What's up everyone? All right? Well, third red day in a row. Red Day recap. And this is a good time to talk about trading psychology. The emotions in trading.

I'm dealing with it right now. As many of you are, we're in a bear market. It's a struggle. The strategy that's been my go-to is not giving me the same level of volatility, therefore the same opportunities as it was a few months ago.

I am green, but the struggle is real. We're going to talk about in the recap and I hope you guys really enjoy it. All right? So I'm gonna do a recap here. This is my third red day in a row.

I'm sitting here with, um, another red day recap. Down Nine thousand, Nine hundred, Twenty six dollars. Which is about the same I guess is what I was down yesterday. So down about 20 grand on the week.

I think this is a good opportunity to have a little session here on trading psychology. I mean, this is just such a topic right now in the market. The market right now is bearish. You know I'm looking here at Dks Dick's Sporting Goods.

Um, sold off hard on earnings down to 57 and under. rallying back up, you know. But you could tell in the one minute this grinding action I just was like I shouldn't do it, I shouldn't risk it. It's too expensive, the float's too high, I could get wrecked on this and then by the and that keeps going and you're like oh my god I can be up two dollars a share if I had traded this.

You're such an idiot. Okay, go short and then it keeps going and then you're losing long and you're losing shorter. It's just like there are so many emotional traps in the market that you can just fall right into. And so this, um, you know, just to kind of like set the stage where I'm at right now on the month is that This is my, uh, second slowest month of the year.

It's May. Uh, January was my slowest month. This is my second slowest. Uh, February, March and April were decent.

I'm sitting. Uh, I was at fifty thousand dollars on the month before today. So now I'm at forty thousand and you know, of course it's frustrating. No, nobody wants to have a red months.

I started today like this. I came in hot, I was like okay, I'm ready to crush it. I'm going to have a oh my God. here comes the ground.

It's coming at me real quick. Boom and just like that, I hit the ground. I hit the ground hard this morning. I took two trades right out of the gates and I lost on both of them and that was that was it.

Max. I mean my max loss is 30 000. In terms of that's where I I can't keep taking any more trades. but um, you know, 99 900 is close enough to being the writing on the wall.

So I was like, all right, you know what? I'm just gonna let it go. It is what it is. Uh, the good news is I was um, I was green last week so 51 000 on the month before today. Accuracy: 65, Profit loss ratio around one to one.

Uh, hit a high of 63 000 so I'm down now 30 33 or so, uh versus my high of month of 63 back to 40. So kind of a little bit higher than this. Um, but we do still have a couple days left in the month for recovery. but this has been a really tough month and having three red days in a row that's not much fun.

So it was Red Monday, Read yesterday and read here again today. So um, let's see. Oh and that's how it felt. Yeah, by the way, that's what it felt like.

Um, when I took that second loss it it really crept up on me. I thought I was um, I thought I was gonna be okay and then all of a sudden I that was on mics uh jumped into this one as it broke V-wap and look at this candle it dropped to 350 like that and I I was I I was done. I was like all right, this is um that's an eight thousand dollar loss really quickly and it happens fast. So so let's talk about trading psychology for a little bit.

Um, the market that we're in right now is a Bear Market. Uh, this is a bit of a more extended bear market than I've had to trade in for quite a long time. The market has been pulling back really since uh, about January 5th and I continued to trade well until mid-january and then when we dropped right here. this is around the 20th of January.

That's when my P. L started to kind of roll over. The market started to pull back and it was definitely hurting me. So now we've been in a Bear Market for about you know, four, four, five months and if we look at my equity curve for this year, you'll see that.

I, um, let's see. we'll go to detailed and we'll go to uh here. No, you can see right here. So this is my equity curve for the year.

I am making money in a Bear market, but I'm not making as much as I would make if it was a bull market. so I you know it's right now just about keeping your head above water. It's a choppy market and one of the things that's really challenging is that these markets can create so much frustration because you come in every single day looking for opportunities You want to trade. Well, you want to make money and then you just keep like either, not seeing any opportunities and you're sitting here thinking okay, should I just should I just not trade What you know, Should I just keep not trading.

How many days in a row am I gonna not trade Or you say all right, Well, something is moving. Uh, so you know today, Uh, E-l-e-v You know this was moving so it's like, okay, I'll take a stab at it, but we're just look at how choppy these are. We're not seeing generally big continuation. We're seeing a lot of whip, a lot of chop.

And this is the area where you come in looking for a small base hit and then you end up getting wrecked. And it's and it's frustrating. It's you feel that sense of defeat day after day. Nobody likes to lose, and you come in day after day after day in these types of choppy markets feeling either like you're losing or like you're just not hitting those big winners that you kind of need.

