Short lessons on momentum trading, every day.

You Might Have to Buy 10 Stocks to Find 1 Big Winner. That’s Trading.

What if I told you that even when you're doing everything right, most of the stocks you buy won't become big winners?

William O'Neil understood this better than most.

In How to Make Money in Stocks, he explains that throughout his career, only one or two out of every ten stocks he purchased turned into truly outstanding winners.

Think about that.

Even with his proven CAN SLIM methodology, most of his purchases didn't become the big winners he was looking for.

So what did he do with the rest? He sold what wasn't working and kept looking.

If those odds surprise you coming from a proven methodology used by some of the greatest traders and U.S. Investing Champions, imagine the odds facing the average retail investor buying stocks based on tips, opinions, and gut feelings.

Even a proven strategy won't make every trade a winner. That's why risk management and position sizing matter so much.

I experienced this firsthand with $LITE and $MU this year.

When I purchased LITE, I had no idea it would become a 100%+ winner. It met my criteria, just like many other stocks I was buying. But I couldn't have predicted which one would deliver that kind of return.

Same with MU. Following my April 22 setup and buy, I knew it had the potential for a significant move. But it wasn't even the strongest leader coming off the market bottom. I never expected the magnitude of its advance.

But... that's the point. You don't know in advance which stocks will become your biggest winners.

You might eventually build a concentrated portfolio of four or five outstanding stocks, but finding those winners could require buying 10, cutting eight, buying another 10, cutting several more, and repeating the process.

This is exactly why I emphasize progressive exposure and building on success.

You start with your criteria. You manage your risk. You cut what isn't working. And you gradually concentrate capital into the stocks proving themselves.

Concentration should be earned through performance, not based on how convinced you are before entering a trade.

Also, O’Neil is not saying eight out of every ten trades must be losers. Some might produce small gains, others might break even, and some will be losses.

He's saying that even an exceptional stock selection methodology cannot reliably predict which opportunities will become extraordinary winners.

That's why you need both sides of the equation: the discipline to cut unsuccessful trades and the patience to let exceptional winners develop.

The goal isn't to be right on every trade. It's to find the few stocks that can make a meaningful difference in your portfolio.

You might have to buy 10 stocks to find one exceptional winner. That's okay. The other nine are simply part of the process, provided you manage them properly.

Cut what isn't working. Build on what is. And never forget that your biggest winners often reveal themselves only after you've bought them.

That's how you turn a handful of exceptional winners into meaningful portfolio returns.

Missed the Breakout? Learn to Buy the Pullback.

A stock moving beyond its base breakout doesn’t mean you’ve missed every opportunity to get involved. But if you want to participate in the next leg higher, you need to learn how to recognize and buy constructive pullbacks.

You also need to understand which entries the market is rewarding.

Just as we study the market environment, we should study how leading stocks are behaving.

Are breakouts to new highs following through? Or are better opportunities appearing earlier, as stocks find support and begin turning higher?

If you’re always waiting for a new high before entering, pay attention to how much of the move has already happened by the time you buy.

Buying pullbacks has been critical for me over the last few years. It has helped me get involved in several of my biggest winners. LITE and SNDK.

The key is recognizing a pullback within an established uptrend, watching for evidence of support, and identifying an entry where you can clearly define your risk.

Study more than which stocks are working. Study which entries are working.

That can make a meaningful difference in both the opportunities you recognize and the risk you take.

LITE Is Lighting Up Again.

$LITE was a huge name for me in 2025 and early 2026. Now it’s back near all-time highs and up over 10% so far today.

LITE is getting interesting again.

LITE rallied off its 200-day moving average when the market made its low on July 29.

Unlike a lot of the other prior big winners, it has since reclaimed its 50-day / 10-week moving average and continued to hold support. Now it sits less than 10% from all-time highs.

And the fundamentals are still extremely strong.

LITE has been putting up triple-digit earnings growth, triple-digit sales growth, and carries a 99 one-year Relative Strength Rating.

Institutional sponsorship has also been expanding aggressively, with the number of funds owning the stock growing roughly +20% quarter over quarter.

We saw bigger volume coming off the lows and around earnings. Then, as the stock moved sideways and found support around the 50-day, volume dried up considerably.

Yesterday, big volume came back in as LITE pushed toward the top of the consolidation.

Back in January, people told me LITE looked too volatile.

Then they missed the next roughly 100% leg higher.

They told me the same thing back in October 2025.

Welcome to growth stock and momentum trading. 😉

The biggest winners are rarely going to look comfortable.

