How I Made $50K Shorting The Stock Market | Step by Step

What a crazy day in the stock market today. Today we had a crazy sell off with spy. Overall market, not just SPY and day trading wise. Today I made a little over $50,000 shorting the market as you guys can see. And in this video what I want to do is I want to talk about the process of my day. I don't want to just talk about, look, I made 50,000. Woohoo. No, I want you guys to go into the process and I want to break that down. I'm going to cover my game plan, I'm going to cover what I looked for, what I traded, how I traded, my entries, my exits, the whole nine yards just so you guys can have a good understanding of my trading day. Now a few things I want to point out. Number one, when you guys see days like this, $50,000, I know it sounds great, but I also want to set real expectations for people that are starting out, people that are struggling. And the first expectation I want to set out is you're not going to have a 50 grand day by putting $1,000 at risk or you're not gonna have a $50,000 day by starting off with the $500 account. Right? I have been trading for nine plus years and on some of these trades, like if I go to this trade I risked about 10,000, right? Another trade I risked about 20,000. So I'm risking money in these trades and also investing about $76,000 of hard cash into these trades. So just want to kind of be straight up about that. I don't want people coming in like oh wow, this guy made 50 grand, I want to make 50 grand tomorrow. No, there's a whole process. It's going to take time. And you know, if you guys focus on the process, focus on, you know, the nitty gritty of the trades, you guys will eventually get to that point and also understand that money and capital have to be invested to it, you know, in order to make that. So with that being out the way, let's dive into my trades, let's dive into my entries, my exits, my game plan and let's just break charts down, right? Let's just kind of free flow this real quick and make it as valuable as we possibly can. So had three trades today, all three trades were SPY puts. Ignore this trade. I accidentally hit the buy button on Tesla stock 100 shares. Like it wasn't really a trade, so ignore that. So I had three trades originally, right? Now let's go into SPY first we're going to break that down and Once again, for people that are new here, I kind of show, you know, my, my P L from thinkorswim. So you guys can see that. But anyways, let's go into the market. Let's go into my game plan. So originally, every time we're taking on trades, guys, any trades you guys take on or whatever the case may be, the first thing we need to understand is we need to know the context of the market so we can prepare for the upcoming day. I think this is one thing a lot of people lack. Right. So you need to have context for the market. Right. So it starts off with having context for the market. Now what do I mean by having context for the market? Context for the market basically means you need to know what has been happening with the market to influence maybe, or possibly today's move. Okay, so with the recent action in the market, let's go into the recent action. We've been having a huge sell off gap down about three days ago, two days ago, consolidation period. After that, massive massive gap fill areas, massive areas in the market itself. So that just kind of gives us a story of what has been happening. So that's the first thing we need to know. We need to have context in what is happening and what context and what has happened just so we can build our game plan that leads to the main thing, game plan. So every day before you guys go into the market, you guys need to have one thing in line and that one thing is having a game plan. So a game plan is the most important thing because it will give you a gauge of what you are anticipating in the market. Now when you're creating a game plan, a game plan should not be, well, the market's going to go up tomorrow, market's going to go up today, or market's going to go down. A game plan has to be a well defined plan that is reactive to the market. Meaning that when you create it, like when I create game plans, what I do, like today for example, my game plan was watching the opening level and seeing if we can attack the 370 zone or not. The 370 zone was the main area I was watching on the open. Now why was I watching the 370 zone? The 370 zone on spy is the same level that we have had a hard time breaking. It's the same level that we gapped down into. It's the same level where we pinned action for the past two days. So it's a pretty important zone that I care about. So watching Spy or watching my Overall market in pre market hold up or look like it's gapping up was an indication of, okay, we're seeing some sort of movement, but not a heavy strong movement of gap up. Now if we gapped above 370 or we broke out of 370, maybe we would have had a bounce day after this consolidation. But seeing this area right here go into the 367, hold the 367. I'm now watching this 367 as my pin going into 370. So I have this three