Strategy

“The stock market is a war. Your money is your army, and each stock is a battlefield you've chosen to fight on. Treat it as such—and protect your troops at all costs.”



Introduction

When I first stepped into serious trading, it was like a veil had been lifted. Suddenly, a stock chart wasn’t just a bunch of lines—it was knowledge, history, and meaning.

But I didn’t start here. I spent the first decade of my trading life being indoctrinated by other people’s perceptions of the market. I heard it all—from non-traders, amateurs, even so-called professionals: “You can’t time the market.” “Just buy and forget until retirement.” “Buy low, sell high.”

Blah, blah, blah. These phrases are rooted in a lack of true market education. And they’re the reason most people never bother to understand the market—or worse, give up before they ever get started.



Let me be clear: trading is not easy. It’s not peaceful. It’s a war.

And like any general stepping into battle, you need a strategy.



In this section, I’ll walk you through mine—a set of principles and guidelines collected over a century of market wisdom, from legends like Jesse Livermore to William O’Neil.



This strategy won’t fit everyone. Every trader has their own risk profile, emotional makeup, and ego to wrestle with. But if you’re patient—and if you can keep your ego in check—it can make you a lot of money.d emotional palet but this strategy has the ability to make you a lot of money, if your patience and ego allows it.



Setups

When it comes to trading momentum stocks, there are several proven setups that consistently offer high-probability opportunities. Fortunately for us, we live in a time where decades of research and market observation have already uncovered and tested these patterns.

One of the first people to formalize and document these setups was the late William O’Neil. Through extensive research, he identified chart patterns that often precede explosive moves in leading growth stocks. In this section, I’ll walk you through the key setups I focus on—those with the highest odds of success when the right conditions are met.



Cup with Handle

The Cup with Handle is one of the most well-known and reliable bullish setups, famously detailed in How to Make Money in Stocks by William O’Neil. It’s also been heavily covered by Investor’s Business Daily and countless professional traders.

Here’s how it works:

  1. The Cup – The stock begins to form a rounded bottom over the course of several weeks or months, typically correcting 20–40% from its previous high.
  2. The Recovery – The price climbs back up to the prior high, completing the “cup” shape.
  3. The Handle – Instead of breaking out immediately, the stock forms a slight pullback or consolidation (the handle) for a few days or weeks.
  4. The Breakout – If the stock breaks above the prior high with strong volume—especially if it’s a leading stock in a leading industry—this may be your entry point.

When executed correctly, this setup can lead to significant upside. But remember: volume confirmation and the stock’s context in the market (e.g. sector leadership, relative strength, overall market conditions) are key.