Warrior Trading Blog

Day 61 of the $583 Challenge -$5k Getting too Aggressive


Day 61 of the $583 Challenge -$5k Getting too Aggressive

All right guys, so we’re going to do a little midday market recap here, a little on the earlier side, go over the trades from today. Overall, extremely disappointing day. I’m not happy with how I traded. I would’ve been better not even coming to the market today. I didn’t take my own advice that I said, “Right at the bell,” which on AXT, or AKTX that on this gapper, I wouldn’t chase it out of the gates.

As I was watching it, it squeezed up right out of the gates all the way to 995 or actually to $10, and as I saw it right up there at 995 I said, “I’m waiting for the first one minute candle for a one minute pullback. First one minute candle I’ll pullback and then I’ll buy the first candle to make a new high.” Instead, I impulsively jumped in at 995 with 2,500 shares. I really don’t know why I did that. I just, I sort of saw it squeezing up and I thought it would … It looked so strong that it was going to break over the whole dollar.

It was breaking over the 200 moving average, which looked good, but it didn’t wait for a proper entry. I promptly lost $2,800. As it dropped here, I had my stop. I mean, it was instantly … I was instantly down 50 cents and I was like, “Well, I’ll just give this a second,” and then it was down to 915, I bailed out and I got filled at 880. I got 40 cents of slippage. I mean, it was just disgusting.

This is a really disappointing trade, I lost over a dollar per share with 2,500 shares. I mean, it’s a really just embarrassing thing to do. I was impulsive, I didn’t wait for the good set up, I chased it and the market reminded me why the market’s always stronger. You have to wait for good quality low-risk set ups and if you chase entries, this is what happens. Now fortunately, I had a big cushion on the week and I’ve had a big cushion on the month and even on the year, which has allowed me to take these hits and not have them be that painful, but it’s just very disappointing.

That was $2,800 loss. I’ll show you my PNL here. I’m finishing the day down 5 grand. $2,800 loss on AKTX and then I made back 2,800 on the HTGM. I got into HTGM, I saw it spiking up and on this one I thought, “Okay, this is a … The first daily candle to make a new high on the daily chart right here.” I was like, “That looks good over eight,” and I got in this one at 814 with 10,000 shares right here, 814.

We popped up to a high of 36, dropped down, popped up, dropped down. I sold right on this candle here. I actually went from being down $2,800 to up $1 on the day. At that point I should’ve just … I mean, I should’ve just walked away. I don’t know why I felt I should continue trading given the fact that my first trade was so bad and this trade just kind of barely got me back to flat. One trade on PULM, which there’s nothing really there.

Then, I saw AUXO was on the scanners. I looked at the daily chart and I was like, “The daily chart does look good. It looks like it’s a breakout set up over 550,” and so on the five minute chart I saw we had this pullback here.

We had a high of 22 and then we pulled back and so I was like, “All right, you know what? That actually doesn’t look too bad,” which is true. I jumped in with 10,000 shares at 520 and then I added at 530, it was like right around 535 thinking that it was … I like to add into strength, and thinking that it was going to break over 540 and go up to 550, 560, and open up the way we’ve seen a lot of stocks open up in the last few days.

That’s not what happened. In the next candle we dropped all the way down to 506. I held through this consolidation. At this point I was like, “Well, this is either going to be a … I mean, it’s going to be a loss. I mean, most likely. I’m trying to minimize the loss. I want to try to get out on the ask.”

I was like, “All right. Well, I’ll let this consolidate on the five minute chart and I’m going to wait for the first five minute candle to make a new high.” Unfortunately, you can see we sold off and when I sold, I got 20 cents of slippage, which was an extra $2,400 of loss with 12,000 shares. That’s the challenge of trading with large size and it shows the limit to scalability.

I’m just, I’m really frustrated with myself because I had said, “I need to be careful, it’s Friday.” I had said yesterday and the day before that I need to scale back, because I’d had a really nice hot streak and I didn’t want to give back $1,000. I mean, I said all of these things out loud and then I just jumped into AKTX or whatever that one was, lost 2,800 and I think that kind of just got me emotional and frustrated.

Got into HTGM with big size, made it back, but I just still was in this really frustrated state of mind. Saw the next set up, jumped in it thinking more about the potential and less about the risk and then the next thing you know, I’m down 5 grand on the day.

It’s a good time to step back a little bit. I’m finishing the month up 29,000, which is disappointing. Last month I made 68,000, so $29,000 is a pretty disappointing month and this month I had one, two, three, four, five red days. Those five red days totaled $20,000 in losses. This could have been a $50,000 month if I could’ve controlled those losses a little bit better.

Even today, even … I mean, it just goes to show how … The challenge that every trader faces. Momentary lapses in judgment. I mean, it only took me four taps of my hockey to load up 10,000 shares of AUXO. I mean, it didn’t take more than a second to get a full position and suddenly realize, this is not a good thing, this is going to be a problem. This thing has a lot of hidden sellers, it doesn’t seem like it’s opening up, and now if I try to just get out I’m probably going to lose on the slippage.

Because of the fact that it’s weighted so heavily, it shows you that there’s an imbalance between sellers and buyers. There were more sellers, so there weren’t enough buyers to absorb my big order. There were enough sellers to take it, but not enough buyers. Yeah, I mean, this is definitely … I mean, I’m just, I’m annoyed with myself because this is not how I like to finish the month.

