Warrior Trading Blog

Another No Trade Day | Ross’ Trade Recap


What’s up everyone? All right, so here we are back Monday morning. No trades, kind of disappointing. I took Friday off, I looked through gap scanner, I didn’t see anything that was worth trading. Given that it was the first Friday of August and, Thursday, I only made $47, I was like, “Just don’t even do it. It’s not worth it.” I didn’t trade Friday, and I didn’t really miss a whole lot. Seemed like there was a little bit of action. Then, today, again no trades. I came into the office, showed up and just nothing that fit within my strategy.

A couple of higher price names, overall market is down big. Some ETFs were moving. The thing is I don’t really adapt a strategy specific for trading the market when it’s either up or down more than 500 points, because it happens so infrequently. To create a strategy specific for trading those days, you just wouldn’t be able to utilize it very often. A combination, the market being down big and not seeing a lot in small caps, I just stepped aside, stayed in cash. That’s risk management. Back at it first thing tomorrow morning.

All right everyone. We’ll do a very short Midday Market Recap here today. No trades for me. Market is down right now 500 points at Dow Jones. S&P 500 was gapping down and selling off, coming back down towards the 200 moving average. This has been the type of action we’ve seen recently of consolidating near the highs, then sharp rollover near the highs, sharp rollover, sharp rollover. This is nothing incredibly unusual in the context of the current market we’ve been in.

For me, being a long biased trader, today, we didn’t happen to have a lot of opportunities. That maybe in part because of what was going on with the overall market, but in part just the fact that the last week or so has been slow for momentum trading of small cap stocks between a dollar and $10. In fact, I didn’t trade at all on Friday. I didn’t see anything good on the gap scanner and figured it just wasn’t worth my time. No trades again today. The only stock actually that hit the low float, high day momentum scanner was DGLY this morning.

You could have jumped on it at 65 for a quick scalp up to 81. I left it alone. It’s a stock that originally had a parabolic move after the shootings in Ferguson in, I think, 2014. Since then, it occasionally pops up on speculation after shootings and things like that. They make body cameras that police officers wear. I haven’t seen it really do anything super exciting in recent months or even years, so I just wasn’t that interested.

[ALLK 00:03:13], this one was on the scanners quite a bit as you can see here. I see your comment there on the risk on it. For me, it’s one of these things where to take a trade on a 66, $68 stock on a day where I’m basically break even on the month right now. I took a trade on Thursday, the first day of the month, but I only made $47 and that was my only trade of the day. I didn’t trade Friday. So far, I haven’t traded today. It’s like being basically break even on the month, taking a trade on something like ALLK feels just unnecessarily risky. It’s far outside my strategy, so no trades on it.

However, we did talk about the break of this pivot right here at 64, 6350 and then 64 leading to a break of the premarket highs. That ended up working out. I know some of you guys did take trades on it. I saw John made about $1,000 trading this stock. That’s great for those that were comfortable with it and it fit within your risk tolerance. For me, not having a profit cushion on the day, the week or the month, I didn’t feel like it was a good decision to take the trade. I sat on the sidelines. That’s, again, another day of exercising that muscle of discipline, sticking with the rules, knowing that when I stick with the rules, over the long-term, I do really well.

Now, of course, I have periods where things are slow and sticking with the rules can sometimes make me feel like I’m missing opportunities and stuff like that. That’s all short-term. That’s in the context of over a couple of weeks or maybe, at the most, a full month. When you’re talking about over the course of three months, six months, years, that’s when following rules is going to really pay off. Yeah, ALLK, I definitely see the opportunity there. Little bit of FOMO, I suppose, because it did end up opening up quite a bit more than I expected all the way up to a high of just about $70, which is awesome. At the end of the day, it’s how much would I have really made on it?

I’m not going to take 10,000 shares of a stock like that. I don’t even know if I would have wanted to take 1,000 shares. Given the fact that my biggest position size would have been maybe 500 shares, the amount of money I would have made is kind of negligible. The amount of risk I would have been taking, probably just unnecessary. I’m at a point where losing 500 here, losing 1,000 there, those losses are going to add up. It really makes more sense just to sort of sit on the sidelines and be more conservative until we start to see better follow through in the market.

What I think about August is that this’ll be probably a month where I won’t have a lot of trades. I’ll probably take a few trades here and there and try to be aggressive on them if I see something that looks good, but I’m really not thinking it’s going to be a good time to really be pushing it. If we look at the trader view reports here for the month of July, so if I do my calendar view and zooming in the month of July, this is how the month looked.

