Warrior Trading Blog

-$8k Red Day Recap – Learn From My Trading Mistakes

red day recap

-$8k Red Day Recap – Learn From My Trading Mistakes

 

 

All right, guys. So we’ll do a midday market recap, go over my trades from today. Total of three trades. One winner and two losers. And unfortunately, I got a pretty good size loss on BDR. So, I’ll go over the trades from today. You can see what I did.

Obviously, today is a little bit of a disappointing day, because it’s a bit of a setback. The trade on BDR was a overly aggressive trade, trying to get myself out of the hole because I really wanted to hold on to my 11-day hot streak and continue it into a 12th day. I saw something popping up. I jumped on it. I got aggressive. I thought it was going to squeeze into a second circuit breaker halt over 1.29 into 1.30. I was up 2,500 bucks on it, didn’t take the profit, ended up turning into a pretty big red trade. So, obviously, that was disappointing, but leading up to that, the day was already a little bit on the rough side.

So, first trade of the day today was on OCUL, and today’s a day where there really wasn’t anything on my watch list that I liked. There wasn’t anything that looked really, really good. And that’s always a good sign to just kind of slow down. Now my first trade ended up being on OCUL, which is a stock that was gapping down 23%, so it’s actually a gap down reversal setup, which is not the type of setup that I really like to trade. I usually avoid these, but there was literally nothing else on my watch list. So, I saw it pop up here from 5.60 to 5.99, and I thought, “Okay, this clearly has a lot of range. I’ll wait for the first one-minute pullback.” And that’s what I did.

I waited for the first one-minute pullback, and I added right here at 1.80 … What was it? 1.85 or 1.84. It pops up to a high of 1.89, and what I wanted on that candle was that it would go right back to high of day, which is 1.99. So the fact that it only went up to 1.90, 1.89 made me feel hesitant, and I decided to just throw in the towel on that, stopped out with about a penny of profit for 20 bucks. So, no love on that one.

Next one was VSTM, and this is another one that was popping up on my scanner. Now, I missed this five-minute setup right here with an entry at 4.08. The first five-minute candle will make a new high. It pops up to a high of 4.35, and so what I decided to do was buy on, again, the one-minute pullback. Of course, on this one, this is what ended up happening. One-minute pullback, I’m in the 10,000 shares, pops from 1.30 up to a high of 1.39, and then, it drops down here, all the way to 4.02.

So, on that one, I got stopped out. It was a false breakout. Not necessarily uncommon when you see a stock moving up without news, but we’ve been in a pretty strong market where stocks without news have given us some great opportunities. So, that put me down 1,100 bucks, and at that point, I was like, “All right. I’m down thousand bucks.” What, and I got into this mindset of what can I trade that will give me a $1,200 trade, so I can get myself back to green, right? Back to break even, or even profitable on the day.

So, I just sort of was looking for opportunities, and I saw some action on fast, didn’t feel like I could really trust it, higher-priced stock. I knew I was getting a little more aggressive to even think about trading these, but was really trying to get myself back to green on the day. And being down a thousand bucks, although it actually doesn’t really matter, felt like it mattered because it was the end of my 11-day green streak.

So then, I saw a BDR pop up. It popped up and got halted at 96 cents, and I thought, “Okay, well, this looks a lot like some of the others that we’ve traded recently that have gone from about 80 cents up to round a dollar fifty.” So, when it resumed, it resumed at 1.03, and it starts surging up. And, as it squeezed up, I started adding at 1.10, 1.15, and then you can see here it squeezed all the way up to 1.27, high was 1.29. I decided to add 1.26, 1.27 because I thought, at that point, we were gonna hit another circuit breaker.

And I’m actually, I’m surprised that it didn’t, but I thought it would go up 10%, which it did, and it would hit a circuit breaker, it would halt, and then it would resume higher, the same as it resumed higher right here. That it would resume higher, and then, from my 1.17 average, I’d be able to start selling up in this area, 1.45, 1.50. That was my target, was 1.50. So, 1.50 target with 22,500 shares at 1.17 is 17, 27, 37, 47. It’s about $7,000 profit, potentially. That’s what I was looking for.

