Hello folks! So in today's video, you are going to be getting a complete guide on how to grow a small account for complete beginners in 2024. Number one: buying breakouts and selling at breakdown Number two: finding grossly undervalued stocks and then waiting Number three: buying the rumor and selling the news up to key catalysts like FDA approvals, number four: buying after a company announces a perception changing Catalyst and number five leveraging major index Trends and the only thing I ask of you in return for all of the work that goes into a very thorough and well thought out value packed video like this one is that you hit that ravishing like button and also don't forget to subscribe. Okay first strategy is buying breakouts and selling them at break down. Now there's this phenomenon that often happens where stocks will try to break out of a previous High over and over again and fail and then when they finally do succeed, you'll find they tend to continue going up and oftentimes by quite a lot.

So buying breakouts and selling breakdowns takes advantage of this phenomenon. For example, Nvda broke out to this new cycle high at 520 is in August 2023. It then proceeded to sell off pump up, sell off, pump up, and then sell off and pump up again, but never really managed to make a new high. But once it did make a new high around the first week of 2024, it proceeded to run another 28% So using the strategy what you would do is put in a buy order the moment it breaks out past the previous Cycle's highs set a stop loss for that level.

So if it fails to hold, your losses are limited and then simply Let It Ride Let's go through another example pltr: The tier of the Palen Palen tier had gotten to a cycle high at about 11 bucks in August 2022 and failed to break out again to that level until May 2023. Once it broke out past that level in May 2023, if you had bought there, you would have seen gains as the stock went on to nearly double to highs just a few months later. Now you may look at this and say okay, but Uncle Charlie Grandpa Charlie Papa Charlie Well, Papa Charlie I mean if I had bought it down here at Low's it would have been way way cheaper. So why would you suggest waiting for a higher high? Well, with this strategy, you're not spending time trying to find stocks that have bottomed or trying to predict when the dip stops dipping.

What you're trying to do with this is simply buy the TR rent. With this strategy, it's very, very simple. You're just simply buying momentum and then selling as momentum starts pulling back before the massive rug pull. And this really only works if you're waiting to make sure that you get those new cycle highs after something has failed to break a level for many, many different attempts.

With this strategy, you're not trying to predict anything. You're just going in if you get a higher high after a previously hardto break resistance level. a previously hard to break cycle. High Okay, so now that you know the Crux of this strategy, what about profit taking? Well, remember, when you use the strategy, you need to be using a stoploss a stop loss at the resistance level your stock broke out from so that you can limit your losses in the event of a immediate breakdown.

So if you do get an immediate breakdown and the overall higher high fails to continue Brewing Momentum: Well, if it just dips all of a sudden, your stop loss is activated. you're out. But for stocks that break that cycle high and then build on top of it o it's going to be a fun time. And if the stock runs, you're using a laded approach.

A 5% exit ladder is a pretty good rule of thumb. Some stocks will will use 10% but I'd say 5% is a good rule of thumb with a 5% ladder. That means every time your stock dips 5% you take profits on a quarter of your position. If it drops 10% take profits on half of your position.

This is a very, very solid strategy for exiting because the more something drops, the less likely it is to immediately come back, and the more likely it is to be breaking the momentum trend. From a capital efficiency standpoint and a profit maximizing standpoint, you don't want to be present for long periods of dips even if the momentum comes back like a month or two from now. If you can get in, get out with your profits, and then go running home to mama with a big check, Well, that's great. Even if it goes back up in two months, Well, it'd be better just to reinvest in a different play.

And regardless, I mean with this strategy, you're ensuring that you're always going to be profitable if the stock runs, because if you just let it run and then all of a sudden it breaks down massively. you might erode all your profits. But if something runs and you're taking profits along the way, well, you're locking in profits. So at the end of the day, you're going to be profitable.

Okay, moving on to the second strategy. Now the second strategy is having a good broker. Okay, that's it's. not really the second strategy, but it's very, very important.

The truth is folks that having a good broker is kind of like having a good car. You could be the best driver in the world, but if your car is a piece of shite and it won't start, it breaks down all the time. Well, you're not going to get anywhere. That's just a fact.

