SOME HISTORY
I started trading in 2011 at age 29. I traded on and off from 2011-2019 with a small account (ranging between $4K-$12K). I blew up and/or lost money every year until 2018 I made 6% and 2019 I was break even. I didn’t have a process. Looking back, my stock picks were random, my entry points were random, I didn’t use physical stocks, I really had no idea what I was doing though I was trying.
I was doing this while working on my career as a musician playing hundreds of gigs a year, flying around the US many weekends, playing in the Southern California area weekly, recording, rehearsing, travel travel more travel etc etc…
2020 brought the coronavirus which ended ALL gigs for me as a musician. Everything got cancelled. For the first time in my life I was on unemployment. At the same time, everyone from the city started moving in and buying up houses in the rural area of SoCal where I live, spiking the prices. My wife and I decided to sell our house and get a bigger house with the proceeds since we had a ton of equity (over 50%). Not only did we get an incredible deal on a new house, but we sold our old house for a great price in 2 days on the market, cash buyer! And that is how my current stock account is funded. We took $30K of house proceeds, opened an account at IBKR September 1st and started trading September 15th 2020. From September 15 to today (December 31st 2020) my account is up 43%!
So what changed? Obviously I’m not under PDT rule anymore. Also I now have a process. A process that I am working on and refining every day. I study setups and breakouts on charts and take screen shots of them and file them in a folder on my computer. I run scans daily looking for setups. I study hours a day after the market closes and on weekends. I take notes on charts. I watch and rewatch videos on stocks, the market, scans, techniques, setups, etc.
Q&A
Q: Who is your broker?
A: Interactive Brokers
Q: What programs do you use?
A: TC2000 for charts. Cheddar for option flow.
Q: Where do you live?
A: Southern California
Q: Are you in a chat room? Subscribe to a service/mentor/etc?
A: I’ve been in a handful. During my on/off years trading I was in Dan Zanger’s room at chartpattern.com. As a new trader I liked that his success was ‘verified’ since there are so many furus out there on fintwit it’s hard to know who is ‘the real deal’ and who sells snake oil. When I restarted trading September 2020 I joined ArtofTrading.com and was with them for 2 months. I am currently with AccessATrader.com and recently became a lifetime member. Dan Shapiro gave me a process which has been incredibly helpful putting me in the right direction. Through Dan I heard about Kristjan Kullamagi who I follow religiously right now. And through Kristjan I found StockBee/Pradeep Bonde. Both have upped my charting and scanning game immensely and have shown me the importance of studying SETUPS and BREAKOUTS.
Q: What is your favorite trading book?
A: Early on I read many books and reread a few of them. My all time favorite is the Darvas book. Here are a few you should absolutely read.
How I Made $2,000,000 In The Stock Market – Nicolas Darvas
Reminiscences of a Stock Operator – Edwin Lefevre
Trade Like a Stock Market Wizard – Mark Minervini
Trading In The Zone – Mark Douglas
How To Make Money In Stocks – William O’Neill
Q: Why are you taking money out of your small account, shouldn’t you leave it in to grow it bigger faster?
A: 100% agree. Yes I should but until my other work comes back I’m supporting my family via trading.
Q: What’s your price target?
A: Anybody who tells you a target is guessing. Nobody knows what will happen tomorrow, next week, next month, or in the next candle. Yes there are more educated guesses…still a guess tho. Trade price action. Breakouts fail, targets fail, companies fail, news drops, something happens in the world macro, etc etc. Trade price action. Watch the price. If it goes against you, get it. If it keeps acting correctly, stay in, trim profits.
JP Morgains 