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David “Laptop Legend” Hanlin sits down on the Words of Wisdom podcast to unpack how a verified seven-figure trader with over $6M in career profits handled an almost $1M intraday meltdown—and came back stronger. He talks candidly about flipping from early investing to OTC momentum, the wild 2020–21 run, and the cold-shower lessons that followed: broker-level max-loss, cutting fast, and building discipline that outlasts any hot market. If you’re new to trading or leveling up, this interview shows the human side of process, pressure, and persistence.
In this piece, you’ll learn the core of David’s risk-first strategy—size only when the trade is working, slash losers without debate, and use guardrails to protect you from yourself. We’ll also break down his playbook for durable edge: focused study (not 2x-speed “edutainment”), building a personal chart database, networking with real performers, and turning lifestyle discipline into trading discipline. By the end, you’ll have practical ideas to tighten your risk, sharpen your setups, and build a trader mindset that survives every cycle.
David “Laptop Legend” Hanlin Playbook & Strategy: How He Actually Trades
Core Philosophy: Protect First, Attack Second
Trading only works when your downside is contained and your upside is allowed to play out. This section nails the mindset and guardrails that keep you in the game, even when the market isn’t friendly. Think risk-first, process over prediction, and compounding small edges.
- Always define max loss before the open: daily -2R hard stop; platform-enforced and broker-level if available.
- One thesis per trade; if the thesis breaks, you’re out—no “hope holds.”
- Size is a reward, not a right: scale up only after evidence (trend + liquidity + confirmation).
- Keep a “kill switch” hotkey that flattens all positions and disables new orders for 15 minutes after a breach.
- Track weekly risk budget (e.g., 6–8R). If you burn 60% of it by Wednesday, cut the size in half by Friday.
Pre-Market Routine: Build Your Edge Before the Bell
Great trades start hours before the first print. You’re preparing levels, catalysts, and a realistic execution plan. This keeps you from chasing noise and forces you to engage only when odds tilt your way.
- Scan top gainers with fresh catalysts; filter for float, relative volume (RVOL ≥ 3), and clean daily structure.
- Mark key daily levels (prior high/low, gap fill, premarket high, whole/half dollars).
- Set conditional orders only after premarket confirms liquidity: spread ≤ 0.5% and at least 5x normal prints.
- Decide “no-trade zones” (e.g., first 60 seconds; lunch 11:30–13:00 ET) and stick to them.
- Write a 3-line plan per ticker: setup, risk, and invalidation level.
Set Up Selection: Trade What Fits Your Playbook
Not every mover is your trade. This section clarifies which patterns earn your attention—and which you avoid—so your P&L isn’t at the mercy of randomness.
- Momentum continuation: opening drive above premarket high with RVOL ≥ 3 and price riding VWAP/9EMA.
- First red day bounce on extended runners: look for panic flush into daily support with capitulation volume, then reclaim of VWAP.
- Broken parabolic fade: lower high under a key daily level + heavy failure at reclaim attempts; risk tight over failure pivot.
- Avoid crowded “no edge” zones: overlapping MAs, messy midday chop, SSR pinball after two halts.
Entries & Adds: Evidence First, Then Fire
Entries should be built on confirmation, not hope. These rules help you time risk to the moment the market shows its hand.
- Initial entry: partial size on break-and-hold of premarket high (long) or fail-and-hold below premarket low (short); wait a full 1-min candle close.
- Add only on higher low (long) / lower high (short) with RVOL on the add-bar ≥ 1.5 of its 5-bar average.
- If the spread widens > 0.8% or prints become sporadic, cancel adds and trade smaller until liquidity normalizes.
- Never add if unrealized drawdown > 0.7R from entry; first add must reduce average risk, not increase it.
Risk & Guardrails: Non-Negotiables That Save Accounts
This is where accounts live or die. Hard constraints prevent single-trade disasters and “revenge spirals.”
- Per-trade risk (R): ≤ 0.5–1.0% of account; tighten to 0.25–0.5% on low-liquidity names.
- Daily hard stop: -2R (platform) and broker max-loss (no override). After the hit, trading was disabled for the day.
- Time stop: if the thesis hasn’t triggered within 20 minutes of alerting yourself, scrap it.
- Location stop: for longs, 5–15c below VWAP or the consolidation low—whichever is tighter and makes R multiple clean.
- News shock protocol: after halts, if price can’t reclaim VWAP within 10 minutes, flatten.
Trade Management & Exits: Let Winners Breathe, Cut Losers Fast
The money is made in the middle of the trade—where scaling and trimming determine your R multiple. Here’s how to keep the good ones alive without giving back gains.
