Warrior Trading Blog

-$406 on $EVER | Ross’ Trade Recap


What’s up everyone? All right, so here we are Tuesday morning and I’m going to finish the day down $400. It’s a red day recap. It’s not the end of the world, $400 isn’t a big deal really at this point. I had three trades on EVER. I had one pretty nice winner, and then a small loss, and then a second slightly larger loss.

The problem was really, there just wasn’t a lot of momentum. The stock actually right now is up to $19.50. I was trading it when it was down around $17, so you already know I’m trading a stock over $10, the risk is higher. I was trading with a smaller share size. 2,200 shares was my first position. I just didn’t catch much momentum today, and made $500, and lost $500 and went into the red, whatever.

This is the market that we’re in. It’s slow. You just got to be patient and wait for those really good opportunities, and wait for the home runs, and they will come. You just have to make sure that when you hit it, it’s not getting you out of the hole. As of right now, I’m down about $350 on the month of August, so basically going sideways waiting for that one big trade. I’m going to be patient and wait for it and be back at it tomorrow hoping that we see something strong.

All right, well today is a small red day. I’m down $400 bucks. It’s kind of a continuation of just this really slow, not a lot of opportunity type of market. This morning I actually took a total of three trades, but the two winners were tiny, one was $500, the other was like $50 or no, actually I had three trades and two losers. One of the losers was $50. It was a small loss and then the other was like $900, so it just couldn’t really get on the right side.

The only stock I traded was EVER. My trades on this one, I mean, it’s a little outside my price range and it was one of the only stocks that was really moving. The first trade on it, I jumped in right here on this bull flag for a break of $17.79 looking for a move up to $18. We did get that move up to $18. I got partial fills on my second order. This was a small trade. I mean, 2200 shares is a pretty small position, so it’s nice that I made almost $600 on it, but it was a small position, so there was a small trade there.

And then I got back in, let’s see, right here on this flat top breakout. I also got back in, let’s see, I had this trade here. I’m just looking at this, yeah, so I took a couple of trades. I got in right here and stopped out for a $50 loss. I then got back in right here, and on this one it popped up to $87. I held and held. And then I stopped out on this red candle here and lost $900.

I don’t know. I mean it’s just kind of just a tricky stock. Maybe I shouldn’t have traded it all. It was above $10. I didn’t take a lot of risk on it. That’s the important thing. If I’d been able to make the $500 and be green, that’d be great. Losing $500, being down $400 on the day on it, nah, it’s not the end of the world, and I’m not going to be bent out of shape on that. I just didn’t see a lot of opportunities today.

We look at the high day momentum scanner, and really nothing on here that was moving quickly. A couple of stocks popped up for a second and then dropped. IFMK, this is a picture perfect example. Just this grinding up and then boom, just out of nowhere this big drop, so you got to be really careful.

Today, I pretty much sat on the sidelines except for these couple of trades on EVER. There was nothing else on the gap scanner. This was a gapper and we’re watching it for a break over $17 pre market. And so, it did end up making a move from $17 up towards $19. I just didn’t trade it in the right spots. I hesitated out of the gates, I jumped in here, made some money there, got back in here, I lost a little, got back in here, and lost again. It just didn’t really continue and open up the way I thought it would.

The good thing of course is that this is not surprising for me that I’m experiencing slowness in the month of August. This is par for the course. It’s very typical. However, I’m certainly hoping that things improve, that we have an occasional big green day. And so right now, I’m taking a little bit of a loss here. That’s fine. I just don’t want to hit my max loss.

My max loss is $2,000. And of course right now in this type of market, if I hit my max loss on three days this month, that’s $6,000 in losses. Excuse me. It’s just going to be harder to get that back, so I’ve got to be really disciplined about minimizing losses as much as possible, and seeing the writing on the wall. Being down $400 could I have kept trading? Could I have gotten back in this right here, or right here? I certainly could have and I didn’t.

A couple of other stocks BLRX hit the scanner. Could I have jumped in this one as soon as it hit the scanner? I could have, but I didn’t trust it. This is one of those days where it very easily could have gone from down $400 to down $1400, $3200, $6400. I just cut that real quick and said, “You know what, I’m not feeling it. As soon as I’m red, I’m done.” And that might be a good approach for the month of August. The second I go red, I just walk away from… for the day because statistically when you go red, you have a very high likelihood, if you keep trading, going deeper in the red. Yes, you can bounce back into the green and that’s what you always hope for, but you can only do that if you’re in a strong market and stocks are really moving.

Now, action on the S&P 500 today, right now, is an inside day, meaning all the price action is inside yesterday’s move. Could I be trading TVX, TVIX, UVXY, or SVXY? I certainly could. However, those are very volatile to me. Yeah sure, I could easily make $400. If I sit here for the rest of the day, I’m sure I could find $400. Right now, I could go short SVXY, or I could go along UVXY as the market is coming back down a little bit. But for me, if I do that, I’m taking risk and I could easily lose $400, $800 or $1000, and this is not a month where I can afford to take that risk.

