Biggest Red Day...

AI Summary

Transcript

What's up, everyone? Welcome to day 27
of my small account challenge of growing
a $2,000 account using Charles Schwab as
my broker. Today is a red day, and it's
not a small red day. I got smoked today.
It's a pretty big red day. And you know,
look, I'm disappointed. We're going to
talk about it during the recap. One of
my goals for this challenge is that I
show up every single day to give you
guys a recap of my trades, whether
they're green or red. I've had many days
where I had a couple red trades, but I
still finished the day green. Today was
one of the days where I took two trades,
I lost on both of them, and they were
both outsized losses, and the second one
was bigger than the first one. And I
think that this all speaks to something
that's going on in the market today. So,
yesterday, if you tuned into day 26, was
a solid green day. In fact, it was the
biggest green day I've had so far during
this challenge, and it is very typical
that a red day will follow a green day.
A little bit of complacency,
a little bit of overconfidence, feeling
like, "Oh, I'm doing so well." The sort
of emotions that come with a good day
can create a little overaggression, uh
and result in following day being a red
day. And I also had a nice big green day
in my main account yesterday. So, kind
of doubly green, and then today, not so
good. And then secondly, yesterday was a
good day, and then this morning,
pre-market, when I sat down to look at
the scanners, we didn't have anything
that looked good. The leading gapper was
only up 40%, and I sat here from 7:00 to
7:30, 8:00, 8:30 to 9:00, 9:30, and
there was nothing that moved. So, I had
no trades pre-market. And then at about
9:15, 9:45 or 9 9:30, 9:55 going into
10:00 a.m., we had a stock that squeezed
up, made a big move, and I felt
FOMO.
Fear of missing out, frustration of
missing out, the disappointment of
missing out, the regret of missing out.
I missed out, and I knew it. And that
wasn't a good feeling. And I I unable to
maintain the discipline to say, "You
know what? It's all right. You'll live
to trade another day." Instead, I acted
on the FOMO and I took a position. Let's
talk about it. Let's jump into the
recap. Now, as a reminder, all of the
profit from the small account challenge
gets donated to charity.
Unfortunately, today I've given back a
little bit of profit. So, that's not
great for the charitable organizations
that we're donating to, but uh you know,
big picture, over the course of weeks
and months of trading in these small
accounts, uh we're still raising a lot
of money and doing a good thing. So,
$385,000 raised so far and $390,000 has
already been donated to children's
hospitals across the country.
All right. So, this morning, when I
first sat down, um pre-market was very
slow. And then the opening bell gave us
this surprise action. Um ED BL, LGHL,
uh DFNS,
uh BIYA. There were a few others that
started to squeeze up, as you'll see.
And that struck me as being a bit
surprising. Um
so, if I pull up my my chart uh here,
let's see. So, let's look at this one.
So, INFL, this stock made a big move
after hours, as you'll see right here,
then pulled back, squeezed up pre-market
at 4:00 a.m., tries to break VWAP, it
can't, tries again, it can't, sells off,
and then at the open, halts up at five,
opens and goes into a second halt, then
halts down, then halts back up, then
halts up again, then dips and rips up to
a high of 820 before dropping all the
way back down to 460. DFNS, this one was
strong yesterday, um squeezed up
pre-market, pulled back, and then in the
afternoon yesterday, it pushed higher
all the way up to 16, then up to 20,
dips down pre-market, goes back up to
21, but pre-market, it was on lighter
volume,
there wasn't any fresh catalyst, and I
just I didn't trust it. So, no trades
there. At the open, it rips into a halt,
opens and goes into a second halt, a
third halt, a fourth halt, ends up going
from 20 $20 a share all the way up to 37
and then dropping back down, then coming
back up, double topping just about and
then coming back down again. So, this is
a 14-point move.
And of course, I missed the whole thing.
And look, if we had had that kind of
breakout during pre-market, of course I
would have traded it and I probably
would have done quite well on it, but
for whatever reason, this one waited
until the 9:30 opening bell to pull
away. And so, as I sat here getting
ready to do my recap, which was going to
be a no trade day, I was feeling um
a bit frustrated and I was like, well,
you know what? It's the end of the
month,
uh last few days of the month, I don't
want to make any big mistakes, so look,
it is what it is.
