“I didn’t ask for permission” — Kristjan Kullamägi Mock Interview
Kristjan Kullamägi is a a true outlier. In 2020 alone more then 10million new trading accounts were opened. Kris is someone who has achieved returns greater than 99.99% of people who have ever bought a stock. What makes him ever more rare is that he is the only person to my knowledge who has achieved these financial goals while also sharing hundreds of hours of live trading and teaching for free. Starting October 1st 2019, Kris has streamed his journey from trading a mid $3Mil account to where he is now. No catch, nothing, completely free content, and alot of it has under 100 views. I figured why learn from anyone but the best, so I made it my goal to recap every piece of content he has ever put out. I still have a ton of work to do, but I figured it would be fun to reflect on some of the gems he has shared. I have been in paid services, studied the trading community, read books, and I believe Kris has provided some of the best information out there, giving us gold, for free. I realized I was like a archeologist digging for gold, trying to learn everything about Kris, his mindset, and how he got from point A to B. I have decided to share some of this gold in a mock interview format. I didn’t actually interview Kris, but these answers are 99% word for word what Kris said with a slight tweak here and there to flow better. Forgive me if anything is taken out of context. Saying thanks to Kris feels inadequate, but thank you, to a true goat in this industry!
Talk about your journey:
My initial capital was $5,000, I lost 90% of it in the first 2months, I blew up. Then I went back to work saved up some more, started again with $3k-$4k and blew up again. So I took a loan, started again and blew up again. Then I took another loan and went sideways for a year, and then I started making money. So first year I blew up 3 times and was close to blowing up a couple of times the 2nd year when I was going sideways but I had some big swings there too. Right now lets just say I don’t need to trade anymore. May 2013 I was down to $9,100 in my trading account. My account was tiny but you can see it growing every month. January 2018 I had $1.4million, I hit $4Mil July 2019, but I had close to a $1Mil drawdown mainly because I over stayed on a bunch of stuff like ENPH and ROKU, Nov 1st 2019 I was in low to mid $3mil. That is how you grow a account, at least 100% per year. As of March 1st, 2021 my account was $82Million.
The majority of your net worth came in 2020, how was that year?
2020 was big anomaly, I have said it 100 times, best market since 99–2000 and not even close, we will see easy money markets again, but I don’t think we will see a free money market like that again for a long long time. Last year and early this year was literally free money, that hasn’t happened since 99–2000, this is what trading is. 2020 was a easy year things just went up.
Talk about GME abit:
Guys like me are rich because people overestimate their abilities. On something like GME a quarter of all the money I made in trading over 10 years came in a one month span on 2 trades on GME. Because millions of people came together and decided they are going to be overconfident in a group, I figure maybe I should be under confident as much as possible, because that seems to be where the money is.
You very often talk about listening to a stock, elaborate:
You have to listen to the market the market is going to tell you, you can’t be 100% sure. Gotta listen to the market, it will give you clues, sometimes it will give you confusing signs, will it be great than things look like shit than great. You have to let it tell you, you can’t anticipate inside of a range. That’s the key, you have to let it tell you and guide you. One main reason people get in trouble trading is they don’t listen, they don’t let the stock tell them what they should do. Instead they try to impose their will on the stock market, but the stock market doesn’t give a shit about you, your feelings, your money goals. Your best friend is a stop loss. Just follow the price action, you don’t know shit, your opinions are useless. Strong opinions held loose. You have to be fluid, I can be super bullish one day and super bearish the next, because I listen to the market. I don’t listen to the media I don’t listen to Cramer, the only thing I listen to is the market thats the only thing that pays listening to, sometimes the market lies to you because he/she is a asshole but thats the cost of doing business. You need to listen to the markets, not these analysts, they’re wage slaves. There can be a whack a mole market, decent breakouts are not working, not a good sign, you have to listen to the market. The strong things can really stand out when the market is down, not that it matters then because I don’t think these stocks are ready to make a big move, but you have to pay attention. I can be heavily net short but I’m still looking for signs and always listening to the market, that’s what you should always be doing, never get comfortable in a position, always look for signs, always listen to the market.
What is your view on jumping around from setup to setup?
If you are new there is nothing wrong with jumping around, that’s how you learn, but after a few years you have to settle with something and stick to it. If you find something that works you stick with it. Jumping around from one thing to another rarely works. People running around doing a little of this, little of that, you will never get good at anything. Be the best at what you do and man you will be in such a position of strength. Most people don’t master anything, they go with the flow.
You used to day trade, but now only swing, talk about it?
