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Breakouts, Home Runs & Exponential Returns · Kristjan Kullamägi — Transcript

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0:03markets
0:03speculation and risk this is the chat
0:06with traders podcast
0:08hosted by aaron field
0:11what's good my friends welcome to yet
0:13another episode of
0:15chat with traders this is number two one
0:19two now my guest is someone who several
0:22listeners have requested
0:24and also the person who stan gluesman
0:26made reference to
0:28in the previous episode it's swedish
0:31swing trader christian kulamagi
0:34christian's been trading the u.s equity
0:37market
0:38full time since 2011 and although he got
0:41off to a rocky start
0:43he's arrived at a very rare
0:46level of trading success i guess you
0:49could say
0:50christian is a member of the eight
0:52figure club
0:53having realized tens of millions in
0:56trading profits
0:58which is only more impressive given the
1:00fact that he's a self-funded
1:02independent trader well trader
1:05gamer i know christian thinks of it more
1:08as
1:08a video game nowadays so things we talk
1:12about
1:12to start with we go back to 2011
1:15and discuss christian's beginnings which
1:18includes his origins
1:19as a day trader from there we get into
1:22how he evolved into a swing trader
1:24how he discovered and researched
1:26profitable setups
1:28and then we do a deep dive into one of
1:30his setups
1:31a breakout strategy last of all
1:34links to everything mentioned and
1:36referenced throughout this episode
1:39can be found in the show notes at
1:41chatwithtraders.com
1:43two one two all right
1:47here we go ladies and gents my guest
1:49christian
1:52kulamagi
1:54christian i wanted to ask you first
1:56thing uh
1:57when did you actually start trading what
1:59year was it
2:01it was uh in 2011.
2:04okay i started investing in 2010. okay
2:08and when you started trading did you go
2:10like straight into it full time or was
2:12it just sort of a bit of a
2:13a side hustle it was
2:16uh i i went into it full time pretty
2:19much uh
2:19from the beginning it was um just um
2:23i was uh in the final months of my uh
2:26like getting my degree in biomedical
2:29laboratory science
2:30and then i got into this trading thing
2:33and uh
2:34it completely took over i i just focused
2:38100
2:39on that so i kind of just dropped out of
2:40school just in the end
2:42uh to focus on the trading thing so yeah
2:44you could say i went all in
2:46oh so you didn't even finish your degree
2:49no oh
2:50wow okay that's that's a real commitment
2:53did you have a part-time job or anything
2:55like that at the time
2:57yes i actually have a i was working as a
3:00security guard like a
3:01mall cop or something similar um
3:05as uh yeah some part time while i was
3:07studying so
3:08i had uh options in case the trading
3:11stuff wouldn't work out
3:13so i had you know security net
3:16you know i could you know just finish my
3:18degree or i could you know
3:20do the security guard work yeah you had
3:22a little bit of income is
3:23some support yes so how much money did
3:26you start out trading with
3:29about 5 000 us dollars
3:32was my first attempt
3:36that was your first attempt okay so i
3:38presume there was probably
3:39multiple attempts then yes in the first
3:43couple of years i blew up three or four
3:45times
3:46and i started with the first time i
3:49started with 5000 and the other times i
3:52had like three
3:53three four thousand us dollars
3:57something similar how long did it take
3:59you to blow up each of those accounts
4:01like were they each short-lived or was
4:02it just kind of
4:04uh small losses over time just slowly
4:08grinding away at your account yeah
4:11so the first time it's kind of funny i
4:13actually paper traded
4:15for a week or two because you know i
4:17read around that everyone said you
4:18should paper trade in beginning so i
4:20paid for traded and i doubled that at
4:22my paper trading account in uh in two
4:25weeks
4:26and then i started uh trading with real
4:27money and i was like
4:29yeah i'm gonna be rich this is like may
4:322011. and i i was thinking hey i'll be
4:34rich uh
4:36by fall uh what happened in reality i
4:39lost most of that money in the first two
4:41months
4:42then i went back to my security guard uh
4:45job and
4:47for six months or so saved up money
4:50started again
4:52with a few thousand three thousand maybe
4:54blew up again
4:56and uh a few months to
4:59six months of intervals and it actually
5:03the first one was the shortest
5:05but every time i blew up i learned
5:06something new i improved a little bit
5:09and it took a longer longer
5:12between the times to blew up and did it
5:15rattle your confidence when you were
5:17losing this money
5:19oh yes absolutely absolutely
5:23it was a horrible experience that was my
5:25life savings
5:27at that time i was maybe 21 years old
5:30and
5:30i had saved up for you know three years
5:34so as i understand it today you're
5:38you're mostly a swing trader if not
5:40entirely a swing trader
5:42but when you first got started
5:45you were day trading so i'm just curious
5:48to hear a little bit about what was your
5:49experience like
5:51when you were day trading
5:54i got into day trading because
5:57the people i found on the internet on
5:59social media they were mostly day
6:01traders so that's what i
6:02did too and that i didn't really know
6:06there was any other types of trading
6:08and so i thought trading was day trading
6:11and in the beginning i really didn't
6:13have any method or a system or anything
6:16i had no idea i just followed what other
6:18people did
6:19that i perceived to be good at trading
6:23but i really had no con
6:26like i didn't really know what else in
6:28the beginning what a stop loss was
6:30i didn't know position sizing i just
6:32went all in on all trades
6:35and i didn't know anything about like
6:37trailing stops or like profit taking and
6:40what to expect from a certain
6:42setup as i in the beginning i really
6:44didn't know
6:45anything i just did things randomly and
6:48it was obviously very stressful and
6:52scary were you trading the u.s market
6:54right from the get-go or did you
6:56experiment on your local market there
6:59yes i did start with the us markets i
7:02i realized early that's that's where the
7:04uh that's where the action is
7:07so i never actually bothered with a
7:09swedish stock market
7:11um at all when it comes to trading i
7:14just focused completely on the u.s
7:17markets
7:18that's where that's my trading software
7:21and all of that it was
7:23just u.s markets only i didn't even
7:25bother getting
7:26anything for the swedish stock market
7:28okay
7:29so what point did you begin gravitating
7:32towards
7:33swing trading
7:36it took if it was uh maybe a couple of
7:40years after it became
7:41profitable or maybe a year after i
7:44became profitable in 2013 about
7:46two years exactly two years after i
7:49started trading i realized
7:53i looked at a lot of stocks i looked at
7:54charts and
7:56i actually went through all this uh
7:59stocks in the u.s markets and i realized
8:01that
8:02the big moves take months weeks and
8:05months
8:06and years to play out day trading
8:10is you know it's it's really hard to
8:13catch like a hundred percent move or
8:15fifty percent move unless you're lucky
8:18and get into one of these micro small
8:20cap
8:20high flyers really early and you know
8:23that have to double on the day but it's
8:25it's very hard to catch those
8:28so i realized i i and i also found
8:31other people on social media that were
8:34actually swing trading so i learned
8:35about swing trading and i also read some
8:37books
8:38where that talked about swing and
8:40position trading which is a little bit
8:41longer term swing trading
8:44so that's how i gravitated into it i
8:46realized it's
8:48has better risk reward and you're not
8:51fighting near your entry all the time
8:54in day trading you're always near your
8:56entry most of the time but in swing
8:58trading if you get a really
9:00if you catch a big one you know
9:03it's gonna be the stock is gonna be
9:05above your stop for a long long time you
9:07don't have to worry about it you don't
9:09have to constantly
9:10look at look at the stock and monitor it
9:14i realized that it's also much more
9:18scalable
9:19like back then i still had a very small
9:21account but i
9:23i realized it that you know if my
9:25accounts would grow
9:26it's easier with a with a bigger account
9:29because in day trading
9:31especially the types of stocks they
9:32traded mostly micro and
9:35not micro caps norm yeah micro cap studs
9:37micro and small caps
9:39they weren't many of them weren't super
9:42liquid
9:42and even i had some issues with liquid
9:45and slippage and some stocks they traded
9:47so that's also something i i realized
9:50kind of
9:50early that gravitated into swing trading
9:54but the process took a couple of years
9:56before i went from
9:57a 95 day trading to 95
10:01swing trading it wasn't an overnight
10:03thing it took it took
10:04it took time one step at a time it was
10:07very uncomfortable
10:08um in the beginning holding stuff
10:10overnight because i had been