You can be the best Trader in the market. But if your broker sucks, you're going to lose. And that brings us over to Mumu which is the broker app that we recommend and is our affiliate partner today. Mumu has a platform that delivers speed, reliability, data, and a vast amount of trading tools and analytics whether you're talking about real-time data.

Level Two Financial News and Analysis Advanced Charting tools, smart alerts, and more. Well, quite frankly, Mumu's interface is pretty damn easy to work with. We've been recommending Mumu for years. We've sent many, many, many people over to Mumu and we've heard back great things and we have a great relationship with the platform.

I Really, really like them and we have arranged a promotion for you. If you do sign up. If you sign up using our affiliate link down below. While this promotion is going on, you'll get up to 15 free stocks, a 5.1% based apy on uninvested cash, and a 3% extra apy for 3 months.

Pretty nice incentive there to try out a free, free and very, very powerful broker, so make sure to give him a look. Okay, moving on. the real second strategy and that is finding grossly undervalued stocks and then waiting, playing a little waiting game. So despite what you might have heard, fortunately, the markets are very, very inefficient.

In fact, many times you will find that stocks are not just undervalued, but grossly grossly undervalued. And alternatively, you might find ones that are grossly overvalued. but that's a topic for another video, and the way to identify these is fairly simple and straightforward. First, you look at the fundamentals of the business.

compare the price to earnings and the price to sales ratio to their history and to their competitors. Is your stock a good deal based on those metrics. Obviously, you want to pay less per dollar of earnings and per dollar of sales. Understand the market size expectations is the market size of the industry or product.

Market Your company is serving expanding or is it Contracting Then you go over to the charts and you look at the technicals. Are you at a historical good deal based on the RSI Has the stock bottomed if your stock is a good deal, but it's a falling knife? Well, you can blow through a lot of money while the dip just keeps dipping. A triple layer tripple for frle layer dip. So check to see if the stock has bounced off a support level and started trying to brew momentum over that.

And lastly, did the stock have a previous pattern of rallying from current prices? If so, that's another positive sign on the chart, especially combined with all of these other points. Now, what is a good example of this? Well, let's go ahead and look at Meta Stock: So Meta Stock Dove From the 380s to 888 bucks a share in the growth crash of 2022. Now, if you check the price to sales ratio at the end of 2022, it was at just 2.8 But Meta historically trades at a price to sales ratio of around 8 to 10. So if you're at 2.8 you're really, really dirt cheap.

And then you look at the market size of advertising and the expected user growth of platforms that Meta owns like Instagram WhatsApp and such and so forth and you start seeing a lot more potential there. Then you pull up the RSI I mean you got a killer deal on the RSI Historically, look to see if it's bottomed and bouncing and indeed it has. And then you look at previous history and Meta has had a ton of huge sell-offs that get it back and bought right back up. And this is the power of the strategy you go through for every stock that you're considering for a undervalued buy, You just look at these six different points and you ask yourself, does the stock fulfill each of the six points? Do the factors stack up to suggest that my stock is a buy right Now With this strategy, you simply buy when the numbers say the stock is grossly undervalued, and then you sell.

When it gets back to its real value or even gets grossly overvalued, you go from dysphoria to Euphoria to Foria and so on and so forth. Okay, third strategy is buying the rumor and selling the news. So there's the situation in the market where when a catalyst is known and a lot of people are excited about the Catalyst. Well, a lot of people will buy the stock before the Catalyst and then when the Catalyst comes out, they sell it and take profits.

Seldomly, the stock will go up a little bit more after the Catalyst. but then still, you get that massive dumpy deita. we'll Dive Right into an example with Mara. So Mara this is actually one that we called out on the channel before much of its run happened in this cycle.

Mara Lovely. Mara Ran massively into Bitcoin ETF approval approval. That was expected to happen in January and it ran all the way into that January approval. Once the approval happened, the stock went up a little bit more and then you got a masse of dumpy deito.

It entered into a big take-profit cycle. So how do you play with this strategy? then well again, all you got to do is when you see a catalyst coming and you see the stock start following that. Catalyst EG Building momentum. Well, you buy it, You write the momentum and then you get out before the Catalyst.

