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The $500 Small Account Challenge (#InlightSAC)

(UPDATED DAILY) Inlight Founder and head trading coach, Max Starr, takes on a small account challenge!

*This post will be updated regularly, so check back each day for updates!*
(I suggest you bookmark this page to make it easy to return to.)

#InlightSAC

Beginning on October 19, 2020 with $500.

Founder and head trading coach at Inlight Trading, Max Starr, is embarking on a journey of emotional rollercoasters and intense capital maneuvers. This is the journey of growing a Small Account. Many traders have faced this journey to this very day, but only some have crossed into the light of profitability - the others simply "blow" their accounts and lose their money to the Sea of the stock market.

Max is taking on this challenge for one reason - and that's not glory, fame, money, or even to lead as an example. He is taking on this journey to show you that it is possible to grow a small account to a point of profitability where one can draw profits out as an income stream in a way that you can learn lessons, tips, and tricks along the way to help you grow your very own small account.

You are currently reading a living blog post. This post will be updated every single day Max continues this adventure to keep you updated on his daily profits, losses, stocks traded, and important lessons learned. Make sure to check back frequently so you don't miss prime educational or even entertaining content!

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Nothing like a fresh account to trade with.

Week 0

Max began this journey after a long break from trading as he moved to the west coast chasing the surf. After finally settling down, he trained in a paper trading account to regain his muscle memory, lightning reflexes, and rock solid trading mentality. These training days were broadcasted on his Twitch livestream channel. He is going to stream every trade he makes in this challenge LIVE on that channel.

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TD Ameritrade deposit

Week 1

Day 1 - Mon 10.19.20

The Monday max started trading live in this challenge was a very slow day in the market. Most moves lacked the umph to follow through to profit targets. Max began the morning fumbling over stock charts as he fine tuned his charting setup in the new account. Once he finally got everything how he liked it, he placed two trades - one in Limited Brands and the other in Snapchat. Both ended up missing their PTs and reversed back to his stop loss. He ended the day with -$46.64 in closed trades and an open swing trade in Virgin Galactic.

$LB - ($36) closed

$SNAP - ($12) closed

$SPCE - open

Watch the Recap Video
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TD Ameritrade trade confirmations from 10/19/2020

Day 2 - Tue 10.20.20

After studying the slow market conditions from the previous day, Max formed a game plan to enter Tuesday's trading session with. He explained it to his Twitch viewers while putting together his watchlist then executed his plan when the opening bell rang. Momentum swung into the market as Q3 earnings reports flooded traders' timelines. Max capitalized on this influx in volume and momentum with a home run trade in Carvana. Virgin Galactic even made a significant move up, coming close to Max's target but missed the mark by a bit too much.

$CVNA - $135 closed

$SPCE - open

Watch the Recap Video
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TD Ameritrade trade confirmations from 10/20/2020

Day 3 - Wed 10.21.20

Wednesday carried even more momentum in the stock market as dozens of stocks, a majority in the tech sector, reported their quarterly earnings. With over 10 stocks on his watchlist, Max had plenty of options to choose from. He narrowed down these choices to the very best setups, which included Paypal, Pinterest, and Square. After closing down his Twitch stream for the morning, Max's Virgin Galactic swing trade ended up stopping out and closed for a loss.

$PYPL - $31 closed

$PINS - $68 closed

$SQ - $83 closed

$SPCE (swing) - ($67) closed

Watch the Recap Video
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TD Ameritrade trade confirmations from 10/21/2020

Day 4 - Thu 10.22.20

Max entered the day eager to capitalize on the high volume movement in the market on Thursday. It turned out these high volume gapping stocks didn't have much volatility during the morning session. He ended up taking four slower trades. Only one trade was closed during his morning stream. After the morning session live stream ended, Max's trade in Bio-Path Holdings INC ended up surging upward through the $6 resistance level, arriving just a few cents short of his target. It then came down just a few cents shy of his stop. He did mention this was a mediocre trade with low to average confidence. Max ended up closing this trade just before the close for a loss to avoid holding is overnight, which would be very risky in a stock like this one. Delta ended up trading sideways after Max closed this trade, then it made a decent move up in the afternoon - he is still happy with his exit in this one. Sirius XM will be held throughout next week as selling this one for a loss will cost the same as letting it expire. AT&T came up to $28.50 in the morning session, a few cents shy of 1:1 Reward:Risk. Then it ended up trending upward through the lunch session but has yet to reach Max's target.

