How many of you have had a day where you start the day green, you make a little bit of profit and then you finish the day in the red. I Think it's better just to go red and have never been green at all than to go from green to Red because going from green to Red is such an emotional trigger. it's like I had something and then because I'm an idiot I gave it back and it's gone. So today is a perfect opportunity for me to demonstrate the Line in the Sand that I'm drawing of when to walk away.

because ultimately, you need to have a system that you're going to follow consistently. If you walk away too soon, chronically, you're leaving a lot of money on the table if you overstay your welcome. Chronically, you're going to be giving back profit. So where do you draw the line and how do you approach this? Number one, It starts with being consistent about a set of rules and number two having the discipline to follow them.

And this is a really big one for me that you're going to see in my trading today because I'm also going to compare it to a week ago from today because a week ago from today I did the exact same thing except at this fork in the road where I sit right now. Last week, I did something different I kept trading and I ended up having a swing in my P&l from $10,000 in the green. I gave back 177,000 and went into the red. That's a big P&l swing today.

I got myself up 11,000 and have given back half. This is my moment where I'm at a 4 in the road and I have to make a choice and I'm going to walk you through how I've come to sort of handle these moments honestly I make mistakes sometimes like I did last week, but I'm going to talk about that in today's episode to help you better understand how to exercise and develop a little bit more discipline and hopefully a set of guard rails in your own trading. So let's go ahead. get on the screen share and Jump Right In In order to be a consistently profitable day trader, you need to have a system.

It's a set of rules that you follow that dictate the type of stocks you buy, right? So we've got it right here. These are the types of stocks that we're going to trade. We could talk about this more in this episode that dictates where you get in, where you get out, and when you walk away. So today, by the definition, I would say that I'm a pretty successful day trader I've got $ 5,669 127 in profit, but it would be very easy to look at the glass half empty because I had a full glass at one point on the day.

I was up $11,000 and that sure felt good. So how does the $5,600 feel in comparison? Now remember this: This is all relative. You could be talking about numbers that are twice as big as mine. You could be talking about numbers that are a tenth as big as mine.

This could be the difference between being up $100 on the day and being up 50. The number isn't what matters here. it's the decisionmaking process that you utilize to tell you when to keep going and when to walk away. So on.

Friday I Met with Uh Ted who runs the trading psychology program here at Warrior and I told him about my epic mistake on Tuesday You know he's like, all right, walk me through it what happened and this is my technique for dealing with big losses myself. When I have a big loss and I make a mistake I need to separate myself from the computer I need to get away I need to sort of process it and usually I'm trying to figure out where did things go off the rails. You know, where did I make a mistake? So for you, if you had a day where you were green and then all of a sudden you're the worst red day of your career, you've got to go back and unpack it. Figure out where you made mistakes and were there points where you could would have should have intervened sooner so that loss can become a lesson.

And for me, the fact is, and you guys I'm sure many of you will deal with this yourself. You'll have days where you know what you should do, but for some reason you don't have the willpower to do it to follow through with it. and so you end up falling victim to Fomo giving into that impulse to keep trading. And so ultimately, it's great to have a set of rules, but you need to be able to follow them.

So on the day last week I could show you um, my P&l base. Basically I'll show you kind of a line of what it looked like I very quickly on the day last week uh, this is my zero line. So I went up about $10,000 with like two trades and then in one trade I lost two grand and in the second trade I lost another like 2500. So I'd given back about half and then I took a big trade at the open and I lost like seven Grand and that put me in the red from there I didn't trade for a while and then I decided to come back later.

I took a risky trade, got myself to up like $10 when went right back to down the same amount, took another trade, went down even further and then took a hail Mar pass and got myself back up to right here. This whole day was a disaster and if you look at it like this, you could probably see very very clearly that there was a spot where I should have walked away. Perhaps Perhaps It was right here. Perhaps it was right there.

Certainly it should have been right here. I should not have taken any of these trades here even though I did end up recouping some loss. This is almost the worst thing that can happen because you're getting a positive reinforcement for a bad behavior. a bad H habit.

