Background

I was talking with some trading buddies over the weekend and put the idea of a 2k to 50k challenge out there thinking I was going to get shut down.  It’s great when your team instead wants in on it and says let’s do this.

Rules

  1. Entries have to be posted in discord in advance including strike and price paid within 5 minutes of entry, but preferrably in advance.  Its ok to alert, I’m looking to enter SPY 260c at a specific price range to give advance notice.  If expiration isn’t provided, nearest expiration will be assumed.
    Examples:
    b 20 SPY 260c paid .20 = buy 20 SPY 260 strike calls @ $0.20/contract
    looking to buy 10-20 SPY 260c for .20-.40
  2. Exits have to be posted near real time or in advance. Examples:
    s 10 SPY 260c 1.25
    s 10 SPY 260c 2.28
  3. Trade only SPY or SPX
  4. Start Dec 17, 2018, ends Jan 16, 2019.
  5. Have fun!

To follow the challenge and trades live, you’ll need to be a member of Black Box Stocks and follow the action in the chatroom on discord.  Be sure to come back and visit this page regularly for updates.

Traders

@spectre_trades

Spectre’s Plan

  • Identify support/resistance
  • Purchase strikes closes to vwap
  • Lock in 50% at next major support/resistance level
  • Hold the rest until any of these conditions are met.
    • end of day (if same day expiration),
    • near next major support/resistance
    • or > 500% gain
  • Use up to 50% of capital with max loss of 50% on the utilized capital — so 2k, buy up $1000 worth of options, max loss $500.
  • If max loss met, reduce next trade size by 50%
  • Roll profits into next trade.

Spectre’s Results

  • 17 Dec
    • Start: $2000
    • Trade 1: -$250
    • Trade 2: +$2200
    • End: $3950
  • 19 Dec
    • Start: $3950
    • Trade 1: $2150
    • End: $6100

UPDATE: Sunday 12/23/2018

  • 21 Dec– I got caught up in some mental noise/distractions and didn’t trade the challenge account (traded personal account but that doesn’t count right)

SO Here is the reality of making a plan vs executing on it correctly. 300% isn’t bad in 1 week right? Well I disagree. I hate the expression green is green.  Green isn’t the same shade of green.  If we want to develop as traders, it not just green vs red, its also green vs green and particularly — how well did you execute your trade against your plan.

This is why executing all parts of a trade plan well matters…

My entries in this first week were spot on but I failed to properly size and hold for the day per the plan/strategy I described at the top of this page.

After doing a post trade walk through of the week I made the following observations.

1. Entries were great!

2. Targets were great!

3. Stops were never hit or even come close to being hit.

4. I took gains way too soon against plan and didn’t reenter.

If I followed the trade plans and strategy this $2k account would be approximately $160k.  With a 50% error rate, it would still be $80k.  See what I mean green is not green.

How?

Day 1: 10x using 1k so 2k to 11k

Day 2: 5x using 5k so 11k to 30k

Day 3: 10x using 15k so 30k to 165k

I know it’s hard to believe but all entries were alerted live in Blackbox discord and targets for the day stated in the morning watchlist.  I’m having a hard time accepting it.

Key lessons:

  • Stick to your plans.
  • Don’t let outside influences affect your homework/planning you did.
  • YES we can turn 2k into 50k in less than 4 weeks.

I will be starting a new challenge in January. Back at 2k. Let’s execute the trades flawlessly in the new year!

THIS POST AND ALL CONTENT ON THIS SITE REPRESENTS OPINIONS ONLY AND PROVIDED FOR EDUCATIONAL PURPOSES ONLY. CONTENT SHOULD NOT BE CONSIDERED ADVICE OR A RECOMMENDATION TO BUY OR SELL A SECURITY. PLEASE SEEK ADVICE FROM AN INVESTMENT PROFESSIONAL.

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