Warrior Trading Blog

Day 29 of the $100k Challenge +$8,097.27 | Ep. #32

Day 29 of the $100k Challenge +$8,097.27


Daily Recap

All right guys, time for a midday market recap. We’ll go over the trades from today, overall it’s been a choppy day. Now, despite it being a choppy day, I’ve still done really well, finishing the morning with $8,097.27. My commissions are $86, and my ECN fees are $394. Up $8,594 before commissions and ECN fees, up just under $8,100 after. Today is a good day that I’m getting back on the horse after two consecutive red days were I hit my max loss. I made $10,000 on Wednesday and then I lost $4,000 on Thursday and $5,000 on Friday. Put me down about $9,000 in those two days. Today is a nice step forward making back about 90% of that. I was up over $9,000 on the day, I thought I had a chance of getting a $10,000 day, but I gave back some profit on some of the last trades.

Big Picture Stats

Actually today’s been interesting because I’ve taken eight trades and I’ve had four winners and four losers. The winners are about $14,000 in gains, and the losers are about $6,000 in losses. That puts me at $8,000 on the day. I didn’t see the resolution that I was really looking for on really any of the trades that I took. It’s not to say that I wasn’t able to capture profit, there were opportunities but they didn’t work out as well as I’d wanted. I’m feeling like today’s gains are in the shadow of the losses on Thursday and Friday so I don’t feel incredibly excited about today’s gains or even super good about them. I’m happy with this step forward but I’m still lagging behind where I was on Wednesday before I had those two red days. I was at about $55,000 in my 100K challenge, small account, but I started with $583 on January 1st and as of this morning I had $45,000.

I dropped down quite a bit and today is a nice step forward, we’ll open around $53,000 on Tuesday morning and then hopefully this week get up close to $60,000 as I make my way up towards 100K. Now, I gave myself a little note, which I’ll show you guys. First, for those of you guys watching on Facebook Live, those are my gains today, $8,097.27. For those of you watching on YouTube, you can see those gains here. I made a note for myself, which is that you’re in the midfield of this challenge, set your pace and go easy. When I get to the point where I’m coming up around whatever it is, maybe 80% of the way there, when I’m coming up to $80,000 in the small account, I think that’s the point where I’ll start to feel like, “Okay, I’m doing so well, I can go ahead and take some extra risk and really try to surge across the line.” For those of you, this is the note that I wrote myself that I put on my monitor, right where my account would be.

Note to Self

I knew on Friday when I wrote it, that I would have to move it on Monday morning before I started trading. I’m going to put it back up there now as a reminder not to trade this afternoon. In any case, when I get closer to 70-80% of the way there, 90% of the way there, I won’t feel as bad about being a little more aggressive in trying to get myself up over that milestone, the 100K mark. At this point, I started this morning 45% of the way there. I’m in the midfield, I’m in the middle of this challenge and this is the time where I need to just kind of keep my head down, grind, set my pace, stay focused, lock up those winners when I can get them. $1,000 here, $2,000 there, but not get overly aggressive.

My Trades Today

Now having said that, this morning, my first trade of the day was on KBSF and I locked up $1,500 on it. It wasn’t exactly the trade that I thought it would be though, and I’ll break this down. What I’ll do here, I’ll back-out of this chart. Where’s my gap scanner? I’ve lost track of it, let’s see, let me find my gap scanner and I will show you what I was looking at this morning before the bell rang. Here it is. Okay, so there’s the gap scanner, so let’s go and change this timeframe, historical date, we’ll change it to 9:15 am, that’s am, there we go. Seems like a little lag. All right. This is going to populate, this is exactly what I was looking at this morning at 9:15, this was my watch list, these were the stocks that I was watching and the ones that I was thinking, “Okay, I got to go through this list.”

Basically I look at the top ten biggest gappers each day, and I go through those and I decide, “Okay, which of these has a catalyst? Which of these has a reason to make a move? If a stock is opening higher than it closed on Friday, there’s probably a reason, whether it’s news or technical breakout. Now, our leading gapper was ZSAN,  and on this one I said, “You know what guys? It’s got almost 2 million shares of volume, I think it’s going to be fairly crowded once the bell rings. The spot I would watch would be for the first five minute candle to make a new high because we already have a little bit of a pre-market pull back. You can see that pull back right here. The first pull back, the second pull back. I thought it would look good over 220, market opens, it ends up surging up to 269, but it came right back down.

