Warrior Trading Blog

Another Tough Day -$14k | Ross’ Trade Recap


All right, everyone. So we’re going to do midday market recap here. Go over the trades from this morning. Another tough day. We’ve been in, I mean I’ve been a bit of a rut here the last, the last week and two days. This being the seventh day of pretty difficult trading, just have not been seeing the continuation and the follow through that we had at the beginning of the month, and what worked at the beginning of the month has not worked in the last couple of weeks.

And today’s trade is another perfect example of it. In a hot market, this would’ve easily been a 30, $40,000 winning trade. And the market that we’re in right now, this trade where I went from up 10,000 on it. I was up 10 grand, unrealized to break even, and then instead of just walk away flat, I tried to recoup the 10 that I’d given up and went down 14. Actually, this is so similar to what I did two weeks ago.

Man, I can’t think of the name of the stock off the top of my head, but it was a stock that squeezed up and I made about 10,000 on the ramp, on the move up. And then at the top I added back, it gave back the eight and then took another trade and dropped down about 11 grand or so on the day. Super, super similar.

It’s a little disappointing to see yourself make some of the same mistakes again and again. You know, I would say the hardest part about being a trader is no doubt the sort of emotional and behavioral components, the actual act of trading, buying, pressing buy buttons, sell buttons. That’s all easy stuff. When the market’s strong, anything you buy works. But when the market’s not strong, which is, you know, for us, for small cap traders the last two weeks, it’s not been strong.

If you were trading a long side, it can be really difficult to keep that presence of mind and slow down and not continue to be as aggressive as you were or would be in a strong market. So let’s see. So basically this morning I had nothing on the watch list. I had no expectations of any of the gapper’s working out at all. XBIO wasn’t even on my watch list. I wasn’t even looking at it, but the bell rings and right here at about 9:34 it spikes up to 10.72, it hit one of my scanners and I was like, “Whoa, okay. That’s crazy.” I noticed ait the moment after the spike spreads were huge. It died down back to about $8 and this is what I was watching, the first five minute candle to make a new high. I just sort of had that spot of 10.72 in my mind that, you know, if it came back up it might break that level.

And so I was watching it, and right here you can see volume came in and it got halted. I jumped in at about 9.28 for the first five minute candle to make a new high while the entry would have been at nine and I chased the entry and then I added at 9.81 going into the halt. So at this point, my average is like 9.55 or something like that. Going into the halt. It resumes. It squeezes up to a high of 11.77 and I doubled my position as it squeezed up.

So I’m adding, so now my new cost basis is like, I don’t know, 10, 10.50 or something. It went from 9.50 to 10.50, and of course at that time I could’ve just sold and taken my profit in that spike. I mean this was already a win, but I was looking at this on the daily chart and I saw this gap from 11.88 right here all the way up to 13.80. And so I thought that if this thing broke 11.88 we would have no resistance until 13.80 and this might be the one that goes parabolic.

And so instead of taking the base hit when I had it, I started to, set my sights on a potential Grand Slam. You know, it’s like the bases are load, and it’s that moment where you could just get a base head and and try to get a runner to come in and instead you try to be a hero. You try to go for the big trade and no doubt, if this had gone up to 13 it would have been a 30 $40,000 winner. Absolutely. It hit a high of the high was 12.30 and I actually added, I added more at 12.20 and 12.30 at the almost at the high of day. I did that because I thought it was going to go into a third halt. We had first halt, second halt and I thought this was going to be a stock that would give us a third halt.

It’s a recent reverse split. The floats about a million shares. It’s a former runner with a history of making big moves and with this daily chart, this beaten up chart as it starts to curl. Yesterday was green, Friday was green, today, big green. It just to me looked like the type that could make a big move and honestly I think in a hot market this probably would have squeezed up to 13.80. We probably would have gotten that move, but in the market that we’re in right now, traders have been a little more cautious. Short sellers have been a little more aggressive and what happened was this resumed from the halt, it squeezed up for a second, it then hesitated and started to roll over and I hit the sell button, control X, control X. I was like, get out. And I was able to get partial fills right up here, locked up some profit. It drops down, gets halted going down.

I’m still holding a partial position through the halt going down. It resumes and is now trading right in this area. It drops too low of 9.37 I don’t like to panic out while stocks are selling. So I was like, I’ll give this a second to bounce back up and it bounces back up here to 10.36 and then right here it actually looks like it’s to me a potentially gonna make a move back up towards 11. So this is where I decided, you know, this was that moment of truth where I could’ve either just bailed on my position or add back to it. And for whatever reason at that moment, and this is sort of the blessing and the curse of I think the way I trade, I can have such tunnel vision that I can usually be really good on my hot keys.

