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Simple Sell Rules to Maximize Your Trading Profits

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So what is position management? Position

management is basically a system for

managing a stock when you are at a

profit to ride the trend relevant to

your style and time frame. This is a

really important last bit of the

sentence. It's not about capturing uh

you know buying the low and selling the

absolute high. It's about capturing the

meat within that trend that's relevant

for you and your style. Different market

environments will favor quicker rules

and put more emphasis on selling into

strength or weakness. And this is a

really important point because I think a

lot of people get uh worked up about,

you know, there's a 2024 or 2020 and

they look back over their trades and

they're like, "Wow, if I just hold until

the stock breaks the 50 SMA or 100 SMA,

I'm going to make 300% every single

time. I sold way too early." But the

reality is that not every year is like a

2020 or 2024. And this is a key point I

want to emphasize and this is something

that Jim Role really emphasized to me is

to capture a monster winner of 200% or

more. You'll need to sit through one or

two bases at least within a strong stage

two uptrend and you're going to have to,

you know, stick through multiple

earnings reports. Some of them may gap

down on you, but in order to get a

monster winner, you need to, you know,

understand where your cost basis is,

your profit cushion, what you're willing

to give back off the table in order to

sit through and get that longer term

move. Selling to strength means selling

a stock as it is rising becoming

extended and volatile or is simply

meeting profit target levels that you

might set at 10% your average gain you

know 3R 5 R 10R whatever your rule is

that's what selling into strength means

selling as a stock is rising and meets

uh those criteria so key reversal bar is

when an extended stock gaps up or has a

powerful move higher and then reverses

even harder and closes well off highs

likely undercutting the prior day's low

and maybe even multiple days low.

Selling into weakness obviously is

selling as a stock is breaking trend or

showing weak or abnormal price action.

And for this, the mindset is we're

focusing on riding the trend until it

really confirms that it is breaking down

and starting a downtrend. And this is

going to lead to larger drawdowns off

equity highs, but potentially greater

reward because you're sticking with that

longerterm trend until it ends while

selling to strength. You might exit

here, here, or here. here. You're you're

participating in this longer term trend,

however long it lasts until it actually

breaks

[Music]

down. All right, guys. So, welcome

everybody to the next trader handbook

webinar. Uh, today is going to be a

really important one and a really good

one as well. Uh, discussing sell rules

and position management. You know,

previously we've talked about risk

management itself, which is kind of

about starting a trade, how to actually

manage risk with your initial stop-loss,

how to move up that stop-loss. Today,

we're going to be talking about if you

have a profit, how do you manage it

properly to make sure you're taking

profit when you need to, but also

letting it run so that you can let

asymmetry work in your favor. So, this

is going to be a really good one and

hopefully you guys are excited. And let

me know right now in the chat and in the

comments what questions you have about

cell rules, position management. You can

get really specific, you know, do you

want to focus more on selling to

strengths, selling into weakness? What

confusion do you have there? Uh, let me

know in the chat as well as in the

comments below. And while you guys are

doing that, just a quick reminder to

join the Trader Handbook weight list.

This gives you early access to a lot of

resources that we're releasing along

with the book here, which will be out on

May 27th. And basically by joining this

weight list, you get extra bonus

articles. You get early access to these

webinars and to register for them and a

whole lot of other bonuses that are

still to be named as well as exclusive

giveaways. Here's a little bit about the

articles that we've been sending out

this weekend. I'll be sending out the

stop-loss setting guide as well as the

sell rules checklist, which will be

really helpful for you guys. Uh so

definitely go ahead and register. Again,

you can scan this QR code right here and

uh join if you are not already on the

list. With that said, uh welcome

everybody to the next Trader Handbook

webinar. Today, as I mentioned, will be

focused on sell rules and position

management. This goes along with chapter

7 of the traders handbook, which will be

released uh pretty soon in May. Uh so,

make sure to grab your copy if you

haven't already. And let me know right

now in the chat if you've already uh

purchased and got got your C copy. And I

I heard from a few folks who actually

bought multiple, one for the office, one

for the home, which is awesome. Uh so

definitely go ahead and make sure to

grab yours. The link to that is in the

description. Uh and you can check that

out right now. All right. So I want to

start with a quote that we, you know, we

saw in the previous webinar, but it

still applies to sell rules and position

management. And you know, this is from

William O'Neal, the founder of Can Slim.

Uh, buying a stock without knowing when

or why you should sell is like buying a

car with no brakes or being in a boat

with no life preservers or taking flying

lessons that teach you how to take off

but not know how to land. And I think

this is really really um important

especially in these current market

conditions where things are more

volatile, things are moving faster than

they used to. Uh because you know I

think a lot of traders uh are almost

surprised when they have a great winning

stock that actually worked for them out

of a strong breakout. And if you don't

manage a stock like that correctly, a

trade like that correctly, you can choke

it off and, you know, leave a lot of

profits on the table. So, we'll be

talking about concrete rules that allow

you to stick with the trend today and

hopefully get the most out of those

trades that really work out and really

move the needle in our accounts. So,

here's the agenda for today. This is

going to be a really good one. First,

discussing sell rules based on time

frames, style, experience level as well.

We'll be definitely getting into the

weeds of selling into strength versus

selling into weakness uh with multiple

case study examples for both of those,

showing how to actually apply it and

what price and volume characteristics to

look out for. They'll discuss a little

bit about trading around a core

position, key takeaways, as well as

discussing some kind of special

situations, handling earnings reports,

large gaps, end of day stops. Um, all of

these are important questions that I

think you have to uh answer for yourself

as a trader to build your trading

system, which is the goal of both the

trader handbook as well as these

webinars to help you do that concretely.

And uh let's go ahead and dive right in.

So these are some questions that you

might be asking yourself related to

position management. You know, how do

you define what is extended? How do you

know when to sell into strength? When

should I sell? How much should I sell?

What if it goes up after I sell? When do

I take profit? How do I manage a

position through earnings? These are all

questions that we'll answer in today's

webinar and are basically really

essential to uh you know answer for

yourself again to build your trading

system and build your cell you know sell

rules as a trader. All right, let me

take a quick sip of water

here. So what is position management?

Position management is basically a

system for managing a stock when you are

at a profit to ride the trend relevant

to your style and time frame. This is a

really important last bit of the

sentence. It's not about capturing uh

you know buying the low and selling the

absolute high. It's about capturing the

meat within that trend that's relevant

for you and your style. If you're a

swing trader, it's going to be that

first momentum burst. If you're a

business trader, it might be, you know,

uh catching the whole trend, but then,

you know, selling it off the top because

it's breaking down. But again, it's

about the trend relevant to your style,

your time frame, and your objectives.

And it incorporates both sell rules for

taking profits into strength and or into

weakness. Depending on your style, you

might be doing more selling into

strength versus selling into weakness.

And I think this is really important.

You know, people say winners manage

themselves, but that's not really the

case. You have to handle a big winner

properly uh to get the most out of that.

And uh we'll be providing concrete rules

to help you do that and provide

guidelines and foundations that have

helped for us and will likely help for

you help help you as well. And I think

this is a really important point as well

is that clarity around your sell rules

reduces confusion and noise and allows

you to execute like a professional. I

think a lot of people, you know, get

again a winning trade and are confused

about their objectives. They're a swing

trader, but they suddenly have this 40%

gain and they don't know if they should

take profit or should you know keep

holding and and see if it can double or

triple from there. And this confusion

leads to a lot of emotions. leads to a

lot of you know lack of clarity and you

need rules to help you understand those

situations what exactly you should do

relevant to your goals and objectives.

So these cell rules that we'll be

discussing today will give you that

clear foundation and help you um limit

the impact of those emotions um on your

trading. And I think this is really

important as well. The goal is

asymmetry. Keeping losses small is

accomplished through stop- losses

through the risk management webinar and

chapter that we talked about um you know

this previous Wednesday which you can

find the recording uh link down below

and letting winners run is defined by

the cell rules we'll be discussing

today. And this is kind of a a very um

you know represent representative

graphic here that I quickly put

together. You've got your entry. It

broke out formed some higher lows. We've

got some sells into strength. You could

also sell some into strength here or

here. But then we start to see a break

of structure. a lower high form and then

the stock really breaks down through

previous higher lows and this is where

you'd be selling into weakness. So sell

to strength is basically selling as the

stock is going up as we'll get into much

later on and selling into weaknesses as

the stock is breaking down through your

definition of trend and starting a

downtrend um once you were uh previously

in that uptrend.

All right, I want to start with this

because I think it's a really important

point and something that William O'Neal

emphasized a whole lot to Ross Haber who

of course uh is a co-founder of Trader

Line. He's taught me quite quite a bit

about trading. Um managing trades on a

technical basis. Um he really emphasized

that we buy based on both fundamental

and technical analysis. You know,

investigating the story of the stock, uh

the the great products it's producing,

the earnings growth, the sales growth,

um the news catalysts that are around

the stock. However, he really emphasized

this. We manage a position solely based

on price action. Uh we're only looking

at the price and volume action. Decide,

you know, should this be a sell? Should

this, you know, be a hold? Um should I

wait for more information? That's really

really key. And the reason for this is

because price action at the end of the

day is what der determines our profit.

You know, you've heard Brian Shannon say

only price pays. It's completely true.

And there's so much news events, so much

noise about the market, uh, you know,

the Fed, you know, the individual stock

going on that it's very hard to

interpret everything uh, to the best of

your ability. And the way to go about

this and to resolve that is price action

at the end of the day is taking into

account all those different inputs, the

market health, what the Fed's doing, you

know, macro events, you know, news

catalyst. All of this has taken account

and has revealed how the institutions

which move the stock over the long term

are interpreting that information in the

price and volume action of the stock. So

that is why we solely uh you know decide

sell decisions based on uh the price and

volume action. And here's a good quote

from Jesse Livermore about kind of you

know identifying interpreting news

events. The reason why uh sorry the

reason for what a certain stock does

today may not be known for two or three

days or weeks or months but what the

dickens does that matter. Your business

with the tape is now not tomorrow. The

reason can wait but you must act

instantly or be left. And I love this

quote because he uses the phrase what

the dickens. I think we should bring

that back # what the dickens. Uh but I

think it's so so true. Uh you want to

manage risk in real time. Deal with the

information you have on the table right

now. And I think that's so so important.

