191 Comments (page 1)

I agree with Garrett - this is great! Thanks a lot for sharing your experience.

Why work when you can day trade right? Bull market for life! Sam

Kyle, Awesome, awesome information and story! I'm in the Important Empire Jumpstart Group, so I figured you'd offer some massive value with this article. And yea... you did. I'm going to re-read this to absorb more of the detailed information, but just wanted to thank you for writing and sharing! Looking forward to connecting and learning more from ya

Hey Robert! Great to see you out of the FB group :) I'm so glad you enjoyed the article! Definitely let me know if there's anything else I can help with.

or something :P

Thanks for the kind words Nina! I hope the info was useful

Will do buddy, thanks

Loving Practical Idealist btw!!

Thanks for sharing! Any reason you don't trade now? Couple of items to emphasize from your post 1. Stay SMALL. I mean REALLY SMALL. If you get nervous over the risk, you are trading too big 2. Options are really the way for retail investors. Staying small and be a collector of premium imo is the real way to trading success. It may feel like a turtles game waiting for theta to decay but probabilistic trading is much more suited than watching charts all day. Peace J

Awesome Material I currently trade and am at a bit of a learning curve. So this method combined with the one I am already using makes me a bit more enlightened haha. Thanks for sharing this really!! Joshua

That's great, wouldn't it be easier to find a banker, tell her she's an ATM, insert the card, and then ask for cash out? Seriously though, I've often wondered if it wouldn't be easier for me to write you a bill for $50,000,000.00 for "telepathic consulting services" and then you can deposit it at the bank. Or maybe just ask the bank to credit that much to an account? I dunno. Let me know if it works.

Awesome trading article....Simple not Easy!

Well put Kyle! My forex career came and went like yours did. My only takeaway now is the cool 5% interest on the AUD or Australian dollar. P'S I found that by viewing on different time interval charts, I seemed to do better. I was able to keep my delusions a bit longer while dying more slowly. I lost 2k and consider myself lucky....ok back to importing.

I currently trade options. Third time around because of emotions. But I guess thats how you learn. Thanks for the tips and insight I look forward to giving it a try, build some capital and move on to something more concrete. I just refuse to quit Thanks again,

Great article, brings back great memories of my time as a retail trader, from even the very beginning. Also very well written article, no bullshit in here people, read it and re read, if you're going to try and make it long term it's all in or move over. - Institutional Hedge Fund Trader

Thanks man! Really glad to hear you dig it :) Funny about your purpose for meditating. I'm hitting up an 8-day meditation retreat this Friday for the same purpose. I hope to share some in-depth material on meditation in the weeks to follow about developing a habit of meditation (latest research on meditation, habit formation, yadda yadda). I love the stuff man. Best gift I've been given in life along with a great family and good health.

Good article. Fun to see on here.....you're talking my language but I prefer options(selling premium)....worth mentioning with trading though that you have to trade your time for money usually and the mental aspect is HUGE....simple system though, thanks for sharing

I lost $600 in the Forex, once. There's still a side of me that would love to learn this world. Maybe someday. Excellent writeup.

