28 Feb

Trading Process Explained – Chart Patterns, Catalysts, And Value


The first two months of 2019 are behind us.

How have you been holding up?

As for me, I am looking at locking in my second straight six-figure month.trading process - chart patterns usat stock, rwlk stock, veri stock 

(I’m up about $300K year-to-date…if you want my best trade ideas and alerts sent to your email inbox or phone, here’s your chance.)

Not too shabby for a once down on his luck public school teacher who now trades part-time.

When I quit teaching to trade full-time, there were no guarantees that I would make it… you better believe I faced scary moments of doubt.

What you see today is the finished product of years of hard work. Not only have I gone on to become a multi-millionaire, but I have helped others achieve that status too.

Now, when it comes to my trading, I focus on patterns, catalysts, and value. I mainly trade stocks under $10 using three simple chart patterns. But only if there is a significant catalyst.

You see, I’m swing trading stocks (holding them for 1 – 4 days) and trying to make 5-20% on them. Of course, not all of them are going to be winners. You’ll be surprised at how much you can make from a series of small winners.

That said, I want to show you how I’ve been making money in the market over the last two months.

Why should you care?

Because you still have time to get in the game if you haven’t yet.

And because my patterns work….

I’ve been proving it with my own money… day in…and… day out.

Trading Process Explained

The S&P 500 Index, Nasdaq Composite, and Dow Jones Industrial Average are off to their best starts since 1991. If you bought the market-tracking exchange-traded funds (ETFs), you would’ve only been up just over 10%, as of yesterday… That doesn’t cut it for me. If you look back to the chart of my performance this year so far… I’m up nearly 150%… that’s a heck of a lot better than the market’s measly ~10% move (13.5% for the Nasdaq Composite, and just over 11% for both the Dow and S&P 500 Index).

It doesn’t matter to me though…

Why’s that?

I’m focused on patterns, catalysts, and finding areas of value. You see, it doesn’t matter what the markets are doing because I have three patterns that allow me to trade in any market environment. When the markets are selling off… I’ve got a pattern for that… markets sideways… I’ve got that covered… markets running up… I have a pattern for that. That’s the beauty of trading small cap stocks and penny stocks using patterns, catalysts, and value. You don’t have to be glued to your screen and try to figure out all the politics, economics, and what not.

That said, let’s look at some of the patterns I’ve used in the current market environment.

Here’s a look at one of the patterns I use is the fish hook (oversold).

For example, check out this daily chart on USA Technologies (USAT)…

USA Technologies – USAT Stock

trading process - chart patterns usat stock, rwlk stock, veri stock

If you look at the chart above, you can see USAT dropped by more than 50% in just one day… I identified the area of value at $4… so that’s what I was playing for. I wanted to buy below the area of value (supply line) for a play to that level and a potential gap fill.

Now, you might be thinking… “Why would you buy a stock that just dropped that much?”

Well, there were a few positive catalysts in play:

  1. Announcement of next earnings call: Last year, their earnings call was around mid-February. We anticipate that when they will finalize the corrected 2018 and last quarter earnings and that an announcement of their next earnings call will be done shortly.
  2. Publication of 10-Q and 10-K: The 8-K filing of January 14 mentioned that the investigation of the errors was finished and their focus is now on filing the 10-Q for 2018 and the 10-K for the latest quarterly earnings: “Although the investigation has been substantially completed, additional time will be required for the Company to finalize and file the Annual Report and the Quarterly Report, including completing its analysis of the proposed adjustments to previously reported revenues identified by the investigation and determining whether or not a restatement is required in connection with any previously filed financial statements. Additionally, the Company’s independent auditor has indicated that it will require additional time in order to complete its audit procedures…”
  3. Increased institutional investors: The price dropped substantially yesterday on February 7th following the news of the resignation of their accounting firm. This price drop opportunity was ceased by asset manager BlackRock to take a 6.5% stake or 3.8M shares. This will not only have other institutions consider to buy but for sure avoid current institutional investors (~90%) to hang on to their shares. We will be looking out for more filings related to institutional stakes.

