Warrior Trading Blog

Day 36 of the $100k Challenge: -$3,930.01 | Ep. #39

Day 36 of the $100k Challenge: -$3,930.01

Daily Recap

All right guys, so I’m back here finishing the day, day 36 of the $100,000 Challenge down $3,930. A very frustrating day. I was not getting really clean resolution on any of the trades I took. One of the trades I took, $SGY, with 10,000 shares, I was up about $3,000, didn’t take the profit, I was looking for a bigger move, ended up turning into a loss. One of the things that I’ve tried to avoid doing. For the most part I tried to keep the stop tight at break even, we dropped down to the whole dollar, my average was $7.08, we dropped down to $7.00 and I was like, “Well, let me just give this a second.” Then when I hit the market order to bail out with a 10,000 shares, I got slippage so ended up being $2,100 loss, which is just incredibly irritating.

Then that was followed by $1,000 loss on $PHMD, and $1,000 loss on $AAOI, which both of them were frustrating. $AAOI maybe more frustrating because I had the right idea and it ended up running two points after I got out but this is the luck of the draw. It wasn’t a clean breakout, it was the right thing for me to do to take the loss, I was a little early on my entry. For those of you watching on Facebook, you can see there’s my PNL today down $3,930. I started the day with $76,750 I the $100,000 challenge and obviously on Monday I’ll be $4,000 lower than that, so around $72,000.

The good news is that I still have a net profit on the week of about $6,000. Last week I made $20,000, so this week, making $6,000 is definitely a smaller week but at the same time this is part of trading. Some weeks are going to be really good, some weeks are going to be a little bit slow. As long as you’re moving in the right direction, that’s what’s important. Because this is the end of the week, I’m going to breakdown my weekly stats and then after that we’ll go into the recap of today’s trades.

I’m going to go here into trader view and just show you my stats. This is up through yesterday, it does not include today’s losses, those will get imported on Monday. Before the loss today, the $4,000 loss, I was up, had a profit of about $76,000. Largest gain since I started this challenge, $10,000, largest loss $5,500. Commissions have been $2,000 plus ECN fees, $3,900 so about $6,000 in commissions and ECN fees with 79% accuracy. Really pretty solid accuracy. Profit/loss ratio is not good because of the fact that the losses I’ve had have been pretty big, I mean they have been. I’ve had 80 winners and 21 losses but those 21 losses have all been fairly brutal.

You can see here, for those of you on Facebook, this is where things are looking for the $100,000 challenge. I guess as of today I’ll be about 72% of the way there, down from 77% but that’s okay. Now, if we look at the overview here, top left. This is the overview for the last 30 days, I’ll just change it to 60 days. You can see here how I had, the very beginning of the challenge, really small days. $187, $150, $150, $153, small winning days. Then finally I got that day where I surged up, made $1,700, I finally got a really good day. A little bit smaller day, another big day, and then I got this day that really just opened up the account. That $7,000 winner, but it was followed by my first red day, I got a little overconfident. Bounced back aggressively, had a $15,000 winning day. You can see here, in total I’ve had, now today will be the sixth red day.

When you look at the PNL, you see these moves up, a little bit of a pull back, another move up, a bit of a pull back, a move up, pull back, move up, and this will be a pull back. That’s what almost every equity curve looks like for any trader. You move up and you pull back. In the last five or six days of trading I had about $15,000 of profit, and now in the last two days I’ve given back $4,500. That’s kind of like three steps up if each step is $5,000 and one step back, and I can handle that. That’s sort of where I’m at with my stats here for the month, well this is since January 1st. That gives me confidence even in the shadow of a red day. Yes, this is a red day, I don’t like having red days, nobody does, but if you’re going to try to aggressively grow an account from $500 up to $100,000 you’ve got to take risks, and sometimes luck is not going to be on your side, the markets are not going to be on your side and you’re going to take some losses.

Having said that, there are of course things that I can do and that every trader can do to minimize those losses as much as possible. We have to understand risk. Every single trade that I take carries risk and there are some days where the market is just simply a riskier environment for me to try to trade in. I think today was a riskier environment and that’s probably exemplified in the fact that I’m red on four out of the five names that I traded, right? This is what I talk about a lot. When I’m hot, I’m green on six out of seven names or seven out of seven names. When I’m off and just not feeling it, I’m red on almost everything. Today’s a day where I was aware of that trend that I was already red on two out of three names. Took a trade on $PHMD, and I’ll break down the trades but you know.