Why I Wouldn’t Buy DELL Right Before Earnings

Someone asked me why I wouldn’t buy DELL before earnings, especially when I’ve held other stocks through earnings.

The difference is context.

With LITE, I was already in the stock and had roughly a 25% cushion going into earnings. In situations like that, I may sell some before the report and hold the rest through earnings.

That is completely different from initiating a brand-new position right before earnings.

If you want to hold stocks long enough to capture really big moves, eventually you have to get comfortable sitting through some earnings reports. There is no way around that. Even with a large profit cushion, you can still get hit with an ugly reaction, like we saw with BLLN.

But I will NOT buy a stock immediately before earnings just to gamble on the report.

And with DELL specifically, the decision was even easier.

The stock looked like it wanted to go higher, but showed very little follow-through. Then it had a bad day today, falling more than 6% and closing below the 50-day moving average.

On top of that, the overall market hasn’t been acting well.

So now you have:

• Poor follow-through after a failed breakout attempt

• A greater than 6% down day

• A close below the 50-day moving average

• A less-than-ideal overall market

• Earnings immediately ahead

Why would I initiate a brand-new position and take on earnings risk with all of that working against me?

For me, there is a big difference between holding earnings with a 20% to 30% profit cushion in an existing position and buying a stock immediately before earnings with no cushion at all.

Those are two completely different risk situations.

Now, with DELL up roughly 10% after hours, I’ll watch how the price continues to act and see whether it gives me a setup. It did something similar in early March after the big gap up in late February.

I don’t need to predict the earnings reaction or gamble on the report. I can wait for the report, see how the market reacts, and then look for a proper setup.

Is LITE About to Make a Comeback?

The Market Shift Was Hiding in the Screens

One of my favorite scans, and one I ran for years in MarketSurge, is the Big EPS and Sales screen. I now run the same scan inside the Momentum Trading Strategy software.

When you sort the results by one-year relative strength, the familiar leaders dominate: SNDK, MU, LITE, WDC, WTX, TER, etc.

The strongest groups are also the ones we have become accustomed to seeing: semiconductors, computer hardware, telecom, and communications equipment.

But sort the exact same screen by one-month relative strength, and the picture completely changes.

Now you see medical, biotechnology, pharmaceutical, oil and gas, and marine shipping names moving toward the top.

This shift was visible in the individual stock screens weeks ago.

When the indexes, sectors, industry groups, and individual stock screens all begin telling the same story, you are no longer guessing whether leadership is changing.

You are watching it happen in real time.

Leadership changes before most traders notice.

Run the Big Earnings and Big Sales screen, then compare one-year relative strength with one-month relative strength.

The shift is unmistakable.

Many of the stocks that dominated the last year still carry elite long-term RS ratings, but their short-term rankings have collapsed:

SNDK: 1yr RS = 99 / 1m RS = 2

AXTI: 99 to 1

MU: 98 to 10

WDC: 98 to 3

LITE: 98 to 10

CIEN: 97 to 12

At the same time, biotechnology, pharmaceuticals, software, and other emerging groups are moving toward the top of the screen.

That is what leadership rotation looks like in real time.

The market doesn’t send a memo. It leaves clues in relative strength, and industry-group rankings.

Nothing Lasts Forever. Don’t Fall in Love With Any Stock.

Some of the market’s biggest winners over the past year have now broken down. At least for the moment, their runs appear to be over.

AXTI delivered enormous gains over the last year, but it has now fallen below its 50-day moving average and is heading toward the 200-day. Its 10-day and 20-day lines are declining, and the 50-day is beginning to roll over.

LITE, CIEN, VICR, AAOI, VIAV, TTMI, FIX, COHR, and several other former leaders have also broken down or suffered significant technical damage.

Many more are sitting in the danger zone near their 50-day moving averages. That includes the memory names SNDK, WDC, STX, and MU, along with other hot names from hot groups VPG, MBIS, MXL, LSCC, MRVL, TER, VSH, STM, ADI, INTC, TSM, LRCX, COHU, PDFS, and others.

The bottom line is that many of the stocks that have driven this market, particularly the memory, semiconductor, and telecom names, have either already broken down or are now testing a critical area around their 50-day lines.

I have not needed to share many new tickers from week to week because the same names I have discussed throughout the year continued to lead. There was no reason to constantly search for something new when the existing leaders were still working.

But nothing lasts forever.

Many of the stocks that worked all year are now either ending their runs or approaching a decisive point. Do not fall in love with any stock. Respect the price action and let the market tell you whether the trend is still intact.