Um but I I was feeling a little bit
frustrated. And so, then um I noticed
INLX. And I had I already been kind of
watching it. It halted up to these
times, halted back down, then come back
up here, sold off, come back down, came
back up here and it dropped down right
here.
And then it rips up right here and it
was such a powerful squeeze up um that I
actually decided um it pulled back, it
comes up here, it pulled back and I
jumped in right here.
I decided to jump in this um and I was
thinking, all right, I feel like this is
going to halt up and we're going to
start to actually pull away here. And
so, that was my first entry right there
at a little over $8. It goes up to 815,
820, it's almost halting up and I take
I don't know, a thousand shares off the
table. I think I had a 4,000 share
position. So, 4 * 3 is like $32,000
uh or 4 * yeah, no, sorry, 4 4 * 8 uh
32,000 dollars roughly.
Uh so, probably had something like
4,000, 5,000 shares on it. And so, then
it flushes down here
and I end up stopping out the rest at
like 750
and I'm down 1,600 bucks. And I was
like, "Ooh, bummer." And check the time.
It's 10:30. So now I've broken the ice
with my first trade later in the morning
than I typically trade.
And
I'm like, "This is not good." Well,
okay, maybe we're going to have a red
day. But, at the same time I was looking
at IN
INFL and I was looking at the daily
chart. Let me pull it up for you. And I
was thinking to myself, you know, no it
wasn't I INFS, sorry.
Um
No, that wasn't it either. Uh sorry.
Back this up.
I INLF, sorry. Okay. So I was looking at
the daily chart on this and I was
thinking, you know, I mean, if this
thing really starts to curl,
um you know, we we could end up getting
a nice squeeze here. I mean, I don't
know how high it's going to go, but
there's actually quite a lot of room.
And so I started thinking, you know,
maybe maybe there's going to be
something here a little bit more to work
with. Um
and so
as it curled back up I got back in right
here at about 770.
And I was like, "I think this is going
to squeeze back through eight." And, you
know, boom. And then instantly almost
like 30 seconds after I got in
it flushed and it halts down at 680.
And I'm holding 4,000 shares.
And in an instant I'm down four grand.
It resumes
and it goes lower
and I stop out.
And so I lost $7,332.81
today. That's a brutal loss. It's nearly
20% of my account. I had $38,000 at the
beginning of the day. So this is the
biggest loss that I've had so far
without a doubt during the small account
challenge. It's disappointing. That's a
big setback. You know, 26 days, one red
day back there at some point was a small
red day. And now, you know, a a pretty
good size drop. And so, at this point,
I mean, look, what's done is done. And
it was a momentary kind of
all of a sudden, um I'm punching an
order at $8, and then I'm down 50 cents
a share. And now I'm down 1,600 bucks.
And then it curls back up, and I'm like,
"Okay, now I think this is going to
work." I get back in, and then it's
halted down, and I'm down a dollar a
share.
And in a matter of like 10 minutes, you
know, things unraveled. And this is why
This is one of the reasons, of course,
that trading is so difficult, because it
requires this constant presence of mind.
You've got to constantly be on the
defense to not allow these emotions of
fear and, you know, FOMO to creep in,
overtake your trading, and then in in an
instant, you've made a big mistake.
You've bought something at the very high
of day right before a big flush. And so,
you know, look, I'm I'm pleased with the
fact that um if we look at my metrics
here um over the 27 days, that I've been
able to maintain now 76% accuracy. Two
losers today drops my accuracy from 78
down to 76. Um but, you know, 59 trades,
45 winners, 14 losses. So, the accuracy
has been pretty solid. I've done a
pretty good job, um but over the course
of 59 trades, I've probably had these
two today, um and maybe
maybe let's see, there was one I think
on Friday, um and then I think there was
another a couple, so maybe there's been
like four of those trades
that have been pretty bad. So, you know,
look, almost 8% 10% of the trades, if
we're going to round up,
you know, six trades out of 60 have been
pretty bad. And the losses of those six
trades have probably totaled, you know,
90% of the amount of money I've lost
during the entire challenge. I've made a
lot, I've lost a little, and so I sit,
you know, exactly where I'm at now at
31,000 in total growth.
