I have been an IBD Live subscriber for over a year and now also have MarketSurge and SwingTrader. I watched for a while with a healthy dose of skepticism about buying breakouts. I have traded in the "buy low"/"sell high" style using moving averages to determine entry and exit. I started the CANSLIM -- specifically breakouts -- at the beginning of this year, with many of the frustrations you mention. Every time I bought a breakout based on an IBD "blessed" stock it was already too late. SwingTrader was having some bad weeks. But I committed to it because my way certainly wasn't working. My options trading magic had also deserted me. But I have back-tested and researched in detail the breakout strategy with tight stops and selling into strength. It is solid and -- most importantly -- lowers risk. An important part of CANSLIM is the selection of stocks with strong fundamentals and long term uptrends. With patience this really does work. But it has to be adapted to current market conditions and technical signals. Thanks, Matt, for your content and I do watch you when you are on IBD Live. You and the other guests can really help round out the "seasoned" wisdom of the long-term IBD guys. TIP: Backtesting on Tradingview is awesome using Bar Replay. You can try various techniques across various time frames. For example, some stocks are easier to trade on a 3-day chart, others 1-day or 1-Week. Of course, you can also try strategies to see how they perform longer term with maximum drawdowns etc. I use this several times a day to get the rhythms of various stocks that are ready for breakout.

Trading for a living, I would NEVER EVER take a 30% drawdown in a certain asset. But I am a day trader, not a long term trader. My risk is never bigger than 1% and if I experience too much consecutive losses I simply stop and spend some days or even weeks in regression testing. Anyway, the math is simple. I assume you have a proven strategy with an average win rate of 60% and a 1.5 profit ratio. Hence your working day trading strategy is on the 15m timeframe. You are able to screen 4 markets and therefore are able to execute an average of 3 trades a day on 4 days per week. So you have 12 trades per week. If you have an account with $4000 and risk $40, you get $60 for 6 out of 10 trades. 4 trades cost you $40. 6x60 - 4x40 = $200 * 1.2 (12 trades) = $240. -> To make $240 before taxes a week with the above strategy you need a $4000 account. $240x4 = $960 per month = $11,520 a year. Now you can do the math to calculate the account size for $100K per year. It should be ~ $40K with 1% risk per trade. But I agree. As the market behavior changes over time, there will be months where you not even won't earn anything but you may also lose. It depend on the trader how long this period lasts before one adopts to the new conditions. I start to reassess my trading log at 5% of loss. Better spending your money on living and learning than trying to enforce your mind on a twisted market. What I did 1. Reduced my costs as much as possible 2. Made it VERY CLEAR to my family what to NOT expect in the next years. 3. Created a STRICT family budget. Also planned for long-term costs like cars, appliances etc. 4. Have a proven strategy and a clear plan how to work. 5. Have an account with the money I need to make the money I wanted. 6. Have a second account with the same amount of money so I can still operate after a "devastating nuclear impact". 7. Have a third account (or storage-of-value assets) with enough money to fund my family budget for 1-2 years. The more the better. So, taking the example above, you would need at least 40K + 40K + 100K = 180K. To sit more comforttable you would need another 100K to survive 2 years without a single trade. But to be very clear: trading this way, you will have a full time job again - just without a boss. If you want to trade more relaxed, you should move up the timeframes to daily or weekly. In this case everything that Caruso said is 100% valid. You'll need a heck of money to run trades on that timeframe - BUT you will spend only a few hours per week trading. So if you have less money than 1 million of free capital I would not start trading until I could not only go for my daily bills, but also for proper account building.

Better to watch this video every day before the market is opened , or at least once a week . Very useful, many thanks.

Starting in a choppy market you learn eventually that portfolio management and trade sizing is huge. Also market situational awareness is key… Saves your money and mind..

Very timely advise, since NVDA lost 3.5% today and tech stocks followed. Great insight from someone with many years of experience! I listened to it 3x to get all your tips. I appreciate your net highs/net lows indicator. Keep up the great advise for us investors!

Looking again at this for (X:th time!), this a perfect CANSLIM summary by you being a very skillfull investor/trader, thank you again. Just the subject of taking the profit or letting a trade run longer time with larger stop loss seems to be worth deeper discussion. It is discussed by another trader with long experience here on KZfaq. It would be highly appreciated to see a lecture/video specially on this subject with a few examples based on your experience and style.

He loves Boss Tshirt😊

You are one of the best in yt

Great analysis as always Thank you for sharing

You have a way of taking all the noise of the market and making sense of it so that even a 5-year old can understand. Keep it rollin, Matt!👍

Great vid, ty - Normally NH/NL has been super reliable but just like any other indicator it's not perfect . I did not take few trades such as OLLI and NFLX thinking environment isn't healthy so it is slightly frustrating but Im just following my process.

Great work Matt. It all boils down to the fact that as trader you shouldn't have an opinion about the market, or if you do don't listen to it; solely rely on your process to react to the market and not to anticipate it

Excellent video ❤

Thank you.

When you upload a new video, I literally drop everything to watch it .Thank you for sharing.

Thanks

Great insight. Thanks Matt.

