My name’s Adam Felsman, I’m a mechanical engineer by trade and I’m an avid four-wheel driving and camping fan. But I’m also a consistent and successful cryptocurrency and stock trader.
I wanted to do write an article to let everyone know and understand the following:
- The truth behind my trading journey because it’s not easy. It takes some time and a lot of hard work.
- There are many scammers and fake gurus there are out there trying to take away your money.
- The beginner cycle of following person after person, YouTuber after YouTuber, strategy after strategy, system after system is NOT the path to trading success.
- You need to stop following the nonsense signals groups, because I’ve never met anyone who’s gotten rich from a trading signal group…NEVER. It’s honestly not the way to become successful in the markets. I know this will be a very unpopular opinion with many out there, but you need to hear the truth if you really want to learn to trade stocks.
My journey started the hard way. I’m an engineer, and I always thought I had to study everything I could about the subject before becoming an expert. So I read 20-30 trading books in my first six months, everything from technical analysis books to chart pattern analysis books, doing online courses and everything I could to learn all the details.
I had very little success, even after 6 months of constant study and effort. I started looking towards signals groups to provide the answers, rather than doing all the hard work myself. I joined Facebook, Telegram, and Patreon Signals Groups. None of them gave me any success. All I was doing was throwing more money after bad money.
Then I started finding educators and coming across gurus… actually mostly false trading gurus; there are so many people out there trying to sell you the dream that trading’s easy, you can become an overnight success, do a weekend course and “It’s all upside from there onwards”. It is a lie – learning to trade is hard… but it IS worth it!
Then in the crypto market there is also the HODLer guru. They tell you to just HODL, but can you really emotionally handle the 70%-90% drawdowns in the Cryptocurrency market?
You don’t have to suffer through drawdowns like this though… there is a better way. You can find systematic ways to get in and out of the market and be much more successful over the long term.
Then there’s the Chart Artists, those guys that have more lines on their chart than you could know what to do with. Of course, they’re going say they are right… the price is going to hit one of their lines at some point… and if not, their response is “well that was yesterday’s video and the markets have changed, you can’t predict the market 100% of the time”.
Chart analysis like this is just nonsense and it’s not the way to trade profitably. There is just too much subjectivity for chart analysis to work consistently. Traders who can look at a chart and analyse it in a discretionary way like this and trade profitably and consistently are very few and far between. I know this is again an unpopular opinion, but chart analysis like this is just not the way to trade for long term consistency and profitability.
How Do You Spot a Fake Trading Guru?
They’re usually standing in front of exotic cars, planes, rooms full of screens that will sell you the unbelievable win rate percentages, 75%, 80%, 90% win rate. That’s what gets you hooked in because of the emotional catch, the desire to be right and the social image of wealth and success they portray.
In reality, successful traders are typically humble and modest, not flashy and extravagant.
Everyone makes mistakes. I’ve been through them all in my four and a half years of trading, and mistakes are the stepping stones to success. So don’t feel bad and don’t give up. There are certainly ways you can get through and be successful in trading, and hopefully, this article can alert you to some of those ways.
What Does it Take For Real Trading Success?
The key is developing a method that is profitable and that you have 100% confidence in… and doing that is hard work.
Most people are afraid of hard work. For any profession like doctors or lawyers, you’ve got to do the work to get to the top of your game. Understanding that you are responsible for all your actions and decisions. That’s why Signals Groups prey on that need to be able to blame someone else and not be accountable for your decisions because you just followed someone else’s advice.
That’s not the way to be successful.
Systemizing your approach is important so you can stay calm and always know exactly what action to take. The emotions of the market affect you far less if you have a systematic approach to the markets. Having a systematic approach to the markets also helps you control fear and greed far more easily so you can make consistent, rational trading decisions.
Rather than letting my emotions impact my trading decisions, I now backtest my ideas, strategies, and trading systems. I verify them over many years of data and thousands of stocks to ensure they work. Then I validate them on out of sample data to ensure they are robust. I look for stability and robustness to prove that the system will make money, not just in the backtest, but going forward into the future.
