Becoming a Better Trader

Jesse Livermore Told You Who Would Lose Before He Told You How to Trade

Jesse Livermore did not open How to Trade in Stocks with a setup or a secret entry technique.

He opened with a warning.

“It is not a game for the mentally lazy... nor for the get-rich-quick adventurer. They will die poor.”

Think about that.

Before Livermore taught readers how to trade, he essentially told them who should not trade at all.

For years, people would corner him at dinner parties and ask the same question traders still ask today:

How can I make some money in the market?

What stock should I Buy?

Eventually, Livermore's answer became brutally simple:

“I don't know.”

He wasn't hiding the secret.

He was rejecting the premise.

Because asking a professional speculator how to make quick and easy money in stocks, Livermore argued, was like asking a surgeon how to make quick money in surgery.

There is no shortcut around the work.

What Livermore would offer was a signpost.

Study. Keep records. Think for yourself. Develop emotional control. Wait patiently. Act when the market gives you a legitimate opportunity.

More than 80 years later, traders are still looking for the shortcut Livermore warned them did not exist.

The market does not pay you because you want action.

It pays you when preparation, patience, emotional control, and opportunity finally meet.

That may be the most important lesson in the entire book.

No adventuring. No get-rich-quick mentality. Study the game and put in the work.

The Trading Edge Most People Are Too Lazy to Build

William O’Neil found that roughly 3 out of every 4 stocks follow the direction of the general market.

He also found that approximately 37% of a stock’s price movement is tied to its industry group, with another 12% tied to its broader sector.

That means nearly 50% of a stock’s movement can be influenced by its industry group and sector, while more than 75% of stocks tend to move with the overall market.

This is exactly why I spend so much time every weekend studying the general market, sectors, and industry groups.

It gives me a much greater awareness of the environment I am trading in.

Over the last 20 years, I have seen the difference in my own trading when I consistently put in this work. I have also seen what happens during periods when I have slacked off.

The difference in my portfolio has been drastic.

Is this work exciting? No.

A lot of it is boring. A lot of it is monotonous. It means sitting down weekend after weekend, when the market is closed, reviewing charts, studying relative strength, identifying leadership, tracking deterioration, and trying to understand where money is flowing.

But sometimes the boring, repetitive work is exactly where the edge comes from.

And I know most traders are not doing it.

So many great traders across completely different disciplines have emphasized the importance of market awareness and preparation. Day traders, swing traders, position traders, and investors may approach the market differently, but they repeatedly come back to the same idea:

Know the environment you are operating in and do your homework.

So if you are not getting the results you want, ask yourself a simple question:

Are you actually putting in this work every weekend while the market is closed?

And if not, why not?

Stop Managing Your Small Account Like a Billion-Dollar Fund

One of the most overlooked advantages in the market is having a smaller account.

We study legendary investors and traders such as Stanley Druckenmiller, Paul Tudor Jones, and Warren Buffett. We can learn tremendously from their principles, but copying how a multibillion-dollar portfolio must operate can cause retail investors to surrender one of their greatest structural advantages:

Speed and mobility.

Large institutions are oil tankers. You are a speedboat.

A large fund cannot move quickly into or out of many stocks without affecting the price. It must focus on highly liquid securities, build positions gradually, and unwind them carefully because institutional trading itself can create significant market impact.

Your account does not have those constraints.

You can:

• Enter and exit positions quickly

• Move into cash without explaining yourself to investors

• Concentrate on your best opportunities

• Trade smaller, liquid growth stocks that cannot meaningfully move the needle for a massive fund

• Change exposure rapidly when market conditions change

This does not mean buying illiquid garbage, overtrading, or taking reckless risks. It means recognizing that your smaller size gives you an opportunity set and level of flexibility that large institutions simply do not have.

Many investors also try to construct their portfolios like Warren Buffett. His principles are invaluable, but Buffett has management access, relationships, and negotiated deal opportunities that most retail investors do not.

