Short lessons on momentum trading, every day.

Your Broker Could Be Stopping You Out at Prices the Stock Never Traded.

Here's a warning for traders, especially beginners and those using offshore brokers or platforms offering 24-hour trading.

A trader reached out yesterday because his stop-loss on a U.S. stock had been triggered. He believed his broker's chart showed the stock dropping to $184.25, but MTS Velocity showed nothing close to that price.

My first thought? Great, I've got a bug in my software to fix. 😂

So we investigated.

On October 8, during regular market hours:

• MTS Velocity: $187.83 low

• Schwab thinkorswim: $187.83 low

• TradingView: Consistent with the same price action

• Trader's reported broker price: $184.25

We also checked pre-market and after-hours exchange data, where the lowest trade we found was $187.61.

That's a difference of more than $3 between the reported broker price and the lowest exchange trade we found.

But here's where things got interesting.

His broker offers overnight trading, and at the time of his screenshot, the spread between the Buy and Sell quotes was nearly $3!

Something many beginners don't realize is that your broker's displayed price isn't necessarily the last price a stock actually traded at.

Depending on the broker, stop-loss orders can be triggered by bid/ask quotes rather than actual exchange transactions. During overnight trading, liquidity can be extremely thin, spreads can widen dramatically, and prices may differ between trading venues.

We haven't confirmed exactly what triggered this particular stop, but it raises an important issue.

KNOW YOUR BROKER.

There are plenty of questionable offshore brokers out there, including poorly regulated and outright fraudulent operations. Some brokers offer CFDs or other derivatives rather than actual ownership of U.S. shares. In those arrangements, the broker may have considerable discretion over the quotes and spreads displayed to customers.

That doesn't automatically mean there's wrongdoing. Plenty of international brokers are perfectly legitimate.

But if you're trading U.S. stocks, you should know:

• Are you buying actual shares or trading CFDs?

• Where does your broker get its prices?

• Do your stops trigger on actual trades or bid/ask quotes?

• Are your stop orders active outside regular market hours?

• Who regulates your broker, and what protections do you have?

If your broker can't clearly answer these questions, that's a major red flag.

And on a personal note, this investigation was pretty satisfying.

I went into it expecting to find a bug in MTS Velocity. Instead, our market data matched Schwab's regular-session low to the cent and was consistent with TradingView.

A nice bit of validation for what we're building.

Sometimes the problem isn't your trading strategy or stop placement. It's how your broker handles your orders.

“You Only Matched the S&P 500. Why Even Bother Trading?”

A lot of traders are chasing superperformance.

But there's something about trading performance that I think gets overlooked far too often.

When someone spends an entire year actively trading and finishes with returns comparable to the S&P 500, you'll inevitably hear:

"Could've just bought SPY and saved yourself the trouble."

Maybe, but have you looked at how much risk that trader took to achieve those returns?

Consider a hypothetical example.

The S&P 500 finishes the year up 11%, but experiences a 20% maximum drawdown along the way.

Another trader finishes up the same 11%, but their maximum portfolio drawdown was only 5%.

Same return. One-quarter of the drawdown. Completely different return-to-drawdown profile.

Peter Brandt discusses this relationship extensively in Diary of a Professional Commodity Trader. Van K. Tharp emphasizes evaluating returns relative to maximum peak-to-trough drawdowns. And in Jack Schwager's Market Wizards, Marty Schwartz makes it clear how much importance he places on controlling the downside.

These traders understood that performance isn't just about how much money you make. It's also about the risk involved in making it.

Now, does one year of lower drawdowns automatically make someone a better trader? Of course not.

But maybe that trader isn't trying to achieve 100% annual returns.

Maybe their objective is to preserve capital, minimize drawdowns, generate reasonable returns, and enjoy something they're genuinely passionate about.

And there's absolutely nothing wrong with that.

I'll continue pursuing superperformance, but I also recognize that not every trader has the same objectives.

Before dismissing someone's trading because they merely matched the market, consider what they accomplished relative to the risk they took.

