Kevin Davey: two years later

KJ Trading Systems
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Summary

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.

Pros: World Cup trading champion continues doing what he has always done. Make money at trading. Kevin Davey represents the top of the food chain.
Cons: If you are losing at trading, this is the guy that is taking your money.

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.

Tax Returns

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.

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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.

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.

  • Copper
  • Crude Oil
  • 30-year, T-bonds
  • Cocoa
  • Russell 2k
  • Japanese Yen
  • Wheat
  • Lean Hogs
  • 10-year, T-notes
  • Platinum
  • Gasoline
  • Swiss Franc
  • Soybeans
  • Silver
  • emini SP500
  • Lean Hogs
  • Soybeans

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.

KJ Trading Systems

Is he wearing make-up?

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.

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42 Comments on "Kevin Davey: two years later"

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Elias
Guest

I don’t trust his face. I’m a hunch guy.

Rob B
Guest
Huh!! When you buy stock in any major corporation or invest in any mutual fund do you check the face of the CEO and maybe the CFO as they could be embezzling money. I have seem more people slickered by some smooth talking 3 piece suit wearing salesman than I care to mention. Maybe if he was missing half his teeth or looked like a mafia hit man. By the way this is in no way is meant to be an endorsement of Mr. Davey, but I think his face tells you little about his ability to or not to… Read more »
Stray Dog
Guest

I hope you’re not a hunch type of guy when it comes to trading.

Kevin Davey
Guest

A better photo

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Alex
Guest

Hi Emmet,
I really enjoy your reviews and writing style.
That said, spellcheck will not correct “false profit” in your introduction to this review.

Joao Santos
Guest
Joao Santos
Kevin Davey’s trading merits five stars. Does his paid courses deserve five stars? For that we need to hear from his customers! Where are they? My conjecture is that they can’t duplicate the master’s achievement. Michael Jordan is great on the court, but paying for his tricks won’t make me play like him. It seems to me that greatness in trading is akin to greatness in sports: it’s a personal trait honed by training and dedication. That’s why we wanna-be-traders look for a model to follow and duplicate. Apparently the 10 profitable automated strategies promised in the past with a… Read more »
Kevin Davey
Guest
Good question Joao! If you go to the other review of me on this site, you’ll see comments from actual students. https://www.tradingschools.org/reviews/kj-trading-systems/#comments Also, there is a thread on my course at futures.io: https://futures.io/vendors-product-reviews/37240-kj-trading-systems-strategy-factory.html But I can’t guarantee success for anyone, of course. I’ll I can do is show what has worked for me, and then it is up to the student trader to actually do the hard work and develop some strategies. I’m also there to support them during their learning phase. Ultimately, the people who succeed with this course will be the people who show up and put the… Read more »
Goagal
Guest

Too bad some of us cannot trade futures. 🙁

Chris
Guest

The statistics from Strike.com for ‘KJ Diversified A Trading System’does not look so impressive:

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GemBow
Guest

At least one person voted down on this comment. Why?

kenneth
Guest

I have noticed in this and the other kevin davey thread , that most comments that says anything that can be interpreted as negative towards kevin will get vote downs – even the post you made which was just a copy of a review on amazon 🙂 .

I think you can assume its just fanatic shills and not care too much about if they vote up or down, as there likely will be no reasoning behind it except “must protect master” pounding in their heads.

Amit
Guest

Hi Emmett, How was KJ performance in 2016 & wondering why 2016 performance/tax return was not included in the review. After 2015 performance it goes to 2017 performance.

Kevin Davey
Guest

I sent Emmett my info in February, before my taxes for 2016 were completed. I only wanted to include info that matched what the IRS received, which could be verified by the IRS via Form 4506-T. I included 2017 info just to show I was still actively trading, and that I wasn’t one of those “he used to trade live, but now is just a sim guy” vendor.

Fara
Guest

Hi Kevin, I am going through your book and I had a question. Would you recommend those wanting to learn to code their own strategies to learn python or just get familiar with trade-station’s easy language. What language do you mainly use for automating your strategies?

Kevin Davey
Guest

Thanks for the question. I use Tradestation for most of my development and most of my live automated trading. Most traders who I work with use Tradestation or Multicharts (both have same basic language) too. I have no experience with Python. THANKS. Please feel free to e-mail me questions too, if you wish.

