0:02 So, you're new to day trading and have a
0:03 very small amount of money in your
0:05 account and you want to grow this
0:07 balance as quickly as humanly possible.
0:09 So, you can have millions of dollars and
0:11 sail your private yacht to pick up a
0:14 fancy pizza in Italy. Now, I get it. Not
0:16 everybody has hundreds of thousands of
0:18 dollars to start out with. You may only
0:21 have, dare I say it, $100.
0:24 That's exactly why in this video, I'm
0:25 going to show you my blueprint to grow a
0:28 portfolio with only $100 in it and
0:31 perform mathematically proven tactics to
0:33 grow this balance to a thriving,
0:36 successful portfolio with millions of
0:38 dollars inside. To start us off, we're
0:40 going to start with one of the most
0:42 important tactics that helped me the
0:44 most when I was a beginner trader, and
0:46 that topic is risk management. Now, I
0:48 know risk management is probably one of
0:51 the most boring topics to talk about.
0:53 boring. But I'm telling you right now,
0:55 it doesn't matter how successful your
0:57 trading strategy is. If you don't have
1:00 good risk management, you will not grow
1:02 your account. If your risk management is
1:04 bad, honestly, you're better off going
1:05 to the casino and putting all your money
1:08 on red because you're basically gambling
1:11 at that point.
1:12 Doesn't account for think of your
1:14 trading account as a lifeboat. Every
1:16 dollar is a passenger you need to
1:19 protect. and too many passengers and too
1:21 many routes, your lifeboat, well, it's
1:23 very likely it's going to sink. If you
1:25 truly want to grow your account, you
1:27 have to aim for longevity and consistent
1:29 profits. The reason why trading with
1:31 high risk is a problem is because of a
1:33 little thing called consecutive losses.
1:35 I don't care how good you think your
1:37 trading strategy is, every trading
1:39 strategy will have consecutive losses.
1:41 If you have five or seven losses in a
1:44 row and you're risking 20% per trade,
1:46 your lipbo, well, let's just say your
1:48 lipo is going to be at the bottom of the
1:50 ocean very quickly. This is exactly why
1:52 some of the most successful traders out
1:55 there follow what's called the 2% rule.
1:58 The 2% rule is simple. Only risk 2% of
2:00 your trading balance per trade. Let me
2:02 show you why. This This is a trading
2:03 simulator. We're going to start with
2:06 $100. Have a win probability of 60%.
2:09 Have two wins for every losses. 500
2:12 trades and finally we'll risk 20% per
2:14 trade. Now, this this is absolutely
2:16 wild. Even though we have a successful
2:18 trading strategy with a win rate of 60%,
2:20 meaning we're winning more than we're
2:22 losing, even though our current strategy
2:24 is successful, our risk has the
2:27 potential to absolutely ruin this
2:29 strategy. For example, the key statistic
2:31 we want to focus on is the max draw
2:33 down. So, look at this. If we risk 20%
2:36 of our capital on each trade, our
2:39 biggest max draw down is 90.4%.
2:41 Meaning there's a probable chance that
2:43 if we continuously use this exact same
2:45 setup, we would potentially end up
2:48 losing close to 90% of our money we
2:50 initially invested. Gone. Setup
2:52 inflames. That money gone. Even though
2:54 we have a successful strategy, could you
2:58 handle a 90% loss? Probably not. And
3:01 that's just 20% risk. Let's see what 50%
3:04 looks like. Yeah, 100% draw down and the
3:07 average is 99%. That's no bueno. But
3:10 take this exact same scenario and add 2%
3:12 risk per trade. The biggest amount we
3:15 could potentially lose is 15%. That's
3:17 definitely better. Now, I get it. If you
3:18 want to double or triple your account
3:20 balance within a day, you're not going
3:23 to get there while trading with 2% on a
3:25 $100 portfolio. Hell, even 10%. You have
3:27 to risk more to get higher returns like
3:30 that. Now, I completely realize not
3:31 everybody has the same risk tolerance.
3:33 Some of you might be some crazy lunatics
3:35 that have insanely high risk tolerances.
3:37 Some of you might like to gamble. Some
3:39 of you want to make millions of dollars
3:41 with only a hundred bucks. So, I know
3:43 what you're thinking. 2% is absolute
3:46 garbage to me. Which I get that. But if
3:47 you truly want to grow your account not
3:50 only efficiently, but consistently, it
3:52 has been statistically proven that using
3:55 the 2% rule is the best way to do that.
3:57 If you're using just 2%, you can handle
3:59 a lot more consecutive losses compared
4:03 to if you're using 20 or even 50%. So,
4:05 if you like math, profits, and a lot of
4:08 [ __ ] money, use the 2% rule. But just
4:09 because we have good risk management
4:11 doesn't necessarily mean we're making
4:14 that money.
4:16 That brings me to my next step, the
4:18 power of compounding. Now, in order to
4:20 make money, we have to understand a key
4:22 concept called compounding. Imagine
4:24 you're rolling a small snowball at the
4:26 top of a hill. At first, it's tiny, just
4:29 like your $100 account balance. Boom,
4:31 roasted. But as you keep rolling, that
4:33 snowball picks up more snow with each
4:35 turn. By the time it's halfway down the
4:37 hill, it's [ __ ] massive. Each
4:40 rotation adds more than the last because
4:42 it's picking up the snow from all the
4:44 previous turns. That's compounding,
4:46 baby. Every small win matters. It
4:48 becomes part of the base for all future
4:50 wins. Let's put this into perspective.
