Update on Challenge Student Karan: Key Takeaways
- See how Karan’s been upping his game since the first time I featured him…
- This student proves you don’t have to win every trade to be successful. Check out his latest stats!
- He’s hit a big milestone, but his goals remain the same…
My student Karan has been in the Trading Challenge since 2017. He’s been trading since 2020…
Those are some amazing goals to hit! Today we’ll cover how Karan did it.
Table of Contents
From Flat Broke to First Class
Then he enrolled in the Trading Challenge.
In order to pay my debts plus student loans off I needed to figure a way to make more money. I landed across @timothysykes and decided to take on another 7k debt to study and learn how to make money in the markets. In the year 2019 I was in NYC visiting a friend
While visiting him I landed a pretty high paying corporate job and also kept pushing to learn the markets. In the year 2020, I borrowed 2500 from a friend to start trading as all my paycheques were going into paying off my debt. Fast forward a year and half later
I managed to clear off all my debt. Have more than 200k of liquid cash at my disposal, most of it came from the markets and some from my day job savings. And I just booked my first first class plane ticket to travel from NYC to LA.
He wiped out his $60,000 debt at the end of 2020. By the end of 2021, he managed to book a first-class ticket on a plane.
This isn’t a game. We’re not trying to stack first-class tickets and other luxury items. Karan isn’t in this for the comfy seat and champagne.
He’s in it to make his goals come true.
The First Step: Having a Goal
Karan’s drive comes from the fact that he knew exactly how much he had to make. He needed $60,000 to clear his debt…
Like most of my top students, he didn’t buy a flashy car when he hit his milestone.
Instead, he doubled down on his commitment.
What Changed Since Our Last Check In?
Almost everything worked out for him on that BIG day. But things working out isn’t a sound strategy. Karan discovered that about a month later…
On August 3, 2020, Karan had his biggest loss of the year.
This was at the start of bitcoin’s stimulus-fueled come-up. I always warn traders about shorting…
The trade conditions were good. It was a third green day. The stock was already overextended…
He was down $35,000 at one point in the trade. He almost blew up his account.
He got out on a pullback. He was lucky again. The stock made it into the high $50s before its run ended.
What Going Exponential Looks Like
Karan doesn’t rely on luck anymore.
He sizes in small when he’s testing a theory. He scales into trades that are working and bails on trades that aren’t.
Here's your daily reminder that SMALL GAINS ADD UP OVER TIME! And compounding growth week over week, month over month, year over year is SO powerful despite being disrespected by too many people worldwide! Please retweet/favorite this & help me get more people to understand this! pic.twitter.com/6lH7fjLI0w
It was his biggest weakness when he started. He knew which setups he liked. He would make money when they worked. And he’d lose money when they didn’t.
He was like a boxer going punch for punch. Not a winning strategy.
He was trading AMC as it bounced around a range. He knew the risks. He had set a risk of $20,000 on that trade.
Say it with me: small gains add up.
The ‘Papercuts’ Theory
Karan loses more trades than he wins. That’s OK. He knows when to get out.
He calls this strategy ‘taking papercuts.’
He’ll try a trade idea with small size. If he’s in too early, he’ll take a small loss. If it doesn’t work, he’s out.
He might go back to the same idea later. Karan’s not playing bad setups. He’s just giving himself as many bites of the apple as he needs…
No one can predict the markets. The way Karan’s built that unpredictability into a working strategy is by managing his risk.
“I stopped tracking my winning percentage,” Karan says. “Initially I was obsessed, but it hindered my trading. I wanted to be right all the time.”
This is a message I want all traders to hear. Good trading isn’t about winning.
“I really don’t care about my winning percentage at this point,” Karan says. “All I care about is how I’m executing my trades.”
What Karan Gets Out of My Trading Challenge
This tweet was in response to a midnight study check I put out.
Been going over my trades, trying to see how can i improve, working on my risk management and tracking some more data.
Studying is the key to success. Having a marathon mindset is key.
Started the year with $2500 and grew it to over 30K now.
Thanks a lot @timothysykes pic.twitter.com/UNYRE8h4Jy
He isn’t resting on his laurels. Karan is after constant improvement.
Before he started trading seriously, Karan hit the books. Or rather, the 7,000+ video lessons accessible through my Trading Challenge. Plus, the weekly sessions with millionaire traders. And the best chat room on the planet.
In the beginning, he studied 12–14 hours some days. He’s still putting the time in. And now it’s paying off for him.
Karan’s Advice to New Traders
But his strategy comes down to some common-sense points. Here’s how he breaks it down:
- Understand how the algos work. “Don’t buy the high-of-day break into strength on listed stocks. Algos are looking for liquidity zones, and those are the main liquidity zones. Wait for the stock to dip, wait for it to hold. Then buy into the trade.”
- Don’t chase strength. “If you’re buying, buy on a red candle. If you’re shorting, short on a green candle.”
- Look at longer time frames. “Don’t draw trends on one- or five-minute candles. Use 15 or 30 minutes. Let the chart develop before you get in a trade.”
- Don’t get into a stock right at the open. “Once you’ve let the chart develop, once you understand how much volume it’s going to trade, you can make a good decision.”
- Understand the psychology of a pattern. “If you can say that this pattern is happening because shorts are doing X, longs are doing Y, and this is the reason why this pattern is forming, you can come up with more variances on that pattern.”
Karan’s working on adding more weapons to his arsenal. First up is the gap and crap.
Karan is just dipping his toe into this pattern, trading small size for now.
This is how good traders improve their game. With the progress Karan has already made, I’m guessing he’ll be up to speed in no time!
What have you learned from Karan’s journey? What can you put to work for YOU today? Let me know in the comments!