Warrior Trading Blog

Bloody Valentine’s Day -$2.9k

bloody valentines

Bloody Valentine’s Day -$2.9k

 

What’s up, everyone? All right, so third day trading here in Boston. It is my third red day. It’s certainly frustrating, but let’s keep it in perspective. I’ve got my reports here. This’ll show you where I’m at basically in the last, what was this? The last 90 days. This includes my trade from yesterday. You can see here, 90 days ago, these are the green days. The red days are down here. I’m in this little pull-back right here. On the chart, this is what it looks like.

If you’re looking at this as a stock chart, you’d be like, “All right, that’s a nice pop, a little consolidation. Nice, steady grind up, and a little more consolidation right here.” This little pop, that little pop, was my $13,000 green day on Friday. Then, the last couple days have gone sideways.

Keeping it in perspective, you can see detailed here, $335,000 in the last 90 days or so. When I look at it like that, it’s a reminder that, yeah, I’m red today. The last three days are certainly frustrating, but it’s not that bad. We’re going to go over all of the trades from this morning and the midday market recap. I’ll walk you guys through what I did right today, what I did wrong, and what my plan is for tomorrow.

All right, everyone. We’re going to start breaking down the trades here from today. Let’s see, I just want to reset my camera so hopefully you guys will be able to see the cam. I don’t know why it’s turned off. Let’s see …

In any case, you can see my trades from the morning right here. Let me drag over my P&L. Started with a good trade on NSPR. Made about $2,000 on my first trade. Then, gave back most of that profit on the second trade, and went into red on the third trade. Ended up having four consecutive losing trades today. No doubt about it, it’s continuing to be a grind for me. In fact, I think this is my longest consecutive red hot streak that I’ve had. I don’t think I’ve had three consecutive red days before.

I want to keep it in perspective. You can see here, this right here was the first day of February. I had two red days in a row on the last day of January and the first day of February. Now, this month has been really difficult for me. I had a great day on Friday, $13,000. Then, it’s just been another two red days in a row. Then, today’s P&L, we’ll go up here later today.

What you can see, this right here is where I’m at, right? That kind of puts it in perspective. It’s easy to get hyper-focused on just each individual day. I’m red today, and that’s frustrating. I was red yesterday, and that’s frustrating. I was red the day before, and that was frustrating.

When you’re zoomed in like that, it feels very frustrating, when you’re just looking at the last three days, five days. When you step back and look at the bigger picture, for me, it reminds me that this is just all part of the action. This was this nice move up, here, little bit of sideways, then curling back up through here. A little bit sideways. This day right here, that was a $13,000 day. It’s just a blip on the radar. Even the big days are just a blip. The red days, here, it’s all just part of the noise.

There’s no doubt about it. We are in a market that’s choppy. I’m having a hard time trading through it. It’s not the market’s fault. It’s just, I’m not good at trading a market that’s choppy. There’s definitely two different types of markets. There’s a market where stocks are really, really strong, and we see big moves, big breakouts left and right. Then, there’s a market where stocks pop up, they do false breakouts, and they drop right back down. That’s kind of what we’re in right now.

I’ll back this out, here. This is big picture. I try to keep it in perspective. Yeah, it’s disappointing to have a couple red days, but that’s the pullback getting ready for the next leg up. Historically, even over … Actually, I don’t think this’ll show more than 90 days. Even if I went back to years of time, you would see this same steady kind of up and down, and up and down, but generally moving up.

ZN, yeah, that was one of the ones that got me for $1,000. Disappointing, there. This was a false breakout. I jumped in at $4, and look what happened. Kind of crazy. I’m not sure what to think about it. As soon as I get in, it hits a high of $4.07. Then, it drops 60 cents. I got faked out there. I got in for the break, thinking it was going to continue higher, and then, obviously, I was wrong. Lost $1,000 on that. 20 cents with 5,000 shares.

