The Setup

After a huge 200% run from April into May, INTC began digesting its gains. I already had it on my Leaders List, and was waiting for another buyable setup.

After a few weeks, INTC printed a very tight inside day and the RS trend line crossed back into Relative Strength. The 4, 9 and 21 EMAs were flat and pressed together, so I set an alert above the 6/9 high.

The Entry

On 6/11, price pushed through my $114 alert.

More importantly, the behavior of the stock started to change. The 4 EMA ticked higher, while both the candle body and Daily Range expanded. By the close, volume had reached 130% of average.

That combination of all these factors signaled a buy for me.

I bought a 30% position at $112.89 with my stop at the low of the day, $110.50.

That put my initial account risk at 0.67%.

Managing the Trade

The next day gave me the follow-through I wanted to see. Price continued higher and the day’s range expanded to roughly 2x the size of the breakout day’s range, giving me further confirmation that a new swing was underway.

I started reducing into that strength:

• First Peel: 25% @ $122.07

• 2nd Peel: 15% @ 127.31

• 3rd Peel: 15% @ $127.59

I wasn’t trying to guess where INTC would top. As momentum expanded, I simply continued reducing exposure while keeping a position in case the trend continued.

The Exit

Eventually INTC accelerated into back-to-back gap-ups.

After that momentum burst, the stock printed a reversal candle on 6/23. I sold my remaining shares at $131.85 and closed the trade.

My weighted average exit came to $128.43, resulting in approximately +4.37% on my equity curve and +6.5R.

Takeaway

Nothing complicated here. INTC was a leading stock in a leading group. All I did was wait for it to reset and give me an entry.

I waited for the breakout to confirm and signal the start of a new swing before getting involved. I hate getting chopped up, so I demand range expansion, volume, and RS confluence before putting money to work.

From there, the peel-and-trail approach allowed me to reduce risk into strength while still keeping enough exposure to participate as the trade continued higher.

Entry: 8/12 @ $29.95
Exit: 8/14 @ $32.82
Gain: +10%

OSCR was a pretty straightforward continuation setup.

Going into the entry, a few things had my attention:

• The prior 3 closes were within 1% of each other, showing tight price action.

• Both 8/10 and 8/11 contracted in range from the prior day.

• Volume also declined each day during that contraction.

• The Relative Strength line crossed back into relative strength after a brief period of underperformance.
  

  

  
  

On 8/12, the 4 EMA ticked up, both the candle body and daily range expanded, volume finished slightly above average, and price closed in the top 80% of the day’s range.

The stock followed through over the next 2 sessions, and I exited on 8/14 at $32.82 for roughly +10%. gain.

Nothing particularly complicated here. The contraction got it onto my radar. The expansion gave me the reason to enter.

Am I a buyer today?

That one question determines almost everything else.

• Am I looking for new opportunities, or am I simply managing existing positions?

• If I am buying, how many new positions am I willing to take?

• What size should those positions be?

• How much total open risk am I comfortable carrying?

Most traders answer these questions emotionally.

After a winning streak, they suddenly feel invincible and increase size.

After a losing streak, they either force trades trying to make it back or become so fearful they can’t execute good setups.

Neither approach is a trading plan.

A trading plan should be the output of a repeatable process.

My #1 indicator isn’t SPY or the news.

It’s my own performance.

I review my last 3, 5, and 10 trades. I look at my P&L over the last few trading days, my monthly performance, and my year-to-date results.

If I’m following my rules and quality setups are working, the market is likely healthy enough to stay aggressive. If they aren’t, that’s usually my first warning to reduce exposure.

Next, I monitor a watchlist of leading momentum stocks. These names tell me whether institutions still have an appetite for risk. Are breakouts following through, or failing immediately?

Finally, I pay attention to the news reaction, not the news itself. When every headline creates violent gaps and choppy action, that’s usually a sign to be more defensive.

The next day 7/8/26 it followed through right away and reached roughly 2R (+13%). Per my plan, I sold 33% of the position and moved my stop to breakeven.