How much you made is only half the story. How much you had to risk is the other half.

Maybe You Don't Want to Quit Trading. Maybe You're Just Tired of Feeling Like You're Failing.

You've spent months, maybe years, studying charts, reading books, practicing, and putting in the work.

But the results aren't coming.

Eventually, something you once loved starts feeling like something you dread. Every loss becomes personal. Every setback makes you question whether you're cut out for this.

You start thinking about quitting.

But here's a question I want you to ask yourself:

If you woke up tomorrow with all the skills, discipline, and consistency you've been working so hard to develop, would you still love trading?

If the answer is yes, maybe you haven't fallen out of love with trading.

Maybe you've just buried that love under the pressure you've been putting on yourself.

In Mind Gym, sports psychologist Gary Mack explains how fear of failure, perfectionism, and unrealistic expectations can rob athletes of the joy they once found in their sport.

And sometimes, the harder they push, the worse they perform.

The answer isn't necessarily to work harder. Sometimes it's to step back, simplify, and rediscover why you started.

Focus on small improvements. One good decision. One properly executed trade. One lesson learned.

You can work incredibly hard at something without being incredibly hard on yourself.

And remember, progress doesn't always happen on your timeline.

Maybe you don't need to quit trading. Maybe you just need to change your relationship with it.

Have you ever wanted to walk away from something you still loved, simply because you were exhausted from trying so hard and still feeling like you were failing?

Before you give up on trading, ask yourself whether you've truly lost your passion or whether you've simply buried it beneath the pressure you've been putting on yourself.

Don't confuse being tired of the struggle with being ready to give up on the dream.

This Stock Just Rallied 133%. Would You Buy It HERE?

No ticker. No dates. No hindsight.

You're looking at this chart in real time. You have no idea what happens next.

What's your move?

A) Buy. I like what I see.

B) Wait. I need more confirmation.

C) Pass. It's too extended.

A, B, or C? And WHY?

I'll reveal the stock, what happened next, and my analysis in a follow-up note.

+251% Earnings. +1,843% Sales. And a Chart That Doesn't Care.

LQDA is another great reminder of why you should NEVER fall in love with a stock.

Look at these numbers:

• Quarterly EPS growth: +251%

• Quarterly sales growth: +1,843%

• Fund ownership growth: +30.7% in the latest reported quarter

These are the kinds of fundamental numbers we study in the biggest stock market winners of all time.

But look at that chart. Massive selling volume, a complete breakdown through the 50-day and 200-day moving averages, and a stock down over 60% in just one month.

William O'Neil put it perfectly in How to Make Money in Stocks:

"The moral of the story is: never argue with the market."

Explosive earnings and sales don't give you permission to ignore price action, institutional selling, or your exit rules.

You can be absolutely right about a company's fundamentals and still lose a fortune trading its stock.

Fall in love with your process, not your positions.

Stop Trading Other People’s Fear

Most people remember a market selloff. Far fewer carry the lesson into the next one. My trading improved significantly when I stopped forgetting what the last panic had taught me.

I put real effort into staying stoic. My politics, personal beliefs, and opinions about what should happen cannot dictate how I trade. The market doesn’t owe me an outcome that agrees with my worldview.

COVID. The 2025 tariff scare. Different headlines, same temptation to let fear take over and convince yourself that this time, there’s no coming back. Even experienced traders can become so invested in a bearish narrative that they struggle to recognize when the market starts proving it wrong.

When pessimism gets overwhelming, I start feeling like a jockey holding back a horse that wants to run. I’ve learned that some of the most prosperous trading periods emerge from the wreckage of a bear market or a major scare. The challenge is staying patient enough to wait for price to confirm the turn.

Fear gets my attention. Price gives me permission.

Everyone calling for another 1929 doesn’t mean the bottom is in. It means I need to stay alert to a change in character instead of letting everyone else’s emotions close my mind to opportunity. And when bearish voices disappear and everyone thinks making money is easy, I want to be paying just as much attention.