First trade was on NSPR. I got in this at 6.85. Basically, this was really strong pre-market. As soon as the bell rang, I jumped in it. Got in at 6.85. It squeezes up to a high of 7.80, which was good, 5,000 shares. Made about $2,000 on it. It then drops down. I get back in for the break over 7.50. It doesn’t break 7.50. It hits that level, and then it drops. I stop out, and I lose $1,700. I went from being up 2,000 to up only 200.

I then got back in right here for the break over $7 … Actually, sorry, it was right here, for the break back over $7. I thought this was, again, a five-minute setup. I mean, it was a five-minute setup. That was the first [inaudible 00:06:21] to make a new high, right on that green one. We popped up here to a high of 7.09. Then, we dropped down to 6.65. I lost about $400 on that and put me red 217 on the name.

For sure, that’s disappointing. Yeah, I have had lag all day long on my eSignal charts. I was looking at the level two. I was looking back at the charts. I’m like, “Why is there a disconnect, here? What’s going on?” There’s just some type of lag going on. Yeah, I don’t know if it’s fixed or not.

Anyway, NSPR down 200. ZN down 1,000. Then, the last trade of the day was HTGM. This one I got in for the first five-minute [inaudible 00:07:05] to make a new high. You can see how it popped up, here. Oops. Popped up, it tapped $5, and then promptly dropped all the way to 4.56. Again, false breakout.

In a stronger market, we would be seeing these break over five, go to high a day, continue to move up, but instead, false breakout, the drop back down to 72. I stopped out, ended up going as low as 56. It’s definitely difficult, because these are decent setups. There’s nothing wrong with the setup. I think that’s a challenge. It’s inconsistent.

In one week, all of these setups work. You’re buying a stock on this type of pullback, and it’s going up to 5.20, 5.30, 5.40. You buy another pullback. It goes up to 5.60, 5.70, 5.80. Today, and the last week and a half, it seems like what happens more often is it pops up like this, and then it rolls over.

Obviously, short-sellers probably look at this as an opportunity to short stocks. If it starts to fail, they’re going to short. Plus, everyone who had bought it for the breakout is going to sell. Now, you have an imbalance between buyers and sellers that’s stronger to the sell side. If you have one of these that goes higher, anyone who does short it will cover. More people will buy it. You have an imbalance to the buy side.

Right now, the imbalance in the market has been more to the sell side on a lot of these stocks. That’s what’s caused me to have these kind of draw-downs. My goal for Thursday and Friday is just to try to be profitable. You know what? If I make $1,000 or $2,000 in the first five minutes, I’ll probably stop trading, because I made a 2,000 today, and then I lost it. I made 2,000 on Monday, and then I lost it. I’d really like to make that 2,000 and keep it in my pocket. If I can do that on Thursday and I can do it on Friday, that’s $4,000 profit, and that puts me in better shape.

Now, NSPR is kind of disappointing, because this one could have been a huge winner, but I started with only 5,000 shares. Even though it went up a dollar per share, I was being more conservative on my share size, because I didn’t wan to take 10, 15,000 shares and have it tank on me and lose $7,500. I started with smaller size, but that, of course, was the best trade of the day. That’s just the luck of the draw, I suppose.

Yeah, it’s a good Curtis comment that a few months ago, maybe I was consistent with a daily goal of $500 a day. I’ve increased my daily goal to $1,000 a day. That’s my minimum goal. Obviously, if I hit $1,000 profit, I don’t stop trading, because if I did that, I would never have days where I make 30 or $40,000, like I’ve had in the last couple months. I would just have made 1,000 and be like, “I’m done for the day.”

That’s the thing. When the market is strong, or when you see good opportunities, you want to try to capitalize on them. That means continuing to trade even when you’re past your daily goal. You do stand the risk of going into the red. It’s certainly a fine line that we walk between continuing to be aggressive and not wanting to risk giving it all back. The last few weeks, it’s been even more difficult. Excuse me.