10:12brainwashed with that oh holding stocks
10:14overnight is
10:16very dangerous you can't control your
10:17risk but it's it's not true you can
10:20control
10:21your risk it's called position sizing
10:23and also
10:24if you check out if you check the like
10:26the earning states and if you if
10:29it happens to be like a biotech company
10:31make sure there's no
10:32pending data or fda
10:35decisions you know it's not that
10:37dangerous
10:39the iterating is much more hazardous i
10:41would say
10:42okay it's interesting that well from the
10:45sounds of it
10:46that you did actually start to see some
10:48consistency and some profitability
10:51uh day trading before you actually did
10:54make that switch across to
10:56or eventually switch across to swing
10:58trading
11:00absolutely i i i
11:03i probably made my first million mostly
11:05day trading
11:06all right yeah yeah but
11:10everything after that has mostly been
11:12swing trading
11:13so yeah yeah absolutely i was profitable
11:16uh consistently profitable
11:17for uh for a couple of years before i
11:20went
11:21uh mostly swing trading obviously it was
11:25a hybrid approach for a while there in
11:27between
11:28okay that really is quite interesting
11:30actually i mean if you've made a million
11:32dollars day trading
11:33and then but you still see bigger
11:35opportunities in swing trading
11:37you know when you did make that first
11:39million dollars
11:41how did your mindset towards trading
11:43change like
11:44did you did you envision that you would
11:48go on as you have done today to make
11:50tens of millions of dollars like did you
11:52see that as like
11:53sort of your your trajectory now like
11:56you
11:57knew that was coming it was now just a
11:59matter of time or did you still have
12:01some doubts about
12:02how big you could get as a trader
12:05yes in the early years when i um
12:09in the first few years after i started
12:10making money
12:12i it was still like i it was still at
12:15times hard to believe it since the first
12:17two years when i was mostly losing money
12:19it was such a
12:22horrible experience like i got scars for
12:25life i was constantly depressed and
12:28and when i started consistently make
12:29money it felt like
12:31unreal it's like is this really
12:33happening like i can actually make a
12:35living off of this
12:36is it just pure luck but after a while i
12:39realized like okay no i mean it's the
12:42same
12:42i'm what i'm pretty much doing i'm just
12:44trading the same patterns that occur
12:46over and over again
12:48and if i can you know find the same
12:52patterns that applies to swing trading i
12:54i can
12:55i can scale it up and uh me
12:58and the the way i saw it was i would
13:01make the same amount of money
13:03but with less effort because day trading
13:05is really a lot of effort
13:07but the way
13:10i didn't maybe really see it scaling up
13:15[Music]
13:17as like it wasn't really my first
13:19priority what i wanted to do was
13:21like make the same amount of money but
13:24with less
13:25less effort uh because i was really i
13:28was getting tired of sitting like
13:30you know from open to the close in front
13:33of the computer looking for trades
13:35when i saw some other people who were
13:37swing trading who were mostly
13:39doing their entries maybe first hour of
13:42the day and then it was just monitoring
13:44their positions the rest of the time
13:45they really didn't do much
13:47the rest of the day or they and uh yeah
13:51so that's really what i was after like
13:54i'm i'm a lazy person so what can i say
13:58gotcha i'd like to know a bit about
14:02when you did kind of make that
14:05that transition across to more of a
14:07swing trader
14:08[Music]
14:09like how did you seek out how did you
14:11discover the setups that you were going
14:14to trade like what was that
14:15process like the i'm talking about the
14:18research
14:18and the studying here to find the sort
14:20of patterns that you would
14:22go after yeah so the
14:25setup ideas i got from from
14:28a guy a stockpi that's where i got the
14:31step setup idea and i also
14:34read a book by william o'neill how to
14:37make money in stocks
14:39uh and that's where i really got these
14:42set up
14:42ideas that these you know stocks move in
14:45the same patterns
14:47as they have done for a hundred years so
14:50what i
14:50did i i went into my uh
14:54shouting software and pretty much went
14:56through every single
14:57u.s stock and i looked for those
15:00specific patterns that i had uh stumbled
15:03upon
15:03thanks to the book and that this guy
15:06stopped me
15:07and i realized wow i mean it's the same
15:09patterns like nothing is
15:10different it's to say it was the same
15:12patterns in the
15:13early 1900s and even late 1800s
15:17it was the same patterns in the 50s same
15:20patterns in the 80s in the 90s and it's
15:23the same patterns now
15:25that was maybe what could it be maybe
15:272015 or something
15:29so i realized wow this is if i learned
15:31this if i
15:32really mastered this these setups like
15:34this one setup
15:36which is a just breakout setup and the
15:39variations of those
15:41of that setup i i can really wow
15:44like it felt like i had stumbled upon a
15:47gold mine really
15:50and how did you begin to build
15:51confidence in those setups
15:54it was a combination of studying the
15:58patterns what i did i
15:59built the data database in evernote
16:02which is pretty much a note-taking
16:04software i took screenshots of all the
16:06setups
16:07before after uh both on the daily and
16:10like the
16:11intraday time frames just to look at how
16:13what
16:14what how does a good setup look like at
16:16the start of the move
16:18or before the move when it starts
16:20breaking out and
16:21like a few weeks a few months after like
16:24how does it how does it act
16:26um and i looked at all these variations
16:29and
16:29that's how i built the confidence and i
16:31started uh trading the setup myself
16:33too and i saw some success and and it
16:36felt like i was always improving i was
16:39always
16:39learning a new variation or you know
16:42something
16:42something new so that's really how i
16:45built the confidence
16:46it really like i say on my stream too
16:49like everyone should do it whatever
16:51setup if you stumble upon a setup and
16:52you want to trade it
16:54like back test it like like look through
16:56like look through
16:57hundreds if not thousands of examples of
16:59that setup and build a database
17:02and go through that database once in a
17:05while uh
17:06just scroll through it that's how you
17:07memorize this
17:09it's so it's all about pattern
17:10recognition really trading is all about
17:12pattern recognition and you can
17:14it could be just purely technical and
17:16you can also
17:17combine it with fundamentals like i do i
17:20also look at
17:20theme what's the theme what's the
17:23earnings revenues i look at the news
17:25overall like what's driving what what's
17:28driving the stock
17:30so i found some similarities there too
17:32it's the same things that have worked
17:34for
17:34a 100 years really that's how you build
17:37the confidence that's how you do it
17:39there's no other way well let's go into
17:42this a lot further i'd love to do a deep
17:43dive
17:44on this particular strategy i mean as i
17:46understand it i think
17:47there's there's kind of three different
17:49setups which are
17:50your main types of plays nowadays
17:54um i mean we we could go through and we
17:56could talk a little bit about each of
17:57those setups but
17:58i think it would be most beneficial just
18:01to
18:02pick on this one particular setup and go
18:05and go deep on that so
18:08before we do just summarize for me
18:12the objective of this strategy like what
18:14is the goal here what is it trying to
18:16achieve
18:18yeah so the simplest of the
18:22uh three methods i use is it's just a
18:25breakout
18:28on the on the daily daily time time
18:30frame you really don't need any
18:32intraday to look at the intraday time
18:34frame for that i usually do i use the 60
18:36min charts too
18:37just to get a little bit of a zoomed in
18:40view if you look at the stock like any
18:43stock that say
18:44doubles or triples or quadruples or
18:47whatever
18:48period of months or years it's pretty
18:51much the same patterns you have a leg
18:52higher
18:54obviously not every stock moves like
18:55this there is but but
18:57a lot of them do they they move like
19:00stairs
19:01okay so let's say you you have a stock
19:04or a stair with say
19:0510 10 steps okay let's looks like
19:08something
19:09it's like any stock that's gone up for
19:11three four years
19:13so you have a leg higher and then it
19:15usually goes sideways or pull backs
19:18pulls back and uh many times
19:21what happens is the volatility contracts
19:24like it gets tighter
19:26and then you have the next step higher
19:28and the same thing happens goes sideways
19:30or pulls back and it gets
19:31uh like builds a range
19:34where volatility ideally not always but
19:37the volatility usually
19:39like the range gets tighter
19:41[Music]
19:43so our goal is to identify
