So it's been a long time since I've updated any of my trades.  Mostly because I've been sitting on my hands watching this melt-up market do some serious damage to my accounts.  I've been in and out of margin call range starting since late Dec in one of my smaller accounts, and starting in early Jan in my two bigger accounts.  Overall, I had at peak nearly 50,000 in unrealized losses, which was just unimaginable to me and the majority of that happened in roughly two weeks, and just when I thought I was through the worst of it, this week has brought the GME short squeeze mania so I was back into margin call range once again.  

Most of my losses remain unrealized, however I panic covered some positions on PLUG at the very top a couple times, first time on Jan 13th when apparently a short fund blew up and they liquidated and it was a million share spike of volume taking the price to a new all time high.  That was a realized loss for about 3,200.  And yesterday, I panic covered again when it hit a new all time high again for a realized loss of 4,750ish.  On both these days, multiple stocks that I was short were running hot and I knew my account was in margin territory.  I had to choose which shorts I wanted to keep or my broker might choose for me. 

Of course PLUG dumped immediately following both those spike days so I could have covered lower if I had been more patient ... but PLUG's just been a nonstop runner and I just didn't know when it would stop.  Plus with the way I've been, I don't know that I would have covered lower because it never dropped far enough to satisfy me.  Even if it had gone all the way back down to breakeven for me, I am so bearish on the stock that I'd probably have kept holding.  

So during this month of watching the market everyday, doing a sprinkling of trading but mostly watching (I'll update my trades on profitly maybe tomorrow or definitely by sunday, there aren't a lot of trades, mostly the panic covers, a few small dabbles, and a few forced liquidations from my interactive brokers account) I have felt my mindset change.  I am no longer out for revenge or blood.  I am at this point just trying to minimize my losses and make the best trading decision I can.  I wasn't exactly ever revenge trading, but I did want to make my money back.  Now I just want to salvage what I can.  

I ended up in this horrible spot because I had too much conviction, too much stubbornness, and not enough fear.  Well, this market has taught me fear.  It has taught me worry.  One of the pithy sayings about how much risk to have is to "sell down to the sleeping point."  Well, I now know what it's like to not be able to sleep because my accounts are in danger.  It's terrible.  A nonstop sense of dread.  You don't know what the market will throw at you next.  Some people say they get headaches, but I get stomach aches.  Or rather, just a nonstop nervous feeling in the stomach that sticks with you for hours.  

I suppose I didn't have enough fear because I started with such small positions and had such a big cushion.  I never ever imagined I'd ever see a margin call.  But the stocks ran so far and so long that my loss just kept growing and growing.  I wasn't doubling down.  I'd add a bit here and there but that wasn't what did me in.  It was just knowing deep in my heart that these stocks were going to go back down.  Even now, I know, I just know for sure, that my main positions are garbage stocks that will eventually go back down to single digits.  If it were up to me, I'd let my accounts zero out before I'd cover, but brokers won't let you do that.  They will force covers on you well before that point.  

It was all so unnecessary though.  Even if I had so much conviction, there was no good reason not to use proper risk management.  I could have covered everytime it broke a new high and then reinitiated my short higher at a better price.  I spoke about this in my last blog post "the need for the tactical retreat."  But I was already in a hole and what seems like miniscule losses now (started around 500 dollars or so) just felt too big to be accepting.  So I waited ... and the losses kept growing.  5,000, then 10,000.  Woah that was bad but then they flushed back down so my losses were under 5,000 again.  But that 5,000 was too big for me to accept and I still had plenty of capital.  Then in a matter of two weeks, it went back up to 15,000.  Woah that's crazy but surely that's the top.  No.  Another round of craziness from the market and now I'm looking at 25,000.  Again, I'm thinking that's got to be the end of the euphoria.  Wrong again.  This week yet another round of craziness from GME and I was briefly 50,000 in the red.  That's maybe 55-60 percent of my total accounts.  GME torched my account even though I didn't trade it.  (well I couldn't resist joining the citron short for 2 shares but I was smart enough finally to stop loss it for a 3 dollar loss)

It feels like we're so close to at least a minor correction coming.  The GME bubble will pop soon, or bitcoin will pop soon, and TSLA today missed earnings so maybe the EV craze might die down for a little bit.  I'm not expecting the big crash anytime soon anymore, but I am hoping for a correction of some sort so I can pare down some of my short positions at a more reasonable price instead of panicking out at the tippy top like I did with PLUG.  I was prepared today for worst case scenario and ready to liquidate my positions and consolidate what's left of my accounts into one daytrading account and starting again fresh.  If TSLA hadn't missed, I was mentally preparing myself to liquidate.  And I'm still mentally preparing myself because in this market, missing earnings might not matter and the market might melt up tomorrow anyway.  I do see a big spike in VIX though and usually that means a down day.    

I've gotten beat up but I'm not ready to give up yet ... I do feel like I've learned a lot about how the market works during my 5 months of trading.  If nothing else, I've learned fear and the utter importance of risk management and that might be the most important lesson of all.  I never understood before all that talk about how the exit is more important than the entry.  Heard it multiple times from multiple experienced traders and it never made sense to me.  But if you look at it from a risk management point, when the market is volatile, it'll run hard one way or another.  If you cut your loss quickly, you save yourself from a big run against you, and when you're right (even if it's only 40 percent of the time), the market runs big in your favor. 

Patterns smatterns, I've seen every pattern broken multiple times.  In fact, it's partly what's gotten me into this mess.  As a short biased trader, I've paid very close attention to tops during my study.  This market has provided topping patterns repeatedly, double tops, triple tops, blowoff tops, shooting stars, evening stars, you name it I've seen it.  Everytime I saw it I was sure I was through the worst of it.  And amazingly, stocks that should have died have popped right back up and started running again like unkillable zombies.  I feel like I've gotten a gauge for what market sentiment is now, and market sentiment is pretty darn important in what patterns will work or not work.  But tight risk management is useful in ALL markets, all the time.  I had to learn that the really hard way unfortunately.  I remain optimistic I will eventually become a profitable trader even if I have to wipe the slate clean and start with a fraction of what I started with.