These last two trades, $PHMD and $AAOI both $1,000 losses, I actually didn’t think I would lose that much on either of them. On both of them I thought they would be small winners or maybe small losses and they just kind of got away from me. Maybe that’s because today just wasn’t a great day to be trading. I could’ve minimized my loss today by not taking those additional trades. For all of 2016, I traded with a max loss of $1,000, which meant not that I wouldn’t have losses bigger than $1,000 because I did, but it meant that if I was down more than $1,000, I couldn’t take an additional trade. My account had a restriction from my broker. Now, since I’ve been swinging for the fences and having these really big PNL swings, I’ve increased that max loss to $5,000 and I think that that’s fine.

I’ve proved on one occasion so far that I can trade from in the red back up into the green or that I can trade from in the red to not as badly in the red. That’s definitely a good thing. Actually I did that yesterday as well, I’ve done that twice. I did that last Wednesday the 15th and I did it yesterday the 23rd, both of those days I went kind of deep into the red and then worked my way back out. I didn’t get out 100% of the way, I closed both those days red but I did reduce the loss. I tried to do that today and today I made the loss a little bit bigger but I kept it within reason and I think that that’s fine.

Today’s Trades

To go over the trades from today. I was a little bit hesitant this morning because I really didn’t see anything on the watch list that I liked that much. We had $PULM, which was my best trade of the day, really this was the only trade that was good, was clean, and that I would stand behind and say, “Yeah, I would take that trade again.” Long over $4.20, right? Pre-market highs, actually we had a spike here but resistance here on the daily from yesterday’s high got in at $4.20, 5,000 shares, sold it on this spike up. Very clean, easy trade, no stress, $720. I should have called it a day with that, I mean that was a great trade. After that trade I got into $SGY. This one was really kind of disappointing because I took 5,000 shares at $6.90 and then I added 5,000 on a one minute pull back at $7.30 and that ended up being a mistake because now I had 10,000 with an average of $7.08.

I’ll show you where I added. I added 10,000 right here on this one minute pull back, and you can see how this is a one minute pull back, this was a logical place to add. I was looking at the daily and thinking, “This has room up to $10.00, it’s a former runner, it’s got a history of making big moves.” You can see this day here, or these couple days where we went from $6.00 up to $12.00 so it was the right type of setup to do that on. We popped up from $7.30 up to a high of $7.50, resistance at the half dollar. Right there I was up $4,200, if I could’ve sold on the ask, that was $4,200 profit. I was preparing my orders to sell on the break through the half dollar and I also had the back of my mind target that if we could get through the half dollar we might get to $7.75, $7.80, $7.85, $7.90, $8.00.

Unfortunately we pulled back in a one minute candle all the way down to $7.08. This is one of those times where $4,000 of unrealized profit disappears awfully quickly and I go down to being break even. At that point I was like, “Okay, well this stock is still showing incredible strength today, I’ll give it a second, let’s see if it bounces back.” It went to $7.06, popped up to $7.29, and then I started to think, “You know what? Try to just get out break even. Just try to get out break even, don’t try to turn this into a winner.” I put my order on the ask at $7.08, $7.09, I didn’t get anything filled. Then in this candle here, we dropped down to $6.92 and I was like, “I got to sell, I can’t keep holding this,” and that’s where I threw in the towel then in this candle where we dropped all the way down to $6.71.

Basically to go from up $4,000 to down $2,000 on a stock is not something anyone likes to do. On the one hand it shows a lot of … Sorry, my cord’s all tangled up down here. On the one hand it shows a lot of volatility but on the other hand it tells us that this stock is just not clean, it’s giving us some fake-outs and it’s just not holding up. It is what it is, I took a loss on that one. In hindsight, maybe I shouldn’t have doubled but by doubling and by being aggressive I have days like Wednesday where I made $8,000. Today’s just one of those days where it didn’t work and that’s just the luck of the draw I suppose. $SGY, no follow through on that one. From there, I was starting to feel a little frustrated, a little agitated, but I was like, “You know what? Just let it go, don’t worry about it, these things happen.”

I jump into $ZSAN, Z-S-A-N, $ZSAN and I got in this pretty high. Fortunately I only lost $20 on it. I got in with 5,000 shares of this one at $6.93 right here for the first one minute candle to make a new high, nice little pull back. We popped up to $3.00 and we were heavy at $3.00 and I said, “This needs to break $3.00 or I’m out,” and we kind of hesitated there for a second, and then when we couldn’t break that level I just stopped out. I ended up on 5,000 shares losing half a penny, which is no big deal. Lost on that one, and then $PHMD, this one came up hitting the scanners, squeezing up. Again, on this one I was like, “Okay, looks good, it’s a former runner, it’s got a pretty clean daily chart with room up to $3.15.” I jumped in at 5,000 at $2.30, doubled to 10,000 with a $2.32 average.

