By 10:00 in the morning, I was down more

than I wanted to be and our desk was

down something like a million bucks. But

the same stock, the same day, we

finished up big. And the only thing that

changed between the part of the day when

being down and finishing the day strong

was one single thing. I'm going to walk

you through every decision I made today

on SPCX. the mistake I made in the

morning, exactly how I reset, and the

moment in the afternoon where I where we

finally hammered it because

understanding why three trades we are

about to cover in real detail are

completely different. That's the

difference between a trader who

compounds losses and one who compounds

gains. Let's go.

So this is SPCX SpaceX the morning of

June 16th, right? Pre-market stock was

quiet. It had gapped up. Nothing really

special, but it had gapped up and it was

the third day up, right? It had sold off

a little bit. traders were kind of

calling for a top because of the

pre-market selloff and they thought

maybe first day of options the open was

going to be the high here. We're going

to open and just sell off, right? It

opened right around 200. Then right at

9:30,

it opened and and the first move was up,

right? And that's when the trade kind of

got amusing and not in a good way, but

it did. A trader called out, "It's

stuffed. Get short. Hammer this thing."

Great. It's a short. Let's put the

hammer on the chart right at the highs,

right? It's going to go lower. We can

get risk on in this trade. Let's hammer

this thing. And traders, I did too. Put

risk on. But the response wasn't really

right. The hammer didn't work. Now, this

is something that happens. You take a

trade and it doesn't work. You take your

stop, right? But traders were so focused

on the idea and they were so afraid to

miss the short, they didn't see that

obvious mini hitchhiker trade setting

up. I mean, that was a rip, right? It

was a frustrating rip. And from there,

for a little bit, it didn't get better

as the stock started grinding higher.

The thing just kept going. There wasn't

really a pullback, but then it did start

to consolidate just below 220. And I was

watching this happen in real time. And

everything in me was saying this is too

extended on the higher time frame. This

has to stop. This has to be close to the

top. So I shorted it and we shorted it

with size. Let's be very clear about

what I did wrong here. What we did wrong

here because this is the exact mistake I

see developing traders make every single

day. I wasn't reacting to the market. I

wasn't reacting to the price action. I

was predicting it. There's a massive

difference between those two things. And

in the moment when you're watching a

stock rip and your instincts are

screaming at you, that difference is is

really easy to blur. At SMB, we grade

every setup, every trade before we trade

it. And the grade isn't based on how you

feel. It's based on what the market's

actually telling you. So, let's grade

this opportunity right now. Uh trend

direction. Well, the trend was up. It

was hard up. I'm trying to short in an

uptrend. Was Was there confirmation? No.

None. The stock hasn't shown any signs

of topping. There's no failed breakout,

no reversal candle. There wasn't volume

drying up. There was nothing. Catalyst?

No. There was no real news. This is a

momentum move. It could run for another

hour if it wanted to. The riskreward, I

mean, I was shorting against momentum

with no defined level to get short

against. My stop was honestly a little

too ambiguous. my target was was based

on hope that this was going to reverse.

If we take those input variables, that's

maybe at best a C trade, but it's more

likely a D trade. And here's the rule at

SMB. C setups get C size, D setups get

no size, and they don't get taken at

all. I broke that rule.

I sized up. traders on our desk sized up

because we were convinced because the

move on the higher time frame looks so

obvious that it just had to fail because

there was a seller at 220, right? That's

it's going to fail there.

A couple hundred,000 maybe a million is

what it costs our desk when we guess

when we are thinking we might be right

on the direction but we're actually off

on the timing. The hardest part wasn't

the loss.

It was knowing in the moment when I was

down 10% of a stop, then 20, then 30,

knowing that I'd made the wrong trade

and I was still fighting because I

wanted to be right. That's the other

mistake in inside the mistake, and we'll

come back to it. But first, what do you

do when you're down a bunch of money on

a trade you shouldn't have taken? So

most traders after a loss like that,

they do one of two things. They either

walk away. They just get up and and walk

away. They shut it down. They're just

too frustrated to think straight and

they need to get all this clarity right.

