[FREE WEBINAR] John Carter's New Small Lot Formula

Awesome Daryl thank you just kind of grabbing my own screen here and I think I'm sharing should be good to go there and welcome everybody uh during a market hours we're here to kind of talk trading and all the fun things here and uh you know normally when we're doing webinars and things like that we do it at uh gosh 7 o'clock at night central time you know which is great on the one hand the markets are Clothes but on the other hand there's things like you know family dinners and I know that you know

for folks living overseas and international that time zone doesn't work so well so we thought we' just kind of try this as well uh just to kind of see uh how that works for everybody and um a lot of times people ask is you know is this live or anything like that this is the account I'm going to be talking about uh small lot account you can see there's the time Uh right there and this is just an account where you know look I my own account I trade is fairly large and sometimes for a

little period of time I kind of got over just the idea of trading a small lot account and then over the summer my daughter asked me like hey Dad can you teach me how to trade and I got really into it and so I'm just going to talk about that Journey uh how we're continuing along that Journey this year and kind of doing Alerts as we're doing trades and things like that uh right now so anyway that's kind of the so it's kind of fun all right so how teaching my teen daughter woke me up

to a simpler way of to double a small account so simpler trading maybe this is simpler or trading in terms of the way this came about and I always love stuff like this because a lot of times you know in trading sometimes when you go to solve a problem and in this case the problem was How do I teach my teenage daughter who doesn't get up um you know in time for the marks to open but how I I want to find a system that works for her that kind of forces you to discover new

ways of looking at the market and often times those present a surprising anomalies and rewards for how to do it going forward so I thought that was pretty awesome all right so welcome everybody disclosure of course if you've got 200 bucks left your name I wouldn't put it all in the next Trade on an options hoping that it's going to change your life got to understand the risks and everything like that uh as with anything like that's a common sense approach there all right so just kind of the struggle here and this is just a

question before we get going because this is I have a pet peeve with this industry I have many pet peeves with this industry but this is one in particular and um just the whole idea that you know if you've got limited Capital how many have found that that actually feels very risky because what I what you always hear uh from a lot of presentation and things like that is they try to cover their ass and say to trade money that you can afford to lose okay well guess what though the truth is is that if

you are starting out in trading and you're trying to learn how to do this and you've set aside a couple thousand dollars to learn how to trade that isn't necessarily money that you Can afford to lose like that's money you could use for rent that's money you could use for groceries okay so this fantasy world where everybody sitting around with millions of dollars in their accounts and they can just throw some money out there that they can quote unquote afford to lose um you know to me that's just not not reality and so uh and

that kind of sunk home as as I talk about kind of this journey because you know like with the um and something like That it's if someone's starting out you know it's not like there's excessive resources they can ply into so anyway I understand the idea behind this but the reality of it is that what I have found is that for most Traders trading a small account it is not relaxed it is actually very stressful for the very fact that you know there are a lot of hopes and dreams Associated to this a lot of

stress involved and a lot of times trading a small account can be more Stressful than trading a large account okay so I just want to clear that up and you know if that's something that you feel in your own trading Journey just want to acknowledge that as well now I think the struggle here and what I've seen is that I've been doing this a long time you know I I was trading actively in the 90s through the do com up and down and 2008 and all the things and and it's great because when the one

thing that being around a lot of different Markets just gives you it just kind of gives you a breath of experience um kind of you've seen a lot of different situations and you kind of understand that you know things haven't really changed that much okay and I think that's that's a good thing um I've made a lot of money trading I'm super grateful for that nothing but gratitude towards the markets and the journey um that it that's that it's given me and it's been interesting especially Over the last couple years or so I've been trying

to figure out like okay well what do I you know what do I want to be when I grow up what do you want what do I want to do for the rest of my life that kind of stuff because I like trading and I like teaching trading but I've also been kind of thinking in the back of my mind like okay maybe I've kind of climbed that mountain is it time to find something else to do you know all that kind of stuff and as I was Going through this process my daughter came up

to me over the summer and just said you know hey D I'd like to learn how to trade like all right well this is a new thing um you know if my kids I I never want to force like stuff on the kids like oh you got to learn how to trade but if they want to learn yeah I'd love to teach them and about the time I was thinking about this she expressed interest and it's like all right let's do this so little did I know the Adventure that was about to begin so we

decided to start this in mid August 2024 I was excited I was prepared I was ready to go 8:00 a.m. I had a curriculum I knew exactly what I wanted to talk about and the only thing missing to get this party started was my daughter so she and again I'm in this kind of thing I'm I uh I believe in pulling not pushing so I'm not going to go pound on her door and wake her up I'm just going to wait and see what time she decides to show up so She rolled out of bed

about 11 o'clock in the morning you know stumbling into my office slowly rubbing the crust out of her eyes uh pulling up a chair you know it's funny cuz I have this image of her like in her PJs and kind of frazzled hair and you the only thing she was missing was like a cup of coffee and a cigarette it's like yeah hey Dad let's get going it's like all right let's do this so just so you know who I'm dealing with here it's our middle Child um this is a fishing trip in Alaska this

is a board game she invented and we're playing it I forgot why I was wearing that this is us playing chess in the BV and us doing some trading and things like that too so anyway she she's a pretty awesome kid all right so I said hey honey look I'm super excited about doing this with you look but the Market's open at 8:30 and you should at least be here by the open and I said that and she stared at me like I just Asked her like to take out the trash you know like how

dare you and so she just kind of looks at me it's like um okay well are you saying we can only place trades at 8:30 and I was like well no no I mean the Market's open like almost all you know from 8:30 all the way to 3: she's like okay so the market closes at three right she's like yeah and so she kind of processed that and she just kind of raised her eyebrows and sat down like I did not have a good argument that she Had to be there at 8:30 I'm like okay

so that that absolutely ended the discussion right there so that was the first thing I just kind of have an adapt to this isn't a situation where it's like all right let's get up in the morning and let's see what's happening in the Futures and stuff like that no this is somebody who's going to roll out of bed at 10301 and we need to adopt a strategy for that I'm like got it okay so I can work with that so we Started going through charts we you know started this process and I would explain stuff

to her and originally I kind of started spending some time explaining different option strategies and stuff like that but I could also see that you know it didn't really sink in and um but so I decided though that look let's just do some trades and then you can kind of see how this works and so we found we found a trade and we put it on and we set a Target and once that was done now Normally for me if I do that I'll you know I'm still going to be in front of the computers

maybe I'm going to go to the gym but I've kind of got one eye on the markets while I'm doing everything once we bought the you know place the trade and place the target she pieced out she's like okay and I did not see her for the rest of the market session in fact I didn't see her till that night uh however through this process she had an incentive because she Could use 5% of the games for buying credits on Roblox and that's what kept her coming back and she was very passionate about all the

worlds she's created in Roblox uh she's had an account for five years and in fact at one point she got banned over the summer and she had to use chat GPT and kind of train how to write a letter that would in fact reinstate her account and it took 32 tries um she kind of like became a lawyer in the process in terms of you Know referring to different things and so that was kind of fascinating to watch so I always like a challenge and this was the challenge so here's an account first of all

