I JUST STARTED WITH CARNIVORE
WHAT DO I DO NOW?
If you’ve already opened up your account at some commission free brokerage firm, and there are plenty that you can use – then you’re on your way.
Now you’re going to get into the flow of the Carnivore trades, our Hall of Fame Traders University where you learn something every day in this Market Wrap – either in the Commentary, or down below Dutch’s signature where we have some stuff that we leave in all the time because it payd to review stuff that is essential from time to time, and then in these segments here, where you see the True Freedom logo. That’s your sign that we’re sharing something we think might be of value to at least some of you. And we take it seriously – seriously enough that Dutch had the logo tattoed on his right shoulder to remind himself that this – True Freedom – is the mission of Carnivore – to deliver the skills to have true freedom eventually.
So what do we do now Dutch?
I was talking to Donk about this the other day, and we agreed that the best way for someone to start is to just watch the NEW trades that are coming. Why? Because these are the most timely for the moment in time that you’ve joined and going forward. And if you take your capital and divide it by 20. Let’s say you have $20,000 for instance. You buy $1,000 of the stock that is coming at you from Carnivore that day. The next day there will be another one. Another $1,000 goes into that one. And so on. When you see us ADDING to a position – if you own it, you add $500 to it (that’s just a suggestion, not what you decide to do – you do what you feel is right for you. Might be $250 – which is just fine!) If you don’t own it, ignore it! It’s a trade that you’re not in – it probably got bought before you joined, so just ignore it. Pretty soon, after a couple weeks, you’ll be pretty full up on your positions.
And then the fun begins.
You’re adding, your selling off stocks that aren’t working, and then you’re adding to the ones that are working.
You’re taking profits on the ones that are working after a month or two, and then redeploying that capital into the new positions that are coming at you from Carnivore.
It’s active, but don’t stress about it.
You don’t have to hit each buy exactly when we’re doing it.
We’re not day traders, so you’re not likely to be missing some $15 point run in a day, and in most markets, that’s super rare no matter what.
You’re paying attention to the Market Wraps so you can get a sense of what we’re seeing out there as to market tone.
Are we positive or negative on the market, are we driving into stocks hard or are we lightening up and cutting the number of positions.
If you miss something one day, you can just hit it or sell it the next day. It’s all good.
What you don’t want to miss is when we send out an ALERT that says something like “The bus is coming, get out of the street or it’s going to run you over.” Or, “We’re selling 80% or 50% of all our positions” or “We’re cutting our positions down to pay off all our margin debt”. These are signs that we’re getting nervous about the market and making moves to protect ourselves.
Just as important is when we see the market opening up and the bull starting to run, when you see us say things like “We’re adding to XYZ and ABC and DEF and HIJ and LMO.” Or “We’ve identified the sector we want to move into and its (for example) Homebuilders and we’re taking an initial position in DHI and are stalking entries on LGIH and GBRK” or something to that effect. Usually when we are moving into a sector that we think will have a run, we will expose to you the stocks that are the best in that sector, we’ll buy one or two or three on the first day to begin our position building in that sector. Like we did with Marine Shipping, our initial position was ZIM at around $28 and we traded it up and up and up, adding to it, as it began to work, and then we expanded our holdings into the sector hitting SB and GNK and GOGL – and finally, our last run in the sector was ESEA where we boomed a $10 point run in about 2 weeks. We dip into the sector after doing the homework, then when it works, we add to that initial position and we expand the number of position in the sector. So you’ll see that and you’ll be reading our Commentary in the Wrap so you’ll be step for step with us and know what’s up.