More importantly, Berkshire must put an enormous amount of capital to work. Buffett acknowledged this constraint himself in Berkshire’s 2016 shareholder letter:

“What is easy with millions, struggles with billions.”

That is the natural mathematics of scale.

A 10% return on $10 million is $1 million.

A 10% return on $100,000 is only $10,000.

This does not mean someone with $100,000 should gamble recklessly to chase an unrealistic return. It means that a skilled growth stock investor with a smaller account has the flexibility to pursue higher percentage growth in ways that may be impossible for a multibillion-dollar fund.

This is why I am surprised more investors do not take advantage of growth-stock strategies such as William O’Neil’s CANSLIM approach while they are still building their capital.

Focus on:

• High Relative Strength

• Strong earnings and sales growth

• Leading industry groups

• The strongest stocks within those groups

• Sound Stage 2 setups

• Proper entries, position sizing, and risk management

• A healthy general market

The goal is not reckless speed. It is controlled compounding while your account is still small enough to remain fast and flexible.

As your capital grows, it is natural for percentage growth to slow. Your priorities may gradually shift toward diversification, capital preservation, income, and steadier returns.

There is nothing wrong with that.

But too many investors spend decades managing a small account like a pension fund, spreading their capital across slow-moving mega-cap and dividend stocks without ever taking advantage of the flexibility their size gives them.

Learn the principles from the market wizards.

But do not copy their constraints.

You are a speedboat. Stop steering it like an oil tanker.

William O’Neil Warned Us Decades Ago: More Information Is Not the Answer

Decades ago, William O’Neil wrote:

“Lack of information is no longer a viable excuse.”

Even then, O’Neil recognized that individual investors had access to more information than ever. The real challenge was separating relevant facts from the endless opinions, personal biases, and stock promotions competing for their attention.

Now add social media, YouTube, podcasts, Discord, newsletters, financial influencers, and AI-generated analysis.

His warning has never been more relevant.

The problem is not a lack of information. It is determining what deserves your attention and what should be ignored.

Opinions are infinite, but the tape is the only truth.

You do not need more input.

You need rules for what gets ignored.

Focus on:

• High Relative Strength

• Strong earnings and sales growth

• A confirmed market uptrend (Stage 2!)

• Leading industry groups

• The strongest stocks within those groups

• Sound setups and proper buy points

• CAN SLIM characteristics

Build your process. Run it. Mute the rest.

Stop Missing the Move!

Finding the right stocks is only half the battle.

You also need alerts built into your screening process.

If a stock makes your watchlist because it has:

• Strong Relative Strength

• Strong earnings and sales

• A leading industry group

…but hasn’t set up yet with a low-risk, high-reward entry, set the alert before it gets there or as it gets closer.

Because the market doesn’t care if you’re working, driving, at lunch, or looking at another chart.

Some of the best stocks can go from “not ready yet” to “actionable” very quickly.

And there’s nothing worse than opening the chart later and thinking:

“Damn. I missed the move.”

Your job isn’t to stare at 100 charts all day.

Your job is to build a process that tells you when the stocks that matter are becoming actionable.

Screen → Watchlist → Alert → Execute.

Then combine that process with the right order types, such as buy-stop orders, so you don’t have to be staring at the screen when the trigger occurs.

This is exactly why I built the watchlist inside our software around three stages:

Watch → Near Pivot → Actionable

With alerts built directly into the process.

This is one of the biggest mistakes I see newer traders make.

They do the work to find the right stock, but because they don’t have a process for tracking it, they either miss the move entirely or chase it after the stock is already extended.

Finding great stocks matters.

Being ready when they become actionable matters too.

This May Be the Most Important Trading Article I’ve Ever Written. It May Also Be the Least Popular.

I would not be surprised if this article gets fewer likes, comments, and reads than almost anything else I publish.

That is also part of the problem.

Everyone wants the setup, the stock, the screen, the entry, or the next big market call. Far fewer traders are willing to do the harder work of understanding themselves, building a process they can actually follow, and confronting the behaviors that quietly destroy otherwise profitable systems.

