WHY I LOST $27,000 TODAY

00:32 - That’s approximately what I’m trying to hold for, however I’m over this number today and you may ask yourself why; the reason for that is because my daily stop loss is a kind of a ‘breathing stop loss’, also my per trade stop loss is kind of a breathing stop loss. What does that mean? First, you need to realize that what I’m about to tell you is something you should never do if you’re just starting out as a trader, just never do what I’m about to say but you need to look forward to being in that position sometimes because as you get along with trading as you become a better trader you need to change that and here’s what I’m about to say; when when when you develop as a trader some trades look to you like they could possibly be bigger winners you may not have the capability, the knowledge, the know-how to determine right now it at where you are if you’re just starting out whether you really have that capability right now or not, but, a few years down the down the road you will come to the point where you can kind of feel that a trade is going to be better than others.

One trade is going to be better than other. Not all trades are created equally some of them look better, some of them seem like you could get a better winner if you put in more money you know when we learn the Star Trader Course, we often say that when we talk about money management or risk management, we talk about the fact that you should risk up to 2%, actually normally 1% of your capital per trade. Never risk more than 1%, however; we also mentioned that sometimes you need to go up to 2%.

Why that big 100% change?  Because some trades are really created better, well in the past year or so you could have noticed that I’m really having some good time with Tesla, several days making with over $100 dollars, tens of thousands of dollars in Tesla, however, today as you can see I have a huge loser in Tesla. Why is that? Because I felt the same way today - I felt like I could have a very big winner in Tesla. Pre-market time, I was pointing out Tesla as one of my biggest winners today.

I was watching the daily I was expecting tesla to come down of course I was wrong you can see the results here but sometimes when when when a trade looks to you as if it’s going to be your best trade today or maybe this week you should put in a little bit more risk that’s what i did today in Tesla, now does it always work out fine? No. Absolutely not. I mean you can see the results… But, most of the time it does and then I’m taking more risk and making more money, sometimes it just goes the wrong way and I’m losing a lot of money.

So, although my daily stop-loss is less than $27,000 still I did the right thing. I was hoping to get a bigger winner in one of my trades. I was taking a little bit more risk and this is in fact something you should do again, not if you’re just starting out just don’t get to that point have your daily stop-loss have your max stop-loss per trade just stand to the rules, possibly have a hard stop in the system you know we discussed this plenty of times.

Should you have a hand stop or a mental stop? I’m definitely saying a mental stop, again, if you have some more experience, if you’re not just starting out, but you know again when you start out better have a hard stop in the system because it makes you trade with more confidence. Have a maximum daily stop loss, because again gives you more confidence and again when you improve as a trader you could change these rules a little bit, so that was the reason why I have a big losing day today and well you know it’s a part of the game and I do have a lot of days like this on the green side but today sadly not.

Let’s take at look at some of my traits today, well Tesla I’ll start with this one because it was a very unpleasant loser, you know I was definitely watching Tesla today it started with the gap down, initially it came down and then it bounced over the highs very strong and then when it came down again I thought, well that should be the time where Tesla fails and look at this consolidation here it tried to move higher, then failed and that looked to me like I was finally right and then it spiked up like crazy and I never move out on spike it’s a one minute candle over the highs here and I never move out on spikes that’s why I hang on in Tesla and it came down again and at that point I thought well, I’m right it’s going my way I should add and I added and there came the stop here $728 was a stop $720.

85 was the highs. Now why should you move out before it moves over the highs? Because when the stock is moving over the highs you could expect a big green candle like that. That’s a breakout point in Tesla, now you need to realize that Tesla a stock that being watched by a lot of people. Everybody’s watching Tesla. I mean show me a trader that doesn’t look at Tesla intraday, I mean do you know trading like that? I personally don’t if a trader has more than just one screen he’s watching Tesla today and when Tesla is moving over the highs well there will be a lot of people who would go long you want to get out before the party starts, you want to get out before everybody kicks in and gives you hard time like that.

Watch the volume, the volume here shows you that Tesla was bought by a lot of people and again you should anticipate and new high, you shouldn’t move out after it moves to a new high that’s what novice traders do. You, as an experienced trader, hopefully, should move out before it moves to a new high, you always need to anticipate the next move I anticipate it’s going to move under the low, that’s why I added of course I failed, but I also anticipated sometimes you make it sometimes you don’t, but that was quite clear you should move out before it moved to a new high.

So moved out of Tesla and very, very unpleasant loss. BTBT is a very small winner because my first trade in BTBT was very red so the second trade actually just covered it and I still have 100 shares, so I could be up another $150 right now so just slightly in green after my second trade BTBT, well BTBT if you take a look at the daily looks to you, we talked about this one yesterday, let’s take one more look just to remind you… you see this stock came up from $4, just a few weeks ago to $33, we had a very nice shot yesterday and I was expecting a continuation today, however; initially it moved up and I thought, well, that would be the end of the game here and then I shorted it here and then it took me out with a stop over here or somewhere over here, I can’t remember and then at the next failure, I thought the party should be over because it’s very likely to be over - this stock is down quite a lot today - and I thought it should do exactly the same like it did yesterday and come down and yes it did come down and I had a very nice winner, not only did we move in here $27.

50, we also added here under $27 that’s why my second trade was a bit better than my first trade so just a very small green trade in BTBT also had FSLR which was by the book trade, stock that gapped down today. It was on my shortlist today. Shorted it. It did play around, but finally did come down I had already a winner here and then it spiked up again I believe that was the case I can’t remember exactly and then the second trade over here which also worked out so FSLR is a nice winner that you know not huge size not a huge winner, I gave tesla more weight, I mean I was really expecting a big winner today in Tesla, of course I failed, so just two nice intraday trades, one winner, one loser in BTBT and a loser in Tesla, so actually have three losers and three winners, I could say but, again I gave Tesla more… well I thought this was going to be a winner. I was wrong. Anyway, can’t make green all the time and for those of you who didn’t realize until now day trading is one of the world’s hardest professions in a day like this if you watch me lose $27,000, then it’s just a proof that things don’t always go right. I do have more winning days than losing days but  this is a profession that comes with risk, a lot of risk, it’s not a walk in the park, it’s a hard profession.

That’s why 90% of the people who, sadly 90% of the people, who try day trading can’t survive this very, very hard, extremely hard profession. I don’t want to I don’t want to make you feel bad about that because you know if you don’t try you never get anywhere and if you do try and you do have enough education and enough money to hang on as you lose because most people are losing at the beginning, I mean everybody is losing at the beginning, when they’re just trying out, then hopefully you can survive but you know it still is a tough time sometime.

Anyway, I want to thank you all for trading with me today and I’m very sorry I couldn’t help you much. I know the other analyst did well. Yogi did better than I did, much better, and Scott and I’ve seen other trades here posted by Danny other analyst, so well you know it’s one of these days i want to thank you all if you’re on YouTube and you like our trading room our free trading room we will appreciate if you could give us a thumb up it’s right here that button and I want to thank you all again and I’ll see you all tomorrow.

Bye traders. .