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)
The Cup-with-Handle pattern is one of the most reliable breakout setups in trading. Used by William O’Neil and many top traders, this pattern has appeared before nearly every major stock run in history.
“The cup-with-handle is one of the best chart patterns for buying a stock just before it explodes higher.”
“A stock that is building a strong base is like a coiled spring, waiting for the right moment to launch.”
If you want to catch the next big breakout, learning this pattern is essential.
📊 What is the Cup-with-Handle Pattern?
🔹 The Cup: A stock declines, then gradually recovers over several weeks or months, forming a U-shaped base.
🔹 The Handle: A small pullback occurs just before the stock breaks out.
💡 Why This Works:
The cup forms as the stock shakes out weak holders and institutional buyers accumulate shares.
The handle creates a final consolidation before a powerful breakout.
📖 Example:
Apple (AAPL) in 2004-2005 formed a cup-with-handle before a 1,580% breakout.
Amazon (AMZN) in 1998 formed a perfect cup-with-handle before exploding 1,800% in two years.
📈 How to Identify a Perfect Cup-with-Handle Pattern
📌 Follow These 3 Steps to Spot a High-Quality Setup:
✅ Step 1: Find a U-Shaped Base
The cup should be smooth and round (V-shaped cups are weaker).
The stock should correct 15-35% from its high, but not crash.
✅ Step 2: Look for a Handle
A small, tight pullback near the top of the cup.
Volume should dry up, indicating selling is exhausted.
✅ Step 3: Buy at the Breakout Point
The pivot buy point is slightly above the handle’s high.
Volume must surge 40-50% above average to confirm the breakout.
📖 O’Neil’s Volume Rule:
“The biggest breakouts always happen on high volume. If the volume is weak, the breakout will likely fail.”
📉 When to Avoid This Pattern
🚨 Red Flags That a Cup-with-Handle is Weak:
❌ Handle drops too far (>10-15%) – Indicates weakness.
❌ Breakout occurs on low volume – No institutional buying.
❌ The cup is V-shaped – A sign of instability.
📖 Jesse Livermore’s Warning:
“The market never makes it easy. If a breakout looks too obvious, institutions will shake out weak hands first.”
📖 Example of a Failed Breakout:
Peloton (PTON) in 2021 formed a weak handle and broke out on low volume → Stock collapsed 80% in months.
🎯 Action Step
✅ Go through any charts on the Daily/Monthly view and look for this pattern
✅ Identify the buy point and volume conditions.
👉 Write your findings in your trading journal.
⏭️ Coming Up Next:
On Monday, we’ll discuss how to use volume to confirm a breakout’s strength.
🚀 Stay disciplined & keep learning!
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
STOCKS SURGE AS NASDAQ SNAPS BACK STRONG 🔥
What. A. Week.
Markets went on a wild ride — but ended with a bang. The Dow and S&P 500 closed the week higher, and the Nasdaq? It ROARED back with a 7.3% gain, its best weekly performance in a while. All of this despite the usual chaos: tariff tension with China, tech volatility, and investor nerves running high.
But the bounce wasn’t just noise. It showed real resilience. With Netflix’s earnings and fresh retail sales data just around the corner (and a short Easter week ahead), things are heating up at just the right time. Are we looking at a new uptrend? Maybe. All I know is — next week’s setup is looking spicy.
Stock Spotlight
📈 Featured Stock of the Week: Bowhead Specialty Holdings (NYSE: BOW)
If you haven’t heard of Bowhead Specialty Holdings (BOW) yet, now’s the perfect time to get familiar. This fast-growing specialty insurance provider is quietly building momentum—and smart investors are starting to take notice.
Founded in 2020 and based in New York, BOW focuses on niche insurance markets like construction, healthcare, hospitality, and financial services. In just a few years, it’s carved out a strong position in the property and casualty insurance space.
🔍 Why BOW Deserves Your Attention:
Strong Revenue Growth: $425.66 million TTM—up over 50% from last year.
Profit Momentum: Net income surged 52.68%, with earnings per share (EPS) at $1.29.
Solid Stock Performance: Trading just below its 52-week high of $42.29, currently around $37.91–$41.00.
Analyst Outlook: Rated a “Moderate Buy” with price targets around $34.40–$35.80, suggesting stable upside potential.
Diverse Protection Portfolio: Offers insurance across high-risk sectors, from cyber risk to medical malpractice—making it a resilient player in volatile markets.
For busy professionals, BOW stands out as a well-run company with a lean model, steady growth, and exposure to sectors that need insurance coverage regardless of economic cycles.
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.