I do not have a profit cushion on the month. In fact, I’m now red on the month by $350. Obviously, that’s not really a big deal, but the fact is we are four days into the month and I’ve got really no profit to show for it because I’ve… I have taken two days to not trade at all just sitting on the sidelines. I had only $50 of profit on Thursday and now I’ve got $400 in the red here on Tuesday, so I’ve got to be really careful.

Now you guys know from the way I trade that if we do get something that lines up, if we ended up getting a nice breakout stock in one day, I can easily make four, five, eight, $10,000, so that’ll put me in great shape on the month in just one morning. And so, what I really have here is a month with, well 2, 4, 6, 8, 10, 12, 14, 16, 18 days left. And during those 18 days, I have to be incredibly patient. I have to be incredibly disciplined and wait for [inaudible 00:08:47] quality setups.

Now I can take a couple of low risk trades along the way like I did on EVER, and if they give me $500 or $1000 of profit, that’s great. If it costs me $500 on the day, that’s okay too. That’s about the most I’m willing to risk. But for the most part, I have to sit here and be really patient while I wait for that big fish to swim by and then strike at it, take a stab at it, so that’s the name of the game and that’s really tough.

One of the things that I learned as a trader, or pretty early on was that, it’s not that hard to make money. What’s hard is keeping the money in your pocket and not giving it back, so the hard thing is not losing more than you’ve made. You can easily trade and you take trades, a bunch of trades on TVIX, a bunch of trades on UVXY, you’ll make money. But, you’ll also have losses and those losses will most likely exceed your profits, so getting into the habit of locking it up quickly, not overstaying your welcome, or being disciplined enough to sit on your hands is going to be important.

Roger posting his trades in the room, so TVIX, UVXY a couple of small trades there, which is good and it’s good to see. And then Nico posting his trades in the room there. The bulk of his profit on TVIX. The thing for me is that adapting a strategy specifically to trading something like TVIX or UVXY is a strategy you’re really only going to be actively trading a couple days out of the year because it’s only the days of the market is super volatile that these are really the most active. On your average day, they’re choppy and you’re going to get chopped up trading them.

I mean obviously this is a bull flag, a one minute micro pullback. Of course, this is only happening because the SPY is a derivative. The SPY was doing a bear flag right there, so which chart are you supposed to look at? Do you look at the TVIX or do you look at the SPY? Because you really have to be looking at the SPY because that’s what the action is based on, or you can just simply look at the VIX that would make the most sense, but you just have this challenge with trading ETFs and you just have to be careful of it.

For me at this point, what makes the most sense is just to be cautious and to trade carefully. I’ve got a really great profit cushion on the year right now and I want to coast a little bit through August. Obviously, today I’m red. That’s not what I want, but a $400 red day is not a big deal. Obviously, if I have 10 of them in a row that starts to be a little disappointing being red four grand. But, even if that did happen, $4,000 is nothing that I can’t bounce back from very quickly once I see something that’s good.

I would say that if I had five red days in a row, I would probably stop trading. I mean, I think the most red days I’ve had in a row is three so, and usually after the third ride day I’m like, okay, this is getting ridiculous. I am literally not going to buy anything unless I see perfection, a quality setup, and then maybe I’ll take a trade. I start getting really disciplined once I have a certain number of consecutive red days. But yeah, ultimately right now there is nothing that I’m super, super worried about, so we’ll just look for good quality setups, roll with the market. The ups and the downs is just part of the deal.

I’ll be back at it tomorrow. I’m hoping that we see a little bit of better action. Small caps have just been like dead, just no action, so it’s a really good time to go back and study and get ready because when we do have something that really opens up, there is a lot of traders that are hungry and they’re going to want to feed on that opportunity, so you will definitely see some exaggerated moves in the market because all that FOMO, that fear of missing out. The way it works is all of a sudden it’s like my Koi fish in my pond. They haven’t eaten for a few days, and you throw anything in the water, and they go crazy. They jumped for it.

Traders are the same way. It’s the market is driven by emotions, fear, and greed. People right now are a little fearful. They’re being a little cautious, which is to be expected. As soon as there is an opportunity that pops up that looks good, that’s going to quickly change from fear to greed. People are going to jump on it. And then that fear of missing out is also going to fuel it.

The last, I would say, big momentum stocks that we had were VS… Was it VISL? No, this one wasn’t that great. CEI, this was a little bit of a bigger one here. I think there was another one around the same week. This one went from $2 up to $10 bucks, so that was an opportunity and that’s what we’re going to wait for. We will see something like this in August. And so the only question is whether you’ll be there to capitalize on it, number one? And number two, whether your profits from it are going to be simply digging you out of the hole because you took a bunch of unnecessary losses, or if they’ll be giving you actual profit on the month?

For me, I’m down $350 on the month, so yes, I suppose the first nice trade will be digging me out a little bit, but for the most part it should be… It’ll be profit. Tomorrow, again, I would say right now a max loss should probably be closer to $500 on the day given the fact that August is statistically one of my slowest months of the year. This is a time to be cautious, be smart, trade less, not more. Trade the best, leave the rest.

That’s it for me. I’ll be back at it tomorrow. There is no reason to fight against the trend of this current market, just live to trade another day. That’s it for me. I’ll see you guys first thing tomorrow morning.

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