I don’t like to finish on a red day. This is exactly what I did in January. January I was up $55,000 and the last day of the month I lost 15 grand. I don’t know if there’s anything to do with it being the last day of the month, or that’s not the issue, it’s I don’t know. For whatever reason though, and that was a Tuesday, it wasn’t a Friday, so I don’t know if there’s any correlation there. I’m glad that we’re going into the weekend and I can step back a little bit.

I’ll open on Monday around 105,000 in this account, which is obviously still impressive from the $583 starting balance, but I hit 100K on March 8th and so in the last one, two, three and a half weeks I only made $5,000 because I lost 15 and then I had to make back 15.

I made back 25 and now I’ve lost 5, so it’s like this is one of the things with trading, sometimes it feels like you’re treading water and you have to be so calculated about being aggressive on A-quality set ups and then scaling back that aggression when the market’s not on your side. Harnessing that desire to be aggressive and to get out there and try to get the biggest win will help you have 5, $10,000 winning days.

I made 5,000 on Monday, 4,200 on Tuesday, but you need to adapt to the market. Today started off just on the complete wrong note with me being super aggressive and chasing a set up. Breaking a rule, I chased a set up, that was bad. Then, HTGM was a good quality set up, size was risky. AUXO was an okay set up, but my size was also too risky, given the fact that I had just had a really rough start to the day and I wasn’t adapting to that.

I like to talk about my losing days, because I think that you guys can definitely learn a lot from them. I mean, when you see a big winning day it’s easy to just kind of be like, “Yeah, I took this trade at the perfect spot. It worked out perfectly.”

Well, what about a time where I take a trade at the perfect spot and it doesn’t work out perfectly? I get the false breakout, how do I handle that? In the case of AUXO, I held through consolidation and I was thinking that I would wait for the first five minute candle to make a new high.

Unfortunately, I couldn’t keep waiting. I hit my max loss. There are other times where this would consolidate, first five minute candle to make a new high, it would go right back to a high a day. It just didn’t happen on this stock. Though generally, I would prefer not to put myself in the position where I’m holding through consolidation, because I’m red on the trade.

That means I’m in a little too high, so the second mistake on this was adding at 35, or whatever it was, 37. That was being too aggressive and I think that sometimes when you get knocked down, you jump back up and you just want to get back on the horse, but what you really need to do is just take a breather.

That’s what I needed to do today and for whatever reason I wasn’t able to recognize that in the moment. Mindfulness, coming back to that presence of self to say, “Okay, Ross, you’re down really pretty badly on one stock. You got yourself back to break even on HTGM, consider it a wash, walk away for the day. What are you doing? Why you taking 12,000 shares of a stock when you just narrowly avoided being at max loss?” I don’t know.

I think that it’s just one of these things that traders struggle with and so today was a day that the market got the best of me and I’m walking away with less money than I started with, but overall it’s been a decent week. I’m still closing the week up just under 5,000, but this month has been difficult for sure. I have not seen the same level of follow … I mean, we had that really rough patch in the middle of the month, a week of just … Basically, we had two weeks of almost no momentum and then it bounced … We bounced back last Friday.

Yeah, I’m not sure. I’ll just have to continue to be mindful going in to April. As I start a new month, I want to build the cushion, not get too aggressive early in the month. Just kind of try to build up that cushion a little bit, get myself into the driver’s seat on the month and then once I’m green, if we’re seeing some good opportunities I can start to scale up a little bit. Just to start, I’m going to kind of dip my toes in the water, get a sense of the climate on Monday.

Today we didn’t have very good momentum and AKTX, I didn’t think it was going to be good, because … I’m just so annoyed I traded it, because I said, “I don’t like it because … ” The move started after hours and so extended, and so I don’t know what drove me to jump in that so high. I don’t know why I let that emotion get the best of me today, but maybe it’s just been a long week and wasn’t as focused as I should have been.

That’s it for today. Hate to do a red day recap at the end of the week and I know I’ll be thinking about it all weekend, but it is what it is and the good news is that I’m still ending the week green, I’m still ending the month green. $29,000, although it’s not what I was hoping to do, it’s still respectable.

I’m probably my own worst critic and I hold myself … I try to hold myself to a high standard of performance and if I’m not hitting that, it’s frustrating. I know comparatively to how I was a couple years ago, or whatever, this is certainly good and I’m doing really well, but when you get used to doing 40, 50,000, 60,000 a month, a month were you come in 50% short is a little disappointing.

I mean, it’s just kind of like having that many red days, having that red streak is just not something that I’m super pleased with. I suppose my goal for April maybe less than a monetary goal, would be the goal to not have, if at all possible, a multi-day red streak where I have a real draw down and just to kind of start to get back on a steady grind.

If you looked at my equity curve for the month of March, it was up and then down a lot, back up and down. I mean, it’s just not as steady as I’d like it to be. That adds more stress when you’re kind of jumping all over the place.

Up five, down five, it definitely adds a little more stress so I’d like to kind of avoid that if I could. It’s on me, I mean, it’s on me to maintain emotional control, to be disciplined on every trade I take, to focus on A-quality set ups, to not chase stocks. I’ll obviously be back in the saddle first thing Monday morning and walk you guys through what I’m looking at and hopefully I’ll be able to be a good … Set a good example and maintain discipline the way I say that you should and point you guys in the right direction when it comes to good quality set ups. Today, we were looking at the right type of stocks, I just … The entries weren’t … The entries and the sizing were the problems.

Anyways, that’s it for today and we’ll bounce back first thing on Monday morning. All right, I’ll see you guys then. Let’s be honest, if you made it this far you must have really enjoyed that video, so what’s stopping you? Subscribe right here and get email alerts anytime I upload new content. Until then, happy surfing.