The power of day trading when done right!

The Dow Jones Industrial average gain is estimated at 10.4% per year in the 20th’s century (100 years). The S&P 500, since it’s inception in 1926 through to 2011, gained about 11.69% per year over 85 years.
Ross, from Warrior Trading, gained 17052% in 44 DAYS! If you consider about 252 trading days in a year, that’s a 97,661% gain per year! Ok ok, enough with the crazya numbers. The point is, Mr. Ross managed to prove a point. That you do need to have a large sum of money to make money on the stock markets. All you need is knowledge, skill and the correct mental attitude.

Ross is still trading his 100k challenge portfolio, and is up to $60,000 after having withdrawn $70,000. So he would have been at about $130,000 today having started with $583 on January 1st this year. There are four lessons to learn from this incredible feat.

  1. You do not need a large sum of money to be successful in the stock market. Anyone, even with a minimum wage job, can save $583 and with the proper trading education and paper money training be able to make profits.
  2. Day trading is extremely volatile and dangerous. This is why, the majority of trading experts advise those just getting started in trading to stay away from day trading. In day trading, everything happens at lightning speeds, since to make the most out of day trading one needs to trade volatile high volume stocks. If you day traded Apple or Amazon, you’d need a huge portfolio in order to make any gains, as you’d be lucky to get a 3 or 4% gain in a day. Where as small cap stocks can jump over 100% in a matter of hours or even minutes. But at the same time, they can fall just as quickly and wipe out trading accounts instantly if one does not know what they are dealing with.
  3. The name of the game is consistency and the proper mental attitude. Ross has had quite a few “Red Days” as he calls them. He’s had many days where he’s lost between $5000 to $8000. Days like those can be very hard on the psyche of a trader, and the difference between successful traders and those that quit are the ones who know that losing is part of trading, and the sooner one comes to term with it the better.
  4. Day trading has a limit on earning potential. Stocks that jump 100% are normally penny stocks where you would have a hard time buying more than say $20-40,000 worth of shares. If you want to go bigger in position size, you’d have to move to mid and large caps but those never make 100% moves. So trading is generally a trade-off between Large short term % gains with small positions vs Small short term % gains with large position sizes. Alternatively, one would have to increase the trade period to medium and long term with large position size in order to have large % gains and large position sizes.

But in such instances you are locking up your capital on a single trade for what could be weeks or months. A long term trader could get a 120% move over a year on 1,000,000 (a 1.2 million gain) for example if someone had invested in NVDA last year. A day trader on the other hand, could make on average a 10% move, 5 days a week, for a year on a daily $50,000 position (or 100% on 1 x $5000 position)(for $5000 daily profits) and also make $1.2 million over a year. You get the idea 🙂

So the day trader and long term trader both achieve $1.2 million in profits, the difference being that the day trader risks say 20% of $50,000 every day (say roughly $10,000 if things went really bad), while the long term trader risks say 1% of his 1 million position of a slow moving stock in any given day (or $10,000).

So check out Ross’s Day 44 of the challenge video below (and check out his other videos). Also, if you are curious about the details of the challenge, and his strategy and goals, visit his 100k challenge page.Ross made $222,244 from day trading in 2016. His best month was a gain of $35,000.

Kyle Dennis is a 27 year old multi-millionaire stock trader. He graudated from UCLA and landed a job that was paying him $35,000 a year. He started trading part time and was student of Jason Bond.

The first year he made $37,000, second year he made $55,000. Once his trading profits exceeded his regular job salary in 2015, he quit his job and started trading full time.

In 2015 he made $850,000, in 2016 he made $1.1MM, and in 2017 he is up $952,000. Kyle started with a $15,000 portfolio and is about to break $3MM in trading profits. Kyle is the type of trader we all aspire to become. He is a very intelligent individual, of friendly demeanour and a great teacher.

Kyle started his own service teaching stocks in October 2016. He specializes in biotech stocks, and has two primary trading strategies. 1-4 week swing trades and fast moving momentum stocks that he holds 1-3 days.

Jason Bond is a multi-millionaire stock trader who left his career as a New York Public School teacher after 10 years, taught himself trading and has been teaching trading to others for the past 5+ years. Jason is a small cap trader (market cap under 2 billion, stock prices under $10). His strategy revolves around short term swing trading (typically 1-4 day holds) to capture stock price moves for a 5-20% profit in 1-4 days. He primarily trades 3 patterns which he teaches. He also trades momentum stocks especially during poor market conditions and likes to trade Fibonacci Retracement plays.

Jason is a very energetic individual who loves trading and helping others improve their trading. He starts with $100,000 every year. He is up +125% or $125,000 in 2017, he was +330% or +$330,000 in 2016 and +155% or +$145,00 in 2015.

Trading Oil ETFs and Inverse ETFs

Working in the oil and gas industry, I have always had an attraction to trading oil. In the Canadian market, I trade HOU.TO (Horizon Crude Oil Bull Plus ETF) and HOD.TO, its inverse brother. Both of these are 2x leveraged ETFs.

In the US market, I used to trade UWTI and DWTI, but these were delisted in December 2016 by Credit Swiss. However, good news was, Janus Capital, the brokers behind UWTI and DWTI listed a new Velocityshares 3x bear/bull tied to WTI crude oil and named them VelocityShares 3X Long Cruide ETN (UWT) and VelocitySHares 3X Short Crude ETN (DWT). As opposed to HOU.TO and HOD.TO, as their name imply, these ETFs are 3x leveraged.

Looking at the UWT chart from inception to date, oil was moving sideways between $23 and $27 from right up to end of February 2017. It then had a massive drop to $16 and started a downtrend with wild swings that took it up to $23.50, then back down to $13.70, then back up to $19.40, to finally hit rock bottom at $10 on June 21st. A swing trader could have made massive gains both on the upswings and downswings during this period. Since June 21st however, oil has started to form an ascending wedge pattern and today UWT broke 2 major resistance levels.

It broke $14.25 horizontal resistance, and $14.25 upper trendline of the downtrend with above average volume of about 10M shares traded. All indications show that oil is turning bullish and possibly starting a new uptrend. Next resistances are at $16 and $19.50, but knowing how volatile oil is and its susceptibility to bad news, I do not expect it to be a smooth ride upward. I expect seriour retracements and even sideways movements.

The next few days will show if this was a real breakout or if a false one, thus resuming the downtrend. Either way, the potential for massive profits exists when holding on this these ETFs for 4-8 weeks. They demonstrated to be having major 4-8 week swings for the past 4 months. The beauty of ETFs is that one only need to buy at pivot points and trade in the direction of the oil market. By buying UWT on upswings and uptrends, and then selling and buying DWT on down swings and downtrends, one could in theory be making major profits continuously.

If one had bought at the low pivot on May 25th at $26 and sold at the third consecutive red candle and sign of weakness on June 23rd at $42 could have made a 61% gain. On a $10,000 dollar position, that’s an easy $6000 in your pocket in a matter of 4 weeks…and then buying at $10, with a little patience, by today could have made another 40% or $6400 profit on the upswing. $12,400 or 124% gain on your position in 8 weeks sound pretty darn good to me!So let’s see what happens in the next few days. 16% gain in 2 days, I expect retracement and profit taking coming soon…