Ultimate Guide to Trading in a Small Account

In this session, I'm going to present the 

ultimate guide of how to start trading in a small account. For those you 

guys returning to the channel, you know we're about to jump into a deep dive. 

And for those of you guys who are brand new, let me briefly introduce myself to you. My name 

is Ross Cameron. I'm a full-time trader. I funded my first account in 2001. And in 2013, I created 

this YouTube channel right here. Begin sharing the strategies and the techniques that I have found 

have worked so well for me over the years. I am probably best known for turning a small account 

with less than $600 into what is now more than $20 million of gross profit. So everything I 

share with you today is not just theory of what I think may work in the market. It's actually 

tried and trueue strategies and techniques that I use and implement every single day. So 

we're going to go ahead and jump on the screen share. We have a lot to cover. You can see 

my profits from today sitting up $21,690.15. And I should be the first to tell you that my 

results are not typical. I have been trading for a long time. There's no guarantee that you'll find 

success in the market. And this actually reminds me of a topic that uh came up at a birthday party 

I was recently at. Before I share that with you, why don't you look at these nine topics that 

we'll be covering in today's deep dive. So I'm going to walk you through how to start trading and 

I'm going to do it se sequentially going through these nine topics which I would consider to be 

essentially the building blocks of learning how to trade. So these are the building blocks. This is 

how we're going to set our foundation right down here. And as I touch on each of these concepts 

and I don't know if that's nine but you get the idea. What you're going to recognize is that I'm 

going to do initially cliffnotes. I'm going to give you high level for each of these topics each 

of these concepts. And then what we do is we go back to them and we add more detail, more detail, 

more detail until eventually you have a solid foundation. And my goal is to help you prepare for 

day one of trading in that small account. Now, by the end of this session, you're going to actually 

have a PDF worksheet that you can take away with you and a strategy, an outline of a strategy and 

a trading plan that you can begin implementing in your own trading starting today. Now, if you 

want to download that PDF, I'll put the link in the top of the comments and I'll also put in the 

description so you can download the PDF resources. You can print them out and you can follow along 

with them as we go through this class. Now, before I jump into uh part one, which is alpha phase of 

sim trading, let me tell you about this little um story. So, I was at a birthday party uh 

recently and uh someone came up to me and they were asking me what I do for a living and 

I said that I'm a trader and I also said that I'm a teacher and I provide a lot of content on 

YouTube and so on so forth. But they were really curious about trading and I explained to them that 

of course that I am a trader and they said, "Well, so what do you do? Do you trade, you know, the 

S&P 500? Do you trade oil and gold?" You know, they had no idea the area of the market that I 

traded. They asked me this question. They said, "How do you know what to trade?" And I said, "I'm 

going to explain it." And and when I explain you, it's going to click. And so what I said is that I 

am a volatility trader, which means I make money trading things that are moving. If something's 

not moving, I can't make any money on it. And so what is typically the catalyst that gives us 

a move? And I asked the question and they said, "A catalyst that gives you a move? I I guess 

some type of breaking news." I said, "Exactly right." And so they said, "Oh, so you must sit 

what reading the Wall Street Journal and reading the news like all day long. Is that what you Do 

you listen to Bloomberg and this and that? I said, "No, I don't do that because there are hundreds 

and hundreds of news stories coming out probably every hour of the day. You'd be inundated with 

news. You would never know where to begin. So, no, I don't read all the headlines. I work the 

other way around. I look for stocks that are already starting to move. And if a stock is up 

10%, just by being up 10%, it's doing something that 99% of the stocks on the market are not doing 

on any given day. Most days stocks go up and down a little bit. Going up 10% is statistically 

significant. So once a stock has broken that first threshold, now I just have to go and check 

to see whether or not there's a catalyst. And nine times out of 10, there is a catalyst. So rather 

than reading all the news headlines and trying to comb through what's good, what's bad, I just 

wait for the stocks to show themselves to me. So does it mean that I missed the first 10% of the 

move? It sure does. And I'm okay with that because typically when we have a stock with a really 

good catalyst, a company that comes out with FDA approval for a new drug that's, you know, going to 

treat a very common illness, that type of catalyst can send a stock up 500% in a single day. So 

even if I miss the first 10%, it doesn't matter. I'm still going to be getting in very early. So 

she said, "Well, this all makes sense. In fact, it sounds downright simple. You just look for 

stocks that are moving. you check the catalyst and then you you you get in. And I said, "Exactly." 

She said, "But I've heard from people that trading is very difficult and people lose money. Why? 

Why do they lose if it's so simple?" And I said, "That's right. It is simple." And yet people 

continue to struggle. Why is that? It's because they can't get out of their own way. And this is 

the most important thing that I want you to learn right here, right? The very beginning. Success in 

trading is about following a playbook, following a set of rules. It's about a system. And what 

traders who lose often do is they think they know better and they break the rules of the strategy. 

Why would you do that? It's because your intuition of what you think you know feels right. I'll give 

you an example. If you've ever gone fishing as a kid or even as an adult, whatever. If you ever got 

a fish hook in your in your thumb or in your hand, your instinct, what's your instinct to do? 

Your instinct is to pull it to pull it out. Now, if you pull it, the barb is going to hook 

even deeper. In fact, what you need to do is you need to push it in to release the barb. You got 

to push it in. Now, pushing it in feels like the exact opposite of what you should do. Give you 

another analogy. Think about being in quicksand. What do people do? They flail. They flail and 

they sink deeper. What do you have to do? You've got to stop. You've got to spread yourself out. 