19:46that those stair steps and buy it
19:49just as it is about to break out uh
19:53into the next uh into the next step
19:56obviously you can have different time
19:58frames on these
19:59uh things you can you know hold them for
20:02maybe three to five days or
20:04and just settle into strength or you can
20:07try to hold for
20:08bigger moves uh like even try to hold
20:11through the next several steps uh
20:15and maybe use the moving averages like i
20:17do the 10 and 20 day moving averages
20:19trailing stops and try to
20:21go for a bigger move uh do fewer trades
20:24that way
20:25um or do more trades by just buying
20:28breakouts and selling after three the
20:31day three or five
20:33because that's how they that's how
20:35stocks move they move in momentum bursts
20:37as uh this guy stopped me where i
20:39learned to set up from
20:41and you you know and i verified it
20:43myself this is really how stocks move
20:45if you identify the right right stocks
20:48obviously like abs
20:50like momentum is a big thing the
20:52stronger the stock the better
20:53which is counterintuitive for many
20:55people but that
20:57that's true uh like the stocks that make
20:59the biggest moves are usually that keep
21:02doing the biggest moves and i'm talking
21:03about like real stocks
21:05that go like like mid and large caps
21:08mainly
21:09uh not these like pump stocks that are
21:11really really popular right now these
21:14like micro small gaps that go up on
21:16total hype and make a 200
21:18move in a day that's not really the
21:19types i i trade even though if i still
21:22was a day trader
21:23those are the stocks i would trade
21:25because those are the ones are the
21:27biggest intraday range but just to
21:28clarify
21:29that that's not really uh what i
21:33what i do anymore uh i look for stocks
21:35that
21:36have look like like this like when i
21:39talk about the first leg higher
21:41those moves are usually several weeks
21:45and sometimes even several months
21:49and there's obviously many variations of
21:51that but that's
21:52uh that's how stocks move pretty much
21:54like you can look at any stock look at
21:56tesla that's a perfect perfect
21:58stair-step platter and look at look at
22:00nio like
22:01just take some big flyers big you know
22:04some of the leading stocks recently look
22:07at something like apple over the years
22:09or google
22:10obviously those are maybe a bit slower
22:12type of movers but
22:14it's the same patterns just you can
22:16choose to
22:17we what uh how fast of a mooc
22:21of a stock you want to trade and
22:23obviously you want to be in the fastest
22:25moving
22:26stocks what do you
22:29typically do do you hold for that
22:32uh kind of initial burst of momentum and
22:35sell
22:36after a few days post breakout or do you
22:39generally try and write it through a few
22:42steps as you describe
22:44yes i do it it depends on the stock
22:48like if there is um like if a stock has
22:51a run up
22:52into catalyst like an earnings or
22:56or anything a presentation um
22:59if it's a very hot stock in a very hot
23:01sector um
23:02i usually i like my
23:06core uh belief like i want to hold
23:09stocks for as long as possible
23:12i really don't want to sell them until i
23:14absolutely have to or
23:16feel like it'll feel like i have to for
23:18any any type of reason
23:21uh but i usually sell some like the
23:23first
23:24move higher if you buy a successful
23:26breakout that's the most
23:29like that that's uh the most predictable
23:32part of the move so what i usually i
23:34always sell some into that first burst
23:37uh to lock in a little bit of profits
23:39maybe i sell 20
23:40or 25 or it can vary a lot
23:44uh just lock in some profits and and uh
23:47now i can now it's a stress-free trade
23:49pretty much
23:50even if it would stop me out i i would
23:53still
23:54worst case scenario break even or maybe
23:56even make money
23:57depending on how much i move the stop
23:58higher but sometimes
24:01if it's an earnings are just a few days
24:04away
24:05and i still buy it because it looks
24:07really good um
24:08i and if i don't have a big profit
24:10padding i really don't like to hold
24:13all my positions into earnings sorting
24:15to any type of catalyst i just sell it
24:18i don't want to risk it like you know
24:20things could go
24:21anyway you never know and uh
24:25yeah i just want to control my risk as
24:27much as possible
24:28i don't really like to gamble over
24:31over earnings for example if i really
24:33don't have a big profit padding already
24:36right um now you briefly
24:39touched on stock selection there i just
24:42like to go into that a little more
24:44um you said you mostly trading these
24:46these larger caps
24:48um how do you scan and how do you
24:50identify the stocks like what exactly
24:52are you looking for
24:53in a company yes so
24:56i scan for uh i also
25:00like uh like i like you said i mostly
25:02take large caps nowadays but
25:04uh just a few years ago i traded a lot
25:06of when
25:07my accounts were much smaller i traded a
25:09lot of mid caps and small caps too
25:11i'm just forced to trade the large caps
25:13nowadays because they are the most
25:14liquid
25:15um but it's the same it applies to any
25:18uh
25:19market cap stock really so what i scam
25:21for is the strongest stocks
25:23with a certain uh with a certain
25:25liquidity like i use 150 million dollar
25:28cut off
25:28but just like two years ago i had i
25:30think i had like 20 million
25:32dollar dollar volume cut off on my scans
25:36and what i do i scan for the strongest
25:38stocks the strongest
25:39two percent of stocks in
25:43different time frames like the one month
25:46three month
25:47six month 12 month and 18 month time
25:50frames
25:51to cat to find all the biggest movers
25:54over these time frames like i said
25:56before it's the biggest move
25:58uh movers the strongest stocks that make
26:01keep on making the biggest moves
26:04so that that's how i find those the most
26:07liquid stocks
26:09that i can find that are that are the
26:11strongest
26:13in an ideal scenario like what criteria
26:16do you want
26:17checked off before you actually get into
26:19the market
26:21like before you hit that buy button what
26:23exactly do you want to see
26:27yes so obviously
26:31i want the big absolute momentum
26:35and also a big relative momentum towards
26:38other other stocks it has to be a very
26:40very strong stock
26:42um over any time frame let's say
26:45a stock has trip sorry doubled over the
26:48past three months
26:49yeah so so that's like that's a lot of
26:52momentum in a stock
26:54so what i want to see is like it's very
26:57hard to
26:58describe this um like it's it's very
27:01intuitive
27:02you can't really scan for this like i
27:04always
27:05you know people i always ask if you
27:06could like scan for these patterns and i
27:09always say just scan for the strongest
27:11moving stocks the patterns you have to
27:13learn yourself but
27:14like linearity like how orderly
27:17is the pullback or the sideways
27:20consolidation after the previous leg
27:23higher in the stock
27:25it's very hard to describe it but what i
27:27usually want to see is
27:30let's let's say i've stopped doubles in
27:32three months and then it pulls back
27:34maybe it retraces
27:36a third of its move and usually when
27:38stocks pull back
27:40like these momentum stocks they pull
27:41back to the 10 and the 20 day moving
27:43averages
27:44and i want to see how they act around
27:46those moving averages what i want to see
27:48is they start building
27:49like either they bounce dire off the
27:52moving average
27:53let's say the 20 day or if it starts
27:56building
27:57higher lows above the 20 day and then
28:00just getting like the short gets tighter
28:02over the next few weeks or the next few
28:04months
28:05uh that that's that's called linearity
28:08um
28:08like people post like on my stream
28:11people post
28:12setups all the time like do you think
28:14this is a good setup or
28:16or is that a good setup and
28:19like and this is this is the hard part
28:23like
28:24identifying a good setup like a really
28:26good setup versus something that's
28:28random and mediocre because that's also
28:31going to reflect on your
28:32results if you trade the random setups
28:35your
28:35results are going to be random too you
28:38want to find really fun
28:39the outlier stocks like you also want to
28:42see if
28:43did it does it have relative strength
28:45like the best um
28:46time to trade this breakout method is
28:49after a
28:50pullback in the markets you want to see
28:52the stocks that held up the most that
28:54had big moves previously and held up the
28:56most and
28:58if you mastered this setup if you trade
29:00this setup
29:01like coming out of a small correction
29:04or a like say a 5 10 15
29:08correction in the overall indices that's
29:10almost like free money for this type of
29:12setup because if you can identify these
29:14stocks that held up the most
29:16during the correction that maybe went
29:19down
29:20initially in the correction but after as
29:22the correction went on
29:24these stocks stopped going down and
29:26actually maybe started building higher
