SmallCapCh8Part1 LongTechnicalSetups

CHAPTER 8.
MOMENTUM TRADING STRATEGIES
INTRO TO MOMO
Momentum Trading Strategy

I love trading stocks gapping up and it’s my go-to strategy for morning trades.
The Gap and Go strategy is a subset of the Momentum Strategy. Any stock gapping up has momentum.
However, the Gap and Go strategy applies to trading stocks gapping up in the first 15 min of the day, and
is the most consistent and easiest strategy I’ve developed.
Many of the examples we look at in this chapter could have easily been included in the Gap and Go
chapter if the stock was a gapping stock. Some of the examples in this chapter were stocks gapping up,
but after the first 15 min of the “Gap and Go” strategy, they continued to provide momentum setups. You
will see a lot of overlap between Gap and Go and Momentum strategies.
Also, once the Gap and Go trades are finished (usually by 9:45-10 AM), we start to look for momentum in
the market anywhere we can find it. This means watching our momentum scanners.
Copyright © 2021 Warrior Trading™

All rights reserved. 1
Momentum (Mid-Day Runner)
Momentum (Mid-Day Runner)

What Creates Momentum?
Momentum is caused by an imbalance between supply and demand.
Extreme momentum and parabolic moves (when stocks go straight up) are extreme imbalances between supply and
demand, and represent crowd mentality that every stock market experiences.
Whether it’s a currency like Bitcoin, or the real estate market, investors and traders experience fear and greed, and
what results are massive moves. Some of these moves last only hours, others last days, weeks, or even months.
When 1 stock is strong, many others follow!

It’s very common when we see one stock start to take off on a parabolic move (100% or more), that other stocks will
get added momentum. Sometimes these stocks will be in the same sector or have a similar daily chart setup, or other
times they are just of similar price.
What is this phenomenon all about?
Traders who missed Setup A get aggressive (greed) on Setup B thinking, “Since A ran, B will run, too.” Multiply this
trading mentality across hundreds of thousands of day traders, and we start to see some incredibly exaggerated
moves in the market. These imbalances offer opportunity for smart traders to profit.

How to Find Momentum?
We find Momentum trades on the HOD momentum scanner. This is looking for stocks hitting
new highs on high relative volume with a volume spike -- exactly the type of indicators of
high interest to retail traders.
We find gap and go with a gapper scanner, and momentum trades with the momo scanner.
Learning to Read Scanners
Learning to read the High of Day

scanners is critical for momentum
trading.
My Favorite Scans
1) “Massive Volume & Low Float” is a

powerful scanner
2) “Massive Volume $1-10” is strong but

doesn’t have the float under 10mil shares

Momentum Example
Multiple 9 EMA pullback entries.

Also bull flag patterns.
These 9 EMA pullbacks provide

safe entries where you don’t feel
like you are chasing.
Momentum Example

Momentum Example
Momentum Trading Strategy Checklist

Time Frame: All day, but momentum is almost always best at in the first 1-2 hrs of the day
Stock Type: Low float stock (under 50mil shares, parabolic stocks will be under 10mil shares)
Range Today: Should already be up at least 10% or up at least 50% to be considered parabolic
Relative Volume: Must be at least 2x above average
Daily Chart: Price should be above the 9 EMA and with room to the 200 EMA, or well above the 200 EMA
Requirements: Stock should have a catalyst or be a former runner, but technical breakouts are okay
Price Range: Price preferred between $1.50-10.00, but applicable for all prices. Higher prices should be 5-min
patterns only
Entry: Any of the setups we’ll discuss today. Parabolic setups are also valid when the stock is up more than 50%.
How to find stocks: Gap and momentum scanners

Parabolic Momo is Momentum on Steroids
Parabolic movers are stocks that basically go straight

up. In excess of 10% in 5 min, and typically more than
50% in 1 day. Sometimes we see this with stocks that go
straight down, but more often, it’s with stocks that are
going up.
A typical momentum stock has the potential to go 20-

30% in 1 day while a parabolic stock can go anywhere
from 50-500% in 1 day!
Fast Breakout Trades on Momentum Stocks

Momentum stocks can have INCREDIBLE range. Meaning in less than a minute, they can spike up $1.00 per
share or drop $1.00 per share. Using a breakout mentality has worked well for me to quickly capture profit
on the setups below, then adjusting stops to breakeven.
In order to take FAST breakout trades, you will need the following:
You need hotkeys.
You need to be good at reading level 2 and time & sales .
You have to willing to react quickly to the market.

