my worst trading month losing 1 4 Million #finance #daytrading #trading #daytrader

I mean I lost 1.4 million dollars in September and I mean I want to make this video to give you guys value and share where I fucked up and what went wrong and here we are. My whole purpose of making this video is I want to try to give you guys value from my losses and then second I want to show you guys that hey losses are a part of the game. Losses are something that happen even though it sucks and it burns and it hurts even 12 years into the game they're just part of the game. They're gonna happen right. So this is not my only time I've had a losing month. This is not going to be my only time that I continue to have a losing month right. But the idea for me is how do I recap from it. What are the mistakes I made. How do I make sure I don't make these mistakes going forward and then obviously how do I bounce back from it right. So we have my kind of platform open here and I'm going to go through some of these trades and I'm going to walk you guys through what happened. So what is the main reason that these trades or you know my bad trading month happened. So to give you guys some context. I came off a really good trading month in August made close to 900000 plus really good month confidence is high. You know you get this confidence of like you know you have momentum going. The second thing that happened outside of just confidence is I went into September with a lot of bias like extreme amount of bias that the market is going to sell off. I even tweeted about it. I even mentioned it and my whole idea around that time was I think that the market is going to rally till FOMC the Feds are going to cut rates market is going to tank because we are not going to have any more anticipation of the next event. Just my theory. Right. Sounds good on paper. It sounded good to me countless times. But where I trap myself here is I created this bias and I was so on the left side of the markets going to sell off markets going to sell off and I'm going to catch this big short. I'm going to catch a short continuously and now going back to it I'm like OK well I see what I did wrong. Right. So like if you look here right. This is like the first day just to give you some context and I'll go into the trade. I take the first trade right here I made one hundred and five grand on SPY 2 or 8 p.m. and then about 30 minutes later right. I essentially took the second trade right. The second trade just completely destroyed me and if we go through if we go through these trades right. Here's here's kind of the first trade ultimately right. I took as you guys can see I took the short right here right. Made money on the short which was great. Now the market after this first short completely rallied right. So if you look at the second trade you guys see second trade market continues to rally. So on that short idea I'm still on the short side while the market is recovering and that short bias is taking over and I'm like blinded by everything. So that's like day one right. Day one happens FOMC I'm like down 11 grand of the day right. But if you look at the overall day I was up 105 grand at a particular point. So now Wednesday and September 17 ends FOMC happens I go into the next day. Now going into the next day because of my bias again I'm like well market is going to sell off. I think markets going to continue selling off. Now this is where I was wrong completely wrong and this is one of my trading problems that I've had 10 years ago and I have it now and I've had had it three years ago and I continuously have this issue pop up where sometimes I get so biased that I avoid looking at the other side. Again this is clearly what happened last last month right. Now how do you prevent this right. The way you prevent this is you always create if and then scenarios. So for me a lot of times if I'm short or want to go long I have to say for me to go short I need to see X Y and Z for me to go long I need to see X Y and Z and for me to play into any of these trade ideas. These are the things that need to happen in the market and this is what my risk criteria looks like. So once again because I had a strong August my risk was higher in September which is OK but then when your risk is higher and you're mentally biased so hard on the left side I can start messing things up. So this is where the really bad day happens I'm down 245 grand in one day. This was like a complete tilt day so I think even if you go tilt session you lost 245 the session shows signs of tilt short trades high frequency fast reactions deep and drawdown right. Most of my trades all of my trades actually not even most of my trades all of my trades or were in drawdown. So if you go to the first trade let's start to break down both trades from a day perspective right. Let's go to 18th and let's see what happens 18th. So trade number one right. We look at trade number one and you know trade number one what do I what do I do. Trade number one I short right on the open as you guys can see market opens I short. Now why did I short. Let's kind of understand this a little bit. When you go into a trading session and once again you're biased you're putting on a lot of risk because I'm like you know I'm going in with like one hundred fifty thousand plus position on options which is large you know close to a thousand contracts on this. I start to get blinded which is natural which happens which is going to continue to happen. But the idea is to be able to recognize that in real time. I obviously did not recognize that in real