Warrior Trading Blog

16th Consecutive Green Day & Crossing $25k In Profits For October

Consecutive Green Day

16th Consecutive Green Day & Crossing $25k In Profits For October

All right. Let’s do our midday market recap. We’ll go over the trades from this morning. So I’m finishing today, the 16th consecutive green day, number 16, with $664.61. Only two trades today, I didn’t push it. I really stayed focused, and I would have loved to have had other opportunities but I really only saw two good ones, so hey, $664, not bad for a Monday morning.

Last Monday I didn’t trade. The Monday before was a $4000 day, but 660 bucks is not bad for one hour of work. So, I’m right now crossing over $25,000 profit for the month of October, and not a single red day. Knock on wood. Hopefully I can keep this green streak going.

Remember, when I started October, September for me was a rough month and I was a little bit frustrated and so I said for October I’m switching gears a little bit and I’m going to focus on consistency. Not trying to swing for the fences, not trying to hit home runs, not trying to make 4, 5, $6000 on every single trade I take, but just finishing every day green.

I’ve had some great days, best day of the month $6000. Worst day of the month is actually today. Today is the worst day of the month. No, Monday, the very first day of the month I was only $184. Monday October 2nd was the worst day of the month, and $184, basically just a slow day. Whatever, that’s fine. It’s just nice to look at that equity curve for the month of October and to see it’s up, up, up, up, up, up, up, up, up, up and just continuing. 16 days in a row.

The green streak actually started on September 27th. I’ve taken a couple days off. I’ve actually taken three days off this month, which I hate. I hate taking days off, but whatever, things come up, you’ve got to do it. So, this is going to be fewer trading days this month for me than for most of you guys, but that’s all right. I’m still grinding along here, so hopefully tomorrow will make it day 17. But let’s yeah, give you guys a look at my P&L for today.

There you guys can see it. I’ll turn this around. So, you can see here, $664, right at the bottom. The two stocks I traded today, LBIX, and EVOQ. Again, neither one was a huge winner, but a couple of solid trades. So, what were the setups that I was going for today? Today I was looking for, well, looking for momentum and the two trades that I took, the first one on EVOQ, was a break of the whole dollar. Entry was at four bucks, it was 7500 shares.

So, let’s look at the chart on EVOQ. EVOQ this morning, obviously ended up being really red, but it started as the break of the VWAP right here, so we were consolidating right underneath the VWAP. What I was looking for was a break over that level. It’s actually, let’s see, my high day exit, it hit a high of 4.08. I got out some at 4.07, but I was anticipating this break over four bucks, and just scalping the whole dollar.

So, as we saw it come up to four, there was a 12,000 share seller on the level two at four, and it went 12, 11, 10, 9, 8, 7, 6, 5, 4, 3, 2 and that’s when I started pressing the buy button. Punched it for 7500 shares, expecting as soon as we broke over five we would snap up. We popped up to a high of 4.08, and then 4.09. I was selling on the ask, and I said now, as soon as I’ve scaled out half, my stop is breakeven on the rest, and I ended up selling the rest at 4.01, which was breakeven on those. Basically breakeven on that remainder of the position.

Tried to sell on the ask at 4.07, canceled it, because I didn’t get filled, and sold the rest at 4.01. You just never know. You never know if a stock is going to do this, pull back and then squeeze to 4.50 and 5, or drop. What we do now is that this is going to be volatile stock today, and volatility means opportunity. But we have to mitigate that incredible level of volatility, and the risks that comes with it, by understanding our max loss on every trade.

So, when I got in this at $4, my stop was 3.90, 10 cents stop. 10 cents stop, target was to see a break over 4, which it did. 4.05, 4.10, and then hoping to see it go up to 4.15, 4.20, and make a move up to the half dollar, 4.50, but that obviously didn’t happen today. But in any case, a small winner. Now, if I had held the whole position instead of being aggressive about taking profit, this would have been a loser. Instead, it’s $366 of profit.

All right, so next trade today was LBIX. I saw this one hit our scanners, our High Day MOMO scanner. Was not on our watch list for a gap and go trade, but it hit the scanner, so we’ll scroll this back here. EVOQ was on the scanners right away. SRAX was on there. Didn’t take a trade on that one. Then let’s see. When does … LBIX hits at 9:42, and $2.47. At that point, on LBIX, it popped up and I’ll pull this back to the one minute chart. So, you can see this popped up here, it hit a high at 55.

