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:
✅ What makes a breakout setup high-probability—and what makes it a trap.
✅ How to filter breakouts using volume, market timing, and base structure.
✅ Why O’Neil and Minervini only act when the technicals and psychology align.
You don’t need to trade every breakout.
You need to master which ones are real—and which ones are designed to trap you.
📖 William O’Neil taught:
“Most breakouts fail because they lack volume, structure, or a confirming market. Wait for power—not hope.”
Today, we’ll look at how to identify breakouts with true strength—before the move starts, and while the risk is still low.
🔥 The 3 Traits of a High-Probability Breakout
✅ 1. Proper Base Structure
Cup with handle, flat base, or double bottom.
Minimum 6–7 weeks of consolidation.
Tight price action and a defined pivot point.
📖 O’Neil’s rule:
“The best breakouts emerge from clean, well-formed bases with tight action and little noise.”
✅ 2. Explosive Volume at Breakout
Volume should surge 40–50%+ above average.
Institutions move in size. No volume = no conviction.
If price rises without volume, be cautious.
📖 Mark Minervini warns:
“You can’t fake real demand. Volume is the truth serum of breakouts.”
✅ 3. Favorable General Market Conditions
Breakouts work best in confirmed uptrends.
Look for a follow-through day on the NASDAQ or S&P 500.
If the indexes are in a correction, sit on your hands.
📖 O’Neil again:
“Three out of four stocks follow the market. A great breakout in a weak market is likely to fail.”
📉 Avoiding Breakout Failure: The Checklist
❌ Weak volume?
❌ Breakout from a 2–3 week base?
❌ Choppy or broad market selling?
❌ Breakout gaps above the pivot, then reverses lower?
❌ RS line isn’t confirming the move?
If two or more of these are true, skip it.
📌 Trader’s Checklist: Spotting a Real Breakout
✅ Base is at least 6 weeks long
✅ Handle forms in the upper third of the pattern
✅ Breakout occurs at pivot on strong volume
✅ RS line is rising and confirms the move
✅ General market is in a confirmed uptrend
✅ Stock breaks out cleanly—and closes strong
🎯 Action Step: Breakout Validation Drill
✅ Choose one stock breaking out this week.
✅ Evaluate it using the checklist above:
Does the base meet the structural criteria?
Did volume surge at the pivot?
Did the stock close strong that day?
Is the market environment favorable?
✅ Grade the breakout:
A+ (actionable now)
B (watch for follow-through)
C or below (skip and refocus)
Train Your Eyes On This Pattern(of the week)
Cup with Handle
📌 Understanding stock price growth:
Look up the historical stock chart of Apple (AAPL) from 2004 to 2024. Notice how the stock’s price has risen steadily over time with some pullbacks.
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
TRUMP HINTS AT LOWER CHINA TARIFFS; MARKETS RESPOND POSITIVELY
On Friday, May 9, 2025, U.S. stock futures edged higher after President Donald Trump suggested reducing Chinese tariffs to 80% from the current 145%, ahead of key trade discussions led by Treasury Secretary Scott Bessent. Despite a mid-session sell-off on Thursday sparked by Trump's proposed tax hike for the ultra-wealthy, markets initially rallied on his announcement of a tentative U.K. trade deal. The Dow closed up 0.7%, the S&P 500 climbed 0.6%, and the Nasdaq gained 1.1%. Key stocks showed strength: Robinhood and Axon Enterprise surged on breakout signals, with several others like MercadoLibre, Rubrik, and GE Aerospace also lifting on bullish moves. In earnings news, Insulet, Lyft, Toast, and Cloudflare reported strong results, while Coinbase, Affirm, and Expedia dropped. Crude oil rose over 3%, and the 10-year Treasury yield increased to 4.4%. The market rally appears to be regaining momentum, presenting select buying opportunities.
Stock Spotlight
Stock Spotlight: Verona Pharma (VRNA)
Breathing New Life into COPD Treatment
Verona Pharma (VRNA) is making waves with its inhaled COPD treatment, Ohtuvayre. In Q1 2025, Ohtuvayre generated $71.3 million in sales, marking a 95% increase from the previous quarter and surpassing expectations of $50.3 million. The company reported approximately 25,000 prescriptions during this period. Verona plans to expand its sales force by adding around 30 representatives in Q3 to further support Ohtuvayre’s adoption.
The stock reached a record high of $74.18 and is currently testing a buy point at $70.40, remaining within the buy zone up to $73.92. Verona holds a top-tier Relative Strength Rating of 99, indicating strong performance. Analysts project annual earnings of 14 cents per share and adjusted earnings of 63 cents, with anticipated sales of $403.9 million, largely driven by Ohtuvayre.
📊 Key Facts:
Current Price: Approximately $70.40 (testing buy point)
Q1 Ohtuvayre Sales: $71.3 million (95% sequential increase)
Prescriptions Filled: 25,000 in Q1
Projected 2025 Earnings: 14 cents per share (reported), 63 cents (adjusted)
🧠 What This Teaches Traders:
Strong product demand can significantly impact a biotech company's financial outlook.
Monitoring buy points and stock performance relative to these thresholds can inform entry decisions.
High Relative Strength Ratings can indicate a stock's strong market position.
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.