Dear Reader,
Tom Gentile here.
Yesterday, I promised to tell you a bit more about myself. So let’s start from the beginning…
Like many of you, I come from humble beginnings, growing up in a small steel-mining town just outside Pittsburgh.
After working for “the man” for up to 60 hours a week, I’d finally had enough – I decided to take control of my finances and my future and taught myself how to trade in my parents’ basement.
There was a lot of trial & error at first, but ultimately, I began to find key PATTERNS in trading (more on that in a second) and built that into a successful financial tech company that taught over 300,000 students about the ins and outs of options trading.
I was fortunate enough to sell that company to the world’s largest brokerage firm for $20 million…
I could have retired. But that’s not who I am.
Instead of resting on my laurels, I put together a team of data analysts, programmers, and actual rocket scientists from NASA and Raytheon to build sophisticated software designed to screen for these key patterns.
Over the next few years, I created dozens of tools that spot the most bankable patterns in the financial markets.
Then, I began sharing them with a small, focused group of traders… before eventually reaching an audience of over one million folks with my market commentary, insights, profitable trade recommendations, and of course, trading education.
Because no matter how high my net worth, my mission in life is to EDUCATE the masses on the nuances of stock, options, and cryptocurrency trading.
Whether that’s at my in-person seminars… live webinars… or right here in your email inbox, my call is to teach you the patterns that I see and trade every single day.
The same patterns I’ve used to rake in a fortune from the financial markets.
But I want to make sure we’re clear on one thing: you might have heard the term “pattern trading” before.
You might have even done some pattern trading in the past.
But what I do is likely very different from what you might be used to – and a whole lot more profitable.
So today, I want to tell you a little bit more about what I do…
What I Mean When I Say “Pattern Trading”
When most folks hear that I’m a pattern trader, they usually think of chart patterns – the ones with goofy names that remind you of real-world objects.
Like the “cup and handle,” which usually signals a continuation of a bullish uptrend…
Or the “head and shoulders.” Three sharp peaks, with the middle peak usually higher than the preceding and subsequent peaks. This pattern can signal a bearish downtrend…
Or the “flag.” Shaped like a sloping rectangle, a flag can signal a reversal of the current trend when and if the stock breaks out in the opposite direction of the trendlines…
Now, I don’t mean to sound so dismissive. These kinds of patterns aren’t useless. They can even help you predict how a given stock may behave at a given point in time.
Emphasis on the word “help.”
Like any indicator, you can’t just trade these patterns whenever you see them. They function best as an additional tool to confirm a potentially profitable setup.
But here’s the thing…
I’m a pattern trader because I believe it gives me an edge in the markets.
These kinds of chart patterns are observed by millions of traders around the world every single day. You don’t even need Bloomberg terminal access or expensive charting software to see them.
Anyone can go to Yahoo!Finance, pull up a stock chart, spot an “ascending triangle” or a “rounding bottom,” and make their move.
That’s not what I’d call an edge.
So I want to be clear: when I talk about being a pattern trader, I’m talking about trading patterns that no one else can see.
Three Patterns I Track Every Day
Over the last 20 years, I’ve built software from the ground up to uncover invisible patterns that occur every day the markets are open.
These are proprietary patterns that only I can see…
Because I have dozens of custom-built scans analyzing billions of data points on thousands of stocks.
That’s my edge.
And today, I want to introduce you to some of the patterns, tools, and techniques I use to earn every profitable trade I make.
The Money Calendar
The Money Calendar is one of the very first tools I developed to spot invisible, proprietary patterns in the stock market.
When I was learning how to trade, I started to notice that a handful of stocks had their own seasonal patterns.
I’m not talking about overall seasonal patterns that everyone knows about, like “Sell in May and Go Away…”
No, I’m talking about patterns that occur in the best 370 stocks in the market… every day the markets are open…
And they’re completely invisible.
We don’t know WHY these patterns occur. We just know that they do – repeating year after year at a 90% clip – and that they can be incredibly profitable.