Meanwhile your friends are selling AAPL and buying AT&T because their “financial advisor” told them to. Stupid. BTW that’s a true story. Hippie Chicks advisor told her to sell AAPL when it was around $115 and told her to buy ATT and CLNE. When Hippie bought TLRY at $17 because she saw us doing it, and it went to $63 in like 2 weeks and we sold, she called her “financial advisor” and told her to sell it – and the financial advisor talked her out of it – and it went to like $7/share. Nice move. Who doesn’t sell when a stock goes from $17 to $63 in 2 weeks? Crazy! Today’s “financial advisors” are just not that smart, OK? We know, we watched Wall Street “dumb down” the whole profession so that any washed up diptard could qualify to become one. Sure she might have a great body, but she’s dumb as a rock and if you listen to her, well, good luck with that. They were NOT taught how to trade. They’re concierges. Let them take you out to lunch or dinner and pay for it, but don’t let them mess around with your money in stock trades!
Anyway, I digress.
Good luck to you and stick to the regimen.
Stick to the process.
Buy, add when it works, if it keeps working, keep on adding. When it doesn’t work cut it. Keep surfing for the big wave you can add, add, add, add and ride and ride as it spikes and runs. Then pull the rip cord and bank the dollars.
MAKING MONEY IS LIKE SURFING
You want the secret?
This section is the most important thing you can learn, especially if you’re new to Carnivore.
Making money in stocks is like surfing.
All a surfer is looking for is a good wave, a winning stock.
He paddles into maybe 5 or 7 waves and pulls back out of the wave at the last minute because it isn’t “forming” right.
Those are the stocks you buy that don’t go up – they do down and you sell them.
Then, when he finds the right wave, he paddles HARD into it and rides it.
The analogy is that he doesn’t sell it quickly, he MILKS that wave for all its worth. If it were a stock, he would be adding to it over and over and over again as he’s riding it.
There it is. You get this, and I’m here to tell you, you will make money.
It’s simple to say and very hard to do, but if you JUST DO IT you will kill it. You will beat the shit out of your friends and others that have no clue how to bang real profits – sure they find the odd winner, but they don’t have the TOOLS that we’re about to tell you.
So without further talk, here it is:
You buy 10 stocks.
You put $10,000 into each one
Maybe 7 lose money. You cut those off quickly. Like you lose 7% on each one.
You have two that go sideways, so you do nothing there as they are still in their “pattern” – could be “in the box”, could be an ascending triangle. But nothing to do yet.
You have just ONE that is moving up.
You add to that one. $5,000 first add.
It goes up some more. You add another $5,000
Again and again and again – 5 times you add $5,000 as it goes up and up and up.
Finally, you sell it.
You make more money on that ONE stock than you lose on ALL the 7 losers combined.
Now you get it?
Here’s the math.
I buy 10 stocks at $10,000 each.
I sell 7 of them with a loss of 7% each. That’s $700 x 7 = $4,900 loss.
I have 2 of them that do nothing, go sideways, I’m still waiting to see how they act.
I have just ONE that goes up.
I bought $10,000 at $10/share. 1,000 shares.
I buy another $5,000 at $12/share.
I buy another $5,000 at $14 share.
I buy another $5,000 at $18/share.
I buy another $5,000 at $20/share.
I sell the whole package at $28.
My total gain is $34,444
I lost $4,900. Boo Hoo.
My net is $29,000 on a total investment of 10 stocks at $10,000 each, plus what I added to the winner, which is another $20,000 (paid for with the proceeds of the losers I sold BTW) and so at the most conservative level of math here, I had $120,000 out (not really but lets say I did) and I banked a net of $29,000. That’s a +24% return.
Even if you sold the stock at $22 instead of $28, your total return would be $15,000 or about +13% – on your entire portfolio value!
And this happens OVER AND OVER AND OVER throughout the year as we turn over stocks.
So when you do this entire process over and over, let’s say you do it 4 times in a year? That’s 24% x 4 = 96% for the year.
Yes, it requires that you find at least 4 stocks that are going to give you that move from $10 to $28. That is key. But they’re out there, and we do our best to find them.
But even if you only do it 2 times…that’s still a portfolio return of 48%!
