The "Blue Sky" Day Trading Pattern

What's up everyone? Welcome to day nine of my brand new small account challenge of growing a $2,000 account using Charles Schwab as my broker. As you know, I had a red day back on I think it was day seven. I was able to recover those losses and I was grateful for that recovery, but I haven't yet hit the highs of what was it? Day six when I was up about 2,500 in one day. That so far is the high water mark. That was the best day of the challenge. Today is a green day, but it's not the biggest green day that I've had so far. However, I can't complain because each day I lock up a little bit more profit. I've got more money in the account and I can use that buying power the next day when I log in. So today, my account is now up over 400% 400% in nine days. That is some really solid growth and of course it wouldn't be possible if we didn't have stocks or making big moves. So as we jump on to the slide deck here, this morning we had another stock that put in a big squeeze. This was interesting. The setup for today was what we call the blue sky setup. A blue sky setup is when a stock breaks through its all-time highs, the highest price it's ever traded at. And on the one hand you might think, oh it's at all-time highs, it's going to go down. People are going to sell. But that's not always the case because when a stock goes to all-time highs, there's also typically not any logical level of resistance, which means when's it going to stop going up? And so in theory, sky blue sky is the limit. And all of a sudden the stock can start squeezing very quickly. In today's example, we had a stock that broke through blue sky at about $10.48 and it promptly squeezed up 100% to $20 a share, which is incredible. And after that big move, we had a couple other stocks that did something simple similar on what we call sympathy momentum. And all of a sudden, the new theme was born to look for blue sky. Okay, so as always, the profits from these small account challenges gets donated to charity. And every time you guys hit the thumbs up in the episodes in this series, I'm adding an extra dollar. We have now raised over $327,000 for charity and here's the progress report. The goal is to donate to a children's hospital in single state in the United States. The 50 state children's hospital goal. And right now, we have donated $334,500. Today, I donated $5,000 to the Arkansas Children's Hospital, the Alaska Children's Hospital, Providence Children's Hospital, and $5,000 to the Children's Hospital of Alabama. So, I hit the A's here. As you may know, I was in Arizona recently. And so, I got the Arizona some children's hospitals especially that serve people that live on the Navajo reservation, the the Navajo Nation. And so, I got a children's hospital there in Arizona, New Mexico, and Utah all tied in with the Navajo Nation. And so, since I kind of, you know, got Arizona at the top of the list for A alphabetical, I figured I might as well get in Arkansas, Alabama, and Alaska as well. So, next up will be California. I haven't been doing this in alphabetical order at all until today. And then I just thought, well, I guess I should just start there. Again, this is Please, no offense to Wyoming. It's not my intent that you'll be at the very bottom of the list. It's just the alphabet that you have to blame. But, maybe we'll switch it up and we'll hit out Wyoming next. Who knows? All right, so that's where we're at there. Thank you guys for hitting the thumbs up. Today's day nine. And so, we're going to set the stage with a little bit of context. So, the this was the stock that went up 400% today on a blue sky setup. The ticker was PLSM. Now, this is a stock that I did not trade in the small account. I did trade it, however, in my main account and I'll upload a recap for that later today. So, for those of you guys who are curious about how I did on this one in my main account, that's coming. But, the issue with it for the small account was quite simply that it was I felt a little too expensive. Um I mean, it very quickly went from $4 a share down here all the way up to 5 6 7 8 9 10 11 12 and then all the way up to about $20 a share. So, it made a really big move, which was great to see. We love that. Um but, by the time I kind of thought there was a obvious setup, I really felt that I had missed um uh not just the beginning of the move. I had perhaps missed the bulk of the move in for the small account. So, missed it for the small account. In fact, well, we'll get into it big account as well. I didn't really trade it that well in my big account, but we'll we'll talk about that later. So, with this stock having made this big move, um it was clear to me that what was really significant was this daily level at $10.28. Sorry, not 10:48. I misspoke earlier. 10:28 right here. So, see how that's the all-time high? Now, this is kind of interesting because this is a stock that um actually doesn't have a lot of chart history. So, PLSM, it's currently up 165% even still right now. So, it's holding its gains uh relatively well for the morning. Um but, if we look at the daily chart, this sort of it actually is a couple of different setups at the same time. Um we have the blue sky setup, which is over $10.28. It's also the highest volume day the stock has ever had. Ever. 40 million shares. It's also a somewhat recent IPO from earlier this year. And so if we back this up here, I'm just going to go over to the dashboard, the members dashboard at Warrior Trading, and I'm going to go over to the education portal. So I'm going to just press control and click that out to a new tab, so we can use this if I need to. So I'm going to go down to the strategies and scaling course right here. Uh this is the course that I just re-taught this year, and we're going to go down to um chapter seven, momentum trading, and we're going to go chapter seven part two on stock types. So on the different types of stocks, um on chapter seven part two, we're talking about the different types of daily setups. So breaking news is what I'm typically trading every day, a stock that has breaking news. So that's your first daily setup. Then we have no news in continuation, which we've seen quite a bit of. Then we've got parabolic momentum, a stock just going straight up. Okay. Then we've got low volume parabolic momentum, which also sometimes happens. And then we've got the blue sky setup right here. Blue sky setup plus recent IPO breakout plus low volume parabolic momentum. So we actually have three stock types that it this sort of all met at the same time. Now recently we've had a number of foreign listed companies and Chinese stocks, you know, we've had um some recent reverse splits. There's a couple different uh daily stock types that I focus on because I do quite well on them. So in any case, today this one checked a couple of the boxes. And when we got this initial squeeze up, um I was sort of taken aback by how how nicely it moved. Now the float on this was my biggest concern. I looked at the float and I said, "Oh, 50 million shares, that's