STEAL This INSANE Simple 98% Win Rate Short Trading Strategy

0:00 That trade was a $668,000 day. So it took me 8 hours to make 400,000 which equivalent to 50,000 an hour. That's pretty good to me. And you can see I had locked in 38,000 on one trade, locked in $410,000 on the other trade, locked in 20,000, and I was sitting at an unrealized $235,000. So all in all, I had locked in $468,000. And as I'm recording the goddamn video, I'm sitting at another unrealized 230,000 for 700. stop seeing this P&L fluctuating in this way, you know, thousands within seconds. How do you handle that psychologically? So, the biggest thing for me that I've learned is this is like your A star setup, right? This is A++. This is the best of the best of the best. This is my Super Bowl. This is the bread and butter, though. This is exactly

0:45 what I'm looking for. These these type of setups, these type of things, you know, I wish if they happened every single day, bro, I'd retire. I'd have an island. I'd be good to go. Unfortunately, I would be stupid not to risk more. If you are so confident and the setup has happened over and over and over again and you know that it has a 98% win rate when it's actually going to happen that you want to be as big as possible to maximize the trade as much as possible because then again it only happens four times a year. Stock tanked $40 a share while other people are using that area to reduce our position. I'm actually getting bigger. I'm sizing. I'm sizing. If I just had and we'll see what happens here. I'll show you. Welcome everyone back to Chart Fanatics, the go-to channel for all of your very best trading strategies and concept breakdowns with the very best traders in the world. Talking of which, today we have a verified 8 figure trader with us.

1:36 We're going to go into a concept called the first red day, which he has done close to $2 million in verified profits with, and we're going to get that exact deep dive into that strategy with live chart examples as well. He is the founder of my investing club. You already know who it is. It's the one and only Alex Tamse. Good to be here. It's a pleasure, man. Thank you for being here with us today. And I'm very excited to get into this, man. And huge congratulations. When we did our podcast, we were just shy of the 10 million mark. And amazingly, we've gone well, not only gone over it, we surpassed it by a very good amount. But where are we going to start today? So, first let's start with where this pattern came from. So, this pattern was created by my mentor Bal, the guy that taught me how to trade. He was the king of OTC back in the day. He was trading the OTC,

2:24 penny stocks, the stocks are like 2, three, four, five cents. So, he would make money on the way up and he would also make money on the way down. What he found is this setup of the first red day not only occurred then, it is still working to this day today. So, the concept is actually really, really simple. It's the first day that the stock goes red. So, I want to kind of just show you an example of what that looks like because a lot of people what they think is when they first hear the strategy, they're like, if it goes red after one day, that's the first red day. But it has a lot more nuances than that. So, for me, what I want to see is I want to see multiple days of extension and then the first day it goes red. Not one day it's green and then next day it goes red.

3:10 Not two days it's green and then it goes red. Not a stock that goes from two to $220. I want to see parabolic action multi-day runner and then that momentum subsiding. So let's get into it. So the basic way to explain is imagine the daily chart. So I'm going to be drawing the day chart. So day one green, you know, and for this strategy is it primarily for stocks? Primarily for stocks. Got primarily for stocks. But there are certain opportunities where you could use this with an option. So on the example we're going to talk about SMCI is a stock. But if you want to multiply that, you could use the option to get some more leverage on that. Gotcha. So day one.

4:06 Running out of space here. So imagine day 1 2 3 4 5 right daily chart up extend let's say let's make uh some prices on here too to make it easy to understand. So this is $1 and then on this day it's $3 and on this day it's $8. Let me get rid of this. And then on this day it's $16. Then on this day, let's say it's $35. So you can see a parabolic move is occurring. Day one, it's at a dollar. Then day two, it extends to $3. Then extends to $8. Then extends to $16. Then extends to $35. What ends up happening is after I get multiple days of

4:54 extension on the daily chart, the first day that it goes red, it triggers something like this. it triggers that. So you could see day one, day two, day three, and let's just say day six. So all of a sudden, the stock that was starting at $1, it went up to $35. The first day went red, it had this absolute destruction. Mhm. And on this destruction, that is what is repeatable and that's how I make the money. So this is the example on the daily chart. Let me show what that would look like on this day on the intraday chart as well, right? So, is it a case where you're trying to capitalize on the move before it's before that red day is taking place? So, what I like to do is when

5:41 I first started, I was trying to anticipate when that day would come. I would say it's been up for three days in a row, it should probably pull back on the fourth. It's up for four days in a row. I should probably pull back. But the reality is you don't know if it's going to pull back on the third day, the fourth day, or the fifth day. So, it's a lot safer to wait for it to go red and then hit it rather than trying to anticipate it. So let's say for example, let's say we're drawing again uh let's say this this dotted line here is the previous day's close. So previous day close. So the stock opens up, trending up, trending up, trending up, trending up, and all of a sudden you start to see a little bit of momentum subside, maybe bounce, momentum side, bounce. Okay, right

6:30 over here. When you see the stock finally going red, Mhm. you attack. Attack. Now, is it important for price to go up first in this occasion versus coming lower then going? I prefer when we get the parabolic move up and then come down, but there are plenty of examples where on that final day, it gaps down. Okay, it starts the day red and then you'll look for a bounce towards the red to green resistance to then get it. So in this example here, this is kind of let's say this is the SMCI example. The moment that it goes red, you attack here and then boom, it's just straight down. So what I found is often times when I first started doing this, I'd maybe short a little bit here,

