5 Key Concepts from My Interview with Oliver Kell, The US Investing Champion of 2020

Hey everyone! A recurring series I will be posting on Trading Engineered will be summary articles sharing Key Concepts I’ve learned from my Market Chat Podcasts with top traders and investors. I’ll also be sharing a little bit of the backstory with how the interviews came to be and any other interesting tidbits I think are worth mentioning.

A perfect place to start is with my interview with Oliver Kell, a fantastic swing trader who now runs his own fund and is the winner of the US Investing Championship in 2020 with a return of 941%!

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And with that, let’s get into the story...

Everything really came together perfectly for this Interview with Oliver. I was nervous to record this one because I knew a lot of people would watch it and it was a chance to really learn something special from a top, top trader. 

At the time of recording we were not sure who had won the championship (more on that later) since several of the guys at the top seemed to be putting up more and more obscene numbers every month. Regardless, I was anxious to make sure I asked the right questions and learned the most I could from the experience.

When it came time for the zoom call though, almost immediately I realized how down-to-earth and self-deprecating Oliver was. Just like with Matt Caruso, Leif Soreide, and other great traders I have been lucky enough to chat with, years of mistakes, grinding, and slowly improving seems to have wiped away any hint of ego.

I vividly remember the day the finished interview was ready to be published. It was January 13th, and we were still waiting on the results from the contest. We weren’t sure whether Oliver had won or if it was Matt, Tomas, or one of the other fantastic traders killing it in a special year. Getting ready to post, I actually made the Youtube thumbnail with the title “Pro Trader”.

I was getting ready to post and was super excited for people to watch this one. The interview had come out great and I was blown away by Oliver’s methods and the simple but extremely effective way he interprets price action. And of course, the numbers he had been putting up spoke for themselves.

Right as I was getting ready to post after the market close, fate seemed to step in and the results dropped for the 2020 US Investing Championship, and boom, Oliver was the winner in an amazing year with a standout return of 941%.

Fintwit went pretty crazy, and it seemed like everyone was waiting to watch my interview with the Champ. I quickly made a new thumbnail to fit the occasion. 

The video got amazing feedback and remains one of my most-watched interviews. Since then, I’ve gotten to know Oliver more and I remain inspired by his story, performance, and methods. He is also someone who is very motivated to help out others and pass on what he has learned. He’ll be the first one to tell you that he struggled for years to successfully trade and had to persevere and work extremely hard to get to the level he is at today. If you don’t follow him on twitter I highly recommend it. His chart thread of key stocks is a must review every day for traders.

With that bit of backstory said, here are 5 Key Concepts from my interview with Oliver Kell, The US Investing Champion of 2020. And If you haven’t watched this interview yet, I highly recommend it (linked below)

Key 1: Persevere and Keep Grinding

I touched on this briefly earlier, but I think this was one of the huge takeaways for me from this interview. No one comes onto the trading floor day one and is extremely successful right off the bat. In fact, if you do start out with a bunch of wins you are probably worse off in the long run because you are likely reinforcing bad habits and haven’t yet learned how painful unchecked losses can be.

Like with anything, it takes time to become a good trader, and even longer to become a great trader. Oliver struggled for years to develop his style and master his emotions. Even if you do read the right books like How To Make Money In Stocks by O’Neil and Think and Trade Like a Champion by Minervini it takes a lot of seat time to learn how to manage yourself, practice discipline, and execute properly. Oliver’s stories about losing money and dealing with trading restrictions I’m sure hits home for many traders. You just have to push through, keep improving, and learn how to manage risk. 

Key 2: Everyone Makes Mistakes

Even when you have been doing this successfully for years you are going to make mistakes and misjudge situations. The difference between the great traders and the rookies is that the great traders push away their ego and gladly rectify their mistakes as soon as they notice them. When a position goes against them they just take the loss and move on to the next trade, no arguing with the market.

In 2020, even the US Investing Champion made mistakes, he overtraded during the march correction and in the fall suffered a drawdown. But once again he persevered, recognized his mistakes quickly, and got back on the right track. Don’t argue with the market, when you are wrong, admit it and get back on the right track ASAP.

Key 3: Simplify your trading

When you watch Oliver go through charts and explain his process, you recognize immediately how much he has simplified his trading and is focusing only on what matters most to him. On his charts, he only really considers a few moving averages, price, and volume. I mentioned this in my previous post but you should strive to clean up your chart and focus on price action as much as possible. 

One of the books Oliver mentions in the interview is How I Made 2 Million Dollars in the Stock Market by Nicolas Darvas. Darvas was a professional dancer who traded by telegram from all over the world and did his charting by hand. He was laser focused on price and volume, ignoring everything else. This might seem like a detriment, I mean how could you trade without the indexes, without twitter, and news sources? But in reality, the situation allowed him to stay objective and focus on what really matters: price and its trends

Watch how stocks act and build structure in an uptrend. Look for character changes and simplify simplify simplify.

Key 4: Follow the Price Cycle & Consider Multiple Timeframes

Oliver has developed his own unique way of interpreting markets by classifying where a stock is within its price cycle. This cycle allows him to know how he should be playing a stock and also if he should be involved at all.

The price cycle framework is also fractal meaning it occurs on all timeframes. For selling, he shared a golden nugget that you want to watch out when a stock becomes extended from its 10 emas on both a daily and weekly timeframe. When this is the case, the move is likely over in the near future and the stock will need time to properly base. Similarly for buying, you can use an intraday price cycle setup such as a reversal extension or wedge pop to enter a stock with low risk near a daily key level.

Using multiple timeframes allows you to put everything in context, trade with the trends, and fully recognize both the risk you are taking on as well as the potential reward.

Key 5: Volume = Price, Cause = Effect

Oliver learned this concept from a previous mentor and the first time he mentioned it to me, something clicked. It describes the relationship between Volume and Price perfectly. Only price pays (shout out to Brian Shannon) but high volume is often a precursor to significant changes of character such as the start or the end of an uptrend.

When high volume comes in at a gap up or breakout from a well-developed consolidation, look for the beginning of a strong uptrend. The higher the volume, the more institutional interest there is in the stock and potentially the more powerful the move.

However, when a stock is already well extended in an uptrend, well above prior support and moving averages, high volume is usually a sign of churning/distribution and the stock may need a new base.

Key Takeaways:

Oliver Kell’s trading performance is the product of years of hard work, perseverance, and many mistakes/learning moments. Superformance is not born overnight, it takes a lot of effort and mastery not only of technical analysis but also risk management and even more importantly, emotional management.

Since this interview, I’ve had the pleasure of working with Oliver to plan and produce his Swing Trading Masterclass with TraderLion. We are striving to pass on how he interprets the markets and teach a comprehensive method for identifying and managing True Market Leaders. The masterclass is going to be an awesome event with the first session happening this weekend October 16th at 11 am EST.

You can click the button below to learn more, I hope to see you there!

I hope you enjoyed this article! Let me know your favorite quotes and takeaways from my interview with Oliver in the comments section and also which interview you would like me to talk about next week!

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Take care,

Richard