Anyways, that’s where I’m at today. Another red day. A little bit disappointing. I’m hoping that tomorrow we see some good opportunities. I’m thinking that it is going to continue to be choppy. It might continue to be choppy until we have the next stock that goes up 100, 200, 300%, because that’ll be when we really probably start to get traders excited about jumping into momentum stocks. Right now, it’s just going to be a grind.

That’s fine. You can profit from a grind, as long as you’re quick and you scalp. The false breakouts are difficult to predict, because they’re good-quality setups that just don’t work. That’s why no one is right 100% of the time. Over the long term, my accuracy has been right around 68, 70%. That means the remaining 30% of the time, I’m wrong. This month is probably going to be a lower average. It all just factors into, in the long term, you’re not right 100% of the time. This is one of those months where I’m on the wrong side of these trades more than the right side. I’m a little bit in the red, but it will turn around. Trading the same exact setups a month and a half from now could yield another $100,000 month. This is the consolidation, the pullback before things start to open up and we start to get good opportunities again.

Yeah, obviously, I want to minimize the losses as much as I can during periods of consolidation. I’m getting to the edge of what I’m comfortable with on the draw-down, so I do need to ease up a little bit. I thought that big day on Friday, that it was a sign that tides were turning and things were picking back up. Then, Monday, Tuesday, Wednesday have just kind of drawn back down.

Now, I’m back to where I was last week. I’ve just got to try to get small winners, and capture that profit, and be really aggressive about scalping 5, 10 cents, if that’s all I can get. As a beginner trader, I would say this is a good market to be trading in with a simulator to practice. If you can be profitable in this type of market, you’ll probably be profitable in any market. It’ll be a challenge to see if I finish the month in the green, being down $10,000 or $12,000 right now on the month. I’ve got my work cut out for me to dig myself out of the hole. Hopefully, I’ll be able to. We’ll come out on the other side and go into a new hot streak.

David, you know, the general comment on why the market’s like this is just the ebb and the flow. This is not different than what happened last April. It’s not different from what happened in September. It’s just the ebb and the flow. We have great, great months where traders are exuberant, and there’s a lot of greed in the market, and there’s a feeding frenzy. Traders are buying, buying, buying.

Then, you have something that changes. Maybe it was with the market dropping 1,000 points. Traders become more cautious, more nervous, more hesitant. They don’t buy as many shares. More people are shorting. You don’t see as much follow-through. Things get kind of choppy. Then, out of that, there’ll be a stock that comes out with terrific news, great news. All of a sudden, it goes up from $2 to $6, $8, and traders are back into the greed, into the feeding frenzy, into the exuberance. That starts the next round of momentum.

That’s all it is. It’s nothing really more than that. It’s just the natural flow of the market. It’s kind of like the tides in the ocean. They don’t keep coming in forever. At a certain point, they turn around, and the tide goes back out. You can’t change that. It just is what it is. It will shift. It will change. The transition point, it’s a little difficult, at times. Then, we roll back in, and we are back into another hot streak.

That’s the way trading is. It’s the way it’s always been. That’s why there’s no such thing as an equity curve that goes straight up. Regardless of whether you’re a trader, or you’re a financial instrument, you’re the SMP 500, nothing goes straight up. You go up, and then tides change, and you get pullback. This, on the overall market, is certainly a pullback. It’s a contributor to what’s going on now.

Back in April, we had a little bit of a pullback. That might have been a little contributor. September was actually pretty decent. It’s not necessarily correlated exactly with the market, although the market can trigger things a little bit.

Anyways, that’s about it for me today. Again, trying to keep the red days small as I can until things start to pick back up. Probably could have done without that last trade on HGTM, but it is what it is. I thought it would break over five and get me a nice little winner. I was wrong on that.

Anyways, I’ll be back at it first thing tomorrow morning. Hopefully we see some good opportunity and I can finish up this week with a couple of green days. That’s the goal. Green Thursday and green Friday.

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