BIGGEST RED DAY...

Today is day 36 of my small account challenge of 
growing a $2,000 account using Charles Schwab as  
my broker and it is the biggest red day so far 
during this challenge. I got completely smoked  
today. Not just on one stock, but actually I 
traded three stocks and I got completely smoked on  
two of the three stocks I traded. In fact, today 
is yet another day where I fell victim to FOMO  
and got caught in a cycle of emotional hijack. 
It all began this morning when I first sat down  
and looked at the scanners. Let's jump on 
the screen share and start breaking it down.  
So this morning I pull up the scanners and 
unfortunately we really didn't have much to  
work with. We had RDAC which was up substantially 
with absolutely no news. This is the problem with  
these stocks. You get a big move, you've got no 
news and this has been the current theme in the  
market. We have a lot of volatility which on 
the one hand we like, but there's no catalyst,  
clear catalyst driving the momentum. So 
this is just a special acquisition company  
that ended up going up. Right now it's up 173% 
on absolutely no news. And so when I first sat  
down and looked at this um earlier this morning 
at around 6:30 in the morning, I thought, well,  
the I you know, it's leading gainer, but it's 
already stair-stepping back down. It was below the  
volume weighted average price. So not interested 
in it and even if I was, the price is a little  
higher, probably be too risky. So I said to 
myself, nah, I'm not going to I'm not going  
to mess with that. Now the second leading gapper 
is MRNA. This is a Moderna, that's the, you know,  
the vaccine company, meta biotech company and 
today they're making a huge move as you can see.  
The float, however, 356 million shares. It's 
obviously way too expensive for the small account.  
No trades on that one. And then we had T N O 
N. T N O N popped up after hours yesterday.  
And when this one first popped up, you got this 
big squeeze, then sort of sideways consolidation.  
4:00 a.m. it pops, it drops, it pops, it drops, 
it pops, it drops. It continues this move and I  
just said, "I can't trust it. You've got ascending 
resistance up here. I'm leaving this one alone."  
And then we ended up having a 
few other stocks that moved. So,  
one of those stocks was SKK. SKK this morning 
comes out with a headline and it squeezes from $5  
all the way up here to 7:50 and then ends up being 
red on the day. Stocks with news do not work. Now,  
as you could see it later rallied back up, but 
through halts, one, two, three halts up, the  
halts down, I mean, this is very hard to trade. 
So, this on very light volume very difficult. Yes,  
we like volatility, but this was This was not 
possible to trade. So, that was SKK. Then we had  
Let's see, we had YJ. Now, YJ hit the scanners 
this morning and when it first hit the scanner,  
it pops up to about $3 a share and I said, "Well, 
wait a second. YJ is the same stock that just how  
long ago was it? You know, a week ago?" Ends up 
going from $1.20 all the way up here to a high  
of gosh, look at this chart. $13.97. But then 
pretty much gave it all back. Now, right here  
you had a second attempt at a pop. If we zoom in 
on that day, on that day it popped up and it was  
a short-lived move and it did a full round trip. 
So, when it first started popping up this morning,  
I thought to myself, "No way. There's no way 
this is going to work. It Look at the history,  
right? It's going to pop up, it's going to 
round trip." And that's pretty much what it did.  
And then it rallied back up here and I held my 
bias. I held a bias on the stock. And this is This  
can be a problem. Even though the chart you could 
argue looked decent and was curling up, I said to  
myself, "No, because of its previous recent chart 
history." I said, "No, I'm not trading this here.  
I'm not trading it here. It goes up to four. I'm 
not trading it here. I'm not trading it here."  
It goes up to 450. It goes up to five. It goes up 
to six. I miss an entire move here of over 200%.  
And I was kind of gritting my teeth. You 
know, cuz I'm sitting here on the sidelines,  
sort of crossing my arms saying, "No, it's not 
going to work. It's not going to work." And this  
thing just keeps going without me. So, then it 
pulls back here and as it curls up right here, I  
end up punching it. So, I punch it right here and 
I end up making about $3,000 in the small account.  
