The risk of loss from trading stocks can be substantial. This is why we employ several techniques to reduce this risk. Each trade is accompanied by a stop loss of 3.5%-5% based on the stock's particular pattern. Also, the profit target is 1%. This 1% is generally achievable within 2- 4 days. In fact, 98% of stocks move to 1% in this time frame, and 78% of stocks filtered move to 1% in 2 days or less. So, if a stock is uptrending and positioned to do several percent, restricting your time in the market for only 1% reduces the market exposure risk. Overall our methods provide a success rate of over 95%.
This is not true of all investments. For example, let me illustrate this using an analogy involving driving speeds. An automobile driving at 20 mph poses a minimum risk to the driver. However, a race car traveling at speeds over 200 mph would pose considerable risk. This is why race car drivers take more safety precautions: helmet, flame retardant suit, roll cage, etc...So, if I suggested that our techniques are like going 500 mph, naturally you might assume that poses great risk. However, the risk is actually less than driving at 20 mph. You see, there are more car wrecks at 20 mph, than at 500 mph. So, the question becomes how is 500 mph safer? It is airplane travel. Airplanes fly at speeds of 500 mph and than crash less often than automobiles. When the change in paradigm goes from automobiles to airplanes, the risk is different. This can be said of trading stocks for small precision gains like 1%. Furthermore, if I buy and hold a stock for a week for 1%, I take a week's worth of market risk. If you buy a stock and hold it one day and make 1%, isn't your market risk less? Yes, but you can also have a higher return at 1% each day over 1% each week. So, using our techniques, when we push down the risk, we increase the return. For this reason, we focus on managing the risk as the number one priority. Managing our rate of return always comes second to risk.
The answer is yes and no. From a popular perspective, day-trading is associated with being glued to a computer screen all day watching the market. We don't advocate watching the stock during the live market. In fact, we discourage this completely. We recommend the student place a trade and walk away. "Set it and forget it!" We do this by placing conditional orders. Once the stock is purchased, the student is taught to place an order for the profit target and for the stop loss should the stock fall. When the stock hits the target or stop loss, the orders trigger and the student does not have to be present to take advantage of this feature. As a result, students can trade stocks while they continue to work full-time. In fact, many of our students still work their day jobs while they first start out trading.
Our system is in fact that. A system. And the system works if the students follow the disciplines outlined in the daily checklist. However, should the student take shortcuts or not follow the rules, the risk of trading is greatly increased. We use the pilot analogy again to demonstrate the importance of following the rules closely. We are teaching students to "pilot" their own planes. However, sometimes a student may think it is beautiful out on the wing, and want to take his lunch out there and eat in the open air. Obviously, any pilot caught leaving the plane while it is flying cannot expect to land the plane safely. And so, if a student deviates from the rules the "laws of physics" may prove deadly to his portfolio. While our system can teach anyone to trade stocks successfully, not every student masters the discipline to follow the rules. In fact, about 33% of students either quit or refuse to trade even after graduating the course having demonstrated the ability to trade at a success rate of over 95%.
Students who trade using our techniques can maintain a 95% success rate or better. This means if they identify 100 stocks that meet the qualifications for our techniques, they will achieve a minimum of 1% gain with 95 or more stocks out of 100. In each year the students generally see about 60-70 trades, and can achieve 70-80% returns during that period. This doesn't mean every stock goes up to 1% right away. On occasion we encounter a stock that falls past our stop loss and the student must exit and take a strategic loss. I say strategic loss, because generally this loss is temporary and the stock reaches a point of support well past the 3.5%-5% stop loss. For example, say you purchase a stock at $50 and it falls past $48.25 and you stop out for a loss of 3.5%. Generally, the stock reaches support much lower, like 6% lower at $47. At which time, you can purchase the stock back as a Phoenix Trade; named after the mythical Phoenix who rises from the ashes. So, from here the stock generally returns to the original $50. This can take several trades, but it does generally happen. So, in this case the gain would be 6.38% minus the original 3.5% stop loss, for a total of 2.88%. Like I said, this does occur. In fact, in 2017 there were five stocks that would have stopped students out for a total loss of 17%. However, in strategically repurchasing them as Phoenix Trades students would have generated over 27%, leaving them with an overall gain of nearly 10% on 5 stocks or 2% for each play. Also, it is for this reason that many students look forward to exercising a stop loss because the resulting Phoenix Trade generally generates a higher rate of return.
Unfortunately, we no longer teach the course to the public as of January 2019. We did teach over 400 students in ten years to successfully employ our techniques. Recently, we moved on to partnering with businesses to implement our strategies. If you are interested in utilizing our time-tested techniques, we encourage to seek out one of the firms we partner with.