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 base pattern valid—and what makes it dangerous.
✅ How to recognize the best breakout setups before they launch.
✅ How O’Neil and Minervini identified base structures for low-risk, high-reward entries.
Buying a stock too early can lead to quick losses. Buying too late often means you’ve missed the best part of the move.
The solution?
Learn how to read a proper base.
📖 William O’Neil explained:
“Virtually every great stock began its major price advance by breaking out of a well-formed base pattern.”
These aren’t just chart shapes—they’re psychological battlefields where institutions accumulate shares quietly before driving prices up.
🏗️ Anatomy of a Quality Base
✅ 1. Cup with Handle
Depth: 20–35% is normal; deeper = riskier.
Length: At least 7 weeks total (cup + handle).
Handle: Forms in the upper third of the base; tight, low-volume pullback.
Pivot: Breakout occurs at the top of the handle, on volume.
📖 O’Neil called this:
“The single most powerful base for launching true leaders.”
✅ 2. Flat Base
Tight range: Usually no more than 10–15% deep.
Duration: At least 5 weeks long.
Often forms after a strong prior run—pause before next leg up.
Ideal when market is also in an uptrend.
✅ 3. Double Bottom
Forms two distinct pullbacks (W shape).
Second bottom undercuts the first slightly (shakeout).
Buy point = mid-point peak between the two lows.
✅ 4. High-Tight Flag (rare but explosive)
Stock doubles in 8 weeks or less, then pulls back 10–20% on light volume.
Breakout occurs on resumption of momentum.
Very risky—used only by advanced traders.
📖 Mark Minervini noted:
“You must be picky with setups. Great stocks tell you when they’re ready by forming clean, tight patterns.”
❌ Common Base-Buying Mistakes
Buying during the base instead of at the breakout
Ignoring volume: no surge = no conviction
Mistaking random consolidation for a valid pattern
Jumping in before the market confirms the move
📖 Livermore warned:
“The market doesn’t reward anticipation. It rewards confirmation.”
📌 Trader’s Checklist: Is This a Proper Base?
✅ Base is at least 5–7 weeks long (not rushed)
✅ Depth is reasonable (not too steep or too shallow)
✅ Handle (if present) forms in upper third of the base
✅ Volume dries up during the handle, then surges on breakout
✅ RS line is at or near a new high as the stock approaches the pivot
✅ Market is in an uptrend (follow-through confirmed)
🎯 Action Step: Review 3 Bases in Progress
✅ Open your preferred platform:
✅ Choose 3 stocks from your watchlist.
Is the base valid?
Is the stock setting up near a pivot?
Would you buy this if volume and market conditions align?
Take screenshots. Annotate the pivot points. And be patient—great bases take time to build.
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
BUFFETT EXIT BOMBSHELL & TRUMP TARIFFS RATTLE WALL STREET
Wall Street opened on uneasy footing after President Trump pledged a 100% tariff on foreign‑made movies, dragging Netflix, Disney, and other streamers lower. The Nasdaq slid about 0.5%, the S&P 500 dipped 0.4%, and the Russell 2000 eased 0.3% while the Dow hovered near break‑even.
The bigger headline came from Omaha: Warren Buffett will hand Berkshire Hathaway’s top job to Greg Abel by year‑end. Berkshire shares tumbled nearly 5% following the announcement and softer quarterly earnings. Trade Desk and AMD logged solid gains, airlines flew higher, and traders now turn to Palantir’s results and a mid‑week Fed meeting for the next cue.
Stock Spotlight
JPMORGAN (JPM)
Banking heavyweight eyes a fresh breakout
JPMorgan Chase is inching toward a 254.67 buy point after topping Q1 estimates and shaking off April tariff‑related jitters. The Dow component is carving a double‑bottom base while record equities trading and a healthier yield curve lift momentum. CEO Jamie Dimon still sees turbulence ahead from inflation and trade policies, yet the bank’s $3.9 trillion asset base gives it plenty of cushion.
Key Facts
Price (intraday): ≈ $254
Chart Pattern: Double‑bottom; official pivot 254.67
Q1 EPS: $5.07 vs. $4.63 consensus (+9%)
Revenue: $45.31 B, up 8% YoY
Market Cap: ≈ $707 B; largest U.S. bank by assets
ATR (14‑day): 4.39 — moderate daily range
Q1 EPS: $1.88, up 58% year over year
Operating income: $137.8 M, +81.5% YoY
FY24 guidance: Income lifted to $520 M – $527 M
Chart action: Shares entered a buy zone after topping the $208.40 pivot
What Traders Can Pick Up
Yield‑curve tailwind – Steeper spreads often revive net interest income, a key driver for big banks.
Diversified lines of business – Trading, consumer banking, and wealth management balance out cyclical bumps.
Volume confirmation – A surge through 254.67 with heavy trade would strengthen any breakout signal.
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.