Interesting... It is not exactly true 99.9 percent of traders fail. It is actually closer to 80%. There is a lot of break even as well. How do I know??? IRS records! I am a gambler, who trades basketball. Rich? No. But I have several years of $50 to $2000. I use Betfair out of England. I say gambler, but really I trade. I have a very simple system. Trading baskets mostly, NBA. It usually works, but last year failed. I moved to the country side of life, and the Interent kept failing as I traded. In simple terms, it is the life of IBM, all of it, in about 2.5 hours. I just take 4 point leads, set a winning sell point, and sell if they lose the 4 points. And yes, it can lose 23 times in a row! You can trade anything, I won $300 one night half wasted on Obama to win. Not that I am a democrat, it looked like a good trade! Plus, I was bored. lol! I do like to read about other traders. Facinates me!!! Thanks! I take what they know, and see if I can use it. Seriously, I was going to try import export. But I am too sick to do it. Epileptic. A bad one. My driving could cause Nascar like accidents! My real goal in the whole sports trading experiment, is to see if one can make a living with it. You are correct. Bullshit abound! But I did find a few real stories of real people doing it. I only want about 50K a year. I'm happy. My biggest problem, is not the mental parts. It is the low liquidity, by times, and a max win I can acheive per day. I never add to trades. Fails horribly in baskets. I built a baseball model, that allows to me trade, easily. No plans to sell it, well not in the way most people would. I just want it built for me, by programmers so I can use it. They can send me commission money if they want, for people who subscribe to the charts. It really is like a stock chart! So when I see things like you post, I am very interested. Have you ever considered, the angle of decent? Say a 50 day moving average, moving through a 200 hundred day one, at a super fast decline? Like 45% instead of 15% over a certain time frame. I gotta check that out. And yes, stockcharts.com is a great place to learn! -Allan. Curious and always learning trader. P.S. Two things to add. Trading is a loney and anti-social way to live. Those two things, I am almost sure, are the driving forces of failure or success. Be anti-social when you must. Don't drink when lonely. lol! FOREX is next for me, but real slow...

Very nice well shared. Thanks a bunch I did learned a few new things..

how do I get started ?

Kyle, freaking that was indeed an awesome article. I have long left the trading world because of getting burned by the company not giving my earned money and wasn't trading faults. Should say be aware of cyprus entities. Anyways the whole article that established the mood and the emotional swing of traders world is what made me write the comment. Cheers Deep

Great Information !

I'm from the original import empire startup group and really loved this article! This really peaked my interest in the markets again. Back when I was in college I was able to trade some and payed for my college outright! That was one of the best feelings ever! Maybe I'll get back into it now. Gotta get to work on importing though....

Hey J Interesting stuff! I never got into options deeply but would definitely consider them. Stay small indeed!

I'm glad you could use the info Joshua! If you're willing to share your system I'd love to hear about it

lol sounds like a plan

The best things are :)

Importing is solid ;) Multiple time perspectives are a necessity for sure! 2k is an easy lesson compared to most, you're a lucky (smart) man

Refusing to quit seems to be the best plan out there--godspeed!

Thanks for the kind words Arthur--that's big coming from you!

I'm excited to hear about your meditation experience! I did a 10 day no speaking/no reading vipassana retreat outside of Seattle (dhamma.org) and it was one of the hardest/best things I've ever done

"time for money" - makes me cringe!

Hey Q-Man, When you get into it again it'd be worth trying to get a solid mentor. Godspeed sir!

Your PS is solid lol-- I should have mentioned some of the mental effects of spending 14 hours alone staring at a bunch of screens... it's brutal. I'm interested in your basketball "trading"... Will plays with this a bit for fun and does well. (We've been playing pop'a'shot like crazy.) Thanks a ton for sharing your story. I've done a bit with moving averages and other indicators - they've done well but I made way more money with other things. FOREX? Good luck sir! But honestly I think you should consider something a bit cleaner

Mission accomplished :)

Spend an hour right now sorting through charts and see if any fit the requirements I described

Thanks for the comment, Deep. Sorry to hear you got burned

I'm glad!

i'm still waiting for those spreadsheets. remember those xtz teas from the rock and java days? can you imagine forex from big red? it's only english that's binary. I'm 28 years old and I never went to high school. but i did learn one thing.... two cats and a dog = death. two dogs and a cat = death.