it's going to be a margin account it's going to be under 25k so that means pattern day trading rules are in effect and that also means no day trades um she is only available from about 11:00 a.m. to noon and then you she does have she does she's homeschool she has stud and things like That too and then also sometimes into the last half hour zero interest in watching the charts all day massive confusion around the concept of short options all right and so I looked at this is this is a situation where you learn

while you earn so this isn't about lecturing and things like that it's let's do it let's place the trade let's document the trade and then let's discuss the trade it's almost like a friend of mine friend of mine Bo when he Was in the Air Force the most important part of the flight was the debrief the debrief could last hours and it was about what what went wrong okay not about what went right but what went wrong and so that's what we started doing with this too it's let's put on the trade let's document the

trade and then let's do a debrief and that became the process so um and I told her up front I said hey look this is going to make zero Sense at first don't worry and I was absolutely right about that what I found was what what worked best was just the concept of show don't tell um this is uh and this is what they tell you in in when you're writing like if you're writing like a narrative don't tell people about it show them you know and this was the whole thing about this too let's

show show the process don't tell and Learn by doing so I started showing a lot of different kinds of Trades just To see how she would respond and over time these developed into a strategy so how did it do so here's uh we'll go through this fairly quickly this is just kind of a record of the trades um because there were there were some mistakes there were some dooes and you the question is is well okay well how did the account do even even with those doozies and what was the net sum and learning that

came out of this that we're utilizing going forward well The great thing about this is that the and I say that factiously so our first trade we placed on August 12th we placed another one on the 13th and another one on the 14th and the first three trades all lost money so $515 $300 and then a whopping $710 when I did a put debit spread that we held overnight and it basically lost most of its value so right away we went from a starting balance of $1,494 down to $9,99 um down $1,500 so right away

you know she's certainly not impressed but then took a deep breath and then we kind of got on a roll and over the course of the next one two three four five trades um we made that money back and then actually took account positive all right so what we were doing here is kind of getting more into a rhythm none of this you know very much eliminating the zero DTE because you know you got you're essentially banking on where it's going To close and cash settle so looking at one two and three DTE for any

the SPX trades and then also bringing in some equities uh we tried to unbalance butterfly on meta that was okay um but was really working here was just kind of doing some overnight you know two three day out credit spreads and debit spreads and a couple of butterflies um and and just kind of settling into that Groove so after the even though we started off really really slow um after The first month with a starting balance of 11 11,500 we ended up at 14,500 with a gain of 26% and so what I've done with all

these two is just kind of also showed uh just a copy of the statement so this account um that I hadn't been using for a while it had 1,400 bucks in it so I wired $10,000 to it so that we could actually start uh with a beginning balance uh so that's the beginning balance we wired this so That's a starting balance of $1,494 and then we ended with 14541 all right so that's that was the first month the second month we come in and we kind of got into a Groove here but we actually and

by we I mean me uh we made a couple of big mistakes the first one was uh this is I was talking through her through a trade on some calls and the account is default to 10 contracts I'm used to having to manually change it to one or two contracts Avery Was not so when I was talking her through it it defaulted to 10 she didn't know to check that and she placed the trade and I saw that it was working and I tried to cancel it but couldn't in time and it filled and this

is you know it this wasn't a cash settled trade we could hold it overnight but it's also PDT and it's one of those hey if you do one more trade you're hose like okay so we had it hold it overnight Murphy's Law you know the next morning of course the Markets went the wrong way and this turned into um one of the biggest losses of the program right there and that was just kind of a trade error and then the next really big loss came when we did I did a uh um a 120 118

put credit spread on Nvidia I thought it'd be a pretty easy trade and I just did too much position size so typically we're looking like let's do Maxis at $500 and on this one I just got a little overconfident bam however all That being said um we ended on a high note and ended up 17 up 17 and a half % for the month um a lot of decent winners just Bam Bam Bam um a lot of consistent winners some bigger ones and then it's just those two big bigger losses were kind of a sour

spot so what happened here then is that we started off with 14,541 we ended at $ 17,94wh getting into it you know learning more kind of placing more trades and and all The fun things here and um first trade was a loser uh from there had a couple more losers but then had a nice kind of a run and uh we did some things uh some butterflies and some different things like that on uh credit spreads a lot of it on SPX not zero DTE but one two and 3 DTE and then uh as well

as different um mstr meta uh and a few things like that so I tried to keep it Prett pretty you know not a whole lot of different symbols to look at but just kind of Let's just focus on a process and and and and do all and that just like that um had a doozy of a loss here and here okay and so what what did I do here and this was my my fault I decided because I'd been doing these wide iron flies in my big account we should actually do these in the small

account and so on the SPX I did 50 wide and two contracts and look at when the wrong way and it just turned out to be a way way way too big of a loss and so at the very least I Should have done one Lot 25 wide and instead I was doing two lots 50 wide and in fact the next big loss was I did another 50 wide and this time tried it with one lot and it also didn't work and that was a $1,700 loss and so part of this process was okay well

yeah you know what some of this stuff is working well in a large account let's try it in a small account but then what we got to do is find the right you know what what's the right risk what's the right position Sizing and so you know from this two of course you know we could use spy that's much smaller than SPX or you know XSP and all that stuff too so again Lessons Learned along the way and even with those two big losses we ended up up 11% uh on the month so you know

again it was kind of nice as we kind of got into a Groove and then so here with this month we started at 17,000 94 ended at almost 19 and just kind of continuing to push forward so then we roll into in November now November was our best month dollar-wise and you'll see here that there's some red right but notice here that the losses are all pretty small so $300 $95 $184 $1 19545 uh the biggest loss I think was right here like 450 bucks all right so all all of these losses 100% of these

losses were acceptable all right because and and and and and I also want to point out here that you know I don't want to do um you know we want to have good win Rates but I'm not a huge fan of you know let's sell a two standard deviation iron Condor so we can show like a 95% win rate and of course we all know that on if you're doing you know risking 20 to make one then every once in a while you're G have this loss that's really bad so we I wanted to avoid

that uh but at the same time we wanted to have something that worked fairly consistently so there was this interest and so you know this wasn't sell Something 45 days out and buy it back 21 days out is a little it was definitely shorter term a little bit more action but something that was uh sustainable within the context of the parameters that you know Avery was giving me and so we started that month at 18 you know 189 and ended up at 239 and just over $4,000 and so on this one so I think that's

uh yeah a little over like 25% or something like that so that so that was Awesome and so at the end of this so basically at that point we were done December came along and it's like you know we G you like all right December we had some travel coming up and stuff like that so let's stop this account let's reset it you know back to like $12,000 and we'll start again January 1st all right awesome so how did this work with the starting point of 11494 on August 12th hitting a low of 9969 after

the first three trades very impressive and Then at the end of November being at 23941 this was a gain of 10.29% over uh 3.5 months so so that what we did and so I I started getting intrigued by this but because because by being forced to work within the confines of the restrictions that she was very good about setting some boundaries around I found that I was coming up with some trades that actually were kind of fun they were much less stress more Relaxed um you know less less fomo and trying to catch every move