If nothing good ever came from breaking your rules, then you would definitely never break them. But sometimes you have a rule that says I'm not going to keep trading past this time of day. You do it anyways and you make a bunch of money and now you're like oh well I guess sometimes it's okay to not follow that rule. See, that's a problem.

So back here. I For a long time had a general rule of thumb that if I give back 50% of my profit on the day, 50% of my profit I walk away now I don't follow this if you know I I go up like you know $150 and then give back 75 I I Really only follow this if I've exceeded my daily goal which is $5,000 All right. So anything over 5,000 I'll say all right if I give back half I've got to walk away and I'm doing that. This is a set.

This is a rule, right? This is a rule that I follow I should follow I have the rule I don't always follow it as you can see, but this is a rule that helps prevent these types of days because what I actually did was I Studied a tremendous amount of my own trading data and you know what I found I Found that on days when I took an initial loss and I went red but kept trading on average on average I doubled my loss on the day so that that's a statistic from my actual metrics that the day. So this this was an exception. Usually what would happen is I actually finish down here down 7,000 and from down 2,000 it's a extra $5,000 in loss that was completely avoidable if at the very least I had walked away after going from Green to Red. However, if I could walk away right here, that's even better.

And so when I was talking with Ted he said when you were up 10,000 why didn't you just stop there and I said well, the reason I wouldn't do that is because then I'll never have a day where I'm up 15 or 20,000 Why would I want to cap my winners and certainly on a day where I'm up 5 or 10,000 in the first hour of trading. Clearly, the Market's hot isn't this? most certainly the time to dig deep? So in that book, by Annie Duke called quit she talks about this story of taxi drivers in New York City and she shares that taxi drivers tend to work until they've made a certain amount of money and on a bad day they'll work a full 12-h hour shift and on a good day they'll just work for like three hours and then they're done for the rest of the shift. And she calculated that in fact, if they worked more on the days when the fairs were coming in, they would make Expon more money. even if it meant on the days it was slow, they stopped before they hit their goal that it's like for me, it was a real sort of Mind expansion I was like whoa.

So what about with trading on days when it's hot I should put the pel to the metal and be aggressive and on days when it's cold? maybe I should stop trying so hard. All right. So I think it's important to try to extend your winners as much as you can on a day when the Market's hot. And so, the general rule of thumb of continuing to trade until I give back 50% makes sense.

However, on a day where for whatever reason maybe I'm a bit more emotionally fueled I have a shorter fuse. even giving back 50% feels triggering and that's what happened today. So today I was up $1,000 and then in one trade I gave back 5,300 which gave back half my day in one trade and I was I was frustrated I really was I I was like gosh darn it. I You know man that that was so quick that was I shouldn't have taken that trade I can't believe it and I'll get into the details of that specific trade and the stocks.

uh, the two stocks I bought uh and traded today in a moment. but the fact is I'm still up above my daily goal And so the lesson here from last week is that this is the place to walk away. Right right where I'm up only half once I've given back half. So this is where I'm at today, right? Let me get another color.

So today I'm right here and So based on my lesson and reminder, every loss can be a lesson. This lesson and loss from last week reminded me that I need to have the discipline to stop right here now. ideally maybe I should move this up. you know, to 25% So if I give back 25% of my goal after hitting after my crossing my goal 25% of my day that at that point I walk away.

You know that that would be a little tighter, but it wouldn't be bad. The only thing is there's probably days where I've given back you know, a quarter or maybe a little bit more and then you know the the market sets up and then there's um, a couple more opportunities and I end up continuing back up. So the goal is to maximize profit and minimize draw down and also to keep yourself at all times in a place where you're emotionally centered. Now this is this is a really important one because a Trader who's emotionally centered, who's calm, cool, collected is going to be a Trader who makes more money because they're making better decisions.

So if you start incurring these really big losses, you start going on the emotional roller coaster of having you know maybe big wins, but then big losses and you're just all over the place. You're going to be trading erratically, you're going to be swinging with really hard with big share size and and that's going to start to get you off your Center and eventually that'll catch up to you in a hot Market You might get quick recoveries and this and that, but long term it's not sustainable and it's very stressful. so it's so much better if you can bring things down and focus on consistency. And before we go over the trades from today, I'll just highlight here my Uh Equity curve for the last like 90 days or so.