point zone that I'm kind of like, okay, I want to pay attention here. So now when I'm creating that pre market game plan, I have that outline where the 370 is my main wall, my opening level, which is about 368.367.5 is the main area I care about on the opening and then the closing is 370. I want to see how Spy responds there for me to initiate a move. Now if Spy rejected here and then held strong and broke out, I would have maybe bought calls or went long on the day. However we got the reject and that is the trade I played right now going into the trades. Right? So we covered pre market game plan. Now we're going to cover the trades now talking about the trades right now because I had my pre market game plan, now my trades become a little bit easier. So let's go on my first trade of the day where I made 32,000. And once again, guys, I'm not a fan of talking about numbers, but realistically I understand numbers is what's going to get views and eyeballs on things. That's why I share that. Realistically, I had a 2.5 R trade, a negative 1.5 R trade and a 2.77 R trade. That's essentially all that I care about personally as a trader. Now what does this mean? Let's break it down. So let's go over the trade first. Right? Made 32,000. Great. Once again, whenever you guys see a trader making any amounts of money on a trade, these are the questions you should ask. When how much did you risk, what was your multiple and what setup did you take? Right? Because if you have a setup, you learn, if you look at the trade risk, it makes sense or doesn't make sense. Because think about it. Imagine on this trade, I risked $70,000. If I risked $70,000 and I made 32, does that make it a good trade? Absolutely not. Right? So you guys have to keep that in mind. And by the way, if you guys are up until here, if you guys can give this video a thumbs up, subscribe, I would highly appreciate that. I'm just really, really trying to put put out a lot of great content. So if you guys can give this a thumbs up, I would really, really appreciate that. Yeah. So anyways, those are two things you as a trader really want to pay attention to. Now going into this trade, let's dive into it. Made 23% on my money. How much did I put into the trade? Another thing, I put $140,000. That was my total amount of position in this trade. Right. I think it was less. I think it's calculated in a different way, which I'll talk about. But about 23% risked about $13,000 and made about 2.5 R overall. Great trade, which leads to a trade outcome of $32,000 in net profit. Now let's go into the setup. What was the setup? Now I have a setup called blowing top. What this essentially means is we get a strong open, and we get an open. And after that open, if we get any sort of weakness and that weakness area starts kind of blowing up or it fades or rejects hard, leading to a blowing top setup. And I've seen this multiple times and I've traded multiple times. So essentially I looked for it here. That was like the first area I looked for it. We saw continuation into my 370 zone that I was talking about 3,7055 we rejected right off 3 7050. And we started fading. Now, when we started fading, as you guys can see right here at 948 is where I get in 300 contracts. Now, once again, going in with size. So 948 right here. Now, why did I get in a 948 here? Why did I not get in here? Why did I not get in here? Because right here I couldn't essentially. I don't want to use the word predict, but I didn't have an edge that this would reject. I wish I did. Right. I didn't. So obviously this would have been a great trade if I did. But I saw the first reject coming into the last hold area of 368.5. After seeing the bounce, I did not see any strength in the bounce. So when I saw weakness in the bounce, having a hard time breaking that 3695 close to 370, I was like, you know what? It looks like this is a fake move up. Let me get into puts. So I got in 300 puts right here, this was my first position, meaning I'm buying puts, I'm shorting the market. I am making money if the market or stock goes down. For people that are unfamiliar, right. Right. Now take the trade there. And then right here at 950, I take 200 contracts off. So at 950, I took 1/3 of my position off. So once again, let's just understand this entry. Took 2/3 of my position off. 300 contracts out. Out here. The reason being is because once we made a big move down, I was like, you know what, we got a big move down. I don't want to get trapped in this bounce, so. So I'm going to lock some profits in. So I locked some profits in. Right when we started bouncing again around 955, I added 200 more contracts. So at 955, which is right here, once I saw the second bounce, I added 200 contracts here. Again, reason being is because I did not see this being a reversal. I was like, okay, I'm a little bit more comfortable. If we break 369, I'll exit my full position. I'll still make money, but I'm putting on a little bit of risk and I'm totally fine with that. So I enter 200 more contracts and at this point I have 400 total contracts minus me taking profit already. And then finally on this big move down at 10am, I fully exit my full position right here. Sorry, it was 300 contracts total right here. Fully exited the position, right? And the reason I exited here is, guys, like once we broke the low of the day, yes, I could have essentially honestly try to hold and play a little bit more. But last thing I wanted to do was just hold through any move. And the premiums at this point, I think where I got out, I got out at 351. The premiums went to almost $4. So I could have made maybe a little bit more. Now, looking at my running P and L, right? 