29:27lows
29:28and that's that's telling you something
29:30if you have a stock that's gone up a lot
29:32and then it stops going down when the
29:34market goes down you know the stock is
29:35trying to tell you something
29:37um and that that's that's what leading
29:39stocks too like
29:40every bull market this is obviously i'm
29:42gonna talk more about it later
29:44you obviously need uh uh up trending or
29:47sideways market to trade this method um
29:50you have leading stocks like leading
29:52stocks and stocks that go up the most
29:54and
29:54are the most liquid and those are really
29:57the stocks you want to trade
29:59um and they are they're mostly mid and
30:02large caps but
30:03even a small cap can be a leading stock
30:06uh and those are really the stocks that
30:10they they don't go down when the market
30:12goes down it's like you
30:14try to push uh uh
30:18like uh like a tennis ball underwater it
30:21just
30:21pops back up and that that's really
30:24those are the type of
30:25stocks you want to find when trading
30:27this method
30:28i know another thing which you like to
30:30look for
30:31because you kind of said it a little
30:33earlier and i think i may have read this
30:36on your twitter this isn't a word for
30:38word quote but
30:39it was something to the extent of you
30:41don't want to be
30:42blindly trading momentum and chart
30:44patterns you also want to see
30:47or have a fundamental angle to the trade
30:50as well
30:51um would you mind explaining that a
30:53little more
30:55yes now to clarify you can make a just
30:58trading of momentum and shock patterns
31:00you can make a very good living
31:03but i think if you can combine
31:07some type of fundamentals because at the
31:09end of the day there are some type of
31:11fundamentals that drive these stocks
31:13like the fundamentals are fuel and
31:16momentum is like what happens
31:18after the fuel if like
31:22so if you can identify what the fuel is
31:25many times like if you go back like
31:28like i did study the biggest winning
31:30stocks most of the time
31:34uh for big big moves multi-year moves
31:37it's usually
31:38fundamental related like you can clearly
31:41identify the fundamentals
31:42it may have a lot of like big earnings
31:45and or revenue growth
31:47uh so that's something that's if you can
31:50find the fastest growing stocks
31:52and combined with this method you will
31:54have a big edge
31:56a lot of stocks don't have any earnings
31:58or revenue at all
32:00they're more like story stocks concept
32:02stocks and right now we see a lot of
32:05these types of stocks it could they they
32:07could be anything like
32:08battery related anything uh like battery
32:12metal
32:13related like lithium stocks are really
32:15hot right now
32:16and a lot of these stocks have very
32:19little or no earnings right now
32:22but if you know what the driver is we
32:24know we know that
32:26obviously like electric cars are a very
32:28big thing and electrification is a big
32:30thing
32:31and that's that's a piece of
32:32fundamentals you can add
32:35if you if you know what these stocks are
32:38like the group and you you trade those
32:42stocks you know these uh
32:44these these uh patterns and these stocks
32:46you will have a big edge versus
32:48trading something that's like super
32:51random just
32:52random stock you don't even know what it
32:54is like i i think
32:56if you can identify these groups that
32:59are hot
33:00they may be hot because of earnings and
33:02revenue growth big earnings and revenue
33:04growth
33:05or they could be hot because of
33:07something else for example like this
33:09lithium and battery stocks
33:11that most most of them are really like
33:13concept and storage stocks
33:15they many of them don't even have a
33:16product like this qs
33:18is a battery stock in the us markets and
33:21they they don't they won't have any
33:23revenue for at least five years but they
33:25have this
33:26exciting battery technology and that's
33:29something identified early like wow
33:31like i read up on it i knew all these
33:33electric car
33:34stocks were super hot and other battery
33:37related things were hot so i kept
33:39track of this thing and once i saw it
33:42getting a lot of momentum and
33:43volume and i ended identified my type of
33:46setup on it like i i did some
33:48decent size on it and that gave me
33:50conviction versus
33:52let's say i would have traded it and i
33:54didn't know what it was oh
33:55what a nice uh momentum stock with a
33:58perfect little flag breakup i wouldn't
34:00have done as much size on it
34:02and i also tried to hold it for longer
34:06so i i think like if i would take the
34:08fundamentals out of my trading my
34:10profitability would drop a lot
34:12so like fundamentals can they they they
34:14do play a big role at least for me
34:16personally
34:17i it it helps me give a conviction
34:21it's really what it comes down to
34:24now when you get into these positions
34:28are you timing your entries intraday
34:30like how are you
34:32how do you approach that part how do you
34:34actually get into the market
34:36i buy everything at once uh
34:39very aggressively i would add i'm a very
34:42aggressive trader
34:43with entries and exits that causes some
34:45problems with the size i trade
34:48because i i create these big weeks even
34:50on
34:51some pretty liquid stocks just because
34:53i'm so aggressive
34:54with my interest exits but that's how i
34:55trade like i don't want to bother with
34:58you know use spending several minutes
35:00getting into a stock
35:01trying to get in between the bid and ask
35:04and get these uh
35:05ecn rebates and like i don't i don't
35:08bother with that
35:09i just want to get in and out in a few
35:12seconds
35:14and that yeah and i i just with a
35:16breakout method i just buy
35:18everything at once and then i scale out
35:21i usually scale some into strength
35:23and then i use a like a trailing stop
35:26it's usually a 10 or
35:2720 day moving average for the rest okay
35:30and if the trade doesn't go your way for
35:32whatever reason i guess
35:33here we're sort of moving on a little
35:35bit to risk and sizing
35:37if the trade doesn't go your way where
35:40are you
35:40going to stop out
35:43of the day so what i do is i i buy the
35:47opening range highs and the opening
35:48range highs is when the stock takes out
35:51uh obviously it has to be a breakout
35:53first um
35:55so it's not like like so the opening
35:58range size could be the
35:59first one minute on the one-minute
36:01candle five-minute candle or
36:02or the 60-minute candle so
36:06whatever like let's say a stock uh
36:10breaks a range it happens to be on the
36:12first one-minute candle
36:14so i wait for that one first minute
36:16candle to uh
36:17finish and then i brought uh by when it
36:20takes out
36:21the highs for the day and then i use the
36:23low sorry day
36:24as my stop and it goes for the 5 and the
36:2660 minute candles
36:28also sometimes let's say a stock
36:32breaks it breaks the first one minute
36:35opening range highs
36:36but it may not be a breakout it may not
36:38still be in a range
36:41and then it keeps on going and maybe it
36:44goes up another
36:45three five percent or something uh and
36:48then
36:48it's obvious that it's a breakout then i
36:50made by the
36:52five minute breakout instead because
36:54that's when a breakout happens
36:56so those are really like very simple
36:59entries and exits it's just a one minute
37:01first minute range the five minute range
37:03and 60 minute range and the stop is
37:05always at lowest of the day
37:07sorry would you mind just clarifying
37:09that a little bit
37:10are you looking for a breakout on the
37:12the one minute five minute or
37:1460 minute okay so
37:17okay yeah so the breakout has to be
37:20obvious on the daily chart
37:22but let's say a stock is in a range like
37:25you are watching stock like for for a
37:28potential breakout and it opens up let's
37:30say it
37:31opens up break even and then it goes up
37:34a few percent um on the first one minute
37:38on the first one minute candle so the
37:40first one minute candle finalizes but
37:42this
37:43is a stock may still be inside of that
37:45range
37:46and you're talking about the range on
37:47the daily chart yes exactly
37:50exactly it's not a breakout on a daily
37:53chart yet
37:54so you don't know it's going to break
37:56out right so you're not going to buy
37:58that first one minute candle because it
38:00looks just another day
38:02inside of a range like i buy breakouts i
38:04don't anticipate them
38:06i don't like i i buy them as they break
38:08out
38:09um so to make it like to simplify it
38:13like i i mostly buy uh
38:16like when it's when it's obvious it's
38:19starting to break out just as it's
38:21starting to break out
38:23preferably many times i also buy when
38:26it's obvious it's already breaking out
38:28and i wish i was in from earlier
38:30but i used this like opening range highs
38:32the one minute five minutes 60 minute
38:35like candles and the lows of that those
38:36candles too to manage my stop
38:39okay so even though you're a swing
38:42trader there are often
