Warrior Trading Blog

Day 45 of the $100k Challenge +365.46 | Ep. #49

Day 45 of the $100k Challenge +365.46 | Ep. #49

All right guys, so here we are, we’re going to do our day 45 of $100,000 challenge recap. Obviously yesterday I hit the $100,000 mark and at this point I’m just going to continue trading in this account. I don’t have any hard goals of what I want to do with it, but my plan was that I would be trading in this account for all of 2017.

I think at this point I’ll just continue with that plan. I thought it would take me the whole year to get up to $100,000, but obviously it only took me 45 trading days or about two and a half months. I’ll just keep trading in this account, I’ll keep documenting the journey and we’ll see where it takes me.

For now, it’s still the $100,000 challenge and I just hit that goal a little early. Maybe I’ll end up hitting whatever it might be, 150, 200, 300, I don’t know? We’ll just keep it going and hopefully I still have strong markets on my side.

The big thing that I wanted to show you guys of course, was that you can grow a small account. It’s not about how much money you have, it’s about the skill. I’m not going to start over at $500 again, although that’s something of course I could do, is just keep starting over at 500 and going up to 100,000.

It’s obviously very difficult number one. Number two, even though I’ve clearly done pretty well to be able to make $100,000, I think that we had extremely strong markets in the first month and that definitely helped me. If I kept restarting, I would inevitably get to a point where we have a slower market during my first month of a challenge.

That could really drag out the process of building a small account by several months. That would potentially mean for me that I would have months where I really didn’t make any money day trading.

If I only make $4,000 or $5,000 in a month versus $60,000 last month, I’m really cutting myself short. I’m just going to keep growing this account and we’ll see where it takes me. Well, and that’s the thing Anthony, I did the same challenge last year, very similar challenge. I took $1,000 and turned it into $8,600 in one month.

This is absolutely something that is repeatable. That amount of money I started with this time was less, I traded a little bit more aggressively, there’s always going to be some variables. In any case, today’s a funny day because I’m finishing with only $365, so it just has ended up being kind of like a total dud.

I came in like today was game day, I was like, “All right, I’m up $20,000 this week, I’m crushing it. This is a potential to be maybe my best week ever if I’ve got two more strong days.” I step up to the plate, I’m looking for something and it’s like no one showed up for the game.

There was nothing today, I mean like almost nothing. I had a total of three trades, one winner and two losers, so accuracy has gone down today to 33%, but obviously on a very small data set, only three trades. You know what? That’s fine.

The good news is that with 33% accuracy, I’m still walking away green. My losers were both $.03. Two $.03 losses and one $.13 winner. That’s a 3:1 profit/loss ratio, and with a 3:1 profit/loss ratio you can be profitable even if you’re right only 30% of the time or 40% of the time.

Today was a day where I was able to just feel like I could sit back I didn’t have to be aggressive. I’ve had a great week, I’m up $20,000 between Monday, Tuesday, and Wednesday. If the market wasn’t here, if there were not A quality setups, I wasn’t going to be aggressive.

For those of you watching on Facebook you can see my PNL there, $365.46, and you can see the account, $101,000. Now, for me, I also had this thought in my mind that I really don’t want to drop back below $100,000 now that I’ve crossed this threshold. I kind of in my head was like, “Today’s the day where I have to have my max loss a little bit tighter so I don’t fall into the red.”

I don’t want to have a $3,000 or $4,000 losing day and fall back below $100,000. I’d rather just keep going, keep building up, kind of get a buffer off that $100,000 mark and then from there, maybe start to get a little more aggressive. This is fine, this just helps me build up that buffer a little bit more and hopefully we’ve got some good opportunities tomorrow.

Although, Fridays have not been very good for me so far last month or … Well, this month Friday was okay, but I’ll be a little cautious. We don’t always have really good headlines on Fridays.

Daniel, to answer your question, the trades that I took, and I’ll go over them for you here. RNVA was off our gap scanner, so I’ll pull that one up. This stock was gapping up pre-market, and this was a simple gap-and-go strategy. The pre-market high was $2.70, but we ended up opening just a little bit lower.

Now, I jumped in this at $2.60 as soon as the bell rang because I knew it was almost definitely going to retest pre-market highs. This is just a pattern we see so often. I jumped in with 5,000 shares, not being super aggressive on size, I got in at $2.60. It pops up to $2.85, so I’m up like whatever, $1,200.

It starts to drop down and I sell it and I lock up $.13 of profit, $650. It drops back down, it starts to pop back up and that’s when I decided to get back in. This time I got in with only 2,500 shares at $2.80 because I knew this wasn’t a very good one minute setup.

I figured, “Look, it just dropped down, but then it came all the way back up. I’ll give it a chance.” I got back in at $2.80, it popped up to a high of $2.86 and then it rolled over so I stopped out of that at $2.77.

