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How to ACTUALLY Make your first $10k Trading — Transcript

by Andrea Cimi · 6,525 words · 926 segments · language en · Watch on YouTube

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0:00It took me more than three years of
0:02burning prop firm challenges, burning
0:04accounts, and being a break even trader
0:06before I could make my first 10K [music]
0:09with trading. Then I've had the luck to
0:11trade side by side with some of the best
0:13traders in the world, like world trading
0:15champions, hedge fund managers, and bank
0:17floor traders. Up to the point where now
0:19I'm able to do $10,000 even in a few
0:21hours because I have more capital, I
0:23have more knowledge and experience. And
0:25if I would go back with the knowledge I
0:27have now, I'm pretty sure I would be
0:28able to make my first 10 K trading
0:30within 6 months. And in this video I
0:32want to show you exactly what I would do
0:34if I were broke again, on my own, and
0:36wanted to make my first 10K trading. The
0:38exact road map, no [ __ ] From how to
0:42gather the first money to start trading
0:44to which exact strategy I would use that
0:46is extremely easy, scientifically proven
0:49to work over the last decades. All the
0:51way to which platform, prop firm, or
0:54broker I would personally [music] use.
0:56Not only how to pierce the wall of the
0:57first 10K, but go all the way up to the
0:59first 100K trading. This is what I would
1:02do. This is not financial advice. I'm
1:04not telling you what to do. It's just
1:06out of common sense and my experience
1:07what I would genuinely do. Knowing that
1:09trading is risky and most people just
1:11fail. And the very first thing I would
1:13do is locking the [ __ ] in. I mean
1:16seriously, I'd get rid of all
1:17distractions. I would panic. I would
1:19stop sleeping, feel nervous, and lock
1:22the [ __ ] in. Ready to commit every
1:25waking hour to my goal. Then I would
1:26gather the three things you need [music]
1:28to start trading. Money, a strategy that
1:31works, PC connected to the markets.
1:33Let's start with money cuz some of you
1:34guys are probably broke. If you have a
1:36bit of money, you have a roof over your
1:38head, you have a family that loves you,
1:39skip to the next chapter cuz we're
1:41literally starting from zero dollars.
1:43So, the number one thing I would do if I
1:46were completely broke and I wanted to
1:48start trading is to find a [ __ ] job.
1:50Sorry, [music] I know you were probably
1:51expecting something else. But bro, to
1:53trade you need money to start. So, I
1:55would look for a high-paying job for at
1:58least 3 months. I'm Italian and in Italy
2:01the average wage is around 1,500 euros.
2:03So, I'd probably look for a place where
2:04they pay seasonal workers a lot, like
2:07during ski season in Switzerland and
2:09bank like 3,000-4,000 francs per month
2:12or in the French Riviera during summer.
2:14Possibly in the place where they give me
2:16accommodation [music] and food or
2:17anything like that. Just look around
2:19your nearby countries where you can
2:21enter visa-free, find a high-paying job
2:23there for a while and be the best
2:26[ __ ] worker you can possibly be,
2:28[music] cash in tons of tips as well.
2:30Force myself to save at least 50% to 75%
2:33of what I'm earning. This is a concept
2:35called force saving or pay yourself
2:37first. As soon as you get the money, you
2:39already take that percentage and put it
2:41[music] into an account where you don't
2:43have a card you can spend it with, like
2:44a savings account. And boom, just like
2:46that in 3 months I got my first 5K to
2:4810K. I can also prolong this for 6
2:50months or do two seasons [music]
2:51and maybe even reach $20,000. And in the
2:54free time I would study trading. Because
2:56I'd likely work 8 hours a day, 2 hours
2:59for eating and self-care, 8 hours of
3:00sleeping, 1 hour at the gym, 1 hour for
3:03travel. Even like that, I still have 4
3:05hours in my day. So, no excuses. In
3:07those 4 hours I would devour anything I
3:10could find about trading, [music]
3:11macroeconomics, fundamentals, technical
3:13analysis, data analysis. Find free
3:15education from reliable sources. And
3:17whenever I'm done working at the
3:18seasonal job, I would then really lock
3:21in to trading. [music]
3:22I'd probably move temporarily to a
3:23low-cost country like Indonesia where
3:25you can live a great life with 500-600
3:27dollars a month. So, that if I'm
3:28starting with 10K-20K [music]
3:30budget, I can live there the entire
3:32year, not work, and still have money to
3:34invest in my trading. Of course, if you
3:35don't have the problem of having a
3:37little bit of money to start, you can
3:38skip this part. But why is this step so
3:41crucial to start? Why is my first step
3:43to make 10K from trading making 10K from
