I hope this gets pinned or something because I’m tired of all the “I’m completely new, teach me” or “why are my ICT strategies not working” type of posts

If you feel I missed something please feel free to comment. If you have questions, ask away. I want this to be somewhere new traders can look to get a kickstart so we don’t keep getting flooded with silly posts about not knowing where to start.

I won’t get into derivatives, as new traders shouldn’t even be trading those anyways.

First off, check out ImanTrading on YouTube. Literally making a YouTube career off exposing fakes like ICT, TJR, DJ Trades, and a whole slew of other scam artists (if you can even call it artistry)…

Here are basics on what to learn:

Types of trading, types of markets, brokers, order types/functions, risk management, developing a strategy, and last but not least, actual successful traders to learn from. I dive into each a bit below.

Types of trading:

Discretionary trading - you buy and sell, using discretion and experience to execute.
Algo trading - coded rules where computer automation handles execution.
Intraday trading - buy/sell same day. Could be a <60s hold or hours before selling.
Swing trading - holding overnight, either for a day or even months.
Long bias - buy to open, sell to close. Want asset to go up.
Short bias - sell to open, buy to close. Borrow shares to sell on the market, buy to return to owner. Want asset to go down.
Long-term investing - VOO/SPY and chill

You’ll gravitate towards a style based on personality and risk tolerance. For example, I’m a discretionary long-bias intraday trader. Some people are algo short-bias swing traders. It boils down to personality, availability, and natural aptitudes.

Types of markets:

Equities (actual companies), crypto (digital assets), forex (currency), futures (commodities), options, swaps, forwards, prediction markets (straight gambling), and more. Futures, options, forwards, swaps, these are all derivatives (the asset value is derived from an underlying asset) and they are extremely complex in how the derivatives value is calculated. Don’t trade derivatives as a newbie. AND DON’T USE LEVERAGE AS A NEWBIE… Trade with your own capital and trade the underlying assets directly until you have experience.

Brokers:

WeBull, Schwab (ThinkOrSwim platform), IBKR, Lightspeed, Centerpoint, CMEG, Ocean One, and more. Some are commission, some commission-free. I’d venture to say with all the commission free brokers out there that ones like Robinhood shouldn’t be considered for serious intraday traders. Maybe it’s ok for swing traders or those that hold longer timeframes, but lacks lots of tools for faster traders.

Order types/functions:

Limit orders, market orders, stop loss, take profit, trailing stops, OCO, fill or kill, and more. Market orders and SL/TP only work in market hours due to thinner liquidity and brokers not wanting you pissed about slippage during extended hours. Look them up, this takes 10-20 minutes to understand order types and functions. Paper trading will help you understand all the order types your broker offers and the basics of how they work.

Risk management:

General rule of thumb is to risk 1% of your account per trade. It’s about survival. If I have a $10k account, I may take a $1k position and risk a $100 drawdown before closing the position. $100 is 1% of $10k. Position size does not equal risk amount, unless you’re gonna stare at it going to $0. Have a daily max loss, weekly max loss, know how many losses in a row before walking away. Know how much profit you’re willing to give back before ending the day. Overnight introduces gap risk (gapping above/below your risk tolerance while you’re asleep) and geopolitical BS risk. Earnings do one of three things; shift momentum to the downside, the upside, or no effect on current trend. Small caps are illiquid as fuck unless there’s a news catalyst; don’t hold small caps as they’re notoriously shitty companies that dilute all the time making your shares worth less. Someone replied to my comment, “date them, don’t marry them” and I think that’s a great analogy. Holding and hoping isn’t risk management, it’s a dream followed by a prayer.

PSA: if your position is big enough to make you sweat that means you’re sized too large. Boring trading is good trading. Edge only plays out over a large enough data set. Flipping a coin gives you 50/50 odds if you flip it 1,000+ times but your first five flips may all be tails.

Developing a strategy:

Pattern recognition. You can either spend hundreds or thousands of hours looking for those repeatable patterns, or you can pick up a strategy that’s already working from someone else and mold it for yourself. Not every strategy works in every market. Learn when to hit the gas and when to hit the brakes. Developing your own strategy takes months or years; lots of trial and error. There’s dozens of already known strategies out there, you can find one and adapt it. ORB, capitulation, continuation, and more.

Traders to learn from:

Probably the section where all the new traders are gonna look at before even doing their own research, which is why I put it at the bottom (because you need to learn to swim before jumping in the deep end). There’s no singular key to success. It looks different for everybody. The Holy Grail of trading doesn’t exist.