So, this is a really good quote to

internalize as you're thinking about

creating your sell rules and position

management rules. All right, so sell

rules based on style. Um, so we'll go

into kind of what a swing trader and

position trader um you know what they

are, how they should be thinking about

sell rules. But first things first in

the chat right now um yeah, hashtag what

the dickens. Perfect. Joho. Um f first

things first in the chat right now uh

put if you're more leaning towards a

swing trader or position trader. I'll be

really curious to see what the uh

results are uh here. So, let let me know

if you're more leading swing trader,

position trader. I personally would put

myself kind of as a hybrid somewhere in

the middle. Um I like to lean into, you

know, which way the market is favoring.

Um so, we see a lot of swing traders. Um

both position traders, both position

traders. Okay. So, a good mix of

everything.

Perfect. Yeah. Yeah. I would put myself

in the middle here. A little bit of a

hybrid approach. And I'll kind of talk

through my exact cell rules and what I

do. um during the examples later on. But

a swing trader, you know, your objective

is to trade the momentum moves and to

sell into those moves and sell into the

volatility to the upside or downside if

you're shorting. And you're going to be

biased towards selling into strength.

And the reason you're going to be doing

that is based on multiple reasons, but

you're trying to exit at equity highs.

You're trying to just capture the short

burst and move on to the next setup, the

next stock that's coiled or meets your

particular setup. Uh you don't care

about what the stock does after you sell

into strength. they could go, you know,

in double, triple, um, you know, and it

doesn't matter for your system because

your system is to rotate, uh, to the

next setup, to the next great

opportunity and to just kind of churn

over your edge and, uh, make progress

that way. The position trader is a

little bit different. you're not really

focused on um you know you are focused

on capturing the momentum moves

especially at the beginning after your

entry but you're more trying to find you

know duration trades uh trading longer

term trends where a stock is trending

for weeks months even a year and a half

or more ideally and you're biased more

towards sticking with that trend until

it really breaks down. That doesn't mean

that position traders can't sell to

strength. You definitely can and we'll

talk about you know some sell rules for

position traders in just a bit. But you

more want to focus on uh building in

asymmetry by capturing as much of that

trend as possible. And there's also

another really good uh Livermore quote

that I think is is relevant here uh

where he talks about you know the first

and last eighth are the most expensive

ace uh you know of of a profit. And with

a position trader you're really trying

to catch early on in the trend after

maybe the first eighth is done. capture

the meat and then maybe, you know, sell

some into strength here and, you know,

just capture seven eights as it pulls

back uh to that prior level. Uh while a

swing trader, you're really just trying

to focus on capturing one or two of

those ETHs during a trend uh during the

most powerful periods of that move. So,

I think that's another good way to to

think about uh sell rules based on

either being a swing trader or a

position trader.

And I also want to bring up here uh and

revisit a concept that we talked about

uh way back in one of the early webinars

here. Um you know the stage you're in

and how that impacts your cell rules.

And today we'll be giving kind of really

concrete cell rules for stage one two

traders. Stage three and four traders,

you know, should build on the foundation

and the techniques that they build in

stage one and two and come up more for

uh come up more with rules that allow

them to perform, allow them to

personally tweak towards their style,

how they like to do things. While stage

one and two traders, it's more about

just building consistency, having a

system in the first place. Because

that's a big problem with stage one and

two traders is in the first place, they

don't have sell rules. They get a profit

and they have no idea what to do. Uh so

we'll be talking about really concrete

rules for stage one and two and stage

three and four traders will being giving

some recommendations and tweaks that

they can do to optimize for their style

swing versus position trading. So again

in the chat here uh let me know based on

these characteristics and based on what

we talked about before what stage do you

feel like you're personally in uh based

on these graphics here and and these

kind of characteristics and uh let me

know. You can also be in between a

stage. You can say stage two plus. Uh

and that's kind of in between stage two

and stage three. Probably many of you

guys are stage two plus or stage 3 plus.

Uh I would imagine. All right. We've got

stage two, stage 2.5. Perfect. Stage two

1.52. Uh very nice. So we've got a good

mix of people. A lot of stage twos,

which is perfect. That's exactly uh the

demographic we're trying to help out

here. Uh Steve, how's it going, Steve?

Good to see you. Stage three, four,

perfect. stage two plus stage 3.14.

Nice, Alberto. All right, perfect. All

right, so we got a good mix here, which

great. So, cell rules for stage one,

two, focusing in on that subset. So, if

this is you, really pay attention here.

Again, at this point, you're just

starting out in your trading journey.

Um, you're trying to establish a system

for the very first time. And your goal

is not to perform. It's not to go out

and make triple digits like US investing

champions that have been trading for 7,

10, 20, 30 years. Your goal is to

actually build a system that protects

you and allows you to build techniques

that will help you in your future stage

three and stage four periods later down

the road. So again, the major goal is

consistency and building sound habits,

building technique that will help you

later on in your career. So for these

traders and you know these rules may

feel constricting but that's really the

point for stage one and stage two

traders who are experiencing a negative

equity curve, not a lot of confidence,

not a lot of success. That's the reason

why these are so strict is because we're

trying to help these stage one traders

stop the losses and allow them to

participate in the winners. So the first

sell rule for these folks is to sell at

5% profit. Um sell half of your position

and move your stop up to break even. So

that's very simple, very easy to do. And

that's a lot about this the rules we're

trying to bring here is keep it simple

because keep it simple means that it's

going to be a robust system and not be

overfitted to one period where

everything's working really well,

trending well, while another period

where it's a pop and chop uh type market

uh where nothing's working. So we want

to build a robust set of rules that

helps us survive all those trading

environments. So again, the first sell

rule for these folks in stage one really

and then also stage two is at 5% profit,

sell half and move up your stop to break

even. Sell rule tool um sell rule tool

is kind of divided in two based on

whether you want to be a swing trader or

position trader. And for swing traders,

sell the last half on two closes below

the 21 EMA. Uh for position traders,

it's basically the same exact thing

except instead of the 21 EMA, you're

looking to sell on two closes below the

50 SMA. So again, if you want to be a

swing trader, use this one. If you want

to be a position trader, use this one.

And these are guidelines. And of course,

you want to adapt it to your own

personal situation. And it doesn't

really matter if you use the 21 EMA

versus the 21 SMA versus the 20 SMA. Uh,

pick what you find helpful to you. And,

you know, adapt these rules to what you

find to be very, very helpful. All

right, let's see. So here's an example

of uh an application of this rule set

for VST. You bought through the

consolidation pivot here. You manage

risk at uh the low of the day here as it

reconfirmed through the prior day high

as well as this key level. And your

first sell is very simple. Up 5% you

sell 50% of your position. So remaining

you have 50% uh to ride that prior

trend. The 21 EMA, which is this line

right here, has moved up through your

cost. So, you're doing well and the

stock really shoots up, trends

beautifully, and you ended up selling

with two closes below the 21 EMA for

swing trader, you sell the last bit of

your position, sell 50%. Remaining you

have 0% and the result is a really nice

gain of just under 20%. Um, if you were

a position trader instead, again, you

would have sold your first uh sell right

here of 5%. But you would have gotten a

little bit more of a profit um and ended

up being a net result of up 31%. Uh, I

think this was up about 50, a little bit

50% here. You've got around 83 all the

way up to, you know, 135 or so. So,

really nice solid gain and you got a net

result of

31.5%. And I want to pause here and talk

a little bit about uh just for a moment

about the pros and cons of swing trading

and position trading because really they

can be both extremely successful. You

see US investing champions with both

styles. Um, however, swing traders are

going to be dealing more in the momentum

moves and there's a little bit more

potential because once a momentum move

ends, they can move on to the next one.

While position traders, there is maybe

uh the potential for um some opportunity

cost uh based on, you know, staying with

the stock that's already made a really

nice move and is just kind of building a

base. There is some time loss there

where your money could be working

somewhere else. However, on the flip

side, a swing trader is never going to

catch a 300 400% move unless they have a

rule where if they have a certain amount

of profit cushion, then they switch over

to more position type trading rules. But

a position trader could have, you know,

you know, a lot less trades and have

extremely great success if they find the

true market leaders and enter those

stocks um and participate during those

longer moves. So, there's pros and cons

for both of these. Um, and for position

traders, this I think is better suited

towards uh traders who are doing this

part-time. They have a full-time job.

There's less action they need to take

and it's a little bit calmer as well.

You can look more at weekly charts while

swing traders, it's a little bit little

bit more maverick. Uh, you've got to

kind of uh keep rotating your money to

turn over your edge. So, that's a little

bit on the differences and pros and cons

versus swing trading and position

trading. And I think with that said, you

can kind of, you know, adopt a h a

hybrid approach, which is kind of what

I've done to get a little bit of the

benefits of both depending on the market

environment and the situation. And we'll

talk about that in uh the rest of the

webinar. All right. So, these were the

basic cell rules. Again, sell your first

your first uh 50% of your position of 5%

and then depending on swing trading

versus position trading, sell on two

closes below the relevant moving

average. There are some progressions as

you gain more comfortable. You're more

solidly in stage two. You feel like

you're stage two plus. So, if this is

you, listen up. This is the time to pay

attention. Uh the first progression, and

I do want to emphasize here to not rush

this process, especially if you're very

early in stage one, it's going to take

time to really internalize these rules.

And just this basic rule set can do

extremely well during trending

environments and when growth stocks are

working. So, don't feel like this is uh

you know putting on um training wheels.