A few hours later, the follow-through faded and the stock rolled over. The remaining shares were stopped out at my entry.

Could it have kept going? Sure.

But that’s not why I peel.

I peel because I have no idea what happens next.

Some stocks turn into multi-week trends. Others fail after one strong day. Taking a partial at 2R lets me lock in something while giving the rest of the position a chance if the move continues.

Today’s trade is a good example. The stock didn’t continue, but it also didn’t turn into a full loss.

That’s the job of the peel

If you'd like to see how that process is applied every day, I'd love to have you inside Voyage Trading Group.

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That might sound backwards at first, but it’s a key principle in my trading system — I’m not chasing home runs, I’m compounding base hits.

Let’s look at a few examples:

• $W (9/2) closed 136% of ATR gave +2.5R in 3 days

• $RGTI (9/12) closed 191% of ATR gave +5R in 7 days

• $APP (8/22) closed 120% of ATR gave +4R in 10 days

• 

These are certainly not the “RULE”, however they are outliers that teach us something.

They show what happens when you stop fearing strength and start respecting expansion.

Stocks must expand to go higher. It’s the confirmation that momentum is strong, not weak.

A practical way to approach these is simple: trade them with more size, and sell the risk sooner. Capture the expansion phase, secure profits, and move on. That’s how you turn a series of volatile moves into a smooth equity curve.

This requires a base hit mentality. Most trades will be quick wins, not multi-week monsters — but they stack over time.

If you want to improve, study the 1-, 3-, and 6-month winners.
Pay close attention to where they closed on the FIRST day of their new swing.
That’s where expansion begins and that’s where momentum traders build their edge.

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For short-term, long only traders, getting knocked out of a few positions was actually a gift. Why? Because it forces you to step aside and observe instead of reacting.

Most traders make the same mistake: they confuse heightened volatility for directional change.

A wide bar or violent intraday move doesn’t mean the market has “decided.” It just means emotion spiked. That’s it.

So ask yourself:

• Did the market really break down?

• Or did volatility just heighten and whip everyone around?

Patience Pays: Watch the Bases

Here’s where most traders miss it.

Stocks that look weak during volatility aren’t always breaking down—they’re often just building bases.

That’s where the real opportunity hides:

• Price holds above key moving averages.

• Volume contracts instead of exploding.

• Support levels get tested, but not broken.

This is base-building, not failure. And when that pressure finally releases, it creates some of the biggest moves.

The emotional traders are out. The patient traders are in.

Effort Doesn’t Pay. Quality Does.

The market doesn’t reward effort.
It rewards quality + patience.

You don’t get paid more for clicking more buttons. You get paid for waiting until the evidence is undeniable.

Current Breakouts

Some stocks like ALAB, HOOD, W, AFRM, RBLX, RDDT are showing amazing Relative Strength despite recent failed breakouts. Now is not the time to push the leaders are key levels. The overall trend is up, until it isn’t.

The truth is, clarity comes from routine. Each night I build a full game plan—watchlists, video breakdowns, setups I’m stalking. That’s the process that keeps me steady when the market seems messy. Inside Voyage Trading Group, I share it openly.

Start Here!

Date: 6/2/25
Entry: 653.20
Max Profit: +5R in 5 trading days

Setup

• Type: Delayed Entry/ Continuation Breakout

• Catalyst: Strong earnings gap up with second Gap up

• Structure:

  • 2 Gap Ups then rest

  • Price held above key moving averages and volume dried up

  • The 4 EMA started to separate from the 9 EMA, signaling trend continuation

  • Persistent accumulation with rising relative strength (RS phase).

Entry

• Trigger: Break above the prior 3–5 closes at 653.20.

• Context: Price closed at top of range, and above all near term resistance

• ATR Check: Entry within acceptable stretch — not more than 1 ATR above recent support. 9 and 21 EMA began to pinch prior to breakout

Risk Management

• Initial Stop: Placed under breakout Low of Day

• QQQ price above 21-EMA and breakouts working well

• Full Sized position acceptable

Outcome

• Stock ran immediately in favor post-entry.