Richard Dennis, Paul Tudor Jones, Ed Seykota, Larry Hite, and Van Tharp all understood this in different ways.

If you are serious about succeeding in trading for the long run, I think this is one of the most important things you can understand.

Read it here:https://tradingmomentum.substack.com/p/why-most-traders-fail-even-with-a

Stop “Personalizing” a Proven Trading System Until You Understand What You’re Actually Doing

When you enter the markets, you really have two paths.

You can master a proven system, or you can become an inventor and build one yourself.

There is nothing wrong with either path.

The problem is when traders think they are doing the first while slowly drifting into the second.

Look at the lineage of growth-stock momentum trading.

William O’Neil influenced traders like David Ryan, Mark Minervini, and Dan Zanger. Then newer generations studied O’Neil while also learning from Minervini, Ryan, Zanger, and others.

Generation after generation, the core principles get passed down.

Each trader puts some of their own personality into it.

One trader tolerates a slightly larger drawdown. Another prefers tighter stops. One favors VCPs. Another gravitates toward cup-with-handle breakouts, flags, earnings gaps, or other setups. Their position sizing and trade management may differ around the edges.

But the meat and potatoes of the system remain intact.

This happens everywhere, not just in trading.

Most successful businesses did not invent an entirely new category from scratch.

They entered an existing market and executed better.

Maybe they built a stronger brand.

Maybe they offered better customer service.

Maybe they improved pricing, distribution, product quality, marketing, convenience, or the overall customer experience.

They did not necessarily reinvent the wheel.

They took something that already worked and found a way to execute it better or make it their own.

Then, every once in a while, someone truly invents something revolutionary.

That happens too.

But being an inventor is a completely different job.

Trading is no different.

If you want to invent your own methodology, great.

But understand what that actually requires.

Years of market observation.

Research.

Backtesting.

Forward testing.

Iteration.

Failures.

Data.

And enough evidence to determine whether your changes actually produce an edge. 

That is very different from learning a proven methodology and then changing rule after rule because something feels uncomfortable.

This is where I think many traders get into trouble.

They hear:

“You have to make the system fit your personality.” or "You have to develop your own system."

And that is true.

But there is a very fine line between personalizing a proven system and becoming an inventor.

You change the entry criteria.

Then the fundamental requirements.

Then the relative-strength requirements.

Then the market-timing rules.

Then the risk management.

Then the sell rules.

Then the setups.

Eventually, very little remains of the methodology you originally decided to learn.

At that point, you are no longer simply modeling a system that already works.

You are designing a new one.

And if you are going to enter the territory of an inventor, you need to apply the same level of research and rigor an inventor would.

Otherwise, you can end up in the worst possible place.

You are not mastering the proven system, but you are also not doing enough research to validate the new system you are creating.

You have neither.

Then when the results deteriorate, the conclusion becomes:

“O’Neil doesn’t work anymore.”

“Minervini’s system doesn’t work in today’s market.”

Maybe.

But first ask yourself a much harder question:

Are you even trading their system anymore?

There is nothing wrong with mastering.

There is nothing wrong with inventing.

Just understand which one you are doing.

Because sometimes the edge didn’t disappear.

You slowly changed the system until you changed the edge.

An MTS member gave me a feature idea that was too good not to build.

I loved the idea, so I got to work on it and pushed it live inside the MTS ETF Screener.

You can now open an ETF, see all of its holdings, click into the individual stocks, review their charts, fundamentals, and fund ownership, and quickly flip through the names without ever leaving the screener.

So if you find an ETF showing strong relative strength, you can immediately start digging into the individual stocks inside it to see what may be driving the move.

This is one of those features that seems obvious once you have it.

And it’s one of my favorite things about building MTS with the people actually using it. MTS members are helping shape what this software becomes.

Big thank you to JJ for the recommendation!

MTS Velocity keeps getting better.

Why CAN SLIM Is One of the Best Trading Strategies for People With a Full-Time Job

There are thousands of trading strategies.

