Victory is Stock Trading, Strategy & Tactics from the US Champion.
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Hi everyone, today marks a milestone for the channel, it’s the 50th video relating to stock trading and investing.
The channel really started to get traction in 2020, so there is no better way to mark the achievement than reviewing the E-book by the 2020 US stock trading and investing champion, Oliver Kell.
Kell takes us through his strategies and tactics which gave him a winning return of 941% within a year.
If you find value, please don’t forget to hit the like button and consider subscribing.
Before we look at the winning strategy lets look at the final championship standings.
We can see Oliver Kell won the title by a significant margin to second place, by almost 450%, with another well-known stock trader Sean Ryan, also making the final leader board.
So, what do we know about Oliver Kell?
Kell has been trading for over 10 years whilst also posting his ideas on Twitter, and since this winning performance his following continues to grow.
Kell’s father was a market maker on the Paciific Stock Exchange, so he grew up with a good foundation of market knowledge. Kell himself later traded at a firm which offered a 60 to 1 margin account, but the approach did not appeal to him, neither did the returns…
Despite tinkering in other ideas and extensive research of the markets, Kell could not nail down a strategy that suited him and went on to say:
“For all my studying, I still struggled to embrace the idea of controlled risk, a vital part of trading”
Over time Kell continued studying and applying strategies to the market, and with that eventually came consistency and account growth.
Kell attributes his success to the book Make Money in Stocks by William O’Neil, in fact Kell says the methods from the book are at the root of his methodology, from which he later built his winning strategy. Its also a book we covered in a previous video.
The former football quarterback clearly had a competitive persistence, and said that prior to perfecting his method, he did not make a profit for the first six years.
Kell is also the founder of Kell Capital LLC, an investment management firm.
Despite his stature, recent success, and newfound notoriety, Kell says his approach is simple, easy to understand and can be learned by anyone willing to put in the work. So, lets take a look at the strategy…
To get a feel for his approach, Kell says:
“I Consider myself to be an intermediate term trend follower and swing trader, I’m always looking for the strongest growth stocks with big earnings and sales growth”
Not too dissimilar to my own strategy, Kell looks for breakouts from big basing patterns, these trades tend to be held for longer periods.
For his swing trades he looks to buy pull backs or shorter-term continuation patterns.
He also focuses heavily on the moving averages to ride a trade to completion. Including the 10 and 20 exponential moving averages for all timeframes, and the 50 and 200 simple moving averages from the daily charts.
Kell combines multiple time frames, ranging from the 5 minute charts all the way up to the monthly charts.
Let’s pull all this together and look at some of his trades throughout the championship.
The well-known company Tesla was one of Kell’s top performers.
Here he takes us through his thought process, and although he does not divulge the exact detail, he does offer guidance.
This first Tesla chart is phase 1 of 3 and encompasses what Kell calls the fractal nature of price action.
Point A is a Blowoff Exhaustion, which extended considerably away from the 10 day moving average and completed a topping pattern.
Points B and C saw large selling candles through the 10 and 20 exponential moving averages, these confirmed price reversals from the prior Blowoff Extension.
Point D saw support from the weekly time frame which coincided with support from the 200-day simple moving average. This marked the potential for a trend change.
Point E marks the first buying opportunity. Price broke through the 20-day EMA confirming the reversal from point D.
The next buying opportunity is seen at point F for what Kell calls an excellent risk/reward trade. Price is supported by the 20-week EMA and a buy order could be placed with a stop loss just under the EMA. You either hit a trend or you exit for a small loss.
Point G becomes the next focus point, the price is squeezed by the support of the 10 and 20 EMA’s and the overhead resistance line.
Kell points out how the chart structure also emulated the well-known cup and handle formation, a formation he often looks to trade.
The pop above the resistance line (out of the handle) took Kell into phase 2.
Here we see point G again, the same break of resistance out of the handle, and the point at which Kell took his position. Kell also refers to this as the base and break.
The stop is placed under the support of the 10 and 20 day moving averages.
At this stage there are similarities to the Darvas box method.
Price once again consolidates, before breaking out through the upper resistance line. At this point you can add to the position and again move the stop loss under the moving averages.
Prices eventually extends too far from the 10 day EMA and reverses with volume. This confirms another blowoff exhaustion and again creates an inflection point which becomes the first point of resistance.
As a short-term trader Kell says this could be a selling point, but as a longer-term trader merely an area to manage expectation and accept that a new period of consolidation is likely.
Point K is an area where Kell gets excited, we see a break of the channel which also coincides with a lateral consolidation area, another great time to take a position. Again the moving averages are supporting the candle, which equally makes a great place to position a stop loss.
Kell sold at point L where he saw a considerable move away from the EMA’s, accompanied by large selling volume.
Before we move to phase 3, could I please ask you to hit the like button and consider subscribing, it really does tell me if people are finding value and if I should keep making similar videos.
Ok, now let us look at phase 3.
Kell points to another base and break at point M. It made for a sensible trade, a break above a daily consolidation, supported by the 10 and 20 day exponential moving averages, which provided the rationale for a sensible tight stop loss.