$T - open

$SIRI - open

$BPTH - ($58.14) closed

$DAL - $21 closed

Watch the Recap Video
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TD Ameritrade trade confirmations from 10/22/2020

Day 5 - Fri 10.23.20

The last day of the first week ended red with a bit of a complicated stop out of $INTC. There were not many moves today in the stock market, which is typical for a Friday. Max was also very limited in buying power after purchasing 100 shares of $BPTH yesterday. Stock trades close in three business days whereas options trades close in one. These closing dates mean that Max won't get that $550 in buying power back until next Tuesday, 10/27/20. Max did end up taking a swing trade in $GILD in the lunch session after the company's COVID-19treatment of remdesivir, Veklury, was approved by the FDA and the company successfully purchased competitor Immunomedics ($IMMU).

$INTC - ($32) closed

$GILD - open

$T - open

$SIRI - open

Watch the Recap Video
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TD Ameritrade trade confirmations from 10/23/20

Week 1 Stats

Starting Capital: $500

Ending Capital (after commissions): $621.96

Percent Change: 24.4%

Wins: 5

Losses: 5

Win Rate: 50%

Avg. Win: $67.60

Avg. Loss: -$41.03

Week 2

Day 6 - Mon 10.26.20

It is a second week in the Small Account Challenge and Max started the week with a BANG! His first trade of the day raked in a whopping $95 profit in $HAS. He ended up taking a secondary trade in $HAS as a swing trade as well. Later in the morning session, cruise and airline companies broke under intraday lows as COVID-19 cases rise globally. Max traded puts in both $CCL and $DAL to capitalize on these moves. He still holds some very small, low risk swing trades from last week as well.

$HAS - $95 closed

$CCL - $13 closed

$DAL - $22 closed

$HAS (2nd) - open

$T - open

$SIRI - open

$GILD - open

Watch the Recap Video
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TD Ameritrade trade confirmations from 10/26/20

Day 7 - Tue 10.27.20

Max is on a roll this week! On Tuesday he took four trades, two were closed and two left open. His first trade, in and out, was $HOG. Max missed his initially intended entry but ended up getting in on an even better setup a few minutes later after seeing just how much momentum this stock was carrying. He rode the wave up to daily resistance where he sold for a decent $90 profit, which was a 14% gain on the account at the time. He then took trades in $EXAS, $NIO, and a second trade in $HOG to carry into the later afternoon or even tomorrow. $EXAS and $HOG (second trade) were reversal plays on these overextended charts and $NIO was a slow-cooking late-morning breakout like we have seen him trade the past few days with success. Lastly, Max took a secondary trade in $EXAS on a better reversal setup later in the afternoon.

$HOG - $90 closed

$NIO - $10 closed

$EXAS - open

$HOG (2nd) - open

$HAS (swing) - $50 closed

$EXAS - open

$T - open

$SIRI - open

$GILD - open

Watch the Recap Video
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TD Ameritrade confirmations from 10/27/20

Day 8 - Wed 10.28.20

Wednesday was a long trading session. It started off with a bang when ThinkorSwim (the charting software provided by TD Ameritrade) crashed and led to Max missing an exit on one of his swing trades ($EXAS) which he will be left to hold another day. He took his main trade of the day, $MSFT, very early in the morning but it didn't break through major support until the afternoon when volatility was low and option prices were taking a hit. He also took two very small trades in $MRO and $BBBY which were both wins. An hour before the market closed, Max exited his Harley Davidson, $HOG, swing trade for a nice profit to avoid holding it another night.

$MSFT - $64 closed

$MRO - $3 closed

$BBBY - $9 closed

$HOG (swing) - $100 closed

$GILD (swing) - ($23) closed

$EXAS - open

$T - open

$SIRI - open

Watch the Recap Video
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TD Ameritrade confirmations from 10/28/20

Day 9 - Wed 10.29.20

Max took the day off on Thursday to hike in the woods and mountains of Sedona, Arizona. The fishing orders he placed on Wednesday ended up closing shortly after the open for an overall loss on the day of -$13, however the recovered loss in $EXAS lead to the account being over $1,000. Therefore, Max reached over 100% in the $500 Small Account Challenge on day 9!

$T (swing) - ($26) closed

$EXAS (swing) - $13 closed

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TD Ameritrade confirmations from 10/29/30

Day 10 - Wed 10.30.20

With $1,000 in buying power, Max aimed to end the week on a high note without taking too much risk. He ended up finding three homerun trades out of the open in $TWTR and $AAPL for his biggest day yet in the challenge. One of these was a classic Max OBD setup and the other two were reversals to the downside as the S&P500 continued it's move down throughout the day. He let all three trades run past their targets, keeping a close eye on any pullbacks, and squeezed out huge profits. Now the account is up 150%!

