Monday, May 13, 2024

The Simple Tool That Helped Set a World Record

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Liberty Through Wealth

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EDITOR'S NOTE

Chief Income Strategist Marc Lichtenfeld has done it again!

Incredibly, on Friday morning, Marc banked his EIGHTH triple-digit winner of 2024 in his research service Technical Pattern Profits: a 301% gain on Samsara (NYSE: IOT) in only 22 days.

Marc has a stunning track record of delivering life-changing gains to his readers - like Tim, who wrote Marc the following note after a triple-digit win in April: "Marc, thank you for your great advice over the years. I've been following you for some time. I sold Heico on 4/26 for an approximate 312% gain. Again, THANK YOU!!!"

Today, I've invited Marc to share a little bit about the system he uses to find money-doubling opportunities like these. Be sure to read his explanation below.

And if you'd like to learn about Marc's full methodology, check out his new video here.

- Nicole Labra, Senior Managing Editor

THE SHORTEST WAY TO A RICH LIFE

The Simple Tool That Helped Set a World Record

Marc Lichtenfeld, Chief Income Strategist, The Oxford Club

Marc Lichtenfeld

In 1996, I sat down at my computer with butterflies in my stomach for my first day on the job as a trading assistant. My job was to execute trades for several traders in the office.

At 6:30 a.m. (I was on the West Coast), the opening bell rang. I didn't need any coffee, as all the traders were suddenly shouting orders at me like "Buy Softee at three 'steenths! Buy it! NOW!" That meant they needed me to buy Microsoft for them at its current dollar price plus three-sixteenths, i.e., $45 3/16. (Stocks traded with fractions then, not decimals.)

As the weeks passed, I tried to make sense of the chaos around me. I watched the market closely, yet I had no idea how the traders were making their buy and sell decisions.

A few months later, I stumbled upon technical analysis, which is the study of stock charts. Some folks try to make it complicated, but chart patterns are simply a visual picture of buying and selling - greed and fear.

Several decades later... yada yada yada... I'm a Chartered Market Technician, or CMT, which means I've passed three rigorous exams, read dozens of books on technical analysis and looked at tens of thousands of charts. There are fewer than 5,000 CMTs in the world, so it's a distinction I'm quite proud of.

And after all those years of learning to use charts in my professional and personal trading, I've found that one chart pattern stands above the rest.

I call it...

The "World Record Pattern."

Now, I can't get into all the details of how I spot and trade the World Record Pattern. We'd be here all day.

But I think you'll still find this information extremely useful.

(If you'd like to learn about the World Record Pattern in depth, check out my new tutorial here.)

The first thing I want to mention is that we don't buy the stock the moment the pattern begins to form. And that's OK. The World Record Pattern is a continuation pattern, meaning it typically continues the previous move higher.

So, to ensure the best results, we wait until the pattern has fully formed. If you buy before that, you're taking on more risk than is necessary.

Also, keep in mind that chart patterns can form for a number of reasons. When you spot a pattern, it's important to determine whether it's real or fool's gold.

Earnings reports are a common catalyst for World Record Patterns, so if you notice the pattern in a stock's chart after the company reports earnings, that's a good sign.

Now let's get into some real-life examples.

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I use the World Record Pattern frequently to pinpoint the best and highest-upside opportunities so I can share them with my readers. In fact, in February, I used it to capture two 140%-plus winners in my trading service Technical Pattern Profits.

On December 8, I noticed that DoorDash (Nasdaq: DASH) was breaking out of two World Record Patterns.

DoorDash

Click to learn more

I recommended the stock at $99.83 and the February $100 calls at $7.66.

You can see what happened next...

DoorDash

Click to learn more

We sold the stock at $118.65 for a solid 19% gain in two months, and we sold the calls for $19.40, which came out to a whopping 153% gain!

That kind of result is amazing, no doubt... but that 153% return barely cracked my top 10 biggest winners in Technical Pattern Profits.

That shows you just how powerful tracking chart patterns can be.

And what's especially great about the World Record Pattern is that you often don't even have to wait that long for a big move.

On January 23, DraftKings (Nasdaq: DKNG) was breaking out of a World Record Pattern.

DraftKings

Click to learn more

And this time, the move was even quicker.

DraftKings

Click to learn more

Just two weeks after we opened the position, on February 9 - the same day we sold DoorDash - we grabbed a 15% gain on DraftKings stock and a 140% gain on the March $40 calls.

The next morning, one of my readers, Tad, emailed me and said, "I bought the DraftKings $40 calls for $2.51 and sold them for $5.40. Thank you for the profits. We have seven grandchildren and we help our families out as much as possible."

It's easy to see why the World Record Pattern is one of my favorite chart patterns to trade.

Independent studies have also shown that it's one of the most reliable.

After examining over 38,000 chart formations in his famous Encyclopedia of Chart Patterns, Tom Bulkowski concluded that the World Record Pattern is the "best-performing chart pattern in both bull and bear markets."

As part of his research for the Encyclopedia, Bulkowski studied 307 separate instances of the World Record Pattern appearing in a stock's chart.

Incredibly, every single one - yes, all 307 - led to gains of at least 5%.

He was so struck by his findings that he began the World Record Pattern section of the Encyclopedia by writing, "I am in love."

You always wish you'd known then what you know now. Had I understood the power of chart patterns earlier, I could have been much more effective as an assistant on the trading desk.

But I'm grateful that I found technical analysis and the study of these patterns. Understanding how they work helps you reduce risk and increase profits. I can't imagine trading without them.

Good investing,

Marc

P.S. Investor's Business Daily says that being able to identify the World Record Pattern could "set your portfolio up for the ride of a lifetime."

To learn how to harness the full power of the World Record Pattern, I recommend watching my quick instructional video here.

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