This can do extremely well and will also

protect you when the market isn't quite

as strong. But these are some

progressions that you can adopt uh if

you feel like you want to make

advancements and these are potential

tweaks to to your existing process if

you've got your own existing cell rules.

These are some ideas for you to maybe

adopt uh to tweak and improve them over

time if you find them helpful. So, first

instead of selling half of your position

at 5% um instead do a third and sell the

next third at your average gain over the

last 20 days uh or sorry 20 trades and

then sell the last third on the normal

two closes below uh the moving averages.

So instead of selling half at 5% you

sell a third uh another third at your

average gain and then the last third on

um in weakness using the moving

averages. Uh the next progression is to

sell a third to 5% a third into strength

as a stock gets extended above your

average gain and gets as I say here gets

visually extended from a moving average

and we'll talk about different ways to

determine extension later on in today's

webinar and then sell the last third on

weakness using the same moving averages.

The next progression is to use the rule

above but allow yourself to add back a

third if the stock forms another lowrisk

entry tactic. So again this is a little

bit more advanced. It's about trading

around a core position and you know

re-entering a stock. If you know there's

another lower setup against a moving

average, a new base forms and then sets

up again. Uh you can add back a third

that you sold prior. And then the last

progression is to uh again sell a third

at your average gain. So you're no

longer using that 5%. You're looking to

hold a little bit longer. Uh a third

into strength and then a third into

weakness using the moving averages. But

you can also add back up to 2/3 of what

you sold if the stock forms another

lowrisisk buy point. So let's go through

an example that same example of VST

applying these different rule

variations. All right. So again, this is

the same VST trade. You're using the

same entry tactic and buy point here.

And this is the first variation where

instead of selling 50%, you're selling a

third at 5%, a third at your average

gain, and a third at two closes below

the MA. So here is your initial sell of

5%. You've got remaining 66% instead of

50%. Uh your sell 2 is at your average

gain which we used in this case an

average of 10% gain. Uh you sell 33% and

you've got remaining 33%. Uh then the

stock trends and you've got your normal

uh sell rules below the moving averages

uh for swing traders down here and

position traders up here. And you might

note that this actually performs worse

than the first rule set that we talked

about. Uh but again, this might be a

little bit more dynamic and might feel

more comfortable for swing traders

especially to sell a little bit more um

and then you can rotate that capital to

another opportunity versus being stuck

into a stock uh as it's trending above

the 21 EMA and waiting for that last bit

uh to sell before you can move on. So

this is a a rule progression that you

can adopt. Maybe you prefer the first

set. Uh go go go with that. Uh f, you

know, figure out what works best for you

and use those cell rules. Here is the

second variation um where you're selling

on the extension instead of um on your

at your average gain. So again, your

first sell is up 5%. Move your stop to

break even. That protects you. Then

you've got an extension here, a gap up

and strong move. You didn't sell at the

high of this day. You sell sold as it

was pushing higher and really becoming

extended with a gap here. And then

you've got your last sell again under

the moving averages. Swing traders again

taken out here. Position traders get

taken out here. And you have again

pretty strong gains here about 20% and

about 27%. So performs better in this

case than the prior variation. And again

it's not about individual trades and how

these rule sets work on you know an

individual trade and individual stock.

It's about how they work over time and

how they fit your personality. how much

risk you like to take, how much you know

draw down you like to experience because

you if you don't like experiencing draw

downs, you want to sell more into

strength more as a stock is going up and

making momentum moves and you know just

letting a trailing piece um on for a

bigger move. So it's all about fitting

these rule sets and figuring out what

works best for how you view the markets

and how you you know experience risk and

your over your own personal risk

tolerance. Here is variation three where

you can add back uh 33%. Um and here is

the add back uh point here as it formed

a new base and undercut and reclaimed

the 20 21 EMA and broke out of this base

here. Um for a swing trader, you

actually sold out of your whole position

before that, but you added back 33%

because that's in your rule set. You're

able to do that and you ended up selling

that for 23% 23% gain here as it broke

down back below the 21 EMA a little bit

higher. uh you've got a 23% gain instead

in instead of about a 20% gain. And for

a position trader, you actually added uh

back here. Um and your overall net is a

31% gain. So you sold 33% up 59% and

that last 33% that you added back that

you sold back here at 5% um and added

back here um here as well. Uh so you've

got a little bit better of a gain. So

again, this allows you to trade around

the core a little bit more. And this

next variation allows you to re-enter

2/3. Uh so you've got uh your swing

trader here up 29 29% now and you were

able to stick with that trend a little

bit more and position trader just gets a

little bit more juice and a 35% gain

because they were able to add back on

the next lowrisk buy point a little bit

more and trade around that core

position. Uh so those are the four v

variations. Again, here is uh the uh the

basic basically the definitions of them.

And in the chat right now, let me know

which kind of uh rule set or variation

kind of appeals most to you. And again,

it's going to be dependent on your

situation. If you like to sell more to

strength versus weakness and also again

where you are in your trading journey.

Uh you know, if you're more advanced,

you're likely not selling half at 5%,

maybe you're selling half at uh your

average gain, half into as an extension,

holding the rest for the 21 EMA. Uh, but

let me know in the chat which variation

kind of makes the most sense to you and

how you like to personally trade. All

right. Uh, J Patel says number

two, one to two and fast number four.

So, we've got a mix. Again, everybody's

going to think a little bit differently

and different rule sets are going to

appeal uh better to different different

situations and different types of

traders. Uh, but again, these are just

examples as well of tweaks you can make.

Maybe you're not going to adapt exactly

variation 4, uh, but you might tweak it

to how you like to trade and your

personal uh, sell rules. Now, for stage

three plus traders, the goal is

different. Again, the goal for stage one

and two is all about building

consistency, establishing an initial

system to actually test out who you are

as a trader. Stage three and stage four

is more about performance and actually

performing really, really well. And

severals will adapt to the character of

the stock and the actual market

environment. Maybe the market

environment is rewarding, you know,

strong trending markets, uh, you know,

holding on to positions longer. You

adapt a little bit more and lean more

into selling into weakness versus

selling into strength. And sell rules

are tailored to the traders biases

selling into strength or weakness.

Again, based on their personal way of

interpreting the markets and instead of

rule one, which is sell into five, sell

at 5%. You can sell at extensions uh as

your first sell instead of fixed levels.

uh so you get a little bit more uh

variability in your cells but it might

you know lead to increased performance

over time and instead of sell rule two

which is breaks below two moving

averages you could divide sells between

uh the 21 EMA and the 50 SMA to hold a

little bit longer and you can use

judgment on the negativi negativ sorry

the negativity of the two close below a

moving average and what I mean by that

is let's go to this um this example

actually right here so this first close

below the 50 SMA is very negative, but

the next close is higher than this bar

right here. And let me let me zoom in

here to actually really show

this. So this first close below the 50

SMA is very negative, closing at lows,

big range bar, but the next day is an

inside bar that closes higher than this

close. If you want to be, you know, if

you're more of a stage three, stage four

type trader, this might not trigger your

sell rule as two closes below the 50 SMA

because this close is more positive than

this close right here. And that allows

you to stick with that trend and, you

know, stick with it. This low is never a

loss. That could be your rule. If it

breaks below this low, that's your

that's your sell rule. Um, and you hold

on and this one rallied and and kept on

going. So, that might keep you in a

little bit longer in certain situations

when a stock is very strong. Um, so

that's kind of a nuance or uh variation

that you can adopt um if you would like

to as a stage three or four trader. Uh,

so those are some ideas for the more

advanced traders out there about how to

adapt their cell rules to be a little

bit more malleable. Um, and you can do

that as a stage three, stage four type

trader. But again, stage one and two is

about uh rigidity, system, consistency.

Stage three and four is about

performance and there's a little bit

disc more discretion and variability

allowed uh for those type of

traders. All right, so here's a stage

three example maybe how you would apply

this as a stage three trader. These are

similar to my personal sell rules. So

you've got that same entry point. Your

first sale isn't at 5%. It's at this

first extension up 20 20%. You've got

still um and you're not selling third a

third. You're selling only 25% looking

to hold the majority for a bigger move.

Uh, you've got another sell on another

extension. You sell 25% of 54%. You've

got 50% remaining. And your last sell as

a swing trader is to close below the 21

EMA. You sell 50% um up 34%. So, you get

a nice trade overall. And your rules

allow you to re-enter 100%. Or if you

still have a full position, add 25% uh

back. So here on the this next lowest

buy point, you re-enter and your final

sell as a swing trader is two closes

below the 21 EMA. Um with that last

trade netting another 12.7%. So instead

of about a 20% gain which we talked

about with the previous variations for

earlier stage traders, you have almost a

50% gain. And that's where the

performance really comes from is waiting

for those key points. this extension,

this uh key reversal bar extension, and

being able to add back and start a new

trade on within that same longerterm

trend, a new swing trade when we get a

re reinvigorated momentum move. And even

looking at this example, a stage three

four trader might not be waiting for two

closes below the 21 EMA in this case

because look at this bar. We break all

these lows altogether, this lows as

well. So you might have actually raised

your stop to this struct element in

structure and uh you know improved the

second trade here and gotten a little

bit more juice and performance out of

the second trade. Uh again just adding

to your overall profit. Uh for a

position trader mindset again maybe you

sold one here into the extension uh sell

sold again here um and then you add back

here and you're selling you know the 25%

position up 20 10% here and overall get

a 61% gain. So both of these situations,

this shows how a stage three type rule

set, which is a little bit more

adaptive, a little bit more

discretionary, a little bit up to the

personality of the individual stock, can

allow you to perform better. But this is

only available for stage three and four

traders who have proved themselves to be

able to manage risk. Uh they've built

that technique over time and uh use that

rigidity that they learned in stage one

and two to allow them to be a little bit

more creative in stage three and four uh

to perform a little bit better. So this

is example of how to apply a little bit

more of a fluid rule set that adapts to

the personal situation and this is

pretty similar to uh my personal uh

trading rule set as well. All right, so

a little bit more on market environment

and sell rules. Uh different market

environments will favor quicker rules

and put more emphasis on selling into

strength or weakness. And this is a

really important point because I think a

lot of people get uh worked up about,

you know, there's a 2024 or 2020 and

they look back over their trades and

they're like, "Wow, if I just hold until

the stock breaks the 50 SMA or 100 SMA,

I'm going to make 300% every single

time. I sold way too early." But the

reality is that not every year is like a

2020 or 2024. and the rules that would

have worked really well in 2020 or 2024

are actually overfitted to that market

environment that was extremely good and

not going to happen every single year.

