KJ Trading Systems
TradingSchools.Org originally reviewed Kevin Davey of KJ Trading Systems back in January 2015. He received an excellent review. Its been two years and many individuals have requested an update. Not much has changed.
In fact, Kevin Davey continues to produce stellar trading results. 100% verifiable. 100% transparent.
If you have ever wanted to take a sneak peak at the inner working of a professional retail trader, that consistently earns an enviable income, this is your chance.
And Kevin’s book remains an indisputable classic for every aspiring trader.
Thanks for reading today’s update on Kevin Davey and KJ Trading Systems
A little over two years ago, TradingSchools.org wrote a highly positive review of Kevin Davey and KJ Trading Systems. Today, we are going to update that review. In addition, we are going to be taking a closer look at a couple of things:
- Tax Returns for years 2014 and 2015.
- A TradeStation Brokerage Statement for January 2017.
- What a professional trader actually looks like.
- And, a post-mortem biopsy of the monthly account statement. We will be looking for clues, fingerprints, and analyzing footsteps of a professional trader.
During the month of February 2017, Kevin Davey reached out to me directly. He asked for an updated review, not because he wanted to show-off his results, but because he wanted to afford the audience a ‘behind-the-curtain’ peak at how an actual professional, full-time trader conducts his business. And a reveal of the type of income that Kevin Davey earns each year.
Its important to note that Kevin Davey is very much a ‘normal’ human being. He is not flashy. You will not find ‘social proof’ or ‘trader porn’ images of Kevin on social media. He does not drive a Ferrari, Mazerati, Lamborghini, or S-class Mercedes Benz. There are no pictures of Kevin with bikini models or eating lobster. You will not find Kevin taking a limousine to the Opera. No carefully propped photos of Kevin in a $1,500 a night hotel suite, holding a glass of champaign, with a gold Rolex wristwatch prominently centered within the image. No yachts, or private jets. No boasting of owning a private spaceship (true story). He works from a small, unadorned desk. Which contains only an old laptop computer, a pad of paper, and an old wooden chair. A very old wooden chair. There is nothing shiny, slippery, or flashy about Kevin Davey. He offers no ‘social proof’ of success.
Trading educators that display ‘social proof’ or ‘trader porn’ is by far the clearest and most reliable indicator that you are witnessing a fraud. The dangling of shiny objects is nothing more than a piece of bait, a lure, the Sirens song. All meant to draw the victim closer to the con-artist, where the victim willingly sacrifices himself upon the altar of a false profit. Spending thousands of dollars for a ‘secret trading method’ and yet more money on a ‘live trading room’. The end is predictable, the meager ark in which so many place their hopes and dreams of a better life, are smashed upon the cold hard reef of market realities. All the while, the false profit continues to proclaim their riches and success, the victim of the fraud is left penniless and in despair. The false profit needs more money, to teach the next layer of ‘secret knowledge.’ Always tempting the victim further along the primrose path.
So many people repeat this cycle. Over and over. Always looking for the next financial guru, with even more shiny objects than the previous financial guru. Stuck in a cycle of financial misery and despair. Most traders lose. Why? The answer is clear and obvious. Flawed market assumptions are passed from teacher to student like venereal warts spread through a Bangkok whorehouse. Ignorance begets ignorance.
Enough with the dark language. Let’s jump into the light.
The following 2014 and 2015 tax returns are authentic. How do I know? Because I sent the tax returns to my CPA, and we verified that they are authentic. Why do this? Because in the past two years, several trading educators have submitted fraudulently produced tax returns to TradingSchools.Org, in an attempt to trick us into writing a positive review. We learned this lesson the hard way. I won’t say whom, you know who you are.
So let’s take a look at Section 1256, Form 6781 which displays gains and losses of futures contracts. Notice how I said futures contracts. This is important because some trading gurus will show tax returns with a massive income on page one of the tax return. But what they are not revealing is that the massive income did not come from investing or trading, it came from selling trading courses, DVD’s, live trading rooms, trading software, etc. We are concerned with none of the promotional income, we simply want to verify the actual trading income. So here is Kevin’s income from trading futures, for 2014 and 2015.
[pdf-embedder url=”https://www.tradingschools.org/wp-content/uploads/2017/03/scan0002-1-3.pdf” title=”scan0002 (1) (3)”]
Many individuals reading this have not been through the subjective torture of filing United States income tax returns. They are confusing. So, for the layman, Kevin Davey earned $162,000 for 2014, and $302,000 for 2015. On average, Kevin Davey earned over $19,000 per month, over the prior two years.
When TradingSchools.Org writes a review, this is the type of stuff we like to see. Actual tax returns. That we can verify.
Account size, exposure, and leverage
Some readers might be looking at these tax returns and say, “but what sort of leverage does he typically employ?” This is a fair question. Example: if Kevin is trading with a massive account, and he takes massive positions of 20 contracts per trade, then these results do not look very impressive. If you are exposing yourself to potential losses of $25,000 per trade, then an annual income of $150,000 doesn’t look very attractive.
Now, lets take a look a recent account statement from TradeStation. And yes, TradingSchools.Org contacted TradeStation and verified the authenticity of the account statement. The following account statement is for January 2017, which showed a profit of nearly $8,000.