Momentum Trading Process
1) Find a stock on the momo scanners.
2) Check the news and break down the daily chart for support/resistance.
3) Choose a potential entry based on one of the setups.
4) Now that I know the price I want to enter, I’m watching the level 2 and time & sales to confirm a
flow of buyers, and to confirm no big sellers on the ask. I’m watching the level 2 when I enter the
trade.
5) Once I’m in the trade I’m still watching the level 2, but I also check back at the chart to keep
checking the low of the last candle. That will continue to be my stop, unless I see an earlier exit
indicator.
6) I’ll start selling when I hit my first profit targets.
Order Entry Window
Entering via order entry window, or simply using

hotkeys
I use hotkey Shift+1 to buy 2500 shares with a limit

order offset 5 cents above the ask. This allows some
slippage, but is controllable.
I will sell ½ when I hit my first profit target (usually 20-

30 cents vs a 10 cent stop).
Then I adjust my “mental” stop to breakeven. If the
stock comes back to my original entry price, I’ll sell the
rest.

Exit Indicators for All Momentum Strategy
Trades
I will begin to sell if:
1) I see heavy resistance on the level 2 in the form of a big seller -- I bail out by selling on the bid.
2) I stop seeing buying, and I’m just seeing a lot of selling on the time & sales -- I bail out by selling
on the bid.
3) my first profit target has touched -- I sell half by selling on the ask , and adjust stop to breakeven
for remainder.
4) 2nd or 3rd profit targets are hit -- I continue to sell small pieces on the ask.
5) my entry is on the 5-min chart; typically I will sell on the first red candle on the 5-min chart,
unless I’m already up so much that I can afford to hold through the pullback.
Breakout or Bailout
If it doesn’t start working in the first 5 minutes of entering

the trade, I often just bail out at breakeven. I expect
immediate resolution from these patterns!
Don’t get caught in those bull traps!

Hot Market / Cold Market
It’s important to be honest with yourself about the current state of the market.
Is it a hot market where leading gappers are +50 or 100% or more and continue to make 100%
intraday moves? If this is the case, I’ll be much more aggressive adding into breakouts and holding
into possible halts.
Is it a cold market where leading gappers are routinely fading and closing much lower? Are we
seeing only small breakouts and a lot of false breakouts? This is the time to be more conservative,
to trade less, and to be extremely fast to take those tiny profits off the table. It’s not a time to be
aggressive and add to positions and expect home runs.
Live Trading Examples

During this chapter, I’ll show several live trading examples.
I will continue to upload live trading examples specifically to this chapter, and to our Live
Trading Archives. You can continue to check out the latest examples as long as you continue
to remain a member of the Warrior Pro Courses.

CHAPTER 8. MOMENTUM TRADING STRATEGIES
TECHNICAL LONG SETUP 1: THE 1ST AND 2ND PULLBACKS
The 1st & 2nd Pullbacks

(Including Bull Flags and Flat Top Breakouts)

The Bull Flag/ Flat Top Setup- The Entry
Entry: The first candle to make a new high, the apex point of the bull flag / flat top pattern. Sometimes I’ll enter early to
anticipate the breakout. If I’m entering early, what typically triggers that entry is either a break through a psychological level just
below the apex point (half dollar/whole dollar), or seeing a surge of buying on the level 2. I would always prefer to have an early
entry because it offsets the risk of a bull trap/false breakout.
Almost immediately upon entry I want to see the price moving up. If the price moves down immediately, my timing is wrong. If I
have a starter position, I may hold with my stop at the low of the pattern and look to add near the support level of my stop, or
add if the price returns to the breakout.
However, when I go red on a trade almost immediately, I often change my perspective to getting out breakeven, either through
adding near support and selling when it comes back out, or simply trying to exit at the price I entered.
This is the type of trade that, when it works well, will work almost instantly, and the early entry allows me to start to accumulate
a position as we see volume coming in. This is likely due to other trades also anticipating the breakout and perhaps short sellers
covering as the stock is showing increased strength.
The First Pullback Setup

Target: The target is always high of day, but if the pullback was a bigger one, there will be increased risk of a double top and a
rejection. This would then require the formation of either a flat top breakout pattern or an ABCD pattern, but in either case, I
generally don’t like to hold my position while I wait for those setups to fully form. I’ll need to exit (hopefully with a small profit)
and get back in when the new pattern is ready for a breakout.