Or they revenge trade. They double their

size in the next setup because they need

to get it back right now. And they can

quickly turn a $1,000 loss into a $2,000

loss. for our desk. That's how we turn a

million dollar loss into a two or $2.5

million loss. It's honestly exactly the

same process. It's just done at scale.

So, we have to be really careful here

because I've done both those things.

I've walked away out of frustration with

myself and I've revenge traded trying to

get it back right away. We all know

exactly how each one ends when the

pressure gets amped up so much that it

almost feels like it forces you to act.

You can physically feel your body

getting tight, your mind almost

certainly driving right into fight or

flight mode. So, we have to put a system

in to interrupt that negative feedback

loop because I don't like the outcomes

of those two choices that I could make.

Right after I got blown out of that

short, I I stepped back. I mean,

physically, I took my hands off the

keys, took a breath, and I looked at the

chart again. I went through this simple

skill. It's called a 120, which we're

going to detail in just a minute. It

just takes three steps. It's 120

seconds. But after that, I did and we

all kind of looked at the chart again,

like the desk hadn't just drawn down a

million dollars on it, right? We looked

at it like it was a new stock and and we

were seeing it completely fresh. And

when we did that, when I did that,

something changed. All right, look at

this area right here.

SpaceX had driven to 225 and now it was

trying to push higher and it it just

can't. Right? Getting clarity after

using that 120. We started to think,

okay, I'm looking for a bearish rubber

band scalp to start, right? The buyers

are maybe exhausted here. This is a

totally different trade from what I

traded in the morning. In the morning, I

was trying to predict a top. Now, the

market actually might be showing me one.

So, I went into the next step of this

process or another step. We're going to

go through all the steps later, but I

graded the setup using our simple asset

protocol and and this time it came back

a B. Not an A, but a B. There was still

uncertainty. The stock hadn't fully

confirmed the rollover. I mean, it

definitely could squeeze back to high.

So, I sized it for a B, which at my

level means with 50% of what I'd

normally trade on an A setup or an A

opportunity, right? I've got a defined

stop above the recent high and I'm

waiting for confirmation before I add

if the stock offers it. It doesn't have

to offer it, but I'm waiting for that

confirmation.

Using the asset protocol allocation was

B- risk. Stop was 2 cents above the high

a day. It was 225, I think 66, right?

The entry was the first move below that

prior bar low, right? or that prior two

bar low. So it was right around

22163ish,

right? Our target was VWAP 212.

Now this is the discipline that most

people don't talk about. It's not

exciting. There's no big moment here.

It's just grade it, size it, execute it.

Right? This trade started to work,

right? It started to roll over

magnetically making its way to VWOP. We

were getting a little more confirmation

as the stock tried to pop and then kept

giving us lower highs and lower lows,

but I never had an opportunity to really

add. This was just a straightup rubber

band, right? The trade gave me B- risk

and it didn't give me a super obvious

place to add. It didn't show a super

clean backside or even a great version

of a fashionably late. So, it was a

trade to exit as it pulled into the

targets.

By the time the position was closed, I

was back to flat, maybe even a little

bit up and so was the desk. As a desk,

we're talking about maybe being up a few

hundred grand. Nothing crazy, but up.

Right now, here's what I want you to

understand about that number. Our

traders,

I didn't try to make back that draw down

in a single trade. I mean, I I didn't

need to. We didn't need to. The rubber

band short wasn't a thousand trade or a

$100,000 trade or a million-doll trade.

It was a B trade. It made back what a B

trade should make because the grade

drives the size. Not your ego, not your

morning P&L, not the voice in your head

telling you to get it back really fast.

The grade drives the size. It doesn't

matter that we were right. Right? That

stock topped out there. There was this

trader that said, "Oh man, that felt so

good." Right? One of the traders says,

"That's the tough. We won't see those

prices again for a long time in this

thing." But here's the big difference

between falling for that mindset and

letting it go and just trading well. One

mindset focuses on being right. You

attach your personal value to your call,

to your prediction. The other mindset is

is a much more productive one. It

focuses on getting your actions right,

grading well, and not giving yourself

the chance to backslide. The day is not

done because one trade is over. And

here's the key self-t talk after that

moment. All right, I made a mistake,

but I came back and I graded it well and

I let the trade fall into my lap. My

next goal, my very next goal, not the

goal of the year or the month or the

week, but my very next goal is just to

win my asset protocol. The first step of

that, the thing that gets the wheels

moving is to get my allocation right.