Because the thing with trading is that there's no trader who's going to be right 100 of the time. That's not. Of course the way it works. all traders lose money, but you offset the losses with your winners.

And the problem with a really cold market is that all you're catching are these really small bases. Small winner, Small winner, small winner. And then you walk right into one of these traps. You know, Look at this Dks, Look at you, look at if you had actually shorted this, um on the five minute which was a clear topping tail, uh shooting.

but it was a um, a doji right here at the top. you've got eight green candles in a row and then this is that candle that says hey, you're short, I want to watch you get stopped out and the Algo rips it up to 4, 78, 47 and then it comes back down. Now you've got two dojis in a row and you know what? Maybe this is going to keep grinding up to 80 bucks And so even though the short bias makes sense, you can't just keep holding it short. If it keeps grinding like this, it just isn't possible.

So you know this is kind of just a another example of the choppiness that comes in these types of markets. So what We What I look for in my trading. I look for stocks that I think meet the criteria for having a lot of potential. That's based on price, float, the rate of change, a news catalyst, and relative volume.

And right now we're not seeing a lot of stocks that are meeting all of those criteria and the occasional time that we do, even those stocks are not resolving the same way that they would have during a bull market. During a bear market, a lot of traders get kicked off the market, they get kicked off to the sidelines, and then they're just out of the market. There's a lot of traders out there that make a lot of money during a bull market. and they don't make money at all during bear markets.

so they just stop trading and they go do other things. All those people, just stopping trading means there's less volume. Relative volume is going to be lower. Total volume is going to be lower.

Less volume means less volatility at these critical breakout spots, which is where we look for those extensions and those short squeezes. So we're in a market right now where we're just not seeing these high levels of volatility in small caps. You're seeing it occasionally on large caps that have earnings and things like that and there's opportunity on them. But you also have to be aware of the way that Algos trade those large caps as you see on Dks, and how you can have a very good technical setup and the Algo just screws it up completely and so that can get extremely frustrating when you have the right idea, but your technical analysis doesn't work as well on stocks that have really high degrees of high frequency trading algorithms moving the price up and down.

So we usually tend to focus more on small caps because small caps have higher relative volume, the Algos are typically not as aggressive on those small caps, and they've typically been an area where we've been able to do a little bit better. But uh, again, in this market, we're not seeing that. So I think the thing that you sort of have to do during this type of market is adjust expectations. We're not in an environment where we're seeing a lot of home runs.

I'm not having a lot of back to back 10 15 000 winners. So to have back to back 10 000 losers that's not sustainable. Not in this market. And I can say for sure that I traded with too much size on mics.

and part of the reason I traded with as much size as I did was because I was down 10 000 yesterday and I was trying to come back. Hit it strong, have a nice trade, and recoup some of that loss. It's a natural instinct and those instincts can cause us in these types of markets to just continue to have back-to-back red days, or to spiral and have the days get bigger and bigger And bigger and bigger as the amount that you need to make to make back previous losses becomes bigger and bigger and bigger. You know, Now I'm down 20 000 on the week.

Which naturally there's this sort of tension resolution of I'm down 20 000. I need to make back 20 000. So tension wants to resolve. How can I resolve that as quickly as possible it would be by taking a 15 20 000 share position on Dks right now and either it drops a dollar a share or goes up a dollar a share one way or the other, I'm going to be up or down 20 grand by the end of the day.

Of course, that type of decision making is what can capitulate the losses in snowball as they get bigger and bigger and bigger, you start taking higher and higher risks. And and that is all coming from a place of desperation and fear of realizing the losses. And I have it even myself. I've been doing this for so long and it's It's hardwired.

In the way I trade, it's very, very difficult to unwire and and to unlearn those types of emotional responses to loss. I think the best you can do is to develop some degree of self-awareness which I think I have. It doesn't mean that I don't fall into these traps a little bit. It doesn't mean I don't have red days, but I know when to walk away.

I know when to stop. You know, my account is not below its max loss. Today I'm walking away. I'm seeing the writing on the wall.

There are times where the writing is on the wall and I'm choosing not to see it. Uh, you know and that. and maybe I don't know. Maybe this morning I did a little bit of that when I first took these two trades.

Maybe I should have seen the writing on the wall just from the fact that I was already read on Monday and Tuesday and had a better ability to carry kind of the writing on the wall from previous day in. but at the same time in, we've seen how quickly markets can shift on a dime from being cold to being hot and every day can kind of stand on its own. Uh, in a sense. But but clearly we are in a little bit of a cold streak here.

and so if I look at my my profits on on the month, Um, I had a really cold week two weeks ago. I was red. I was green last week and now I'm red again this week. So I've had two good weeks for the month of May and I've had you know, right now, two bad weeks.

