The "Stair Step" Day Trading Strategy | Full Breakdown

So let's start by looking at the charts on this. The stock here is SPRC. It had news earlier this morning. The news comes out and what initially happens on breaking news. You have to realize that a a high percentage of the market is driven by algorithmic highfrequency trading. So these are actually uh computer bots, computer programs that execute trades and they use different triggers to execute. So one of the ones that they use are breaking news headlines. So, when the news hits the wire before retail traders like us get it, the institutional traders with their super super, you know, high-speed fiber line that's connected like, you know, within three feet to the main server that puts out the news, they get it and boom, they execute the first trades. That's what we call the Algo spike. So, the stock starts spiking up. And when it starts spiking up now, all of a sudden, it starts hitting the radar of traders like myself. So there's this interesting level of efficiency in the market where all of the retail traders like us, we're using tools to find stocks moving. So it's like beep beep beep beep beep. All of a sudden we've got we've got a live one and we've got a stock that's starting to squeeze. And that's what happened on SPRC. So the institutional traders, they get the first crack at it. They're in. But once it starts moving, what I'm looking for is that first pullback right here. So, let me show you SPRC and let's talk about why this was a good stock to trade. Because, of course, there's stocks all day long that hit the newswire that have headlines and might pop up a little or drop a little, but this one did something kind of special when I start my day. And my day starts um not too early uh right now. There were times where it started at like 4:00 a.m., but it doesn't start too early. I start right now at about 7 a.m. And the first thing I do is I pull up my my scanners on my phone. These are my stock scanners. And this tells me what's moving in the market right now. And so I noticed the stock was already squeezing up over 100%. And I looked at the chart and I thought, you know what? I think I missed the move. It had already kind of made this squeeze up and it was in this area here, which I would say is the backside of the move. I want to trade stocks on the front side of the move when they're still accelerating, not on the back side when they're kind of, you know, sort of fading off. So, I thought, all right, I missed that one, but we clearly have some action today. Let's see what's next. And when I sat down at my computer at about 7:30, 7:45, I saw SPRC squeeze up right here. So, this and and these yellow arrows are my um this is actually my first trade right here at about $5.71. And this is my best exit up here at about $7.71. We'll break those uh entries down in a second, but when I first pulled up SPRC, I saw it about like this. All right. Now, let me show you what the scanner looks like on my computer. So, this is my top gapper scanner. And I actually I hired a development team to build out these scanners for me, but they're now used by thousands and thousands of traders all around the world who are using Warriors uh stock scanners. So this morning, what I do on any given day generally is I'm looking at the top three to five gappers. The reason I do that is I like to trade the stocks that I think are going to be the most obvious that everyone's going to be looking at. If a stock is more obvious, what does that mean? So, if it's obvious, it's going to have most likely one, higher volume, right? There's going to be more people trading it. Higher volume, if it has good news, is going to lead to bigger percentage changes. So, bigger percentage change to the upside. And what I usually find is that this these are the types of stocks that start to give the cleanest patterns and start to give the biggest moves. Because here's the deal, as a retail trader, if I can capture five or 10% per day, I'm doing pretty well. So if a stock is going from, you know, let's just say $2 to $4, it's going up 100%. It's a lot easier to capture 10% of a 100% move than to capture 10% of a stock that's only going from 225 to, you know, 260 or something like that. So, bigger moves make it easier to capture your little slice of the pie because ultimately that's that's our goal. That that was always my goal as a trader is to sit down and just try to make my little slice. I was never sitting down to trade to try to get rich. I've made far more than I ever would have guessed. I was just sitting down to try to make a couple hundred dollars a day. That's it. And so this is the pattern. This is the strategy that I've been using for all these years. And it just turns out that on some days like today, I can far exceed the couple hundred that I really set as my minimum goal. So SPRC was our third leading gapper in the market today. The leading gapper has basically no volume, only 100,000 shares. So I disregard that. The second leading gapper, if we pull up the chart on it, we'll notice that it's trading more or less sideways. And that's because this company has been bought out. So, oh, I've got to pull up my um my stock quote window here. So, here's my stock quote window. And we're going to just uh type in PNT. So, PNT is a acquisition. All right. So, um doubles on Eli Liy deal. All right. So, this is what I've been talking about with these pharmaceutical companies. This happens all the time. They get picked up and bought out by the bigger uh the bigger the bigger companies. So SPRC was our third leading gapper uh 82% at the open, but it was up uh more than that a bit earlier. And this is our one minute chart. Now the stock itself had news of a European patent. Didn't feel to me like a super significant headline, but it did pop up pretty nicely right here at 7:30, 7:38 when the news came out. It then pulled back and as it came up right here, I was watching it for a possible trade. Uh, however, what I noticed was that there was something funny happening with the spread. So, it sold off. It came back up to about five $5. It then pulls back. It then pops here up to 550. And right in this area, we had a large spread. The spread is the difference between the bid and the ask. So when we've got a bigger spread, and in that case it was about a 20 cent spread, that creates more risk for taking the trade. This stock right now has a 6 cent spread. That means you could buy 10,000 shares at five and sell them at $4.94 and you'd be losing $600 from the spread. So, you know, manageable risk. I think 6 cents is is an acceptable risk uh for a spread. But 20 cents, 30 cents, 40 cents, that starts to get a little bigger. So, I didn't take it on this first trade. It pulls back and then it comes back up again right about here. And I actually want to switch this to a 10-second chart because this window was only 12 minutes long. So, if we look at a 10-second chart, we can actually get a