This Trader Turned $15K to $1M+ In His IRA

0:00 welcome to undiscovered Trader today we have Jason from Manchester 21 to 25 I lost all of my life savings trying to trade options I turned that $155,000 into over a million in my all my IRA retirement accounts welcome to undiscovered Traders the podcast that focuses on the charts stats and Edge of the latest six figger verified traders who have not been verified before today we have Jason from Manchester is it Manchester Manchester Connecticut yeah Manchester Connecticut

0:32 not Manchester the UK yeah but and Jason's going to walk us through a couple of charts couple of charts where things went right couple of charts where things went wrong and and what you can learn from each but correct me if I'm wrong Jason you're up now with a very very sexy is the right word to say I don't know yeah very pretty sexual pretty sexual $1 173.000 since July 1 yes yep

1:04 so how long have you been trading because this is 2024 you've made a lot of money in a short amount of time yes so I started when I was you know around 17 18 my father introduced me to you know stocks you let me bu Verizon you know pretty boring stock and then I kind of took it up over you know having in the stock market games in high school college I got very good at those I

1:28 became obsessed with it and I became a very good Trader and just all on paper because I never had $25,000 saved up and you know to day trade and then after college ages 21 to 25 I lost all of my life savings trying to trade options yeah yep yeah exactly I I had a strategy I thought would make me a millionaire and it was essentially to buy options the day before earnings and then sell options a day after earnings

1:56 recorded thousands of Trades and then I tried to put the you know that into practice and it failed you know maybe there was something to what I was doing but I yeah I ended up failing this podcast is brought to you by stocks iio the faster simpler and more affordable stock scanner co-founded by Humble Trader click the link in the description to start trading with the fastest stock scanner now back to the episode after that in the last five

2:27 six years I got back to what I was good at and that was trading stocks my General in my IRA I had a total of $155,000 invested after leaving a couple of jobs and I turned that $15,000 into over a million in my all my IRA retirement account so and that's that was from swing trading undervalued stocks generally that are turnaround stories where a company has done something wrong there's something you

2:57 know there's been a big you know news story about them and they OU the bad Executives they turn around the company and they shoot up and that's generally what I made all my money on it and clearly there was a lot of that a lot of undervalued stocks during you know before covid so I think that's really where I took off in that account and made most of my money and then recently this year I said I I worked for a hedge

3:27 fund I was in the back office helping people who are doing trading in New York City and that went out of business and I said okay it's time to get back to what I'm good at and taking my life into my own hands and having freedom and I started Short Selling took me a few months to figure out what I was doing find find my Edge and every day I would wake up and notice all these you know

3:53 short cap stocks gapping up you know 100 200% plus and I found found out how to actually short these things because so many Brokers don't allow that and yeah yeah and so I kind of after that modified my execution and and has been very successful since kind of all everything's kind of align since then so yeah that's absolutely crazy I've got too many questions to start off and I haven't got any I haven't got any questions planned so it's it's it's it's

4:24 good that it's good that you've come out with all of this interesting information but first of all yeah this preco covid strategy so just to reinforce this for the for the for the viewer all of the stocks are down because the Market's down in general so that's one of the key advantages that you've got but you were looking specifically for where the management had been outed and they're going to turn around with a new vision and you

4:47 expected just from that happening that and that was 15,000 to a million or swinging these stocks yes yep short term three to six month holds three to six months but like so is that like five grand in one five grand in one five grand in one or you leveraging up again I did oh it was no you can't leverage in your retirement account so there was Zero leverage I use zero leverage for that I would do long-term options oh

5:12 but I would not never do short-term options but that was the only way I would leverage I guess yeah like there's there's plenty of examples there's Valiant Pharmaceuticals Lumber Liquidators trying to think of others they're one of my biggest gainers was luck and coffee bought that at $4 and sold it at N9 and now it's in the you know 20s that's the biggest coffee chain in China like everyone expected them to deist from the US exchanges after they