[pdf-embedder url=”https://www.tradingschools.org/wp-content/uploads/2017/03/davey.pdf” title=”Kevin Davey Account Statement”]
Most people will take a quick glance at this account statement, and then quickly move to the very last page. They are only interested in the ending monthly income. But contained within this account statement is a ‘treasure trove’ of very revealing information. Let’s take a closer look:
The first thing that pops out to me is that Kevin Davey is not a big position trader. The overwhelming majority of trades are only single contract trades. So his leverage is very light. On a few occasions, he will take a larger position size of 2 contracts or rare 3 contracts. His largest position was 6 contracts in the 10-year treasury note futures.
What I also find fascinating is the distribution of different products that he trades.
- Crude Oil
- 30-year, T-bonds
- Russell 2k
- Japanese Yen
- Lean Hogs
- 10-year, T-notes
- Swiss Franc
- emini SP500
- Lean Hogs
For the month of January 2017, he traded an amazing 17 different products. This is just nuts, and I never would have expected this. What does this tell us? Quite simply, this screams hyper-selectivity. Kevin is not chasing any particular market. He is scanning ALL markets and taking only the juiciest and most attractive trades. Never in a million years would I have expected to see Lean Hogs, Gasoline, and Cocoa. Whom in the hell trades those markets? This distribution of instruments reveals that Kevin is waiting for only ‘loaded dice’ before he takes any risk on an outcome. He isn’t predicting anything. Only waiting for the statistical pattern to emerge, and then he pounces on the opportunity. Pouncing might not be the best word to use, more like gingerly taking a tiny position.
Furthermore, his hold times are short. Most trades are opened and closed within the day. So he is not leaving himself open to overnight events, or pre-market crop or earnings reports. This is hugely important. My mind still cringes about the time I held an overnight position in wheat and it lock limited on me, for three straight days. Wiped my account out.
Another big reveal is the distribution of wins vs losses. The losses clearly cluster around $800 to $1500 per trade. The winning trades distribute in a range of $1,000 to $3,000 per trade, with an occasional ‘fat chunk’ of $5,000. What does this tell us? This is a clear indication that Kevin is getting into a winning trade and letting it run as long as possible. This indicates that his strategies are waiting for a potential trend day to emerge, where the market opens and closes at extremes. This is immensely helpful in our own research.
This tells us that overtrading and shooting for small target profits are not the path to success.
Who knew that analyzing a simple account statement would reveal so much? My only wish is to have years of account statements from Kevin. Oh, the information that I could glean. But getting Kevin to release this much information took a Herculean effort. He certainly is not revealing so much for my benefit, he is doing it for the trading community as a whole.
What is Kevin selling?
Yes, Kevin is selling something. A course. And no, I have no financial interest in the course whatsoever. Not an affiliate commission or anything at all (I wish I did). He offers an online course, and a live workshop, both are priced at about $3k. Several of my readers have emailed me about the course and their eyes were opened wide regarding the realities and exhausting hard work that goes into finding these ‘juicy patterns’ and ‘loaded dice’ situations.
Kevin also sells a book. I consider this book to be pretty much the starting point for all aspiring professional traders. If you want to become a ‘trading Jesus’ you better learn a few things about one of the ‘holy books of trading.’ Kevin’s book is one of the classics. In a damned swamp full of ridiculously stupid trading books, Kevin’s book is the cream that rises to the top.
In fact, before anyone even contemplates spending $3k on a course, a person should invest a few bucks and read the book. Read the book first. If what you read makes sense, then you should take the next step and start developing your own strategies. The book contains the path, the road map to take you where you need to go. You just need to apply what you read. It really is as simple as that.
If you cannot convert the material from the book into digestible and actionable trading ideas, then consider the course. But I would recommend you start with the book.
Why you should not like Kevin Davey
Damn you, Kevin Davey. Trading is a zero-sum game. For every winner, there is a loser. And unfortunately, just about everyone reading this blog post (myself included) is a victim to your outrageous machinations. Your sneaky, devilish little schemes to enrich yourself at our expense. Unmercilessly draining our trading accounts, with little regard for the pain and frustration that you have subjected upon us all.
You are a little rat. Scurrilously sneaking out of your little hole. Stealing our sandwich and drinking our milkshake. Leaving only crumbs behind. We all have suffered at your (tiny) hands for far-too-long. And now, to add insult to injury…we must buy your crappy little book and attend your seminar to potentially free ourselves from your persistent thievery.
Or maybe, I should stop complaining and adapt my behavior. Maybe I should just surrender my bevy of worthless indicators in which I paid thousands of dollars, and start to approach my trading from that of an engineer. Like yourself, a mechanical engineer, that developed cutting edge efficiencies in various technologies. Maybe its time that many of us stop listening to the nonstop parade of financial charlatans. All peddling stupidity like ‘order flow’ and ‘Fibonacci.’
Maybe if we all start approaching our trading with the seriousness that is required, and use a scientific approach, then perhaps many of us can escape the cycle of never-ending losses.
Thanks for reading. And if you buy something from Kevin. Let him know that reading this review played a part in your decision.