7:18 maybe I would short a little bit there, and then you might see a little bit of a bounce. It's not confirmed. So if you are shorting ahead of time, if you are anticipating the move, be prepared to not use a lot of size because you might have the wrong day. It might come, you know, it might end up doing a little bit of this kind of comes back down right before it's about to do it. It rebounds back, right? So, if you're going to take a little bit of a piece, you could take it before, but you have to reserve your size for when that moment that it crosses under the previous days close. Yeah, it's relatively simple. And that's why it was working so well for me for such a long time cuz it didn't require too much brain use to be honest. I would say it's multiple days of extension and that first day that it goes red,

8:08 it pulls back. Now, hey guys, I hope you're enjoying this episode so far. And don't forget, we send every single strategy breakdown from every episode for free on chartanatics.com. So the link for that is in the description below. So just make sure you click that. You just put your email in and every single week we will send you an up-to-date PDF strategy breakdown for you to keep, to learn from, to reference for free. And don't forget, we're also launching Chart Fanatics Live, where your favorite traders from Chart Fanatics will be live trading every single day. I will also be including special guests on the live Chart fanatics edition. So, make sure you go subscribe to that YouTube channel right now is linked on the main profile of Chart Fanatics. So,

8:54 make sure you're ready for that. But let's get into this episode. What is the reason that it does this? Yeah. Right. So, let's just again have that little example here of all those extending charts and you know whatot. So, what happens? Day one, day two, day three. What ends up happening is on this next day, this next day here, everyone that missed out, let's say you're joining on day three, you're seeing this move. Yeah. You missed out on day three and you're like, "Ah, it's going to go up again." So maybe I should buy. Or even this guy here, h maybe, you know, it's up. I think it's going to go up again. So what ends up happening is they fool the whoever is manipulating these stocks, whoever is running these stocks is fooling traders into believing

9:40 that's going to continue forever. Right? The saying is that when everyone is saying that stocks are going to go higher, the inverse happens. When everyone says that stocks are going to go lower, the inverse happens. So what ends up happening is they trick traders that are late to the party to keep buying. Yeah. They're like, "Oh, it keeps going up. It keeps going up. It keeps going up, but eventually when that momentum subsides, there is absolutely no reason for the stock to continue. Traders that missed the move the previous days end up trying to buy the dips. They try to buy the dips. They try to buy dips because it worked so well for so long. But once the momentum finally subsides, once the trend finally changes, it's not coming back, right? It's like there's the example of SMCI that we're going to get into. That was the top forever. It hasn't hit that as we're recording

10:30 this. It happened on Micro Strategy. Still hasn't rebounded to that same area. You know, all these different stocks, it ends up realistically becoming the top because there's so much people stuck from all these. So, when this finally happens, right, when this finally happens here, there are so many people that are stuck from these levels up here. There's so many people that are stuck from these levels up here. And all these guys have already sold by the time it happens that they keep averaging down and averaging down and averaging down more liquidity for this. Correct. And then eventually what happens is these toxic companies they do an offering. They end up raising money at a dilutive price and then at that point more supply enters the market at a lower price and it just doesn't come out. Pushes even more. Yeah. Yeah. So that would be what it looks like

11:15 on the intraday basis. So you know we've seen these examples happen over and over again. And the reason why it happens is it's human greed. Humans always end up getting greedier, wanting more and more and more and more, right? They keep thinking that it's just going to keep going up and up and up. And there are certain opportunities where yeah, it ends up going up further than expected, but I think we both know that gravity has own rule of working as well. Nothing goes up forever. So for a a healthy chart, a healthy chart needs like to go up, consolidate down, go up, consolidate down, go up, consolidate down, go up, consolidate down. You know, there's some price discovery, price acceptance, price discovery, price acceptance. So you need steady consolidation

12:05 for a healthy move up. Yeah. When you're starting to see a, you know, let's actually keep it here. when you're starting to see you're starting to see a rocket ship, right? The same way that gravity comes back down and consolidates because this is such a rocket ship. When it does finally come back down, it doesn't come back down a little bit, it comes back down a lot because the velocity the velocity of the move is so extended that the same way that velocity goes up, the velocity comes right back down. That's it. And then plus to kind of coincide with that the way we're pushing sort of accepting pushing accepting there's orders are being collected along the way. People are getting a chance to sort of get the next wave. While in this case there's a lot of chasing. There's

12:52 a lot of emotion involved on the way up just as there will be on the way down. Um and therefore all these people who are getting in at the highs the highs highs they're just fueling that move to be able to just drive straight through price. It's like one of the most historic examples is that day of GameStop where Robin Hood turned off the buy button. Yes. Right. Yes. So that is actually I think I should have a screenshot somewhere. I'll send it to you. I think that day was another one of those first red days for about 300,000. Now why was that important is because everyone that was buying GameStop was just buying it based on the hype. They were buying cuz like oh GameStop it's a meme stock. Oh it's going to 200. It's going to 300. It's going to go to a,000. It's going to go here. And that what ends up happening is the moment that Robin Hood turns off the buy button, all of this is not natural price action. This is not moving based on a catalyst that's legitimate.

13:43 It's moving based on hype. And whenever there's any type of movement based on hype, gravity eventually comes back down. So my job as a trader is to not only identify when these extended moves are happening, but to make sure that I don't get chopped up on this day. I don't get chopped up on that day. I don't get chopped up on this day. Because at the end of the day, what I've recognized is the moment that it turns red, right? Let's say again at intraday basis, yada yada yada. The moment that it turns red, that is a momentum shift. The momentum is shifting. The trend is changing. It is different this time. Yeah. Versus trying to anticipate it. So I tried to anticipate it a bunch of times and I found that the simplest way is when it goes red. Now,

