Warrior Trading Blog

Choppy Monday Market! | Mike’s Trade Recap


Hey, what’s up everybody? Well, I’m finally back in the office after a week long live trading seminar from Disney World. What a great time it was too. A lot of really great information put out there, as well as some awesome giveaways for all the attendees. In any event though, it’s time to get back to work and back trading this morning.


One small loss on one trade this morning. Got stopped out, but markets are a little choppy. A little hard to navigate still. We’re still not seeing that continuation. More lack of momentum, but that’s okay. We’ll just keep sitting tight, keep taking those trades that’s set up properly. If they don’t work, we want to quickly stop out.

Let’s take a few minutes and break down this morning’s action. All right, guys. Let’s do a quick recap here this morning and talk a little bit about the action that we had. I took one trade on TEVA. I tried to get the gap fade started on it and it didn’t really work out. I had some size on this to try to get a quick move for about a point down to the gap fill and it just didn’t continue. The market was kind of choppy. I’m actually a little bit red today. I am down just about 400 bucks. I had 6,000 shares on this at the initial entry at, let’s see, $23.90. When I took the initial entry here at $23.90, as we got below $24, I took 6,000.

I tried to get a quarter off almost immediately as we got a quick spike down. I got filled a thousand out of 1,500 at $23.70. I got $.20 on only a thousand. I was trying to get a quarter off. I was really trying to hold the balance for a fast move down towards $23. Now I got a thousand off. I canceled the balance of the order and then I had 5,000 shares remaining. As it started to pop back here, I was using $24 as kind of the back stop. $23.90 being my break even, but I was trying to give it towards $24 since that was a big spot initially for it to get through. When it popped through $24, caught a little bit of slippage, the size that I had.

I got rid of the 5,000 that was remaining and that’s where I ended up. Disappointing that it’s red, but at the same time, 396 bucks, that’s well within the risk parameters for the type of size and strategy that I’m trading. 396 bucks, it’s a lot of money definitely. It maybe a lot of money to a lot of people. That’s definitely the case. But you have to understand that when you’re trying to swing for the bigger hits, these relatively bigger losses are going to be present even with a relatively tight stop. Now I could have stopped at break even, but we had the VWAP right overhead. We also had that $24 spot that was causing a big support point on the way down.

If we dial in to a faster timeframe, I’ll show you guys what I was looking at on the 15 second here, remember we were talking about a pivot being put in the direction of the trade or the direction that we want to trade it. I didn’t trade the open because we never got a pivot put in out of the open, right? We got a quick little sell down and then it ripped up to the upside, but it never put in the lower high and then rolled over. The only time it did that is right in through here and through this consolidation. You can see the type of support $24 was putting in on this 15 second chart. What I wanted to see was that $24 be taken out before I took a trade.

Once the $24 level got taken out, I punched my order. I got fill at $23.90 and then almost instantly we sold off down towards $23.60’s or 70’s. Again that’s right near the low, so usually I try to take something off. I was able to get a thousand off. I was trying to get a quarter, but only got filled a thousand. Then we just consolidated sideways. We tried to test that level several times again. This was what I was talking about the basing action. We’re holding at a high and low and through all this basing action. The SPY is not really breaking down and I was giving it towards $24 because of this support that we had put in, right?

It’s a big support level, and I wanted to see if we could remain below it if we tested it again. When we got up to it, we punched right through and I stopped out. You can see it’s not that I was letting it go too far against my stop. I was still trying to give myself an opportunity to allow the trade to work. In this situation, I just didn’t see what I liked. If I did see what I liked in the market, if I saw the SPY continuing to break down, I probably would have held this trade longer. But since the SPY wasn’t doing that if we look over here at earlier this morning, we got the initial sell down here. The lows kept being bought, right?

It never actually was breaking down and continuing to sell. Every time it tapped those lows, we were being held in that same spot. Being that, we weren’t seeing the continuation in the market. I didn’t really want to give this trade anymore room and that’s why I decided to stop out. I’m glad I did because the trade hasn’t moved, right? It hasn’t really gone anywhere. It just kind of chop sideways and grinding higher. Kind of a disconnect with the market. Those are the trades you just don’t want to be in because they typically don’t go anywhere. All right. That was a trade on TEVA.