3:46a normal job? Because you need to know
3:47the truth, okay? Regardless of what some
3:49guru told you on social media, trading
3:51is not that type of burn the boats
3:53business. It's not something you just go
3:55all in with everything you have and hope
3:58for the best. Because that's just the
4:00best recipe for financial disaster, I
4:03promise you. And I wish someone told me
4:05this before I started trading. It would
4:07have saved me so much headache. You need
4:09to understand this. Trading is nothing
4:11more than long-term systematic
4:14controlled gambling. You're taking a
4:16small bet, the same small bet every
4:19single day. You lose [music] some, you
4:21win more than you lose, and those wins
4:24stack up over time and build your
4:26profit. It's an extremely boring
4:28process, where the only way to make fast
4:31money with it is to bite more than you
4:33can choose, to risk way more than you
4:36can afford on something that is
4:38virtually impossible to happen. So, it's
4:40a different game than the one you
4:42probably think it is. And you're also
4:44not here to make your first 10K, use
4:46that to pay your bills, and then maybe
4:48think about [music] how the [ __ ] am I
4:50going to do the next 10K. Trading isn't
4:51a get-rich-quick method, it's a
4:54get-rich-slow method. And whoever is
4:56telling you differently is probably
4:58trying to sell you some course, so they
5:00have a conflict of interest with you
5:02believing this. But the actual truth is,
5:05you're in finance, bro, okay? Trading
5:08isn't this.
5:11It's actually this, the good old boring
5:14finance. And finance starts from saving
5:18and investing and low-risk stuff to
5:21protect capital. Trading, actively
5:24trading, [music] is the riskiest part of
5:27finance. Trading is trying to speculate
5:30and have a better ROI than 99% [music]
5:33of people that try. It'll take time for
5:36you to be able to build the skills and
5:37the success and really potentially being
5:40able to making a living out of trading
5:42alone. Still financially very risky.
5:44Having just one source of cash flow as
5:46risky as trading, but also with any
5:48other source of cashflow. If you just
5:49have one source, if that stops working,
5:52you're done. So, if you're struggling
5:54financially, the first thing to do isn't
5:56burning the boats and all in into
5:58trading. The first step is to have a
6:00minimum financial cushion, like an
6:03emergency fund. Cuz trading is already
6:05an extremely emotional game [music] that
6:07you're probably not ready for
6:08psychologically or financially. When all
6:11of your life depends on the money you're
6:14making the next trade, you're never
6:16going to be able to have the soberness
6:18necessary to trade rationally and with
6:21emotional detachment. First, we get some
6:23money to start and then we finally plan
6:25our road map. We don't just get into it,
6:27we plan it thoroughly. So, the next
6:29thing is to plan my trading journey. How
6:31do I take this money I have and turn it
6:34into more money putting it into the
6:36market of money at the right time so
6:40that I can take money from other people
6:43betting their own money on the same bet
6:46that I am making but after me. And the
6:48truth is there's a thousand ways you
6:50could do this from buying the breakout
6:52to freaking programmatic multi-leg
6:55option calendar credit spreads low
6:57latency gamma scalping arbitrage. But,
7:00you're probably just a beginner so we
7:01need something easy, powerful, and that
7:04fits your calendar. And people never
7:06talk about this for some reason. Like,
7:08if you have a 9-to-5 job, you don't want
7:10to just quit your job and go all in to
7:12trading. Because as we discussed, that
7:15bears some serious financial
7:17irresponsibility [music]
7:18or as my father didn't used to say,
7:20financial suicide. So, in that case, you
7:22might want to swing trade instead. Not
7:25every day in front of the chart but like
7:263-4 hours a week, long-term chill. If
7:29you're maybe a freelancer or you work
7:31part-time and you have at least 3 hours
7:34a day, then you can day trade. And if
7:36you have money, you have no work to
7:39worry about, you can potentially do
7:40both. Now, the next question is, which
7:42strategy would you use? And your average
7:44guru would tell you trade ICT, trade
7:47support and resistance, trade trend
7:49lines, [music]
7:50Bollinger Bands. And if you really dig
7:52the source of these suggestions, it will
7:56always be somewhere in the lines of
7:58trust me, bro. Nothing verifiable. And
8:01in finance, rule number one, never trust
8:04anyone with an opinion. Only trust data.
8:08So, to establish a healthy relationship,
8:10I will not tell you my opinion. I will
8:11share with you some scientific data
8:13instead that will help you understand
8:15how to qualify whether a trading
8:16strategy is {quote} unquote good.
