Warrior Trading Blog

Bouncing Back +$4,120! | Ross’ Trade Recap

What’s up, everyone? All right, so here we are finishing the second day of August, up $4,000. Little bit of a bounce back after the losses yesterday, but you know what’s interesting today is that, we just did not see a lot of momentum.

I traded three stocks. I had two winners and one loser. The biggest loser, a hundred bucks so no big deal there. I had one trade on NSYS, $4,000 of profit. A trade on IHT, I lost a hundred bucks, and then a trade on LEDS and I made a hundred bucks. Basically, two scratch trades and one decent winner. It was kind of disappointing not to see more momentum in the market today. It was just very slow.

Good to be able to start digging myself out of the hole, and hopefully keep it going Friday and into next week, but I’d really like to see more volatility. With volatility is opportunity, so the lack of volatility for me is kind of bumming me out today. It was just like, nothing was moving. What I’m doing is I’m adding a couple of new rules for the month of August because of something I did yesterday that really got me frustrated. I’m going to be talking about that during the midday recap.

Again, this is the kind of beginning of the month, so time to put those rules in place, be disciplined, get the month off to a good start and it’s still summer trading. It’s probably going to be a little slow here, but we’ll see flurries of momentum here and there and those will be the opportunities to create the profits for the month of August. That’s the game plan. You guys watching the recap, any questions, any comments, leave them below. I’ll come back through and answer them later today. All right, enjoy.

All right, what’s up everyone? Okay, so here we are, August 2nd. Finishing the day up $4,120.33. That’s a good day. 141st trading day of the year. I’m happy about that. It’s a decent day. You know what’s interesting is that we really didn’t see a lot of momentum today. In fact, my last trade was at 9:38. I’ve been done since 9:38. I made $4,000 in eight minutes this morning and that’s it. I haven’t taken a single trade since then. We just did not see a lot of volatility.

What’s kind of interesting there is that this week of kind of slow and sluggish trading is continuing into the month of August, and I’m a little bit disappointed about that. This slow stretch for me began on, I’d say it began on July 19th. That was the day that things slowed down. I had made $8,000 on the day before and then I made only $800 on the 19th, which for me was a very small day. I made $500 on the 20th, lost $32 on the 23rd the next Monday, and then that week just continued to be choppy.

You know, we started this week with a couple of winners, $2,500 on Monday, $1,000 on Tuesday, and then I lost money yesterday. I started the day with two really tiny winners and then ended up losing $4,500 before lunch time. That was disappointing, but what was even more disappointing was that I continued the losing streak into the afternoon. It was just so stupid. It gets me so frustrated when I break my rules of afternoon trading, and then take a loss.

Now, one of the things I talked about during the watch list this morning was the fact that the hardest thing about trading is that sometimes you get rewarded for breaking the rules, and sometimes you get punished for following the rules. That inconsistency there, I mean, if you think about like, parenting or something, you have to be consistent with how you enforce the rules. Otherwise, kids are going to think, “Oh well, you know, sometimes I can get away with this.” As a trader, the market does not consistently enforce the rules.

Sometimes you will break the rules and make money, whether it’s because of luck or because you were in the right place at the right time or whatever the case may be. Then there’s other times where you’re going to follow all your rules and you’re going to be really disciplined and you say, “No, I can’t trade that stock because it hasn’t given me a really good pullback yet,” and then you watch it go up 100% without you. You’re following the rules and you feel like you’re getting punished because you missed this great opportunity. It’s just one of the most challenging things for me to deal with and I don’t think it’s just isolated to me. I think this is traders in general to deal with, just the inconsistency there.

The stock I lost money on yesterday afternoon was NSYS. You can see yesterday afternoon, it made this push up right here around lunch time and then it dropped really hard. Then it came back up consolidated, popped up, and then dropped again really hard. Then it squeezed all the way up to $9.28 which was ridiculous, and then it dropped down to $7.37. Then this morning it’s come all the way back down to $4.75. You know, it’s been just kind of a mess. You know, this is no doubt volatility. Within that volatility, there’s an opportunity for profit. In total, I guess I’ve made money on the stock because I’m up $4,000 on it today. You know, I made back yesterday’s losses, but the fact is I did break my rules by trading in the afternoon.