Now, obviously, there’s really no reason for me to try to get a $7,000 winner when I was only down a thousand bucks. I think I was just being aggressive because I was in the red, and I was trying to position myself where if I was up at least 15 cents, it would be a decent-sized win. So what ended up happening is it hit 1.29, and then, on this one-minute candle, it dropped all the way down to 1.06, and instantly I’m down 10 cents. And, I kinda was like, “All right. Well, let’s give this a second.”

One-minute candle will make a new high. This one-minute candle pops up to 1.15, and then it drops down to 98 cents. It’s halted on another circuit breaker, going down. This time it resumes lower, and it consolidates around 90, 91. I thought, “Well, I’ll give it a second,” ended up stopping out on this candle here as it dropped to 84.

So, a $7,000 loss, which is kind of silly, like that’s a much bigger loss, that’s actually the biggest loss that I’ve had in probably two months. So, what was the chain of events that brought me to that? It was the frustration that I was in the red on VSTM and that I wanted to not end the day red because of this kinda arbitrary hot streak, well, the consecutive days that I’ve been on. And so I got aggressive. I thought it was gonna squeeze into a circuit breaker haul, and if it had, I think this would’ve been a very different situation. It probably would’ve been a five to six, maybe seven thousand dollar winner, but it ended up getting rejected, dropping back down, and so I got stopped out.

And this is, to a certain extent, the way trading is. You have days where you get overly aggressive, and you give back profit. I can’t say that this will never happen to me again. I mean, that would be very unrealistic. It would be unrealistic for any trader to say, “I’ll never have a big red day again,” because they happen. It’s just part of trading. Trading is, you’re trading against the market, but you’re also trading against this collective trader mentality. There’s other traders on the other side.

Today’s the day where I suppose anyone who shorted BDR did really well. Next week, you may see a stock just like this that goes to five dollars. And those people who today are green are gonna be the ones that are losing 10, 15 thousand dollars. I saw a trader not that long ago take a $75,000 loss on a setup like this that just continued higher.

So today’s a day where I’m on the wrong side of the market, and I gave back a little bit of profit. Obviously, disappointing, and I think what’s most disappointing is that I probably should have been okay and content with just being down a thousand bucks because realistically, a thousand bucks really doesn’t matter much to me. Being down a thousand is not a big deal. It wasn’t the being down a thousand that was upsetting me. It was the, it meant my 11-day hot streak was over, and I really didn’t want that. I just wasn’t okay with that.

So, I guess it’s just a reminder how these little things can get in your head about being on a consecutive hot streak, consecutive winners, things like that, and how that can change the way you approach the market. So, going into the rest of the week, I don’t know if I’ll trade Thursday and Friday. I’ll see how I feel. Thursdays and Fridays are not my best days of the month, of the week. Generally, I do much better on Mondays and Tuesdays. So, the fact that I’ve now dug myself this hole to try to get out on a Thursday and Friday is not, that’s not likely that that’s gonna happen. My next best opportunity for a really good trade is probably gonna be next week, Monday or Tuesday.

So, the thing right now is I don’t really have a hard set of rules that I’m applying to my trading, like in the past, I’ve had, I’ve been very strict about share stocks. Right now I don’t have a max share size. I suppose I have … 20 cent stops, so maybe I should’ve stopped out at 97. Of course, that’s right when it got halted.

So, today’s not really a day where I specifically broke hard-set, written rules. It was more a day where I … I allowed myself to trade when I was frustrated, or I allowed myself to trade when I was slightly impaired by this goal of trying to have July be a month of no red days. That was what I was trying to do. So obviously, that’s not gonna happen because of today. And even if I end up being green every other day of the month, it’s still not a month where I have no red days because of today. So … I don’t know. You know that’s …

In any case, I’ll step back for the rest of the day today, probably go for a bike ride, maybe try to do 15 or 20 miles, and just, let today settle in. This is just like I said, it’s part of trading. I can remind myself that I’m still the trader who took 583 bucks and turned it into what is now a hundred and thirty-something thousand dollars, and that’s great, but, and if I need to boost my confidence, I can say those things. But the reality is today is a little bit of a disappointing day, and it’s obviously self-inflicted.

