I figured I needed to learn what everyone else was doing in order to make it. Well, I soon realized they were all watching the same news, reading the same articles and using the same tools … fundamental analysis, technical analysis and everything in between.
And it hit me, right away … if I did what everyone else was doing, I was never going to get ahead.
So I had to find out what the top traders were doing…
Not the top 10% or even the top 5% … what did the top 1% all have in common?
This is straight from a presentation my colleague Adam recently gave on why he decided to become a true options master.
His path was to become a Chartered Market Technician — the same designation Mike and Chad have. This is what separates the men from the boys in the trading world.
CMTs must take a grueling three-part exam which is why only 1% of financial professionals ever achieve this elite ranking.
Whenever you encounter “options experts” on the Internet, check their bio. Are they CMTs? Did they work for the Chicago Mercantile Exchange (CME) Group? Were they ever a floor trader on Wall Street? Did they manage money professionally? If so, do they state how much (if not, it wasn’t a lot).
After Adam earned his CMT ranking, he was approached by an internationally renowned economist (who I used to work for, in fact) to design a proprietary trading system for his clients.
This was a group of people who REALLY hated losing money.
This was in 2012. Since then, his performance is 3,960%.
Those are the kinds of gains a true master can achieve.
The crazy part is that he showed folks like you how to make those gains along the way.
This is just a snapchat of the individual gains he’s racked up. The full breakdown is here.
You might think that Adam employs all kinds of weird technical variables and uses advanced coding and algorithms and such to game the markets and … you’re right. He does do that.
However, Adam is a thinker. He wanted the idea to be simple … and then use his technical prowess to handle the advanced mathematics and calculations.
Adam’s strategy is to buy high and sell higher. It defies conventional wisdom, which says buy low and sell high.
However, momentum traders and CMTs understand you need to wait for a signal that a stock is already moving higher.
That’s why Adam uses a convergence of short and long-term momentum.
Basically, he wants to make sure the stock is moving into a long-term uptrend.
Then he waits for a surge of new buyers in the short-term that can catapult the stock higher.
It looks like this:
For instance, back in 2016 Adam spotted a setup in Pan American Silver (Nasdaq: PAAS). He spotted a momentum convergence where short-term momentum crossed through the long-term.
The result was quick gains of 114% and 336%.
And the funny part is … all the “fundamental” guys were saying don’t buy silver. You know, all the talking heads in the news and whatnot.
But Adam trusts his system. It can help him spot things the nervous nellies do not.
You probably have a system of your own and don’t even realize it.
You may have a certain number of stocks you trade and follow closely. Narrowing the universe of 10,000-plus stocks down to a few variables … that’s a system.
You may prefer to buy only after an abbreviated selloff so you can “buy low.” That’s a system.
The difference with guys like Adam is they code everything out and try to take out as much of the discretion and guesswork as possible. It requires discipline and overcoming human psychology, but systems like his tend to work if you stick to it.
I like Adam’s strategy because it’s simple in nature. I see too many systems that have too many weird rules and are overly muddled and can’t adapt to different environments. Adam’s has been fairly consistent for the last nine years (3,960% performance is hard to beat).
Your takeaways:
- If you want to make money, you can’t do what everyone else is doing.
- You need to learn from real experts.
- Momentum rules.
- Systems help you take out some of the guesswork.
Ciao,
Chris Cimorelli
Chief Editor, True Options Masters
P.S. To get content like this in your inbox everyday, subscribe to True Options Masters. Click here and subscribe.