Kristjan Kullamägi (Qullamaggie): Stream 1 - Stream 5 [Oct 2019] - Notes

Oct 10, 2023

Over the months I have gone through every stream that Kristjan Kullamägi (@Qullamaggie), a prolific momentum swing trader, has ever posted. I think that these streams, where he records insights into trading his system and the actions he performs during the market, are so insightful that posting and categorizing them would be very helpful to anyone entering the realm of momentum swing trading.

Below I have categorized my notes into topics relating to his strategy. There are about 420 streams that he has published. With the help of another site called FewMoreDays, where a user by the name of @Nevonal has transcribed his streams, I was able to more effectively compile my notes and summarize these posts for you. I will be breaking down my notes into 5 - 10 stream segments for each substack post. I use “I” at times because I am taking direct things he has said. All of my notes are in relation to what KK has said on stream. If you enjoy the content, please subscribe! 🙂

*I have also been posting a version of these notes to my Twitter account.

Stream #1: “My FIRST trading stream! Oct 1, 2019”

Swing Trading Wisdom:

You want small losses and big gains when it comes to swing trading
You want trades that have good Risk-to-Reward (R/R) - Risking very little to make a lot (10, 15, 20x, and greater)
Smaller cap names can still make moves in choppy market conditions - but you have to be careful
I would say news and fundamentals are great but 95% is price action, it doesn’t really matter if the fundamentals and news are great or bad, it’s all about price action. It can be kind of confusing bc the markets don’t make sense, ever, you just have to get used to that sometimes good news is bad, and bad news is good.
If you had only to trade one setup it would be stocks that gap up on surprising good earnings with high volume.

Day Trading vs Swing Trading:

In day trading you’re trying to get a high win rate (over 50%), but your R/R is smaller. It’s very hard to get 5 to 10x R/R intraday. In swing or position trading, for every trade you make, you are aiming for 5 to 10x or more R/R but your win rate will be very low (~30%), so it’s a different kind of trading.
Day trading is great if you have an account that’s small (<$1M), that’s a great way to trade, and it’s the fastest way to learn trading, and growing your account bc you do a lot of trades. But once above $1M you just can’t scale the same way swing trading does.
- Years later, in his more recent streams, a viewer asks him if he were to start over what type of trading would he do. He advocated that he would swing trade in the beginning because although you make a lot of trades and are able to learn, the hassle of trading every day is not worth it in the end when it comes to day trading.

Learning from the Past:

He has a backtracking watchlist, where he tracks all the major breakouts and breakdowns then looks them up a few weeks/months later to see how they performed. He states that it’s all about pattern recognition, training your brain to see patterns.

Sector Rotation:

He usually buys strong stocks but if there has been a huge rotation over the past months from high-flying growth names to beaten-down names, you must adapt, you have to trade what’s working, you can’t stick to something that’s not working.

Timeframes:

Must look at the Weekly chart as well as the Daily, as it may give further insights

Breakout Setups:

Flag breakouts have worked the best for him (most of his money comes from this setup after trading 8 years, as of 2019). Flags work on all timeframes, you can trade flags on the daily chart or intraday flags, it’s the same principle you just have to define your timeframe.
You want high Average Daily Range Percentage (ADR%) stocks, the smaller the account the bigger the ADR% criteria you can have - you want fast stocks that can make explosive moves.
Not only ADR% but you also want big ranges, you want clean charts!
Breakouts are bought as they break out, it doesn't matter if it’s morning, afternoon, or midday
It’s important that the market is good, that the setup is solid, and preferably volume, as you usually you get above-average volume when there is news
When a stock is up more than its ATR you do not buy it.

EP Setups:

Usually looking at the 1 or 5min chart at the open. Sometimes, will buy in the PM if they’re liquid enough. Usually buy on the 1min chart, Opening Range Highs (ORH) and put a stop at the Low of the Day (LoD), or the 5min chart, then if you want to add even more then wait for the 5min candle to form.

Position Sizing:

You should not be trading over 1% of daily volume on a stock
- What this means is that if a stock trades 100,000 shares on average every day. You should not be trading more than 1,000 shares of that stock. This is because your orders will be more difficult to fill at optimal prices and it could be difficult to exit a position if circumstances change and a significant price decline occurs in a short period of time.

