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Trader with profitability of 2700% for the last 3 years. shares the criteria he uses for stock selection.

Eduardo Briceno is a trader with a return of 2700% for the last 3 years, who shares the criteria he uses when selecting stocks. Briceno also shares how he used trading to survive after fleeing Venezuela and how the hardships helped him become a better trader.

He loses some of his savings trying to trade until he changes his mindset and focuses on technical criteria.

Taking his attention away from the desire to make money and instead focusing on the technical aspects of trading. Ignoring the very reason he was trading allowed him to detach himself from the emotional spiral of desperate need for a positive outcome. Instead, he can focus on honing his skills.

The beginning:
In 2016 Eduardo Briceno decided to pursue his dream and went back to school to get his MBA. He also began taking courses in trading and investing. After learning about different types of markets such as forex, futures and options, he decided he wanted to become a trader. By March 2016, Briceno enrolled in a program and began doing small transactions from his laptop.

In 2017 comes the big test for him, as together with his pregnant wife, they emigrate to the USA. When he arrived in the US, he had no means of earning an income, so he resorted to stock trading.

According to Briceno, it was the worst decision he ever made. The combination of being a beginner and trading from a position of obligation and desperation is a recipe for disaster.

“I wasn’t allowed to lose money. So when something went against me, I was like, well, no way. I can’t afford to lose this money. So they have to come back,” Briceno said of his inability to get out of a deal and accept a loss, which is a key element of trading. Losses are part of trading, with him losing about $8,000 in the beginning.

“If you trade to survive, it will somehow lead to disaster. And that’s what I did. I was trying to trade to survive, I was trying to trade to pay the bills. And in the end I failed by resetting two accounts,” says Briceno.

It wasn’t until he made a change in his thinking that he was able to make a career in stock trading. Specifically, shifting his attention away from the desire to make money and focusing instead on the technical aspects of trading. Ignoring the very reason he was doing something felt counterintuitive, but it allowed him to break free from the emotional spiral of desperate need for a positive outcome. Instead, he can focus on honing his skills.

Briceno says he started with $28,000 and turned it into over $800,000. Based on his starting amount and taking into account total withdrawals equal to $788,551, he has earned 2716.3% since October 2020. until February 2023

Briceno is aware that his approach requires a high risk tolerance and a strong character, and according to him, the difficulties in his life have built his ability to take risks. He sees challenges as phases or stages of life… and trading. “I was in some dark times, but I was really grateful,” Briceno said.

What are the criteria for successful trading by Eduardo Briceno
Reducing uncertainty

Trading is a game of probability. To increase your chances of winning, you should only act when you have an advantage. Otherwise, the market will always have an advantage over you.

Briceno seeks his advantage by sticking to familiar companies and benchmarks because they increase his chances of predicting developments. It trades in small-cap momentum stocks because they have fewer fundamentals that could influence price action. He finds it harder to trade larger companies because they are more heavily influenced by valuations, market cycles and institutional investors—variables with which he is less familiar.

It uses the Market Screener by filtering three main criteria: small caps /under $2 billion market capitalization/; increased trading volume, meaning a stock has suddenly attracted attention; and a minimum price increase of 20% during after-hours and pre-market trading, which is a signal of momentum.

Stocks that are in hot sectors are most preferred because they can go up with high volatility and high liquidity. For example, during the worst of the pandemic, any company that provided a product or service related to the recovery effort increased favorably. This was also true of oil and gas reserves when Russia first invaded Ukraine in February 2022.

Stocks that have a strong catalytic event are also preferred. For example, receiving a government contract or FDA approval of a product are positive catalysts.

He avoids stocks with a free float below 1 million because they can become too volatile while having little liquidity. If liquidity is low, then it is more difficult to enter and exit a trade.

He prefers stocks that do not have too much institutional ownership. This is usually not a problem for large-cap stocks, but it can be for smaller ones. Ownership above 50% reduces its favorability as it gives institutions more control over the share price.

Companies that have had recent initial public offerings are not as favorable unless IPOs are trending among traders. For example, in July 2022. AMTD Digital Inc. (HKD) went public at around $16, and by August 5 was trading at $721. This surge caught the attention of many traders who were looking for the next hot debut. He is trading the IPO this month.

Issuance of new shares is perhaps the most important foundation he pays attention to. When a company raises capital by selling more stock, it reduces the shareholders’ percentage of ownership in the company. If a company has poor cash flow, it increases the likelihood that new shares will be issued soon. In this case, he avoids taking long positions, but may consider shorting the stock.

He looks at the stock’s historical charts to determine where the big traders’ entries are, using volumes as well.

Example of a successful deal: One stock he was trading that met his criteria was Bakkt Holdings Inc., a crypto trading and payments company. On October 25, 2021 had a big catalyst when it announced a partnership with Mastercard, sending its price up 50% in premarket trading. It was also in the hot sector of blockchain.

Despite his successes, he doesn’t always get it right. Therefore, he never risks more than 2% of his entire account value on a given position.
A stock may meet some of his criteria but still fail. For example, on September 14, 2022. Aditxt Inc. appeared on his scanner. It was up 60% in pre-market trading, and had historically high volume and lack of technical resistance. However, he missed two key details. There was no news catalyst and there was potential dilution /issue of shares/. He felt confident in the stock and broke his rule of only risking 2%. The result was a loss of 15% of his total bill, or about $10,000.

In summary:
Briceno admits that the majority of marketers fail, but the same is true of entrepreneurs, and persistence is the key to success. Ultimately, everyone’s strategy will be different because it’s based on your personality. Trading is an art. You can take ideas from other traders and add them to your own process, but it’s very difficult to try and copy a strategy because you don’t have the same risk tolerance, years of experience, and money.


 Head Dealer Alexander Alexandrov

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