RED DAY on Day 6 of my Small Account Challenge transcript

Well, we knew it was bound to happen sooner or later. Today is day six of my brand new small account challenge of growing a $2,000 account using Charles Schwab as my broker, and it is the first red day of this challenge. Thank goodness for the first 5 days all being green. I was able to build a nice cushion of profit, which helps make today more tolerable. Of course, if I had had this loss on day one, it would have decimated the account.

It would have cut down so badly. It would have made getting to where I'm at today, you know, nearly and I don't want to say nearly impossible, but it would have taken a lot longer. So, those first few days, it was so important for me to keep my quality standard really high to build the account, knowing that each day that I was able to add a little profit, that would give me more buying power that I could take into the next day.

Today, unfortunately, I ended up getting on the wrong side of one particular stock, and it was infuriating. I'll describe what happened, and then we'll get into the recap. So, we had a stock yesterday that was a little bit lower priced that squeezed from about a dollar and 20 cents all the way up to nearly $6 a share. It was an incredible move, and I'll be honest, I underestimated it because initially it was a little cheaper.

So, when this stock today, which was also cheaper, hit my scanners and became the leading gainer in the entire market, I was like, this thing looks very similar to the big move yesterday. I'm going to look for an entry. And I took an entry. It was a great entry, good price. I get in on a little pullback, and it doesn't break out. And the problem with being in on a lower priced stock was that I bought more shares than I've taken on any other trade so far in this challenge.

I haven't traded a stock at a dollar and 50 cents before, so I haven't been able to afford to buy 5,000 shares. But that's what I did. I was all in on this trade and it falters, it stalls out. It pops up about 5 cents a share, then it drops down 5 cents a share, it comes back up and I end up selling it more or less break even. It was a small profit of $60 a share, so like 1 cent per share. Call it break even. So I basically a break even trade and then, get this, it ends up ripping up 50 cents a share without me.

So now I'm frustrated. Okay, but on the other hand, I'm thinking I had the right idea. I just got shaken out because it was a little choppy. So it ends up making this big move, which is great. That's what I wanted to see. As it dips down, it forms a second pattern. And it's a pattern that I can recognize and that I like and so I take that trade, but it didn't resolve and continue higher. It rejected. So now I'm really frustrated.

You've added salt to an open wound. Not only did I have a good entry and I got shaken out, I got in higher and then I lost on it. All right. So let's go ahead and jump on the screen share. We'll get into this. Now, as you know, all of the profits from the small account challenge get donated to charity. Today, of course, is a red day, which is a bummer, but every time you guys hit the thumbs up in the episodes in this series, I add an extra dollar to charity.

So you guys have the chance to lead the way today. We're currently at over $318,000 of money raised for charity and I've actually already donated $319,500. So hopefully the thumbs up on today's episode will put us well up over uh $320,000. So day six, leading gainer was failing. The leading gainer was CAST this morning. It's up million shares of volume with a 22 million share float. Because this was failing, it had made the big move but was rolling over, it was opening a position for a new stock to take the leading spot, basically.

It It was When you have a leading gainer that's failing, then traders are going to look for the second or third leading gainer and CDTI is the stock that became what I felt was the obvious stock. So, CDTI starts lighting up the scanner. It's popping up. It's a biotech stock. I look at it. I pull up the chart and I'm like, I I think I can work with this. So, we get this first move from 75 cents up to 80, 90 cents, a dollar, dollar five, dollar 15, dollar 25, all the way up to a dollar 50 and I bought this micro pullback right here where you see my white arrow.

So, I got in right down here at a dollar and 39 cents. It pops up to a dollar 45, a dollar 50 for a second. It comes back down. I'm red on it. It then comes back up and I end up getting out break even. I gave it a chance to work and it just didn't and so I got out and with that first trade you can see getting in at a dollar 38, dollar 39, getting out at a dollar 40. I had a profit of $62.37. Okay, that's day six and I could have called it right then and there and said, "That's it.

I'm done." But, I didn't. I went back in for trade two. Now, this was frustrating. It ends up breaking a dollar 50 and going all the way to $2 a share. Then it gives us a little one-minute pullback right here. The volume profile is good. We've got high volume buying. The MACD is open and I said, "All right, you know what? I'm going to punch it right here." And so I got back in for that first one-minute candle to make a new high and rejection.

And I end up losing on it and now I'm down $463 on CDTI. All right, I'm frustrated. And what do I do with that frustration? I took a third trade on it. Was that a good idea? Probably not. So, here's the here's here's the issue. This was where I took that second trade right there. It rejects and then once again comes back up to 195. Comes back up right here and I said, "No, no, no. Fool me once, shame on you. Fool me twice, shame on me." I'm not going to be fooled a third time.