And isn’t that better than what you’re financial advisor is saying is “a good return” for you to expect?
THAT is how, when people say “BS. You aren’t making 50% or 100% or 200% a year” we can say “BS right back, diptard! You cycle that very situation I just described 2-4 times and you have real returns.
And what if you click off 2 or 3 like every cycle?
Our example is that you only hit one out of ten!
Now you can see where the juice comes from, right?
Now you dig me?
I took 7 losing trades probably pretty quickly – maybe in the first 2 weeks trial with Carnivore.
But you don’t see our winner in the SALES report, because we are riding that wave. It’s laying there in the Positions Section at the top of every Wrap but you don’t see it.
This is why so many people think that after two weeks we just lose money.
They only focus on the stocks we’ve sold.
Not the ones we’re holding and adding to.
They’re too focused on how many stocks make money – which doesn’t matter at all really.
THE NUMBER or PERCENTAGE OF TRADES THAT MAKE MONEY DOESN’T REALLY MATTER
One has to focus on how much we make on the winners, versus how much we lose on the losers.
Which is ALL that matters!
HALL OF FAME traders make more money on their winners than they lose on their losers.
They leverage into winners and cut their losers relentlessly.
And for those poor souls that quit after the 2-week free trial because they’re not focusing on WHAT MATTERS, then they will remain the people we take money from in the market, the losers. And God bless them, we need them.
THE THREE THINGS YOU MUST LEARN TO DO
First, when we do an initial buy, its small 99% of the time. So start small. When it starts to work, we start adding to it, we call that scaling in. We add, we add, we add and then if it keeps on working, look! Now its in the top 10, then the top 5 stocks. Scale into the winners.
Second thing: Ride the winners up…and cut your losers quickly. Most people do EXACTLY the opposite. I’ve seen it on paper, OK? You get excited about a gain, you take it. A $400 gain on GLBE should have been a $5,000 gain on a $7,000 investment. But you put in $7,000 into the trade and you took it off when it was up $400! What are you doing? Your account should, at the end of the month, your statement should have a series of small losses. A fair number of trades where you took small losses. And a few bangers where you had been riding something up for a month or so and then you sold it. So – loss of 2.5%, loss of 5%, loss of 3.8%, loss of 4%, GAIN of 41%, GAIN of 67%, GAIN of 21%.
And that leads us to number 3 thing: It is NOT IMPORTANT that you win on all your trades. In fact, it is the least important part of all of this. You can lose on 70% of your trades – if you’re taking a series of small losses – and make money because on the 30% of winners, you make serious bank, real money, you scaled into the stock as it was going up, and you rode it like we just did today with GLBE from $28.80/share purchase to $52/share sale. That’s a banger, that’s a boomer, that’s what makes up for the FLL’s and the BGFV’s that we take our small losses on, OK? That’s called Money Management! You’re scaling into winners, you’re taking a series of small losses, you’re cutting losers – remember they don’t care that you own them, only you do and that’s just foolish. Never, ever get married to a stock. It will cheat on you in a heartbeat! So if it isn’t working, throw her or him to the curb like the dirty trash that he/she is! It’s just a stock! Opportunities abound! It’s like blondes in California…there’s one walking by every 4 minutes.
Scale into winners
Cut losers quickly
The number of winners versus losers is not that important. Your money management is!
YOU WANT TO TRADE BETTER?
Remember Gann’s Rules.
Divide your capital into 10 equal parts and never risk more.
Use Trailing Stop Loss orders – always protect your trades and your capital.
Don’t overtrade (have too big or concentrated a position)
Don’t let a profit run into a loss.
Trade into a trend, not against it.
Don’t average down into a loser.
Trade only in active stocks and active markets.
Don’t close your trades without a reason.
Don’t trade just to get a scalping profit.
If you’re in doubt, get out. Clear your mind.
Never buy something just because it is low priced. It can go lower.
Pyramid into winning trades and let your winners ride.