8:20Now, please notice something. I want you
8:22to think about your last year in the
8:23market and what your performance was
8:25with your trading, okay? Lock it in. You
8:27got it? Great. This is extremely
8:29important. Exactly 1 year ago, out of
8:32100 traders that put $5,000
8:36into their trading account, 90% of them
8:40lost it all. 7% of them stayed at break
8:43even. 2% earned a little, and less than
8:461% was profitable. And even less than
8:50that was able to make a lot of money,
8:53okay? Which one are you? Let me know in
8:54the comments. But the truth is, 100% of
8:58them put hours and hours of stress, hard
9:02work, frustration, family making fun of
9:05them while paying hundreds, if not
9:08thousands of dollars in prop firm
9:09challenges, brokers commissions, spread,
9:12paying random YouTube gurus money to
9:14teach them nothing useful really. 100%
9:17of them. Now, compare that with this.
9:19With 100 investors that just bought and
9:23held the Nasdaq 100 index, the American
9:27stock market. Well, 0% of them lost
9:30money. 100% of them almost doubled it,
9:34okay? 100% of them. 0% of them spent
9:38more than 10 hours in front of the
9:39charts the whole year. Not per day, not
9:42per week, the whole year. 0% of them
9:45spent more than $10 in broker
9:47commissions. Okay, this is true. Also
9:50true, 0% of them outperform the index.
9:53Now, I'm not showing this to discourage
9:55you. I'm just saying here, in order for
9:57trading to mathematically make sense,
10:00for it to be worth your time, effort,
10:02risk, well, you have to at least be
10:05confident that you're going to
10:06outperform passive investors, right? At
10:09least. Otherwise, you just invest your
10:11money and be done with finance. So, the
10:13first reference point in what makes a
10:15strategy worth it is that it has to
10:17statistically outperform passive
10:19investors. We agree on this, I hope,
10:21right? So, a good strategy in finance is
10:23anything that systematically outperform
10:26buying and holding the American stock
10:27market, either the Nasdaq or the S&P
10:29500. And spoiler alert, there are
10:32strategies that do. And I will teach
10:34them to you in this video, so keep
10:35following. And maybe subscribe if you
10:36want to see even more. Because yes, last
10:39year in the Nasdaq, it was really
10:41profitable, but it was also its best
10:43year ever. Because if, for example, you
10:45invested in the Nasdaq 100 at the top of
10:48the dot-com bubble in the 2000, you
10:51would have to withstand a 83%
10:55unrealized loss and not see any money
10:58before 20 years. Also, buying and
11:01holding stocks, investing,
11:03[clears throat] isn't easy or risk-free
11:06at all. The only way to kind of avoid
11:08all this is, for example, you just buy a
11:1030-year US bond, guaranteed by the US
11:14government, 5% per year on average,
11:17almost zero risk. This is what in
11:18finance we define as the risk-free rate.
11:21Not bad, it's guaranteed. Low risk, low
11:24return. But I know 5% is boring, we're
11:27here to make money, but still, let's be
11:29professional. Let's look at history,
11:30let's gather some data, let's crunch
11:33some numbers. Only on one year, not only
11:35in the best or the worst year of the
11:36stock market, but the average return of
11:38100 years. And introducing some numbers
11:40you might not be familiar with, but you
11:42need to know cuz they're the bread and
11:43butter of finance. And the number you
11:45probably mostly care about, the only one
11:48you probably care about as a financially
11:50illiterate Joe Schmo, is the average
11:52return per year. What is also known as
11:54the compound annual growth rate.
11:57Compound annual growth rate. So, the
12:00average yearly return of the S&P 500,
12:03net of inflation, so the real cagada,
12:06about the net cagada, little joke for my
12:08Italian friends, is 7 to 8% per year.
12:11For the NASDAQ 100, it's a little bit
12:13higher, it's 10 to 12% per year. Not
12:16bad, right? And you might say, "Well,
12:17Andrea, with my $5,000, 12% return is a
12:23whopping unenthusiastic $600.