So, sometimes, as is the case in other aspects of life, your intuition doesn't serve you well. 

your gut response, your gut reaction. And that's exactly the case in the market. Your gut reaction 

of when to buy and when to sell by default will lose you money. That's the reality. So we actually 

have to follow a very specific outline, a system, a set of rules in order to achieve predictable 

results. And so what I'm going to share with you is exactly that blueprint. I'm going to make 

it as simple as I can, but it requires you to have the discipline to follow the rules, and 

that's what can be very challenging. All right, so we're going to go ahead and dive right in 

here. We've got a lot to cover. Um I'm going to begin right here with um alpha phase one. And 

as I already mentioned, everything that I share with you here is actually based on my own success. 

It's based on my own trading profits. This is not just a theory of what I think might work well in 

the market. This is all based on what I actually know to work well in the market. It's data from 

over $22 million of trading profit. And this is as of today. I just exported this um just this 

morning so I could have this updated. Now, I also want to share with you that um I am no stranger 

to these small account challenges as you already know. And I'm actually getting ready to begin a 

brand new challenge. And every time I do these small account challenges, I also couple them with 

a fundraiser. And so for this challenge, every dollar that I make will get donated to charity. 

However, I will give you guys the opportunity to help me double that donation. So, in addition to 

me donating all of the trading profit that I make, I'm also going to offer a double. So, I'll go 

ahead and double whatever I make in trading. And the way you guys can unlock that double or 

that match is every time you hit the thumbs up on the episodes in this series, I'll add an extra 

dollar to how much I'm donating. So, right now, you guys by hitting the thumbs up can add a dollar 

to our fundraiser for charity. We've already raised over $200,000 right here, which brings our 

total fundraising to just shy of $2 million. But this is just from the last uh couple of challenges 

that I've been doing. So, every time I do these challenges, it's an opportunity to raise awareness 

and uh raise money for good causes. And so these are some of the charities I've been donating to 

during this last round. Primarily, as you can see, children's hospitals um and um humane societies 

and things like that. Okay, so let's go ahead and jump right into the alpha phase. So alpha phase is 

when you are practicing in a simulator. Practicing in a simulator is critical before you ever put 

real money on the line. Now, it doesn't matter if you use our simulator that we've built here at 

Warrior Trading or you use a different simulator. This is our simulator right here. And this gives 

you the chance to pull up a stock, whatever it is. And you can see the market data, which I'm going 

to walk you through um what all these numbers mean during today's session. You can see the charts, 

you can see the news headlines, and you can actually go ahead and you click the the price, you 

can click the buy button, and boom, you're going to execute a trade, and you're in. And now you 

decide you want to get out. You click down here, you click sell, and you're back out. So, this 

was a break even trade. I was in, I was out, I was break even. But every single time you take 

a trade in the simulator, we're aggregating your data. So, you can go at the end of the day or the 

end of the week or the end of the month, whatever the case might be that you like to do, and you 

can review all of your metrics. And this is very important because you should never trade with 

real money until you've first proven you could be profitable in a simulator. All right. So, phase 

one is trading in the simulator. That's the first step. By trading in the simulator, you're going 

to gain a ton of experience. And this is how you begin to build your educated intuition. There's a 

process of converting knowledge into skill. Just because you read a book about skydiving doesn't 

mean you should jump out of a plane. You've got to practice. Just because you've watched a a 

workshop or a class like this on day trading doesn't mean you're ready to trade with real 

money. You've got to do some time, pay your dues, and and do some time in a simulator practicing. 

So, I encourage you guys to start right away. And during your time in a simulator, alpha phase 

is all about gaining lots of experience. It's about taking as many trades as possible. Most 

days there are enough stocks experiencing some degree of volatility throughout the entire day to 

give you the opportunity to put time in studying the level two, getting in, getting out, studying 

the tape, getting better at reading when there's hidden buyers, hidden sellers, looking at chart 

patterns, and getting into all of the technicals that make up the the the skills that you need 

to learn in order to be a successful trader. So, we're going to begin this class with a 

reminder to always trade in a simulator before putting real money on the line. Part two, risk 

management. You know, trading is risky. You've heard it from me a million times. I'm going to 

say it again. How do we minimize our risk? It first requires understanding that for most 

traders, what most traders do is they come into the market and initially they first put 

money into the market and they lose it because they do not have a strategy. They don't have a 

system and they don't have a set of rules. So, they're really just shooting from the hip. They 

throw that money into the market and that creates, as you would imagine, a poor track record. So, 

you begin with a poor track record. What does that lead to? That leads to poor self-confidence. That 

then leads to increased pressure, desperation, and reckless trading because now you feel a sense 

of loss and you want to make back that money. And so again, even though the logical response to 

the loss would be to stop doing what you're doing, most people try to muscle through it. They say, 

"I'm going to get to the other side of this. I just have to stick with it." And they end up 

taking more trades, increasing their risk in an attempt to recoup previous losses, and that just 

further accelerates the poor track record. And what that ends up doing is creating a downward 

spiral. I don't want you to go on a downward spiral. I want you to go on an upward spiral. So 

the first element of risk management is trading a quality stocks. Making sure you're trading the 

right stocks is the most important thing because when you're trading the wrong stocks, that's when 

you get yourself into trouble. So what are the right stocks? We're going to talk about that in 

a moment with stock selection. But before we do, I'll just show you today ENVB, WLDDS, those are 

two stocks I made the most on today. And look at this. These two stocks right here are the top 

gainers in the entire US equities market today combined. 200 million shares of volume up 129% 

up 90%. Both of them have breaking news. So these were the right stocks to trade. The most important 

thing is you're trading the right stock. Getting into the exact entry point and the exact ent exit 