You don’t need an opinion on every headline. Follow price action, a few key moving averages, and the behavior of leading stocks. When the market’s character deteriorates, reduce exposure and honor your exits. When it improves and valid setups emerge, start putting money back to work.

Be more stoic. Stay flexible. Learn the lessons, and carry them into the next cycle.

Stop Calling Your Comfort Zone Your Personality

“Choose a trading style that fits your personality.”

Good advice, but there’s a fine line between knowing yourself and using “that’s just who I am” to avoid working on your weaknesses.

Imagine someone who knows exactly what career they want, but pursuing it requires public speaking. They’re terrified of speaking in front of people, so they walk away from something they love and justify it by saying, “It doesn’t fit my personality.”

Maybe the career fits them perfectly. Maybe public speaking is simply a skill they need to develop, and the discomfort is worth overcoming to do what they truly love.

Trading is no different. Your temperament, strengths, schedule, and goals should influence how you trade, but even a strategy that suits you will demand things that don’t come naturally. Taking a planned loss. Waiting patiently for a setup. Resisting the urge to chase. Feeling uncomfortable doesn’t automatically mean you’ve chosen the wrong style.

Sometimes you need to adjust your approach. Sometimes you need to work on yourself. The hard part is being honest enough to recognize which one applies.

No one else can draw that line perfectly for you, but before you dismiss something as “not my personality,” ask yourself: Does this genuinely conflict with my strengths and goals, or am I avoiding a weakness I need to overcome?

Most Traders Don’t Need Another Indicator. They Need to Read These Books.

If you can't read price and volume, identify leadership, recognize a proper setup, screen for the stocks and industry groups actually in play, and define your risk before entering, more indicators probably aren't going to fix your trading.

One thing that has surprised me on Substack is how many traders are missing these foundational skills and are trying to trade live money.

Some can't identify a proper cup with handle or VCP. Others know the pattern names but don't understand what they're actually looking for underneath them: supply and demand.

A constructive setup often shows the same basic characteristics: strong price action when demand is present, weaker volume as the stock pulls back or moves sideways, tightening price action as supply dries up, and renewed demand as the stock moves through its pivot.

If these are gaps for you, you don't need to reinvent anything.

Start with:

William O'Neil:How to Make Money in Stocks

Mark Minervini:Trade Like a Stock Market Wizard and Think & Trade Like a Champion

Anna Coulling:A Complete Guide to Volume Price Analysis

Stan Weinstein:Secrets for Profiting in Bull and Bear Markets

Then use Edwards & Magee, John Murphy, Schabacker, Jiler, and Momentum Masters to go deeper.

But reading isn't enough. You have to run screens, study hundreds and eventually thousands of charts, review your trades, study your mistakes, and repeat the process until you can recognize these characteristics almost instinctively.

The books give you the blueprint. Screen time builds the skill.

You do not have to invent a trading strategy from scratch to become a successful trader.

Look at how many of the traders we admire learned from those who came before them.

Mark Minervini and David Ryan both learned from William O’Neil’s work. Ryan worked directly for O’Neil, while Minervini has openly discussed the lessons he learned from him.

Stanley Druckenmiller learned from his early mentor, Speros “Doc” Drelles, and later from George Soros.

Jerry Parker trained in the Turtle program led by Richard Dennis and William Eckhardt, then built his career on that foundation.

And O’Neil’s own education reached back further. He studied Jack Dreyfus’s stock purchases and learned from the writings of Gerald Loeb, Jesse Livermore, and Bernard Baruch.

These traders contributed their own research, insights, and refinements. They also benefited from knowledge that already existed. Some learned directly from mentors. Others learned through books, seminars, and studying successful investors.

The knowledge kept building from one generation to the next.

I’m incredibly grateful for that. These people spent years studying markets, making mistakes, refining their approaches, and sharing what they learned. Their work gave me a foundation that would have taken far longer to develop on my own.

Most of my struggles as a trader were not about inventing a system with an edge. They were about getting out of my own way and consistently following the approach I had learned.

