 Hey traders, this is T Bradley 90 from the My Investing Club chat. As a special gift to every viewer on YouTube, there is a link in the description to apply for a free Breakthrough Trading Strategy session with myself. What does that mean? Alex created a free trading course for beginners and at the end of it we will be selecting a few non-members to get on the phone with myself, Tosh, T Bradley 90 to help with your trading. Click the link in the bio, watch the video and apply today. Now while today is just a preview of the full length video if you wanna watch the full length or any of our exclusive content then become a member of MIC. What I'm gonna go over today is can be applied to longs too but most notably this is a short selling small cap strategy that I like to see used. Anyways, so let's get to it. So we're gonna talk about key traders. I honestly didn't do the only trade I made all week was today on CTRM. I'm gonna go over it but like and I count my start of the week because I do my webinars on Thursday I start my week like on Friday and it was just a slow week for me you know but like I didn't wanna force trades just to go over them here. I always feel that pressure that I wanna force some trades to make sure that I have stuff to go over here but like I mean it's just not my style like I'm more of a like Posh said today a two to three trades a week kind of guy that's all I need. I don't need to just keep going. Like that's when I lose money. So anyway we're gonna go over market sentiment trader topics, trader topics slash fallacies that I like to include in there too sometimes. This week we're gonna go over strategy boards strategy that I wanna go over and we're gonna end it with Q&A. So if you guys have any questions if you guys have any questions feel free you get I'm at the end of the screen I'm gonna go over all of the Q&A all of the questions that are in here and I'm gonna go over them one by one. So if you have a question that's pertaining to what I'm talking about at the time you can post it and like if I happen to see I'll go over it if not I'll get to it at the end. Sam, what's up buddy? All right so okay. So CTRM CTRM for me was the first resistance short and I kind of originally when I first when this first came up it was just kind of a trade where can everybody hear me? It was I realized this was over here. CTRM was a trade where the daily line of five was pretty prevalent, right? So I felt like that was kind of what everybody was watching was the $5 line and that's essentially I wanted to treat this as the first resistance short and this is a little bit of what I'm gonna get into the specifics of this kind of mentality at the end of the webinar but I basically covered this like a piker but I was okay with that because for me it was still front side and I was going for the front side cover when it ultimately failed here. So a quick interjection on process and I didn't wanna go over this, right? The following the process is not meant to maximize your profit on any given day. It's supposed to increase profits and consistency in the long run but it's goal is not to ensure gains. Like you don't have a process to the goal of the process is not to create gains, right? That's not a process is job is to make sure that you make money, right? That's, there's one part of the process that's supposed to ensure that and that's the profit taking part of the process but the process as a whole its job is to mitigate risk and to keep you in the game. That's the only job of a process, right? Is to not blow up, right? To keep your mind healthy for tomorrow's because you don't wanna miss out on an opportunity because you're so hungover on your trade on your missed trade or messed up trade or lost from yesterday, right? Your process is designed to keep you following your rules which will keep your mind saying it will keep you in the game long term because one thing that for most traders will develop over time is you will get an experience as the longer you're able to stay in the game but if you don't follow your rules in the beginning I mean you're gone in the first two years like the people that I see on Twitter I can't tell you how many traders are not on Twitter today that were on Twitter when I first started. So today, this week's market sentiment was significantly slower than the last couple of weeks but it's not nearly as bad as in the summer. We're still getting a couple of plays every single week. I happen to miss them this week but or they weren't my place I know a couple of other people got trades but yeah, the main leaders this week like that stayed positive were EDSA, which was today, LCI which is all last week and ABEO which was like I think two days ago but everything else was kind of everything that popped up kind of faded and if you guys have been watching these webinars long enough, you guys will notice that there's always more red tickers than green tickers, right? But the green tickers are always so much stronger than the red tickers. So this is actually a good representation of how small caps work and this is kind of what I'm gonna be going over but this is a good example of how small caps work. It's like with shorting, you're gonna win most of the time, but you're gonna lose big, right? You're gonna lose big on these three names but you're gonna win on all of these names, right? If you're only short and if you're only long, you're going to win on these and lose on all of these. So like just thinking about it like if you're a longer you almost have to have patience to be a longer, right? You need patience to be able to sit through and hold for larger moves because you know that larger moves are possible. And if you're a short seller you just by looking at this market participant like what's red and what's green every single week it should kind of give you a clue that you're gonna win most of your trades but there's the one couple exceptions that you have to watch out for. And depending on whether you're a long or short bias trader you can make money being both, right? But you have to formulate your process in a way to where it adheres to the style of what you're trading. Like if you're a long trader you wanna be gearing, you know, in my opinion when I form my long process I try to gear it towards taking full advantage of the good risk rewards of my trades. And when I'm shorting I'm trying to take full advantage