Cut your losers quickly.
WHAT IS A “HALL OF FAME” TRADER?
Definition: “Over the course of a time period, a year for example, the number of trades that are profitable are over 50% of all trades, AND, over the same period, you make more – on average – on winning trades than is lost on losing trades.”
It is possible for a trader to make money and have only 30% or 40% of his trades be profitable trades… and the rest losing trades, and many traders do just that. In those cases, that trader must make much bigger profits on each winning trade than he loses on losing trades. It is also possible to make money if you don’t make more on your winning trades than you lose on your losing trades IF your winning percentage is up over 70% or even higher. We saw a trader that almost always lost more on his losers than he won on his winners, but his winning trade percentage was around 80%. The guy had a huge winning percentage. Now imagine if that same trader cut his losers faster and he switched that ratio as well? Then his returns would be truly spectacular.
DO A TRADE! DO 3 OR 4 TRADES!
The most important thing one can do is get their uniform dirty. Do a trade. Get in the game. Learn by doing… Do 5 or 10 trades. Trading is free. There are no commissions so there is no friction to move into or out of a position. No reason not to trade.
WHO ARE THESE GUYS?
He spent his young professional career on Wall Street searching for brilliant young people and hiring them, then submersed them deeply into the Wall Street trading culture, literature, economics, philosophy, and politics. His aim was to create a group of “super-traders”. These many years later they have become the core of many of today’s largest hedge funds and trading desks on Wall Street. They’re like Spectre – they’re everywhere. And their bosses don’t know. And some of them ARE the bosses! They now contribute to Carnivore and provide Dutch with their intelligence and expertise some 2 decades later. His creation of the BITE system works in concert with Trader Z’s system Vector Nostradamus (described below). BITE is unique in the system takes Trader Z’s picks and delivers a target PRICE and a target TIME FRAME as well as a behavioral-based STOP LOSS. Combining the firepower of Vector Nostradamus with BITE we think creates a powerful trading package and we share that with our subscribers in real time.
Known as the smiling assassin. This name comes from the fact that he is affable and friendly, but smarter as heck, and if he thinks you’re a Cramer, he will never let you know it. He is a unique character with amazing trading abilities, he has bright flashes of brilliance that come randomly and unexpectedly like bolts of lightning. He actually holds the trading desk together. Without him these animals would simply kill each other. His brilliance is masked by his southern United States upbringing and simply his humble style of being. His profitable trading calls have been epic and legendary and include some of the biggest winners in Carnivore history. He has an uncanny knack for finding special situations.The collaboration of Trader Z, Dutch and Donk works to bring Carnivore probably the best trading team on the Street today.
An anonymous Carnivore trader that is known as the best living trader on earth today. Deeply schooled in multiple traditional and esoteric trading methodologies. Fairly young man with an IQ above measurable range. Discovered at age 20 by Dutch and through multiple discussions, Dutch saw that Trader Z understood capital markets and economics and specifically grasped the nuances of how markets moved in relation to one another and the subtle and direct inter-relationships of politics, policy and economics and how that caused price movements in stock, bond, currency and commodity markets…knowledge that most seasoned Wall Street professionals did not grasp after a lifetime on the Street.
The genius of Trader Z developed further under Dutch and Donk at a major Wall Street firm. Trader Z was later tapped to handle complex investment and trading strategies at some of the largest investment houses where he spent much of his free time immersed in studying the Sacred Vedic Scriptures of India where they hid numerical, geometric and astronomical codes revealing the natural order of the universe, advanced cosmology and mysticism, the science of spiritual and material transmutation, the arithmetical and geometric keys found in astrological codes found in ancient Egyptian work, the mystical traditions of Qabalah, Freemasons, and Cathedral Builders, the work of Plato, Pythagoras, Elizabethan polymath John Dee’s work on the divine cosmos and geometric time, the Avatamsaka School of Buddhism, Chinese Jua-Yen Buddhism…the list goes on and on.