You start small and then you scale it up, no need to get stuck in that stupid day trading thing for the rest of your life. Well it just a personality thing, if you like action and want to feel like your doing something all the time great, I just fucking hate day trading, I’m not bashing successful day traders. Swing trading is harder in the way that you have to have the ability to wait for weeks on end. Day trading is really tiring I hate it, sometimes I do it if I see something really good but mostly it just takes up alot of time, it’s just so much easier to make money swing trading in my opinion, the hard part about swing trading is sometimes you have to wait sometimes for multiple months and do very little or almost nothing. Swing trading you have to do nothing and just sit on your hands and that is the hard part, and I’m still learning but you know you have to find some hobbies, that’s why I have played World of Warcraft alot in the past. Day trading it is very easy to get trapped in that scalper mentality. I see people that I have followed for years that are still stuck in that scalping and making a few hundred a day but don’t scale up their trading, scale up the size and time frames, and they can make much more money with less effort, so I realized that early that there is much more money swing trading. I think that it is also easier if you wait for the right market conditions. I really believe the big money is on the long side in the multi week and multi month moves. There is much more money in swing trading absolutely. I don’t want to sit and day trade the rest of my life the big money is in the longer term moves anyways. I am always looking for bigger moves I am not looking for a couple of day trades, I want things I can hold for weeks and month. I think day trader or swing trader you should get 100% per year minimum, that has been my benchmark and I have hit it for the past 6 years, you should at least be able to double your money every year at least. Swing trading is very different from day trading. In day trading you are trying to get high win rate, your win rate should definitely be over 50%, but your risk reward is smaller maybe 2–3x your risk, its hard to get 10x your risk, but in swing trading thats what I’m aiming for on every trade, 5–10x risk on every trade, but my win rate is very low its maybe 30%. Swing trading you should probably have at least a one to five risk reward ratio, if you have a potential trade where you could set a defined stop but you can’t see at least 5 times potential reward, you probably shouldn’t take the trade, at least or around 1:5. If you day trade if you are up 1to2x your initial risk you should probably lock in 1/3 to 1/2 and then let the rest ride and raise your stop. The way I trade now I go for home runs, I try to go for 20–50X RR on many of my trades. Swing trading is different because you can get these enormous moves over time, but day trading per definition you don’t have time you have to be out before the close, you don’t have time, stocks need time. I definitely had a higher win rate as a day trader, because I locked in a piece faster and was more aggressive at moving stops. I also used to trade differently, I used to short alot probably 50% of my trades were on the short side, now it’s maybe 10% short. Because in swing and position trading it is much much easier to buy stuff. Because momentum on the long side works differently and also mathematically I have stocks that go up 50–100% all the time, but you rarely short a stock that goes down 50%. I don’t sit there and day trade for a few K here a few K there, I’m just getting too old for it. Like I want to trade the rest of my life but I don’t want to day trade, I don’t want to sit there looking at charts 7–8hrs per day, I have done that it’s really exhausting, so I’m just sitting around and doing other things mean while I look for big opportunities. For a day trader I would say there are money making opportunities pretty much everyday, but for someone like me not even every week. Some markets things just don’t have alot of juice, thats another thing that is different from day trading, if you are a day trader a long or short trader you will find trades pretty much every day, there is no bad or good market, you can trade everyday if you get a setup. But swing trading is different, because at times it just doesn’t work on the long side, you have to be inactive for long periods of time, sometimes months. While if you are a day trader you can be more active, there isn’t necessarily periods where you have to be more inactive to the same extent as swing and position trading. That is also why it’s better to have a larger account if you start swing trading because you don’t have to worry about the money as much and having bills to pay and needing to make money. So what if I don’t make money this month? Because maybe next month I make a million. It’s very psychological too very psychological this game.
Talk about a flag, how do you have edge? Give a flag example:
Everything looks like a flag if you look closely enough, we are looking for very specific setups that give us an edge. We want edge, not randomness. You are your own worst enemy, you need to get the randomness out of trading, you need to trade with an edge. Put in some effort, invest in yourself, and then you don’t have to trade random stocks you can trade with an edge. I’m always looking for tightening up action, relative strength, higher lows, I want the odds on my side. I don’t want random things in my portfolio. Its very hard to explain what looks good vs. what looks random, it takes a long time, but don’t worry about it, try to improve and look at charts, look at thousands of examples, go look through every stock and look at high tight flags. You will see the best setups the ones that makes the biggest moves are just very clean in the way they act, it is hard to explain. It takes time, it takes many years to get good at this. You can get profitable much faster but to get really good it takes years. But if you are really focused on the things that work and put in alot of effort, you can be profitable from the start, especially if you start out in a good market. The cleaner the chart the better, you have to train your eyes, I have been doing this for 8 years looking at maybe 1,000 charts a day, you have to train your eyes and get a feel for whats clean and whats choppy. You don’t have to be super advanced in your analysis, the simpler the better, you will out perform 99% of experts. Focus on the stocks that have great charts and great earnings, or any kind of earnings, to make money in the markets you need some kind of an edge, not some random stock that maybe goes higher. Make a habit of drawing these triangles, if you can’t draw a triangle the setup is shit, if there isn’t a range and higher lows the setup is shit it’s as easy as that, move on. If you need a barcode reader its not a good setup. LEDS May 2021, that is a great setup, this is picture perfect, this is your role model breakout, study something like this. Makes a HUGE move on big volume more then triples, pulls back, finds support around the 10 and 20, goes sideways and tightens up, and then breaks out on volume again from this tight range. First base breakout. You don’t need to trade 10 different tickers a day, find the super star ones and thats all you need. This is a super star, the model one, this is what you need to try and find. Pattern recognition varies from person to person, it’s very subjective its not a exact science. Its kind of hard to explain what I see, I have a huge data base of charts in Evernote, literally 10s of thousands of charts that I have annotated with news and earnings, this is a project I have been working on for 6years, and I’m still not done, I am constantly updating it. You don’t have to connect the tops of the candles, trendlines are not a exact science, its here to visualize, you want to visualize it getting tighter, its moronic to draw the perfect line, its not fucking rocket science, throw away the TA books you have read, go back in the US market and learn how stocks move. I want to see higher lows, tightening ranges, and relative strength, cut 99% of things that don’t matter and your trading results will improve. People do irrelevant technical analysis. Some people use 20 indicators and don’t understand how good stocks behave. The main thing is you need to be in the right stocks.
Talk more about the right stocks and stock selection:
You want to find stocks that are expected to grow 20, 30, 50%, not 3%, there is nothing there for me personally, you want to find the most explosive stocks. Do you want to trade stocks that have the potential for 10% moves or do you want to trade stocks that have the potential for 50% moves? That’s what you need to ask yourself, and if your answer is you prefer stocks that make 10% moves please leave. I don’t want to see anything below 5ADR ever again, only people with over $10Mil accounts can trade below that, for everyone else its a waste of time. High ADR, 5+ thats the minimum cut off, if you want to waste your time on low ADR stocks please don’t share with us its a waste of time. You could buy a ADR 3 setup that looks good but it won’t go up 65% in a week, this is the reason you stick to high ADR stocks guys. I pretty much look for the strongest 3–4% stocks in the US markets. Best way to make money is focus on fast moving stocks. If you trade things that are random, you will get random results. You need to trade top momentum stocks that’s where your edge is. Things like DOGE that have a explosive move don’t need a multi month flag, went up 1000% in 2 days and flag was 5 sessions that’s more than enough, explosive instruments are not going to wait around. Not rocket science, you just need to spend a few hundred hours identifying what is a good setup. It takes years to see which is a good setup. Don’t just buy off a random up day, needs to be coming off a solid tight range. Stock price makes no difference, focus on the setup. Re-watch the swing trading school videos, the previous move needs to be explosive, those are the ones you want to focus on not some random stuff. You want explosive stocks, the only way you have elite results is focusing on elite stocks. Forget about weekly charts you guys don’t need to pay attention to weekly charts until you get to 10+ Million. Focus on the daily chart, 1month, 3month, and 6month momentum, the strongest stocks across those 3time frames, the strongest stocks, elite. The bigger the first leg higher the bigger the second leg higher is going to be. So let’s say the first leg higher is 50% and then it goes sideways and flags all the usual stuff, I mean the second leg higher could easily be another 50%, but if you are trading a slow moving stock and the first leg higher is 10% the second leg probably won’t be 50% if you understand what I mean. You want the strongest names and sometimes it is the things that have gone up the most that will keep going up the most. The only thing that matters at the end of the day is the setups, whats on your scans, how are the stocks in your tradeable universe acting, thats what matters at the end of the day, all indicators are useless illusions.