That's all I have to do. Now, we're

going to show you the 120, a process we

use. We teach our traders to get back

into that trader mindset in two minutes.

But the key here is I don't have to pick

what's going to happen in the stock on

any given day or week. I just have to

get my allocation right for the very

next trade I'm making. I have to make

sure I have to win the asset protocol

first. And even more of a focus, I have

to win the allocation part of the asset

protocol first.

Once you have that mindset and

particularly if you're looking for the

next trade with that mindset, that

targeted focus, our desk was able to

stay grounded. It actually allowed

traders, it allows you to say, "I don't

have anything to risk now." As we watch

the price action evolve, it wasn't even

a C trade, so it wasn't worth it to me

at all right now. And we just kept

saying that as it kind of chopped

around, chopped around. We let other

people guess with size if it was going

to break out or if it was going to break

down. But at that point, it wasn't even

worth see risk there. So, we didn't have

anything to do. So, nothing was was

done. As we came into the early

afternoon, we started to see, you know,

the price change. We had been watching

SPCX all day. We knew this stock now. We

knew where it had been. We knew how it

moves. We knew where the key levels

were. And we started to see something

happen.

So this red line that you're looking at

of the chart, that's VWOP, the volume

weighted average price. It's the line

that separates where buyers are in

control from where sellers are in

control. For most of the afternoon,

SpaceX had been above VWAP. I mean, not

super strong, a little bit weak, but at

least above VWAP. The sellers were

trying, but the buyers kept holding it

up. Then right around here at like 130,

it started to change.

And then at like 245 it changed the

stock loss VWAP and and not really

barely big candles, real volume, real

sellers stepping in and I'm watching

this happening. I'm running through the

asset grade in real time. Would I have

liked to catch it from that 215 failure

earlier in the day? Yeah, absolutely.

Did I have a trade there? No. Would I

have liked to catch that move below

VWOP? That would be amazing. Did I have

a trade there? No.

Working the asset protocol. What was

happening in the trend at that point?

Now it was clearly down. The VWAP was

lost. The moving averages were rolling

over. The price was making lower lows.

We can actually use a catalyst here too

because the stock spent all morning

trying to go up and now it's failing.

That failure is the catalyst. Remember

price getting through an important

technical level is a catalyst not

because of the level but because of the

psychology of the stock and more

specifically the psychology of the

participants watching and trading this

stock along with us. At this point the

VWAP and that level getting broken

anybody who was looking for this to

squeeze into the close was wrong. the

chasers or the people looking for that

momentum to continue to the upside are

are wrong and they're going to offer us

a great trade for the afternoon. So, the

stock gave it one last attempt to try

and rally back above VWOP and it got

completely stuffed after there was this

consolidation, really tight

consolidation. And if you notice, it's

below the area where the buyers were

supporting it all day. Now, this is a

puppy dog consolidation. It's a

modification of the big dog. It's just a

shorter one at a more pivotal level.

It's a consolidation below a key support

level in a stock that was overextended

and now showing signs of reversal.

Given the fact that the trend changed,

given the fact that the price action was

confirming for us, this is an a

allocation a setup and a setups get a

size. Was there confirmation? Yeah, the

VWAP break was with volume. This wasn't

a fake out. The seller seemed committed.

Now, let's go through our full asset

protocol here again. Allocation. Well,

the stop was clean. It was above VWOP,

above 212, right? If I'm wrong, I know

exactly where I'm wrong. The entry was a

break of the puppy hog consolidation to

the downside. So, it was around 20875.

All right. So, what do you have for a

target here? I I'll admit this is a

little bit of a tricky one, but let's

think about it. If buyers from today are

wrong, where should this go? Well, yeah,

at a minimum it should go down to 200.