Here is my list of verified profitable traders that are content creators;
- Lance Breitstein
- Kristjan Kullamagi
- Ross Cameron
- Tim Grittani
- Timothy Sykes

These are just about the only content creators that are truly verified. I’m a visual learner so these guys provided great insight for me. There are plenty of books and whatnot that can teach market fundamentals too. Any other content creator is essentially unverified, take it with a grain of salt and check if ImanTrading made a post about them to see if there’s known proof of scams/fraudulent behavior. Iman does his research, I’ll say that much.

How they’re verified: Ross has 3rd party audited broker statements on his website (strongest verification), Lance was verified by his proprietary firm (Trillium) and audited for the Market Wizards book, Kristjan was audited for Market Wizards book as well and his tax returns are public and live trading history documented on YT, Tim Grittani and Timothy Sykes are both verified through Profit.ly with some of Grittani’s trading history also publicly documented on YT. Sykes also has some audits/broker statements/tax returns he’s put out there.

This is hundreds if not thousands of hours of research for you to kickstart your journey. Losing $10k doesn’t teach you more than losing $1k, it just means you lost more. Learn from mistakes, adapt, and most importantly… survive…

It’s a career of survival. You can’t turn the corner to profit if you don’t have capital to trade in the first place.

Two books I’d suggest reading to understand the mental aspect of trading: “Thinking in Bets” and “Quit” by Annie Duke (professional poker player). Basically managing risk and making decisions with limited information. Great books.

Thank you for coming to my TED Talk. Have a blessed day.

We [mostly] all know the general dangers of penny stocks. Large short sellers, dilution, delisting risk, no news moves/round trips, just generally buying not great companies.

However, I believe one of the most slept on risks are spreads (difference between the bid/ask)…

At 3:50pm I sat down to prep for afterhours trading, as I normally do. As usual, quite a few of the morning runners got rejuvenated from postmarket traders making a secondary move.

Then $WVVIP popped up on my momentum scanners again. It didn’t have much volume but it was definitely moving and it looked interesting UNTIL I looked at the level 2 data.

The spreads were roughly $0.30. That’s not the absolute worst by itself, but as I continued watching the spread started jumping around, and for a brief few seconds the spreads hit $2 per share and continued bouncing around from $0.30-$1+ spreads as it fell.

$WVVIP moved from ~$3.05 all the way to ~$6.88, an absolutely fantastic move in about 10 minutes from the bottom to the top. But as the momentum started to die out the floor absolutely dropped out from under it with the ask still sitting at $7 and the bid dropping all the way to $5… Yesterday at close this stock was <$3, by mid premarket this morning it was at $28… Now it’s back under $5 and will probably continue to fall back to its levels prior to this morning.

If you hit the ask with only 100 shares and realized you were wrong trying to get out on the bid you would have nearly $200 of slippage from the spread alone… You may have gotten some relief with getting met somewhere in the middle with orders actively going in and out, but that is risk that is almost impossible to manage. Waiting for volume to confirm a move is drawing attention is very important for this exact reason.

It’s still pretty active as of this post but volume is absolutely not there. Don’t get fooled seeing big moves on light volume… If you get in thinking it’s an A+ setup you may have the floor disappear right out from under your feet.

Managing risk is what sets a trader apart from a gambler.

Curious what other penny stock traders look for to manage risk and avoid potential bad trades?

TL;DR at the bottom. It’s long but worth brushing over.

I’m making this post because I know most every trader tracks their own metrics and data.

My question to you is this: do you actually know what your data is telling you? Most traders don’t have a degree in statistics, so sometimes metrics can mislead traders early on in their journey. For this example we’ll only cover expected value (EV) metrics, but it’s not the only place new traders can be led astray by their own metrics.

The premise:

Imagine I came up to you and made an offer: we flip a coin as many times as you choose. Heads, you win +50%. Tails, you lose -40%. The odds of heads/tails are 50/50, no hidden tricks.

The expected value of each individual flip (or trade) would be calculated like this:
• EV = (50% [chance to win] × +50% [win earnings]) + (50% [chance to win] × -40% [win earnings])
• EV = +25% - 20% = +5%

So this is objectively a +5% EV bet.

Where small accounts can be misled by good metrics:

You only have $100 in your pocket but decide to take the deal and go all in every coin flip to increase your gains and grow your “account”… Or so you think…

First flip is heads, you’re now at $150. Second flip is tails, 40% of $150 is $60, so now you’re sitting at $90. Heads again, you’re at $135. Tails again, 40% of $135 is $54, so you’re now at $81.