Not a huge not a huge profit, but it's a profit. 
And then right here I get back in and I'm looking  
for this curl through the high and up to 720. I 
knew on the daily chart that we had a gap from  
720 or a window all the way up to 1397. And so, I 
said, "Well, jeez, it looks like now it's starting  
to go." So, I add back right about here for the 
break throughs the highs and I held into the open.  
Why did I do that? I got stubborn. I got stubborn. 
I got frustrated. I'd missed so much of this clean  
move. I got a little bit of this spike and 
then right here I get back in and I'm like,  
"This is going to work." And it just couldn't 
pull away. And I got stubborn and I didn't want  
to cut my loss. And finally, of course, I 
had no choice. And, you know, this could  
have been one of the stocks that squeezed back 
up and halted up and ended up da da da da da,  
but so far it has not done that. It's just sold 
off. So, let's pull up the slide deck and break  
it down. All right, so that was my those were 
my first two trades for day 36. Now, all of the  
profits from these small account challenges gets 
donated charity, which makes today feel that much  
more disappointing, discouraging, embarrassing. I 
feel so angry. I just gave back all this profit.  
And I've already donated the money. I've been 
donating the money as I go to charity. So,  
I've already donated over 460,000 exactly $460,000 
to 47 children's hospitals across the country.  
And now I've got to spend the next couple of days 
digging myself out of this hole. So, today day  
35 YJB became the leading gainer. Um it did meet 
four out of five pillars of stock selection, but  
of course I missed the beginning of the move. And 
if we look at it, there were a lot of jackknife  
candles on this thing. So, these big topping tails 
it just kept not holding up. I tried to take the  
curling pattern. Um this Sorry, this that was the 
chart from yesterday, so I'll just delete that.  
And so, this was um where I sat at the end of 
that trade. I went from green about $3,500 to red  
$5,400. I lost about $9,000 just being stubborn. 
Wow. Was I following the rules of the strategy?  
Nope. Nope, I didn't. I thought I knew better. 
In the moment, I held. I waited. I hoped it would  
turn around. I hoped it would curl. I thought it 
would curl. And it did not curl. So, there it is.  
Now, after that after that loss, I was pretty 
frustrated. And I said, you know, this is just  
this is not okay. I don't want to finish the day 
down $5,000. In fact, there've been many days  
this month where we've had big moves 
after the open. Just look at SKK.  
And so, I said to myself, no, I'm not going to 
um accept being down here when certainly there'll  
be things moving. And so, when VRAX started to 
squeeze, I jumped on that. Look at this breakout.  
A break of four, a squeeze up to a high of 450. I 
was looking for a retest of the pre-market high.  
Look at what happened next. Big rejection. And so, 
I ended up losing on ARWRX. Let me pull up my P&L.  
On ARWRX, I ended up losing $3,000 $346.20
down 8,000 on the day, and I wasn't 
done yet. I wasn't done losing.  
I took one trade on ARDAC for a $700 profit. ARDAC 
you know, gave me a little profit. Uh this was um  
trading this range right here as it was squeezing 
into halts going up. Made $700 on it. Not very  
good risk to reward. Just did a dip and rip on the 
halt up. And then, I took a trade on CISS. And I  
lost $10,000, the single biggest losing trade I 
have had during this challenge. A $10,000 loss.  
Because uh SKK was moving up so quickly, I thought 
that attention would shift because um this was  
sort of a similar setup to CISS. CISS began moving 
very quickly, and as it rallies up, I bought  
for the break of 450 and for the squeeze up to 
five. What happened next was the false breakout,  
a flush back to four and eventually me stopping 
out completely defeated. Just a terrible day.  
This is where I get so frustrated as a trader. 
Today was avoidable. Most of the red days are.  