38:43times when you'll buy the breakout so
38:46you know presumably the high of the day
38:48at that point
38:49um and then you may also get stopped out
38:51within the same day
38:53does that happen quite frequently oh
38:55yeah it can happen
38:56you know sometimes i buy something and
38:58i'm i get stopped at two minutes later
39:00that happens all the time especially if
39:03you use like the first one minute
39:05opening range highs the failure rate is
39:06a bit higher
39:07actually much higher versus the five
39:10minute and 60 minute but
39:12uh the pros are that you get in earlier
39:15on the ones that work so there's pros
39:17and cons
39:19uh but but yeah yeah it happens all the
39:21time like my win
39:22rate last year and i had insane returns
39:26last year was only about
39:2735 and the year before
39:302019 it was 25 so yeah
39:34you you have to get used to get stopped
39:36out a lot and sometimes within
39:38many times the same day and many times
39:41within a few minutes
39:42that's the name of the game that's
39:44that's really
39:45yeah that's how it is let's say you do
39:48get stopped out on a particular name are
39:51you
39:52i mean i presume you don't take that off
39:54your your radar
39:55all together you you re-watch that for
39:58or you continue watching that for a
40:00re-entry
40:02yeah absolutely if it's a good-looking
40:04like it happens a lot that they
40:06especially when i buy the first
40:08one-minute opening range highs
40:10when it breaks out on the first one
40:11minute uh
40:13the like i said it just said the failure
40:15it is a bit higher on the one minute
40:17breakouts and what happens a lot of
40:20times
40:21is you know i get stopped out and just
40:23few minutes later
40:25the stock takes out the highs again so
40:27you know i get back in it takes
40:28it it takes out the highs so
40:32yeah it happens a lot i can i can buy
40:34stock it stopped out and re-buy it
40:37you know within a few minutes uh
40:40sometimes
40:41no it doesn't happen that often but you
40:43know it happens so
40:45and you can't you can't hesitate if it's
40:46a good setup you gotta you gotta get it
40:48back in
40:49even if it means you have to re-buy it
40:51higher
40:52but that's that's just yeah that's how
40:54it is but you also have to
40:56you know i'm also very aggressive and
40:58you know if i get stopped out i get
41:00stopped out i don't i don't think i just
41:02get out
41:04i've seen i i've seen too many scenarios
41:06you know when
41:07things just keep going uh lower and uh
41:10you know you hesitate and now suddenly
41:12your stop is twice as big as it would
41:14have been
41:14and now it's three times as big and it's
41:17just
41:17you know free supplemental power not
41:19overthink things i just get in
41:21and i just get out so how do you manage
41:23your positions let's say
41:25you've bought a breakout it's
41:26successfully moving higher
41:29how do you manage it going forward like
41:31i know you use uh
41:32trailing stops you've spoken a little
41:33bit about um taking partial profits into
41:36strength
41:37which is great but what about the stop
41:39management
41:43yes so initially my stop is always
41:46low low sodium day uh and once the
41:50moving averages the 10 and the 20
41:52uh the moving averages it depends on the
41:54stock the faster moving stops are you
41:56stocks i moved uh i used the 10 day and
41:59the slow we're moving once i use the 20
42:01day and
42:02sometimes i you know it depends it
42:05depends really
42:06um on a lot of things but once the
42:09moving averages start to catch up i also
42:12start to trail
42:13let's say i've decided i'm going to use
42:1610-day on a certain stock and once it
42:18starts
42:20moving higher like the 10-day catches up
42:23to my initial stops
42:25and moves higher then i start moving in
42:28my stop
42:29uh with the 10-day so what i do i
42:32wait for the first close like i have one
42:35absolute stop where i like
42:37okay i get out no matter what and the
42:39trailing stop
42:40is for like if it violates it intraday
42:43i'm not worried
42:45um i only wait for the close
42:48like let's say um if it's like 10 15
42:51minutes before they close and it's
42:52kind of obvious it's gonna close below
42:55that moving average that's when i close
42:57the rest of my position
42:58but intraday violations are very common
43:01and that
43:02that's something that got me all the
43:04time previously when i was still
43:05learning and experimenting with this
43:08method
43:09like as soon as the price uh like
43:12undercut the the moving average my
43:15trailing stop
43:16i i just closed it and then the stock
43:19just went straight up from there
43:21and closed green on the day like it it
43:23it touched the moving average or
43:24undercut it a bit and then it just
43:26rebounded and yeah so very important
43:30wait for the close
43:31um for that trailing stop and then you
43:33also have that
43:35stop where you're like i'm gonna get out
43:36no matter what
43:39do you ever add to a winning position
43:42only if there's a good setup i don't
43:45that just because
43:46something is you know going my way like
43:48i said i just you know buy everything at
43:50once i know some people who trade
43:52similar setups than this like breakout
43:54type of setups
43:55uh like dan sanger uh
43:58i'm sure you heard about him like he
44:00that's that's also a guy that
44:02trades these types of setups i learned a
44:04lot from like i know he scales in
44:07he buys like fifty percent and thirty
44:09percent and twenty percent
44:11uh as the stock goes higher so there's
44:13many different ways to do it i
44:15i really don't i only do it
44:18if if i'm in for a longer move i use
44:22maybe the 20-day moving average which is
44:24a bit slower
44:25and the stock builds the next uh step
44:28let's say i've been in a stock for a
44:30month or two already
44:32and uh it has a new a new setup
44:36develops and uh you know
44:39that i would buy it and i would treat it
44:40as a new a new position
44:42even though i'm already in it so those
44:44ads let's say i double my position in
44:46the stock
44:47that that new position i i treat it as a
44:51new trade
44:52with the same with the same rules for
44:54that new
44:55uh like i used like a described earlier
44:59so it's a new trade and the
45:02position i had earlier i treated that
45:05trade separately
45:07if that makes sense that does make
45:09perfect sense i'm following
45:11okay i have some questions just around
45:14swing trading in general
45:16when you're swing trading you're
45:19you know you're holding numerous
45:21positions for weeks and even months at a
45:23time
45:24sometimes uh you're much more
45:27susceptible to moves of the broader
45:30market how do you deal with that
45:34yes um absolutely so
45:38it helps getting into at times where the
45:41market already had a
45:43correction like for example uh early
45:46november
45:47uh last year uh the nasdaq had been uh
45:51in a correction for a couple of months
45:53uh it had a correction bounced a little
45:56bit had an
45:56another leg lower and uh there were a
46:00lot of stocks that that
46:02other leg lowered they were just holding
46:05uh they were just screaming at me they
46:07wanted to go higher
46:08so that that's that's the best time
46:11to uh buy these things
46:15and usually when you had a correction
46:18multi-month correction it usually
46:20takes a few months before you get
46:22another pullback in the markets
46:24um unless obviously on a bear market
46:28my point is you want to get in the
46:30stocks that show relative strength to
46:32the market that are stronger than the
46:34overall market and that really helps
46:36holding through these these corrections
46:39you you know corrections always happens
46:42uh and it really helps you
46:45and these stocks you know if you buy the
46:47stocks that already proven
46:49they're stronger than the market and
46:51shown relative strength
46:52they're gonna keep showing that relative
46:54strength usually
46:56uh for uh for some more time
47:01uh but yes this is a this is a very the
47:04market overall market is very important
47:06for this type of trading
47:08uh like all this like breakouts
47:12you know they don't exist in a in a
47:14falling market like even if you happen
47:16to get one
47:16just you know don't don't touch it it's
47:19gonna fail
47:20most likely uh so it's very important
47:22also to study
47:27when this type of trading works and when
47:29it doesn't
47:30and in up trending and sideways markets
47:33this type of trading works really really
47:35well
47:35and down trading markets not so much um
47:39that's that's when it's time to sit in
47:41cash
47:42do less and uh do trade with smaller
47:45size if you're trading this
47:47particular type of setup so the market
47:50where market is super
47:52super important to be aware of um at
47:55least the market
47:56sentiment um like you don't have to look
47:58at day-to-day moves in the markets like
48:00i rarely do i i most of the time i don't
48:02know if the market is up or down on a
48:04day i just look at my
48:05the stocks on my watch list and my scans
48:08and my portfolio and that
48:10and they're usually not telling the