Very few have been documented, studied, and successfully used across multiple generations of markets like William O’Neil’s CAN SLIM.

That’s why How to Make Money in Stocks is still one of the first books I recommend to serious growth stock traders.

But one of the biggest advantages of CAN SLIM doesn’t get talked about enough:

You don’t have to sit in front of six monitors all day to do it well.

O’Neil’s process is largely about doing the work ahead of time.

• Study the overall market and determine whether conditions favor buying.

• Watch the major indexes for accumulation, distribution, follow-through, and changes in price and volume.

• Study daily and weekly charts.

• Screen for companies with exceptional current and annual earnings and sales growth.

• Look for something new: a new product, service, management, industry change, or a stock moving toward new highs.

• Find the leaders, not the laggards, using relative strength.

• Focus on the strongest industry groups.

• Look for quality and increasing institutional sponsorship.

• Watch price and volume for signs of institutional accumulation and demand.

• Identify proper bases and exact buy points.

• Build your watchlist ahead of time.

• Then wait for the stock to prove itself.

That covers the heart of CAN SLIM without making the process unnecessarily complicated. O’Neil specifically taught that market direction should be determined by the price and volume action of the major indexes and the behavior of individual market leaders.

And you can do most of this work at night or on the weekend.

O’Neil even recommended reviewing charts weekly, creating a shopping list of stocks that meet your fundamental and technical criteria, and writing down the buy points ahead of time.

And the track record is hard to ignore.

David Ryan won the U.S. Investing Championship using these principles, and if you spend time going through the history of the competition, you’ll find winner after winner who credits William O’Neil, How to Make Money in Stocks, CAN SLIM, or strategies heavily influenced by the same growth and momentum principles.

We’re talking about traders producing +100%, several-hundred-percent, and even 1,000%+ returns. The championship continues to produce verified results in those ranges today.

The system itself wasn’t built around somebody’s theory of how markets should work.

It came from studying generations of the market’s greatest winning stocks and identifying the characteristics they shared before their biggest advances.

That’s what I love about CAN SLIM.

There are plenty of other great trading edges.

But there aren’t many that are:

Well documented. Repeatable. Built from more than a century of market history. And realistic for someone who still has a career and a life outside the market.

And you can take it as far as you want.

The same basic growth and momentum principles have influenced championship traders, full-time professionals, and people who went on to manage outside capital.

But you don’t need to become a full-time screen watcher to become very good at it.

For a growth stock investor or position trader using daily and weekly charts, CAN SLIM is still one of the best foundations ever put on paper.

Growth Traders: Why Are You Using Options?

First, this is specifically for growth-stock investors and momentum traders following a CAN SLIM, O’Neil, Minervini, Ryan, Zanger, Kullamägi or similar approach.

If that’s not how you trade, I’m not talking to you.

For everyone else, ask yourself:

Why are you using options?

If the answer is:

• “I want more leverage.”

• “My account is small.”

• “I can control more shares with less money.”

• “I can make a bigger percentage return.”

Then I’d seriously question whether you should be using them.

Because that’s not really an options strategy.

You’re using options for leverage while accepting expiration, time decay, implied volatility, strike selection, spreads, and liquidity risk.

And I don’t think it’s a coincidence that some of the greatest growth-stock traders we study either rarely used options or actively warned against them.

O’Neil wrote that options involve substantially greater risk and volatility than common stocks and believed investors should first prove they can make money in stocks before considering them.

Minervini stopped trading options because he felt there was too much working against you. David Ryan rarely used them because of time decay. Dan Zanger said he didn’t really start making money until he stopped “playing with options.”

Zanger even listed “Avoid options” as one of his top trading rules.

And for the more aggressive short-term swing traders who look up to Kristjan Kullamägi, the message isn’t much different.

Kullamägi strongly discourages developing stock traders from using options. His own FAQ says to avoid them until you’ve already made millions trading stocks and points out that once you’ve done that, you probably won’t need them anyway. He started with only a few thousand dollars and built an extraordinary fortune trading stocks, ultimately reaching roughly $100 million without needing options as the engine of his strategy.