Scanners:

Uses strong momentum stocks w/ good fundamentals. Has scans such as EP scans, ADR% scans, and OTC scans.

Stream #2: “Least exposure this year so far!! Started UVXY 0.00%↑ long, markets real weak. Oct 2, 2019”

Swing Trading Wisdom:

It’s just a waiting game, if you wanna make money in the markets you’ve gotta wait, you’ve gotta have patience to wait for your setups.
He doesn’t read filings or income statements or balance sheets, he uses MarketSmith to look up earnings (as long as you can see the estimates for the past two years and the past 2 Qs of EPS and revenue growth)

Timeframes:

In the first 15mins, he looks at the 1 or 5min charts but after the first half hour he usually just watches the hourly and daily, on some kind of special occasions he may look at the 5min all day usually when there are big runners

EP Setups:

Usually wants the fastest-growing stocks, they don’t have to be profitable. A lot of them are losing money but if their revenue growth is big they can work really well.
If you study the biggest movers in the markets, things that go up multiple years and make huge moves, they’re all earnings-driven.
You want setups with strong growth stocks with great earnings, especially when they show resilience and relative strength compared to the market.

Drawdown Wisdom:

The worst kind of drawdowns are when you’ve lost money or been going sideways for a while, then you have a big drawdown, that’s really demoralizing. So there is a difference between a drawdown and a drawdown, even if you lose the same amount of money, psychologically there’s a huge difference.

Market Sentiment:

If your positions hit your trailing stops, that’s one way to tell the market internals are weak. Being stopped out of position after position, and that new positions haven’t been working.
For a swing trader sell-offs are great, because that’s where the biggest opportunities are, the biggest swings start after the market has gone down, every single time.
The key is getting in when the next swing-up starts, that’s the hard part.

Entry / Exits:

On entry day, he buys and places a stop at LoD, then sells a portion as it moves up and starts trailing it. When price closes below the 10-day Simple Moving Average (SMA), you sell 1/4 or 1/3 of the position left, then sell another 1/4 or 1/3 the first close below the 20-day, then the same thing at the 50-day etc.
- This method has been updated but I think still has relevance. He now uses one or the other in later streams but I think if there is a large cap or mega cap stop and the theme and momentum are good, taking partials at each moving average could be a strategy.
He waits until End of Day (EoD) to sell using the SMA levels. He also has a level he sells at no matter what, which is usually the previous wick lows as the ultimate stop.

Stream #3: “UVXY 0.00%↑ long, TSLA 0.00%↑short, let’s get the momentum going! Oct 3, 2019”

Swing Trading Wisdom:

The way he trades, he has lots and lots of very small losses and a few big wins. So there is never a problem taking small losses, because he needs is to catch one or two big wins and you can make it back
Trading is all about multiples on your risk, getting very good R/R over and over again is what matters.
Beaten-down stocks can make huge moves even though their fundamentals suck, just bc they get overpriced to the downside, then funds realize like this is really cheap then they go up a lot.
Waiting is such a big part of the game like 95% of trading is waiting, looking for clues, and looking for those great opportunities.

Day Trading vs Swing Trading:

You can trade the same breakout pattern on the intraday chart. You just wait for something that’s up on big volume then just wait for a setup. It’s all about getting tight setups, and with tight setups come tight stops and very good R/R trades
It’s hard though to get big R/R trades on an intraday timeframes. It’s hard to get a 20R trade on a day trade but if you swing/position trade that will happen often.
In day trading, you need to lock in profits faster, he usually doesn’t lock in profits up 1-3R but on a day trade, you almost have to lock in some at least 1/3 or 1/2 and then raise your stops.
- He had a higher win rate as a day trader because he locked in partials and was more aggressive in moving stops.

Market Sentiment:

Uses NAMO, NASI, CPCE for market sentiment to determine if general markets are strong or weak
- Every week or so he looks at these. Over the years, he has focused more on setup proliferation and SMA’s on broad market indices.

