Warrior Trading Blog

A Bad $AAPL -$92 | Mike’s Trade Recap

Mike_9.12

Hey, what’s up guys? Well, unfortunately I’m ending the day just slightly in the red after an unfortunate situation this morning where some news hit the market and caused a big reaction in a bunch of stocks across the board. And I was trading Apple and unfortunately the stock moved the opposite way from the trade that I was in. So I gave back my early profits and I went slightly into the red. So whenever I go from a green to a red day, I know that at that point it’s time to shut it down. And my next best opportunity is first thing tomorrow. But I want to talk about a few things in today’s trade, especially the good trade that we had this morning on Apple as well as how to handle a situation such as what happened today. So let’s take a few minutes and break it down in today’s recap.

All right, good morning, guys. A little bit of a frustrating morning here. We had a really nice day going out of the open, traded some Apple to the short side, got a really nice fade, was up around 300 bucks, and we try to take it again a little bit later into the morning, which we’ll talk about here shortly. And we had this reaction take place to some news in the market and just totally ate up the profits and put us slightly into the red. So something we’ll talk about, how to manage these types of situations. But one of those situations that is completely unpredictable and just had to deal with it in the moment. But that’s going to put us in the red 92, I was down over 300 because I had about 300 shares when we tried it again, and it moved two points against me in a matter of a few seconds and I just marketed out.

But then I got back short and we were able to make some of that up. So not too terrible of a day, just a small step back from yesterday. But again, that is completely an unavoidable situation, it’s going to happen. This happened to me probably more times than I could count on one hand, just one of those things you have to learn how to deal with in the market.

But, anyway, 92, not a big deal. It’s just the frustrating part is this move. And while there’s nothing I could’ve done about that, it’s just out of my control. It’s just unfortunate that had such a nice trade going. We tried to take another trade to add to our profits, which started to look really good. And all of a sudden we had this huge knee jerk reaction that caused us to have to close it up for the day.

So anyway, let’s talk about this. So what we were talking about Apple early this morning was you’re starting to break into this big window. If we look at the daily chart here, you’ll see big window from this 223 up to 233.50, the recent highs. This is the pivot that we were looking for it to potentially hold and move. But if it didn’t move, we are looking for it to break back below that and pull down into the most recent pocket, which is going to be from 223 down to essentially the low of yesterday, which was around 217.70s. So a lot of room there to move either way. So what happened here this morning is that you had the pre-market highs up here and I was looking at that for either the stock to hold above that and continue into the 10 point pocket or reject off of that, come back in below VWAP and then take the short look for the breakdown.

So since we got the rejection off the pre-market high and we started to fail that we came back in below VWAP, I got short, we had a nice move. We had a nice move, right to 223. We covered down as it hit 223, had a little bit of the position left, and I covered as we came back to the breakeven. But that was the good trade of the day. Really clean, really good volume, nice clean move. And then we got hit by this one over here. So, looking at the fast timeframe, which you’ll see is that you have the reaction off the pre-market high and you pull in below VWAP. As soon as I saw this move come back to VWAP right here and fail, right in this little, little portion right here. This is what it’s all about. These small consolidation pivots that take place. As soon as I saw that happen and we were failing, I got short. All right. I got short right in through here 224.80s is where I got filled, and then first flushed down, took some off there, and took some more off as we broke lows again, took more off as we hit 223, and then we started to come back up here and I exited the rest as we came back to break even.

So good trade there. Was able to rack up a few hundred bucks on that one. And then I was watching this for VWAP fade. What we had here is I had a speed line. I had this nice well-identified speed line we were reacting to on the way up. So I was simply waiting for it to break down below that and put in a pivot. And what happened was, as we started to break, all right, there’s the break, we started to pivot below the speed line and we started to come below VWAP. Right here is where I took the short, because we had everything we needed. We broke the uptrend, the short term uptrend that was being respected very well. We broke VWAP, I got short. As we were coming through VWAP 224.30s, and was looking for the rollover potentially back towards 223 and beyond, because it was breaking the uptrend. The market looked like it was also going to roll back over, so we had some alignments and had a pretty low risk, at the time, trade here. So we wanted to give it a shot to see if we could add another couple hundred bucks to the profit for the day.

And then literally probably in less than 24 seconds, because this is a 24 second chart, so less than 24 seconds after I entered this happened. And we’re up over 226 and I was trying to figure out what was going on here and then I quickly glanced at the market and saw the market was spiking. So then I knew that this was a reactionary or a knee jerk reaction move to what the market was doing. And this is where I want to talk about how to handle these types of situations. So right here I saw this big popup, I was trying to figure out what was going on in these few candles, so I ended up getting out around 225.50 or so. And again, that put me in the hole a little bit.

But then I started to try to decipher what was going on. And once I knew that it was a market reaction, the stock was reacting to the market, it was not a specific piece of news out on the stock itself, it was on the market. And when that happens, you can typically expect a reverse, a pull back. It’s not going to continue to keep spiking because it’s not stock specific. So I was out of my position, I was back in the red, and then I decided to take a short on this because I knew that, again, this was reacting to the market and it’s likely that we’re going to see just a correction on this because it’s not a stock specific move. So I got short up near 226 here, took a few hundred shares up here, then it turned over and I was able to get out on this move right here, down to 225. So I got about a point out of that. It put me back not nearly as much as I was in the red. So I ended up down 92. And I decided not to trade it again because it was kind of choppy. It’s just not really doing much now.

But, again, this type of stuff will happen. Sometimes it will be stock specific news. Sometimes it’ll be market related. The most important thing is to not panic. Figure out what’s going on. Is this stock specific, or is it because of the market? If it’s because the market, I’m much more comfortable taking a position to try to reverse it back down to equilibrium, which is going to be somewhere where it took off from or VWAP. And that’s what I tried to do here. We didn’t get the full move, but I got enough to pull me out of the hole quite a bit. And all in all it’s not a bad day, it’s $90.

It’s more frustrating that we had this just completely unexpected move and that stole my profits. It’s not that I made a bad trade or was revenge trading or something of that sort or trading past my back’s loss. It was just a situation where it was just completely out of my control, and there was nothing I could do about it. And that’s the most frustrating part about it. It’s not that I was trading bad, because if that was the case, then it wouldn’t be that much of an issue. So, anyway, that’s the recap for today guys, and we’ll get back at it first thing tomorrow morning.

Hey, everyone. Thanks for watching the videos. I’ll continue to make sure that all of the watch list as well as the recaps are available to all of you. Make sure you subscribe to keep up to date on what’s hot and what’s not in the market.