Making money in the stock market sounds like a dream come true, and for most traders, it's just that: a dream. Unless your name is Jack Kellog, the 24-year-old who achieved $8 million in gains from day trading in 2020 and 2021.
Where It All Started
Starting his trading journey in 2017 with only $7,500, Kellogg has encountered and overcome various market conditions, including the 2020 stock market crash, the bull rallies of 2021, and the bear market of 2022. His experience has taught him the importance of simplicity and adaptability in trading.
These Indicators Are Kellogg's Keys To Success
Kellogg’s strategy involves using four key indicators: the volume-weighted average price (VWAP), linear regression, volume and support and resistance lines.
VWAP shows the average price paid for shares, adjusted for volume, helping Kellogg avoid entering positions too late or at unfavorable prices. He also uses VWAP to gauge the appropriate time to exit his position.
The linear regression indicator helps Kellogg understand the direction of the stock price trend and possible shifts in direction. It consists of three lines that overlay the price candles, indicating ranges of price movements, volatility and averages. This indicator allows him to predict the stock’s price trend with more confidence.
Volume, the number of shares traded at any given time, serves as an indicator of a possible stock price reversal. It helps Kellogg to identify when many people might be on the “wrong side” of a trade, potentially causing a stock to reverse its direction.
Support and resistance lines indicate where a stock’s price tends to hold or sell off, respectively. Kellogg identifies key levels by noting parallel increases in volume and pays attention to how often and for how long a price level holds to gauge its strength.
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But Don't Follow Indicators Blindly
Despite his reliance on these indicators, Kellogg emphasizes that he never bases his entire trading decision on them. If the price action contradicts his trading thesis, he readily cuts his losses, demonstrating his commitment to flexibility in his strategy.
He also stresses the importance of emotional mastery in trading, as having the best strategy and indicators can be ineffective without the discipline to stick to them.
Kellogg’s trading success serves as a testament to the effectiveness of a simple, flexible and disciplined trading approach. His journey from a novice trader to a multimillionaire at such a young age provides valuable insights for aspiring traders, emphasizing the importance of understanding key indicators, being adaptable to various market conditions and mastering the psychological aspects of trading.
Long-Term Investing
Active trading isn’t for everyone. The volatility of wild swings in price action can leave some feeling sick and anxious, especially for those that don’t know the fundamentals. For many, long-term investing can be an easier and simpler way to go. For investors with a longer-term outlook with an inclination towards risk, startups can offer a solution for some investors. For example, over $1 billion has been invested in startups through platforms like StartEngine and Wefunder.
Long-term investing tends to be less volatile because your investment horizon is measured in years, not days or weeks.
See more on startup investing from Benzinga.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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