The First Pullback Setup
Risk Factors: Stops are tight and these flag patterns are typically strong, however, false breakout and double top rejections are
risk factors. Confirming no big sellers on the level 2, the 9 EMA position vs. current price and size of initial pullback retracement
help avoid false breakouts. Of all the patterns I trade, the bull flag is the most common because traders don’t want to wait, but I
would say the ABCD is probably the most powerful, because the long period of consolidation has given every opportunity for
long traders to see the setup and short sellers to start stopping out.
Stop Loss: Stop can be low of last 5-min candle, or arbitrary stops at 5-10-20 cents.
Profit Target: 10-20-40 cents. I’m typically going to use breakout of bailout rather than identify an exact to-the-penny exit.
Notes: In a strong market, rather than sell partial position into the first move, I may keep adding with the goal of not selling
anything until the second or third leg up (after 2-3 micro pullback setups). This is aggressive, and risks losing initial unrealized
profits if the stock suddenly reverses.
Bull Flags and Flat Tops

Bull Flags
Bull Flags

First Pullback after Break of VWAP
First Pullbacks after Signs of Strength

Buying Pullbacks after Break of VWAP
Buying the First Pullback after Break of VWAP

Buying Pullbacks into Late Morning Momo
Buying Pullbacks after Break of VWAP

Afternoon Pullback after VWAP Breakout
Pullbacks and Flat Top Breakout at 2.55

Inverted Head and Shoulders
(Pullback after Breakout / Break of Pivot)

(Pullback after Breakout / Break of Pivot)

(Pullback after Breakout)
Flat Top Breakout at 8.00


1min/5min False Breakout then Rip

First Pullbacks after Parabolic Squeeze Begins
Live Trade: 5-min Bull Flag
See video presentation for recording of

live trading

Live Trade: First 1-min Pullback

live trading
Live Trade: NNDM Flat Top Flag

Pattern then Bull Flag Pattern

live trading

Live Trade: Buying 1st Bull Flag

live trading
Live Trade: Flat Top Breakout

live trading

TECHNICAL LONG SETUP 2: THE ABCD SETUP
The ABCD Setup

ABCD Setup - The Entry
Entry: On one hand, the ABCD setup can be a little annoying because if you bought the first candle to make a new
high, you had a failed bull flag breakout (it either doubled topped or didn’t even make it to the top). So you may have
had a loss. However, remember, short sellers who traded the opposite direction are now holding through what is
starting to look like a longer period of consolidation, and coiling, before the breakout. If this pattern begins to
ascend towards the breakout price with increasing volume, with the 9 EMA just below it, and it’s a stock that is
obvious (meaning many traders are watching it), the breakout could be powerful.
The proper entry point for an ABCD pattern is the apex of point B (2); however, an early entry would be basically the
second bull flag first candle to make a new high, and yet another entry could be off the ascending support trend line.
The lower you enter, the closer your stop, but of course you lack confirmation and it means you will probably not
see an instant breakout. If you like the immediate win, you may prefer to wait for the apex point that will give you
the instant breakout or bailout setup.
Another note on this setup: when you take a 1-min ABCD pattern you will want to see that this is occuring in the
context of a 5-min bull flag. A 5-min ABCD pattern should also provide logical 1-min entries, although it won’t likely
be a 1-min ABCD pattern; it will look more like a longer period of 1-min consolidation and hopefully curling up with
higher lows on the dips.
ABCD Setup
Target: This will depend on the form of the ABCD pattern. If the pattern is right below high of day and resembles a
flat top breakout, then typically a target would be 25-50 cents up to the next half or whole dollar. If the ABCD
pattern occurs below the highs, then the first target is high of day, then a squeeze through the highs. An ABCD
pattern does carry risk of a double top and false breakout, so it’s important to be cautious as it breaks through the
highs to look for volume to be coming in (visualized by reading the tape/time and sales window). I would say that
some of the most impressive trades I’ve ever seen have come from ABCD patterns. They provide great entries and,
when we have the right combination of float, daily chart, and hot market sentiment, the resolution to an ABCD can
be powerful.
Risk Factor: The fact that the stock first formed a bull flag pattern and then failed is weakness. However, it could
have trapped early short sellers who will likely cover over point B, and then certainly over high of day.
Stop Loss: Low of last -min candle, or arbitrary 5-10-20 cents.
Notes: I like to see consolidation above the 9 EMA. Sometimes this pattern isn’t picture perfect; they continue
flagging and turn into a MA breakout setup.