Most of the red days are avoidable. At least in 
their size. I didn't need to lose $18,000 today.  
I certainly didn't need to do that. 
That at a certain point was a choice.  
It It choice to hold YJ as long as I did. It 
was a choice after being down 5,000 to trade  
VRX and to trade ARDAC and then to trade CISS 
with increasingly bigger and bigger share size.  
It was a choice not to walk away sooner. Now, the 
truth is that while those were cognitive choices,  
at a certain point, I became hijacked by my 
emotions. And when you're angry, when you're  
frustrated, you'll do things without thinking. 
You'll punch a wall. You'll throw something  
across the room, whatever you might do. You shout 
something. You say something you maybe don't mean.  
And you say, "Well, I'm sorry. What was I 
thinking?" Well, you weren't thinking. In  
that moment, you were completely hijacked 
by your emotion. That feeling was so big,  
it took over the logical part of your brain. 
And so, as a trader, we are constantly  
walking this line between maintaining emotional 
control, capitalizing on emotions in the market,  
because it is, in some ways, the emotions of other 
traders that create these big moves. The emotions  
of fear and greed that create unbelievable moves 
to the upside that make no sense, which we can  
capitalize on if we get in at good places and we 
exit the right point. Uh the fear and greed of  
short sellers not wanting to miss a move and 
then getting squeezed, the stubbornness of a  
short seller adding and adding and adding and then 
finally capitulating and giving up, and you have a  
giant green candle as they cover their position, 
or capitulation from a long bias trader who got  
in way too high and finally sells at the very 
bottom, creating a giant bottoming candle wick.  
And I would say that through my career I probably 
spend I mean, I would argue 90% plus of my time  
being the trader who's calm, cool, collected, and 
is able to capitalize on volatility, is able to  
see the emotions of other traders without sort 
of crossing that line of falling victim to my  
own emotions. But, you know, every now and then, 
and it's been much more in the last few weeks  
I've been getting caught up in uh myself 
getting emotionally hijacked. And so  
you know, if we think about um in the past what 
I've done uh during these periods where I've  
gotten emotional hi- emotionally hijacked, there's 
a couple different approaches that I've taken.  
And the the one that you probably have 
heard me talk about is trader rehab.  
Trader rehab is when I put the guardrails back 
on my trading to help kind of restrain and put  
some boundaries around how many shares I'll buy, 
uh how much I'm willing to lose, and to trade for  
a period of time with the guardrails on just to 
regain my balance. It's like putting training  
wheels back on a bike after a big fall. Now, you 
might say you shouldn't do that, you just got to  
get back on the horse. And you do want to get back 
on the horse, but on the other hand, you don't  
want to take another fall. So, these training 
wheels, these guardrails are really valuable.  
And so, what that typically looks like for me is, 
you know, I have a nice rally in a small account.  
I have had some losses already in the small 
account. Uh oops, and then I had another one um  
the other day. And then right there, I just 
had one that's going to drop me down, you know,  
kind of like that. That's a pretty big size 
loss. I'm not proud of it, but it is what it is.  
So, now I'm in the shadow of this loss. What I 
don't certainly want to do is come in tomorrow and  
have another one, right? We don't want that. 
So, that's the worst thing that could happen.  
Which means there's a couple things. Number one, 
my account balance is also declined from what was  
nearly $80,000 back down to about $60,000. So, 
it was about 80, now we're down to about 60.  
So, my ability my position sizes are going to 
be decreased by this amount because I just can't  
trade with as much size as I had been trading. 
So, that is going to force me to small share size.  
But ultimately, I need to reduce size, 
reduce share size, and focus on rebuilding  
sort of slowly. And then once I've rebuilt 
slowly and recovered about half of the loss,  
then I can start taking the guardrails back off. 
