I blew up my small account… 🤯 Small Account Challenge Day 6 transcript

Well, well, well. Here we are. Today is day six of my brand new small account challenge. And I can't believe I'm saying this, but today I blew up my account. So, now we've got to have a conversation about number one, how this happened. And number two, what this means for the small account challenge. I think it's safe to say at the very least that I'm starting over. So, resetting the account $2,000. Try again, right? See what I can do on round two.

But let's also kind of take a step back. At the beginning of this challenge, I shared with you that I would be documenting every step along the way. I'd be sharing with you the ups and the downs. No trade would be overlooked. My goal here has been complete transparency. And so, at the beginning of this series, I uploaded a fulllength master class teaching you the ins and outs of the small account strategy that I've been trading for more than a decade.

I hope that you have watched it. I hope that you have picked up a lot of tips and tricks from that episode. through days one through five. You've watched me grow the small account at the end of last week. I noticed a few comments of traders saying, "Ross, it's amazing. You grew the small account from $2,000 to $25,000 in 5 days, but guess what? It's not a small account anymore. Now you're trading with a $25,000 account." And so I thought back to the original goal for this challenge.

The first was to document what it looks like for a seasoned trader such as myself to trade in a $2,000 account. I chose $2,000 because FINRA has just approved this new amendment to the pattern day trader rule reducing the minimum account balance from $25,000 down to $2,000. So, I thought this is a cool time to demonstrate what it looks like for a seasoned trader to trade with $2,000. And then the second big goal was that I would be donating 100% of these profits to charity.

And so that motivated me to take quite a lot of risk on a lot of these trades. So this morning when I first sat down and we'll we'll pull up the live trading archive because we're going to have to get into it here today. When I first sat down this morning, I had $25,000 just under $25,000 in the account. That was all of last week's profit plus the $2,000 starting balance minus of course fees and commissions. And I sat down and I said, I'm I don't want to take a trade on anything unless it looks like it has the potential to make a huge move.

And so when I first sat down this morning at 7 a.m., I was like, I don't know, guys. You know, JFB, it was on my watch list, but you know, it's a construction company. Yes, it has a private placement. That's a good news catalyst, but I I don't know. I don't know if I can do it. And so, I'm sitting here at 7 a.m. The this uh live trading archive begins right here at 7 a.m. No trades yet. You could see nothing I've touched yet.

And I'm just sitting. I'm being patient and I'm waiting. And there's no good headlines that come out at 7 a.m. that I really like. There were a couple of headlines like this company uh upholding a $10 million summary judgment, but I I just thought that's not significant enough. There were a few others like this one, DWTX, that had some news, but again, I was like, I don't know about that. Uh it's a little shady. Kind of few things about that company I already know.

I didn't really feel good about. So, I'm sort of sitting waiting and next thing you know, it's 7:30 comes and goes. We've got nothing. And then 8:00 a.m. comes and goes. We've got nothing. And I'm doing the best I can to sit here and to be patient. And this is really the challenge. I'm sitting I feel like, you know, I'm kind of like a hunter, you know? I'm I'm sitting here in the tall grass. I'm waiting for that big lion or whatever it is, you know, to jump up.

And so, all of a sudden, here we come to 8:30, the bottom of the hour. And I'm sitting I'm patiently waiting and I'm just, you know, sitting quietly waiting for that one stock to kind of pop up. And I'm sort of getting a little disappointed. And all of a sudden, MSS, boom, hits the scanners right here. And I I see it hit the scanners. I get my audio alert. So, it's like, whoa. Oh my gosh. We've got something moving. It's It's time to get get focused.

So, I you know, I click on the stock. I pull up the chart. I see the stock's going straight up. I see that there's a headline that they've secured a $70 million private placement. I type in the ticker. I press shift one. I try to buy and all of a sudden, look at this thing. I I sent my buy order to buy this at like $2 a share. And this thing is already now at 239 250 now. My order's not filling. What's happening? It's back at 210 and I feel like I'm fumbling.

You know, this is the problem. Finally. Finally, the lion comes into view. I'm fumbling to get my gun or my bow and arrow and I'm flying and bullets are flying everywhere. I've lost my composure. Well, this is what happens. You know, I was I was like so waiting for this moment and so finally I I end up getting a partial fill on this and I tried to buy a huge position and I only filled 4,000 shares and long and short of it is the stock ends up going up over 500%. it go.