point. We'll get there. But first things first, you want to make sure you're managing your risk by 

trading the right stocks. Because when you trade the wrong stocks, what ends up happening is you 

subject yourself to unnecessary losses. You're taking risk, as we all do whenever we trade, but 

you never really stood to gain that much. When you trade an Aquality stock, you're trading the 

type of stock that has the potential to go up 30, 40, 50%, maybe even 100% within the next 10, 15 

minutes. So if you're risking 5% to make 50% we would consider that to be a good riskto-reward 

ratio. That's the way I think about trading and that's the way everyone should think about it is 

risk and reward. So if you are risking $1 to make $1, how often do you have to be right to break 

even? 50% of the time. Right? Now, if you risk $2 to make only $1, you would have to be right 66% 

of the time just to break even. On the other hand, if you risk $1 to make $2, you only need to be 

right 33% of the time in order to break even. Now, I would say that's setting the bar pretty low. 

You could be wrong nearly 70% of the time and you'd still be a break even trader. Isn't that 

Isn't that exactly what you want to do? You want to set the bar so low that it's easier for you 

to be successful. That's what lo That's what the logic would tell us. So now, if we pull 

my metrics back up here, let's just take a look at where I'm performing. I'm at about 68.5% 

accuracy. And this is on over 33,000 trades that span more than a decade. What's my average profit 

loss ratio? As of this 10 plus year period, my average winners are about $1,600. And my average 

losers are about $1,400, which gives me, you know, a slightly better than one:1 profit to loss 

ratio. Now, if we looked at just the last year, we just look at last year for instance, last 

year was a $6.5 million year with 71% accuracy, as you can see right here. And the average winners 

were 3500, and the average losers were only 2,000, which was getting closer to a 2:1 profit to loss 

ratio. One of the things I'll tell you is that when the market is stronger and we're in a bullish 

market, the winners become bigger and accuracy becomes bigger. But when you're in a cooler 

market, obviously the losers become a little bit bigger, accuracy declines. And so it averages out 

over the span of 5 10 years, so on and so forth. So what's really important to take away here is 

that if you think first about risk, how much am I risking on this trade? and then asking myself, 

can I double whatever I'm risking? That you're you're then by doing that positioning the trade in 

a structural way where you're setting yourself up statistically to succeed as long as you're trading 

the right stock. This is very important. This is where you want to be. Now, even if you don't 

end up here, even if you don't average two times whatever you you were risking, if that was at 

least a reasonable target, it justifies taking the trade. And that's what's important. And so, a lot 

of beginner traders when you begin trading, and I was no different, you don't even think about that. 

You're not thinking about profit to loss ratio. you're not think we don't think in those terms 

which again is a reminder that our our sort of uh default instinct of the way we think about trading 

is not aligned for uh what is required in order to have success. So getting into a positive feedback 

loop means you begin first with and we'll just go back to this previous slide here real quick. So 

we we begin first with high accuracy focusing on trading aquality stocks. By trading high quality 

stocks will invariably have a better average winner versus average loser ratio, also called 

the profit to loss ratio. And that's going to then breed higher levels of consistency. When you've 

got high accuracy, a better profit loss ratio, and consistency, that's going to create a strong 

track record, which creates self-confidence. Now, that self-confidence is going to increase 

profitability because now you could justify taking larger positions on every trade you take. When you 

look at my metrics right now and you see that I'm obviously doing quite well over long periods of 

time, you probably say, "Ross, why why don't you increase your share size? Why don't you increase 

it by, you know, 10%, 20%, 50%." And the truth is, I do. That's exactly what I do. I continue to 

gradually increase share size. Now, you can't increase your share size 10 times overnight. 

You don't know how the market will respond, if your strategy will still be sustainable and 

profitable at those highly elevated levels. Will you be able to get in and out as quickly? So 

on so forth. And so you just continue to sort of gently push at the edge of your comfort zone to 

increase your share size and therefore increase your profitability. Which is why last year was 

my most profitable year to date. I'm increasing profitability as I get further and further into 

my career. But this can begin even as a brand new trader. You focus on trading the right 

stocks, building a strong track record, and you do all of this before you ever put real money 

on the line. Now, let's talk about number three, stock selection. So, stock selection. How do you 

choose the strongest stocks each day? This is very simple. I don't want to over complicate it for you 

and I don't need to because I simply look at the leading gainers in the market this day. GLTO MOVE, 

those two stocks were the leading gainers. So, you better bet those are the stocks I was trading 

today. The leading gainers are, as you could see, what was it? Um, ENVB, ENVB right here, and WLDDS. 

These were the leading gainers. Therefore, those are the stocks I'm trading now. ARTL and JTI, 

those are other stocks I traded. At the time, they were a leading gainer. They were looking good. 

And then at a certain point, they rolled over, momentum changed. And so, some stocks will sustain 

that first position placed for a long time, the whole day perhaps. others will be in first place 

and then there's a shift in momentum as traders move away from that stock as perhaps another 

stock comes out with news and attention shifts and that's very common but there's a theme a 

common denominator if we look at all of my biggest winners and the first is that I make the most 

money on stocks that have five times higher volume on the day that I'm trading it than their 50-day 

average. So, why would a stock have five times more volume today than what it averages? Well, we 

can look back to this example right here. We've got ENVB. ENVB today right now is actually trading 

1,931 times higher volume today than its average currently. Right now, it has a 121 million shares 

of volume and yesterday it had only 1 million and a week ago it had 10,000 20,000 shares of volume. 

