MDB has been very strong recently and suddenly gapped down on 6/20 after they announced a secondary stock offering. Although a stock offering does dilute shares, I took this trade based on an exaggerated market reaction (gap-down) on a strong stock. The stock did fall a little further before recovering and is now trading at $362.

MDB just went against me after putting this spread on and never recovered. But this trade highlights an important rule that I follow in my trading. i.e cutting losers at 50% loss. This rule although not as important for accounts > $50K but is critical if you want to grow a small account like I do with my $25K challenge. If you follow the 50% loss rule, it creates a statistical advantage for you. By doing this 1 winner should ideally cancel out 2 losers. This is what creates "positive expectancy" and in trading your account will never grow if you don't have positive expectancy built into your trading method.