Hey everyone. Alright, so my account statements have arrived and it's time to do the 2016 annual Review. So I'm going to go over my trades from 2016. Here we are: January 12th early 2017.

This is a good time to look back on what was a fantastic year of trading. Now as many of you know, 2016 for me: I was able to lock in over two hundred twenty two thousand dollars in profits now I've got the broker statements right here. that's going to show those gains now. The only thing that I removed from these broker statements is my account number I blurred out the last four digits and I removed my address.

but everything else is the same. So we're going to go over this. I'm also going to go over my statistics for the year I Imported all of my trades into trade review so you guys can see what I was doing right and what I was doing wrong now. I'm going to live broadcast this so those of you tuning in right now welcome and I'll be able to answer questions as we go.

I'm also going to archive this to upload to YouTube and to post as a podcast so you guys can listen in a number of different places and you can all email me with questions if you're watching a recording or listening to a recording Ross at Warrior Trading Comm. Alright, so the agenda here is: we're going to start by looking at broad brushstrokes, a big picture of my 2016 trading year, how I did the numbers and everything like that, and then we're going to get into answering the question of how did I do it because that's what you guys I'm sure want to know. I'm also going to talk about some of the challenges that I face during 2016. You know we'll talk about the peaks, but we'll also talk about the valleys.

and then I'm going to lay out my goals and my projections for 2017. Alright, so first let's jump in here and look at the big picture. Alright, so the review of my statistics. Now the big picture is I Finished the trading year with $222,000 222 thousand, two hundred forty four dollars, and ninety one cents to be exact on 777 total trades.

Now I'm going to go for those of you on screen share watching the recording I'm going to log into my my Speed Trader account where I'm going to be able to show you the the actual statement. So I'm going to log into that here. those of you watching on Facebook live, you're going to see me holding my statements. So let me go here.

So I'm going to go over to online documents and I'll show you guys what we're looking at here. So we've got a online documents. so I'm going to go to statements right here and then see I'm going to click my December 31st statement, click here and download. There we go.

So opening this PDF Alright, so this shows my ending balance. End of the year was $28,000 in the account and I'm going to go here. over to page two. Let's see how I go to page two.

There's page two. So finish the year two hundred Twenty One thousand, Seven Hundred Twenty-eight dollars and 85 cents now I Actually asked Speed Trader why this is about five hundred dollars lower than my export into Trader View and they said they're going to look into it and get back to me. So I'm not a hundred percent sure why there's a five hundred dollar discrepancy if it's from wire transfers. this right.

Here is my Trader View report where I exported every single trade from 2016 and this was a total profit 220 thousand, 244 dollars and that includes Commission's and everything like that. So it's possible that these are I'm not really sure what the fees are now I Noticed on this statement over here. Let's see. let me scroll up.

where is it? This has a line item for other transaction? Yeah, here it is. So this has a line item right here for other transactions and it's ninety two dollars and sixteen cents and I'm not sure what that's about. you could see I did a wire transfer I took out sixty nine thousand at the end of the year, but this ninety two dot sixteen cents is a little bit of a mystery, so in any case, I'm asking for clarification on that, but that's a fairly small discrepancy versus you know, two hundred twenty thousand dollars. So it's off by a hundred five hundred bucks.

But the big picture is still pretty close to the same and these are all the trades they imported. So when I get an update from Speed Trader I'll let you guys know with those if there's fees or what, what's there that I'm not aware of. and this is my printed out statement here, which again, the only things that I removed were my my address and the last digits of my account number. So I finished the month of December with 20 1987 dollars which was not bad.

not a bad way to finish the month and then finish the year just under two hundred twenty two thousand according to this, which again, I'm not sure why it's a little bit off. So the big picture, it was a good year, made some good money and I did it trading two hours a day and that's it. Only two hours a day. So you know when you look at these statistics how does it break down? Well, my accuracy is 66 percent and those of you that see a trader view you can see here the accuracy is 66 percent in my profit loss ratio.

My average winners were seven hundred and eleven dollars average losers worth $56 $556 So that gave me a profit loss ratio about 1.3 to one which is not bad, but it is a little lower than what I strive for. I Usually like to have my PL or my, you know my profit loss ratio closer to 2 to 1 and that means if I risk $100 it's because I scan the potential to make 200. if I risk a thousands to make 2,000 So based on this, I was risking a thousand to make 1,300 Basically so the profit loss ratio is a little bit tighter and that means that my accuracy needs to be higher. Now if you trade with a one to one profit loss ratio, your accuracy anything above 50% is profitable.

So you know as you increase accuracy or you increase the ratio, you can make more money. And so you know that's kind of a big picture. Now interestingly and I'll show you guys who are watching on. Facebook My average hold time for winning trades was 8 minutes long, my average hold time for losing trades was 6 minutes long, and my average hold time for scratch trades that were breakeven was less than a minute.

So this is basically the breakout or bailout mentality that when I got into a trade, I was expecting almost immediate resolution and if I didn't get it, I got out. In all of 2016, I only had 5 consecutive losses back-to-back I had 15 consecutive winners back-to-back Now my total: Commission's ten thousand Seven hundred fifty dollars in commissions and fourteen thousand nine hundred sixty six nine nine hundred sixteen dollars in ECM fees. Alright, so ECM fees. Those are your routing fees so that's a total of about $25,000 now.

I'm showing you my P&L here is net. If I show it to you as gross, you'll see. this jumps up to two hundred Forty Seven thousand, Two hundred Forty Seven thousand dollars with my profit before commissions, right? But no one's really looking at that. You're looking at the realistic profit which is how much you made after commissions.

All right. Now let's look at the breakdown: What day of the week did I make the most money? I made the mo on Mondays and Wednesdays and I made the least on Thursdays. Despite today being a Thursday and it actually being a great day statistically, I make the least amount of money on Thursdays and I make the most on Mondays and Wednesdays. So interesting distribution.

Their performance by time of day: I made the vast majority of my profits between 9:30 and 10:00 a.m. the rest between 10:00 a.m. and 11:00 and a small amount between 11:00 and 12:00 and very little afternoon telling you again I trade the first two hours and then I'm done. All right.