Strong stocks are supposed to go up in a good market, your job is to find the strong stocks and then wait for a good market. You can’t control the market but you can control the setups and the scans, focus on the right types of stocks instead of some random piece of shit stock. You want to look for big leaders to find a little bit of support with a little bit of a rounded bottom and a range, these are signs I look for, these leaders that have pulled back alot the past few months and then they are bottoming, and they are way stronger then the overall market. When you look at the Nasdaq, and it has broken down from its range but strong names are holding up inside their range, they are holding up. You want to see these leaders starting to show resilience against the overall market, because what happens is when the market stops going down or starts going up, these stocks will go up even more, so these are all signs to look for but there is no guarantee. If the market keeps going down these things will break down eventually, but you have to look for these signs and you have to wait. Waiting is such a big part of this game, it’s like 95% of trading is waiting and looking for clues, and looking for those great opportunities. I use market smith to look at the earnings, it’s a tool I use alot during earnings season. You can see estimates for this year and the year after, and you can see the past 2 years or 8 quarters of earning and revenue growth. I track these things, I usually want the fastest growing stocks, they don’t have to be profitable, alot of them are losing money, but if the revenue growth is big they can work really well. If you study the biggest movers in the markets, things that go up multiple years and make huge moves they are mostly all earnings driven. It takes years to see which is a good setup. You can be a moron but not a super moron. I fuck things up all the time and I still have really good returns over the years. Thats the great thing about having a big edge, if you have no margin of error in your trading your edge is too small. Thats why its so important to really focus on stocks that can make big moves so you have bigger margin of error.
Technical analysis or fundamental?
Technical analysis it works what can I say, I think technical analysis works, combining technical analysis with fundamental analysis is just a winning recipe in my opinion. Guys to make 10s of millions or even hundreds of millions you don’t need to know any fundamentals, if you could figure out where the money is flowing you don’t need to know any fundamentals. Fundamentals are just to give you a little more conviction, if you are good at stock selection and can figure out where money is flowing you know…Or you can know a bunch of fundamentals and be a complete useless piece of shit you know, be totally unable to extract money from the markets, I would say I’m a little bit in between. I’m between a useless piece of shit and someone who can extract money from the markets. The macro stuff yeah I am too lazy to do that. Deflation concerns well my concern will be that the breadth has been incredibly bad and the major indexes are kinda due for a pullback, those are my concerns I don’t give a shit about the macro, I care about the technicals thats what pays. Macro is not going to pay, technicals will. In the past there was a lot of volatility in Brazil with all the political drama and shit like that, but I don’t care about any of that I care about price action. Macro is irrelevant, GDP and inflation, its just charts and earnings. If the macro is good and the charts are shit, you won’t make any money. And if the macro is shit and the charts are good who cares if the macro is shit, you are going to make money. Unless you are running $100Million you probably shouldn’t care about the macro at all. There can be all the bad news of recessions and trade wars and everything going to hell, but you know the chart can look like a bull flag. Fundamentals can help with conviction like if I know a company is a leader in its own market share or if it has a niche, and has big earnings and revenue growth that gives me conviction to pair it with a strong chart definitely. Instead of trading a stock that will likely go bankrupt and I am really just betting on a dead cat bounce so I don’t have conviction in it fundamentally. So yeah if I had to choose something I would just trade off strong chart no matter what, but I do feel having a little bit of knowledge gives me a edge, thats why I track earnings and stuff like that, earnings leaders and growth leaders. It is so important to go back and study what actually works, instead of buying a course or following a moron. You have to do the work, study, and figure out yourself what works and what doesn’t, that’s the only edge you can get, don’t expect someone else to do the work for you. Trading is a imagination game, the one with the biggest imagination wins, assuming risk management and all that stuff, the people that try to analyze everything with numbers and valuations they will be mediocre. The biggest moves in the shortest time frames is usually stocks that can’t back it up with fundamentals or valuations. Especially true in this part of the market cycle where we have been in a bull market for 12 years when people will buy anything and everything. News and fundamentals are great, but 95% of my trading is price action, it doesn’t really matter if fundamentals and news are great, its all about price action. It can be kind of confusing because the markets don’t make sense ever, even though alot of people try to make sense of the market but they don’t.
Talk about market conditions, what is a good and bad market?
Market conditions are super important, any idiot can learn a setup, the hard part is to learn when it works and when it doesn’t, that’s what takes time. What worked in January won’t work in March, market environment matters. Look at NASDAQ, the 10 and 20 day moving average will keep you in most of the good periods and keep you out of most of the bad periods. Very simple not rocket science. Look at the indexes in the past, trending above the 10/20day you can get easy money.
