Momentum Trading Strategy

Notes

Becoming a Better Trader

Building and improving your trading process over time: how to learn, which method to use, and how to measure progress.

Showing 1–5 of 5 notes

$LITE ×
View on Substack ↗

Stop Waiting for Someone to Hand You the Next Big Winner

If you are struggling to find the big winning stocks, you do not need to wait around for me or anyone else to tell you the names.

Open the Relative Strength Stock Screener and click the Leader / CANSLIM preset stock screen.

You will immediately see many of the market’s strongest names near the top of the list.

As you scroll through the list, some names will be extended. Those go on your watchlist so you can wait for the next proper pullback or setup.

Some will be near pivot points.

Some will already be actionable.

That is the entire point of the screener.

It is not there to overwhelm you with tickers. It is there to help you quickly identify where the real leadership is.

This is the same exact process I have used to find and share many of the biggest winners since January.

Names like:

SNDK

MU

AAOI

AXTI

DELL

CIEN

LITE

WDC

STX

SIMO

and many more!

Your job is to build the habit of checking the list, following the leaders, managing risk, and being ready when the setup appears.

Everything you need to learn the process is inside the Momentum Trading Strategy Course. I also provide a list of books that teach many of the same timeless principles.

Learn the process.

Use the tools.

Trust yourself.

You can do this.

View on Substack ↗

The Multi-Bagger Irony

A lot of stock newsletters sell people on the hope of finding the next multi-bagger.

A 100%, 200%, or 300% winner.

Many talk about holding for years to get the big returns.

What people don't realize is this:

By the time you figure out they were full of it, they already made plenty of money selling you the hope.

The funny thing is, I don't even teach or claim to give people multi-baggers.

But many investors would likely get similar or better results by learning how to identify true growth stock leadership, proper setups, institutional demand, and strong price action.

Here are a few names I mentioned in January and early February:

• AAOI +302%

• AXTI +294%

• SNDK +249%

• DELL +214%

• MU +160%

• LITE +155%

• CIEN +147%

• STRL +127%

• STX +126%

• WDC +124%

• INTC +101%

• AMD +101%

These were discussed in the paid subscriber chat and watchlist posts.

But to be clear, this is not what I do here.

I'm not telling you to blindly buy a stock and hold it until it becomes a multi-bagger.

The goal is to teach you how to find leadership, manage risk, identify proper entries, and build a repeatable process.

View on Substack ↗

Copying Traders Won’t Make You Rich. Learning the Way Might.

At this point in my trading, I don’t pay attention to what anyone else is doing.

But recently, I looked around and noticed something interesting.

Some of the traders I learned from, including Dan Zanger, recently were buying many of the same names, around the same areas, using the same types of setups I was seeing.

Names like: SNDK, DELL, MU, LITE

Why?

Because we learned from the same source material.

The same books. The same legends. The same principles. The same market truths.

When you truly learn a strategy, your decisions start to look similar to others who have learned the same way.

To outsiders, it can look like people are copying each other.

But that is not what is happening.

Will you be one of the few who carries the torch forward?

The traders who actually learn the process, study the patterns, understand the risk, and develop their own conviction are the ones who carry the torch forward.

That is how great trading knowledge gets passed down from one generation to the next.

Will you be one that carries the torch forward?

View on Substack ↗

You Don’t Pick the Big Winner. Your Process Finds It.

Here is something many beginners do not understand.

You can have a real strategy.

You can have a proven method.

You can know exactly what you are looking for.

And still, to find the big winner, you may have to take 10 qualified trades.

Six or seven may end up as small losses or break-even trades.

One or two may be average winners.

And then one may turn into something like SNDK or LITE.

That is the part most people miss.

The big winner usually does not announce itself in advance.

At the time of entry, it is just another name that fits the process.

That is why I do not get obsessed with any single stock.

I do not fall in love with the story.

I do not assume this has to be “the one.”

LITE was a big winner for me, but I did not know at the time it was going to be one of the one or two out of ten that really worked.

That is not how this game usually works.

Sometimes you know you have something special early, but most of the time you don’t.

Your job is not to predict with certainty which one will be the monster.

Your job is to follow the process, cut the ones that do not work, and stay with the ones that do.

That is why process beats obsession.

The beginner wants to know which stock is going to be the big winner.

The professional knows the big winner will reveal itself over time.

View on Substack ↗

What We Actually Do As Momentum Traders

For those of you that are new, here’s what we actually do.

Momentum Trading Strategy primarily focuses on swing and position trading, mainly in growth stocks, while following the trend.

Our strategy is rooted in principles that have worked for over 100 years.

The foundation comes from traders such as Jesse Livermore, Gerald Loeb, Bernard Baruch, Richard Wyckoff, Nicolas Darvas, William O'Neil, and more modern traders like Mark Minervini, David Ryan, Dan Zanger, Kristjan Kullamägi, along with many U.S. Investing Champions.

Different eras.

Same principles.

So what are we primarily looking for?

When the market is bad, we are preserving capital.

We are mostly in cash.

We are preparing for the next Stage 2 uptrend.

When the market is healthy, we are looking to participate in the strongest industry groups.

This changes cycle to cycle.

More recently, we’ve seen strength in areas like computer data storage with names like SNDK.

Telecom with LITE.

And semiconductors with AAOI.

Within these hot industry groups, we are looking to trade the biggest names and the best leaders.

These tend to have high relative strength (RS), meaning they are outperforming the index and most other stocks in the market.

They also have fuel driving that strength.

That fuel usually comes from:

  • Strong earnings

  • Strong sales

  • Or acceleration in earnings and sales

Also, something that might catch the market off guard.

These stocks are typically making new highs repeatedly.

If you look at the chart, they are consistently forming higher highs and higher lows.

So what we are doing is aligning:

  • The overall bull market theme

  • The hottest industry groups

  • The strongest stocks within those groups

All while looking to enter at points that offer low-risk, high-reward opportunities.

If we are wrong, we lose a small amount.

If we are right, we make multiples of that risk.

3x. 5x. 10x. 15x. 20x.

That’s the entire game.

My goal is to provide you with all the tools necessary to actually do this.

Paid subscribers get access to:

  • A web app with a Relative Strength Stock Screener to find these types of stocks

  • A weekly market newsletter to help you stay aligned with the market

  • A Relative Strength dashboard

  • A watchlist feature and additional risk management tools

  • Shared stock ideas and scans

  • And a full course that breaks all of this down in depth.

All for $120 per year.

That’s only $10 per month.

If that’s too expensive, then frankly, you probably shouldn’t be trading.