5:41 inflated their sales and you know I I kind of looked into them after that and said okay they this is a big company they they want to you know want to remain reputable and seems like they're not going to D list for the markets and you know kind It's a combination of luck and and doing your due diligence and you know I I have never been afraid to go all in I don't really do that as much

6:05 anymore as I'm getting older but I would generally do my due diligence spend hours researching these names and and then yeah and they usually would pay out not always so obviously but so it was it was with options to get that volatility though you were you were trading long-term options yes or just a stock itself like lock and coffee I just bought the stock at $4 sold at N9 had $200,000 on it and that was like all my

6:30 life savings at the time and yeah and so just kind of went off but yeah but then he lost you you lost all your life savings at one point as well and that was with options on earning so that was a separate that was that was before that that was when I was ages 21 to 25 before then and then I I yeah and then I have gone all like straight up since then essentially but I've never hit two

6:52 million that's always my goal like two million net worth and you know I've never reached that but trying but but did you have much of it I mean did you have much you said you spent hours with due diligence like how did you come up with this theory for this pattern and also how many variables do you need for it to be successful is it just low chart turn in macro market and new staff or is

7:15 there many more variables yeah you have to be able to read I I've read dozens and dozens of 10 Q's 10ks 20 FS do you have to really dig into the financials of the company and you know figure I love reading like message boards because you always find good ideas on there but just kind of doing fundamental research I'm I'm All About fundamentals I don't do any technical re anything technical I don't do I don't do any bwop any any sort

7:44 of indicators charts or anything like that I'm just not a believer in that I'm kind of just a fundamental Trader I guess but yeah that's crazy so you bet your life savings without looking on a chart yes the charts all I mean they matter you know it's down talk about all that matters is market cap you know pees price sales all you know all that that matters way more to me than what the chart has so I'm just I'm just thinking

8:10 about the title of the video as as I'm talking to you and I already know the title of the video will be the man that bets is lifesaving without looking at a chart but still Mak millions of dollars that's the T yes okay but what's what's your what's your ex content what's your you were mentioning that you wanted to put your name out there Network a bit more do you have your handle we'll throw that in straight

8:32 away we'll link it below yeah yep it's at loone Wolf with wolf with the e at the end Trader so is my handle well we'll we'll drop it below as well and then and then what happened with the hedge fund your hedge working at a hedge funds like do many hedge funds go boss they're meant to be the experts I yeah I don't they're supposed to be the expert this is a very small one that had been

8:54 around for years it was like a neutral Strate neutral Market Market neutral strategy but they were just kind of mismanaged they at one point they had like a private jet and they were just kind of throwing away a lot of money and it all went bust and now they're being sued in court Bankruptcy Court but yeah yeah I loved working for them and I the thing with me is that I when you work for a company like that

9:18 you have a you are forced to trade in a certain way you have compliance rules you have to follow you have to hold for 30 days or 60 days you have to you know you have to get everything pre-approved so you can't really day trade in a company like that and and the thing is I career-wise I love working on the markets I love the stock market and I want to be close to that but you

9:38 can't have the best of both world you can't day trade and be in a job like that at the same time so no no that's that's really interesting because I don't know if there's a misconception that people think hedge funds are are day trading hedge funds aren't day trading at all they they're like buying holding good ideas right yes yeah they definitely do some day trading though it depends on the trader they're they yeah some of them will go you know

10:00 options expiring in a couple days and put a big position on that like they're they there really aren't a lot of rules like shorting and yeah oh yeah they love shorting love yeah they short Apple like it never made sense to me but like they do they did whatever they want with you know and with limit size you know sizes limitations to their sizes and things like that I've got like three questions for you on this I've got

10:27 what was what what was the biggest learning you had from it I'll ask you one by one what was the biggest learning you had from the hedge fund so I didn't learn like I learned that the tra some of the Traders are great they're Geniuses they outperform all the time and they are confident and they know what they're doing and at the same time there's a lot of traders that are absolutely idiots and they don't deserve to be Traders a lot of the

