Kevin Davey has won the Robbins World Cup Trading Championship and placed multiple times. But the real story isn’t the trophy. It’s how he approached the competition with a level of deliberate strategy that most traders never apply to their own trading. In this third and final part of the Trading Triumphs series, Kevin shares the defining moment that shaped how he thinks about goals, luck, and what it actually means to succeed as a trader.
Kevin is a systematic algo trader who turned part-time trading into a full-time career. He’s the author of Building Algorithmic Trading Systems and runs KJ Trading Systems, where he teaches traders how to develop and test strategies properly. But before any of that, there was a $15,000 account, a year-long trading contest, and a plan.
Watch the full episode below, then read on for the complete breakdown.
Starting with the end goal in mind
In 2003, Kevin was developing early algorithmic systems on a part-time basis. When he looked at the 2004 Robbins World Cup results, he noticed something: if he had entered with the algo he had been working on, he would have beaten the winner that year. Most people say things like that. Kevin actually decided to test the idea properly.
Before entering, he did something most traders skip entirely. He went back to the brokerage and asked for the first, second, and third place finishers for the previous five to ten years. He built a data set. He ran the numbers. The conclusion was clear: a 100% return in a single year would, historically, put you in third place or higher. That became the target.
He wasn’t aiming to be Larry Williams, who turned $10,000 into $1.1 million. That kind of result is an outlier. Kevin was targeting a realistic benchmark based on actual historical data, then building a strategy to hit it. That distinction matters. One approach is a lottery ticket. The other is an engineered process.
What a 107% return actually looks like
Kevin entered the contest in 2005, 2006, and 2007. In all three years, he returned over 100%. He finished second twice and won in 2006 with a 107% return, which he described as “the worst of the three years.” The two second-place finishes came with returns around 112% and 148%.
The win itself was not clean-cut. Kevin is candid that one copper trade “blew the account upwards” in the winning year. Without that trade, he would not have won. That single position had an outsized impact on the result, which is something worth sitting with. Even a carefully designed strategy with a realistic target depends, in part, on what the market delivers.
That honesty about luck is one of the things that sets Kevin apart from the usual contest narrative. People who run to the front of the leaderboard in January and disappear by February are not being unlucky. They are taking on risk that cannot sustain itself. Kevin’s approach was the opposite: design a system that could produce 100% with controlled drawdown, then accept that luck would play a role in where exactly you finished.
Van Tharp’s surprising reaction
After winning the competition, Kevin wrote up an article for Van Tharp’s newsletter. He expected enthusiasm. Van Tharp’s response was basically the opposite: “So what, he won a trading contest. That’s kind of reckless.”
Kevin admits he was angry. He had relied on Van Tharp’s home-study courses and felt that his mentor had dismissed a real achievement. But after cooling down and sitting with the criticism, he understood what Van Tharp was actually pointing at.
The value in winning the competition was not the return percentage. It was the process. Kevin had identified a specific goal, designed a strategy to achieve it, put it into practice, and it worked. That methodology, not the scoreboard, was what deserved credit. A Martingale system might have produced a higher return. It would have been luck. What Kevin did was repeatable and intentional.
That reframing changed how Kevin thought about trading success across the board. The question is never just “did it work?” It’s “how did you do it, and can you do it again?”
Why goals define everything about strategy design
The World Cup experience made one thing concrete for Kevin: goals have to come before strategy. Not after. The contest had an explicit goal: a 100% return increases your odds of finishing in the top three. That constraint shaped every decision about system design.
This same logic applies to everyday trading. Kevin now standardises the performance parameters he looks for across any strategy he builds or teaches. There are specific metrics a strategy must hit. If it hits them and was developed through a sound process, it is a usable strategy. If it doesn’t hit them, it isn’t, regardless of how interesting the backtest looks.
He also pointed out the difference between a competition account and a full-time trading account. In the contest, he was willing to lose all $15,000. That was an explicit, informed decision. The contest was a finite experiment with capped downside. Running your entire trading operation with the “go big or go broke” mentality would be a completely different situation, one he described as “idiotic.”
Context determines the appropriate goal. The goal determines the appropriate strategy. Skipping that first step is where most traders go wrong.
Building a portfolio around goals, not just results
Kevin’s goal-first approach extends beyond single strategies into portfolio construction. He described a scenario many systematic traders recognise: you build systems, and eventually you have 20 S&P systems and five crude oil systems, but no wheat system. At that point, building a wheat system becomes the goal, not because wheat looks like a good trade right now, but because diversification across different market sectors is part of the overall objective.
Other traders go the opposite direction: build systems wherever they work, then trade whatever markets those systems cover. Both approaches are valid. The point Kevin makes is that either way, the goals have to be clear upfront. You have to know when a strategy meets your criteria, and that requires having defined the criteria first.
Without goals, you are reacting to results. With goals, you are measuring outcomes against a known standard.
Luck, backtests, and the honest accounting of both
Kevin is direct about how he thinks about luck in backtesting: every backtest has good luck built into it. That is his default assumption. When a backtest looks great, some portion of that performance is luck, and that luck is likely to either disappear or reverse when the system goes live.
This is not pessimism. It’s calibration. If you expect live performance to match the backtest exactly, you will be constantly surprised and constantly adjusting. If you start with the assumption that the live performance will be somewhat worse, you build that expectation into your position sizing, your drawdown tolerance, and your decision about whether to continue trading a system when it starts underperforming.
He also made a sharp point about post-mortems. When a system fails, traders invent reasons after the fact. Maybe volatility declined. Maybe correlation shifted. These explanations sound logical. But as Kevin put it: “If you were that smart before you started, you should have said that before losing money.” The risk of over-explaining failures is that you give yourself false confidence that you understand what happened, when in reality you are pattern-matching on noise.
The confidence that came from competing
Kevin was candid about one of the less-discussed reasons he entered the contest: he wasn’t sure if he was actually good at trading. The contest was a way to find out, to put himself against other traders in a structured, real-money environment with real consequences. Three years in a row, he returned over 100%. That answered the question.
That confidence then carried into his decision to trade full-time. The contest wasn’t just a competition. It was a proof of concept for his methodology. And even after winning, Kevin stayed grounded about what the result meant and what it didn’t. The performance was real, but luck was part of the story, and he knew it.
Beyond the results, the contest opened relationships he still values. A group of World Cup winners who connect monthly via Zoom. Real money, year-long, with actual stakes. Those are the kinds of environments that produce genuine learning, not paper money weekend contests.
The lesson for systematic traders at every level
Kevin’s advice for aspiring traders is straightforward: trading is a long road and a hard road. The traders who last are the ones who can handle frustration and setbacks. Drawdowns are part of the process, not a sign that something is broken. If you cannot sit with that discomfort, passive investing is the more appropriate choice.
But if the puzzle of markets has you hooked, and you are willing to approach it systematically, with clear goals, honest accounting of luck, and strategies built to hit defined targets, then the path he describes is achievable. Not easy. Not guaranteed. But achievable.
The most important insight from this conversation is one Van Tharp was pointing at all along. It is not that you won. It is how you did it.
Related episodes
- Trading Triumphs: Kevin Davey #2 – Drawdowns and Margin Calls
- How to Detect a Failing Trading Strategy – Kevin Davey
- Trading Triumphs: Jerry Parker #1 – Fear of Executing Trades
- Trading Triumphs: Brent Penfold’s Journey to Success
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