and just this nice kind of consistent Groove that I also started following along in my larger account because you know we're trading stuff that's fairly liquid so what are some of the setups and things like that that we're doing so here was one because of course one of our motivations for doing this was buying Ro Robux Robux on Roblox so we you know Roblox is one of The ones that we look for and some of this is kind of the setups that I like to look for where okay we got a squeeze we got the

moving averages stack positive we've come back to the 21 EMA and then the question just becomes okay great you know multiple squeezes so this is like a classic setup that I love um but then the question is was like all right well how do we do this on a small account are we going to buy the stock we could but there's challenges with buying Stock of course in a small account um you know do we buy some cheap out- ofth the- money calls well that's it's attractive because it's low risk but then it's also low

probability unless the stock takes off and so it was kind of a process of like Let's find let's find something that gives us good upside um but also at the same time um maximizes the potential of this move and so um on this is a good example and this is of course when the account was a Little over $20,000 so we we would increase size as the account grew but we did a in this case a put credit spread 18 days out and then and that was kind of the what I would call the lwh

hanging fruit let's just kind of capture some Theta and then the money would come if this thing moved would be come from the debit spread uh which we got for pretty cheap $130 and we kind of a rule if we're going to buy a debit spread it should be At least 25% or less the width of the spread and then the idea is um you know we're looking for on the on the ones that work in this case working to looking to make like $500 to ,000 on a trade while risking about $250 to $300

on a trade so that was that became kind of the groove that that we that we fell into another one that we really liked and some of this would be things that we'd find like IBD 50 and different things Like that but CLS this was uh this is one that we've looked at a couple of times uh there's a squeeze here and so what we do because remember she's not sitting there staring at the screen um we're not doing conditional orders because that's a little too advanced but what we did talk about is like okay

look if there's a situation like this let's put orders near the 21 EMA and we walk through just kind of the whole idea of theoretical Pricing and all that like all right if this if this flushes down let's have some orders working like you know some debit spreads and things like that where you know they're just ready to catch it like we're we're we're willing to catch into support and we don't necessarily need to wait for confirmation or anything like that so that was kind of the idea here and this worked out great because then

we could actually get some really good entries and also she didn't Have to sit there and watch it all day she could come back at the end of the day and say okay did we get filled or anything like that and it was helpful for me to kind of watch how she did it you know she she wasn't all nervous and staring at the charts it's like once we had the orders working and stuff like that she just left and reminder like let the you know let your orders do the work you don't need to

stare at it in fact staring at the chart isn't any you know Isn't going to help at all and in fact May uh be more detrimental to process and and cause errors and stuff like that too this was a little earlier in the process and in this case you know again debit spread 35 days out um in this case we got filled at this was a $20 wide so we got filled at 550 and I think our Target was on this was 10 bucks and so again just two contracts not a ton of risk um

at that point but also because 35 days out you can kind of you know if It's not working you have time to get out and it's not like it's going to go to zero unless the stock absolutely collapses so the other thing we would do is that sometimes we might find that it's like gosh you know we've got a lot of Longs here in this case we were long atat CLS fur onon um and then we also had some calls on TLT and we were trying to buy I mean Tesla and we were trying to

buy TLT so there was a lot of exposure so on this Particular case I kind of added a cheap out ofthe money SPX put for you know like a dollar just just one because in case you know the market was looking a little frothy so in case the market just kind of rolled over and died and uh it was showing signs of that so okay that's some cheap insurance so so there were days uh going to drink of water here real Quick so there were days when you know portfolio kind of took a hit but

it offset because we had hedges in place and so that was another way of kind of doing this is what I would simply call portfolio management uh managing the the net liquidating value of the account so that we might have a day where you know the market pulls back and we're long and instead of riding out that hit it's kind of like trying to lock in your account balance so that you know if the market Falls your account balance stays about the same and then you take off your hedge and then if you get a

bounce back then you know your net lick is actually growing instead of coming back to from whence it came right and so that that's an important part of what I simply would call portfolio management that we did and then I was also a fan a fan of butterflies uh we tried $5 wide those are absolutely worthless on the SPX they only count um you know really if you let It cash settle or you close it you know five minutes before the close so we would try to do things that were in this case it was

uh um $15 wide and you know you're getting in at two bucks and in this case getting out like at $5 so a lot of butterflies like that that were wider Nets that were you just kind of look to hold it overnight see if we could get a double the next day and that worked really well in markets that were trending because we could just set You know a new one that's out of the money and and and let that keep going and so that that was nice and that was a good strategy as well

so a big part of this and I've kind of talked about you know some some of what didn't work and some of what worked but a big part of this was absolutely learning what not to do okay so here's what we learned that didn't work you know 50 point wide iron flies in the SPX held overnight okay not good in an Account this size I like doing those but they're more appropriate for larger accounts okay so if I'm going to do SPX we're talking you know probably 25 wide one lot Max um more you know

it's probably better on something like this to look at XSP or spy because are on10th the size right so that was something that I thought that was going to be kind of a Haack like wow we're going to be able to grow this really quickly by doing this But as always and stuff like this you always got to plan for what happens when it doesn't work not when it does and that was just too much risk uh Friday pinning trades on equities like meta Etc absolutely no uh I don't mind doing those in my big

account but for a smaller account with my daughter absolute show part of my French but all that you guys know all the stuff that happens you know on Friday and the Clothes and the all the stuff and things like that you know I would always just kind of watch her expressions and it's just like if she just looked either like confused or frustrated like I just we just stopped doing it and so while that's something that I don't mind doing here this is something in terms of especially thinking about what she wants to do but

also if we're going to send out alerts on this stuff um I don't want people having to sit there and stare at The screens this is something that I want people to be able to mimic like hey look if my daughter is rolling out of bed at 11 and we're placing a trade and then she's going away for the rest of the day that should be an alert that someone who's working full-time or they're mom or something like that they should have the same courtesy like this is not something where you have to like frantically

you know try to manage all this stuff so we just stop that like Again even though I'll do them on my large account I kind of like the idea that like you know what maybe this isn't a fight that we need to deal with and uh so I like that a lot earnings trades well first of all my teen would sleep right through it so this was like you know what this is not an earning this is for the most part there's really nothing here we want to do with an earnings trade um you know

we absolutely could do one and set in order overnight but again It's just it's just the risk you don't want to have that one trade that gets away from you so any earnings trades just have to be absolutely kind of asymmetrical risk and things like that too but in general we avoided them uh pushing into Friday's expiration on equities too much can go wrong so what we did kind of find is for the most part you know if we were going to do a shorter term trade we might get an option 10 days out and

then take it off When there was like say four days left but we would avoid things like okay this thing expires in two days and let's put it on and see what happens unless it was like a cash settled SPX trade that had very very attractive risk reward so again a lot of this was just like you know what this is this stuff yeah it's fun it can be sexy blah blah blah blah but she didn't want to do it and so that's that's what we incorporated into it I I mentioned this $5 wide SPX