The first period here, this was up $26,000 right in this stretch here, which is pretty awesome. That’s 10,000 there, that’s 10,000 there. Then, this got me up to 25 or 26,000, so a really nice, hot streak of several consecutive days. Then, gave back 7,000 here and another 4,000 here. A setback here from up 26 to up only 16,000 and then a green day. Then, another good size red day. Very disappointing. Then, from there, kind of just flattened out on the month. If we look at my P&L for the month of July, let’s see, this is how it is. It peaked out up here around 26. I finished the month up only $13,600, which makes it possibly, I guess, my second smallest month of the year.

For me, I’m still in the mindset of I need to get back up to here. That was my all-time high of the year being up here. I’m $12,000 below that level. I need to make back 12,000 just to get back to here, the high of July. Then, I need to start making some fresh ground, fresh progress. I’m glad that I’ve been sort of steady here. If I start to lose money in August, then I’d be really putting even more distance between me and this mark that I need to get to. That’s kind of mentally what I’m working with here. July was really strong to start, but then dipped down. For August, I just want to kind of make some progress knowing that August statistically is not my best time of the year.

If I go back a couple of years here and we look at this by days and times, you’ll see that August and September for me have been bad. September, kind of like March of this year, because of having some big losses, because I was getting impatient. What I’m going through right now in August, by September, you can start to get impatient and start to take out that impatience on the market. I’m going to be really mindful of that instinct and really try not to let myself do that this year, just to embrace patience. If this is a slow year for me in this stretch, it’s slow and you know what? All things considered, when I started trading, it was because I wanted the freedom of not having to have a nine to five job. I’m sitting up over $270,000 on the year.

I don’t have a nine to five job, I trade for two hours a day. Even though I’d love to be able to make more than I made last year, which was 500,000, if I come up shy, I come up shy. It doesn’t really matter. What’s the difference between 400 and 500 or 500 and 600? At a certain point, I’ve already achieved my goal of being able to live life on my own terms. It’s easy to get fixated on, at least for me, because I’m very competitive, fixated on these sort of goals. They actually don’t make a really big difference. They’re not going to change my life really whatsoever, whether I hit it or I come up short.

Getting bent out of shape and getting so frustrated that I’m not tracking for it… Because I need to be making $2,000 every single day to be tracking for the goal. Every day that I’m short on that, I can feel disappointed. Of course, every day that I’m well above that is great. You really just feel frustrated on the days you come up below it. It’s kind of like in terms of emotional playing field, if every day you’re above your goal, you’re like, “Well yeah, that’s great. I achieved what I had to do.” You don’t really have a peak and emotional uplift. You’re just like, “All right,” that’s just flat. That’s doing my job.

Then, every day you’re below goal, you’re deflated because you didn’t achieve your target. Then, you’re just at a continuum of just going down and then back to flat, back to flat. I think that that’s unnecessary added stress. I’m just trying to give myself a little pep talk here for the month of August, settle in for what I expect will be a slow month, likely, of course, with a couple of great opportunities scattered unpredictably throughout the month. I will be ready to capitalize on them when we see them.

If we don’t see a lot of them and I just have to be patient, I’m going to try to be really patient. Yeah, looking at my accuracy here for the month of July, accuracy was actually pretty solid. The problem was my average winners were tiny, because we just didn’t have a lot of home run trades. Average losers, only a little bit bigger than average. My average winners were about… Well, this is significantly smaller than average. If I look at my average trades for the month of July or the whole year, July dragged it down quite a bit. Let’s go back a little further.

I’m right around one to one here, 900 to 900, so having average losers in July be over 1,000, average losses were a little higher. Having average winners be only 600, well, that was significantly lower. That’s kind of what threw things off in July, despite the fact that accuracy was pretty solid. It was just I didn’t have follow through on the wins. We’ll see what we can do here for the month of August. It’s a really good time just to be studying, exercising that muscle of self-control and discipline.

If you can be green during some of the most difficult months of the year, you’re setting a really good foundation for not just the rest of the year, but actually your career as a trader. This is a good time to test yourself a little bit and see if you can follow the rules. That’s it for me. I will see you guys back at it first thing tomorrow morning. Hopefully tomorrow, we’ll be able to actually take a couple of trades. All right? That’s the goal, and I’ll see you guys in the morning.

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