Leaders:

Leaders that have pulled back a lot and then bottoming, they’re way stronger than the overall market, holding up inside of a range. You want to see leaders starting to show resilience against the overall market, so when the market stops going down or starts going up, these stocks will go up even more. You have to look for these signs, and just wait.

Watchlists:

Uses a combination of fundamentals and momentum (“strong”, “stronger”, “strongest”). Then he has “strongerest” scan that scans these three watchlists where the criteria is, above yesterdays highs up 1% on the day.

Insider Buying/Selling:

You don’t have to look at insider buys and sells (unless it’s a microcap and a lot of insiders start buying meaningful stakes, especially if it’s biotech, but you don’t get that many scenarios per year)

Stream #4: “Big reversal yesterday, some of the growth leaders trying to bottom. Oct 4, 2019”

Swing Trading Wisdom:

Fundamentals help with conviction, if a company is a leader in its field and is taking market share or has created its own niche, and has big EPS and revenue growth plus a strong chart, that gives more conviction to the trade. But if he had to choose he would just trade off strong charts no matter what. He also believes that having a little bit of knowledge about fundamentals gives an edge, that’s why tracking earnings and other fundamental metrics can be useful.
He is always trying to hold things for as long as possible, to catch the big big moves, but sometimes he overstays. That’s the thing you never know when these things will go or stop, that’s why MA selling rules are in place.

Breakout Setups:

With High Tight Flags (HTFs), you want it to rest on a few MAs, usually, it’s the 10/20day, you want the MA to catch up to the position. It doesn’t necessarily need to touch the price but it needs to catch up. Riding the MA’s, usually the 20-day, those are the best ones or at least the most common. Surfing like it was surfing a wave, you want to see Higher Lows (HLs) or a rounded bottom. It doesn’t have to be perfect you can get these undercuts but as long as these undercuts get bought up really fast like a one day thing that’s fine, you want to see shakeouts (to the upside).

Parabolic Short Setups:

If you get a move that’s 20-30% to the downside in two days you have to cover it, there’s no way to know it would go down another 60% in a couple of weeks.

General Wisdom:

He has been slightly depressed most of his trading career because everything feels so dark when trading. Trading is not a great profession for mental health. You really have to be special to make it in trading. That’s probably why most people don’t make it, they just can’t handle feeling like sh*t all the time, because it does if you’re in a bad period in trading you’re losing real money, it’s not like a real job where you can hate your job but still get a paycheck, but in trading it’s different.

Drawdown Wisdom:

You must recognize market conditions (choppiness or trending down) and must wait for better market conditions when your account is going sideways, or in a drawdown.

Mentors:

He has subscribed in the past to @Cameronfous, @kunal00 from Bulls on Wall Street, @InvestorsLive, @danshep55, @PradeepBonde. He has been a paid member of all of these sites throughout his trading career, now (in 2019) he subscribes to just Stockbee (@PradeepBonde) because all the others are more day trading.

Stream 5: “Dead cat bounce or bottoming process? Oct 8, 2019”

Swing Trading Wisdom:

Price is the only thing that matters, Level 2 and stuff like that, he has not bothered with. Mostly just algos playing with each other and too much information. You can only watch one at a time and takes too long, whereas scrolling through many charts is fast and efficient.

Breakout Setups:

A second flag breakout in a short amount of time. The first flag is usually the best.

General Wisdom:

Not self-taught, he has read a lot of books, studied a lot of traders over the years, studied their methods, and compiled hundreds and hundreds of pages of diff trading methods and stuff he picked up over the years, then put everything together, tried to simplify it as much as possible and find timeframes and stuff that works for him and his own personality.
He dropped day trading and mostly short-term swing trading because it’s easier to wait for the few times per year when you can get these big moves. It’s not easy it’s hard, waiting is the hardest thing ever, trading is easy it’s the waiting that’s hard, waiting for your setups, waiting for the ideal opps. Every year, you should be doing a little bit more of what works and a little bit less of what doesn’t work, and every year he overall does less.

Leaders:

Eg of a Leader (2019) — NVDA 0.00%↑, former leader, has crazy earnings gap ups, if you look at this thing from 2017, great earnings, crushed estimates, raised guidance, and ran up 140% in less than a year, riding MAs, put in HLs all the way. You only need a few of these per year.