"two cats and a dog = death. two dogs and a cat = death." - that' really the only thing we need to remember

Hey Kyle, Awesome, read. I love the no BS approach to telling it like it is. I think it is a fascinating subject with never-ending possibilities and risks. Currently, I am in the import empire class and doing some consulting while working full-time. By reading this article, I realized that if I want to trading, I pretty much have to put all my efforts and energy into this with no other obligations for awhile. So for now, I will leave this as a future project. Thanks again for sharing your story and look forward to reading more posts. I think what you guys are doing at Startupbros is amazing. The value behind your content is just so much greater than most any other type of entrepreneurial blog/books/content etc. I've read Self-Made U 3 times now. I guess all I'm saying is thank you and keep it coming! Jeff

Hey Jeff, Thanks a ton for taking the time to comment. It's great having you in the importing course--it sounds like that's definitely the best way for you to be spending your time/resources. That is a HUGE compliment! We try hard to give the best content possible. It's kind of bizarre selling books. I see them sell on Amazon but I rarely get to interact with people who have read it. So when you tell me that you've read it THREE times... well, that makes my freaking day! Feel free to drop a line any time! See you in the importing group :) Kyle

Beautiful. That's what I'll be doing this Friday (missing 2 days for work). I hit it up 1-3 times a year. Definitely one of the hardest/best things I've done too. Glad to hear you got a bunch of value from it as well. After I write-up some of the new meditation content, I'll shoot you an email to get your feedback on it. See what thoughts you have. Take care Kyle

Kyle, Awesome post! Not terribly long ago I looked heavily into what avenues of approach their are to successful active retail trading. I found and quickly ran away from all the newsletters teaching "perfect penny stock plays" and so on (like you warn against)… It felt impossible to actually find anyone trustworthy: "yeah, pump and dumps!" (what??? No thanks LOL) I eventually found the options trading methodology Tom Sosnoff (who created sink or swim and sold it to TD) teaches at tasty trade … He has a site by that name and a youtube channel. His new platform he's created is called dough. Dough will show you probability of success, max profit and loss etc on positions before you open them, and it links with your TD account. There are training modules all built in, its all free (except you can pay for access to see all his actual trades I think, but not necessary). I was going to rehash what I'd learned listening to him but I'd be at risk of losing something in translation, not actually having implemented it myself I don't feel expert enough, but suffice it to say I think its worth a look if you/anyone gets into options ever. Those with options experience - your thoughts? Anyway, what turned me off for now was the same trading time for money making me cringe idea… but if I ever get into trading, that's the methodology I will test (with paper money to start, of course ;) ) For now, going to keep learning in the importing course! Loving what we've gone through so far… Keep up the great work!

Hey Patrick! Great to see you here. I never looked into Tom Sosnoff--thanks a ton for telling me about him! I'm a big fan of thinkorswim so I will most definitely be checking out his other work. A couple of people in the comments mentioned options but I haven't gotten into them myself. The Importing course is a much more solid base I think--I'm pumped to see what you do with that in the coming months! I'll see you in the group :)

How much capital did you start out with and how much would you recommend a newbie start with?

Hey Allan, I'm not trying to play doctor, but have you ever tried a paleo or ketogenic diet for your epilepsy?

Great article Kyle, I believe lots of traders will benefit from the truths you have shared. I am also monitoring Commitments of Traders data, and advise everybody to do the same. This is not another fancy indicator that derives itself from price data, but comes from an entirely different source, and lets you peek inside the structure of the market. Here are some more stuff on COT analysis if you are interested: http://cotbase.com/resources/books By the way the first book I read on COT analysis was the same you recommend, from Larry Williams (excellent stuff)! Another great work is from Steve Briese. Note: I am the co-owner of the above site, www.cotbase.com, that we created from our Excel tables that monitored the changes in COT data. Once the tables became so big that Excel could barely handle them, we asked a programmer to build an app from it and also open it for everybody on a subscription basis.

Hey Balint--great to have you swing by! I was HUNGRY for your service when I was trading. It would have been a HUGE time saver!!

Hey Stephen, I started with just about $1k - I wasn't trading full commodity futures contracts until I had about $10k in the account (even then, the risk per trade vs the account was huge), plenty of people start with just a few hundred though. $500 seems to be a good minimum. This doesn't mean that you shouldn't start practicing though! You may spend 6 months paper trading before you find something that you can begin making money with, so if you're interested, begin studying now regardless of the amount of money you have to play with.

That's interesting Stephen, I never knew paleo could help with something like that. ---Is that a grain brain thing?