If I'm not profitable in the first two hours, I'm done. Now this here shows you that I Actually, you know I took trades between 10:00 and 11:00 but it didn't make nearly as much money on it, right? They were not as profitable I took some trades after 11:00 and those ones were almost scratch in total over the entire year. All right now we can look here: Performance by the month of the year so January 10,000 February 3900 pathetic March 8400 better April 19,000 good May 4,800 pathetic and in May that's when I decided that I need to turn things around and I set a new a new game plan for how I would trade during the summer. I'll talk about that a little bit more in a moment when I talk about how I did it.

But the result was that in June I made $34,000 in July I made 32,000 in August I made twenty nine thousand and in these three months I made ninety-four thousand dollars and then I was interviewed and that interview appeared on The Huffington Post I'll give you guys the link to it September started declining profits and honestly, in October I was like what's going on with this trend I've made less and less money each month since June and then I bounced back in November good month in November decent month in December. So the overall average, you know about twenty thousand dollars a month for all of 2016 and the first four months. The first five months were really nothing to be impressed with. It was the the second half of the year where I really surged forward and started producing some good results.

100% of my trades were intraday I didn't hold a single trade or a single stock overnight in all 2016. All right. Performance by intraday duration: I Guess this is the time that I the amount of time I held the trade. So as you guys know, trade times were pretty I have pretty short between one minute and you know there was some I guess as long as a couple hours but I don't even really remember which ones.

those were alright. So now let's look at price and volume. So here this is the awesome thing with trader views that you can break down all your statistics. So the Price: Performance by price: Stocks under $2 Not a lot of money.

Stocks between $2 and $5 A hundred and Twenty thousand dollars Stocks between five and Ten Seventy one thousand above $10 Only nine thousand between twenty and fifty I Lost thirty three hundred dollars. And above that, just scratch a couple small winners, small bosses. So again, my wheelhouse is stocks between three. Between you know, a dollar and ten dollars for sure.

But really, between two dollars, three dollars and ten dollars is ideal all right now. Performance by volume. It makes sense that I made more money when I have larger shares and when I traded more volume on the stocks. So this is total volume between buying and selling.

If I bought and sold five times in a day, that's my total volume on the day performance by the in trade price range. So I guess this is must be Performance by in trade price range. Not sure exactly what that means I'm not sure. Trade distribution, distribution by volume traded.

these are another one another kind of miscellaneous Stats: Lots of stats here. Not all of them are incredibly important. Now this is the breakdown: Stocks they made the most done and lost the most on my biggest winners: Mph MN Y Sk Ln l EDS These are like you know, these are cult classics. We all have been trading these like you know all all year long.

Mo Cg lbs I got a shipper stock in there I don't let Dr. Ys on the top 20 Opt t cool SP you kown le I Jagex HP J tops cool resn those names are probably familiar to you Now on the downside: A PTO $7,800 loss Brutal Tah-tah 4700 Brutal Ship and V FY K PT IC ER C Bo SC packed the Plmd CP x Ax so you know these are the ones that I got smoked on distribution of instrument by volume by instrument volume. So where did I make the most money relative to the amount of volume that the stock was trading Now even though I trade low float stocks I trade them when they have volume. So the majority of my trades are on stocks with at least 500,000 shares of volume and most of them You can see we're between 1 million and 2.5 million to point 5 and 5 5 to 10 and then as it gets over 10 million I usually start to trade less but I did I did still trade some of them I traded more stocks over 25 million shares of volume than I did stocks under 250,000 shares.

and interestingly, the stocks with low volume I lose money on you can see right here those low volume stocks. they don't serve any well and as we increase in volume, I made them the majority the most money on stocks trading between 5 million and 10 million shares of volume. all right now. I Also made the most money on stocks with super high relative volume.

Look at that. Five hundred percent, a hundred and eighty four thousand dollars. But with stocks trading on 500% and higher relative volume, that's pretty interesting, right? That's what we're talking about. That's five times relative volume.

So in a few minutes when I talk about how I did it, this is what we're gonna be talking about. Finding: those stocks are going to have high volume. All right. Some more stats here, but not these ones are not necessarily as important so we'll scroll back up market behavior.

This for me, is not particularly helpful. Performance: By the movement of the spy majority, my gains were when the market was between zero and one percent when the market was up more than one percent I lost money when the market was down I Still made money that may or may not be really any correlation may just be a coincidence. So the market behavior stuff: Win-loss expectation Accuracy: 66.5% win-loss So three hundred sixty six thousand dollars in total gains? That's great. One hundred forty four thousand dollars in losses I Could have done without that, but you know that's not what trading is about.

And this right here is my total equity curve over the year. So remember how it was slow those first couple months into May and then finally I was like okay Ross it's game time, you know. get your head in the game. Let's really grow this account and that's when I took off.

You know, a couple slow months right in here was a little slow through October but then surged up into November and December And you know what? This is what almost everyone's equity curve looks like. It's not straight up, it's a little bit sideways and then a boost up a little more sideways. Another boost up. This is.

this is totally fine. now. something that's interesting to see here is the cumulative drawdown. What does that mean? These are the biggest read days I Had now notice I Didn't have a single read day until February of 2016.

Pretty pretty good right? I was on a 58 day hot streak I wasn't read I Didn't have a single read day between November of 2015 until February of 2016. So when I start hitting some read days, they were like down 1,500 no big deal and then in May I had a couple of bigger red days down 4600 there and that's when I was like I really need to get myself focused. Even in June though I had a big red day. forty-seven hundred dollars in the red.

forty five hundred there and then you know these days. basically as my size increased, the winds were bigger, but the losses were bigger also. Worst day of the year was found ten thousand dollars on October 20th. That was my biggest drawdown of the year and and I was a day.

