Warrior Trading Blog

+$3k Before a Bear Raid Hit The Market! | Ross’ Trade Recap

blog_ross_recap_08_09

What’s up everyone? All right, so here we are finishing Thursday morning up $3,000. Two back to back green days. I’m still digging my way out of the hole little by little.

 

I was down as much as $12,000 on the month at the very lows, and now I’m sitting down right about 5,000 or maybe, I think it’s around 5,000. So that’s good. My goal for the end of the week was hopefully to be all the way out of the hole. That’s not going to happen unless I make 5,000 tomorrow. It’s possible but I’m not going to set that as my expectation. So, I’ll probably be all the way out of the hole by early next week and then I can focus on making August a green month.

Really, the bar is set pretty low since historically August is one of my worst months of the year. And last year I only made about $5,000 in the month of August. So, if I even make 5,000, I’ve actually done better than last year. So the bar is set low. Having said that, in order for me to hit my $600,000 profit target for the year, I really needed to make closer to $50,000 this month. I’m definitely behind that goal. But, even if I finish the year with maybe only 500,000, that’s still really, really good. And you never know what the rest of the year is going to hold. I mean, we might have an incredible month of October where I make $120,000 and just like that, it totally makes up for the month of August.

So I’m not going to beat myself up or get too stressed out about this kind of goal that I’ve set for myself. If I do that, it could almost do me more harm than good. Yes, I have goals. They’re aggressive. Hopefully I’ll hit them. Just the way it goes, and we were talking about this in one of the recaps the other day, on the Tour de France, you don’t have the same time for every leg. If you’re going through the mountains, obviously, your pace is going to be a lot slower than if you’re going downhill or you’re on a flat. It’s the same with trading. If you’re in a really hard month and difficult market, things are choppy, you’re not going to be able to make as much as in a month where everything is working, momentum is hot and stocks are going crazy.

So it’s just all about at the end of the day are you making progress? And I’m competitive with myself so I’m already doing much better than I was last year at this time. I’m still right around 350, 360,000 on the year and I finished last year with around 380,000. So if I make another $30,000, I’ll have made more than I made all of last year and I’ll probably hit that market in September. So anything I make in October, November and December is just extra profit versus 2017.

That’s kind of where we’re at right now and we’ll break down the two trades for today. Today’s midday market recap.

All right everyone. So we’re going to break down the trades from today. Another green day up $3085.73. I only took two trades this morning. I did not overtrade. Yesterday, I might’ve overtraded a little bit. I took a lot of trades yesterday. But today, only two trades. So that’s good for commissions and I’m happy with that. So a $3,300 winner and a $260 loser gives me a net of $3085 on the day. That is $8,000 in the last three days of trading. So I’m digging myself out of the hole. But you know what I was quick to do today, I was quick to shut it down because I recognized that we were starting to see an invasion of the bears. And here’s something that’s really important guys, don’t feed the bears, don’t do it. Don’t feed the bears. When you see them coming in, get away, leave, walk away. I walked away fast today.

Basically, what we started to see was this a shift where the very first stock that I traded a CTXR, this was good. I mean it was a nice move, but it rolled over hard. It did not hold up well at all. So, on this one, I jumped in basically right out of the gates. There was some news on it, you can see that it was a gapper, it was moving higher. And so I jumped in it at $2.50. Now, when you’re looking at this on the one minute time frame, it’s almost hard to tell exactly where the right entry would have been. So, let me sort of break this down.

Now we’ve had traders that ask me, they’re like, Ross, why are you showing us 10 second charts? Are you trading on a 10 second chart? And the answer is no. I don’t use a 10 second chart when I’m trading. I only use it during the day, kind of like during these recaps to show you what I was seeing because when I look at this chart, I can tell there was a one minute micro pullback right here. But a lot of you guys might not be able to realize that. So I want to break down this one minute candle, these two minutes of time to show you what I was seeing there. So that’s why I go down to a 10 second chart. I could go to a 30 second or something like that but 10 seconds seems better.

So, this is what I was seeing. This right here as we zoom in is a bull flag, right there. All right. So for all of you guys that are in our classes, we’re talking about the bull flag. A couple of green candle surging up, couple candles of pullback. First candle to make a new high. Right there is the bull flag resolving. So on this one, I had my order up and ready to go to jump in as soon as I saw the first candle to make a new high and I got in with 3000 shares at 44 and 3000 shares at 60, which gave me an average of $2.51.

So I’m in this at $2.51 with 6,000 shares. It then squeezes up to a high of 78 and does another momentary pull back. See that little pull back there. That for me was an opportunity to add. So I added 5,000 shares at 2.81 and then I sold at 3.03, 3.02. I tried to add back on a scalp and for some reason my order, I don’t know, it didn’t get filled, I’m not sure what happened there. Let’s see, where is that? Yeah, I don’t know what happened there or why some of these say, I must’ve been putting out too many orders and crossing my orders or something. But anyways, I stopped out of the rest of it as it came back down to 70 and then the last 300 shares at 2.14.

