Hey, there it’s me, Victor, again sorry for not posting more frequently. As you know I have been taking a small break from the trading screens. But that does not mean I do not check in with the markets. Everyday check to see what the big percent gainers are. Once more I am a day trader I am not an investor. If this is the first post you read understand that I am not a guru I don’t want to confuse anyone. I am not a master of the markets. I am a student of markets. Being transparent is my main mission within this blog. As of week 74, I have nothing to show for it. Zero. And that’s fine. I never got into this game for the monetary value. I know the mass media promotes trading to be a get rich quick scheme when in reality that's far from the truth. I find trading to be boring at times. I know movies like the Wolf of Wall Street depicts a different image. Again there’s a reason why 90% of traders lose money. The 10% who succeed in this game understand that this is not a hobby it’s a business. In the very beginning, I thought of trading to be a hobby and I learned very quickly that it is the wrong mindset to have. Trading is one of the most brutal businesses in the world. Yet it offers instant gratification. There is no other business in the entire world that offers instant gratification. It's a level playing field. All you need is the minimum to open an online broker account and call yourself a Trader. That is what makes it so attractive, there are few barriers to entry. Most don't understand that it takes time to create a state of consistency within the markets. Focus on the process, not the outcome. I firmly believe the 90% who don't succeed in the markets do not focus on the process, they want to play follow the leader mentality. I understand that learning from others is great. Whenever I first began I was like a sponge I absorbing all the information. The driving force was Curiosity. No matter the career choice, find a Mentor that has achieved what you are striving towards. For me, it was Tim Sykes, Steven Dux, Mark Croock, Michael Goode, Roland Wolf, Tim Grittani and many more. Just understand that whenever you are subscribed to gurus don’t play follow the leader. Don’t use their trading alerts to trade with because the markets move too fast. Instead, ask yourself what’s their mindset, what’s the thesis. Always ask why. The big question before I go into any trade is why. Why do I want to trade the stock? What is the worst-case scenario? The list goes on and on. Most importantly Trading is not an exact science, what works for someone else may not work for you. Everyone has their own unique personalities within the markets. And I highly encourage you to read Jack’s Schwagers and Mark Douglas trading books, they are a gem. It takes time to find out who you are as a Trader. That is why many encourage you to start small. And whenever you open up trading accounts starting small is the best way to go. Grow it organically. There’s nothing wrong with starting small everyone has their own unique process. But again only put in what you’re willing to lose because trading is not like a normal 9-5. You don't get paid just for showing up. If there’s one thing that I have learned is that you cannot rush success. To create lasting success, you must be willing to endure the minor set back. Don't look at minor setbacks and think their Mount Everest, in reality, they are speedbumps. The key is to keep going forward in pursuit of success in spite of failures. Below I am going to go over the long term outlook.
Where I’m at in my Trading Process?
So I am in the week 74 of my Trading Process and you may want to know how much money I have extracted from the market. And the simple answer is zero. For the past 74 weeks, I have been immersed with the markets and I have nothing to show for it. Again as I noted before I never got into this game for the monetary value. Whenever I was hooked. I was fucking obsessed. I still am to this day. Once more I never decided to become a Trader, I simply never stop learning and that is really how things took off. I am still working on a detailed recap of how I got started in trading. That is going to be out very soon but nevertheless, I am still here so let’s just talk over where I’m at right now and I hope you enjoy it.
So if you know who I am and if you read the other blog posts you would know by now that I will not be returning to school in 2020. I’m not gonna spend too much time on it because I can talk about it for a while. In a nutshell, I was an undergraduate student at Texas State University and I did not enjoy being there. I was there to make my parents happy. I want to emphasize that live your life, not anyone else’s. Live your dream, not no one else’s. I was going to college to make my parents happy and it took me the entire year to tell them. I don't get back TIME! 2019 was full of disappointment, time and time again I attempted to open a Trading account,but I would always get pushed back. Never for one second did I ever think about giving up. The past is in the past. For 2020 I am going to be Trading in a Simulator account for 3 months, in order to grow my methodology. I fully understand that trading is a simulator in comparison with a live account that has a different effect. The main argument is that there are no emotions trading in a simulator account. To them I say Fuck you. We are in the greatest technological era in our time. Utilize what has been given to us. 3 months of trading in a Simulator, then the goal is to fund my account Mid April. Once more start small and grow organically. I only have one goal, to stay in the game.
