My Biggest Struggle as a Day Trader | Ross's Trade Recap transcript

what's up you guys alright well today is a red date for me and I think I'm gonna turn this loss into a lesson for you guys because this is so typical of my trading and it's one of my biggest struggles as a trader even having done this as long as I have I have days like today where I give back the last seven eight days of progress so I'm down seven thousand dollars I'm only up eighty five hundred on the month before today so you know I just gave back like ninety percent of my profit on the month and today is the let's see it's the fourth it's the ninth day of the month or it's a eighth day of the month so here on the eighth day I just gave back you know it's like I had seven small steps forward and then one huge step back and it feels even now even as a profitable trader it feels so devastating it feels so frustrating to have you know weeks of progress and then to give it all back so why does that happen where did things go wrong today and what can I learn from this and and what can you guys learn from these types of red days that's we're gonna be talking about today so let's start by laying out the facts today I've got three stocks I traded and I'm read on all three my first trade out of the gates I lost $700 my second trade I lost 900 my third trade I jumped into a stock quickly as it was spiking up a little impulsively probably because I was down 1,400 on the day and I was trying to quickly just get myself back to green so I jump into the third stock it searches up I'm up $2,500 it drops down I have to average down it then comes back up and I'm out for about $2,500 a profit all right so I'm up you know I'm green on the day I then went back into that stock and I got really aggressive and I ended up losing about $8,000 in one trade and I went from up 2500 to down 5 grand on that stock would put me down 7000 on the day so now I'm red on three names all right so red on three times a little bit more context this morning you know it's a it's a Thursday I've been green Monday Tuesday Wednesday all small green days no home runs I haven't hit a home run and about almost a week and a half so maybe feeling a little antsy to hit a home run and to get a nice big win I was having some tech issues this morning with my system and you know these things happen but the result of that happening was that as we were getting closer to the bell my system was not running well even though this was a really nice new computer for whatever reason it just wasn't running something was wrong something was using a lot of memory so everything was lagging and going slow and you know as we get close to the bell I need to be dialing in for what I want to watch what I'm looking at so when I'm clicking on platforms like my scanners or my charts it says not responding I'm starting to get frustrated all right so I'm getting frustrated that means I've got shorter fuse and I didn't really I guess have the self-awareness that that was happening at the time I mean I thought I was frustrated but I was just like okay let's just get this thing working so I can start trading so the bell rings and you know I'm kind of a little bit off guard so I'm like oh my god the bells about to ring in 30 seconds the bell rings I see a stock popping up I jump into it it instantly turns into a loss and I'm down 700 bucks I was less than a minute long trade and then I take a second trade I jump into a second trade and I lose 900 bucks so I'm like what is going on here and then the third trade actually know now that I'm looking back let me look back on this let me jump onto my screen share that's not the way it happened what happened was I took my very first trade out of the gates on SS MT which was a gap scanner stock from this morning so SS MT was actually on the watchlist pre market you can see even now my my computer is still having a problem all right so SS MT I don't know where it is right now but it was it was gapping up I guess maybe in this area and then just before the ballot dropped down the bell rings it starts squeezing up I bought it for the break of four it squeezes up to four thirty I actually took some profit I was up five six seven hundred dollars and then it flushes down to 380 and I stopped out and I went from being green on the day to being red on the day that's never good then I see on the hide a momentum scanner mi tío mi tío was actually a stock that we were also watching this morning this one was on the watch list and so it started popping up read right here seven thirty seven forty and then seven forty eight seven seventy seven seventy eighty five and I saw people the chatroom who said that they were already in that they were buying it and I think I felt a little bit of FOMO and of course I was read on a day so I was like okay I'm jump right in this so I tried to jump in and I got she'll fill right around $8 so I only got like 700 shares and squeezed up to 825 so I press shift 1 again cuz it's ripping and now I'm I got a full word fill and it goes up to 865 and I add again going into the hall then I had a moment of it's about to get halted I'm in this really high this maybe is too aggressive because the last couple of halts actually haven't worked out really really well so I went ahead and sold half going into the hall it resumed from the hall it then drops down and then curls back up and as it curls back up I add and then as it came back up I got out of the whole position for about twenty-five hundred dollars of total profit on the trade now while the stock was halted while I was halted I went into ONC s ONC s curled up right on the 1-minute chart it was right here that it curled up as it curled up and then pulled back I jumped in it on this candle right here this red candle because I thought it was gonna make a new high and then rip over 20 and go higher and I bought twelve thousand shares twelve thousand shares is a really big position now granted this is a lower price stock but I was being too aggressive on my share size I was really trying to dig myself out of the hole from the $700 loss and so I took this and when I took this trade and then stopped out for a $900 loss the little bit that I had sold of mi tío going into the Hall now I was basically back to I think I'd sold a mighty I and mi tío going into the hall so I booked some profit that might have gotten me out of the red and into the green and then this put me back into the red on the resumption mi tío flushes down and I'm deeper in the red I add which is always risky and then it curls back up and I'm out and at that point I think I had maybe around $700 of net profit on the day so I had a 900 our losses $700 loss and then like a twenty four hundred twenty five hundred dollar winner so I'm up like seven hundred bucks and I felt at that time like okay that should have been my opportunity to say whoa you just got way too aggressive you got to slow down you've got to stop but I did it I kept watching mi tía and I thought because it made this big move from 7:24 all the way to 865 that it had homerun potential I mean ultimately that trade could have been a home run $2,500 isn't bad it wasn't terrific and so as it curled back up right here at about eight as a curl back up to 840 at about just before 10 a.m.