So the fact that it’s sold off this hard for me was obviously not good at all. That concerned me and it disappointed me. So, at that point I was like, okay guys, this is really similar to what we saw yesterday on IDRA. Yesterday on IDRA, I jump in this stock at 6.50 right here and it pops up to a high of 6.65 and then it drops down here and I lost $3,000 on it. It was not clean at all.

So when I saw that on CTRX, I was kind of disappointed. I realized that we weren’t seeing very, wasn’t CTRX, it was CTXR. When I saw this move here, I was just like, all right, this is disappointing, it’s not holding up very well. This may be an indicator that it’s time to slow down a little bit. So, I made with 11,000 shares, 30 cents per share. Excuse me. So $3300, which is great. So I was happy with that. That’s a good trade.

Now, we started watching the scanners. And the stock that we were watching this morning, the most closely was KBSF. KBSF was gapping up more than 50% this morning. That is a huge gap but I didn’t trade it well. Let’s look at the chart at KBSF and you’ll see why. As soon as the bell rang, this thing sold off. Had a high pre-market of $9 and it’s currently at $5. It’s down almost 50% versus the high. So we’d already talked about this pre-market, but for those of you that didn’t see it, we’ll talk about it now. So, KBSF, it’s a leading gapper. Typically, I’d be all over this one, right? This is a stock I would typically buy but I didn’t trade it today. I looked at the news this morning and I saw that there was no headline right here. So I was like, okay, that’s a little strange. I need to do a little due diligence here and figure out why is this stock up as much as it is.

So I go over to sec.gov and I’ll pull this up for you guys right now so we can do this together. So I go to sec.gov. I see this nice lady on her telephone and like, all right, that’s cool. So I go down to company filings right here. I search KBSF. KBSF, and I want to include ownership. So I search again with ownership highlighted and I see a 13D filing. So I click it in a new tab and I see, I was saying Allianz earlier today because Allianz is a life insurance company. I think this is actually pronounced Alliance, but in any case.

I saw this company name and I was like, oh, that’s familiar. Why is that familiar? I’m trying to think for a second. And so I’m like, huh, that seems familiar, so let me Google them. I Google the company and let’s see. Alliance trading. Let’s see, or Alliance trading and here it is right here. I scroll down. Now remember, this is another company, kind like SureTrader that allows you to trade with no PDT restrictions. You don’t have any PDT levels with them. And they are in Jamaica. So Alliance Investment Management Limited. So I see this and I’m like, okay, all right, now I see what’s going on.

So this looks very, very similar to me to what we were seeing. Am I pronouncing it right? Okay, there we go. So anyways, this looks very familiar to me to what we were seeing a couple of weeks ago on AWX. So I look at this and I see, okay, they’ve bought common stock right here and it shows that they bought I believe 195,000 shares. That’s a pretty big position. And remember guys, this is what happened on AWX. We looked at AWX, the thing that’s different about AWX is that AWX was squeezing up for like four days in a row and then on this day right here, after hours, we got the headline that MintBroker International had bought, it was like two million shares or something like that. So that was on AWX. We can go back to that, we can just search that one for a second.

So, AWX. So let’s see. We’ll include search again. Again, you guys have the benefit of not having to do all this stuff because I kind of do a lot of this research in advance. So we see the company filing here. Primary Doc. This one’s available as an actual doc. 1.9 million shares bought my MintBroker. MintBroker is a familiar name of course because that’s the company that owns SureTrader right here. You can see at the bottom MintBroker. They give you this like error or whatever, this IP thing, but you could see MintBroker International.

All right, we saw them alert or announced the form 3 filing, they’d taken this big position right here. The next day it hits a high of $20 and then sells off. So a lot of traders were like this is a short, it’s a total short. Mint ended up selling their position over the next couple of days. So they’re all out now.

They did something really similar on GBR. GBR was strong and then all of a sudden we have this form 3 filing, they’d taken this big position, it was like 700,000 shares. It squeezes up and then the next day they sold and it comes back down or maybe two days later. So, when I saw this on KBSF, what I knew is that both on AWX and on GBR, once this filing was out, it was like the stock drops. I guess it’s because, well, because GBR, GBR sold off so much and MTS sell was another one that also sold off so much. So now people are like, okay, this is the pattern. Once that filing comes out, the stock drops. People start to short it and so it happened really bad with AWX and look what happened with KBSF.

