How I Made $20,805 on a Trade

What's going on, guys? So in this video, I'm going to go over my trade breakdown on Roku. So today I traded the stock Roku, and on that stock I was able to amount to a gain of $20,000. If you guys take a look right here, there's $20,000. So what I'm gonna do in this video is I'm gonna walk you through my entries, my exits, what made me get in the play, why I was watching the stock and how I kind of traded it. Now, before I dive into that, I want you guys to understand a few things. Now when you guys see some traders making 10,000, 20,000, 5,000, 8,000, what I want you to understand is that these big days do not happen every single day. That's number one. Number two is that when these big days do happen, we traders are putting on risk, right? So I'm not making $20,000 on a trade by risking $50. I'm not making $20,000 ON a trade by risking $1,000. I'm putting risk out there to be able to make 20 grand. So if you are a new trader that's starting out and you're like, wow, I want to make 20 grand, I want to make 5 grand, I want to make 40 grand, right? You have to understand that you're going to need a lot of capital and you're going to need to put out risk. And obviously you need a lot of experience. So do not jump the gun trying to make a lot of money right off the bat. So let's get right into it. Let's go to the charts and let's check out the trade. Alright guys, so these are all my entries for stock Roku. I'm gonna explain my entries in a bit. Why I got in, why I got out. But before I explain my entries, I first want you to understand why was stock Roku on my watch list? What made me watch this stock? So every morning I would go through a set of stocks, right? There's stocks that I constantly watch, such as Roku, Apple, Microsoft, Amazon, Netflix, Facebook and so on. There's a set of stocks that I watch every single day. Now my focus on these stocks come from stocks that have a catalyst. Right Now a catalyst is any set of event that may trigger the stock to go up or down, right? A catalyst can be earnings. It could be the company coming out with new good or bad news. It could be an upgrade or downgrade. So anything along the lines of that is known as a catalyst. So Roku on the morning of December 2nd had a catalyst. Now the catalyst Roku had was this right here. If you guys take a look on December 2, before the market opened, right? Morgan Stanley basically said, hey, we think Roku is overvalued. We think Roku's valuation is too high. We think they're worth too much. Basically saying that their stock price is way too high. So Morgan Stanley saying that automatically makes me watch Roku. There's a lot of eyeballs on Roku. So that's how the stock was kind of a focus point for the day. Now getting news like that already made me look at Roku from the downside. Like, hey, I think with this set of news, Roku is probably going to take a hit on the downside. Now seeing news like that doesn't always mean that Roku is going to fall or whatever stock we're watching is going to fall. But you kind of have some sort of idea what may happen. But we don't take the trade until we get confirmation on price action. Now seeing that set of news, you guys can see right here I have the five minute chart up. And right here I have the one minute chart up. Now on the five minute chart you can see once the news came out, look at stock, Roku stock. Roku started going from 150 all the way down to 146 in the pre market. So Roku is already down about four points in the pre market. So the market has not even opened yet and Roku is down four points. It's already making a move based on the news. This shows that the news actually matters. It's actually affecting the stock. So once again, that's how Roku came on my watch list. Now with that being said, Roku is one of the stocks that I'm watching on the day. I'm watching for the day. Now I never trade the first minute or the second minute. I like to wait for some confirmation. Sometimes I would trade after the formation of the first five minute candle. Now me as a trader, I know how I'm trading. I know what my approach is. I am scalping options. Okay, so I'm entering an exit. I'm entering and exiting trades very quickly and I'm trading options. Now just to kind of give you a recap on options, there's two type of options. There's calls and there's puts. Now if I buy calls, I'm anticipating that the stock's price will go higher. If I'm buying puts, I'm anticipating that the stock's price will go lower. So basically If I buy call options, I make money only when the stock goes up. If I buy put options, I only make money when the stock goes down. So in this situation, I am looking to trade put options. Put options if the stock goes down. So right here we're going to go minute by minute on stock Roku and check out price action. So you guys can see, first minute, stock opens pretty choppy. Second minute, still very