3 Simple Trading Rules Could Make You A Millionaire by 2030

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1:00First rule is the 40-30-30 rule. 40% of the stocks move is due to the market. When the market is pushing up, that makes your life so much easier. 30% of a stocks move is due to the sector. When the sector is working for you, it makes your life so much easier. And only the last 30%. That's what is left for the stock itself. Now, I'm starting with this rule because I like to start with the top down approach. Once you understand that the market works this way, you will make your life so much simpler. So we can look at Nike stock as an example, because right now is a great example as to why you want to be using the 40-30-30 rule in your favor. Maybe you think that it's the best time ever to buy the stock that's been beaten up all the way down. I mean, let's just zoom out real quick on Nike. Nike is a garbage stock. Now, that may hurt some of your feelings if you've decided to buy it all the way down. But if you bought all the way down, you're also feeling, dang, Nike is a garbage stock right here. If only I had known about the 40-30-30 rule in my favor.

2:01Now, let's say that you were taking a position in Nike or in any stock. This will apply on any stock at any time. If you're applying this rule, you would start with the market. Okay, the 40-30-30 rule starts with the market. Is the market trending up or is it trending down? Well, one thing that we've been fighting with for a minute is the fact that the market. I mean, technically it is trending up because it has a 10 over 20 price over 50. We'll talk more about that rule a little bit. It's technically trending up, but it's been going sideways. That's why we look at more than just the trend. So next thing that we look at in the 40-30-30 rule is the momentum of the market. So if we jump over into the momentum of the market, the spy, the SPY, giving two seconds to load that in, SPY, what you're going to see is a bearish momentum alert has started on spy. So while the trend may be up just slightly though, just ever so baby slightly, we have a bearish momentum alert.

3:01And we've been chopping back and forth in this area for a while. And if you've been trying to go long and remember this will work at any time, whenever you see a choppy market like this, it's really, really, really frustrating. But if you're getting a bearish momentum alert on the market, it's telling you, it's not the best time we buying stocks at all. And then lastly, market breadth. You can look at market breadth in a couple different ways. I like to look at it here in Outlier and you'll notice market breadth has been absolutely killed. Absolutely killed. It's done at 13% of the 9,000 stocks in ETFs that we cover. 13% have bullish momentum. The other, what is that 87% all have bearish momentum. And then you can look at it in a different way as well. You can use mmfi and mmth. Those are two indicators. And that's not the one I wanted to see. Those are two tickers that you can put on your charts at any time. And just look at this, right? It has been absolutely killed. It's been absolutely killed.

4:02Now, we're going to talk more about the 10, 20, 50 rule in just a couple of minutes. But the mmfi is the percent of stocks above their own 50 day moving average, which means they're longer term moving average. Is it moving up? If it's above the moving average, that means prices moving up. Now, what I want to show you is a couple different stocks. Okay. First, let's go to Nike. Let's go to Nike. Is it under its 50 moving average? Nope. And just like a ton of other stocks, it's getting beat up because it's being pushed down. So that's the 40 part of the 40 30 30. Let's go to the next part, the 30% do the sector. When we look at the sector, we want to see that it's not the one stock alone moving, but it's moving with all of its friends, all of its cohorts is everybody in this group pushing up together. And if so, that means there's a lot of buying interest in this group that's going to help push your stock even higher. If you find one stock and the whole group is getting beat down and your one stock happens to be working, that one stock has got a lot of weight pulling against it.

5:06So what you want to do is you want to find stocks that are all moving together, like think of Nvidia and AMD and SMCI and micron, right? When the semiconductor stocks were, were, were ripping, they were all ripping together. So you could about any one of them and you could have been doing great. So we're looking for the fear and greed, which is the average fear and greed score. In fact, let's go back to Nike, the average fear and greed score of all the stocks in the sector to be pushing up. Okay, this all works together. None of these work on their own. That's why we call it the outlier nine, right? Not the outlier one in three quarters or the seven and three or seven. What is it? Seven or three quarters. Yeah, yeah. Not the outlier Harry Potter's train platform. So looking at this, right? What we see is the average fear and greed score of everybody in the discretionary sectors falling off a cliff. This is measuring this chart right here and look at that. Look at how many stocks are showing to be fearful. Look at how many stocks are showing to be greedy. There is a reason why Nike is getting destroyed and it's not just Nike on its own.

