The Framework

We don't pick stocks on a hunch, and we don't chase whatever's moving that day. Every position we take has to pass the same system before we take it. This page is that system, laid out in full, not a highlight reel of what worked, just the actual criteria.

Our approach is built on Bullish trend template and VCP methodology, adapted to how we manage risk and size positions. If you've read his work, this will feel familiar. If you haven't, this is the short version of what we mean when we say a stock is "in the zone."

Stage 1: Does the stock even qualify?

Before a setup is worth looking at, the stock has to be in a confirmed uptrend structure, not just moving up on a given day. We check for things like:

Price trading above both its 150-day and 200-day moving averages, with the shorter average above the longer one.
The 200-day moving average itself sloping upward, not flat or rolling over, for a sustained stretch, not just a week or two.
The 50-day moving average above both the 150-day and 200-day, and price above the 50-day.
Price meaningfully off its 52-week low, and reasonably close to its 52-week high, rather than a beaten-down stock hoping for a bounce.
Strength relative to the broader market, not just relative to itself. A stock that's merely "not falling as fast as the index" doesn't qualify.

This stage alone rules out the majority of the market. We're not interested in every stock that's up this week. We're interested in the small subset that's structurally strong enough to be worth watching closely.

Stage 2: Is it actually ready?

A stock passing Stage 1 can still be untradeable for weeks or months. What we're waiting for after that is a volatility contraction pattern, a stock's price swings getting tighter and tighter over several pullbacks, each shallower than the last, on progressively lighter volume. It's the market equivalent of a coiling spring: sellers running out of conviction, volatility draining out of the stock before a move.

We don't buy the contraction itself. We wait for the breakout out of it, on volume that's clearly above average, at a specific price level what we'd call the pivot point. That combination, tight contraction plus a decisive, high-volume breakout, is the actual trigger. Everything before that is just a watchlist candidate.

Stage 3: How much, and for how long

A good setup doesn't mean an unlimited bet. Every position has three rules attached before it's ever taken:

A hard stop-loss, decided before entry, not after. If the trade is wrong, we're out with a small, predefined loss not hoping it comes back.
Position sizing tied to conviction and volatility, not a flat amount on every trade. A tighter, cleaner setup can earn a larger size than a looser one.
Adding to winners, not losers. If a position proves itself by moving in our favor, we may add to it. We do not average down into a position that's moving against the original thesis.

This is the part of the system that matters most and gets talked about least. Most of what separates a durable trader from someone who blows up isn't the entry, it's rules two and three.

Why we're not showing you live examples here

You'll notice this page has no tickers, no charts, no current setups. That's deliberate. This page exists to explain the system, not to flag today's opportunities. If you want to see the framework applied to something you're currently watching, that's what the screening and selection sessions inside membership are for.

This page describes an educational trading methodology for illustrative purposes only. It is not a recommendation to buy, sell, or hold any specific security, and nothing here constitutes financial advice. Trading involves risk of loss, and no system, including this one, guarantees a profitable outcome.