$TWTR - $25 closed

$AAPL - $117 closed

$TWTR - $89 closed

$SIRI (swing) - ($5) expired

Watch the Recap Video
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TD Ameritrade confirmations from 10/30/20

Week 2 Stats

Starting Capital (after commissions): $621.96

Ending Capital (after commissions): $1,246.77

Percent Change: 100.5%

Wins: 14

Losses: 3

Win Rate: 82.4%

Avg. Win: $50.00

Avg. Loss: -$18.00

Week 3

Day 11 - Mon 11.2.20

The day before a major election in the United States, Max came into this Monday with low expectations and a sturdy mindset. He ended up finding a decent breakout trade in $NIO which ended up reversing. He liked the reversal even more in this stock and took a second trade on that setup. Max ended up holding these trades over night as $NIO hovered sideways around his original breakout entry price.

$NIO - open

$NIO (2nd) - open

Watch the Recap Video
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TD Ameritrade Confirmations from 11/2/20

Day 12 - Tue 11.3.20

The day of the election now, Max sat at his trading desk expecting a little more momentum as trades manage their portfolios to reduce risk and price in predicted election results. He started the day with a homerun trade in $PYPL that surged up to his extended profit target, which was a support level from last Friday. He then took a trade in $TWTR as it formed a breakout setup with enough bullish momentum - another profitable trade. Max's $NIO swing trades gapped up and reversed out of the open, but they eventually broke through yesterday's breakout level and hit Max's target at $35. The reversal trade closed with a big profit, but the breakout trade ended up as a small loss because the option prices took a hit overnight, despite the trade hitting his target and the stock making the move Max predicted. The loss after a change in volatility and the time it took to reach Max's target proves that the nature of options is inherently different than trading stocks and must be respected.

$PYPL- $157 closed

$TWTR - $21 closed

$NIO (swing) - ($14) closed

$NIO (2nd) (swing) - $98 closed

Watch the Recap Video
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TD Ameritrade Confirmations from 11/3/20

Day 13 - Wed 11.4.20

The day after the election was full of technical difficulties for Max. First, ThinkorSwim acted up as it sometimes does and entered Max into a canceled order a full candle after canceling the order. This error put Max into a situation where he was accidentally holding two calls of the same option in $UBER, which is against the Small Account Challenge rules - however, it wasn't intentional. Next, Max's livestream cut out - the heart of this small account challenge lies in Max being able to perform his trades live to teach other traders. The purpose of the Small Account Challenge is not for Max to make money but rather as an educational stream of content as we all watch him grow this account. Therefore, without the stream (and therefore no video), there was no point in Max continuing to trade that day. He tried trading $AMD and $NFLX while attempting to fix the livestream. Max was able to exit his $AMD trade for a decent profit but then his internet cut out. Through all of these distractions, Max ignored his trading and sorted everything out, fixing both the stream and his internet to function properly for tomorrow. By the time he signed back into ThinkorSwim, his $NFLX trades were still active because they didn't fill at his stop loss and they were at a loss much greater than his max loss of 10% (which would have been $150 with the day's starting buying power). Max decided to just hold these trades overnight to give this stock an opportunity to pullback on it's negative news as it had gotten overextended following the post-Election Day stock market rally.

$UBER - open

$UBER (error) - open

$UBER (2nd) - open

$AMD - $44 closed

$NFLX - open

Watch the Recap Video
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TD Ameritrade Confirmations from 11/4/20

Day 14 - Thu 11.5.20

Max spent Thursday closing his $UBER swings for an overall loss trying to cut his losses short after the market gapped up again. He managed to make a quick trade in Apple out of the open, a classic OBO setup. Max then takes a few more entries in Netflix as this stock still had overall bearish sentiment but was just following the bullish moves in the S&P500 and NASDAQ. At this point, Max was committed to either closing yesterday's errors as close to breakeven as possible (to continue with the Small Account Challenge where it was before the errors) or allowing the massive loss to close at a breakeven point on the account as a whole. These two paths were determined to have the best narratives for the education coming from the Small Account Challenge, either continuing as if the errors didn't really happen or allowing viewers and Inlight Trading students (who do care about earning money from their accounts and not just using the account as an educational example) to see what can happen in the stock market if you don't stick to your rules and trading structure.

