I want to first get this out of the way. If you are a greedy pig who defines “inspiration” as making enough money to buy fancy cars, boats and vacation homes, then this blog article is not for you. You can stop reading now, save yourself some time, and move along with your day.
If you define “inspiration” as a situation where someone who formerly struggled with their trading has now put together a consistent and profitable trading strategy (backed by proof), then please keep reading.
Background Information
I have never done anything like this, so I thought it would be a good change of pace. While I have talked about my personal trading in the articles How I Ruined My Month and Trading 90 Minutes a Day: The Results, I have never shared the results of someone who has been a student of my training and member of the community. If this article is well received, I will try to get some more members to open up their books.
For those of you who are members of the private trading community and actively participate, the member being discussed in this case study should sound very familiar. RDTrader12 (find him on Twitter HERE) has been a member of the community for a very long time, and it’s been exciting to watch his progress. I’m not going to go into any other information since RDTrader12 (“RD”) was a guest on The Stock Trading Reality Podcast and has already shared his story. If you want to learn more about him and his story, you can listen to his interview here.
The Ultimate Trader Goal: Scalability
The most common error of new traders (and “why” the marketing gurus feast on this emotion) is they believe the goal of trading is to make money. While of course that is the end goal, you can never reach that goal on a consistent basis if you are focused on it right from the beginning.
The key goal for new traders should be figuring out a system that works for them and fits into their personal risk tolerance levels. When this is achieved, they can then begin to scale their system upwards. Sure, at the beginning the numbers are not going to be huge (as we will see with RD), but that is not the point. The point is to figure out your strategy and then later on, begin to scale upwards.
Do you know what happens when you achieve scalability and can scale your system upwards? The profits scale themselves upwards too!
The problem is, new traders are too focused on “profit increases” right from the start. Sure, their random dart throws land them a bulls eye here-and-there, but “dart throwing” is not a scalable trading strategy and in the long run, they just become another statistic of greed.
How do you know when you’ve reached ‘scalability’?
Maybe you’re asking yourself this. If so, it’s a very good question. The good news is, there is a very simple answer: account trend.
Notice, I did not say “the size of your wins”, nor did I say “the winning percentage”. If your trading account capital looks/feels like this:
then there is nothing to “scale upwards” because at best, you are breaking evening and totally random. However, let’s say your account looks like this (with “small” winning trades):
then who cares if they are “small” wins? If your account is growing over time with the strategy you are using, then you are clearly doing something right! All it takes is increasing your position size over time (for example, instead of using 100 share lots, you can use 150, OR, instead of trading 2 option contracts, you can trade 3 or 4) and the math will take care of itself.
At the end of the day, it is all about forming good habits within your trades. I won’t go into any more details here; however I did an entire free video talking about how All Wins Are NOT Created Equal.
With all this in mind, let’s now take a look at RD’s trading results.
The Trading Results
RD was kind enough to send me his trading results for the last ten weeks. He took a break in August to refocus and fine tune a few things, and as you will see, RD has turned his account into one that is up trending over an extended period of time.
I was going to ask for more results, but as you are about to see, since he is sending over each individual trade, you’ll see that this was PLENTY of data to look at while accomplishing the point I’m trying to make.
Make sure to scroll down below the image for some overall observations.
Trading Result Observations: Only 56% Win Rate???
I added things up. There were a total of 91 trades made over the ten week period. Of those, RD was slightly better than a coin toss at 56% accuracy. These are the numbers that should motivate and inspire you!
Stop and think about it. His “stock picking ability” was slightly better than a coin toss, BUT, his account grew $2,116! (this is with commissions paid factored in) How the heck is this even possible?!?!?! I thought you had to be a wizard stock picker in order to make money?!?! Some observations…
- Slow and steady wins the race. If this is not a picture of simply taking what the market gives to you and letting small wins add up, then I don’t know what is.
- Risk vs. Reward. RD has formed his whole system around this concept. The results speak for themselves, and the good news is, this concept can be learned by anyone who wants to invest in themselves and put in the effort.
- Kissing the losing trades good-bye. RD is a normal human, therefore, he is going to be wrong which in the world of trading, results in losses. The key is he never let any of them spin out of control and wreck the progress he had made.
- Risk management via position size. You won’t see any massive position sizes here. RD is doing this by design to manage risk in a very simple way.
- Sticking with the system. You’ll notice a few “losing streaks” that RD goes on. You know what? It happens, so get used to it. RD remained confident in the system, and as you see, due to his risk management systems, he was able to overcome the rough patches.
- Over time, his account is larger. Ten weeks is a solid amount of time. Sure, you could have a green week here or there, but ten weeks in a row tells me there is a realistic and plausible trading system in place.
Take Action TODAY! Build Your System
Many people out there like to “sell systems”. Meaning, they proclaim to have a strategy that works for everyone. All you have to do is follow their strategy. This just is NOT how it works.
Why? Because as humans of emotion, we all have different personalities and risk tolerance levels. So a strategy for one person is not going to work for someone else that has a totally different “sense of comfort” (some people enjoy skydiving and roller coasters, other people do not).
I can teach you the tools that RD now uses in his trading, specifically technical analysis (the use of charts). While charts are not a crystal ball, they are a way to “manage the unknown” and produce consistent results when used properly. RD is a perfect example of this.
If you are interested in going through the same training program RD did, the best value for your money will be my University/mentorship program. If this is outside your investment range for education, you can buy individual components of the program HERE. There are quite a few courses, so if you’re not sure where to start in regards to the training, you can watch this short video. Please let me know if you have any questions. I’d be happy to answer them for you. Shoot me an email.