It should test everybody who was long,

right? And then with our asset protocol

armed with our a risk, knowing our stop,

knowing our clear entry, and knowing our

target, we can just wait for that entry

to materialize.

It gives us that entry. SBCX started

moving and I mean I mean moving right

now it was getting hammered lower not

that choppy back and forth of the

morning. This is a clean directional

move with sellers in control, buyers

clearly stepping aside. The stock

quickly went from that 209 or 208 entry

to 202.

I've seen this before, but let's break

it down again because now the stock's

below everywhere the buyers have been

supporting all day. The only threshold

left is that 200 target.

It's below that 205 area of key support.

It got so close to that target at 200.

And because it got there so fast, I have

to cover some just because it went down

there that quickly. I cover half traders

on the desk who had loaded in with me.

Lots of traders taking a risk on this

trade.

covered half.

But given the change in dynamics and

given the time of day, I got to look for

a second chance scalp. We all got to

look for a second chance scalp. So, we

can keep half our position with a stop

at break even now from our puppy dog

scalp and we can look for a totally new

trade. And the second chance scalp is a

great one to use once the setup has

changed, right? And this one went from

all the momentum to the upside to all

the momentum to the downside. So, the

setup has changed. The second chance is

a trade you you make when people have to

get in because they're going to have

FOMO after the trade broke out of range

to the upside or they have to get out

because the stock's already broken to

the downside. Again, I'm not counting my

money in the trade that I'm already in

or I'm not worrying about if it stops me

out. I've already accepted the risk and

this next risk is a good risk to be

taking. The risk from the prior trade

was a good risk to be taking.

All I have to do is reset, take a deep

breath, and make sure I can focus on my

asset protocol here. All right, second

chance below a key level this late in

the day. It's B risk. I know, I know

what you're thinking, right? What? Isn't

that a risk? Weren't you just in an

A-Risk trade? But wait a second. Did

this break 200? No. Now, if this same

price action that happening that's

happening around 205 or between 200 and

205, if that was happening below 200,

how much better would this trade be?

That trade would be a risk. All the

buyers would be wrong in the day. But

they're not. So, I have B allocation.

My stop 205 and a half. Let's call it

206 just to be safe because this thing

moves, right? My entry would be when I

get a clear break to the downside. So, I

want to see the candle break that small

range that's formed to the downside.

Entry is like 20330, right? Or 203

probably. And let's just call it three

points of risk. Now, target this is a

momentum trade. So, I'll trail using a

trailing stop of the 9 EMA. And I'll use

it on a one minute chart. Other traders

will use uh a double bar break or

something like that, but I like to give

it a little bit of room and use those

trailing EMAs, but at a minimum, this

should break 200, maybe a little fight

there, and then actually move lower

given the time of day. 205 to 200. I

hold tight stop, let it work. 200 to

197. All right, that's where I start

scaling out or getting ready to scale

out. I'm ready because as soon as that

that bid steps back in, as soon as we

get clearing above that 9 EMA, I really

need to manage my risk 197 to 195. By

the time we close out of the last

position, by the time we get that flush

and then that rebid and all our traders

are saying that that's it, we're out.

that momentum to the downside is gone.

When that happens, we're finally on that

day up some serious money in this trade.

You actually heard it from different

sections of the trading floor as traders

took advantage of this. People were

clapping like, "Yeah, nice job." No one

is applauding the P&L. That wasn't what

we're about. We're actually applauding

the risk and the risk takingaking, that

following of the asset protocol to stay

engaged. This is all on SPCX, SpaceX. It

was the same stock that we lost close to

a million on in the morning across the

desk. But here's the thing I need you to

understand. I want you to understand

because this is the part that so many

people get wrong when they hear a story

like this. I didn't make serious money

because we're better traders than we

were this morning. We didn't suddenly

develop new skills between 10:00 a.m.

and 2 p.m. It's not the way it works,

right? The market just gave us an a

setup in the afternoon.

It gave us a D setup or a C setup maybe

in the morning and then it gave us a B

setup as as we saw that reversal, right?