I’ve got myself a new sticky for the month of September, new rules. Sorry, for the month of August. For the month of August, new rules. Rule number one: when I’m done trading I’m going to shut down my charts and scanners so I don’t get tempted to take a trade in the afternoon. Now, I’ll leave this on for you guys, but I’ll just turn off the monitor so I can’t see it and I’ll mute the scanner so I don’t hear “boing, boing, boing, boing, boing” at 1:00 in the afternoon and get tempted to take a trade.

You know, obviously if you step out of the office you cannot take a trade, but you know, I often sit here, I have meetings, I’m working on doing stuff for the classes, I’m working with students, I’ve got all these things going on so I’m usually sitting here and if I just leave stuff up, which I often do, I see something and then I talk myself into it. Rule number one is when I shut down for the day, which is going to be well, now and definitely when this recap is over, I’m going to close down e-signal and I’m going to turn off this monitor. Scanners will keep running for you but I’m not going to keep looking at them.

Number two: no trades if you’re down more than $2,000. Yes, I have the $5,000 max loss on my account, but I feel like even yesterday, once I was down more than two grand, the trades became impulsive and not as calculated. It felt like my judgment was just a little bit skewed. I’m going to tighten that max loss to $2,000. I’m not going to email … You know what? I am going to email Lightspeed.

I’m just going to email them because it’s as quick as sending an email, so I’m just going to email Rob over at Lightspeed and say, “Hey Rob, can you tighten up the max loss on my account from $5,000 to $2,000?” He is not going to care. He’s going to say, “Sure Ross, no problem, it’s going to be done within five minutes.” Tighten up max loss. Hey Rob, can you tighten the max loss on my account from -$5,000 to -$2,000? Thanks, Ross. I won’t tell him that I’m so ashamed of myself that I need him to do that. I’ll just leave that part in the read between the lines. That email is sent. All right, so $2,000 is the new max loss.

You know, again, when you make $100,000 in one month as I have, a $2,000 max loss feels like, it’s such a tiny amount. The reality is when, on the first trade of the day you take 10,000 or 15,000 shares, it’s certainly not impossible to lose $2,000 and then be closed out of my account for the day, only to see a great opportunity at 10:45 or something like, 9:45 or 10:30 that could get me out of the hole.

I think what I would rather do for right now is say that, if on the first trade I do lose $2,000 bucks, that’s enough of an indicator that I should walk away. If it means I miss some opportunities, well, I’ll miss some winners but what I’m also stopping is the down side loss. At the end of the day, which one’s better? That’s kind of my two cents there. All right, so that email’s sent. That’s number two, max loss of $2,000, tightening it up from $5,000. Given the fact that the last couple months have been averaging only about $50,000 a month, not $100,000, I think tightening up the max loss makes sense.

Number three: if I have three back to back losers, go home. You’re done. All right, so that one has been a soft rule that I’ve held for the last couple months, but I don’t always adhere to it. You know, I kind of set it as a rule of thumb rather than a hard-set rule. I’d say, “You know, I had three losses but he’s trade number four, it actually looks really good so I’m going to go ahead and take it.” No. Three strikes, you’re out. Follow the rules. I’m just going to make that as a hard-set rule.

I got myself up bright and early this morning, did half an hour in the gym because that was my punishment for breaking a rule yesterday. You know, that’s on me and I’ll eat the loss and it is what it is. You got to enforce the punishment, at least I do for myself, and so now I’ve got these three hard-set rules for the month of August. If I break one of these rules, I got to get up at 6:30 the next morning and go to the gym, even though I absolutely hate it. I got to do it because if I don’t then I’m not enforcing the rules. It’s a punishment for me. I know some of you guys love the gym. Some of you guys love it, so that’s not a punishment. Your punishment would have to be something that you don’t love doing. For me, I don’t really like going to the gym so it’s a punishment.

