I Lost $26K Day Trading AMZN (12/27/21)

What is going on, everyone? So in this video I want to break down my trading day today. So today I day traded Amazon and obviously it did not go my way. That was my only trade of the day. I lost about 26 grand on this trade. So I want to dive into that, right? So this is my trade. You guys can see traded about 30 contracts, started off with 20, added 10, and then started scaling out of these points. I was up close, close to 12,000 at one point and then obviously walked out the trade losing about 26,000, basically a negative 2.8R, which is terrible. And I'll dive into that. Right? So now let's go into the trade and just break down everything that basically happened. Right? So I took my first entry around 9:40am Eastern Time. So going into 9:40, what do we see? Right. So now a lot of times when I trade Amazon, when I trade any of these big names, I do look at the overall market such as SPY and qqq. So looking at Spy and looking at qqq, what we had on the Open is we had a lot of strength. So that strength that we got on spy, that strength that we got on qqq, you know, a lot of times results into these big names. So we see Amazon, it starts breaking this key level around 34.35 that I have and then it starts making the first move above that. Now, like I mentioned before, I don't like trading breakouts, but obviously there was a good scalp play there. I waited for the pullback. Once we got the pullback and I saw the 3,000, 440 held very well, I was like, you know what, this is looking to be a good play. So I added right here at 940, right around 940, added 20 contracts at about 46 bucks. I put my stop loss close to 42 bucks. And then as the stock price starts moving in my direction on the second move down around 948, you guys can see right here, 948, I add again at 42. Now the reason I added more here is because once we got this move up right and we saw the rejection, now obviously when I saw the rejection, I should have scaled out. And if I did scale out of this rejection or if I did take profits off or even half my position, I would have potentially walked out 12 or $6,000 green on the trade. Now when I saw that happen, I also saw the overall market. The overall market around this 942, 943 area is looking a little bit strong. So I'm thinking that, hey, market's looking strong. We might continue to rally up higher. Now, obviously, when the market starts rejecting and obviously Amazon starts rejecting and has a huge push down, you know, I start panicking and I'm like, listen, maybe we see a bounce at 34.35. And we kind of did get that bounce when the first bounce happened. Now mentally I start thinking that, hey, you know, markets trapping people in here, as markets trapping people in here. Let me add 10 more. I was going to do 20, but I was like, let me add 10 more. So add 10 more at 42 or 5. Where my original stop was, right, that's where my stop was. And obviously game plan went out the window. I would have lost about 9k around that, that point, but obviously didn't follow my plan. We get the first push up. As we start seeing the push up around 951, you guys can also see market prior to that is also breaking out. So at 948, market starts breaking out. So as the market starts breaking out, I start thinking, hey, you know, this is a good entry point. Looks like we bottomed out right here. Market is also rallying. We'll see. We're seeing some volume kick in and, you know, we might break this 3460 zone. And if we do, could be a good opportunity, right? And obviously, as the market starts going up, the first flush in the market happens and this starts pushing right back down. Now, something that I should have been cautious with is when moves like this happen for options, premiums get thrown out the window very hard. Premiums start getting readjusted, and, you know, risk reward ratio goes out the window. So I took 20 off around 36.10. So I already lost about 10 points. I lost 21,000 on that trade itself around 954. This, this is where I start scaling out over 50% of my position. And then as time goes on, around 959, I scale a little bit more. Now, the reason I scaled out a 959 is because I didn't like this hold. Right when we start seeing the market, market is looking strong, market is holding, market's looking like it's going up. Amazon is diverging away from that. And as Amazon is diverging away from that, I got a little, a little bit scared. And I was like, you know what? I'm not comfortable holding this. I'll revisit. And then obviously, when I look at the big picture for Amazon, look what, what happened with Amazon. Now, a few things about this trade that I want to dive into first. This number right here should not be a negative. Now, if you guys understand how R multiple works, it should basically be a negative one R. If it's negative one R, what that identifies is I followed my game plan. So in this trade, I obviously did not. My stop was at 42, and obviously I did not exit at 42. I exited about 3610 and 3640. So that was one big red flag, right? Every time I'm wrong in a trade or I get stopped out, I don't want to see anything more than a negative one R. This basically meant that I put on three times more risk than I originally wanted to, at least 2 times more. But my risk was 3x more based off my original exit point, right? I was only supposed to lose $9,200 on this trade, but I lost three times more. So I lost about $26,000 because I did not follow my stop. Now, going back to this trade, right, what could I have done better? Going in with about 30 contracts or going in with about 20 contracts? I do think that looking at a scalping point of view, once I saw this rejection around 3,455, 3,460, I should have taken half my position off. Now, if I took half my position off, right, the contracts moved really, really nice. So I would have, let's say my full position was 12,800. I would have walked out making six or seven grand right around this area, maybe even, let's say five grand on half my position. Now, if I locked in half, five grand on this position, right? And let's say I scaled out around here or I cleared my position, I would have been flat at 5k for the day. Instead, I added, which, you know, once again, I don't think was a terrible ad, but I should have reconsidered watching the level hold and maybe take this out. So maybe it wasn't. It was a little bit of an early ad, I'd say. But I think the real issue here was my exit point. I did not take profits, especially getting in at a good entry point. And that's why, if you guys saw my last video, I broke it down. Scaling out is very, very important, you know, especially if you get into this big trades with nice size 30 contracts. You get in 15, you get a, you even, you even sell 15 or you sell 10, you know, on 5 or 10, 5 or 10 points, you'll make 5, 10 grand, you know, especially for option traders. So I left that on the table. And like I said, I could have revisited and you know, taking that huge loss on the day and starting the day red and having a negative 2.8R, I was kind of like, you know what? I got too stuck in Amazon. And then I just started watching Amazon, trying to catch the bottom. I, I wanted to get in some trade here. Didn't touch that, you know, and then same thing, end of the day, a new low of the day. And then it just kept, you know, going all over the place. And I missed a lot of good setups like Mu Nvidia, Tesla, a lot of good trades. And if you look at the market overall, pretty strong move on the market. Another thing I kind of noticed, right, I noticed even the last, last, last Monday prior to today, I was red as well, right? And I, and I noticed the reason, like, I had a few Mondays I've been red and I've noticed the reason I've been red on Mondays is because I start out, I've been starting out very aggressive. Like, I start my week extremely aggressive. And today, I think with, you know, Friday off and going into a long weekend and having a hard reset, it made me become even more aggressive. Assuming that, hey, Amazon looks like a great setup. So take this trade on Amazon because there's a possibility it may go up higher. And like I said, this, this loss was out of the ordinary. Usually my losses are in 10, 15k range, so. So taking a 26k loss on one trade is, you know, it's me showing myself that a. Not that I exposed myself to too much risk, because I exposed myself to about $10,000 worth of risk. It just showcases I didn't follow the game plan and I didn't exit when I should have. And I allowed myself to take a three times bigger loss than I originally was planning to do. So. So, yeah, that's my trade recap. I hope you guys enjoyed and yeah, thank you for watching, guys.