Ideal market is a bull market with very little volatility, or an up trending market with little volatility and good breadth where alot of stocks go up, not that I trade a lot of stocks but a good breadth is very nice to have. An ideal market looks like the first half 2019, just up up up with very shallow drawdowns. Also a market from 2017 to 2018 it just keeps going higher or sideways, with very little volatility, that is an ideal market. In a market like that you can be like that you can be like 150% long and you really don’t have to do anything, you get long good setups and then you could just sit and wait for months, and everyday you are making money pretty much, these are the market conditions where I have made millions in a relatively short amount of time, and more importantly you don’t have to work hard for it, things just work, you buy a stock and it just keeps going higher. Sometimes I go 3–5 months without making money, 2015 I went sideways for 9 months and I still more then doubled my account that year, but that was a really tough year I was so out of tune with the market that year. The first and second quarter of 2019 were insane I doubled my account in like 3–4months just crazy crazy, and the biggest rally’s they always happen after drawdowns when the market has gone down for several weeks or several months. That’s why at times I am looking for the market to tank and I want it fast, because the kind of chop is the worst kind of market environment, because in chop you get good setups and then they get slammed down and fail. In a down trending market there are no good setups, everything is just going down every single day I just sit and wait it is the easiest market ever you don’t do anything. The best money is made after a pullback. The easiest money in my career was April to September 2020 was free money. And January to May 2019. Also late last year in November to February when the market broke out of multi month sideways. 2017 was overall easy too, just kept going higher. The best time to buy stocks is after a multi month sideways or multi month sell off. For a swing trader sell offs are great, because thats the best thing can happen for a swing trader if you trade on the long side. Because thats where the big opportunity is. The biggest wins, look at the Dow Jones chart, go back 100years, the biggest swings start after the market has gone down, every single time. The key is catching it and getting in when the next swing up starts. Thats the hard part obviously because you can buy into a bear market rally and then everything goes back down, so thats the hard part. This is why the 2nd leg lower or undercut the previous low those are much safer then getting in on the first leg down, you always want several legs down. You want to buy breakouts when the market, the nasdaq is the best index to follow, comes out of a multi month sideways consolidation or a multi month sell off. You want to see things setting up, then breakout then new things setting up. A mediocre setup in a good market will work better than a good setup in a bad market. In good market conditions you get multiple good setups everyday for months, months. A good setup will still work out with index going sideways, but you have to be patient and super selective. When the indexes have big powerful moves that usually means the stocks underneath have big powerful moves, a clean low volatility trending market that is the best time to be a swing and position trader like I am. I like to trade markets that have big breadth when most things are going up those are the easiest markets to trade, trading a choppy market is like winning the lottery you buy 5 stocks and maybe only 1 of them is going to go up and the rest will stop you out. I want to be in a market where I buy five stocks and three of them go up and 2 stop me out. A hot market will end it will not last forever but while it lasts you have to capitalize on it, because most of the time the markets are not this good (Late2019). In easy bull market trading, it’s easy to feel like a genius, but it’s not me it’s the market. In bull market trading, you pick your spots and then you just wait, cut your losses fast and let your winners run, because a bull run can lost for longer then anyone thinks is possible, that is why it is so important to trail your stops and not try to anticipate some kind of top or what ever.
You don’t buy breakouts when the 10day and 20day are down trending on Nasdaq, this simple rule will keep you out of bad markets and in good markets. You don’t buy breakouts in down trending markets period. Buying one stock that looks good and is breaking out is a fools game, you want to feel like you are missing out. I don’t like to buy the only game in town, I like to buy when theres alot of good setups and I feel like I’m missing out. It’s never a good sign when you only have one good looking stock, it’s not a good sign, thats always a bad sign, you want a lot of things looking good not just one stock. When market has gone up 6–9 months without any pullback thats when odds on the long side get really bad. Once the market is straight up for multiple months you have to be careful buying breakouts, you should have already bought breakouts for multiple months. When the markets are in a range stocks break out and then get slammed down again, nothing has follow through, break out then slammed down, break out then slammed down, because the indexes are in a range and most stocks do with the market does. Four out of five stocks do what the market does, so if the market goes down most stocks go down and if the market goes up most stocks go up, generally. Range bound action, it’s hard to take any directional bets, that’s what the market does, these are the hardest markets to trade, markets that go straight up like last year and super easy to trade, and market that go straight down are easy too personally because there’s just not much to trade. The range bound markets are the worst, the good thing is range bound markets morph into directional markets, and usually it’s up. You have to wait it out. Choppy markets are worse than bear markets
What is your view on the market? (Worded as if asked early Q4 2019)
The markets have been going sideways for many years SPY is up 5% in 2years, Nasdaq is up 10% in 2years, small caps are flat / down, so the indexes have been going sideways a pretty long time, which can fuel a potential rally, we have been building solid bases. Every time the market over the past 20years has been going sideways for two years in an uptrend we have gone higher. Every time the market has had a year or 2 year base there has been a year or 2 year rally following that. It was the same thing in the 90s, mid 2000s, and since 09. And now it looks like we are taking out another consolidation to the upside so I have no doubt there is at least a few months or quarters of rally in this thing. So that is also one of the reasons I am on margin right now there is a lot of millions to be made if we are in the early stages of a long rally lots and lots of millions to be made. With what I see now for my type of swing and position trading I really do think the next three to six months are going to be great. Because the indexes look like they want to go higher this is a bull in a cage, we have been building higher lows for years and now we have a bull flag, yeah it is really hard to be bearish here. The technicals are very very strong forget about the financial media and all the pundits on TV, everyone has been bearish for 10 years forget about these people, technicals is all that matters. We are 0.4% off all time highs, you wouldn’t believe that reading the media. On the weekly chart that indexes looks so good, look at this QQQ it has been building higher lows for 2years, it had this big washout and then it just came right back and has just been putting in higher lows, it is getting so tight here same as SPY. The sentiment at lows in December was more bearish then in 2008, thats just insane, and then it had a big rally and now it is just getting tighter and tighter. If they breakdown they breakdown and then we go lower but the thing is when we start breaking out of these ranges on major indexes and get growth based moves, we could be in for a 6–12 month rally. It’s just a waiting game I’m kind of excited. I can’t believe these people that are bearish right now, just this morning I read in the financial media about the upcoming market crash, I have read the same articles for the past 8 years since I started trading about the upcoming crash and yet the market just keeps going up. I don’t know anything. I just know if I see a setup that has been building higher lows for 2 years and is taking out a 2 year range I just know thats a bullish thing, thats all I know. If the market wants to go higher it will go higher no matter what every bull run there is a lot of doubt, since I started trading in 2011, I joined twitter in 2012, and alot of people these experts have been so bearish for years and years and still markets are going higher. I don’t know, I follow price action that’s what I learn from you can’t listen to peoples opinions because most of the time they are worthless. The only thing you have to listen to is the market in price action, and what I see from the price action is most things look pretty healthy. You can’t ignore the action in the indexes it is just so strong, we get alot of negative data almost daily, manufacturing data and trade wars is bad and Brexit and economy, bla bla bla indexes are building higher lows and they are flagging, the price action tells me we are going to go higher.
