There are thousands of stocks, hundreds of ETFs, and an endless amount of news, opinions, analyst targets, economic data and social media noise telling you what you’re supposed to care about.
Most of it doesn’t matter.
The Trading Initiative is focused on trying to answer a much smaller set of questions: Where is capital going? Which areas of the market are benefiting from it? Which securities are acting like leaders? Where can we enter with defined risk and asymmetric upside?
And maybe most importantly: Could this be the beginning of something much bigger?
Because we’re not trying to dink and dunk our way through the market. We’re looking for the handful of trades each year that can actually move a portfolio.
So far in 2026, we’ve found them in XOM and INTC. In 2025, it was SLV, MU and CRWV. Before that, GLD etc.
They were different trades in different markets, but the objective was the same: get positioned early in a major trend, control the downside while the trade proves itself, and then stay with the winner long enough for it to matter.
Everything we do at TTI comes back to that process.
These are the 12 rules behind it.
Rule 1: We follow the money.
Markets move because capital moves.
Prices don’t go up because a company has a good story. They go up because demand exceeds supply. When large amounts of money start moving into an asset class, sector, industry or individual security, it leaves evidence behind in price, relative strength, momentum, volume, breadth and leadership.
That’s why capital flows and liquidity are at the center of what we do.
We’re much less interested in asking, “What looks cheap?” than we are in asking, “Where is capital already proving that it wants to be?”
Price follows capital.
Rule 2: Start at the top with the Market Blueprint.
Before we start looking for individual stocks, we want to understand the environment they’re trading in.
Our Market Blueprint process is top-down:
Market → Sector → Industry → Stock.
A great stock can struggle when its sector is under distribution. An average setup can become a monster when huge amounts of capital are pouring into its industry.
So we start by asking what the market is rewarding right now. We look at the broad market, then the sectors, then the industries inside those sectors, and finally the individual securities receiving the strongest sponsorship.
We’re not trying to predict every move in the S&P 500. We’re trying to understand the direction of the current.
By the time we get down to the individual stock, the market has already done a lot of the filtering for us.
Rule 3: Attack the market from the bottom up too.
Top-down analysis tells us where we should be looking. Our Hit List process is what finds the best stocks to trade for huge wins in those areas.
We’re scanning the market for securities showing the characteristics we care about most: strong trends, exceptional relative strength, persistent momentum, constructive price action and clearly defined risk.
Sometimes our Market Blueprint framework tells us capital is moving into a particular area and we need to find the best vehicle.
Other times an individual stock starts acting unusually well before the larger story becomes obvious.
When both approaches lead us to the same place, that’s where things can get especially interesting.
Either way, price earns our attention first. The story comes second.
Rule 4: Every trading vehicle must pass the Three Golden Rules.
We can look at dozens of indicators, but three things matter more to us than everything else:
Trend. Relative strength. Momentum.
Trend tells us whether price is moving in the direction we want to trade.
Relative strength tells us whether the stock is outperforming the market, its sector, its industry and the other opportunities competing for our capital.
Momentum tells us whether there is enough force behind the move for it to continue.
We want leaders. Not former leaders. Not laggards that look cheap. Not stocks we hope might become leaders someday. The leaders.
Fundamentals, catalysts, valuation and sentiment can all matter. But if a trading vehicle fails these three tests, it usually doesn’t belong in our portfolio.
Rule 5: Strength is information.
People naturally like bargains. If something was $100 and now costs $60, it feels cheaper.
Markets don’t necessarily work that way.
A stock falling 40% isn’t automatically 40% more attractive. Sometimes the decline is the information. A stock making new highs isn’t automatically too expensive either. Sometimes the new high is the information.
Large institutions can’t always build meaningful positions in a day. They accumulate over weeks or months, and that repeated demand can create persistent trends.
Those are exactly the trends we’re trying to find.
The biggest winners rarely feel comfortable early. They’ve already moved. They look expensive. Someone will tell you that you missed them.
And then sometimes they double or triple again.
Our job isn’t to decide that something has gone up “too much.” It’s to determine whether the behavior that made it a leader is still intact.
Rule 6: We don’t buy ideas. We buy setups.
A good company isn’t automatically a good trade. Neither is a great story, a strong theme, or even a stock that passes our Three Golden Rules.
Price still has to give us an opportunity.
Before we enter a trade, we need three things: an entry, an invalidation level and favorable reward-to-risk.
Without those, there is no trade.
Sometimes that’s a breakout. Sometimes it’s a pullback, reclaim or continuation setup. Sometimes the right move is simply waiting.
We would rather miss a move than manufacture an entry because we’re afraid of missing out. There will always be another trade.
Rule 7: We demand at least 3:1 reward-to-risk.
Before we enter, we want at least three dollars of potential upside for every dollar we’re prepared to lose.
That matters because you don’t need to be right all the time to make money. At exactly 3:1 reward-to-risk, the mathematical break-even win rate before costs is only 25%.
The goal isn’t to be right as often as possible. The goal is to make substantially more when we’re right than we lose when we’re wrong.
But 3R is only the hurdle for getting into the trade. It isn’t our profit target.
If a trade reaches 3R and everything that got us into it is still intact, we’re not selling just because a spreadsheet says we’ve made enough money.
Sometimes 3R becomes 5R. Sometimes 8R. Sometimes 10R or more.
The 3:1 test tells us whether a trade is worth taking. It doesn’t tell us how big we’re allowed to win.
Rule 8: We’re hunting grand slams, not singles.