Even if I finish this week with two green days, even if I managed to finish green which is unlikely, it's still going to be a bad week because I had three red days in a row. So you know, as I am kind of coming to the end of the month, I'm trying to be very grateful that I'm even green at all, because being green at all is a reminder that I can make money in a bear market. Do I make as much? No. Do I have some bigger losses? Yes, But I'm still making money and that's good.

That's that's what we say. If you can make money in a bear market, you've proven you have set a foundation that you can scale in a bull market. and that's a generalization, but I generally think that's true. As always, my results are not typical and there's no guarantee of success whether you're learning from me or you're trading on on your own.

So I'll just put my disclaimer out there and look at that Dks. So even though you have three Dojis in a row, uh, this has now gone up to 79.35 so you know it's just continuing higher. You've got eight green candles in a row, three doji's and then off it goes heading up to 80 bucks. It's now up 11 on the day.

What a swing! So I think right now, adjusting expectations is important. These are markets that are going to force you to sort of take a second look at your strategy. The way you're trading, the way you're choosing stocks to trade. It's a great time to get focused on trying to be kind of as efficient as you can.

cutting, trimming the fat, Where you've got subscriptions that you don't need, Where you've got you know, extra money you're spending trimming it down a little bit, sticking with the basics. What are the tools that you really need to trade? You know you've got your basic things that you need and then you've got the extra stuff. Some traders are using commission free brokers right now and just trading with smaller size. I think that that's not a bad idea.

The fact is right now my profits of 40 000 are are after commissions. I'm up probably closer to 55 60 000 in commissions. Uh, if you take those out and put them back in. so uh, you know, uh, that? that's something.

that's a little bit of a question right now. Right now you know if the market's this cold, maybe just catching a couple base hits on a Td, Ameritrade or E-trade account is is okay. It keeps your cost of kind of running lower. I think that this can also be a time to start to look at diversifying, trying to find Um, second and third and fourth sources of of of income.

Because you know, if this does turn into a longer recession, there can still be opportunities in the market. But it's a good idea to be thinking about. How can I be self-sufficient How can I sustain myself even when things get really slow? Because the whole idea of being a trader for me is about being independent. And you know that means I need to be able to when I have good months and good years.

Put some of that money away to save me, save to sort of tide me over when things are slow and I want to make sure that I'm not the type of trader who you know makes 10 million dollars during a bull market but then loses 3 million or 4 million during a bear market that that's not what I want to do. I want to be the type of trader who makes whatever during a bull market, and then during a bear market. I guess I just make less Now I suppose. Uh, the best case scenario would be that I make the same amount whether the market is bullish or bearish.

That would require me to do a couple things. It would require me to start getting comfortable trading stocks that are not small caps. Because small caps right now are not volatile enough to be profitable. Whether to be profitable to the extent that I was last year, whether I was long or short, I I don't think that I would be able to make as much as I did last year trading small caps, whether it's long or short in this market.

So looking at mid caps stocks like Dks, but this is where you can struggle a little bit because you're dealing with a lot of institutional traders, you're dealing with the high frequency trading algorithms, and this is where you're trying to play chess against the computer. And if you have the sort of mindset of going in for quick entry, quick exit, breakout trades, half dollar, whole dollar scalp trades, things like that, That's not a sustainable strategy with large caps. In all of my years of trying to do that, it has not been successful. What is? And so ultimately in a lot of ways, trading on the one minute chart, small caps or mid caps and large caps really does not work well for me.

It's too choppy, so that's where you have to start getting into focusing on larger time frames. Five-minute 15-minute multi-time frame alignment. You're trying to position yourself with the institutional traders. with those big hedge funds trade the same direction they're going.

You know it's going to chop out a bit because it's going to pop up. It's going to drop down. That's a combination of Algos institutional orders that are going through. It's just a different way of approaching trading and one of the things that I look at is exposure risk.

So if I'm holding a 5 000 share position of this type of stock, granted, it's gone up enough that I could have made 30 40 000 from the bottom of the top of the move, I would have had 300 000 on the line and I would have had to hold it for 30 40 minutes. Now of course, if I actually was consistently trading these uh, and doing that well on them, I'm sure I'd be able to justify the risk. But there is more exposure risk and so I have a bit of a hard time getting myself comfortable on these types of stocks. I'm not.

I don't like that they don't respond as well to technical analysis. They do in certain ways, but not on short time frames, which is where I really trade the most aggressively. That's where I feel comfortable trading aggressively. I'll take a high level of risk, but for a very short period of time when I have the 20 30 minutes to sit here and look at myself holding a 300, 400, 000 position, I just talk myself out of the trade.