Now, during the last week or so in my big account,  
as you've seen in my large account, I've had 
days where you know, I I gave back 73,000,  
then I made it back the next day, and then 
I kept going, and then I gave back 64,000,  
and then I made it back over the course of 
two days. So, I haven't reduced share size  
because I felt that on these days the issue 
was not that the overall market had shifted,  
but that I had fallen victim to emotional hijack. 
And if I could just maintain emotional control  
with the same share size, that I would be able 
to recover very quickly. And although I did,  
you know, what we now see today is you know, this 
$18,000 loss, which this time it is in the small  
account instead of the big account. And so, we 
now have three instances in the last 2 weeks  
of emotional hijack. So, that's like 30% 
of the time over a 10-day trading period.  
And that that is too much. Now, we could you know, 
we could place blame if we want to point fingers  
that you know, well, it's it's just because of the 
market. You know, the market has been so volatile.  
Look at CIS. I mean, this one ended up 
doing a round trip. What about SKK? I mean,  
I'm probably I'm surely not the only trader who's 
probably feeling heightened emotions right now,  
or seeing these unbelievable moves, halt levels 
that are just almost impossible to trade.  
You know, it is difficult. Fair enough. Okay, 
that's that's all true. Uh and while that is true,  
what's also true is that when it's difficult like 
that, and when you're seeing, you know, these  
repeated um red flags or caution flags, whichever 
you want to say, each time this happens, you know,  
there's a caution flag out, right? So, I'm going 
to put a caution flag out here. Oops, sorry. Um  
caution flag, caution flag. Now, fortunately, 
I've been able to recover all of these losses  
quite quickly. Um but on the other hand, I think 
that we also have to look at this as presenting  
the risk that I keep taking big size on day two, 
and one of these times I'm going to have two big  
red days in a row. You know, or maybe three 
big red days in a row. Because this is not  
I mean, I guess you could argue it is sustainable 
because I am still net profitable, but  
uh even in this 2-week period. But I I feel 
that it's I feel that it's not sustainable.  
Um that's my gut feeling that eventually it 
will catch up to me, and emotionally it's not  
sustainable to keep having these big swings. 
And so, what I'm struggling with right now  
is that I am feeling FOMO. I have a fear of 
missing out. And then when I when I do miss out,  
which we all miss out on moves, I feel frustrated, 
and then I overcompensate for the move. And I'm so  
frustrated today because I sat on the sidelines, 
sitting, sitting, sitting, and I was like, I need  
to not overcompensate, and I kind of knew it, 
and I walked right into it, and I did it anyways.  
Because I was zero on the day. I hadn't taken a 
single trade and I didn't want to watch this thing  
go to 7 8 9 10 without me. That was a fear. And so 
that fear prompted me to jump in and then I caught  
this big loss. And then at that point, you know, 
I I things unraveled from there very quickly.  
Um I hit my breaking point today, you know, 
being down 18,000. I'm not taking any more  
trades at this point. I am done. I mean, that last 
trade And this is notable. The last trade was a  
$10,000 loss. The last loss was the biggest 
one. And that's so classic. So, my P&L today  
looked like this. Green 3,000 and then swing 
to red 5,000 and then um let's see. Then I  
Oh, actually, I think I was up like 1,500 on our 
whatever a little bit on our DAX and then made a  
teeny bit more on uh V VRAX and then um then boom, 
another big loss. And then an even bigger loss  
here that was actually like, you know, two times 
as big. So, this is not even scaled correctly.  
And this is what This is exactly what tends to 
happen on red days. They go from bad to worse.  
You get stubborn. You get start taking bigger 
and bigger share size thinking, "I'm down 3,500,  
3,800, 5,000. I just need, you know, a 20 cent 
winner with 20,000 shares and I'm back to flat."  
And then you take 20,000 shares and you lose 
50 cents, you're down 10 grand. Boom, gone. So,  
um you know, I I put this out there for you guys 
as always, not because um I feel like this is  
I'm not I'm not proud to do these recaps. 
