Welcome to the Beginners in Stock Trading Newsletter! Over the next several months, you’ll receive expert insights, proven strategies, and real-world examples from some of the greatest stock traders in history.
Every newsletter has 2 sections. The 1st section is devoted to learning. Each building on the previous day’s lesson in logical order. Giving you a full, free trading education in under ten minutes a day.
Missed a day? You can find all of the previous newsletters online to catch up or if you joined later.
The 2nd half of the newsletter is a briefing on 1-3 stocks in the news. Read it. Then click on the links to see the corresponding charts inside the original articles. This will accelerate your ability to read the charts.
Learning to how to trade will change your life.
Daily Lesson(each builds onto the next)
📝 Today, You’ll Learn:
✅ Why volume is the most objective indicator of institutional activity.
✅ How legendary traders like William O’Neil, Richard Wyckoff, and Mark Minervini used volume to validate every decision.
✅ How to interpret common volume signals—from breakout confirmation to stealth accumulation—and what they mean for your trades.
📝 Opening Thought:
Most traders obsess over price.
Elite traders read volume.
Price tells you where the stock is going.
Volume tells you who’s behind the move—and whether it can last.
📖 William O’Neil emphasized:
“Volume is the most important confirming indicator. A price move without volume means nothing. A price move with volume tells you big money is involved.”
O’Neil wasn’t alone. From Wyckoff to Minervini, the best in history have used volume as the lie detector of the market.
This deep dive will show you how to read it fluently.
🧠 Part I: Why Volume is Your Edge
Volume is the heartbeat of the market.
Every bar of volume represents buyers and sellers agreeing on a price—but not on value.
Here’s what volume does that price alone can’t:
Confirms conviction: Big players can’t hide their buying.
Reveals exhaustion: Weak volume at turning points shows lack of interest.
Exposes deception: Price moves with no volume are often traps.
Tells the truth: Volume doesn’t lie. You can interpret it.
📖 Richard Wyckoff, pioneer of volume-based analysis, said:
“Study the cause (volume). It always precedes the effect (price).”
🔍 Part II: The 4 Most Important Volume Signals to Know
✅ 1. Breakout Volume – The Only Buy Signal That Matters
A true breakout should happen on volume 40%–100% above average.
This shows institutional conviction—mutual funds, hedge funds, and algos are stepping in.
No volume? No trade.
🟢 Example: AAPL breaking out of a flat base on 60% volume surge = textbook.
🔴 Trap: Stock breaks out with 5% volume increase and fades—retail-only push.
📖 O’Neil stated:
“Without a volume surge, the breakout lacks sponsorship. And without sponsorship, your trade lacks a future.”
✅ 2. Dry-Up Volume – The Calm Before the Storm
Occurs when price tightens and volume dries up near the end of a base.
This means sellers are done. Buyers are waiting.
When the move comes, it comes fast.
🟢 Look for dry-up volume in:
Handles of cup-with-handle bases
Tight flat bases near highs
Stocks with rising RS during sideways action
📖 Minervini shared:
“Low volume tells me sellers are exhausted. Smart traders get interested when nobody else is watching.”
✅ 3. Climax Volume – Know When to Take Profits
Huge volume + vertical price moves = possible exhaustion.
Often occurs at the end of extended runs.
Can signal institutional distribution, not just momentum.
🟢 Signal: If volume surges on the highest price bar in weeks—and price reverses = exit trigger.
🔴 Don’t confuse this with a breakout that’s just beginning.
📖 Jesse Livermore warned:
“At the top, you’ll find the crowd excited, and volume at its greatest. That’s when the pros quietly exit.”
✅ 4. Volume Spikes on Support or Breakdown
Bounce on volume = demand returns.
Break below support on volume = distribution confirmed.
🟢 If a stock pulls back to the 50-day line and bounces on 50%+ volume, that’s a buy.
🔴 If it cracks the 50-day or 10-week on heavy volume, that’s your sell signal.
⚠️ Part III: Common Mistakes Traders Make With Volume
❌ Chasing quiet breakouts: Price moved, but nobody’s home.
❌ Selling low-volume pullbacks: They may be healthy shakeouts.
❌ Buying volume spikes in downtrends: Big volume can mean dumping.
❌ Confusing low volume with safety: It can also mean no interest.
📖 O’Neil observed:
“Beginners get excited by price. Professionals wait for volume. Patience with confirmation separates winning traders from the rest.”
📋 Part IV: Trader’s Volume Checklist
Before you enter or exit a trade, ask:
✅ Is this move backed by 50%+ volume above average?
✅ Has volume been drying up near a base or handle?
✅ Is the stock bouncing off support on meaningful volume?
