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.
Today, you’ll learn:
✅ Why buy-and-hold often underperforms active growth trading.
✅ How avoiding downturns and focusing on leading stocks increases returns.
✅ Why market timing (when done correctly) is key to outperforming the market.
Daily Lesson(each builds onto the next)
You’ve probably heard people say, “Just buy and hold for the long term.”
But is that really the best strategy?
While buy-and-hold works over decades, growth trading beats it by focusing on the strongest stocks at the right times and avoiding downturns.
📖 William O’Neil’s Insight:
“The market doesn’t reward those who just sit and wait. It rewards those who buy strong stocks in strong markets and exit when conditions change.”
📖 Jesse Livermore’s Take:
“There is time to go long, time to go short, and time to go fishing. The best traders know when to be in and when to be out.”
Let’s break down why growth trading consistently outperforms buy-and-hold.
📊 Buy-and-Hold vs. Growth Trading: The Hard Truth
Most investors believe “stay invested no matter what” is the best strategy. But data proves that growth traders who follow market cycles outperform buy-and-hold investors.
📌 Example: What Happens When You Avoid Market Downturns?
Strategy | 1970–2023 Avg. Annual Return | Drawdowns Avoided? | Active Stock Selection? |
|---|---|---|---|
Buy & Hold (S&P 500) | 10.4% | ❌ No | ❌ No |
Buy & Hold (NASDAQ 100) | 12.7% | ❌ No | ❌ No |
CAN SLIM® (O’Neil’s Growth Trading Strategy) | 22.4% | ✅ Yes | ✅ Yes |
Turtle Trading (Trend Following) | 18.1% | ✅ Yes | ✅ Yes |
Mark Minervini’s SEPA Strategy | 30%+ | ✅ Yes | ✅ Yes |
💡 Lesson? If you simply buy and hold, you’ll experience every bear market. But if you focus on strong stocks in strong markets and exit in downturns, you can double or triple your returns.
📈 Why Growth Trading Outperforms Buy-and-Hold
📌 Three Reasons Why Active Growth Investing Wins:
✅ 1. Avoiding Bear Markets Protects Your Capital
In 2000, 2008, and 2022, the market crashed 50% or more.
Growth traders who sold early and waited for a follow-through day to re-enter avoided massive losses.
📖 Example:
Investors who stayed in the market during 2008 lost 50% of their money.
Those who moved to cash and re-entered after a follow-through day recovered in half the time.
✅ 2. Focusing on Strong Stocks Instead of Holding Everything
The S&P 500 is full of average stocks—but great traders focus on the top 5% of stocks that outperform the market.
Buying the best stocks during bull markets accelerates growth faster than holding index funds.
📖 Example:
In 2010, the S&P 500 returned 12%.
But Netflix (NFLX) was up 220% and Apple (AAPL) was up 150%.
✅ 3. You Make More by Sitting Out the Downtrends
The market moves in cycles—knowing when to sit in cash is just as important as knowing when to trade.
If you only participate in bull markets, you avoid large drawdowns and compound faster.
📖 Jesse Livermore’s Warning:
“The market never moves in a straight line. The best speculators don’t just buy and hold—they buy when the trend is up and step aside when the trend is down.”
📖 Example of a Costly Mistake:
Buy-and-hold investors in the dot-com bubble watched their portfolios drop 80% from 2000 to 2002.
Growth traders exited at the first signs of a major market top and waited for the next cycle to re-enter.
📉 The #1 Mistake Buy-and-Hold Investors Make: Staying in a Bear Market
🚨 Buy-and-hold investors experience the full impact of every crash:
❌ Dot-Com Bubble (2000-2002): NASDAQ dropped 78%.
❌ Financial Crisis (2008): S&P 500 lost over 50%.
❌ 2022 Bear Market: S&P 500 fell 30%, NASDAQ fell 38%.
📖 Jesse Livermore’s Take on Market Crashes:
“The stock market is never obvious. It is designed to fool most of the people, most of the time.”
💡 Growth traders recognize market tops and exit before the major crashes.
