Since I opened up a discussion with my readers, my inbox has been flooded with questions on how to succeed in trading. And while I can’t get to all of your responses… I do try my best to answer the most commonly asked questions.
More specifically, I try to find the ones that have propelled me from a $15K account into more than $7M in just a few short years.
There was one question I saw today that really resonated with me because it was one of the driving forces behind my trading success…
What’s your step by step trading process?
Today, I want to draw back the curtains and give you a taste of the questions I ask myself before I get into any trade.
If you ask any successful trader out there, they’ll tell you they have a mental process they go through whenever they throw down bets on a trade. They don’t just randomly push their chips into a stock or option… they actually have an edge and plan accordingly.
I actually struggled with this when I first started out trading because I was so focused on making money. Let me tell you, being a broke college graduate who earned just $32K annually living in LA was not easy. I wanted to change my life and the stock market was my ticket out.
So I scraped up whatever I could and saved up $15,000. However, I didn’t have a process whatsoever. I just placed random trades thinking I would magically make money… and I ended up losing nearly half of my account.
I went back to the drawing board and tried to figure out what my bread-and-butter setups were. Thereafter, I structured a plan around them. I quickly realized how easy trading is, just as long as I stuck within my guidelines.
Now, I have a mental process before I get into any trade. I ask myself:
For the most part, the reason behind entering a trade should fit your personality. If you’re into chart patterns, news events, fundamentals, or any other form of analysis… stick to that. For me, I focus on catalysts and chart patterns.
For example, here’s a look at one trade idea.
The reason behind this trade was based on a catalyst (the coronavirus) and a bullish chart pattern. Thereafter, I identified clear zones to buy, take profits, and stop out. The last thing to do was just size the position properly.
Pretty simple, right?
Once you get the mental process down, all you have to do is execute and let the stock do its thing. Win, lose, or draw… as long as you stuck to your plan, you should be proud of yourself.
If you haven’t done so already, sign up to Trade With Kyle and you’ll receive complimentary gifts that I think could take your trading to the next level.
Markets are closed today in observance of President’s Day, and while I could take the day off… I’m hard at work stalking stocks to trade for tomorrow. Not only that, but I’m using this time to try to help as many of you out as possible.
One question that I saw come up a lot was, How do I find the right stocks to trade?
While I can’t tell you what to buy and sell, I can show you my method of building a bulletproof watchlist. I know what you’re thinking, “Kyle, if you teach us your techniques, wouldn’t that eat up your trading edge?”
No, because my strategies are not only repeatable but scalable too. That means I don’t care who really gets their hands on them.
Before I found that simple, repeatable, and scalable pattern… I was in the same boat as many of you are now… not knowing what to trade, so I just threw down money on random stocks — that got me nowhere.
The strategy that allowed me to take my account from just around $8K (I started with $15K and lost nearly half of my account from the start of my career) was finding my winners and tweaking the pattern I found. I noticed there was a commonality between all of my profitable trades.
Now, before I get into any trade there has to be a reasoning behind it. In other words, there needs to be a catalyst. Thereafter, I develop an execution plan, which includes the buy zone, stop loss zone and target zone. Once I have this all written down, it becomes really easy and I have a “bulletproof” watchlist.
The reason you get into any trade should be written down whenever you build a watchlist. Your thesis could be anything really — chart patterns, catalysts, fundamental changes, whatever the case may be… just make sure it’s in line with your trading style.
Let me show you with an example of a stock that was on my radar based on a chart pattern, for simplicity.
Check out the hourly chart in Nantkwest Inc (NK).
Check out the chart above. Notice how the stock is “flagging” and curling towards a big breakout over $7.20 area. If it breaks that, we likely could see a move to $8.00+. That could be your thesis right there. A bullish chart pattern with the stock popping.
If you look at the daily chart, it’s the same pattern.
Both charts show a bull flag pattern, and that increases the odds of success when both the short-term and long-term charts are aligned.
So what did I decide to do after I saw this price action?
