Trading As A Business vs. A Hobby: Our Plan is Working, What's YOUR Plan?

Alrighty. Ladies and gentlemen, it is Tuesday night, March 5, 2024. Let's get into our trades for today. Overall decent day considering the market and considering gold on the session today. We'll talk a little bit about that and then we'll get into some new trades and then I want to talk a little bit about trading as a business with you today. So I want to share a little bit of a book I have coming up and I really want to touch base on what the difference is in really between trading as like a hobby or trading as a business and being serious about what you're trying to do. So we're going to get into that as well. Let me go ahead and share my screen. Let's jump into the trading account today on 3 5. Now we didn't do a recap on Friday but that's all good. We'll. We'll just go right into today. We ended today with the delta of positive 149 on the market drop. The S P dropped about 52 points on session. We had negative delta to start. The day started to increase up as the market dropped on the session. So 149 still 0.03. Still very delta neutral. I like where we are. 1065 on theta. So theta still a little bit low. Volatility still low. It did crank up to old 1446 on the Vix today. Still extraordinarily low on theta. Netlike dropped to 436202. So we're down just a bit from Friday's close and down a little bit from last week's all time highs. Nothing key but the markets are down. We're down just fractionally. Buying power usage has pretty much stayed the same. Dropped a little bit from Friday down to273. 295. When after we subtract our bill puts us right about 52.67%. So we're right at our 50 level, give or take a little bit of a space there. We did take a loss today. 3458. Let's jump into that and see what. How that happened today. A couple things happen to create some losses today. So first one was we did lose on a gold strangle. Not so much. I mean we, we stuck to our plans. We closed at exactly 200% stop loss. So a 2x loss is exactly what what we lost. We lost 5,120 5,120 on this trade on a $436,000 account is only about 1.1. 1.2% of our account. So pretty small loss on the account. However, we stuck to our mechanics and closed the trade. Now gold did revert a bit price wise and not too much volatility wise. But the whole reason this strangle got pressured was gold's had been on a three day bender to the upside. But volatility also cranked up about 50% in gold. So when volatility moves while the price is moving substantially, you're going to get tested to the upside. One of my strategies is to actually hold during a volatility spike as long as we're really remaining pretty dead center of the trade. However, I did feel we were starting to move up higher with a pretty good breakout today on gold. So I just thought, you know, I'm stick to my mechanics. I get out of that trade. All right. We did put on two zero dte trades today. First off, we did a call spread early on in the day. We closed it out for a 50% winner and then we put on a put spread as well. Had we left it on it would have been a 50% winner. But I had a few things and errands to run. Didn't, couldn't watch the market. So I just closed it. Took 25% on that. So nice little gain on the session as well. And then finally we also closed a strangle on copper. So we had a strangle on copper. Closed $1300 to the good. We captured a little over 51% on that in just 14 days. A 20% return on margin. So gold loss, copper wins. Overall we are 16 for 17 on strangles this year. So 16 out of 17. Not too shabby. We'll take the one. We'll put some new trades back on. We'll keep it going. Here's where we are just for the year. So overall for the year, even with these gold strangle loss today, Strangle is still up $12,000. Almost 13,000 for the year. And then 112 trades up about $18,000 for the year. And Then our long term 112 is up about 6,000 for the year. And then you have a variety of other trades in here between some ratio spreads. 0dte is doing well. Hedges are always going to be a loss hopefully. And then you have some spec trades down here. So Overall we've still netted 40,788 on the year which puts us up about 10% in realized gains for the year which is really good. S p is at 7.3%. So we are out out dueling the S P500 so far. Pretty decently for the year. Off to a really good start. Anyway, so took a little bit of a loss today on gold. It's all good. We'll recover. There's some people going to give up. Go, hey, I lost gold a year ago and then I lost again today. And I just hate gold. I can't win on gold. You know what? We had dozens, dozens of winning trades on gold in between. Well over 30 gold winners since the last loser. So not going to give up on that strategy. It's a fantastic strategy. And we have a 90 win rate on our strangles. Why would you stop something that gives you a 90 win rate? In fact, I saw that in another video discord channel. Somebody saying, you know what? I got burned on gold. My fault. I'm not going to trade gold anymore. Don't trade gold. It's all good. If it's not something you feel comfortable with, that's fine. But if a strangle has a 90% win rate, if you lose one, I expect to win the next nine strangles, which will put me in pretty good shape. And as I said, we are already 16 out of 17 for the year. We have a 94% win rate this year alone on Strangle. So 94. You're not going to win every single trade. It's all good. We just close it and we move on. Nothing to get too excited about. All right, let's take a look. So now that we're in the account, let's jump into the markets for a moment and let's just take a look at what opportunities may await us tomorrow. And the reason we do this again is not to. Because I want to be some kind of chart analyst or guru. I'm looking for trades. I have buying power to use potentially. We'll see what happens tomorrow. And by the way, my buying power includes a working trade that has not filled all day. All right, take myself off of the screen. Let's look at the. The markets overall on the S P futures down almost 50 bucks. 49 bucks on the session. Now, we did close below the uptrend line here. And you can see on the daily and you can see it here on the weekly as well. We have an ascending wedge. A break below is usually no bueno. You've got macd falling, RSI falling. Squeeze starting to roll over. But we held the uptrend.