22,000. You guys can see it up one point, up 23,000, then down 18,000, then immediately being up over 36,000 at one point. So at one point I was up 36,000, right? Which is obviously great, but walked out the trade still making $32,000. And like I said, a few things I want you to take away from this trade. Okay, number one, I had a setup, right? I had my levels that started from the pre market walkthrough, right? I had a setup, came from the pre market walkthrough. Pre market setup that I have, pre market game plan that I have. What? Once that happened, I got the entry boom entered here. After there was a huge move, which I didn't anticipate the candle to drop a whole point or two. I took half off, more than half off. After taking half off, I get comfortable with the position because now I'm up on the position. Now, as the position goes the opposite way, I have 100 contracts and I'm like, you know what I can see for a reject, and if I see a rejection zone, I will add. So. So I add 100. And then finally, when you break down that zone again, I go in, I exit my full position doing wall once again. Didn't catch the bottom. Didn't catch the top. I'm not trying to catch the top. I'm not trying to catch the bottom. I'm essentially just trying to catch a piece. And if you go in the piece, the piece I caught is this piece, right? If you take this piece out of the full piece, I am okay with that, right? So that's the first trade. Overall, I think great trade. I'm happy with execution. I'm happy with the scaling out. I'm happy with the way I played this trade. Now let's go into the next trade. Now, the next trade is where things kind of got a little bit wild, right? Ah, not this one, this one. So here I, you know, kind of a messier trade. So let's go through it. And I want to go through, like, the mental aspect of this trade. So really, really pay attention here and just understand, right? Because like I said, as traders, we're never perfect. We're always going to make mistakes. And we need to be aware of those mistakes that we make. Because sometimes when we make one mistake or one trade, the problems or outcomes or whatever issues from that trade typically will bleed into your next trade. And that's what happened here. Okay? So here at 1008, I got 200 contracts. At the 366 put. So here, let's go to 10O8. This is 1008. So you know what I did here? I got 200 contracts, not calls, puts. So essentially, when we look at this, right, I got 200 contracts right at the bottom. The play I played was low of the day. Now, if you have been following me on Twitter, on Instagram, my links are down below. I don't typically trade low of the day. I'm not a fan of it because I feel like there's a lot of reversals and setups that happen There and they're not ideal. What did I do? I play the low of the day. Now why did I play the low of the day? And that's, that's the important part, right? The important part is why did I play the low of the day right now in this trade I played the low of the day essentially because. Now let's go back to our last trade. Remember this was trade number one. When I went to trade number two, mentally I was already like, wow, I got out at 350. The premiums went to like $4.10. $4.20. If I held my premiums I would have made so much more money. So there's the idea of one, I left money on the table which is normal and it's going to happen, right? So that carries over to my next trade. Then there's the concept of okay, I left money on the table, but I also think market's going to dump. Now I start creating thesis in my head which sometimes makes sense, sometimes don't make sense, especially when it, it kind of bleeds into from your last trade. So once that starts bleeding in for my last trade, I start going, wait, hold on. What, what, what is going on here? Right? So I get in with the idea that I missed left money on the table. I don't want to miss out on this huge sell off. So let me get in right now. So Obviously get in.

200 contracts at 1008 and 1018 I get out. Where is 1018? This is 1018. I get out because it starts breaking that area and I don't want to get caught up in anything else. Essentially I got in at 200 contracts. At 335. I got out 200 contracts at 282. I had to stop at three. I anticipated to risk 7,000 on the trade. I lost 10,600. So I didn't follow my stop. Terrible mistake on my end, right? This, this was just a stupid mistake. And then this Trade was at 10:08. Now something out. 10:18 was my last trade on here. Now something I want to share with this, right? So after having 1018 as my last trade.

