 Welcome back to the Trade Hacker Mindset. In this episode, we are going to talk about the question, do you completely accept risk? Trading the markets can be difficult to master and seemingly just out of reach. Professional traders have a secret. Trading requires total mental and emotional control. It requires the Trade Hacker Mindset. All right, so let's jump into this discussion of completely accepting risk. As a trader, we are taking risk with every single trade, right? There is no such thing as a riskless trade. But the question is, a lot of people will say they are accepting the risk, right? I use a stop loss, I'm accepting the risk. I position size the way I do, I'm accepting the risk. But do you truly and completely accept the risk of the trades that you put on? I would say a lot of you do not. I would say there are certainly times when I don't necessarily accept the risk when I'm being honest with myself. And at the time of this recording, it's Wednesday, August 16th. The market just closed about an hour ago and this is fresh on my mind because we had a scenario today that really brought this to my attention. And what happened was, so we trade zero DTE options in SPX and we stream live every day at the end of the day. We call it Power Hour. And the way that it works is, at least the way that I trade it, is I enter with three different tranches. So we're selling premium in SPX because a lot of the times at the end of the day, the price kind of settles down and we capture that premium. The decay is the fastest of any part of the day because those options have to go to zero because they are getting ready to expire. And so the way that I do it is, I enter in three different tranches. Enter at tranche one five minutes before the top of the hour, another tranche 215, another tranche 225. And this is central time. And so what happened today was, I got into tranche one and about, within about 15 minutes, we had about a 15 point sell-off in SPX. I've got a stop. I got stopped on tranche one before I had even gotten to the point of entering tranche two. And so that's no fun, right? But I had my stop loss on, got stopped out, took the loss and I was, didn't even think twice about it, getting ready to enter tranche two. And a lot of the people in our community were in the same position. They got stopped out of tranche one. They see this little move down 10 or 15 points in SPX and they started bailing like crazy. Like not entering tranche two, not entering tranche three, even though coming into it, and that was part of their trade plan that they were gonna enter tranche one, tranche two, tranche three. Now everybody's plan was a little bit different, but there were a lot of people who bailed on tranche two and three when that was actually part of their trade plan. And because of this little sell-off, they decided not to participate in the second two. So the question is why? Well, obviously the answer when you get down to it is fear, right? They didn't want to take any more of the loss. So going back to the topic of this conversation, they were not truly completely accepting risk, okay? And so, but why is that? Is it because they were position-sized too big? Was it because they just got nervous because of this little sell-off? They thought it was just too volatile? Regardless, they didn't follow their plan. And so I hear people will say all the time when I talk about this topic that, yeah, I accept the risk, but the reality is if you are bailing in the last minute before you were supposed to enter a trade, you have not completely accepted the risk. Now, if you can imagine what happened with tranche two and three is basically we booked near max profit. In my trade plan, I exit the trades five minutes before the end of the day, five minutes before the bell, and they were pretty much as good as you can get as far as the exits go. So not only did I make up the loss in tranche one, but I ended up booking, I think, a netted over $6,000 based on my winnings of tranche two, tranche three, and loss on tranche one, and netted out over $6,000. So this isn't about I told you so. This isn't about, oh, look, you should have done what I did. Look at me, you did the wrong thing, I did the right thing. It's not about that at all. Because the reality is even if tranche two and tranche three would have been losers, it still would have been the right thing to do if it was part of your trading plan. It's about accepting the risk and following the trades that you plan on doing because you have completely accepted the risk. Because here's the deeper issue, okay? If tranche two and tranche three would not have been winners like they were, if they would have been losers and you failed to enter them because of this little sell-off and you got nervous and fearful and didn't accept the risk, if they would have been losers, that would have validated your rule-breaking, okay? If they would have lost, you would have said, yep, see, I told you so, I knew I shouldn't have entered, I'm glad I didn't. Yes, I broke my rules, but look at me now, I avoided those two losses. But here's the problem with it. Now you've opened up the door, you've opened up the window to breaking your rules. And because you validated that, next time, there's some little, something happens in the market. Could be a little sell-off like we saw today, could be a big move up, could be a, I don't know, could be anything. It could be, you know, the stars look a little bit different in the sky. But the reality is, is that if you have the plan and if you've accepted the risk, then you need to execute on that plan. Because if you go down that road of opening that window to breaking rules based on whatever it might be, then what happens is, if you start going down a losing streak and you start, you know, having a loser, a loser, a losing day after a losing day, but you're breaking your rules and you're using this discretionary basis of when you're gonna execute your plan and when you're not and all this stuff, then what happens is you don't know how to get yourself out of it. You know, it's kind of like a baseball player who starts going through a hitting slump, okay? Maybe it's just one little thing that they need to change. Maybe they don't need to change everything. Maybe they're hitting the ball hard every time it just happens to go right to a fielder, right? There's nothing that they need to change. The reality is not every trade is going to be a winner, right, just like a baseball player is not going to bat a thousand, right? That's why baseball players who bat 300 go to the Hall of Fame is because it comes down to can you accept losing? Can you accept the risk? And if you can't, then you may need to, the only thing that you may need to look at is your position size. You know, if you're not able to accept the risk of going through a drawdown with the current position size that you're using, it might just come down to you were trading too big. You know, a lot of the zero DTE strategies that we trade are very back test driven, right? We're entering based on specific times and using specific strategies based on the consistency of the performance of how they've performed in the past. And the amazing thing about the tools that we have, about Option Omega, the back testing software is that they include a trade log where you can go into that trade log and see and what I try to do is I try to feel every trade. You know, I try to feel every losing streak as I'm going through those past trades and then ask myself, do I accept that? If that happens to me in real trading, will I accept that? And if the answer is no, then you should A, not be trading that strategy or B, reducing your position size. You know, in one of the ways you might change your plan or change the strategies, you might create a filter in that test to see, okay, well, if this happens, then I won't take the trade or if this happens, I will take the trade. But when you change your strategy in mid trade or right before you're getting ready to make the trade, that's never going to end well. It's not going to end, you may miss out on a loser here and there. You also may miss out on a winner like a lot of people did today, but long-term, the psychological damage that you're doing to yourself, if you're truly trying to become a professional or a full-time trader, it will never end well if that's the way that you go about your trading. And oh, don't I know this from my own personal experience. This is, I don't want you to think this is me kind of standing up on a pedestal, talking down to you all like, oh, you do this and I'm doing it right, you're doing it wrong. It's not about that at all. It's about A, my only agenda is to help as many people as I can become consistently profitable traders. And it's about sharing my own negative experiences so that you can learn from those so you don't have to make all the same mistakes that I did. Trading is such a mental game. It is such a mental game. And what happened today, and because it's top of mind, I wanted to record this while I had all these things floating around in my head. It's such a mental game. And those who can master themselves are the ones that end up being the most successful. Obviously, I mean, that's what this podcast is all about. The trade hacker mindset, focusing on the mental side of it. You know, it's not the back test. It's not the strategy. It's not the, it's not a lot. It's not the indicators. It's not, it's not any of that. It's how well can you focus and control yourself that's going to make the biggest difference. So hope this was helpful. If you guys have any questions, always feel free to post in the community. Hit me up, I'd love to hear your thoughts. Take care, see you on the next episode.