14:30 not always is it as clean as it goes red and then it goes straight down. So what I like to do is let's say I attack here. Yeah. Right. I attack there. Now my thought pro what's your stop? How do you manage risk? What do you do? So what I like to do is I like to risk a reclaim of that red to green area. So if my first initial entry, you know, maybe I have a FOMO entry here, right? Let's say I have 10% of my size here. I kind of cure my FOMO there and I go in 100% of my size here. So what I will do is if it ends up reclaiming the red to green area, you know, I'll cut off that 90% ad that I had, right? I added 90% of my size. I cut that off and then the rest I'll cut off right here. Same place. the the problems that occur is that the entire thesis is based on

15:21 the stock going red and staying red. So the moment it reclaims red, my trade thesis is no longer valid and I get the hell out. Yep. So that's how I manage risk on these setups. It attack when it goes red and then most of the time it's going to bounce a little bit. It may not bounce but then you could see traps happening and it comes back up. So that's what I do is if the trade thesis is based on the stock going red, if the stock goes red and comes back, the thesis is negated and the trade is over and I wait. And you know, sometimes it might come back and come back down. I take the trade again. Yeah. But often times if it's going to work, it's probably not going to reclaim. Yeah. Let's take a break for a minute there, guys, cuz I want to tell you about our preferred prop firm here at Chart Fanatics, and it is Apex Trader Funding. We are no stranger to Apex. We've had

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16:59 thing that we love about Apex is that there's no daily draw down. It's a one-step evaluation and the fact that is uncapped payouts and 90% of the profits made are yours to keep. Now, don't forget, regardless of the type of trader that you are, you do not have to worry about trading news as long as you are following your day-to-day trading strategy. The possibilities are limitless at Apex Trader Funding. Now you can get up to 90% off. 90% off the biggest discount in the entire industry at Apex using the code CF and the link in the description below. Thanks to them and thanks to Chart Fanatics. Make sure you get your futures funding with Apex. Now let's get back to the episode out of interest. Well, just to cover a couple things here. So going back to this example,

17:45 the reason why the parabolic side of things and then you know why we're able to sort of look at this level uh as our entry point is during that parabolic stage we're not really coming back. We're not going red really cuz that's the whole nature of it being parabolic versus the other example of price going up and sort of accepting the parabolic nature is we're not getting that reclaim. So that's why that becomes significant because we're not seeing and not seeing and not seeing it might even be 6 7 8 it could be however long right I know we covered sort of like 1 to 3 days but that's just example for we don't have enough space correct yeah we could keep going up exactly but it could keep going but essentially the characteristic of it is that we're never really getting below that daily open we're never really getting there when it does finally happen it's a strong indication that the party's over almost right but on top of that you mentioned

18:32 about gapping down so let's say we were here when you say gap down do mean that we gap down below the open but we still have a parabolic move and then have that move. No. So I'll show you that's actually a great great call. So let's say Okay, so we're going to draw the daily chart and we're going to draw the intraday chart again. So daily chart and what I need to see here is I need to see at least 3 days worth of extension. If it's one day green and then it goes down, it doesn't really count. Like a stock could go parabolic 500%. It's not going to come back red on the day that it goes 500%. Okay, the second day it's not really enough. I need at least 3 days worth of major extension. Got you. So now this is day one, day two and day three. So this is the daily chart, right? Let's do

19:18 day chart. So now where are we at on the intraday? So the intraday let's say uh let's draw a previous close. So let's say you know stock you know kind of closed somewhere around here. So it kind of started coming down towards the end of the day let's say so we open up somewhere here let's say this is five I'm just again $5 and let's say this is $2 whatever actually let's do a bigger example to kind of emphasize how extended these may be. So let's say this is $30 and this is $25 right? So and then we started the move here. Let's say we started the move at $2. Let's say we were here at $15 and over here we close at $30. Yeah. Okay. So, now we're opening up on day four at $25. Mhm. So,

20:12 like I said, I would prefer if on day four we gapped up again and then went red. But there are certain times where on day four it opens up weak or something happens. And what I'm looking for here is I'm looking for a bounce without the previous day's close reclaiming. Okay. So, I want to see it bounce to the previous day's close and fail. Yeah. Proving once again that the profit taking is occurring. You know, sometimes it may just push a little bit and come back down. Other times it may push right back up and come back down. But I personally prefer prefer when there's that final day of another gap up because that's once again more exhaustion. Because what ends up happening is let's say we did gap up to 45. There's people that bought in between that then

21:02 now gets stuck and that entire gap will get filled all the way back down plus more. Yeah. Because you need that. You need as in essence you need them to be stuck. Correct. To facilitate your dream. You want those people to start to become sellers and they will be a lot more sellers if they're buying at 41, 42, 43 and then all of a sudden when it's down to 30 they're like holy [ __ ] what did I just buy and then it keeps going down and then so in essence your a star for this playbook that we're covering is where we're we starting a higher and then we we come down and and take out that correct open. This would be where it's still valid but it's not as um you know sort of appealing. It's not really what we want. I'll still take it. I'll still take it. And instead of the daily chart turning into a gap up and go down like this, you know what ends up happening is, you know, we gap

21:52 down here. Yeah. And make that move. Right. How do you go about executing this one though? Is it a bit more sort of nuanced and discretionary? Yeah. This this one's a lot tougher because I want more meat on the bone. The higher it goes, the more room it has to the downside. So, by nature, if it gaps down, that downside is reduced. But then again, is it really? Because the stock is still up from $2. Exactly. You almost play a trick on your brain cuz your brain gets greedy and it's like, ah, I wish it more of I wish it went up. You know, I wish it went up so I have more room to make more money to the downside. But this still is very viable as well. Again, not every time is it going to be as clean as a gap up and then break red. So you have to also be prepared for those times that