I'm very frustrated. I would rather not do  
these recaps because it's only highlighting that I 
continue to struggle with this in my own trading.  
Um and wouldn't it be so nice if Ross, you know, 
you finally, after all these years of trading,  
you know, were better than that. You know, that 
you didn't still, you know, fall victim to FOMO  
and spiral and end up losing, you know, going from 
3,000 green to 18,000 red like a complete [ __ ]  
This is a pathetic small account challenge. You 
know, you should have crossed over 100 grand  
5 days ago. You know, you already had two big red 
days. Now you got a third one. This is going to  
cost you another 5 days to recover. It's going to 
take you, you know, 50 days to turn the 2,000 into  
100 grand. And even if you say at the end of 
it, "Oh, you turned 2,000 into 100 grand." Well,  
it doesn't discount the fact that you 
kind of suck as a trader because sometimes  
you get emotionally hijacked and then don't follow 
your strategy at all. You've got a great strategy.  
You're just too dumb to follow it. So, you 
hear me beating myself up a little bit. That's  
But and that self-talk is what a lot of traders 
do. You know, you get angry with yourself. You get  
frustrated. You beat yourself up. And that doesn't 
serve to help you. In fact, it only makes you even  
more emotionally activated. Where the next trade 
you take you're even more likely to fall victim  
to being stubborn because now you're trying to 
prove that you're not an idiot. And so, these are  
like all of the emotions that traders experience. 
Um not just, you know, beginners, but even  
intermediate and experienced and very experienced 
traders. In fact, the more experienced you are,  
um you know, the more track record you have, 
the more kind of um you feel an obligation to  
maintain a certain standard. And it's, you 
know, humiliating when you screw that up.  
And I'm sure that there are traders who have made 
far, far more than me. Billion-dollar investors uh  
who could probably relate to the embarrassment 
that comes with a bad position. I mean, people  
are still giving Bill Ackman a hard time for his 
Netflix trade um during the pandemic. He bought,  
you know, whatever, billion dollars or something 
worth of Netflix. Um, he bought it uh like right  
here on a dip, then it drops, and then it drops, 
and he stops out and loses a huge amount of money.  
And now it's all the way back up. Apparently, 
he's getting back in it like in this area. But,  
I mean, you know, it it's it is humiliating to a 
certain degree. Well, it it would be for me. Maybe  
he has a better um way to cope with that defeat. 
Um, and you know, we all maybe that's maybe that's  
something that he's got gained in his um years. 
He's older, certainly older than I am, and far  
more successful. So, maybe that's something that 
there's a, you know, a secret to how to do that.  
But, for me, um you know, I continue 
to ride the roller roller coaster,  
and I have big green days, and I'm elated 
and thrilled when I have those days, and um  
when the market is hot, it's pretty much either 
big green days or big red days, because the market  
is pretty warm. We are seeing some huge moves. 
We've got multiple stocks up over 100%. And yet,  
I managed to be red on one of the leading gainers. 
And that by itself becomes a trigger for emotional  
hijack. And so, I can come back tomorrow, and if 
I kept trading with the same size, and I you know,  
the market's just a little bit cleaner from the 
beginning, I don't have to deal with like a stock  
like YJ that inherently has this initial weakness, 
then I might be able to have a phenomenal day.  
Uh and you know, whatever. But, I am concerned 
about how big the swings have been in the last  
week, and it really has hurt my profit loss 
ratio in I mean, there's no doubt about it. It's  
crushing my profit loss ratio to have these types 
of big losses. It hurts my accuracy a little bit,  
but the profit loss ratio is really going 
to take a hit. Um and it's just like two,  
three weeks of really outrageous kind of market 
behavior. And um you know, I again, it's like I'm
I you know, I I don't feel like I have too much 
right to complain because big picture, the account  
is still growing. Today's day 36. I'm sure by you 
know, day 50, I'll this will be water under the  
bridge and I'll maybe I'll be up over 100 grand. 