Do markets change?
It is the same thing over and over again just the stocks and the actors change. And when I say actors, like right now it is the Wall Street Bets and Reddit people, and in 10 years it will be another crowd, 10 years ago it was another crowd, but its different stocks doing the same things, the behavioral patterns are the same everyone thinks they are unique but they aren’t. It’s the same thing over and over again, just the players change, don’t be a victim, educate yourself. Anytime you lose money on anything it’s your fault, no one else’s. I’ve gone through all the phases, 5 chatrooms, alerts, waste of time, put in the work, put in thousands of hours and study the same setups that actually work. Just the players change, stocks change and the themes change but the setups stay the same. I have thousands of charts from the 80s and forward, and I even have charts from the 20,30,60s, etc. It’s the same patterns repeating.
Will the SPY go up or down next year?
I can think a correction will be larger in the SPY than the Q’s, but in the end I don’t know, it’s all mental masturbation. Who cares what I think, I don’t know anything, is it going to go up, is it going to go down, is the sun going to shine tomorrow, I don’t fucking know. If I knew these things, I would be the richest person in the world, but I’m not.
Do you believe you should create your own setups?
Using brain power is for geniuses, or those who think they are geniuses. You’re better off just copying. You become successful by shamelessly copying the things that work.
What are some of your best or most profitable setups?
Flag breakouts is the type of setup that has been working best for me, thats where I made most of my money over my trading career, I’ve been trading for 8 years. Flags work on all time frames, you can trade them on the daily chart which I do not since I’m a swing and position trader, but if you are an intraday trader you can trade intraday flags. It’s all about defining your time frame, since I have a longer time horizon I really don’t look at intraday flags I just don’t care. I usually look daily charts and also weekly charts. My main long setup is things that are gapping up on earnings good earnings that have been in an uptrend, and then I buy it opening range highs, on the 1min, 5min, or 60min ORH, those 3ranges are my main ones, and I buy both earnings gappers and regular breakouts on ORH with LOD as my stop. If there was one setup I would trade it would be high tight flag, or EP. If you have to trade one set up it has to be a flag especially these small and microcap stocks, when they make the initial move they double or triple or something and then they go sideways for a few weeks or a month, and start surfing the 10 or 20 day, and then they have a range expansion man, this is the one setup you should trade, it is such a simple setup, simple but not easy. Mean reversion short setup is the most profitable day trading setup, and the high tight flag is the most profitable swing trading setup. EPs are the 2nd most profitable swing setup, and mean reversion shorts are the 3rd, at least for me. These 3 setups, getting them served on a silver plater, I wish that someone had done that for me. I had to find these things out from many different sources and then verify for myself that they worked. It’s not just the setups guys, it’s risk it’s the ability to sit on your hands when the conditions are not favorable, okay, it’s so many other things. Setups are easy, like any retard can identify a good setup, I have literally seen retards identify good setups, but you know there are so many other things that need to be in place, position sizing, there is so many moving parts. And especially when it comes to breakouts if the market is not good the breakout is not going to work, it’s just that simple. It’s not just about setups and risk management. Its also about stock selection and identifying correct market conditions. And you aren’t going to learn setups in a few weeks, sorry. It’s not my strategy, its what works in the markets, it’s just a way of making money in the markets. Alot of great traders trade the same setups because they work and have for 100 years
Will you buy a breakout in a bad market?
Unless you are a day trader there is no edge in a poor market for a swing trader, unless you are shorting triple ETF’s and have a little bit of a longer time horizon like multi week or multi month potentially, there could be some edge, but you know don’t churn your accounts, don’t look for breakouts. It is not a breakout market if all the major indexes the 10day is sloping lower, the 20day is sloping lower, the 10day is below the 20day, you know the rules. Everyone that has followed the instructions on the screen knows the trading filter.
What do you do in a slow market? How is your patience?
The most important thing is to preserve mental capital, stay positive and healthy physically and mentally. Let other market participants wear themselves out, and when it’s time to be aggressive you will be in a position of strength. That’s how you win in trading you have to do things differently. You need a lot of patience as a swing trader, this is what sets up big moves later, you have to wait it out. I trade when I see setups, not because the market is open. I’m here to make money, not trades. Patience is important, just because the market is open doesn’t mean you have to trade. Patience is something you can develop over time, I was not patient in the beginning but it is something I have developed as I have grown more confident in the markets. This is what trading is all about it is mostly boredom most of the time you do nothing, just wait for opportunities and when you get an opportunity you just wait for it to play out, that’s it. This is what trading is all about, it’s 95% boredom, but if you want to make millions you have to have patience and wait for the few times a year when the market has big rallies, the rest of the time it is just all about waiting. Trading does not have to be complicated it’s just simple things that you do over and over again and the money will compound, with long periods of extreme boredom in between, that is trading in a nutshell. It is all just a waiting game, just a waiting game, trail your stops, sell into strength, cover into weakness, it’s just a very simple method I trade, nothing complicated, the hardest part is just the patience part, because it gets really really boring, the first half to hour is where things move, then the rest 90% of the time is just watching paint try. Stay patient that is the only way because I know the good times will come back, there’s going to be a period of a few weeks or a few months where I know I will make at least $1mil. I don’t know if it will be somewhere this year but it will definitely be somewhere next year I just have to wait. Wait, wait wait wait it’s all about waiting, it’s all a waiting game. If you want to make money in the markets you have to have patience, you have to wait for your setups, sometimes you have to sit there for months, because you can’t swing trade on the long side when the market tanks there is no setups. Just looking at charts all day it is going to fuck you up in the head, it is just not healthy, so you need to do something else, I used to play World of Warcraft. I can’t leave the computer since I am watching the stock, but on the other hand I can’t just look at the stock and do nothing. Looking at too small of time frames can be very very toxic. When the markets are strong and healthy you just don’t have to do a lot it is 99% about waiting and let the things work for you. I think one of the biggest mistakes traders do is they try too hard, the markets are all about waiting for the right setups, and that is what I do and then I just manage the positions. In early 2019 I made well over a million in a very short time in a few months, and I really didn’t have to do much, I bought a few stocks and then I just waited, and thats how I like to trade, I don’t want to work too hard for it, because you don’t have to, if you wait for your setups you don’t have to work hard. But you do have to work hard to get to the point where you know where the good setups are if you know what I mean. Patience is the hard part, because you feel like you have to do something, every day I am fighting the urge to trade, I’m a chronic over trader and probably always will be and thats fine, as long as I realize it and don’t go crazy with it. I am a chronic over trader, thats one of my biggest flaws, I want to do something everyday but that is not how the market works. Just because you trade the market isn’t going to give you anything, actually its the opposite, you always trade and will get punished.