He created his own system, which he calls “Vector Nostradamus” that is one of the tools the Carnivores use to spot market trends and tone, and to identify the sectors and stocks to invest in.
OUR SYSTEMS AND METHODS
For the new Carnivores, we use two systems here that work together. Vector Nostradamus is a complex set of fundamental and technical systems that finds what’s working in any market environment. It finds stocks that often are under the radar of most average investors, and it has a bias towards growth and high margins and liquidity and quality. The set of stocks it selects are usually over $1 billion in market cap and real companies with real revenues. As with everything we talk about, the stocks are currently reporting and trade on a major exchange. The BITE system works with Vector Nostradamus by taking the stocks it selects and then spreads over the top and finds three things: A future price target based upon its current trend, the actual date that it should hit that target, and finally, it finds a resolution date for when the stock is most likely to “jump the torus” or make an explosive move. Not all stocks have a resolution date. When we mention it, it is because the resolution date is quite clear. If we are working with the right VN stocks, the odds are higher that the torus jump will be to the upside, which puts the odds in our favor. Also, when we see the resolution date, it has been our experience that the stock often makes the leap a week or even two weeks before the date, so we don’t try to time the entry into the stock perfectly as the leap can occur around that resolution date approximately, but what we know is that if a stock is priced at X on the resolution date, the odds become high that it will move to our target price on time. Finally, we choose our stocks often because the move from the current price to the target price might be 20% from one stock and only 12% for another stock in roughly the same time frame – so we pick the stock with the higher implied return as per BITE’s forecast. BITE prevents us from “chasing” stocks that have spiked – although a stock that spikes might have a great looking RSI, it might also be poised to correct 5-10 points after the spike in a pullback, and BITE recognizes this and prevents us from entering if the explosion in price has already occurred.
WHAT MAKES CARNIVORE DIFFERENT?
99.99% of stock services adopt one method to use in picking a stock. There are guys that only use fundamental research and they don’t care about the entry point on a trade, they don’t care that the chart looks horrible, if the fundamentals are strong, they’re going to show that stock to you. Same with the technician. He’s looking at the charts and he doesn’t care what the fundamentals are. If the pattern in the chart tells him to buy it, he buys it. Both the fundamentalist and the technician care little about macroeconomics or sector analysis. They don’t ask “Is this stock gong to benefit in this economic environment? Is this sector a good one to be in right now? Finally, the technician may use only one indicator, like Relative Strength, to make up 80% of his call on that stock. None of them combine all the things that we do into our trading style. It is this approach that no one thing works consistently all the time that we understand, and that we use to our advantage, because we can identify an opportunity that is driven by a pure technical indicator, or macroeconomics, or a sector call – equally and without being constrained by a single style of methodology.
At Carnivore, we start with macroeconomic research…the big picture. How is the economy? What parts of the economy are going to do well? That tells us what sectors are going to do well. Then we go to the stocks themselves in those sectors that we have already determined should do well. We do a lot of fundamental research at this point. Who is the Rolls Royce top of the line company in this space? For example, if we think microchips will do well as a sector, we find ourselves looking at the NVDA and AMD and AMAT’s of the world. Because if we’re right about the sector, then those will attract the institutional money that can really drive a stock. A lower quality stock might get some of the move in the sector, but it might not either, because it can’t attract the big money the way a higher quality stock does.
After that, we start the technical analysis. Charts, technical indicators. We determined the small number of quality stocks in the sector that we like and now, who has the best set up? This is where the technical indicators come into play and the patterns on the chart start to reveal which stock is closest to a resolution date, which one is poised for a breakout, whatever.
What makes us different? We incorporate macro-economic analysis with sector analysis with technical analysis and fundamental analysis…and then we add the chicken bones, the esoteric ancient wisdom stuff that some people scoff at, such as the Law of Vibration and Universal Laws that govern the movements of all things.