Really pretty good reading level two, time and sales trading on the one minute, five minute chart, I’ll be in the zone. But when I’m so in the zone, sometimes I sort of lose focus of the fact that, hey Ross, you know, you’ve been read five out of the last, seven days or whatever the case was. This might not be the time to be really aggressive. You should have taken your base hit and you should not be adding back to this. But as it’s consolidating here, this to me was kind of similar to what it did right here. And so I thought, okay, if it holds up right here, and it was, we might grind back up towards 11 and if we break 11 and move up to 11.50, 12 this might go back to high a day, just the way it did in this pattern.

So you know, this is where I got a little aggressive, too aggressive, and I decided that I was like, all right, I’m gonna add back to this thing. Get a high here of 11 of 10.57, it drops, it goes sideways. That didn’t break. And so then I’m kind of holding and I’m a little bit not sure about it. And right here it drops to 9.75. As soon as it dropped to 9.75 I was like, all right, I gotta bail. This doesn’t look good. So I tried to sell, I filled maybe 200 shares of my order, didn’t fill. My order did not fill. It dropped too fast. And then here flushes down to 9.12 and I’m like, “Oh my god.” I tried to sell again, I’m getting partial fills on my sell order. The spreads are big, I’m just not having an easy time getting out.

And then here it drops down to 8.52. My lowest exit was 8.70. So you know, this was the high of day volume on that candle and it just was really disappointing. So you know, I went from being up 10 grand to down 14 on this stock. It’s a $24,000 swing and the P&L, it’s … it’s disappointing. And I think the hardest part about it is the fact that this setup would’ve worked really well had we been in a hot market.

And sometimes it’s hard to predict when the market will change. What will be the first stock? Had this gone to 13 and then maybe to 14 or 15, this would’ve been the first stock to sort of maybe start a new round of momentum, but being able to time your trades so that you’re hitting the first stock as a new round of momentum starts, with big size, it’s very difficult. Bordering on just not possible. And if you keep doing it, you know, as I have been for the last week or so, you’re gonna keep incurring big losses.

It’s like you just keep swinging and missing, and swinging and missing. And you know, I’ve just been basically giving back profits. I had an amazing start to the month of June making 50 grand in the first week and a half, you know, it’s a terrific start. And then I’ve proceeded to have a red day, big red day last Monday. Red on Tuesday and Wednesday, small green days on Thursday and Friday, small green day, no small red day yesterday, and then a big red day today. So I’ve given back about, I would say right around $32,000 of that profit, which you know is totally disappointing. So you know, I went from being up 50 on the month to being up, I don’t know, somewhere between 15 and 20. I’ll have to log in and see where I’m at tomorrow, or sometime later in the month.

Maybe not a good idea to log in tomorrow. And then see it and feel FOMO, but I think the challenge for me, and you know there’s definitely people that have said, “Hey Ross, clearly you don’t know how to manage risk.” And you know to that I would say I’m trading the same exact strategy that I use to turn $583 into 1.1 million dollars over the course of about two years.

The strategy works. A feature of the strategy is that there will be some big swings in the P&L from time to time and that’s because I’m taking a fair amount of risk. This trade, had it worked well, would have been a 30, $40,000 winner. So to risk 14,000 to make 30,000 is a two to one profit loss ratio. If we look at the detailed and then I’ll go down to my win/loss expectation.

You’ll see here, this is my equity curve. Now on a day like you know today I’m kind of, you know down in this area here a little bit of pullback. This right here was a $50,000 draw down, $47,000 you can see it right here. It doesn’t look like much on the equity curve, but that was 46, $47,000 in losses from right there to right there. That little pull back. So you know in the grand scheme of things, these draw downs are not statistically significant.

In fact, this was a 5% draw down at the time the account was near $1 million of profit. The biggest draw down being 5% during a time when the account grew by about 183,000%, I mean it’s, it’s really not that bad, but I’m saying that to try to make myself feel better because on those days like there and you know, like what I’m having right up here, it can feel devastating.

