbacks, the moving average pops,

and the 1234 also known as the ABCD pattern. Okay, so that's coming up soon. And let's see,

when it comes to setting up your charts, we're setting up charts to give us the best understanding

and context for the current price action. This allows us to make well-educated decisions,

well-educated predictions about which direction the stock is going to go, and thereby it helps

us reduce our risk as traders. So the thread is coming together, we're bringing this back

to this being an additional opportunity, the third opportunity to reduce your risk as traders.

The first opportunity to reduce your risk is to keep a tight stop on every single trade.

The second opportunity is to trade the best stocks. The third opportunity is not just to

trade the best stocks, but to trade those best stocks, the best stocks when they have the best

daily charts, meaning they're above their moving averages, they have large windows, large pockets,

they don't have any nearby resistance, etc, etc. Okay, so a couple of steps that you guys can take

today to get better at finding strong daily charts. Number one, I keep my charts simple,

obviously I use just my exponential moving averages as indicators. When you're looking at

the daily charts, you want to try to find those large pockets with no support, no resistance,

big windows. You want to try to see the charts, the stocks opening above the 200 moving average,

whenever possible. If you're opening above the 50 and you've got lots of room up to the 200,

there's times where that's okay. As we know, a really strong catalyst on a super low float stock

that has high relative volume and that has the cult following and everyone's jumping on

can be really strong. Those can override bad daily charts, but we want to see the perfect

storm, the perfect chart, the perfect stock, the perfect intraday setup. I want you to start

looking at the daily charts of all the stocks that you're putting on your watch list each day.

Remember, your homework yesterday was to start building a watch list every day and to put those

stocks in the chat room. Well, now I want you to not only build your watch list each day and to

put those stocks in the chat room, but to start breaking down the daily chart, identifying what

you think are the good windows, the interesting triggers and that sort of thing, the spots that

you think other traders would look at and consider significant. If you don't think other people would

consider it significant, it's not important. With that said, I want you to make sure, of course,

you continue on to the FAQ section that we're going to do in just a moment and don't forget

to do your homework and the quizzes for chapter four. Okay, so.