Aggressive trading and a $1,400,000 profit – John Carter

Finance-Focused Summary

John Carter describes himself as an aggressive, primarily options trader who also trades futures. He generally holds positions for two days to two weeks and emphasizes patience, simple setups, planned exits, and sizing positions according to the opportunity.

Trading Approach and Risk Management

• Choose a trading style that fits your personality. Carter prefers swing trading over frequent intraday trading. He avoids five-minute charts and focuses mainly on 30-minute, hourly, daily, and weekly charts.
• Wait rather than chase. He says missed moves are inevitable and chasing them can lead to emotional decisions and leave a trader poorly positioned for the next opportunity. Being flat is a valid position; he advises against trading simply to relieve boredom.
• Focus on a small number of setups and markets. Carter favors a narrow watchlist and argues that too much information and too many indicators can distract from execution.
• Plan exits as carefully as entries. He uses stop-losses, price targets, expected moves implied by options pricing, and Fibonacci extensions. For example, if a stock has a priced-in $8 move over two weeks and reaches that move, he would consider exiting rather than assuming it will continue.
• For a position targeting Fibonacci extensions, he described taking most risk off at the 1.272 extension—for example, selling 7 of 10 S&P futures contracts—and moving the stop on the remaining position to breakeven. He gave the 1.618 extension as a possible further target.
• Add to a position only when it is working and the setup remains compelling. Carter favors concentrating on strong opportunities rather than continually opening small positions, while acknowledging that aggressive sizing increases equity-curve volatility.
• He described a goal of finding roughly one or two particularly strong trading days per month on which he might take a larger-than-usual position, then returning to a more patient approach.

Options and Portfolio Construction

• Carter says long options have a defined maximum loss: the premium paid. He contrasts this with futures, where adverse price moves may force a trader out of a position.
• For beginners, his basic directional approach is to use in-the-money calls for bullish views and in-the-money puts for bearish views. He cautions against choosing options merely because they are cheap: far out-of-the-money options may expire worthless.
• He recommends learning credit spreads as a relatively straightforward options strategy, while saying elaborate structures such as butterflies are unnecessary for his style.
• Options can be structured for different risk and return profiles. Carter says higher-probability strategies, such as selling an out-of-the-money credit spread, may produce a smoother equity curve but limit potential gains. One example he gave was a Tesla put credit spread with an estimated 90% chance of profit; this was his illustration, not a verified outcome.
• He described “funding” a trade by buying a longer-dated option and selling shorter-dated options against it—for example, a three-month GLD call paired with 30-day calls—or using credit spreads to offset the cost of long calls. These are more complex strategies and still carry risk.
• Carter says he generally prefers three or four larger positions over 18 small ones, arguing for focus when a strong setup appears. This is his personal approach, not a general diversification rule.

Technical Analysis and Testing

• Carter’s primary setup is the “squeeze”: Bollinger Bands contract inside Keltner Channels, which he interprets as a period of volatility compression that may precede a larger move. He said an uptrend with this setup had an 87% chance of continuing, as presented in the interview.
• He emphasizes price action first and treats indicators as mathematical interpretations of price, not independent signals. He suggests using no more than three indicators and keeping a setup simple enough to explain to a 12-year-old.
• To assess a setup, he recommends taking 25 trades in a row and reviewing the results rather than drawing conclusions from a handful of trades. He notes that wins and losses can cluster even when a strategy has a positive probability of success.
• He warns against staring at a chart or adding indicators until a desired trade appears, as this can encourage confirmation bias.

Tesla Trade Discussed

The interview references Carter’s large Tesla (TSLA) trade from around January 14–16, 2014. The host introduces it as a trade involving about $1.4 million, although the conversation focuses on its setup and interim profit swings rather than clearly stating the final realized profit.

• Carter said TSLA had fallen about $10, then reversed and was up about $5. He checked that short interest was around 40%, which he considered unusually high. He said levels above 20% could make a surprise bullish catalyst more powerful as short sellers hedge or cover.
• He believed there was little chart resistance between roughly $150 and $170. The catalyst was described uncertainly—possibly an earnings-related announcement.
• He initially bought 100 call options at $6 each, then added as the trade moved in his favor, reaching about 1,000 calls and also buying shares.
• In a roughly $1.5 million account, the position’s unrealized profit rose from an initial daily loss of about $100,000 to around $300,000, fell back to roughly $200,000, then recovered. Carter stepped away from the screen during the pullback; later, the gain reached about $600,000.
• He sold half near the close and held the other half overnight. The next morning, TSLA was up another 10 points.
• Carter attributed the move partly to heavy short interest and a reversal that caught bearish traders on the wrong side. He said large moves often occur when many traders are forced to exit losing positions.

Performance, Experience, and Market Context

• Carter said his trading development involved three boom-and-bust cycles: at times turning about $10,000 into $100,000–$120,000 while taking excessive position risk, then giving back much of the gains.
• He said it took him about eight years to become more consistent. Reading Mark Douglas’s The Disciplined Trader and Trading in the Zone helped him adopt a probabilistic mindset, accept that any trade can lose, and focus on risk rather than needing to be right.
• He suggested that a trader with appropriate tools might shorten the learning process to around two years, while stressing that experience across different market conditions matters.
• He cautioned that excessive risk can lead to large losses, while excessive caution may prevent a trader from earning enough to meet their goals. As an example, he said that when he earned about $100,000 a year in corporate work, he estimated needing roughly $8,500 per month from trading to replace that income.
• At the time of the interview, near the end of Q1 2016, Carter said January’s market weakness had initially kept him out of the decline; the Dow had been falling about 300 points a day. He described bearish sentiment in January and bullish signals in February, while cautioning against loading up on longs after a strong rally.
• He said he started a publicly visible model account with approximately $180,000–$185,000, trading mainly options with some futures, and wanted to grow it to $1 million by year-end. The subtitles garble the account’s then-current value and claimed percentage return, so those figures cannot be reliably reconciled.

Instruments and Markets Mentioned

• Stocks: Tesla (TSLA), Apple (AAPL), Netflix (NFLX), Google/Alphabet, Amazon, Facebook/Meta, and Intel (INTC).
• ETFs and commodities: GLD, gold, and oil.
• Futures: E-mini S&P (ES), mini Nasdaq, yen futures, and gold futures.
• Currencies: Australian dollar and U.S. dollar. Carter recounted buying Australian dollars at roughly US$1 per A$1 before a 2008 trip and finding they had fallen to about half that value by October.
• Options strategies and instruments: Calls, puts, put credit spreads, call credit spreads, and diagonal trades.

Disclosures and Cautions

No explicit “not financial advice” disclaimer appears in the subtitles. Carter’s examples and probability estimates are his own descriptions, not assurances of future results. The episode also includes promotional material for Technician, its sponsor.

Presenters and Sources Mentioned

• Presenter/host: Aaron Field (the subtitles also render his name as “Aaron Firefield” or “Erin”).
• Guest: John Carter.
• Other sources cited: Mark Douglas and his books The Disciplined Trader and Trading in the Zone; Warren Buffett (to whom a remark about diversification is attributed); Kirk Duplesis and the Option Alpha podcast.
• Sponsor/platform mentioned: Technician. Carter also directs listeners to Simpler Trading/Simpler Options.