I You know I'm not particularly proud of, but it's part of the deal with any trader you know we. we sometimes push it a little bit too hard I pushed it too hard on that day and I got smoked a couple other red days. sixty one hundred and seventy sixty nine hundred. And the thing is, you know, honestly after all these years of trading, I used to get really beaten up about the red days and these none of these red days really bothered me because I wasn't breaking the rules.

Maybe I was getting little aggressive? Maybe I was taking bigger share size than normal but for the most part I know I wasn't doing anything wrong. Alright so now let's go up here. I'll show you the last thing I'll show you here is I don't know if my win last days are particularly helpful. not too helpful trader View software by the way, for those of you asking on the Facebook live stream, so check out this is my calendar.

This is how I traded a hundred percent green in January that's a month to really be proud of February only two red days March I had four red days April only one red day May was pathetic. Two, four, six, eight red days. it's pretty bad June not bad July only two red days. not bad there August a little choppy September a little choppy and then going into the very end of the year October November and December each around four to five red days out of the month and that for me, is really pretty.

You know I can accept that I can accept having you know a couple red days a month. you know, maybe one red day a week. It's kind of what I budget more than one red day a week starts to feel a little excessive and you can actually see here in January I Like to make make fun of myself, but right before the holidays I go in on a three day losing streak. it's like Merry Christmas to me, you know, right before the holidays before I'm going to spend time with my family and they're like, uh, Ross how's work going? It's like it's going horrible I just lost three days in a row I'm pathetic.

You can't help but feel that way and I always do that before the holidays if I trade on my birthday guaranteed I'm gonna lose money on my birthday I Don't know why it happens, but it's the worst. So I highly recommend scaling down on your trades when it's the holidays and you know what? I should have scaled down anyways because people get ready to go away, not everyone's around and you know there's less volume in the market. It's just kind of the way it seems to be. all right.

So those are my. those are my statistics for 2016. You guys saw the detailed breakdown I showed you some of the you know, the days, the price, the relative volume, and the stats of the trade. so you know in total I finished the year in really good shape, was really happy with my trades and you know, yes, there were a few days where I got overly aggressive I pushed my luck but I didn't have any days where I really really broke my rules.

Now I've talked in the past about the worst day I ever had as a trader. the worst day I ever had I lost thirty thousand dollars. It's a lot of money to lose in one day and you know I was down $4,000 I was having a bad day and instead of throwing in the towel and saying I'm done I'm going to walk away I kept trading I saw stock spiking up on breaking news I jumped in it with a hundred percent of my account and it ended up being one of those you know, fake new spikes up goes all the way back down. Boom.

Gone. Just like that doesn't take much. it really doesn't. It takes a moment.

it's only a momentary absent judgment before you can really blow up your account. Fortunately, when that happened, my account was large enough that it was it didn't you know I didn't blow up my account, but I certainly lost more than I would have liked to have and it took a long time to bounce back from it emotionally more than anything else you know financially. I was able to bounce back fairly quickly, but emotionally I you know I think that it was a loss that that changed me a little bit. Alright, so I'm going to jump in here for those of you watching on.

YouTube I'm going to put this back into our slideshow where I kind of break down the a couple of the ways that I was able to have such a good year and the things that I had to do in order to produce these types of results. Alright, so 2016 over two hundred, twenty two thousand dollars in profit. So how did I do it right? That's what everyone wants to know. You know, whether you, whether you're a beginner trader or you're an experienced trader, what did I do? That allowed me to make over $200,000 trading for two hours a day.

It's pretty simple for me, my success. It all comes back to risk management. and you know right now, as many of you know: I Started 2017 with a small account I started with five hundred and eighty three dollars. that's how big my account is right now and with that $583 account, I'm now up five hundred and twenty seven percent.

I'm up to a balance of three thousand, six hundred dollars and I'm on day eight. I'm doing pretty well eight days in and it all comes down to risk management. I've taken a total of twenty-five trades in that account and I've had 25 winners. I get in two stocks that I have ninety nine percent conviction in and I set a tight stop.

If it does go against me, I'll stop out for a small loss, but if it goes up even thirty cents or even 20 cents, I'm going to sell half and adjust my stop to break even. And that means I'm guaranteed to have a small winner. even if I stop out, the rest of the trade break even. I'll have a small winner.

Alright, so it all comes back to risk management. That's how I mitigate risk. Now you guys know if you're interested in day trading, that the majority of traders out there will fail to make money. I'm sure you guys have heard only 10% of the day traders who come into the market will actually be successful now.

I Think that 90% of the traders out there fail. Not because they're not trying hard, not because they don't really want it, but because they don't have a strategy or a framework to base their their trading on. They don't have a plan and every trader needs to have a plan. My plan is really built on a foundation of risk management.

So if you know that 90% of the traders out there are going to fail really, what you have to do is figure out why are they failing and what can I do differently from all of them. Well for me, having worked with thousands of students over the years, I can really tell you without any doubts that the leading cause of failure is an inability to manage risk. So what does that mean? It means the traders get into trades and they don't know what their max losses. So you know, Let's say they buy a stock thousand shares at $3 it drops down to 250.

they're down five hundred. Instead of selling it, they just keep holding it and I've had people students email me asking me Ross what should I do This is unde out for 500 bucks and the first thing I say is well what was your max loss on the trade and you do they say I don't know So a trade is now to trade until you know what you're risking. It's all about risk and reward. You risk 500 to make a thousand.

You risk a thousand to make 2,000 So what is that? That's risk reward ratio Offensive Profit loss ratio. Now for those of you that are looking at the screen, you can see if you trade with a one to one ratio and I'll show you for those of you watching on. Facebook If you trade with one to one ratio right here, your breakeven point is 50% If you're right half the time, you'll be breakeven. Now that doesn't include commissions.

So for me I was trading I wasn't training with the two-to-one profit loss ratio I was training kind of right in between these two. So my breakeven was low more than 50% and higher than 33% So maybe somewhere in the low? look just below 40% Website: All right. I Guess a 1.5 to 1 profit loss ratio would be like 41% So somewhere right around 41% anything better than 41% accuracy I'd be profitable. So I traded with 66% accuracy, which is really good.

