Yesterday, I led you on a trip down memory lane, where I talked about my early start as a trader.
That post ended right as I was about to tell you about my journey into options trading.
Without that discovery, I doubt I would have gone from being a 9-to-5 accountant…
… to making my own schedule as a multi-millionaire trader.
How does one even begin to make that sort of leap?
That’s exactly what I’ll share with you today.
If you’re serious about making positive changes in your trading — then you’ll find this lesson to be of great value to you.
Developing a Winning Strategy
After I’d found the options market, the next critical step in my career was developing a winning strategy that I could trade consistently.
WARNING: Honing a winning strategy is one of the most difficult aspects of any trader’s evolution. Don’t rush this step!
As I studied more and more in Tim Sykes’ Trading Challenge, I found that I had a knack for calling the tops on overcrowded momentum stocks…
This discovery led me to sharpen my trading strategy into a repeatable pattern that I could rinse over and over again.
So what exactly do I look for in a trading setup?
My strategy is very specific. I’m only looking to trade particular patterns based on expert technical analysis.
Here are the three technical indicators I look for in every single trade:
- Volume. I only trade stocks when they’re experiencing periods of elevated volume on a daily or weekly basis.
- Volatility. I wanna see wild swings in price action, which tend to lead to the first red day and first green day setups that make me millions.
- Catalysts. Technical indicators are important, but I also look for big news catalysts that could send a stock into further volatility.
If a setup doesn’t have at least two of these technical indicators — I don’t trade it.
Watch this video where I go into further detail on my trading checklist with my longtime buddy Tim Bohen:
Hitting the Million-Dollar Milestone!
In 2018, after eight years of nonstop studying, I finally hit the million-dollar milestone.
Following so much hard work and patience, becoming a millionaire was one of the most satisfying accomplishments of my life and career…
Here are four major lessons I learned along my path:
- Timing’s everything. Being early (or late) on a trade is the same as being wrong. (This is especially true with options, where one small price swing can ruin your contracts’ value.)
- Focus on the big picture. If you have confidence in a pattern playing out — trust your gut! Don’t let intraday price action pull you out of a five-star setup.
- Stick to your strategy. Be selective with your trades. You don’t need to trade every day. NEVER let FOMO tempt you into trading a subpar setup.
- Don’t be a hero. Sometimes the setup looks great, but the trade just doesn’t pan out. Resist the urge to ‘revenge trade’. Cut your losses quickly and move on to another play. (Sometimes no trade = best trade!)
Here’s a video from around that time where Sykes and I go over some of the finer points of my strategy:
These lessons helped me a lot, but let me tell you — making a million dollars isn’t easy!
Many different factors contributed to my success…
The Most Important Things I’ve Learned
As I reflect on my trading journey, a few additional points come to mind:
- My journey to becoming a millionaire trader was long and challenging.
- Had I become impatient —or too aggressive — in the wrong market, I could have blown up my entire account.
- In contrast, I’m a good example of why slow and steady wins the race.
- For better or worse, I’m stubborn. I’m never satisfied with my trading results and I’m always looking to improve — even when I’m winning!
- After a decade in the markets, I know what works for me. I’ve taken certain chart patterns Tim taught me — like the first red day pattern — and successfully traded them over and over again.
- Technical analysis is at the heart of my strategy. I stalk charts until I understand their personalities like the back of my hand.
- My patience is a virtue — I’m happy to sit on the sidelines and do nothing until my setups emerge.
These days, I’m very confident in my strategy and comfortable with where I am as a trader.
That being said, my road to making millions was long and winding.
Yours probably will be as well.
But if you work hard and dedicate yourself — it can all be worth it. Trust me.