My Trading Process: Below I am going to describe what I look for when to enter a stock. Again note that Trading is not an Exact Science, what works for me may not work for you! It's more of the guideline! Again take it as you will and try to gain something from it. I will see you soon!
1) Focus on Big % Gainers: This one should the obvious one! I know too many people that focus on non-volatile stocks! And it blows my fuck-en mind. Understand that you need Volatile stocks, yes they are riskier than your higher blue-chip stocks, but again the higher the risk, the greater rewards. Understand that trying to grow small accounts with Blue Chip stocks is going to be more difficult. Focus on the Big % Gainers. And no excuses, People always say I don't have access to the Big % Gainers. That's Bullshit! It's called the fuck-en Internet! Yes, having platforms like StockstoTrade or Equity Feed gives you an edge over others, but it comes at a cost. Again ask yourselves, are you going to treat this like a Business or a Hobby! 90-95% of traders try to be coupon clippers. Fuck that! It's all Market Tuition! If you are cheap and don't have anything, there is still plenty of sites that give you the big Percent Gainers. Such and Yahoo Finance, or Finviz.
2) Focus on Tickers that find your Niche as a Trader: Once you find the Big % gains, understand that you don't have to trade all of them. I'm not saying you can't, but in my opinion, prefer to select the one with the highest odds. Again Trading is a unique industry, cause what works for me may NOT work for you! It's not a direct cause and effect. Don't play follow the leader mentality! Focus on you. I know that in every begging you may not know what your set-ups are, but that is why I an advocate for paper trading. Test and refine overtime in pretty of success.
3) Put the stock into the Overall context: When I see a stock that interests me, I take the overall context. Why, How What. I want to get the overall sentiment of the stock. Again I focus on the TICKER NOT THE COMPANY. Nate said it best "Trade the Ticker". I am not saying to ignore the fundamentals, because that does matter, but again PRICES MOVE BEFORE FUNDAMENTALS...PRICE ACTION IS KING. Firstly I look at the Chart, Look left to predict the right as Nate would say. At least I go back 1 year, the main thing I am asking myself is "Has this Stock ran in the Past." You must always respect former runners, they can always run again, it's in their DNA. As well as volume and how the Trend has been up to the time looking at it. The Chart is not everything but is a major factor, it's Pattern Recognition. Secondly, I ask Why is this stock up? Again I don't primarily focus on the news, but it's still apart of my process. Ideally what interests me are Partnerships, Earnings, Hype Plays, and Bio-Techs. Again I am not going to go over each of these, cause I can do a whole post later. Thirdly I since we trade the most volatile stocks, I check the FLOAT. The total number of shares that can be freely traded at the Market. Again the Float is never going to be exact, but you can get an idea. How do I find the Float? Look in the OTC Filings! Keep it simple guys and gals! I go back to the recent 10-Q / 10-K and use CTL+F and type the phrase "outstanding." You should be able to see it pretty quickly. On some occasions, I may use a 424B form since that is where the Offering Price and Diluted properties can be found. The FLOAT is a Major Factor for us Traders. Think in terms of supply and demand. When there is a low supply with an excess demand what do you think will happen! Look at $SES $BIMI $BNGO $OPTT $BPTH $DRY $SHIPS $IGC $NBEV $WWR $TOPS the list goes on and on. I categorize a low float stock that is under 10 Million, but again it's not an exact science. Next, I check out the Filings for any skeletons in the closet. Understand that we are trading the worst of the worst. What I am looking for? Ideally, I am looking for any potential Dilution. The same process as with the Float, I use the Command Key and search for key Phrases. For example, Offering, dilution, warrants, ATM ~ at-the-market, Unregistered Sales of Equity and Use of Proceeds. I typically go back for their recent 10-Q / 10-K. As well I am looking for any 424B Forms or an S-1. The S-1 is a shelf, if a prospectus, it's not live until the 424B if filled. Again this process may seem like it takes a while, but rinse and repeat and it becomes second nature. I don't spend too much digging since the more I investigate the more likely I will add to my confirmation basis. Ideally 10 min Max. A quick note, be very cautious is you attempt to Long a stock, that has a history of conducting Toxic financing in the past. Just like you, These "Companies" goal is to stay in the game, by any means necessary. So I do encourage you to just check you the flings if you do intend to Swing a Long overnight. Lastly, the most important indicator that I use is the PRICE ACTION! At the end of the day, the only thing that matters is the fucking Price Action! What does the daily trend look like? What day of the week is it? What's the volume? Price Action is KING!
