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My Dear Friend, Loss Has Returned! But Brought Gifts!: Lessons for Growing a Small Options Trading Account

Growing a small trading account often involves navigating losses, and today’s SPY trading session was a humbling reminder of that reality with four 10% losses but a redeeming 20% gain. 

Despite ending the day in the red, I gained invaluable lessons in execution that will shape my future trades. 

My goal with this post is to offer transparency on how to scale a small account, using my session as an example, and share actionable tips for small-account traders.

Economic News: U.S. Economic Update

Today, U.S. factory orders for April 2025 increased by 0.7%, slightly above expectations of 0.6%, signaling modest growth in manufacturing demand. 

Meanwhile, job openings in the JOLTS report for April 2025 fell to 8.1 million, below forecasts of 8.3 million, reflecting a cooling labor market that may have influenced SPY’s choppy price action.

Today’s SPY Trading Session: A Tough Day with a Valuable Lesson

SPY opened near the previous day’s close, surged upward, but quickly retraced, forming a clear tail bar candle that indicated strong sellers and a potential reaction zone at the high. 

After some consolidation, the 15-minute range formed with a high of $593.26 and a low of $592.05, supported by a rising 20 EMA and two touches confirming the reaction zone at 593.26.

I waited for a reaction zone breakout, entering SPY 6/3 594 calls at $0.93 (Entry 1), but was stopped out at $0.83 for a 10% loss. With a third touch confirming the zone, I tried again at $0.87 (Entry 2), only to be stopped out at $0.77—another 10% loss. 

A third attempt at $0.92 (Entry 3) after breaking the previous candle’s high resulted in a stop-out at $0.82, marking my third 10% loss. Frustration grew, but I resisted the temptation to engage in revenge trading or switch to puts, given the bullish 20 EMA.

A fourth entry at $0.94 (Entry 4) on a color change at the reaction zone showed promise—I reached a 10% unrealized gain—but I held too long and was stopped out at another 10% loss. 

Exceeding my two-trade daily limit, I knew I was pushing it, but I saw an opportunity. 

Finally, a 15-minute breakout/reaction zone breakout retest with a clear color change presented itself. I entered at $0.91 (Entry 5), adjusted my stop as the price climbed, and exited at $1.09 for a 20% gain, though the price later hit my target of 595, where I could have achieved a +100% gain with better execution and trade management.

Key Observations:

  • The reaction zone at 593.26 was a battleground, requiring patience for a confirmed retest.
  • Early entries on breakouts led to losses; waiting for a retest with a color change yielded a gain.
  • Adjusting stops protected my final trade, but better execution could have maximized profits.

Post-Trade Reflection: Refining Execution for Growth

This session was a rollercoaster—four 10% losses followed by a 20% gain, leaving me in the red but with a monumental lesson. 

I should have focused solely on break events followed by retests with a color change confirmation, avoiding premature breakout plays. 

Moving forward, I’ll refine my execution by waiting for these setups and consider selling one contract early while letting the second run to targets like 595, balancing risk and reward for my small account.

Growing a Small Account: Steps to Scale Through Losses

Losses are part of trading, but they can teach you how to grow a small account if you learn from them. Here’s how I’m refining my approach, with tips for other small-account traders:
  • Wait for Break and Retest Events: Only enter after a break event, retest, and color change, as my final trade showed with a 20% gain.
  • Stick to Trade Limits: Avoid exceeding your daily trade allotment (e.g., two trades) to prevent emotional decisions.
  • Adjust Stops Strategically: Move stops to secure profits, as I did on my last trade, but consider selling one contract early to lock in gains.
  • Learn from Losses: Use losses to refine your system—my four 10% losses taught me to prioritize confirmed setups over breakouts.

The Power of Transparency: Lessons Are Gifts

Transparency means sharing the tough days—today’s net loss after a 20% gain highlights the challenges of small-account trading. 

But the lessons learned are gifts: by refining my execution, I’m building a stronger foundation for future profits, showing small-account traders that growth comes through persistence and learning.

Key Takeaways for Aspiring Traders

Today’s session taught me the value of patience and execution in small-account trading. Here are actionable takeaways:
  • Focus on Retests: Wait for 15-minute breakouts and retests with a color change to confirm entries.
  • Limit Daily Trades: Stick to your trade allotment to maintain discipline.
  • Balance Risk and Reward: Sell one contract early, let the other run to targets like 595.
  • Embrace Lessons: Use losses to refine your system for future growth.

Video Review: Learning from Recorded Sessions

I recorded today’s session to analyze my decisions in real time. Watch the video below to see the SPY price action, my multiple entries, and the final retest trade.

Reviewing recordings helps you:
  • Spot Premature Entries: See where I entered too early on breakouts.
  • Learn from Retests: Understand why the final retest worked better.
  • Refine Execution: Build a more systematic approach for future trades.
Check out the video to apply these lessons to your trading!

Conclusion

Today’s SPY trading session brought losses but also gifts—my 20% gain after four 10% losses taught me to refine my execution for my small account. 

Small-account traders, stay patient, learn from setbacks, and focus on confirmed setups to grow steadily.

How do you handle losses with a small account? Share your tips in the comments or connect with me on X for more trading insights!

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