22:38 it does gap down because what ends up happening is this. The day that it gaps down, you as a trader think in your head, ah, you know, I missed it. Mhm. I missed it or ah maybe let it just bounce a little bit and then I'll do it and then it end the bottom ends up falling out. You shouldn't really think that if you you missed it when the stock is up, you know, 500, 600,000 percent, it's down two, three, four dollars, you know, like it's it helps to have it gap up and make another parabolic move, which further emphasizes it. But I feel like a lot of traders, they end up forgetting about it because on this day that it gaps down, another crazy stock is moving. They'll trade the other crazy stock and they'll forget about this one. Yeah, man. Where do we go from here, dude? Uh, you tell me. So I think we could show uh some more examples of actually this happening or I mean this

23:26 is just pretty simple. It's I told you before we were starting to record as well that this is a very simple concept for most people to understand. The difference is not classifying everything as a first red day because people will see a stock that goes from you know they'll see a stock that goes from two to four and be like that's a first red day. Not really. Not really. You want to see a parabolic move. You want to see two to like 12, maybe two to 25. Yeah. Right. So, for this concept to work, for this playbook to work, you need that parabolic move. It has to see the name of it. The name of it makes you assume, yeah, first red day after a green candles we're in. But it's not the case. It's more after a parabolic move. Our first red day is what we're looking for. Exactly. It's

24:14 like if Tesla goes up one day, it goes up, let's say 8%. You have people say, "Oh, the next day's first red day, it's going to go down." It doesn't really work like that. It doesn't really work like that. But if you have multiple multiple days of extension, so it's like micro strategy. Prime example. You know, we had such a heavy run up up up. Exactly. That's our first red day. Exactly. And we have an example of that, right? Yeah. I can show you. So amazing. Before we get there though, let's just do the pros and cons of the first red day. Um, so if you just put pros on this side in the green and then we'll do red on on the cons. Sure. So again, just for everyone at home, cons wise isn't that it's necessarily bad. It's more so something that you need to be aware of when using this, something that can be helpful, something that could be bad, right? In terms of maybe it's timing, etc. With this particular one, probably not timing wise. Um, pros-wise though, of

25:04 course, it's a it's a very large move. You know, it's a very uh uh probably a large risk-to-reward uh trade, right? So, I'll keep it even simpler. It's easy to spot. Yeah. Right. It's easy to execute. Why? Just wait for it to go red. You have the signal red. Um huge profit potential. Yeah. Right. If this stock is making a parabolic move to the upside, gravity is going to kick in. It's going to make a parabolic move to the downside. Right. uh easy to spot, easy to execute, huge profit potential. I also think that you know it is available in every market cycle. Yeah.

25:58 Why? It's because human greed and human nature doesn't change. People always want more. They're always going to get greedy. They're going to say, "It's up. It's going to go higher. It's going to keep going. This is going to change everything. This is a once ina-lifetime opportunity, whatever it may be. So, it's available in every cycle. Whether you're in a bull market or bare market, this is still here. One of my biggest trades ever, which we'll get into, was on Indo. That was a stock that moved when Russia invaded Ukraine uh all the way back when. Yeah. It was an oil and gas stock. So, the price of oil skyrocketed and this small cap company went absolutely parabolic, right? And if you remember when Russia invaded Ukraine, the market started going down. So this setup was available even when the

26:45 market was down. So that could be some great examples of the pros. Let's talk about the cons. Okay. So for the cons, you have to make sure that you're not having FOMO. It's very very easy to get in before the confirmation. So you have to make sure that you are being patient enough not to attack on day one, not to attack on day two, not to attack day three, day four, day five, day six. Is to wait for that confirmation to happen. And often times you get intoxicated by the opportunity. You're getting a little bit too early. So another con may be it doesn't happen every day. Yeah. Yeah.

27:34 I would say it probably happens once a quarter. So, let's say four times a year. Sounds more than enough there. It's plenty. Mhm. Uh you have to make sure that you know if you miss it when it happens not to take. So this is more of like a mental thing where if you miss that first red day setup and you know that it only happens four times a year and one out of the four you missed it, you screwed it up, you got in early, you have to make sure that doesn't screw with your head for the next couple of trades that come because there's been plenty of times where I executed improperly. Maybe I got a little bit of FOMO. Maybe I was in a little bit too early and I missed it. What I would end up doing is take those same emotions into the next age trade and end up

28:19 losing money, right? So, I guess controlling emotions. Sorry, my handwriting is like doctor. It's horrible. You can't reach chicken. Everyone, everyone says it. Don't worry. But, um, another con I would say is in terms of you have to make sure you actually maximize profit, right? the actual holding out with that volatility which can be hard to do potentially because otherwise if you don't you kind of wasted the trade in a sense like the whole I think the whole thesis of the trade isn't just in terms of the first red day and the execution side but it's actually trying to maximize that downside right really to get that P&L because otherwise you could be it's still a great trade but it might not be really what you're actually meant to be going after with this strategy correct there's been plenty of times that the first red day setup comes I'm

29:09 I wish I had more money, dude. I wish I I wish I sold my car, my house, my everything, put it into the account, and attacked it. And that's because if I know that this has such a high probability of working, if it is indeed that first red day setup that I am looking for, then I would be stupid not to risk more. Right? It's like if you are so confident and the setup has happened over and over and over again and you know that it has a 98% win rate when it's actually going to happen that you want to be as big as possible to maximize the trade as much as possible because then again it only happens four times a year. And another thing that I mean it's not really pro and con, but it's mostly something that's important on this is I treat regular trading, the day-to-day trading like

29:57 the regular season games. You know, you're staying limber, you're practicing, you're playing. But when these first red days come, it is the Super Bowl. So, if I was just to be a type of trader that only could trade one setup, I would only trade this. The problem is that it happens four times a year. Let's say maybe give or take one or twice, right? Happens only four times a year. So what ends up happening is if you are not actively trading and you are not kind of knowing what's uh the current theme, what's going on this and that, you will not be able to execute it properly because you'll trade based on emotion. You're like, "All right, I haven't traded for 3 months. It's here. Let me make sure I do it right. Oh, but I'm in a little bit early. I'm this or that." So I treat this as the Super Bowl. You want to participate. You want to trade. You want to be at