I think it might be because the body is using fat as fuel instead of carbs? https://www.epilepsy.com/learn/treating-seizures-and-epilepsy/dietary-therapies/ketogenic-diet http://www.google.com/#q=ketogenic+diet+and+epilepsy http://www.google.com/#q=paleo+diet+and+epilepsy

"Warren Buffett’s #1 rule in investing is to keep your capital. He says that his regrets have mostly been acts of omission instead of commission" Haha! I JUST watched a video on Youtube (with Buffett & Bill Gates) where he said this verbatim. I am frequently astounded by the synchronicity in your articles and my own life, Kyle! On a sidenote, I think Buffett and Munger have a ton of useful best practices for personal development.

"Over half of children who go on the diet have at least a 50% reduction in the number of their seizures." ... damn Alan, sounds like it's worth a shot! Thanks a ton Stephen, that was cool of you to share

I do love some synchronicity! It always feels like there's a group of people following similar threads of ideas/thinking/action... it's interesting to see the variations in them! They do have some great personal development ideas out there. I love Munger's idea that you should leverage your own circle of competance instead of tryingt o compete outside of it.

No problem, hope I didn't derail the comments too much. :)

What percentage of the 10k were you risking per trade?

lol you've been too helpful to "derail" anything!

So I stayed between 1-5% risk for most of the time--I increased risk slightly as I became more competent. I actually traded S&P 500 futures before doing commodities in a big way. Once I hit that I increased the risk tolerance of my personal account to 10% per trade (sometimes even more). The trades just worked so often (and were somewhat rare) that I felt alright with this. This was somewhat suggestive. Sometimes a trade was just so perfect-I could get in with a tiny risk for the potential reward or the setup was lined up perfectly-that I had to go bigger. If I did get punished for a big trade then I would pull back my size by a lot. Also, remember that the 10k was capital I was willing to lose - I would have been happy to seed another 10k to go again.

What up Kyle! long time no see, just read your post it was very interesting. do you have any info/tips on more of a long term position?

Yo JD! I actually do have some ideas for longer positions-- send me an email over at kyle at startupbros dot com with some details about what you're thinking and let's chat. Good to hear from you!!!

To me this is a lot like playing poker. You can be the best player around, but even then you are only going to win about 65 percent of the time. And if you don't play within the limits of your bankroll you can go broke easily.

Oh wowzers, Samurai in the house. Love your blog bro, keep doing your thing. Glad to see you check out StartupBros.com. This blog and yours are some of my most read.

For clarity on the trading system discussed: I am talking about commodity futures here, no options. I rarely held a position more than a week with this system, never more than two.

Absolutely the best write-up about trading I've ever, ever, ever seen! Thank you Kyle and thank you StartupBros! I am tempted to rattle on about my experiences and thoughts: possibly to vent and hopefully to help by emphasizing what you said. But if your readers really read this "manifesto," they can skip reading 99.999% of anything else written on the subject including anything I would say. ( I may be a few 9s short, so please excuse any lack of precision. The accuracy is still there.) Sincerely

Thank you for the high praise Robert! I would love to read about your thoughts and experiences if you're willing to write them.

