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In this interview, swing trader Ariel Hernandez sits down in Miami on the Words of Wisdom podcast to unpack how he went from a $30,000 account in 2020 to verified eight-figure results. Fresh out of prison and new to markets, Ariel found early traction day trading before evolving into a swing/position trader, learning from names like Peter Brandt, Jason Shapiro, and Mark Minervini—and proving why his journey matters to any trader chasing a real, durable edge.
You’ll learn how Ariel spots themes and “sympathy plays,” when he scales size, and why market regime awareness (not just signals) drives performance. We’ll cover his simple-but-strict risk framing, the shift from fast scalps to higher-quality swing structures, and the mindset that helped him survive 2022 and thrive afterward—so you can copy the parts that fit your style and build a strategy that actually lasts.
Ariel Hernandez Playbook & Strategy: How He Actually Trades
The Core Edge: Theme-Driven Swing Trading
He focuses on strong themes first, then picks the cleanest stocks inside those themes. That shift—from chasing tick-by-tick noise to trading narrative + structure—lets him size up with conviction and hold through normal churn.
- Scan for 1–3 dominant market themes each week (e.g., AI infra, energy, biotech catalysts).
- Build a 10–20 name watchlist inside those themes; keep only stocks with clear daily trends and liquidity.
- Prefer leaders over laggards: highest relative strength vs. sector ETF over the last 20 sessions.
- Avoid “story-only” names unless price confirms with higher highs + rising 20/50D MAs and expanding volume.
Set Up Selection: From Idea to High-Probability Pattern
Once a theme is set, he wants repeatable structures. The goal is to trade only A/A+ patterns that define risk tightly and give room to scale.
- Focus on 3 go-to swing structures:
- Breakout + Retest of prior range high (daily).
- First Higher Low above the 20D MA after a strong thrust.
- Base Breakout after 15–30 days of contraction (ATR% down, volume dry-up).
- Require 3 of 4 confirmations: rising 20D and 50D MAs, RS line making new 20D high, price above anchored VWAP from the last major high, and RVOL ≥ 1.5 on push days.
- Skip if average true range shrinks < 60% of its 3-month median right into the entry (signals may be “too quiet”).
Entry Triggers: Simple, Tight, Repeatable
Entries are mechanical: get in where risk is clear and the tape confirms. No “hope entries.”
- Breakout entry: Buy through prior high only if 30–60 min RVOL ≥ 2 and spread is normal; place stop just below breakout level or the base midpoint (whichever is tighter).
- Retest entry: Buy the first reclaim of the breakout level after a clean pullback on lighter volume; stop goes under the retest low.
- Higher-low entry: Buy the first higher low above the 20D MA; invalidate on a daily close back below the 20D.
- If wick > body on the breakout candle and RVOL fades < 1.2 by the close, abandon the setup.
Risk First: Position Sizing and Stops
Sizing is pre-planned so that one trade can’t wreck the month. Stops live where the thesis is objectively wrong, not where it “feels” comfortable.
- Risk a fixed 0.5%–1.0% of equity per trade; never exceed 3% total open risk across correlated names.
- Use structure-based stops (below base lows, retest lows, or 20D MA for higher-low entries).
- If intraday loss hits −1R and market internals flip risk-off (e.g., breadth < 30%, sector ETF loses VWAP), reduce size by 50% immediately.
- Move stop to breakeven only after a +1.5R push and a higher low forms on the 60-minute chart.
Scaling Plan: Add When Price Proves You Right
Adds are rare and rules-based. He adds only when the risk actually goes down because the structure improves.
- Plan a maximum of two adds, each ½ of the initial size.
- Add 1: after a clean retest and hold of the breakout level with RVOL ≥ 1.5 on the reclaim.
- Add 2: on the first higher low above the 10D EMA during trend, if ATR is expanding vs. prior week.
- Never add if the position is below VWAP on the day of the add or if the sector ETF is red.
Exit Rules: Turn Winners Into Paydays
Exits are binary: strength sustains, or the trend is done. He mixes target-based and condition-based exits to avoid giving back weeks of work.
- Tiered targets:
- Trim 25–33% at +2R or at the measured move (height of base).
- Trim another 25–33% at prior weekly resistance or when RS line stalls for 3 sessions.