4) Always Know the WHY: Again we all know what we do, but most do not know WHY. Trading Randomly will only lead to Random results. It all goes back to finding your niche as a Trader. If you ever feel uncomfortable in stock, I would encourage you to simply exit. It's much easier to get back in that it's it to get out. Fuck your EGO!
5) You don't have to Trade every day: This one is very underutilized. Look I don't look to Trade every day. I don't wake up expecting to Trade, I have a game plan yes. But again I will only act if those indicators are hit. As well depending on what the Big % reveals. If there is nothing that fits my personality, then I simply do NOT Act. I don't Trade to Stay Busy, trading to Stay busy will cost you money. Again is this a HOBBY or a BUSINESS to you. It sounds counter-intuitive, but trading less can help you in the long run. Trading is reality is Boring, I am like a Lion, I only come out when I see a baby gazelle. Or a Gimme Set-up.
Those I have talked about in the past blog post but I wanna add some few more below that I add to my process again what works for me may not work for you.
6) Risk Management: This is a key component in my Trading Process. Understand that as a Trader your job should be to stay in the motherfucking game. Don’t worry about how much money you make in beginning. Filter out the noise, don't let other Traders' profits, make you feel bad about your trade. Again WE ALL ARE DIFFERENT! Understand that 90% of traders do not find a state of consistency within the markets. There is a reason for that. They have itchy fingers they have FOMO along with many other psychological hurdles. The goal is to outlast your competitors, be staying in the game.
7) Loosing is apart of the game: Understand that losing is in an essential part of Trading The key is to minimize your losses and to maximize your profits. Again the trades, in the beginning, in you’re trading career, does not matter in the long run. So I understand it’s hard seeing other Traders' profits on Twitter or any other social media platform, but it takes time to create a state of profitability within the markets. Each Trader has its own process, so don't try to copy their exact moves. Instead, learn from their mindset. That’s why risk management is very important in terms of your Trading process. If you don’t know what you’re doing if you’re just going to trade with any amount of size you are doing yourself a huge disservice. Again your job is to outlast your competitors your job is to stay in again and by doing so increases your odds of success in the long run. And I understand it just because you’re in a losing streak don’t get yourself down whenever you’re in a losing streak I highly encourage you to lower your position size. Avoid adding to a losing position. This is a game of losing because you have to lose well in this game and you have to accept a loss. A loss is never a bad sign, use that failure to learn from. That is what gives success its flavor in the end.
So that’s gonna be it for this weekly Recap. I want to wish everyone a Merry Christmas. I know that again no one really reads these. I don't really care, these posts are for me. When I look back on this post, I know that it will be worth it. I’ll be doing more recaps when I start trading in a simulator account. I’ll be recording live trades and doing much more detail by post. Once more the website is in development but I will not make it live until I trade with real money. Practice makes progress. As I write this I am trading time for money. Have a great Christmas and I’ll see you next Sunday.
Disclaimer: This blog has a term of use that is incorporated by reference into this post; you can find all my disclaimers and disclosures there as well.