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:
✅ The key technical and behavioral signs that signal a potential top.
✅ How to protect profits by recognizing distribution and weakness early.
✅ The mental discipline elite traders use to step aside before the crowd reacts.
Most traders only realize the market is topping… after they’ve given back all their gains.
But the best traders don’t wait until their stocks crash. They’re out before the headlines, because they’re watching the right signals.
📖 William O’Neil warned:
“Most of your portfolio losses will occur not because of poor stock selection—but because you stayed fully invested in a falling market.”
Spotting reversal signals early is one of the most profitable defensive skills in trading. Let’s break down the most reliable ones.
⚠️ 5 Key Signals That Often Precede Major Market Tops
✅ 1. A Spike in Distribution Days
A distribution day = major index down >0.2% on higher volume than the prior day.
3–5 distribution days in 2 weeks? Institutions are exiting quietly.
These add up—and they kill uptrends silently before a crash begins.
📖 O’Neil taught:
“The market doesn’t ring a bell at the top. But it leaves footprints—distribution is one of them.”
✅ 2. Failure of Leading Stocks
Watch your strongest names. If they break their 50-day or 10-week on volume, the tide is turning.
When leaders break before the indexes, trouble is brewing.
A handful of failing leaders > dozens of laggards.
✅ 3. Climax Runs and Parabolic Moves
Huge volume up days with vertical price action (e.g., 20% in a week)? That’s not strength—it’s froth.
Look for climax tops and exhaustion gaps.
📖 Jesse Livermore warned:
“Markets are driven by emotions. A rush to the top is almost always followed by a sharp correction.”
✅ 4. Major Indexes Break Support
If the NASDAQ and S&P 500 break their 50-day or 200-day, and stay below them, the correction is on.
Don't fight the tide—step aside and preserve capital.
✅ 5. Weak Breakouts & Broad Divergence
When breakouts stop working—no follow-through, low volume, or quick failures—money is rotating or exiting.
Especially dangerous when the indexes rise, but fewer stocks participate.
📉 Mistakes Traders Make Before a Crash
❌ Holding top-performers while they break major support
❌ Ignoring failed breakouts, assuming “it’ll bounce”
❌ Doubling down when leaders break down
❌ Thinking market crashes “come with a warning”
📖 Mark Minervini shared:
“The market doesn’t have to give you a reason to drop 20%. All it needs is for traders to be unprepared.”
📌 Trader’s Checklist: Is the Market Topping?
✅ Are there 3+ distribution days on the NASDAQ or S&P 500 in the last 2 weeks?
✅ Have 2–3 recent leaders broken their 50-day or 10-week with volume?
✅ Are breakouts failing or showing weak volume follow-through?
✅ Have major indexes lost their 50-day or 200-day moving averages?
✅ Are sentiment and price action becoming extreme or euphoric?
🎯 Action Step: Protect Your Gains
✅ Log into your charting platform and do this now:
Count the distribution days on the S&P 500 and NASDAQ.
Identify 3 recent leaders and evaluate: Are they breaking down? Holding up?
Look at breakouts from the past 2 weeks—how many held above the pivot?
✅ Decide:
If you’re seeing these red flags, it’s time to raise cash or tighten stops.
Remember, defensive action is offensive preparation.
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
DOW ROARS BACK 1,000 POINTS 🚀 THANKS TO TRUMP TALK, TECH TAKES OFF
What a wild day on Wall Street!
The Dow Jones shot up nearly 1,000 points Wednesday morning — one of the biggest moves of the year — after President Trump cooled his tone on China and the Fed. That sent Apple, Nvidia, and Tesla into rally mode, while Amazon and Microsoft also joined the charge. It wasn’t just a bounce, it looked like a full-on rocket launch 🚀 across major indexes. Nasdaq surged 3.7%!
Some of the hottest stocks on my radar right now? McDonald’s, Netflix, Spotify, and MercadoLibre — all sitting near key buy points. But remember: the market’s still shaky underneath. The smart move? Keep your watchlist tight, your exposure light, and your eyes glued to the price action.
👉 Get the full breakdown and stock watchlist right here: Read the full IBD recap
Stock Spotlight
📈 Feature Stock of the Week: Guidewire Software (GWRE)
Helping Insurers Go Digital – And You Stay Informed
This week’s standout stock is Guidewire Software (NYSE: GWRE) – a tech company quietly revolutionizing the insurance industry. If you’ve ever filed a claim or paid a premium online, chances are high a Guidewire platform made it seamless behind the scenes.
🧠 What You Need to Know
What they do: Guidewire provides cloud-based and on-premise software for property and casualty (P&C) insurance companies—think managing policies, processing claims, and billing.
Why it matters: Over 300 insurers worldwide, including some of the biggest names in the industry, use Guidewire’s InsuranceSuite and InsuranceNow platforms to digitize operations and cut costs.
Smart edge: Their products like HazardHub use predictive analytics to help insurers better assess risk—a major game-changer in underwriting and pricing.
Tailwinds: As the insurance industry accelerates digital transformation, especially post-COVID, demand for scalable, cloud-native platforms like Guidewire’s continues to grow.
Growth angle: Revenue is shifting toward a recurring subscription model, a strong signal for long-term investor stability.
🧪 Why It Improves Your Trading IQ
Guidewire is a great example of a "picks and shovels" tech stock—they don’t sell insurance, but they power the companies that do. Understanding this kind of B2B SaaS play helps you spot trends in tech that aren't always flashy but often highly profitable.
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.