It dropped down here for a second to like $2.70, and then it popped up and this was kind of like inside this one minute candle and so I ended up hitting the bid at $2.77. I just hit the bid and it was that quick.

I didn’t know when I hit the bid if I was going to get filled at $2.78, or $2.79, or $2.75 because I think it was $2.78 on the bid. My average ended up being $2.77, so lost a little bit there and then it ended up rolling over. Interestingly, XTLB was also on our scans this morning and was similarly kind of choppy out of the gates.

It popped up and I decided not to chase that one because I didn’t like how RNVA traded. Then, you know what? It’s a good thing because it ended up rolling over. This is a stock that I didn’t even touch it, but it did almost the same exact thing, it popped up and then it rolled over. You see this stuff all the time. Today just wasn’t a good day to be aggressive.

Those were two trades on RNVA, $.13 winner, $.03 loser, so that put me up a net of, what is it, $581 on the name. Then I traded INAP, and this one I got a little just sort of … I jumped into it.

Someone in the chat room was like, “Hey, INAP is spiking up, take a look at it.” I see it spiking up and I was like, “Oh, interesting.” They said there’s news on it, there’s earnings. I looked at the daily chart, I saw it was sort of a former runner, had made a big move on this day.

In my mind I was like, “Okay, it’s breaking out, we’ve got room up to the high here, $3.03, I’ll jump in,” so I jumped in 5,000 shares right as it was spiking at $2.75. We pop up to a high of $2.94, and again, on this one I was thinking I would add possibly over $3.00, to 10,000 shares and maybe we would move up to $3.10.

Then it rolled over really quickly, dropped down to $2.68, popped up to $2.80, first candle to make a new high, went up to $2.83 and when it couldn’t hold that level I said, “Nope, I’m out.” Hit the bid, market order, bailed out, and that was it.

On that one I lost $.03 with 5,000, so about $135 and it wasn’t three, it was two and a little bit, whatever it was. $135 loss on that. Then at that point I said, “Okay guys, clearly the market’s kind of weak, so I’m just going to look for,” yeah, I was hitting the bid. It’s a marketable limit order.

If you hit the bid with a limit order of $2.60 and the current price is $2.68, basically it’s a market order, right? But it has a limit, the least that it’ll give you is $2.60. Anyways, at that point I said, “All right guys, I’m just going to switch gears and look for reversal trades.” I started, I see IMMU popping up a little bit, a little bit of volatility there.

I was like, “All right, I’ll watch the reversal scanner, we’ll see if we see something good.” I didn’t get any alerts today on my one minute reversal scanner. This is the one that I traded QCOM on yesterday, QualComm, and nothing on it today.

IGT was on the scanner at 11:30, but not on my one minute scanner. We got a little bit of a reversal here, and I’m pretty sure one of moderators traded this in the room, but I didn’t trade it. Mike traded SIG, he took a short on this, made a solid point on it after these four consecutive green candles.

Shorted up on the highs around $69.00, covered on the drop down to $67.29, something like that. Solid trades there, but higher price names and neither of them for me, looked as good as what I was wanting to see. I’ve got basically a pretty tight filter of when I’m willing to take a reversal, a counter trend trade, trading against the current.

These ones for me didn’t really fit it, so just a slow day. I can afford to have a slow day because I was really aggressive when the trading was high, and that’s what you have to do.

If you get into that mindset of, kind of pacing yourself, like, “Oh, I’m always going to take 2,000 shares. I’m always going to take three trades a day.” Then on a day when you’ve got incredible opportunity, you’re totally minimizing on that potential, you’re not capitalizing on it at all.

Then on a day when a market is horrible, you’re still grinding and you’re just going to have losses. I know a lot of traders try to get into that almost robotic trading mentality because it’s easier to disconnect the emotional side of it, which is what sometimes encourages you to scale up or scale down, but you really need that because that’s how you make a ton of money on a hot streak and then during a cold streak you taper back.

It’s what you have to do. That’s definitely what I’ve done this week. Today I tapered back, biggest share size was 5,000 shares. Yesterday I was trading 20,000, the day before was 20,000, the day before was like 12,000.

I tapered back today and it was absolutely the right move. If I had gone in these with big size, I would have ended the day red almost definitely because with 10,000 shares I wouldn’t have been able to minimize to only $.03 of loss. Slippage would’ve made it worse, $.05, $.06, $.07.

Anyways, that’s kind of where we’re at today. An uneventful day 45 and that’s fine with me. I’m just happy that we hit the challenge and hit the $100,000 mark, so can scale back a little bit now. Just kind of work on building that cushion, wait for good opportunities to show up, and when they do I’ll be ready to be extremely aggressive.

I see IMMU, a big whip there, this is interesting because it dropped down to $4.80 and then it spiked up to a high of $5.64, and this is halted right now on a licensing deal over a cancer drug. Some opportunity there perhaps.