12:28Not going to make a living out of that,
12:29right?" I know it. Wait for it, cuz it's
12:31going to get way worse. Introducing the
12:34max drawdown. The maximum drawdown or
12:37the worst-case scenario, how much money
12:39you would lose, even if you exclude the
12:411929
12:42market crash and the 2000 dot-com bubble
12:45crash, where we saw upward of 80%
12:47drawdowns. So, excluding possible tail
12:50risk armageddon, still it could be
12:51easily up to 50%. So, half of the value
12:54of your account. So, I have to risk half
12:56of my money potentially to make 10% per
12:59year. Mwah. Yeah. Well, yeah, but the
13:02stock market tends to keep going up. Is
13:05it going to go up forever? We don't
13:06know. As long as they print money,
13:07probably yes, if you don't sell within
13:1020 years. I get your frustration. This
13:13is why this is not an investment course,
13:15but still, what we do? Now, you could
13:17understand that, yeah, return is
13:19important, but the return compared to
13:21the drawdown, to the potential loss, is
13:24also very important. See, you're
13:25starting to think like a real finance
13:27bro. So, how do I consider both the
13:28return based on the risk? Well, there's
13:30a number that does exactly that and it's
13:33called the Sharpe ratio. The Sharpe
13:35ratio is the benchmark, the score
13:37together with the Sortino ratio on the
13:39risk-adjusted return. And S&P and
13:42Nasdaq, they have around a 0.5
13:44Sharpe ratio. Well, it means [ __ ] To
13:47make it easy for you, 0.50 Sharpe means
13:50that for every dollar you risk, you only
13:53get 50 cents more than just lending it
13:56to the US government for 5% interest
13:58rate risk-free. So, not much. But guess
14:01what? 80% of funds that tries to
14:04outperform this [ __ ] fail. Mhm? I'm not
14:07sure if that's clear. I'm talking
14:09hundreds of thousands of finance
14:11professionals, [ __ ] you name it, with
14:14billions of dollars of asset under
14:16management that can invest in resources
14:18and research, blah blah blah. They
14:20cannot do better than this. And I'm
14:23talking about specifically stock market
14:25funds, equity funds. So, what a lot of
14:26investors do instead of being 100%
14:28exposed to what the stock market is
14:29going to do tomorrow, they know that
14:31when the stock underperforms, maybe they
14:32take bonds or gold, they diversify their
14:35investment portfolio and lower their
14:37so-called beta, which is the exposure to
14:38the stock market, and maybe have 20%
14:41gold, 10% in like alternative
14:43investments like crypto, like wines,
14:46watches, whatever. A good 40% in bonds,
14:49maybe some government ones, some low
14:52risk, some higher risk, and the stock
14:54market maybe 30%. And this exact
14:56allocation, let's call it diverse, would
14:59have yielded an annual return of 6%,
15:01which is kind of lower net of inflation.
15:03But with a maximum drawdown of 19%.
15:07Well, that already looks like a way
15:08better risk-adjusted return. The Sharpe
15:10ratio of this, in fact, is around 0.7,
15:130.8, which is kind of better. But still,
15:156% a year? Uh,
15:17we need to do better. We need to find
15:19something that has a better Sharpe
15:20ratio, that better risk-adjusted return
15:22than this. And the good news is, as a
15:24retail trader, we can. Cuz here's
15:26something you might not know. Yes, all
15:28of these finance bros, they have
15:29billions, they have resources, they have
15:31the best talent, the best technology.
15:33So, of course, they're always going to
15:35win. But hear this, you, my friend, have
15:37something. You have an edge just by
15:39being you that they don't have, and they
15:43desperately wish they had. And that's
15:45why, my friend, there is a road map to
15:46success in trading. There is a narrow
15:49way through. And it's all based on the
15:51fact that you're small. Your tiny little
15:53account, that's your edge. Your capital
15:55is insignificant. Your trades don't move
15:59markets. But their trades, they do.
16:02They do. Let's say today you buy those
16:05$5,000 worth of Bitcoin, maybe even with
16:07a 20x leverage. You buy it now and sell
16:102 hours later, and cash in a small $50
16:13to $100 profit with a small scalp on the
16:15market. Well, no one would notice. But
16:17if you try and buy $5 billion worth of
16:21Bitcoin, and you try to do the exact
16:23same thing, you try to buy it now and
16:24then sell it 2 hours later, all at once,
16:27you would immediately lose $1.5 billion.
16:32Dollars. Okay, with a B. Because of what
16:34we define as liquidity constraints.
16:38There's just not people, I mean, you're
16:40trying to buy $5 billion, you need to
16:41find a $5 billion seller. And it's
16:44definitely not the average seller in the
16:45book. So, the bigger of a fish you are
16:48in finance, the more the real problem
16:51isn't really finding an edge, it's the
16:53physical constraint of scaling your
16:56strategy. You cannot dream of applying
16:58the same strategy you're using on a $2
17:00million account with a $2 billion
17:02account. So, us as retail traders can
17:05take advantage of some patterns, some
17:08repetitive behaviors that are simply
17:10unaccessible to institutional traders.