I got back in it I got back in it adding thinking it was gonna rip over the half dollar and make new highs and so I was back in it right here right around here was seven thousand shares it does not make new high and it drops down to 784 and now I'm holding seven thousand shares down 40 cents a share so seven times four that's 28 so I'm down $2,800 and I was only up about 700 right so now I'm down $2,000 and I think this is where stubbornness kicks it cuz I felt like no I am NOT closing today red and I'm not gonna sell this thing down here only to watch it rip back up because that's basically what happened before it dropped down and then it came back up so I helped through this consolidation it then starts to break out of the consolidation right here around 10:20 and as it broke out here I'm looking at the 5-minute I'm thinking if this thing breaks over 849 we're gonna make a new high 850 865 as high a day this might squeeze up to a circuit breaker haul we might get a move up to dollars and so as it starts to curl up I add to my position I add at right around 828 25 835 845 848 and add add add add I kept adding so all of a sudden now I'm holding 20,000 shares actually might have even been more than that see I just kept adding I was being incredibly aggressive I'm not sure how many shares I had but in any case I kept adding so now I have close to 20,000 shares maybe a little bit more I definitely saw it too so is at least 20,000 and it hits 850 it doesn't break that level and now I'm holding 20,000 shares at basically eight dollars and 40 cents it drops in this flush down to $8 and with 20,000 shares I'm down 40 cents a share I'm down $8,000 and I hit the sell button and I went from being up well it bounced up a little bit so I went from being up about 2,500 to being down 5400 and this feels like such a wild day you know I started red I started frustrated with a short fuse and then I started swinging for anything that moved I took a big swing on ONC s and missed it took a swing on SS MTN miss I took a swing on mi tío and on the first swing you know I I pulled out a profit but it wasn't a clean one and then I took a second swing total mess and instead just letting it go I ended up holding that trade for well about let's see half an hour holding mostly in the red by $2,000 and then when it came back up to what could have been a break-even exit instead of getting out breakeven and thereby finishing the day up $700 I added and it added added thinking that I was gonna hit a home run and just like that it failed and I lost almost $8,000 on that trade this for me is one of the most frustrating things about trading in one day in a matter of about an hour I gave back seven days of progress and I can't tell you how many times I've done that those of you guys who have been in this position comment below you know how many times it happened to you more times even count maybe what do you feel like are your triggers what do you do to help prevent these red days because even after doing this as long as I have this still happens to me so I'm going to pull up my trader view stats here and these trader view stats I look at that's certainly they make me feel a little bit better about the red trades because you know when I look at my detailed P&L I've got over 1.5 million dollars in profits there and if I look down this is my equity curve now when you're looking at it from this point of view obviously it looks pretty good I've got to kind of zoom into it a little bit more but the fact is it's me it is marked even though it's hard to tell by some serious draw downs and so this this looks actually it's just such a nice curve up it's hard to tell so let's look instead at this this is my cumulative drawdown so what this shows basically is from all-time highs what my biggest drawdown was so at the beginning of 2016 and up through my biggest drawdown was about $10,000 meaning and that may not have been in one trade it may have been in two or three bad trades but in those two or three bad trades I dropped ten thousand dollars off my all-time highs it's not to drawdown and what you can pretty clearly see here is this trend where my average were my draw downs my cumulative draw downs have gotten bigger this year reaching the all-time high of losing 46,000 dollars off of my highs and that was that was really devastating and that was absolutely it wasn't that much different from today it was no it was a day that I lost 30 grand and then the next week I think it was Monday or Tuesday the next week I had a $16,000 loss so two really huge read days like back-to-back now again this is all in the context of during this period of time I made over a million dollars of profit but this is something that I don't like about my training it's something that emotionally is is hard to deal with I don't like days like today where I'm down $7,000 I don't like feet the feeling of giving back weeks of progress I don't like the feeling that this was totally unnecessary that why didn't I just take the seven hundred dollars in profit why didn't I just get out break even when I was able to and I think at that point I was like well I've been in it for half an hour I'm seeing this thing through I'm not gonna celebrate even only to watch you