So this stock basically went from having no volume for all of this period of time right here. I mean 

I could actually measure the volume. So during all of these days it had a combined volume. This is 

over the course of um 76 days. It had 3 million shares of volume over 76 days. And then today so 

76 divided by 3 million whatever that is. And then today it has 120 million shares of volume. It's 

because it had breaking news. The breaking news catalyst is what brought in the volume. And so 

when we recognize that I do the best on stocks that have five times above average volume, we 

realize pretty quickly that stocks don't have that type of volume for no reason at all. They 

have it typically because there is breaking news. But from a technical perspective, if I'm looking 

for a stock to trade, I can pretty concretely rule out that if it doesn't have at least five times 

above average volume, it's not worth touching. And then second is I do better when the stocks also 

have high total volume today. High total volume means that there's millions of shares of volume, 

which means it's easier to get in and easier to get out. It's very liquid. So more volume means 

you can take bigger positions. Bigger positions means you can make more money. So it makes sense. 

I would do better on a stock that has millions of shares of volume versus a stock that has only 

hundreds of thousands of shares of volume. Then I do the best when I'm focusing on stocks 

that are gapping up. A gap is when a stock moves up during the overnight or afterhour pre-market 

trading session before the official market open at 9:30. And so gapping up essentially is another 

confirmation that the stock had some sort of news that was occurring overnight. So why would a stock 

gap up on five times above average volume? It's because of breaking news. So, I'm a volatility 

trader and I'm a discretionary trader. I trade myself. I don't use an algorithm to trade. I 

don't have robo trading or anything like that. I manually choose when to buy and when to sell. 

And I do it based on searching for volatility, which is the result of stocks with breaking 

news. I also do the best on stocks between $2 and $20. And within that range, stocks 

between five and 10 are actually my, you know, ultimate sweet spot. as you can see right here 

representing um you know a considerable chunk of the total profit. But between 2 and 20 is 

really where I do the best. Now the reasoning here is that stocks between 2 and 20 offer larger 

percentage returns for account growth. And so if I'm trading in a $2,000 account, I could buy 

a th000 shares of a stock at $2. If that stock goes from $2 to 250 to three, all of a sudden 

I could double my account potentially in one day or at least grow it by 40 or 50%. You simply 

cannot do that trading stocks like Tesla, Nvidia, or any large cap company unless you're trading 

options. But of course, the risk with trading options is that as a derivative, they have the 

risk of expiring worthless based on the movement of the underlying asset. And a lot of beginner 

traders and even more seasoned traders really struggle with options trading because of all of 

the factors um that that are used to determine the premium and that you can actually be directionally 

correct. The stock can go the direction you wanted um and you can lose money because of time decay 

or because of volatility decay. And so while some traders may get into options, what I've always 

found to be more consistent for small account growth is trading outright stock on lowerpriced 

securities. So between two and 20 is really the sweet spot. And no doubt for the next small 

account challenge, I'll be focusing in this area. Now, everything I've shared with you so 

far um is is helpful insight into the type of stocks I make the most money on. But there's 

another criteria which is very important, perhaps the most important, and that is the float. 

The float is the number of shares available to trade. And stocks with floats of under 10 million 

shares make bigger percentage returns than stocks with larger shares that are outstanding. Float 

is the number of shares available to trade. And so when a company has a float of 5 million shares, 

that means that's the total number of shares that have been released on the open market. So, 

if the stock is up, let's say for example, let's just use a a large cap company. We'll 

pull up a chart for uh Bank of America here. So, Bank of America right here has a float of 7.1 

billion shares. That's how many shares they had to sell to investors on the open market to raise 

enough money to provide capital for the bank, including buying all of the real estate, opening 

all of the branches, all the equipment, plus having the money on their balance sheet. So, if 

Bank of America went up, let's say 50% in one day, how many of these 7 billion shareholders would 

want to sell? How many of those 7 billion shares would be up for sale because the stock is up 50%. 

Let's let's say le let's just say a quarter of them. So, you've got, you know, a little less than 

two million two billion shares that are for sale. Well, has this stock ever traded on even one 

billion shares of volume? And the highest volume day that we have here just in the last 

five years is about 200 million shares. That's the highest volume day ever. So, what that means 

is that if the stock somehow was up that much, there would be far more selling than there was 

buying because all of these people want to lock up their profit. And so it would in fact prevent 

the stock from ever going up even close to 50%. Because even as it started to get up to 5% and 8% 

and 10% and 15 and 20, you would have new sellers that are coming out to get pro to take profit 

take profit take profit. Now on the other hand, when we have a stock like ENVB, ENVB has a total 

float of 1.8 million shares. So there were 1.8 8 million shares yesterday that were owning the 

stock and whatever and today they're up 150%. So if all of them want to sell and cash out because 

the stock going up 150% overnight is phenomenal, would they be able to do it without crushing the 

price? And the answer is yes. Because there are so many people that are interested in buying this. 

Total volume today, as we can see, is actually in excess of a 100 million shares. Now, you might 

say, how could there only be 2 million shares rounding up available, but 100 million shares of 

buying and selling? And that's because of trading. You buy from someone who's selling, you then sell 

to someone who's buying, and it's just this frenzy trading back and forth, back and forth, back and 

forth. So, people are just trading the same shares back and forth. one person's getting out, taking 

profit, and another person's buying their shares, looking for the next leg up, and then the price 

goes higher, and then they sell to someone who, you know, thinks it's going to go even higher yet. 