6:11It's the whole sector is getting cooked. Right? Next, sector breath. sector breath actually is pushing up slightly pushing up slightly. It's got a couple more bullish momentum signals. Then the rest of the market does now does that mean it's going to rip higher? No, it's still super depressed. We're still looking at 15%. Like what? There's a floor at zero. Okay. I see tons of supported zero. Anything above zero. I mean, if you cross slightly under that point at 15%. Yeah, it's going to show a bullish breath. Reading, but that doesn't mean that it's great. It doesn't mean that's great at all. So that's 70% of the move of your stock has nothing to do with your stock. The last 30% does the trend. The trend. The trend is actually going to lead us into the next rule, which is the 10, 20, 50 rule. Now, what do I mean by this? All stocks in history of time. Anytime they had a big old giant move anytime. In fact, we'll use Nike. We will continue to use Nike.

7:13Remember, this works on any stock at any time on any time frame. Always because it's just math and I don't need a YouTube disclaimer about that. When the 10 EMA goes over the 20 EMA and price goes over the 50 EMA, every every 100%. Every big move ever started with that. So it is induitable. If you do not have the 10 over 20 price over 50, you are not in a bullish trend. If you buy stocks, when do you get paid in a bullish trend? So how about make your life so much simpler? With the 10 over the 20 price over the 50 on your charts and you can basically run with just that. Just that will keep you in big trends when they're working and out of big nasty scary trends when it stops working, right? It's really weird how these moving averages will show you direction every time. Will you show you duration and magnitude? Unfortunately, no. I don't know how far down this is going to go, but I know the direction and it's pointing straight toward the South pole. Now, why the 10 2050?

8:22You can use whatever, right? Use three different moving averages on three different time intervals each progressively getting longer. The 10 is two weeks of data. That's 10 periods, right? The 20 is four weeks of data. That's four 20 periods. The 50 is 10 weeks of data and that is 50 periods. That's the whole point of it getting three. Your short, intermediate and your long term all in agreement. That's what is next in the 40 30 30 rule. If we go back over to here, the trend of the stock and the trend of the market both utilize the same 10 2050. Next, that momentum alert, like I was thinking about when you see a bearish momentum alert, like it did on July 23rd and it just fell off a cliff after that point. You don't have to be involved. You can get out of the way. You can put your money in anything else in the world besides watching like a third of it evaporate over the span of a couple of months. I don't want that to happen you. I never want that to happen you. That's why you have to understand the data that you're looking at. You can get access to this at outlier.com for just 82 cents a day. Next, fear and greed. We have not just fear and greed on the sector, but also fear and greed on the individual stocks.

9:30So looking at Nike right here, you can see it was getting way more fearful for ages ages. We might have found a bottom on the fear though. Might have found a bottom. There's always a floor at zero, but we're down to 27 right now down to 27. When this is pushing up higher, that is an opportunity for you to start considering a stock, but you want to make sure that the all nine are working in your favor. So the fear and greed right there and then last say outlier blocks. It's so funny. It's so funny how these outlier blocks work because they show you where they are trapped buyers. Now you've got a little bit of room up to there. You've got you've got from around 35 up to around let's say 45 before the next overhead resistance point comes through when it comes back to this point. If it ever comes back to this point, look for sellers to sell out as fast as they possibly can. They will say, thank you very much. I will gladly take my money and get out of the way. Let's see if we can find a couple examples in the past on Nike. Yeah, let's do this one right here. So if we look in this area, right Nike came up to the $88 level created an order block because these people got got trapped almost that strapped.