You Cannot Predict the Winner. You Can Control the Risk.

I screen for stocks with the same characteristics shared by many of the biggest winners in market history.

Strong relative strength. Accelerating sales. Triple-digit earnings growth. High ROE and margins. Leading industry groups. The CANSLIM characteristics and many of the traits I teach throughout Modules 4 and 5 of the Momentum Trading Strategy Course.

All of that improves the probabilities.

But even then, I never truly know which stock will become the big winner.

There are plenty of names I expect to work that quickly stop me out. Then there are trades like LITE.

I bought LITE in late January as it found support around the 50-day moving average. It had a 99 RS Rating, accelerating sales, improving triple-digit earnings, strong ROE and pre-tax margins, and belonged to a strong industry group.

I did not know the company well. I did not fully understand the story. I did not even know NVIDIA was a major investor until that news surfaced later.

I was simply following my system.

LITE became a much larger winner than I could have predicted. But there were several other stocks with similar characteristics where I entered, took a small loss, and moved on.

That is trading.

Your criteria create an edge, but they do not create certainty.

The one thing you can control before entering is how much you are willing to risk.

I stay concentrated, cut losing positions, and add to positions that prove themselves. Once I have sold some into strength and raised my stop toward breakeven, I become more adaptable.

Sometimes a trade I expect to hold for a few days becomes a multi-month winner.

Sometimes a stock I expect to hold as a position trade stops acting right, and I exit quickly.

You do not decide which stock becomes the monster winner.

The stock and the market decide.

Your job is to control the risk, follow your system, and stay with the winners that prove themselves.

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.

Everyone Saw the AI Chips. Few Saw the AI Plumbing.

William O’Neil called this the “cousin stock” theory.

When a major theme is working, most traders focus on the obvious leader.

But sometimes the better opportunity is hiding one step away.

• The supplier.

• The equipment maker.

• The parts provider.

• The infrastructure company.

O’Neil used Boeing as an example.

Boeing was the obvious winner during the airline boom, but every new jet also needed parts from suppliers. One of those supplier stocks, Monogram Industries, went on to make a massive move.

Same theme. Different angle.

That still happens today.

In the AI boom, Nvidia was the obvious AI leader.

Everyone saw the GPUs.

But AI data centers also need high-speed optical connections to move data between GPUs, servers, switches, and storage systems.

That is where Lumentum (LITE) became a modern cousin/follow-on stock.

LITE does not make Nvidia’s GPU.

It does not need to.

It supplies advanced lasers, optical modules, transceivers, and photonic components that help AI data centers scale.

Then Nvidia made the connection even clearer by announcing a strategic partnership and investment in Lumentum.

NVDA was the obvious leader in 2023–2024.

LITE was a related supplier benefiting from the same AI infrastructure demand, which helped it become one of the leading stocks in 2025–2026.

Most traders ask:

“What stock should I buy?”

Better traders ask:

“What theme is driving the market, which group is leading, and who are the cousin stocks benefiting from the same demand?”

That is where leadership leaves clues.

The crowd usually sees the main story first.

The best traders look for the ecosystem forming around it.

That is why industry group and relative strength matters.

This is why I built the Momentum Trading Strategy RS Scanner.

Not just to find strong stocks, but to help identify the strongest groups, and related names moving with institutional demand.

Why Do You Keep Missing the Biggest Winning Stocks?

Most traders spend their time looking for stock tips.

The best traders spend their time looking for stock characteristics.

Strong earnings. Strong sales. Strong relative strength. Strong industry groups. Strong price action.

The funny thing is many of the biggest winners were not hiding.

MU. LITE. SNDK. CIEN.

They were displaying many of the same characteristics long before their biggest moves.

The challenge isn’t finding the information.

The challenge is having a process that helps you recognize it.

I just published a new article walking through the exact screening process I use to find potential market leaders.

If you’ve ever wondered how traders consistently find big winners while everyone else seems to discover them months later, this article is for you.

https://tradingmomentum.substack.com/p/how-i-find-the-biggest-winning-stocks

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.

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?

The Quiet Warning Showing Up Under the Surface

A lot of leading stocks are still acting strong.

Many are making new highs. Many still have great relative strength.

Price is still king, and I would never execute a trade based on one data point alone.

But I am noticing something worth paying attention to.

On the most recent earnings reports for a lot of leading names I’ve been following, fund ownership has dropped.

Again, this does not mean the move is over.