And so, it's just this constant cycling of shares. But you need that cycling of shares to allow 

people who may have been holding it from the day before to get out with profit. And so, this 

introduces the concept of float rotation. the number of times that the float has rotated will 

help us understand whether or not all of those insiders could sell. And so in this case, we've 

got float rotation of 60. The float is rolled over 60 times in terms of the amount of volume, total 

volume and the float. And so that means that right now the stock is still up 130%. And everyone and 

anyone who wanted to sell has already sold and it's still holding up. And that's a really good 

thing. that couldn't happen with Bank of America because there there just really could never be 

enough volume on it that everyone who wants to sell could sell. And so, as a result, Bank of 

America is a low volatility stock, which makes it excellent for long-term investing. It makes it 

excellent for pension funds and and mutual funds. It does not make it excellent for day trading. So, 

for day trading, we seek volatility. We need that range. And that means by default we're looking at 

stocks with lower floats. So look at all of the floats on this day right here. None of them are 

more than 20 million shares. These are the leading gainers in the entire market. So this is a common 

denominator of these leading gainers. So stocks need high relative volume. We have a criteria 

for volume right here which is the stock for me to trade should already be up 30% on the day. It 

should have a breaking news headline. The price ideally should be between five and 10 for like the 

real sweet spot with five times relative volume. It should be a hot sector. What what is hot 

changes from time to time. So whether it's crypto, biotech, or AI, whatever is the current hot 

theme. And the the the time of day when we see the heightened demand is between 7 a.m. and 10 

a.m. This is an overlap between US trading and European trading when both US and European traders 

are able to participate in the New York market open. So even though this is quite early, it's 

Eastern Standard Time for uh West Coast traders, they do get up in order to capitalize on this 

early morning volatility and it's later in the day in uh in Europe, but they are still of course 

awake because it's only in the afternoon um really at 1:00 in the afternoon and so they're trading um 

the the same time. So we have an overlap of time zones which increases the number of participants 

in the market. So when you have all of this demand corresponding with a very limited level of supply, 

that is when we see these really big moves. That's when things get exciting. And here's an example 

right here. MLGO 432% on the day with 300 million shares of volume. Yes, absolutely. I would trade 

this every single day I see it. So to break down my five pillars of stock selection, it's the stock 

at a minimum should be up 10%, five times relative volume, breaking news, between two and 20, and 

less than 10 million shares. We can in we can tighten up those filters a little bit by boosting 

up the percentage return, boosting up the relative volume or dialing in the price to get into a 

really sweet spot. But if you make it too dialed in, then you might run out of opportunities. So, 

by the way, everything that I'm sharing with you right now, you could download and it's in the my 

PDF. So, I have these PDFs I've put together as worksheets that accompany these classes and are 

also available for members of Warrior Trading. But those of you guys tuning in on YouTube, you're 

welcome to download these. They will be a resource that you can utilize in your own trading starting 

right now. And it it prevents you from having to memorize or take notes on everything that I'm 

walking you through right here. So now let's go to number four. Understanding candlesticks. So what 

we've talked about so far is trading a simulator, understanding risk management and stock selection. 

Candlesticks are the universal language of the financial markets. We utilize candlestick 

charts to give us context around price action to understand if the price is strong or if it's 

weak relative to where it's been. If you say, "Hey Ross, the stock's $5. I don't know if that's 

good or bad. I don't know where the stock has been." So candlesticks give us the context. So 

I'm going to give you a quick lesson on decoding candlestick shapes. Every candlestick is made 

with four pieces of information. Every candlestick represents a period of time. The period of time is 

based on the candlestick chart. And so if I pull up this chart right here, I actually have four 

charts of the same stock. This is a daily chart, which means every single one of these candlesticks 

represents a day of time. Now, this is a stock, as you can see, has sold off for a long time. But 

each one of these candlesticks represents one day of time. So, that's one day of price action. So, 

the four pieces of information is the open, the close, which is our current price, the high, and 

the low. Those are our four pieces of information. This candle's currently green because it opened 

low and is closing higher. Now, in this case, the candle is still forming. Yesterday's candle here 

opened at the top, closed at the bottom. That was the low. And the high of day was also uh the open 

price. So that was a very weak candle. Now this is a 10-second chart, which means these candles 

are closing every 10 seconds. They're forming that quickly. This is a high-speed time frame for 

people who are very actively trading the markets. A lot of brokers don't offer 10-second charts 

because they use too much bandwidth. Uh we do offer them for our simulator and for our members 

at Warrior Trading, so you can utilize them. and I use them in my own trading. This is a one minute 

chart, meaning each candle represents one minute of time. And this is a five minute chart, meaning 

each candle represents five minutes of time. So, we've got the open, we've got the close, we've 

got the high, and we've got the low. Those are our four pieces of information that every candlestick 

communicates. This is the open and the low and the close and the low and the high. So red opens at 

the top and closes at the bottom whereas green opens at the bottom and closes at the top. So we 

do need our our candlesticks um differentiated as being red or green. Historically in the age of 

black and white, you know, everything uh a green candle was white, it was hollow, and a red candle 

was uh black and was solid filled. So now you know the anatomy of an individual candlestick. 

Let's go over a few candlestick shapes. The long body candle is a candle that has a very 

long body and a short body candle is a candle that has a very short body. So a longbody candle being 

very tall is very bullish. It can it communicates very strong sentiment. Traders are very euphoric. 

