Big Winner THEN An Even Bigger Loser!! transcript

What's up, everyone? Welcome to day 18 of my small account challenge of growing a $2,000 account using Charles Schwab as my broker. Today, the roller coaster was open. Big green on the first trade, big red on the second trade, on the third trade recovered back to green. Today is a small green day. It was nearly a red day recap. It was very close. I almost thought there there was really no way to avoid it. It was just going to be a red day, and that was it.

So, we're going to break down these three trades that I took. There are some lessons to learn from today's price action. I made a little bit of an error in judgment on trade number two. Not only did I hold it a little too long, which is sort of a second story, but the the main issue is that the actual setup was not arguably as strong as some of the other setups that I've been trading during this challenge. So, was a little more active today, and that did not pay off.

I would have been better off if I had just taken that one trade at the beginning and shut it down and walked away. Well, at least I survived and lived to trade another day. So, let's go ahead and jump on in the screen share and start breaking it down. Now, as a reminder, all of the profits from these small account challenges gets donated to charity. We have now raised over $360,000, and I appreciate you guys because every time you hit the thumbs up on the episodes in the series, I add an extra dollar to how much we're donating.

So, the last donations were for the Children's Mercy Hospital in Kansas City and the Seattle Children's Hospital. Those were the last two, which were from last week. So, hopefully we'll get um some money out this week. I've already donated $367,000 though. So, I've either got to make a decent amount of money trading this week or we need you guys to hit the thumbs up. So, let's see if we can do a little bit of both and make another donation this week.

Goal is to donate to a children's hospital in every state in the United States. Okay, so with that, today's day 18, and there was nothing obvious this morning, at least nothing yet, when I first sat down at about 7:00 a.m. We had Q T B B, which was up quite a bit, but the problem with Q T B B is that this is a stock that was a little bit more expensive as you can see, $18.71 per share. In fact, it was interesting because coming into 7:00 a.m., it squeezed right here going 6:55 into 7:00 from about 16 all the way up 22.

But, the stock is a little more expensive, it's got bigger spreads, and it was easy to borrow. When a stock is easy to borrow, there's a higher likelihood that shorts are going to be shorting it to the downside as soon as it pops up, and that's going to create an increased level of supply in the form of short selling. That means you need even more demand to offset it, and we just couldn't do that today. So, Q T T B, this one was out of play, not interested in it.

F T R X or F T R K, that one was too cheap at $0.57. A J N at $4.75 was fine, but the float was too high at 38 million shares, and the stock was very thickly traded. So, it moved relatively slowly. I'll pull up the chart for you. Now, if you like slower momentum, you know, that's something to consider, but I think about my risk not only in terms of how much money I'm putting into a trade, but how long I'm holding the position.

And a stock like this doesn't give you quick uh breakouts, so you end up having to sit and hold it for a bit longer, which then increases your risk. And the other stocks were gapping up a little bit less on the scanners. Until, boom, all of a sudden 7:58 roughly, P L S M hits our scanner and starts squeezing up. So, as this stock starts squeezing up, initially I'm thinking, you know, all right, I don't know if this is going to work because it was about a week and a half ago, maybe 2 weeks ago, when the stock popped up, and when it popped up back then, what ended up happening was it went to a high of about $13 a share and then it rejected and finished the day down.

So, it ends up on the daily chart showing as a big red candle, which we don't really like. So, for that reason I was thinking, "Nah, I don't know if I can really work with this. It feels like today's move is in the shadow of the big move from a couple days ago." But, nonetheless, this thing kept rallying higher. It squeezed up, it pulled back, and I decided because of how quickly it moved up on that first ramp, that first sort of leg up with the increasing volume, that I would buy this dip right here, and I did.

I bought 2,000 shares on that dip. It goes up a dollar a share, a little more than a dollar share, and almost instantly I'm up $2,363.44. Awesome green day. Now, you can see this thing went all the way up to a high of $13 a share. I sold it probably too soon, but I locked up profit and I was grateful for that. So, then it dips down. Now, here's the problem. I did not trade this in my main account. In my main account, we had a stock that went from $6 to $13 a share, and I didn't take a single trade on it.