- Condition exits:
- Two consecutive daily closes below the 10D EMA after a trend extension.
- The sector ETF closes below its 20D MA, and your stock fails to make new highs for 5 sessions.
- RVOL on down days > up days for 3 of 4 sessions, and the stock can’t reclaim VWAP intraday.
- If a gap opens −1.5R against you, exit at the open; do not “hope” for a bounce.
Trade Management: Intraday Tells for Swing Holds
Even as a swing trader, intraday tape gives early warnings. He uses it to manage risk, not to micromanage every tick.
- Hold if price is above day’s VWAP and making higher lows on 15–30 min.
- Tighten stops if you see distribution footprints (multiple high-volume red 15-minute bars near highs).
- If the first pullback depth exceeds 38.2% of the opening leg with RVOL dropping < 1, avoid adds that day.
- On gap-ups, sell into the first parabolic 5–10% intraday extension; leave a runner only if RVOL stays > 2 into midday.
Watchlist & Prep: Weekly to Daily Flow
Routine is the edge. He builds a funnel: broad theme scan → curated list → A-setups only.
- Weekly: Identify 2–3 themes, tag 30–40 tickers, mark levels on the weekly/daily.
- Nightly: Cull to 10–15 A-setups with precise entries, stops, and add levels.
- Morning: Confirm catalysts, check sector ETFs, and predefine if/then conditions for entry or pass.
- Drop any name that trades sloppy (wicks, overlapping bars, random volume) for 5 sessions.
Catalysts & Narrative: When News Helps the Trend
News isn’t the trade; it’s the fuse. He wants catalysts that align with price and create sustained attention.
- Favor material catalysts (earnings beats/guide-ups, sector policy changes, major partnerships).
- Require price confirmation: breakout + RVOL ≥ 2 in the first 60–90 minutes.
- If the catalyst pop fails to reclaim VWAP within 15 minutes post-halt or post-open, stand down.
- Avoid trading “second bites” on day two unless the stock holds above the prior day’s midpoint by noon.
Short Selling (Only When the Tape Screams)
He’s primarily long-biased, but will press shorts when trends break. The same structure rules apply, flipped.
- Short on a failed breakout that closes back inside the base with RVOL ≥ 2 on the failure.
- Short the first lower high under the declining 20D MA after an impulsive break.
- Cover a third at range lows or at +2R, move stop to entry after a close below the 10D EMA.
- Do not short against a strong sector bid or into high-short-interest squeezes near weekly levels.
Capital Allocation: Concentrate When It Counts
Edge compounds when you bet bigger on the right names. Concentration is earned by structure and behavior, not feelings.
- Cap portfolio to 3–5 active swings; leaders can hold 2–3× the size of second-tier names.
- Reduce gross exposure by 50% when the index is below its 20D MA and breadth < 40%.
- Allow pyramiding only in the best name within the best theme; avoid pyramiding across correlated tickers.
- If weekly P/L drawdown hits −3R, cut exposure to 1–2 positions until you print two green days.
Metrics & Review: Keep What Works, Drop What Doesn’t
He treats trading like a business. Measure, review, and iterate without ego.
- Track per-setup win rate, avg R, max adverse excursion (MAE), and time-to-target.
- Tag every trade by theme + setup type; cut any setup with < 0.6 R expectancy over 30 samples.
- Run a Sunday review: keep the top 2 setups, shelve the rest for 30 days, and update playbook screenshots.
- When equity hits a new high-water mark, raise per-trade risk by 0.1%, not more.
Size Risk First: Position Small, Survive Drawdowns, Compound Later
Ariel Hernandez hammers one point before anything else: keep your risk tiny until your edge proves itself. He frames each trade by the dollars he’s willing to lose, not the dollars he hopes to make. That keeps him emotionally steady when the market whips and chops. Small risk per trade also lets him take multiple quality shots without one miss ruining the week.
He sizes positions so a single loss barely dents his equity curve, then earns the right to scale when the setup performs. When drawdowns hit, he cuts exposure automatically, not after a “feeling” says it’s time. Once he’s stacked wins and volatility favors his style, he nudges risk up in measured steps—not leaps. That discipline is why his account keeps compounding while undisciplined traders churn.