The Money Calendar uses 10 years of data to spot specific dates (usually 35 days or less) that certain stocks move up or down.
What I’m looking for is either a bullish or bearish pattern that repeats over the same trading days 90% of the time (or nine out of the last 10 years).
So for example…
Adobe Inc. (ADBE), the software giant considered a leader in Artificial Intelligence, recently popped up on my Money Calendar…
Because for the last 10 years ADBE stock has gone up an average of $25.96 every year between May 6 and June 6, as you can see in the chart below.
So 100% of the time… ADBE stock has gone up… every single year… between May 6 and June 6… for an entire decade.
Do you think it’s going to happen again this year?
According to Money Calendar, it’s very likely.
The best part? My Money Calendar delivers dozens, even HUNDREDS of these patterns every single day the markets are open.
Then I whittle it down to find the very best trades every week.
For my Stock Cycles Trader subscribers, that’s the strongest stock pattern…
And for my Timed Trader Pro subscribers, the absolute best option trade that can deliver 100% gains in just 30 days.
Darknet
Darknet is a contrarian indicator that identifies three invisible proprietary channels that, when properly aligned, indicate an imminent reversal of the current trend.
Here’s how it works…
Darknet’s first job is to find stocks where trading volume has artificially suppressed a stock’s price.
It accomplishes this by tracking three proprietary stock channels that incorporate multiple parameters, including time, regression slopes, and price fluctuations.
Unless you have a degree in statistical analysis, explaining all of this in detail would put you to sleep.
But what you need to know is that Darknet looks for stocks in which trading volume has artificially depressed the stock’s price.
Stocks drifting lower on low volume are, to put it simply, behaving abnormally. I’m not talking about pullbacks, which tend to happen rather quickly, on volume, with conviction, but a slow slide to the downside, without the volume to give the move real conviction.
Eventually, the price drifts so low that buyers step in and the price explodes to the upside.
Now, preceding that explosive move to the upside is our first signal – the alignment of our three proprietary channels.
It looks like this:
As you can see, all three channels are perfectly aligned.
But this isn’t our buy signal just yet.
We get a true Darknet Buy signal ONLY when we see the short-term channel break slightly out of alignment, signaling that explosive upside move…
You’ll be hearing more about Darknet in the coming weeks and months – especially how it helps me find the best options to sell in my Cash Flow Trader research service.
I’ve also applied my Darknet technology to the cryptocurrency, giving me reliable contrarian signals on Bitcoin (BTC) and Ethereum (ETH) published in my Crypto Trend Trader research service.
Currency Waves
My Currency Wave System is simple, but effective: it tracks the interplay of short- and long-term moving averages in hundreds of smaller alt coins, which I sometimes call “microcurrencies.”
Microcurrencies are small coins, usually on the Ethereum block chain. Some are designed to perform a specific task, others are used by specific industries, some are designed to help deploy “smart” contracts, others assist with frictionless payment.
The one thing they all have in common? Volatility. These smaller coins are incredibly volatile, seeing massive price swings of hundreds or even thousands of percent in a blink.
And if you know when those huge swings are going to happen, these coins can be incredibly profitable.
My currency wave system is designed to help me get into position ahead of these massive moves. When those long- and short-term moving averages interact in a bullish manner, it tells me a powerful shift in momentum is coming – and it’s time to buy.
Take a look at a chart from a recent buy signal in The Graph (GRT).
While this chart doesn’t show you the Currency Waves, the chart is marked with a B where and when we got a currency wave buy signal…
The last two times we saw this setup, it led to gains of 120% and 200% in a matter of weeks.
That’s how powerful this is.
My Currency Wave trades are the bread and butter of my research service Crypto Trend Trader, where I monitor hundreds of alt coins and deliver the best Currency Wave trade every single week.
That’s all for today…
And I know it’s a lot to take in – especially if you’ve never traded this way before.
But don’t worry. I’ll be back tomorrow with the very first installment of my “Cash Course,” my weekly educational video series designed to get you up to speed with how I trade and see the markets.
Until then…
Tom Gentile
America’s Pattern Trader