• Achieved +5R within 5 trading days — a textbook slingshot continuation.

• No volatile pullbacks during the run, confirming trend health.

Lessons Learned

1. Strong back-to-back gap ups that consolidate and break above closes provide clean entries.

2. EMA separation (4 > 9) remains a reliable early momentum cue.

3. Don’t chase Gap Ups — patience during the subsequent base pays off.

4. This trade reinforces the value of combining catalyst + technical triggers with a structured quality check before entering a trade.

   ---

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One of the hardest lessons momentum traders must learn is that you don’t need to catch the first move. The market will often reward patience, and Zillow’s November 2024 earnings gap is a great case study.

📊 The Setup

• Earnings Gap: +23% change on 250% of average volume, closing in the 77% range (a textbook BGU signal).

• Base Structure: A 7–10 day base formed immediately after the gap.

• EMA Behavior: 4 and 9 EMA pinched tight, setting up the Delayed Entry trigger.

• Confirmation: 208% range expansion bar with the 4 EMA turning up, price closing at the high on volume.

This is the essence of our Quality Check process: range expansion, volume confirmation, EMA uptick, and a strong close.

⏳ Why This Was a Delayed Entry

The Gap Up was explosive and fast – chasing it would have meant buying at max stretch. Instead, the real opportunity came from the delayed entry after a brief consolidation:

• Price went 2 days tight, compressing volatility.

• Volume dried up as sellers disappeared.

• The trend expansion trigger fired once price resolved higher, once price and the EMAs both expanded.

Patience meant entering with defined risk after the crowd had cooled off.

🧭 Key Takeaways

1. Gap ≠ Entry. The gap only sets the stage; the setup forms in the days after.

2. Compression fuels expansion. The 2-day tight pattern was the springboard.

3. EMAs tell the story. The 4 EMA uptick on volume confirmed momentum was ready to resume.

4. Trend Expansion Trigger. This gave the green light – not the gap itself.

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I’ve logged every single trade since my very first one in May 2018 —
Over 2,400 trades in the past 7+ years.

Today, I want to share some of the most epic and horrific trade data from that journey — not for sympathy, but to inspire someone who’s struggling or maybe just starting to turn the corner.

For the first two years, I mostly messed around with ETFs and dividend stocks. But in 2020, everything changed — I ran my account up nearly 300% from inception.

Then came the inevitable top tick:

Two massive $AMC trades rocketed my equity curve… just before it all came crashing down.

The following months were brutal — stacked losses, poor decisions, and a slow bleed that lasted well over a year.

I eventually got control of the downside, but my profit-to-loss ratio still wasn’t anywhere near breakeven. I had stopped the free fall, but was just scraping the bottom, trying to hang on.

This went on from 2022 through August 2023, when I made the most important pivot of my trading career.

After hitting rock bottom after rock bottom and seeing my account go from 0 to 75K and back down to 20k I was broken.

I realized I needed to go deep — not into the charts, but into myself.

That’s when I connected the dots between my impulse trading, FOMO, and ADHD. I saw how being on margin gave me too much rope… and I kept using it to hang myself. So I switched to a cash account. It gave me structure. Even if I slipped, I couldn’t spiral out.

Heading into 2024, things finally started to click.

I had done the deep dive — on myself, on my process, on my edge.

I found setups that were “right for me.”
My winners became larger than my losers.
And for the first time in a long time, I had the discipline to see real progress.

Fast forward to June 2025, and I feel more dialed in than ever.

I’m not “there” yet — I still need to smooth out the inevitable drawdowns — but I’m entering the performance stage of my career.

To everyone who’s helped me along the way:

Thank you.

Here’s to many more years of learning, refining, and growing.

Let’s talk about something most people say they do… but few do with real intention:

Reflection.

