Kristjan Kullamägi (Qullamaggie): Stream 6 - Stream 10 [Oct 2019] - Notes
Over the months I have gone through every stream that Kristjan Kullamägi (@Qullamaggie), a prolific momentum swing trader, has ever posted. Below I have categorized my notes into topics relating to his streams.
For reference, the chart below shows the overall market KK was trading in, at the time of the stream below:
Stream #6: “Dead cat bounce or bottoming process? Oct 8, 2019”
Sector Rotation:
If a very highly valued stock doesn’t go up on good news anymore, it can be a sign of weakness
Because there wasn't much wisdom in this stream I give you some food for thought. Even if you quit and aren't successful in trading, at least you will never be able to say that you fat-fingered a trade for millions of dollars!
Stream #7: “$4200 Sushi is what you get for eating near the market open. Oct 9, 2019”
Swing Trading Wisdom:
Has a big belief that the big money is on the long side, multi-week and multi-month moves… You don’t even need to take a huge amount of size to make big big money if you catch something of substance, you catch a few big movers per year, and doing that for many years, you don’t have to work a day in your life.
Options Trading:
He has tried options and they were not for him, (possibly less of an edge trading options). It’s so much easier to lose money because you have the time factor and all the other things. It’s just too complicated. The leverage you can get from a normal broker is like 400% intraday and 100% overnight which is more than enough. You don’t need more than that, you’re just going to blow up.
Stream #8: “NO MORE $4200 Sushi!! Oct 10, 2019”
Macroeconomics:
Macro is irrelevant, if the macro is good and the charts are sh*t, it doesn’t matter you’re not gonna make any money, and if the macro is sh*t but the charts are good who cares if the macro is sh*t you’re gonna make money. Unless you have >$100M you probably shouldn’t care about macro at all.
Need to remember that when he is referring to “macro”, he is not referring to the overall market. You still need to have good market conditions to trade the types of setups he is trading.
Learning from the Past:
Has a database with tens of thousands of charts, with different types of historical setups (ie, short trades, breakouts, earnings gapper). This is something you have to do if you want to make many millions in the markets, this is something he has been working on for 6 to 7 years.
I recommend getting either Evernote or Onenote to track different setups. Different types of time frames, news, earnings numbers, theme stocks you get a bunch of these every year just keep your eyes open.
Breakout Setups:
Beaten-down stocks can make huge moves. A microcap stock that is down 50 - 90%, could see a squeeze because it gets so cheap over a bad general market.
Drawdown Wisdom:
His portfolio drawdowns have definitely been smaller since shorting momentum stocks as it’s one of his main money-makers. There’s more diversification now and less risk-taking. He once had a 50% drawdown and plenty of 20% intraday drawdowns. That does not happen anymore. If a drawdown occurs, it takes several weeks or months to occur. He is not drawing down 10% in a day anymore and hasn’t in many many years. He does have 10% drawdowns, multiple in a year, but they usually take several weeks.
Transitioning from Day Trading to Swing Trading:
Going from mainly day trading to mainly swing trading took a few years, and going from mainly short-term swing trading to mainly longer-term swing trading and position trading took another few years, you have to give it time. You need to study, you need to put hundreds of hours into studying how stocks move, build a pattern database in your head, it’s gonna take years, but it’s gonna be worth it in the end, it’s going to be worth it.
Software:
TC2000; there are no alternatives that are as easy to use, scans, annotated charts, or watchlist. It’s not perfect but overall very good. Uses Esignal, for intraday charts, also if you want to go back and look at past charts you can go back to 1-minute charts from the 90s, which is pretty cool. If you see his Evernote the intraday 30/60min charts for all stocks, those are from Esignal, he went back and looked at the intraday charts, it’s all about grinding it out, putting it in your head, repetition, repetition, repetition.
Holding Periods:
Doesn’t keep track of the average holding period, but if a stock works he holds it for several Qs, at least partials, but generally a few weeks would be the average holding period. But a lot of stocks get stopped out the same day or next day or within a few days. But the big winners were multi-month holds.
Position Sizing:
Everything from 5-25% for position sizing, depending on liquidity and conviction. In a good market 15-20 positions, or if in a bad market in all cash, but typically will have 5-10 positions.
Stream #9: “Markets back into range after failed breakout attempt. Oct 14, 2019”
*This stream KQ mainly talked about his shorting strategy.*
Swing Trading Wisdom:
Money can be made on low volume or high volume, for him price is 90% of it, and volume is very easily manipulated especially on the intraday charts.
The Ideal Market
The ideal market for setups is a bull market with very little volatility and good breadth where a lot of stocks go up. If you look at the indices, you want a market that looks like this Jan-May 2019. It goes up with very shallow drawdowns, also like late 2016-early 2018. In a market like that, you can be 150% long and you really don’t have to do anything, you can just sit and wait for months and every day you’re making money, these are the market conditions that made him millions in a very short amount of time, and more importantly, you don’t have to work hard for it, things just work.
$SPY - Daily Chart: Jan-May 2019 
$SPY - Weekly Chart: 2016-Early2018
Breakout Setups:
In hindsight it’s kinda obvious, you have these Higher Lows then perfect range breaks. Breakout setups, they’re universal, you can use them on any timeframe, but you have to pick the right stocks.
Parabolic Short Setups:
Many times on high momentum stocks you get stopped out a couple of times before you get the trade. Almost never nails them on the first try, and many times not even on the first day he shorts them.
Usually don’t chase things, but sometimes it pays to chase, most of the time it doesn’t.
Rarely watches the 1min chart but on super fast stocks you almost have to do it, because sometimes you don’t see it on the 5/60min but it’s very clear on the 1min.
He never shorts the first day, it’s stupid. He scales in all the time when going for big size. Most trades usually get in all at once, but on the bigger ones, he usually scales in.
Drawdown Wisdom:
Sometimes you just need one win. Drawdown periods happen a few times per year, it’s part of the game just have to man up and stay patient, that’s the only way because you know the good times are going to be back. There’s going to be a period of a few weeks/months where he will make at least $1M, you just need the patience to wait for that time.
Stream #10: “Great trading… Not. Oct 16, 2019”
General Wisdom:
It’s always obvious in hindsight
Some days the market gods are gonna piss in your face, and you have to take it, you have to take it and you say thank you and the next day you come back stronger. This is one of those days.
Spoken like a true teacher!
Parabolic Short Setups:
You never want to cover when everyone else covers that’s the way you lose money in the markets, you have to play differently, and be a little bit contrarian.
Day Trading Vs Swing Trading:
In day trading you have to sell 1/3 or 1/2 when you have a 1RR trade, because in day trading it’s hard to get big R/R, you have to sell some then you keep the other for a potential bigger move, because then you’re sitting in a free trade, if the other half goes bad you still have a profitable trade.
Index:
Stream 6 - 10 [Oct 2019] - Notes
Will be waiting for future stacks...!!
The amount lf knowledge in 2 stacks which are out is huge. Provided one go through them with open mind.
Are you working on more such stacks on Qullamaggie ?