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