The World of Stock Gurus – Atlas Trading
Well, I got sucked into the world of Fintwit stock gurus and discord servers. In this video, I break down my take on the Discord server, Atlas Trading.
Intro
The world of trading is more prone to fake gurus than maybe anything else out there. A lot of people love the idea of being a full-time trader, myself included. Being able to make a nice living by trading at home from your computer sounds amazing. But unlike other high-paying career paths, there is no clear route to become a day trader. The path to become a doctor, lawyer, or engineer is pretty clear cut, but not so much in this world.
So if you’re new to the world of day trading, it can be hard to know where to go for education and community without having to dole out thousands of dollars.
Enter the stock guru – or “furu.” Prevalent in YouTube ads – maybe one even played before this video, also in articles on business-related media outlets, and on Twitter. Typically, these gurus are so successful at trading stocks that they can teach you how if you only purchase their course with their special trading system or their proprietary indicators or scanners or whatever.
Now, I, for one, don’t inherently take issue with people selling courses. If you have valuable experience and information that can help shorten the learning curve and help make newcomers more successful, and want to sell that for a reasonable price, that’s fine. When it comes to trading though, a lot of these gurus or “furus” can’t prove their trading success, teach basic concepts that can be learned for free, and make the vast majority of their income from selling their courses and chatrooms – not from actually trading. There’s a reason why I dub myself the anti-guru. I’m just not a fan.
Most people’s counter-arguments with these furus is “if you’re so good at trading, why would you 1) tell people about your strategy which could hamper your success in the markets and 2) why do you need to sell a course for thousands of dollars?
And these are valid points. I can understand that they may find marketing and teaching better suits their life now, and the stress and risk of depending on trading for your income is less desirable to slinging the online courses.
But the real problem is day trading is freaking hard to get consistently good at, no matter who you are. When you have massive ad spend and an approachable teaching style, you can dupe thousands upon thousands of people into paying you their hard-earned money, when in reality, the overwhelming majority will not be profitable over time. And to me, that rides a pretty thin line, ethically-speaking.
Oh, and almost all of these strategies are really best-suited for people with a margin account of over $25,000. If you spent $1,000 of your savings on a course only to learn that every strategy taught and every chatroom moderator has unlimited day trades scalping .10 moves in the stock price with a massive share size, that doesn’t do a whole lot for you with a few thousand in your account hampered by PDT or good faith violations.
So I don’t have the rosiest view on trading courses, not that they’re all bad, but let’s move on to Financial Twitter, or fintwit.
The Twitter Rabbithole
If you’ve been around the trading world for just about any amount of time, it’s likely you’ve heard of Zack Morris. Zack Morris is perhaps the most infamous Twitter FURU and, well, he leans into the title. With over half a million followers on Twitter, he definitely carries some weight. And every genuine day trader I’ve heard from thinks he is a clown pump and dumper who only trades on a paper money account and doesn’t have millions of dollars to his name as he claims. When I first heard about him, I ignored him. At one point, he made his Twitter private, there were rumours about him being investigated by the SEC, and you know, the usually fintwit drama.
But I thought there might be a little more to it, so I decided to dive in a little more, albeit skeptically.
Following Zack Morris led me to other traders prominent on Twitter for their sick nasty gains. There is Gary Trades, for whom a $64,000 day is a rough one. This one is more like it. I actually kinda like this guy because he does try to help new traders out. There’s Tommy from the band Breathe Carolina who grew his account from $34,000 to over 1 million just this year alone. And Hugh Henne, clocking a 6 figure day like it’s nothing.
This can make anyone wonder what on earth they are doing wrong with their trading and make an incredibly solid $500 day feel paltry in comparison.
The common denominator with all of these traders is they are part of a Discord server called Atlas Trading.
Just about any trader who’s had a modicum of success seems to launch a paid discord group pumping out trade signals. I’ve joined a handful of these over the past 18 months to see if they provide educational value, good trade ideas, and a solid community – which can all be well worth the monthly fee of $50 or $100.
But unlike many others, Atlas is 100% free to join. So, of course, I joined to see what it was about. If these guys are trading in there every day and making absolutely wild profits, why not see what it’s about?