Not just the quick “what went wrong today?” kind of reflection, but the deep, strategic kind that sharpens your edge and helps you evolve as a trader. Especially when it comes to your trading system—the foundation of your process—it’s critical to pause and ask the right questions.

Here are the top 3 questions I ask myself (and my coaching clients) when reviewing a trading system:

1. Is My System Built Around My Strengths or Someone Else’s?

Too many traders build systems based on what they see working for others.

But trading isn’t one-size-fits-all. Some traders thrive in fast-paced scalping environments. Others do better waiting patiently for high-conviction swing entries.

So ask yourself:

• Do the setups I trade align with how I think, react, and process information?

• Do I feel mentally drained after trading, or in flow?

• Would this system still make sense to me if I never saw it on Twitter or YouTube?

The best trading system is one that feels natural to you, not forced.

2. Do I Have a Clear, Repeatable Process… or Am I Just Winging It?

This is where quality setups separate from random trades.

Ask yourself:

• Can I describe my system to someone else in less than 60 seconds?

• Do I know exactly what conditions need to be met before I enter a trade?

• Do I review my trades to see if they followed my system—or if I acted on impulse?

If your trades feel inconsistent or hard to explain, you may not have a real system yet. You may just have a collection of ideas that haven’t been fully refined.

Clarity and repeatability are what transform you from a reactive trader into a consistent one.

3. Does My System Actually Have an Edge?

Let’s be honest: not all systems have an edge.

Some are just wishful thinking wrapped in technical indicators.

So ask:

• Have I tracked the win rate, risk/reward, and expectancy of my setup over a sample of trades?

• Have I stress-tested the system across different market conditions (trending, choppy, low-vol)?

• Does my system protect me from big drawdowns, or just hope they don’t happen?

Without data to back it up, you’re relying on luck—not a system.

You don’t need perfection. But you do need proof.

Final Thoughts

Reflection is a performance tool. It’s how you build self-awareness, refine your edge, and evolve with the market.

If you’re serious about long-term success, build the habit of asking hard questions. Be honest with yourself. And don’t be afraid to tweak, test, and rebuild when needed.

The market changes. So should you.

Keep growing. Keep leveling up.

Refusing to Take a Loss: You hold onto a losing trade because you don’t want to admit you were wrong. The stock keeps dropping, and instead of cutting it, you "hope" for a recovery.

Overconfidence After a Win: One big win makes you feel invincible, so you size up recklessly on the next trade—only to get wiped out. Ignoring Your System: You convince yourself that you "just know" a stock will go up, so you ignore your setup and take the trade anyway.

Solution: Accept losses as part of the game. The best traders are wrong all the time, but they cut losses quickly and move on. The market doesn’t care about your ego.

Impatience in Trading:

Chasing Entries: You see a stock running and FOMO in at the highs, only to get dumped on when momentum fades.

Forcing Trades: You feel the need to always be in a trade, so you take low-quality setups instead of waiting for A+ opportunities.

Cutting Winners Too Soon: You take quick profits because you’re afraid of losing gains, instead of letting the trade play out.

Solution: Let trades come to you. Good setups take time to develop, and chasing only leads to bad entries. Train yourself to wait for high-probability setups.

The Bottom Line:

Ego makes you hold when you should cut. Impatience makes you jump when you should wait. Both lead to losses. Discipline and patience separate winning traders from the rest. Control your emotions, respect your strategy, and let the market do the work.

When the market is trending, watchlist management is relatively straightforward. Traders focus on setting alerts, identifying breakout levels, and looking for prime entry points. But when the market corrects, the game changes. Suddenly, the most effective use of your time isn’t hunting for breakouts—it’s scanning for strength.

Why Watchlist Management is Crucial in a Correction

During corrections, the broad market is weak. Many stocks will follow suit, breaking down or trading erratically. However, not all stocks will fall apart. Some will hold up, trade in a tight range, or even push higher despite the market’s downturn. These are the stocks showing relative strength, and they are the ones to focus on.

