by Jeff Yaede, Founder and Lead Trader of the 100K Challenge
This is the evolution of TraderMinute and the 100K Challenge. It is the culmination of years of work designed to deliver what we all enter the market for in the first place. The evolution of TraderMinute and the 100K Challenge is a story about the freedom that TraderMinute is built to deliver to everyone involved.
My Early Trading Life
As a freshman in college I was sitting through a student loan orientation session designed to scare us into taking the least amount we needed as that loan would be a burden later in life. I don’t remember many of the details but I do recall a statement on a sheet of paper that I had to sign that said that we would not use the funds to invest in stocks or trade in the stock market. I found the statement rather odd but did not think much of it at the time.
A few weeks later, a buddy of mine was talking about how he opened an Ameritrade account and had bought some Yahoo stock. I knew absolutely nothing about stocks nor the market, so I started to ask questions. Those questions quickly turned into me opening a trading account and putting the extra $2,000 in spending money that I had for my year at school entirely into the account.
Once the money posted in the account, I put all the money on Yahoo stock and watched. Admittedly, I missed a few more classes than I should have. I might have been sick for a day or two of work. The bottom line, I was hooked! In less than a month, my $2,000 was almost $4,000 so I cashed out. I had to move on with life and make sure my studies and employment were back on track.
As time went on, the market went through a lot of turmoil. This gave me a great opportunity to observe and learn how stocks and options traded through news and dramatic events. My trading turned to more observation. I also met a girl that had a grip on me that I couldn’t shake. For the first time, another person became the center of my world and everything else seemed secondary.
And then it happened...I decided to propose marriage and realized I would need a ring. Upon visiting many jewelers, I found the ring my bride to be would love and took out a sizeable loan to pay for the ring. Unsure of where I was going to get the money to pay off the loan, I once again turned to the market.
Penny stocks grabbed me. The high rate of return seemed too much to resist, so I set out buying them up. Quickly, I realized that every penny stock trader talks about the penny stocks that went their way, but those were few and far between. I saw company after company that I bought declare bankruptcy and move well below the penny range. It was brutal and shook me as I realized that the market was full of losses. It wasn’t all gains like my Yahoo experience.
My fiance and I traveled back east to visit my parents in Pennsylvania for the holidays. Just before we left, I put the last of my trading funds into a company facing bankruptcy trading at two pennies. I gobbled up all the shares I could and decided it would be my last foray into the market.
Well, as you likely can deduce by now, SBAC was not my last trade. The penny stock managed to jump to a dollar in a few months and I was able to cash it in, pay off the ring, and set aside a bit of cash for future trading. I started to learn about the market and ran into the world of options. This led me to the world of money managing, trading other people's money, and ultimately back to trading for myself.
It was quite a ride, a 13-year journey in the market with many highs and lows, successes and failures. And there I thought it was just about over. I was moving on, always with a love of the market but simply trading for myself.
The Birth of the 100K Challenge
During my time managing other people’s monies, a client of mine and my trading partner approached us to show how well our options trades were doing. We traded mostly stocks but did dabble in the options market from time to time. He commented that he thought with our options trades we could probably turn $5,000 into $100,000 and challenged us to do so.
We didn’t think much of this challenge but decided to give it a shot anyway. We logged our trades on the simple site we had for our clients to use. We managed to hit the $100,000 mark which was exciting but seemed a novelty at the time considering the other monies we were trading.
After moving on from trading other people’s monies, I was approached about sharing my trades. I rejected the idea at first as having other people follow my trades would seem to bring the same stresses and irrational expectations that existed managing other people’s monies. However, I slept on the idea for a while and then it hit me!
What if I just show some of the personal trades I make in a ‘challenge’ format where I challenge myself to take $3,000 and turn it into $100,000? So I started a blog. I logged my trades. I shared my thoughts. This was the start of TraderMinute. The blog is no longer updated but still exists today. https://traderminute.wordpress.com
The Start of the TraderMinute Community
The blog was successful beyond anything that I expected. As the blog was gaining traction, I was fortunate to have my youngest brother, Jason, come to take a look at what I was doing. His interest was in web development and he had a real knack for it. We sat down and looked at the viability of turning the blog into a full-on website with real-time alerts, live video, and other functionality that would be prohibitively expensive to hire out to do.