They're very enthusiastic. There's a lot of greed. Maybe there's fear of missing out. People are 

being very aggressive buying up the stock. So if I see a stock and it's moving higher and I 

see a candle, let's say that's a long body candle like that, I understand the communication there is 

that this is strong. So the next candle then adds context and the previous one adds context. If the 

previous candle was smaller like this, then what this is showing is that it's gaining momentum, 

right? If the next candle's bigger, the momentum is continuing and the previous one's smaller than 

that. Or if the next candle starts to get smaller, then we're kind of running out of momentum. We're 

cooling off. So, you can see based on the shape of the candle whether momentum is building or it's 

waning. The areas that I pay the closest attention are when I think the trend is about to shift from 

moving higher to moving lower. So, then it slows down right down here. and we might think, uhoh, 

the trend is getting ready to shift again. And so, we're looking for that first green candle and then 

a rally back up. Now, that's a very big swing, but you get the idea that the areas I focus are 

where the trend is about to change. The quicker you are at identifying changes in trend, the more 

money you'll make. You'll be buying before the trend changes or right as it changes from down to 

up, and you'll be selling just before it changes from up back to down. And what you'll find is 

that most stocks trade in sort of these waves where they move up and down and up and down. And 

so you get many opportunities throughout the day to time these entries and exits right around 

the pivots in price. So long body candles are very bullish and smaller body candles or short 

body candles are a little bit more bearish, communicating a bit weaker sentiment. We then 

have dogee candlesticks. A dogee candlestick is defined by a candle that opens and closes 

at nearly the same price as these ones that are circled do. So open and closing at the same 

price, which is giving us that flat line. Opening, closing at the same price right here. Opening and 

closing at the same price right here. But in this case right here, this is called a gravestone 

dogee. And it's called that because while the price opened and closed at the same spot, it 

pushed higher and then dropped back down. That's ominous. It's bad. What it means is that while the 

stock squeezed up, the sellers pulled the price back down and ended up closing flat. Whereas down 

here, the Dragonfly Dogee, Dragonflyy's uh lifting off is bullish because although the price sold 

off at the bottom of this candle wick, it rallied back up and closed at the top. Now, this one here 

opened and closed at the same price, but popped up and and dropped back down, which communicates 

indecision. So if we are looking for a potential change in trend, these would be great indicators 

to be searching for looking for these dogeis because they communicate indecision. If a stock 

is indecisive after having just made a big move up or a big move down, then that indecisiveness 

could be the beginning of a change in trend. A spinning top candle is similarly indecisive. 

There's a small body, but there's an upper candle wick and a lower candle wick. The hammer 

candle is present at the bottom of a sell-off. You have the lower candle wick right here, which 

is bullish because while the price sold off, the buyers came in and rallied it back up. And then 

this little small body takes the form visually of almost like a mallet. And so we say it's hammering 

out the base. So a hammer here is bullish. Now, in this case, an inverted hammer after a big 

squeeze up is considered bearish because you've got that big topping tail candle and then you've 

got the drop back down and you've got this small little body right here. Shooting stars come 

back down to earth. So, this is indicating a possible change in trend. Now, the shooting star 

could be green or it could be red. If it's red, it indicates the reversal has already begun and 

then it's confirmed that it continues as those next candles drop further. This is a tweezer top. 

two topping tails back to back. This is bearish. These tweezer tops typically mean that this is 

the top. There's resistance and the price cannot go higher. Whereas a tweezer bottom represents 

support and the price is holding that level for reversal back up. So what you're learning here 

are the building blocks. Individual candlesticks are letters of the alphabet and they combine 

to form words. And those words are buy or sell. That's how I interpret them. So the individual 

candlesticks combine to form multicandlestick chart patterns. And those multi-candlestick chart 

patterns are what we teach and I go over in depth for members at Warrior Trading. Now I want 

to share with you so you can walk away today with one multi-candlestick pattern that you can 

begin trading. I want to share with you one of my favorites. This simple pattern is something that 

I trade almost every single day and it and it's so logical when you think about it. So, first we have 

a stock squeezing up very quickly. So, how do we find it? We'll find the stock squeezing up on the 

scanners. So, in this case, UPXI hits my scanners right here. And these are the same scanners. This 

is um a high of day momentum scanner. And so what it's doing is it's searching the entire market in 

real time for stocks that are moving higher. You set your audio alerts on it and then you'll get 

a ding through your speakers on your computer and you'll hear ding ding ding. We've got something 

moving. So when I see something moving like this, I click the stock. I pull up the chart and I 

look for the pattern. So what's the pattern? I let it squeeze up and I wait for a pullback. 

I let it dip. And now what I'm looking for is a change in trend. So, sometimes we'll have a 

a dogee here. Sometimes we'll have a hammer, a bottoming tail. Other times we just have a 

small little red candle, a short body candle, and then the next candle we're looking to go 

green. So, right here, as that candle goes green, the change in trend has occurred. So, what 

is the moment that the change occurred? The moment is when this green candle broke the high 

of this candle right here. That's the moment the change occurred. And so that's the moment that 

I buy. What's my max loss on this trade? My max loss becomes the low of the pullback. So now 

I'm risking 1x for max loss and profit target has to be 2x, right? To justify the 2:1 profit 

loss ratio. And that would give me a target of back to the high a day. Now retesting high a day 

is a logical target. Usually stocks will retest the high a day and then they'll push a little bit 

higher before then giving another pullback which presents yet another opportunity to take another 

trade. And that's the beginning of these waves that we see in the market. So, I'm going to give 

you a little pop quiz here. All right. So, we're going to look at the actual chart. Now, you've 

seen the green candle squeezing up, the little pullback. And what we're looking for is that first 

candle to make a new high. So, would you be a buyer right here if that next candle goes green? I 

hope the answer was yes. You can see right there, that was the apex, the moment that candle made a 

new high, and then we squeezed all the way back to a new high of day. And that's a simple base hit. 

jumping in, jumping out, and taking profit. Now, I do have specific exit indicators that I 

rely on which tell me when to get out. So, I don't sell too soon, and so I also don't hold 

too long. But, uh, the entry is arguably more important so you're not chasing. You've got to 

make sure you've got a good entry. So, we focus on entries first. What about this one? We've 

got all these green candles in a row. We wait for a pullback. Now, we have that bottoming tail. 