You know, it can just feel like, man, everything I’m doing is going wrong. Everything I buy, the second I buy it is just, you know, tanking or the trade that I think is going to be a home run and I’m being aggressive on, total fail. And that, you know, when we’re in such a hyper focused sort of a mindset of daily profits and weekly profits, monthly profits, an individual day that sets you back two weeks is, it feels really kind of emotionally devastating. It took me about six weeks to recover from that draw down right there. And of course I recovered, well the low that pullback was somewhere around one, well this was gross, I’ll go switch to this to net.

So the low from a 9.92 down to 9.44, oh yeah. So after commissions, 47,000 raise. So that makes sense. So you know, from 9.44, I’ve grown the account up to, you know, 1.076 right there. And that was before the $50,000 of profit this month. So you know about a solid $160,000 or so from the last red streak. So the last, basically this hot streak was about $170,000 of profit.

And now I’ve been on a red streak here where I’m down about 30 grand. So it’s kinda like, you know, if each step is $30,000 that’s you know, like whatever, five steps up, one step back. Okay. It’s part of the deal. Time to get ready for five more steps up. But the problem of course is that you just don’t know when the market is going to turn. And I’ve had periods where, you know, I went through four or five months of fairly slow trading. And during periods like that you can’t swing for the fences, because you’re not going to hit home runs, you’re just going to get strike outs.

But really since 2017, since November, 2017 I’ve been on a pretty long extended and sustained hot streak, generally. You know, with an exception of a couple of pull backs here and there. So I think for me, I wish I was better at adapting to cold markets and slowing down faster and you know, taking my foot off the gas, I have a bit of a hard time doing that.

I keep being aggressive even when market conditions are saying, you know, go slow, and sit on the sidelines. And you know, if I was better at sitting on the sidelines then during these periods of slow trading, instead of losing 15, 20 or 30,000 or more, I would hopefully just kind of be breakeven for a period. And then I would, things would pick back up.

So in terms of how to, for me, how to learn from these losses, it’s really a tough one. I’m not sure what I need to do in my trading to prevent myself from getting tunnel vision when I see what I think is a quality opportunity, how to remind myself that Ross, that’s not a quality when the market for the last week and a half has been terrible. It means anything that you think is a quality, is automatically a beat. It’s just because part of the rating system, ranking for in a quality stock is the overall market. You can’t forget about that.

So, you know, and yet I do. And that’s the one spot where, you know, I’ll sometimes say, “Okay, today my max share sizes in a 6,000 shares or whatever.” And then I’ll see something like this, which I’m like, Whoa, this has huge potential. Which of course it did, and with 6,000 shares, maybe I would’ve done better if I hadn’t been more aggressive down here or whatever.

But then in the moment I’ll say, “Oh, I’m going to go ahead and increase my share size. This is a great opportunity.” So maybe for me, and again like even as I am about to say it, I’m like making an exception to the rule. What I was about to say is that maybe what I should do is at the beginning of each day, say , “Today my max share size is 6,000 shares and that’s because of the performance in the market that we’ve seen over the last couple of weeks.”

For instance. So tomorrow my max share size is 6,000 shares. And then what happens tomorrow if we end up seeing a stock like this go from eight to nine, to 10, to 13, to 14, to $15? And what if it does its first pullback, and then it goes up to 17, to 18, to 20 you know, what point is it like, Whoa, okay, today is the day that we’re having that stock that’s going parabolic.

And if I don’t increase my share size, I’m not going to fully capitalize on it. You know? And that I think that’s really speaks to the struggle of FOMO, the fear of missing out, that if I restrict myself then I’ll miss opportunities. Therefore, you know, I should be at a level where I don’t apply any restrictions. I’m able to simply, be so present in the moment that I can quickly go from 3,000 share position to 25,000 share position if the market justifies it, and then just as quickly come back down.

But in practice, I’m not good at making that adjustment. So you know, for the duration of my trip here in terms of trading, you know, it feels like I’ve kind of ruined the vacation, put a little bit of a shadow over it. It’s going to be impossible not to be thinking about this for the rest of the time that I’m here. And so that’s what I’ve got to deal with. Just the fact that this is where I’m at right now.

This isn’t what I wanted for the end of June. I wanted to finish the month strong, go into July feeling great. And I screwed it up and it is 100% my own fault. Other people were green on this trade. Other people who were calling it out in the chat room who got in down here and sold up here, or sold right here, made money. And I was swinging for the fences and you know, took a big loss.