A well-managed watchlist during a correction isn’t about chasing red-to-green moves or panic-selling—it’s about maintaining a list of leaders. These stocks will often be the first to recover when the market finds its footing, offering the best risk-reward setups when the trend resumes.

How to Manage Your Watchlist in a Correction

1. Filter for Relative Strength

   • Look for stocks that are holding key moving averages while the market is selling off.

   • Stocks that are consolidating near highs instead of breaking down are showing clear leadership.

2. Prioritize Sectors Showing Strength

   • Market corrections aren’t uniform—some sectors will get hit harder than others.

   • Identify the pockets of the market that are weathering the storm. Are certain industries, such as semiconductors or biotech, holding up better than tech or financials?

3. Track Volume Trends

   • Stocks holding up on lower volume may be avoiding selling pressure, but those seeing accumulation on high volume signal institutions are stepping in.

   • These names should be high on your watchlist.

4. Set Alerts for Future Setups

   • Instead of jumping into trades prematurely, set alerts at key resistance levels or trendline breaks.

   • The goal is to be ready to act when the market environment improves, rather than react emotionally in the moment.

5. Monitor Market Conditions

   • A strong stock in a weak market still carries risk. Keep track of major indices, volatility levels, and sentiment shifts.

   • Once you notice broad market stabilization, start looking for early entries in your watchlist names.

Leaders Will Bounce Before the Market

The stocks that show strength during corrections are often the first to bounce when conditions improve. These are the stocks institutions want, the ones with strong fundamentals, and the ones that will likely become the next trend leaders.

Instead of being caught off guard when the market turns, a trader with a dialed-in watchlist will already know where the best setups are forming. They’ll be ahead of the move, not chasing it.

Tools I use to stay engaged

I will apply a price above 21ema filter to my scanners. the stocks that make the cut are showing high RS by default.

Additionally, using a spreadsheet to monitor ETF performance is a great way to track sector strength.

Final Thoughts

Market corrections are challenging, but they are also opportunities in disguise. The traders who use this time wisely—by refining their watchlists, tracking relative strength, and preparing for the next move—will be the ones best positioned for success.

A correction isn’t the time to shut down your screens; it’s the time to stay engaged, refine your list, and prepare for the next leg up.

Sector Strength Research

To streamline my workflow and reduce the time spent screening, I removed dedicated sector strength research from my routine.

Previously, I would run specific screeners to identify strong sectors. However, I realized this was redundant. By running daily screeners focused on gap-ups and high-volume action, I naturally develop a sense of which sectors and themes are performing well. Adding another layer of sector ETF reviews or additional screens was unnecessary and led to doing the same work twice.

This adjustment allowed me to focus more on actionable data, keeping my process efficient without sacrificing awareness of market trends.

Removing Fundamental Filters from Screeners

This year, I also eliminated the use of fundamental filters in my screeners.

Initially, I thought applying criteria like earnings growth or strong financials would help narrow down high-quality setups. However, I realized that by running daily screens for high-volume gaps, I naturally catch every earnings report or catalyst that aligns with strong fundamentals.

Essentially, the price and volume action reflect the impact of solid fundamentals without the need to pre-filter for them. This shift not only cut down on redundant screening but also ensured I didn’t miss momentum plays that might not check every box on a fundamental level but still offered strong potential.

Simplifying this part of the process allowed me to focus on what really matters – the price action and momentum driving the market each day.

Cutting Out Wide Weekend Screens

Another shift I made this year was removing the habit of running wide, expansive screens on weekends.

In the past, I’d dedicate time to casting a wide net, looking for potential plays outside my daily scans. But I realized that by consistently running quick, focused screens each day, I was already capturing the best setups in real-time. The weekend-wide screens often surfaced the same names I had already seen throughout the week.

Letting go of this process freed up valuable time – time I could spend refining tools, working on strategy, or stepping away from the market entirely to recharge. Reducing screen time without sacrificing quality setups became a key focus, and this small adjustment helped strike a better balance between trading and personal life.