Anyways, that’s all just to say we’re at the beginning of a new month, it’s time to set intentions, get disciplined, and focus on [inaudible 00:11:24] quality set ups. If I can, you know, I lost $5,000 on January 1st and I finished the month with $117,000 of profit. Losing $5,000 out of the gates on the first trade of the month or the first day of the month, it doesn’t mean this won’t be a great month, but if it’s going to be a great month I’ve got to turn it around and I’ve got to get focused. These rules are going to help me get focused on taking the cue when I’m not hot to walk away and trading during the time of day when I perform the best. That’s my plan here.

Now, the three trades today to go over these trades, NSYS, this one, here was my thinking. It was holding up actually better than I thought it would. It dipped down right here, but then it popped back up. What I thought was that if it squeezed up over $8 and if it broke over the pre-market high of $8.75, that it would squeeze out early short sellers as it broke over $8.75 and went up to $9.20. That’s what I thought would happen.

I jumped in early anticipating that break, getting in at $7.45, $7.50, and adding at $7.90 for the break over $8. It popped up to $8.08, and then we saw a pretty big wall of sellers. I saw that wall and I was like, “You know what? Even though I think this could go to $8.50, I’m going to do the smart thing and sell half.” Boom, sold half at $8.50, or sorry, sold half at $8. I keep watching it, it’s not going higher, and so I sell another quarter at $8. Then it drops all the way back down to $7.50. I sold the rest at $7.50 and $7.37. A $4,000 winner there. I’m happy with that.

This, I really think had potential.If it had broken over $8.50, it would then almost definitely have gone to $8.75 breaking over pre-market highs, we would have been first target breaking the high of after hours, and then a squeeze up to $10. This certainly could have been a trade from $7.50 to $10. Today just didn’t happen to be that day. I started with 10,000 shares at $7.50 and I added 5,000 at $7.90 and then another 2,500 for the break of $8. I had 17,500 shares. In total with 17,500 shares I really only made about, let’s see, $0.23 per share, or so. It wasn’t the biggest winner, but it had the potential had it squeezed up to $8.50 and maybe gotten halted, gone up to $9. It could have been a $20,000 winner.

Now, I think my share size on this was aggressive partially because I had lost on it yesterday and I wanted to try to redeem myself, but it was also because of the fact that the stock showed potential. It genuinely showed potential to me to make a big move given how much it moved yesterday, how much it had already moved pre-market. I knew if I was right on it, it could be a really big winner. In fact, I ended up being wrong on it but I was able to still make money on it, and then you can see it sold off, after a bear flag it faded to the down side.

You know, this is one of those stocks that I do wish that I had shares available to borrow on, because I would have loved to have been able to flip short right here and add right here on this second bear flag. The reality is, I don’t have shares available with Lightspeed. You know, this is where I could open an account with Center Point and put in the $50,000 minimum to get set up there, but I just feel that it’s a little bit unfair for me to be trading those stocks because it requires such a high barrier to entry.

The majority of you guys aren’t going to … I mean, you’ll benefit from me if you’re watching me trade and maybe you’ll learn something, but you’re not able to trade them also, and so it’s kind of like, I don’t know, watching someone do something that you can’t do because you don’t have enough money. It just doesn’t feel totally, I don’t know, fair or helpful. I wished that Lightspeed had more shares available to borrow of some of these stocks, but they don’t and neither do a lot of firms.

For right now, I try to be on the same playing field as you guys. You know, I have the same commissions as you guys. I don’t get any preferential treatment. It’s part of setting that expectation that anyone can do this. I’m not special, in terms of the way I’m viewed at my broker or the type of accounts that I set up. Anyways, that’s one of the reasons I haven’t set up a Center Point account. Maybe I will at some point, but I haven’t done it yet. That was that first trade.