of the probability side of my trades. That's why I'm always so conservative with my covers on shorts, right? But my long trades are always so much bigger, right? That's just what I try to strive for because that's the innate advantages I feel in longs versus shorts that I want to capitalize on. And if you just look at the market by this make it's always a small amount of green and a large amount of red. That's just always the way it works. And I still think we're right here like we were here last week I still think this week and last week we're kind of the same. I do think we're gonna be like I think CTRM was a little bit of a hint today that of what might be to come next week or the day before that it might transition more from a longs can be free to buy to where shorts can feel a little bit more confident in their shorts and things might gap and crap a little bit more often. That's just kind of the direction I see next week. OSN I counted last week. Oh, like, but yeah, OSN was good but I counted that last week. My week is technically I guess for me starting Friday to this Thursday because I don't want to double count content. But yeah, OSN was good. Yeah, but I like back to what I said I do think that we are shifting into maybe like next week or so it might like shorts might have their turn, right? Longs had their turn the last couple of weeks again shorts are gonna have their turn their turn in the next week. So one quick thing I want to get over before I get into the meat of the presentation is why mixing lines is really bad? Like I think I went over this yesterday or this morning it was one of two, but it was something I wanted to go over more. Why mixing lines is really bad and Joe and I have gone touched on this in another webinar but it's basically the reason why it's bad is because you're essentially forcing two trades in one. And what I mean by that is think about any trade you ever take there is always a reason why you're in and the reason why you're in is because if you're buying it you think it's going to go to X from, it's gonna go to Y from X, right? The exit is the reason why you're in because you think it's going to be higher in the future or lower in the future if it's a short, right? The exit is always gonna define the entry, right? There's always like, if you wanna sell at $10 and the stock is at $7, tanking to $5 you don't need to be the guy that buys it at $5 and sells at $10, right? Because what's likely gonna happen is if it goes to $4 you're gonna stop out of the trade it's gonna go to $10 and you're gonna be shy about re-entering because you just lost but even though it went to 10 you're still right. You see how that works? So depending on where you wanna sell or cover that almost tells you what's the most where it makes the most sense to enter to provide the least amount of stress on yourself, right? But also, so because of that factor if you're trying to combine like one exit with two different entries very rarely does that happen, right? Like if a stock is washing out of the open and your exit that the find you're by right at the open is you thought it was gonna gap and go or something you thought it was gonna gap and just ignite up and go from $7 to $10 well if it starts tanking to $5 and you say, well no, that's good, that's a washout long trade I'm gonna buy that too. What you have to consider is after it's washed out is your goal of 10 really feasible? And very rarely is that kinda gonna happen, right? And then the question then presents itself well if it is gonna go to 10 you can wait for it to get back up to seven before you enter and risk the fact that one you might be wrong and it might just go back to three. You risk that, you know, you're taking that risk off of the table and you're probably going to, like knowing that unless your timing is spot on which let's be honest, how often is your timing perfectly on you can probably get your same average on the after it's already bought up, right? So just taking those two factors into consideration. So this is what I wanna talk about. This is the strategy I use to get that has led me the most consistency when it comes to shorting and longing but it's especially short selling in general short selling small caps. I'm gonna call it the powerful pair and the powerful pair is the basic part of the strategy is that you need to start late and you need to start slow. This is the most consistent way I've found to short selling small caps, right? And so I'm gonna go into it. Most traders are gonna flock to one and you're probably gonna find that you do one of these in your trading but not both. And so like you'll try one of them and it will kind of work but not consistently and then what you'll do is you'll try the other one and it will kind of work but not consistently and you'll never ever try both, right? You'll never ever start late and start slow. And the reason why no one ever does both is because they're greedy. I mean, it took me a while to figure this out too. Like it's because traders are greedy and if you remember what I talked about in last webinar greed and the inability to be grateful for gains is in my opinion, the one reason why traders fail is because they can't mentally win in their brain and they just go down this down. So this is what we talked about in last webinar. So really it was I think one of my favorites. So if you haven't seen it, make sure you go see that one. But yeah, not being grateful for your gains, right? Because you always want more, right? So most people either start late or start slow but never both. So and in my experience in backtesting one never cuts the juice, right? You know, it's either one you're always gonna win small win small win small and then like lose big and the other one is you're just you're gonna get restless and never trade and then just make an emotionally impatient bad decision. Individually they can work but your odds are lower if you're not exceptionally anal about being like particular and selective with your trades. So I'm gonna define them here, right? So starting late, what I mean by starting late is starting after everybody else, right? And I mean starting like making sure that you start after everybody else. Meaning like if you have a line here, right? If there's a line here at eight, you know people think that it's not gonna get there and people are basically shorting before six, they're shorting