Allocate by Volatility: Scale Exposure When Range Expands, Cut When Contracts
Ariel Hernandez treats volatility like a dimmer switch for risk. When daily ranges widen and momentum is clean, he allows more size; when ATR compresses and ranges shrink, he dials back. That keeps him aligned with the market’s opportunity set instead of forcing trades in dead tape.
He watches ATR, RVOL, and intraday range to decide whether to press or protect. If the stock’s average range doubles week over week and structure is intact, Ariel increases exposure in steps; if range collapses and overlapping bars appear, he halves size or stands down entirely. This volatility-based allocation keeps his equity curve smooth without choking off upside. In short, Ariel Hernandez sails with the wind at his back and coasts when it goes still.
Diversify Intelligently: Mix Underlyings, Strategies, and Trade Durations
Ariel Hernandez doesn’t spread thin; he spreads smart. Instead of piling into five tickers that move the same way, he mixes uncorrelated underlyings—leaders from different sectors, a selective index play, and the occasional commodity proxy—so one theme can’t sink the whole boat. He complements swing trades in trend with a smaller bucket of mean-reversion and catalyst plays, giving him multiple ways to get paid in different tapes.
Duration matters too. Ariel staggers holds across short swing, medium swing, and position trades so exits don’t cluster, and he caps correlation by limiting how many positions share the same driver (e.g., only one or two per hot theme). If two setups rhyme too much, he keeps the best and ditches the rest. The result is focused diversification: fewer names, cleaner signals, steadier equity.
Rules Over Predictions: Trade Repeatable Mechanics, Not Market Guesswork
Ariel Hernandez doesn’t pretend to know where the market is going tomorrow; he knows what he’ll do if it goes there. His edge comes from repeatable mechanics—entry triggers, risk placement, add criteria, and exit rules—executed the same way across tickers and regimes. By outsourcing decisions to prewritten rules, he removes the most expensive variable in trading: moment-to-moment opinion. If a setup doesn’t meet his checklist, Ariel passes, even if the narrative sounds irresistible.
When a trade qualifies, he follows the script: buy the level, honor the stop, scale only when structure improves, and trim into strength, not hope. Ariel tracks every move in a playbook, so patterns are measured, not remembered, which lets him refine rules with real data instead of stories. The result is consistency through noise—fewer impulsive entries, cleaner exits, and an equity curve that reflects process, not luck. In short, Ariel Hernandez trades plans, not predictions, and that’s the point.
Define Risk, Define Exit: Pre-plan Stops, Targets, and Add Conditions
Ariel Hernandez starts every trade by drawing the line where he’s wrong. He places structure-based stops—below the base low, the retest wick, or the 20-day—so a hit means the thesis actually failed, not just noise. Targets are set before entry too: first trim near +2R or the measured move, then trail against higher lows or the 10-day to stay in the trend without giving it all back.
Adds are earned, never assumed. Ariel adds only if price proves him right—clean retest holds, RVOL stays elevated, and the stock reclaims VWAP with strength. If those conditions aren’t there, he holds or even reduces. With the exits and add rules locked in, he trades the script and lets the market do the grading.
Ariel Hernandez’s playbook boils down to discipline over drama. He built results by sizing risk first, defining where he’s wrong before he ever clicks buy, and letting only price and structure decide what happens next. He treats volatility like the throttle—pressing when ranges expand and sitting on his hands when the tape goes quiet—so a few hot days don’t tempt him into overexposure and a few cold weeks don’t bury his month. Themes come first, then leaders within those themes, and only when the chart offers a repeatable entry—breakout and retest, first higher low above the 20-day, or a tight base that finally breathes with real volume. If conditions vanish, he reduces or exits; if structure improves, he scales in steps. No heroics, just rules.
The other constant is process. Ariel Hernandez journals setups, tags positions by theme and pattern, and trims anything that doesn’t deliver positive expectancy across a real sample. He concentrates capital into a handful of A ideas, caps correlation so one narrative can’t sink the boat, and keeps adds rare and earned—reclaims with RVOL, holds above VWAP, higher lows in trend. Targets get planned, stops get honored, and drawdowns trigger automatic de-risking rather than emotional guesses. It’s a simple loop: find the strongest stories, wait for a clean structure, execute with predefined risk, and let the market grade the trade. That’s how he turned an early hot streak into a durable strategy—and why the edge persists when the environment changes.
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