Record Breaking Green Day! transcript

What's up everyone? Welcome to day 26 of my small account challenge of growing a $2,000 account using Charles Schwab as my broker. Today is a recordbreaking green day, the biggest green day so far during the challenge. And there was a question that a chat room member asked while I was taking this trade. He said, "Ross, it looks like you're risking $30,000 on this trade." And yeah, I made money, but the amount you risk was far in excess of the amount that you gained.

And this is a common question that a lot of people ask. And so, I want to help you understand the way I think about risk when it comes to trading. Yes, I did put about $30,000 into this trade. That's a lot of money. But if I was risking $30,000, then it would mean that I was going to hold until this went to zero or there was a high likelihood that the position would become worthless. Now, if you buy a lottery ticket and you spend $30,000 on lottery tickets, there's a very high probability that they will be worthless.

You can't resell them for any value. If you buy uh I don't know, if you buy a used car and you're planning on fixing it up and reselling it, then you spend $30,000 on it, most likely, as long as you've done at least a little bit of due diligence, you're not going to be a max loss reselling it for zero, right? I mean, it would have to have something crazy crazy wrong with it for that flip to go badly. And with trading, if I buy something for $30,000, I know that it has value.

And we're in a liquid market where I can turn around and sell it right away. So really then the question is the difference between the price that I get in and the price where I'm going to sell and bail out. And so on this trade today, I was taking probably more like 40 cents of risk per share. So then risk based on the number of shares and cents per share, that's the actual amount that was at risk. And so in this trade, my profit was about two times the amount that I was risking.

Okay, so let's go ahead and jump on the screen share and we'll break it down in more detail. As a reminder, all the profits from these small account challenges gets donated to charity. And every time you guys hit the thumbs up on the episodes in this series, I add an extra dollar to how much I'm donating. We have now raised over $390,000. And today I donated $5,000 to the Children's Hospital in Wisconsin and $5,000 to Stan Stan uh Sanford Health, not Stanford, Stanford Health in South Dakota.

So we've now donated $390,000. So thank you guys for hitting the thumbs up and helping me uh with this challenge of making a donation to every Children's Hospital or one children's hospital in each state here in the United States. So 50 children's hospitals. That's the goal by the end of this year. and we're right now at I think 33 or 32. Okay, so today's day 26. It's a Monday morning and the market was warm. We had a couple of stocks that were up quite a bit.

We had DFNS, which actually began its move in after hours trading on Friday. I was looking at that one um as I put together my watch list uh for Monday morning here. Uh I was looking at it last night and it had this nice rally as you could see here. um you know and so I expected it would probably be good for a trade right at uh the open of pre-market and it was but then it kind of pulled back curled pulled back then it popped back up to seven um kind of pushed a little higher but wasn't able to get back to those pre-market highs and so this one didn't end up giving me any good trade uh opportunities.

Then we had um let's see what was the other one on the scan? It was um LGHL. Now LGHL is a stock that I've definitely traded before. Yikes. Look at this drop at the open. So, you know, love to see that. Um, I was actually wondering if this would break through the volume weight average price and squeeze back up towards those highs, but as I looked at it, it was very thickly traded. In any case, there was no opportunity pre-market and then the bell ringing resulted in uh the price actually selling off.

But then we had EDBL. EDBL came out with news earlier this morning about um the uh the relationship they have with Walmart and getting their products on the shelves at Walmart and the stock ends up going from 350 up to 450 up to 550 650 750 850 all the way up to $9.50 50 cents pulls back goes back up to just under 10 and then now it's kind of started to unwind a little bit but a really impressive move. So I felt like it was safe to say that the market was warm.

Uh hindsight could have would have should have traded EDBL in the small account. Uh I did trade in my main account but not in the small account. I sort of felt like I missed the beginning of the move. The trades I just wasn't as confident they would work. Um so anyways no trades on that in the small account. LGHL, no trades. DFNS, no trades. Uh, NBI YA, no trades on this one either. It's a little bit um a little bit cheaper and um has popped up a number of times in the last few days and not worked out.

Uh so then all of a sudden we got this scanner alert at about 9:15 9:17 and it was VTIX. Hits the scanner, ding ding ding ding ding, and it goes from 292 292 to 349. So I was like, "Wow, this thing's moving." light volume 18 million share float. And I pull up the stock and I look at the news headline and it says sells first enterprise system to Tesla keyword for Optimus humanoid robot division. And I thought that's very interesting.

A small cap company having any relationship with a big company like Tesla or SpaceX. That's a big deal. And so I pulled up a chart and I saw that it had squeezed up right here, popped up, squeezed up right here, pulled back, and I jumped in on this pullback right here. And I was looking for that break through 370. I took 4,000 shares at an average of about 350. My max loss on this was well, you know, if it broke down to 320, that wasn't going to look so good.

Uh 315 and certainly $3 hard stop. So 4,000 shares risking at most 50 cents a share is $2,000. It ended up squeezing up here. And as it squeezed up, I doubled my position to 8,000 shares. But as I doubled my position to 8,000 shares, I adjusted my stop from down, you know, up to 50 cents a share to break even, which was now around 375. It ends up going to 425, up to 450, up to 460. I take profit off the table. It dips down.

I sell the rest as it starts to come back down. And then I was looking potentially for another trade, but it broke volume weight average price. And then it came down and it actually ended up going red on the day which is shocking. I am shocked that it went red on the day in spite of this headline. But it speaks to the market that we're in right now where there's a lot of excitement especially around Chinese foreign listed securities.

In fact with no news whatsoever. Yes, the floated 18 million shares is a little high. I thought you know with this Tesla catalyst that would be okay but evidently I was wrong. So, the move was shortlived, but I jumped in, jumped out, and I'm glad that I did. And I locked up just under $4,000 of profit. So, about 2 to1 risk-to-reward, which is great. And now the account's at a little over $38,000. Now, all of this profit is getting donated to charity.

Uh, right now the account is up just just shy at this point of 2,000%. Averaging about 78% accuracy. So, I'm making good progress. Next goal, $50,000, keeping the account growing. And so we'll see how I do uh back at it tomorrow morning for day 27. Now, if you guys have not already checked out a two-eek trial, you can watch as I continue growing this account. Granted, it may not be uh what you would consider to be a small account right now with $38,000.

Uh but I am still taking the approach generally of uh just taking one or maybe two trades a day, focusing on quality over quantity. I'm not super active in this account. I'm just looking for the best setups because I the stakes are a little bit higher. I don't want to lose money that I'm, you know, have already donated charity. So, I'm donating basically as I go and putting it on my American Express. So, if I lose, then, you know, then I'm sort of losing money I already gave away, which doesn't feel really great.

So, I'm being a bit more selective here. Uh, which I think many of you guys appreciate. Uh, so anyways, check out the twoe trial. Link is pinned at the top of the comments. And I'll remind you guys as always that trading is risky. My results aren't typical. And there's no guarantee you'll find success whether you trade with me or you learn on your own. So, please manage your risk, take it slow, and always practice in a simulator before putting real money on the line.

With that, I'll see you guys back at it tomorrow at 7