Um, and so when they adopt those rules

that, you know, to hold on to a stock

until it breaks the 50 no matter what,

the next year is choppier, breakouts

aren't falling through nearly as much.

And instead of getting those 300% 400%

winners, uh, they get stopped out a lot.

uh they hold on too long to their to

their losers, to their to their winners

as they're pulling back uh way back into

the moving averages and they just don't

perform using that rule set which was

supposed to be the secret sauce and

perform really well. But the reason

being that it didn't is because the

market environment is not always

conducive towards longer term uh poor

position trading sell rules. Uh so you

want to remember that as you're looking

back on your trades and deciding what

rule sets to use is you want to avoid

overfitting and think about a rule set

that is robust that will adapt to

different market environments both

really great trending ones as well as

choppier ones and protect you in those

situations. And uh just be be aware that

a rule set that worked really well in a

strong trending market environment may

perform horribly in a very choppy uh up

and down volatile market. Uh so that's

something really important to remember.

And uh a way to help you identify if

you're in a trending or shopping

environment that can be an input to

allow you to switch rule sets or just be

more aware is you can track your average

gain over the last end trades. This

could be 20, this could be 50, this

could be 30, this could be 10. And if

your average gain is increasing um or

decreasing, that could help tell you are

we trending or are we uh more choppy. If

it's increasing, it's more likely to be

a trending market environment where

longerterm sell rules may uh do better.

But if it's decreasing, you might want

to tighten things up because it is a

little bit

choppier. And uh also, I just want to

point out that, you know, this is pretty

obvious, but is worth mentioning as

well. Um stronger markets after

significant correction/bear markets will

favor those longer term rules. So you

might want to lean more into um you know

the position trading type mindset after

a significant bare market or correction

like after COVID after the 2023 bottom.

That's when the long trends really

happened. That's where we saw PLTR

Nvidia start there a thousand% moves

that would have held up really well with

uh longerterm sell rules. Uh so keep

that in mind as you go through it. And

also I want to mention here when a

market trend goes sour it often happens

fast and growth names will all kind of

drop in tandem altogether. So uh you

want to be aware of that and you know

act fast and manage risk in real time

and also you can track the leaders

carefully and if they are breaking down

be on guard for more weakness and that

can help you inform you about the market

environment and how you should be

managing your positions. Um so you know

this is just an important slide to think

about how the market environment will

impact which cell rules are you know

working well in that current uh market

cycle. All right so we'll take a quick

Q&A break. I'll uh so drop your

questions in the chat here and uh we'll

go ahead and answer a few questions.

Also this is the QR code that you can

use to order the trader handbook. If you

find these webinars helpful, you'll

definitely enjoy this trader handbook.

Everything we talk about here, we talk

about at length in this book as well.

And the last chapter, chapter 12, is a

model book of the greatest winning

stocks over the past decade. Um, and

it's great study material to help you

speed up your learning curve and study

those winners to distill the concepts

that we're talking about in these

webinars. So, definitely go ahead and

order yours if you haven't already. And

let's go ahead and see if there's any

questions here. Shouldn't the initial

sell depend on what your initial stop

is? Uh, it can if that's your rule. Um,

you know, you could sell at 3R, 2R

instead of that average gain or 5% rule.

But for stage one, two traders, we're

just using a very simple and effective

5%. Uh, but if you're more stage two

plus, stage three, you can say, I'm

going to sell at two risk multiples or

three miss multiples. And that's how you

can define your initial cell, cell

number one. Uh, clarify extension. We're

going to get into that uh very shortly.

So, great

question. Does the same apply for short

selling rules? I would say short selling

rules are the same on the flip side, but

you want to be faster and lean more into

in terms of selling into strength for

short selling rules just because the

moves are faster. Uh the the um the

moves up from sell, you know, the moves

up after uh a strong extension down are

more vicious. So you want to lean more

into in terms of selling to strength,

which means, you know, selling into

weakness if you're uh or sorry, covering

into weakness uh if you're if you're

shorting. Uh so you just want to be a

little bit faster when shorting as well.

Hard stop versus mental stop. We'll talk

about that at the very end. And uh we'll

we'll dive right in because people a lot

of people are talking about extensions.

So let's discuss more. Oh, actually

first I want I want to talk a little bit

about this. Let me get a sip of water

here. So this is more for the position

traders out there. So pay attention if

that's you.

tips for holding big winners longer um

and getting the most out of them because

I think a lot of people would have much

better performance if they kind of got

out of their own heads and when they

have a big winner at 40% plus actually

let it work and and let it trend for

them instead of time choking it off and

micromanaging it. So, uh first things

first, the best trades that really

contribute to your performance need to

be handled carefully to not choke them

off and sell too early. And uh probably

many of you have sold a stock that went

on and doubled and tripled. And if this

is you, hopefully these tips will be

helpful. So if you do get a significant

cushion, you know, around 40% plus, and

the market environment is trending and

strong and the stocks looks to have a

lot more runway, uh, focus on the trend

and not so much on the day-to-day

movements. I'll talk about what exactly

that means in just a minute. And this is

because we can get scared out of our

best stocks, our biggest winners that go

on and double or more from there simply

because of one to you three day sharp

pullbacks that simply recover and keep

moving higher. You know there's many

instances during this Reddit trend where

we pull back for 4 days, recover, pull

back, recover, pull back, recover and

keep going until it really breaks trend

here. And this started all the way down

here. Very strong action all the way

until we actually meaningfully broke,

you know, a trend line. the moving

average, the 50 SMA, whatever your

definition of trend is. You know, there

are a lot of sharp pullbacks in here

that could have shaken you out and

allowed you to, you know, miss out on

all these profits and gains uh to be to

be gained by getting out at the proper

points as it's actually breaking down uh

into a downtrend from being in an

uptrend.

And one really good tip that uh Rye

actually actually taught me a few years

ago is when you've got a stock like this

where maybe you entered right here,

which is actually where I entered and

you get a gap up, you've got a really

strong profit, you add more, you're

you've got a nice position, very strong

position in this name. Uh you know, when

you've got a great profit all the way

from down here, um you want to think of

your profit more in terms of the

trailing 21 EMA versus what the stock is

doing on a day-to-day fluctuation. And

the reason why this is important because

you know the changes in P&L from here to

here are pretty significant. But you've

got a great cost basis. The stock is

still acting fine. It's above a rising

21 EMA, above a rising 50 SMA. And this

fluctuation doesn't really matter

because in a sense it's noise. As long

as the stock is above a rising 21 EMA,

it's in a healthy trend. And you want to

give it the benefit of the doubt,

especially if you have a great cushion.

So watching versus the 21 EMA smooths

out kind of how you're perceiving your

profit in that position and allows you

mentally to stay with that trend a

little bit longer until it meaningfully

uh breaks down and begins a trend below

that that 21 EMA to end that trade for

you. So again, if a stock is trending

above a rising 10 21 EMA and 50 SMA, it

is healthy. Let it do its thing. Let it

work. Um and this is really important.

Big winners can double or more while

never breaking their 21 EMA. I think

Tesla went up several hundred% without

breaking the 21 EMA back in 2020. NEO

went up like 500% without breaking the

21 EMA. This moving average will keep

you in the strongest stocks instead of

trying to micromanage everything and try

to be perfect. Sell up here, buy back

here, just letting that 21 EMA do the

work will help you uh both mentally as

well as financially profit from that

trend a little bit longer. Then another

way to stick with the trend a little bit

longer and uh let me know in the chat.

This is actually my question for the day

to win a signed uh book. What stock is

this? This is a guppy chart. These are

moving averages. What stock is this? Let

me see who gets it here and you'll win

the signed copy of the trader handbook.

Uh so let me know your thoughts here.

But GMMA charts are basically uh they

eliminate the day-to-day fluctuations by

only showing the moving averages. Uh so

we've got some short-term moving

averages in red um and longerterm moving

averages in blue here. We've got trader

EMAs are the short term and uh investor

moving averages are the longer term in

blue and you're looking for a red,

white, blue pattern. This was taught to

me by Dr. Eric Wish. This is a great

thing that he he taught to us.

Basically, if you're in a red, white,

blue pattern with red moving averages

with some white space above a blue,

there's nothing to be done if you're in

that stock and with a good profit. You

just want to let it work until it

actually breaks down into a red below

white uh you know sorry a blue white red

pattern. Until that happens there's

nothing too much to be done. And even

here it's more just basing versus

actually breaking down into a blue white

red pattern. So again if red is above

white space above blue and you've got a

strong profit let a stock work and let

the trend work and do its thing. But

once we meaningfully break down and this

is where it started to break down here.

Uh this is where you want to be more

selling and uh just be looking to take

profits as we

bl red pattern the inverse of this

strong trend here. And uh let's see who

got it here. Got a lot of PLTR guesses.

Netflix. All right. Awesome. It looks

like Ronaldo uh got it. This is Nvidia.

This is the start of its move back in uh

2023. And uh this is the the recent

action as it's basing and pulling back

and starting a potential stage four. So

Ronaldo set send me a DM on Twitter and

we'll get you hooked up with a free copy

of uh the traders handbook. Awesome.

Great great stuff guys. All right, cool.

