Table of Contents
This interview features Andrew O’Connell—CEO of Pristine Capital and a top performer in the U.S. Investing Championship—sitting down on the “Words of Wisdom” trading podcast in New York to unpack how he actually built a verifiable track record. Andrew isn’t pitching a one-off home run; he’s the “string together great years” kind of trader, and that’s why his process matters for anyone trying to go pro.
In this piece, you’ll learn the core of Andrew’s strategy: cut losers fast, never add to them, and press winners with size when fundamentals, story, and trend align. You’ll see how he blends swing/position trading with clean technical triggers (bases, coiling MAs, volume), uses options for prudent leverage, and keeps himself accountable with a simple trade log. If you’re looking for a beginner-friendly roadmap to move beyond boom-and-bust into consistent, scalable execution, this breakdown will give you the playbook.
Andrew O’Connell Playbook & Strategy: How He Actually Trades
Core Philosophy (What he optimizes for)
This is the “why” behind the method—compounding clean, high-probability swings instead of swinging for fences. The bullets give you a north star for decision-making so you know what to say yes/no to instantly.
- Trade to string together great years, not great trades; protect downside first, let upside take care of itself.
- Only deploy risk when story, fundamentals, and trend align; pass on everything else.
- Simplicity > complexity: a few repeatable patterns, executed with size when they’re right.
- Never add to losers; only add to strength after evidence of progress.
- Keep your process falsifiable: every position must have a clear “I’m wrong here” level.
Universe & Preparation (Where the ideas come from)
Keep a tight, liquid universe that can trend and respond to catalysts. The bullets show how to filter noise and prep lists so entries are effortless during the week.
- Focus on liquid leaders (top ~300 by average dollar volume); avoid illiquid names.
- Build two watchlists daily: “Ready Now” (near trigger) and “Developing” (needs time).
- Favor names with fresh catalysts (earnings beats/raises, product launches, guidance, regulatory clears).
- Read the tape around catalysts: large range expansion + above-average volume gets priority.
- Drop names that stall for 3–5 sessions after a catalyst; opportunity cost is real.
Setups & Triggers (When he actually presses Buy/Sell)
Entries are simple and visual. The bullets define the exact technical conditions that turn “interesting” into “tradeable.”
- Breakout from a tight base (5–20 sessions) with close above prior pivot high on 1.5–3.0× average volume.
- Reclaim of 20-day and 50-day moving averages with rising slopes after a shakeout wick.
- Anchored VWAP reclaim from the catalyst day; enter on the first strong close above AVWAP + intraday hold on a retest.
- First pullback to rising 20-DMA after a breakout; buy the first higher low with risk to the swing low.
- For shorts (rarer): failed breakout that closes back below pivot with 2× volume and a downward-sloping 20/50-DMA stack.
Risk Management (Exactly how he avoids big drawdowns)
The goal is to stay solvent and emotionally stable. These bullets constrain the worst-case scenario in every position.
- Risk per trade: 0.25%–0.75% of equity (never >1%).
- Initial stop: just beyond the invalidation level (below pivot low/AVWAP/20-DMA for longs; above for shorts).
- If a position gaps through your stop, reduce to the original risk at open—then reassess the setup.
- Portfolio heat cap: total open risk ≤ 2.5% of equity; reduce new adds when at cap.
- No averaging down, ever; if the stop hits, you’re flat and done.
Position Sizing & Pyramiding (How he gets big without being reckless)
Sizing is earned by the trade, not granted by conviction. The bullets give rules for scaling that won’t torpedo your week.
- Starter size on trigger: 0.5–0.8× a “full” unit, while the market confirms.
- Add only on strength: new high after initial risk goes to +0.5R; raise the stop to protect at least breakeven on the combined.
- Maximum 2–3 adds per position; each add must improve the average price relative to risk, not worsen it.
- If an add fails within 1–2 sessions, peel it back to core; do not “hope manage.”
- Absolute cap: no single name > 20% of total portfolio market value during early trend; can rise to 25–30% only after multiple R locked in.
Options Usage (Prudent leverage, not lotto tickets)
Options are used to control risk and express timing—never to gamble. These bullets show how to choose structures that match the chart.
- Use calls/call spreads when IV is moderate and trend is early; target 45–75 DTE for swings.
- Prefer verticals when IV is elevated; they cap risk and reduce premium decay.
- Roll winners up/out on strong breakouts to keep delta while crystallizing gains.
- No OTM weekly lottos; when using weeklies, it’s to fine-tune around a catalyst with defined risk.
- For shorts, buy puts/put spreads instead of shorting thin names; avoid hard-to-borrow surprises.