📌 Trader’s Checklist: How to Trade Growth Stocks Smarter
✅ 1. Avoid Market Downturns
Exit when you see 5+ distribution days in a short time frame.
Re-enter after a confirmed follow-through day.
✅ 2. Only Buy the Best Stocks
Focus on stocks with strong earnings growth and high relative strength (RS > 80).
✅ 3. Don’t Be Afraid to Sit in Cash
If market conditions are weak, hold cash and wait for better setups.
✅ 4. Follow Market Trends, Not Opinions
If the S&P 500 and NASDAQ are in a bear market, wait before buying.
✅ 5. Use a Systematic Approach Like CAN SLIM or Minervini’s SEPA
Growth traders follow rules-based systems to avoid emotional trading.
📖 Example:
Traders who used the CAN SLIM method in 2008 avoided massive losses and were ready for the bull market in 2009.
💡 Lesson? If you trade smart, you don’t have to suffer through every bear market.
🎯 Action Step: Think Like a Growth Trader
✅ Go to Yahoo Finance or Google Finance.
✅ Look up the NASDAQ Composite Index (IXIC) and compare:
The 2000 crash (Dot-Com Bubble).
The 2008 Financial Crisis.
The 2020 Bull Market.
👉 Reply to this email: When do you think the next big bull market will start?
🔥 I’ll feature the best answers in an upcoming newsletter!
⏭️ Coming Up Next:
📌 Wednesday’s Lesson: “The Market Always Wins – Are You Paying Attention?”
You’ll learn why even the best stocks fail when the market trend is against them—and how to stay on the right side of the market.
🚀 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
TURN $10,000 INTO $23,608? THIS 3-MONTH STOCK JOURNEY IS WILD
Imagine this: you invest $10,000 in January, pick the top-performing S&P 500 stocks each month, and by March, you’re sitting on $23,608. Yes, it actually happened. From Constellation Energy in January to Huntington Ingalls Industries in March, these gains were nothing short of jaw-dropping. While this strategy isn’t exactly realistic for most of us, it’s a powerful reminder that even in tough markets, there are HUGE opportunities for those ready to play smart.
👉 Ready to see how the math works? Read the full breakdown here.
ALBERTSONS HITS THE SWEET SPOT WITH A BIG RS RATING JUMP
Albertsons just cleared a major milestone—jumping to an 84 Relative Strength (RS) Rating. For context, the BEST-performing stocks in history usually have an RS of 80+ before taking off. This grocery giant is also trading in a buy zone after breaking out from a chart pattern pros LOVE: the cup-with-handle. With the stock market all over the place, Albertsons might be one to watch closely.
👉 Is it time to fill your cart? Take a closer look here.
NEXT-GEN SOLAR STOCK NEXTRACKER IS ON THE RISE (BUT NOT THERE YET)
Nextracker just got a boost in its RS Rating, climbing to 72. While it’s still shy of the golden 80 threshold, the solar energy leader is showing signs of strength. With the top rank in the competitive solar industry group, can it hit its breakout point? The solar revolution is heating up, and Nextracker might just be a player to watch as it consolidates for its next move.
👉 Could this be solar’s next big breakout? Find out more here.
Stock Spotlight
Spotlight Stock: Huntington Ingalls Industries (HII)
Huntington Ingalls Industries (HII) made waves in March, standing out as the best-performing stock in the S&P 500. The company, which specializes in building and maintaining U.S. military ships, surged 16.9% during the month. This performance comes amid growing global demand for military equipment, attributed to geopolitical tensions and shifting alliances under President Trump’s policies.
Despite its impressive March gain, analysts caution that much of the stock's rise is speculative. HII’s earnings per share are projected to remain flat for 2025, with potential growth (+18%) anticipated in 2026. It also holds a low RS Rating of 25, meaning its relative performance lags behind many other stocks. For now, HII trades below its 200-day moving average—making it a "watch" rather than a "buy."
Trading Knowledge Nugget: HII’s story reminds us of the importance of doing your homework before jumping into hot stocks. A sudden surge doesn’t always mean a stock is ready for long-term growth. Look for strong fundamentals and technicals like a high RS Rating (>80) to confirm strength before investing.
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.