ABCD Setup
ABCD Flag Pattern

ABCD Flag Pattern
ABCD Flag Pattern

ABCD Flag Pattern
ABCD Flag Pattern

ABCD Flag Pattern
ABCD Flag Pattern

ABCD Flag Pattern
Live Trade: CAPR

live trading

Live Trade: ABCD Flag Pattern

live trading
Live Trade: 1-min ABCD Flag Pattern

but Extended and Then Fails

live trading

1min

live trading

on $KOSS

live trading

Live Trade: 1min ABCD Flag
Pattern

live trading
TECHNICAL LONG SETUP 3: THE HALF & WHOLE DOLLAR BREAKOUT

Whole & ½ Dollar Entries
The Whole Dollar & ½ Dollar Setup

Entry: At ½ or whole dollar. Sometimes I will buy at 4.90, expecting 5.00 breakout. This is a setup I’m
much more likely to trade in a hot market. In a cold market, we’ll often see a break of a half or whole
dollar, then an instant rejection. This becomes a bull trap, and a short entry setup for short sellers. In a
hot market, however, I look for a quick break of the half or whole dollar, and then an immediate 5-15 cent
break above that level. An entry might be anywhere from .85 to .95 and adding at .96, .97, .98, or .99 for the
breakout. On the break I want to see a quick surge. If we immediately hit a big seller, I’ll hit the bid and
bail. It’s typically critical for it to break for instance from 3.00 to 3.10, then the first dip back down to the
whole dollar MUST hold that level to show strength. You can do a quick breakout trade and then get back
in, or hold for the bigger move. That can provide a dip entry around 3.05 with a stop at 3.00 (stopping
before it breaks the whole dollar if I’m seeing sell orders going through the tape). With a dip entry AFTER
the break at 3.05, target is then 3.15 - 3.25. If it breaks 3.25, then we’re looking for a test of 3.50. On a
parabolic stock this works much better because the moves are faster. On a higher float stock, a large cap
stock, a stock with lower relative volume, or in a cold market, half and whole dollar entries just don’t work
as well. This is a setup to be reserved for a stock already proving a lot of strength. I do find this setup
also works better as the price gets higher because the breakouts

The Whole Dollar & ½ Dollar Setup
Stop Loss: It’s important to keep stops tight on this setup because the first winner is often small
(less than 10 cents) unless it goes parabolic. Holding back down to .75 or even to .50 would give a
poor risk-reward ratio. This is going to be a breakout or bailout setup.
Target: As already discussed, a quick surge through the whole dollar and then possibly up to .25
or .50 (or .75 and the next whole dollar in the case of a .50 breakout trade).
Risk Factors: This is a strategy that DOES NOT work in a slow market. But in a strong market
where FOMO is strong and the feeding frenzy is active, half and whole dollars are good entries.
Notes: Remember that this is also where short sellers will place their stops (just as long traders
place stocks near ½ and whole dollars. That creates an extra surge of volume through the
breakout.
This strategy does require closely watching the level 2 and time and sales to confirm the surge of
buying is coming in as the breakout price approaches.
This works best on stocks that have particularly big ranges, and is an especially good strategy for
parabolic stocks.
More Examples in Parabolic Setup Section

As noted in the previous slide, since many half and whole dollar entries that perform best are on
parabolic stocks, you’ll see more examples of this price action in the parabolic section of this
chapter.

½ Dollar Break Micro 1min Pullback
Whole Dollar Break Micro 1min Pullback

Whole Dollar Break Micro 1min Pullback
Whole Dollar, Half Dollar,

Halt, 1st and 2nd Pullback

Entry at 5.00 for Quick Rip to 6.00
Resistance at 4.00 then Finally a Breakout


Resistance at 9.50 then a Breakout
False Breakout / Rejection (Topping Tail then Reversal)

Bull Traps at Whole Dollars
Bull Trap at 10.00

Live Trade: $GBR $4.00
Whole Dollar Breakout

live trading
Live Trade: $ACRS

False Breakout Bull Trap

live trading

Live Trade: Buying 1st
Candle to Make a New High

live trading
Live Trade: ½ Dollar

Breakout with a 60k Seller

live trading

Live Trade: ½ Dollar
Breakout on SNOA

live trading
TECHNICAL LONG SETUP 4: THE MICRO PULLBACK

Micro Pullbacks
Micro Pullback Setup

Entry: The entry can be within 1-min candle, as the stock dips down and surges back up. This is an aggressive entry and should
be reserved for stocks that have already proven they are very strong. Some of the best micro pullbacks and first 1-min candles
to make a new high are in the context of either the first pullback after a fresh 5-min breakout (5-min bull flag or ABCD pattern),
or directly after the open, or directly after breaking news. This is a hot market type of setup, but ultimately if a stock has JUST
squeezed up 10-20% or more in the last 5-10 min and is near halt levels, micro pullbacks will draw in new traders and stop out
early short sellers. If a stock has a lower float and the market is hot, this setup will work even better. If the stock is only up 5-10
cents and is a higher float, I wouldn’t even consider a micro pullback setup.
In order to feel the confidence to press the buy button on a micro pullback on an extended stock, I need to see green buy orders
on the tape. Those signify to me that other traders are stepping up to buy or cover short positions. If there is low volume during
the micro pullback or just red orders on the tape I’ll wait for more signs of strength. If I see a larger seller such as 25k shares, I’ll
watch for that seller to thin out (19k, 15k, 11k, 5k) then start pressing the buy button. As the seller thins out, green orders will be
going through the tape as people buy up that seller’s shares. If I’m feeling aggressive and confident in the stock due to the daily
setup, market sentiment, and specific stock characteristics, I may start buying more aggressively.