Accepting losses. Staying patient. Taking the right setups. Managing risk. Becoming skilled enough to execute the same process under pressure.

A medical student learns from an existing body of knowledge. An athlete learns established techniques from coaches. Both still have to put in years of practice to become proficient.

Having access to the knowledge gives you a starting point. Mastery takes work.

The way I see it, adopting an established trading approach is a little like buying into a franchise. You start with an operating model someone else has spent years developing. You still have to understand it, manage it properly, and demonstrate that you can make it work.

Inventing an entirely new strategy adds another job: developing and validating the method itself.

If that is what you want to pursue, I respect it. Just recognize that you have chosen an additional challenge. You’re trying to establish an edge while also learning how to execute it.

I chose to build on foundations that successful traders had already documented.

Over time, you refine your approach to fit your temperament, timeframe, and experience. You track your results and check whether those refinements preserve or improve the edge.

Jerry Parker is a good example. He retained the foundations he learned as a Turtle while refining how he applied them over the years.

You can develop your own style without starting from zero.

Learn the foundations. Put in the practice. Understand why the rules exist. Then make the approach your own.

A losing trade can be well executed. A winning trade can reward terrible behavior.

If you judge every decision solely by whether it made money, you can end up reinforcing the very habits that eventually hurt you.

In Super Trader, Van Tharp gives us a useful question to ask at the end of the day:

“Did I follow my rules?”

Start there. Then review your results across a series of trades. You need to know whether you’re following your process and whether that process is actually working.

Brett Steenbarger makes a related point in Positive Trading Psychology: when we make trading responsible for satisfying our ego and need for recognition, letting go of outcomes becomes much harder.

And that is where so much avoidable pain comes from.

You need to be right. You need to make back yesterday’s loss. You need this stock to prove you’re a good trader. You need one big winner to change everything.

You’ve made one position responsible for far too much.

Now you’re moving your stop farther away to avoid taking a loss. You’re forcing entries to make money back. You’re cutting winners for emotional relief and holding losers because accepting the loss feels personal.

Trading becomes a remarkably effective form of self-inflicted psychological torture when you put that much weight on one position.

A stock hitting your stop does not make you a failure. You can feel disappointed, take the loss, and still follow your plan on the next trade.

Get comfortable taking a planned loss. Keep your risk manageable. Give your winners room to develop. Build confidence through consistent execution and honest review.

Your next trade is one trade. Stop asking it to carry your entire future.

Get really comfortable with losing. Comfortable enough that you stop needing any individual trade to work.

I know that sounds strange, but you need to reach a point where a stock can stop you out without taking your confidence, discipline, and emotional balance with it.

Tom Hougaard gets right to this in Best Loser Wins: learn to take a loss without resentment, emotional attachment, or the need to get even.

Mark Douglas puts it plainly in Trading in the Zone:

“When you have accepted the risk, you will be at peace with any outcome.”

That is what I mean when I say you have to get to the point where you “don’t care” what happens on an individual trade.

You care deeply about your preparation. You care about protecting your capital. You care about following your rules, but you have accepted that this particular trade can fail, even when you do everything correctly.

For my approach, the framework is straightforward:

• The stock meets my criteria. Check.

• The setup is part of my playbook, with a clear entry and favorable potential reward relative to the risk. Check.

• The position is sized so I can accept the planned loss before entering. Check.

• I take the trade with an attached stop.

• I take partial profits into strength or sign of weakness. As the trade progresses, I move the stop to breakeven when my rules and the price structure justify it.

• If the stock keeps working, I give the remaining position room to run, using a trailing method such as a stop beneath higher lows or an appropriate moving average.

If it fails, I take the loss. If it works, I manage the winner.

I know that sounds almost too simple when we’re talking about exceptional performance, but these books repeatedly bring us back to the same principles: accept losses, control risk, and execute a repeatable process.

These principles have been passed down through generations of traders. The big names you hear about today didn’t invent these fundamentals. They studied those who came before them, learned from their successes and mistakes, and refined those lessons into their own approaches.

They learned these principles. They practiced them. So can you.