So these GMA charts I think are really

powerful. I think a great exercise for

everybody watching right now to do is

you know plot out a stock that you feel

like you should have done a lot better

in. Uh look at your entry. plot it on a

guppy chart and if it's way back here,

just look at where you would have sold

if you just used the moving averages and

waited for a blue, white, red pattern to

develop and see what profit you would

have gotten versus uh you know what you

actually got and see if this this system

this process using these guppy charts

once you're at a great profit uh could

help you stick in uh stay with a winner

longer. Another variation of course is

also to use just a weekly chart and

focus more on the weekly action once

you've got a great profit. And this is a

key point one I want to emphasize and

this is something that Jim Roel really

emphasized to me is to capture a monster

winner of 200% or more. You will need to

sit through one or two bases at least

within a strong stage two uptrend. And

you're going to have to, you know, stick

through multiple earnings reports. Some

of them may gap down on you, but in

order to get a monster winner, you need

to, you know, understand where your cost

basis is, your profit cushion, what

you're willing to give back off the

table in order to sit through and get

that longer term move. So, there's

sacrifices that have to be made if

you're active investor, a position

trader, a swing trader. There's always

pros and cons to both. And part of the,

you know, the cons of position trading

is it's going to take quite a quite a

while and you're going to have to sit

through bases, consolidations, earnings

reports, uh, which add risk, uh, in

order to profit potentially from a

monster winner, which I know probably

many of you had a really good, um,

Ronaldo, uh, shoot me an email at

richardtraderline.com, and we'll we'll

get you set up. So that's

Richard.com. Um, so yeah, in order to

sit through a monster trend like this

and get uh really strong profits on app

or a similar name, you have to sit

through bases and sit through earnings

reports. All right, so here are some

good quotes for position traders/active

investors. This is from Jesse Livermore.

It was never my thinking that made the

big money for me. It was always my

sitting. Got that? My sitting tight. It

is no trick to be right on the market.

You always find lots of early bulls in

bull markets and early bears in bare

markets. I know many men who were right

at exactly the right time. I began sell

buying or selling stocks when prices

were at the very level which should show

the greatest profit and their experience

invariably match mine. That is they made

no real money out of it. Men who can

both be right and sit tight are

uncommon. And that's from Jesse

Livermore. And what he means by that is

even if you bought correctly here, the

ability to sit through this trend as the

stock is working from you is very tough.

And that's why we need to have rules

that say I won't sell until we we break

below the 50 SMA or I won't sell until

we break below uh and start a blue white

red pattern. These rules protect us and

allow us to profit from these monster

winners. So that's really important to

remember.

Then for more active traders, I've got

one from Darvis here. As to my basic

strategy, I decided I would always do

this. I would just jog along with an

upward trend, trailing my stop-loss

insurance behind me. As the trend

continued, I would buy more. When the

trend reversed, I would run like a

thief. So again, active traders, more

swing traders, it's a different

perspective. You're more trying to just

participate when the momentum is

strongest and get out uh get out of the

way. Uh run like a thief when that

momentum ends and we start breaking down

a little bit. uh or even you know in

this environment you can sell to

strength and uh just trail the rest and

uh wait for the stock to really break

down for that last remainder of the

position. All right, so now we'll get

into selling to strength rules, selling

into weakness rules, and you know what

the hell does extended mean and how do

we define it? So let me take a quick

pause here and see if there's any

questions. All right, I don't see any.

So perfect.

Okay. So, selling into strength. Selling

to strength means selling a stock as it

is rising becoming extended and volatile

or is simply meeting profit target

levels that you might set at 10% your

average gain. You know, 3R, 5R, 10R,

whatever your rule is. That's what

selling into strength means. Selling as

a stock is rising and meets uh those

criteria. And selling it to strength is

more suited towards swing trading and

its focus is on locking down profits

after quick moves, momentum moves. And

the benefit of this is it reduces equity

curve draw downs because you're selling

as a stock is rising. Um although it

does increase trading and you know you

you're basically required to go and

rotate that money into a new idea, a new

momentum move. Um and the bad thing

about this and the the the difficult

part and the art of it is that

extensions are a judgment call. That's

why there's so many questions about uh

you know what does extended mean and you

can define extended based on a visual

extension. This is how William O'Neal

did it after looking at millions of

charts I'm sure by the time he uh

retired. Um but you know you can do it

on a visual extension. You know how far

extended are we above a moving average

compared to we ha to we have been in the

past. Just kind of make a judgment call.

All right we're about this this far. You

know previously we only got this far.

All right we're a little bit extended

here. You can also define it more

objectively based on an ATR from a

moving average or a percentage amount

from a moving average. You know, rule of

thumb is 10% above the 10 EMA, 20% above

the 21 EMA and 50% above the 50 SMA,

100% um or more above the 200 SMA. Those

are just rules of thumbs and it's going

to depend on the the character of the

stock, of course. And you can also base

it on relative measured extension. This

is an indicator that we developed in DFW

to actually objectively uh measure

extension and I'll show you that in the

examples in just a second. So this can

be a really simple and effective way to

say this is extended based on prior

price action. You can also use key

reversal bars. We'll talk about exactly

what those are. Uh failed breakouts are

also a time to sell to strength. Uh when

we try to break out of a base and fail,

that can be an early warning sign to get

get out of the way. And then gap ups

after powerful moves. But I want to be

very careful here. Gap ups after

powerful moves. When a stock has already

been trending for quite some time, it's

extended in its move, it's extended

within its statue uptrend. And the gap

is more likely to be exhaustive than a

sign that there's a lot of demand,

renewed demand from institutions. Gap

ups early in a trend are a very strong

positive sign. Uh but later in the

trend, they could be more exhaustive and

more likely should be sold into than

accumulated on. And that being said,

even for early uh stage gap ups, um

swing traders likely are selling into

those because again, their goal is to

simply rotate capital out of the

powerful movers into the next

opportunity. And gap ups are gift in in

their minds and allow them to get a

profit very quickly. Uh so even for

swing traders, uh early gap ups are

likely to be to be sells or spots of

sell to strength as you see in this

diagram. And I think this is a really

good rule of thumb as well. If you're

thinking about, you know, should I sell?

I don't know if I should sell it. I'm up

30%. Should I sell? Should I hold? Uh,

look at where the 21 EMA is, which kind

of defines the trend for your time

frame. So, use the relevant moving

average, the 50 SMA, the 10 EMA even.

And if you're not able to stomach a

pullback of your position to that key

moving average, it's a good idea to sell

a partial. So, if you if visually you

you expect or or think about if the

stock pull back next week all the way to

the 21 EMA, which defines what an

uptrend is for me. Um, if you can't

stomach that pullback, which might be

10%, 20%, and uh really diminishes your

profit on the position while a stock is

still in an uptrend, that's a good point

to, you know, sell 25%, sell a third,

sell half, so you can stomach that

pullback, that natural pullback within

the context of that uptrend.

And Mickey asked uh please repeat the

percentage points of extended above the

moving averages. Yeah. So this is just a

rule of thumb from the 10 EMA about 10

10 to 15% above that is extended. Again

higher ADR stocks it can go a lot lot

bigger than that. Uh from the 21 EMA

about 20 20 to 30% depending on the

stock's character. Uh from the 50 SMA

50% uh from the 200 SMA double 100%

above that is considered a little bit

extended. But again, these are all

judgments and there's always art and uh

the character of the stock to take into

account as you're defining what is

extended. And that's where um relative

measured extension kind of comes into

play to actually give you a framework

that's objective uh to you know um

interpret extensions on all stocks the

same way. All right. So what the hell

are key reversal bars? Let's get into

that. So key reversal bar is when an

extended stock gaps up or has a powerful

move higher and then reverses even

harder and closes well off highs likely

under undercutting the prior days low

and maybe even multiple days low. And

you can see in this case uh and let me

know what stock this is. There's there's

no prize, but just I want to see if

there's anybody who can get it. During

this move, there are many gap ups. Uh

it's gapping up almost every day. It

looks extended almost every day. Uh it's

pretty volatile and this day is just

kind of at the end of this exhaustive

phase. So let me know what stock this

is. I want to see if there anybody who

gets it. Uh Meta AMD. Nope. Nope. Not

SMCI. There we go. Say got it. MSTR.

This is MSTR guys. Um so this is a key

reversal bar when we have a gap up or

initial move higher and then an

extremely negative reversal down.

breaking the high, breaking the close,

breaking the low, breaking multiple days

lows. This is the type of bar that we're

looking out for because this could be a

sign to sell some into it is into

weakness, but it's more closer to highs

than waiting for a break below the 21

EMA. So, there's going to be an early

sell signal for position traders or, you

know, the last bit that you take off as

a swing trader. Uh, so these periods,

these key reversal bars often lead to

the start of a pullback or a basing

period. And that's really important. And

most significant uh these are most

significant after a stock has already

been trending for multiple weeks and or

is showing signs of climactic type

action. You know multiple gap ups many

green days in a row increasing

volatility increasing slope of the move.

So if you visualize a slope this is the

rate of ascent and then it kind of

increases this way and often these days

are the largest range bar in the move

and on very high volume as well. So,

these are bars that you want to look out

for. And once you kind of start looking

for them, you'll see them all the time

as a stock is topping, as a stock is

starting to base out. And we'll show a

few examples uh later on as

well. So, this is MSTR. Uh this was a

the zoomed in view that I just showed.

This is the key reversal

bar. And you can see throughout this

move, it really respects the 10 EMA

here. It's a faster moving stock. So the

10 EMA is kind of the the moving average

that I would consider for this name. And

within that, there's a lot of points

where it gets visually extended from

that 10 EMA. If you look at how far it

kind of gets from the 10 EMA, this kind

of matches it or exceeds it. This kind

of matches it or exceed it exceeds it.

And each time it does that, it pulls

back for a few days and even undercuts

the 10 EMA. And these drops look small,

but in reality, they're like 10 15%

move. So, you don't really want to be

sitting with that um that type of move

in a full position. And this would be

the buy point as it uh uh gaps above the

50 SMA, forms this tight flag inside day

and breaks higher. That would be the buy

point we're using in this case. And

these pullbacks are something to avoided

or just you want to sell into these

extensions. Again, visually extended.

