Read this BEFORE you take any trade. The setups won't make sense without it.
Do NOT take any trade off this site before you've read and understood this entire methodology page. The signals only work when paired with the discipline rules — stop loss, position sizing, and exit logic.
Trading involves risk of loss. Even with a 69% historical win rate, losing trades happen. Without proper risk management, a 69% win rate can still wipe out an account. The discipline below is what separates "the setup worked" from "I made money."
If you skim this and rush into a trade, you're skipping the most important part of the system.
Plain English: A "bracket" is a price range where a stock has been stuck moving sideways. A "bracket excess" happens when price dips BELOW the bottom of that range during the day — and then closes back INSIDE the range by the end of the day. That dip-and-recover behavior means sellers tried to push the stock lower, failed, and buyers stepped in with force.
Why it works: when a stock that's been ranging fails to break down and snaps back, it usually trends higher over the next 1-2 weeks. Backtested at 69% win rate over 10 years.
Plain English: Same Bracket Excess pattern as above, but with an EXTRA confirmation layer. When the BE signal happens RIGHT AT a major long-term trend line (the 200-day moving average), it qualifies as a "premium" setup.
Why we treat it differently: when both the bracket-excess pattern AND the long-term trend line agree, the historical win rate jumps from 69% to 74%. We size larger on these. Some big stocks (Apple, Amazon, Microsoft, Nvidia, etc.) ALWAYS qualify as Premium because their historical win rate is already 75%+ baseline — they're built different.
Position size: roughly 25% of account vs 17% for standard. Still safe because of the tight stop (see below).
Plain English: A more permissive version of the Bracket Excess pattern. Doesn't require the textbook reversal-candle shape — just any candle where price dipped and recovered most of the way back up by the close, near a recent low.
Why it fires more often: looser criteria = more setups per year. Win rate is slightly lower (63% over 10yr) but the volume of opportunities is 7× higher than strict BE. The trade-off: you have to honor stops on loose signals strictly — 37% of them lose. The losers are part of the math; if you skip stops, the system breaks.
Position size: smaller than BE — about 5% of account. Frequent, smaller bets.
Plain English: This is a Wyckoff-style pattern that signals quiet accumulation by large institutions. Instead of a single dramatic candle (like BE), LVD shows up as 5+ days of price drifting near a key support level on BELOW-average volume with small candle bodies.
What it actually means: when volume DECLINES while price hangs near support — and the candles are tiny (no big up or down moves) — it usually means big buyers are quietly absorbing all the available shares without spiking the price. Once they're done, the stock typically marks up sharply. The technical Wyckoff term for the trigger is "LPS" (Last Point of Support).
Why it works on specific stocks: some names form clean accumulation patterns (Microstrategy, JNJ, Honeywell, John Deere); most don't. We only signal LVD on the ones where it's been backtested to work. Historical: 60% win rate, 5-day average hold, patient setup.
Plain English: When you enter a trade, you set a STOP LOSS — a price at which you'll automatically sell if the trade goes against you. This is non-negotiable.
The rule: Stop = the LOW of the signal bar, minus 1%.
Example: If the signal fires on a bar where the lowest price of the day was $100, your stop goes at $99 ($100 minus 1%). If price closes BELOW $99 on any future day, you sell. Full exit. No exceptions.
Why this specific level: the signal-bar low is the level that institutions are using as a battle line. If price closes below that level, it means the buyers who tried to defend it have given up. The original thesis is invalidated and we move on.
Plain English: Because the stop is only 1% below the signal-bar low, your DOLLAR risk per trade is small — even when your position size looks big.
Example: $20,000 position on a $100 stock = 200 shares. If stop hits, you lose $200 × 1.5% = $300. That's only 0.3% of a $100,000 account.
The rule of thumb: Position size can be 5-25% of account, but DOLLAR RISK per trade should never exceed 1% of account. The tight structural stop is what makes this safe — without it, the position size would blow up the account on a bad day.
The stop only triggers on a daily CLOSE below the level. Intraday wicks that go below and recover don't count — those are normal market noise.
If price wicks to $98.50 mid-day but closes at $100.50, you HOLD. Only if the day ends at or below $99 do you exit at the next open.
Plain English: Instead of picking ONE price to sell at, we sell in three pieces as the stock rises. Each piece locks in profit while leaving room for the trade to keep running.
Why three pieces: single-target exits leave too much money on the table when a trade really works. Trailing alone gives back too much when a trade reverses. Three-stage captures the best of both. Backtested to beat "all-in / all-out" by 15%.
Use the calculator on the This Week page — type in your TOTAL account size and it returns the position size for each signal tier.
Hard ceiling: never more than 1% of account at risk on any trade. If your dollar risk per trade exceeds 1%, reduce position size until it doesn't.
Each trade has its own stop loss. If you have 5 trades open at 1% risk each and all 5 hit stops on a bad market day, that's a 5% account drawdown in a single day. Painful and recoverable, but only if you don't pile on more positions while it's happening.
Keep your active position count manageable. 1-3 open trades at a time is the sweet spot.
Every ticker in the system has been individually backtested. We trade names where the pattern works: defense (RTX, LMT, AVAV), mega-cap tech (AAPL, AMZN, NVDA, META), financials (JPM, BAC, GS), energy (XOM, CVX), and select small-to-mid caps (FUTU, HL, KTOS).
Tickers that backtest poorly are EXCLUDED even if popular. The ticker list is a moat — built from thousands of backtested trades, not opinions.
The exact parameters, the complete ticker selection rationale, the Pine indicator code, the backtest data, and the proprietary scan logic are reserved for members.
The methodology above is enough to understand HOW the system thinks. It's not enough to recreate the edge from scratch.
To get the actual scripts, alerts, and ticker tiering: see the Services page.