17:12That they have no interest in even
17:14thinking of pursuing. And the core of
17:16our edge is exactly this. Most of these
17:18participants that actually have an
17:20impact in the market in the price, like
17:23banks and hedge funds and all these big
17:25guys, they can't just just buy a stock.
17:28They need to buy it slowly a little bit
17:30at a time through days, sometimes weeks,
17:33or go to places like dark pool to get a
17:35better fill. And we will soon make a
17:37video on this channel on how exactly
17:38they optimize the execution of these
17:40orders, but for now all you need to know
17:42is this. They take these huge orders
17:45that we call meta orders and they split
17:47it into multiple small orders. And they
17:51will split it into two main groups. So
17:53they split it and they gradually pour it
17:55into the market bit by bit, bit by bit
17:57through some fractioning and best
17:59execution algorithms like VWAP, like
18:02percentage of volume. So they see how
18:03much trading there is and they put the
18:05same percentage kind of or TWAP. So they
18:07put a fixed amount every second, every
18:09minute. And let's say this is a huge buy
18:11order, they will put some buy orders in
18:13the form of passive flow. So like they
18:15offer these buy orders and they absorb
18:18all the demand for selling, the
18:19aggressive sell flow. So they absorb all
18:22of the hungry seller creating a support
18:24in price not allowing price to go down
18:26kind of. Some of it will be an
18:28aggressive flow through pure buying
18:31pressure that will push price up and
18:34accept to pay a small spread eating
18:36through any sell offer. So they will put
18:38some passive, some aggressive. And
18:41basically what these algorithms do is
18:42they decide how much will be a
18:44aggressive, how much will be passive
18:47based on how much FOMO they have. Yeah.
18:50Embedded in the formulas that split
18:52these orders, they can decide if they
18:54want to join the party, join the FOMO or
18:56not. That's why for example, if you see
18:57the stock market is pumping, well, it's
19:00likely that it will keep pumping the
19:01following days because they don't want
19:03to miss the chance of getting their
19:05hands on the money but in a controlled
19:08paced way. So this mechanics create a
19:09predictable flow of buy orders in the
19:12stock market, something that has vast
19:14scientific proof and academic literature
19:16called order flow auto correlation,
19:19which basically means buy orders will
19:21lead to more buy orders. And this order
19:24flow auto correlation creates some
19:26predictable behaviors in prices as a
19:28consequence called drifts or structural
19:32drifts, which means that price will not
19:34just do this and embed new information
19:37in the market all at once super
19:38efficiently and then stay stuck there
19:41until a new news comes out. But instead,
19:44because of these liquidity constraints
19:45that create this auto correlation order
19:47flow, we have drifts. We have the
19:49so-called trends, right? A move doesn't
19:51just last for 1 day and that's it or 1
19:53second, but you have these continuous
19:55trends. And there are some of these
19:57drifts, some of these trends that we can
19:59systematically exploit and that are well
20:02documented over the last decades.
20:04Regardless of what the efficient market
20:06hypothesis says, these repetitive
20:08patterns have been a structural edge
20:11over the last decades. They have
20:12generated better returns than just
20:14buying the stock market with better
20:16risk-adjusted returns as well. So, let's
20:18meet two famous examples of drifts that
20:21will exactly be the two strategies you
20:23could start implementing. Again, it's
20:25not financial advice. It's not
20:26guaranteed that they're going to work
20:27tomorrow as well as they did over the
20:29past, but at least you would trade based
20:30on science and not opinions. The first
20:33one is the post earnings announcement
20:37drift. So, if a company, maybe Apple,
20:39maybe Tesla, maybe Google just released
20:41earnings, right? And they do so every
20:43quarter or so. They basically declare
20:46how much money they've made. Well,
20:47investors might think that they've done,
20:49for example, a billion dollar in
20:50profits. They come out and they say,
20:52"Hey guys, you know what? We've actually
20:53made 3 billion dollars in profit." Well,
20:56investors will be definitely happy. So,
20:58the first thing they would do is they
20:59will typically be a gap and the
21:01valuation of the asset will move up all
21:03of a sudden. But it's not just going to
21:04stop there. There's vast scientific
21:06research supporting the fact and by the
21:08way, you can also check it yourself. You
21:09can replay any financial chart and
21:10you'll see that this is actually
21:12happening. You tend to have a very
21:13strong trend, a persistent trend for the
21:16following 60 days. So, if instead of
21:19just buying S&P, you were buying this
21:21for pretty much any stock, then of
21:22course you can optimize. Just buy and
21:24don't sell until 60 days. This strategy
21:26alone would have a win rate of around
21:2860% with around a 1 to 1.5 average risk
21:32reward, a profit factor of more than
21:35two, an annual rate of return of around
21:3715% with an average drawdown below 15%
21:41with a potential sharp ratio of above
21:43one, which is already better than just
21:45buying and holding S&P. And this
21:46strategy just requires less than 100
21:48trades per year. And this is just by
21:50buying a stock and not selling it for 60
21:52days. There's many other ways you can
21:54play around with this. But this is
21:56already a swing trading strategy with a
21:59very good expectancy. Now, that was
22:01already a good swing trading strategy.