James
Guest
Wow, I’m impressed! I kind of felt bad for Kevin as I read the exchange that led to this reveal, seeing a guy who seemed to be a decent fellow be under such scrutiny. But such is the nature of this education business. There is so much fraud that now everyone is viewed with a skeptical eye. I haven’t taken his course but if I do, it is nice to know that I could have confidence that my success/failure is 100% on me. Unlike other vendors where there is no chance of success no matter how hard you work because… Read more »
Jim
Guest

Any chance on doing a review on tradenet, Meir Barak. And Trade empowered? These 2 pop up all the time on youtube recommendations…

Simon Watson
Guest
Simon Watson
As far as i could see on his website; What’s being offered is an understanding of how to test and build your own trading systems, as well as being taught a similar “brother” of the system that he currently uses to trade profitably. Perhaps one reason that it’s a ‘brother’ is to avoid diluting his edge? My brother for example is dim-witted and can barely tie his shoe laces. In which case what are we rewarding the high reviews for? I understand he passes the Emmett criteria of providing proof of profitable trading but his exact algorithm or methodology will… Read more »
Kevin Davey
Guest
Thanks for the comment Simon. Sorry about your brother. Earlier today I was teaching my youngest son how to tie his own shoes… Of the strategies I give you, 2 are EXACTLY what I trade. The other strategy has one difference – it enters at a different time than the version I trade. The one I give out is actually a slightly better performer. BUT, do NOT sign up for the class for the 3 strategies. That is not the point of the class. The class teaches you how to develop your own strategies, using the same process I use… Read more »
Simon Watson
Guest
Simon Watson

Thanks for the clarification Kevin.

GemBow
Guest

Amazon reviewer says “I have to give this 3 stars because it is badly mistitled. The correct title of this book should be “Testing Algorithmic Trading Systems” because that is exactly what the book is all about. There is virtually nothing in the book about BUILDING algorithmic trading systems (winning or otherwise), or providing ideas on how to build a WINNING strategy (such as a discussion of successful approaches to trade entries, exits, managing trades in the areas of stop losses, profit stops, trailing stops, etc. … all of which combine to make a “winning” system).”

GemBow
Guest

5 thumbs down and no replies that contradict this review.

I was hoping someone would offer a “rebuttal.”

Joao Santos
Guest
Joao Santos

The big question is “What’s in it for me”? He trades great; does his course buyers duplicated his results?

Kevin Davey
Guest

I have a reply with links awaiting moderation, for your other similar comment. I can tell you that I have received around 100 strategies created by students, using my methods, that have performed well for at least 6 months AFTER the student traders developed the strategies (I personally monitored and verified the results as part of the Strategy Factory® Club). So, students can and do create successful strategies, not just in back test, but in real time too.

kenneth
Guest

How many strategies did you received that didn’t perform well the following 6 months ?

Are the results better than, say strategies made and optimized with a strategy builder (builder, strategy quant etc.) .

Kevin Davey
Guest

I have no idea what the pass rate is for those products, so I can’t compare my student results to those products.

kenneth
Guest

but you may have an idea of the failure rate (ie. the ones submitted that didn’t perform well over the following 6 months) ?

Kevin Davey
Guest

Of course I do, and I will be more than happy to answer that and any and all questions you (or anyone else) has, just e-mail me: kdavey at kjtradingsystems.com

kenneth
Guest

Very nice to see someone having success as a retail trader. Good job.

dtchurn
Guest

was that full tax returns or just the form 6781 page? The tradestation statement shows net 2.9k profit, and about 5k open equity which isn’t exactly closed profit. Which isn’t bad for a small retail account. nah, I doubt KJ’s trading is taking most seasons trader’s money, maybe a few newbs. The HFT billionaires and insiders are leeching the most, so I don’t blame KJ at all for my previous losses as single contracts are insignificant in moving the market much less doing any accum/distr. Holding on to profitable trades is fine, i’ll give it that.

Todd
Guest

Great review of Kevin Davey…. Must be a pleasure to write a raving review on that rarest of occasions… ESPECIALLY a second one!

Fara
Guest

Hi Emmett, Thanks for the updated review.

Jon
Guest

Thank you Mr. Davey for draining the swamp. God bless Mr. Davey and President Trump. Make America Great Again.

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