Not quite a hammer, but almost. We're looking for first candle to make a new high right there and 

then a retest a high a day. This one goes even higher. That's great. That's an entry at about 

370 and a squeeze all the way up to over $4.70 right up here. That's phenomenal. It's a dollar a 

share. That's a great risk-to-reward ratio. Now, what about this right here? Okay, so in this case, 

this is a little bit different. We already had a pop. We had a pullback right here, which was good. 

That was fine. But now we have a little bit higher selling. These are bigger red candles. Notice the 

volume profile. We're seeing more selling. The problem when you start to see high volume selling 

coming in is that these stocks often unwind. So, the amount of volume on any given candle helps 

communicate whether these are going to go up or go down. One of the things that you guys have the 

benefit of is that for members at least at Warrior Trading, you can listen to my real-time market 

commentary as I'm trading. You get to see my positions window. You get to see as I'm getting in 

and getting out of trades. And so you get to hear me share with you my interpretation of the price 

action and call out things like, "Hey, we've got higher volume selling right here." Now, I might be 

wrong. I'm not right on everything, but it seems to me that it makes a lot of sense to listen to 

someone with real money on the line who's been trading for a long time, especially as a beginner 

versus trying to just figure this all out yourself because it's so easy to miss one of these little 

subtle indicators. So, is this an entry right down here? The answer is no. There is no setup here. 

The stock had setups earlier in this area, but now it's just going sideways. There's no trades there. 

This one, what about this? Well, unfortunately, you might say it looks good, but this indicator 

right down here shows us that the blue line has gone below the orange. That's a negative MACD, 

which is a divergence. We don't like that. This is a no trade. And boom, that's a no trade. It 

doesn't work. What about this one? Higher volume selling. Once again, that's a problem. So, we look 

at the volume profile. What about this one? Now, this is okay. High volume building. Yes, 

you've got a red candle here, but but in total, the buying volume is much stronger. Our MACD is 

positive. And this is a good entry spot. Boom. That's a nice squeeze higher. And so, it once you 

start using your technical indicators, once you start recognizing these buy and sell signals, it's 

very quick to eliminate setups that just aren't going to work, and you don't trade them. What 

about this one? Now, this looks pretty good to me. That's a nice squeeze. Yes. You have a little 

higher volume on the top candle, but nice little pullback. We stayed positive on the MACD, higher 

volume on these green candles, which is good. Volume comes back in. We break through the high. 

This is another one right here. Higher volume now. Little pullback. MACD is still open. We push 

a little bit higher and then we kind of stall out up here. Then the MACD goes negative. Higher 

volume coming in. And this becomes a little bit choppier. You might not end up taking that trade 

right there. Right there because of this initial move. So, I usually find that I do the very best 

at the beginning of a move. and I don't want to overstay my welcome. Now, in order to trade, 

I have to execute my orders using market data and level two. So, when you pull up your trading 

software, and this is one of the platforms that I use, but you could also see um our simulator 

right up here. When you pull up this software, um you actually see all of these numbers. This is 

market data, and this is communicating to us all of the buyers on the left and all of the sellers 

on the right. The bid is what people are bidding to buy. The ask is what people are asking to 

sell. And because these people are selling at 439, you could buy from them right now. You click 

437, whatever. You click buy and those shares are yours. If you want to get out, let's say at 437, 

438. I put my sell order at 437. And now I've got to wait for the price to go up. I've got to wait 

for someone to come and buy my shares at 437. So, I could wait and wait and wait. And I might be 

okay doing that, especially if I'm already up on the position. Or if I decide, you know what, I 

think I should just get out. What I could also do is I could sell at any time to one of these buyers 

right here. And so in this market, you can buy the moment you want to and you can sell the moment 

you want to to any one of the buyers or sellers that are right here sitting on the book. Now, some 

of the buyers and sellers on the book are market makers. They make the market through arbitrage. So 

they're always buying from someone who sells and they're always selling to someone who wants to buy 

and they profit from the spread. So essentially some market maker institution bank with very deep 

pockets just sits there providing some degree of liquidity all day long. So now as it comes back 

up to 37 38. There we go. There's 39. I put my order at 39. Let the price go up and my order got 

filled and I'm out. Let's see. I got filled at 30 38 I guess it was. So I'm out with profit and 

that's good. Now this is an important concept. Whenever you're trading, you're buying from 

someone who's selling. Whenever you're selling, you're selling from someone who's buying. And so, 

we're actively participating in this market. So, what if we pull up a stock, we look at this 

level two data, it's called level two data, and we saw that there was a 100,000 share buyer. 

That tells us that there's someone out there that wants to buy a lot of shares. That's very bullish. 

That's a positive thing. What if we see there's a 100,000 share seller? Well, that's a weakness. 