22:03Let's see now. And that's great if you
22:05don't have a lot of time to dedicate to
22:06trading. You can do it also part-time,
22:09not just as a way to make your first
22:1010K, but to grow your capital through
22:12time. But let's say you have time to day
22:13trade. Well, there's an even better
22:15strategy that exploits the same type of
22:17mechanic. And it's called the opening
22:19range breakout. This works mostly on the
22:23Nasdaq 100. And we're basically trying
22:25to do the same thing we did for
22:26earnings, but for a day, like an
22:28intraday type of drift. But instead of
22:30basing ourselves on earnings, we just
22:33assume that there will be a constant
22:35flow of investors in the stock market,
22:36which typically happen because, you
22:38know, stock markets typically go up, but
22:40sometimes they also go down. So, we take
22:42advantage of the FOMO that is always
22:44there in stocks. And during very
22:46directional day, we join the party. We
22:48join the crowd of big money. So, what
22:51basically what we do is we just take the
22:53first 30-minute candle, we draw out the
22:55high, we draw out the low, and we wait.
22:58As soon as there is a candle that closes
23:00above the high of the opening range, we
23:02just buy and we either place our stop
23:04loss below the candle that breaks out
23:06with a 1:0.5
23:08risk to reward ratio. So, we put the
23:10take profit basically half of the stop
23:12loss. If it goes wrong, we sell here at
23:14a loss at a small loss. And if it goes
23:17up, we sell at a profit at the same
23:19distance with the stop loss. So, it's a
23:211:1 risk to reward ratio. And this,
23:23exactly like the earning surprise, is a
23:25long only strategy. We just buy into it.
23:28But, as we can do it with leverage of
23:30course, we're going to be able to maybe
23:32risk, you know, 1 to % per trade.
23:34There's another version of the same
23:36strategy that uses the 15-minute opening
23:39range instead. And it works both long
23:40and short, but it's like a a short-term
23:42scalp strategy. You place your stop
23:44above the candle that breaks out or
23:45below the candle that breaks out 1:0.5
23:48risk to reward. So, you kind of take
23:50advantage of the short-term momentum
23:52more than the drift, but it's not really
23:53part of the strategies we're exploring
23:56today, even though it's potentially
23:57still profitable. And this has around
24:01win rate, a sharp ratio of 1.84,
24:05ladies and gentlemen, with a annual rate
24:07of return of around 30% and a maximum
24:09drawdown of 10%. Okay? Now, this is the
24:12performance over the last 6 years. Of
24:14course, past performance doesn't mean
24:15future performance. So, far from me from
24:17guaranteeing that this is profitable.
24:18It's just It is well documented. We've
24:20done the analysis. We've done the
24:21testing. And kind of however you tweak
24:23it, this is realistic. This is
24:25realistically what you would have got in
24:26the past. And it's a very simple
24:28strategy that you can begin with. So, to
24:30recap, if I were to have a swing trading
24:33strategy, I would use the post earnings
24:36announcement drift as a base to start.