Micro Pullback Setup
Target: Target is a retest of high of day, and potential squeeze into a halt. The idea in this setup is to be potentially entering a
stock that is about to become parabolic, using the first high risk trades to start to build a profit cushion on the stock and then
wait for a pullback or dip entry for the next bigger position.
Risk Factors: This is an aggressive entry, false breakouts are not uncommon, high risk. This risk is higher if the volume is really
light because suddenly a flush could drop right back down and result in a larger loss or a lot of slippage with large share size.
Stop Loss: Stop can be low of last 1-min candle, or arbitrary stops at 5-10-20 cents. Profit Target: 10-20-40 cents.
Notes: This is the most common setup for parabolic stocks. They are moving so quickly they often don’t pull back for more than
a few minutes before surging back up. If you wait for a 5-min pullback, by the time it pulls back, the stock may simply fade off the
highs because it squeezed up 100% or more in the 5-min breakout. Typically 1-min micro pullback entries are required to profit
from parabolic squeezes.
Micro 1min Pullback

Micro Pullback before
50% Squeeze

20% Squeeze

30% Squeeze (Barely
Noticeable on 1min)
Micro Pullback before 30% Squeeze (Close up

on 15-sec chart)

Micro Pullback after Bear Trap!
Great Micro Pullback after Fresh 5-min

Breakout

Micro Pullbacks Pre-Market
Live Trading: Micro Pullback then Halt

live trading

Live Trading: Micro Pullback after Break of
VWAP on WAFU

live trading
Live Trading: False Breakout on Micro

Pullback (Still Profitable Due to Quick Sell over
½ dollar)

live trading

TECHNICAL LONG SETUP 5: BUYING A BREAK OF HIGH OF DAY
Buying Break of High of Day

Buying a Break of High of Day Setup
Entry: Buying a high of day break can be similar to buying a micro pullback on a stock that is surging up, it
can also be similar to buying a flat top breakout (if that’s at high of day), or buying the high of day break as
a bull flag resolves back to the highs. Regardless of the specific instance, the entry at high of day is a risky
trade. However, this is the exact place where a short seller would set a stop. Therefore, a break through
the highs can result in a quick squeeze. Sometimes it’s only 5-10 cents, other times 25-50 cents or more.
The entry is at high of day or sometimes just a few cents below it if I’m seeing green on the tape and expect
that a short seller might start covering just before the break through the highs. Just as I would stop out on
a long just before the break of a critical level, a short will often start covering before the break of a critical
level, knowing from experience that once the break occurs it could result in a rapid move and slippage. So
this setup of buying a high of day break is a way of capitalizing on short covering and capturing a quick
profit. Directly following the high of day break, we’d look for a micro pullback to either add back or look for
continuation.
Buying a Break of High of Day Setup

Target: On this type of setup I try to ride the momentum as long as I can, but if we run right into the resistance of a
big seller, or it looks like it’s doing a false breakout, I’ll be quick to take profit off the table. This is definitely a quick
breakout setup anyways, not a longer 5-15 min hold time in most cases. These trades could last less than a minute if
the breakout is quick.
Risk Factors: Risk of a double top if the stock suddenly squeezed up, but short covering should fuel buying through
the breakout point. Also risk that the stock is extended or running into daily resistance levels (always good to
confirm we’re not running into the 200 EMA or something else that is significant on the daily).
Profit Target: 10-20-40 cents. Breakout or bailout!
Notes: This setup capitalizes on early short sellers covering through high of day.

High of Day Breakout Example

Entry at 2.60 for Quick HOD Break

Entry at 2.34 and 3.57 for Quick HOD Breakouts
Entry at ~7.50 for Quick HOD Breakouts

Live Trade: High of Day Breakout Example

live trading
Live Trade: High of Day Breakout Example

Slightly higher priced stock, buying to anticipate break through the high of the recent move,
and looking for a retest of high of day.

live trading

TECHNICAL LONG SETUP 6: VWAP BREAKOUT
VWAP Breakout Setup

The VWAP breakout setup is a specific type of red/green setup. The VWAP is often considered a
support/resistance level. As a stock curls up to the VWAP, if it cannot break it, short sellers often
take positions and set stops just above VWAP.
However, if it does break the VWAP, on a 1min retest, I want to see it hold that level, then I take my
position with a stop just below VWAP. These can be powerful setups as the stock swings from red
the green.