choppy. Third minute, fourth minute, fifth minute. Now, when I look at this simple price action, and obviously I don't have level two in time and still is open right now, I can see that at this level, there's a lot of buying pressure. At this level, there's a lot of rejection. So obviously, Roku just fell about 4 points. Right? Stock is opening up and on the open, it is kind of taking a break. It's kind of consolidating. Now, where is it taking a break? It's taking a break around my critical level. Now, one thing I want you guys to understand about a critical level is that this critical level that I established 144.18, it never becomes an exact point. So where a lot of traders mess up is, is they may see roku go below 144.18 on a one minute time frame. And they're like, all right, it's time for me to get in. No, guys, you want to wait for the candle to close. You do not want to get faked out. A lot of people that entered here need to understand that. This candle at a point look like that. This candle at a point look like that. Once the candle closed, it now looks like this. That's why waiting for the candle to close, especially on a one minute chart, is, is extremely, extremely important. Now, the second thing I saw here, I saw that the bid kept holding. Here on L2, the bid kept holding. Every time the stock would get around this level, buyers would step up and bring the stock up. Buyers would step up and bring the stock up. Now, my interest point is now, if the stock gets to this level again and those same buyers, those aggressive buyers are not stepping in and they're nowhere to be found, I may then look to buy puts once again. Puts. You buying puts is you basically making an assumption that the stock will go down. You make money if and when the stock goes down. So I'm ready to trade options and buy puts if it can break this area. Now, if you look at take a look at the next candle, the moment that break happens, the moment volume kicks in, the moment I See, buyers are stepping away. That's where my entry kicks in. You guys can see my entry is kicking in right there. So I get about 50 contracts at about 440. So I get one fill here, another fill there. So I get about 50 contracts at $4.40 for puts, for 140 puts. That's when I'm trading. Now, seeing that a minute later, when I see that this trade is going my favorite, I add more to my contract size. As it goes down more, I'm adding more. I'm like, okay, it looks strong. Buyers are not stepping in. There's no buying action going on in time and sales. Nothing going on the tape. So I think this stock is going to maybe consolidate and continue dumping. So when I saw that, that's when I added about 40 more to my position. I wanted to add 50, but I only kind of got filled for 40. But you can see 39 and 1. That's the reason it's separated is because of two different fills. Now, once that happened, I have about 90 contracts. Now, for anyone that doesn't know about options, one contract equates to basically 100 shares. So at this point, I'm controlling 9,000 shares, right? Because I own 90 contracts. And since I'm buying puts, I'm basically making a bet that the stock will go down. I only make money if the stock goes down. Now, as that happens, my first exit is at 942. So let's go to 942 and let's take a look. I'm gonna go to 942. Now. If I go to 942, you guys can see what tends to happen around 942, which is right here. The stock goes into my next level. So I had a critical level around 140, around 139. When the stock goes around there and starts holding, that's when I take some size off. So I took some size off at that point. I took off 40 contracts. So after I took 40 contracts off, I was still in with 50 contracts. So I took some of my position off at $6.40. I entered around $4.40 and $4.35. So I did well on my first trade. About a minute later, not even I exited out of my second trade or my remaining position. And the reason I exited here is because I had a very critical level around 140, right? And I wanted to see, was the stock going to hold 140? Was it not going to hold 140? In this situation, the stock was not. Was holding the 140 level. So that made me exit my position. Now, obviously, if you look at this chart now, it's like, oh, man, why'd you sell? What did you do? But. But you have to understand at this point, right? It's kind of like, wow, I'm at a very critical level. I'm watching the tape. I see the tape holding the 139 level. Every time the stock goes below this point, I see buyers aggressively bring the stock up. So now I'm like, hey, I made a good trade on this. So far, as I made a good, quick trade. I'm up for the day. Do I want to stay in the trade, or do I not want to stay in the trade? My first thought process was to take 50 contracts off, which is what I did. After I saw this hold, that's where I was like, I don't know. Let me take off my remaining position. And I cleared my full position