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Warning: Long dramatic thread below (on my $GME loss)
I started this account 4 years ago with the purpose of documenting my trading journey. Something to look back on. To that purpose, I'm obligated to post this. It's a big event for me.
I started this account 4 years ago with the purpose of documenting my trading journey. Something to look back on. To that purpose, I'm obligated to post this. It's a big event for me.
I've been trading consistently for 4 years. My goal? To become consistently profitable. I've went through phases of trading mega caps, small caps, long, short, options, common, you name it. In 2020, I found a process that works for me: selling weekly option premium.
Before I knew it, I turned a 50k account into 150k in 9 months. Not only that, I was doing it making 5-6 "low stress" trades a week, collecting an extra ~2k per week, while still holding a solid day job. Not bad.
On Friday 1/22 at noon, I saw @TraderNickyBAT tweet about juiced $GME premium. Stock trading at 50, the 60 1/22 calls (20% OTM) were trading at .86. I took a quick look at the chart, saw it was wildly extended, and 2 minutes later sold 7 calls for an "easy" $600. Easy cash flow.
As long as $GME didnt shoot 20% in 3 hours, I win. Easy trade. What I didn't realize is that $GME had went totally viral. This ignorance was fatal. It shot 40% from 50 to 72 in 20 minutes. Before I could blink I was red 20k.
$GME came down to earth at the close. I had the opportunity to exit for BREAKEVEN. I'm typing that again. I could've exited for BREAKEVEN. I didn't. Why? "It had to come down to earth" I thought.
So I held. "Short 700 shares at 60 may be good going into Monday." Second fatal mistake. Hoping for a drop with real no basis other than "it's too high".
Monday: it gapped up over 100% to 134 premarket. Sh*t was I underwater. I had never seen anything like it. Defied all rules I'd ever learned. I held for 3 hours that morning, hoping for the bottom to fall out. It didn't. Squeezed to 143. Was red 50k and got margin called.
It kept going. Had no choice but to cover at 143. 7 trading hours, I lost 58k. Stunned is an understatement. Couldn't think straight, see straight. Staring at a red 58k on my screen was paralyzing. Undid months of work in 7 hours.
Worth noting that I try to avoid these "crazes" when I can; it's not my game. This time, I didn't know the magnitude of the $GME story when I entered. I hated the feeling being in that trade. I may as well have been in a casino. All control was lost. My edge? Gone. I wanted out.
But I didn't want to lose more. Anyway, pretty scarring loss. Humbling. So now I am back to the basics. Building this thing from the ground up again, week by week. I love the game and have no doubts I'll succeed and love doing it over the long term.
If you're still reading, hopefully you take away 1) the market is always bigger than you 2) the old saying "market can stay irrational longer than you can remain solvent" holds true 3) most importantly, you CAN WIN trading. It takes years to get the feel/consistency/discipline,
but its not rocket science. Its screen time and discipline. If you have a passion for it, you can succeed.
Thanks to the below for content they share. Ya'll don't know me, but it's valuable stuff and has helped me along the way.
@bostonchaahhts @traderstewie @moon_shine15 @PeterTrader99 @stocktrader300 @johnscharts @HedgehogOptions @zerohedge @tastytrade @kpak82
Cheers.
@bostonchaahhts @traderstewie @moon_shine15 @PeterTrader99 @stocktrader300 @johnscharts @HedgehogOptions @zerohedge @tastytrade @kpak82
Cheers.
