You’ve probably had a trade go bad and had no idea why.

Was the setup wrong, was your timing off, or did you just get unlucky?

This is my favorite setup this week

You don’t have to be the smartest guy in the room to find and execute winning trades.

You just need to be PREPARED.

I’ve lost more than 4,000 trades…but I’ve made more than $26 Million in confirmed trading profits.

In the early days, I couldn’t tell you why I lost or won a trade on any given week.

I had no real strategy and no emotional discipline, so every trade was a fresh guess (and every loss taught me nothing I could use on the next one).

What changed things for me was the process itself.

Without a process, there’s no way to answer that. You end up with a pile of trades that all felt different, nothing to separate the good decisions from the lucky ones, and nothing to fix before you sit down and do it again next week.

Every trade I take now runs through the same five steps, in the same order.

Calm market, wild market, doesn’t matter…

Step 1: Find The Name

You should already have your watchlist ready from pre-market, then it’s about narrowing down that list to one name you’re going to trade first.

The names at the top of my list are almost always low-float companies with barely any shares available to trade.

It doesn’t take much buying to move something that thin, which is why those names travel further and faster than anything big ever will.

That’s where I want to be.

I’m not hunting for what everybody’s already talking about. I want what got hot today and could still be hot tomorrow.

Step 2: Confirm It On The Chart

A name off the scanner isn’t a trade yet. It’s a candidate.

So I pull up the chart and look for a level. A name that already ran once, pulled back off the high, and then sat on a price instead of sliding through it. Buyers were there before, and they left a mark I can key an entry off.

The tell is volume. If it stays heavy while the stock sits still, the pause is structural, and that price is my entry.

I don’t trade the spike. There’s no level on it yet, so the entry is a guess, and nobody nails a guess twice in a row. I want the window that opens after the spike and closes before the crowd shows up.

Tim Sykes calls that the dip buy. I just call it the only part of the move that hands me a level.

If I can’t find a level, I go to the next name on the list.

Step 3: Make The Plan First

I map my entry, target, and stop while the chart is still quiet.

Not once I’m in. Not while the thing is moving on me. Before.

This is where I watch people skip a step. They get in on the feel of it and work the rest out live, with real money on the line, and by then every decision they make is an emotional one.

I can’t manage a trade I never defined.

So I define it. And when I can’t define it, I don’t take it.

Step 4: Wait For The Trigger

Most of this job is waiting, and nobody wants to hear that.

I set my alert at the level, then I do nothing.

Even as a full-time trader, I’ve gone weeks without making a single trade.

The price has to come to my level, and I don’t walk over to it. Chasing costs me on both ends. I pay up on the entry, and then my stop is sitting somewhere that stopped making sense the second I got in.

Step 5: Execute And Manage

When it triggers and holds on volume, I’m in.

Then I scale out into strength. Take a piece, move the stop up to my entry, take another piece.

If the level breaks, I’m out. I don’t average down or sit there waiting on it to come back to me.

I only win about half my trades.

My average loss is a few hundred dollars against six-figure winners.*

That gap is the whole business, and it only exists because the stop was set before I had a dollar at risk.

Why These Steps Work

No matter how solid your process is, you will still lose trades.

If you’re trading WITHOUT a process, every loss is just a headache to get over.

When you trade WITH a process, every loss becomes a lesson you can apply to your next trade.

That’s the secret that turns your average day trader into a profit-hunting machine.

If you want the setup I like best this week, it’s right here.

Stay sharp,

Jack Kellogg

*Past performance does not indicate future results