Once you go through this process of backtesting and verifying, you will then have belief in your system, which makes it so much easier to follow and maintain your discipline.
How Do I Check If I Have A Positive Expectancy In My Trading?
I urge you to constantly challenge your trading mentor / guru to provide you with some indication of their expectancy. You have to ensure your system has a positive expectancy. There are two main styles of trading system that will give you a positive expectancy in the markets. The first is with a trend following system and the second is with a mean reversion system. If your trading system uses one of these strategies then you have a good chance of success… but you still need to check your expectancy.
To have a positive expectancy, there is a fairly simple calculation which is the average dollar value of your wins multiplied by your win percent minus the average dollar value of your losses multiplied by your loss percent. If you’ve got a trend following trading system, which have low win rates of 30% and 45%, there needs to have a high win-loss ratio to be above the break even line on the chart above.
With mean reversion trading systems, the win rate is typically higher (60% – 80%). However mean reversion systems have far lower win-loss ratios. You need to ensure your trading system is above the breakeven line on the chart above. Any combination below the breakeven line will not be profitable over the long term.
What Is The Difference Between Professional And Non-Professional Traders?
Trading psychology is critical. Starting to think, behave, act like a professional trader. Professional trader’s don’t watch YouTube videos to see what stocks they should buy and they don’t follow fake gurus promising overnight riches, nor do they subscribe to Telegram trading groups to get their trade signals.
Instead, they study and work on themselves, their trading strategies and systems and build the discipline to follow their trading plan. Markets will always separate the professional, prepared trader from the unprepared. They’ll also continue to transfer the money and wealth from the unprepared to the prepared.
My life-changing moment came after three years of frustration through Signals Groups, fake gurus and bogus educators when I came across a trading book called the ‘Way of the Turtle by Curtis Faith’. I have heard Curtis didn’t end up in a perfect spot in life himself, but he wrote a great book. This book set me off on a life-changing path.
I started looking into those that were successful. Jerry Parker, Ed Seykota, Larry Hite, Nick Radge, Linda Raschke, all have several things in common. They’ve been in the markets for 20-30 plus years. They’re all very successful, but more importantly, they all trade systematically… This was the key for me. All of these successful traders also diversify across different strategies, markets and timeframes. I realised that to be successful I had to diversify across a different number of markets, strategies, timeframes. That is what gives consistency to your portfolio growth or equity curve.
What Do I Do Nowadays?
Having graduated from this long and winding journey to trading success, I now trade 100% systematically using a software program called AmiBroker. Using AmiBroker is great since it’s low cost and highly effective way to backtest your trading systems and generate your trading signals. It’s designed to help professional traders to backtest trading ideas, strategies, and systems to generate confidence they are profitable and stable over a large amount of data history very quickly.
I now trade seven diversified systems across the Australian Stock Exchange, US Stocks and of course I also trade the Cryptocurrency markets, which is the most exciting and profitable market at the moment.
Because my systematic trading approach only takes about 30 to 40 minutes a day, I now have my life back AND I am more profitable than I have ever been! There’s no more staring at screens for eight hours a day watching gurus, trying to find a needle in a haystack or looking through hundreds of charts a day. Instead, I spend 30-40 minutes a day to update my data, run my systems and place my trades – It is quick, easy and efficient.
Now granted, there is other time which I spend on research, system performance testing and other related analysis, but that is all focused on continuously improving my portfolio, and I really enjoy it! If you have that genuine passion for trading, there is no better way to spend your time.
I’m still here helping people, coaching and mentoring. Get in touch if you’d like to know more about my journey or want additional resources to help you on your journey. If you’re interested in knowing how to start trading systematically and bring that approach to your Crypto trading or other types of trading.
You can reach me on Facebook,
My Twitter handle is @trends_trader
My email address is [email protected]
I hope this article has helped inspire you to keep going. If you want to learn how to trade systematically, get your life back and profit in the process, I highly recommend you check out The Trader Success System from Enlightened Stock Trading… If you want to finally start making consistent profits trading the crypto markets then come and join The Crypto Success System and I will see you in the program!