10:51 Traders on on your P podcast could outperform them in the in in the way even trading in the way that they have to you know even big cap name whatever like they're they're just no brain cells just I don't know how they got to where they are and they're making so that much money but yeah good good fames and what's what's the main disadvantage of of the hedge fund I think you mentioned it with compliance in in the two month yes working there is

11:17 the compliance and having to hold for 30 days but it's it's fascinating seeing what the Traders do I guess so just all the moves they make so the rules are that you have to hold the trade for 30 or 60 days so how are do people taking options with the next day expiry they would have to convert this to shares and then hold those shares for 30 days so they're finding a way they're finding a way around it to

11:44 Y exactly so you you can't just buy and sell options like that you know it it's a lot there's a lot to it so and what's the craziest story that you're allowed to tell that happened in the hedge fund it was not one of the crazy headphones you see in in on wol Wall Street but it I I don't know I I think one of the craziest trades was putting I don't know it was like two

12:14 or300 million on it was I think it was a spin-off where they're were trying to ENT the the trader was trying to Arbitrage both sides of the spin-off he would short like the result in security or something and then bought like the previous security and yeah that was like one of the biggest trades I had to deal with because I dealt with corporate actions but yeah yeah they they do whatever it takes to make a dime but you

12:42 know they they have a lot of fees when they trade a lot of you know costs associated with it and they charge clients a lot of fees so it's not really a if you're not doing well as a hedge fund you're not going to survive so yeah I know and I've heard stories about different hedge funds and a lot of hedge funds don't even outperform the markets and exactly yep hedge funds in the I think I remember saying hedge funds in

13:05 the olden days were were just meant for hedging to meant for hedging risk and they've evolved and changed a lot over the over the years but so how does it feel from going from from handling money into the hundreds of millions to to what you're trading now is it a bit less stressful or is it hard because it's your own money it's a lot harder because it is your own money and you see the you don't like losing as a competitive

13:28 person person I don't like losing you don't want to accept losses and that's always the hardest thing to do when day trading is accepting your losses so but like so so can you do you mind saying you NW I mean I can say on Kino I don't know if you want to share screen but I can say on Kino you're up you're up a couple hundred th000 from July August sept the last four months you're up a couple hundred

13:49 thousand do you m shown more or less your net net worth or not net worth what you've gained from Trading yeah as of right now I have a like probably a little over $1 million in net worth liquid net worth so yeah and that's slowly over time I'm age 32 now and it's been that's like six years of you straight up I guess how does it I mean how does it feel to make a million it feels incredible it was my

14:20 dream it does it just it's it feels great because so my goal with to make a million was not because I really wanted a million is just want security and be able to live with the rules of society and just not have to worry about where I'm going to get the next you know living to paycheck to paycheck and just having the freedom and lack of worry about money in general is just the greatest feeling ever it's it it you

14:46 just never have to worry about what you're buying you know pinching pennies anywhere so yeah well what was the what was the hardest what was the hardest thing to learn on the path to the million like what was the hardest lesson big mistake I really I for me it was really just going all out and doing your due diligence like digging so deep into these companies if you what you what I mean by due diligence is to spend an

15:13 hour and a half to two hours just looking at a company minimum just there's so many as like mid small mid and large cap companies there's so much to them and there's so much information out there on the web and I just think doe yeah doing your due diligence is essential the times I've not done that and it it pays like you you lose a ton of money because you didn't you didn't cover all of your

15:35 bases you can't predict the future but you can do your best to make make it statistically probable that you're going to make money on you know a stock like that is undervalued so oh this is like I mean this style is probably I think this is more swing you're swing trading a little bit more yeah this is more swing yeah this is all as yeah yeah I just short on my Kino so or and the kfo

16:00 count so but how this is probably the dream of a lot of people because it's the it's the safer way of trading sh a little bit more in the moment you can knock the Thro you can add loser and boom all the all the money's gone if you don't have discipline but just one we'll on your shorts now but how did you learn the process of of this like long-term investment of undervalued companies I I am not a podcast person