The only reason I was in a position to

take that A trade with full size with a

clear head with that discipline to hold

it and then add to it when that other

trade showed up was because I hadn't

blown up my account on the idea trade in

the morning. And more importantly, I

hadn't blown up my psychology

on that idea trade in the morning. I

didn't need grit. I didn't need like

like this resolve to be able to stick

with the idea. No, the mental cushion I

built by using that appropriate reset,

the money I made back in the B trade,

that's what gave me the emotional runway

to trade the afternoon correctly. I

wasn't desperate. I wasn't trying to get

back to break even. I was just watching,

waiting, grading, and looking for that a

trade. And when it came, I was ready.

All right. So, let me ask you something.

If you'd been down $1,000 or $100,000 or

a million dollars by 10:00 a.m. today,

what would you have done? Would you have

stepped back,

graded the next setup, size for a B when

you were only in a B situation?

Or would you have done what most people

do? Let that morning loss poison the

reversal and then the afternoon. Because

here's what I've learned after years of

training traders at SMB. The traders who

make money long term, they're not the

ones with the best scanner or the best

data feed or the most screens. They're

the ones who put themselves in a

position to grade every single trade.

That's the standard that they have for

themselves. They don't listen to how

they're feeling. They listen for if they

are thinking through trades from the

asset protocol. If they can't follow the

asset protocol, that's when they take a

break, a quick break, but a break. Let's

get into the specific twominut break

that they take. And this is a little

part of the pressure mastery protocol we

teach to our traders. This subset of it

is called the 120. And here it is. Step

one, you label the emotions that you're

feeling. And this comes from a concept

from a really great book, Never Split

the Difference. I think it's by Chris

Voss. We actually teach traders to label

the event that triggered them and label

the emotion around it. And what they do

is they actually say this out loud. I

forced this trade because I was afraid

to miss a good opportunity.

So they label the trigger and they label

the emotion.

That's the first step of this entire

process. Usually, it takes a couple

seconds to get into that mindset when

you're like, "Okay, I forced this trade

because I was afraid to miss a good

opportunity." Step two, you take your

hands off the keys for 60 seconds. Off

the mouse, off the keys for 60 seconds.

Not getting up and running away. Just 60

seconds sitting at your desk. Hands off

keys, off mouse. Just be there.

That's the pause.

That pause allows your brain to start

receiving information again

and then you make the switch. Step

three, you go right into the asset

protocol. Now, if you can't get to a

clear asset protocol, you don't force

anything, but you use it to get back

into high quality idea generation mode.

Here's an example from this morning

right after I took a 120. All right. All

right. The allocation. All right. This

is now extended. It's a B trade. If I

see a rubber band candle. All right. If

I see a rubber band candle, where's my

stop? All right. It's above the high of

the candle. Where is my entry? All

right. It's the close of the first red

bar before the prior two green bars,

right? Double bar break. What's my

target? It's VWAP. Now, a really

fascinating thing happens when you enact

the 120.

Traders,

you won't become someone you're not.

You'll actually become who you actually

are. And for almost everybody, that's

enough. Traders are balanced. They're

back to who they are at their best. They

can trade with a clear mind because

we're traders who size by the grade, not

by how they feel.

Traders that use this stay in the game

long enough for that a setup. That setup

that occurred later in the day to arrive

and at that point they take the right

risk in the right trade. That's who we

are and that's who you are. You're just

like us. We're all traders. We're all

elite level traders. Today started badly

and I could have let that define the

whole day. We could have let that define

our whole approach to the opportunities

offered on the day. But instead, I let

the grade define my trades and the

trades define the day. That's the shift.

That's what changes everything.

If you want to build a system that

actually does this, if you want to

understand how to grade your setups, how

to size by grade, how to know the

difference between a C trade and an A

trade before you're in it, uh here's a

link to a video where we teach the

actual trades we discuss, and there are

cheat sheets for those as well. Watch

that next. It's the framework behind the

trades I made today, and it'll change

the way you see every chart you look at

from here on. I'll see you there.