Things I Did Really Well in 2024

Reflecting on this year, several key decisions and habits had a positive impact on both my trading and mindset.

Adapted to Volatility Over the Summer

I didn’t fully step away from trading during the summer but recognized the market’s heightened volatility. Instead of forcing trades, I took positions in QQQ and NVDA and let these trades work with minimal management, freeing up time to focus on personal pursuits like improving my running.

Consistent Use of a Position Size Calculator

In 2023 I made it a rule to use a position size calculator for every trade. This consistent approach kept me disciplined, improved risk management, and reduced impulsive decisions, reinforcing a structured trading process. In 2024, the incorporation of the calculator felt very natural and was easy to use.

Focused on One Day at a Time

I shifted my mindset to focus on the present, trading one day at a time instead of getting distracted by long-term market noise. This daily focus kept me grounded, lowered stress, and enhanced overall performance.

Adjusted Trade Management for Better Profit-Taking

I recognized that most of my trades hit 1R or 2R before pulling back to break-even or failing. To adjust, I took larger initial positions and scaled out sooner to lock in profits. This shift allowed me to secure gains and gave trades room to breathe if I entered a day early. Scaling back in without pressure became easier, enhancing my ability to manage trades flexibly.

Things I Need to Work on for 2025

Loosening Stops Around Support Levels

One key area I need to improve is loosening my stops when trading near support levels.

This year, I refined my understanding of how support functions. I shifted away from viewing it as a place where institutions "bounce" trades and started recognizing it as an area where they accumulate shares to improve their average cost. Often, institutions will leave bids at support without aggressively pushing the price higher.

To align with this, I need to stop taking overly tight, large positions at these levels. By being more flexible and allowing trades room to develop, I can better participate in this accumulation process—rather than getting stopped out as institutions scoop up cheaper shares.

Trading with More Size and Aggressive Add-Ons

I’ve built a system that is highly refined and efficient, allowing me to filter out 98% of the market noise. I stay consistently in tune with market leaders but often mess up and get stopped out too soon or I don’t trade them with enough size.

In 2025, I want to focus on sticking with the leaders and trading them with larger positions. My edge is strong, and scaling aggressively when the right setups present themselves will help me fully capitalize on my strategy. This is an area where I know growth will come from stepping up and trusting the system I’ve built.

Top Winners of 2024

IBIT 10/11/24 ($35.15) to 12/5/24 ($58.18)

RDDT 10/30/24 ($111.60) to 12/10/24 ($156.05)

PLTR 11/5/24 ($48.03) to 12/10/24 ($60.83)

MU 3/24/24 ($114.21) to 4/4/24 ($126.59)

In my latest video, I dive into momentum bursts with short vs. long bases. Learn to spot higher-quality setups and avoid the false breakouts that crush your win rate.

Watch here:

• Reframing “Extended” Stocks: Recognize that breakouts mean range expansion—it’s part of the momentum!

• Strategic Stop Losses: Use ADR to set relative stop losses, making entries smoother and more confident.

• Top 3 Setups: Gap ups, breakouts, and continuation patterns—My bread and butter, with key risk levels explained.

• Building Confidence: Through repetition and review of high-ADR charts, you can improve your buy confidence and capitalize on the momentum phase.

Watch the full video to dive deep into these setups and refine your trading edge! 🧠💼

Voyage Pro Mentorship Group

Voyage Pro is a premium mentorship service offered by Voyage Trading Group, designed to support traders in refining their skills and mastering profitable setups. With access to expert guidance and real-time insights, Voyage Pro members benefit from:

1. Personalized Mentorship: Direct support from experienced traders, helping you navigate the market confidently.

2. Exclusive Strategies: Learn high-probability setups, like bottom bounces and continuation patterns, focused on timing entries and exits.

