One of the many questions I get from my students is “when can I trade with real money” . Its really the thing on all traders minds. One of the tenets and promises I expect from my students when they take our TRADING BOOTCAMP is that they don’t trade live while the class is on. That’s even for the most accomplished of my students. Many of the people that take our class have been trading 10 years plus but need to get to the next level. They need to get more consistent or learn to trade larger size or have more setups in their toolbox. But most of them are brand new and so its really important to start off on the right foot and make sure to learn the material and finish the program before one goes live. The coursework is really only have the battle as that is just book knowledge. You can see a pattern on a bunch of slides in class that I have handpicked but that doesn’t mean that you can trade. A trade has dozens of variables beyond just pattern recognition which is just step 1. Even if you can recognize the pattern and think you know all the angles can you do it in real time during market hours? That’s a whole different ballgame. That’s why we have all our students spend time on a trading simulator. This simulator is a real life trading platform and we simulate the exact conditions you would see when your trading your own account from size of account, commissions, margin expense etc. You literally need thousands of repetitions of practice before you can make the leap to trading without emotion or thought. You don’t just make it to the NBA without thousands of hours of practice. You don’t just become a brain surgeon without thousands of hours of study and practice. Being a trader is no different. Your skill has to be developed and then worked on constantly.
Here is a conversation I had with one of my students John. John had done pretty much everything I had asked him to do and more. He really displayed an incredible work ethic but also his passion for trading on a daily basis.
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So is John ready to trade live? Has he done the right things?
I say yes. Look at all the goodness he has in his emails. All these things are necessary to trade with real money.
1. Complete Trading Bootcamp (28 classes 60 days) finish projects/homework/participation grade in google+ community
2. Develop a toolbox of GOTO trading setups that will allow you to trade in any market condition.
3. Build a Business Plan for your Trading Business (if you tried to open any million dollar business you would need a biz plan this is no different )
4. Trade on Simulator successfully hitting all metrics (one should be profitable 4 out of 5 days a week for a month )
5. Do detailed review of Trades & archive them in journal format for Teacher to review
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So what did John have?
1. detailed metrics of his trades all archived and journal and tagged by setup on our trading simulator. He knew his win % vs loss % he knew avg gain vs loss per trade and per day.
He also tagged his setups so he knew his win ratio for each setup. A big part of trading is finding your GOTO setups and really focusing on those setups. Cutting out
the setups that consistently lose you money or have a less % win rate can really boost your results but you need the DATA!
2. Business Plan- He wrote a 16 page biz plan!
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3. GOTO setups: He had detailed reports on which setups he was fantastic on so we know what to trade and what size when we go live.
4. Near daily contact with teachers & community of students (this is huge you need to totally immerse yourself when learning)
SO IS HE READY? i think so! This is the gameplan for when someone starts trading live.
The key is to trade small and build the habit of winning and finishing in the green. The hardest part of trading is going from being a losing trader to just finishing green. even up a dollar. The beginning is not about trying to make 5k in a day. Its about building good habits learning to trade your setups to the fullest and extract what you can out of them. When a new trader trades to large size he/she will sell everything to quick when a stock goes up as they are just trading their profit & loss rather then the setup. But then if the stock goes down the loss will be much larger then those small gains they took profit on. Winning is a habit too so trading a small size and focusing on being profitable will allow you to scale in larger size and you wont notice any emotional impact. As you slowly build size you will see yourself as a big time trader and your stress of the larger positions will be the same as when you were trading 100-200 shares.
1. Trade small- Max 200-300 share size.
2. Profitable 4 out of 5 days over 2 weeks then move to 500 shares. Each 2 weeks review and add size if successful.
3. If weekly stop loss is it work with mentor/peer group on game plan for next week to pinpoint issues.
4. Still archive and journal each trade for review. Keep building your toolbox of setups.
This is the best way I know how to do this. Everyone wants to come in like gangbusters and trade huge size the first week and make a bunch of money. But its never happened that way. I have seen hundreds of traders go overboard and just jump into trading without properly taking these steps and doing the work necessary to be successful. Not a single one of them succeeded till after they came back into the program and did things the right way with no shortcuts. everyone naturally thinks they are very smart and the exception to the rules but everyone at some point will have to do things the right way. Either in the beginning or after a couple rounds of failure!
