Video summary

COPY This CRAZY Simple 98% Win Rate Trading Strategy

Main summary

Key takeaways

Finance

Strategy: “First Red Day” (primarily shorting parabolic stocks)

Core idea

After multiple days of “extension” / parabolic upside, the first day the stock closes red (down) often signals a momentum shift and can lead to sharp downside (“destruction”).

The trader attacks when the stock goes red, rather than trying to predict the exact red day in advance.

Applies to

  • Mostly stocks (historically including OTC/penny stocks references)
  • Can be used with options for leverage

Required setup characteristics (nuances)

You generally want parabolic multi-day extension before the red day—not just “1 green day then red.”

  • Minimum framing: at least ~3 days of major extension is referenced for one variant (including a “gap” version)
  • Extension magnitude examples discussed:
    • Desired parabolic move roughly ~2 to 12, up to ~2 to 25
    • Not considered the same as small/low-range movement (e.g., $2 to $4 / other much smaller framing mentioned)
  • The red day is most reliable after true parabolic action, not merely after any streak of green candles

Trade execution / framework (step-by-step)

  1. Identify parabolic extension on the daily chart (a multi-day runner).
  2. Wait for confirmation
    • Prefer the first day it goes red (closes down), then trade once the red move confirms.
    • Avoid FOMO: do not short days 1–5 before the thesis is confirmed.
  3. Intraday entry logic
    • Use previous day levels, including:
      • The “red to green” area (described as a previous day close / prior resistance band)
      • VWAP as an intraday resistance/mean reference (explicitly called out as the “VWAP line”)
    • Attack when price breaks down / goes red, using:
      • Stop orders to reduce FOMO and enforce discipline (especially for newer traders)
      • A starter small position, then add when confirmation happens (when it goes red / breaks the key level)
  4. Risk management (“thesis invalidation”)
    • Exit if the stock reclaims the red-to-green area
    • Explicit rule: the thesis requires the stock to stay red; if it reclaims red-to-green, get out (“trade is over”).
  5. Scaling / position management
    • Take partial profits to build a cushion and manage psychological risk.
    • Add on confirmation, but manage adds carefully due to bounces/traps.
  6. Holding period / overnights
    • Earlier approach: mainly capitalize on the first red day
    • Mature approach: sometimes hold a small portion overnight (example: ~10% overnight) because the stock may not fully recover after the top is set

Variants: “Gap up then first red day” vs “gap down”

Preferred case: gap up then first red day

  • On the red-day setup, the stock gaps up again (or otherwise extends), then fails and turns red
  • Stronger exhaustion dynamics when there’s a fresh gap up that traps buyers

Harder case: gap down

  • If the red-day day opens weak (gap down):
    • The trader looks for a bounce that fails without reclaiming the previous day’s close / key resistance
  • Still requires multiple extension days (≥3) for the setup to be valid

Key risk / psychological notes

  • Extreme P&L volatility: profits can swing by thousands within seconds
  • Main psychological control tactic:
    • Lock in partial profits to avoid becoming emotionally “dead” if the profit disappears
  • Frequency analogy:
    • Treat setups like the “Super Bowl”: infrequent (about ~3–4 times/year), so discipline and readiness matter
  • Confirmation matters:
    • Do not short ahead of confirmation with full size
    • If you short before it actually goes red / breaks the key level, expect bounces/false starts—use smaller sizing when anticipating

Performance metrics & explicit numbers mentioned

  • $668,000 day
    • Mentioned in a RZ / AMC example section (narrative indicates $668,000 day tied to the VWAP/first red day segment)
  • DJT time-to-profit example
    • Took 8 hours total to make ~$400,000 (≈ $50,000/hour)
    • Described via scaling/covering around VWAP resistance/breaks
  • AMC example (recording narrative)
    • Locked in realized: $38,000 + $410,000 + $20,000 = $468,000
    • Also referenced unrealized amounts:
      • ~$235,000 unrealized
      • Later another ~$230,000 unrealized figure (noted as fluctuating as price moves)
  • SMCI “underperformance” vs leverage what-if
    • Alex says he underperformed but still made $50,000
    • Belief: with better option usage it “could have” been materially larger
    • Claims include option leverage magnitude examples such as “up a 1,000x” / $3 to $60 puts

Win rate claim

  • The title/description framing includes a “98% win rate” claim
  • Presenter confidence is tied to the setup having a 98% win rate when it’s actually going to happen
  • Still requires strict risk invalidation (notably: reclaiming red-to-green)

Tickers / instruments / sectors mentioned

Stocks / equities

  • SMCI (Super Micro Computer, Inc.)
  • MSTR (MicroStrategy)
  • INDO (oil & gas stock referenced in a Russia/Ukraine era oil move context)
  • GameStop (GME) (historical meme/hype example)
  • DJT (Trump Media & Technology Group)
  • RZ (referenced in the $668,000 “VWAP/first red day” segment)
  • AMC (AMC Entertainment; catalyst was ATM offering)
  • TSLA (Tesla mentioned as a generic comparison example)
  • Nvidia (mentioned as a catalyst context enabling SMCI’s parabolic move; not traded in-lesson)
  • OTC penny stocks (general historical reference; no specific tickers listed)

Options

  • Use of puts and options leverage discussed
  • One mention of Friday / options expiration timing effect

Sector / thematic references

  • Oil & gas sector (INDO / Russia invasion oil move context)
  • Meme/hype-driven trading context (GameStop, social hype exhaustion)

Macro / event catalysts discussed (why these moves happen)

  • Russia invaded Ukraine → oil surged → oil & gas stock (INDO) parabolic run
  • Nvidia breakout → catalyst context enabling SMCI parabolic move
  • Donald Trump election → DJT ran up, then sold off after win (“sell the news” theme via gap/reversal)
  • AMC ATM offering announcement → catalyst amplifies the washout / first red day dynamic
  • GameStop / Robinhood buy button turned off → example of non-catalyst hype exhaustion; “gravity comes back down”

Disclosures / disclaimers mentioned

  • No explicit “not financial advice” statement was included in the provided subtitles.

Presenters / sources (as stated)

  • Alex Tamse
    • Founder of “my investing club”; strategy creator/presenter in the episode
  • Chart Fanatics
    • Channel context (host not explicitly named in subtitles, but show intros/outros are from the channel)
  • Strategy credit: mentor “Bal”
    • Taught Alex; described as “king of OTC back in the day”
  • Sponsors mentioned (not necessarily strategy sources):
    • Apex Trader Funding
    • Funded Next
    • TradeZella
    • propertrader.com
    • propfirmtrader.com (mentioned in the same sponsor/comparison context)

Original video