“Nike Isn’t Going Anywhere” Is Not a Buy Signal

Nike doesn’t have to go bankrupt to cost you years.

The stock is roughly 80% below its 2021 peak, back around prices last seen in 2013. Yet one of the most common defenses I keep seeing is: “It’s Nike. The company isn’t going anywhere.”

Okay, but the company’s survival doesn’t tell you when to buy its stock.

On the chart in front of me, I see a Stage 4 decline: lower highs, lower lows, and price beneath falling major moving averages. A familiar name doesn’t change that evidence.

If you’re a value investor or turnaround investor, you may have a different process, time horizon, and set of rules. Fair enough.

But if you call yourself a growth stock or momentum trader, buying an aggressive Stage 4 decline because “it’s Nike” is a departure from your process.

You can believe in Nike’s future and still require its stock to earn your capital.

That principle runs through the trading books I study. These are the published rules I’m applying to this chart.

William O’Neil wrote in How to Make Money in Stocks:

“You should buy stocks when they’re on the way up in price, not on the way down.”

Mark Minervini wrote in Think & Trade Like a Champion:

“I avoid going long a stock in any stage except Stage 2.”

Stan Weinstein made the instruction unmistakable in Secrets for Profiting in Bull and Bear Markets:

“Never buy a stock that’s in Stage 3 or 4 (especially Stage 4).”

And when David Ryan was asked in Momentum Masters whether he ever bottom-fishes, his answer was:

“I never buy new lows, if that is what you are asking.”

Their methods have differences, but they all agree on this. Dan Zanger describes his preference in Momentum Masters this way:

“Uptrends are my best friend and certainly my preference…”

There is a reason this emphasis on strength keeps appearing.

Minervini describes making the opposite mistake early in his career: buying depressed household names like AT&T and General Electric because he assumed their familiarity and size made them safer and that they eventually had to go up. That reasoning led to losses.

“It’s a great company” can become a very expensive substitute for an entry strategy.

Microsoft is a reminder of how long the wait can be.

After its late-1999 peak, Microsoft’s share price did not set a new record until October 2016, nearly 17 years later. That is a share-price comparison, excluding dividends. Recovering an old price also does not restore purchasing power lost to inflation.

Also, the cost is more than the decline in your account. There is also the time spent waiting and the other opportunities you cannot take with that same capital.

Nicolas Darvas captured the discipline in How I Made $2,000,000 in the Stock Market:

“I should hold the rising ones and sell those that fall.”

Nike may recover. It may become an attractive momentum setup again. I can reconsider it when the evidence changes.

Let it end the decline. Let it build a base, establish a Stage 2 uptrend, and present a valid entry with defined risk.

Until then, “it’s Nike” does not satisfy my buying criteria.

A famous logo does not get an exception to your rules.

“To offend a strong man, tell him a lie. To offend a weak man, tell him the truth.” - Author unknown.

There’s a lesson in that for every trader.

Here on Substack and across social media, it’s easy to find people who agree with our ideas. People who like the stocks we own, support our outlook, and tell us exactly what we want to hear.

It feels good. It makes us feel right.

But growth often requires facing truths that are uncomfortable to hear.

Now, I’m not talking about trolls or people who show up just to put you down. There’s plenty of that online, and you don’t need to give it your attention.

I’m talking about educators who challenge your thinking, point out weaknesses in your process, or explain why something you’re doing may be holding you back.

Maybe they point out that you’re breaking your own rules. Maybe the stock you’re defending doesn’t fit the strategy you claim to follow. Maybe you’re looking for reassurance when you should be evaluating the evidence.

That can sting.

The temptation is to dismiss them, get offended, and retreat to the people who make you feel comfortable again. Before you do, ask yourself whether there’s something useful in what they’re saying.

You don’t have to agree with every criticism. Consider the evidence and the reasoning. Be willing to acknowledge when a point applies to you.

A losing trade doesn’t automatically mean you made a mistake. But when you have made one, “I got that wrong” needs to be part of your vocabulary.