Again just didn’t really work the way we wanted, but definitely worth the shot because if it did work out, there was nice potential there for a move down towards $23, which would given us a really nice win. That one worked out initially, but no continuation, right? I would have taken this trade again any day we have that set up, right? That’s one of the questions you always want to ask yourself is go back and look at the trade and ask yourself the question, would you have taken it again? If the answer is yes, then you probably did everything that you were supposed to. It’s just the trade just didn’t work out, right?

It’s the same situation for this. It’s got a good setup here. We came in back with a VWAP in the 20. We broke through the pivot support. We got short. It did move, right? It started to move really nicely. Just didn’t get the continuation. No problem with the trade. Just one of those ones that didn’t continue like we’ve been seeing lately. The other side of that is to … If you see the action and you don’t like it, get out of the trade. You don’t have to wait or give it extra room or let your stop hit. You could just get out of it. I tried to get out of it. I had a little bit more size, but it was still a relatively tight stop.

Around $.10 or so. All right. That was TEVA. The other one we had on watch was AMD. Now AMD, you could see this thing has just been all over the place too. Really choppy. No direction, right? It’s virtually sideways here. There’s no momentum in either direction. Now you could have gotten a move out of the open. You could have gotten a scalp long, but again there’s no real directional move to this thing. That’s because the market up until now hasn’t really had any sort of direction either. If you look at AMD, another thing I want to show you on this is that there was never a pivot put in to the short side for the gap fade.

That’s something that I have to wait for. You can see what happened here out of the open. You initially pop up. You pull back. You never broke the low and then you started to pop up again. That’s how you can avoid being caught in the wrong side or being whipsawed out of a trade initially. If you get a move like this where you get a higher low and you’re looking long, then this would be a trade that you might want to take the long side. However, the market was pulling. You had the five minute 20 above you. That’s more of those situations where going against the market can be a really tough trade. It’s not typically the highest success rate, right?

Those are ones we want to stay away from. Now it did continue to the upside. It started to put in a pivot back below … Not until later in the morning here, but right over here started to put in a pivot back below your 20 again. It sold off a little bit, but again there’s no real continuation when it’s back up. Just another example of the choppiness. It’s just the follow through is not really there right now. Scalpers market maybe, but as far as the continuation goes, we’re just not seeing it. You just have to be a little bit quicker on your feet and get out of the way if something’s not working. Those are the two trades we were looking at.

BABA did break down a little bit here in the morning. There was probably a decent opportunity if you’re able to catch that back below VWAP here. But again, there wasn’t really a catalyst on it. If there’s not a catalyst, it makes it much tougher to trade. BABA, there’s some opportunity there probably for some scalps. For those of you guys that were able to catch that, good job too there, but the market’s just choppy right now still, right? The SPY is just inconsistent. There’s not much direction to it. We’re not seeing much momentum. What happens is exactly what’s happening here. You start to see a little bit of a move and then it comes right back in the line.

It snaps right back and that’s going to kill all continuation. That’s what makes it really tough. When the market will trend in one direction or the other, that’s when you get good continuation. When you have this sort of snap back action, that’s going to kill all continuation and it makes it really tough to size into a trade to get a big hit. You won’t know that. You won’t know that initially when you see this action and you initiate a trade. You have to act on it because the market is breaking down. You are sitting below VWAP in the 20s, so your signal is good, but you can’t not take the trade because you think it might snap back.

You have to act on this and then when it snaps back is when you have to play defense and decide what you’re going to do. It’s just the type of market that we’re in. We’ll look for other trades. They’re here. You just have to be patient. Again 390 bucks or whatever it is, no one wants to start the week that way, but again it’s very, very small and are relative to what we’re usually pulling in on these trades. That’s all right. We’ll stop there for the day. I’ll be here the rest of the day. We’ll try to find something else. If not, we’ll be back at it first thing tomorrow.

Oh, hey. I didn’t see you there. I was just working on the dream board for my next home run trade. Hopefully it comes soon. Until then, make sure you subscribe to get email alerts anytime I go live or upload new videos. Until then, happy surfing.