That's great now. Live traders will be like oh hey, I trade with 88 percent accuracy. Well, that's great, but that's only one side of the coin that doesn't tell you the other half, which is what's your profit loss ratio Because you could be a trader who's right 90% of the time and loses money. and in fact, that could be me.

Let's hope it's not, but that could be me. in my in my share trader account. I've taken a total of 25 trades, but what if I lose $4,000 on my 26th trade? I'll be a trader who's right 98% of the time but is losing money so it's not all about your accuracy. it really at the end of the day comes down to managing risk.

And what? I learned on that one day when I lost so much money is that one lapse in judgment can put you out of the game. It can end your career. I've talked to traders who lost hundreds of thousands of dollars in a single day doing something just stupid I Mean we admit, it is stupid. It didn't make sense.

It was a bad thing to do and that's it. You know? And you look at a stock like B Ry s Just for instance, you know D Ry s as illogical as it sounds, went from $2 or sorry, went from $4 all the way up to a hundred and twenty dollars a share over the course of three days. Four days. now.

What if you're a guy who shorted this and just decided to get stubborn. You short 10,000 shares for $10 You could lose a million dollars on a trade like that. I Mean you really could. It doesn't make any sense.

It's not logical. This thing has come all the way back down to. you know, a dollar down here. But if you couldn't remain liquid through this squeeze, you'd be you'd be blown out of the trade and that would be it.

That would be the end of your career. So regardless of you know what you think a stock should or what you think the fundamentals are. If you want to be able to make you know $200,000 in the year, you have to manage your risk on every single trade. That's what it is.

risk management. So that means you look at a stock and you ask yourself, you know First of all, what's my risk on this trade. What's my max loss? You need to know your max loss. Once you establish your max loss, you you know I have a lot of different things they look at but you know you look at support stuff like that.

the lows last 5-minute candle, moving averages, etc. you say okay, well this is my max loss point. 200 bucks. All right.

Well I'm going to risk 200. Do I have the potential to make 400 if the answer is yes I take the trade if the answer's no I don't take the trade now for me I Trade two hours a day and one of the reasons is because I get decision fatigue every time I see an alert come up on my scanner I Have to make a decision and it's an important decision I have to decide am I going to buy the stock. It is what's the risk, how much risk am I willing to take? and every time I do that, you know it drains me just a little bit. You know more and more and more and more until by 11:30 noon time I'm like I'm done.

That's it. Thrown in the towel I'm done for the day if I try to trade for the afternoon. My ability to make a good decision has declined so much that I get sloppy I Learned that in 2015 and it's why in 2016 I made the decision to trade one strategy and to focus on only trading from 9:30 to 11:30 I said stop trading the afternoon. Don't worry about it, people.

you know there's people in the chat room that want alerts. You know stuff like that. Don't worry about that. You got to focus on you.

You got to focus on the strategy that works the best for me. and you have to lead by example and that's what I'm doing and that's what I did all 2016. All right. So the first, the first secret to my success last year was risk management.

Even though I had a few trades where I blew out my max loss. that happened for the most part because I had too much sighs. There were a couple of trades where I took 15,000 shares and I lost 30 cents. That's a $4,500 loss and it happens really fast.

now. There were also trades where I took 18 thousand shares and made $12,000 Like that risk reward. Okay, the trades where I lost 4500 I had the potential to make 8000 done and had that happen done. Several trades but from some of them.

inevitably I lost and the one day that I lost 10,000 I was in I took two trades like that at the same time I lost on both of them. It's a bad day. It wasn't fun, but I bounced back and by the end of the week I was actually back. There's almost back to break-even as if the day never happened.

So the ability to get back on the horse and bounce back is important all right now. So if the first secret is risk management, the second is knowing the right type of stock to trade stock selection. This is something the traders ask me all the time. Ross How do you choose the stocks to trade each morning? You know, do you trade penny stocks? What's your routine? And for me, my routine is very, very simple.

Now, one of the biggest things that I learned as a beginner trader when I was first getting started: I realized that almost every single day there's a stock that moves 20 to 30 percent. And that's true almost every single day. Today we had a couple of stocks and moved over a hundred percent. So at a minimum, there are at least one or two stocks every day that move 20 and 30 percent if I could find a way.

so I told myself to profit on those types of stocks to find those stocks before they make the big move, then I could potentially start growing my account if I put let's just say I put a quarter of my account into a stock and it moves 20 percent, then my accounts going to go up five percent a day, right? I Mean that's that's pretty good. The logic makes sense I just need to find those setups before they make the big move. What I realize is that the stocks that make those types of moves I'll share several common denominators. It's the anatomy of a home run stock and it took me a long time to figure this out.

I had to, really, you know, print out Lots Stocks go over the all of their stats and try to figure out where these guys all have in common. Well, all the stocks that make these huge moves, the ones that make the hundred percent move, they all have a lower floo. They've got a limited level of supply, so low flowed stocks are exponentially more volatile than heavier flowed stocks now. I Spend a lot of time talking about float and going into the details of it on our website.

I've got a couple articles about it other videos on Youtube, so if you're a little unfamiliar with that term, you can do a little research and I can show you some more info on it. But float of under 100 million shares? That's my threshold. I won't trade anything above that and I prefer below 30 million below 20 million and below 10 million. those stocks become exponentially more have exponentially more homerun potential, so that's number one low flow.

Well, that tells us that the stock has a very limited level of supply. Supply is only helpful when we have high demand. so that's second part of the equation. We've got supply on the one hand, then we've got demand on the other.

So what creates high demand? High demand is the result of news. When a stock has news overnight and it could be you know, headlines like you know at FDA announcements or releasing clinical trial study results or for biotech stocks. Or it could be a company that has a new contract or could be EPA announcements like Fiat Chrysler is having right now? You know anything like that earnings. These are fundamental headlines and these can make a stock move.