3. Advanced Tools: Access to unique indicators, such as the RTI indicator, to identify optimal trade opportunities.

4. Community Support: Engage with a like-minded group of traders for insights, encouragement, and strategy-sharing.

5. Continuous Improvement: Receive feedback on your trades and adjustments to fine-tune your trading approach.

Voyage Pro aims to accelerate your growth, simplify market analysis, and enhance your trading success.

Sector Correlation: Friend or Foe?

When you buy into several stocks within the same sector, you're amplifying your exposure to that industry’s fortunes—good or bad. During bull markets, this can feel like a winning strategy, as strong sectors can outpace the broader market. But when the tide turns, these concentrated bets can quickly backfire.

Take, for example, the technology sector in 2022. After a seemingly unstoppable rise, tech stocks experienced a sharp downturn as inflation concerns and interest rate hikes crushed growth valuations. Many traders, overweight in tech, saw their portfolios erode rapidly, despite strong individual stock picks. The lesson? No matter how solid a sector or theme looks, when the broader market sentiment shifts, the correlation between stocks within that theme can drag everything down together.

Recent Examples: When Themes Sour Quickly

1. AI Hype in Mid-2023: The buzz around artificial intelligence sparked a massive rally in tech stocks like Nvidia, Microsoft, and other AI-adjacent names. But by mid-year, as concerns over overvaluation crept in, the entire AI theme saw sharp pullbacks. Traders who over-committed to this theme felt the sting as once high-flying stocks quickly reversed.

   

2. Renewable Energy in Late 2021: The clean energy sector was another high-flying theme that looked unstoppable. Stocks in solar, wind, and EVs soared as governments globally pushed for green energy solutions. But by the end of 2021, the sector faced severe declines as supply chain disruptions and policy uncertainties dampened investor enthusiasm. Those with heavy exposure to renewables found themselves caught in a downdraft with little warning.

   

3. Crypto Crash in 2022: Cryptocurrencies and blockchain-related stocks were another perfect example. After an epic run-up in 2021, many traders continued piling into crypto assets and crypto-adjacent equities, believing the momentum would last. By 2022, though, the entire theme collapsed, with Bitcoin and Ethereum losing over half their value, and companies like Coinbase and MicroStrategy suffering massive declines.

   

How to Avoid the Trap

The key to avoiding sector or theme overload is simple: diversification and risk management. Don’t allow your emotions to cloud your judgment. Just because a sector is hot doesn’t mean it will remain so indefinitely. Here are a few guidelines to help you stay disciplined:

• Limit Exposure: Aim to keep your sector exposure below 20-30% of your portfolio, even in the strongest markets. This protects you if that sector suddenly reverses.

• Watch Correlations: Pay attention to how stocks within the same theme or sector move. If they are highly correlated, be cautious of taking on too many positions.

• Sector Rotation: Be aware of the natural rotation between sectors. Money moves from one area to another. Don’t chase yesterday’s winners blindly.

In the words of Mark Minervini, "Preserving capital is priority number one." It's about being in control and having a game plan. Overloading on a single sector might feel like a fast track to wealth, but it’s often a fast track to heavy losses when the sector cycle changes.

Stay smart, stay disciplined, and always keep an eye on managing risk.

Relative Strength is one of most important ways to gage how strong a stock is. The trick when creating these lists is to ignore if the stock is “setup” or not. The idea of building a list of leading stocks is to make a list of the strongest stocks, not a list of stocks near buy points.

Using TradingView Scanner 2.0, I will run the following scans:

I add them to 1 Watchlist

Now I will add a relative Strength Indicator on my chart: TraderLion's Relative Strength Line

Now I will go through all the charts and will move stocks from my “bullish work” watchlist to my “leaders” watchlist that have an RS rating of 90+ or has had a recent EP or “game changing” catalyst.

This new watchlist is not a “ready to buy” type of watchlist. This list should be used to gage market health. If a stock in this list breaks down, they should be removed, and if a stock from this list starts to trade near a buy point, it can be flagged or moved to a “ready to buy” type of list.