little bit more dialed in and better visualize the stairstepping pattern. So, this stairstepping pattern happens uh essentially when a stock usually comes out, it has breaking news. Oops. So, we've got the news headline right here. We get that first leg up. And then what happens? There's a little bit of profit taking right here. Some people take profit who were in at the beginning of the move. And then right here, this is sort of the moment of truth. More buyers come in right in this area here. And it gets bought up. Now, it squeezes up for a second stair step up. So, first step, second step, and then naturally it pulls back a little bit more. And then more traders come in right here. And what we love to see on this is a volume profile where we've got high volume on the green candles, light volume on the red candles, and where we see volume increasing as it's going higher. So, the higher it goes, the more the volume increases. That ascending volume profile right there goes handinhand with stocks that make big moves. And this one obviously went up over 100%. Which is a great move. So my goal with this is to buy on the pullbacks. But you might say, well Ross, how do you know it's not going to just do this? So there's a couple different things that I can do. One of those things is to draw out a trend line. So in the case of this stock here, we'll draw a trend line from about here to here. Uh we'll click snap it in. So this is a trend line. So for instance, because we know the stock pulled back in these areas, kind of like this, you know, this area here, right in this area as it starts to pull back, I know that we have support at this blue line, this blue ascending support line. So I like the idea of buying off of this line, buying off of that support level right there. All right. All right. So, I can get in off of support. I can also buy the first candle to make a new high, which in this case is a break through a psychological area, $7. We know that stocks trade um they they generally have resistance around half dollars and whole dollars. So, if this is $6 here, the stock will come up to it. It'll pull back, breaks through, it comes back, retests it, shows it can hold, and then we're going up to the next level, which is 650. We again pull back, we break through it, we hold over it, and then we're going up to seven. So these stocks really trade in increments of about 50 cents. 6 650 758. So on this one right here, my very first trade on it was um let me just back this up. So the stock had squeezed up right here to a high of 607. And as it pulls back, it bottomed at this candle at about 563. $563 right there. And I actually bought this dip at about 571. Now, the nice thing with that was I was getting in about 30 cents below the high and I was getting in only about 8 cents above the low, which means on that trade, what was my max loss? What was I risking? So on 3,000 shares, 3,000 shares at 571. So 3* 6 is about $18,000 in the trade in total. That was the total amount of money I had in the trade. But that's not how much I was risking. My max loss on this was about $563. All right. So on this trade, I was risking about $240. $240 the difference between 571 and 563 add a little slippage approximately $300 of risk. So I'm risking 300. This $18,000 is just a tool. This is a tool that I'm using because now I own value. I own an actual stock. My risk is the difference between my entry price and my max loss. All right? So granted, in order to take a $3,000 trade, you would need the buying power to take that trade. And whenever I've done small account challenges, I've used leverage to allow me to take bigger positions. But other traders will use their cash balance, and that's fine, too. It depends on your risk tolerance. All right, so we got that pullback, we got the popup, and then my next trade was right here, getting in for the break of $6. So I I added here for the break of six. this stair step. I was looking for it to break through that level and we broke and we squeezed up to 638 just underneath 650 half-doll psychological resistance. We pull back and what do I do? I add right here at about 637 and we get a squeeze up through 650 all the way up over $7 a share and I took my profit as it went up higher right into this area. It then dips down again right here and squeezes up to 750. Pulls back and then it breaks below this blue ascending support trend line. But look at what happens right here. It comes back up and tries to break back above it. But it was not able to do it. That shows that this was a valid trend line. It was being respected both on the top and on the bottom. What you can even do with these types of trend lines, you can uh you can copy them to create a channel. So now I can create a channel connecting approximately the tops. And this could be helpful because then it helps you better understand where you may have resistance resistance and then buy. So we want to buy off of support and take profit into resistance. And this is a stock that's trading in these waves moving higher. And they can continue to move higher and they can even break out of this channel to the upside. But in this case, it pulled back. This was our first warning sign. As it came back up here, it tried to squeeze back up again, but it had broken out of the channel. It wasn't able to hold. And although I did take a trade down here for this squeeze back up, thinking maybe we would get up to the bottom of this trend line, we weren't able to do it and we sold off. So that marked my best exit right up here at about $7.71, which was $2 a share from 571 up to 771. So in all, this was a this was a really solid trade. But again, this is the type of stock that we have a small window. And your job is to be able to capitalize on this opportunity, which means a good amount of time is sitting and being patient. So if you're someone who sat down right here, you do not want to be trading the backside of the move. This is not the clean area. This is choppy on this particular stock. It does come back up towards seven. It tries to curl, but really we had the front side of the move right after the news and then that was it. The window on this stock was smaller than on the window we had last week on a couple of the others. You know, last week we had a stock that went up 600%. We had another one that went up 400%. We never know exactly how high they're going to go. Our job is just to trade the price action that is right in front of us. So, if you found this deep dive interesting, make sure you check out this stock right here that went up 600% last week. I locked up nearly $23,000 of profit on it, and I broke it down just like I did in this episode, walking you through how I managed my risk, where I got in, where I got out. And on that one, I even included some live trading examples, which I think you guys will really enjoy. So, check out that episode. I hope you hit the thumbs up, subscribe to the channel. I'll see you for the next upload real