The competition is getting fierce in The SteadyTrade Paper Trading Challenge!
In case you’re not up to date, here’s the current state of affairs.
Earlier in the month, during the “High on Weed Stocks” episode, hosts Tim Bohen and Stephen Johnson announced the first contestant to be eliminated.
At that time, the rules of the competition also changed. In order to keep challenging each contestant, their respective account balances were lowered to just $1,500.
Suddenly, everyone was under the PDT (pattern day trading) rule, which limits the number of day trades that can be executed per week to three per five-day rolling period. This means that every trader has to be extremely tactical in choosing their trades.
Last week’s episode offered an immersive update on Stephen Johnson’s teammates Liz and Jude, who have been learning a lot and honing their skills bigtime. This week, we’ll explore how Tim Bohen’s remaining teammates are doing:
Note: Teammate Josh was unable to join this update episode, but we’ll add an interview at a later point!
According to Cara, the self-titled “Jesus freak girl,” the first few weeks with the lowered balance have been “horrible”.
Following an initial $40 gain, she went on a losing streak and was down over $300 at one point. However, on the very day that the episode was recorded, things started to turn around for her, and her losses are now just about $50 thanks to a winning short selling opportunity.
In the episode, Cara discusses her approach to short selling a stock that has a history of a “red to green” move, and Tim offers constructive criticism to help her improve her approach. Every trader will pick up some valuable tips!
He’s made $1,115 in profits, which is, according to Tim, “insane” (in a good way)! The very first day of the new challenge, he got into a very sweet short and was up $200 right off the bat.
It was a great start that gave him lots of confidence. However, in spite of things going well overall, he has experienced his share of challenges. As he puts it, “the PDT did get me good one day”.
He explains how he identified a great setup, but how he experienced the huge and inimitable frustration of not having any trades left to execute when you’re under the PTD rule.
This adds to a greater discussion of trader survival techniques when contending with the PDT and how it kind of forces traders to be much more careful and calculated with rationing out their trades.
WTF About PDT?
How does the PDT work? Basically, it’s a limitation for day trades for traders with small accounts where they can only execute three day trades within a business week. So, if you were to make three day trades on a Monday, you can’t make more until next Monday.
In the episode, you’ll get a greater explanation of the PDT, including what it actually is, why it exists, and how you can continue to profit in spite of (and possibly even because of) it.
Tim’s Team Review
Tim is the first to admit: Had this been the same time last year, he would have expected to see some big numbers for this challenge. However, considering the constraints, he’s extremely impressed with his team’s work.
In the episode, he offers his tips for success moving forward. Will his team pull ahead of Stephen’s? Only time will tell!
To close out the episode, Tim, Cara, and Chris discuss what the rule changes should be for next month. An even lower account … or perhaps one very close to crossing over the PDT threshold?
Do you have an idea for what might be the most compelling challenge? Feel free to leave a comment on this post with your thoughts!
Got a Pressing Question?
Do you have a question for Tim or any of the contestants? Visit the “submit your audio” portion of the website to ask us anything.
Thanks for tuning in to the SteadyTrade Podcast. Stay tuned for weekly episodes featuring the hottest topics for aspiring traders!
Did you love this episode? Be sure to leave an iTunes review!
Hey! Greetings & Happy Holidays from your neighbors up north in Canada! Young trader still in training (not actually trading just yet); I really liked this video!
I learned a lot of things I didn’t know regarding the PDT rule, buying power and the difference between cash and margin accounts. I’m glad to have been listening to this podcast since it first started! Learning something new everyday; 1% better, stronger, faster as Tim likes to say!
Also picked up an interesting tip about the RED – GREEN move… taking lots of notes to say the least…
How about those weed stocks eh??? 😉 (You’re welcome…) hahaha..
P.S.: ROOTING FOR TEAM BOHEN, SORRY JEEVEN BUT TEAM BOHEN IS GONNA KICK YOUR BUTT ALL THE WAY BACK TO ENGLAND! 😀
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