We bounced at last week's lows, so we bounced off of that higher. So we did finish off of our lows of the day. We did Finish back above the trend line and we have not cracked the 21 EMA on the daily. So still. Still pretty bullish overall. I'd love to see a little bit more pullback in the market, but, you know, obviously we'll see what happens here. MACD rolling over on the weekly RSI coming down from overbought and then the squeeze. It's only one bar, but squeeze seems to be losing some momentum on the weekly as well.

All right, oil, let's jump into oil and take a look. Now, oil, we had this breakout last week on Thursday and then Friday we gave it back and then today we sold off a bit more on oil. Just this thing just continues to just meander sideways. One thing that I do notice here is even though we've been in a weekly uptrend for the most part, you're still in an overall downtrend. So it's really just a bounce within a downtrend. But weekly MACD rising, squeeze momentum rising. You're in a squeeze right now. So things are starting to squeeze up a bit, building some momentum.

But on the daily get, we're losing that momentum here on the macd Two down days. RSI falling and squeeze losing momentum.

All right, so that gives us. Excuse me, Voice is going a bit Tom. So this gives us a little bit of a pause here on oil. I think that's all good. We are sitting on a bunch of trades in oil right now. We have a just a put debit spread working. We've got another 112 working where we're way out of the money on our naked puts, which is nicely profitable. We've got another 112 working that's up 92% in 25 days. We've got another 112 working up 50% in 11 days. We've got another. We've got a 1,1,1 trade that we put on today in or yesterday in gold or I'm sorry, in oil. And then we've got a strangle trade up 35% in 15 days. If we pull back or keep moving sideways, that's going to be great for the strangle. So overall, plenty of trades well set up. I like where we are in oil. We'll continue to keep playing oil. Gold's the problem child here. Stopped out a bunch of people today.

I stopped out mechanically as I should. However, we did finish off of our highs of the day. Now we are above the 3 ATR line on the. On the daily charts here, but you're still stacked with all of your moving averages. Stacked and moving higher. You know, MACD moving higher, RSI is moving higher but is now overbought. And then the squeeze is firing to the upside. So it made sense to get out and not try to tempt fate that it's just going to be volatility. It's a problem. But if we look at gold volatility we moved up from 11 all the way to 15 and change today. We broke in 16 or 17 the other day. So really from about 11 to 15 and a half is almost a 50% pop in the last four days in volatility. So really that's what got us more than anything. It was the gold volatility pop along with this breakout of this ascending triangle which you could see it just, it was weak here but then started to build momentum the last two weeks.

And really Thursday, Friday and today is really when this thing just popped. Otherwise it was in a bit of a downtrend but it was just squeezing here a bit and now it's firing. So now we'll just stay long on gold. And what do we have working on gold right now we put on some covered strangles in gold. We did we enter those by entering two naked puts. That's how we enter our coverage triangle. I will give credit to Lance Kaminsky of Theta Traders for the the general concept and idea. I do it a little bit differently and we actually have a long put in here but similar type of strategy that he does to enter the coverage triangle. And I do like that. So I think Lance does a good job on that trade. So anyway we do have coverage strangles that we are now up 50 in one day. And then we also have a 112 trade where we had calls, naked calls on that trade initially to reduce margin. We closed those calls for a winner as gold was in a bearish trend. So those calls are gone and now we're sitting on just a standard 112 trade without those calls. And it's up 80% in 43 days. So a beautiful trade on gold. And we've got.