Is it sufficient to just use screen shots over a statistical data base?
Yes. I think it is far superior to any statistical data base. Trading is about identifying the outliers, that’s where your edge is you are not going to catch outliers with a statistical data base jerking off to a excel file, its just not going to happen I’m sorry. You need to study, you need to put hundreds of hours into studying how stocks move. Make some scans for stocks up 100% or more in the past couple of years and look at how they move, build a pattern data base in your head, it is going to take years, but it is going to be worth it in the end, it will be worth it. I can show you my Evernote and how much work I have put into building a pattern database. Just look(10/10/19), I have 10s of thousands of charts. Look at the amount of EP earnings growth charts, this is something you have to do if you want to make many millions in the markets. This is something I have been working on for 6–7 years. I recommend Evernote, if Evernote of tc2000 increased their price 500% overnight I would pay it, there are not alternatives. I use Esignal to get 30 and 60min charts on alot of these stocks, I went back and looked at the intraday charts, it’s all about grinding it out, putting it in your head, repetition repetition. I am not self taught I read a lot of books and studied a lot of traders over the years and their methods, in my Evernote there is hundreds of pages of different trading methods that I have picked up over the years, and then I put everything together and tried to simplify it as much as possible and find time frames and stuff that works for me with my personality, so I dropped day trading and mostly short term swing trading, because I find it is much easier to just wait for the few times per year when you can get these big moves. Well it’s not easy it’s hard, it’s the hardest thing ever, because trading is so easy it is the waiting for your setups that is hard, waiting for the ideal opportunities. But I am trying to get better everyday, week, year. Every year I do more of what works and less of what doesn’t, every year I do less, the amount of trades I do goes down.
Can bad companies make big moves?
Many times it’s the biggest scam stocks that make the biggest moves. I have said it many times before scam stocks make the biggest moves. The best moves in the stock market are stocks that have either no earnings or very small earnings, that is how the stock market works. There can be stocks they look like they are going to go bankrupt but sometimes when these things catch momentum they could double and triple in no time, and sometimes they move even more explosive than the best growth stocks, so this is why I am always stalking these kinds of names. You don’t even need to know the fundamentals you just need to know the trend. I know the fundamentals are shit I could see that just from looking at the chart they are in big trouble they probably have a lot of debt and losing alot of money etc etc. Many times the shittiest companies can be the most profitable trades, thats the irony of the stock market
Do you hold losses?
I hate holding losing things, I hate having red numbers in my portfolio. A quick small loss is the best loss. That is how I trade. I usually have lots and lots of small losses and a few very big wins, so I have no problem taking these small losses on these things, because all I need is to catch 1 or 2 and I will make it all back and much much more. Sometimes stocks go down. Most breakouts I buy fail.
Do you vary position size?
Yeah I very position size I always bet more on stuff I like that’s how it should be, you should never have static risk ever ever, that’s how you make money, the higher conviction the more you should bet. And to get conviction you need experience, and to get experience you need to make alot of mistakes so haha, I have made all the mistakes you can make.
What are you looking for on a EP? Give an example:
A good looking stock, that has been surfing the moving averages and putting in higher lows and now it is just trying to break out of this range on earnings, good earnings, good estimates, it is the perfect trifecta, this is what I am always talking about, big volume already above average volume good earnings good estimates and good chart. I am looking for explosive explosive earnings big surprises big numbers coming out of big bases on big volume. You only need around 2hours a day, a hour before and after open, most EPs you find after hours and premarket, especially large and midcap ones since they have alot of volume premarket. You just scan for stocks gapping lets say 4% or more on more then a couple hundred thousand dollars traded premarket, and then you look at growth, big growth, analyst beat, and a nice looking chart, thats all you need. And all you need is to find 1–3 per earnings season that you trade well and it will pay for so many losers, there will not be candidates everyday. Growth estimates are extremely important because the market is a forward looking mechanism. Look at ROKU in 2019, I traded it perfectly, same thing I have talked about it a lot on the stream, big earnings, big analyst beat, had been in a multi year kind of uptrend, but it had big big growth it beat analyst estimates it just went, and the next earnings report the same thing. So that is what I am looking for, stocks that have been going sideways and have been kind of neglected for the past six months to year, maybe even a couple of years, and are preferably in a longer term uptrend and then they have a earnings gap up, big analyst beat, revenue and earnings growth, and big volume. That is what I look for. ENPH in 2019 it was the same thing, it is the same thing over and over again, and usually you can find 1,2,3,4 sometimes even more really good ones per earnings season. And I’m talking about large and mid cap ones, if you look at small and the microcap space there are even more, but I don’t really trade the small and microcap names anymore because my accounts are way too big, I would have 30 positions. You will find good ones where you can risk $1 to make $30 or $50 over a period of months or quarters. Some you will miss, some you will get shaken out, and some you will trade perfectly. And the 1–2 you trade perfectly will pay for 50 losses, but you will probably not have 50 losses to find that one, you will probably have 5 losses, so there is a lot of money to be made if you know what to look for and with a little bit of patience. There is nothing magic about it, it is a very simple process, you need to do the same things over and over again. AMRN in 2018 was a great trade I had biotech gapper same trade as always, buy the opening range highs, and more than doubled in a month big big trade, extremely liquid, look how many shares it traded, it went from trading a few million shares a day to 163million shares in a day just crazy. I think it was one of my better trades that year you don’t get many, but if you can get a few on decent size you know you don’t need much more, a trade like that can pay for 100 small losses.