a little bit high." But what's not uncommon with a new IPO is that the float will be higher uh and they'll trade like a lower float, or that the number they put into the float uh cell in the data table for the market data vendors was wrong. And the float's actually different, sometimes higher or lower. And eventually it gets straightened out, but sometimes with a new IPO, the paperwork's not perfect. And so actually the float on this is more like 3.5 million shares. So going into the filings, you can see that. But anyway, so we pop up to five, we pull back, we squeeze up to six, micro pullback, we push up to nine, micro pullback. We get up to 10, that daily resistance. We dip off of nine, we rip up to 11, micro pullback. We break 12, we go to 13, 14, micro pullback, up to 18, micro pullback, up to $19 a share, just under the high of 20. Unbelievable. And this is a blue sky setup. Now it starts to pull back here, which isn't surprising. And so as it dips down after such a parabolic move on pretty decent volume, we're just sitting here patiently watching the scanners and waiting to see if something else pops up. And sure enough, something else did pop up. And we got after this move on PLSM, a high day scanner alert, FRTT. Now when FRTT first hit the scanner, it was only at like $2.69 a share. And it goes to 442, then to 640. So it squeezed up very quickly. Here's what I did. I click on the ticker as I always do. This scanner right here has the bell right there, which means the audio notifications are turned on. So you can change the audio audio notifications as you'd like. I've got them on mute right now. Uh but you can have a dog bark, you can have these different sounds. Anyways, you turn it up, you turn up your volume, and even if you're over in the kitchen or you're, you know, whatever, doing something else, you've got your volume loud enough and you hear that noise, it means something's hitting the scanner. And I'm going to tell you, I've tripped over my dog running to catch the scanner. I've knocked over toddlers running to catch the scanner. I hear that scanner going, and everyone looks because Ross is going to be running across the room as fast as possible because I need to see what's moving higher. And so we had FRTT hitting the scanner. So it hits the scanner and what's the first thing I do? I click the ticker just like clicking the ticker here. It then updates the stock quote window where I see if there's any news. I see where the company's located. I see this the market and the exchange it's trading on and the sector that it's in and then I see the daily chart here. I back that out. I zoom out and sometimes I'm already familiar with a company. BLXL I'm familiar with. Look at the position of the 200 moving average and you know, kind of get dialed in. But in the case of FRGT uh this one I popped in or sorry, not FRGT, FRTT. I pull up uh the daily chart and the first thing I see is this is a recent IPO and it's blue sky. And I'm not really put off too much by the sell off right here or the volume cuz the volume is very light and so these red candles don't really mean a lot. But what I know is recent IPO squeezing up, this is a very similar setup to what we just saw make a big move on PLSM. And so as soon as it's doing a micro pullback, I'm jumping in. It squeezes up right here. It does a little micro pullback right there. You see that little micro pullback? And that micro pullback was enough for me. It hesitated just for a moment right under about 450. It dips back down to about 390 and as it curls back up, I punch it right there. It pops up to 640. I'm taking out some profit. It dips back down. And then in my main account, I'm watching it for continued trades for a curl back higher. Unfortunately, this one wasn't able to do that. Sort of lighter volume on the move up and then higher volume on the selling is the first red flag and then it was back below the volume weight average price which is this orange line and then it ended up retracing a good portion of the move. Now we also had just after that another stock that popped up um also on sympathy momentum at least I think it was um and so you can see FRTT has come back down quite a bit. Here's the thing, you don't know in the moment if a stock is going to keep going higher and go to 12, 13, 14 dollars a share and XTS from Monday, remember this one? We we had no idea. We got in early and ended up making a huge move. It continues all the way up to 24 dollars a share. I sold too soon. But it got and it kept going higher. Well, you could say on FRTT I sold it just the right right time. Well, it so happened just because my goal is to take profit and as soon as I see an exit indicator I take that profit off the table especially in the small account. And so I saw an exit indicator. I took the profit. Now an exit indicator doesn't mean it's going to go all the way back down. It just means right now there's a little bit of selling so it's time to get out. So I let it dip down and sometimes it curls and you get another setup. Other times it rolls over. Rock, ROC, this is another one that popped up this morning. Pops up, sells off and it's actually red on the day now but it's also a somewhat recent IPO with the all time high on this one being up around 750. So, you know, this one initially had what we thought was maybe some potential but didn't end up taking any trades on it. So, now if we jump back onto the slide deck here um only took one trade today. Total profit 1,513 dollars and 69 cents which means my small account is now up more than to to a balance of more than 10,000 dollars. I've got more than 8,000 in profit versus the 2,000 dollar starting balance. So, the growth is right around 400%. 16 trades in total. 13 winners, three losers, 81.5% accuracy. Average trade is about 509 dollars and 50 cents. And for those of you guys that haven't already checked out the two week trial, you can watch over my shoulder while I'm trading and you also will get access to the same exact software that I'm using every single day. And during that two week trial, we give you access to chapters one through six of day trading the basics. So that means if you come back up here to the learning management software that we use, you come back here to the top, go back down to day trading the basics, you'll be able to go through these first six chapters and that gives you a sense of how I'm trading every single day. So you'll have access up to right here during your two week trial. And if you love it and you want to continue going through more classes, then you're welcome to become a full fledged member. All right, so hope to see you guys in the chat room bright and early tomorrow. I'll be streaming at 7:00 a.m. But let me remind you as always that trading is risky, my results aren't typical and there's no guarantee you'll find success whether you trade with me or you learn on your own. So your best bet is to practice in a simulator to manage your risk before you ever put real money on the line. With that, you guys bright and early tomorrow morning at 7:00 a.m.