Voice of calm reason with the expertise I love to hear from! Thank you!

Thanks for sharing your logical approach of investing! Especially now investors need to fight FOMO at all time high!

You put into words what I've been thinking subconsciously. Great video!

Remember, you have the power to choose positivity in any situation. Let's embrace positivity and make the most out of every moment!

Best trading channel on KZfaq

You are such a wise voice of the market. We are fortunate to be learning from someone who has made it! Thank you so much for sharing your wisdom with us!

Good presentation….. confirmed what I’m seeing …. Thanks Caruso

great .

What are your favorite books?

Please plan to write a e-book for Commodity trading for beginners for sharing your wisdom. Thank you

I enjoyed and benefitted from this advice. Not only it is on target, but also well organized. It is honest and realistic. Thank you very much.

Thank you Bro ❤ Kindly plan for writing book for sharing your knowledge for timings, Risk management, portfolio management and position sizing which should be combined with canslim .

Excellent Video, Thank you.

Great Video! Thanks Matt

Cant get my mind on whats the difference between up/down volume and OBV indicator

Matt, fine video. I agree with almost everything you said. I make a bunch of suggestions below. I believe you have enough knowledge and experience to pull it off. - - - You may conclude what I've suggested would require another video. I assume you would-be OK with that. I suggest you change the sequence in which you present the material. Specifically, break it into 3 parts. * Part A discusses your analysis of the overall market. * Part B discusses the basis for your decisions in regard to your portfolio construction. * Part C discusses your analysis of individual securities. Details below. In regard to Part A, in addition to reviewing some broad market indicators, please include your overall conclusions and, more importantly, what changes you would make in your portfolio because of what you see in the market. In regard to Part B, this part would answer two questions: (1) What are going to be your revised security groups (equities, bonds, money markets, gold, commodities, etc.) in your portfolio? (2) What portion (%) of your funds do you plan to allocate to each group? In regard to Part C, I think you need to make an opening statement that you base all your buy/hold/sell decisions on technical analysis. That is, you do not do any form of fundamentals analysis or analysis of a company's finances, customers, markets, suppliers, and industry. Then, please discuss how you decide which stocks/ETFs to closely analyze. For example do you use some screening app? If yes, what are your screening criteria? How many individual stocks/ETFs do you analyze in a week? When analyzing an individual stock/ETF, I believe only 3 indicators are needed: the first two are the MA of the price of the security and the RS. I have been looking closely at charts for about 15 years now. After checking out indicators like MACD, Stochastics, RSI, etc. etc. I've concluded they are all saying the same thing. Once a person decides on his wavelength (50 days, 200 days, etc.), they go up and down in parallel, thus giving no more insight as to what action to take, making them redundant. The third indictor is some type of a "Volatility" measure of the stock/ETF. Some possibilities are: Maximum Drawdown in the last 10 Years. Average Return from Year to Year. Worst Year. By the way, the EMA (Exponential Moving Average) is better indicator than the MA. Because it gives more weight to recent prices, it gives buy/sell signals earlier. I am a great believer in what Greg Davies (Barclays) & Arnaud de Servigny (Deutsche Bank) said, - “The idea is not to forecast turning points, but rather to capture turning points rapidly, once they have taken place.” - - - Apply the EMA to both the price of the security and to the RS line.

Thank you SIR

Best trading channel on KZfaq

Excellent commentary. I love the power and simplicity of the humble moving average and have found it very useful. Rock on.

Thank you Matt 🙏 , you're the man!

For the up/down ratio being used in index, noted QQQ now in new high the up down ratio lower when QQQ was at lower high, is that being affected overall lower volume seasonally?

Great video! Short and full of useful info. This video has more actual useful content than many 2 hour video. Thank you for posting it.

Thank you, Matt.

amazing explanation, reasoning and logic. What is RS 134,12 on your chart? Which MA do you use for RS?

RS ,UN/DOWN VOLUM , INTEREST RATE VS HIGH YIELD BODN , 52 WEEK HIGH AND LOW ,MOVING AVERAGE

Thank you ,Caruso.

Always look forward to your videos, will definitely read up on the whitepaper today. Thanks Matt, have a good memorial day weekend.

Great educational video! Thank you

thanks a lot for making these videos. Your videos are always very clear and insightful for new traders to understand the nuances of the markets.

Absolutely Outstanding info and sharing of knowledge. A Brilliant must watch video on Trading Psychology. Thoroughly enjoyed listening to the logic and reasoning behind patterns. TACTICAL BUYING PATTERN was a key takeaway from this video. Tactical buying patterns will become more and more relevant and necessary as everyone knows the obvious buying points thanks to so much trading education/ charting consultancy on so many channels on you tube.

What a brilliant brilliant brilliant video. Every one thinking about trading should first watch this outstanding piece of guidance from a pro. Most of the trainers or trading education sites don't talk about this reality so that they dont scare away prospective clients. God Bless

Superb awesome video and insights. Loved it. I use convergence of EMAs and price taking support at convergence. Please do make a video on how to trade stocks at all time highs as they can be big opportunities but also risky? What success rate do those trades have?

Outstanding knowledge