- First target: opening range high/low; trim 25–33% and move stop to breakeven + a tick.
- Second target: measured move (length of opening leg projected from pullback).
- If two consecutive 5-minute closes form against your position and down-bar RVOL > up-bar RVOL, exit the remainder.
- Trail by structure, not dollars: last higher low (long) or lower high (short) on the 2–5 min chart.
- If the price goes parabolic into your target, take more sooner (liquidity vanishes on the way down).
Sizing & Scaling: Earn the Right To Be Big
Big size without confirmation is how traders blow up. These rules make size a function of proof, not bravado.
- Start with 30–50% of the intended size on initial trigger; add 20–30% on confirmation, final 20% on trend re-test.
- Cap total exposure per ticker at 2–3R; never exceed 1.5x your average winner’s R without locked profits.
- Correlation cap: Avoid stacking multiple tickers in the same theme unless risk is reduced across the basket.
- If slippage exceeds 0.3R on two trades in a row, cut size by half for the next three trades.
Tools & Execution: Make the Platform an Edge
Execution problems are avoidable. Tighten your routing, hotkeys, and order types so you get filled where your plan lives—not where the market shoves you.
- Use hotkeys for: market-out, cancel all, and bracket entry (entry + OCO stop/target).
- Prefer limit or limit-with-protection over raw market orders unless halts/auctions demand speed.
- Route to venues with consistent price improvement for your universe; log fill quality weekly.
- Maintain two layouts: “Open” (time & sales, 1-min, level 2) and “Manage” (5-min, VWAP, trendlines) to reduce context switching.
Journal & Review: Turn Reps Into Edge
You can’t improve what you don’t measure. Treat journaling as R&D: you’re mining your own data for repeatable outcomes.
- Record every trade with a screenshot at entry/add/exit, plus thesis, setup tag, and emotion tag.
- Weekly audit: top 10% winners and bottom 10% losers—extract what was repeatable vs. avoidable.
- Build a personal chart library: one slide per setup with criteria, examples, and “gotchas.”
- If a setup posts three consecutive 1R outcomes, bench it for a week and review the criteria.
Psychology & Bounce-Back Protocol: Survive To Thrive
Drawdowns happen. What matters is how quickly and cleanly you reset. These rules keep you operational after inevitable hits.
- After -3R day or a humiliating mistake, mandatory next day: trade half size, max 2 tickets.
- Start the session with a “green print” goal: take one A- setup to +0.5–1R, then reassess size.
- Morning routine rule: 10 minutes of written plan + one page of recent mistakes and their fixes.
- No “get back” trades: if you catch yourself calculating what you “need” to be flat on the week, you’re done for the day.
Playbook Setups (At-A-Glance Rules)
Here are the bread-and-butter setups with exact triggers. Use these like checklists so you only fire when the criteria line up.
Opening Drive Continuation (Long)
A high-RVOL name breaks premarket high and holds above VWAP early. You’re riding momentum with rules that keep risk tight and targets clear.
- RVOL ≥ 3 in first 10 minutes; spread ≤ 0.5%.
- 1-min close above premarket high; enter 30–50% size.
- Add on the first higher low that holds VWAP; add-bar RVOL ≥ 1.5 of its 5-bar average.
- Stop: 5–15c below VWAP or HL pivot (tighter of the two).
- Targets: ORH → measured move; trail by 2–5 min higher lows.
First Red Day Panic Bounce (Long)
The extended name finally prints a big red day with capitulation. You’re buying fear only after proof of a turn.
- Daily extension ≥ 3 green days and ≥ 30% move prior; morning flush with capitulation volume.
- Entry on reclaim of an intraday level + VWAP tag/hold; scale in only after a higher low forms.
- Stop: under panic low by a few cents.
- Targets: first VWAP push → prior intraday supply; partials fast, trail tightly.
Broken Parabolic Fade (Short)
The blow-off snaps and lower highs start stacking. You’re fading the backside with structure and volume confirming.
- Failure to reclaim parabolic pivot; lower high under a daily level with RVOL staying elevated.
- Entry on rejection wick + 1-min confirmation close lower; adds on each lower high that stalls under VWAP.
- Stop: above failure pivot by tight buffer.
- Targets: VWAP → prior day’s breakout level → gap fill; trail via 2–5 min lower highs.
Size Positions by Volatility: Let RVOL and ATR Dictate Your Risk
David “Laptop Legend” Hanlin keeps it simple: bigger volatility, smaller size—calmer tape, larger size. He uses RVOL to judge whether a move is real participation or just noise, then checks ATR to quantify how far a name can swing against him. If RVOL is >3 and ATR has expanded, he cuts the initial size and widens stops to keep R constant. When RVOL cools and ATR compresses, he lets the size step up while keeping stops tighter.