Now I Went ahead for your convenience and wrote a list of catalysts that you can buy the rumor and sell the news into. These are not in any particular order, but planned new product launches pending partnership agreements pending FDA Decisions on drugs, pending patent approvals pending earnings. Although large earnings, anticipatory runs really only happen for small cap stocks, and I mean they're not that common in today's market condition. I Think they're going to become more common A Q2 Q3 perhaps Q4 Pending legislative regulatory hearings pending key contract decisions especially when it's government and big big companies Big companies partnering with small companies.

Very big deal pending suspected mergers, pending clinical trial results o This can really really make a stock run if it's a really small cap and it has like two drugs in the pipeline and then they got a positive Tri result o that thing can run and then of course, pending entry into major indices like the S&P 500 or Russell or S&P 600, so on and so forth. Now remember folks, to play with these isn't to hold through the actual Catalyst Because in the case of all of these catalysts, well, these are pending catalysts that could ultimately result in good or bad news. And unless you have insider trading information which that's illegal, you're not going to know if it's going to be positive or negative. And guess work is really few because lots of players are involved in every single one of these decisions.

And quite frankly, I mean you could get a negative or a positive announcement. and in both situations, the stock could dump massively and often times in the most positive Catalyst situations. the stock. Maybe it goes up a day and then it dumps massively.

So most of the move happens in the buying the rumor stage. Now there are some catalysts that actually have staining power and cause the stock to run up longer. But most of the time, when you're looking at the Catalyst on this list, you're going to find that it's better to just play the run up to the Catalyst and and get the hell out with your profits before the Catalyst ever drops. Okay, Strategy Number four: Buying catalysts that change dramatically: Investor perception of a stock NOW Unlike Strategy three, where you're buying an anticipation of a catalyst with number four, you're buying a catalyst after it comes out.

This strategy only works if your Catalyst has staying power, and it works even better if markets don't know, the Catalyst has staying power and they're only going to realize it over the coming weeks. If everybody knows and they all buying at once, you're going to get a massive pump and dump. But if all of a sudden you have a new Catalyst that only a little bit of people know about and more and more people know about over the weeks and months. Then all of a sudden you got a really nice steady momentum trade.

Let's go into some examples. So examples of catalyst that change: perception of stocks that can cause medium to long-term rallies. Well, long-term rallies. You have extended earnings growth.

When you have a few quarters of reported positive earnings growth, it tends to be the case that after maybe three or four quarters of that positive trend, if markets haven't woken up to it yet, well, all of a sudden after that last earnings report, you're going to start seeing markets waking up new competitive advantages, strong products pipeline coming, and a growing track record of success with previous products. You have new long-term contracts coming out if the government is booking $100 million worth of your product or service over the coming three quarters. Well, all of a sudden people are thinking okay, well I actually know how much more this company's going to grow Their bottom Line: major regulatory approvals, successful entry into new markets sector Trends if for example, AI is really hot everybody's buying AI Well, if your company's in the AI space, it's eventually going to some of that Capital too Management overhaul If you're hiring big names with big experience from big companies now, there are a couple other ones that I found will cause a 1 to two. We rally like analyst upgrades, especially when they give a high price.

Target analyst comes out and says oh, this stock that our subsidiary is holding or this stock that our friends back from college or holding. While this stock just got a much higher price Target 50 bucks, 100 bucks, 300 bucks sometimes that will cause a one to two week rally. The more reputable The Firm Of course the more that can sustain itself big hedge fund and or other institutional byrev ations if Warren Buffett Mr Buffett himself is going in directing Brookshore Hathaway to buy massive amounts of blah blah blah stock while everybody's going to start buying blah blah blah stock. The key with this is of course making sure that the media is talking about how this hedge fund bought blah blah blah.

Warren Buffett blah blah blah. All that kind of stuff. Okay, Strategy number five: Leveraging the market. so the trend is your friend until the trend bends and then the trend is no longer your friend.

Now Luckily, when it comes to the overall Market Trend Well, the trend tends to be upward. Pretty easy to predict. Now this isn't always true, but over a long enough time Horizon it is always true. I Mean governments print tons and tons of money which ends up into the market and in the bottom line of major companies listed in the market.

And of course, good companies also get smarter and more efficient and more profitable just in and of themselves. and Technology improved so on and so forth. So you put all this together and what happens, will stocks go up now? of course. That being said, throughout history, there have been periods where stocks have trended down, sometimes for a few quarters, sometimes for a year and you certainly have to be able to identify those.