Butterflies they're attractive because they're cheap but you know you got to let them cash settle and the odds of you know Penny and a $5 wide butterfly are pretty small so just kind of stop that and then just looking at too many symbols so we would go through a lot of stuff and every once in a while and I ask her I'm like look if you're bored just tell me and she would just kind of Mumble like I'd be going through something and she'd just say don't care I'm like okay okay thanks for the feedback

and and that was good for me because it's easy for me to kind of you know get too complicated too fast and my goal with this was to get her uh an appreciation of this and teach a skill that she could do this on her own um should she so desire right so what did work so one of the things that I really liked with this is setting up Limon orders in advance for flushes in the key support levels uh mostly sometimes of Course you look for rallies and a key resistance levels but you know

the market up until January has been trending pretty high so I didn't want to do a lot of counter Trend trading so I really like that and so you know typically when we get filled we get re you know really good fills and then if the trade doesn't work typically there's like a dead cat bounce and a chance to get out you know for even break even or a small gain but really Focusing on being patient and nailing those good fills okay so no chasing uh no buying it plus at you know plus two ATR

stuff like that too so that means we' miss a lot of stuff iron Condors 14 to day 14 10 to 14 days out on stable stocks like McDonald's Visa Etc I would do sometimes on the SPX but man the SPX would get really volatile and once you've traded the SPX for a while it makes you really appreciate kind of a stock like McDonald's like you're just Not going to get too much CZ in a stock like McDonald's and then that also worked in alignment with Avery's schedule as well and then wide butterflies for overnight uh

on the SPX when it was appropriate because you know that was something where you could actually get pretty good risk to reward um and if it wasn't working the next day you could actually get out it wasn't like it would go to zero so it's you know you would kind of know fairly Quickly like oh great this could be a double or you know we got it for $150 we're going to get out for a dollar and so that that was actually a pretty good one as well um so we did do a couple of

cash settled SPX trade in the final hours and again remember she's going to put it on and walk away so it's just looking at it from that perspective and again it's a PDT account so we're not looking to you know if we're getting it at 50 cents That's it you just let it go into the into the into the close like that um overnight credit spreads in SPX slightly larger size but what was nice about this kind of the same thing like we did a put credit spread obviously if the market gapped up the next

day great we could just get out but if it kind of Gap down um it wasn't like the spread would fall apart and we could either try to scratch it or get out for a small loss and the other thing too is that we were we had a Policy called first exit meaning that we weren't trying to if the target was here like okay here's a Target it's a voodoo line it's an extension whatever it is we're not trying to get out here you know we're trying to get out here we want to leave plenty

of room for liquidity and for other people to make money on that we don't want to be the last one out we're kind of it's kind of like first fifo first one in first one out instead of lifo where you're the Last one in after all the confirmations and then you're hoping to get the best price but then it rolls over and and smacks you so we took a simply a fifo approach to this and then the other thing that we did with this is that we always had working exits um meaning that on anything

that was very shorter term so sometimes we might get into something if it's 30 days out great we know that if we got in at 250 then we want to get out about five but let's give it a Couple days and see if there's some crazy bounce where we might get a little bit better but otherwise like you know let's kind of get into you know we're not trying to milk this let's just you know get it out sell too soon stops a lot of time were based on time is if you've traded options before

you know putting a stop- loss in the options Market isn't necessarily the best idea on the planet but if you're doing it right um we're also not doing things That you know has a high risk of going to zero so it's like all right you know uh let's define what it is for a trade setup to still be true or not true and if it's not true great let's just exit so that that was pretty clear as well um and then I also found that if we were losing a lot she'd lose interest but win

winning kept her coming back this was that might seem obvious but for me as a Trader I you know I'm used to trades you know trades don't always work Out and sometimes you got to sit on it for three or four weeks and that's normal like I you know that doesn't bother me um you know but for her an important part of learning was seeing success and so what I found with this too is that changed the way look at setups it wasn't so much like okay this trade may pull back but let's get it

now just so we get it we can sit through any pullbacks no no no let's get the pullback because that's that's what's Going to keep the interest here and that's the goal all right so that was that so this was um this is what the p&l curve looked like remember uh the account started at $1,400 I added 10K so our starting balance for trading was 11494 we had those first three losing trades in a row um you know made made new highs had a little bit of a pullback had a couple of good trades and

then from there you can see it was pretty steady like no no real Big draw Downs part of this as you saw that one slide where we had that SPX put in place part of this not all the time but once in a while we'd have hedges in place that would help this but I just thought it was important to really talk about p&l management you know this wasn't about um let's go for it let's get a big trade no it's just it's this is the goal you know you want to have an equity curve

that goes from the lower left of your screen right and let's Trade in such a way as to facilitate that and make that the high probability outcome that we're looking for so why small accounts you know I mean I like trading big accounts but I've been Trading long enough that sometimes I forget what it's like in the beginning and I've learned so much just by watching the market through her eyes okay you can kind of after a while if you've done this for a while you know I don't know if jaded is the right word

But you know you're kind of maybe get a little too cute let's kind of scalp every little thing but here was you know here was a process where she was mostly just interested in the outcome like let's just find a process that gives me the outcome that I want I don't need to sit there and try to learn every little Nuance in the market or you know what's the flow happening right here she didn't care about that but she did care about um a process that would give her good Entries and high and that had

a high probability of working out and that was something that I could work with and it really also made me realize that the hopes and dreams of a small account are much much different than the hopes and dreams are around a large account the hopes and dreams around a small account could be as simple as well I just want some extra money to buy Roblox bucks Roblox Robux and that's a lot different than that's a lot Different than um okay you know I want to grow this and you know all all the different things that

can come into play there but that was a simple goal to create income from an account with a strategy that was manageable for someone that was a student you know had a lot of other things going on but could kind of create a reliable source of income in order to buy Roblox that to me is something that's like okay I can get my arms wrapped around that And uh water break hold [Music] on and that was something I could get my arms wrapped around so that's just it's just a different set of goals and it

really really really helped me to kind of look at that and sit next to her while that was happening so spending time on a microphone you know and talking about trades is something that I enjoy uh but I don't necessarily understand how useful the Information is unless I got feedback and what was interesting as I and I as I have gotten feedback from people and of course I could see the reaction you know on Avery's face uh when we were doing stuff is that you know what resonated and so I kind of thought about that

too over the years like feedback and things like that that I've gotten uh from clients this is one that I saved and really stood out and uh because a lot of times when I was placing trades you know In the big in the room I you know hey this is on my big account this is what's happening and you know if it wasn't quite working I would adjust quickly and it's like during the years that I've been a gold subscriber you know I've never been able to show a profit on my account the problem seems

to be that I can't take your high cost trades with a 10K account the most recent example is data data at the time and so a lot of times the trades that would work out for Me I might be buying call options that cost 20 bucks and selling them at 30 well if you've got a small account you can't really do that and so that really got me thinking in terms of let's do this in a way that a small account could follow it a b that it's based on PDT pattern day trading so this

is not not day trading or anything like that and then C um you're getting really you know really solid entries that you're patient for you know it's kind of like if you Live in a neighborhood of $600,000 houses and you buy a house for $700,000 you're going to have a hard time making money on that house but if you live in a house of 600,00 or neighborhood of 600 ,000 houses and you're able to get one for $490,000 even if it's in bad shape you're probably going to be able to get out of that you