And this is the hard thing about trading is that, I think I probably beat myself more than other people I know in other careers. There’s just this feeling of frustration when you have a bad day or when you have a bad streak, if you have five or six bad days in a row. So, my goal tomorrow, if I trade, will not be to make a thousand dollars, or to make eight thousand dollars. My goal will just be to have a green day and just to put one day between me and this red day. And that’ll be the same for Friday. Just take one trade, try to have a green day, and that’ll be that.

We had some fantastic momentum for the last 11 days, but today, OCUL just totally no follow-through. VSTM, no follow-through. And now, of course, BDR, no follow-through. So, today we just saw a little bit of a shift in momentum. So, maybe there are short sellers who have been getting squeezed for the last 11 days, got their day of redemption. And so, good for them for getting that, and we’ll get it back. We’ll be back on our side soon enough.

So, I’m still waiting for that stock that goes totally parabolic, and, even in the last 10 or 11 days, we haven’t had that. We’ve had a lot of these stocks break out of this 80-cent range, which I was talking about earlier today, and I thought this was, I mean this did break out of 80 cents. It went all the way up to, whatever, a dollar twenty-nine, but it didn’t hold that level at all. Whereas some of these other ones have broken out of this range like YUMA, and they really make this burst. This is what I thought was gonna happen.

We break out of one-dollar range, a dollar fifty was my target. And so, you can see why it was logical that I might have had that target, based on what we’ve seen other stocks do in this same price range. Today just was the day I happened to be more aggressive, and I happened to also be wrong. And I think that is also a challenge because if you don’t size evenly on every single trade you take, then you can position yourself to end up having this one trade, like this one right here today, become disproportionally weighted in your average losses. Even though my success rate is still probably 90% for the last two and a half weeks or whatever, one loss that’s really big, because your share size was too high, can become really detrimental.

So, it’s just part of the deal with trading, and today’s the day that I got a little frustrated, but I’ll bounce back. And, the good news is that my account is still growing, still moving up, so it’s just part of that upward grind. You look at the SPY. It’s up and then a little bit of down, up and a little bit of down.

And, so if you get caught up in focusing entirely on one red day, like this red day, then things can seem very dire, right? When you’re kind of zoomed into this perspective, it’s like, “Oh my God. Today’s this huge red day. It’s all that I see.” And it’s easy to feel that way because we’re right in the middle of it. But, you step back, you look at the bigger picture, and you realize, “Yes. I’m right here on a red day, but this is where I came from.” So, that’s one of the things that can give you some confidence in your strategy, in yourself, and in, I suppose, the overall market.

Green days and red days, we all have them. Today’s a red day for me. I know some of you guys did pretty well. I know John, today, was down 900 bucks. I was down a thousand when he said he was calling it quits, and he said, “Yeah. I’m gonna call it quits.” And I thought, “Yeah. I don’t think I’m going to because I really don’t wanna close the day red.” And that was stupid because being down a thousand bucks is not a big deal, obviously, compared to being down eight grand, which is the result of being stubborn and so …

Anyways, that’s it for today. Again, I know days like today may not be easy to see. They’re not the easiest to talk about. They’re not fun days to talk about, but one of the things that I wanted to do this year was to share with you guys every single step of the journey. So, that began with $583, and it’s grown up to a hundred and thirty thousand, and it’ll continue to grow. But within this amazing journey, there have certainly been some bumps along the way, and they’re opportunities for you guys to learn from them. They’re opportunities for me to learn from them, too.

But, like I said, this is not my first $8,000 losing day of the year. I’ve had several of them, and there will probably be more, but there’s also been many 10,000, 15,000, and 20,000 dollar winning days. So, those will be the fun days to talk about, and today are the ones that are paying are dues for the bragging rights on those next big green days.

So, anyways, that’s it for today. I’m gonna get some fresh air, go for a bike ride, and I will see you all first thing tomorrow morning.

All right. See you guys in the morning.

Oh, hey. I didn’t see you there. Well, I was just working on the dream board for my next home run trade. Hopefully, it comes soon. Until then, make sure you subscribe to get email alerts anytime I go live or upload new videos. Until then, happy surfing.