And I was feeling a little bit of FOMO. Yes, I was glad to be up 2,300 in the small account, but in the big account I got nothing. So, as it dips down, I'm now watching for a trade in my big account. And what I ended up doing was I watched and waited. It pulled back, it broke below VWAP, it came back up, it dipped back down, it came back up, it dipped back down, sort of stair-stepping down. And then right here, I got back in with both accounts.

With my big account, I jumped back in, and with a small account, I jumped in as well, and I was in right around 9:50. This level I was looking to break, 9:59, and I thought if that broke, that we would get a squeeze back up towards the pre-market high. Well, in fact, what happened, as you can see, is that we broke that level by about 15 cents a share, and then we flushed back down. And so, I ended up bailing out and being red in both accounts on that trade.

I was red in my main account, and I was red in the small account. And in the small account, I flipped from being green to being red on PLSM. I was down $560.56. And then I I felt really frustrated because now I'm red in both accounts on this stock. Not only did I miss it at the beginning of the move in my big account, which made me feel like I missed a great opportunity, but then I trade the backside of the move looking for a curl.

It doesn't work, and I sacrificed the profit that I had in the small account because I took both trades at the same time, which is difficult. That means toggling between two accounts. Now, at the moment, at the time that I took the trade, I really thought this being the leading gainer was going to break this level and rally up to 11, pull back, and then up to 11.50, up to 12, maybe 13. I thought we were in good shape.

But maybe my FOMO was giving me a little bit of a bias. And unfortunately, that trade did not work, and it flushes down, and I take the loss. So, now I'm down 560 bucks on the day, which makes this my second red day so far of the challenge. And I'm also red in my main account. Well, then we had a stock VEEE that popped up on the scanner. And this stock pops up with headline that they are um doing a strategic merger and a concurrent privatization of its recreational marine business.

And the stock suddenly starts squeezing up. It moves up on the scanner. The relative volume's increasing. And I notice that the stock is expensive to borrow. So, the cost to borrow it is almost 50 cents a share. That's a lot. And I also noticed that the collateral requirement to borrow it was 300%, which means if you wanted to borrow $10,000 worth to sell short, you would need $30,000 in your account. And that collateral requirement was increasing as the stock was moving higher.

And that means anyone who shorted it initially with a collateral requirement of, let's say, 100, one-to-one, now suddenly needs to put up more capital. I mean, you can have a collateral requirement as low as 25%, which means you can be trading on borrowed money, but that was not the case with this stock. And so, as it started to pull away, I broke the ice in my main account, and I was able to build a cushion of profit in this area right here.

And then in the small account, I took this trade right here, which was the pullback right around 11, and we got that squeeze up to 12. And that gave me a profit with 1,000 shares of $765. So, I made 76 and 1/2 cents per share, and now I am green by $205.18 on the day. >> [sighs] >> Slow and steady wins the race. So, the account is now up just a little over 23,000. That's the balance right now. It's up a little over 1,000%.

I added three trades today, two winners and one loser. Accuracy has declined from 78% to 76% here, and my average winner has declined, or my average trade has declined as well, to $490. Today was not an easy day, but I survived, and I'll live to trade another day. I am green in my small account. I'm green in my big account. It was not the day I was hoping for, but we did get some momentum on two separate stocks, which is really good to see.

Now, for those of you guys that haven't already checked out the two-week trial, I'm going to put the link in the description, and I'll pin it to the top comment so you can check that out. And you can watch over my shoulder, and you'll see that not all days are uh are particularly easy. But this was V, from $6 to 13, really nice move. That's the stock I made my recovery on, and then of course uh PLSM was the stock that I initially had profit on, and then gave it back.

Arguably, PLSM was a cleaner move cuz it went straight up, um but then everything else was on the backside, whereas uh VEEE was a little slower to get started, but it just continued to grind higher. And right now it's halted just underneath the high of day. So, I hope you guys get more action in it, but for me it's important to know when to walk away, and I got to throw in the towel and walk away today, having gone red and recovered.

And now the window when I typically trade the best is closed. Today was not the cleanest day, so time just to manage the risk and step back and come back and be back at it first thing tomorrow morning. So, I'll remind you as always that trading is risky, my results aren't typical, and there is no guarantee you'll find success whether you trade with me or you learn on your own. So, um please manage your risk by practicing in a simulator before putting real money on the line.