J. Stone Harridge @foundationsoftr

@LizAnnSonders Translation: only about 1 in 3 Nasdaq stocks is above its 50-day average, while the index still looks fine. A few giants are carrying everything. That works until one of them stumbles.

@EliteOptions2 Spot on; there is one more in the bank. I fear it could be a big one though.. But we need it out of our system before we can move on..

@LizAnnSonders The gap between the two lines is the story. Getting laid off is still rare, getting rehired is the slow part. A labor market cooling from the inside. This won’t show up in the headline until it does.

Tape feels neutral with a nervous lean. P/C 1.02, $VIX near 20, $SPY sitting just under its 50-day. Dealers are short gamma on $SPY, so hedging flows tend to amplify moves rather than dampen them. And the calendar is stacked: Fed Wed, PCE and GDP Thu, midterms Nov 3, jobs Nov 6.

Start of 2020 to end of 2021: oil +22%. USO, the ETF a lot of people bought to "buy the dip" in the crash: −47%. Turns out an oil fund doesn't own oil. It owns futures, and rolling those through a crash is brutal. $USO #CrudeOil #Futures

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Same strategy. Same win rate. Same trades. One group risks 1% per trade, the other 5%. The typical 5% trader ended up with more money. But more than half of them watched their account get cut in half along the way. Position size isn’t a detail. It’s the strategy.

@spylieu Normally, 0DTEs are not great business. Research shows (Beckmeyer, Branger & Gayda, Univ. of Münster, 2023) retail traders lost about $20M over 10 months (05/22 – 02/23). What breaks the bank is trade fees. After fees the loss was about $70M. @spylieu hopefully alters those odds.

@spylieu Curious about the other side of the +$85k. What was the biggest drawdown along the way? With 0DTE that number usually tells me more than the P&L.

@spylieu 0/3

@Team2Trading Clean setup. Where do you usually put your stop when the PDH retest fails? And how do your average wins compare to your losses? Win rate alone always feels like half the story to me.

@LizAnnSonders The wars in energy-exposed parts of the world, and world leaders adding to the uncertainty. De-escalation not happening, on the contrary. Tech being on a space rocket for some time now. One statement, and all could be reversed on Monday.

@RayDalio I used to be shortsighted as hell. Overtrading. In and out, on to the next one. Until I took a time-out, looked at what actually matters. I landed on position sizing, exit strategy. Don't matter if you'e right, you need to get out before the market puts you in the tumble drier..)

Most expensive options lesson I know: Dead right on the direction after earnings, still lose. The stock moves your way, but the option was priced for an even bigger move. IV collapses overnight, as does your profit. Before earnings, the question isn’t up or down. It’s how far.

@EliteOptions2 Exactly. And that numbness is earned. It only shows up once position size is small enough that no single trade can hurt you. Size too big and every click is a heart rate spike. Boring is the goal. Sizing is how you get there.