People are like, yup, this looks like the same thing. And look at that drop, that is so bad. It’s so ugly. So, because I saw the news, early on, I was like, nope, I don’t trust this. This is going to be really kind of too risky. And the reality is even if I wanted to trade it, I was like, you know what, I don’t know what that company is planning on doing with the stock. They might hold it for weeks or months. MintBroker, they were selling the stock a few days later but we don’t know, this company might hold the stock for, we honestly have no, we have no idea, you can only speculate.

So, until we see another filing for KBSF we don’t know whether or not they sold it today or they’re still holding it. But right here, I was like, initially, I’m interested if it breaks over 8.90. You know what, maybe this thing will go, maybe it will. So, I have a long bias above 8.90 and basically below that pullback a short bias. It ended up dropping pre-market. The bell rings and it sells off hard. It does a bear flag right there and then goes lower. And of course I didn’t have shares available to short it. Probably nobody did. Only a small handful of traders did. So, congrats for those of you that took the short on those bear flags. I’m sure those were easy trades and nice winners. Yeah, just wasn’t something I could do.

So it’s kind of a bummer when something is such an obvious short on that bear flag and on that bear flag, shorting at 6.50. I mean, it’s a nice drop there down to 6.12. But, you know, it is what it is. That’s one of the challenges with being a short seller is you’re limited to availability of shares to borrow. So, that’s the reason I didn’t trade KBSF. We’ll find out I guess in the next few weeks or whatever what’s going to happen with it, if we’ll see more filings out or if that company is going to hold their shares for a while. I don’t know. It doesn’t list the price that they got in at, at least I didn’t see it listed. Actually, let me just look at this.

I just wanted to see if this had a date on it. So that was 8.6 percent of the float. I just want to see if there was a, so this was July second. So that’s actually really interesting. This was signed on July second. So what that tells us is that they got in way back here. I don’t even really see how, honestly, that’s confusing because I don’t see any volume for that type of position on those days, but maybe it was accumulated over a period of a week or something. I really don’t know, I’m not even sure. Yeah. Kind of just interesting. Who knows what their plan is.

You know, it’s not uncommon that you’ve seen companies or individuals take majority stakes of a company. And one of the reasons, like I said this pre-market, if I wanted Warrior Trading to go public, one of the ways that you could do it is by buying a publicly traded company at a really low price. You buy it as low as you could and then you do this merger where you merge the two companies and then you do a name change and just basically through all that paperwork, Warrior Trading is now a publicly traded company.

Generally when people do that, they do it on like penny stocks, like HMNY type of stock because it’s so much cheaper. Obviously there’s no reason to do it on a company that actually still owns like offices and is doing stuff. So you never know. That could have been a motivation or could be a plan, but it’s hard to say, it really depends on the price. What was the thing? It was 195,000 shares. It’s only eight percent, that’s not enough to take over the company. So, I don’t know, it’s hard to say. But anyways, it’s all speculation, don’t really know what’s going to happen there. You just trade the patterns and the patterns here on this one were no good. But understanding the fundamental catalyst here was important because I think it did help you potentially avoid jumping into something that really was pretty weak.

So anyway, so that was the trade there. And then IDSA, that one hits the scanners. I jumped in it 3,000 shares, took small size. It pops up to a high, I got in right here, pops up to a high of 69 and immediately drops back down to 47. So I stopped out. It was doing a little bit of a pullback kind of flag pattern there. It was a five minute flag, but it didn’t hold up so I stopped out. Only 3000 shares, lost eight cents or nine cents, 260 bucks, not a big deal. If it had worked, I would have added 3000 over 75. I might’ve added another 6,000 over 90 and then gotten myself to 12,000 shares, but not until I’m already up 15, 20, 30 cents a share. And then at that point I’m in the driver’s seat.

All right. That’s about it for me today. Green day, $3,000. I’m up 8,000 in the last three days. So that feels good. Momentum is coming back a little bit for me. Yesterday certainly could have been a better day, but had a couple of bigger losses. In any case, digging my way out of the hole. I’m still down about 5,000 on the month. I was hoping to be able to recover most of those losses here by the end of the first week. Not quite there yet, so, it’s probably going to continue into next week trying to dig myself out. That’s all right. I seem to like a challenge. So, that’s my goal right now, get myself out of the hole, get myself into the green. If I can finish the month up 20,000 bucks, $25,000, I’d be happy with that. That’d be pretty nice. If I can do a little bit better, that’d be great but 25,000 would be a good start.

Anyways, we’ll just see what the market’s willing to give us. Trade the market we’re in, not the market you want to be in. That’s what we’ll say again and again. So, that’s it for me today and we’ll be back at it first thing tomorrow morning. All of the Warrior Pro students, join me over in the classes at noontime. So in about 20 minutes, we’ll get started here with the rest of the classes. All right, so I’ll see you guys in class.

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