know with with a profit so so I I so I think that uh you know that's something to kind of kind of keep In mind as well all right so the other thing I found here and uh you know especially with smaller accounts it's easy to kind of like okay really start focusing on I got to make some money and you know you see something that looks good and that that triggers some dopamine like you know you might see Tesla like Tesla yesterday just kept going and going and going and you know right here it's

at $428 and a lot of you know if you get excited about that and You buy it right there because of the dopamine going through your brain and then today Tesla's been pulling back pulling back pulling back well you know anybody that's getting stopped out on an entry from yesterday that's kind of a great entry for today and that's kind of we got into Tesla like that today when it was a you know $410 give or take based on this exact thing and that's that's something that's uh you know something to do so so why

options you Know you get a fixed risk it's h you know we're not doing obviously naked shorts and stuff like that um fix risk because you know exactly what your max losses I really like the asset class flexibility whether it's Bitcoin whether it's a big stock that's a $2,000 stock you know whether it's a small stock you can do you know with options you can construct anything so you're not limited um you know you know Bitcoin there's stocks that mimic Bitcoin you can do Options on those stuff like that and then strategy variation you know

the market doesn't always go up sometimes it's going going sideways sometimes it's going down um and with options you can trade all those scenarios so I you know I do trade Futures Forex and stuff like that but you know they don't have that fixed risk like an actual option contract does that's either long or as a spread okay I'm also a fan of a crypto but again that's not really about Trading that's about exposure longer term exposure to an asset class and options you know I wouldn't say they're super easy to understand but they are

not as complicated as they have to be and I think that you know sometimes it's easy to get caught into the you know all the Greeks and the Deltas and the and the Vegas and all that kind of stuff and you don't really if you know that obviously that's great but you know look ay doesn't she's not going to learn that So it's more about look let's identify a setup and then what's an option strategy that works good with that setup doesn't necessarily have to understand all the Greeks you know for that so that was

that was a good that was a good thing um so the the whole idea with this keep the money you make and you know don't blow it uh I I the most common thing I hear in trading is just the idea of uh someone's made a lot of money trading and they give it back so that's The that's the most common that's the most most common Tale in trading so the idea is make some money and keep it so Avery and I are going to continue on this Jour We are continuing on this journey with

the new year and this time around I'm going to post each and every trade that we do in case anybody wants to follow along so Avery way this is uh essentially no day trades so it's too much effort plus it assumes um that everybody's going to be we're going to Be using a PDT margin account under 25k so we can't day trade so we're not going to post any day trades uh new trades entered as limit orders around 11: a.m. Central no scrambling for Market orders at all hours or anything like that everything's limit orders

typically you know below current price um and just kind of waiting to see if we get filled waiting for the market to come to us versus uh versus chasing sometimes there are SPX related trades in the last half hour sometimes during the day just kind of depends what the markets you know are we around a big round number or something like that and then some straight calls and puss puss uh puss puts some straight calls and puts uh but oftentimes you know using spreads to take advantage of you know everything with options and stuff like

that too but the idea with this is it also assumes that everybody that's participating uh and I get some People will be very Advanced options Traders but some people won't and that's fine and so the idea with this is when these trades are posted they're also well documented kind of a learn while you earn uh type of a situation um and I'll show you some examples of that so we have um so these are the trades so far uh in this account um this year uh that's my that's my larger account the um so this

is an example we just did a Trade on um VRT we got filled last week on this flush to the 21 EMA and we still have it you know I think now it's trading up at 132 or something like that but we'll go through and just list like look this is why we're taking the trade you know this is what we're going for this is why we're doing it so the idea becomes you know it's a learn while you earn and then just kind of documenting like you know hey we decided to go further out

into February Blah blah blah and you know again this this so this whole book is being done in real time as the trades are placed and then this is something that you know at the end of the year is probably going to be you don't know a thousand Pages or something like that but it's just a way to learn in real time while making trades so learn learn while you earn so if you're new if you if you're new to options don't worry that's why I'm explaining the trade step by step Because I'm also reviewing

them with my daughter right so I got to make sure that she understands it too and um what I found is that by having to explain it to her that also ensures that anyone that's new to options and and trading in general or they're just looking to learn more uh also fully understands what's happening as well less is more no overtrading if you work full-time or you're just busy you know this super designed for you you know my my teen is Typically not available all day long so there's pockets of time when she is and

that's when we place the trades um so you know this again this that's just an example of of a trade that we just recently did and it's a it's one of those where it's like all right here's something taken off let's put in some orders down at the 21 EMA you know there's a squeeze and we're just going to work that order and a lot of times especially on stocks like this This is an IBD 50 stock you really want to be there when it's flushing with a plan in with a plan already in place

you want to have your bait in the water and catch it because a lot of times this is fleeting what What's Happening Here is that all the people that bought here are getting flushed out and this thing can be a pretty quick uh it can be a pretty quick kind of a turnaround there um and in this case we just kind of did a debit spread 36 days out uh we Were filled at 225 and then typically we're looking to get in at about 25% or less on debit spreads the width of the spread and

then get out at about 50% or more of the width of the spread I.E I know we don't have wine here to kind of kick back and relax so we'll just kind of make this quick um if for anybody that's interested in this we have already started sending out alerts on this account um what's great about this is that if you Are a currently a member of simpler trading um you can get $100 off this price and so what will happen is if you go to mys simpler trading.com small lot you will see a page

and it'll kind of know if you're logged in or not but um it'll it'll look like this and just kind of talk about everything and like okay so there's a small lot but then there's also the the pro version and then if you if you are a member in your log you log in you should actually see that this is $149 a month and you can lock that in so there's no you're not going to get your price raised on you or anything like that uh and again I'm looking at this as a one-year program

so I'm willing to commit to a year and then you know after that I you know I don't I don't know if I want to do it again but I Avery's down for this so I'm down for it and we're willing to send this out and commit for a year um the class that's around it will simply go through in more detail if You're newer to this like hey look this is the kind of stuff that I'm looking for this is what I look for in Investor's Business Daily and this is the squeeze this is

why I set it up this way and so it's all that stuff if you you know if you want to learn a little bit more about the house and the wise um if you look at this you're like well I just want the alerts awesome this this kind of gives you alerts and then this gives you kind of the learning plus the Alert so that's just a um one you know that's just the feed for the class and then it would continue at the at the 149 if you're a member um okay so from there

what else or we what else is in here so you get the alerts U there's a trade Journal that I'm keeping that we post every week so you can see charts and the thoughts behind it and you know what H what went right what went wrong kind of the debriefing uh once a quarter I'll do Kind of the big picture Outlook this is more based on the macro like is the real estate market going to have another 2008 in a couple years um you know what's going to happen if the bank If the Fed expands

his balance sheet what assets are going to benefit from that you know that that kind of bigger macro stuff in addition of this if you're familiar with Allison she'll also be posting her trade alerts in the live in in this room as well which is great because she's got a Lot of knowledge especially as it relates to SPX and things like that all right so if you again if you are like say a member of simpler Cal uh or another room um and you log in you should see that you'll be able to lock this

in now this this is only good up until the class starts after that even if you are a member it's going to be at the 249 to 299 but this is just kind of a hey if you guys are members you're already with with this on some type of a Service then we want you to get a chance to kind of lock this year-long journey at a lower rate all right so my commitment to you with this too is that I am fairly confident that this strategy is going to double this model account uh with