The way I trade these stocks that are halted, I look at the high before the halt. The high is $5.64, if it opens below $5.64 I add at $5.64. If it opens higher, I might add at a half dollar or a whole dollar. In this case, if it opened at like $.89, I might add for the break of $6.00, but I wouldn’t add above $6.00.

If it opens above $6.00 I would just wait for the first one minute pullback. This will probably be a five minute circuit breaker halt on IMMU. You can keep that one on watch. Just to check the float on IMMU, this one is 88 million shares, so it’s not an 8 million share float, it’s a little bit more thickly traded.

That just means that … It means two things, number one, if you want to take a really, really big size, it’ll probably have the liquidity. But number two, it’s not the type of stock that typically is going to move 50% or 100%. If you’re looking for that type of move, it may not be the right one.

These midday new opportunities are sometimes a way to have a boring day suddenly become interesting, but at the same time, these types of trades have also gotten me into a little it of a pickle on a day when trading wasn’t really going that well and so I jump into a news play and next thing you know I lose $2,000.

That’s happened to me many times. That’s why I get a little cautious trading the news. For those of you who have been part of the community for a while, you probably noticed that in the last maybe two and a half months I haven’t really been using the news radio as much, that squawk-box that says the news.

I just kind of found it distracting. Yes, there are certain times, like this, that maybe there is an opportunity missed, but it also drew my attention away from good quality setups because I would jump to the thing that was sparkling. Then the next thing I know, that thing didn’t work and the good quality setup is now gone without me.

Just be mindful. Also, we’re at a lunch hour so a lot of traders, myself included, are not going to trade this stock, that means less volume, less buying volume. You sort of have to think about that collective trade mentality.

It’s not just me, it’s thousands and thousands of traders all around the world that are all having lunch right now, or know that it’s the lunch hour, this is a time to be a little bit more cautious. Doesn’t mean the stock won’t run, but you’re going to have typically fewer participants.

Times when you have fewer participants is usually when you get more of the false breakouts and the choppy price action. That’s why I avoid lunch and definitely on a day like today it’s probably for the best. We’ll see what it looks like when it opens.

Let’s see. Some trades you guys were looking at today, OCRX. That was one that was on the scans for sure. I wasn’t super interested in it because it’s below $1.50 and $1.50 is kind of like my minimum price. It was continuation from a move yesterday, continued to rally higher and there was some opportunities here.

With big share size you could’ve made some money. You’ve got a lot of volume on this thing today, looks like millions and millions of shares of volume. You certainly could’ve been aggressive if you wanted to, but not really my go-to price range. Brandon, in terms of swings, Jeff will call those out when he sees them and when he takes the swing trades.

He’ll send out email alerts as well. Let’s see, on IMMU, I don’t have the time on this one. Let’s see, the time, it was halted at 12:19 … No, sorry, I’m looking at the wrong stock.

IMMU, it’ll be resuming five minutes from the halt. It was halted at 12:14, so it should resume around 12:19, so it should resume any moment now I would say. We’ll watch this. There’s the resumption, opening a little higher at $.72, a little sell off to fill the gap. The high of that candle’s $.72, so over $.72 is a possible add point with a stop at the low of the previous candle.

Looks like it’s going red, false break, made new highs for a second, went up to a high of day of looks like $.78, and now down to $.48. That’s kind of typical. At this point, the setup that I would sometimes look at would be the first candle to make a new high, but that would be almost a red to green move.

Yes, there’ll be a mentor session today at 4:00 pm, you guys can log in for that, Warrior Pro students. Mike will be teaching that class, and then I’ll be teaching class again on Tuesday.

How do I deal with big spreads? For the most part I try to trade stocks that don’t have really big spreads. Sometimes I’ll end up with a stock, like a GLBS or something like that where the spreads are $.08 or maybe at most $.12.

It does make it a little bit trickier. Obviously it increases the risk, so the way I handle that increased risk is usually to take fewer shares, smaller share size. That’s the safest way to do it if I still think it has a lot of potential despite the spreads. Sometimes the spreads are enough for me to say, “I can’t trade this because I can’t manage risk on it. My stop is going to be too far away.

I don’t want to be instantly down $.20 or $.30 as soon as I buy this stock.” That’s especially true with some of the higher priced stocks that come up on the reversal scanner. Sometimes there’s a good looking reversal setup, but the stock has $.22 spreads.

As soon as I get in with 1,000 shares I’m down $220. If it drops a tiny bit, I’m down $400. I can’t do that. That’s my approach on spreads, but for the most part, if we’re looking at the right type of stock, the right stocks require volume, high relative volume and so usually the spreads will get tighter because of that volume.

All right, so a little bit of a shorter midday recap today, not as much to go over, but we’ll be back at it first thing tomorrow morning, Friday, and we’ll try to finish up the week strong. All right guys, so enjoy the afternoon and I will see you all first thing tomorrow.

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