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 a profit-taking day is and how it differs from a distribution day
✅ Why strong stocks and assets must pause to continue higher
✅ How to read volume and price to know if it’s time to sell—or sit tight
✅ What Livermore, O’Neil, and Minervini taught about handling these situations
✅ Real examples from stocks and crypto, including Bitcoin’s recent behavior
📝 Opening Thought:
Even the best stocks—and yes, even Bitcoin—don’t go straight up.
They surge, pause, and sometimes fake you out before continuing higher.
But when is a dip just normal profit-taking?
And when is it a sign of something worse?
📖 William O’Neil taught:
“A stock can’t keep going up without letting people out along the way. Profit-taking is part of a healthy uptrend.”
Let’s break it down clearly.
📐 What Is a Profit-Taking Day?
A profit-taking day is when an asset (stock, index, or even crypto) pulls back without signs of panic or trend failure.
You’ll often see:
A 1%–3% drop
On light to average volume
Price holding key support levels (like the 10-week line or 21-day EMA)
No breakdown in RS or group strength
📖 Minervini explains:
“If you’re holding a true leader, profit-taking isn’t a red flag—it’s the market catching its breath.”
🔄 How It’s Different from a Distribution Day
Distribution days:
Show heavy selling pressure
Come with high volume and price declines
Often appear near market tops or fading trends
Profit-taking days:
Are expected and healthy
Let strong hands reload
Tend to resolve higher if the uptrend is still intact
📌 Rule of thumb:
If price pulls back on light volume and support holds → stay in.
If price collapses on heavy volume → pay attention.
🧠 Why Profit-Taking Is Healthy
Allows traders to lock gains without destroying the trend
Flushes out weak hands
Gives institutions room to re-enter without chasing
Sets up the next breakout or base-on-base formation
📖 Livermore warned:
“The market will always test your resolve before rewarding it.”
📊 Real-World Examples of Profit-Taking Days
✅ NVIDIA (NVDA) – March 2023
Pulled back 2.5% after a 30% run
Volume light, price held above 21-day EMA
Within a week: back at highs
✅ Result: Healthy shakeout → breakout
✅ Meta (META) – June 2023
Sharp 3% drop, then found support at 50-day
No breakdown in RS
Stock reclaimed highs by end of month
✅ Normal consolidation
✅ Bitcoin (BTC) – May 2025
Ran from $88,000 to over $104,000 in just 2 weeks
Then pulled back to ~$97,500 on light volume
Consolidated sideways for several days—no panic selling, no break of major support
As of this writing, BTC is still holding above the 10-week average
✅ Classic example of profit-taking, not distribution
📖 Livermore’s principle:
“When prices advance fast, rest becomes necessary. Fast moves invite pause—not reversal.”
📌 Trader’s Checklist: Spotting Healthy Profit-Taking
✅ Is the pullback shallow (1%–3%) and on lighter volume?
✅ Is the stock or asset holding key support (21-day, 50-day, 10-week)?
✅ Is the RS line steady or rising?
✅ Are other leaders acting strong, not breaking down?
✅ Are breakouts still working across the board?
If YES → this is likely just profit-taking. Hold or consider adding on strength.
🎯 Action Step: Evaluate a Pullback in Stocks and Crypto
✅ Choose 1–2 names from your watchlist, plus BTC or ETH
✅ Open daily and weekly charts
✅ Check:
Did it pull back 1–3%?
What was the volume trend?
Did it find support at a key level?
What happened the next few days?
🧠 Final Thought:
Every leader—whether it's Apple or Bitcoin—needs to rest.
The key is knowing whether it's just a pause… or a warning.
📖 Minervini said:
“You don’t get shaken out of greatness because of a normal dip. You stay in, because the trend hasn’t given you a reason to leave.”
Train your eyes. Trust the price.
And learn when to sit tight with confidence.
Train Your Eyes On This Pattern(of the month)
“Double Bottom”
📉 What Is a Double Bottom Pattern?
A double bottom is a bullish reversal pattern that signals a potential end to a downtrend and the beginning of a new uptrend.
It’s shaped like a “W” on a chart and forms when a stock tests a low price level twice, finds support each time, and then breaks out above the midpoint between the two bottoms.
✅ Key Traits of a Double Bottom:
Two Distinct Lows
The second low should occur at or slightly below the first (a shakeout is common).
The time between lows should be at least 3–4 weeks, ideally longer.
Tightness and Volume Clues
The second bottom often occurs on lighter volume, showing selling is drying up.
Watch for increased volume as the stock rises from the second low and especially on the breakout.
Buy Point (Pivot)
The buy signal is triggered when the stock breaks above the peak between the two lows—known as the pivot point.
Volume should be 40%–50% above average on the breakout.
📖 William O’Neil’s Perspective:
“The double bottom is one of the most successful base patterns when formed properly, with the second low shaking out the weak hands and the breakout occurring in sync with a strong market.”
📊 Real Example:
Let’s say a stock drops to $50, rallies to $58, then drops again to $51.
If it then surges past $58 with strong volume, that’s your buy signal—with a pivot at $58.
📊Chart Example:
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
MARKET FUTURES DIP AS TRUMP'S TARIFF THREATS RATTLE INVESTORS
U.S. stock futures declined sharply on Friday after former President Donald Trump threatened significant tariffs: a 25% tariff on Apple and a 50% tariff on European Union goods. Trump stated that Apple must manufacture iPhones within the U.S. or face the tariff, opposing the company's plans to shift production to India. These would mark unprecedented penalties against a specific company. Trump also criticized stalled U.S.-EU trade negotiations and suggested increasing tariffs from the current 10% to 50%, highlighting ongoing disputes over specific sectors like steel and autos.
Stock Spotlight
BrightSpring Health Services (BTSG)
Home Care Provider Climbs to Top of Industry Group
BrightSpring Health Services (BTSG), a provider of at-home and pharmacy care for elderly and special-needs patients, has rapidly ascended to the top of its industry group just 16 months after its IPO. The company's impressive financial performance and strategic acquisitions have contributed to its strong position in the market.
Key Facts
Current Price: Approximately $24.50
Earnings Growth: EPS growth of 23% to 96% over the past four quarters
Revenue Growth: 13% to 29% over the same period
Analyst Forecast: Projected 50% increase in annual earnings to $0.84 per share
Acquisitions: Recently acquired North Central Florida Hospice and Haven Medical Group
2025 Outlook: Revenue between $12 million and $12.5 million; adjusted EBITDA of $570 million to $585 million
IBD Composite Rating: 99
Technical Pattern: Forming a cup base with a potential breakout point at $24.80
The company's stock has shown signs of heavy institutional interest, with its Accumulation/Distribution Rating at A and a relative strength line near highs. BrightSpring's focus on specialty infusion treatments and generic drugs, along with its strategic acquisitions, positions it well in the growing home care market.
What Traders Can Pick Up
Strong Financial Performance: Consistent earnings and revenue growth can indicate a company's robust operational health.
Strategic Acquisitions: Mergers and acquisitions can be a pathway for companies to expand their market presence and service offerings.
Technical Indicators: Recognizing chart patterns like the cup base can aid in identifying potential entry points.
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.