It can make traders think wow, there's a reason for me to want to buy this stock. I Want to get into it? You know, as quickly as I can. All right. So now here's the thing.

if you go on. you know, market watch or something like that, you'll see that there are stocks reporting news all day long every day. So how do you know which ones of those are actually worth caring about? That's a good question. I've instead of manually searching through all the headlines I Take a different approach I look at the stocks that are already moving up 5% or more if they're moving up 5% or more.

It tells me that other traders are already seeing an opportunity, but it's not to extend it yet. So I'm to look at that. and now let me go figure out on these small handful of stocks, what's the news? It's definitely to give the news on every stock on the market. I Look at the news on the stocks that are already up 5% or more.

but of course I only look at the news on the stocks of 5% or more if they have that low flow. so you know one thing builds on the next. and that's how I start to filter down my watchlist each day. Stock selection about finding the needle in the haystack and it's not hard when you've got the right tools.

So I've got a set of scanners they use. scan the market every day to find these stocks with homerun potential. So once I publish my watch list which I publish for my students every day. I Usually have 4 to 5 stocks that I'm watching very closely and there's a very good chance that those 4 to 5 stocks will move 20 or 30% today.

The question is just whether or not they'll be easy to trade, whether or not I'll find a good entry, whether or not they're going to move that way to the upside or the downside because sometimes they fake you out and go the other way. Now when a stock starts moving I have another set of scanners that will alert me whenever a stock with a low float and high relative volume that sum up more than 5% is hitting a new high a day. So I can take those stocks. Maybe they're already on my watch list? Maybe they're not.

But I can take those alerts. and now I look for my entry and one of my favorite patterns is the very simple bull flag pattern. It's so simple and you don't have to overcomplicate it. I've met so many traders that you know they put all of these indicators on their charts.

They make it super super complicated, they've got you know, histograms and they've got oscillators and it's just it becomes so busy you know, boxes and windows with all this stuff? Well, I made 220,000 dollars last year and my charts are very, very clean. All I really have are moving averages now. I put the Bollinger Bands on there sometimes for when I'm trading reversals or pointing things out to students. but I keep my chart simple and they don't look for technical indicators to give me confirmation I look for candlestick patterns because those really are one of the most respected indicators out there candlestick chart patterns and in my experience, they have the cleanest and most predictable resolution.

So when I'm looking for a bull flag looking for a stock that's made that quick move up and then I look to take the first pullback and you can see right here there's our bull flag to move up right here first. Campbell to make a new high after the red Campbell's right there. that's my entry stop is it below? So those of you watching on Facebook I do that a couple times a day on home run stocks I Did today on a couple stocks. You know it's just the same thing every single day.

Looking for that same pattern again and again and again. Earlier this week I had an $11,000 winner trading off my scanner buying the first pullback. you guys can see right here. this was DFS n very, very simple.

it was on the scanner. Here's the alert telling me it's hitting new highs below float. It's got the big rate of change. There's eleven thousand dollars in profit, one and done.

You know one trade that you know if I have ten days this year where I can do that, that's over a hundred thousand dollars in profit from ten days. There are 250 trading days in the year. That means if I have a homerun, you know five percent of those days I could make over 100 grand. So in between those homerun trades, I've got to be really diligent not to give back profits.

and that's why my equity curve I Want it to look, you know, big boost up a little sideways. big boost up a little sideways rather than sharp draw downs. Alright I don't want to have those big red days I don't want to have those days where I'd get back a lot of profit now. I've already had, you know, a couple red days in my speed trader account this year, but sure, traders 100 percent green, so that's my focus.

Trading a small account is really the most important thing to me because it's showing students that you can make a living with an account as small as five hundred dollars, you know, and well, I'm proving it to myself. Also, I've never trade when to account this small. It's a very small account. But you know.

the fact that I've been able to grow at 527 percent and 8 days tells me that? You know. Yes, this is. this strategy is scalable all the way down to a small account. Now will I make two hundred Twenty thousand dollars this year? I'm not sure about that because I'm trading from such a small starting balance, but I do think that I'll be able to make more than enough in this account to be able to say I'm making a living as a trader.

And I think anything more than a thousand dollars a week, fifty two thousand dollars a year? You're making a living as a trader All right. So you know those were really my three secrets to success in 2016. Risk management, proper stock selection, and trading the best chart patterns I Don't over trade, you know I trade, breakout or bailout if it doesn't work I Get out of the way I Don't overstay my welcome even if I'm red I Shut it down at noontime and that level of discipline has served me really really well. Having said that, 2016 did present some challenges as you guys saw from the first few months, you know.

January February March April May I really wasn't doing nearly as well as I wanted to be doing I was disappointed with the way I was trading and I was getting a bit frustrated myself. What was my problem? My problem was over trading. trading too much and I'll show you right here. This is what one of those days looked like.

All right. This is a day where I took six trades and I was read on five out of six. Accuracy was just pathetic. My Commission's were four hundred and ninety dollars.

This is over trading. This is sloppy now. I had at that time in eighty six thousand dollar balance and so I could say Oh being down two thousand dollars is no big deal. This is totally unnecessary.

and again, if you do this ten days in a row, you're down twenty thousand dollars right now. I Also want to point out you know just for the sake of it that I'm doing something here that a lot of traders don't do. I'm showing you a lot. Not just you know, a red day but a day that was pretty embarrassing.

The accuracy was horrible. Now you know I do this kind of thing because I want to show you guys that you know this is the life of a real trader. I mean I have great days but I also have bad days and I want to be transparent about that I mean not just to show you the broker statements, but to show you that you know there are going to be days where despite your best efforts, you do, you do things wrong and you don't come out on top. Now on this particular day, the thirty four hundred dollar loss see er see, it was unnecessary I was already having you know a bad day in terms of accuracy and then that tray just you know wiped me out and I had a $2,000 winner on that day.

So it's like I had a good you know a good trade here. but I remember I had had that trade and you know then I chose to take this trade on CRC because I was a little annoyed about the fact that my accuracy was bad and I was a little annoyed about the fact that I only made two thousand an OPG n even though I was up over five thousand dollars on that trade I let my emotions get the better of me I decided to jump into a trade and I promptly lost thirty five hundred dollars I went from being up you know, fifteen hundred to down two thousand dollars I would much rather close the day Green especially up fifteen hundred bucks and down, you know, two grand. So you know when I had days like that, it was a wake-up that you need to be more focused. you need to be more disciplined And it's not to say this didn't happen to me.