So I guess that’s, again, the biggest struggles as a trade is that mental hurdle. And even after doing this for years and years, it still gets me that I’ll find myself being aggressive at the wrong times. You know, conservative at the wrong times and not across the board. You know, I mean obviously I’m giving myself a little bit of hard time here, but you know, I’m green, obviously green on the month despite this. Green on the year by, well right now probably about $250,000, but if I could tighten this up, I could do so much better. And I know I can do better. And I think that that’s the part that nags at you the, you know, last year I made about $700,000 and then I had $200,000 in red days. So I finished up only 500 grand. Wouldn’t it be nice if I could’ve cut those red days in half. Reduce some of those losses by not doing emotionally impulsive, super aggressive, stupid stuff like this.

And that’s what I want to work on as a trader and being able to be so present in the market that when the market is hot, I can be aggressive and when it’s cold I know to slow down and take profit sooner. Something that is very confusing in the market is that sometimes you get rewarded for breaking your rules. Adding into this after the second halt here, adding right up here, that’s a pretty aggressive thing to do. But you know, let’s look back at RBZ for one second. And you know, an example where on this stock, I followed, on this stock I followed my rules and didn’t chase it.

For some reason the charts loading really slowly here. And it ended up halting like five times in a row going up. It was ridiculous. It must have been right up in here or something. So followed my rules, wasn’t aggressive on it, missed what was probably one of the biggest opportunities that we’ve seen this year. It wasn’t there. Where it was it? Well whatever. I, I’m not gonna be able to find it off the top of my head. These trucks are loading too slowly.

But in any case, there was a day where it halted going up like five times in a row. And just went totally straight up. And if you had broken your rules and chased it, you would have made money. And then there are days like a day, in that case where I followed my rules and I kind of felt like I got punished for it, because the stock goes up so much and I didn’t chase it, didn’t make any money. So these mixed messages from the market getting rewarded for breaking rules, getting punished for following rules, and then the fact that doing the exact same trade will have completely different outcomes depending on what’s going on in the overall market.

So you know, that just adds this whole extra layer, which if you’re trading by yourself is just going to be overwhelming. The biggest benefit of trading with a community is that you get a sense of what’s happening in the market, what other people are doing, what they’re looking at. If they’re green, if they’re red, what’s working, what’s not working. And you know that kind of helps you combat that struggle between when to be aggressive and when not to. But then at the end of the day, you’ve got to be the one that says, all right, I’m gonna stick with my guns and follow my rules here. This isn’t the time to be aggressive, or do like what I do and kind of like swung for the fences on like every trade, regardless of market conditions and either sometimes hit huge home runs or sometimes have huge losses.

And since I’m right, 75% of the time, I make money doing it. But the emotional extremes of the big ups, the 30, $40,000 green days, and then the big downs, it’s just like, it’d be really nice to level that out a little bit. Well actually, it would be really nice to keep the big green days and minimize just the red days. But that may be asking for something that’s just not possible in this career.

So anyways, that’s it for me. Long recap, but hopefully helpful for those of you guys who are in similar positions. The biggest struggle now is that tomorrow and you know the rest of the week and whatever, I’m just going to have this instinct that I’ll have to fight to be aggressive. Being down 30 grand in a week is, you know, it’s not a good feeling and the best way to alleviate that discomfort is to make $30,000.

Right? And that may have been a contributing factor to why I was as aggressive on this as I was, because I was already coming in to the day down like 18,000 over the last week. And so instead of just taking my profit, it was like, I’ve got a hole, I really want to get out of it. I just would love to just start this vacation off with a huge win. Big confidence boost. Be on the top. And this wasn’t the day to do it. You know, that doesn’t matter. The market doesn’t care that I’m on vacation. The market doesn’t care that my internet is not that great right now. Market doesn’t care. And you got trade, the market that’s in front of you. You go out there to go surfing or something like that. It doesn’t matter if you want to hit big waves. If they’re not there, they’re not there.

It’s easy when you’re looking at the waves in that sense to say, all right, well there’s nothing gonna happen. Nothing’s going to happen today. But with trading, because things are always moving, and because you may see a set up, it’s easy to pull the trigger. But what we lack is the resolution and the follow through, and that’s where it can get really frustrating.

So anyways, that’s it for me. I’m going to wrap it up and I will see you guys first thing tomorrow morning, 9:15. I’m having trouble live streaming on YouTube this week because of my internet. So I may or may not be live streaming on YouTube, but I will certainly do the recap. And those you on YouTube, encourage you guys to join chat room. All right, see you guys later.

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