do what I thought it would do half an hour ago because then I'm gonna feel like an idiot so but you know what who really cares like feeling like an idiot feeling stupid how important is that I mean it just seems so arbitrary so the biggest loss drawdown was down here in March at 46,000 the second biggest one was in June on my trip to Italy 34,000 the this one at 16 in August is kind of Thai you know here and so right here today I'm already gonna be down this $7,000 you know not quick to the 10,000 mark and then you can tell that this 10,000 is probably a pretty acceptable drawdown then if in one day hopefully not one day but over the course of two or three red days those red days are often clustered together that I could have a drawdown the thing is red days for me are usually clustered together because the market becomes really slow today I saw lots of traders in the room posting that they were green that they made money on the same stocks that I lost money on and the problem was today unlike yesterday unlike the last seven days today I was trying to swing for the fences today I had a short fuse today I felt frustrated before I even started trading and I took some of that frustration out on the market maybe when you come into the market already feeling kind of crappy you feel like the only way to make yourself really feel better is to hit a home run a base hit today you know that would have made me feel okay but a home run would have really made me feel awesome and so I went for it and ultimately I tried to force it you know I I was buying a stock that wasn't a perfect setup it showed volatility it showed opportunity but I was being too aggressive so one of the goals that I set for this month was to try to have a better profit - loss ratio because my average winners during this period of time have been about nine hundred and thirty five dollars and my average losers have been nine hundred and eighty nine dollars so my average losers are slightly bigger than my average winners which I don't like I'm not happy about that it's great than my accuracy is close to 70% but I don't like this and this is something I really want to work on the problem is it's this occasional huge loss like today and like what we have here that are really throwing me off and then hurting that profit loss ratio so coming into today my average winners were $1,150 on the month my average losers were $238 with my biggest loss being 404 dollars and then today I just took a seventy five hundred eight thousand dollar loss so that ratios all screwed up now now my biggest trade of the month is a read trade and now my profit loss ratio is gonna probably go down to minus 900 on my losers and plus you know nine hundred or whatever on my winners back to the way it always is one to one and it's because I have these occasional huge losses maybe that's just part of my strategy maybe that's just what comes with a territory maybe I shouldn't care because hey trading like this has made me a millionaire but it doesn't feel good to have days like today and I wish that I could stop having days like today I guess what I would wonder is that if in order to stop having days like today it would mean I'd have to stop swinging hard and if that in turn would mean I'd stop having the homeruns right and those home runs when I do hit them they're pretty awesome thirty thousand dollar green day a 40,000 dollar green day and you don't have big green days like that without taking some risk you've got to take twenty thousand shares to make thirty thousand dollars I mean realistically on most small cap stocks so I think at the end of the day the big reminder is that you have to take the losses with the winners you can never separate them that's part of trade it'd be like trying to be a boxer and never take a hit you're gonna take a hit the best boxers in the world will take hits and being the best in the world means you know you you swing hard and sometimes you land and you know you generally do better and it harder than you get hit and you come out at the end of most of your days on top and I do so then why is this still so hard to accept I don't know I'd love to hear what you guys think about it I'm sure many of you guys go through it and I'm sure many of you guys are looking at me like Ross what's your problem you know you're a millionaire who cares you've done seven grand and yet in this moment right now you know it feels pretty crappy to be down seven grand and it feels just as crappy as it felt years ago and I was first getting started to have a $5,000 red day doesn't really feel that much different of course in those days I think I had the added stress of I have a red day and then I'm also questioning whether or not I'm ever gonna figure this out so this is what it was like in the beginning I have you know a series of small steps forward I'm gonna have one big step back and then a few more small steps forward and then another big step back and so my problem as a beginner trader was that generally I was losing more than I was making where is now I'll have a series of you know five six seven steps forward and one step back and now even though today I'm giving back the last seven steps I've been on an up streak for the last like three weeks