Trade Execution (From alert to filled order)
Execution turns a setup into P&L. These bullets make your entries repeatable and less emotional.
- Place buy-stop/stop-limit at/above the trigger level to avoid front-running chop.
- If a breakout gaps above trigger >1.5% without you, skip the open; wait for the first 15–60 min pullback to VWAP/AVWAP.
- On pullback entries, require a higher low and a reclaim of intraday VWAP before executing.
- Use bracket orders (stop + first target) where supported; reduce decision latency.
- If slippage exceeds planned risk by 50% at entry, halve the size and reassess.
Trade Management (How winners are protected and pressed)
The money is made by managing winners with intention. These bullets define when to hold, trim, or get out.
- Take the first partial (20–33%) at +1.0–1.5R to reduce pressure; trail the rest.
- Raise stop to breakeven after the first partial or after a decisive close above the next resistance band.
- Trail with the 20-DMA or anchored VWAP from last add; exit on a close below, plus failure to reclaim next day.
- Into vertical ramps or day-2/3 post-breakout extensions >5–8%, trim 10–25% and let the trend re-set.
- Full exit on a lower high + close below 20-DMA with above-average volume, or on a failed breakout that re-enters the base.
Market Regime Filter (When to press and when to coast)
Context matters more than opinions. These bullets gate your aggression based on how stocks are actually behaving.
- Risk-on: index above rising 50-DMA, breadth thrusts, leaders breaking out and following through → increase exposure, allow 3 adds.
- Neutral: choppy ranges, mixed breadth → trade smaller, take quicker partials, cap portfolio heat at ~1.5%.
- Risk-off: index below falling 50-DMA, failed breakouts >50% rate → trade ½ size or sit in cash; focus on capital preservation.
- Earnings season: tighten stops pre-report or use options to define risk; no “naked” stock through binary events.
- Macro shock days: stand down first hour; trade only if AVWAP reclaims align and volume confirms.
Journal & Review (How the edge compounds)
Feedback loops are the edge multiplier. These bullets make the review process fast and brutally honest.
- Log every trade: setup name, trigger, risk, adds, exit reason, R multiple, and a one-line post-mortem.
- Weekly: tag top/bottom 5 trades and extract one repeatable improvement for the next week.
- Track “time in trade” and “follow-through %” by setup; double down on the highest expectancy pattern.
- Screenshot entries/exits with 20/50-DMA and AVWAP; annotate why you acted.
- If a setup logs three consecutive expectancy declines, pause it until you have fresh data.
Psychology & Routine (How he stays consistent)
Consistency beats intensity. These bullets create a routine that reduces randomness and keeps emotions in check.
- Pre-market: 15–30 minutes to review “Ready Now,” adjust alerts, and visualize execution rules.
- During market: no P&L watching until planned check-ins; manage the chart, not the dollars.
- Post-market: 20 minutes of journaling + markups; schedule next day’s alerts immediately.
- Health rules: sleep ≥7 hours, workout 3×/week, no trades after two consecutive losses in a day.
- “One-trade rule”: if you break a risk rule, the day ends—close the platform.
Personal Guardrails (Non-negotiables that protect the franchise)
These are the hard edges of the process. The bullets below prevent small errors from becoming career-ending mistakes.
- No more than two correlated positions from the same sub-theme at once.
- No chasing: if a name extends >2% beyond the trigger before entry, wait for the retest or skip.
- No adding after a reversal bar against you on above-average volume.
- No trading during travel or major life events unless using fully automated brackets.
- If the monthly drawdown hits 6–8%, drop size by 50% and switch to A+ setups only until new equity highs.
Size Risk First: Define Max Loss Before You Click Buy
Andrew O’Connell starts every trade by fixing the loss he’s willing to take—then works backward. Before entry, he marks the precise invalidation level and calculates the size so a stopped-out trade costs a small, pre-decided fraction of equity. That discipline keeps him emotionally neutral, because the worst-case is already budgeted. If the math forces a tiny position, he takes the hint or skips the trade entirely.
He also separates conviction from sizing—conviction doesn’t buy extra room, the chart does. When volatility expands, Andrew shrinks position units; when volatility contracts and signals are clean, he lets size normalize. Stops live just beyond the “I’m wrong” line, not at round numbers where everyone else hides. By defining risk first, he protects the month, survives the quarter, and earns the right to press when conditions finally align.