I mean, this thing goes straight up as I expected it would because this was the headline that we were talking about. And so, today was one of those days where I sort of fumbled out of the starting gates. And that can be a recipe for disaster. You know, you kind of fumble and then you feel FOMO, almost a sense of loss, like I should be up $10,000 on this or 20,000 and I'm only up x amount. So, and I'm sitting here and I'm thinking, but what about the children?

You know, I'm trying to make as much money as I can here for the children. And I'm wearing I'm sweating, feeling like an idiot, wearing my double lucky sweatshirt. And, you know, all of a sudden, I get this moment to shine and I fumble in the spotlight. So, long story short, I end up mismanaging my risk on MSS. Essentially, what ends up happening is I missed that really good early entry. And sometimes when that happens, you feel like you need to overcompensate and trade it more aggressively near the top.

And that's exactly what I did. I traded it more aggressively near the top. And then after that, we had another stock that popped up with a very similar catalyst except on this one, I was lined up and I pulled that bow back and that arrow went flying out. You know exactly what happened next. Yeah, you know. Well, I ended up today growing the account by 140%. That's right. I blew it up. I doubled it again in one day. So, and you knew that's what I meant, I'm sure, when I said that I blew up the account.

I doubled it. So, I'm now at over $59,000 as of day six. It's for the children. All right. So, this is unbelievable. I I'm I'm blown away. So, I'm up $34,541 today. My account is up 2,962% since last Monday. The balance is now approximately 59,000. This does not include the commissions from today, which will be maybe a couple hundred. So, probably be right around this level. So, now we do still have this question of where do we go from here? because this is no longer a small account.

And although I do want to grow the account and make as much money as I can to donate to charity, my goal was to donate $100,000 to charity. And remember what I said that every single one of you guys had the opportunity to help me raise more money. I said that I would match dollar for dollar everything that I made. I would do a full match, which means I'm at, let's just round up to $60,000. $60,000. That means I'll donate up to 120 grand.

And so, where's that other 60,000 come from? It comes from you guys hitting the thumbs up on episodes in this series and subscribing to the channel. So, let's check in there with where we're at. On Friday, I posed the question of guys, do you think that it's possible that there's going to be a day where I cross over like this? I literally said that on Friday because for the entire challenge, I've been playing catch-up.

You guys have been ahead of me. I uploaded my big master class two days before I began trading, so you guys got a head start. And it wasn't until today that I took the lead, which means now I'm setting the curve and you guys are playing catch-up. In fact, we need 8,327 more thumbs up to meet the 100% match for this challenge. But I've already put some money on my credit card. All right, so let's back this up for one second.

Today I donated $30,000 to St. Jude's Children's Hospital. Then I donated another $30,000 to the Boston Children's Hospital. That's $60,000 on the American Express already right now here today. So the Boston Children's Hospital, $30,000. And so with those two donations, paid it forward for the children out there who, you know, through no fault of their own, are in a position where they need some extra help. And so I'm really thrilled to be able to do this.

But one of the things I often talk about, and don't worry, we're going to get into breaking down all of the trades from today in the live archives. But before I do, one of the things that I'm a big advocate of is helping where you can back home in your own community. And so I've decided to donate $30,000 to a local food pantry. Uh they're called Birksher Bounty and they actually support a number of food pantries all around Birksher County.

And I've been a supporter of them uh really since they first um created their organization several years ago. It was sort of just before the pandemic. And so I donated $30,000 to Birkshshire Bounty. and I donated another $30,000 bringing us up to the full $120,000 for this charity drive here today to Birksher Busk. This is an organization that helps revitalize downtown communities. So, what does that mean? Well, you probably if you're in small town America see a lot of downtowns are struggling.

You've got a lot of open businesses, you know, or open storefronts for rent. You know, they've just been abandoned long ago. It's because so many people go shopping online, Amazon, Walmart, whatever the case is. So, it feels like all of the money gets sucked up by these big corporations. A lot of it seems to go overseas to these factories and we're just left with these sort of dilapidated downtown areas. And so, the idea with Birkshare Busk is holding a weekly during the summer festival where we invite street performers to come and perform in downtown.

And so we put them on different sections of the of the neighborhood downtown and it brings all of these people into town. In fact, last year it brought over 25,000 people into town for these events and in in fact generated hundreds of thousands of dollars of economic activity for the local downtown businesses. So I'm donating $30,000 to Birkshshire Busk. And this isn't the first time that I've been a donor for them either.