16:25 I do not generally watch YouTube videos or anything like that so so any of those Traders I'm not I I'm I'm kind of old school and just reading reading books and just following the market every day just following news following stories and just you know becoming obsessed with that yeah I'm I'm old school so I like I like reading but the fence how do you learn the fence oh I I started like when you look through them

16:54 you notice that there's a lot of information there that you're not going to find news articles anything from the company you know said by the company there's so much so many hidden gems in those especially executive pay when I get into the shorting you know a lot of these executives are taking millions of shares and from you know and every year when the when the company's not making money like there there's so many gold like gems in those that you can't see on

17:24 the surface and that these people on message boards that are talking every day non-stop have no idea what is going on and until you actually look into something like that beautiful I think now is the time to bring up a couple of shorts and give some examples of what you what you're looking at so I'd love to hear maybe a trade that you did that went well and a trade that you did that didn't go so well but just while

17:46 you look just while you're bringing those up do you have a technique or something that makes you manage your discipline well by shorten these volatile stocks yeah so originally I started with a a 10% stop loss I I'm I'm just shorting the stocks that the short caps that go up a lot every day because there's a clear Edge to doing it we can go over why there is an edge at some point but I started and I noticed that every

18:16 time I would get stopped I would be become emotional obviously no one wants to become emotional so I raised my stop loss to 50% and now I have an extremely wide stop loss all the way at 200% because I do not like getting stopped out and just being able to accept your loss and move on from the day is is has become my risk management motto and so I've been getting stopped out roughly two times a month and if I get stopped I

18:44 sto trading that stock for the day I move on and go to the next day if you look at the know the ticker drug that went from a dollar to $70 that like so many Traders lost five six figures in that week it was absolutely insane and I I was stopped out at $9 and something you know you just have to move on from your loss and accept it and I I just know these are horrible

19:09 companies you can do all your dual diligence and figure that out for yourself I do not I do not like getting stopped you know because on these horrible companies because I know they don't deserve to be at the prices they're at so but but you I mean I know this like white stop strategy on gabas I'm sure you've got more criteria than than than what you're suggesting but but typically what are you playing a 50% stop on the

19:33 gabas on day one gabas on some of the poorer companies what was that sorry so I started with a 50% and I moved up to 200% you moved up to so you went I think yeah sorry so you playing a 200% stop yeah and you you've run some simulations and you've checked the back testing on the results and you can see that mathematically like that's the best that's one of the it's also just best for me too yeah exactly I think 50% is

20:01 ideal probably for most but for me I like to keep it wide so just because I know what the value of these companies really are if you from the fundamental side so yeah and you've made you've made $200,000 doing this is you don't have to give everything away but is the like youve made $200,000 in a few months as well which is crazy but are you like are you are you digging into the filin and looking for the worst

20:23 worst ones or no so every day before I short a stock a small app stock I always look at their balance sheet income statement dilution and the news and I kind of try to come up with a a value for that stock like what do you what do I think the price is worth for this company and a lot so that's only 5 to 10 minutes of research before most people probably you know blindly short them because they know they're crap and

20:51 yes that's true 90 to 95% of them probably are crappy you don't even have to do the due diligence you can short them and make money in the long run but I like to do that extra step to kind of see how how bad the company really is can I hold this short all day comfortably and not worry about you know the price obviously there's a lot lot of manipulation in the small shorting these so sometimes what you think the

21:16 value is doesn't doesn't always pan out right away it might take days or weeks to get to the true value of the company so but you'll accept that manipulation as part of the business and some of them are just going to turn out that way like that's just exactly you have to accept them there's no way to control it you have to just kind of let go of control in general you can't control it so you ever playing the first

21:41 red days a couple of days later on something that went completely parabolic yes absolutely I will I I stay on top of the stocks that especially I think are extremely overvalued I will stay on top of them and for days I will I will resore every morning I don't currently hold anything overnight maybe one day I will but ever since there was a that stock I think it was tan a few weeks ago that went from 3 to 130 at 4:30 a.m.