We'Re getting you know, taking what good advantage of that look at bonds. And let's see what we're doing now before I jump to bonds, let's go back up and take a quick look at the US dollar and then we'll look at tnx US dollar moving sideways out of this triangle pattern. Sideways to down. You've got momentum down macd rsi so the dollar giving up some gains which is good for forex overall. And if we take a look at The TNX and the 10 year treasuries. This thing has just been rolling over pretty decently here. I don't know that you can consider this necessarily a head and shoulders pattern, but I'm going to use this blue line here as the, technically the shoulder. This is a bit of a left shoulder and we're in the bit of the right shoulder. Tom on bonds, if bonds can come down here, I don't know that they will, but if bonds continue to fall, if the Fed signals are going to start cutting soon.

I think you'll see bonds starting to fall more. Right. But right now they're already in a fall. Macd, RSI squeeze falling. Your squeeze is tightening here. I think this thing could definitely come down and if we break this, you could see bonds really start to cascade. I'm sorry, bond yields really, I keep saying bonds, bond yields really starting to cascade lower here. So overall you're in a, still a bearish trend on these. And I don't want to put too many trend lines because you guys all complain it's too many trend lines. I can't follow what's going on in the, in the account, but if you take a look at this thing, you can see that this trend line remains pretty well intact here. And this is where we've been. We're falling down, so you still have a downtrend. Technically, this is also a descending wedge. So this, this area here at 38 is really, really important on these bond yields. If we break this 3950 or so mark here, we could be in for some significant pain on bonds. So we'll see what happens. The weekly looks decent, the daily does not. We'll see if it's just a little bit of a pullback on this overall recent uptrend. But what does that mean for us on the bond side? Well, it means exactly the opposite, that if yields are falling, then bonds themselves should be rising. Now, bonds have been in this falling channel for a while, but we have been definitely rising for the last three weeks. So as rates are tumbling the last couple weeks, bonds are rising and you can see macd, RSI and the squeeze all moving their momentum upside. We're now above all of the moving averages. They're not stacked yet, but you're getting close to seeing probably in another day or two with any more movement in bonds, you could be at least testing the top of this channel if not breaking through it.

And I don't know that this, you know, it's kind of the exact same if we look at this as a little bit of a shoulder here, the head and then this shoulder. We would look really for this area in here.

So maybe we bring this across.

Which I think will set up pretty well as our. I know there's a lot of lines so you guys all complain about it but I think this is the neckline here overall that if we can get above this I think bonds could really start to rally if yields continue to fall. But overall there's still a ways off. I'm not too not too worried but you are starting to see some bullish momentum on the daily while bearish momentum have been on the squeeze here. But you're starting to see RSI catching a little bit of a move along along with MACD so you could get some continued. I want to be long bonds, I want to be long buttons. Okay. Can't tell you how much I want to be long bonds. In fact we put on more trades and bonds today. So not only did we have 1112 trade that's working that's up 168% in 60 days. This thing's got a little bit of time left on this trade before it expires but this trade's in great shape. We've got more covered strangles working on bonds just like we do in gold. Those are up 81% in eight days. I'm also sitting on a strangle which is of 18% in eight days because even though I think we'll move up I don't know that we're going to move up all the way to here. Just a lot of resistance and things to go through. I think we just move sideways a bit to up. But we also have ratio spreads on Those are up 16 in one day. And then today we dropped a 112 trade on in ZB as well and that trade just underway right now. So we've got plenty of trades Tom in bonds mostly to the upside with one strangle and I think that bodes well. I'm looking at copper here as well. We were trying to get filled on copper all day. It's just sitting exactly at our credit. But we can't get filled. But we did get filled closing out that strangle for a 50 winner. Now I'm hoping to get back in with another strangle on copper. I think it just sets up so nicely here in this channel near the 21 moving average. You've got kind of mixed signals here on the weekly with MacD kind of flat RSI maybe everything's dipping a little bit here but then you've got MACD falling with RSI falling and squeeze rising. I love to see it. And then you've got a piece our bear bullish signal here and you're stacked on the moving averages. I think this just sets up well to continue to write strangles on this. So that's what we'll continue to do. Loved what the NASDAQ did today watching this thing breaking through.

This uptrend line here. So breaking down through the uptrend line did bounce off the 21 but still breaking down a bit here. With RSI falling, MACD falling. The weekly looks weak as well. So I think some of the big names could be a little bit in trouble which is great for us. We have this set up right now. We have a BA which is a pseudo hedge type of a 112 BA, 112 trade. It's up 1128% in 41 days. Yes, 1128% up so far. And then we also have another 1 1, 2 trade that's up 32% in 14 days. And we're looking at roughly the 175 to 125 ranges. So we're not to start to hit the trap. So soon as we start to hit, you know this level down here, right around the 50 day moving average we can hit down here. We're going to be getting close to entering some traps on this thing which could really start to pay off. Even without hitting the trap we could really start to see the put debit spreads starting to pay off on these trades. And then we're way down here around 1500 or 15,000 for our naked but so we would have to have just a complete collapse to do this. So I love where we are set up on NASDAQ as well. Rty.