*Disclaimer*
And I also feel like I should mention I have absolutely no affiliation with anyone who runs Atlas. I’m sure they don’t have any idea of who I am and could not care less.... I only decided to make a video about it because it is so prominent in the trading space and is also super polarizing. A lot of love and a lot of hate, and I honestly don’t know where I stand with it. That’s all – back to the video.
So the Discord is absolutely massive – not just in member size which is well over 200,000 people, but also the amount of channels. It can be absolutely overwhelming. Between small caps, large caps, crypto, and education, there are well over 60 channels to navigate between.
Most the action during the trading day happens in the small cap chat rooms. Which – small cap stocks tend to be the favorite of a lot of these Twitter gurus I’ve come across. Tickers that aren’t household names, like RCAT, VRPX, and AHPI.
A lot of these small cap stocks also have a low float, which means they just don’t have a lot of tradeable shares out there. Take Tesla, for instance, which has a float of 775 million. That’s a lot of freakin’ shares. Now, compare that to VRPX, which has a float of about 2 million.
This means if VRPX sees an uptick in trade volume, the price can move fast, due to the limited number of shares available. So, if you run a Discord server with tens of thousands of people who are looking to you for what stocks to play, you can load up on VRPX shares, send out an alert, and then sell it a few seconds later once hundreds of people start buying into it.
Now whether or not that’s what Zack Morris and the other pro traders are doing, I don’t really want to speculate. Zack and others will post losses on their plays every now and then.
To Zack’s credit, back in January he was posting about AMC when it was under $3 and from what we can tell, he loaded up pretty heavy. On January 27th, the day the stock hit $20, he posted his daily P and L showing over $21 million in profits.
Now, do I believe it? Yeah, I actually do. A lot of people made a lot of money on AMC and Gamestop at this time, and if you had the account size and conviction, you could make a killing if you played it right.
Trading Zack’s Plays
While the general public doesn’t know his real identity, I did listen to his podcast on Pennies: Going in Raw – which is actually hosted by Hugh and another Atlas member, and Zack did talk about his old day job working on new home construction and his growth as a trader. He did say that there was no reason to start a paid Discord because he makes plenty of money trading stocks, and he really does like helping other people make money. So honestly, despite what most people think, I don’t think he’s a fraud pump and dumper. I do think he is a good trader.
And while he does get a lot of hate from any bagholders who lost money on one of his trade ideas, it does seem like people are making money from his plays and other plays by Atlas moderators. But honestly, I’m not entirely sure how. The server is kind of like a hodge-podge free-for-all of wall street bets-style chatting mixed with ticker alerts and educational tid-bits. There’s no real clear cut strategy that these guys are using other than playing these small cap stocks that gap up in the morning and have an unusual amount of trading volume.
I decided to hop into a few of Zack Morris’ call-outs to try it out. He tends to buy stocks that he thinks are undervalued and hold them until they pop off, whether that’s a few hours or several weeks. First, I bought AHT, which is a REIT and I believe was a re-opening play.
Zack was expecting a break of $10, but it never happened. I did make a nice little profit, buying 1,000 shares on June 2nd for $5.87, and then a week later I bought another 1,00 shares for 6.97 hoping to see it break $7, but it lost momentum and I sold $6.78 for a profit of $725.28.
AHT then did a 10-to-1 reverse split and the stock price dumped back down below $2.
The other play I took was WISH. It did seem like a really undervalued stock, so I played a mixture of shares and call options. I did pretty well on the stock except for my call option trade that I swung into July. So overall, I did lose about $151.
That being said, I still think it’s undervalued and once it finds some support, I will consider buying shares again.
Scalping Trades
So historically, I trade stock options on large cap stocks like Tesla, Nvidia, and Amazon. I almost always avoid stocks that don’t have options available, so a lot of this small cap momentum trading that a lot of the big traders in Atlas do just doesn’t fit my strategy. But, with that said, I have tried it out, hanging out in the Discord server during market hours to look for plays and see if that style of trading works for me, because I honestly haven’t really locked in my trading style and strategy.