30:46 the market every single day for the regular season games. Make sure you understand what's moving the market. Make sure your executions are good. Make sure you're still stopping out properly. But when that Super Bowl does come, you better make sure that you execute because there's only one winner when it comes to the Super Bowl. And you better hope it's you. Well, this is like your Aar setup, right? This is A++. This is the best of the best of the best. This is my Super Bowl. Let's take a break for a minute there, guys, because I want to tell you about the best CFD prop firm in the entire industry, Funded Next. Funded Next is a proud sponsor of Chart Fanatics, and they have been leading the CFD prop firm industry for many years. Literally a top three prop firm. Now, why is that? Let me quickly just run through all the incredible things that they do. First off, they have challenges for every trader. Whatever you're looking for, they have. They have a

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33:10 is to give you the capital as well. One, keep you sharp, right? Keep you in the game, keep you make sure you're actually in tune with the market to identify it, number one, but then two, it will allow you as well not to hesitate because, you know, when you haven't traded for a long time, you're not as trigger happy, if you will, which can be a pro in a sense, too. But then most of all in terms of the size for an A star, you're not just going to want to just size into it using all your own capital versus the profits, the profits that you've made from those base hits and those, you know, regular uh playbooks essentially is for this for this moment, you know, because even if it happens once a year, but you've done those base hits, this could be this could make up pretty much the largest portion of your P&L, right? It's usually, if not always, this is the largest portion of the P&L because, you know, these days it depends, but some days, let's say it's 200,000

34:00 to 400,000 that I'll make on each of these setups. So, round it up to 300,000. If you have four of these, it's 1.2 million, right? So, just on the first red day setup, I can make 1.2 million, but on my other day-to-day trades, maybe it adds up to another 800,000 to a million. So, by participating in the day-to-day, not only do I have something that I feel is very high probability to improve my P&L, I still have the ability to generate more P&L by participating and getting that confidence, getting that uh staying in tune with the market because no matter what happens, whenever you take any type of time off from the market, whether it be a day, a week, or a month, you are completely disconnected to what the true nature of the market is going on at that moment in time. Love that.

34:49 Well, it's finally time. We're going to look at some trade examples using this exact setup. So, we've now got the charts out after breaking down that incredible strategy, going over the pros and cons. Now, we're actually going to go through actual chart examples that Alex took these trades. I think there's one that was a missed trade if I'm not mistaken, but otherwise some phenomenal multi6ig trades using this exact strategy. Right. So, let's start with SMCI. So, this is one that I under capitalized on. This is one that had the potential to be a six-figure trade, maybe even a seven figure trade, but I just underperformed. I underperformed. And this was a setup where I underperformed and still made 50,000. So, it's not so bad when you underperform and do that. So, let's kind of go over it. So, what happened here on SMCI? SMCI had a big big big breakout when

35:38 Nvidia started breaking up. This is like the most classic classic example of like the first red day. You see people on Twitter, social media, everyone. This was a big one uh back in 2024. So you could see extension, extension, extension, extension. And then it really started to go parabolic over here. And this is split adjusted. This was back then I think it was trading around like $500 maybe. So it was split adjusted. These are all split adjusted things. So started going parabolic, parabolic, parabolic. And all of a sudden it's not even having a red day, right? These red days that it's having here are kind of consolidation. So it's creating consolidation days versus extension extension extension and then what we saw here is now that three days 1 2 3. So you see multiple

36:24 multiple multiple days of extension but then the next three days are extend extend extend gap up. Okay. So how did I trade this? Well, this is actually a great example because I have a live recording of it. So, I have my exact trade and I'll show you as it happens. So, you could see here on that day, right? So, let's just go back on that day, this day here, this day that it finally gapped up, right? What did I do? So, you can see the gap up day here. It gapped up and starts to wash out. It starts to create a trend. And what I want to do is if I do have a little bit of FOMO like I showed in the chart that I'll take a small piece. So this arrow here is my entry. Okay,

37:09 my first primary short entry. So I took and this dotted line is the previous day's close. So I had a little bit of FOMO. I got in a little bit early. I waited for it to break the low of the day. It set its range and I waited for it to break the low of the day. So now what did I do? Even with that range, you can see how it brought buy, you know, really induced the buyers in with that reaction. Correct. So now we're watching the stock. Boom. So let's pause here. So it went red. What did I do? I added to my position there. So I took my first initial starter and then it went red. How are you going about the execution there? Is it like a stop order or is it a manual execution? So that's actually a great question. So what I was first doing when I first started is I was actually using a stop order because sometimes it would happen so fast that I would miss it. And by using a stop

37:56 order, you kind of control your FOMO because it'll only trigger if the stock goes red. Yeah. Now, I've gone a lot faster with my mouse and I'm able to kind of point and shoot. But for anyone that's kind of first starting out or if they want to control the discipline and control the FOMO, definitely set a stop order. It makes it easier. You just if this is the day you set your order and you wait, right? But I, like I said, I had a little bit of FOMO. I got in a little bit early. I added to the winner here when it finally went red. So if you see here 1,025 let's say,25 just to make the math easy. The first entry added at 1,05 here. So what is that? Maybe that brings my average to,5 right just to kind of say something along those lines. Now it goes red. What happens next?