Definitely bigger than this and this as

well. Um strong bar though. It holds up.

Uh you've got a key reversal bar here,

but it actually recovers, holds, and

gets even more extended. And again, look

at the distance, the air from the 10 EMA

compare compared to back here during the

normal trend. This is a clear sign that

we're getting extended. We get a fadeoff

highs. And you might want to be taking

some off every single one of these days,

every single one of these extensions.

Even though it's not the top, you might

want to be taking some off. So then we

when we do get the pullback, significant

pullback from the key reversal bar,

you're able to handle that a little bit

more objectively because you're not

focused on how much money you're losing

in the moment. And this is the key

reversal bar. This starts the basing

process which it's still been in um for

quite some time now. And we'll see if it

does recover and and set back set back

up again. But again, this key reversal

bar could be your last sell as a swing

trader or just you know a warning sign

to sell half as a position trader. And

down here we've got the deep view

relative measured extension indicator.

Anytime it gets in this red area, we're

getting a little bit sorry, short-term

extended from the 10 EMA. I'm using the

10 uh EMA, sorry, simple moving average

here with the 50-day look back period,

and that is kind of what the indicator

is trained on it. It's looking at the

moving average as well as the past 50

days and how extended we've gotten from

that moving average. So, anytime we get

into this red zone, it might be a time

to take profits back here, back here as

well. Um, and you know, that's how you

can use this indicator. We've done a

whole webinar simply on RME. So, uh,

I'll kind of link that below as well and

take a look at that if you're curious

about this indicator

here. Here's an example with Tesla. Um,

this obeys more the 21 EMA. So, that's

why I'm using the 20 uh EMA uh, sorry,

20 SMA with RME. And again, we're

getting extended in this area as we're

gapping up. A lot of gap ups. Definitely

extended. This would be where you're

selling some of strength. And then we

get a Q reversal bar here, breaking all

these lows all at once. And this starts

a basing process before it sets up again

and went on another nice move. But this

Q reversal bar and recognizing that

allows you to protect yourself from this

gap a little bit. Maybe you're still

selling a little bit, but maybe not your

whole position. and you know this

further pullback all the way from 270 up

here all the way down to you know 180

almost 100 points here uh you'd be able

to hopefully protect yourself uh and and

sell earlier to protect yourself from

this decline here by recognizing this

key reversal bar and this would be the

entry range breakout upside reversal to

prime the setup strong push through that

pivot level and you get a gap ups a

little bit short-term extended swing

traders would be selling likely into

this day this day as well this day as

well and then maybe selling the final

piece as it breaks uh you know prior day

lows right here on the Q reversal bar.

So that is another example with

Tesla. Here is Reddit. Uh you get an

entry on the 50 SMA reclaim or the entry

right here on the flag breakout and we

get an extension here. But remember this

is a also a powerful earnings gap and

this is a new stock. So this is kind of

more recent and newer within the stu

uptrend. So maybe you wouldn't be

selling as a position trader into

strength here, but a swing trader

definitely likely is selling some into

strength. Uh you've got uh another

extension here as well. There's a gap up

that was sold after 25% move and uh this

would be a sign to take a little bit

profit as a swing trader. Again, gap ups

are gifts if in a stock that's already

short-term extended. And you get another

gift here. Strong powerful move up. I

think this is also with a an analyst

price target here. That's another sign

that the gap might not hold and we pull

back afterward. we get another extension

volatility and this actually starts a

base here um for a few weeks here. So

again, these extensions as a swing

trader, you'll be looking to sell into

them. As a position trader, you want to

be aware of them and recognize where a

stock within its life cycle. Maybe

you're not selling early extensions as a

position trader, but you might be

selling very uh extreme ones or later in

the trend just to lock in some profits

and weather a pullback to the 21 EMA or

the 50 SMA.

All right, then we'll get into selling

into weakness

here. All right, selling into weakness.

Selling into weakness obviously is

selling as a stock is breaking trend or

showing weak or abnormal price action.

And for this, the mindset is we're

focusing on riding the trend until it

really confirms that it is breaking down

and starting a downtrend. And this is

going to lead to larger draw downs off

equity highs, but potentially greater

reward because you're sticking with that

longerterm trend until it ends while

selling to strength. You might exit

here, here, or here. Here you're you're

participating in this longerterm trend,

however long it lasts, until it actually

breaks down. Signs of weakness that you

want to be watching out for. Closes

below key moving averages, breaks below

trend lines that you can draw at key

lows here, breaks below key lows. So,

you know, this is a key low here. We

broke below it. Instead of basing above

it, uh we broke below this low right

here as well. Uh large gap downs. So,

off the top, if there's a failed

breakout and then very large gap down on

earnings, that could be a sell signal.

Uh reconfirmations of lower highs. So,

here's a lower high. We've reconfirmed

down. That would be a sell signal as

well. Uh short-term moving averages

curling down and acting as resistance.

That's also what happens when we're

starting a corrective down period in the

market. And let's dive into some

examples here. So, here's Reddit. Here's

the base that started here. Uh, we get a

nice further move up from this base. But

then what happens right here? You can

see we broke out of a pivot, moved

higher, and then started pulling back

and gapped down and closed below this

level. So, this is a subtle thing that,

you know, more advanced traders will see

is this reconfirmation failed. And even

though we're pulling back to the 21 EMA,

we've got a gap down that tried to rally

through that pivot again, but couldn't

close higher. And then we leak lower the

next few days. So, this is the first

sign of weakness. Then we get two closes

below the 21 EMA. That might be your

sell rule um as well. Then we get a bad

close below the 50 SMA. Base breakout

fails. You know, this breakout here,

this broke out back in this area fails.

Another negative sign. The 21 EMA is

curling down here. We form a range here.

it can't rally higher into the 21 EMA.

You can see um a lot of wicks up here

and tries to move higher, reconfirm

down, break belows below the range, gap

down, gap down. Gap downs are key, guys.

You want to be watching out for these

gap downs. And if they can be filled

quickly and recovered quickly, that that

might kind of uh heal things, but if

they can't be healed, it might lead to a

lot further downside. Uh and then here,

decisively, we're trending below a

decline 21 and 50 SMA. So this is kind

of the the topping phase here and some

signs of weakness that you want to be

looking out for. Failed breakouts,

failed pivot reclaims, uh breaking below

moving averages and all this that we

note here on the

chart. All right, here is TDD. Uh you've

got a nice uptrend here. We break below

the trend line as well as the 50 SMA in

this case. But also even before that,

this is a little bit of a consolidation.

We get a breakout. The expectation is we

go higher. Instead, we can't, you know,

fall through to the upside. uh we kind

of stagnate at the pivot, we leak lower

and then we get a bad break of the 21

EMA. This would be definitely a sell

signal here. Then we break below the

trend line as well as 50 SMA start to

leak lower. The 50 SMA acts as a

resistance multiple times and then we

get very large gap down. So if you're

not out by this, which you definitely

should be as a swing trader in even a

position trader, we're below the 50 SMA

at this point. Uh you're definitely want

to exit here. And I think this has

declined about 50% since this very large

gap down on very large volume. So all

these warning signs are things you want

to watch out for to protect yourself

before further weakness happens and

before a stage stage 4 downtrend really

takes

hold. Here is GEV and this is something

I want to talk about large gap downs. Um

you know this is something probably a

lot of people experienced recently with

Deepseek. you know, Nvidia got hit, GEV

got hit, VST got hit. A lot of the

high-flying names which were the leaders

got hit pretty hard. Uh, so let's talk

about, you know, this large gap down.

We'll talk about how to handle them

later on. But here's the entry range

breakout, strong trend, and then we get

the catalyst out of nowhere, deepseek,

gamechanging news, and this is basically

a sell. Even though it rallies, it is

abnormal action that changes the dynamic

of supply and demand. So even if you

hold and rally these likely you want to

be sold

into and uh basically you know if you

bought a mean reversion trade here you

want to be more biased towards selling

to strength because this gap takes time

to heal often months to heal this type

of thing if it does and here you can see

it can't break out. It breaks below the

range breaks below the 21 EMA breaking

down and starts a downtrend and is

basing out now. But we'll see. We'll

have to see what happens with this name.

But this large gap down is something you

want to look out for because like with

TTD, these large gap downs could just be

the start of major major declines. And

again, the goal at the end of the day is

capital preservation. And these gap

downs are abnormal action that you don't

know if it's going to rally or if it's

going to fall through to the downside.