22:07 yeah I I I maybe one day I will swing overnight but I currently don't but I will stay on top of it and Resort it the next day I'll do that for days and days if I really strongly believe that this company is worthless so and maybe I'm asking too much I don't want you to get but I blame the same 200% stop the next day as well or yep every day every single position I don't doesn't matter

22:28 how large it is but you know sometimes I I'm I'm I'm watching all day every day you know I'm not I'm staying on top of it if I want to take a loss I could take a loss that's a lot smaller than that obviously but for the small caps I will keep it at 200% every day so no I love it I I love your style it's I'm think I'm thinking I need to I have problems with discipline a little

22:52 bit I can't I can't take the loss yeah it's hard it's hard you have that's why the stop loss is great because because it does it for you you know it's just a matter what you do after the stop loss or if you you know people lift the stop losses then that's that will kill you obviously yeah know I've one of the strategies that because like I said I've traded profitable I am a profitable Trader but discipline kills me and what

23:15 I've actually started thinking they're doing is only only Mac only MacBooks don't run d right for example MH a MacBook won't run certain trading softwares like D but so you need to buy a Windows computer so what I'm thinking about doing is I've got a Windows computer place the trades in the morning on the computer give it to me fiance to hide the computer with this with the stop loss in y and then go to a MacBook to do the

23:44 work which is impossible to access the trading software that's the latest strategy I'm thinking about employing cuz I love to do the research and look at the news and look at the flaw and look at the dilution check the TR check its history anyway this let's let's people are going to be waiting for the the stock chart so let's let's have a couple of I won't keep you too much longer cuz I've kept you longer because

24:05 your story is really interesting and okay yeah sure let me I'm just I'm using this one as a home run example this was the China liquidation ticker twg they had done dilution at 40 cents a share and then for no reason the stock kept climbing for days after all the way up till 12213 into their financials the company has almost nothing on the you know in terms of assets and liabilities there's really not much worth to the company and I kind

24:37 this is what kind of one where I kept on top of it I shorted Resh shorted every morning and eventually I HD it perfectly I had it short at $13.31 and I covered all the way down at $165 the next day and it it kept going after that so this is kind of a China liquidation story there's there's dozens of these ticket out there and they you just don't know when they're going to liquidate it's it's hard it's

25:02 hard to find and I've heard sorry to interrupt I've heard a lot of people say about Chinese liquidation plays yeah is is there something that gives away the liquidation it's just the fact that it's almost like a shell company they've got no real assets so you know they're just pushing the stock because it's something like that exactly it's it's kind of a shell company it's usually a recent IPO and the the only way I've been able to tell is if it's

25:30 going to liquidate there's generally a huge spike in volume the day before liquidation and usually like in this case there's a huge spike in price right before it liquidated and I I've just when the volume comes it it feels like it's time for liquidation and it is out it is absurd how many names are out there these Chinese companies trading at 100 probably you know 90 100 times the price that they should just based on their you know balance sheet and

25:59 income statement yeah this is this is one I generally i' i' try for you know get them all time maybe get one one a month but yeah but do you ever get caught on these because Chinese players are a nightmare do you for manipulation and going up more than you think you have are these not the same tickers that kind of stop you 200% where you get stopped out or yes they absolutely can be they yes like this this one went

26:26 from the day they announced a sold shares for 40 cents it went from I think like $3 to eight n $10 so yeah these are the ones that could absolutely stop you out on it there's just so much manipulation going on it's and the SEC doesn't really seem to do anything about them so they just let them liquidate and do whatever they want and people manipulate them yeah like I remember HKD as well that was another another cre yep exactly

26:55 and if you actually do the fundamental research it's it makes it even crazier here and then then here was this this is just a random ticker during the week when the drug stock went from 1 to 70 the stock it's actually not even showing at all but here was one I shorted on the day it spiked probably around this $182 and this chart is doesn't even show it but yeah yeah shows there hit a high of