38:45 Almost instantaneously it goes down $30 a share. Instantaneously. And now here I am looking at the chart looking to see what I'm doing, trying to make the triangles larger. And but now $50 a shares down from red. Right? So just pausing here real quick. I took my first initial starter when the range broke and I added when it went red. Now you could ask yourself, look at this straight down. But you ask yourself, where did I go wrong? Well, I went wrong not being super super super aggressive. I'm seeing the stock bouncing and I know, all right, this is the first red day. This is setting up. This is it. I want to add to my winner. I don't want to just take it off here because remember the stock is extended like crazy. So, even if it falls,

39:35 again, just to make the math easy, let's say it falls 5.6 points on the split adjusted price, there's still plenty and plenty and plenty of downside. So where other people are using this area, they said, "All right, stock tanked $40 a share." While other people are using that area to reduce their position, I'm actually getting in bigger. I'm sizing. I'm sizing. If I just had, and we'll see what happens here. I'll show you. So, we're seeing the stock trend out. We're seeing the stock trade out. It's trying to consolidate. Maybe, maybe it's not. And then, let's see. It's bouncing. But as we continue with the video, you could see that the bounce is starting to fail. Look at that. Yeah. So now what ends up happening here is that short biased traders end up taking

40:22 their profit instead of adding. And long biased traders start to average down. They're like, oh, you know, it's going to go higher. It's going to hit 950 and then bounce to 1,100. And that ends up trapping the next round of people. So I had two opportunities to get in bigger on the stock. the first initial move it went red and the bounce and both times I hesitated maybe I think it was the past couple days the day before maybe I was having a shitty trading day maybe I was fighting with my girls and it could be any reason you know this was year and a half ago I don't even remember but I just remember that I wasn't at my tiptop shape and you could see within these are one minute candles so within one two three four five it's down nearly $100 a share wow and I took my first initial cover, right? So now what happens next?

41:16 Stock is trying to bounce, trying to do its thing, bouncing a little bit, and then all of a sudden the bounce fails again. Now what happens? Well, all of a sudden, now you start thinking in your head, wait a second, everyone that is buying the dip is now underwater. If you bought this gap up, you're down nearly $150 a share if you bought the gap up. If you bought on this balance, you're now down $40 a share. So, what happens? So, the low of the day is right around 920. Let's say we're trying to retest, see what happens. And all that's doing is drawing in more of the buyers. Correct. Because RZ,

42:03 it was just up to,070,80. Why isn't it going to bounce this time? And it's actually only like 15 20 minutes ago, right? That it was like that. And now the low of the day breaks. As it continues to go down in my favor, I'm reducing. And I even reduced a little bit too early, right? I reduced a little bit too early because as you're going to see, it just keeps falling and falling and falling. Remember the first red day was triggered when the stock broke the red to green line of let's say a thousand. Mhm. Now 1 2 3 4 5 6 7 8 9 10 11 minutes later it's at 8.83. This is kind of exactly what we talked about. Even though you did make $50,000 on this trade,

42:50 we spoke about how one of the cons is making sure to maximize this concept and this strategy by holding that volume as much as you can, which isn't easy. No doubt. Correct. No doubt it isn't easy, but this is a great example where you still made money, but no doubt. What What could it have been? Do you know? Uh I mean, what do we want to know? So, here's a pen 50,000. And if I remember correctly, so this stock, it ended up trying to bounce a little bit at 860. If I remember, it had a midday selloff and sold off as low as 750. So it got absolutely decimated. Now, if I traded with just stock, I probably could have made 150,000. But on this trade specifically, the reason why the opportunity was so big is it was Friday and options expiration. Yeah. So, had I

43:40 bought instead of shorting the stock here, maybe I bought the 950 puts or the 900 puts, I could have taken that same position size and probably made a million dollars. Wow. Because of the option going up a,000x, right? So, I don't even remember how many shares I had here. Maybe it was maybe five, I don't know, 500, maybe a,000 shares. I can't even remember. But if I use that same capital Yeah. on the option, I would have probably made a,000% maybe even more. And that's what would have led to this trade being a lot exponentially bigger. So, ever since this day happened, that taught me a lesson that if there is ever a first red day on a megga cap company that trades options, I want to be more focused on the option side of that trade rather than the stock side because then again,

44:28 $1,000 a share is pretty expensive, right? Pretty expensive. But with the options, I remember seeing people post an option that went from $3 to $60, the puts. Yeah. You know, so this was an example of I didn't capitalize as much as I should have, but it taught me a lesson for future trades to now utilize the options. So that was one example. Now, let's talk about another example. So this was the setup that I was telling you about, Rich, the Russia invaded Ukraine, oil and gas sector play. So if you look before this happened, right, let's kind of let's let's go back a little bit. So before this happened, the stock was trading around $4. It was trading around $4 for the past forever,

45:19 right? And then Russia invades Ukraine and all of a sudden this oil and gas play goes from $4 to a parabolic move of at the highs $86. Wow. Okay. So, why is this another big one? So, if you see here, right, if you see here, yeah, it kind of had a little bit of consolidation here, a little bit of price acceptance, but the price never really extended. The price never really just kind of made this abnormal parabolic move. Yeah. Until it started happening here. It went from 17 to 25. Yeah. And then it went from 22 to 49. And then it went from 42 to 86. And then it had the first red day set up. Yeah. Right. So, let me actually see if I can zoom out

46:06 that far. So, give me with the first red day. Is it Are you just trying to capture that red day like the essentially trying to get out by the end of that day or are you holding even further? So, when I first started, I would just capitalize on that first red day. But now, as I'm realizing, it ends up going down lower after that. So that example of SMCI, if we just pull it up, you can see that the day after it went red, it had two more days of downside. So as I've been more mature with the setup, as I was as I'm kind of learning more, I may hold like 10% overnight or just a little bit because you never really after the top is set, chances are it's not coming back. Yeah. So let's go back to this IND up cuz with this one in particular, that one falls off entirely. Right. So give me a sec here, R. I'm going to spend like 5 minutes just zooming out