That's triple shame That's double shame on me. I can't do that. You know the old saying. So, when it pulls back down here to ascending support, I said, "I got I'm going to outsmart this stock here. I'm going to buy on this pullback right here. That's going to be the ticket." That was not the ticket. I bought on the pullback, and it rejects immediately down to a dollar and 40 cents. And now I'm down $1,500, $1.73. Thank goodness, day five was a big green day, because I'm now really cutting into it with these losses.

So, I'm down 1,500 bucks. That's not great. And I said, "All right, well, that's enough. I'm not going to trade CDTI again." And then we have another stock that pops up on the scanner, and the ticker is WOK. It has a recent reverse split taking effect today. It opens at $5. It dips down for a second, and it rips up here to six, micro pullback up to 650, up to seven, up to 750, and I jumped in on the micro pullback, and booked a profit, a small profit of $586.60.

All right, so I'm finishing the day in net down $915.13. And unfortunately, because I took four trades, and I had two losers today, I've now gone up to a total of 10 trades, but my accuracy has declined to 80%. And my average gain has declined sharply, because I'm now up $6,988 in the account from the $2,000 starting balance, so minus two is $4,988 of growth. So, the account's up 249%, and my average winners are now $498.

So, today was not a successful day in the small account. I went red farther than I would have liked. I was able to recover some of it on, you know, a stock that bounced up um on a reverse split. But in total, I was left today feeling a bit disappointed and a bit discouraged. So, you know, I had such a nice hot streak. Where did things really go wrong today? I suppose I took a little bit of FOMO from yesterday's big move on a low-priced stock and applied it to today.

Traditionally, I don't usually like trading those lower-priced stocks because I don't usually do very well on them. And so, my quality standards told me not to trade them unless they're, you know, getting up to $2, $3 a share. And so, breaking the ice at $1.50 wasn't a great spot. Adding back at $2 right under the psychological resistance of the whole dollar was risky. And so, I end up losing twice on in a row on it.

And one of the challenges there is you keep going back and getting burned, you start just getting more and more frustrated, and then that's an emotion. So now you're trading with emotion. And you're swinging harder, and you're getting more stubborn. And getting stubborn and swinging harder is not a recipe for success. And so, the result was that I took a larger loss than I really should have. I didn't want to lose, you know, $1,000 on a $8,000 account in one day.

I didn't want to lose 1,500, but I did. So, you know, I again recovered some of it, but I took too much risk um I suppose on the wrong stock today. And so, the issue was not the patterns. The issue was the underlying stock. That I deviated from my five pillars of stock selection by trading a cheaper stock. That was my mistake today. And then once I broke the ice with the first trade, it was easy to take trade two, trade three, and I could have taken 10 trades today.

Cuz once I was actively trading, I was like, well, I'm just going to keep trading. And And again, now sort of that quality threshold has been um thrown out the window, and I'm just trading what I'd sort of broken the ice on. So, I'm glad that I was able to hold it together until day six before having, you know, a day where I fell victim to FOMO and got frustrated and, you know, sort of lost my composure a little bit.

Um And, you know, it's all within uh kind of the grand scale and picture, which is that my account is growing. It's not going to grow every single day, but generally I'm still making progress. This week was still progress. Last week was progress. And so, I just need to essentially take a day, kind of slow it down, reset, and remember to focus on the best quality stock. If I had not taken eight trades on CDTI, then I would have just had that one trade on Walk, and I'd be up 500 bucks today, which would have been better than where I'm at.

So, quality over quantity. Remember those five pillars of stock selection. All right. So, that's where I finished the week. That This is where I finished the day, and uh I guess I didn't total up where I finished the week, but it's fine. It's a green week. I'm grateful for that, and I'll be back at it for day seven on Monday. So, I If you guys have not already checked out the two-week trial, the link is pinned to the top of the comments and posted in the description.

You can do a two-week trial. You can watch over my shoulder as I'm trading, and you'll see everything. I mean, you'll see the ups, you'll see the downs, you'll see in full transparency. It's not easy every single day, you know? It's It's one of these things that it is a challenge. Trading is a challenge. A small account is a challenge. And the the biggest challenge is having the ability to have the discipline to follow your rules while at the same time being able to adapt to the market that's in front of you.

Because sometimes the market calls for being more aggressive, sometimes it calls for being more conservative. And you know, when things are hot and we're seeing big momentum, you know, yeah, I want to step up to the plate and try to capitalize on that. When things are cold, I got to take my foot off the gas. And so, you need to be able to have that sort of nuanced touch with the way you trade. So, you can extract the most profit when it's hot and not give back too much when it's cold.

So, thank you guys as always for tuning in. Reminder, trading is risky. My results aren't typical, so manage your risk, take it slow, and I'll see you guys bright and early streaming Monday morning at 7:00 a.m.