We spent a couple of months piecing these together before we were ready for launch but we finally launched in 2013 and kicked off a new Challenge! Expectations were high and the community was small but growing.
The first 2 Challenges failed to achieve the same results of past Challenges. I spent some time evaluating the reasons why and if my trading had changed now that the site had a membership and following. Was I returning to the stresses that came about managing others' money? I remember telling my brother and the community that I would give it one more Challenge and if the live-trading results weren’t there, then I would end TraderMinute and move on to the next phase of my life.
The next Challenge started with a call trade on KMB...what a painful trade! I entered and the stock just couldn’t gain any traction. The market sold off pretty hard but CAT went into a very interesting dip spot. I stepped in on the dip but the stock continued to dip and go against me. It was then that I sold KMB and then watched CAT finally take off. The Challenge was in the green and off to the races! In the months that followed, the Challenge rallied to $49,000 and I had proven the concept with members live trading my trades along with me!
At the start of the next Challenge, more than 500 people joined. The business quickly had to hire to keep up with all the growth. The growth was fun but also challenging. I was able to bring in some of the best traders and people I had been able to make connections with over the years. The ultimate goal was to build the business and allow the Challenge trading load to be shared among 4-5 traders so that anyone who was running a Challenge only had to do so once a year.
The Hard Times
The next couple of Challenges failed to gain any traction and as a result, the TraderMinute membership numbers plummeted. I proceeded to use personal savings and debt to keep the company going to cover the payroll and fixed costs. I believed in the Challenge concept but month after month of only proving the risk management side and not realizing the reward side of the challenge led to further business contraction.
Sadly, I was forced to cut back drastically. I had to lay people off that I greatly respected. People who were my friends. People who were like family to me! And all because I couldn’t get a Challenge to take hold and realize the strong gains like before. It was a very dark time for TraderMinute, its employees, its members, and me. TraderMinute was fortunate to have a few key people willing to stay and to take significant salary reductions to keep the dream alive but the business needed some Challenge successes. Many of you know Jason and Michele, and they have been vital in keeping TraderMinute going!
Challenges continued to come and go. They failed to realize past successes and with the trading all on my shoulders, the weight became heavier and heavier to bear. I knew that our long-time members who were so committed to TraderMinute deserved to have success and that TraderMinute couldn’t rest until those members saw the success they deserved. Granted, many members stayed for the education and analysis but TraderMinute was meant to be a live trading website with trading success, not just education and analysis.
From Struggles to Hope
It was during this dark period of Challenge failures that Jason and I started working on trading algorithms to automate trading signals and apply market metrics to see when major shifts were taking place in the market. We saw some immediate success with the market metrics and turned that into what we call the MarketVibe. We also saw great results in the trade signals and began to publish them.
But there was one issue remaining. The signals did not translate into the $100K Challenge. We went back to the drawing board and had to figure out a way to not only apply options to the signals but a way to apply the challenge format to the signals coming in.
After 3 years and more than 600 trades to test and understand the best fit, we finally figured it out. Did we figure out how to predict what a stock would do tomorrow? No. Did we figure out what stocks would move the most? No. But we did figure out how to add a trend probability to a stock and then gauge whether or not it would be a viable trade for the Challenge format.
While all the real-time testing and building of a $100K Challenge algorithm was going on, my real-time Challenge trades continued to lag. In March of 2019, I announced to the community that I had run my last Challenge using my trade ideas and that I was going to replace the Challenge with this new automated system.
The Start of Something New
As expected, the new system was met with much skepticism and understandably so! I ran the new system for several weeks in a paper trading account with members in an attempt to teach how the new system would function going forward. While the 3 weeks was not enough time to convince people of the new system, it was enough time to message the changes and on May 9th, 2019, the first automated Challenge with real-time trade alerts kicked off!
The success of the 100K Challenge algorithm was the culmination of years of work designed to deliver what we all enter the market for in the first place. Freedom! Our members were freed up knowing how trades decisions would be made and the times of day they would take place. Freed up from wondering, what is Jeff going to do next? I was freed up from having to find trades. I was freed from having to sell my trade decisions to a community that just wanted to trade. But most importantly, a system was put into place to deliver results in a much more consistent manner than ever before. These results have and will continue to translate into freedom for the entire TraderMinute community.
Here is to the next chapter of TraderMinute. A chapter that captures our original intent of TraderMinute. Freedom!