time. I shorted and in reality even on the short if I think about it the short is totally OK if I just took a stop right so like if I was to stop out here I was to stop out on high of the day right. What would have happened this whole trade would have looked different instead of me losing one hundred and seventy eight thousand dollars on this trade. I would have maybe lost 60K I would have maybe lost 70K but once we made a move down I chased this particular trade I got in and I held it all the way till the top. This is ultimately to me just stupid in any possible way every possible way this is stupid right didn't follow my risk management plan didn't follow my stop didn't follow my game plan. There was no real trade set up here. So even if let's say there was no real trade set up hindsight 2020 why did it not follow my stop. That was like the first thing and typically this is where you start getting the snowball effect of things just going downhill right. Like how many of you guys like like think about this for a second right. How many of you guys have been in a situation where you've taken a trade and it was such a bad trade. And right after that bad trade there's like a snowball effect of more bad trades more bad trades more bad trades. And typically when that starts to happen it's because you are now on tilt. For me everything after Thursday was a bad tilt stupid trade. And for me like the way to prevent this and once again this has happened many times in the past as well as you stop in the middle of this you recognize it you walk away you stop trading for the day like after I did this stupid trade I should have been done I should have said hey I'm a little biased market kind of reversed me it's harder to trade. Let me step out of this and let me figure out what makes the most amount of sense for me in the next few days because I just took a 200 K loss on one stupid trade in 45 minutes. OK. But no. What do I do. I say absolutely not. I'm going to take another trade. What's that trade going to be. It is going to be a short. So I take another trade. You know much smaller right. But take another trade. It was 31 grand. OK. But I do right after I take another trade short. They're all shorts right. And like if you look at the action right. We take a look at the action for the day it's all like after this huge move up it's all like choppy sideways action and I'm trying to like capture a short. So give or take I burn 64 65 grand. Now the problem here is I'm not I didn't just burn capital I'm now destroying my mental confidence. I'm destroying my mental energy. I am now down 245 grand in a trading session which is like whoa. And it's just frustrating because you as a human you get into the state of like I need to make this back. I was maybe too early in the short. Maybe the short is tomorrow. And once again coming from biasness coming from not not following my risk management plan just being completely an idiot to be honest. Now we go on to the next day right. We go on to Friday. What do you think happens Friday. All right. We go to Friday. Boom. Same exact thing. What happens Friday. Same thing. Deepen drawdown. Let's look at the Friday trade. Right. I go to the Friday trade. Boom. Down 121 grand. OK. Now it's like well what do you mean you're down one hundred and one hundred and twenty one thousand. What happened. Now there's a few things that did differently on Friday and these are rules to help me. When typically I have bad trading days and one thing's one when I have two three back to back bad trading days. One rule that I recommend everyone to do even myself. I didn't follow it here is take the day off reset. We as humans we get caught up in our thoughts and our emotions and we overthink everything over and over again. And for me that's basically this was supposed to be a day where I recalibrate rethink about stuff. Obviously I did not do that. Obviously I went into the day and I said you know what I'm not going to trade the first hour which I didn't. Thank God. Right. I'm going to wait. I'm going to wait for some direction. So obviously when we look at the action here and we start to see what's happening with the market. Right. I start to go. Well what is going on with the market. What is going on with this particular trade. Market starts to sell off. I'm like OK. I don't want to miss the trade. Once again because I was biased it's not kicking in. I don't want to miss the trade. Now is the time we're selling off. I go in super heavy. What do you think happens. I go in super heavy short and look at just look at that. And for everyone watching this I hope this kind of makes you feel a little bit better because when I first started trading out I used to have moments where anytime I would take a short it would go up anytime I would go long it would go down. And look 12 years later it's still happening. It still happens. We get caught up in stupid trades. And the first thing you think is oh the market is so rigged against me right. Which I'm not going to lie. I thought about it. Oh my God. There's got to be something going on. So I take a short and right after I take my short just look at how right after the market just completely rallies right. And as this market just starts rallying I'm not exiting I'm not getting out of my position I'm not cutting my losses I'm just letting this one trade burn to the ground. And what happens I take another big hit that could have been avoided if I didn't trade. And even if I did trade that's another thing I could have sized down I could have cut my size down by 50 percent I could have