The Phoenix Account

I've blown up my E-Trade account. There's not much left in it. I've considered merging it into my main account, since the value has dropped to just $840 from a high of around $70,000, but I'm not ready to throw in the towel just yet. I decided to keep the account around and try to rebuild around a new strategy.

If this is going to work I need to learn from my mistakes and develop a sustainable trading strategy. I've had many positive trades but I've committed the common mistake of holding losing Positions for too long.

With this new approach I'd like to focus on a few key items:

Stop the loss.

As the saying goes, if you find yourself in a hole stop digging. With an account this low my options are limited until I rebuild my funds. I can't effectively day trade until I have 25k. Loses should be limited. I must learn to let go of bad trades early. Most of my trades have been green but I let several losers burn me. This is a top priority if I can't get this one right I'm fucked.

Don't swing for the fences.

I've had a hard time with this one. The desire to make up for lost ground is strong. When the account was larger it was easy to make a few hundred in a trade. Replicating that with a smaller account means taking on riskier trades. A $10 dollar profit might seem like nothing but an account below a thousand that's going to be more than a 1% gain. I need to remember the size of my account when taking profits, it might feel like it's taking forever but increasing my account by 1% per day will add up in the long run and is a phenomenal rate of return.

Don't force trades.

I need to be careful with my trades. Since I'm trading with cash there's only so much I can do in a day. Also, I can't afford too many bad trades. It's better to sit the day out sometimes. Not losing money is almost like making money.

Comments

Rate Hike 21 Sep

I went all out today and loaded up on SQQQ calls with no hedge. The Fed was going to raise rates for sure and I suspected that Jerome Powell would say something hawkish. So I went big and it paid off. This could have blown up on me and been the end of my "Phoenix Account" adventure. My man JPow didn't leave me hanging, told everyone to expect more pain in the future and sent the market into a nose dive. I didn't hang onto my calls for too long. They shot up in value and I decided to lock in my gains and at least be somewhat cautious. $400 is a fantastic gain for an account hovering in the nine hundreds. My next move is the most important one. I can't let this win go to my head. I broke my rule about not swinging for the fences. It worked well today but if I keep making aggressive trades I'll strike out for sure. The rate hike was a special event, still risky, but the reward was high. Now I need to hang onto it.

Tuesday Daily Report 23 August

Today was probably the riskiest trade I've made since starting my new strategy. I was busy at work, missed the market opening, and then decided to make a quick mid-day trade. I entered a SPY put position right as it was plunging. I figured things would drop further and I could be in and out with no issue. That didn't happen. I bought in near the low for the day. This was stupid and risky. See the chart below, I circled about where I bought in. Luckily there was a deeper plunge and I exited my position for a slight gain but that was not worth the risk I took on. If things had gone differently today my gains for the week would've been wiped out. I need to remember that my primary goal is to protect my capital. I would've been better off sitting today out if I didn't have time to monitor things properly. On a positive note at least I survived the day and still made a gain. I've closed out my positions and I'm not very far from bringing my account back into ...

Bad Start for the Week 19-20 September

I started this week expecting another down day but the market had other ideas and SPY rose in value. Thinking this was just a temporary spike I sold my call leg figuring I could take profits then gain on my put when the price retreated. Once again the market didn't care about my wants and held firm into a small closing rally. I locked in a $44 gain but my put was down much more. Normally my rule is to cash out at the end of the day but I felt like this rally wouldn't hold and I could find a better exit on Tuesday. Which was true, the next day things dropped and I was able sell at a $46 loss. This wasn't ideal but with Monday's gain it kept me about even. Turns out I could've waited things out and made a profit for the week but I didn't know that and was starting to worry that the market would launch into a rally going into the Fed announcement.

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