24:38Or if I wanted better returns and and
24:40let's say I would like to have a more
24:42discretionary approach and analyze macro
24:44and kind of be a little bit more
24:46professional through time, I would have
24:48in my mind to take a look at
24:49macroeconomics. So, a lot of
24:51fundamental-based trades with volume
24:54profile and stuff like that. With
24:55intraday, I would definitely start with
24:58an opening range breakout strategy, and
25:00then maybe I would look into some VWAP
25:02strategy. Something they're also
25:04mechanical, cuz there's a lot of cool
25:06stuff that can work with that. And then
25:07I would aim to go into order flow and
25:10option flow to get deeper into the
25:12discretionary trading side. So, this one
25:14over here and this one over here are not
25:16so easy and mechanical. They require you
25:19to study the markets, spend a lot of
25:20time in it. And this is the kind of
25:22stuff you want to study a little bit
25:23later in your process in your journey as
25:25a trader. So, I would start with
25:26something simple like a post earning
25:28drift or an ORB strategy. And then I
25:31would take the time to study the [ __ ]
25:32which you can do on this channel for
25:33free, by the way, without paying any
25:34course. I'm about to release a lot of
25:36videos about this. So, now that I've
25:38selected my strategy, there's one thing
25:41I need to decide. Now that I have
25:43$10,000 in my bank account, or let's say
25:45I have I'm starting from $5,000 in my
25:47bank account that I put in my brokerage
25:49account or whatever that I set as my
25:51budget to trade. Here I have two main
25:53options. I would either buy a prop firm
25:56account or I would deposit it in a
25:58regulated broker. And we're going to see
25:59which one exactly is better
26:01mathematically, but the most important
26:04thing I would do is I would make sure I
26:06would trade with a platform, either prop
26:08firm or broker, like this one over here,
26:10Deep Charts, that first of all already
26:13has ORB in it. It's called the IVB
26:15model, but that's not the point. The
26:16second point is it has an integrated
26:19risk manager. So, if I look back, a lot
26:22of the mistakes I've made were mostly
26:24because of over-risking, over-sizing,
26:27getting emotional about trades, and
26:29being revengeful, and then [ __ ] it
26:30up, and exploding my trading account.
26:32Well, a professional trader doesn't do
26:35that. And professional trading platforms
26:37like Deep Charts typically have a risk
26:39manager embedded in the software. What
26:41does that mean? It means that you can
26:43basically trade, and you can trade only
26:46what you preset your maximum risk for
26:49the day is. So, there's no, "Hey, today
26:50I feel lucky. I'm going to risk more
26:53than expected." No, that's your daily
26:55risk budget and that's it. So, it's a
26:57really good asset to have as a beginner
27:00because it will keep you from losing
27:02more than you can afford so that you can
27:03give time to your edge to unfold itself.
27:06And the difference between buying a prop
27:08firm account or depositing it in a
27:09regulated broker basically is because
27:12with $5,000, if I even buy a prop firm
27:14account, I can for example buy an
27:16instant funding account. I would
27:18personally not go with a challenge
27:20account because it takes so long to
27:21pass. So, I would probably go for an
27:23instant funding one. And with $5,000 on
27:25average with a futures prop firm, I can
27:27get up to $200,000
27:30worth of a funded account. The drawdown
27:32will probably be around 5% so you
27:34basically get $10,000
27:37worth of risk. So, you're basically
27:39paying $5,000 to trade with $10,000. And
27:43from this you would get around 80%
27:44profits. Of course, there's probably
27:46going to be rules so I have to be very
27:47careful about those rules, but as for
27:50the orb strategy, in an average month
27:51you can make, I don't know, 2.5%
27:53historically. I would make on average 5K
27:56the first month, 5K the second month,
27:58and in around two to three months I
28:00would have my first 10K. If I instead
28:02deposited it to a regulated broker,
28:04instead of accessing this leverage, I
28:06would just have $5,000 worth of a
28:08trading account, but I would have no
28:10rules, no trailing drawdowns, and not a
28:13lot of these prop firm rules that they
28:15could use to make you fail. So, I could
28:17probably risk a little bit more
28:19percentage-wise on the drawdown, and
28:21basically treat these $5,000 not as my
28:25entire capital in trading, but as my
28:27first deposit, my first investment in my
28:29trading. Maybe throughout the next, you
28:31know, five years I'm planning to put at
28:33least 50K in my trading account, and
28:35this is just what I'm putting this month
28:37as a first investment. So, I'm like
28:38splitting my investment into multiple
28:40years so this is just the beginning.
28:41This is just the drawdown for this, you
28:43know, the budget for the next few months
28:45or for the next year. And how long I
28:47make it will depend on my risk profile.
28:49Because if on the prop firm I will risk
28:50maybe 0.5% per trade, let's say, or 0.4%
28:54per trade, which is around $800 to
28:57$1,000, well, here going with $800 to
29:00$1,000 risk can be a little too much.