46:55 of this so I could show you the exact example. Let's take a break for a minute there, guys, cuz I want to tell you about our incredible sponsor, TradeZella. Tradezeller is the number one trading tool in the entire trading industry. Tradzella allows you to become a more profitable trader, allows you to make immense progress as a trader, no matter if you're a beginner or an advanced level trader, because it makes journaling easy. It makes journaling something that is fun and enjoyable and something that is interactive. So, no matter if you're a crypto trader, no matter if you're a futures trader, no matter if you're a forex trader, no matter if you're a stock trader, all you have to do is select your broker, your platform of choice and connect it to Tradesella and it will automatically sync your trades and pull all of that data onto the dashboard,

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48:27 better trader today. Now, let's get back to the episode. This is the bread and butter, though. This is exactly what I'm looking for. These these type of setups, these type of things, you know, I wish if they happened every single day, bro, I'd retire. I'd have an island. I'd be good to go. But Unfortunately, the extended nature of these moves, you know, is few and far between. I mean, it's like the same thing as a GameStop. If we had a GameStop every single day, every single week, every single month, it'd be totally different. Ready to go? Yeah. Okay. So, this was that first extended day that it had, that major major day where it went to 87, right? So, that stock ends up pulling back, right? And it ends up closing. So for reference, we're going to use this yellow line as the red to green area. So you can see the next day, the day that it had the first red day, it

49:16 gapped down a little bit. It gapped down a little bit, tried to bounce a little bit, you know, even tried to bounce towards 920, 9:25 a.m., but still it is not breaking above the previous highs. So okay, now this is a little bit different. It's a gap down, right? The previous day's close is over here. So, it's above the previous day's close, but it's still technically considered under the previous day's highs, right? So, it's not breaking above the highs and it's still kind of above. Remember, this is going to be our previous day's close line. So, what ends up happening is right at 9:30 a.m., right at 9:30 around here, it kind of comes back down, right? So, at this point, I'm thinking in my head, the stock is unable to break above the previous day's high. Yeah, it

50:04 closed weak the day before. The market opens and it washes out. It tries to bounce but can't even reclaim. And at this point right over here, which I'll zoom in on at this point right over here, when it tries to bounce again, now it's coming at the red to green line. And if you notice, when the red to green line finally broke, the stock halted down. Yeah. So, this move here was from 65 to 56. The moment that it broke, it was already down. And then for the rest of the day, it just sold off and it sold off and it sold off. So all you had to do was wait for it to go red and attack. Was the timing um important as well as a added confluence and added sort of benefit especially

50:51 because we gapped down then came back up. Right. So what I liked on this is the fact that it gapped down and it tried to rebound. Yeah. But it could not even reclaim the previous day's high of the day. Right? So it's under the resistance area. So that is already telling me that the momentum is a little bit weaker. Y so I have the gap down. I have a bounce unable to break the previous day's high and then a little bounce and fail. A little bounce and fail. And if you notice here, RZ, you can see it just came right there. Right about to break the red to green and it bounced. Yeah. And then when it finally broke, it halted down and just went straight down. So this trade and that rebound onto that yellow line there, is that a VWAP? That's a VWAP. That's a VWAP. And

51:39 that trade was a $668,000 day. Incredible. And you can see the same thing here. First red day, right? Is this the same principle as well? Like start scaling out as you're going lower and lower, right? And I think on this one, I probably waited until the close. If you see it closed right at the low of the day, closed right at the low of the day. And this is the daily chart again, just for the reference. Oops. It's interesting because as you say, it's that parabolic move. And normally, uh, the way they say, right, with selling anyway is that you the buyers take the the stairs and the sellers jump out the window, right? Norally how it goes. In this case, it's like the buyers are on a rocket ship, but then it explodes and everyone falls back down. Staircase up, elevator down. Yeah. So, that's another So, this was probably one of my uh bigger setups,

52:28 right? Obviously, 600,000 is an incredible setup, but uh let's move on to the next one. Is this the trade we referenced in the podcast, right? I think so. Yeah, I think was this November. So, this was DJT. So, this is actually the one that we talked about on our last podcast. So, if you see pretty much the same type of thing. So, this DJT was running up in anticipation of Donald Trump becoming the president. So everyone's like, "Oh my god, he has a publicly listed company. If he's going to become president, this is going to go crazy. It's going to go crazy. It's going to go crazy." So the stock started off its move right around 11 to 12 and kind of came up maybe a little bit of consolidation. Came up, consolidation, and then once again, we saw the three parabolic days coming up. So from here, this was around $11 and it went as high as $55. $55. So how' I trade it?

53:21 If you see here, if you see here, that first red day, it gapped down. Yeah. So, what did I do is I shorted, right? This was very early. This is like 4:00 a.m. So, I couldn't I couldn't wait to go uh trade this. I was awake in the morning. I was ready to go and I saw it gap down. So, rather than trying to say, let me wait for it to balance. Let me do this that, let me at least take a piece, right? So, I started scaling in on the short side. And as it came down, I took some profits off. I took some profits off as a way for me to build a profit cushion. That way, just in case it pushes up and it doesn't really have that natural first red day, it reclaims at least that way I'm making sure that I have some of my profits locked in and I could use those profits to turn the trade into a bigger trade. Stock ends up washing out and ends up rebounding. And this

