Investors Underground is home to so many amazing traders. Behind each of these traders is a unique story: a journey of evolution. Every trader starts at square one and goes through similar trials and tribulations. The path to success is paved with hard work, failure, and adaptation. For the most fortunate traders, this path eventually leads to consistent profitability.
Today's story is about Alex Sposito, a 23-year old finance major at Auburn University. Alex has been interested in trading stocks since 2014 when he was introduced to the stock market through a stock picking contest in economics class. Since then, Alex has become more and more engaged in the markets and is quickly making a name for himself.
Check out the interview below to learn how Alex found consistent profitability, his recommendations for new traders, and his aspirations for his future in day trading.
Interview With Alex Sposito
- Alex is a 23-year old trader who has quickly learned the key lessons that lead to trading success
- You will never make consistent profits by following other trader's alerts. You need to strive for self-sufficiency.
- Paper trading is a good educational tool, but much different than normal trading. Paper traders don't have any skin in the game, and may be surprised by the emotions that come with trading real money.
- Analyzing your trades is the best way to refine your trading strategy. Review the results of your trading history and figure out where you are making your money. If done right, this can help you identify your best setups so you can focus on your highest probability trades.
- Planning is a huge part of trading. There's no greater feeling than watching a plan work out perfectly.
- Traders should avoid biases. You may be 100% right about a company (i.e. fraud, undervalued, etc.) and the stock can still humble you. Don't let your biases affect your trading.
- The process of scaling up is slow and gradual. You need to see consistent results and then you can slowly start increasing size.
- You need to have a maximum set risk to avoid potentially catastrophic situations (i.e. always cut losses at $5,000). No one likes taking losses, but this rule can protect you from taking even bigger losses that may jeopardize your trading career.
- Traders shouldn't be afraid to use small size. Every trader wants to see big profits, but capital preservation is a big part of trading. Using small size when you're less confident can help you protect your account.
- Small gains add up over time. If you look at most successful traders, their career P&L is built from small wins and small losses. It's not comprised of a few "home run" trades.
- Start networking with other traders. Building a solid trading network can have a major impact on your trading. You can learn from others, share ideas, and build a support system.