Module 15: The Rocketship Strategy
Lineage: This module is our walkthrough of the gap-and-go small-cap momentum strategy popularized by Ross Cameron of Warrior Trading. The rules, the language (HOFC, FIRE, WATCH), the discipline patterns — all his. We've automated the signal detection with an AI scanner, but the playbook is Ross's. If this module is useful to you, the place to go next is his work.
What it is
The Rocketship Strategy looks for small-cap stocks gapping up 10%+ in the pre-market on volume far above their normal trading range. These setups produce the most explosive intraday moves on the market — sometimes 50–200% in a single morning. They also destroy unprepared traders, because the same stock that runs 50% from 9:30–11:00 frequently gives all of it back by close, and is often down 60–80% within a month.
The discipline rules around this strategy are what make it work. The signal is easy. The exit is hard.
The setup criteria
The scanner is looking for all of the following before market open:
| Criterion | Threshold | Why |
|---|---|---|
| Gap up | +10% or more from prior close | Catalyst must be real |
| Price | $1–$30 | Where small-float runs happen |
| Float | < 20 million shares | Less supply = bigger moves |
| Relative volume | > 3× normal | Crowd is paying attention |
| Pre-market volume | > 50,000 shares | Liquid enough to trade |
In the system, a candidate that hits all five is tagged FIRE. Three out of five is WATCH. The Telegram bot pushes FIRE candidates to the trader at 9:35 AM ET with a chart and entry/exit levels pre-computed.
The play (Ross's rules)
Step 1 — Watch the open, don't trade it
The first 5-minute candle is wild. Sellers and buyers are still finding each other. Your job for the first five minutes is to mark the high of the first 5-min candle — Ross calls this the HOFC (High Of First Candle). That price is your line in the sand.
Step 2 — Wait for the pullback
After the opening drive, the stock will pull back. Look for 2–3 red candles that do not break below VWAP or the 9 EMA. That tells you sellers can't push it back through the volume-weighted average — meaning buyers are still in control underneath.
Step 3 — The entry trigger
The trade is when a green candle takes the high of the most recent red candle AND closes above HOFC AND volume on that bar is above its 20-bar average. All three must happen on the same candle.
That's your entry. Mark it.
Step 4 — Stop placement (non-negotiable)
Stop goes below the low of the pullback consolidation — wherever the recent red-candle low was. Not VWAP, not the 9 EMA, the actual consolidation low. That's what's invalidating your setup if it breaks.
Risk per share = entry − stop. With a $40 risk budget per trade (the discipline cap), position size = $40 ÷ risk per share. Always.
Step 5 — Scale out at R-multiples
Don't try to ride to the top. Scale out:
- 1R (1× risk added to entry) → sell 1/3, move stop to break-even
- 2R → sell another 1/3, trail stop under the 9 EMA on the 1-minute chart
- 3R → sell the last 1/3, or trail it on a tighter stop
This is the part beginners skip. They watch the trade go from 1R to 4R back to break-even and call it bad luck. Bad luck didn't take their profit. Greed did.
Step 6 — Sell the rip on exhaustion signals
When the chart shows a long red wick + climactic volume + the angle of the run going parabolic — that's the bell ringing. Get out. The smart money is selling into your trail stop.
Step 7 — Hard exits
- Lose VWAP? You're done. Bagholder territory.
- Halt during the run? Out next print.
- Volume drying up on green candles? No buyers left. Exit.
- 11:30 AM ET? Done for the day. The peak liquidity window is over.
- Never hold overnight. Look at any historical small-cap pump-and-fade chart. The same stock that ran 70% intraday loses 70% over the next four weeks. The strategy is a 30–90 minute trade.
The ONCO case study
On April 9, 2026, ONCO fired a Rocketship FIRE signal at $1.62 (pre-market gap +43%, RVOL 323×).
| Time | Price | What happened |
|---|---|---|
| 9:30 | $1.62 open → $1.79 high → $1.55 low | First 5-min candle. HOFC = $1.79 |
| 9:35–10:20 | $1.55–$1.78 range | Consolidation under HOFC. Patience. |
| 10:25 | $1.80 breakout | ENTRY — green bar takes HOFC on 4× avg volume |
| 11:05 | $2.82 peak | EXIT zone — long red wick + climactic volume |
| Close | $1.22 | Fade gave back every penny of the gain |
A disciplined scale-out exit would have locked in 5R+ on this trade. Buy and hold gave back everything.
Then look at the next four weeks:
- Apr 10: $1.09
- Apr 13: $0.80
- May 14: $0.39 (-86% from signal high)
This is exactly why Ross's rules exist. The strategy isn't "find good companies." It's "exit before the dump." If you can't do step 7, don't do step 1.
What this module is and isn't
This module is: an open-source walkthrough of someone else's strategy. We give Ross Cameron full credit. If you trade this, study his free YouTube content and (if you want depth) consider his paid education at Warrior Trading.
This module isn't: a substitute for the real thing. We learned this from him. So can you. Don't take our word for it — go to the source.
The Top the Bot scanner runs this strategy automatically every morning. The Education Hub explains the principles. But discipline and screen time are on you. The system rings the bell. You make the trade.
Honor where it's due
To Ross Cameron — thank you for being transparent about your method, posting your statements, and treating teaching as a serious craft. The Rocketship Journal at trading.michaelmankin.com/journal is one student's attempt to do the work in public.
— The Top the Bot team