We popped up to a high of $2.45 and I was like, “All right, this looks good,” but I wanted to break the half dollar of $2.50. Really needed $.20 of profit so from $2.30 up to $2.50, stop was $2.20. Then you can see here in this candle, all of a sudden we drop back down to $2.26, I held for a second and then I sold on this candle here. The fact that I was selling 10,000 shares obviously didn’t help, there just weren’t a lot of buyers. I thought this stock would get some momentum but it didn’t so I lost $1,100 on this one. I thought I had the right idea but on this one I was just wrong, the momentum wasn’t there.

At that point I was down $2,800 and I was pretty much like, “I’m probably done for the day, but I would also like to keep my eyes open for a good reversal trade.” That’s when I saw $AAOI coming up on the reversal scan. I was watching this for a short, I was looking for the first red candle after this long consecutive run of green candles. I was kind of watching it around the half dollar at $47.50, right here, but I didn’t want to get in a little too early. In any case, it drops from $47.50 down to $46.18, so it just really dropped quickly, would have been a great trade. Pops back up, consolidates, and this is when I start thinking, “Well you know what? This is looking like it’s going to be a long. I think I want to get in this for a reversal trade.” I’m letting it consolidate here, watching the pull back on the moving average, and when I see it start to pop up here $46.34, I think, “Okay, this is looking good. It’s breaking over the 20 moving average so I’m going to jump in.”

I went ahead and jumped in right here at $46.52, right around there, and I took 2,000 shares. Then it dropped all the way down to $45.87, lost $.50 on it, and it was like that. I took the loss, I was like, I thought it looked good. I didn’t think I was risking $.50 when I got into it, I thought $.20, which I was comfortable with, $400, but it just dropped very quickly and so I stopped out. Obviously though, I had the right idea, I was just early and my share size was maybe too big to hold through the pull back. It’s nice when you’ve got the right idea and that tells you, “Yes, you’re looking at the right stuff, you had the right thought but the timing was off.” Maybe not really any fault of my own just didn’t work when I thought it was going to work. Added another $1,000 of loss on that one and at that point I was like, “Okay, I’m done for the day.”

I’m not going to recover this loss, there’ll be better opportunities probably on Monday. Opportunities where I can take 10,000 or 15,000 shares and make $.50, and make back this $3,900 in one trade, and that’s not going to happen today. With 2,000 shares though, I did think from $46.50 for my entry, if we could get back up to $47.50 I could make $2,000 and that was realistic. Wasn’t going to get me 100% out of the hole for today but it was good potential and obviously it’s gone even farther than that. This could’ve been a $4,000 winner but obviously if I had gotten back in a second time I would’ve risking $1,000 the second time and I try to avoid getting back into a stock that’s burned me once.

In any case, today, a little bit of a setback, a little bit disappointing. I’m not happy with closing the week on a red note but if I step back and look at my overall statistics I can see that even though today is red, I still trending exactly where I want to be and I’m actually way ahead of my schedule. I’m now $28,000 away from the $100,000 goal and I’m still planning that I’ll be able to get there at some point in March. I think that’s realistic. I just have to stay focused, look for the next trade, not let myself get bent out of shape over this little setback today. That’s what I’ll do, I’ll jump back on the horse Monday morning looking for a good momentum trade. If we continue to see choppy markets like we saw today, then I’ll have to just continue to be mindful of that.

I had two red days two weeks ago now where I lost, and you can see here, lost $4,000 on the first day and then lost $5,000 on the second day. I’ve had two back-to-back big red days during this challenge and obviously I’d like to avoid that, but then on the following day I made $8,000, the day after that, another $8,000. Even when I have a couple of consecutive red days that feel like a pretty big draw down, I can still bounce back out of that pretty quickly. The goal is right up here, $100,000, little bit of a pull back here in the $75,000 range, and then hopefully I can get a nice strong push up to $100,000. You can see I had a really strong push from $16,000 up to $55,000 and it slowed down a little bit in the last two weeks or so. I say that but I’m still up $26,000 in the last two weeks. Still pretty good but slowing down maybe a little bit.

All right, so that’s it for today and any of you who have questions or comments who are watching on Facebook or YouTube, you can put them in the comments section and I’ll make sure I reply. For those of you in the chat room, we’ll get back to it first thing Monday morning and I hope you guys all have a great weekend, relax a little bit. It is definitely a good idea to get your mind on something else and kind of let the trading stuff simmer on the back burner, come back to it refreshed on Monday morning. All right guys, so I hope you all have a great weekend and I’ll see you on Monday. All right, thanks.