VWAP Breakout Setup
Entry: Several of the biggest winning trades I’ve taken have been based on the VWAP breakout setup. I’ll show
you several examples of how powerful this setup is. What creates the power? The early weakness accumulates
swing trade short sellers looking for an all day fade on a gapper that is failing. The sudden and powerful break
of VWAP of course brings in long traders, but also forces a large amount of both swing trade and day trade
short-covering. This means double or even triple buying vs. selling on the breakout. The entry can be just below
VWAP, but that is very risky due to the likelihood of a fade off VWAP (a strategy taught in the short selling
chapter). A stronger entry is either on the moment is surges through VWAP (which is risky in the event that
becomes a bull trap and it immediately reverses) or just following a break of VWAP and a 1min micro pullback
just above VWAP (showing it can hold that level). While the safest entry is after a pullback above VWAP,
sometimes these are so powerful, they don’t even retest and next thing you know, they are surging into a halt up
as short sellers are trapped and getting squeezed. As always, this is a setup that will perform best in a hot
market, on a stock that meets all our criteria for having home run potential.
VWAP Breakout Setup

Target: Target is typically aggressive with halt potential in a strong market. In a weaker market, or even on a
large cap stock, the target is simply a squeeze through high of day. The goal should be always to have twice the
profit potential as the max loss. First target is always a re-test of high of day.
Risk Factors: Biggest risk factor is that the early weakness shows there has been an imbalance to the sell side;
short sellers may line up and bring it back below VWAP. A bull trap at VWAP and then a quick flush back below
VWAP could result in panic long traders stopping out and a flush all the way back to low of day or even a halt
down.
Stop Loss: Stop losses can be relatively tight, just below VWAP.
Notes: These can become parabolic stocks when it occurs on a low float stock.

APDN 1min VWAP Setup
APDN 5min VWAP Setup

BLPH 1min VWAP Setup
BLPH 5min VWAP Setup

VWAP Breakout Setup
VWAP Breakout Setup

VWAP Breakout Setup Fail (Couldn’t Break)
Break of VWAP on PECK

Break of VWAP on ATHE
Break of VWAP on ATHE

Break of VWAP on TAOP
Break of VWAP Pre-Market on SSNT

Break of VWAP on WHLM
Break of VWAP on IMRN

Break of VWAP on FFHL
Break of VWAP on WAFU

VWAP Fade then Breakout
VWAP Breakout

Break of VWAP and Ascending Resistance
Break of VWAP on CBLI

Break of VWAP on GTEC, then Pullback Entries
Break of VWAP on ACY

Break of VWAP on ACY into Parabolic Squeeze
Live Trades: Break of VWAP on CBLI

live trading

Live Trades: Break of VWAP on APDN

live trading
Live Trades: VWAP Breakout PIXY

live trading

Live Trades: Break of VWAP on SRNE

live trading
Live Trades: Two Break of VWAP trades on

ESEA and MRSN

live trading

Live Trades: Break of VWAP on ADAP

live trading
Live Trades: Break of VWAP

live trading

TECHNICAL LONG SETUP 7: BUYING INTO OR OUT OF A HALT
Buying into a Halt or Out of Halt

Buying into a Halt Setup
Entry: Traditionally, stocks that surge and halt going up gap higher and continue. When we’re talking about
parabolic stocks and big movers, we’re usually going to be seeing circuit breaker halts. The gap higher is created by
an imbalance of orders that bid up the stock; so it opens higher on resumption, resulting in short sellers continuing to
get squeezed and long traders who missed the first part of the move jumping in. While there has to be a
consideration for the type of stock we’re trading (news, no news, listing exchange, price, float, etc.), when a stock is
squeezing up I will often buy into the halt or, if I already have a starter position, add into the halt. The goal would be
a gap up and continuation, with the next entries being micro pullbacks. I would say generally the safest way to be in
a stock about to halt would be to take a micro pullback setup and then add into the halt. While stocks often gap
higher, it’s not always true. Sometimes stocks will even open lower, or open higher and immediately halt coming
back down. Market conditions help dictate whether or not this strategy is currently applicable.

Target: The target would be a high open and then a squeeze into another halt.
Risk Factors: Risk of the stock not halting and then I’ve just bought very high, which is why I start with smaller size
and then keep adding. Risk of FALSE HALTS. A false halt is when it looks like the stock is about to be halted (pinned
price action for 10-12 seconds but not the full 15 seconds required) and then suddenly drops. This can happen
because of a few very large sell orders taking out the buyers holding the stock above the halt level. False halts going
up can sometimes provide quick dips then a surge back to the halt level, or, if the halt level moves up, a move to the
next level. But in any case, false halts do create some risk. Another risk is simply the fact that trading stocks around
halts mean they are trading at extreme prices vs. the last 5 minutes. If we’re in a market where we’ve seen several
stocks reverse from halts up and halt down, that may be a time to be more conservative about holding into halts to
the upside. If that’s the case, I can still trade around the halt level, but I may choose to take profit off the table before
the stock actually halts.

