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 trade 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 you know it's a leading gainer but it's already stairstepping back down it was below the volume weight average price so not interested in it and even if I was the price is a little higher it probably be too risky so I said to myself no I'm not going to not going to mess with that now the second leading gapper is MRNA this is a Maderna that's the you know the vaccine company, metab 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 TN. TN popped up after hours uh 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 a sending resistance up here. I'm leaving this one alone. And then we ended up having a few other stocks that moved. So, um, 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 750 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, halts down. I mean, this is very hard to trade. So, this on very light volume. It's very difficult. Yes, we like volatility, but this was this was not possible to trade. So, that was SKK. Then, we had um 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. Y is the same stock that just how long ago was it, you know, a week ago ends up going from a$120 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. 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, geez, it looks like now it's starting to go. So I add back right about here for the breakthroughs, 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 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 d 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 to 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 thou well exactly $460,000 to 47 children's hospitals across the country. And now I've got to spend the next couple days digging myself out of this hole. So today, day 35, YJ 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 jack knife 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, 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 have been many days this month where we've had big moves after the open. Just look at SK. 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 Rxrax. Let me pull out my P&L. On RX I ended up losing 3,34620 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 a 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 C 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 was a choice to hold YJ as long as I did. It was a choice after being down 5,000 to trade VRAX 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, "What? I'm sorry. All right, 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 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 guard rails 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 guard rails 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 guard rails are really valuable. And so what that typically looks like for me is, you know, I have a nice rally and in the 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 uh there's a couple things. Number one, my account balance has also declined from what was um nearly $80,000 back down to about $60,000. So, it was about 80, now we're down to about 60. So my ability um 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 smaller share size. Um but ultimately I need to reduce size reduce share size um and focus on uh rebuilding sort of slowly and then once I've rebuilt slowly uh and recovered about half of the loss then I can start taking the guard rails back off. Now, during the last um week or so in my big account, as you've seen in my large account, I've had days where um 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 um 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 I would be able to recover very quickly. And although I did um 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 two weeks of emotional hijacks. That's like 30% of the time over a 10day trading period. Um and that that is too much. Now, we could, you know, we could place blame if we want to po 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 um SKK? I mean, I'm pro I'm surely not the only trader who's probably feeling heightened emotions right now. We're seeing these unbelievable moves, halt levels that are just almost impossible to trade. Um, 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 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 twoe 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 1500 on or whatever a little bit on RDAX and then made a teeny bit more on uh 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 start taking bigger and bigger share size thinking I'm down 3500, 3,800, 5,000. I just need, you know, 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 uh 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 five days to recover. It's going to take you, you know, 50 days to turn the 2,000 into a 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 the but and that self-t 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 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, billiondoll investors, uh, who could probably relate to the embarrassment that comes with a bad position. I mean, people are still giving Bill Aman 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 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 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 read 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 a phenomenal day. Um, 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 2, three weeks of really outrageous kind of market behavior. And um, you know, I again, it's like I'm, 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 a 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 don't know. I'm 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 uh 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 to 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 then 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 the day up 50 60 $70,000 and then others are just getting, you know, just I mean it's like the market's just running circles around us. We're just getting completely smoked. Our heads are spinning. And I've been both of those traders several times within the last three 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 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 a rip cord, which how hard is it going to fall? So, you know, this is just me putting it on a 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. Because if you can't make money 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 a.m. Eastern Standard Time.