Be aware of those and risk manage to prevent those from destroying you. But for purposes of this video, all you got to know is the trend is your friend until the trend bends and then it's no longer your friend. With this strategy, all you have to do is identify an overall trend which way it's going and then take advantage of that momentum. The way the strategy works is first identify the direction of the market on the chart.

If spy has climbed 10% or more from lows, and it's climbing above or making increasingly successful attempts to climb above the 180 day moving average, well, odds are strong, you're on an uptrend. Now here's where the fun part comes in. So you might imagine: As you might imagine if markets average around 8% up a year. Well, even if the trend is hot, you're not going to be able to make much money, especially if you have a small account.

You just can't buy that much. So what you got to do is you got to use leverage And the best way to Leverage is with options. Let's go back to March 2023. A few months into the Spy uptrend, you would have identified that we've climbed more than 10% from lows and we're increasingly fighting to change direction over our red directional SMA line.

In that situation, you could have said okay. well, I'm going to go ahead and I'm going to buy 10 Spy 430 strike calls dating out to January 20204 allowing for a reasonable amount of time for stocks to Rally You think that you're going to get at least another 9mon rally and you could always sell out earlier if the rally breaks. If the trend breaks and this 430 strike call is a pretty damn good number because you see a ton of open interest at that level, meaning it's going to be super liquid to get in and out of. So you're pretty golden with this contract.

and buying calls this far out of the money allows you to get about 20x the leveraging power. These calls allow you to pick up complete control over each share of spy for just 18 bucks a piece, whereas if you bought the direct shares you'd have to pay 398 bucks a piece. So with this strategy, you have about 20x the leveraging power and you got ample liquidity if you are wrong or you want to take profits early. Now let's go ahead and go through this trade.

So if you pick up just one call, well, that one call gives you the contract for 100 shares and 100 time. $18.36 is about 1,836 in a limit order total cost and then you send the order out and you get executed at a slightly better cost at $17.15 which comes out to 1,715 bucks when you multiply it by 100 because each call is 100 shares, right? Well, fast forward out to December 20th at the end of the year and you're for 430 options. Your 430 strike options have gone up a ton, the Spy has climbed to 474 and your position here has now gone up 3,12 bucks. You put in originally 1,715 bucks, but your spy calls are now worth a total of 4,727 bucks.

Your position grew 3,12 bucks. Pretty good trade, right? That's a very, very good return for a super small account. Especially Now what if you had decided instead to buy straightup shares using the same amount of money? Well, for the same amount of money 1,715 bucks, you would have only been able to buy about four shares. So instead of having the controlling power of 100 shares, you got the controlling power of four and spy went up 19% during that time span.

So you would have only made 300 bucks on that position. So in the end, you got a 10x profit increase just by using options for the same exact trade. Really? I mean you're thinking spy is going to go up for seven months. You could buy shares or you could buy call options dating out those months.

In this, in this case, you chose options and 10x the return. Now, obviously, there's a lot of factors when you're trading options that I couldn't get into in one part of a segment of a video. But but at the end of the day, you could see how the leveraging power is so effective when it comes down to options. And quite frankly, you could also do options for any of the strategies in this video, but for the purpose of a beginner.

I Would start with just trading straightup shares on a paper trading simulated platform like Mumu link down below and then later on start practicing with options so that you could leverage those moves further. For those of you looking to learn more strategies in trading the stock market I have a ton of videos on the channel, different playlists, and tons and tons of content that I made over many years for for you to watch completely free. If you'd like to join a membership program where we have very thorough and in-depth hours of content and strategies and practice and private Discord well we have Zip Trader you. You also get access to our daily morning briefings I'll put the link to that down below and if you want to learn options, we just released our new A through Zg guide on options trading.

It's called Zip Trader Options and if you'd like to learn using that, we'd love to have you there too. But I would simply start with the strategies that we presented here in this video. paper. Trade them, try them out about 10 times each, see which one you like the best, look at how your returns are, and then once you've deemed yourself that it's appropriate, maybe move forward with real money anyways.

Hope you found value in this video. Make sure to hit that ravishing like button and subscribe. Have a good one folks and we'll see you in the next video.