You know in the fall and through the summer it did happen from time to time, but it was happening a lot in the spring and that's when I decided that I needed to adjust my focus I need to create a set of rules, a framework for how I would trade the market every single day now. I already created the rule of I only trade the first two hours and that was going well. but you know I had days like this. So one of the rules that I put in place was the thousand dollar max loss if I'm down and I have this even to this day if I'm down more than a thousand dollars I cannot initiate a new trade I called my broker and I said hey, can you set this up for me and they're like Ross We're happy to do that for you because we don't want to see you losing money.

They're happy to do that. They want to see me trade in there for the next 30 years. That's good for them, right? commissions? You know, every day. So they want to do anything they can to help me, you know, improve my trading.

And so they said sure, we'll put a max loss of $1,000 on your account now. Doesn't mean you can't lose five thousand dollars in a single day. You can, but once you're down more than a thousand, you cannot take a new trade now. I'll explain the the way that I got around that a couple times, but by doing that for the most part, it forced me to walk away.

So it's when I started to get impulsive and emotional. It just nipped that right in the bud because I couldn't act on it. You know? I talked about how if you're a race car driver, let's just say for instance, you're a race car driver and you know you have a day where you really push it and you spin off the track and you screw up your car. Well, you can't go right back out on the track.

You've got to go repair your car. You've got to get stuff fixed and that forces you to reflect on what you did wrong. Think about it. Cool off.

as a trader, we don't have that You can screw up and lose a thousand bucks and then jump right back in there and lose another thousands and then another thousand. Another thousand and you can keep doing that until your account is gone. Really, you could lose. You could blow up your entire account in one day.

A lot of traders have done it. It's a scary thing to have that kind of responsibility and again, you have to respect the risk. Now you know for me, adding this thousand dollar max loss has helped me control that. The one thing that it's allowed me to do or encourage me to do on a couple of occasions is hold a losing trade knowing that when I press the sell button I won't be able to take a new trade and sometimes in the first you know minute of the day I take a trade and instantly be down to grand and instead of closing it I'd say well, maybe I'll hold this for a second because I know when I close it I got out of my account for the rest of the day.

Maybe I'll hold it for a second and even I hope to hold it down a couple thousand bucks. I'll hold it until another setup comes and then maybe that one will get me out of the hole the day. I Lost ten thousand dollars. That's essentially what happened.

I was holding one trade really heavy, got into another one and I lost on both of them. So the thousand dollar max loss is not foolproof. Yes, it prevents you from initiating new trades, but doesn't stop you from doing stupid stuff. You know it comes back to holding yourself accountable and following a set of rules.

So in June of this year for June First I created a set of rules. The rule was I would only take a quality set up, but when I saw a quality set up, I would take 2 times the regular share size. So instead of taking 2,500 shares, I would take 5,000 shares of an equality set up. The result was that before I would take a trade, I would feel a little bit nervous because I was like oh my gosh, I'm risking more money on this trade.

That forced me to be more selective about what I was willing to trade and inevitably my accuracy improved. At the end of that month, I made $34,000 just under 35,000 That was my best month of the year of all 2016 and it was by implementing that rule now. I kept the rule of being down more than $1,000 if I broke that rule. I made myself run now I Started by making myself run a mile for every rule that I broke.

but that kind of backfired because I sometimes would make that you know that quick risk, reward, decision and say you know what I'll run a mile for this rule break. So then I changed it to if I broke any rule I had to run five miles and I stopped breaking rules pretty quickly because running five miles, especially in the rain is not a lot of fun Now at the end of the summer in three months I made 94 thousand, one hundred and nineteen dollars in fully verified gains right here you can see for those of you on on Facebook so those are my gains at the end of the summer. Accuracy: 66 percent I did have my biggest winner and my biggest loser during the summer you know I was stepping up to the plate and swing me hard. so when it connects you've got a big win and the course when it when you strike out it's it's a pretty big loss.

But the result was I Had a fantastic summer and at the end of that summer I was interviewed in that interview appeared here on The Huffington Post Day trader makes ninety four thousand one hundred nineteen dollars in three months. So I finished the summer feeling really more confident than ever. I was like I've got this, you know I'm really trading smart I'm making good decisions and I'm making more money in short periods of time and never made before as a trader and that was the result I also learned how to increase my size, how to be more aggressive so when I had green days, I would make a lot more I would really capitalize and that was me essentially putting the pedal to the metal. You know what I found is that when I'm having a good day I need to go hard and push hard I need to dig deep, be aggressive, and really step up to the plate.

And today is one of those days. Today I traded six stocks in my small account and with a 1896 dollar balance, I made one thousand, seven hundred and sixty one dollars I made ninety two percent today on my small account. That right there was in achievement and it was trading the same strategy I trade every single day. It was just that.

Today, the market was really hot, it was really connecting and so I said I need to push hard I'm not going to walk away just because I'm up five hundred dollars on the day. If I'm having a good day, I'm going to try to make a thousand fifteen hundred and by being aggressive, my best days have gotten that much bigger. So instead of tapping my winning days and saying oh, anytime I'm up 200 bucks, I'm going to throw in the towel and walk away. now.

Sometimes the beginner traders do that and I used to do that actually as well I realized that when you know I'm having a good day, I need to be aggressive and then that that way I'm allowing for bigger green days and bigger hot streaks. and on the flip side on a red day, that's the type of day I need to cap my losses so don't go below a thousand if you're below a thousand. Don't take new trades and you know that's allowed me to really sort of reverse that profit loss ratio because in the past I traded with a negative profit loss ratio I was trading where my losses were bigger than my winners because I would allow myself to get too aggressive I'd allow myself to go into the red now. I Really turn that around in 2016 and I'm really happy for you know for the results.

