well 2018 is gonna go down in history as
one of the longest years of my life well 365 days of trying to figure out how to
become a better day trader and I finally figured it out on day 363 I finally
figured out what I’ve been doing wrong for the last two years of my day trading
journey gonna talk about it in this video how I’m now rewiring my brain to
fix this one very tiny flaw but also a major flaw that has prevented me from
making more money day trading or at least being able to protect some of the
profits that I have made and not have major losses gonna talk about it in this
video so make sure you stay tuned hey what’s going on guys Patrick here today
I’m talking about is very very simple idea it’s almost too simple to give away
free on the internet but I’m gonna do it I’m gonna give away
this very simple idea that I’ve recently discovered it’s not recent by any means
I’ve talked about before but I wanna make a video that’s dedicated to this
very simple idea and I keep saying it’s a simple idea because it’s gonna sound
really simple you should always buy low sell high
ding-ding-ding-ding-ding you can now pay 500 dollars to learn more about day
trading I’m just kidding I was one of those day traders who thought that the
only way to capture momentum was to buy the breakout duccini every time a stock
went higher it would just keep going higher like it’s by hired it would just
keep going hard their resistance was at three dollars and the stock was going
higher all I had to do was just buy at three dollars in one sense and obviously
I would make money because the stock broke through resistance and it’s going
higher to the moon but what I figured out a lot of times was I was actually
just getting dumped on over and over and now I know exactly who was dumping on me
in the first place and I know who you are
you bear people now if you just listen to my three simple patterns that I’ve
taught people around the world to trade with somebody out there we’ll pick that
up what it is is this very simple pattern what I do now is I’m looking for
overextended stocks if I’m buying I’m buying the dip on an overextended move
to the downside to support areas and if I’m shorting I’m shorting into
resistance on an overextended move say I’m buying a stock it’s three dollars
and I really want to buy it three dollars it just broke through that
resistance it’s going higher now what I’m doing I’m asking myself okay first
off if the three dollar area can’t hold I’m gonna try to buy a little bit lower
like 286 maybe like 285 look for that pullback I want to see a quick little
pullback and I’m gonna jump in at that point once I see buyers stepping in
there now it’s not always as simple as that you can’t always nail the bottom
perfectly on these small pull backs but what you can do is protect yourself a
little bit better now in the past I was buying the breakouts over $3 I by 301
303 and all of a sudden the stock would drop to two dollars and 80 cents and I
would get out for a 20 cent loss and what I’ve changed is instead of getting
out for a 20 cent loss on that break through resistance I’m now buying 20
cents below that break trying to get the best entry possible and what this is
allowed me to do is first off if the stock is now pulling back to that
previous support area that previous area on the chart that we’ve seen
consolidation we’ve seen some support bouncing if it pulls back to that area
I’m getting in knowing that there is you know support in that area if I’m buying
the resistance break I’m just buying with the hope and it’s not going to go
higher and higher cuz I’m buying a $3 and I’m crossing my fingers I’m praying
that the stock is gonna go to three dollars and twenty cents possibly but
there’s actually a much better chance that the stock is going to pull back
through the whole dollar through that three dollar whole dollar resistance
that was there previously it’s gonna pull down through there get down like
the 280 area maybe to 90s and then it’s gonna bounce back through that
resistance if the stock is strong now this is not always going to happen
exactly like that it’s not always gonna be picture-perfect but what I’m doing is
I’m asking myself okay we just broke through resistance at that resistance
area I know there’s gonna be some sellers people
I can profit short-sellers sitting there as well is the stock overextended where
is the recent support where are the EMA’s I’m asking myself all these
questions before entering the trade we’re in the past I would just be like
it’s going higher the stock is going to the mood if this stock breaks through
the $3.00 resistance I’m buying buying buying no matter what I’m going to buy
the breakout and I’m gonna ride it to the moon well you know what happens like
I said the stock breaks through the resistance and then it just pulls right
back to the support where I could have gotten in anyway if I would have waited
if I would have had patience if I would just had a little bit more patience and
I would have understood the idea that stocks moving waves the idea that stocks
had to go up it’s gonna come down it’s gonna go up it’s gonna come down it’s
gonna go up to come down now people always ask me how do you know if you’re
buying the support bounce or if you’re buying the crash is the stock really
really overextended is it up three hundred five hundred percent on the day
what’s the volume looking like what’s really going on here is it a big strong
move is there news what is going on understanding what the move is seeing
the trend and asking yourself if this stock pulls back to the support area is
it going to continue to crash or is it going to find buyers and that’s gonna
just take time you’re gonna learn that over time
you’re gonna be able to identify these opportunities a little bit better but
what I’m telling you here is that you should really focus on trying to buy
these little dips these little pullback a pullback is simply when a stock goes
up and then pulls back to the previous support area if a stock goes from $4 to
$5 all of a sudden and there’s previous support at $4 we’re expecting that
there’s a possibility that the stock could pull back to $4 bounce there and
then continue higher it’s just kind of how it works
people are sitting at these key areas and they’re waiting to see the bounce
the smart buyers the day traders who are buying those support here is the day
traders who have patience are waiting to see these things add up they’re waiting
to see the overall trend they’re waiting to see that support bounce they’re
looking for different in before buying 2019 the big thing for me
is I’m buying either overextended stocks to the downside when they sell off on
these moves up let’s say the stock goes to 375 it holds 375 for a minute and
then it shoots to four dollars and fifteen cents in the past I would have
bought right at four dollars for that break above four dollars and the stock
would have pulled back to probably 375 anyway to kind of balance with that
support maybe make it higher low and then head back higher so instead of me
buying at four dollars I’m now trying to buy that a little bit of a pullback to
