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Oh, what a wild ride it’s been. When the Steady Trade Paper Trading Challenge started, we had six promising contestants. There have been ups and downs, good mentor meetings and bad ones, and yeah, ok, a few skipped ones.

It’s been an ambitious and enlightening project, and the first time the podcast has attempted a live trading challenge with members.

Now, the competition has dwindled down to just three contestants: Jude, Chris (aka “DJ”), and Liz. How are they faring?

Here’s what’s going on with the crew:

Spoiler: this will be Jude’s final installment in the Paper Trading Challenge! She’s got a big trip to Mexico coming up and has chosen to resign. So today’s episode will be part update and part exit interview. What has Jude learned?

Jude:

When the Challenge began, Jude felt that she had “no idea” what she was doing. Happily, she no longer feels that way.

Jude shares several of her biggest challenges and realizations throughout the Challenge, including difficulties with stopping out under the PDT.

Traders with small accounts: listen up! Tim cautions how the PDT can actually bring out the worst in traders, forcing them to make bad decisions because they don’t want to use up their valuable (and limited) day trades. This is a common and very real problem.

Jude loves to “chase the sparkly runners in the morning” but still needs a little help. Tim and Stephen offer suggestions for helping Jude further refine her strategy, targeting red to green moves in the morning and morning runners with specific indicators.

Ultimately, the Challenge has helped Jude focus, and she’s become more disciplined about waiting for a setup to meet her standards. She’s faced a lot of trial and error, but has found it easier to be profitable overall. With practice, it all started to click.

Chris (AKA “DJ”):

Chris has had a good month, and a good time overall in the Paper Trading Challenge so far. Tim and Stephen are impressed by his focus and how he’s applied himself to a few key patterns.

Right now, Chris’s key patterns are the overextended gap down and shorting into volume blocks. Those have been working very well for him, and he’s sharing his secrets: Check out his YouTube channel to follow and track his every trade!  

Along with the crew, Chris talks about red-green patterns, the importance of being nimble as a trader, and when to switch from a short to long position.

You’ll want to listen to what Chris has to say — after all, his paper trading profits are over $36K!

Liz:

She feels like trading is a video game where every level gets increasingly harder. She’s now at “SEC Filings: What the Hell is That?”

Liz is breaking into a new level of trading, but finding that things are getting, well, hard. When things get hard, she’s tempted to return to her go-to method of trading: scalping.

Liz really loves scalping, which she calls “meditative”. She likes a stock that moves within a range and bounces. She’ll do things like buy a boatload of shares of a low-priced stock at the ask, then try to sell fairly immediately at the bid. Obviously something about it works: she’s up $225K in the Paper Trading Challenge!

The problem here is that it’s not a long-term strategy. As Tim and Stephen both warn: It’s the type of trading method that works … until it doesn’t. And when it doesn’t, you could blow up your entire account!

They talk about how viable a strategy this is in the real world and with real money. You’ll learn about the problems with scalping, including how things like slippage and timing can affect the fill orders.

Ultimately, it’s still important to have the knowledge of the long-term stock performance. And with scalping, your discipline must be razor sharp.

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