Summary of "Verified Trader: Here’s Exactly How He Made 40,000% Return On A Small Account"

Summary of Finance-Specific Content from

“Verified Trader: Here’s Exactly How He Made 40,000% Return On A Small Account”

Key Trader and Performance Highlights

Trader: James Creger, verified trader on Kinfo.
Returns: Turned $17,000 into over $1.3 million in verified profits, representing a 40,000% return.
Trading Timeline:
- Started dabbling around 2007-2008.
- Went full-time before 2014, but blew up capital and stopped trading for nearly two years.
- Resumed trading in late 2018/early 2019.
- Breakout year in 2021.
Notable Period: Majority of profits made in a concentrated 3-month period (Dec 2020 - Feb 2021) by exploiting specific market conditions.

Markets, Instruments, and Strategies Mentioned

Instruments: Primarily stocks, especially penny stocks and “gappers” (stocks that gap up/down at open).
Tickers Mentioned:
- LAKE (Lake Resources)
- AP (exact company unspecified)
- CURR (a gapper ticker traded recently)
Trading Style: Day trading with a technical, chart-based approach focusing on price, volume, float, and gapper strategies.
Strategy Adaptation:
- Initially focused on shorting gappers, especially higher float gappers.
- Shifted to micro float gappers in recent years, which are more challenging to short.
- Constantly developing new strategies as market conditions evolve.
Strategy Development: Self-taught, heavily data-driven, with extensive backtesting and journaling.
Mentorship: Introduced to trading by Tim Sykes, but no formal mentorship; mostly self-developed strategies.

Risk Management and Position Sizing

Risk per Trade:
- Uses a strict 1-2% risk per trade rule.
- 2% max risk when trading well.
- Drops to 1% or lower (down to 0.25%) when not trading well.
Position Sizing: Percentage-based risk ensures position sizes grow with account and shrink with drawdowns, preventing blowups.
Stop Loss Discipline: Adheres closely to stop losses; rarely disobeys stops in recent years.
Psychological Risk Management:
- Emphasizes paying oneself regularly to lock in profits and reduce mental pressure.
- Advises having other income sources to reduce dependency on trading profits.
- Will reduce size or take breaks (paper trade) if not performing well.
Pattern Day Trader Rule: Initially split capital across multiple accounts to circumvent PDT rule and maintain day trading ability.

Portfolio Construction and Income Management

Income Strategy: Treats trading like a job, paying himself twice monthly (~2.5% of account balance each pay).
Other Income: Maintains other income streams (e.g., fitness business “Welogy”) and long-term investments to reduce pressure on trading.
Capital Protection: Focuses on protecting capital and profits rather than maximizing risk.

Market and Macroeconomic Context

Market Conditions:
- The 2020-2021 period had an unusually high number of gapper opportunities.
- Market cycles cause strategies to wax and wane in effectiveness.
- Shift from OTC pump and dumps to NASDAQ pump and dumps.
- Changing float sizes and volatility impact strategy viability.
Sector Focus: Does not chase sectors like AI or quantum computing; strictly technical setups dictate trades.
Market Hours: West Coast trader, starting pre-market scans at 6:30 a.m. PT.

Methodology / Framework for Trading Success

Start with paper trading to prove an edge.
Use data-driven backtesting to develop and validate strategies.
Risk 1-2% of capital per trade, adjusting down when performance dips.
Pay yourself regularly to lock in profits and reduce psychological stress.
Manage risk tightly with stop losses and position sizing.
Be disciplined about when not to trade (sit on hands if no edge).
Continuously adapt strategies to changing market conditions.
Maintain multiple strategies to diversify sources of edge.
Avoid chasing others’ trades or sizing up based on others.
Keep trading psychology in check; avoid emotional decisions.
Treat trading like a professional sport—practice, review, and improve constantly.

Performance Metrics and Trading Psychology

Profit Concentration: Approximately 20% of trading days generate most profits.
Winning Rate: Can be below 50% if winners are larger than losers; key is positive expectancy.
Drawdowns: Avoids large drawdowns by limiting risk and obeying stops.
Mindset:
- Intuition plays little role; relies on data and edge.
- Recognizes trading is “the hardest easiest way to make money.”
- Accepts losses as part of the game; focuses on long-term compounding.
- Emphasizes the importance of not rushing and learning from failures.
Social Media Caution: Warns about distorted views from social media showing only gains, not losses.
Long-term View: Aims to trade profitably for 10-15 years, willing to take breaks to reset.

Disclaimers and Recommendations

This content is based on personal experience and educational purposes only. It is not financial advice.

Beginners are recommended to start with paper trading to establish an edge before trading real money.
Risk management is essential to avoid blowing up accounts.
Psychological health is important; maintain other income sources and take breaks when needed.
Avoid over-leveraging; stick to percentage risk and avoid chasing others’ position sizes.

Sponsors Mentioned

Tradezella: Trading journaling and analytics tool for all types of traders (crypto, futures, forex, stocks).
Alpha Prime (Alpha Capital and Alpha Futures): Proprietary trading firm offering funded accounts via challenges and live capital access with salary and professional resources.

Presenters and Sources

Guest: James Creger, Verified Trader on Kinfo.
Host: Unnamed host of the “Words of Wisdom” podcast.
Mentions: Tim Sykes (early influence), Michael Good (trader friend).
Platforms: Kinfo, Profitly, Investors Underground chat room.

Overall, the video provides a detailed, realistic view of how a trader achieved extraordinary returns through disciplined risk management, data-driven strategy development, psychological resilience, and adapting to changing market conditions while emphasizing the importance of protecting capital and maintaining a long-term perspective.