So here’s my challenge: open yourself up to uncomfortable truths.

Listen to people who give you a reason to question your assumptions. Be willing to learn something that challenges your ego.

That willingness can help you grow as a trader, and it can carry over into every other area of your life.

The market is an expensive place to defend your ego.

NBIS has been showing up on my screens.

Going through today’s movers, I pulled it up again. A lot of us have been watching this one for a while, but look at those sales numbers.

That growth is insane.

Then you look at fund ownership: up 43% in the last reported quarter.

Apparently, I’m not the only one who’s been staring at that sales column.

Who else has this one on their radar?

6,400% From a Stock I Knew Nothing About

FIX has climbed more than 6,400% from the 2020 level marked on this chart.

When it first appeared on my stock screeners, I knew nothing about the company.

That is exactly why this chart is worth studying.

Comfort Systems USA first caught my attention in the summer of 2022. The broader market was in a bear market, yet FIX was pushing to new highs and bucking the trend.

By January 2023, when there was still plenty of uncertainty about whether the indexes were emerging from the bear market, FIX was already establishing higher highs and higher lows.

The stock was demonstrating leadership before the market’s recovery felt comfortable.

I wasn’t searching for an AI trade when I found it. I was screening for the CAN SLIM leadership characteristics I look for.

As it turns out, FIX is an AI infrastructure beneficiary. Its mechanical, electrical, cooling, and modular construction capabilities help build the data centers supporting AI. Management has explicitly identified AI as an additional source of data center demand.

But I didn’t understand that connection when the stock first appeared on my screens.

My process found the strength before I understood the story.

Throughout much of the advance, the fundamentals reinforced the price action. From 2023 to 2025, annual sales rose from $5.2 billion to $9.1 billion, diluted earnings per share more than tripled, and gross margins expanded from 19% to 24.1%.

To me, FIX is a modern model book stock.

It displays the combination William O’Neil teaches us to recognize in How to Make Money in Stocks: strong earnings and sales, improving profitability, relative strength, and constructive price action. There is a reason he opens the book with 100 charts of past market winners. Studying their recurring characteristics helps us recognize potential leaders while their moves are still developing.

Mark Minervini makes a point in Think & Trade Like a Champion that fits this experience perfectly:

“I embrace new names instead of avoiding them.”

The discussions in Momentum Masters reinforce another lesson: leading stocks can emerge before the indexes make a new uptrend obvious. Stan Weinstein’s Stage 2 framework gives us a way to recognize the advancing phase, with rising prices, higher highs, and higher lows.

These lessons come together in FIX.

A process helps you find potential leaders, identify proper entries, define your risk, and manage the trade as it develops. Following that process requires discipline, especially when the company is unfamiliar or the market still feels uncertain.

“The trend is your friend until the end, when it bends.”

The last part is important, too. Give a winner room to develop within your rules, and respect your exits when the evidence changes.

You need a process that can bring an unfamiliar leader to your attention, the patience to let a winner develop, and the discipline to follow your rules from entry to exit.

New Highs. Mixed Signals. Are You Prepared?

A new trading week is here, with the Nasdaq Composite and Nasdaq 100 sitting right at all-time highs. Yet weak breadth, elevated distribution, and rising Treasury yields deserve attention.

O’Neil emphasized market direction and leading stocks. Zweig taught us to respect the tape while watching monetary conditions. Together, those lessons call for following price without dismissing the risks.

We don’t need every indicator to agree. We do need a plan.

This week’s Big Picture Market Pulse breaks down the conflicting signals, where leadership stands, and the stocks and groups I’m watching.

Read it before the trading week gets moving.

https://tradingmomentum.substack.com/p/the-nasdaq-at-all-time-highs-who

You Can’t Master What You Keep Abandoning.

No strategy works equally well in every market.

You can learn that from experienced traders who’ve been writing about it for decades, or let the market teach you the expensive way.

There will be stretches when your strategy is crushing it while another struggles. Then conditions change, and the roles reverse.