It's not without losses, right? So I do have losses that say they happen from time to time, but the goal is that the equity curve continues to be in this upward Trend In fact, if we went to detailed and then we jump over here to win loss expectation, you can see that Um, this is My Equity curve for Um for the year as of right now so you know I had a little bit of a bigger draw down there. but generally speaking, the account continues to grow. That's what it's all about. So having an account where I've made over $1 million and this year my biggest draw down is 22,000 That to me is good risk management and it keeps me pretty much at the top of my game at least emotionally at all times.

So now let's look a little bit more specifically at today's trades to help you kind of understand my thinking and and why at this point. Uh, I feel it's the right move to walk away and and and call it a day. And one more thing that I'd like to add something that is really important, especially for beginner Traders is recognizing that there are going to be days that you are just super super strong from the beginning and everything is like firing on all cylinders. And then there's days where for whatever reason, even though the setups look good, they just don't play out well.

and when the market is choppy like that I just want to sort of steer clear and get out as quickly as I can once I get out once I say I'm done for the day if you remember the lessons from last week I Do not want to keep checking the market on my phone because if I do that, what good is going to come of it none. I'm only going to get Fomo if I see that the stock that I traded right if I saw the stock that I lost $5,000 on was back to up way past my entry, I would be very annoyed. So the stock that I lost on was Tpst, we can look at that trade first and on this one. Um, you know this was a stock where where I took an entry at $8.90 Wow.

and it was right before that big red candle. one of the biggest red candles of the day. A poorly timed entry you could. certainly.

Um, you could certainly say that what I was looking at at the time was the stock had just made this really big move up as we could see right here and it was consolidating. and so I punched it not like 3 seconds before this red candle formed. right there it was. It was like just almost the worst possible timing.

but I got in right here. I saw this as a micro pullback and I was looking for the break through nine. Now this is an example of a a a chart or and a trade where I was trading using level two and I was also using the 10-second time frame and that might have gotten me into a little bit of a a little bit of tunnel vision because when I step back and look at the one minute chart, I do sort of I I see more clearly that I was buying a stock that already had four green candles in a row and was obviously extended. you know that's not.

doesn't seem like a great entry I suppose. In my defense, uh, one of the other things I was looking at was that if this broke over I think it was approximately $9 Uh, we had quite a bit of room on the daily back up towards 11, so I was looking at some of these recent levels up in here. but in any case, it was a bad trade and uh, and it was a quick loss. I I got in an instantly you know biggest red candle of the day forms so you know it was the right move to sell.

If I had kept holding that position, well, I would only be deeper in the red right now. so it was the right move to sell. Had this come back up and gone through 10 and 11 and 12, that's the spot where if I had seen it I would have felt fomo and frustration and I might have tried to overcompensate for my loss and get back in a higher price with an even bigger position. And if that had gone wrong just like that, that's ha.

swing from green to Red. So really, the right move once you decide to walk is not to look at anything for the rest of the day. and it's crazy how much of a tunnel we can get into with our thinking where on a day like today, a Trader could be upset and I could be upset and I am a little upset because I gave back half my profit and no longer am I grateful for the profit I have the very real $5,600 that I have that's more than I had at the beginning of the day. My mind is thinking about what I lost.

Now you can say oh Ross you're so dumb you should just be grateful blah blah blah blah. But those of you who've been trading for a while you know that this is the trap in thinking that many of us fall into. and this is one of the reasons that trading is so hard. Because you know, yeah, objectively, gosh, it's still a great day, but when you're in it, you're constantly dealing with the emotion of loss.

So in terms of some of the rules that I would encourage following and that I'm trying as always to follow in my own trading, number one is if I give back 50% of my profit, walk away. but I found that that's not quite enough I also have to seriously stop watching the action because if I continue watching the more I watch the more emotionally activated I become the more I feel fomo and the more tempted I am to come back and try to get a piece of this action to recoup what I've lost right and so really out of sight out of mind truly is the best in this case, just it's It's very hard you have to have the discipline. It's as simple as that. You have to have the willpower to say I will not look look at charts until tomorrow morning you know, or until after the Market's closed 8 800 p.m.

if you want to do evening research. but I will not look at it while the Market's still open because I do not trust myself and I know from prior experience that I will give in to fomo because after all, I am only human. so the more I tempt myself the worse it'll get. So this was the loss that I had on Tpst.

