They say every trader learns patterns and then feels out which patterns are truly right for the trader. I think that I have definitely found mine. It is an obvious one and one for beginners (that would be me with being only 5 months in now). But even if I wasn't new or when I am not new, I am not sure my pattern will change. I tracked trades that I took in different times of day and different patterns and it all comes down to the fact that when I didn't trade a morning panic my odds went up a lot of losing. 

When one thinks of it, this just makes sense. If going long you want the price to be down considerably to have room to run up. And you want to have enough interest and volume to bring the price up after the price has been pushed down. So, in other words, we need to have the odds in our favor of the price coming back up.

Here are some factors in better odds that I think of.

1.) Top Gainer and Unusual Volume...are eyes on the stock that we get enough buyers to be on top of themselves to drive the price up.

2.) Candles...I watch candle activity. Are the candles continuing to decend without seeing much green candle activity above previous red candles. And here we have to be careful of the fakeout breakout. If the green candles were slightly above the previous red...I need more confirmation that this isn't a fakeout breakout. Double bottoms and building a base are a great way to confirm this. Sometimes this means you miss the run up. But would rather be out of a trade and wish I was in than in a trade and wish I was out. A lot of times that fakeout break out will find one or two more support levels before building enough conviction with other traders to buy in. 

3) Difference in drops and finding new support levels. At first the drops will be quite steep, but eventually, the drops slow down and the red candle volume gets shorter. You can see that there is less selling pressure. I usually come in later than the bottom here, but I would rather have confirmation. 

4) The strength of the catalyst. Is it just a change of appointment in the company. Or is this really legit news like a contract winner or really great earnings. 

5) Stairstepping...when I see a stairstepping trend that gives me the double conviction to enter the trade and a guide by which might be the current support. I look for stair stepping in the shape of a chart for sure. NAMM on August 1, 2025 was a prime examples of this and just gives me conviction to take the trade. 

 

In short, I love when a price spikes big in pm, sometimes it will downtrend the rest of the day, so being prepared to cut your loses is always essential to protect your profits.  But starting with small portion size so that you can average down and having a good enough catalyst to drive the price back up have brought me some of my most consistent recent successes!