That’s the nature of markets. The sooner you accept it, the sooner you can stop searching for a system that always works.

But what do many beginners do?

The moment their strategy struggles, they chase whatever is working right now. Then that strategy struggles, and they switch again.

New indicators. New setups. New gurus.

Constantly starting over. Never developing enough experience to understand what they’re trading.

At some point, you have to commit to learning a process, measuring its results, and understanding the conditions that help or hurt it. A difficult stretch alone doesn’t tell you whether the edge is gone.

Yes, some experienced traders use multiple strategies and shift between them as conditions change. But they’ve put in the work to understand those approaches and establish rules for when to use them.

Adapting from experience is different from switching out of frustration.

Before you abandon your strategy, ask yourself:

Has the evidence changed, or has my patience run out?

Somebody Wins the Lottery Every Week.

Minervini has made this point for years: somewhere in the market, there’s a stock going up.

But the existence of a winner doesn’t mean you have a strategy for finding and trading it.

Somebody wins the lottery, too. That doesn’t make buying tickets a sound financial plan.

Yet plenty of traders approach the market exactly that way. Chase whatever is moving, hope for a big winner, and mistake the occasional payoff for proof of skill.

A winning trade is not proof of a repeatable edge.

The real question is whether your process produces positive expectancy over a large number of trades. After accounting for losses and costs, does it make money?

That requires more than finding a stock that goes up. It requires repeatable criteria for entries, exits, position sizing, and risk management.

Are you building a process you can repeat, measure, and improve, or just buying another ticket?

The Market Can Turn Before Your Opinion Does

Breadth looks terrible. The Nasdaq is at all-time highs. Both matter.

These two screenshots track breadth across 11,700+ stocks, comparable to the broad-market view on platforms like Finviz.

In the spring, the percentage above the 50-day moving average climbed from 17% on March 27 to 24% on April 3, then 72% on April 17.

Conditions changed quickly. Waiting for every indicator to look healthy would have meant missing much of that recovery.

Now that same measure has fallen from 64% on August 14 to 33% on October 2.

Another recovery is possible, but the warnings are real: elevated S&P 500 distribution, Nasdaq new lows overwhelming new highs, rising Treasury yields, downtrends in the Dow and Russell, and Fed rates no longer falling.

I remain bullish because the Nasdaq and select leaders are holding up despite those pressures. But continued deterioration could eventually pull those leaders lower, too.

The spring comparison shows how quickly breadth can improve.

Stay nimble. Be willing to shift from bearish to bullish, or bullish to bearish, when the evidence changes.

Size positions appropriately. Define your risk. Cut failed trades. Increase exposure as positions work, and reduce it when they stop working.

You do not need to predict the next move to prepare for it. Keep your opinions flexible and your risk discipline consistent.

With all that said, the Nasdaq is at all-time highs, forming higher lows and tightening up the right side of the chart. Price remains the most important indicator. 😉

Your Trading Strategy May Be Older Than You Think

In 1910, Richard Wyckoff published Studies in Tape Reading under the name Rollo Tape. More than a century ago, he was teaching lessons traders are still trying to master today.

• Read price and volume to understand supply and demand.

• Trust market behavior over tips and opinions.

• Keep losses small and avoid trading too frequently.

• Reduce position size and trade frequency when losses build.

• Study your mistakes and track your results. Memory alone gives you an incomplete picture of your performance.

Decades later, William O’Neil built upon the work of Wyckoff, Jesse Livermore, and other predecessors. As Trade Like an O’Neil Disciple explains, their ideas helped shape his investment philosophy. O’Neil combined that foundation with extensive research into historical stock-market winners to develop CAN SLIM, bringing together price and volume, earnings growth, leadership, institutional sponsorship, and market direction.

That work helped shape another generation, including David Ryan, Mark Minervini, Dan Zanger, and many U.S. Investing Championship winners. They studied those principles, applied them, and developed their own approaches and refinements.

Great traders study the work of those who came before them.

They learn the principles, test them, and build an approach they can execute. Reading the classics gives us the same opportunity.