get a better entry and it’s gonna reduce my risk so if I’m buying a thousand
shares of a four dollar stock and I’m trying to buy it at 375 and my stop-loss
is at the 370 area I’m only risking five cents because I know there’s a little
bit of support in that area but if I’m buying the stock at four dollars and
five cents I’m now risking 30 40 cents on my stop-loss area anyway so if I’m
gonna be entering a trade I should be always asking myself where is my
stop-loss where is the support where is the opportunity to get in safely and get
out safely also another thing I really like about
you know buying a small pullback is that even if a stock you know is going higher
and higher and higher and it bounces and I buy a little bit of a pullback maybe
it doesn’t go all the way back to high update maybe just you know balances off
that support kind of gets denied and starts to go lower if I can identify
that there’s resistance pulling up if I can identify that we’re not making a new
high at least at that point I can take a small profit I can get out for a 10 cent
gain where in the past I would have gotten out for a 20 cent loss now I’m
getting out of a trade for 10 cents profit instead of getting out for a 20
cent loss I know this all might just sound crazy right now because I’m not
showing you on the charts and all that if I was previously buying it for
dollars and I had my stop-loss at three dollars and 70 cents I’m risking 30
cents so if I have a thousand shares that’s a $300 loss now the same exact
stock that I would have bought at $4 with my new idea with my new
understanding of buying the dip of buy the bottom of the wave I’m now buying at
$3.75 and I’m risking five cents for the same exact trade and I’m having a much
better upside as well so instead of risking 30 cents I’m risking five cents
for the possibility of making 60 cents on the same exact trade so you can see
the overall idea here is not just about making more money it’s just about
reducing risk but also if the stock does pull back that support I’m thinking
best-case scenario we’re gonna get a little bit of a bounce back maybe to
that four dollar area and I’m still up 25 cents if the stock doesn’t break
through $4 again I then know that there’s resistance there’s trouble I can
get out for a small profit we’re in the past I was getting out for a small loss
on the same exact trade and that’s really gonna be the biggest game-changer
for my day traded currently that’s really gonna help me become a better day
trader understanding that I should be buying these little pull backs or
selling into the overextended part of the stock I know it sounds really really
simple and like people are probably like well I’ve already known this Patrick
I’ve been telling you this for years why would you not have listened to me five
years ago you know sometimes he’s got to learn the hard way and I learned the
hard way I’m not afraid to admit it that buying the breakout isn’t the best
opportunity now like I said you have to kind of learn how these stocks move you
can’t just always try to buy the dip you got to be able to identify the support
identify the overall trend I like to buy that first maybe second pullback I’m not
trying to buy the tenth or the thirtieth pullback I’m looking for opportunities
I’m aligning everything you know correlations correlations are king here
and that’s really what I’m looking for same idea if I’m going short on a stock
what am i doing I’m shorting as the stock gets really overextended to the
upside into resistance in the same exact short that I would have taken in the
past let’s say the stock goes from $12 to $13 very quickly and it just has one
green candle and all I see is how overextended it is and I see that
there’s previous resistance at the 13 dollar area in the past what I probably
would have done is I would have waited for it to spike and then I would have
waited for started to crash and I would have shorted at $12 and I would have
missed out on all the opportunity anyway really what I’m doing here is I’m
minimizing the risk for the trade and then I’m maximizing the reward the same
exact trade that you would have taken in the past if you think about buying the
breakout errs buying an overextended stock if you’re buying the pullback if
you’re buying as the stock pulls back from resistance you’re buying that area
you’re gonna be able to capitalize on that move back above the resistance so a
lot of times these stocks get stuck at the whole dollar area you know that $3 a
whole dollar support we get that little pullback down there the two 80s and then
we push through $3 and go to 320 so buying the breakout over $3 would get
you 19 cents in profit buying the pullback is gonna get me 40 cents in
profit only risking you know 5 10 cents where me trying to buy the breakout I’m
risking 20 to 30 cents for the same reward we’re buying the small dip as the
stock is trending higher but we’re making sure that you know it’s a higher
low higher little higher or lower so are buying the big crash you know we’re
really waiting for the opportunity the volume is important we want to see that
of some news people buy we’re not just buying any stock in every stock that’s
just pulling back we’re looking for those small pull backs to get long and
then we’re looking to capitalize on that move higher so hopefully you can see
here how excited I am to finally realize that I’ve been kind of working on this
for the last couple months you know you might have seen my trade in the last
three or four months trying to really capitalize on this idea of buying the
dip more you know not buying that stock when it’s really overextended these are
just things that you’re gonna learn over time when you first start trading you’re
gonna learn that it’s not as easy as it seems just because you see the ads on
YouTube talking about making thousands and thousands of dollars it’s just not
that simple but the big thing to focus on here is just you know learning how
these stocks are moving and seeing this pattern
seeing how these stocks are like oh I’ve seen this before I’ve seen the same
exact setup I’ve seen this bull flag and how its exploded on the upside I’ve seen
everything before you’re gonna be able to identify these patterns and see
things as they’re happening and then you’re going to be able to execute
profitable trades while doing that and that’s gonna be my laser focus in 2019
is really just being able to capitalize on momentum but not being the guy who’s
buying at the top I’m not buying any more tops no thank you no thank you I do
not want to be that guy anymore I’m buying stocks that are overextended to
the downside on a little bit of a pullback back to the support area I’m
looking for that nice big dip and then I’m shorting into that nice big spike
real simple really easy all I’m doing is I’m minimizing my risk and maximizing my
reward by this one simple idea that stocks moving waves baby moving waves
there it is I’ll talk to you guys later on if you haven’t already do me one big
favor hit that subscribe button it’s somewhere
I don’t over there

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