You're welcome! So, per your invitation to share my thoughts and experiences, I've re-read your post. YES, it is still the best! At present, I simply don't have the oomph or time to do a thorough post of my own. Instead, I'm going to just make a few comments. They will primarily reference your fine post. (By the way, the time thing is partly your fault. Your piece on "Antifragile" has me now poking around in Taleb's 300+ page "Silent Risk". Plus, your site has lots of other good stuff.) Onward. NUMBER 1: People need to re-read your "What Not To Do." There are so many things and ways to trade that whenever people would ask me about trading, I would always start with a few don'ts and shouldn'ts. My main shouldn't was: "You probably shouldn't trade." It was accompanied with a statement about why. Your version is: "DO NOT: Trade." After that, if we were still talking, I tell them some things they would need to be able to trade effectively: margin account, real time data feed (even for chartists), direct execution broker, etc. AND my one hard rule. The rule is a disguised "don't lose all your money." I would say: "Remember there is always another day if you still have money! Base each specific trade, any type of trade, and any system, method or approach you use around this one rule! Again, base ... !" Of the two things I feel are a "little off" about your post (it is still the best I've ever read), not emphasizing "capital preservation" more heavily is the main one. Of course, one doesn't make fantastic money, $30,000 into $2,000,000 in 3 months, by even having the word preservation in one's vocabulary. One of my best "runs" (after having not traded for over 6 months) was to go from $18,500 to $106,000 in exactly 3 months. Of course, the first month, I turned the $18,500 into just over $13,000. End of story. But, as you say later in your "What Not To Do" section, "DO NOT: Get Caught Up In Stories." So, please, please don't get caught up! My second point of mild disagreement, is with "DO NOT: Use Real Money Before You Know What The Hell You’re Doing." Without some "Skin In The Game", you don't Really know what your doing! Firstly, you are only going through the motions. This practice is important and needs to be done. One needs one's mechanics down and a plan to execute. Good mechanics are needed so one can do what one intends and not &@#*^ it up--going short instead of long, buying/selling too little/much, buying/selling the wrong things, etc. With a plan, one can take a "trip" and then evaluate and correct or adapt. BUT, I question "how much practice" is needed without any real risk. Live Action changes the dimensionality of the game. Also, some early light or moderate losses help moderate the impact of stories not ignored, quell mental extrapolations that confuse "might be" with "will be," or more simply dampen greed. NUMBER 2: My last trade was early 2007. Got my ass kicked due to a bad data feed. NUMBER 3: THAT'S ALL (for now) FOLKS ! Best

Great article Kyle! However, I have one question: you mention that you would pass on the soybean oil trade because producers are still significantly short soybean oil. However, wouldn't producers of a certain commodity always hedge their risk by entering short futures positions on that commodity? So even if the price of the commodity was in an uptrend, wouldn't they still maintain a mostly short position through futures contracts and make their profit exclusively off of their actual production. After all, they're not speculators. Thanks for the help, John

Awesome post (though I admit, it's really late here and I'm falling asleep, so have bookmarked to read the second half tomorrow. Lol)!!! I'm studying up on day trading right now. I only have a few grand and was looking into perhaps starting with CFDs. What are your thoughts on them?

Hi I browsed through charts of dozens of commodities but the COT charts are only available for a handful of them. For example, I couldn't find the Cot chart for Zinc or Copper. Does it mean you used to trade only 10-12 commodities? If yes, then why browse through 200 odd charts as you mentioned in the post.

COT charts are available here: http://www.cftc.gov/MARKETREPORTS/COMMITMENTSOFTRADERS/INDEX.HTM I think you'll find everything you're looking for there :) You may be looking at a site that only provides COT charts for certain contracts

Trading is the hardest way I know to make easy money... And to those who think their going to learn how to trade in a few months... SEVEN YEARS! before I had any kind of consistency. And I have a 150 IQ. And I'm about as emotional as a goldfish. Trading is so incredibly simple that people think that equates to easy. So is losing weight: eat less exercise more. Why then can very few people do it? Simple does not equal easy.

Amen

I'm a day trader and formerly a market maker of commodity options. Tough business with a lot of hidden risks (mainly revolving around technology.. for me anyways). I have enjoyed the consistency and -- to use a trading term -- high sharpe ratio of returns in importing/selling online. Once the online biz is big enough I'll be happy to take more risk trading and potentially hire on a FT quant to run my book. Anyways, cool article. -- always looking to chat with solo-traders (dinosaurs) (real traders, not e-traders)

Anyone know of anyone good tutorials to learn the mechanics of thinkorswim?

I'd recommend their internal help stuff, it's good

I loved ur post and i deeply appreciate...