before, you know, you're shorting at five, they're shorting at six, they're shorting at seven, right? But there's a clear line here at eight and this is the most outer line, right? It's like seven, 75 or eight, right? Starting late to me means starting at the outer lines, right? Not scaling into the outer line, which is what most people do because nobody wants to be, these are the people who start scaling before the outer lines are the people who have FOMO and they don't want to risk missing the move. They don't wanna risk missing whatever move is out there currently. They feel like if it goes down without them, they're gonna lose money, if they're losing opportunity, they're gonna feel really bad if they miss it, right? So most will start in on inner and build into outer and this has some credence, like this will work a lot of the times, right? But what tends to happen is people will start at inner lines and build into outer lines and when you get to the outer lines, you're nervous, right? So I'm gonna define starting slow. So starting slow means at these outer lines, not only are you starting late, but you are starting slow, meaning at the outer lines, you're using a starter. You ever change, remove your entries for the fantasy or based on price action? As a general rule, no, but if it's something really crazy, you bet your ass, like something like OPGN, like if I had an idea, like it depends, if the price action, from the time I set the order there, if the price action is trading a certain way, but all of a sudden it starts to trade a different way, like the ass, all of a sudden it starts getting really thin, really choppy or really, really, or it starts halting or really starts getting exponential, I might consider being like, you know what, F this trade. I may be not, I might not move it, I might, I'm more likely to just be like F this trade, right? It's, I'm not really, I'm really gonna change the order and say like, oh, well, maybe a little bit higher because now that's just me being afraid. That's not me trusting my lines and that's not me, and that's me trying to be afraid. And if you move the order, now you're gonna regret it. If it goes to that order, stops and comes down, it's much better to just have the order in there and stop out. If you're not wrong, that'll save your sanity and be like, okay, the trade didn't work and I pre-planned the risk and it worked out or it didn't. When, more likely than not, I'm just gonna be like, you know what, I don't like this anymore. Like I am no longer, this is not me, I'm not gonna tackle this. This has gotten like, maybe in the beginning of the day, it was trading on lightish volume and you're like, oh, let me put the fancy order or pop up there, I'll come down. You know, after, you know, and like, but since then it slammed really hard and then like, and like all this volume traded and then it comes back up. Now that wasn't in the original cards, right? It wasn't supposed to already take and then come back up to my line on some renewed strength, right? That, you know, like that might change my thesis a little bit, but as a general rule, I'm not changing the order because that just, you're normally just changing it in fear and what's to stop you from changing it on like your second, like if you'll change it the first time, why won't you change it the second time? It's just fear that's making you change it. And if you're afraid now, what makes you won't be afraid later? You gotta trust yourself a little bit, right? I'll only remove the order if I feel my thesis is invalid. Good question, very good question. I may have missed this, but do you add after the trade starts working? And if you do, where do you add? So I didn't go over that in this webinar, but I have in others. So my rule on ads is I only like to add when I can lower my risk. So like, I only add if I can lower, so let's say I was short here. Let's say I shorted into Edson, right? Here at 7.25, and my risk is eight, right? This is now my risk. Now when it tanks over here, I might consider an ad over here, but I'm only going to add if I feel comfortable moving my risk down to 7.40. So that's my general rule of thumb is I only add when I can... I only add when I can feel comfortable moving my risk down, not moving my risk down because I added. Make sure that they don't flip, like you're moving your risk down because you added. Like only when there's like a level that kind of makes sense to move your risk down, that's when I like to add. Another rule of thumb is if I wasn't in the stock and I wanted to get in, where might I get in and risk a certain level? And it's the same thought process, right? That's now the risk of that trade. So essentially I only add when I'm trading two trades at once. Like I still have this trade risking this trade, but now I have this trade risking here, but I'm also just moving this risk up to here because I think this will invalidate both pieces. So I only add when I can lower risk and this also works when I talk about involved risk. Like sometimes, and it's a more advanced technique is when like you always have an ultimate stop, but I don't often wanna take my ultimate stop, I will, but I'm hoping it doesn't come to that. And I'm typically really small in, you know, if that, so that if that does happen, I'm not gonna be hating myself tomorrow, but when I have an ultimate stop, but I know I wanna be in because I feel like this action is not sustainable. I have an ultimate stop, of course, but I'm waiting for some price. I'm waiting for the action to evolve to where I feel comfortable adding some size and using that the risk. Now I have identified the risk or essentially moved the risk down from the ultimate to now my preferred stop I'm gonna use. Hey traders, this is Tosh. I go by T Bradley 90 in the My Investing Club chat. Just wanted to reach out and say if you have any questions about MIC, joining MIC, maybe you're a member already, you have three ways to contact myself personally and through MIC, you can hit our social media, you can hit me through PMs in chat or you can contact us through my email at Tosh at myinvestingclub.com. That's T-O-S-H at myinvestingclub.com. I will get back to you in a timely manner and I'm saying this because I'm here to help and I don't want anybody to be afraid to reach out and ask any question that they have. We are here for you guys. All right, see you guys.