And we have to manage risk in real time

as traders. And if our if our reason for

buying is that it was moving higher and

breaking out of a consolidation when it

pulls back right to our entry point and

gaps down to that level, um we don't

know what's going to happen. It could

break these lows and just, you know,

follow through to the downside. We have

to manage real risk in real time with

the information we have available and

not hope. We have to follow our rules

and exit accordingly. All

right, here's the next one. We've got

Teddoc back in 2021. Uh, this is one I

actually bought right here and and sold

into strength here. Uh, we've got a nice

rally up above the 21 EMA. Then we have

a downside reversal. It can't break out

from this consolidation. We get

reconfirmation down, another sell

signal, a bad break at the 21 EMA, all

in one bar. We get a gap down. Again,

gap downs are key. We have another gap

down, lose at the 50 SMA, lose the 200

SMA. So, if you're not out by this

point, you haven't been paying

attention. Really, if you're not out by

uh this point, you haven't been paying

attention. And then this starts a major

major decline. I think it dropped 80%

from this level um or even more. And

throughout that that decline, it

couldn't rally above the moving

averages. It was below declining 50 and

200 SMAs. There are a lot a lot of sell

signals here that have that you could

have kind of picked up on um to sell

into strength as well as into weakness

and protect your capital if you did

enter from this point or even are an

investor and a long-term investor at

that. Here's one more example. We've got

Nvidia. Uh, and I want to include this

because it's more of a normal type

correction in a leader than something

that's completely breaking down like the

other ones. Uh, we've got a nice strong

trend. We get a key reversal bar. Again,

these are a sign that often basing is

needed. We get a lower high. This

another sell signal or, you know,

warning sign to be looking out for. And

we can see we try to form a range here,

but instead of breaking out and

reconfirming through this high, we break

lower. And that's a sign that more

correction is coming. And again, we try

to firm up, try to move higher. We break

lower, downside reversal, downside

reversal, and all of that will hopefully

protect you and get you out as a swing

trader or position trader before the

really bad break of the 50

SMA. And then the stock kind of firms up

because the best leaders will, you know,

need these bases to set up for the next

leg higher. I think this rose about 60

70%, you know, from these levels here

and from this extension down, there's no

follow-through lower. Then we start

forming higher lows. So the opposite of

these lower highs and firm up again and

start a new uptrend. But again, as swing

traders, we want to be selling into

strength here, selling into strength of

the lower high. Position traders breaks

below the 50 SMA very badly, sell to

that, and then wait for it to set up

again and restart a new uptrend. That's

the goal that we're trying to

participate during the momentum moves,

the natural trends versus the corrective

bases right

here. All right. So, I'm going to pause

here and see if there's any questions on

selling to strength, selling it to

weakness, as well as uh defining

extensions because I think that is a key

thing that people likely have questions

here. So, let's see there's any

questions. Shall we think about volume

strength as well as just um MVA? I think

just MA there. That's what you mean. But

basically, you know, price is the

ultimate deciding factor. It's the most

important thing. volume often confirms

and emphasizes key price and volume

characteristics, but price is enough to

make decisions by because that's what's

defined by supply and demand. Uh so I

think price is the most important.

Volume can help confirm what you're

thinking. Uh does this work for weekly

or hourly charts? It works on all time

frames, but we're really focused here as

swinging position traders for growth

stocks and we're thinking more about

daily and weekly time frames. Um so it

does work on all time frames. There's

going to there's cycles of price action

on all time frames, but there's a lot

more noise on intraday charts and weekly

charts might not be the right position

management time frame for you,

especially if you're a swing trader. So,

we're focused more on daily charts here

and daily characteristics, but these

characteristics you want to look out for

on all time frames. Uh, let's see

here. Uh, I use the 5 EMA to measure

extension sometimes. Perfect. Yeah,

Ethan, that's great. Especially for

faster swing traders, instead of a 10

EMA, uh look for a visual extension or

percentage from or ATR from the 5 EMA.

Uh that can be a great way to measure

extension, especially in the really fast

movers. 5 EMA is probably better than 10

EMA. Uh when I'm thinking about

extensions, I'm always thinking about

the character of the stock, the the ADR

of the stock. And you know, MSTR is a

much faster mover than even a Tesla or

Reddit. So, I want to be using a 10 EMA

versus my normal 20 20 EMA, 21 EMA. So,

think about what moving average makes

sense. What moving average has been

respected in the past? Does it

consistently pull back to? And then you

could plug that into RME or just look

visually and see are we extended from

that moving average compared to where we

normally are. So that's again a way to

define extension is use the moving

average that matters to the stock and

then look for visual extensions from

that moving

average. All right, let's see

here. All right, when I get stopped out

and want to buy back, my broker raises

my break even price due to tax reasons.

How do you avoid this? So, I treat every

every um every trade as a new trade um

with with the new cost basis. Um you

know, everything for doing stuff for tax

purposes isn't the way to go for

performance and isn't the right way to

think about things. You want to reenter

a stock because it sets back up and

there's the potential for a new trade

opportunity. That's that's kind of the

end of it. And then taxes will kind of

take care of itself when when when it's

the time to do

that. All right. parabolic moves like

the quantum stocks recently exhibited.

Yep. So again, accelerated rates of

ascent. You know, this is the rate of

ascent and then it kind of changes right

here. That's another sign that we're

getting extended and you might be want

to selling into strength here. You never

know what the top day exactly is going

to be until we get that really key key

reversal bar. But you don't want to

participate too much and draw down too

much, but you do want to participate. So

you could sell a little bit into

strength. Maybe, you know, 25% 25% 25%

25%. keep doing that and um

participating with the trend until we

get a significant break here. Uh can we

use anger VWAP? Yeah, you 100% can. Um

for sell rules, I don't I don't think

it's quite as effective for me

personally. That's how that's how I

interpret things. I like using it at the

tops of bases or from key days like

earnings reports uh as kind of a line in

the sand uh to determine where you know

how supply and demand, who's in control

um buyers versus sellers. But, you know,

you could place it versus uh this day

right here or from a key pivot level.

And if that's helpful for you on

pullbacks, definitely go ahead and use

it. All

right. Is there a tool to find these

signals automatically and get

notifications? We'll be building that

into Deep View. You know, you'll be able

to add a conditional alert when RMV gets

up to 100. Uh, give me a notification.

When we are 10% above the 10 EMA, give

me a notification. We'll be building

that in, but right now I don't know of a

tool that does

that. All

right, great. I think we can move on

here. So, special situations. These are

just kind of key things to think about

as well when it when it comes to

position management. Uh, first, earnings

reports. Um, earnings reports obviously

are a binary event. A stock can gap up

10%, it can pull back 10%. uh you don't

know, you know, there's there's no way

to tell even if the the news is

supposedly good, this the market can

react negatively to that. It's really

about the reaction u versus the news

that really matters. Uh so you don't

want to go in and gamble. That's that's

the main thing. You don't want to just

hope that we're going to get a gap up.

So the guideline is that we have is your

profit cushion must be larger than the

implied move based on earnings to hold

any of your position through. And you

can look up imply move various places.

We'll be adding it to DFU pretty soon.

Uh but basically if the if your profit

cushion is 10% and the implied move is

8% it's right on that edge of do I have

to sell something? Do I have to sell

50%? Do I sell my whole position? Uh

because I don't want to go from uh 10%

profit to only up 2%. That's giving back

a lot. Um and yeah, there could be a a

point where you're up 10% and then it

gaps up and you're up 20%. But you

always have to think of the downside

more than the upside. And I think as

swing traders specifically, you should

be biased to selling at least some

before earnings. Uh because earnings are

such a binary event that it kind of um

it kind of ruins your edge of just kind

of rotating through momentum setups to

hold your earnings because it's such a

binary event. You could be up big, you

could be down big. So I think swing

traders should be biased to sell before

earnings. Position traders must have a

really good cushion as I mentioned to

have and have a reason to believe the

stock is more runway. It's early in a

stage two. It's part of a very strong

trend. um earnings growth that's been

really strong the recent quarter. Um and

then you could be justified in holding

through earnings. But uh you know

earnings reports you always have to

think about am I willing to stomach a

gap down of 15% or more after this

earnings report. Can I handle that based

on my profit cushion? If not, you have

to sell some. And I think this is really

important. You can always sell half of

your position and look to add back on

the next setup because think about this.

um the the the emotions are at play here

is fear of missing out right here. Uh so

if if you don't hold through earnings,

it gaps up without you, you're going to

feel terrible because you're not

participating in the trend when you had

the stock. But you can kind of cure that

by thinking about, you know, I'll sell

half and then if it gaps up, I'll buy on

the earnings gap or I'll buy on the uh

the pivot breakout after the earnings

gap. I'll just re-enter that 50%

position once, you know, it sets up

again because it will set up again. If

it's going to double from the earnings

gap, it's going to set up at least a few

more times. So, you can always sell half

of your position and look to add back

what you sold on the next lower setup.

So, don't feel like you're missing out

on anything because you sell some before

earnings. Um, in fact, you're kind of

protecting yourself because, you know,

if it gap down gaps down, maybe you're

only losing 4% of your profit versus 8%

10%. And that's a big difference

psychologically and financially. Um,

based after selling half. So, this is

kind of how to handle earnings reports

is think about what your profit cushion

is, think about your time frame. Are you

a swing trader or position trader? Think

about the potential of the stock. And

then also, I didn't mention this on the

slide, but I should have. Think about

the market environment. Has the market

environment been uh really good? Are

breakouts working? Are earnings, you

know, gapping up all over the place? If

not, and things are gapping down, then

it's probably a riskoff uh environment.

And even if the stock blows out

earnings, it might get sold off anyway.

So, that's something else to take into

account and might bias you towards

selling and protecting you when it's a

riskoff environment overall. All right,

gap downs. Um, we talked about this a

little bit in the risk management uh

webinar as well, but um, gap downs will

happen based on unforeseen events. We

saw it with DeepSeek, it might be that

the stock pre-announces before earnings.

Uh, gap downs will happen in some of the

names that you are owning. And uh, even

in the strongest stocks, in the

strongest markets, based on news

catalyst, there's going to be gap downs

of 5%, 10%, you know, maybe they

announce a secondary after hours. Um,

that could be a reason for for a gap

down in a recent IPO. Um, so here here's

kind of how to think about handling it

on small gaps in a strong market. If

you've got cushion in the stock, uh, you

should look to give the stock a the

benefit of doubt. Uh, but of course,

always obey your worst case stop- loss.

So if it's gapping down below the 50 SMA

and you're going from 20% profit to 2%

profit, that's not that's not really a

small gap down actually. Uh, so you

know, think about what your profit

cushion is and take that into account in

deciding, are you going to give the

stock the benefit of the doubt? And in a

strong trending environment, uh, gap

downs, you know, in in bull markets, gap

downs are bought up. You want to see

that. If it doesn't happen, that could

be a sign to sell, you know, close to

the close. Uh, and, you know, lower

lower your position size overall. Uh,

but small gaps in a strong market, the

main thing here is you want to give them

the benefit of the doubt to stick with

the trend. Uh, if you have a strong

cushion, however, very large gap downs

are kind of a different beast

altogether. It's much more abnormal

action. Um, so you have to manage risk

in real time. Again, if you're going

from 40% profit to 5% profit, likely

something is wrong with the stock and

there's a supply and demand imbalance

that even if the stock recovers in the

short term, it's likely going to start

maybe a downtrend in the future. So,

always think about managing risk in real

time, protecting your capital above all

else. And uh you can always sell first

and back, you know, buy back on the next

setup if it does set back up again. but

a very large gap down. The money that

you had is gone. You have to think about

the current situation and if that stock

is the best potential candidate for your

hard-earned money and um and basically

make the decision, should I sell, move

on, or do I still believe in the stock?