the alerts that I send out that if I don't double this account at least once by February 1st 2006 I'll give you double what you paid in store credits so meaning that you know if you're doing 149 a month and over 12 months that's You know whatever that is that's like 1,500 plus bucks then you will get $3,000 worth of store credits that you can use for you know a class you know different things like that and um we even looked at kind of doing like a cash but that's hard for for a lot of

reasons but um you know maybe that's something we'll try in the future but in this case this is something where hey at the very least you know you're risking one to make two in a way at Least in terms of you know additional classes and things like that too so I I think that's kind of cool but that's you know they were like oh my God you can't you know you sure you want to do that I was like yeah I'm super confident that this is something that's going to work and if it doesn't I'm

willing to do this um all right so I think that's that um y'all can read that there so I'll just I'll just kind of leave this here and then just see if there's any Questions um if you go to um if you're doing this and you go to the PayPal option they have a an interest free you know six months interest free all that kind of stuff you can you know to make payments for 6 months and um all that kind of stuff so if you are interested in this and I'll hang around here and

answer questions otherwise we can kind of get back to trading um you can obviously just sign up just go here and sign up uh we are in And by the way if you're already a small L member of Allison service you don't have to do anything you know this is included with that so that's a bonus um but otherwise you know you just kind of you'll go into the small lot room um I can log in real quick and just kind of show you uh what that looks like and there's a community in there um

the main thing is is I'm just looking at this as mostly alerts you know I'm not necess not not really planning to be on The mic much um but I am sending out alerts some Market commentary posting notes from the trading journal but the goal is to have a record of all the trades that go out and um again kind of a learn while you whilst you earn um type of a situation all right all right let me uh just check and see if there's any any question here that I can answer um do you

know the date and time of the class yes good question so the date of the class is going to be February 1st and then uh the time of the class is I think is 12 Central so 12 12 o'clock Central there [Music] let's see iay yeah well so the here's so here's some comments that I've gotten so far on this because we've already started posting uh trades and things like that and you know and I recognize definitely some of the people that are already in the room and they're already taking the Alerts but it is

kind of getting back to a much more disciplined approach and you know it is kind of easy especially with SPX and Zer DTE to like all right let's just kind of Sling some trades and stuff like that but the goal with this is like hey here's a disciplined trade instead of a disciplined approach instead of overtrading we're under Trading um but it's not like we're only trying to make 1% you know or anything like that it's it's we're trying to double Account within that within all that process and so if you go to it's called

the small lot you'll this is what you'll get the small lot trading room and then if you scroll up you'll see like okay you know here's a trade that we did here's the chart um Allison's posting trades in there too um and then you know the and the the ones that were you know we were're tracking are my trades that's the only you know that those are the trades that are that are tracked on the On the double your account thing but you know is a as a bonus Allison has put in some awesome trades

in there as well um you know this is a setup we did on Tesla again the details and everything like that's there um let's see what was the other trade here yeah anyway so you can see all that and then if you go like over like to notes and uh stuff like that you'll see a more detailed explanation of all the trades and things like that so again the idea is learn While you earn uh this is a trade that we put on today in alab we just got a bid in place and again so

anyway it's just that's what we're doing this is what I did with Avery and that's what we're doing with this and so it's kind of it's been kind of fun um all right let's see what else let me put this back here and again if you are a member um You know if you're a member of simpler Central you know trendy John rgy um you're able to lock in a $100 $100 off per month and remember I'm just kind of looking at this as a one-year program and you know after we get to February 1st

2026 um my plan right now is I'll just wrap this up again this is just kind of a one-year program uh maybe at the end of the year I'll want to keep doing it if uh you know Avery's interested or Dylan's interested but Right now my plan is this is a one-year program and this is a way to kind of you know participate and you know I think it's kind of fun you know keeps Avery engaged as well and uh you know all the comments from you know good bad ugly whatever it's always it's always

fun to kind of go through like that all right um yeah never give up and I look and I and I think a big thing like this because I've talked you know I've talked to a lot of Traders and they get you Know they get frustrated and stuff like that but it's really just the thing that I've remembered you know in doing this is that trading more and trading more frequently does not necessarily equate into making more money and often times it's the opposite like a lot of times the biggest problem people have is over

trading and this is a way to kind of take a deep breath minimize the amount of trading that you're doing but the trading that you are doing is still Impactful okay and I think that sometimes people think like well you know if I'm if I'm only trading twice a week I can't make that much money but if you position size correctly okay so that you know your upside is pretty attractive and your downside is manageable um you look look I I have no interest in setting up a small account and like look we made 12%

for the year who cares you know that's and and and I get it so for some folks hey I'm just Looking to make 12% this year I'm not you know I'm so but I'm looking at ways how can we do this and double the account and keep our risk contained and part of that a big part of that is managing the net liquidating value meaning that you increase your position size as the balance increases okay so yeah I might be doing two contracts now at 12K but at 18 K you know we might be doing

four contracts right and then setting up Hedges that are in place Knowing kind of when to be flat um you know it's not like like going into CPI we just kind of had one position you know if the market was the market was up 100 great but if it was down 100 you know we're not going to get hurt either and so it is kind of knowing you know knowing when not to have exposure uh knowing when to press it a little bit I think that you know sometimes people get not really sure what to

do with position sizing and look if if I've got you know I've got what I would call normal position sizing but then there's times when I'm going to position size a little bit bigger because it's a better situation it's I be able to identify those situations document it put the journal so you can see like oh why okay and you know look and some of these trades I I'll be taking um you know I think you know in Tesla we did this call debit spread hey here's what I'm doing in the small account but in

the big Account you know what I'm doing in the money calls you know deeper in the money and I I'm happy to share both uh but the focus is absolutely with the alerts is on a smaller account um let's see uh can we take this class can we take only the class no no really the the class really is designed to document the alert service so what I would do is if you wanted to just take the class um I Would probably still do at least a month you know 30 days the alert service you

don't have to keep it you know you can cancel it but that's that's how it that's how it's currently put together just for simp licity and all that um yes indeed great um what is the commitment on our side okay no good question so I'm doing it for a year and you can pay monthly you don't have to pay monthly all year If after 30 days you're like eh I know you're doing this for a year but this isn't for me that's fine you can cancel um if you to be in you know to be

eligible for the you know the $3,000 in credits of course you have if if I don't double the account you know you have to be a member throughout the whole process of course um but I think that's a you know it's a pretty strong uh a pretty strong statement to say like look guys you know I if this is What you're looking for I'm not going to be screwing around here like this is stuff that's going to be tracked it's going to be very careful um you know so if that's something that that resonates with

you and you know there's like a lot of accountability there as well then um you know I think it'll I think it'd be pretty intriguing um let's see what else what if you can't enter the trade At the time of the alert okay so that's very possible now the good news is is that when I do an alert it's it's a like a limit order so like yesterday so like when I placed the alert for VRT we didn't get filled for two days is okay I placed an order yesterday for Tesla we didn't get filled