What is the difference between a small account and big account?
When I was growing a small account it was all about the singles don’t try and go for homeruns, now I try to go for homeruns but if you have a small account or tiny account I would say go for singles and try to be as consistent as you can, try to avoid drawdowns and the more bored you are the better, when you start getting excited is when you take a step back because that’s when things get dangerous, you should be bored out of your mind, that is how you trade a small account. When I had a small account I didn’t manage my emotions because you can’t, I think people who think you can manage your emotions are full of shit you should just accept your emotions. And this is why I over trade, I am a chronic over trader, sometimes I put on trades I know they are not optimal but I do it smaller size just to get that fix, I need my fix thats how it is, I learned to accept that. I need to make small donations to the market to avoid bigger losses later on so I don’t do something big and really stupid later. These emotions like fomo and whatever they are will never go away, they will always be there, thats why sometime I used to play WOW, to take my mind off trading. If you have a smaller account and want to swing trade you should probably trade smaller stocks that have more volatility. Small account edge, not only do you get bigger moves you also get more opportunities if you have a smaller account. For every opportunity I get you guys with a small account get 10 and can compound so much faster
Is trading easy?
Trading can be very frustrating sometimes, thats ok, if it was easy everyone would do it. A good example, the whole year of 2015 was just very exhausting, and that’s the part most traders can’t handle, people go mad, it’s too hard, but you have to stay calm, you have to keep believing in yourself, in your method, and your markets, that is the hardest part. Making money is the easy part, anyone can make money in the right market environment, but most of the time it’s just staying patient. Most of my trading career I have been slightly depressed, because everything feels so dark when trading is not going well even in real life, so I don’t think trading is a great profession for mental health, you really have to be special to make it in trading to be honest, I think that’s why most people don’t make it, they just can’t handle feeling like shit all the time. Because it does if you are in a bad period in trading and losing real money, it’s not like a real job where you can hate your job but get a paycheck, in trading it is different. I was mostly depressed first 3–4 years, it was super tough, it gets easier, you build confidence, once you understand the markets and certain setups appear over and over, its all a patience game you just have to wait for opportunities. Trading is so fun, some days I don’t even want to think about trading anymore some days the market will just piss in your face, and that’s going to happen you just have to take it, and you say thank you and the next day you come back stronger. Man trading is so easy and it’s not at all testing your psych, it’s smooth sailing all the time..
Talk about sell rules:
You always trail I don’t buy into this sell into strength, well you should sell some into strength, but a few times per year or preferably more than a few times per year you will catch a stock that makes a huge move, 100–500%, and if you sell your position after it goes up 30% and it goes up another 400% I mean, you missed out on an opportunity there, it doesn’t make sense to sell everything after 3–5days. I think it’s good to sell some and then keep the rest and trail it with some type of MA. You are either going to sell too late or too early, but you know what I prefer I would rather sell a little bit too late after the stock has gone up 100–200%, rather then sell too early on a stock that is about to go up 200%. I would rather sell a little too late then alot too early.
Talk about risk to reward?
Its a odds game, its a numbers game, you want to put the numbers in your favor. The more numbers you can put in your favor the bigger margin of error you are going to have, the better returns you are going to have, the fewer and smaller drawdowns you are going to have. Trading is all about small losses and big gains. Its all about probabilities, you are never going to get certainty. I am always trying to hold things for as long as I can to catch the big big moves. I don’t open trades with the intention of a day trade, I’m looking to hold this thing for months and months. My trading journal at times is mostly a sea of red and then there is a big big winner here and there but it is mostly small losing trades, my win rate is maybe 30% or so, but its fine because the winners I have are 10,20, sometimes 50 times my initial risk. thats how it is being a swing / position trader, I have been doing this for many years now, it works for me it’s not for everyone. NUGT 2019 one of my biggest wins at the time $300K trade when I bought the breakout May 31st, I didn’t have crazy size it just tripled, I had less then $1 stop and it went up $30, I was up over 30 times my risk. Same with ROKU May 2019 EP, I bought it ORH, I don’t think I risked more then $2 and it went up over $100, I was up over 50times my risk, you don’t even need to take huge amount of size to make big big money if you catch something like this. If you risk half a percent of your account and it goes up 30 times your risk you are up 15% overall, now I usually scale out into strength but you get the point. You catch a few big movers like this per year, and after not that many years you don’t have to work a day in your life, it doesn’t take that many years. The key to getting 10–50x reward is buying everything at once and then let it ride, not adding to it, if you start adding to it you ruin your average. This is what trading is all about, you can be wrong 8/10 times and still make money. That’s what you saw the first few weeks of my streaming I took a lot of small and medium sized losses and then I started to get some big winners again. I can have 10 losses in a row and lose $100K, and then I can have 1 winner and win $100K, and then if I have another winner I am up $100K, $200K, $300K etc. It’s all about risk to reward, you need to find the scenarios where you could get great risk reward and then you just have to wait, do nothing. First you wait and do nothing and find your setups, then you buy or short your setups, and then you wait and do nothing other then maybe scale out and move your stop.
Do you trade options?
No I have tried options and they are not for me, I think you have less of an edge, it’s so much easier to lose money you have the time factor and all the other things it’s just too complicated I don’t get it. I think the leverage you can get from a broker is more then enough. I wouldn’t consider options, almost no one understands them, I have never met a rich options trader, so I lean on the fact that they are even bigger losers then stock traders. I have traded options, I don’t understand them, look I tried I don’t care, I made millions not trading options, I have no problem not trading options, it’s just another way of making things complex, and complexity kills returns, I try to keep it as simple as possible.
Do you use margin?
I have no problem being on margin if I have good profit paddings, like if I have alot of stocks up alot and I keep getting good setups, I have no problem getting in on some margin, nothing crazy like 200% no never, 130% if I have good padding. When your trading on margin anything you are uncertain about needs to go. I am generally afraid of leverage I think the leverage I get in my retail margin account is more then enough, because leverage that is what kills accounts. I use margin quite a bit, I only use it when things are going well, you have to deserve to use it. If things are going well you should push those periods.