Profit Target: 10-20-40 cents. Generally this is a trade where breakout or bailout applies, but by the time you’re
bailing out, a bigger loss is possible. I’ve had trades around halts where, nearly instantly, I was down over 1.00 a
share.
Notes: Short squeeze potential, FOMO, feeding frenzy, etc. I always ask myself, “Is this stock the one?” Meaning: is
this the obvious stock today that most active day traders will be watching? If the answer is yes, the follow through
will almost always be better. If the answer is no, people won’t be watching this stock and it’s more likely to fail.
Sometimes, when we have many stocks moving at the same time, there isn’t an obvious stock and that can be a
problem.
This is a strategy of capitalizing on FOMO and potential parabolic momentum in the market. Gap up & continuation!
Buying into a Halt Example

Buying into a Halt Example
Buying into a Halt Example on COHN

$DFFN Gap and Go into a Circuit Breaker Halt
KODK with Multiple Halts into Parabolic

KODK Squeeze into Halt then continuation
UONE Halting Going Up and Coming Down

Multiple Huge Gaps on Halts
Multiple Huge Gaps on Halts

Live Trade: Buying right as halt level jumps up!
GLSI

live trading
Live Trade: SLS Halt and ABNB IPO

live trading

Live Trade: Buying right as halt level jumps up!
NTEC

live trading
Live Trade: False Halt on $MTSL

live trading

Live Trade: PHUN Halting Down!

live trading
TECHNICAL LONG SETUP 8: DIP BUY (on flush/washout/panic selling)

Dip Buy (on flush/washout/panic selling)
Setup
My first dip buys were during the 35% market crash of March 2020, when I started buying stocks about to be halted going
down, or just after halts going down if they showed strength, noticing some huge whips that created an almost instant
winners. I then began applying this dip strategy to less extreme examples.
While this setup is similar to a bottom bounce reversal setup, a bottom bounce is typically a setup we look at when stocks are
at the bottom. In order words, at low of day.
A panic selloff dip buy setup can occur while a stock is extremely strong, but just has a momentary panic drop then pops
right back up.
This is a complex setup, and will likely be one of the last you’ll master as a momentum trader. It requires a strong
understanding of level 2 and technical levels. These skills help you understand potential bounce spots and signs of strength
coming back in.
Dip Buy Setup

Entry: While dip trade entries have been a great addition to my strategy, when timed wrong, they can also produce big losses as
I’m buying right into a stock that is selling off. So the ultimate question is how to determine when to buy and when to wait for it
to keep dropping. This is a difficult setup for me to clearly articulate because I think to a certain degree this setup has become
based on intuition. Therefore, it should be considered one of the most advanced entries, and likely not suitable for beginner
traders.
I don’t think a dip trade has ever been my first trade on a stock. I typically only start doing dip trades if I’ve already traded a
stock very well, have great profits, and can afford to throw small orders (1/10th of full size) out to see if a dip pops right back up.
I would do this on stocks that are making big moves, that generally have shown dips to get bought up, and are bouncing off what
I think is a clear area of support.
Dip trades sometimes are from false halts down; sometimes they are after the panic sell off that can result from a false halt up,
or that can simply result from a parabolic stock being so extended. This setup is reserved for parabolic stocks.

Dip Buy Setup
Target: Target is typically a bounce ½ way back to the highs, but, depending on my share size, I may add for a
squeeze back through the highs (which would make the dip a bear trap). Or, I may take profit off the table quickly
into the pop if I’m seeing sellers stacked up at the ask price as it starts to pop.
Risk Factors: Biggest risk factor is that you are literally buying a stock dropping. If you are too early, you’ll
immediately get stopped out. If you keep adding while it keeps dropping, you could be caught into a halt down and
then find out it’s because breaking news just came out. That’s why I start with small size in case I’m early and use
extreme caution if averaging down.
Stop Loss: Stop losses are a bit bigger, typically 25-50 cents on parabolic stocks, or near the next half or whole
dollar.
Notes: This setup works best on parabolic stocks with big range.
How do I know when to buy?

The tape should be red, and dropping on high volume, often the moment I see a green print
I’ll press the buy button, knowing short sellers will likely cover and it will start to bounce.
Stop is at the low.
The best dips are when I’m already watching the stock very closely and, in almost what
seems like a flash, it drops 50 cents or a 1.00 or more per share. This to me is what I’d call
“irrational” and I try to immediately buy the dip. However, I do have to be careful if it keeps
flushing that I’m not holding into a halt down as they often gap lower.
I will already have ascending and descending support lines drawn to help me predict
possible bounce spots.