So, on the one hand, I am really pleased
with my success. And I think it's
important to be able to look back and
give yourself a pat on the back that
you've done a good job to get from where
you were to where you are right now,
even in spite of this drawdown. Losses
happen. Momentary lapse of judgment
happen. Whether it was FOMO or it was
you didn't sleep well and you were had a
shorter fuse and you got frustrated and
stubborn. Whatever it is, it happens.
And so there's just no way to completely
avoid that in trading. And even if
you're like, "Oh, I'm going to automate
my trading and create some
high-frequency trading algorithm." Which
by the way, as an individual retail
trader will never really be able to do
successfully to compete with these hedge
funds that hire MIT graduates that are
like the smartest and you know, they
could possibly be with these types of
things. But even if you were to do that,
even those free high-frequency trading
algorithms make mistakes. Now, no one
really says they're responsible for a
mistake. Oh, the computer made a mistake
and and lost some money today. Oh, well,
I guess that's just what happened. You
just chalk it up to the fact that
there's no such thing as 100% accuracy.
And so, you know, as I said now with 76%
accuracy, I am a little disappointed
that I'm now going to have to spend the
next
you know, the certainly the rest of this
week recouping that loss. The biggest
green day of this whole challenge was
yesterday at 3,900. So, to lose $7,000
in one day is, you know, 50% more more
than that than my biggest green day.
That by itself doesn't feel good. It
will hurt my profit-to-loss ratio to
have losses that are that big. Um but
thankfully the accuracy is maintained uh
a high level and so I'm still net
profitable as a result. And if I can go
another 26 days uh
until I do that again,
well, then that would be probably the
best I could hope for because it will
happen again. It's only a matter of
time. This is the way trading is. Easy
come, easy go. And so I always remind
you guys to manage your risk. You
shouldn't blindly follow me or anyone
else. I make mistakes. You know, there's
no trader who doesn't make mistakes. So,
you got to learn a strategy. You got to
sit down. You got to show up. You got to
trade that strategy every day. And
you've got to try to take your winners,
you know, with a bit of grace. And just
accept that, well, I got beat up today.
And I made a a few mistakes, but, you
know, I I don't need to be too hard on
myself because, look, you're trying to
do something that's very difficult. A
lot of people give up. A lot of people
get frustrated. This emotion of
disappointment then leads to, you know,
tomorrow coming in and losing even more
because trying to make back the $7,000
in one day and swinging for a home run
and then you lose and now you're down
14,000 in 2 days, 20,000. And then all
of a sudden you're like, I I give up.
You know, I I gave back 30 days of
progress in 3 days. This is I'm done.
And I've seen that happen to a lot of
traders. And so, it's probably the most
important thing here at this moment is
that I'm in a fork in the road where I
can either spiral and continue just
trade from pure emotion. I'll buy
$31,316,
which is my current account balance, of
the next penny stock that pops up. And
either goes up 200% and I double my
account in 1 day or it drops 50% and now
I'm at 15,000 in the account, right?
It's either going to be, you know, a
hero or a zero.
Or I take the other path, which is
not as emotional and it's just basically
buckling down saying, well, I'm going to
be here for a little bit. It's going to
take me a little while to make back this
loss. I can do it because I know I've
done it before. And I'm going to do it
by trading with smaller size, just
chipping away, getting in, getting out,
trading during the window I typically
trade the best, 7:00 a.m. to 9:30, not
after the open, and focusing on the
types of stocks I do the best on and
just taking base hits, getting in,
getting out, getting in, getting out.
And three or four days from now, even if
I haven't made back all of the loss, but
I've had three or four small,
medium-size green days, emotionally I'll
be back on track. And then at the end of
the day, the profits are the byproduct
of your strategy and a byproduct of
being a confident trader who's trading
calm, cool, and collected every day. So,
that's where I'm at here for day 27. You
get to watch live if you do the 2-week
trial, which I encourage you guys to
check out,
and continue to see how I how I, you
know, rebound from this red day.
All right, so that's it for me. Reminder
as always, trading is risky and my
results aren't typical. So, manage your
risk by practicing in a simulator before
putting real money on the line.