This thing is just struggling with this ascending wedge. We'll keep extending this over got the ascending wedge piece here that works. It's extending up and then you've got the overall range that we continue to struggle with. But we what came out dropped below and then moved back above trying to break out of this ascending. Either way you look at it, you had an ascending wedge here which we broke and are still moving up. And then we have another one here that we're just struggling with. This resistance line came back inside today. This thing does not want to take charge of the market and a lot of that's going to have to be predicated on potentially banks as well. So we need to see financials start to fall a bit and see what happens in the market. But if we take a look at financials, we need to see these weaken a bit potentially for the markets to fall. But also I think if these things hold in here, we'll be doing okay on the Russell. And then if we look at everything here, boy. Nvidia saving the day at the end of the day. Apple look at this thing. Horrendous two giant gaps down, down another 3% almost today. Microsoft falling heavily today, breaking the 21 day moving average. Amazon falling still in that ascending triangle. But it's got gaps to fill. Meta falling, it's got gaps to fill. Google falling, it's already creating caps as this thing just continues to fall down. Not overdone yet, but Google's heading significantly lower. Nvidia just trying to save the market single handedly. Nvidia was down, rallied up, closed above the 3 ATR here on the daily. You know this just stupid uptrend here is just ridiculous.

If Nvidia goes, the market is going. Tesla gap down. Doesn't look too hot here. So outside of Costco which was flat on the session, everything else down significantly. Big down day on Salesforce, big down day on Adobe update. Overall a down day but only slightly on amd fell and regained it amap and some of the semis here that we're looking through. Roku continues to just be bottom feeding here. Zoom getting crushed, Autodesk getting crushed. Alta stayed in, hung in there. Home Depot maybe getting a little toppy here. Lulu falling, Disney been extended. I think the momentum's running out of this thing, at least for the time being. And then Boeing, this is a pretty nice, let's extend this out. So if we really look here, Boeing right a AT support here and this is a descending wedge as well and there's some support. If the support doesn't hold, could be in for trouble. If it does hold, Boeing might not be a bad item here if you want to do something with defined risk. It held up well today. So Boeing held up well on the overall session today. One of the few stocks that was up on the day. All right, and then we want to take a quick look at bitcoin and see how this thing is doing. Had a pretty good pullback on the session today. Hopped all the way up here, hit 70,000 on Bitcoin before falling back down to 63,000. Big Swing Day today on bitcoin. I think what makes me interested here and bitcoin would be look at how overbought this thing is. This is the most overbought it's been. But there's no divergence here. And then the squeeze is getting a little bit long. But overbought doesn't mean it can't stay that way. And then overbought, but falling on the daily. We'll see. Do we get any more pullback? I think if this thing pulls back to 55 or so, I think it gives you another opportunity. 52, 55. Somewhere in this range down here, I think I would be looking to potentially do something in bitcoin. And way I play it typically would be MicroStrategy, which filled the gap, which is nice as we filled the gap from Friday on. Microstrategy pulling back still overall in a very overextended range, mirroring bitcoin. And you can look at coin as well, kind of the same type of setup. But microstrategy, to me is a good way to play bitcoin. Some people are talking about beto as well.

And beto, you know, as an ETF here, something that's falling down. All right, so what I want to do is take a moment and I know we've been going for a little bit of a. A little while, so let me just touch base with you here on trading as a business. So we reviewed a little bit of everything with you. Let's just touch base on this. And you know what I'll do is I'll probably make another video on this, but in a. Another ebook that I've created, I have one on mindset, one on just trading, treating that, you know, you're trading as a business and really trading at its core is a business venture. And I want you to make sure that if you're serious about trading, that you treat this like a business itself. And the one thing I want to touch base on today, and we're going to leave it, we'll get more in depth on this in a separate video. Is trading as a business versus a hobby. And trading as a hobby and trading as a business are really two completely different approaches because they really differ in their mindset, your objectives, your commitment, and your operational methodologies. Understanding these differences are really crucial for traders to align your activities with your goals and expectations. So I really want you to think hard today that are you trading.