cut my size down by 80 percent. No what do I do I keep my size the same. If not I increase my size which in retrospect is just stupid right and not even in retrospect overall I think it just does not make sense. And this starts to continue and you guys can see at one point I'm like all right I'm done. Obviously I think the one good thing maybe I did this day was I ended the day early right and I said OK I took one trade lost money let me get out. Now we go to the next day which is Monday. What happens Monday. Another I know for people that are probably watching this for the first time they're like why do people listen to this guy he sucks at trading and I promise you in September whoever the hell I was I sucked at trading I was a completely different person. So I get it I get I get the idea. But the thing that I want to be transparent and show you guys is this side of trading is where it's like man we're all human we're all going to **** up. There's days I beat myself up and I'm like I don't know how the hell I did it. I don't know how the hell I took this trade. I don't know what made me take this trade. And these are things in trading that are always going to actively be there. And the way we beat this isn't thinking that they're going to go away or you're going to overlook this is you have systems and processes in place to kind of tackle this right. And obviously I didn't follow my systems obviously I didn't take a step back. I'm in this rage of like I need to make my money back. I'm going to catch the short I'm going to find the perfect trade in the market and I'm going to get very very aggressive with it right. That obviously did not happen. This trade kicked in on Monday and then what starts happening then. Same thing. And you know if you guys look at the patterns right. Same thing here. If I go to this particular trade just to look at the one minute chart just to open it up. Same exact thing right. Just kind of get a good good grasp. Market opens. I have this level. I'm like OK we're seeing some weakness. And by the way when I went back to these trades and looked at order flow and I looked at the things I look at the trade nothing signaled me to take these take most of these trades maybe one or two. Sure. But most of the trade nothing signaled me. I still took it because I'm now looking for confirmation bias and that confirmation bias for me is hey take this trade. It's going to it's going to go down it's going to go down it's going to go down. You don't want to miss the short. Find that one particular one particular trade. So what do I do here. I take another short and you guys can see. And you know what the crazy part about all this is is if I flipped my trades and I just went long on all my shorts I would have made so much money like so much. And I know this. This is that thought that plays in. Oh my God. The market's rigged against me and you know I should take another side. And I did think that these are things that did kick in. But you guys aren't the only ones that have stupid months or stupid weeks or stupid trades. I think I know so many traders that have been trading for 20 years 25 years that have made significantly more money than I have ever made. And these are moments that all of them go through. These are periods that all of them go through some of them have a quarter of just trading really bad and have months and months of trading really bad. The big question here is like all right you traded bad. How do you get out of it. What do you do. And you know one thing that I always say to get out of bad trading months or bad trading periods is how do you bounce back. What is the game plan. How do you manage your risk. How do you overlook these losses. And I think coming out of drawdown especially when you're trading right. Because what happens is if you're at like zero right or let's say you're trading up here the moment you go into drawdown right here is like everything just messes up right. Your confidence as mentioned is like at an all time low. Your ability to execute is low. You feel losses are like much higher point because you don't have the same cushion to support you. So everything is just kind of on hard mode right. And this is not a comfortable place to be in. And I'm pretty sure a lot of people are either in the stage or going through the stage and that's why I ultimately wanted to make this video to show you guys OK I go through drawdowns I go through bad periods. So when you guys see my good trading weeks and months understand that this is this. This is the other side of it right. So you see like a million dollar month or one point four million dollar month or one point eight million dollar month on the other side of it. There's big losses and big trades because I'm putting on a lot of risk right. So now what do I what's my game plan here to get out of this. What do I what am I looking to do and how do I overcome this and you know when I have a bad week or a bad month what do I do right now obviously I didn't do all those things early on in the month of September and I wish I took a pause and I put a breaker in between but I did not do that obviously not going forward. What are those steps. Step number one is decrease risk. Take my risk and decrease it. Why. Because I want to build up my confidence so confidence I want to build up the way I build up confidence is I have to be able to take more trades as I as I take more trades I have to be you know maybe you're right or follow my stop loss and get stopped out at the levels I want without blowing my account and without causing more damage