Now, I didn’t take this trade and a lot of people look at this and say, “Well, this only got in because you got in and traders want to trade with you.” No, that’s not true. This is a setup that is universal. Traders look at this same opportunity, these stocks go up because they’re already gapping up. Thousands and thousands of traders all around the world are watching these gappers, these top ten gappers. That’s why we focus in on that strategy. In the first five minutes this surged up with 3 million shares of volume, 3.7 million shares of volume. Made a really nice move but I passed on it, I was looking for something that I thought had maybe more potential and that was KBSF. Now, KBSF is the stock I lost five grand on, on Friday and I was really disappointed because on that trade I was up about $8,000 and I ended up totally giving that all back and then stopping out and taking a loss. Very disappointing.

This morning when I saw it gapping up, I thought, “Okay, well this might be one of those stocks like DRYS, it went from $4.00 all the way up to $13.00 between the gap and then the move Friday. Now it’s gapping up again, pre-market, it had a pre-market high over $16.00. This is the type of stock that could have gone to $18, to $20, to $22, $24, $26, $28, $30 and then into the $40’s. We’ve seen it happen before and this was the right type of setup. Unfortunately, that’s not what ended up happening. The bell rang and as soon as it rang I was watching this for a possible entry, just waiting for the spreads to tighten up. I got in 2,000 shares at $16.00, it pops up to a high of $18.00. I’m up four grand, over four grand. Did I sell? No I didn’t. I held it and then the next candle we dropped down to a low or $15.21. I went from being up $4,000 to down $1,800.

Then it pops back up here to a high of $17.89, I sold it, made $1,500, it drops back down and I was like, “Wow, I was sloppy, I’m glad that I’m out of it.” It wasn’t clean, and it had the potential, everything looked right, it just didn’t work. I did take one more trade on it and that trade was getting in here for the break of $17.00. This break of $17.00 was the first five minute candle to make a new high. It’s a good quality setup, the right setup, I got in and instantly it dropped and I lost $1,200. I went from being up $1,500 on the … Well, unrealized $4,000, to down $1,800, closed at up $1,500 and then I gave back $1,200, I’m up only $300 on the name. Not exactly what I was looking for there, I was a little annoyed that I gave that back because that’s a really frustrating thing to do, especially right after the market opens. You get into a trade, you’re up $4,000 and you’re thinking, “This looks like this is going to be it. This is a great setup, it’s working.”

I held it because I was thinking, “Look, what if this thing goes to $18, and then breaks and then $19, $20, we have a short squeeze. This could be an $8,000, $10,000 winner, I’m going to hold it. Then of course in one candle it drops two and a half points. This is the type of stock that could’ve done either and it just ended up dropping, which is disappointing. I locked up a small win, got in for the first pull back, second opportunity, stopped out, gave back basically all my profit. In the first five minutes I went from being daily goal to just basically up $250 on the day after commissions. That’s when I was like, “All right, well this looks like it might be a little bit of a choppy day, lets kind of switch gears, look for the next opportunity.” The next one was MYOS. Now MYOS has been on my watch list for several days waiting for the first daily candle to make a new high.

The Daily Breakout on $MYOS

Now, the reason I like this so much is because MYOS has a history of making these big moves. This big move here a couple Fridays ago, this one here a couple Fridays ago. I was watching on Friday for potentially the break over $4.30. It didn’t happen, we opened lower, but then this morning we opened and started to get a little volume as we came up towards $4.00. Yesterday’s high was $4.03, and so that was the spot I was watching. You can see here, first daily candle to make a new high, we pop up to a high of $4.60, up $.60 from the entry there at $4.00. It ended up being $4,426. It was a good trade, it just didn’t work out as well as I wanted it to. On the five minute chart once again, I got back in for the first five minute candle to make a new high right here, and I got stopped out. That’s where I gave back. First trade I was up $6,000, second trade gave back $2,000 right here, gave back about $2,400 on that.