48:13same story sometimes the markets like
48:15the nasdaq can be down on a day and
48:17everything in my portfolio is green
48:19and sometimes the market is up on the
48:21day and everything my portfolio is read
48:23so
48:24when i say be very aware of the market
48:26i'm talking more about the overall
48:29sentiment and the trend of the market
48:31and that's also something you kind i
48:33have to learn with experience
48:37it's not something you really read into
48:39a book you just have to go
48:41through it through a few cycles you have
48:43to see a few set
48:44ups you have to see a few crazy
48:48bull runs you have to see a few sideways
48:50shopping markets to really understand
48:53these uh relationships
48:56it takes time yeah yeah because i mean
48:58that's going to be one of the most
49:00frustrating things as a swing trader
49:03to have you know what you think is a
49:05great position on it's been going well
49:08and then all of a sudden there's a few
49:09bad days in the the broader market
49:11and um you know you get stopped out
49:14purely as a
49:16just for neither reason than the
49:17market's coming off
49:20but as you said like if you're in stocks
49:22which are
49:24generally stronger than the market
49:25that's that's less of an
49:27issue you know on a portfolio level do
49:30you limit the number of
49:31open positions you have at any one time
49:36i don't really have a limit uh what
49:38usually happens coming off a correction
49:41um like all the methods i trade i
49:45i usually don't uh trade much when the
49:48market is a correction but let's look at
49:50an example like
49:51last year with a kobe sell-off that
49:54lasted
49:55about four weeks in from like mid
49:58mid february to mid march if i remember
50:01correctly so i
50:02so when the market bottomed uh mid-march
50:05i think it was i really didn't have a
50:07lot of things going on in my portfolio i
50:09may have had a few positions here and
50:11there
50:12so and then the market started
50:15this big big big bull market that
50:18started from
50:18from that point and i was a little bit
50:20late to it i really didn't believe the
50:22bounce at first but then i started
50:23seeing this enormous amount of setup
50:26so i got into them i i went from a
50:28couple of positions to seven positions
50:30to 15 positions and what happens when
50:33the market is on a
50:34multi-month run uh usually is i end up
50:38with a lot of positions
50:40because i take some partial profits and
50:42some and then i roll that money into
50:44new positions new breakouts
50:48and i can end up with you know 20 25
50:51and i've had 30 positions sometimes
50:54actually so far every time i ended up
50:58with 30 positions
51:00it happened three times in the past 12
51:02months every time
51:04in the next few days the market pulled
51:07uh you know started uh like a multi-week
51:10or month multi-month pullback or
51:12sideways
51:12consolidation so that's a really good
51:15proprietary indicator i have
51:19so yeah no i really don't have an upper
51:21limit but i have a i've had 30 positions
51:24a few times but ideally i try to keep it
51:26between 15
51:2720 after 20 it starts getting a little
51:31bit hard to keep track of them all but
51:32again like i said before
51:34in swing trading and especially when i
51:36have a lot of positions
51:37it means they are all working very well
51:40some some of my positions may be up
51:41hundred percent two hundred percent even
51:43if it's some
51:44some of these uh crazier smaller caps
51:47like right now the
51:49uh crypto related stocks that make big
51:52big moves i've
51:53i had a i have a few double doubles in
51:56my portfolio right now
51:57and when they're up that much and
51:59already you know you sold some
52:01uh to lock in profits the partial
52:03positions
52:04you really don't even have to look at
52:06them you can look at you can look at
52:07them
52:08you know a couple of times per day like
52:10you don't have to monitor them and
52:12that's that's
52:12uh that's the good part about swing
52:14trading if you
52:16you know and you have this uh bull runs
52:19yeah it's it's a low effort type of
52:22trading you also have obvious have to
52:24put in a lot of effort at first to learn
52:26all of these things
52:27um these patterns the fundamental
52:30drivers of the stocks the overall market
52:32it takes many years to put it together
52:34but once you get it
52:36it's a fairly low effort type of trading
52:39you don't have to
52:40fanatically look for trades and uh you
52:43know constantly getting not get out of
52:45stuff like you have in day trading
52:47as you just said you've got a couple
52:49positions in your portfolio there which
52:51are up 100 to 200
52:54it made me think i should ask you
52:55earlier you said that your win rate was
52:58around about
52:5834 uh last year
53:02what's kind of the the the ratio
53:05obviously it varies greatly here but
53:07what's that
53:07you know you yeah your ratio of we're
53:10talking average win to average loss
53:14you know that's a very good question and
53:17i have no idea
53:18i i i gave up uh doing
53:21doing that type of stuff many years ago
53:25like looking at the micro stuff in my
53:28trading
53:29um i i really don't have an idea i
53:32i get i get that question a lot on my
53:34stream too
53:35and i i really only know my win rate
53:38because so many people kept asking me
53:40about it so i went back to my journal
53:42and looked it up
53:43and i think i think if you get the big
53:46stuff right you don't have to worry
53:48about the little stuff
53:49and yeah i i yeah i i honestly i don't
53:52know
53:53okay no i appreciate the transparency
53:56let me ask you this question then i
53:58might phrase it a little differently
54:01you know come the end of the year if you
54:03look back
54:04at the majority of your gains do they
54:07come from just a few
54:08big winners like you know i can't think
54:10of what the name of it is but it's kind
54:12of like that 80 20 rule like do you find
54:14that
54:14absolutely oh yeah yeah yeah it's so all
54:17about the
54:18small losses and big winners and there's
54:21maybe
54:22you know i don't again i don't have any
54:23data on that but i i know intuitively
54:26there's a
54:27few few big winners that where most of
54:30my money comes from
54:31most of the other stuff they kind of
54:33break even but maybe
54:35i don't know 10 to 20 of my trades
54:37that's where
54:38maybe not 10 but definitely like maybe
54:4020 of my trades that's where all my
54:42money comes from
54:43uh really uh the big ones and those are
54:46like i
54:47i've said it also in my stream a lot
54:49like i'm a home run trader
54:50i don't i know a lot of traders they try
54:53to make you know go for a
54:54higher win rate and try to make money on
54:57more trades
54:58uh but you know that's that's the style
55:00i've chosen it works for me
55:02like try to catch the big ones and uh
55:06have a very high uh or actually a very
55:09low win
55:09rate have a very very low win rate so
55:11most of my trades
55:14uh just you know even themselves out and
55:16then go for that
55:18i again i don't have any numbers but
55:20maybe that 20
55:21or 15 percent of the trades that really
55:23that's that's where the money is for me
55:26yeah low win rate high payoff yeah
55:30christian i'd like to ask you just a
55:31couple i guess more general
55:34questions about you as a trader even at
55:37your level
55:39what challenges do you still deal with
55:41on a daily basis
55:44i've gotten a rid of a lot of challenges
55:47over the years
55:49but the things i still struggle with
55:52are i would say over
55:56trading because i do
55:59i'm a little bit addicted to trading um
56:01i'm not gonna lie
56:03i i do i do like i do like to trade
56:06even when i know i shouldn't uh
56:09so that does take that uh
56:13you know that that's something that
56:15takes a chunk of my
56:16returns every year and also patience
56:20uh is something like i i'm
56:23like i know i should use the 10 and the
56:2520 day moving averages
56:27um as my trailing stop so many times
56:29when a stock just goes straight up
56:31and especially it's been an issue the
56:33past uh 12 months or so
56:36or 11 months since we've had this big
56:38big great bull market after the code
56:40sell-off
56:42like the moves are insane like
56:44everything is super charged versus
56:47earlier years versus you know the eight
56:50previous years i had been trading before
56:52that
56:52or nine um and it's kind of been hard to
56:58adapt to those like everything just
56:59keeps going up and up and what i do
57:01is i just you know i'm like oh [ __ ] [ __ ]
57:04it this stock is up so much it can't go
57:06higher uh like for example i had to
57:10straighten
57:10nvx which is one of these vaccine stocks
57:14i it went up i think it doubled or so in
57:17two weeks and i'm like this it's not
57:19gonna go higher so i just sold the
57:21position
57:22it got it it started getting a bit
57:24stretched from the 10-day moving
57:25averages
57:26average which i was intending to use as
57:28my trailing stop
57:30and at first the stocks actually went
57:33lower
57:33after i sold it and
57:37a few weeks later it doubled again and