The strategy we follow does not require options to achieve superperformance.

The edge is finding the strongest stocks, buying them at the right time, controlling risk, cutting losses, and getting the most out of your winners.

If you want more exposure and your system, experience, market conditions, and risk parameters justify it, consider traditional leverage. You don’t need to turn a stock trade into an options trade just to get leverage.

If you want leverage, use leverage. If you want to trade options, have an actual options strategy.

Now, if you’ve built an options-specific system, back-tested it, forward-tested it and/or modeled it, understand exactly what options add to the strategy, and have demonstrated positive expectancy, then by all means use them.

That’s different.

But most growth traders I talk to aren’t using options because options improve their edge.

They’re using them for leverage and making an already difficult game even harder.

Your Trading Strategy Has to Fit Your Life

You can study every Market Wizard on the planet and still fail if you copy their strategy without considering your own circumstances.

Your starting capital matters.

Your available time matters.

Your risk tolerance matters.

Your financial obligations matter.

Even the asset class matters. A strategy that works beautifully with a large account may be completely impractical with a smaller account if the position size required would violate your risk parameters.

The same goes for trading style.

If you work full time, trying to trade like someone staring at screens all day may be setting yourself up for frustration before you even begin.

This is why Dr. Van Tharp emphasized building a trading plan around your goals, objectives, resources, and constraints.

There is no single “best” trading strategy.

There is a best strategy for you, at this stage, with the capital, time, and risk you have available right now.

Before asking, “How did this great trader do it?”

Ask:

“Does the way they traded actually fit the life and account I’m trading with?”

That question can save you years of frustration.

Everybody Wants the Profits Nobody Wants the Process

Everybody wants to make a lot of money in the market.

But very few people want to master the skills required to do it.

Chart reading. Price action. Supply and demand. Stock screening. Position sizing. Risk management. Psychology.

They don’t want to study hundreds of charts, review trades, learn from mistakes, build rules, and develop the discipline to follow them.

They want the profits without the process.

That’s why so many traders are constantly searching for shortcuts.

But there are no shortcuts.

At the same time, this is not rocket science.

You do not need to be the smartest person in the room. Your ability to execute a sound process with discipline matters far more than your ability to intellectually explain everything happening in the market.

A lot of market content is either fear driven or filled with sophisticated commentary that sounds impressive but does very little to make you a better trader.

Just scroll through and look.

The skills that matter are simpler:

Can you read price and volume?

Can you find strong stocks and proper setups?

Can you size positions correctly and control risk?

Can you cut losses?

Can you manage winners?

Can you follow your rules when your emotions are telling you not to?

The concepts are not that complicated.

Executing them consistently is the hard part.

Everybody wants the profits. Few are willing to master the process that produces them.

The Trading Service Everyone Wants Is the One I Refuse to Provide

One of the most in-demand products in trading is an alert service.

Tell people what to buy, when to buy it, and when to sell it.

I refuse to offer one.

One passage from Market Wizards helped me turn a corner in my own trading. Brian Gelber was asked:

“What does the average trader do wrong?”

He answered:

“He overtrades and begs for tips.”

That made me realize I needed to stop searching for shortcuts, stop gambling, and actually learn how to trade.

I dedicated myself to mastering William O’Neil’s How to Make Money in Stocks, along with Mark Minervini’s books and course.

You would think receiving tips from a great trader would lead to success.

It does not.

Even when the trades work, someone who has not learned the complete system will eventually find a way to sabotage the results.

After doing this for 20 years, I have never heard of anyone building enormous, lasting wealth from alert services. They may experience short-term success, but eventually they blow up or lose everything they made.

I am not going to get into the psychology behind it. Frankly, it does not matter.

Alert services have existed for decades. The traders and investors who become consistently profitable and actually keep what they make are the ones who learn how to do it themselves.

It is never the people blindly following tips and alerts.