I've been a a longtime supporter. You can actually see the Warrior Trading um little sign right here. So this is just such an amazing event and it's something that you can replicate really in any small town. It's it's basically street performers which creates so much interest and so much excitement and kids and adults everyone comes out for it and naturally these people that come out end up buying from local businesses and restaurants.

So it's great for the restaurants, it's great for the businesses. It's just a terrific thing and you could do it in your town as well. So, Berkshire Busk is creating essentially very much the way I create my trading strategy. They're creating the blueprint of how to run this type of uh event in order to revitalize your local community. So, now on day six, I've met the goal of crossing $100,000 in fundraising for charity.

So, I'm thrilled with that. And yes, I am going to start the small account challenge back at $2,000. So, my thought here is um basically to give you guys a second chance at seeing what it's like live and in real time as I grow a small account. Because as you saw from this challenge, it didn't take long at all for me to cross over $25,000 and then 50,000. And if I kept trading this account, I might be over $100,000 tomorrow.

And it's that's great, but it's no longer a small account challenge. So now I feel like I'm not keeping up on sort of that other end of the bargain, which is demonstrating for you what small account trading is all about. So yes, I've had fantastic growth. I've been focusing on stocks that met all five pillars of stock selection and that fall right within the trading plan that I laid out for you guys in my master class I uploaded last week.

So I will put links here where you can download the PDF resources that accompany that master class. I'll put links to the end of the episode where you can rewatch the master class because I think you really should if you haven't already. But just as sort of a refresher, the small account growth strategy has been focusing on trading momentum on breaking news between 7 am and 10 a.m. using 10% risk and 10% reward parameters as a target.

I don't want to lose more than 10% and it has to be with the potential that I could have made at least 10%. A lot of these trades far exceeded that which is fantastic. Target accuracy 75%. I've exceeded that. We'll look at my metrics in just a second. Target growth per week blew that out of the water. focusing on stocks that meet all five pillars of stock selection, which you can see right here. So, now let's jump back into that live archive and look at it through the second lens of now you know that when I said I blew up my account, I meant that I doubled it up 140% in one day.

Okay, so I sat down today. Yes, focusing on being disciplined and I did still fumble this first trade. I mean, I I can't deny it. I I was a bumbling idiot. I don't know what happened, but I just I just fumbled it. I think I was just so excited. Now, part of the thing for me is that I'm not really used to uh using this software um for the small account challenge. So, that's that's kind of half the battle. You know, it's it's like driving a car.

And I've said this before, but you know, you get used to one car, you get into a new one. They're the same in a lot of ways, but then, you know, there's just things that are a little different. So, MSS hits my scanner at 8:30 a.m. Eastern Standard Time. I see that it's a $70 million private placement to launch a digital asset treasury strategy. And immediately I'm like, this is the headline I've been waiting for. So I'm like, you know, I'm like, oh my goodness.

Like pull everything's slow motion. I'm like, pull up the broker window, press the buy button. So I type it in, I press shift one, and I can afford 31,626 shares. And I'm like, I'm all in, baby. So I I send the order and you know I send the order because to me I just knew this was going to squeeze. I knew it was going to squeeze. This is the headline that's been giving us huge moves. Now I didn't know how well it would hold up as the day went on.

That is to be determined. Some of these hold up really well and some of them come back down as we've seen CWD and several others pop up and then sell off all day long. Some of these and there is an investigation going on have been subject to insider trading where these have popped up before the news came out. And so when that's happened that's totally screwed up the setup. But in this case I saw the headline. I I I saw the stock met all five pillars of stock selection.

It was a little on the cheaper side but very quickly it was above $2. So I send the order for 30,000 shares. It does not get filled. So why did it not get filled? I don't have a great answer for you on that. Uh I wish I did, but it is uh admittedly a large order to send in one u in one block. And it's possible that the broker just I don't know, it just was too big of an order and it sort of stalled. So then what I did is I changed my order from buying with uh 95% of my buying power to buying with just um 15% of my buying power.

And I press the enter button. Now, another possible issue with this is that it gave me it said I had buying power, but in fact, because the stock was below $3, that buying power was not available on this particular stock. That is that is definitely possible. Um, we could we could actually pull up um and just double check. So, MSS So, just go check on this. Let's see. So long, it says it says it's marginable by default, but I'm also not totally sure if that's the case.