because if I take two big trades and they put me in the deeper drawdown everything starts to get worse for me. So in order for me to do that is I need to number one reduce risk. Number two is I need to start being more focused on my rules. What do I mean by my rules is I need to go and I need to have if and then scenarios so I should not be allowed to be biased. Right. So if I say hey tomorrow I think I want to short. Well what do I need to happen to short. And then I ask myself a question where what is one thing that would make the market go up and I have to come up with a reason why I would go long. Like I have to force my brain to think about the long side. And I did not do that in September. I didn't say well I want to go short and this is why I want to go short. Well what if I it's like you know when you prompt AI right. You prompt your brain and you basically basically basically have to say give me give me one reason why I should go long and I have to give a reason I'm forced to give a reason why I should go on that same concept for me in a lot of months and a lot of days a lot of trades has helped me look at both sides so I obviously didn't do that in September and I'm moving forward. That is another thing I need to kind of implement because I don't want to you know keep thinking markets going to go lower market markets going to go lower and I kind of destroy my account. The third thing is restricting pretty bad but restricting trades right. Restricting like hey if I have one bad trade my second trade either my risk has to reduce or I have to call it a day. I have to be more selective on my trades if I have one trade a day or I have two trades a day I have to be very selective. So if I see enough if I see an opportunity I have to make sure that opportunity is the best opportunity available or present at that period. If not I have to avoid it. So like I start to decrease my risk I start to decrease my trade count size it starts to decrease how many days I can trade because I obviously don't think that every single trading day out of the month is valuable and you know we need to trade. So I become very selective right. So as I become selective right this forces me to look for good opportunities and look for good trades. So doing the three things just keeps me accountable and then obviously obviously at the end of every day just looking at the market forcing myself to think of different scenarios forcing myself to think about different positions and just looking at the market from both angles not just market needs to go down or market needs to go up but understanding both and why you know both make sense. And the biggest problem out of all of this and I remind myself even now is the market is never wrong. We are wrong. So in this situation I keep going like and I caught myself in this why the market sell off it shouldn't have sold off. I mean why did the market go higher it should have went lower it should have no market shouldn't have to do anything. Market will do what the market wants to do and my job as a trader and this is what your job as a trader is just just keep this in mind. My job your job as a trader we have two jobs. Number one is manage risk and then number two is to make sure that we are not attached to a side on the market. We are not in love with the side. We are able to look at levels we're able to look at the market and we are able to react based on certain entry and exit triggers and if we are able to react to raw data raw information we trade off that we don't trade our opinions we don't trade our thoughts we don't trade what we think is going to happen. What I think is going to happen most of the time is wrong right. But if I think something's going to happen I need the market to showcase it. And if I'm wrong in that or if the market entries are wrong my risk protects my downside. So yeah that's basically it. Kind of you know kind of a kind of a difficult video to make but I think it's important for everyone to see the other side of trading and see you know the struggles that come with it. I'll update you guys towards maybe you know end of December on what happened afterwards what my account looked like afterwards for context just to show you I you know for some people watching I didn't blow my account. This is a percentage of my profits of the year and I'll talk about it in December. So I'm alive I'm continuing to trade but I did not anticipate to have these many stupid trades that had no reason right. Because there's two types of trades that I always say exist there's good trades and bad trades and a good trade isn't always a trade that's profitable. You can have a losing trade. All right. That's a good trade because you followed your game plan. You followed your risk risk style on it. Risk amount your entry criteria is good. Everything on that trade was good. You lost money. You took a risk. And then there's bad trades. All of my trades or majority of my trades in September were bad trades. So it's a hard lesson. You know you live and learn. And that's it. I hope you guys found value in this video. I hope you guys you know understand that losses are part of the game and you guys are going to go through losses. I will not say you're not you're going to lose money. But the big question is you know I always say is like you identify good traders not by their winning days or winning months you identify traders by their losing periods how they respond and how they bounce back and how they deal with drawdown. So if you're dealing with that good luck and I will update you guys in the coming months.