till today um now sometimes there'll be a trade that we want to get into that day and stuff like that but generally if like we're setting an alert at 11: it's not like okay we Got to get into this trade right now at 11: it's okay we're going to work this order so the idea with this is that you know I look at it as and again I'm I'm designing it for uh you know my teen daughter who's not available all the time and it's the same thing the service is designed around that it's assuming

and if you're in front of the computer obviously that's fine you know that that's easy right but it's also assuming that you might be working you might be Running errands you might be picking up your kid from school you might be at yoga um so the idea is that the type of Trades that are done are not uh it's not a prerequisite you got to be sitting at your computer like oh my God I got to do this it's the idea is like hey here's the order you know we're working the order we'll let you

know when we're filled if you miss it you know a lot of times you probably still have you could probably still get in the next day You know maybe it's not quite the same price but it's going to be close you know that kind of stuff um let's see yeah no that's a good question you know I'd love to make 12% without huge draw Downs I get it um I think that you know and I think look the last year or two you know I've got money in index funds and it's been great just being

a passive investor but I I think the idea You know making 20% 25% a year just by investing in index funds you know I think that period of time is over and on something like this I am looking for a more volatile market and so I think on something like this you know even if even if the markets go down I'm still looking at doubling the account that's the goal it's not oh the Market's got to go up for this to work it's let's trade in such a way that if it doesn't work it's not

a huge draw Down and it's um a variety of Trades that take advantage if the Market's going up down or sideways uh within you know within that context what's the average option price of the trade so great question so because it's based on this case on a smaller account right now the balance is around 12 a little over 12,000 the the pricing also takes that into account so I'll show you an order that we're Working um you know that we're working right now so so this is a trade um that we're working right now we're

not filled on it yet and the symbols alab it's a uh IBD 50 stock so we're working this order and you'll notice here that you know the current it was $4 but we're working to get in at 280 and so generally like for debits and things like that we're trying to get in you know around $3 or less so if you did one contract and it's $3 then That's a total exposure of $300 meaning that if went to zero you'd lose $300 now we don't plan to hold things to zero you know at $300 but

that's worst case scenario um sometimes we might do like some SPX trades that might be 50 cents you know there's like this end of month trade I like to do that's something that we would do in here to get this cheap you know cheap option and just let it cash settle um but the idea with this is that you know because it's a small Account we're not going to do options that are 20 bucks okay um or if we end up doing an option that's like $5 we're not going to do two contract tracks we're

going to do one so it does absolutely um you know a lot of times we're doing spreads because you know the individual option like on Tesla if we wanted to buy a call it's going to be like 15 20 bucks right well that's not appropriate for a small account because if if it doesn't work it could it could Hurt but we could do like say an out- of-the money debit spread for $2.50 right or a butterfly or something like that so that's all absolutely taken into account in terms of account size um [Music] all right

let's see if there's anything else here yeah so right now so basically um yeah and I I share the account with you as we go so this account started at Right at 12K at the beginning of the year right now it's $1,953 29 um and so it you know as it grows you know if it gets to 18,000 then you know so so you no so if you're trading say an account half the size and I'm doing two lots and you want to mimic it then you would do one contract that way you're mimicking the

risk and stuff like that as a percentage if that makes sense um am I going to the money Show in Las Vegas next month no I am not uh usually I go this year uh so I'm a member of this group called YPO and they're doing this conference in Barcelona it's called the it's like a and um and my wife has always wanted to go to Barcelona so we're kind of using that as an excuse uh so I'm going to take her to Barcelona we'll spend a couple days at this conference I I traveled abroad

a lot as a kid or kid when I was in College I did a year abroad so um you wanted to kind of show her that too and she did her 23 and me and found out she's 55% from Spain her so and she's never been there so I might as well go go see if we find any of our relatives uh so I won't be there in Vegas um there's one in Dallas in April I'll be there and um Heather who trades with me she'll be in Las Vegas Heather I don't know are you

doing a talk there did they did they sucker you into doing a talk I Don't mean sucker but you know that's kind of funny you can do it um let's see all right yeah so good question is there an Exit Plan that's put in place once the trade is in yeah so again so it's kind of weird right with the pattern day trading account if you so we entered a trade today on Tesla I'm not posting an exit today on Tesla because if it's Filled this is the weird thing about pattern day trading right if

it's filled you get penalized so so what I do is like Hey we're going to Target you know we got in at 250 we're going to Target like five bucks as an exit but you know I'm assuming that's not going to get hit today and then after the close we can place an order tomorrow morning we can place an order but the idea is that we have working exit Orders um and we don't have live stops in place I we we do sometimes if it's like spy and it's pretty liquid but a lot of times

you know spreads and things like that but what we do is um we're not holding anything up to expiration and and you know smoke in the hopium pipe it's sometimes we'll let SPX stuff cash settle so there's an advantage of that you know you just don't have to worry about it um but the idea is we're not scrambling Last minute stuff like that and so what'll happen if a trade's not working out typically is let's say we got in at three and we're not going to have a you know a working stop in place but

you know if it gets to the point where it's falling in half like a150 it's kind of like okay either a will add to it and and I'll do that sometimes if it's a appropriate sometimes it is sometimes it's not or we'll just cut it loose and just move on to the next one so like you Know if there's still 30 days out and it's said support it's like okay awesome let's do this but if it's eight days out and you know it's now it's kind of drifted kind of further out of the money so

we kind of look at that as well so so I guess the answer your question is we'll have we do have working exit orders for targets again kind of so so you don't have to stare at the screen and that's always nice you know you come home or you hear a buzz on Your phone and then typically for a stop we'll just alert say Hey you know okay we're going to we're going to set this order here and typically we're not going to flush it out it's let's see instead of trying to get out at

our Target we're going to lower our Target to just above where the market is right now and let's just try to ease out of this and so that's kind of the idea yeah so Calvin is it a good idea to do 50% limit 25% stop on any options Trade place I mean that's a good default so generally it depends on the trade so butterflies I'm generally looking for 100% gain okay but it depend you know it's depend depending on the width um on debit spreads my goal is 100% so to buy it at 25% of

the width of the spread and then sell it at 50% of the width of the spread which is 100% gain on the Trade Credit spreads are different so if we sell you know you know you sell maybe we sell a $5 wi at two bucks and we want to Try it back at a dollar uh you know just so it kind of depends on the trade but yeah I mean you're kind of ballpark right yeah and look uh Julius just saying hey I love the idea of the service and and look I this is this

is something that I am you know it's interesting because it's almost like an act of service like I'm like okay as I learned in doing this for for Avery it's like okay look I I could see how maybe my style of trading like what I do in Simple Central it isn't for everyone I mean I've been doing this a long time I'm willing to tolerate a lot of risk you know so the stuff that doing my big account it's like well maybe that's not you know I'm happy to share it but that may not be

appropriate for everyone whereas this one it's like I kind of doing this because you know I I want my daughter to be in a situation where she's safe you know she's traing an account where it's safe but also shows Her the possibilities of being able to make an income from Trading and so I'm looking at that a lot differently than I'm looking at you know my account um my account I'm like I'm a big boy you know yeah I'm going to sell this put spread that expires in you know 38 minutes and it might work