I quickly developed a plan and threw it on my watchlist. When you look at this pattern, you’ll probably realize there is a clear area where you can buy, stop out, and take profits.
For the buy zone, you could’ve looked to buy between $6.60 and $6.70. The stop zone could’ve been below the lower uptrend line (in the bull flag pattern)… so if the trade went against you, you would look to stop out below it (below $6.50) The target would be above $7 (just above the upper trend line in the bull flag pattern).
Pretty simple, right?
Here was my thesis…
Shortly after, the stock actually made the move! However, I actually tweaked my plan and was watching the stock. Sure I was up $7,000 at one point… but I wanted to see if it could actually get to the key level at $8.
When I saw myself sitting in profits, I knew what I would do if the stock pulled back… I would just take my profits off the table, which I did.
Pretty simple, right?
All you have to do is repeat this process and you’ll have a handful of names to keep an eye on. The best part is you can build watchlists ahead of time. However, if you’re struggling to find stocks to trade… I’ve got you covered.
Today, I am going to release my watchlist for the week… and for being a loyal reader, I want to provide that to you at zero cost. All you have to do is click here and enter your email address, and you’re all set.
Once I opened up a discussion to readers, I’ve been bombarded with questions on how to start making money in the markets. Now, I’m just one guy and I can’t get to each and every one of your questions… but I do try to help as many people out as possible.
I noticed one frequently asked question in my inbox: How can I find a trading edge?
It makes sense with the market environment we’re in… and it tells me traders have a tough time as they search for money-making opportunities. I get it because I was in the same boat just a few years ago.
I worked hard to save up $15,000 and I put that money into a trading account. Of course, I was brand new to trading and like many of you… I struggled. I tried to be a jack of all trades, but that just led me to become a master of none.
You see, whatever strategy I read up on in books didn’t help me whatsoever, I was simply testing strategies that weren’t proven. I watched my account dwindle to just around $8,000. I had knots in my stomach and I considered stepping away from trading for good.
However, I realized it was my only ticket out and I could turn things around quickly. All I needed to do was find an edge. So I went back to the drawing board and reviewed all my trades. I found out exactly what I was doing wrong and cut out those losing strategies. As I reviewed my trades, I discovered I did have some winners.
So guess what I did?
I tried to find a pattern with those winners, and it made a lot of sense to me.
Of course, if you want to find a trading edge in the markets… the first thing you have to do is understand how to trade. That means setting up a brokerage account and understanding the basics.
I learned order types, how to use technical analysis and catalysts to my advantage. Not only that but I finally realized how to manage risk, size my trades and become patient. However, that’s not enough.
I already learned dozens of trading strategies and setups… but I wasn’t using the ones that made the most sense to me. You see, every trading strategy that cost me thousands of dollars didn’t fit my personality. I love to find low risk, high reward setups, and the very few trades that did work to my favor fit that.
So if you’re having trouble finding a profit bucket… there’s one question you have to ask yourself: What setups make the most sense to you?
Is it catalyst plays, chart patterns, a mix of both, fundamentals? Whatever the case may be, it should be in line with your personality type. If you can do that, you should notice trading becomes a lot easier.
Once I found my edge, things really started to click for me. All I did was use my edge to turn my trading around… after I lose 50% of my account value, I came back and made more than $40,000 my first year. I continued to tweak that strategy and in the second year of my trading career, I raked in $838K!
Sure, I’ve made more than $7M throughout my trading career (I’ve been trading for about 6 years now)… but as you can see, that would never have happened unless I found my edge. I want to show you EXACTLY what turned my trading career around in a week-long event.
You’re probably wondering to yourself, “Kyle, why are you exposing your best trading strategy… aren’t you afraid we’ll gobble up your edge?”
Absolutely not because my strategy is scalable and repeatable… and the best part is: anyone can do it. There’s still time to register for this week-long event, and you don’t want to miss out on Thursday, Feb. 20 at 8 PM EST. Click here to secure your spot.