This is another thing I want you guys to really take away. Like if you want to take trading serious, these are things that you, you know, hacks and tips and tricks, if you want to call it, you got to really kind of get. So let's go through the trade recap once again. Trade number one was here, did well. Felt like I left money on the table. So took trade number two here once I took trade number two here. I lost money. Now, trade number two ended here around 10:18. Trade number three guys did not come until 11:41. So where's 11:41? Let's go into 11:41, right? This is 11:41. Trade number three, right. Did not come in until 11:41. So we have one, two, and three. So this whole period, even though we had, you know, choppiness and craziness going on, I decided to walk away. Like, I walked away legit from my computer for 10 minutes. I went. I got coffee, came back, took like 15, went, got coffee. And I was like, you know what? Let me step away right now. And the reason I stepped away is because when you get in this weird funk of letting a trade bleed into your next trade, there is a high probability you can go on a tilt or go on mass destruction of just trading nonsense. And I've done it in the past, and I'm pretty sure you guys have too, right? So I walk away, you come back, and you come back with letting your last two trades go. And you look at the market and you reanalyze it. So now me reanalyzing, and I'm like, okay, we have the365,364 area. We got the first leg down and. And consolidation. So this first leg down here becomes a setup for me. Now I'm looking at it from a level of continuation, consolidation here, and then the next leg down. So I'm like, okay, if that's the case, I'm going to start building my short position here. So that's what I did. I essentially went, got 200 contracts and then got. I tried to get 100 here, but I got 59 filled at 59. So 1141, I got 200 contracts. So where's 1141? Right here. I got 200 contracts. And then right at 1146, I tried to add another hundred. Got filled 59 contracts at 302. Right? When there's markets start selling off, I now start writing the sell off. And look at my running p. L. This is while I'm in the position, I get in up 3,000, you know, up 5,000, back to 4,000, make a big move into 18,000, down to 13,000, big move up into 31,000. This is Minute by minute while I'm in the trade, right? And eventually I scale out, right? Sell 200 here, sell the 59 remaining here around 12. So when you start looking at this, what was the setup here? Same thing. I risked $10,000 on this trade. Based off my stop, I made about 28037% on the trade. Almost a 3R continuation sell off trade setup. Got the first leg down. Consolidation with the weekday, looking for the, you know, consolidated breakdown on the downside with the stop right above the 365, 366 zone right here. If we broke that, I go and I'm like, you know what? I'm going to exit just like I did here. Even though this was a bad trade, I exited my position right here. Okay, now a few things I want to kind of talk to you about, talk to you guys about. Right? So that's my trade recaps, right? Just talking about my trades, how my trades went, how my day went, right now a few things I want to leave you guys off with, okay, Is number one, when you guys are taking trades, guys always try to have a setup, right? Before even any of that, just make sure you need to know how you're going into the day, what your setup is going to be like. Make sure you have your risk analyzed. Like if you are taking trades and you have a 2R 3R, that's great. But if you have trades where you're risking a thousand to make $500, even if you made 500, does not matter. Terrible trade outcome. Trust me, I'm not good. So make sure those things are aligned. And also finally, and I talk about this a lot, wait for the market to come to you. So if you go into my September month, right, not every day is a 50k day. I have 16k day, 7k day, 12k day, 1k lost money. Other days I lost money too.

Let the market come to you. September has been more of an active month, but overall, let's a play come to you, right? And then last but not least, when you guys have a loser or you have a bad trade and we're all going to have bad trades like this, this, I can call it a bad trade. I can call it whatever I want. It happened. It's, it's gonna happen as a trader. But now my question to you is, how do you prevent yourself from letting this bad trade carry over into your next trade? Right? I had a good trade carry into my bad trade, which happens. How do I prevent that? How do I prevent it? See, this happened. But now I was aware during real time to not allow this to bleed into my next trade. That's why my open time on the next trade was a lot further out, right? So yeah, with that being said, I hope you guys found value. Ignore the $50,000 number. You know, focus on the R multiple. That's essentially what we care about as traders. And that's what I want anyone that watches my stuff to really care about. Like, this is what I care about. Because if I can have a 3.7 R, that means I can make $3,700 on my risk, I can make $37,000 on my risk, or $370,000 on my risk. Just numbers at that point. Right? So, yeah. With that being said, thank you guys for watching. Appreciate you guys. And I will see you on the next video.