If you do not believe me, read the Market Wizards books. You will hear the same message repeatedly. Or ask any great trader.

That is why I spent so much time building a course that teaches people how to screen for stocks, evaluate setups, manage risk, and develop a complete process.

Then I created affordable software that helps them find those opportunities themselves.

When I share a ticker, or someone in the community shares one, it should be done professionally. Share the setup, why it matters, the risk, and what would invalidate the trade, similar to how an idea would be shared inside a professional firm.

But you still need to plan and manage your own trade.

That does not mean beginners should be afraid to ask questions or share their own ideas or trades. I spend a great deal of time each day answering questions, discussing setups, and helping people think through their trades. That is education, and it is completely different from blindly asking for a ticker or an alert.

I do not want ticker sharing to become the primary function of this community. The second I see people blindly throwing out tickers or turning this into an alert room, I will call it out. If it continues, they will be banned.

Many people have not even completed the course, learned the basics, or learned how to screen for stocks.

Until you understand those fundamentals, you should not be focused on alerts or tickers.

If alerts are what you want, there are plenty of immoral people willing to take your money. Many of them have larger followings, better marketing, and will be easy to find.

Momentum Trading Strategy exists to teach people how to become growth stock investors like William O’Neil and David Ryan, and momentum traders like Mark Minervini and Dan Zanger.

So if you are looking for alerts, please do not subscribe, follow, or waste your time here.

Come back when you are ready to stop begging for tips and learn how to trade.

The One Weak Link Keeping You From Consistent Profits

If you are not getting the results you want, the answer may not be another strategy.

You may be solid in nearly every area of trading but weak in one, and that one neglected weakness can be the difference between consistent profitability and consistent underperformance.

So step back and ask yourself:

Have I actually put in enough work to understand, practice, and improve in each of these areas?

Market environment: Do you understand the conditions you are trading in and know when your strategy performs best?

Proven setups: Do you have a clearly defined playbook, or are you trading whatever looks interesting that day?

Chart reading: Can you distinguish a proper setup from a defective one, an extended stock, or a stock beginning to break down?

Execution: Have you practiced your setups enough to execute them with precision?

Position sizing and risk management: Do you know how much to risk, how large to trade, and which position-sizing strategy fits your system and risk tolerance?

Stock selection: Are you consistently screening for accelerating earnings and sales, high relative strength, institutional demand, and strong industry groups?

Sell rules and trade management: Do you know how to place your stop? Do you have rules for cutting losses, protecting profits, adding to winners, and selling into strength or weakness?

Trading psychology: Can you follow your rules through losses, drawdowns, and even success? I have watched traders prove they have an edge, grow their accounts, then suddenly sabotage themselves and return to square one. They repeat the same cycle because something deeper has never been addressed. I am not a psychologist, but I have seen it enough to know this area should never be ignored. Maybe it is not you. But maybe it is.

Trade planning: Are you creating a plan before money and emotions become involved?

Rules and business plan: Are you running your trading like a serious business, or improvising every day?

Review: Are you conducting after-action reviews to identify what worked, what failed, and what must improve?

Study: Are you studying the biggest winning stocks in history and learning the characteristics they repeatedly shared?

Have you read the books? Taken the course? Learned how to properly use professional screening and market-analysis tools such as MarketSurge or the Momentum Trading Strategy software?

You can be strong in nearly every one of these areas and still underperform because of one neglected weakness.

Sometimes the breakthrough is not finding something new.

It is finally fixing the part of your trading you have been avoiding.

Most Traders Don’t Have an Information Problem. They Have an Effort Problem.

“You can lead a horse to water, but you can’t make it drink.”

There has never been more trading information available.

Books. Courses. Screeners. Software. Podcasts. Interviews. Market history. Risk tools.

Yet most traders still refuse to do the work required to become consistently profitable.

They want the winning stock without learning how to find it.

They want confidence without preparation.

They want discipline without rules.

They want results without reviewing their trades, studying charts, understanding market conditions, mastering position sizing, or building a repeatable process.