If your are interested in learning to Trade our Trading Bootcamp Starts November 5th https://bullsonwallstreet.com/trading-bootcamp-starts-november-5th/
This post is awesome. Very encouraging to stay the course. Thought i was ready to go live several times but the bad habits have a way of revealing themselves time and again. Awesome seeing John get some props as the guys a hustler, puts in the time, and is gonna do awesome once goes live. Ya buddy!
The thing that helped me the most was risking a maximum amount per trade (R multiples). For example, rather than trading a maximum share size, trade a maximum risk size. I started with a $30 risk on every trade, this was the maximum I would lose. Divide $30 by my stop size to figure out how many shares to buy. for example, if I have a 10 cent stop divide $30/.10 which equals 300 shares. Aim for at least 2:1 risk : reward which in this case would be a 20 cent gain. Usually I’d scale out half at my .20 target then set my stop at b/e and let the other half run.
Rather than focusing on profits, I focus on risk multiples. My daily target started with 5 times my risk, so $150 total. Every 50R I would increase my risk by $10 per trade. This was very helpful as I didn’t focus on profits, and it took the emotion out of trading increased size. It also lets you trade larger if you have a very tight stop, so occasionally it is possible to catch a 10R trade or even higher. For example, if your stop is only .05 you can trade 600 shares while only risking $30. But the danger is that you will likely get stopped out more often.
I also found it very helpful that my maximum losses were kept the same on each trade. When I used to trade on share size ie max 500 shares I would lose $10 on some trades and $200 on others, so its easier to control losses this way.
Happy Trading!
i do agree with u chris and thTS How we orignailly had it..but a lot of folks just stink at numbers and it gets complciated so i found this a bit easier for people to track but still use a max loss per trade etc
Very True! I first heard about this system from Van Tharp and you taught it in your course. I didn’t actually begin using this method until a few months ago, and the difference it made in my trading was huge!
Thank you so much for this post Kunal. As a new student coming in to the bootcamp with hopes of trading full time profitably one day, I’ll be referring to this post regularly when I know I’m getting ahead of myself trying to rush things. Counting down the days till’ Nov. 5th! Great Post, stick to the plan!
BOOKMARKED
Great post! It brought me right back to reality and the details that I need to be focusing on.
This is an awesome post and couldn’t be more true. Guys – I am a veteran of the 2nd bootcamp EVER and the course has come SO FAR since I took it. I never had to do any of this homework, making a biz plan etc but it is ABSOLUTELY REQUIRED. I did all this stuff on my own and then as Kunal and I worked together and tweaked my strategy we even watched the bootcamp change along with his students!
The bottom line is you guys cannot simply jump in and make $1k or $2k or $5k a day. I have been doing this for 2 years now and I still have days and weeks where I get into a rut and can’t make crap, so don’t think you can do it in a month or three months! You have to put in the work, take the emotion out of it, and just do what Kunal tells you to do. BUT when you do YOU WILL BE SUCCESSFUL just like I am! I made $20k in September WHILE I WAS WORKING FULL TIME so trust me, coming from one of his students it can be done if you put in the work!
Kunal has changed my life for the better w/ his bootcamp and his mentoring. I am quitting my job in two weeks to trade full time and even started my own LLC so I can help other new traders learn just like I did without making all the same mistakes!
Just wanted to throw my story out there and give you guys hope – it can be done if you are willing to work at it. What you get out of it is what you put in. Kunal gets up at 4:45am every day and goes to bed at like midnight and works his ass off for all of you so DO THE SAME FOR HIM and you’ll come out w/ dollars in your pockets for life!!!
Great advice!