How to Not Blowup Trading 0DTE
Blowing up is bad. Do not blow up.
The authors of this post are not registered with the SEC or any government agency or authority that permits us to give financial advice of any kind. That said we are regrettably all too experienced with blowing up accounts trading options and may have some tips that prevent the same from happening to you. Some say it's a necessary and painful lesson. It was for us. The market will humble the shit out of you. It's okay to get humbled. Don't blow up.
Introduction:
A lot of this stuff is theoretical psychological poetical whatever type of speak.
We repeat ourselves 10x over and over again.
To be honest, it feels great writing this because we are always trying to improve on execution.
It is our biased low-iq not to be trust opinion that anyone can be successful with the RIGD system if they can master the mental side of 0DTE.
The mental side of 0DTE is really only two things:
1.) be patient 2.) don't be stupid
If this sounds easy to you, then you have never traded 0DTE or are complete idiot.
There is nothing harder than being patient and not being stupid when you are trading a volatile financial derivate that can make hundreds or thousands of dollars in a few minutes and lose all of them the next.
The mental side of 0DTE is everything.
You miss an alert and it was the one.
It was the trade you were looking for.
You're on tilt before you even make or lose anything.
You take a trade and your stop loss hit but you didn't sell...
What happens next determine's whether you'll be successful in this or not.
How do you manage the primal instinct to trade anything and everything to get back what you lost or what should have been yours?
If you make a bad stock trade you have time.
If you marry the wrong person you can get a goomar.
If you take a bad 0DTE trade and are not prepared mentally, you will be turbo fk'd spiral out and blow up.
The following is our attempt to convey the lessons of thousands of trades and tens of thousands of dollars made and dollars lost.
It is by no means complete but should serve as a solid mental baseline to get you going.
We're on your side every step of the way comrade.
EVERY SINGLE TRADE: FEAR DOWN 🔻 HOPE UP ⬆
This was a small passage in Remininsces of a Stock Operator which is actually one of the trading books that's actually worth a damn.
Every time you trade an alert no matter how good the PS, score, whatever - your mental framework should be how much money am I going to lose.
This of course is the opposite of human psychology.
You get the alert and that pea brain of y(ours) is thinking...
This is the perfect alert!
This is the perfect setup!
I am going to make so much money!
Once you get locked into the frame of how much money you are going to make, you forget about how much money you stand to lose if it does not go your way.
Once you are locked into that frame it becomes terribly difficult to get out of it.
Locking into the "profit" idea before the trade even gets going is how you hold on for too long, double down and get destroyed.
Every single trade:
FEAR IT GOES DOWN
HOPE IT GOES UP
We want to enter every single trade with a defensive frame to start.
What is the maximum I am willing to risk on this?
You can use a percentage or dollar value.
Whatever it is, stick to it.
There will be kill candles and your stop loss will be hit. This happens. It sucks.
Do you chase or wait for a better entry?
Both can work.
Remember patience and don't be stupid.
Market buying 100 contracts after your stop loss is hit is very stupid (very guilty here).
Patiently waiting for a kill candle to catch the move is not.
Once the trade starts moving in our direction, do we flip from our fearful defensive posture to let's fk-ing gooooooo yolo max gains let's hit 100% on this mf-er.
How we fear and hope:
As extreme degenerates the following will likely not apply to you. Risk and reward is between the 0DTE trader and her god. Ours says the big wins make up for the losses.
Fear is a 20% loss at full size (100+ contracts).
That is the maximum we are prepared to lose on every single intelligent trade we enter. They are not always intelligent.
Hope is when our profit is at 20%. When we reach this level we will move our stop loss from -20% to +10%. The +10% protects us if the position nukes while providing enough cushion (sometimes) to stop a kill candle from liquidating the position.
We HOPE we will hit 60%+ and offload the majority of the position there.
Risking 2 for 6 requires a 25% win-rate to breakeven.
25% is the only breakeven number that works with our brain.
This is a very easy website to do the breakeven math if you are unable to.
NO ALERT, NO TRUST, NO TRADE
Successful 0DTE trading has very simple rules that are extremely difficult to follow.
This part should be the easiest.
❌ No alert
❌ No trust
❌ No trade
But if you're reading this now you know it's probably the hardest part.
Remember... patience and don't be stupid.
Patience is waiting for an alert.
Stupid is trading without one.
Here's what that looks like for a regular 0DTE degen
We all know and we've all been there.
Sometimes we feel very special and important. To the market we are nothing barely a byte. Whatever you are seeing, everyone is seeing.
Whatever you are feeling, everyone is feeling.
Whatever you are thinking, everyone is thinking.
In 0DTE there is no gain without pain. It can be your pain and someone else's gain. Or your gain and their pain.
Don't be stupid.
Do be patient.
Moves can and will continue to happen without option flow or a RIGD alert.
Do you need to catch every single one?
It sucks knowing you could have had 100%.
But can you... get over it?
Can you catch the next one?
More often than not the move up or move down without a RIGD alert is a fakeout. It is pain. Buy their pain and take their gain.
Nothing personal homie it's only business.
Patience and non-stupidity.
Always Lose Small, Sometimes Win Big
The obsession with fear should be matched with the obsession with against losing. Not losing is better than winning. Losing leads to tilt. Tilt means no patience. Tilt means stupid. Stupid equals blowup.
A big win early and you will become confident which will lead to a bad decision. The bad decision will lead to tilt, tilt leads to stupid and stupid equals blowup.
In time a 0DTE trader can begin to find the profit targets she likes to hit. When the leave it on to run and when they hit it and quit it to take the money and run.
How much time depends on the person.
There is nothing more mentally challenging and financially rewarding than trading 0DTE.
Mind body and soul are put to the test every single day.
Can you be patient?
Can you not be stupid?
Most people decide this is not for them and give up. That's okay. This is not meant for everyone.
We want to lose small (or make a little) on the alerts that go 30-40%.
We want to win BIG on the straight up perfect trades.
Successful 0DTE traders know that win rate is not as important as win size. The big wins should be big. The losses should always be small.
Here we look at the flow from 11/16/23.
We lose small on the first SPY BOMB and win big on the QQQ BOMB.
Fear the loss and hope for the win.
Patience.
Don't be stupid.
Blowup is when your trading account balance reaches zero.
Your trading account for 0DTE should probably be a fraction of your total assets.
0DTE is extremely high risk, you can feel invincible on top of the world one second and then a kill candle comes out from nowhere and boom you're destroyed.
If you are new to options trading and / or 0DTE, then it's probably best you avoid using this website or if you really desire to learn (it's a free country and your money do whatever you want) start with a papertrading account.
Tradestation, Webull and others all offer papertrading (simulated).
Learning the RIGD 0DTE system will take time!
From what we've seen from users, it takes about 3 months for new traders to understand the RIGD system and begin to learn to manage their risk. RIGD is designed to be easy and put traders into situations where they're trading with, not against Wall Street.
Do not expect to come in and be consistent right away. Confidence leads to cockiness leads to blowup. Trust us we know.
Start with a cash account
With a cash account you can only trade the amount of money settled from the previous day. Not having access to your full balance and being able to "send it" is one way to stop blowing up.
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