I used to share stocks I was watching, entry levels, stop locations, and trade-management ideas. Many of those stocks went on to gain hundreds of percent.

But I eventually realized I wasn’t creating better traders.

I was creating dependence.

So I built a course to teach people how to find their own stocks. Then I built software to give them the tools to scan, analyze, manage risk, and review their performance.

But none of it matters if they refuse to use it.

The course cannot help you if you don’t take it.

The software cannot help you if you don’t learn it.

The rules cannot protect you if you keep breaking them.

This message isn’t for everyone.

It’s for the 1%.

Also, the 1% can be anybody.

Kristjan Kullamägi was a security guard before turning a few thousand dollars into more than $100 million.

Mark Minervini was broke and a junior-high school dropout before becoming one of the greatest stock traders of his generation.

The market doesn’t care where you came from.

It doesn’t care about your education, gender, religion, ethnicity, job title, or social status.

It cares about what you consistently bring to it:

Preparation. Discipline. Risk management. Emotional control. Relentless review.

The 1% isn’t a group you are born into.

It is a group you choose to join through your actions.

None of This Knowledge Started With Me

I’ve learned from many of the same books I’ve shared with you, especially the work of William O’Neil and Mark Minervini.

I’ve also been fortunate to learn from mentors who were willing to share their experience, their mistakes, and the lessons it took them years to understand.

None of this knowledge is mine alone.

Every generation of traders learns from the people who came before them, tests those principles through their own experience, and eventually passes the lessons forward.

That is all I’m trying to do.

I’m taking what others were generous enough to teach me, combining it with what the market has taught me over the years, and sharing it in a way that may help someone else avoid a few mistakes and shorten their learning curve.

Maybe one day, you’ll do the same for another trader.

That is how knowledge survives.

One person learns it.

One person applies it.

Then one person passes it on.

Most Traders Look at Price. The Best Look at This.

William O’Neil did not invent relative-strength analysis, but he was one of the most influential investors to make it practical, measurable, and widely accessible to individual traders.

Through Investor’s Business Daily, MarketSmith, and what is now MarketSurge, O’Neil helped popularize the idea of ranking stocks by their price performance relative to the rest of the market.

His Relative Strength Rating became a foundational tool for identifying potential market leaders before they became obvious to everyone else.

His book, How to Make Money in Stocks, is still one of the best places to begin studying growth investing, momentum, earnings growth, institutional demand, relative strength, and overall market direction.

I used MarketSurge for years and eventually built my own software for paid subscribers around many of those same foundational principles.

It includes many of the features I relied on most, along with expanded relative-strength tools, custom lookbacks, anchor-date analysis, historical RS, and multiple timeframe comparisons, all at a much lower price.

Relative strength will not tell you everything.

But once you truly understand how to use it, you will never look at the market the same way again.

Why Doesn’t the RS Scanner Include Every Stock?

A member recently asked why the MTS RS Scanner shows roughly 3,200 stocks when platforms such as TradingView list substantially more.

The difference is intentional.

The purpose of the RS Scanner is not to rank every security that happens to be listed. It is to rank a practical universe of stocks that growth and momentum traders could realistically consider trading.

The current universe requires:

• A NASDAQ or NYSE listing

• A share price of at least $5

• Average daily volume of at least 100,000 shares

• A market capitalization of at least $100 million

• No OTC securities

Why filter the universe?

Because Relative Strength is only as useful as the stocks being compared.

Including thousands of illiquid penny stocks, dormant securities, and thinly traded microcaps may produce a larger universe, but it does not necessarily produce more useful rankings.

A stock can rise sharply simply because a small amount of buying moves the price. That does not mean it is attracting meaningful institutional demand or becoming the type of sustained market leader most momentum traders are looking for.

The current filters are actually fairly lenient.

William O’Neil often used a minimum share price of $10, while traders such as David Ryan, Mark Minervini, Dan Zanger, and Kristjan Kullamägi generally focus on stocks with far greater liquidity.

