What is “The Trade Risk”?

the trade risk reviewTheTradeRisk.com is a stock trading service run by friend and colleague Evan Medeiros.  The service provides you with daily trade alerts on high momentum stocks.  He tells you precisely when he’s getting into a trade and when he is getting out of a trade. 

He takes this service a step further by providing you with weekly recap videos (about 20 minutes long on average) where he walks you through each trade, explaining the rationale behind it.  


How I discovered “The Trade Risk”

Evan and I met at Stocktoberfest 2014.  Over a beer, we discussed the market and what trades we were interested in at the time.  As it turned out, our process for finding high-quality growth stocks was very similar and we often traded the same setups.  In fact, we even took the same entry point on BABA on the same day and got the same fill price!  

Our strategies for managing the trade turned out to be a bit different.  Most of my trades tend to be held from weeks to months at a time whereas most of Evan’s were held for a few days at the most.  He isn’t a day trader.  Rather he is a shorter term momentum based swing trader.

We both made money on this trade and we are both successful traders.  However, our trade management styles are slightly different.

How I Made Some Money Using “The Trade Risk”

Toward the end of the year Evan and I were talking on Twitter and we started to discuss his trading service “The Trade Risk” and how things were going.  He told me all about the service and I thought that it may be a very good fit for some of you.  I agreed to test it out for 6 weeks, put it through its paces, and see if it was worth sharing with you.

As part of the trial, I asked Evan to make sure I was treated exactly the same as everyone else and received no special treatment.  

The service is pretty straightforward:

  • Trade alerts sent straight to your phone as they happen
  • You receive exact entry points and exit points
  • Every weekend there is a wrap-up video that is about 20 minutes long.  Evan walks you through the trades step by step

I took each of the entries and exits that Evan suggested and walked away making a little over 1R for the 6-week trial.  Not bad considering the choppy environment!  

For those of you not familiar with the work of Van Tharp, “R” stands for Risk.  He views each individual trade as making a multiple of the amount you risked.  For example, if you risked $100 and made $150, you would have made 1.5R.  

I typically risk 1% of my capital on every trade so over the 6-week trial, my portfolio was up about 1%.  

For all of 2016, Evan was up 14.08R (if you risk 1% on every trade, you’d be up about 14% less transaction fees).  

His biggest winning trade was up 3.73R 

His biggest losing trade was down -1.65R

There were 157 trades in total. 

New Trading Techniques Learned from The Trade Risk

One of the great things I like about Evan’s service is that like any good trading service, he provides open email access and typically responds to all emails within 48 hours (at one point during the trial Evan was traveling across the country and STILL managed to respond to an inquiry in a timely manner).  

Selling on the Way Up

As mentioned earlier, Evan and I go about finding high-quality growth stocks in a very similar way but we go about managing them differently.  He likes to sell into strength and take pieces off on the way up.  Selling into strength has always been challenging for me so to see him do it in real-time was very helpful.  

Counter-Trend Trades and Buying the Dip

Evan is also very good at picking up counter-trend trades and reversals off of a support area.  If he is wrong, he is often out in a hurry and very seldom loses the full amount.  (His biggest loss during my trial was -0.48R).  Again, “buying the dips” is something that is often easier said than done.  Watching him do this in real-time was a good learning experience.

A few caveats…

While I really enjoyed Evan’s “The Trade Risk” service and definitely recommend it, I don’t think that it is for everyone.  Here is who I think the service is NOT for:

  • Someone who is NOT an active trader.  Most of the trades I was in with Evan lasted less than a week.
  • Someone with a small account AND/OR has a broker with high transaction fees.  Keep in mind that 2016 generated 157 trades with at least 314 entries/exits.  I say ‘at least’ because Evan likes to scale out of trades.  If you’re paying $10/trade you’d have at least $3,140 in transaction fees last year.  

The bottom line…

During my 6 week trial, I enjoyed Evan’s “The Trade Risk” service quite a bit, learned a lot, and made some money.  Despite the caveat above regarding small accounts, I was able to make the service work WITH a tiny account that I have with Robinhood because they have $0.00 transaction fees.  If this is you as well, you may still want to give The Trade Risk a try.