out great or I might get my head hang to me but I can handle that but I know like you know I know that my daughter wouldn't like that and so so I really that's that's been really helpful For me too and so I just bring that that same thing because she'll still be helping me with it so I'm bringing that same stuff to you you know in a service and just kind of looking at it that way um yeah so Danielle uh Dan Daniel not Danielle um will this type of trading work on an

account that has like 5K yeah so that's the idea so if I'm doing so there's a there's this concept called notional trading so either one you can Either mimic what I'm doing so I'm you know 12K account I'm doing two lots if you have a 5k account you can do two lots if you want to but just understand that your risk is twice as much right give or take or you could cut it in half and so the main thing here I think that's important is that when I'm posting a trade I'm posting the exact

position size that I'm doing in the account okay so it's not like one lot every time Sometimes it's going to be one lot sometimes it'll be three lots you know sometimes it'll be two lots but I'm posting the exact position I'm taking the position size and everything and you'll also see there's a running list of like what the account balance is and stuff like that too and I think this part is is probably a lot more important that people realize um because now you're really seeing what percentage of the account is being risked right um

and And sometimes I might like gosh okay might do something that's a little bigger than normal because of of something you know maybe more unique that's happening and but it's but you understand like okay gez on this trade um you know he's risking 4% of the account but on this trade initially he's risking 8% of the account wow well what's going on well I'm gonna have it documented here's why and uh you know so all that stuff so I think that part's Really important too how do you calculate the price of a limit order so

it's a good question so there's a couple different ways to do it because you there's this thing called theoretical pricing where you can say okay if this stock Falls $10 over the next two days you know there's a theoretical pricing model you know like on thinker swim or something like that and you can kind of see like about what the option would be um so I'll do Something like that uh with spreads that's a little tricky so what I might do is just say you know if if I want to get the spread you know

when the stock Falls 10 points well then I can look and see what the you know what the current spread 10 points lower is trading for you know there's things like that so it's kind of a little bit of a back of the envelope math but the main thing is is that if I if I'm going to do a $10 wide debit spread and my goal is to sell It for $5 you know I start with the end in mind okay well what what entry price do I want to get well 450 that's not a

lot of meat on the bone but if I could get like $250 $3 then there's that and so so why exit at $5 because a Max profit would be $10 right well the thing about a debit spread is that you're you're only going to get Max profit with if there's a couple days left to expiration because the premium Decay so so getting Max Profit on a debit spread it's kind of a Fool's game you know unless you're doing a cash settled SPX or something like that um and then from there to get even $7 on

a $10 wides spread it has to go way in the money okay and so that's another thing it just um you know you got to be really close to expiration for that to happen so so the idea is just kind of all right if our if our Target on any debit spread is 50% of the W of the spread then from there all we got to Do is work on an entry so yeah maybe sometimes we are going to get get in at four and get out at five but I start with the end in

mind and then it's like all right you know if we're in a neighborhood of $600,000 houses then you know I want to buy the house at 400,000 I don't want to buy it at 700,000 right um yeah YPO Edge if anybody is there's um it's either GLC or Edge but I think it might be Edge yeah It's like February like 18th 19th 20th in Barcelona something like that um oh Heather awes okay awesome Heather you're gonna be speaking so that's awesome so yeah so Heather is um so it's great because she's super smart has you

know does all stuff with trading and then it started been kind of you know gathering together like all the stuff I'm like I really wish I could see this and this and she'll just kind of slowly Start building out these morning uh documents that you know get just have gotten more and more useful as she kind of like uh and it's great because she'll kind of watch what I do and then say like all right well here's what you said and here's some key levels like this is awesome so a Heather thank you appreciate all

that and then B um what's great about this is that you know she's been she's been doing this long enough where she just You know knows her stuff frankly and uh it's great so I'm super excited I'm sorry that I won't be in Vegas to see you speak but uh I'm super excited that you get a CH chance to do that and then uh yeah I can if we're at a money show together where you are speaking I can I can Heckle you from the audience obviously I would never do that well I'd ask some

questions but um let's see here okay all right I think we've caught up On well there's a lot of questions but I think I'm seeing that they're kind of um oh good question all right do the alerts get delivered via email SMS or in the trading room only okay so we post them in the trading room and then that's also tied into an app uh that we have so what a lot of people do is if they don't want to hang out so if you're kind of more full-time trading and you want a community you

hang out in the trading room and you see the alerts there and if You're like okay I get what you're saying I'm busy uh I just want I want I just need the alerts then you just use the app um I haven't logged into it after the latest update but I believe that um you can set it up where well Lorna is that can you set it up where you just get alerts from certain services or you just get alerts from all the services that you have but but either way you can get notifications and

you know get the Alerts yeah there we go thank you so we don't do email I don't think um but for text message I mean we you know it's the uh blah blah the app alerts which is it's kind of very similar [Music] anyway okay all right good stuff yeah so we used to do SMS I think we use like twio but man you would do it and it would be like 20 minutes later the last person would get the alert Whereas with the app it's instantaneous and so that's kind of we kind of made

that switch um um is has this small lot been profitable for the last four years in different conditions well um so yeah this is kind of a this is like a new thing so I my own account trading I've been doing and and posting my results on those trades that's a fair question um the the reality of it is is that I've Traded a lot of different conditions I fully do not expect the market to be an easy Market this year and I'm fully also accepting the challenge of doubling the account whether the market implodes

I kind of think we're going to get this rally into the inauguration and then we're going to see like some stocks puke you know that so just things like that so this isn't a okay let's just buy the dip and hope for the best um I I think we're going to see some volatility and You know I'm looking I'm looking forward to that volatility um all right so I think I got most of the questions there it is 215 217 so let's go ahead I'm going to wrap up because of course the Market's going to

be closing here and stuff like that I'm sure most of us want to go look at that I'll just uh leave you with this if you are interested in this you can go to this link here my. simpler trading.com Small lot I think the link is also posted there that will bring you to an option you'll see I believe uh 249 a month but again if you're a member of one of our services at simpler if you log in you're going to see this and you've got like until this date to lock in this lower

price again I'm looking at this as a one-year program and if you would like to join me on this one-year program where we're doing the alerts you get the trade journal the big picture Outlook also you know Allison's trade alerts and all that kind of fun stuff too um you can lock it in here and then you know a year from today we'll see what happened if the account didn't double you get $3,000 with the store credits and then if it did you doubled your account so I kind of like that is kind of a

good trade um and if you're not a member um the 249 I think is actually very reasonable as well but I think most people here are probably Members of something on the site and then if you want to do the class and again you don't have to do this this is just more hey I I really want to know what kind of Trades are you doing why are you doing them what are the strategies that you're doing you know if you're newer to options it's probably a good idea but you don't have to but it's

a way we'll hang out together Saturday February 1 for four hours and we'll do kind of an in-depth uh analysis of the Trades and the wise and all that kind of fun stuff all right all right I will uh I'm going to sign off you guys have a great rest of the day have fun trading the cloes remember tomorrow is expiration monthly expiration Friday and the markets are closed on Monday so we've got a three-day weekend um you guys have a great rest of today and trading tomorrow have a great long weekend and uh see

you Next week if you are do sign up um I will see you in the alert room tomorrow and we'll see what kind of kind ofu we have going on in the close all right everybody have a good one and take care