In practice, David builds a fixed per-trade R, then adjusts share count so expected wiggle (ATR) fits that R. He refuses to add if spread + slippage could eat more than 0.3R on entry. Adds only come on confirmation—higher low with RVOL on the add bar ≥1.5 of its 5-bar average. If volatility spikes mid-trade, he trims to bring position VAR back in line and trails by structure, not dollars.
Trade the Playbook, Not Predictions: Rules First, Opinions Last
David “Laptop Legend” Hanlin doesn’t guess; he executes. His day starts with a written plan for each ticker—setup, trigger, invalidation—and he treats that plan like a contract. If the market deviates from the rules, he doesn’t “reinterpret,” he cancels the trade. Opinion is allowed in the watchlist, never at the hard moment of entry.
When he’s in, the playbook still leads: adds only on higher lows with rising participation, cuts instantly when the thesis breaks, and never widens a stop to “give it room.” David measures discipline by how closely the plan is followed, not by whether the trade wins. He’ll gladly miss a move that doesn’t hit his criteria because “missed” beats “mauled.” The edge comes from repeating clean rules across many sessions, letting probability—not prediction—do the heavy lifting.
Diversify Edge by Underlying, Strategy, and Timeframe to Smooth P&L
David “Laptop Legend” Hanlin spreads risk across more than tickers—he diversifies by the type of move and the clock it plays on. He’ll pair momentum continuations with backside fades and first red day bounces so one regime doesn’t own his week. If small-cap momentum dries up, a large-cap news momentum or mean-reversion scalp can still pay, keeping the equity curve from turning into a roller coaster. He thinks in “buckets” of edge, not a single identity.
Time also does heavy lifting. David blends quick opening-drive trades with slower afternoon trend holds, and he limits the number of positions that share the same catalyst or sector. When correlations spike, he drops the size or skips the duplicate look to avoid synthetic overexposure. The result is a portfolio of independent shots on goal—different underlyings, different patterns, different durations—so no single cold patch nukes the month.
Define Risk Upfront: Hard Stops, Daily Max Loss, No Exceptions
David “Laptop Legend” Hanlin starts every trade by locking the max pain before he chases any gain. He sets a per-trade R, places the stop where the thesis actually breaks, and sizes shares to fit that distance—never the other way around. If the stop gets tagged, he’s out instantly; no widening, no “give it room,” no second vote. He also runs a platform and broker-level daily max loss, so one bad spiral can’t torch the week.
When volatility spikes, David tightens the leash rather than ego—halve size, keep the same R, and let the market prove it deserves more. He uses a time stop too: if the setup doesn’t trigger within a defined window, it’s canceled to avoid drift trades. After a -2R day, trading shuts down and the journal opens; the only green he’s allowed to chase is improvement. The rule is simple but brutal: protect capital, then come back tomorrow with a clear head.
Manage Winners Systematically: Scale Into Confirmation, Trail Structure, Exit Weakness
David “Laptop Legend” Hanlin treats winners like a checklist, not a victory lap. He starts with partial size at the trigger, then adds only when the trade proves itself with a higher low, rising participation, and clean holds above VWAP. Each add tightens average risk and is paired with a stop update under structure—never a dollar amount. First target comes at the opening range high/low to bank some R and remove pressure.
From there, David trails by swing points on the 2–5 minute chart so price action—not emotion—dictates the hold. If momentum stalls and he sees two consecutive closes against his position with heavier relative volume, he’s trimming or flat. Parabolic spikes get sold into because liquidity disappears on the way back down. The net effect: scale when the market is paying you, step off when it’s not, and let structure write the exit.
David “Laptop Legend” Hanlin’s core message is brutally simple: stay in the game by making risk management non-negotiable, then let proven setups do the heavy lifting. He’s a verified seven-figure trader with over $6M in career profits who survived an almost seven-figure hit—twice—and still showed up the next day, which tells you everything about his process and resilience. He’s been at this since his early teens, evolving from long-term investing curiosity to an execution-first day trader who measures success by discipline and repeatability, not by any single trade.
The takeaway playbook: only size up when the trade is working, cut instantly when it isn’t, and use systems that override human hesitation. Don’t add to losers—especially on the short side, where adverse moves expand risk fast—and install hard daily loss limits so one spiral can’t erase weeks of work. Build scanners and networks that surface the right tickers so your playbook is actually triggered by the right charts, then execute the same criteria relentlessly across sessions. Trading is hard by design; accept that, love the craft enough to journal and refine, and keep your edge sharp by protecting capital first and letting confirmation—not opinions—determine when you press.
