Week 3: Lost 90% of the Profits

Hello,

In some ways, it feels like I’ve been doing this challenge for months. But it’s only week 3. Weird.

You can find the previous weekly updates here:

1. Week 1: $500 Challenge It Was Up 24%
2. Week 2: $500 Challenge High Conviction Trades Only

At this point, I’ve laid a ton of groundwork between the first two weeks and have raised the account to $1,000. Okay, $997.75, close enough.

However this week was a real mentally challenge for me.

1. Controlling My Emotions Everyday
2. Current Positions
3. $SPY Going to $0
4. Regaining my Portfolio bBack to 40% P/L
5. Final Words

Controlling My Emotions Everyday

First thing is first, every day I’m going to trade, before the market opens, I tell myself, “I will be unbiased today”.

It’s critical for a trader, to be able detach themselves from their emotions and control it.

I will sound like a broken record on every update, because this is important.

There’s two things that kills every trading account:

1. Theta
2. Emotions

Whether it’s fear, greed, ego… let them go.

The minute those emotions start to creeping in, you’re goin to be an emotional trader and make decisions that are going to cost you on the long run.

If you sense them, step away. There’s always another trade tomorrow.

Okay, let’s start with what happen to me this week.

Current Positions

1. $AXSM $50 calls 10/21 – 1 contract open

$SPY going to $0

A week ago, I opened a position for $SPY calls with an expiration date of October 14, 2022.

And all it did was just decline in price action, for 4 days…

At one point my contracts were -60% down, and I believed in my trade so much I averaged down to -40%. Making my $SPY calls total cost of $300 for the small challenge account.

Theta, and price action going further away from the strike price was just destroying my premium. It was honestly, tough to look at that every morning.

On top of that I had 2 losing trades. To say the least, by Tuesday the $997.75 account value dropped to $550.

I practically just observed and watch the market for three trading days (including the Friday before).

See, I had high conviction that the market needs to rally again, at least one more time. It didn’t make sense to me that it would crash when everyone is so prepared, and all of America is still spending on high inflated prices.

On Thursday, CPI report came out and it was above market expectation. With premarket as high as 1.25%, the market tanked -2.25% in less than an hour.

But some magic happen…

The market recovered 194 points! and was extremely green!

But by this time, my contracts were considered worthless, and nothing could save it.

It was a tough pill to swallow, but like I mention on every start this update, control your emotions, stay calm and collected.

Regaining my portfolio back to 40% P/L

This entire week, was choppy, and couldn’t provide anything really worth to swing or day trade.

From Wednesday to Thursday, all I did was scalp trade Nike ($NKE) and $SPY by using Supply and Demand zones combined with tape reading.

With enough I managed to climb the account back to $700 in value.

Final Words

I personally think, the best part of this week was that I didn’t let this absurd size position going to $0 faze me out.

Yes, it sucked seeing my account drop day by day, but I had my head in the game, and was patient about the following trades.

With midterm elections coming around the corner, I hope we have a clear direction to the upside, before we see the biggest or one of the biggest crashes in history.

If you want to reach out or follow my trades closer, I post everything on my Facebook Page.