54:07 uh blue line is the VWAP line as well. And I'm starting to see that the stock is acting heavy and heavy and heavy. So, I just keep adding and adding and adding. And my plan was to get very very aggressive if that red to green ended up failing. So the red triangles are shorts, the green triangles are covers. And actually I think I have this more zoomed in version. So you can see here that as the stock bounced at the market open, it failed. So we're red on the day. We're red. We're gapping down and we're starting to have some weakness. So whereas other traders are like, "Ah, the move is over. It gapped down. It's this and that." I'm aggressive. I'm adding. And if you remember when SMCI broke the low of the day, that's kind of where I started to get a little bit more aggressive. The same thing when DJT started breaking that low of the day, I added, covered,

54:53 short of the bounce, covered, VWAP. Now VWAP is acting as a natural area of resistance. So I'm adding again cuz VWAP's showing you the average of all these orders, correct? The average price that's being held of the stock on the day. Yeah. So now it's kind of coming back down, coming back down, coming back down. All of a sudden, the stock that was at uh the day before, the stock that closed at 5150, now all of a sudden it's down to 39. And now from my first initial entries, I'm making $10 a share. You know, and then that led to 400,000. It's incredible. So that's just another relatively fast as well, right? These are all minute candles. These are all minute candles. So I mean, look, I was awake at 4:00 a.m., right? So if you count from the exact moment I entered

55:42 to the exact moment I exited. So 12:45. So what is that? 5 6 7 8 9 10 11 12 8 hours. So it took me 8 hours to make 400,000 which equivalent to 50,000 an hour. That's pretty good to me, dude. 100%. That's pretty good to me. You know, just to highlight though for the people at home, like that is incredible and that is the reality. You know, it's a multiple uh you know, yearly average salaries for the US and most of the world if anything. However, the patience, right, they don't happen every single day. They happen, as you say, like three to four times a year, give or take, but you still have to be prepared. You still like you had to be up at 4:00 a.m. for this one. Correct. So, to execute properly, you still have to track throughout the day. And to achieve that result with this one, it was more of an aggressive play. Um, you know, and really making

56:27 sort to size in and sort of playing throughout the day and being able to handle that psychologically, handle that in terms of understanding the play that you're doing. These are all things that are so important to achieve that 400,000 to basically earn the 400,000 and the multiple correct six figures. And honestly, I was actually a little bit pissed because if I remember correctly, we recorded our podcast in November and that was when Trump first got elected. And if you saw over here, this is a separate setup, but this is a sell the news setup. So DJT was gapping up on Trump winning and then as soon as he won, stock sold off. So this was an example of when we were both in Dubai and I was unable to capitalize on a separate setup because my wife would have killed me if I traded that. So that's another one. Uh let's talk about MSTR the one that I missed. So MSTR I

57:15 missed this one because once again I was in Dubai on my honeymoon. My wife would have killed me if I traded. So if she's watching this we missed out on a new house. I'm not gonna say anything but anyway so you know just so you know. So this is another one which was pretty amazing if you think if you look at the long-term chart the extreme long-term chart of this micro strategy you know going from trading at you know 13 all the way to 500 is pretty incredible but so let's talk about this so same thing so MSTR if you remember the same type of breakout that SMCI had before its parabolic move this had the two so look here and then look here almost Identical man almost identical you know almost identical literally. Yeah. Even on the other side as well. Yeah. So

58:07 anyway so this MSCR So this MSCR is starting to extend and then what do we end up seeing? Day 1, day two, day three. So I'm looking for at least 3 days worth of extension at minimum. At minimum, you know, 5 days. The more extension the better. I hope to God it goes 15, 20, 30 days in a row, right? Because I know for a fact that when that moment finally does happen cuz even with this one like you can see as you say the last three days in particular are parabolic but even before that yes you have a red days if you want consolidation but you have you can still see the parabolic nature of this for from the lows obviously much slower to begin with but it did you know from here you start to see a lot of more volatility a lot more aggression correct slow down again but then it just almost like a blow. You could make you could make the argument that you could short this first

58:55 red day, right? You could you could make that argument to short that day, but it's not enough for me. Yeah, it's not enough for me. I'm sure there's traders that trade that. It's profitable. Good for them. No problem. It's not enough for me. You really need to see I want to see something crazy. So, what I see here is I see the day 1, day 2, day three. And even the price levels of that. What is that? That's So, this is from 340 all the way to 540, right? So, now let's get into it. So, uh, 119, let's say 1120, 11:22. So, this is MSTR. So, we're going to use this yellow line once again as the red to green area. So, the day MSTR, the day before the first red day, is starting to close a little bit weak. It's starting to close a little bit weak, kind of pushing up, come back down,

59:42 and then lo and behold, the next day gaps up. It gaps up. We're gapping up. We're gapping up. We're gapping up now. What happens here? Well, just like SMCI, it starts to break the low of the day, right? It starts to break the low of the day. So, if you really want, once the structure is created and it breaks the low of the day, you can take a starter. You can see that it ended up bouncing a little bit, which is fine, but then the bottom started really coming out. And this is the red to green area. So, if you wanted, what you could do is you could take a starter on this area and maybe set a stop at the high of the day. Yes, there's a lot of range. Yes, there's a lot of meat on the bone. Yes, there's a lot of everything. But if you're just sticking to the same thing that we saw, which is the structure is created. And then just like SMCI, when the low of the day breaks,

1:00:31 you could take a starter. Just like INDO, when the low of the day breaks, you could take a starter. So for me, had I been there, had I been trading this, I would have probably taken a starter here at this 520 mark. I would have probably given it towards the high of the day or the pre-market high of days to stop out. And then as we start to see it fail more, as we start to see it break that low of the day that it created, you could add more. So I would say a 10% starter here, you could probably add another 10% here as it starts to break the structure and then the moment that it goes red, size up. Yeah, you get that first initial move down. You could take a little bit of covers and then it bounces. But lo and behold, it does not reclaim the red to green area. Yeah, it does not reclaim. And then what happens next? It just waterfalls. It waterfalls down and on top of that

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