Well, once I saw a price I liked… it was time to buy. I let Millionaire Roadmap clients know about this play:

trading process - chart patterns usat stock, rwlk stock, veri stock

Here’s what the stock did just a day after I bought shares…

trading process - chart patterns usat stock, rwlk stock, veri stock

Just a day later, the stock was up 10%… and I locked in $9K in profits.

trading process - chart patterns usat stock, rwlk stock, veri stock

That’s the power of my patterns, knowing catalyst events and finding areas of value.

Moving on, let’s look at another example of how powerful they can be.

Veritone Inc. – VERI Stock

Now, I’ve traded VERI before, and knew there was a lot of value in the stock… you see, back in December, there was buy out news surrounding VERI stock, and it actually popped to $10 in the pre-market that day.

However, the stock has pulled back from those levels…

This stock had a good chance of hitting a big positive catalyst due to its emerging technology in the artificial intelligence space. Not only that, the company released earnings… so the news was out and it guided its first-quarter revenue above consensus… that’s a positive catalyst in my opinion.

Here’s the chart I was looking at:

trading process - chart patterns usat stock, rwlk stock, veri stock

Well, VERI stock broke above the level I was watching, and here’s what happened:

trading process - chart patterns usat stock, rwlk stock, veri stock

Now, I was on a flight when this happened… but managed to sell my entire position:

trading process - chart patterns usat stock, rwlk stock, veri stock

ReWalk Robotics – RWLK Stock

Another trade in which I used patterns, value, and catalysts, was my RWLK stock trade.

Here were the catalysts in RWLK stock.

  1. FDA submission under review for its new product.RWLK is developing and intended to commercialize a lightweight soft suit exoskeleton.RWLK CEO noted on an earnings call, “At the end of October, we achieved a major milestone with our ReStore program, our new breakthrough product for stroke patients. We have completed patient enrollment in our ReStore clinical trial and have met the study accrual objectives. We are now moving to complete the clinical study data reports to support our 510(k) submission, and we are on track to file with the FDA around year-end.”In a press release a few months ago (which I noted in a report that I sent out to Millionaire Roadmap members in mid-January), RWLK stated, “With our clinical study accrual now completed, we plan to finalize our ReStore submission to the U.S Food and Drug Administration shortly.”
  1. Increased reimbursements from insurance companies. Since insurance companies were looking to reimburse more on RWLK’s exoskeletons, then its revenues would increase.The CEO noted, “The number of German requests for authorizations under the new MDC code are expected to reach 43 for the year. Based on this, we expect Q4 sales to be in the range of $2 million to $3 million pending timing of insurance conversions.”

Now, here’s a look at the chart I was watching in RWLK stock:

trading process - chart patterns usat stock, rwlk stock, veri stock

That’s the Fibonacci retracement (rest and retest) in the blue lines… and the green horizontal line is where I identified an area of value.

Well, here’s what the stock did…

trading process - chart patterns usat stock, rwlk stock, veri stock

Now, the stock had a massive gap higher… so holding until it reached the green line would’ve been too greedy… and you know what could happen if you get too greedy…

That said, I decided to take profits off the table when I was up 43%, or $11K!

trading process - chart patterns usat stock, rwlk stock, veri stock

Now, that’s not the first time I made money in this stock… in 2019 alone I’m up just over $25K from trading RWLK stock.

trading process - chart patterns usat stock, rwlk stock, veri stock

If you think about it boils down to discipline. You can dramatically improve your results if you just cut out the dumb stuff you’re doing with your trading. And instead, try to put more effort into developing the strategies that are working for you.

My best students trade nothing like me. Am I offended? Heck no. Ultimately, you will develop your own trading style.

However, you’ll always need to have good habits like:

  • Being Prepared
  • Sticking to your Strengths,
  • Journaling
  • Having a Trading Plan
  • Identifying Catalysts

That’s what I teach and so much more.

That said, I’ve been able to make about $300K in trading profits this year. I know… its only been two months. But you know what? I think the next 8 months are even going to be bigger and better. That said, I want you to come along for the ride. Click here for my 90-day challenge and get started today.

The diary of a real $ trader,

Jason Bond


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