It looked good, it’s the right type of setup, it just didn’t work, I don’t know why? For whatever reason it didn’t work. After that trade I was up about $4,500 on the day so I was like, “All right, that’s pretty good, not a bad day.” Of course, I was up $6,500 and then gave back $2,500 of it. Being up $4,500 or whatever it was didn’t feel like the biggest win since I just gave back a third of the profit. Next trade, GLBS. Now, we saw SINO, S-I-N-O, running up this morning. Strong momentum, it moved from $3.40 all the way up to $3.67. As it was moving I kept saying, “Look guys, I need a five minute pull back, I need a safe opportunity to get in this stock. I can’t just buy it as it’s squeezing up on the one minute.” I told myself I would really try to cut back on that this week and focus more on five minute setups, I got to wait. I said, “All right, I’m going to wait.”

While I was waiting, someone brought to my attention GLBS in the chat room, they said, “Hey, look at this one it’s starting to consolidate.” It popped up with SINO, pulled back, let’s watch it over $7.50. I looked at it and I said, “That’s great, that looks like a good setup because it’s sympathy.” They’re in the same sector. GLBS, DCIX, ESEA, TOPS, SHIP, SINO, DRYS, seven shipping stocks and every single one of them got a little bit of action today. GLBS, one that I’ve traded quite a bit and I’m familiar with, I got in at $7.50. We spike up to a high of $7.88, and then all the way to a high of $8.49. Now again, on this one, was looking for that second move, I got back in for the first candle to make a new high, popped up to $8.10. Stopped out as it dropped down to $8.50. On this one I made, let’s see, $5,700 on the first trade, and I lost $1,500 on the second.

Again, a step forward and then a step back. Just frustrating. That put me up around, I think after the winner I was up about $9,000 on the day, and then after the loser I was up only $8,000 or something like that. Gave back a little bit of profit there. Then the last trade I took was SINO, the first five minute candle to make a new high. This was a good one, entry right here at $4.55, which came up to a high of $4.87. I ended up selling it in the 70s, only made $324, I took smaller size on it. That’s where we’re finishing today, you can see SINO, you can see DRYS, strength there. ESEA, a little bit of action there. DCIX, little bit of action there. These are all those shipping stocks. Usually when one starts to get momentum, the others do as well. Actually SHIP didn’t really move at all today but the other ones did pretty nicely.

Total today of eight trades, I think it was eight. Actually it might have been nine, no it was eight, it was eight. I actually took three trades on GLBS, I took three total trades on GLBS because I added at $8.30 and stopped out at $7.80 but I was still holding a core position so I guess we’ll call it eight trades. Anyways, not the easiest day ever but for the most part I had a couple trades off the gap scanner, off my watch list, a couple trades off the high day momentum scanner, and $8,000. It’s not bad, it’s a good day. When you’re being as aggressive as I’m being, trading 10,000 shares, 15,000 shares, you want to get trades that run $.50 or $1.00. That’s where you’re going to get the big wins. Today we didn’t really have that, the only one … GLBS was good but it didn’t hold up. SINO was okay but wasn’t able to get a good entry. NYOS didn’t hold that level, and KBSF was just horrible.

Getting Desensitized to Loss

Hopefully we’ll see some better opportunities but it’s one of these things where last week I was kind of thinking about the trades I took. Of course, I made $5,100 last week but I lost $10,000 on Thursday and Friday. I would’ve been up $15,000 if I hadn’t had those two red days, maybe would’ve been up more if those red days actually had been green. I was thinking about that, I was like, “Okay well, the good news is you made $5,000, that’s good. Obviously the strategy is working but I feel frustrated that I gave back that much profit and I feel frustrated that I stepped up with such large size on a couple of these trades and then got crushed in slippage.” I reminded myself that this is again the time to be consistent. If I keep doing the same thing, eventually I will get into one of these trades that 100% connects, it opens up and I’m going to get that $20,000 winner in one trade. Or $10,000, $15,000 winner in one trade.