so then I'll you know start building back up like this and then I'll drop down so generally now I'm trending up now one thing that I would mention is that over the last two years of trading since January 1st 2017 I've spent a hundred and forty three thousand dollars on commissions so you might say I've spent a hundred and forty three thousand dollars on commissions in other words I've given a hundred and forty three thousand dollars to my broker and that as a beginner trader can be the difference between being well breakeven or red for me fortunately I had the profit margin to give that 143 thousand dollars to my broker you guys now you've got a big advantage each trade Ameritrade fidelity Charles Schwab Interactive Brokers Robin Hood weeble sort of you've got free Commission's so now the bar for breakeven is so much lower and today's a day we're on all the trades that I took I'm down seven thousand dollars and it'll probably be another hundred dollars to maybe even two hundred in commissions because I trade it so actively so you know as a beginner I understand that the most frustrating part about these Stairsteps to the downside and I used to call them my snowball days are the fact that you don't have the profit to afford the loss and so you're on this you know series where you're generally red but this is what I would encourage you guys to focus on number one and this is what I did whether or not it helps you comment below I'm not sure but this is what I did I told myself number one let's space out the red days excuse my handwriting it's I know it's not the best you probably can't even read that super well but space out the red days so in other words you know I'd have this series and just even if I had days that were tiny green you know having tiny green days instead of this big red day or having just small red days because I set the rule that three red trades walk away number two if I have minus two thousand dollars in a loss I walk away unfortunately today I had that but it was on the trade that I lost 7,500 all right so it's kind of hard to get around that and then number three a max loss portrayed the the problem is these rules are only as good as the person enforcing them and I'm at a place in my trading where I set rules for myself and then I'll trade a little outside the rules because sometimes you know in order to hit that homerun you've got to take more share size than you're supposed to right and you supposed to is based on whatever rule you set for yourself and I think it's probably like a you know professional athlete you have sort of a set of rules that you work within and then every now and then you go for that Hail Mary pass and you do it because you need to in that moment and if it works you're the hero so the first thing I try to do is to space out the read days and then what start happened was instead of having them once every month I started having them more like once every every other month and so that meant during this period of time that I was having a stair-step up where I would typically have that big drawdown I was maybe having a small read period and then I would make another bit of progress and then of course I would eventually have that big red day but at least I was still net positive from back here so when I started asking myself is how much have I made during my last hot streak since my last big red day let's look at how much I've made all right so I'm gonna pull up here and go to overview and I'm gonna go to filter okay so now I'm gonna look at my calendar and since my last I had a red streak back here so you know unfortunately it's a $3,000 red day I would say the last room that was a not a great day but that also wasn't a killer day I would say this $5,000 day was probably my last so let's say the fifth of September so since the fifth of September and we'll say since the sixth how much have I made in this last little period of momentum and it shows I've made about $18,000 so that's 18 steps up and now seven steps back today that's not the best hot streak that I've ever had but we've also been in a market that's been a little bit slower a market where unfortunately it's gonna take more than just a couple days to bounce back from today's loss sometimes that's the way it is so I'm gonna have to buckle down tomorrow just focus on a base hit I'm not gonna be able to try to hit a home run it doesn't make sense to even think about that just try to start rebuilding one brick at a time and I really believe very firmly that the more time you spend trading the fewer and further between and these big red days will be until you get to that tipping point unfortunately for you guys with zero Commission trading your breakeven just got you know a little bit easier so I hope this video has helped you kind of went on a little bit of a tangent there but I hope you find it helpful and as always questions comments leaving below if you watch the whole video I hope you liked it give me a thumbs up and subscribe to that you can alright I'll see you guys if you're still watching you must have really enjoyed that video so why not subscribe and get email alerts any time I upload new content remember when you subscribe you become a member of the warrior trading family [Music]