Episode 009: Kyle Williams – Trade Well, Not Your PnL

May 4, 2019 beyondthepdt

In this episode of the Beyond the PDT podcast, hosts Bryce Tuohey and Matthew Monaco interview Kyle Williams. Similarly to our last couple episodes, Kyle is primary an OTC trader because he has found the market to be more welcoming than the NASDAQ market. However, Kyle mostly shorts old fashioned pump and dumps and overextended OTC runners. Mastering these two strategies has allowed Kyle to become a consistently profitable trader.

Who is Kyle?

Kyle is a college student just like Matt and I who found trading back in 2016, and like many people, started through Tim Sykes. When he first began trading, he had barely even studied but decided to hop right into it. Right off the bat during the course of the first few months, Kyle lost a bit of money (25% of his account at the time) due to a lack of preparation for the markets. He would trade blind and rarely study, but he soon realized that if he wanted to be successful at this that it would be appropriate to study up. After taking these losses, though, he began to absorb as much knowledge as he could and within the next 12 months, he became a profitable trader who was seeing consistency in his trading.

As of current, Kyle is a college student enrolled in a finance degree. He told us in the beginning of the episode that while he thought finance may help him in his trading, he has realized that it is not doing much for him. That being said, he still enjoys the subject and had planned to work at a brokerage firm for some time after college if trading wasn’t going too well for him. Luckily, at the rate Kyle is going, he plans on being able to trade full-time after college instead of having to go out into the working world. At the moment, Kyle has just surpassed $60,000 in trading profits, but it should be noted that the past few months of his trading has been where he has seen true monetary success.

How Does Kyle Trade?

Like the past few interviews we have done, Kyle has found his success in the OTC market. Again, for the same reason that our other interviewees have found success, he believes that the OTC markets are simpler in nature and easier to trade because of their slower moving action. When he first started off in his trading career, he was looking to long OTC runners, but he quickly realized that his key to profitability was going to be shorting them instead. Furthermore, he also realized that he needed to stick to a defined number of strategies instead of just playing something because he liked the look of it.

Kyle’s first glimpse of profitability came when he started shorting OTC supernovas, sometimes even on the way up. The way he would do this is by confirming that it was a pump-and-dump. For those pump-and-dump plays, he pays close attention to how many days its been running, the size of the float, and simply ensuring that it truly is a stock that is being promoted. Because of the fact that it is hard to get shares to short for these runners, he has to short them on the way up, but he does so with small size so that he can afford to be down.

For those runners that are not OTC pumps, he will wait until the backside is confirmed for the most part and short the dump and do his best to long the panic. With these two strategies, Kyle tells us that he has been profitable. As of today, Kyle has worked on playing some NASDAQ’s as well, and says that roughly 20% of his trades are on listed stocks. Part of the reason for this is because the OTC markets are not always hot, and when there is not a sector to play or any kind of momentum then it is very rare for there to be a viable play.

What Has Kyle Attributed to his Success?

While talking to Kyle, one this appeared very evident; he is extremely patient. He mentions to us in the episode that Kyle would rather be late and right about your trading thesis than early and wrong, and using this to his own advantage, he makes sure that the stock is going to do what he wants it to do before simply entering the trade and hoping.

Building off of this, Kyle’s patience also allows for him to be able to not play stocks that he knows are not going to make him money. A lot of new traders have the mindset that if they are not making money then they are losing. Kyle on the other hand is able to mentally realize that even is he is not losing money that he is doing better than the 90% of traders that are losing money. Having this mindset is very important and while it seems simple, it is often much harder to put into practice than new traders understand.

Kyle’s Tips to New Traders

Overall, it is clear that Kyle has found success because of his hard work ethic and his patience. He emphasizes a number of times throughout the interview that his patience is what has made him a successful trader. Also, though, he tells us that too many traders trade for the sole purpose of making money, and while this is ultimately the end goal, it cannot be the beginning goal. One of our favorite quotes from the episode was “trade well, not your PnL.” Essentially, the point here is to trade your strategy and do not worry about the money. There is always time to size up when you prove that you can be consistently profitable, but do not go into a trade for the sole intent to make money doing so.

We had a great time interviewing Kyle and hope that you enjoyed this episode. He offered a lot of insights as to what works for him, and hopefully these will be able to work for you too. Matt and I are excited to follow Kyle on his trading career and wish him nothing but the best of luck moving forward – hopefully we will be able to talk to him again in the near future as he continues to crush it!

Like our podcast and our blog? Have any comments, questions, or concerns? Let us know what you think by filling out a comment below or by sending us an email!