29:02So, I would need to look at historical
29:04data. And if I know that, for example,
29:06with a 0.5% risk, I can have a 10%
29:10drawdown. On this budget, which is 10%
29:12of the investment I want to make, I can
29:14lose it all, but I still need it for
29:15margin. So, maybe I don't want to go
29:17below 50% or 60%, you know? So, I would
29:20probably risk a little bit more. I would
29:22risk like 5%, which seems like a lot,
29:25but considering it's a small percentage
29:27of the entire capital I will dedicate to
29:28my trading, it's reasonable, and it
29:30would probably amount to around $250,
29:33which is around a fourth of what I'm
29:35able to risk in a prop firm account. So,
29:37of course, it's going to take four times
29:39the time, provided that the strategy
29:40performs. So, with a prop firm, it would
29:42probably take me around 3 months on
29:45average. With a brokerage account,
29:47depending on how much I risk, it could
29:48take up to 1 year. So, of course, prop
29:51firm, they have a lot of rules, but they
29:53can get you there if you have a
29:54profitable system way faster. Which prop
29:57firm should you use? Which brokers
29:59should you use? Honestly, I've never
30:01been really in and I don't really like
30:02to publicly promote specific prop firms
30:04or broker, but I'll make a review on my
30:06Telegram channel. You can see the link
30:08in the description. It's free. In the
30:09Telegram, I typically send a lot of free
30:11value, and I do some comparisons
30:13between, you know, brokers and deals and
30:15prop firm and stuff like that. So, what
30:16I would do as soon as I've done my first
30:1810K with prop firms, at that point, I
30:20would reinvest all of them into trading
30:22again, into buying more access to
30:24different prop firms. So, for example, I
30:26would look for taking prop firm A, prop
30:29firm B, prop firm C, and my very first
30:32$10,000 out of my 5,000-ish investment,
30:36I would basically be able right away to
30:37double my exposure and then to triple my
30:39exposure. Up to the point where I can
30:41maybe have half a million in funding on
30:43prop one, half a million in funding on
30:45prop two, half a million in funding on
30:47prop three, lower my risk and make on
30:49average as I said 1 to 2% per month,
30:52really boring stuff. But on 1.5 million,
30:55it's 15 to 30k per month. And all of
30:59this money would go straight into my
31:01brokerage account. Because with these
31:03prop firm accounts, you know, a prop
31:04firm might implode, they might fail,
31:07they might ban you when you do too much
31:09money. I maybe lose one and then just
31:12the next two work. Or I hit a rule and I
31:15lose an account, whatever, you know? So,
31:17I would use the prop firm as an initial
31:19leverage to then fund my trading
31:21account. And maybe after a year that I'm
31:23able to have this consistent performance
31:25from prop firms with a very small profit
31:27per month so they don't get angry, they
31:28don't see me as a threat to their
31:30finances. Maybe to make 10k on average
31:32every single month up to the point where
31:34I can have my trading account at 150k.
31:36And I start trading this instead, not
31:38with a 0.4 % risk anymore, but maybe
31:41with a 1% risk or a 2% risk. Any risk
31:44that is calculated to not burn my
31:46account based on statistical data, of
31:48course. You need to do the data
31:49analysis. And at this point, I have
31:51built my capital and I can diversify.
31:53And I can trade to stay in the market
31:55for the long run, aim at not having big
31:58drawdowns, control risk, aiming just to
32:00making a better risk-adjusted returns on
32:02my money than just pouring it into the
32:04stock market. Some I would probably
32:06still put it in the stock market, you
32:07know, just to diversify my investments.
32:08And at that point, I would have, you
32:10know, a part of my strategies which is
32:12automated. I'd have my trading bots
32:14working for me. I would have my
32:15discretionary trading. I'd have some
32:17investments, some more risky ones, some
32:19more controlled risk. And maybe have
32:22some option strategy and kind of
32:23diversify my trading as well. This is
32:25also very important because if one
32:27strategy, the strategy I'm using stops
32:29working, well, I kind of need something
32:31else. So, also within the automated
32:33strategies, I would have a portfolio of
32:35different strategies between
32:36discretionary, I'll maybe have a little
32:37bit of macro, a little bit of order
32:39flow, a little bit of swing trading, a
32:40little bit of day trading. Option
32:41strategy would buy some options and sell
32:43some options and have, you know,
32:45diversified exposure there. And for the
32:47investment, I can use a smart DCA and
32:49basically optimize my portfolio with
32:52ideally the entire portfolio having a
32:54sharp of two, which is like elite level
32:57sharp. And do this, rinse and repeat for
32:5910 years, you're rich. You're like
33:01[ __ ] rich. Of course, this is not
33:02financial advice. This is just what I
33:03would do. This is all hypothetical
33:04performance only. It's not guaranteed at
33:06all. You're likely going to lose all of
33:07your money because you didn't probably
33:09listen to anything I said. And tomorrow
33:11the Armageddon might come and you lose
33:12all your money. You know, it's doable.
33:14Easy, okay? Read the disclaimer in the
33:16description. So, this is exactly what I
33:17would do. If you like this type of
33:19video, let me know in the comments. If
33:20you want to know anything else, if you
33:21want me to go deeper into some of these,
33:23let me know. That's all for this video,
33:25gentlemen, and I'll see you in the next
33:26one.

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