$AAPL - $51 closed

$UBER (swing) - $51 closed

$UBER (error) (swing) - ($38) closed

$UBER (2nd) (swing) - ($69) closed

$NFLX - open

$NFLX (2nd) - open

$NFLX (3rd) - open

$NFLX (4th) - open

Watch the Recap Video
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TD Ameritrade Confirmations from 11/5/20

Day 15 - Fri 11.6.20

After taking one profitable trade and seeing his Netflix hold continue to act up, Max decided on the second narrative (as seen above) of starting the account challenge over and letting the Netflix trade bring the account back down to $500. Like a phoenix, this next run in the Small Account will likely be much stronger.

$EA - $84 closed

$NFLX - ($744) closed

$NFLX (2nd) - ($139) closed

$NFLX (3rd) - ($139) closed

$NFLX (4th) - ($79) closed

Watch the Recap Video
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TD Ameritrade Confirmations from 11/6/20

Week 3 Stats

Starting Capital (after commissions): $1,246.77

Ending Capital (after commissions): $510.90

Wins: 7

Losses: 7

Win Rate: 50%

Avg. Win: $72.29

Avg. Loss: w/o NFLX error: $40.33; w/ NFLX error: $174.57

Week 4

Day 16 - Mon 11.9.20

The phoenix rises and Max begins week four of the Small Account Challenge right around where he started, at $510.90 in capital. ThinkorSwim crashed again at the open with a surge in volume as the S&P500 gapped up around 5% along with many individual stocks gapping up well over 20%. This crash led to another entry error for Max, forcing him into two contracts of Lyft stock which he had canceled. One of the orders filled at a price 64% higher than the limit order Max originally attempted to enter at. This error ended up eating away Max's great profit in Pfizer. He also took a very low risk put in Carnival, which was up 36%, just in case the travel stock continued it's pullback in the morning session.

$LYFT (error) - ($59) closed

$PFE - $80 closed

$CCL - ($14) closed

Watch the Recap Video
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TD Ameritrade Confirmations from 11/9/20

Day 17 - Tue 11.10.20

Today was a great day for those in Max's livestream chat who took profits in their trades and got to learn multiple big lessons. Max took a big trade in Beyond Meat after they reported bad earnings and had a 23% gap down. Max took a classic OBD trade under lows, however, the stock barely teased his 1R level (1 Reward: 1 Risk) before a massive buy order shot the price up in a split second. This price action ate away Max's $200 profit and ended in a $172 loss. While unfortunate that Max couldn't secure a profit in this trade, multiple of his students did, and everyone in chat got to learn a massive lesson about not trading based on P/L.

$BYND - ($172) closed

Watch the Recap Video
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TD Ameritrade Confirmations from 11/10/20

Day 19 - Wed 11.11.20

No trades. Labor Day is a bank holiday - even though the stock market is open, trades from yesterday to not close today. Therefore, Max had no buying power to trade with!

Day 19 - Thu 11.12.20

Max didn't take any trades yesterday because the bank holiday for Labor Day is not a closing day, which left him with no buying power to trade with. He is trying out a different trading style in this second run at the small account challenge to see if it fits the current market conditions a bit better. This new trading style involves tighter, harder stops and quicker trades. Previously, Max had been letting trades settle around a stop level and giving them a chance to bounce and continue in his favor. The patient style worked for the first two weeks but nearly cost Max the entire account in Week 3. Today, the results of his tests were mixed. He got stopped out of both of his trades today. Delta ended up continuing against him throughout the day, so he avoided more losses there. Xpeng, however, stopped Max out by .02 and ended up bouncing off of his stop level (LOD) as support and shooting up into the lunch session. His option price ended up tripling at its peak. Max still feels good about how his trades worked out because minimizing losses is more important in a small account on a mediocre market day than wishing for luck to turn in his favor.

$XPEV - ($30) closed

$DAL - ($14) closed

Watch the Recap Video

~~~

You're all caught up! Remember to check back to this blog frequently for updates.

Glossary of Terms

#InlightSAC - reads as "Inlight Small Account Challenge"

LOD - "Low of Day," the lowest price of the day in a stock, which is usually viewed as a support level to intraday traders.

Quarterly Earnings - Statements publicizing the profits, losses, and earnings of a company reported at the end of each of the four fiscal quarters in a year.

OBO - A type of opening strategy where a stock with a big gap up pulls back within the first few candles, setting a low that can be used as a stop loss level, and then breaks over its previous high for an entry opportunity.

P/L - "Profit/Loss," how much profit or loss you have in a trade

Put - An option contract where the buyer expects the price of the underlying stock to move down.

Reward:Risk - Is a comparison of the difference between the entry price and the stop loss vs. the entry price and the profit target in a trade. R:R over 1 is best.

Stop Loss - The maximum loss level of a trade placed by the trader.

Take Action

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