The $3,000, the $4,000 winners are good when you take 15,000, 20,000 shares and you’re thinking $.30, $.40 that’s good, but getting points is ideal and I just haven’t had trades that really open up and give me that opportunity at least in a couple of weeks. I’m just going to be steady, this is the strategy, it works. When it works I’ll have weeks where I do $26,000, $30,000. I’m up $8,000 on the week right now and obviously got four days to go so this might end up being a good week. I’m up on the month $47,000. It’s a terrific month and I’m … Sorry $45,000 on the month and I’m up $87,000 on the year. Obviously the strategy works but you have to be prepared when you swing for the fences or when you take big size that you’ll have big losses.

I think in a way I’ve become desensitized to making $8,000 or losing $4,000 because it’s been happening so much, those are no longer really big numbers to me. For a lot of our students, losing $800 may feel horrible and making $1,000 may feel amazing. But as you start to experience these extremes and they get bigger and bigger and bigger, your threshold for what you can tolerate emotionally also expands, and that’s good. In my opinion that’s good to test your boundaries and to go outside your comfort zone because it really helps you develop as a trader. For me, these two months, the last two months are two of the best months that I’ve had trading so I’m just seeing that all of the efforts and all of the work that I’ve put in, even over the last six months to try to improve my strategy, to try to condition myself to be okay with taking more risk in exchange for when it works, a bigger winner.

My Strategy: Be Aggressive

It is paying off. The strategy I’m trading right now is no different from the one I traded a year ago in January and February, or two years ago, three years ago, it’s not different, I’m trading the same strategy. The only difference is that I feel comfortable to take bigger positions. One of the things that’s nice is to know that this is a scalable strategy. Whether you have a $500 account or a $50,000 account, or a $500,000 account, that you can scale this. I don’t think you would be able to easily take 100,000 shares of most of these stocks, but to take 20,000 to 30,000, 40,000. That’s most likely going to be realistic for most of these trades. Not all of them, but a lot of them. Definitely SINO wouldn’t have been a problem, it’s got 13 million shares to volume today.

There’s a range with these stocks of how much liquidity they have to support that type of scaling and I don’t think you would be able to trade the same strategy with … I wouldn’t have been able to start this year let’s say with $500,000 and have by now turned it into 150 million or whatever. That’s not realistic, there’s not that amount of liquidity, but can you take 10,000 shares, 20,000 shares and get $5,000, $10,000 winners? Yes. I think that if I had the market on my side and we had some better follow through on some of these trades, I could potentially be seeing $20,000 winners. Maybe $30,000 or $40,000 winners if I was trading … If we had some really parabolic stocks, which is kind of like KBSF except for the fact that this one was too thinly traded, there wasn’t enough volume.

On Friday it traded four million shares of volume as it went from $5.00 to $11.00. There were a couple of opportunities maybe right on the five minute pull back around $12.40 where you could’ve gotten in and taken some size, but it wasn’t super, super liquid. DRYS has been a little bit better actually. A little easier to take big size on that one. Again, I’m trying to test my own comfort, my own ability to take more risk and not feel stressed out about it. I think being a little outside my comfort zone has been good. Although, losing $13,000 two weeks ago was not fun, making $22,000 the next day, or two days later was pretty awesome. Those are really the two extremes that I’ve had in over a year in terms of biggest winning day and biggest losing day, and they were really within three days of each other.

I think that I could scale down and I could have a $1,300 losing day and a $200 winning day, or I could scale up and that’s … I think last year at this time my winners and losers were more in the range of $1,300, $2,200, maybe $3,000 on a really good day. The difference between last year at this time and now, is that I’m trading with about three times as much share size. The gains are amplified and the losses are amplified. In any case, that’s where I’m at here. This is a good start to the week, good Monday. Hopefully we see some really good opportunities tomorrow, Wednesday, Thursday, going into the weekend. We’ll see what the market’s willing to give us. It’ll start the same way as always, first thing tomorrow morning, looking at the gap scanner, looking for the stocks that are opening higher than they closed today. We may see continuation on DRYS or on SINO where they open higher.