I don't know where you were going with that, but I deeply appreciate too :)

Thanks for the info. I jus started trading and my system works. I traded paper money for 3 weeks then implemented my system with real money and it works! I jus have to have discipline to get out as soon as I hit my quota for today and not be greedy or try to make more. Yea it bothers me sometimes when I see that I could make more but I rather follow my system and be safe cause I make money everyday literally

If you're making money every day you're in the top 99% of traders... don't get greedy! Congrats!!

What was the average amount of time you'd hold onto a single position?

During the trading I focused on mostly, average was probably 8-10 days if it survived the first day. Most behaved badly immediately and so I got out within hours.

Kyle, What do you think of trend following and more specifically Michael Covel and his books?

Trend following can work - don't know enough about Covel to have an opinion unfortunately

I thoroughly enjoyed your post! Trading can be lucrative and it is very exciting! By following the industry research and opinion and utilizing sound statistical rechnical analysis it is no surprise you have done well! I would like to clarify one salient point regarding Warren Buffet and his thoughts on investing. As a professional investor and one follwing his methods I feel wholey qualified to say that while warren advices the unintelligent investor to invest in index funds he advices the professional investor to arbitrage sure things and purchase great businesses at discounts. Personally I have had success using these methods. I had an excellent surplus to the market last year and expect to beat it again this year. If you really Are good at trading I would suggest reading books by Mary Buffet regarding Warrens methods. Be wary of some of the advice regarding stock choices but the math and methods are sound and approachable. Please feel free to email me to discuss it more

Awesome write-up...good job keep it up and expect tons of questions from me later on hehehe very informative Thanks :)

I'm looking forward to them :)

Hi Kyle, this may be stupid question but, when you say; "The second thing I would look for is a daily Morning Doji Star or Hammer Candlestick.".... Do you mean you want to see these patterns each day, or you want to see these patterns once on the daily graph? Great article. Thanks

Just one on the daily graph. Glad you're actually putting it to use :)

Wondering what you think of Harvey Walsh's "How to Day Trade Stocks for Profit." I am interested in day trading and look forward to practicing with paper. Thanks for you article. Max

Hey Kyle, Thank you for the article! It was great! 1 question for you: I find myself second guessing myself when something goes wrong, so I set up stop losses and it seems like 99% of the time It stops me out then goes right up from there lol. Any advise on setting up a good stop loss? Like is there a range that I should be setting up instead of just setting up what I don't want to lose? Thanks!

I have never read or heard anything about Walsh's book, wish I could be more helpful!

If that's happening regularly (and doesn't just *feel* like it is) then you probably want to find new way to set your stops. Just being "looser" won't be helpful though. And setting it up just for a 1% loss (or whatever you're willing to risk) isn't great either. This is going to vary on your time-frame and risk tolerance, and contract you're trading. Usually I would just put a stop below a previous layer of major support.

What does that saying mean? I googled but found nothing. I enjoyed the article by the way, bookmarked it and will re-read it several times when I feel like I'm straying from my mental focus during my trades. Thanks for sharing!

Great article, Kyle! I have been paper trading for a few weeks. Thought all was going well so I dipped in this morning. I've been using the, pre-market outbreak on great news. Check it > ISR The price jumped to $2.17 at open. I paused and was watching on level 2. I ended up getting in at $2.00. The stock was bouncing around from $2.10 to $1.95. I decided to put a stop loss in at $1.92. I had to walk away because of my nerves. BAM! Came back about 15 minutes later and my position was sold at $1.92. 1st trade = very disappointing. Later in the day I was traveling so I decided to check and see what the price was now (hoping it was much lower so I would feel like I made a great decision) it is $3.05. I look far into the distance and all I could say was S.O.B! I sure wished now that I would have known then: put in your stop loss at the previous days low! Adding this technique to my trading! (please work!)

No need to pray, just test! :) That's brutal though. Let me know how it works for you!

Kyle, excellent post! When you friend lost much of the $2M, did he fail to set stop losses or what would you/he attribute to the loss? Thanks much!

Bad stop losses, hyper-leveraged, overconfident

This was an awesome read, I inspire to be like you.