Uh but the the the path uh to 100 grand was not  
uh as smooth as I wish it was. I I wouldn't How 
nice would it be if I was able to turn, you know,  
2,000 into 100 grand just like this. That 
wouldn't that be nice? Wouldn't that be lovely? Uh  
and instead, what I've got is, you know, kind of 
underperforming initially and then like a big day  
and then a big red day and then, you know, kind 
of underperforming and then uh another big red day  
and then a big green day, whatever, 
and then, you know, a big red day  
and and it's all taking longer, 
right? So I I I I don't know. Um
frustrated uh and this is this is the aspect 
of trading that is the hardest. This right here  
is the hardest part. The red days. The red 
days are the hardest. The days when things  
are not going the way you want them to go, not 
going the way you expect them to go. These are  
the hardest days. Accepting defeat and doing it 
humbly gracefully with grace, doing it faster.  
And I have been a very poor display of that in the 
last few weeks. I've been getting frustrated. I've  
been swinging hard. It feels like for some reason 
it it feels like the last if you ever watch like  
the Tour de France, you know, the last like, you 
know, couple uh you know, half mile or whatever,  
uh or should I say kilometer, the last kilometer, 
um where things sometimes get a little sloppy.  
It's like this is my I you you know, it's like 
you're pushing so hard just to cross this line and  
you're barely holding it together and sometimes 
you see huge wipeouts right there at the end.  
Um or huge, you know, uh and all of a sudden 
someone leaps forward that was in third place.  
And that's kind of what's happening in this type 
of market. Because there's so much volatility,  
there's just like these stocks that squeeze up 
2,000% and then there's another one that goes up  
2,000% and then gives it all back. And so traders 
are sort of scrambling from one to the next.  
And some of us are doing it and we're just making 
it look so smooth and, you know, finishing day up  
50, 60, 70,000 dollars. And then others are 
just getting, you know, just I mean it's like  
the market is just running circles around us 
and we're just getting completely smoked, our  
heads are spinning. And I've been both of those 
traders several times within the last 3 weeks.  
Same person and I've been on both sides. And maybe 
some of you I imagine are feeling the same way.  
Uh so some of this is a symptom of what's 
going on in the overall market. I was looking  
at my P&L yesterday. I I've made less than 
half uh this year as what I made last year.  
Uh this year without a doubt is a smaller green 
year than last year, significantly smaller.  
Um it's been tough. I mean this this whole year 
has been tough uh for a number of reasons. And so,  
you know, all of a sudden we're in August, 
we're getting a little bit of surprise momentum,  
and I'm trying to make the very most I can out 
of it, and it's just not clean. You know, it's  
it's really just um it's scrappy, and it's how it 
barely by the skin of your teeth survival feeling,  
and it it doesn't feel great. So, um you know, 
but on the other hand, I suppose it would be  
worse if we had absolutely nothing moving, if it 
was just crickets. Right? That would be worse.  
So, we do have things moving. It's just difficult. 
It's just difficult right now without news  
catalyst to know which one's going to keep going, 
and when people pull the rug or you know, pull the  
rip cord, which how hard is it going to fall? So, 
you know, this is just me putting it on the table.  
This is where I'm at right now. Today's not a 
good day. I'm disappointed. It's day 36. But,  
I'll be back at it tomorrow for day 37. All right, 
so that's it for me. Thank you guys for tuning in.  
Long recap. Uh reminder as always, my results 
aren't typical. As you see, easy come, easy go.  
So, please don't try to blindly follow 
me or anyone else for that matter.  
And don't trade with real money until you've first 
proven you can make money in a simulator. Cuz if  
you can't make money in a simulator, you've got 
no business putting real money on the line. So,  
with that, I'll see you guys back at it tomorrow 
morning at 7:00 a.m. Eastern Standard Time.