The goal is not to rank every stock.

The goal is to rank the stocks momentum traders are most likely to actually trade.

Your Strategy Isn't Broken. You're Ignoring the Context.

One of the biggest mistakes beginner traders make is believing strategies, setups, and indicators work the same way in every market.

They don't.

The same strategy can perform extremely well in one environment and struggle badly in another.

The same setup can produce powerful follow-through when the market, industry group, and stock are aligned, then repeatedly fail when those conditions disappear.

The same indicator can be bullish in one situation and meaningless in another.

Education matters, but experience develops the awareness to understand when each signal actually matters.

A novice sees an overbought reading and immediately thinks, "Sell."

An experienced trader asks:

What is the market context?

Did the market just break out of a six-month correction, with institutions returning and the indexes reclaiming key moving averages?

Or are we months into an extended rally, with leadership stocks breaking down, distribution increasing, and volatility rising?

The same indicator can flash in both situations, but the message is completely different.

After months of consolidation, a few powerful weeks may only be the beginning of the move.

After months of running hot, that same reading may be warning you to sell positions and reduce exposure.

The indicator didn't change.

The context did.

The same applies to your strategy and setups.

A breakout strategy has better odds when the market is healthy, leadership is expanding, strong industry groups are producing multiple winners, and institutions are aggressively buying.

That exact same breakout setup has much lower odds when the indexes are weakening, yesterday's leaders are breaking down, and the stock belongs to a weak industry group.

Eventually, you start saying:

"This strategy doesn't work."

But the strategy may not be the problem.

You may be using it in the wrong market, in the wrong group, and in the wrong stocks.

Experienced traders are not reading one signal.

They are reading the entire environment.

Years of screen time do not simply teach you patterns.

They teach you how the pieces fit together.

No single factor makes the decision.

It is the weight of the evidence.

Situational awareness is also difficult to maintain when you are emotionally overwhelmed by oversized positions or unwilling to accept the risk you placed in the market.

Before considering an individual trade, ask:

• Is my strategy suited for this market?

• Are my setups currently producing follow-through?

• Does this indicator matter in the present context?

Before every trading day, ask:

"What kind of market am I in?"

Once you answer that question, everything else becomes easier to interpret.

Context is the lens through which every strategy, setup, and indicator should be viewed.

Why Great Traders Can Be Bullish and Bearish at the Same Time

One of the most confusing yet surprisingly simple concepts for new traders is hearing one person say they are buying the S&P 500 while another says they are shorting it.

Even more confusing?

Sometimes the same trader is doing both.

No, they are not necessarily hedging.

They are trading different timeframes.

A long-term investor or position trader may believe the S&P 500 remains in a cyclical or secular bull market and continue adding to long-term investments.

At the exact same time, that trader may short the market as a swing trade because a correction is unfolding over the next few days or weeks.

Just look at the chart of any long-term bull market. You will find several meaningful corrections along the way.

Both trades can be profitable because they are answering two completely different questions.

Long-term: Where is the market likely headed over the next 6 to 24 months?

Short-term: What is the highest-probability move over the next few days or weeks?

These are not contradictions.

They are simply different lenses.

Even among investors, timeframes can vary dramatically.

One investor may be buying during a cyclical bear market because they believe the secular bull market remains intact and their outlook is 10 to 20 years.

Another investor may be selling the exact same market because their timeframe is only three to five years.

Both decisions can make sense.

The same is true even among swing traders.

One trader may be long based on a setup expected to play out over the next four to six weeks, while another is shorting a pullback expected to last only three to five days.

Both can be right.

Both can make money.

This is where beginners often get lost.

They hear opinions from investors, position traders, swing traders, and day traders and assume everyone is talking about the same move.

They are not.

Before accepting or rejecting anyone’s market opinion, ask one simple question:

“What timeframe are they talking about?”

Once you understand that, many of the apparent contradictions in the market disappear.

The market can be bullish on one timeframe and bearish on another.

Great traders understand the difference.