So now 2015 was a great year, but 2016 is in the books. so 2017 what are my goal? All right? Well, goal number one is to start the year with a 583 dollar small account. As many of you know, I was planning on starting that account with seven hundred dollars I funded it with seven hundred dollars. What? I didn't realize is that my platform fees would come out on the first of the month because I funded the account in December.

So I ended up actually starting with five hundred eighty three dollars and fifteen cents as of today. I'm up to thirty six hundred dollars in equity and my goal in 2017 is to grow it to a hundred thousand dollars now. I hope to be able to do that in 2017. I think I can, but time will tell you know right now I'm 3.6 percent of the way there so you know here's to getting started and and a strong start: I Think that for me, the first few weeks in the first couple months first two months will be the hardest I hope to be a twenty five thousand dollars by March and I think by the time I get up to twenty five thousand dollars, I'm going to move my account from Sure Trader back to Speed Trader and only trade in that account and I mean really? I've been making $20,000 a month consistently for all 2016, so once my account has grown, I should be able to just pick right back up where I left off and get it to a hundred thousand pretty quickly.

I might even be able to do quite a bit better than that, but at the same time I can't be as aggressive with this small account as I was last year with my big account. last year in my big account with eighty six thousand dollars I Could you know I can stand tall I could take a twenty thousand share position knowing that if it works and I make fifteen thousand. That's awesome if it doesn't work and I lose five or six grand doesn't really matter. it's no.

I mean it's you know, not good. but I can handle it. I'm not going to be able to handle that type of loss for a long time with this small account even though I have the buying power to take you know 5,000 or 6,000 shares, I don't have the risk tolerance to handle the loss if that type of position goes the wrong way. So I'm going to have to keep that in mind and remember that it's just got to be one trade at a time building the bricks of the foundation and then once I've got the foundation really solid and I've built the account up to you know, five thousand dollars in equity? You know, six thousand dollars in equity then I can start to be a little more aggressive knowing it.

If I have a bad day where I lose a thousand bucks, it's not going to knock me out, it's just gonna. you know it'll beat me up a little bit, but it's not going to put me out. you know of been back to Square One. that's my biggest fear and I even had bad dreams about this that I blew up the entire account.

It's a scary thing and it's something that that could happen and you know, knock on wood. Hopefully it doesn't but if it does, you know I'll be here to walk you guys through it and tell you you know how I'm going to bounce back and how I'm going to rebuild during this challenge again. I'll be. you know doing this in real time so you guys will be able to watch me.

Those of you who are in the chat room and in our classes and see me every single day as I'm adding to this account buildings up trade by trade. My second goal for 2016 or 2017 is to increase my accuracy to 70% a trade at 66 percent accuracy in 2016 and I'd like that to get a little bit higher if I can. that means I have to be a little more selective about what I'm willing to trade. you know, but at the same time, as long as I'm making money and I'm doing well, I don't need to get too hung up about the statistics, the statistics will sort of.

You know they'll follow the profits. Third, the third goal for 2017 is to try to increase my profit loss ratio to one point five to one. I would of course love to be a two to two to one, but I'm not sure it's realistic for me to try to increase it by, you know, almost a hundred percent. So I'm going to start by saying one point five to one and if I can do better than that's great.

That means I have to do one of two things. Number one, I've got to have bigger winners or number two I have to have smaller losses. Or if I could do a little bit of both, then I should be able to get my profit loss ratio just tweaked a little bit higher. Goal Number four is to continue to help thousands of traders at Warrior Trading on their path trading success and so I'm excited in 2000 17 I'll be having a group of traders fly out to trade side-by-side with me.

We're going to do two seminars this year and I'm just going to continue doing everything I can to help beginner traders avoid the frustrations that I went through so you know everything that I've gone through. all these experiences, this is all been trial and error. I've learned all of this the hard way and I love it when I'm able to work with a beginner trader and help them avoid those same frustrations. John's one of our students that last year made a hundred and sixty thousand dollars training side-by-side with me.

So I'd love to see more traders, you know, just like him in that same position where they learn the strategy. they trade side by side with me. We're all looking for the same setups and you know we trade together as a team over at Warrior Trading. Now 2017 so far is off to a great start, but we're only 12 days in so I wanted to make sure that I got this 2016 annual report uploaded and you know and recorded so you guys can see it.

You can ask me questions and so I can sort of set the positive intention for 2017. I think it's going to be a great year and I'm so excited to be able to be doing this side-by-side with so many awesome traders in the warrior trading community and of course all of you and who are tuning in on iTunes and YouTube and Facebook Alright guys, so what I'll do is answer some questions. For those of you who are watching and have some questions and those of you watching and listening the recordings, please feel free to comment, you know! thumbs up! I'll make sure I reply back to comments I log in pretty much every day to answer them. so even if it's a few months from now, I'll make sure I get those questions answered Alright Francois Canadian Trader We do have a lot of students in our chat room who are Canadian and they trade at a couple different places.

Some of them trade with quest trade, some of them trade with Interactive Brokers and some of them trade with a shirt trader. so it kind of depends on your account size, what you're looking for. This is one of the things with brokers that there's not. You know, there's not one broker that's good for all.

Canadians It depends on what type of trader you are if you're a high speed trader, if you need hot keys, if you need fast executions, sure traders, probably where you want to be. If you you know prefer to keep your money, you know in your country you've got a larger account, Quest trade might be better. Interactive Brokers It's also a fantastic place to trade, so you know it just sort of tends on where you're coming from. One of our students recently asked me you know she's getting started to Ross Is it really as easy to make it look and I recognize that this looks easy and what I should have said at the very beginning of this annual report is that as easy as this might look, all of this is the result of a lot of hard work I Spent years studying fifteen hours a day and trading, trading and studying to get to where I'm at today.

and even even today, you know it's it's it's evening time. I'm still working and doing my thing. My entire world right now revolves around trading in the morning, working with students in the afternoon, studying you know, uploading videos to YouTube and stuff like that. It's really non-stop work if you expect or you want to be in the top, you know, 10% If you want to be one of those traders who makes a lot of money and is really successful, you have to be willing to work hard.