Every time I'm like it's not worth the risk. It's too choppy, the pops, the drops, having to hold through those whips. I just I can't do it. I'm not the type of trader I never have been that I could say okay, I'm going to get in here at 67.22 and I'm going to set my stop at 65.

that's a two-point stop. Then that would be ten thousand dollars of risk with a 5 000 share position and I'm just going to set a trailing two-point stop and just let it roll. And I would be getting. I would have stopped out two for a two point, um, dip right up here at like, you know, 70, 74 or something like that.

70, 75, 76? whatever, you know. So in hindsight, that might have worked fine. although you did have a two-point dip here on this candle, and you might have in a couple other spots. So two point might have been too tight of a trailing stop on this stock.

But that's such a big swing, so in any case, I know where in the market I've been able to do the best. It's on parabolic momentum, and that's been predominantly on small cap stocks, although occasionally on a mid cap like Gamestop or something like that. So I suppose I could spend this, uh, slow period in the market trying to hone my skills in a different sector, different sort of type of stock in the market and see if I can find some success with it. I think one of the things that's challenging for me is that, um, when I'm already red, I get very hesitant to try new things when things are slow, but then when things are hot, I don't feel the need to branch out.

So it kind of leaves me in this state of not branching out. whether it's hot or cold. It would take a real conscientious effort for me to try to push myself and get more active on these mid caps and large cap stocks. And maybe that's the right decision? I don't know.

Um, you know, at the end of the day it would probably if I if I was able to be successful. I mean, it would only make me a better trader, but um, I suppose it's a it's a patient's question if I have the patience to do it, if I have the motivation to do it, or if I'd rather just kind of let it be cold and cool right now and wait it out until things are things are hotter again and I'm not really sure the answer to that. You know it's it's easy to say oh well, just learn options or get better at options or why you just start trading forex. Well, that's easier said than done, because we know how long it can take years to master a strategy.

So sure, the effort that I might put into it here would it Would it hurt me? No, it wouldn't hurt. probably wouldn't hurt as long as I was able to make sure I was trading with small enough size that I didn't generate unnecessary losses. Um, but to the extent that it would help me in the short term make more money over the next three months. I I don't think that that's a reasonable expectation either.

I think that if you're starting to learn a new strategy and branch out, you should expect that those first three four months are probably not going to be profitable at all. You're probably just going to be grinding very very small gains. hopefully small losses practice in a simulator. Um, you know, and and this and that, so I don't know.

I'm just thinking out loud, but uh, we're definitely in a period that is slower and so it may be a good time to start to look at branching out a little bit and you know you could say oh gosh, the market's so bearish. why don't you just short again? It's really a volatility issue. If you were short dks any time except for this one candle today, you know you pretty much would have lost money. This thing has just kept going up.

You know, snapchat yesterday would have been a good short. Today we got a little bit of a bounce back, so you know I mean you. Yes, you could have traded. This is short side.

It is a large cap stock. It's got a over a billion share float, but you did get a fade at the open and it did sell off pretty well. And so you know that's one that I left alone for a number of reasons. It doesn't fit within my strategy for the type of stock I would typically trade, but uh, yeah, I don't know.

So right now I'm just kind of trying to be grateful for what I have look at the glass as being half full, but also be openly curious about what could I do to better survive this type of market Because it survived till you thrive in trading. And you know if the market that you're trading is getting slow because the stocks and the setups that you like aren't presenting themselves as much, then that may be a good time to start looking at branching out a little bit. So I say that you know, not with necessarily the intention that I'm going to do it, but just start talking out loud. Um, so anyway, so that's it for me today.

I just kind of wanted to do that recap and kind of let you guys know where I'm at. It's a, uh, it's definitely a, time of testing patients, but you know I'll get through it as I always have. we have ups and we have downs in the market and sometimes they can present opportunities to improve your strategy and improve your trading. And so that could be the opportunity.

And for others it becomes the the moment where you just blow up, you capitulate, you spiral and you're done and you're gone. and that's it. So respect the risk in the market, respect how challenging this is, and do everything you can to keep your head above water. Survival, survive to you thrive.

This is a marathon and this is a hard stretch in the marathon. This isn't the easy fun stuff, this is the hard stuff. But you have to get through it. or I mean you don't have to.

but that's choice. If you want to get through it, you have to be disciplined and you have to be patient. And I need to try to exercise a bit more of that in my own trading. so that's it for me.

I hope you guys have a great rest of the day and I'll see you back here first thing tomorrow morning. All right, see you in the morning And that right, There was an entire video with no ads. I don't monetize my youtube channel with video ads, which means you guys get to enjoy the content. but do me a favor, Please hit that subscribe button and give me a thumbs up and let Youtube know that this channel is the channel to watch if you want to learn about day trading.