4:52 Say you're making just a measly 1% gain
4:54 on your account each and every week.
4:56 Now, I know 1% it's a low number and
4:58 probably isn't a lot of money for you,
5:01 but over a year, thanks to compounding,
5:04 that's roughly a 67% total gain. That
5:09 means $1,000 could become about $1,670
5:11 by the end of the year. And that's just
5:14 with a measly 1% every week. If you got
5:16 that number to 2% each week, your
5:18 account would double within under a
5:20 year. Yeah, you starting to see what I
5:22 mean. Once your little snowball gets
5:23 later down the hill, that could
5:26 potentially be millions of dollars every
5:28 year. It's not about hitting a home run.
5:30 It's about hitting consistent base hits.
5:32 So, you remember our little 2%
5:33 riskmanagement tactic that you guys
5:35 complained about? This is where it pays
5:38 off. By avoiding big losses, you keep
5:40 that snowball intact to roll another day
5:42 and another day and another day. Protect
5:45 your capital so it can compound. Guard
5:47 your capital from big losses with your
5:48 life. Your main priority is to make sure
5:51 that compounding engine continues to
5:53 operate. One giant loss can stop our
5:55 snowball completely. Don't let that
5:57 happen. So, we got our risk management.
5:59 We now know about compounding. Now's the
6:01 fun part. Finding your edge. Now,
6:03 there's a lot of ways to do this.
6:05 YouTube videos, books, or your uncle
6:07 Larry. Hey, I'm Larry. It's kind of up
6:09 to you. I personally like the YouTube
6:11 option just because, you know, I'm a
6:13 visual guy, so I like to watch videos.
6:15 Plus, that Larry guy is kind of weird.
6:17 But I post strategy videos all the time
6:20 and all of them have a statistical edge.
6:22 So you can simply look through those to
6:24 find a strategy or you can find another
6:26 YouTuber strategy. Kind of rude, but
6:28 moving on. It doesn't really matter how
6:30 you find your edge. What matters is you
6:33 actually test the edge yourself. Find a
6:34 strategy, go to your charting platform,
6:37 and actually back test that strategy.
6:39 What's the win rate? How many wins? How
6:41 many losses? How did it do? Is it
6:43 actually profitable? These are all
6:45 questions you yourself should know. And
6:47 if you don't know, well, you got to test
6:49 it. Now, I get it. Back testing, it's
6:51 basically work. Nobody wants to sit down
6:53 and put in the work to test a strategy.
6:55 But remember that whole snowball thing?
6:57 If you don't have a statistical proven
6:59 edge, yeah, that snowball thing, it
7:01 doesn't work. So, this is definitely the
7:03 most crucial step in growing your small
7:04 balance. If you want the millions of
7:06 dollars, put in the work and start
7:08 testing. So, now you should have a
7:10 statistical edge or basically a back
7:12 tested trading strategy. Now, it's time
7:13 to do the final step in the blueprint,
7:16 and that is to journal. Now, I'm not
7:18 talking about dear diary, today I made
7:20 my first trade type of journal. I'm
7:21 talking about a system to easily
7:23 identify the history of your trades,
7:26 entries, exits, was it profitable? Did
7:28 it fail? If so, why? All of these
7:30 questions should be answered for each
7:32 and every trade. But why would you waste
7:34 your time doing this? Take Conor
7:36 McGregor for example. Conor McGregor, if
7:38 you don't know, is a UFC fighter. One
7:39 day he was watching back the tape and
7:41 noticed his opponent moves his right
7:43 hand slightly before throwing it. So he
7:45 went to the gym, started practicing that
7:47 exact same scenario where he slightly
7:49 moves his hand and he counters. Then the
7:52 big fight comes and within 9 seconds
7:55 this happened. Conor relax and smiling.
7:59 Oh Jesus. My point being if Connor never
8:00 looked back at the tape he would have
8:02 never known to do what he did. Same goes
8:04 with trading. You can look back at your
8:06 trades and say, "Oh, whenever I trade
8:08 out of boredom at 2 p.m., I lose." Or,
8:10 "My best trades happen when I follow
8:12 trends instead of trying to pick
8:14 bottoms. Those insights are priceless,
8:17 and just like Connor, you only get them
8:19 by reviewing the tapes. You don't need
8:21 anything fancy. A simple spreadsheet or
8:23 notebook works. I personally use a site
8:25 called Trader View. It's basically a
8:26 site where you can just upload your
8:28 broker statement and Trader View gives a
8:31 lot of useful metrics like each trade,
8:33 if it was a win or loss, and overall how
8:35 profitable you are. No, this is not an
8:37 ad for this site. Just thought it was
8:38 pretty cool. I'll leave a link to them
8:40 in the description. So, this all makes
8:42 me feel very sentimental. Making money
8:44 in stocks really isn't about getting
8:45 Lambos overnight. Sure, it can
8:47 definitely get to that, but in the
8:49 beginning, it's really about honing in
8:51 on your edge, consistently improving set
8:53 edge, and keeping that snowball rolling.
8:55 And on top of all of that, keeping track
8:57 of your progress. This mission isn't for
8:59 the weak. There will be losses. There
9:01 will be days where you question if
9:03 you're even cut out for this. There will
9:05 be nights where your balance is red and
9:07 all you have left is the trust within
9:09 your statistical edge. But I can promise
9:11 you one thing. If you actually apply all
9:13 of these rules to your trading, you will