Next trade was IHT, was watching this one break a pre-market high. You can see it popped up here to $2.69. It didn’t hold up at all, actually lost 100 bucks on it, it didn’t work out. LEDS, I jumped into this for a break of pre-market highs as well at $4.20. Pops up to $4.36. I got in at $4.25 actually, and stopped out as it came back down at $4.25 and $4.21. Made 100 bucks on 10,000 shares, but that’s nothing to write home about.

You know, that’s kind of the big picture of where things stand today. I did go ahead and update my broker statements for the month of July, so if you’re ever on our home page, you go to the very bottom you’ll see my 2018 broker statements here. I’ve got July posted. Zero trades in the IRA for the month of July. I don’t know why I had cash out of $92.50. I’ll have to ask them what that is. They must be charging a platform fee or something, another $9 right there. That’s kind of a pain, since it’s out of the IRA, but whatever. No trades in the IRA last month. I just didn’t see anything that I really liked.

Then the main account, $49,000 right here, that’s the P&L for each day, and this is the breakdown of all of my stats. I have a $25 wiring fee, but other than that that’s what it is. Average winner, average loser about $650, 66% success and a lot of trades. I definitely traded a lot in the month of July. That’s okay. You know, commissions are pretty high, almost $11,000 in ECN … $7,000 in ECN fees, $4,000 in commissions, so my gross profit is actually $61,000 and my net profit after these commissions is $49,000.

It’s the cost of doing business. I’m not really going to complain about that. That just comes with the territory of trading with big size. When you trade with 10,000, 15,000 shares, these fees will go up. Your commissions will stay the same, but your ECN fees will go up if you’re doing direct routing. If you’re using a broker like E-Trade or Ameritrade, you won’t have any ECN fees. These ones aren’t there. Your commissions will be higher, and your profits may be lower because you weren’t able to capture the winner when you had it because those firms don’t have very good hot keys, the routing is slower, and so the result most likely is that the fees here, they more than make up for the extra profit that I have right there.

Anyways, it’s important for me to post all of these at the end of each month. What we have is my challenge to take $583.15 and turn it into $1 million fully transparent, fully verified. Started with $583 January 1, 2017. Total gains as of the end of last month $697,000. Total profits in 2017: $335,000. These are my 2017 broker statements. The challenge continues. $300,000 standing right now between me and the $1 million mark.

I’m not really tracking to hit that by December at this point, because I’ve had some red days. I would need to be averaging, let’s see, I’ve got it down here. I would need to be averaging $3,322 per day, versus the $2,600 per day that I’ve been averaging so far this year. I’m a little behind on my average. It probably has me now breaking over this level in January or maybe February.

Anyways, again, that’s not the biggest deal. I was hoping to cross the line this year, but that just may not be realistic. Anyways, I just wanted to update you guys on that and of course we’re going to be back at it first thing tomorrow, try to finish up the week on a good note with a couple more trades. Might still be a little slow but I’ll try to make some money and see what I can do. All right, so that’ll be it. Back at it first thing tomorrow morning around 9:00, 9:15 for pre-market analysis. All right, we’ll see you guys in the morning.

Let’s see, yeah, I know the L is for Locate and I can email them to ask for shares. Trader View stats are sometimes incorrect. I mean, the way they run the stats, some of them are not totally logical to me. I don’t really understand all of these ones over here, like this stuff, but I don’t really understand that, why that would be … Oh, well this was for that month. In general, it’s pretty accurate. Sometimes you’ll have trades that don’t import properly, you need to get them to help you with it. Overall, they’re pretty close.

All right, so I hope you guys have a good afternoon. I’m going to turn off my monitor so I don’t look at the charts and I don’t get convinced to buy something crazy high. This is on mute so I’m not going to hear it, and that’s going to be it for me. All right, I’ll see you guys in the morning.

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