These stocks can absolutely keep running higher from here. That’s exactly why price always comes first.

Also, sometimes this happens for a quarter or two, then funds increase again and come right back into the name.

But when leading stocks are pushing higher while fund ownership starts declining, it can be an early sign that some institutions are taking profits into strength.

If price starts to break down later, this gives us a possible clue as to what may have been happening under the surface.

Some names where I’m noticing this:

SIMO, ALAB, MRVL, LITE, TTMI, NVT, LASR, AMD, STRL, LRCX, AAOI.

This is not a sell signal.

This is not a prediction.

Just something I’m taking note of.

The News Was Late. The Stock Was Already Leading.

NVIDIA announced its planned $2 billion investment in Lumentum, ticker LITE, on March 2, 2026.

But LITE was already a major leader before that headline ever came out.

I was buying it and writing about it back in January when it was pulling back to the 50-day moving average.

Why?

Not because I knew NVIDIA was going to invest $2 billion.

I had no idea.

It was because LITE already had almost everything we look for:

• Strong earnings growth.

• Strong sales growth.

• A 99 relative strength rating.

• Accelerating institutional ownership.

• Leadership in a top industry group.

• Alignment with the broader AI theme.

That is the lesson.

You do not need to know everything about a company before the move happens.

You do not need to chase every headline.

In many cases, by the time the news confirms what is happening, the stock has already been under accumulation for weeks or months.

The process finds the clues before the headlines explain them.

Many of the biggest winners I have traded were not names I knew deeply at the time. They were not always comfortable. They were not always obvious, but they had the characteristics that big winning stocks tend to show before the crowd fully understands the story.

If you only trade names you are already comfortable with, you may miss many of the best opportunities.

The process often tells the story before the news does.

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.

What Soros Taught Druckenmiller About Big Winners, and Why CIEN Is the Point

One of the biggest misconceptions in trading is that you need to be right all the time.

You do not.

What you need is the ability to keep losses small when you are wrong and press your advantage when you are right.

That is one of the biggest lessons Stanley Druckenmiller described learning from George Soros in Jack Schwager’s The New Market Wizards.

Druckenmiller said Soros taught him that when conviction is high, “you have to go for the jugular.”

He also called Soros “the best loss taker I’ve ever seen.”

That combination is powerful:

Be aggressive when you are right.

Walk away quickly when you are wrong.

I have made plenty of wrong calls on individual stocks. I am wrong often.

But the goal is not to be right on every name.

The goal is to structure your trading so the small losses stay small, and the winners have enough room to pay for the losers and then some.

That is why a winner like CIEN, along with names like LITE and SNDK, matters so much in my trading strategy.

I mentioned CIEN earlier because it had the kind of relative strength, leadership, and constructive price action I look for.

Since then, it has continued to show why holding real leaders matters.

One real leader can make up for a lot of small losses.

But only if you do two things:

• Cut the trades that are not working.

• Hold the trades that are.

That is the hard part.

Most traders do the opposite.

They give losing trades too much room and cut winning trades too quickly.

The best traders understand the math is not about being right all the time.

It is about making sure that when you are right, it actually matters.

This Is Why You Track Leadership Before Everyone Else Sees It

On April 8, the market gave us the signal.

We had a follow-through day, the NASDAQ-100 reclaimed key moving averages, including the 50-day and 200-day, and the conversation shifted from defense back toward offense.

But the real edge was not just knowing the market was improving.

The edge was knowing where to look.

When the market gets stronger, I want to be focused on the strongest industry groups and the strongest stocks inside those groups.

That is exactly what we had been tracking for months.

• Telecom.

• Computer Data Storage.

• Semiconductors.

Many of these names were not random new ideas. They had already been showing up in our work, some for months, and some even last year.

So when the market confirmed on April 8, there was no need to bounce around looking for the next hot ticker.

The leadership was already there.

From the April 8 signal to yesterday’s close:

AAOI up 40%

LITE up 12%

CIEN up 12%

VIAV up 30%

SNDK up 81%

WDC up 38%

STX up 53%

TER flat

AEIS down 4%

AEHR up 50%

LRCX up 12%

FIX up 30%

GLW flat

Not every stock works.

That is normal.

But when the market confirms, and multiple stocks from the same leading groups start moving together, that is usually not a coincidence.

That is institutional money flowing into a theme.

Strong market.

Strong industry groups.

Strong stocks.

That is the process.

The goal is not to chase every move.

The goal is to already know where the strength is clustering before the move becomes obvious.