Max long position says 50,000 shares, so I was darn near close to that. Anyways, so we'll back that up. So, so MSS ends up hitting the scanners. It's up 150% and I get a partial fill of 4,000 shares. And then I try to send another order and it gets rejected. So now I'm kind of like, what's going on? I'm trying to buy. I'm trying to buy and my orders are just getting rejected. You see this red rejection here. And I think it I I I don't really know why, to be honest.

I'm not really sure. I'll have to reach out to the broker and see if I can find out why so many of these orders were rejected. Sometimes if you send too many orders at the same time, they reject it. They're trying to protect you from like accidentally double clicking and over buying. I'm not really sure. But nonetheless, my intention was to add more shares and I wasn't able to here and that was really frustrating. So, I'm pressing all the buttons.

I'm trying as hard as I can and I feel I'm kind of fumbling. It's probably user error if I had to guess because I'm not totally used to this platform. But in any case, you know, I'm like, "All right, well, gosh darn it." You know, it is what it is. So, so this is how big of a position I have. 4,000 shares and suddenly I'm up almost a dollar a share on this. So I take 3,000 shares of it off the table when it failed to break through three.

It pulls back a little bit and I'm kind of like, should I add back? I don't know. I'm kind of thinking about it. And so, you know, this is sort of a different approach with a small account than I would approach this with a big account. So there's sort of two strategies that overlap at times, but also at times are different between the small account strategy and the big account strategy. And that's that's sort of a whole level like layer of complexity of training myself whi which am I focusing on right now and can I trade this in my big account?

You know, can I jump in this here and get a piece of this action in my main account because this is still a really good headline. So, you know, there were a couple of things I'm trying to sort of decide on here and next thing you know, we're up to 330 340 looking for the break of 350. So, we see this first uh squeeze, the first pullback got bought up. So, I add back right here on that micro pullback and I'm looking for the squeeze to four.

So, we end up getting a 370. I put out the order here. I try to add again. It rejects my order. I'm trying to be aggressive on this because what I know is that the last stocks that we had that were a private placement went up a lot. And so, I am trying to be pretty aggressive on this. Now, I'm holding an average of 329 7,000 shares. So, we fast forward a little bit. I take the profit off the table, I'm up 3,400. And then I end up adding back.

I add back, I'm up 5,000. And I end up continuing to trade this sort of throughout the morning. I end up in total actually making just about $9,000 on this stock. I made 9,200 and then I gave back a little bit off the top and I was like, "Okay, you know, I think that's the time uh to call it a day." So, if we back this up here, um let's see. Uh well, let me let me show you this and then we'll just go back to that profit.

So, one of the things, one of the keys for success in a small account is discipline. Discipline, emotional, emotional regulation, situational awareness, certainly internal drive, and computer literacy to a lesser extent. I mean, it's important, but I sort of figure you're probably already coming to the table with that. Growing a small account is not easy. The it's you're up against the ropes. This is a real challenge.

And so, you know, today I finished with uh $8,900 on MSS and then POI ended up with $25,000 of profit. It came out with a similar headline about 37 minutes later. And then this stock BQ right now is up $295. This thing went to a high of $18 a share. And this one went without me. This one I didn't trade. I sat down, started focusing on the recap and getting this ready for you for today. And I and it started to squeeze and I said, "You know what?

I'm just going to let it be. I I can't catch them all. I'm going to do the best I can to trade the ones that are right in front of me, but I cannot catch them all. So, now let's go back to that question of what comes next for the small account challenge. So, I am going to reset the account. I'm going to take the profit out because I got to pay off my American Express card. And so, I'm going to take that out. I'm going to pay that off.

And I'm going to reset the account back to 2,000 bucks. And so, for Warrior Pro members, I'm going to give you guys a second chance at seeing what it's like for me to grow this account. So, for those of you guys who have not already joined the twoe trial, I'd encourage you to join. So, during this next small account growth leg, the second leg up, you can watch me grow the account again. Now, I don't think I'll be starting the small account challenge tomorrow because I'm going to have to wait probably a day for that trade from those trades from today to clear to then take the money out.

So, it might be a couple of days, but I will be starting the small account over. And in the meantime, I'll be back to just focusing on my main account while the small account gets worked out. So, for those of you guys who haven't already checked out my episode on the full master class of the small account growth strategy, make sure you guys check it out. It's a really solid, comprehensive training. And as always, I want to remind you guys to please manage your risk.

Take it slow and practice these new strategies you're learning in a simulator before putting real money on the line. Because if in case you haven't heard it before, trading is risky. Easy come, easy go. So, take it slow.