Um you know, my I always if there's a

very large gap down, my bias is selling

very shortly after the open. Um maybe

giving it a chance to rally on a fivem

minute, but if it doesn't, I'm very

quick to to cut back. Um, so that's kind

of how I personally handle large gap

down

situations. Then another question that

uh likely many of you uh are wondering

when it comes to position management is

do you use end of day stops? Do you have

stops in with your broker or you use

mental stops? I always personally have a

stop in with my broker. I I trail that

um below the 21 EMA a few percentage

points below 21 EMA and then I have

alert set on the 21 EMA, higher lows,

all of that. So I'm I'm always aware if

a stock is breaking starting to break

down or potentially showing signs of

breaking trend. Um and personally in

terms of end of day stops versus you

know acting in the moment. I think again

it depends on the market. In a very

strong market that's rewarding breakouts

that's maybe just after a bare market or

significant correction um and things are

acting well. You want to give the stock

the benefit of the doubt because

sometimes we'll have shakeouts intraday

and the stock just recovers and even

goes higher into the end of the day and

you're you're out of your position. You

need to buy it back at a higher price.

So, um personally, if it doesn't hit my

um worst case stop, I want to wait until

the last hour or last 30 minutes to make

a decision about whether I should sell

or not. Um and yeah, this is basically

what I'm saying here. Um, ideally wait

till the last hour if possible. But in a

weak market, in a negative market, I

sell first, ask questions later. If a

stock is breaking down, uh, it could get

very, very ugly very, very fast,

especially if we're below the 50 SMA,

below the 200 SMA. We've seen some very

significant declines in, you know, blue

chip companies. Um, and things can get

very bad very fast in bad markets. So,

in bad markets, it's completely

different. I will, you know, sell as

soon as it hits my stop or even before

that, uh, to protect my capital again.

And during a during a negative market,

riskoff environment, defense first and

uh sell first, ask questions later.

Things are guilty until proven innocent

in bad markets and innocent until proven

guilty in good markets. And just in

general, from a style perspective, swing

traders should ask act faster. Again,

you're just trying to turn over your

edge. Um while position traders can give

it a little bit more time, see if it

recovers end of day or even the next

day, and give the stock uh look to give

the stock a benefit of the doubt. And

here over on the right hand side, I have

one of my mistakes that I made in

2020. I'll go ahead and zoom in here.

Um, this was a docuign. Um, this is

actually from the from model book

section of of chapter 12, guys, from the

handbook. So, a little sneak preview for

you guys. We have a positive expectation

breaker. I didn't even see these back

then. I didn't know what to look for,

but now that you you know what a

positive expectation breaker is, you'll

see these all the time before stocks

break out. But I entered really nicely

right through um the pivot of this

breakout, the short range here right

here. It trended beautifully above the

21 EMA. You can see a downside reversal

above the 21 EMA still acting fine. Uh

recovers and acts well, but I sold maybe

the low tick of this day here uh as it

was breaking the 21 EMA. Um I had my

stop right there. Uh we were in a strong

bull market right here. Things were

acting well. I think I was up 40%. I

mean this is uh 87 to about uh 136 here

at this point 120. So I had a very nice

profit in this stock but I sold as it

broke below the 21 EMA and then by the

end of the day it recovered really

strongly and then just went up and I

think made another 50% move from this

point and this could have really changed

my performance that year uh to to make

it even better. Um so this was a mistake

that I made in a strong market. I sold

way too early before giving the stock

the benefit benefit of the day um

benefit of the doubt and seeing if it

closed well and it did and just kept on

going respected the 21 EMA and even here

is a sharp pullback to the 21 EMA closes

well and just keeps on going. So this is

a good example of when you're in a

strong market try to give the stock the

benefit of the doubt and see if it can

recover and if it keeps on moving down

and you've got your worst case stop

definitely protect yourself. Uh but you

know try to wait until that last hour to

make a decision if possible.

All right, so getting more into the

summary here and hopefully this has been

helpful to you guys. Uh here are some

kind of overall key steps for position

management. First, once at a profit,

know your rules for moving up stops.

Again, we talked about risk management a

lot more in the previous webinar. Uh

watch for sells into strength if that's

your style. If applicable, look for ad

re-entry points if you're more stage

three, stage four. Uh watch for sells

into weakness that define the end of the

trend. And then if you do end up exiting

all the stock, don't just, you know,

kick out the stock and never revisit it.

add the stock back to a watch list and

see if it sets up again, sets up a new

base, and sets sets up a new

opportunity. Often the best stocks to

trade are ones you've already traded and

had a lot of success with. That's a

that's another golden nugget for you

guys. So, here are some key takeaways

that I want you to have from today's

webinar. Uh, first, to find rules that

match your stage and trading style. uh

whether you're a swing trader or uh day

trader or position trader, active

investor, uh whether you're a stage one

trader or much further along, stage

three, stage four, uh know the pros and

cons of selling your strength versus

weakness. We talked about those. The

opportunity cost, the uh needing to find

a new trade versus, you know,

potentially getting a 300, 400, 500%

plus move. Then you want to find rules

for yourself for selling into strength.

Be as objective as possible. Define what

extended means to you. Is that a percent

above a moving average? Is it ADR above

a moving average? Is it using relative

measured extension from deep view? Um,

pick a rule and define it so somebody

else could say uh could follow that rule

and say looking at the chart exactly the

same way as you. Yes, that is extended.

That's the clarity and the amount of

clarity that you want to have in your

rules. Uh in the same way, define rules

for selling into weakness. Is it two

closes below a moving average? Is it a

break of a trend line? How do you draw

that trend line? Define that in your

rules. So another trader of a similar

experience level could follow it exactly

as you do. Then this is really key. Sell

rules allow you to manage a position

with clarity with a framework to try to

manage those emotions and uh have an

understanding of exactly your objective

and what you're trying to do. Uh and

then lastly, I I discussed this a few

times. Different market environments

will favor faster or slower sell rules.

And you don't want to overfit your rules

to one market type of environment

because you want it to be robust and

work in all market environments. And

then one more tech uh key takeaway I

want to add here is again your cell rule

should reflect your experience level in

the markets and where you're at. If

you're very new at this, you know, in

your first year, two, three years even.

The goal is consistency and process and

being very rigid with your cell rules

versus later on when you've got more

experience. uh you're you're you're much

more you know adept at things at

managing risk all that recognizing

shifts in the market at that point you

can be a little bit more creative a

little bit more um you know

discretionary in your choices do I sell

at this extension or do I wait for the

next one um at that point you've earned

the right to be more fluid with your

sell rules but early on you want to be a

lot more rigid and build that

consistency build that technique up that

gives you the skills to then be more uh

flexible later on. All right, so that's

it for today's webinar. Hopefully this

has been really helpful for you guys.

Hopefully the examples applying the

different variations of cell rules

helped you as well. Um, and I just want

to say again, if you find these webinars

helpful, a great way to thank us and

also get more resources is to go ahead

and order the Trader Handbook, you can

do that by scanning this QR code. If

you're enjoying these webinars, you're

going to love this book. Um, and even if

you're a very advanced trader, um, the

model book there is definitely worth

reviewing to study those greatest

winners. And if you're a very new

trader, this handbook could really make

the difference in in helping you build a

system, become profitable, become

consistent, and uh, learn the blueprint

for trading success. So again,

definitely go ahead and order yours if

you haven't already. Uh, but thank you

guys all for attending. I'll answer a

few questions

here. All right. Uh, yeah, on DocYign, I

did not start a new position after I got

shaken out. Again, another mistake

here. All

right. Uh Darnell asks, "Can you tell us

about the stoastic in to me is the best

indicator to buy, sell, combine with

trend lines 2050 uh S 200 SMA?" Yeah,

the the stochastic is great. I I think

any indicator can work well. Uh and Dr.

Wish uses the stochastic and I used it

for many years. Um any indicator can

work really well. It's basically just a

momentum indicator, but you have to

study it, see when it works, when it

doesn't work. Test it for yourself, and

it can be a great way to buy pullbacks,

strength after pullbacks. So, use it for

yourself and define rules that another

trader could follow using the same

methodology. All

right. All right. Let's see

here. There's no formula for the uh

extension indicator. Uh it's

proprietary. You can use it in DU.

highly recommend doing it. Uh it's

something that I developed

myself. All right, Scott says, "Love the

webinar. Pre-order book. Looking forward

to learning more." Awesome. Thank you so

much, Scott. Appreciate it. Uh a lot of

thank yous. Thank you guys so much. Glad

Glad this has been helpful, guys. Thank

you so

much. All right. Yeah. And again, this

will be released on May 27th, but you

can pre-order right now uh at Amazon,

Barnes & Noble, anywhere. And uh that

way you'll get it as soon as it's out.

So, thank you guys so much for

attending. Um, and uh, yeah, thank you

so much. Uh, we look forward to seeing

you in the future webinars. Uh,

definitely go ahead and pick up your

book if you haven't already. And, uh,

yeah, we'll have this recording up as

soon as possible. So, thank you guys all

for attending. Uh, if you did enjoy,

please go ahead and leave a like down

below, subscribe if you're new to the

channel, and uh, if you're able to share

it on Twitter, share with friends. If

you find uh, this to be valuable, go

ahead and share this webinar uh, with

anybody you can. So, thanks so much

again for spending some of your Saturday

with me. Definitely appreciate it. And

I'll see you guys in future videos. Take

care.

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Simple Sell Rules to Maximize Your Trading Profits