5 Ways To Read Price Action

1. Highs and Lows 2- Support and Resistance

Avoiding the Traps in Small-Cap Stock Manipulation

5 minutes worth 8 years of studying and tracking small caps 🧵 Small-cap stocks, known for their high volatility and low liquidity, often attract traders with the promise of quick gains. However, these same characteristics make them prime targets for manipulation. Understanding these traps is essential to navigating the landscape safely and profitably.

TRADING PLAN

1/9
Don't trade without a plan! 📋
A written trading plan guides your decisions. It includes:
Where, how, and why you enter/exit trades
Risk management strategies

How to find trades and much more 2/9
How to manage your trades:
Define your entry/exit points: stop loss, profit target, trailing stop loss, or indicator

Always have a reason for your moves!

12 Top Traders and their Best Tip 1.The Intelligent Investor by Benjamin Graham:
•“The individual investor should act consistently as an investor and not as a speculator.”

Market makers and institutional players often employ sophisticated strategies to capitalize on retail traders’ behavior.

Here’s a short breakdown of some of the “secrets” and tactics used 1. Retail Traps and Market Maker Tactics

Market makers use strategies like “spoofing” and “layering” to create a false impression of supply and demand. They might place large orders on one side of the order book (which they have no intention of executing) to push retail traders into a position. Once retail traders react, these orders are pulled, and the market maker takes the opposite position

I'm writing a COMPLETE THREAD about one of the Best Trading Strategies “The Ross Hook”

Trading it on my accounts swing and European stocks since 2003

❤️ this post if you are going to READ it 1. ROSS HOOK TRADING STRATEGY

To trade the RH pattern, we need to follow several steps:
1Find a 1-2-3 pattern.
2Wait for violation candlestick to emerge (it is considered to happen at the breakout of point 2 of the 1-2-3 pattern).
3Open a trade after the point 2 retest.

This is all you need to know about strategies

1. breakout
2. pullback
3. crossover
4. reversal

Give me 1 minute to explain them to you First you need to learn the wyckoff cycle which is formed by:
- accumulation
- markup
- distribution
- mark down

I'm 43.

I've been dreaming, thinking, loving trading for more then half of my life.

I spent over 39,000 hours studying the best traders, practicing, testing, trading, and having mentorship with them.

Here’s what I found on how to become a day trader: The market is a jungle.

You are going to trade against the biggest, most powerful, and highly resourced institutions like Citadel.

For example, they have 100 portfolio team managers running operations.

Hear it from Keith Griffin himself in this insightful

8 most famous risk management quotes to learn by heart

1. Paul Tudor Jones: The most important rule of trading is to play great defense, not great offense. 2. Warren Buffett: Risk comes from not knowing what you’re doing

🚨 THE MOST POWERFUL SETUPS

Small caps are very manipulated.

You can focus on news and you will see good news dump and bad news run.

You can focus on dilution and you will see often that stocks with dilution run and stocks without dilution fade.

So where to find edge?
🧵 1. Volume is key

Volume will never lie

Use volume to find confirmation for
- runners with high buying pressure
- faders with heavy selling pressure
- exhaustion for reversal
- capitulation for reversal

But volume alone is not the answer

Trading Lesson on Volume - AVOID THESE ERRORS

Learning how volume works will give you an edge in trading. These are my tricks that I learned during the years observing the market.

#thread 🧵 1. High Volume Reversal Setup

How many times they told you buy the breakout on high volume. WRONG! If you do this often you will get trapped on liquidity trap by smart money.

Becoming a better trader #thread

It took me 25 years to improve this process but this is what my 6 & 7 figure traders that I mentored have been doing to become successful.

I am going to share all this: My Goal: improve my trading skills and focus the next week only on the best trading opportunities.

Let's take small caps for example ( I will do a different one for mid&large caps)

1. Analysis 3 categories

First I analyze all the "hot stocks of the week" and divide them in 3 main categories

- gaps above 30% with at least 1M volume traded
- non gaps stocks that extended after the open 30% +
- overextended plays (runners for more then 1 day)

An example below of a scanner with edgetotrade

Working since starting of the year with Mikeyta, from a $30K account to $200k in 7 months. He is a full time trader that needed that extra conviction to raise his level. Now he is ready to scale up.

How he did it till here. July over $30K month 1. Reduce scalping and improve day trading habits

He was over scalping and made him a little stressed. He wanted a clearer way to trade and he focused more in taking less trades and holding winners more.

This meant also less commissions.

How to recover from a big drawdown

I recently had one conversation with a student about his problems in trading his account after a 25% drawdown.