When the mods find a small cap stock they like, they call it out – and when it dips, they’ll buy ‘em up… and sometimes these stocks break out and other times they just fizzle out – which I suppose is the nature of trading small caps. You’re expected to manage your own trade, since they don’t often alert when they exit, which is fine, but I feel like a lot of new traders who don’t have a firm grasp on technicals end up bagholding.
In general, it seems most people are using the same type of scanners from TradeIdeas, so you could probably find some of these small cap breakout plays on your own, but it doesn’t hurt to have people calling out potential moves.
So like I said, I did try my hand at this style of trading the past week and honestly, it was kind of fun. I ended up having a win rate of about 67% and profited about $456.26, usually going in with 500 to 1,000 shares of these small cap stocks.
One thing I don’t really like about it is I have no idea what any of these companies do, and as quick day trades, I don’t think it really matters – but if you get in a tough spot and want to swing the position overnight, there’s a good deal of risk. A lot of these small cap stocks pop on news and then sell off over the rest of the day, so the next day the price can be 25% lower than the day you entered. Basically, it can be a little tricky to lock down the right strategy if you’re not experienced with this kind of trading.
Education
One of the most important aspects of any trading Discord is education. If they aren’t teaching you anything and just calling out tickers and alerts, that’s not really helping you become a better trader. And honestly, Atlas has a pretty extensive education section. From patterns, to indicators, to ebooks, to YouTube videos, there’s a lot to go through and learn from. One of the mods that I actually think really cares about teaching people is Ripster. He is constantly posting solid tips, charts with what to look for, and he calls out a ton of plays throughout the day usually well before it really takes off, giving people plenty of chance to take the trade. He isn’t very flashy and isn’t posting photos of him with Rolexes, but he is a great trader who puts a lot of effort into teaching people for free.
There’s also Rocket Catchin Bob, who has a helpful YouTube channel, Incredible Bob, and Brady who streams on Twitch.
Honestly, I would recommend that new people avoid the trading rooms and just use this server for the educational resources. There’s hundreds of hours of material you can go through to really get a solid foundation for your trading.
Final Thoughts
I think it’s clear that some people in Atlas are making a lot of money. The question I have is what percentage of those actively taking those Atlas trades are also making money apart from the mods? A lot of people post to Twitter thanking the pro traders of Atlas for helping them make a lot of money, so I assume there has to be plenty of people out there who have learned to trade profitably from that group, but I’m still not fully sold.
It’s kind of weird, because when I set out to write this video, I didn’t expect to have a very favorable review of this corner of the Fintwit world, but the more I analyzed everything, the more I realized there is actually a lot you can learn here for free.
The issue becomes when you see the 6 figure daily P&Ls, the cars, and the Rolexes, you may be tempted to blindly follow whichever trading guru into some trades and lose a lot of money because 1) you don’t know their strategy or risk tolerance and 2) they probably have more experience trading. Don’t compare where you are at in your trading journey to where someone else is. There will always be someone better, someone making more money than you, so it’s best not to focus on comparison. If there’s anything I’ve learned from trading over the past year and a half it’s that it is not a get rich quick profession. It is super difficult.
But like I said in a previous video, if something is free, chances are you are paying for it in some way or another. While there is some value to be found on servers like Atlas, please don’t blindly follow any play without a plan. There’s no doubt that a server with over 200,000 people could move a low float stock, so while I did find some good there, I do remain skeptical overall. If I had a 7 figure account, I could easily make $10,000 off of a ten cent move of a low float stock, so just keep that in mind and be cautious.
If you want to try trading the same stocks that any gurus on Disord or Twitter or wherever are trading, start with a super small amount– even just 1 share. Stick to a strategy – maybe that’s setting a stop-loss under a moving average or support and taking profit at the next level of resistance – just stay disciplined even though one share makes it incredibly low stakes. Track your trades and when you can have a win rate of over 80% while keeping losses to a minimum, you can then increase your position size. Just take your time to get a better grasp on how these stocks move, what patterns they tend to follow, etc.
Well, that’s all for this video, I gotta get up in 7 hours to find the next small cap banger, but, if you would, hit the thumbs up button on this video if you enjoyed it, consider subscribing if you haven’t already, and I will see you in the next one.