As a hobby or are you treating this as a business? And one of the keys here is your mindset and your attitude. Hobby trading. If you're trading as a hobby, you're typically just driven by the excitement of just participating in the markets. You may view trading as an interesting pastime or a way to make a little Bit of extra money. I'm just going to throw a couple thousand dollars in and I'm going to dabble or do a little bit of this, because some people are, are doing this on YouTube. Typically that just lacks seriousness. It likes seriousness. It likes discipline and strategic planning, and those are all really critical to your success. Decisions may be based more on intuition and the thrill of trading rather than any rigorous analysis that you may do. And this is typically why a lot of traders fail, is you're not serious about it. Number one, you're dabbling and you're thinking, well, there's a lot of free content on YouTube. I'm just going to follow some of these guys making a bunch of money. Well, don't, okay, don't follow me. Don't follow anybody on YouTube, okay? Make your own way through. Unless you want to just treat this as a fun hobby and you're willing to just throw a couple grand away. Because that's probably what you'll do is you'll hit a couple of winners, you'll hit a loser, and you'll quit. That's what hobbyists do and they're not serious about it.

Business trading, though, if you're trading as a business, now, this requires a much more professional mindset where every decision is made with a serious intention of generating profits. Serious intention. Everybody wants to make money, everybody wants to generate profits. But if you're serious about it, you have to treat it as a business and you're serious about generating profits and protecting capital. While hobbyists, not so much concerned about capital. It's just a little fun thing to do, try to make a little extra money because they saw somebody post something on Facebook.

Most dangerous thing you can do, just start tracking what people are doing on YouTube and Facebook. It'll get you killed.

Traders treat their trading activities the same seriousness as running a company. If you're trading as a business, okay, if you were running your own company, would you be frivolous, just throwing trades with no business plan? Would you operate without a plan? Would you operate without understanding this business or the strategy we're in? You don't buy a business or start a business with have while having no concept of how to actually run that business or if the market will even support that business? Hey, I'm going to trade. 0dte. I saw this Tom guy doing it and he's got a 97% win rate on 0tte. I'm going to do what he's doing. Well, probably the day you do that is probably the day I'll hit a string of three losers in a row and you'll lose your capital and you're out. Because a, you didn't understand the strategy, didn't understand the risks involved. You didn't focus on a. A stop loss or a trading style. You didn't focus on your planning here. You didn't focus on risk management. And you've obviously, if you're trading as a hobby, okay, you're not continuously improving. You're just throwing trades out there, following the shiny objects and watching it fail. If you're trading as a business, you're looking at continuous process improvement. In fact, I should probably change that to process improvement more than anything. But as a business, one of the things I do with my other job as a consultant is I work with businesses to work focus on continuous process improvement. Kaizen strategies Lean management principles. Making sure you have a business plan. You've got great risk management in place and you're focusing on continuous improvement. How do you do that? How do you continuously improve? You have have a plan. You have to manage that plan. And then you may also need to get some mentors or some people to help you build that plan for success. With business trading, there's a strong emphasis on discipline consistently and treating trading as a career or a serious income source. Otherwise, have at it. Throw some stuff on. Do some automated AI trading. Follow some guys on YouTube, including me. They follow some people on Facebook. Join a discord group. Watch some guy making 10% a day. If somebody's making 10% a day, you should be a little concerned for your own safety. Not that you can't do that, but you have to take an unbelievable amount of risk to do that. You may not be prepared for that. My suggestion is start with the business plan. Write out your business plan. And before you do any of this, my one suggestion for everybody to get started here and I'm going to talk to you seriously about it here, you need to know your why. We're doing a course with all of about 20 members or so. So it's a small group course. We're only limited to 20 people. And one of the first things we did in that group was we asked them to generate their why. Why are you trading? Is it for just fun and a hobby, or are you seriously trying to help your family, help your kids, help your spouse, help yourself monetarily? Either achieve financial freedom, protect capital, whatever it might be, growth income protection, any of those things are important. But you got to understand your why. When you know your why, then you can decide if this is going to be a hobby or a business. Okay? And if it's going to be a business, then treat it seriously. If you like this video, click the like button. I'm serious about it, so click the like button. Let me know if you like this video. If you got something out of it with what we do. If you're not a subscriber, go ahead and subscribe. And if you're not in the Discord group, go ahead and jump in there. We'd love to have you. You can see what we're doing. Helping traders with not only their mindset, their business plans, their strategy plans, and honing your strategies. Learn to fish and you'll be much better off. All right, take care, everybody. We'll see you later. Bye. Bye.