27:23 $17.75 so this is the case where I took a Max loss you know at berbe at six seven eight dollars and you it one day you know it it'll come all the way down eventually but you just kind of have to accept the loss and move on and as I said before I kind of just wait till the next day in order to reenter a stock so I'm not emotionally trading and I'm not adding more to my losses or adding more to my

27:50 Max position size that I all have for you know myself I will say in general I do I just short the you know all the almost all the small caps that are up every day I I will short them and I'm not afraid to take them all and I'm not afraid to stay on top of them for days afterwards to continually short every morning until they get down to a value that more reasonable but like does it

28:17 not is that not just cuz I I know I know a few people who made a million dollars or nearly a million dollars in 2020 2019 2020 with this strategy MH and then I think it seems like stocks started getting manipulated starts there more manipulation stocks doing more crazy things and You' get you you'd get you stop taking out more but like is the strategy not a bit simple just to short anything that gaps up and hold it for

28:42 200% is that is that cuz it was that easy everyone would make money exactly it it is almost that easy I guess there's some I'm def it really is like you can back test it if you just short everything you know up 30% more or more and you cover it at the end of the day you're going to make money in the long run and why is that the case because there's there's barriers to entry you have to have $25,000 minimum

29:06 they all you you have to be on one of these smaller Brokers to do it and these companies are very bad like there's Executives getting like millions of dollars in pay and the company doesn't make any money and it barely has any market cap or value yet they continue to give themselves shares every year and they're probably dumping those shares onto Gap up days additionally they when these compan like their only mission to be on the

29:31 stock market is basically to dilute and gain financing they they that's the only way they can survive they just want the money and they when they dilute they will give an institution you know shares through you know warrants or just regular private placement or just regular shares so I'm guessing a lot of those companies with you know that holding these large chunks of shares from dilution are dumping on these days as well I mean this is all guesswork for me it's not

29:58 I don't have the actual answer but but yeah it works in the long run there is a clear Edge D shorting small caps because of those things so and you know on the other side you have manipulators who are bringing up this up the stocks yeah but there's a clear Edge it makes complete sense I've SE I've seen a few like this strategy is it's not the first time I've heard like this style of this strategy or the way you've

30:22 discussed it but I appreciate that you've give a bit more insight into it for anyone who's like look into explore new strategy or technique but I think the key the the only differentiator can be that makes a simple strategy fail is the person executing it just they can't handle that they got stopped out at 200% off 50% 80% exactly yep that that risk management is the most important thing to it's like you're at the casino and

30:50 you're say you're playing Blackjack and you keep losing on your you know $25 bet and you get mad so you keep betting more and more and more and eventually you lose your entire bank roll the similar case here except that we're not playing Blackjack we're playing in a area that has an edge there's a clear where we are the casino and it's are you able to manage your risk so that in the long run you can make you can make money doing

31:14 this because the you can as long as you manage your risk correctly so as long as you're okay with accepting your stop losses and moving on and you do not go past your max position size or what you're comfortable with then you can be successful doing this yeah it's I'm probably going to start tring a very similar strategy to what you've already discussed again because I was already doing it before but I couldn't manage the risk but I'm thinking about

31:41 doing it again so inless there's any final gold nuggets we can we'll close out do you want any final words any final pieces of advice or closing yeah I just I just think if you want to get started just you you know if you don't have $25,000 then and start on paper there's plenty of simulators you can use or and if you if you do have $25,000 start with very small position size and then kind of scale up slowly as

32:08 you gain more confidence and find your own Edge because everyone trades differently everyone has their own strategy Everyone likes to do something their way so you just need to find that and slowly get better at it it just takes time but to close out I really I really appreciate the the amount of insights you give on the edge I really you you obviously I know there's you didn't give a whole strategy way in in a class but you give a lot of things a lot

32:33 of tips that are going to help people at least get started into exploring this if they're interested so great thanks for that thanks for the great stories and course have a great day yeah you too thank you