Trading Lesson of the Week

• June 1, 2026
• FATE | MRVI | T,CHR

In This Week’s Issue:

• Market Outlook – The Trend is Your Friend
• This Week’s Market Minutes video – How to Limit Losses in the Stock Market
• Trader Training – Understand This and Succeed in the Stock Market
• Strategy – Stockscores Simple Weekly

Market Outlook – The Trend is Your Friend

Stocks continue to trend higher, although strength remains fairly concentrated in large cap tech stocks. However, when investors see the positive performance numbers for the big indexes, they are inclined to be optimistic and more eager to buy. We are seeing short term trading opportunities increase and that should spread to longer term opportunities as well.

The pattern day trading rule changes significantly this week. For US based traders, they no longer need to have $25k in capital to day trade, now the minimum is just $2k. That should bring in more small retail traders which should then bring in more emotion and volatility. It will be interesting to see the effect.

This Week’s Market Minutes Video – How to Limit Losses in the Stock Market

Great investors and traders don't take large losses in the stock market. That requires a plan on when to take the loss and how to manage risk effectively. In this week's video, I show a simple method to know when to take a loss and size your positions. Then, I provide my analysis of the overall markets and look at the trade of the week on MASK.

CLICK HERE TO WATCH ON YOUTUBE

https://youtu.be/P7fk0LfFqeA

Commentary – Understand This and Succeed in the Stock Market

Want to know how to consistently do well in the stock market? Let me give you an outline for the mindset you must have.

First, understand that the stock market is not fair. Some people get better information than others. They have an advantage.

Second, use this lack of fairness to your advantage. When people with better information act in the market, they leave a trail for the rest of us to follow. If you want to find stocks that have a better potential to move up significantly, don’t listen to what the media says. Don’t listen to what people say. Look only at what people are doing with their money.

When a stock suddenly shows strong buyer interest with stronger than normal volume, take notice. These are the characteristics of Alpha stocks and trading Alpha stocks is how you beat the market. They lead the pack.

Learn how to read a stock chart. If you don’t know how yet, sign up for my webinars in October, links above. Watch the free videos on the Stockscores YouTube channel. It is not hard, but it does take practice. You have to know the basics of chart reading because not every stock that shows abnormal price and volume activity is worth buying. Only those that make abnormal moves from a predictive pattern are worth considering. I can teach you how to read chart patterns.

Realize that even the best analysis on the stocks that have the most standout chart pattern breaks does not guarantee success. Trading is a numbers game. Some trades will work, some will work really well and others will be losers. What matters is how you do over 10 trades, not just one. This requires an appreciation for Expected Value. Don’t know what that is? I will teach you that to you in October.

Since you will not be right on every trade, you must be good at losing. You must know when to take a loss and have the discipline to take that loss when the market proves you wrong. Good losers do well in the market because their losses don’t outweigh their winners.

You must always be learning and evolving. The market has always been about human fear and greed but the ways to take advantage of it change over time. After 30 years of trading, I am still always looking for ways to be better. We have to be one step ahead of the crowd.

Finally, if you want to be successful in the market, focus on yourself. Emotional control, discipline, focus, determination and optimism are the characteristics of most good investors and traders. Whether you succeed or fail is entirely in your control, you just have to take the time to understand how the market really works and how to take advantage of it.