✅ Did the breakout occur in a strong market, with RS rising?
✅ Has volume confirmed every stage of the setup—not just the breakout?
🎯 Action Step: Master Volume With a Chart Audit
Today or tomorrow morning, take 30 minutes and:
Pull up 3 stocks that recently broke out.
Ask:
What was the volume at the breakout?
Was there dry-up volume before the move?
What did the first pullback look like in terms of volume?
Then, do the same for 2 failed breakouts.
What was missing?
Did volume confirm or contradict the price?
Train Your Eyes On This Pattern(of the week)
Use these market tools to scan for and review stocks:
✅ MarketSmith (MarketSurge) – Premium Market Analysis and Scanner Tool
✅ Charts.com – Budget-Friendly Charting Option
✅ TradingView – Free & Subscription Stock and Crypto Charts
✅ DeepVue – MarketSurge Inspired Analysis and Scanner
👀 Seeing real-world stock patterns helps train your eye for long-term trends.
Our Sister Newsletter. Because everyone’s a Beginner in something.
News
WEEKLY MARKET ROUNDUP
U.S. stocks ended the week in a tug-of-war between tariff headlines and central-bank caution. Early in the week, President Trump hinted at trimming China tariffs and sealed a U.S.–U.K. trade deal, sparking a rally in industrials and cyclical names before indexes stalled just under their 200-day lines . Midweek, the Federal Reserve held rates steady—citing stagflation risks—and flagged a “wait-and-see” stance on future cuts, keeping bond yields elevated and growth stocks on edge .
By week’s end, a surprisingly strong April jobs report (177K vs. 130K expected) reignited bullish sentiment, lifting the Russell 2000 and small-caps into the green for the week . Tech giants delivered mixed earnings: AppLovin and Axon Enterprise rallied on upbeat guidance, while Netflix and Palantir faced profit-taking. Bitcoin’s surge past $100K buoyed crypto-linked names, even as defensive sectors like utilities lagged. Overall, market breadth improved, with leading stocks flashing buy signals—setting the stage for next week’s CPI data and further trade-talks updates.
Stock Spotlight
Toast Inc. (TOST)
Restaurant Software Maker Breaking Out on Strong Recurring Revenue
Toast Inc. (TOST), a provider of restaurant management software, saw its stock surge by 8.2% to $39.65 following positive business updates, despite slightly missing Q1 2025 earnings and revenue expectations. Adjusted earnings rose by 53%, and revenue increased 24% to $1.344 billion, just short of the $1.351 billion estimate. However, the company exceeded forecasts in annual recurring revenue, which jumped 31% to $1.713 billion, and in customer locations, which grew 25% to 140,000.
Key Facts:
Current Price: Approximately $39.65
Q1 Adjusted Earnings: Increased by 53%
Q1 Revenue: $1.344 billion, a 24% increase
Annual Recurring Revenue: Rose 31% to $1.713 billion
Customer Locations: Grew 25% to 140,000
Notable Clients: Secured deals with Applebee’s (~1,500 locations) and Topgolf (~100 locations)
IBD Composite Rating: 97
What Traders Can Pick Up:
Recurring Revenue Growth: A 31% increase in annual recurring revenue indicates strong customer retention and a scalable business model.
Enterprise Client Acquisition: Securing large clients like Applebee’s and Topgolf demonstrates Toast's appeal to major restaurant chains.
Technical Breakout: The stock's surge past the 36.65 buy point from a cup-with-handle base suggests bullish momentum.
Refer a friend
5 referrals How to Make Money in Stocks Complete Investing System by O’Neill
10 referrals How to Make Money in Stocks Success Stories by O’Neill
15 referrals How to Make Money in Stocks, Getting Started by Matthew Galgani
30 referrals Trade Like a Stock Market Wizard by Mark Minervini
50 referrals Lifetime access to the upcoming video courses and 50% off live events and digital products
How to Make Money in Stocks Set
Thank you for reading. We’re all Beginners in something!
-Beginners in Stock Trading Team
This newsletter is for educational and informational purposes only. The content herein should not be considered financial advice, investment advice, trading advice, or a recommendation to buy or sell any securities or financial instruments.The strategies, opinions, and examples shared reflect the personal views and historical references from publicly available sources, including the works of William J. O’Neil, Jesse Livermore, Mark Minervini, and other professional traders.Trading in the stock market involves risk, including the risk of losing capital. Past performance is not indicative of future results. You should conduct your own due diligence and consult with a licensed financial advisor or registered investment professional before making any investment decisions. We do not guarantee any specific outcome or profit. You are solely responsible for your own financial decisions and trading actions.