You just had 2 wins and 2 losses and you’re now down 19%. That seems strange because we just established that every flip has a +5% EV.

The reason is that EV and account growth are not the same thing.

The +5% EV is an arithmetic average of the possible outcomes. But when you go all in, your account compounds: (((($100 × 1.50) × 0.60) × 1.50) × 0.60) = $81

The +50% and -40% don’t cancel each other out. A 40% total loss requires a ~66.7% gain just to get back to breakeven. Just like a 50% total loss requires a 100% gain to breakeven. The gain required to cover losses grows exponentially with larger losses.

With this exact game, the arithmetic expected return is positive, but the geometric/compounded growth rate of going all in is actually negative.

The geometric average of one heads and one tails is: √(1.50 × 0.60) = √0.90 ≈ 0.949

That means the typical compounded result is roughly a -5.1% growth rate per flip, despite the bet having a +5% arithmetic EV.

This is where position sizing comes into play:

Now let’s say you have 10 $10 bills (still $100, but you’re not betting it all every flip) so you only bet $10 every time.

Heads, you win $5, now at $105. Tails, you lose $4, you’re now at $101. Heads again, win $5 to put you at $106. Tails again, lose $4, but you’re at $102.
After those same 4 flips, instead of being down 19%, you’re up 2%.

And the expected profit of each $10 bet is (50% × $5) + (50% × -$4) = +$0.50

So over 100 bets, assuming you can continue making the bets, the expected profit is +$50. The important distinction here is that risk management didn’t create the positive EV. The game (your strategy) is assumed to already have positive EV.

What proper position sizing did was allow us to actually survive long enough to realize the edge* *without letting a few unlucky outcomes destroy the account.

This is essentially the same concept we deal with in trading.

Conclusion:

Your EV tells you whether the bet is favorable.
Your position sizing determines how much of your account you expose to that edge.

You can have a profitable strategy and still blow up because you’re betting too much. Conversely, you can have a relatively small edge and compound it successfully if you manage risk appropriately.

This is also why simply saying “my strategy has positive EV” isn’t enough.

In the coin-flip example, the individual bet has +5% EV, but betting 100% of your bankroll produces negative long-term geometric growth. Betting a smaller fraction allows the positive expectancy to compound without exposing the entire account to the devastating effects of a losing outcome.

So the takeaway isn’t simply:
“Positive EV = make money.”

It’s: positive EV + appropriate position sizing + enough repetitions = the ability to actually realize the edge over time.

And that’s one of the fundamental differences between having a profitable trading strategy on paper and actually being able to make money with it in the real world.

TL;DR

Trading is about surviving long enough to realize the statistical edge over a long period of time. Surviving long enough requires understanding how to manage your risk.

Thank you for coming to my TED Talk.

TL:DR why do you choose to pay for prop firms instead of putting that money into your own account?

I’m just looking for some reasonable rationale to why some of you make the choice.

I legitimately do not understand why people would put money into these prop firms chasing funded/live accounts just to end up another person complaining they were denied a payout because they broke some obscure rule or blew their $55k account because they had a $500 loss and went past their max trailing drawdown when overall the account was still up significantly, inevitably losing thousands because a few hundred red.

Why not just throw a few dollars into your own account?

I’ve heard a lot of rebuttals and none of them ever made sense to me…

“You can trade with bigger size.” But if you don’t have enough to fund your own account to at least decent size (even with like $500-$1k), do you really need to be trading with larger sizing?

“If you can’t trade without break any one of 200 rules you shouldn’t be trading in your own account either.” (Legitimate rebuttal I’ve heard before) Like, what?? At least if I act human and mess up in my own account by bending the rules I don’t get denied a paycheck from days/weeks/months of work…

I hear some of y’all complain about blowing like $2k on evals and not even getting funded… If I was in that position I would put that in a normal brokerage, paper trade till profitable, go live with 1 share positions to verify profitability with slippage, size up to 10 shares, 100 shares, whatever. Hell why not go to Robinhood and trade partial shares if you wanna trade expensive shit with $100… Why hand your money over to someone else who can then just stiff arm you?

It just never made sense to me why someone would give their money to someone else and then let them be in charge of when you get paid. It feels like paying your boss to go to work every week and you only get paid if you kiss his ass enough and do everything flawlessly every time.

I’m not trying to be an ass (although I know I often come off like one), I’m legitimately curious on what your reasons are for choosing prop firms instead of trying to build your own account. I’ve literally never used a prop firm a single time in my life. As you can probably tell the appeal hasn’t been there for me.