That's why i cant stand the "long as u close green, it's fine" mentality. It's the WORST advice ever. Every account has a MINIMUM amount of $ that u must make per trade. It's pure math. Ur avg win doesnt have to be massive, but it MUST be big enough to cover fees & future losses.
So there is no such thing as "green is good" or "a win is a win". That mentality will make u take profits WAY too fast each time u're green, even when there's still room until ur target. Green is only good if that green is big enough relative to ur win rate, & risk/reward (TE)
As long as the stock still has room to move, and ur target is reasonable (not a greedy target), LET the trade play out. Worst that can happen is the stock reverses & u get stopped out. whoo-pde-fucking-doo. Cry me a river. welcome to trading, where shit happens from time to time.
Trust me, it doesnt matter how long u trade, u'll never get used to the shitty feeling of seeing ur stock go from in the money to reversing & stopping u out. But its part of the game. WAIT for ur target. Take partials once it hits. Use a trailing stop from there

#BearTipOfTheDay

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More from @team3dstocks

17 Feb
U should set ur max loss per trade (1R) based on % of ur account. In short, ask urself "what FIXED amount am i willing to lose back to back b4 my acct becomes untradeable".

Plan 4 the worst, so give urself a 1R that will let u lose at LEAST 20 trades in a row before blowing up. Image
So example if u have a $50K acct, u can only lose $25K to be under PDT.

So $25K / 20 = a 1R of $1250.

That means if u are a cursed fuck & lose every single trade 1 month, it will take 20 back to back losses to put u under PDT. and that's still VERY aggressive in my opinion.
For more conservative traders I recommend making room for at least 30-40 consec losses. Now we know that wont happen unless u're an absolute dumb fuck (or cursed by Odin, Osiris AND Zeus combined), but knowing that u have such a huge margin of error will give u peace of mind.
Read 4 tweets
26 Jan
1st figure out how delta hedging works. $GME was nothing new, it was just $TSLA on a smaller scale.

Any stock with

1) weekly options
2) high short%
3) low float

is candidate for a "gamma squeeze", since u now have 3x the buyers instead of 2x like in a regular shortsqueeze
in a regular shortsqueeze the 2 main buyers are the bent shorts & the breakout chasers (double the demand)

In a gamma squeeze, u have 3 main buyers: The shorts, the breakout chasers, AND the option sellers (who are delta hedging). So it's pretty much a shortsqueeze on cocaine
So as long as someone (or a group of ppl like robinhooders) is reckless enough to buy a ton of OTM calls, near friday, on a stock w/ those 3 criteria, u have the recipe for a squeeze. They'll probably attempt another squeeze soon, with a different stock that has those 3 criteria
Read 4 tweets
25 Jan
Re-read all my supply/demand (S/D) imbalance & delta hedging threads. Then observe the recent fuckery on stocks like $GME $TSLA etc

When a bunch of reddit traders & robinhooders can make established Hedgefunds eat shit, u tell me what moves price.. S/D imbalances, or valuations?
that's why I hate the usual "where do u think stock XYZ will be in X years/months" questions. i dont fucking know nor care. why? b/c even tho i can tell u all I know about their financials, i CANT predict how many will buy or sell, and that is ultimately what drives price.
So let bulls argue about what stock XYZ is worth & why it should go to Jupiter due to their expert research.

Let bears argue about why stock XYZ should go to 0 b/c of its valuations etc.

ur job is to sit back & WAIT to see who gets bagged.

Drop ur biases, FOLLOW the imbalance.
Read 4 tweets
21 Jan
Same answer as usual.. Data. Here are 5 steps to optimize your exits (stops & targets):

1) collect as much data as possible on ur specific niche

2) categorize each group of trades/stocks into specific setups

3) For each setup, find out the ideal (most consistent) entry signal
4) calculate what the average selloff % (bear) or squeeze % (bull) is from the entry signal. that'll give u an idea of where to look for targets

5) calculate how much the stock usually rips against the entry signal when the setup fails. that'll help u with stop loss placement
So in short, you NEED to know your setup's RANGE. How much does the stock move (on average) when the entry triggers? how much does it move against u when the entry backfires? If a stock usually moves $1.00 from the entry signal, then obviously dont have ur target $2.00 higher
Read 6 tweets
21 Jan
Results of this poll reinforce what Ive been saying for years, & what the data from brokers & the research on daytraders and investors show:

Entries are literally the LEAST predictive of trading success. EXITS (proper targets when right & proper stops when wrong), are EVERYTHING
Nobody blows up b/c they had a bad entry.. a bad entry is a bad entry only in hindsight. U can get in at the perfect fucking price & the stock can still reverse & do fuckboy shit. So ppl dont blow up b/c of bad entries, they blow up bc of bad EXITS (not stopping out)
Also even if u have the best entry in the world, but you dont EXIT at the right time (too greedy), the stock can reverse & put u back in the red.

And if u have the BEST entry, but EXIT too early, u wont make enough to pay for future or past losses, or even fees.
Read 5 tweets
6 Jan
Catchup on all my $TSLA tweets since Oct 2019. a ton of funds were balls deep short with insane size, with a breakeven price of around $305 (presplit). So i explained repeatedly that if we reclaimed $305 it would result in a MASSIVE demand imbalance due to..
delta hedging, short covering + fed pumping & retail chasing etc, that could catapult $TSLA to $1000 by june 2019 & eventually $1600 (presplit).

As of right now there is over $30 BILLION worth of demand from bagged shorts alone, ready to clog the bids at every dip.
Add to this the constant delta hedging and dumb ass retail who loves to chase overbought shit, plus the $SPY inclusion index buying plus fund managers who "chase performance" etc and it doesnt take a rocket scientist to figure out that there is way more demand than supply.
Read 4 tweets

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