I got in right on this candle as it broke over the half dollar. So, my entry, I was anticipating the half dollar break, so I got in at 2.45, 2.45, and 2.47. 7500 shares. Pops up to 53 and I tried to sell and I couldn’t get filled. At that point I said, “Okay, I better start flipping out of this.” I got out at 50 and I sold the rest at 49. Ended up being a pretty small winner.

It hit a high of 55, dropped down, popped back up to 65, double topped at 65, and then from that level has faded back down. It’s one of these things, again, where we have this short little opportunity, this burst of momentum from 2.10 to 2.65, and now back down to 2.16. You’ve got opportunities on both sides of these moves. Whether you want to go long or you want to go short. For me, I go to the long side and I was able to capture some profit.

I wouldn’t have been able to short this one if I wanted to. I can type it in here. LBIX. You’ll see the locate, not easy to short. Whereas, a stock that’s easy to short is going to show E right here. So, that’s easy to short, Facebook, no surprise there. But most of these small caps are going to be harder to short. Not just for Light speed, the broker that I’m using, but for most brokers.

The reason they don’t give you these shares available to borrow is because if you short this stock at $2 and all of a sudden intraday squeezes up to 6, to 8, to 12, to 14, you could be at a margin call. If you’re at a margin call, who has to cover you? The broker. The broker’s the one that’s taking that risk. If you blow up your account and you’re in debt $50,000, they’re the one that has to cover you until you can pay them back.

Or, if you never pay them back and you’re broke, then they’re the ones that are stuck with the bill. So, they have to mitigate that risk by making it really hard for you to short stocks that could potentially go up 400% in one day. That’s why they typically just don’t have shares available of these small cap stocks.

If you’re a beginner trader and you buy a stock and you’ve got $100,000 in buying power and it starts to drop, I mean, you can also lose money obviously. But the amount you can lose is at most, your margin. So, you can lose but it’s not exponential the way it can be with stocks like DRYS, or HMNY, and these ones that just go parabolic.

And yeah, someone’s asking on Facebook if it’s legal to work with two brokers. Yeah, lots of our students have accounts with more than one broker. Short sellers will especially do this. They’ll have accounts with three or four brokers to try to find which one of them has shares available to borrow. So that’s very common. I only use Light speed but many people have multiple brokers.

The thing is, each one of those brokers, you’ve got to maintain that $25,000 minimum balance. If you want to have four brokers, each one needs 25k, that’s 100k. That means number one, you need $100,000. Two, if you have $100,000 and you want to be aggressive, let’s say you want to take 40,000 shares of a stock, you’d have to combine that position across two brokers because you might not have enough buying power in just one of them.

It kind of slows you down because you have to take your 20,000 shares in this account and then open up the other one, take your 20,000 shares in that account. That can be a little bit tricky. And Brian, one of the reasons I like Light speed a lot, number one, commissions. For every one that’s a Warrior Pro student, $2 per trade. That’s ridiculous. That’s super, super low. That’s number one.

My commission is 2.50 per trade, because I’m not a student. I don’t want to give myself a preferential discount, so it’s 2.50 per trade for me, but for you guys it’s $2 per trade. That’s number one. Number two, hotkeys. The hotkeys are great and they’re super great. You can see how quickly I get into and get out of trades. I wouldn’t be able to do that without direct access routing. This type of software allows you to trade really, really quickly and that’s giving us a competitive advantage as a trader.

You’re competing in the market against someone who’s trading on their iPhone or using Robinhood or trading with maybe etrader or Etrade or Ameritrade that maybe don’t have these advanced routing systems. You’re just inevitability you’re at a little bit of a disadvantage. That’s the way it is. You want to find any edge that you can in the market, and for me, trading stocks between a dollar and $10, and getting in quick. Getting in, taking my profit, and then trail and trim the rest. That means, it keeps going up, I take a little profit, adjust my stop, adjust my stop, et cetera.

Okay, so again, today’s pretty straightforward. Only two trades. My commissions are pretty light today which is nice. I would have been happy to trade more. I was hoping to get to the $1000 daily goal but I didn’t see another good opportunity, so throwing in the towel here at 11:30 this morning with 600 bucks. Green is good.