When do I avoid buying dips?
When a stock is dropping due to breaking news. If a stock drops and halts going
down on news, it can open substantially lower. This is going to have a poor profit-
loss ratio.
If a stock is dropping due to simply panic, and is still trending up, even if it halts
going down, it’s still worth watching for a bounce, as long as it’s not a breaking-
news-related drop.
The best time to trade a dip is when a stock is still generally strong (above VWAP).
Dip Buy Setup

Dip Buy Setup: CAPR (5min Chart)
Dip Buy Setup: CAPR Dips to Support

Dip Buy Setup: CAPR High Volume Flushes
Dip Buy Setup: CAPR Massive Panic Drop

Dip Buy Setup: CAPR Break of Support and Washout
Dip Buy Setup: Buying Dips to 200 EMA on 1-min

Dip Buy Setup: Buying Dips
Dip Buy Setup

Dip Buy Setup
Huge Panic Sell Off

Dip Trade off VWAP in Pre-Market
Dip Trade off Ascending Support

Dip Trade off Double Bottom

Live Trade: False Halt, Risky Trade

live trading

Live Trade: PIXY False Halt

live trading
Live Trade: False Halt then Rip Back to Highs

live trading

Live Trade: Caught in Halt Going Down - JFIN

live trading
Live Trade: Bounce after Halt Going Down

Typically halts going down open lower, this one opened flat, which made me think it would
bounce!
When a halt going down opens flat, I like to go long.
When a halt going up opens flat, I often think short (but primarily if there have already been
1-2-3 halts going up that gapped).

live trading

Live Trade: Bounce out of Down Halt $DARE

live trading
Live Trade: Quick Flush then Pop off the Lows

live trading

Live Trade: Quick Dip Trade on Flush

live trading
Live Trade: Dip Trades on SNDX

live trading

Live Trade: Dip Trades on ESEA
Dramatic Rejection of a Half Dollar Breakout

live trading
Live Trade: Dip Trade off the Half Dollar ESEA

live trading

Live Trade: Dip Trade up to 10k shares

live trading
Live Trade: 9k Share Dip Trade on Flush

live trading

Live Trade: Bounce off VWAP Setup SNOA

live trading
Live Trade: Bounce off VWAP Setup CHK

live trading

Live Trade: Bounce off VWAP Setup GRAF

live trading


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CHAPTER 8.

MOMENTUM TRADING STRATEGIES

Momentum Trading Strategy

Copyright © 2021 Warrior Trading™

Momentum (Mid-Day Runner)

Copyright © 2021 Warrior Trading™

When 1 stock is strong, many others follow!

What is this phenomenon all about?

Copyright © 2021 Warrior Trading™

Learning to Read Scanners

Learning to read the High of Day

1) “Massive Volume & Low Float” is a

2) “Massive Volume $1-10” is strong but

Copyright © 2021 Warrior Trading™

Multiple 9 EMA pullback entries.

These 9 EMA pullbacks provide

Copyright © 2021 Warrior Trading™

Momentum Trading Strategy Checklist

Relative Volume: Must be at least 2x above average

How to find stocks: Gap and momentum scanners

Copyright © 2021 Warrior Trading™

Parabolic movers are stocks that basically go straight

A typical momentum stock has the potential to go 20-

Fast Breakout Trades on Momentum Stocks

You need hotkeys.

You need to be good at reading level 2 and time & sales .

You have to willing to react quickly to the market.

Copyright © 2021 Warrior Trading™

3) Choose a potential entry based on one of the setups.

6) I’ll start selling when I hit my first profit targets.

Order Entry Window

Entering via order entry window, or simply using

I use hotkey Shift+1 to buy 2500 shares with a limit

I will sell ½ when I hit my first profit target (usually 20-

Copyright © 2021 Warrior Trading™

If it doesn’t start working in the first 5 minutes of entering

Don’t get caught in those bull traps!

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Live Trading Examples

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TECHNICAL LONG SETUP 1: THE 1ST AND 2ND PULLBACKS

The 1st & 2nd Pullbacks

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The First Pullback Setup

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Bull Flags and Flat Tops

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First Pullbacks after Signs of Strength

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Buying the First Pullback after Break of VWAP

Copyright © 2021 Warrior Trading™

Buying Pullbacks after Break of VWAP

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Pullbacks and Flat Top Breakout at 2.55

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Inverted Head and Shoulders

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Flat Top Breakout at 8.00