57:39now i was like okay
57:41um yeah like overriding these
57:45like i try to override these moving
57:47averages trailing stocks
57:49stops like outsmart them but i just
57:52can't do it
57:53like like but no i i wish i was a robot
57:56that just
57:57followed the method 100 i just can't
58:00my entries are so good like i'm so good
58:03at the entries but my exits are just so
58:05bad
58:05i just can't follow my own rules and
58:08it's it's costing me money in the past
58:10you know this great me bull market we've
58:13had
58:14it's just yeah that's
58:17yeah it's kind of annoying but the issue
58:20is i guess sometimes it it pays off
58:22to override those rules and then
58:24sometimes
58:25not so much yeah but
58:29most of the time it doesn't pay to
58:31overwrite those rules
58:32um i i would say again i don't have an
58:35exact data but just
58:36intuitively three quarters of the time
58:38it doesn't pay
58:40so the logical thing to do
58:43would be to not override my own
58:46cell rules but i still keep doing it and
58:49the people in my chat they're gonna make
58:51it fun of me because they know like hey
58:54christians just sold because uh he
58:55thought it was overextended let's buy it
58:57it's probably gonna double again
59:00you know so right so those are my two
59:02biggest struggles
59:04overriding my cell rules and over
59:06trading
59:07i never like i know a lot of people have
59:10problems with taking
59:11taking their losses like they they have
59:14very hard times
59:15scaling out when they get stopped out
59:17they they just hope it comes back
59:20that's something that's an issue i never
59:22really had i only remember a few times
59:24in my career
59:26that i've done it just and i got really
59:30burnt a few times and after that
59:32really i've never had an issue taking
59:34taking losses
59:35and i know that's a big issue a lot of
59:37people have and people also write to me
59:39on twitter and ask me about it all the
59:41time
59:42those are my my struggles still those
59:45two
59:46in what ways has your attitude to risk
59:48changed
59:49as your buying power has you know
59:51obviously massively increased over the
59:53last few years yeah so
59:56something i have done really like i
1:00:00i i've done successfully is
1:00:03i've managed to scale my trading up
1:00:06massively
1:00:07like if i double my account my risk and
1:00:10my
1:00:11size will double also it's there's a lag
1:00:14there
1:00:15but it's usually a few months but it
1:00:17will eventually double too
1:00:19so i'm always bringing my my my my
1:00:22risk and my size up in relative it's in
1:00:26relative terms and percentage terms it
1:00:28all stays the same the position sizes
1:00:30and the percentage risk
1:00:31relative relation to the account but i
1:00:34know a lot of people they just take
1:00:36money out of their accounts all the time
1:00:37to put it away and other stuff
1:00:40but i've never done that i've always i
1:00:42only take out money when i
1:00:44really have to like to pay living
1:00:46expenses or to pay taxes
1:00:49and other than that i just use the the
1:00:52account to grow my account
1:00:54all the time and i also i
1:00:57i should mention i use marching quite a
1:00:59bit um
1:01:00and i only i only use it when things are
1:01:03going well
1:01:04when i deserve the use margin i think
1:01:07marching is something you have to
1:01:09deserve
1:01:09it's not a privilege just because it's
1:01:12there
1:01:13doesn't mean you should use it
1:01:15unfortunately a lot of people do use it
1:01:17and they use it the wrong way they start
1:01:18using margin when things are not
1:01:20they may use in margin when things are
1:01:22not going well
1:01:24but that's not how you do it you have to
1:01:27gain some ground let's say every year
1:01:31but no matter where you reset this but
1:01:33let's say in the beginning of the year
1:01:35if if you if you if you do if you do
1:01:37well that's when you start
1:01:39using some margin uh because if things
1:01:41are going well you should you should
1:01:43push those periods
1:01:44and then there are periods you shouldn't
1:01:46uh trade a margin at all and maybe you
1:01:49shouldn't even be trading at all
1:01:51so this taking it's it's all very
1:01:54relative this um risk
1:01:58approach i have oh my attitude
1:02:02risk yeah i think it has matured um
1:02:07i was a bit more reckless in the
1:02:08beginning like like i said before i went
1:02:11all in
1:02:12um on all stocks because i didn't know
1:02:15better
1:02:16and but that was also when i was much i
1:02:19had a much smaller account like i
1:02:21wouldn't be able to trade you
1:02:22i mean if you have a small account and
1:02:24want to do swing trading obviously you
1:02:25can't be holding
1:02:2615 20 positions like i do uh it's maybe
1:02:30smarter to hold
1:02:31fewer positions um but again like
1:02:34position sizing
1:02:35i realized yeah especially when you kind
1:02:38of hold things overnight
1:02:39you can't have everything in two or
1:02:42three stocks you gotta diversify a bit
1:02:44more because i've seen too many stocks
1:02:45up and down fifty percent and
1:02:48it's just not worth it so
1:02:52and also the margin related things when
1:02:54i first got a margin account
1:02:56in the beginning i traded with swedish
1:02:58brokers these u.s markets with swedish
1:03:00brokers there was no march
1:03:02in there and i opened us accounts and
1:03:05then suddenly i could use margin i
1:03:07really didn't know how to handle that
1:03:08like oh my god i'm a
1:03:10insane amount of buying power let's use
1:03:12it um
1:03:13but i got burned a few times and you
1:03:16know i kind of matured and i realized
1:03:18like you
1:03:18kind of can't trade that way you kind of
1:03:22you kind of have to deserve the risk
1:03:24um and also even if you're not using any
1:03:27leverage or margin in your trading
1:03:30which is fine you can have incredible
1:03:32returns never using any type of leverage
1:03:35i just like to you know spice it up a
1:03:37little bit when things are going well
1:03:39um because you know again i studied from
1:03:42history i know that
1:03:43bull runs again lasts for a long long
1:03:45time and
1:03:46you you wanna you really want to
1:03:48capitalize it if you
1:03:49if you're a swing trader because as
1:03:51swing trader you
1:03:52you know you gotta sit think mostly in
1:03:54cash for long long time so periods too
1:03:57so you you got to make the fun more fun
1:04:00while it lasts last question for you
1:04:06why do you think your level of trading
1:04:08success is so rare
1:04:10obviously everyone sets out with the the
1:04:13ultimate dream of
1:04:14uh making as much money as you have from
1:04:16the markets
1:04:18but very few are able to achieve it um
1:04:20and you know from what you've described
1:04:22here and
1:04:23your strategy it all sounds fairly
1:04:25simple
1:04:27not to discredit any of the the hard
1:04:29work you've put in
1:04:30but no you know why do you think so few
1:04:32make it to the big time
1:04:34i'm glad you i'm actually very glad to
1:04:36set it that it all
1:04:37it's very simple because it is i'm
1:04:40always trying to take things away
1:04:42i think there's an inverse correlation
1:04:44between the amount of indicators and
1:04:46profitability for example
1:04:49um i think people focus a lot on the
1:04:52wrong things
1:04:53instead of they look at a lot of
1:04:55indicators instead of focusing on a
1:04:57price and what's really really
1:04:59moving a stock and how the stock is
1:05:01moving
1:05:02like i really focus on the it's just
1:05:04purely a price
1:05:05a lot and try to listen to what the
1:05:08market what the stocks are trying to
1:05:09tell me
1:05:11uh a lot of people uh they just focus on
1:05:14a lot on other people's opinions they
1:05:17they may be watching cnbc and they you
1:05:20know there's maybe some bear porn going
1:05:22on or
1:05:23you know some uh hedge fund manager
1:05:25that's panicking on cnbc
1:05:27and you know that that's gonna affect
1:05:29you right and what what
1:05:31and that's gonna affect your trading too
1:05:32like oh wow the
1:05:34professionals are really scared maybe i
1:05:36should be too scared too
1:05:37and vice versa and i i
1:05:40think if you can tune all of it out
1:05:42everyone's opinions out
1:05:44like even even the billionaires the
1:05:46hedge fund managers
1:05:48what i realized over the years they're
1:05:50like they had they are
1:05:52wrong a lot too but they have to say
1:05:54they use they they do it the same way
1:05:56like i do when they're wrong they lose
1:05:59small and when they're right they win
1:06:00big
1:06:01so i really can't pay attention to all
1:06:04any of opinions just focus on what the
1:06:07market is doing
1:06:08focus on what the leading stocks are
1:06:10doing or whatever
1:06:11method you trade like just focus on
1:06:14how is that method working is it working
1:06:16well or is it not working at all
1:06:18are there setups are there no setups
1:06:20that's really what you should pay
1:06:22attention to
1:06:23that's that's one big part i see a lot
1:06:25of even successful traders struggle with
1:06:28they these this other opinions
1:06:31do snuck in instead of just listening