Talk about drawdowns
Almost all of my drawdowns were from shorting one momentum stock, the problem is when you short these momentum stocks that go crazy it is very easy to be too early, and thats when it can hurt alot. But now I haven’t had any big individual losses where I lost 5–10% of my account, I wouldn’t be able to handle it. Now most of my drawdowns are from highs, you make 30% and give back 1/3. The worst drawdowns are when you are already going down or sideways for months and then go down, thats really demoralizing, thats the worst kind of drawdown. There is a difference between a drawdown and a drawdown, even if you lose the same amount of $ psychologically there is a huge difference. The biggest drawdowns always happen after great runs and thats how it should be, if you don’t have a draw down it means your taking no risk. Doubling your account and your draw downs doubling in size is a feature not a bug. I have draw downs that last 3–6 months every year, its a feature not a bug.
Why do you still trade?
One of the big reasons I still trade is to find homerun trades, where people get excited about a stock way after I’m already in. Only reason I still trade is trades like AMC and BB June 2021, when you catch something that goes up 90% after entry, those are the trades I live for, those are the reasons I still trade. I want the big winners, its so satisfying its like a treasure hunt, its such a fun feeling when you catch something, and especially with big size, size matters.
Why are you so successful?
If you want to be successful in this business you better learn how to lose, and stop blaming others made up or not. If you are losing money it is because of you and not anyone else, if I get angry I get angry at myself, not some made up fairytale. Its all about catching the big runs, when you have easy money, a couple of times a year, and do little in between. If you want to be a profitable trader you need to be a leader, you need to lead yourself. Its all pattern recognition, the better you get the more successful you will be, in the market you also have to be aware of the market conditions and the sentiment. Cut away the shit that doesn’t work and do more of what works, and rinse and repeat and you will be profitable. For good trading you need to focus and be able to make great decisions, have inner calm and confidence, anything that takes that away needs to go. Knowing a good setup and when to push it in the market is one part of the equation, you can’t have stress and drama in other parts of your life. It is my job to make money, I don’t care what kind of stock it is, I see a setup I trade it . The problem is people are constantly looking for reasons not to make money. There is always something wrong, “oh its a meme stock, oh the valuation is at nose bleed, but the bonds oh oh.” No one is going to roll out the red carpet, there is always issues going on and something wrong in the world, no one will roll out the red carpet and say now its safe to make money, thats not how it works. There is always something to worry about, but the key to successful trading is ignoring all those things, ignoring all the noise. Successful trading is about cutting away all the useless things you have learned and heard, most things people have learned about the financial markets are totally useless. The more useless things you can unlearn you can become incredibly wealthy. Go broke or get rich, you are in charge of your destiny its your choice, unfortunately most of you will go broke, I can tell by my Twitter DMs. I’m such a moron at times. I’m telling you you really don’t need to be that smart to get to $100Mil net worth, get the stupidity out of your system it’s going to be so easy. You only need to catch a couple of moves per year on significant size and you will outperform most market participants. Small losses big winners, small losses big winners, that is my mantra. Thats how I roll. Learn from people better than you, get better, I always want to get better, improvement is very satisfying. Once you become good at trading you can grow your account so fucking fast, you won’t believe how fast you can grow your account especially if you figure out how to scale your trading which is no problem if you focus on swing trading, you can reach $10 Million so quickly once you figure trading out. Grab your balls and do bigger size, force yourself out of your comfort size, increase your risk by 10%. When you double your account your risk should double too in dollar terms.
The only thing you will learn on this stream is study setups for at least 1,000 hours or fuck off, that’s the most valuable thing you will learn, everything else is noise it doesn’t matter, you have to do something that most people are not willing to do, that’s the only way you will be a successful trader. Discipline is the most overused word in trading, its never a discipline problem its a confidence problem, because you haven’t put in enough effort to build your confidence. If you study enough examples of a certain breakout or setup you will build confidence. Spend 500hrs studying one setup, thousands of historical examples, or you have no confidence holding for a big move or get shaken out on 1 down tick. If you want to be successful you have to identify the real problem, everyone wants to blame discipline, no, its you haven’t put in enough effort to build your confidence, and for some its the lack of experience. You have to combine studying and trading. You have to do both, you have to outstudy most people, and you have to combine that with experience. Stfu, do some studying, and get a winner mentality. Alot of people think they want to be profitable traders, but most are not willing to put in the effort and pain that is required, thats the problem.
If you want it enough well then you want it enough, people write me all the time who don’t want it enough. People bitch and moan that there is too much content. Are you fucking kidding me? When I found Pradeep in 2011, he has a free blog where he has posted since 2005, I went through every single post, then I signed up for his paid site and went through every single post he made since inception which was 6years. When I found Minervini I read his books, signed up for his paid site, went through every single tweet he has every tweeted, and looked for setups and his entries. When I found Dan Zanger I signed up for his paid site and went through every single news letter till inception late 90s, trying to understand his method, what he trades, how he trades, trying to understand everything about his method. So when someone writes to me, “Hey I signed up for this site there’s so much content idk where to begin” STFU. Thats what I think about bitches and moaners asking for short cuts. Now can I guide you in the right direction? Sure follow the instructions on the screen, but there is no substitute for going in depth and studying different traders and different methods. You have to go in depth, you can’t just spend 5minutes and oh no thats not for me. Thats how you learn, thats how you get an understanding of the market, there is different structures that occur over and over again in the markets. I used to be like that too in the beginning, I didn’t want to do the hard work, I thought trading was going to be easy, then I realized its super competitive its super difficult, and if I’m going to make it in this game I have to get my shit together. And you can spot the people far away that don’t want it enough, they think they want it, but they really don’t, they are not willing to do what it takes. You want to be successful in this field or any field you have to be willing to do what it takes. Thats a fact, there is no such thing as talent, talent is developed. It’s like people are asking for permission for hard work. It happened maybe once or twice that I contacted a successful trader for advice, I googled and searched for every piece of information there was about them, I didn’t ask for permission to do things. I read all the main trading books, I didn’t ask for permission.