And so using the market data in combination with our charts and indicators, we now can form a very 

strong bias or well I don't want to say a bias, a thesis of what we think the stock is going to 

do. And so that gives me confidence in taking my trades. So I execute my orders using level two 

market data. And what's very important is that whenever I'm trading, I am using hotkeys. So I am 

empowering um I I am empowered through my keyboard to execute these orders very quickly. So if we go 

back to here, if I press shift one, it'll buy a thousand shares. So shift one, I'm in. And then 

control Z, I'm out. And just like that, I can buy and I can sell and I can buy and I could sell 

and I could do that all day long. Now, of course, if you just buy and sell like that, as you could 

see, you're not really making money. The price has to be going up. But what you want is software that 

allows you to get in and out that quickly. Now, uh I do have a list of brokers that I'm a big 

fan of that I think are phenomenal and have great software and a list of brokers that I would never 

use. So, I have other episodes here on YouTube where I rank the best brokers and the fastest 

brokers, which you guys could check out. But, um all that is to say, not all brokers are created 

equally. Is you want to make sure that when you're first practicing, of course, you're using a 

simulator. Some brokers don't offer simulators because they don't make money when you're trading 

a simulator. They just want you to use real money. So, unfortunately, most simulators you might have 

to pay for a little bit just to cover the market data cost, but you want to make sure when you're 

trading that you've got software that allows you to get in and out quickly. The last thing that 

you want to have happen is have a stock pop up 40 or 50 cents a share and you can't sell and take 

profit because you're fumbling with your keyboard to point and click and enter the correct price 

and the correct numbers and your fingers are too fat and you can't press the buttons right and then 

finally h now the price is down and you miss the whole move. It used to happen to me all the time 

until I learned that there's brokers out there that are better. And lo and behold, that's what 

a lot of the more successful traders are using, better brokers. You use better tools. And so, 

it's important to match the tools for the type of trading you're trying to do. Number seven, 

you've got to understand your metrics before you ever trade with real money. And what that means 

is reviewing your performance. Your performance by day of the week, your performance by time 

of the day, your performance by the price. So, we aggregate all of the data for you guys. So you 

can look, for those of you guys who are trading in our simulator at least, so you can see how you're 

performing. If you're not using our simulator, you can still upload your metrics to a third-party 

um uh uh platform. I use Trader View. This is the platform that I've been using now for more than 

a decade. So all of my trades in Trader View um I mean, I've just I've I've been thrilled with 

the platform. It's been really solid. I don't have any affiliate relationship with them, so it makes 

really no difference to me one way or the other what you might choose to use. Um, but it it's been 

really good. And what I like about it is the way you can kind of break down your performance. 

So you can go into a detailed report and you can look at your profitability based on, you 

know, based on time of day, based on, of course, the price and the volume. So you see, oh, I make 

the most on this price range, right? That's good to know based on, you know, all of these details. 

And as I go through them, I recognize the stocks I make the most money on. Well, what do these stocks 

have in common? What's the sector? You start to develop a connection of you start to see patterns. 

And picking up on patterns is critical to success in the market. You recognize a pattern of this 

is where I make the most money, you want to lean into that. You recognize a pattern of this is 

where I'm struggling, you want to pull away from that. And that's ultimately what trading is. It's 

using your metrics to make informed decisions. You're not making decisions based on gut, what 

you think, based just on what you know. Now, part eight is the beta phase in the sim. Transitioning 

from a simulator to real money has to be done carefully. And so, your first phase is alpha phase 

where you're just trading as much as possible. Getting in, getting out, getting in, getting 

out. And now we move forward to the beta phase, which is your dry run for going live. During the 

beta phase, I encourage traders to focus on just taking one trade a day. Keeping it really simple. 

getting in, getting green, getting out. Success is about keeping it simple. You can make a living 

trading doing just one trade a day. There's people that trade hundreds of times a day and they don't 

make money. Just focus on finding one really good setup, getting in, getting out, maximizing your 

buying power on that opportunity, and capitalizing on it. So the one trade a day challenge for uh 

for the beta phase is focusing on stocks that meet all five pillars of stock selection. Looking 

for one of the entries such as the first pullback which I already shared with you and getting in 

at that apex and then not selling until you see a valid exit indicator. During this first 10 days of 

taking one trade a day, by the end of it, you will know whether your accuracy very very simply is 

greater than 60%. You want it to be greater than 60% and you want to be profitable. If you are, 

you then replicate that same first 10 days with real money. Each day you report on your trades 

using this trade reporting dock and each week you report on your progress. And as you uh watch 

your progress, you monitor where you're seeing improvement and where you're struggling and you 

make adjustments as needed. So, the decision to go live and to start trading real money is not taken 

lightly. You don't do it until you've first proven you can make money through the beta phase. So, one 

trade a day. And I've asked members to send over some of their calendars so I could share them with 

you. And most traders are really good about this, taking one, maybe two trades a day. Some take a 

few more, some take a few less. But I want to see you have a calendar like this before you go live 

with real money. The reason is I want you to have a track record that you can anchor yourself to 

that is your source of self-confidence that you know it's worth putting real money on the line 

because of what you've done in the past. It's so important. So here's your next step. We have just 

scratched the surface and there is so much more to cover. So what I'm going to do is I'm going 

to put links to a couple other episodes right here that I think you guys will enjoy. They're a 

deeper dive. They continue further. There will be more episodes in this series leading up to my next 

small account challenge. If you want to watch over my shoulder during this challenge or any of my 

upcoming challenges, there will also be a link for a twoe trial at Warrior Trading, which is 20 

bucks. $20 for two weeks watching over my shoulder going through a selection of classes for my full 

length Warrior Pro curriculum. You're going to get a lot out of it. Now, if you found value in this 

episode, I hope you hit the thumbs up. Remember, every thumbs up will add an extra dollar to the 

match for donating money to charity. And so, I want to thank you guys for participating in this 

challenge with me. It's really exciting. And stay tuned for the next episode coming real soon. And a 

final reminder as always that trading is risky and my results aren't typical. So, manage your risk 

by always practicing a simulator before putting real money on the line. And make sure you check 

out these episodes right here and right here that I think you will enjoy for a deeper dive. We've 

got a lot more to learn. So let's keep studying.