So, I’m going to be content with that and finishing the 192nd day of the year, and crossing over $25,000 on the month is not bad as well. All right, so those of you watching on Facebook, feel free to add comments. I’ll come back through and reply to them later on. Anyone watching on YouTube, feel free to add questions and comments as well, answer those.

Students in the chatroom, I’ll answer some of these questions you have now. To trade with a simulator on Light speed, they only will give you a seven day trial. They don’t give you real time, long term trials, unfortunately. However, this platform, and really all … I hate to say this, but all trading platforms are so similar in the sense that if it has direct access routing, whether you’re using DAS Trader or Light speed, they’re so similar that to switch from one to the other, to me it’s like when you rent a car and you’re used to driving your car but all cars are pretty much the same, as long as they’re in the same category.

You go from a Honda to a Toyota, Honda Civic to Toyota Camry. I mean, they both are so similar. Yeah, there’s intricacies that are a little different, but you get used to it, and it’s as simple as that for me, really. It takes a couple days to transition and then you’re used to it, and it was like it never happened.

Jay, no, i don’t trade with an LLC. Some people will do that. There’s some advantages to it, but not enough for me to feel that it was worth it. DRYS, I saw that one today. Squeezing up a little bit. I can pull up the chart on it. It’s one of those stocks on my no trade list, because it’s so, it’s manipulated, it’s crowded. Volume on it today is probably 13 million shares of volume. It’s just not going to be an easy one to trade, in my opinion.

TC2000, yeah, that for me wouldn’t work for trading, but it’s okay for charting. So, I would use it for charting. [Garrin 00:14:05], no I don’t think the position size really makes any impact there. Sometimes if you accumulate a really big position, like you buy up 7500 shares and you’re buying at the ask at like let’s say 2.50, and you buy it up, and even after buying the 7500 shares, the ask hasn’t moved, that tells you there’s probably a hidden seller sitting there at 2.50 who’s unloading his position.

He might only be showing 10,000 shares, but he might really hold 100,000. So, yeah, you bought 7500, but someone else has to come buy the remaining 92,500 shares before that guy’s going to move, and it’s going to break over 2.50. So, that’s the problem. That’s one of the reasons that I like to go in with 2500 shares, because if I see a 10,000 share seller and I buy 2500 shares, as soon as that order goes through it’s going to go to 7500 shares, because that seller’s getting bought up. I’m buying the shares that he’s selling.

So, that’s what I like to see. When I see that, I’ll buy it up, because I know that it’s not a hidden seller. If I just punch the order for 10,000 and it shows 7500 or whatever it might be, and that seller doesn’t change, even though my order went through, that’s something that’s going to make me nervous, because now I’m in with full position and the stock is not going up. The seller’s not moving. That would definitely be a concern.

Couple higher priced stocks that yeah, I saw some of you guys were looking at today. STX, some good volatility on that one. Big range. Spreads are a little on the big side at times, and it’s to be expected with a stock of this price range, but STX, PETS, yep. That one was interesting as well. I saw Mike had a great trade on AIMT, shorting this out of the gates at 37, or 36.80. I mean, fantastic move. Three points, down to $33. Some really good opportunities there.

Today was a day where large caps seemed to maybe provide more opportunities than small … Oops. Than small caps, but yeah, it’s just the luck of the draw. So, a little bit of a slow start to the week with only two trades, but again, for one hour a day, it’s not bad. That’s one of the things that’s so awesome about trading, is once you’ve mastered your strategy, and every single one of you, you are one strategy away from being a successful trader. Once you have one strategy, you come in, you trade that strategy, and then you leave.

We know the best opportunities are between 9:30 and 10:30. So, you sit down at 9:15, you put together your watch list. The bell rings at 9:30, you trade ’til 10:00, 10:15, and you’re out by 10:30. You put in in one hour, and wherever you finish that day, whether it’s with $4000, like a couple Mondays ago, or $600 like today, you come in, you trade your strategy and then you’re gone. It’s just a fantastic skill to have once you’re at that point where you’ve really mastered one strategy.

So, I encourage all of you guys, for the rest of the month of October, to focus on that one strategy that you’re trying to master, and not to try to do a million things at once. Don’t be a Jack of all trades, be a master of one. All right. So, I hope you guys who trade this afternoon trade smart. Probably scale down on your size you don’t give back your morning profits, and I will see all of you first thing tomorrow morning. All right guys, have a great afternoon. I’ll see you in the morning.

Oh hey, I didn’t see you there. Well, 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.