10:41They got strapped and trapped all the way down. How far did it fall? Imagine that you took a stock and it felt 13%. You probably wouldn't be very happy about it, but the next time you got back to break even what would you do? You would sell it. That's exactly what happened. And the next time it came up to here, if there were enough buyers, which in this case, the buyers overwhelm the sellers, it can push higher. So the more times these order blocks are hit, the weaker they get, but totally random spot on the chart happened once again right here completely random around $104, $105. You can see that it came to the spot fell hugely came back to the spot fell big Lee came back up to here and let's say that there were a hundred buyers here. And then there were, oh, I missed this one right here. Yeah, a smaller baby one move right there 20 buyers sold right there 80 buyers sold right there. So there were no sellers left to sell at this point. So boom, rocket, a tire. So that's the 40 30 30 rule and the 10 20 50 rule the last rule you got to understand is the 50 80 rule the 50 80 rule says this when you see a stock and I'm going to I'm going to pull up a couple stocks you might recognize these one of them I believe is called a mic was it micron.

11:59Let me see this guy. I mean, it can't go down right let's look at micron in 2024 a 50 80 rule would say that oh wow 50% of the time a big moving stock like this will fall by 80% and 80% of time a big moving stock like this will fall by 50% now this happened a micron in 2024 now let's push forward that was just a one time flu Chris there's no possible way that that could happen again right. I don't know let's just let's just see what happens right I can see this this big move up here on micron and then down 41% take 60 and 40 hey it hit the 50 80 rule at average to 50% down 80% of the time now there's just a flu right that could never happen on an amazing stock like so by never could that happen on a hugely amazing tremendously important stock like so fights the future finance actually happen twice here in 20.

12:59In 2025 it felt 53% here so if I has fallen by college football is back so Hilton called me the superstition concierge to make your fan rituals a reality need a room to match your lucky number we got you want to make sure our team doesn't wash your lucky jersey. Oh that smells lucky. Hilton's unmatched hospitality can keep up with any superstition even a marching band wake up call it 5555 seconds hit it. When you need a team that will do whatever it takes on game day it matters where you stay Hilton for this day. When you need to build up your team to handle the growing chaos at work use indeed sponsor jobs it gives your job post the boost it needs to be seen and helps reach people with the right skills certifications and more. Spend less time searching and more time actually interviewing candidates who check all your boxes listeners of this show will get a $75 sponsor job credit and indeed dot com slash podcast that's indeed dot com slash podcast terms and conditions apply need a hiring hero this is a job for indeed sponsor jobs.

14:0854% no no no it would never happen to my favorite stock western digital no western digital it can't happen to that one. Let's do some let's do some mass around here let's see what happens. No there's no possible way the 50 80 rule can hit one of these stocks literally 50.48% is no here. It's not so weird so I want you to remember these three rules now I just quickly walked you through them so you definitely want to subscribe because we talk about this every single day the 40 30 30 rule when the market is 40% the sector is 30% and your stock is 30% 70% of the move of your company. So your favorite stock has nothing to do with your favorite stock. Now it's a crazy thought but it's the truth the 10 2050 every single big trend ever in history always 100% of the time starts with the 10 over 20 price over 50. Now sometimes they can pop up and pop right back down you might make a buck or lose a buck but you won't know the outcome until the end of the trade so that's why you have to watch this every single time it happens because the one you think it ain't going to do it is exactly the one where it's going to be.

15:17And then lastly the 50 80 rule 50% of the time these big high flying stocks are going to fall by 80% and 80% of the time it's going to fall by 50% and I'm sure that you can find several examples in fact I challenge you go find some examples and put them down in the put them down in the comments down below now I don't want you to miss out because we just did a big lesson about how I made $2 million in stock market talking about so far talking about so far click this video to watch more be sure you subscribe. Brussels clean up nicely at sweet green maple glazed roasted and edges perfectly caramelized sweet greens fall harvest is back on the menu and the season's most overlooked little green vegetable is dressed to be devoured you know what to do order on the sweet green app. Close your eyes exhale fill your body relax let go of whatever you're carrying today. Well I'm letting go of the worry that I wouldn't get my new contacts in time for this class I got them delivered free from 1800 contacts oh my gosh they're so fast and breathe.

16:22Oh sorry I almost couldn't breathe when I saw the discount they gave me on my first order. Oh sorry namaste visit 1 800 contacts calm today to save on your first order. 1 800 contacts we'll talk soon.