And I know that there's a lot of traders out there who have worked just as hard to me, if not harder and who have not had the good fortune of being successful. And that's why. one of the things I said earlier is that you know traders fail not because they don't try hard, but usually because they don't have the right framework, the right template, and the right tools. You need all of those things together in order to be successful.

But at this point, for me, trading is easy. It's something that took me a long time to learn how to do. and now I've got it. So if you think of something else that's you know really hard to figure route, you know.

Here's an example. Skiing skiing is easy on the surface. skiing is pretty easy, but doing tricks is hard now. I You know, and you anyone who's a skier can attest to the fact that this is one of those things that's really challenging.

and Ryan I think that you're watching so you'll you'll be able to back me up on this. When I was skiing, you know, as a teenager I wanted to start doing the tricks you know I want to start going off the jumps and doing the 360s and stuff like that. It's exactly funny how similar this is to training. I would go off the jump and I would start the spin and I would go not 360 degrees.

I would go like 270 degrees I would go like three-quarters of the way around and then I would stop and I would just land. You know, just another fall immediately and I just kept doing that again and again and again. And it wasn't because I didn't have you know the skill, it was because it was totally mental. I Couldn't commit myself to making that a hundred percent turn all the way around and you have to guide you know, with your shoulders and with your head.

And then finally one day I got it and it was just like boom I got it like you know, spinning. you know, spending the the pen on my finger. Just finally one day it just it just went and I was like wow, I've got it, you know. and even if you try to do this, if you don't know what I'm doing, you know it's one of these things that it's like what is he doing about pen? There's easy, but you try, you try, you try, you can't get it right, you can't get it right.

and then finally it connects you land and from that point forward you've got it. You got over that hurdle and that's trading is so much like that. It's it's this mental game and so many of us struggle with keeping the losses small. You know, minimizing the loss is maximizing the winners.

We fall into these bad habits of having big losses and small winners. I Recommend a lot traders to read this book called trade Mindfully by Gary Dayton I Don't have a copy of it right next to me at the moment, but it really is a great book all about trading and the mentality that you need to have as a trader in order to be profitable. I actually think I might have it up here on the counter or up on the shelf. but in any case, and I don't know where I put it trade mindfully, it's the book I recommend you guys check out.

you can find it on Amazon and stuff like that. but just being able to overcome those emotions because it you can have like a total mental block stopping you from being able to do something. You know. another thing I struggled for a long time to be able to do a flip off the diving board in a swimming pool.

another one of the things I commit only seventy percent of the way and then I'd end up. You know, being upside down I mean it's just a mess. It's mental. you physically can do it.

So I really believe almost that almost anyone out there could be a traitor. It's just getting getting your mental game. It's learning a strategy, having the template, the framework, and then having the right tools to make it happen. So you know.

the good news is that there are people out there you know like me who are happy to help you. You know, happy to help you through that learning curve. I'm I'm working with you know, so many students right now over at Warrior Trading, helping them achieve their goals and helping them on their journey to success. And you know for everyone, successes is a little bit different.

It's not design is the same thing for everyone, but you know. I Think for me, an extra $50,000 a year with success as a beginner trader and you know what? That's $200 a day. $200 a day? You know? I've been making more than that in the last eight days with five hundred dollars in my account. So I really think anyone was? You know a little extra money has the potential to trade.

It's just. you know, can you over overcome the mental side of it? I have a student right now who he's retired and he spent his career as a pharmacist. As a pharmacist, he was always taught that you can never make mistakes. you make a mistake as a pharmacist when something really bad happens and so he's feeling really trigger shy.

He's afraid and nervous to take trades because he doesn't want to be wrong and I've you know, kind of had to break him of that because it's okay to be wrong as a trader. I'm a guy who was wrong 34% of the time last year and I still made $200,000 That certainly wouldn't be true of your pharmacist. If you're a pharmacist and you're around thirty four percent of time you're fired, you're a bad pharmacist, but as a trader, you know you can be wrong. thirty four percent of time and make money and and be considered, you know, Very successful.

I'm I'm in the top five percent in terms of my income just from trading in 2016. So you know it's not about being right on percent of time. it's not at all. It's about learning how to minimize the losses.

So you know it's like every time I get in. I've got a really tight backstop. It's like you know, you know rock climbing. and I've got this constant delay.

you know this rope that's constantly pulling me up. So if I do fall I only fall back a little bit and you know I love going rock climbing and that's something that I'm thinking about. You can have automatic automatic delaying devices that pull you up and just kind of like you know, keep keep you going so you're never going to fall that far back or you have someone standing there to help you for me in a lot of ways. with my trading account, it's my broker that provides me that breath that backstop by having the max loss on the day.

so I can never have you know too deep of a drawdown. and although maybe I could do a little bit to improve that with making sure I don't break the rules by taking crazy crazy big sides. and you know, even with that I could tell them to restrict my share size. don't let me take more than twenty thousand shares.

and that might not be a bad idea because there was at least one time last year that I meant to take twenty five hundred shares and I accidentally, about twenty five thousand. So you know it's these things are available. You can talk to your broker about it. You can help.

They'll help you become a better trader. You just have to reach out. There's a lot of people out there. they'll help you I'm certainly one of them, but your broker is also one of them.

Alright guys, so with that said, you guys are welcome I'd love to have you go over to Warrior Trading Dot-com check out the website, many of you are already you know members and you're just watching the recap. So I hope you guys enjoy! and Steve yeah to answer your question about trailing stops: I Don't use trailing stops I don't use trailing stops because of the fact that the trailing stop always stops you out when the stock is going down and because of slippage, you know your loss is always going to be a little bit bigger. So I'd rather sell when the stock is going up. So what I do is I put out orders as the stock is going up to sell into that strength.

that way by the time the stock is going down I've already sold three cords of my position and I've tried that method of saying I'm going to hold the whole thing until I get you know one red candle. Well, just today I saw a stock that went up I tried to get in at 810 and my order didn't get filled. so I didn't get in and it went up to 880 and