This is one of the biggest differences between how we approach markets and how a lot of traders do.
We’re not trying to manufacture a tiny gain every day. We’re hunting massive trends.
The ideal trade starts with clearly defined risk. Then it begins working. The trend strengthens, relative strength expands, momentum persists and capital continues flowing into the trade.
At some point, the job changes from finding a profitable trade to something much simpler:
Don’t screw up the big one.
Most trades won’t become portfolio-moving winners. That’s fine. Some will lose. Some will go nowhere. Some good setups simply won’t develop.
Then every once in a while, you catch one genuine monster and the math changes.
That’s why our system isn’t only designed to protect us from losses. It’s also designed to keep us aboard when we’ve caught something special.
Rule 9: Define the downside and give the upside room.
Every trade begins with invalidation.
Before asking how much we can make, we want to know what price action would prove that the trade is no longer working.
That determines our risk, and our risk determines the position size. Not the other way around.
We don’t buy first and figure out the risk later. That’s how stops get moved, theses get rewritten and manageable losses turn into portfolio problems.
If the reason we entered disappears, we move on.
The opposite matters too. When a position keeps proving us right, we don’t want to manufacture reasons to get out simply because we’re sitting on a big gain.
We may raise stops, trail support, trim extreme extensions, reduce around binary risk or simply leave the position alone.
There are two expensive mistakes in trading: letting a loser become too large and never allowing a winner to become large enough.
Our process is designed to avoid both.
Rule 10: We’re here to teach you how to trade, not spoon feed you signals.
There is a big difference between following someone’s trades and actually learning how to trade.
TTI is built around the second one.
If all we’ve taught you is to sit around waiting for us to say “buy” and “sell,” then we haven’t done our job.
We want you to understand why a trade exists. Why that sector, why that industry, why that stock, why now, why that entry, why that invalidation level, why we’re holding and eventually why we’re exiting.
But there is also a reality to learning markets: the best way to learn is to do.
That’s why we encourage members to follow our trades live. Not because we want you dependent on us, but because it lets you experience the entire lifecycle of a trade firsthand.
You see the setup before it triggers. You see the entry and know exactly where we’re wrong. You watch how we handle normal volatility, how we manage risk and what we do when the trade either works or doesn’t.
And every once in a while, you get to watch an ordinary setup turn into one of those portfolio moving winners.
Our goal is to turn the live trade into a classroom.
The goal is to learn the framework, watch it being applied in real time, and eventually be able to do it yourself.
The TTI Philosophy
If I had to reduce everything we do to one sentence, it would be this:
Follow the capital, trade the leaders, define the downside, and give the biggest winners enough room to meaningfully impact your portfolio.
You don’t need to predict every market move. You don’t need to own every winner. You don’t need to be right every time.
And you definitely don’t need to spend your time in the market collecting tiny wins.
You need a repeatable process for finding asymmetric opportunities, the discipline to keep losses small when you’re wrong, and the patience to let exceptional winners become exceptional.
Most trades won’t become grand slams.
That’s fine.
We’re looking for the few that do.
And along the way, we’re teaching our members how to find them, trade them, manage them and eventually do it themselves.
That’s what we teach. That’s what we trade. And that’s what runs The Trading Initiative.
What You Get When You Join TTI
When you join The Trading Initiative, you’re not just getting a newsletter or access to a list of trade alerts. You’re getting the entire process we just described, applied to the market in real time.
The Trade Desk, our proprietary market dashboard, is the center of it. That’s where our clients track the opportunities we’re watching, the trades we’re taking, our entries, invalidation levels, position management and the changes that matter as the market develops.
You also get our market and opportunity research, where we break down what we’re seeing across the market, where capital is moving and where we think the best opportunities are developing.
Our nightly Desk Notes keep you updated as conditions change, without making you sort through hours of market noise to figure out what actually matters.
Members also get three live coaching sessions throughout the week, where we go deeper into the setups, trades and decision-making behind the process, plus access to the education inside TTI so you can actually learn the framework instead of blindly copying it.
And then there’s the private Discord, where you can follow us during the trading day, see the process unfold in real time and be around other traders working through the same market.
The idea is to connect everything.
You see the research that leads us toward an opportunity. You see the setup develop in the Trade Desk. You see what we’re doing when the trade triggers. You follow the management as it develops. You see the final result. And through the coaching and education, you learn why we made those decisions in the first place.
That’s the point of TTI.
We want to help you find better trades today while teaching you how to become a better trader tomorrow.
That’s what you get when you join.
If you’re ready to learn how to trade the markets using an evidence-based system that combines top-down research with bottom-up precision, the signup is here:
PS. If you become a paying member of the Profits Over Prophets newsletter for $10/mo, there is a special discount to join our full-service. I encourage you to try before you buy!
Educational content only. Nothing published by The Trading Initiative constitutes investment advice, financial advice, or a recommendation to buy or sell any security. Any levels referenced—including entries, stops, targets, or invalidation levels—are provided for educational and analytical purposes only and do not take into account any individual’s financial situation, objectives, or risk tolerance. The Trading Initiative, its team, and its contributors may hold positions in securities discussed, as well as positions not mentioned, and may enter, adjust, or exit those positions at any time. Trading and investing involve substantial risk of loss. Past performance is not indicative of future results. Always conduct your own research and make your own financial decisions. © The Trading Initiative. All rights reserved.
"A stock falling 40% isn’t automatically 40% more attractive" -- great way to put it