1:06:34purely on the market
1:06:36and also i think also just purely
1:06:38education
1:06:40i think a lot of people even some pretty
1:06:43decent successful traders i think they
1:06:45would do even better if they really went
1:06:48back and looked at
1:06:48thousands of examples of the of that oh
1:06:51that setup they trade or the setups they
1:06:54trade
1:06:54and really nail down all the variations
1:06:57of those and look at it look at also
1:06:59maybe the overall
1:07:00market like what was the overall market
1:07:02doing when there were
1:07:04a lot of setups and when there when when
1:07:06that setup worked really well
1:07:07versus what was the market doing when
1:07:10there weren't any setups and
1:07:11the setups weren't working any well i
1:07:14think
1:07:15that that's gonna improve your edge by
1:07:18by significant margin looking at all
1:07:20these variations
1:07:22um and then there's also the the
1:07:25leverage
1:07:25part uh you can either hurt yourself or
1:07:28you can supercharge your returns
1:07:31uh by using leverage but you gotta do it
1:07:33the right way
1:07:34um uh
1:07:37and also scaling your trading that's
1:07:39also something
1:07:40like i've seen there's a i know i know a
1:07:42lot of traders that say
1:07:44pretty much trade the same size they've
1:07:46been trading for
1:07:4710 years they trade the same setup like
1:07:50they mastered
1:07:51their setup they really know what
1:07:53they're doing but they haven't been able
1:07:55to
1:07:56scale their trading and that's also
1:07:59a big thing that i think sets me apart
1:08:03from
1:08:03i see a lot a lot traders too and that's
1:08:06how you really can make a return
1:08:08especially in the crazy bull market
1:08:11we've had in the past
1:08:12year like it's gonna make a difference
1:08:15of you making
1:08:17100 versus making 900
1:08:20it's you know scaling it up as account
1:08:23as your account grows um it's not going
1:08:25to happen instantly like if you double
1:08:27your account
1:08:28uh let's say in a month uh i know that's
1:08:31a
1:08:31maybe no that's unrealistic maybe even
1:08:34though you can't do it
1:08:35especially if you're a day trader and
1:08:37use
1:08:38like a margin um but you know let's say
1:08:41double your account in a certain time
1:08:43frame like eventually
1:08:44your size should double to your size and
1:08:46your risk
1:08:47and i i see a lot of people too they
1:08:50just they they
1:08:51can't they can't like
1:08:54they can't push it like um obviously
1:08:57every time you size it up and you take
1:08:59that first big loss
1:09:01after you sized your trading up it all
1:09:03it hurts
1:09:04but you also you always have to think in
1:09:06percentage terms like i always cringe
1:09:09when people also
1:09:10another reason to never pay attention to
1:09:13any type of financial media like i
1:09:14always cringe
1:09:16when they when they talk about points oh
1:09:18the tao is up to a thousand points it's
1:09:21such a useless thing to say it doesn't
1:09:24really
1:09:24you know there's no context at all like
1:09:27why don't you just say percent because
1:09:28one percent is always one percent
1:09:31no matter if what if the dow is at 5000
1:09:34or at 50 000 right
1:09:36but a thousand points like a thousand
1:09:39points meant
1:09:40a very different thing five years ago
1:09:42versus today
1:09:43um so always thinking in your trading
1:09:46too in percentage terms like
1:09:48think about percentage risk like oh i'm
1:09:50going to take a percentage return
1:09:53oh sorry a risk on this trade and the
1:09:55and since my accounts have grown
1:09:57a lot that percentage risk is going to
1:10:00be higher than it was say a few weeks
1:10:01ago
1:10:02but it was always thinking percentages i
1:10:04think that's a very useful exercise
1:10:07that may take your training to another
1:10:09level instead of maybe thinking about
1:10:11points um it's just
1:10:14you know instead of thinking about like
1:10:16points or
1:10:17in in dollar terms like absolute taller
1:10:20terms
1:10:21uh like let's say you risk a thousand
1:10:24bucks
1:10:25usually on your trades but your accounts
1:10:27have doubled
1:10:29and you're scared to take and you're
1:10:32scared to even risk 1500 bucks but
1:10:34actually in percentage terms if your
1:10:37accounts have doubled you should be
1:10:38risking 2 000 bucks
1:10:40so maybe get used to that 1500 bucks
1:10:42risk first and then you push it to that
1:10:442000 bucks
1:10:45risk just as an example
1:10:49so those are the three or four
1:10:52things i think that may improve
1:10:57most traders uh returns um
1:11:00the you know three four concepts that
1:11:02really really help
1:11:04yeah very wise i love that
1:11:07actually one more question i lied
1:11:11i promise this is the last one
1:11:14since you've seen this type of success
1:11:16that you've had in trading
1:11:18how has your life changed not much
1:11:21really
1:11:22[Music]
1:11:23like i used to like in my earlier years
1:11:26like between 2013 when i started my
1:11:29evernote project or 2014 i started just
1:11:33you know just saving articles like i
1:11:35started um
1:11:37like i started everything trading
1:11:39related i read a lot of books i read a
1:11:41lot of articles i
1:11:42studied a lot of these successful
1:11:44traders like dan sanger
1:11:46like i studied everything he had written
1:11:48this all his newsletters back to the 90s
1:11:50i read through them
1:11:51i looked at the patterns he was looking
1:11:53for so i spent a lot of time on
1:11:57on especially on the weekends like
1:12:00studying
1:12:01like i tried to absorb everything i
1:12:03looked at every single angle
1:12:05every single method i don't know how
1:12:07many thousands
1:12:08probably 10 000 hours plus that i've
1:12:10spent
1:12:12just doing studying uh over the years
1:12:14and
1:12:15now i feel like i i
1:12:18i don't do that as much anymore because
1:12:21there's just not much
1:12:22new ones it's the same patterns it's the
1:12:25same concepts and i feel like
1:12:27i have a pretty good grasp grasp of
1:12:29these things and i don't have to spend
1:12:31this much as much time doing like just
1:12:34studying um
1:12:36like i do it uh but not as much so
1:12:40you asked me when uh
1:12:44when we started this call what i did
1:12:46yesterday since yesterday was a day off
1:12:48in the markets and i spent the whole day
1:12:50playing computer games that's how my
1:12:53life has changed i went from
1:12:55studying everything market related to
1:12:58doing
1:12:58things that i enjoy doing on my days off
1:13:02okay well that's a pretty simple answer
1:13:05yeah
1:13:06more free time on the weekends and uh
1:13:08more time for video games
1:13:10absolutely more social life and more
1:13:13more uh
1:13:14time spending on hobbies okay okay well
1:13:18christian it's been an absolute pleasure
1:13:19speaking with you and i greatly
1:13:21appreciate your time
1:13:22for anyone who's listening who might
1:13:24want to uh
1:13:26find out more about yourself uh where's
1:13:28the best place to go
1:13:29you know twitter etc yeah
1:13:33you can pretty much go to any of my
1:13:34social media but twitter
1:13:36um there's also a link in the in in my
1:13:39bio where you get to my blog and you can
1:13:41read up on
1:13:41uh you know there's a you know blog
1:13:44posts
1:13:45about me and my methods my setups and
1:13:48also my twitch stream
1:13:50um where i stream uh every market day i
1:13:54should usually stream the first hour and
1:13:56a half or so you can see me
1:13:58trade real time i talk about
1:14:02the setups you can ask me questions um
1:14:06and uh yeah close to twitter and twitch
1:14:10okay and what's the link for your blog
1:14:12because i think for anyone who's
1:14:14you know listened this far through the
1:14:16podcast it would probably be a good idea
1:14:18for them to actually
1:14:19uh put some visuals to you know some of
1:14:21the things we've been speaking about
1:14:22here and and those are definitely on
1:14:24your blog
1:14:25what's the link yeah it's uh
1:14:29shorts and stories.com
1:14:32chartsandstories.com
1:14:33okay and your twitter handle is uh at
1:14:36the caller maggie
1:14:40q-u-l-l-a-m-a-g-g-i-e
1:14:42and that's also the handle my twitch
1:14:44handle and my youtube handle
1:14:46okay excellent uh and folks listening
1:14:49those links can also be found at
1:14:52chatwithtraders.com
1:14:54two 1 2 as this is episode 212.
1:14:58christian once again very much
1:15:00appreciate it thanks a lot for doing the
1:15:02podcast
1:15:03let's chat soon thank you very much
1:15:06i'm very grateful uh that you asked me
1:15:10to be here
1:15:10and i'm very happy thank you so much
1:15:12aaron my pleasure
1:15:15you've reached the end of this episode
1:15:17of chat with traders
1:15:19but rest assured there are more episodes
1:15:21loaded with
1:15:22real market insight and zero hype on the
1:15:25way
1:15:25soon so to stay updated with each great
1:15:28new release
1:15:29subscribe to the podcast and itunes and
1:15:31we'd love it if you leave a rating and
1:15:33review
1:15:34we'll catch you next time on chat with
1:15:36traders
1:15:38[Music]

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