Allocate by Volatility, Not Gut—Position Units Earn Their Size
Andrew O’Connell doesn’t eyeball size; he lets volatility do the talking. He converts each setup into standardized “risk units” based on ATR or recent true range so that a choppy name gets fewer shares and a calmer name can carry more. This makes the portfolio’s dollar risk per trade consistent even when tickers behave wildly differently. If a chart demands a stop that’s too wide to fit his per-trade risk, Andrew cuts size or moves on.
He also scales exposure with regime shifts—when market volatility spikes, Andrew automatically dials down unit size and caps total open risk. When volatility compresses and follow-through improves, he allows units to normalize and pyramids only on strength. Correlated names don’t sneak past him either; he treats a basket with shared beta as one position for risk budgeting. The result is simple: sizing is earned by the tape, not awarded by confidence, and Andrew’s portfolio feels the same sting on a loser regardless of the symbol.
Diversify Across Underlying, Strategy, and Duration—Not Just Tickers
Andrew O’Connell spreads risk along three axes so one surprise can’t wreck the week. He mixes uncorrelated underlyings—index leaders, a few sector standouts, and occasionally a commodity proxy—so a single theme doesn’t dominate the P&L. Then he diversifies by strategy: classic breakout longs, first-pullback continuations, and the occasional defined-risk short when leaders falter. If one playbook stalls, another can still work.
He also staggers duration on purpose. Andrew will run a core swing with a wider stop and pair it with a shorter-term add that he’s willing to peel on strength, letting trends pay while still banking wins. Options help him split horizons too—45–75 DTE for the swing thesis, a tighter spread around catalysts for timing. The point isn’t more trades; it’s independent edges that don’t all fail together, keeping Andrew participating without overexposing to any single narrative.
Trade the Mechanics, Not Predictions: Rules Beat Opinions Every Time
Andrew O’Connell treats opinions as background noise and lets rules run the day. He waits for objective triggers—tight bases, AVWAP reclaims, closes above pivots on real volume—then executes without debating the macro. If signals don’t print, he doesn’t manufacture trades; no trigger, no ticket. That mechanical approach keeps him from chasing headlines or narrating why a stock “should” move.
Once in, Andrew manages strictly by checklist—move stops to breakeven after first partials, pyramid only on strength, and exit on specific invalidations instead of vibes. He grades every trade by rule adherence, not outcome, so a disciplined loss still counts as a win for process. When the environment flips, he adjusts rule thresholds, not his temperament. The edge isn’t forecasting; it’s enforcing the same high-quality decisions, over and over.
Choose Defined Versus Undefined Risk Intentionally, Then Enforce Exits
Andrew O’Connell starts by choosing the structure of risk, not the ticker. If he wants capped downside into an uncertain catalyst, he’ll use defined-risk options (debit spreads) so the max loss is baked in. When the trend is clean and liquidity is high, he may use a stock with a hard stop just beyond invalidation—still “undefined” in theory, but tightly controlled in practice. The key is deliberate selection: he matches structure to scenario instead of defaulting to whatever’s convenient.
Once the trade is on, Andrew enforces exits like a contract. Defined-risk options are held to plan—take profits on measured moves, or let them expire only if the thesis is intact and priced. For stock, he respects the stop, moves it to breakeven after partials, and never widens it to “give it room.” If a gap jumps the stop, he reduces the size at the open to restore the original risk and reassesses immediately. The result is simple: structure the risk on the way in, and police the exits on the way out—no excuses, no hope.
Andrew O’Connell’s edge isn’t a magic indicator—it’s a grown-up process that starts with risk and finishes with accountability. He fixes max loss before entry, sizes by volatility, and refuses to add to losers, which keeps him emotionally steady enough to press when the tape finally agrees. He hunts liquid leaders with fresh catalysts, then waits for simple, visual triggers—tight bases, AVWAP reclaims, clean 20/50-DMA stacks—so he’s reacting to proof, not predictions. When he wants leverage or binary protection, he uses defined-risk options; when the trend is clean, he goes with stock and a hard stop. The portfolio stays diversified across underlying, strategy, and duration, so one theme can’t sink the week. And every decision gets logged, graded by rule adherence, and fed back into the playbook.
What stands out from Andrew’s interview is how deliberately he built a real track record: string great years together, protect the month, and let winners compound. He treats market regime like a dimmer switch—size up when breadth and follow-through are there, coast when they aren’t. Exits are contractual: partials on strength, stops to breakeven, and full cuts on failed structure—no widening, no hope. The routine is boring by design: prep lists, alerts, bracket orders, and quick post-market markups. That’s the “secret sauce”: a simple set of mechanical rules executed with patience, sized by volatility, and audited relentlessly. Follow that, and you’re no longer chasing luck—you’re building a franchise, just like Andrew O’Connell.
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