Yeah, uh, and like I said, I can see how I got a little tunnel vision and jumped in that a little too quickly. Um, however, there were a couple of things about Tpst that I did like. So uh, Tpst is a uh, a stock that has a 7.5 million share IPO sorry float uh if we look right here, uh, it was already up 10% on the day. The relative volume today um is 2.78 so it's actually a little low.

This is true and this is very common when we're doing a daily Contin Uation setup the daily volume is low because I had such high volume the other day, right? It's not like low in total, but relative volume is lower so that was a little bit of a risk factor. The price was fine though. It was priced between 2 and 20 and you could see by the way, Um, this is the daily chart where we're looking at the volume being a little lighter. All right.

So volume. So what I'm looking at is down here. these volume bars being a little bit smaller. So the high volume was on this day right here.

And then we've got light volume. Red candle light volume. Red candle more volume came in. But in any case, our relative volume right here is 2.78 flow to 7.5 million shares.

Uh, today it's up. Let's see right now, Tpst is up 5% It's pulled back a little bit so at the peak it was up. you know, a little 10 15% Maybe it wasn't up a ton, but it was up more. Uh and and the float was right.

You know in the news Catalyst on this this this is unfortunately one of those stocks. It's really a continuation setup. I have a whole scanner dedicated to tradeing continuation I Like continuation, but we can have this issue where continuation trades can be a little less reliable than first day breakout. However, the stock that I made the majority of my profit on today.

Sprc. All right. So Sprc I Got to link these these two together. All right.

So Sprc this one. Uh, we're going to switch to. Well, we'll look at the daily first. So Sprc I was a little unsure about because it has this daily chart where it has a history of red candles here here and back here.

So because of those red candles I was a little bit worried. However, it's a recent reverse split. as you can see right here. Uh, right.

there's the recent reverse split. So this was a big big reverse split 26:1 and uh, this morning morning it started squeezing up. So I was like okay, I'm going to go ahead and jump in it. all right.

So hang on one second. All right. So we're going to switch to our one minute five minute chart on this. This was the trade that I took stock is squeezing up.

At the time, it was our leading percentage gainer in the entire market and the trade that I took on it was right over this level here of 686 as that broke I was trading this move here for $111,000 of profit. so that was a pretty nice move. from $686 all the way up to just under 9 to 8.86 that's $2 a share. $2 a share certainly pays the bills.

Uh, but after it pulled back right here I said I'm no longer interested and the reason was this was a nice step up. Nice pullback, but right here on this green dogee candle, it did not break through nine I Want to see a break through nine and then see a pull back over nine for the next leg up. So what ended up happening on this was it pulled back a little too much, it didn't go up high enough, Then it pulled back too much and so at the open I was like this is no longer a strong you know stair stepping up pattern. This is now starting I feel to step back down and that's when we get that head and shoulders pattern.

So that's the shoulder, that's the other shoulder and this guy's just got a really skinny head right here. He's like hello and that's it. So that was the end of that one for the day. We got some good action.

uh, in this range right in here and I traded it. Uh, right in here and that was it. You know today was a day where I was green premarket and then at the open I ended up giving back profit. There's other days where I'm red premarket.

Then at the open we get some really good opportunities. but uh, recently, pre-market has been fairly strong. So kind of a bummer that I did give back that profit today, but again, going back to the rule of thumb: number one giving back 50% of profit, time to walk away and number two stop watching. So this is the thing where I wasn't even sure I was going to record a recap because I was like I really need to not watch at all.

but I thought well let's just record it quickly and then be done. So here's my recap of today's trades and I hope you found this interesting as always. Hit the thumbs up if you did. and I'll put a link to an episode YouTube Thingss You Love right here and another one of my recent uploads right there and I'll see you for the next one real soon.