right here. After I cleared my full position, there's a few things I could have done better, which I'm gonna break down now. What I could have done better is after I exited around here, I should have looked for a reentry. If the stock got below that level, I should have rewatched the stock, which I did. I was re watching the stock, but I did not execute. Now, I didn't execute because mentally, I was like, wow, I'm up 20 grand. I'm done for the day. And mentally, I kind of clocked out. Since I clocked out, it was kind of harder for me to execute, which is my mistake, because if I took that trade, you can see pretty solid trade. Should have taken another trade around here, and. And if we keep going ahead with this trade, this stock kept dumping throughout the day. Now, a few things I want to bring up about this trade, right? And this is what I want you guys to take away. Okay? The first thing I want you to take away is. You can see my entries were super quick. I was in and out, so I kind of scalped. I knew the mindset. I was going in with this trade. I knew I was going to get in, get out under a short period of time. Now, when I look back at this trade, there's multiple approaches. I can have one approach. Wow. I got in around here, I got out around there. If I did not get out there, and I held right? And I held my trade until maybe the end of the day, right? Or until maybe another 30 minutes, another hour, I could have maybe made $50,000 on the day. Now, this is what Starts messing traders up. They're like, oh man, I sold. I only made 20. I could have made 50. I could have made 60 only if I held. Why did I do this? No, guys, in trading, the word what if should not exist. You need to eliminate that word. That word needs to be completely eliminated, completely destroyed from your vocabulary. In the world of trading, what if should not exist? Yes, I can go back and I can always say, well, I could have had a. I could have re entered again. I could have reentered there. I could have reentered there. I maybe could have sized down, but I liked my first trade. Now there are trades I take that I don't like, I mess up on. But. But this trade, my entry and exit, I liked it. Could I have made more money? Yes, I could have made more money. But that's almost every single trade, right? So I want you guys to take that away from this second thing just to kind of give everyone an update on this. Because people are like, okay, how does this kind of make sense? How does the numbers make sense? One contract equals 100 shares, right? So if I have 90 contracts, that's technically 9,000 shares. So basically the math on that is if this goes up, If I buy one contract at 440 and that contract goes to 540 and I have 9,000 shares or 90 contracts, I'm already up nine grand. That's with option trading. Now, with option trading, you have to be very careful because there's a lot and a lot and a lot of risk involved, guys. It's not easy money, it's not quick money. Also with this trade, I did put up risk. My risk with this Trade was about four grand, three grand on the table. So I was risking about three to four grand, I was risking about three to four grand to potentially make maybe 12. I ended up making more. And some trades that you guys are going to take, you'll see, you'll maybe make 15, you'll maybe make 20, you'll maybe make a little bit more if you manage the trade properly. But this trade was 20,000 because A, I traded options, which is very, very risky. And I don't recommend people starting out to jump into that. And, and B, I put out risk. There was capital invested, there was about 40 grand invested in this trade, and I allocated risk. Now talking about that is that a lot of people would see a 20k day and they're like, I want to make 20k. Okay, if you want to make 20k, would you be okay with losing maybe 4k? Would you be okay with maybe losing 5k? Would you be okay with losing maybe 7k on a trade? If this is not something you're okay with? And obviously no one wants to lose money, I get that. But in trading, you're gonna lose money. The idea is being able to risk that and be being okay with it and moving on and allowing your account to survive. If a 4k hit is going to hurt your account, you cannot go out and look for 20k trades. It's just not realistic right now. If you're like, okay, I want to lose 200 now, maybe you're looking at 400, 500 bucks, 600 bucks for the day on the trade and so on. So you have to start looking at things from that perspective now. That's all with this trade. If you guys have any questions, comment down below. Like the video, subscribe to the channel. I'm gonna upload a lot more. I also have a stock market lab page on that page, on that YouTube page. I have a lot of content. I have a lot of webinars, so check that out, too. And once again, if you have any questions, comment down below and I will answer those questions. Thank you for watching, guys.