This trader is based in Europe and trades the futures market and started talking about how his life changed when he started to trade for a living.

Let's see if you are this type of trader, give your comment.
1. Trading part time and trading full time is very different. In part time you still have the safety of a sure income because you have a job and trading is more like a passion, like a hobby.

When this becomes your first and maybe only source of income you will need to upgrade fast. This means you have now to manage fear of not making money, the stress, the pressure of bringing home a paycheck for you and your family.

Expectations create for certain traders stress.
How good can you handle this?

Patience: trader’s public enemy no. 1

If impatience is killing your profits, read this:

How to Develop Patience in Trading 1. Understanding Impatience

Impatience is the opposite of patience. To improve patience, we must define its dark side. Impatience will:

•Make you anticipate
•Raise your FOMO
•Create anxiety
•Make you frustrated
•Cost you opportunities
•Lead to impulsive decisions
•Increase trading errors
•Cause overtrading

The man who turned $10,775 into $18 million in 16 months from June 1998 to December 1999 and later $18 million to 42 million in just two years.

The 10 points of his Trading Strategy from the Legend J. Dan Zanger you need to read: 1. Make sure the stock has a well formed base or pattern such as one described here before considering purchase. Dan highlights stocks with these patterns in his newsletter like cup and handle, wedge, pennant & more. His principles are technical analysis on momentum stocks.

FREE 88% STRATEGY

Most trading chatrooms failed to teach you a real consistent strategy.

I know because I tried and enrolled every chatroom out there when I started.

Stop paying $$$$ for chatrooms that give you no edge, just pumps and alerts. I'm here to share a real, proven strategy for free. This is the Gap & Crap Version @SmallCapRoom

This is for all the short sellers out there that have still difficulties to be consistent in trading stocks.

The idea is to wait a stock that gaps up and to short it in the first 10 minutes out of the gate.

This can still be improved and you can reach out anytime for help.

24 green months in a row
18 months above 5 figures
3 years working together

I brought this trader from beginner to pro. He left his job and now trading for a living and supporting his wife and two daughters

The story of a man who risked everything

1/10 1 The Decision

Life is full of risks, and we must choose what we want: an easy life without risks working for someone else or a life where we take risks in pursuit of greater rewards.

The first thing I told him was:

“Consider the pros and cons carefully. Weigh them on your personal scale and decide if it’s worth it for you.”

I was in a trade yesterday and things started to turn ...

🧵1
I built a position with size, looking for a dip long on a strong support

I had my plan set for entry, target, stop loss and I only had to execute it

I started to see after 10 minutes I was in the trade that it was not going to work easily

I said " will give a little more wiggle room"

Since this moment, my plan was not anymore systematic and mind was going to take over 2
from " I trade my plan and execute only my plan " my mind shifted to " add a little more below support to now now you are going to have a better average J"

market washed and I could see sweeps in the order flow taking over stop loss of long traders

at this point after the washout, stock bounced to near my support and avg and I thought

" I am always in control, I knew it, stop hunt and now reclaim of support, this will run in my favour, let's add more"

In one of the latest threads I spoke about how a 8 figure trader from a well known prop firm trades.
Today we are going to cover how a trader that I mentored became a 7 figure trader and what his setups look like.

His trading is based on only 3 patterns
🧵thread Trading Small Caps: Key Setups and Tips

Trading small-cap stocks can be highly profitable, especially since, on average, 75% of gappers fail and close red on the day. The majority of these stocks tend to fail on day one, with some holding out until day two or three before they drop. As a day trader, it's crucial to build a playbook, manage risk effectively, read price action and tape, and maintain mental and emotional control. Here, we'll discuss three main setups in small-cap trading, all of which are backed by data and statistics from the last seven years.

Trading Performance Review for Professional Trading

The main goal is to become a better trader and avoid mistakes for the next day. Questions like: "How can I become better? How can I learn not to anticipate? How can I know when to cut or let it run?" resonate in our heads at the end of the day.

🧵thread
3 Main Tasks to Do at the End of the Day
✅Review Charts: Annotate errors, thoughts, and considerations.
✅Replay Your Trading: Analyze the process, timing of entries, and price action from recordings.
✅Maintain a Report Card and Trading Report: Similar to the one shared at T4Cause2022( pic below) A. Trading Performance Process Questions

Ask yourself and write down

Did I trade discretionary or systematically?
Did I select my stocks based on my strategy or impulsively?
Did I set a stop loss in my mind before taking the trade?
Did I set a target profit area before taking the trade?
Did I enter due to FOMO, or was I precise and patient?
Did I manage to respect risk, or did I oversize and/or overtrade?