A trader doubled his money every year. Here's where he fished.
Wizard Wednesday #6: Kelvin Chu, the perfection trap, and fishing where the big money won’t.
Chapter six breaks the pattern. Kelvin Chu is the first trader in this book who didn’t start in low-float penny stocks. Cambridge economics, a London futures desk, then out on his own. Roughly 100% growth a year, about $500 million cumulative, and a Sortino ratio near 6, which means the returns didn’t come from wild leverage. That’s enormous return per unit of drawdown.
The idea worth stealing is where he fishes. He deliberately hunts edges too small for institutions to bother with. His logic: no fund assembles five people, a lawyer, and a compliance sign-off to make a couple hundred grand. So those edges never get arbitraged away. They just sit there for individuals. That’s the honest version of the retail advantage. Not that hedge funds are hunting your stop loss, but that we can move fast and trade things too small for them to touch.
The other piece that stuck: his straight-A record may have hindered him. School trains you to be right. Trading pays you while you’re wrong more often than you’re right, and if perfection is your baseline, drawdowns feel like failure instead of rent. His fix was the oldest rule there is. Grade the process, ignore the month. Anyone who claims they don’t sit in drawdowns for months is lying to you, and that includes us. Ours are published weekly.
If you want the small, repeatable edges delivered with entries, stops, and sizing, that’s Stats Edge Pro. $149.99 a month, 30-day money-back guarantee.
Michael Nauss, CMT, CAIA, CDMS