Warrior Trading Blog

Day 75 of the $583 Challenge +$4,688.08

choppy start

Day 75 of the $583 Challenge +$4,688.08

All right guys, so here we are day 75 of the $583 account challenge. I’m finishing the day up $4,688.08 which is not bad. Finally a little bit of redemption after what has been overall a very slow month. Well you know what, the month started pretty nicely, the last two weeks have been slow, and so I’m just going to turn this light off. I’m definitely happy to finish the week on a good note and get a little bit of redemption.

Today the momentum was just totally different from the way it was yesterday. I mean yesterday I was right on one out of four stocks and today I was right on four out of I think five trades that I took. Just really night and day difference, and the reality is yesterday I should have been a little bit more careful. Having said that, coming into Friday I was pretty careful because I was like Friday’s I don’t usually do that well so I need to scale back, I need to reduce my risk, and despite that I ended up still having a great day because we had momentum. When you have momentum I mean it’s easy to trade. When you don’t have clean setups it can just be really, really tricky.

The last two weeks I kind of fell into a bit of a cold streak which I was really trying to avoid having that happen in April, but you step up to the plate and sometimes there’s just nothing there and the best thing to do is step back down and instead I just kept swinging.

Anyways, now I’ve got to dig myself out of this hole from the last six days or so of choppy trading and today was the first day to dig myself out. Just under $5,000 is a good day, and for me anywhere from $5,000 to $10,000 at this point is a pretty good day and above $10,000 is fantastic.

Today is a good day, it’s not a great day, it’s not an incredible day, but it’s a good day. I’m going to need three or four more good days between now and the end of the month in order to really get myself back on track. If I stay focused and I am really dialed in on trading A quality setups it’ll happen. If I get impatient and frustrated and trade lower quality setups then I’ll continue to have draw downs.

The reality is I am still the trader who took $583 and turned it into $100k in 44 days. I wonder if not having a clear goal past $100k was kind of a problem for me. I had this goal to hit $100k and I hit it and then what? It just kind of was like now what do I do? I just sort of keep trading and I haven’t really had a new goal, I haven’t really had any particular plan. I was kind of thinking when I hit $130k I would take out $100k and drop my account back down to 30 and then build it back up again. Getting to $130k has been a lot harder than I thought it would be.

Right now I guess the goal is $130,000 so I can take out $100 and go back down to $30,000. Just keeping doing that 30 to 130, 30 to 130 or something like that. Just sort of take out in large chunks, that’s kind of my thinking right now. At one point I was like well I should just keep all the money in this account and just let it keep growing and people will be able to visually see that I went from 500 to 250, 350, 450, but the mentality changes when you have that much money in your account because you start thinking well who cares if I lose $2,000 or $3,000? I’ve got such a big account it really doesn’t matter. You know what? Being up $4,000 is really no big deal because on this size account it’s only 4%, what I really need is a $15,000, $20,000 winner and it just changes the way you think about things.

Now obviously in the strong market it’s okay to be aggressive like that because you’ll end up having $15,000, $20,000 days maybe more regularly, but in a weaker market it makes you unappreciative of base hits, $500 here, $500 there. The reality is $500 a day’s $100,000 a year. $100,000 a year when you make $100,000 in 44 days might not seem like a lot but for a lot of traders it is, and so it’s kind of the type of stuff that I’ve been thinking about over the last few days.

As I reflected on kind of that hurdle that I came up on in March and then regained, and then came up on another little hurdle here in April. Some of the things that are on my mind and sort of deciding how I’m going to trade or deal with the account as it is right now. I think for right now I’m going to set my sights on $130,000 and then take out $100,000. That’s kind of what I’m thinking at this point.

That means, let’s see I’m going to open on Monday around $114,000 and I’ve got $14,000 to go. Three more days like this and I’ll be at the 130 spot. That’s kind of the goal. I’d like to get there by the end of the month, but I would need to have really, really good trading in the next one, two, three, four, five days and I might be taking off a day next week which is not going to help. I’ll definitely be here Monday, Tuesday, and Wednesday, but I’m not sure about Thursday.

Anyways, I’m going to play that by ear a little bit and at the same time it’s important to have goals, but you can’t get too fixated on them because then you can start to do things that are a little bit desperate. Take it one day at a time and that’s what I did today. I came into the market and had some strong trading.

Let’s go over today’s trades. The first trade, well pre-market we had a couple stocks on watch. Let’s see we had PTX as a gapper on watch with a pre-market high of 3.60. It was on watch because it was a gap stock but it didn’t have a lot of volume so I said, “Well, I’ll just wait until the bell rings.” CARV, I had this on watch pre-market because it was gapping up 30%, but was very light on volume so I was like well again, I’ll just wait until the bell rings.

Those were the two I was really watching out of the gates. STV was also on watch, but I said, “The place that I would buy it would be over this pre-market trigger of 1.88.” Now it ended up opening never hitting 1.88, never hitting my trigger, and so I never bought it, never got it. If it had broken over 1.88 it probably would have gotten in for the break at this pre-market pivot with the target of being a move back to the pre-market highs which is 2.12. That would be a nice 10% move right out of the gates, that would have been totally fine but it didn’t hit my entry spot so no trades, that was STV.

Now once the bell rang I was kind of looking at different things and then someone in the room all of a sudden said, “Hey, look at PTX, it’s popping up.” I took a look and I was like it is, I mean absolutely it is and I missed a good entry down here at 3.60. It opened a little lower, it opened at 3.46 and then started to surge up. You could see it squeeze to high of 4.23 and then up to a high of 4.99.

I got in with a 3.75 average, 3.75 and I sold on the move from 3.75. My best fill was at 4 … Let’s see, oops, I got to open my laptop. My best fill on this one was at, let’s see 4, I sold … I’m just scrolling back here. I think it was in the 4.80’s. I have an exit at 4.85, that was my best fill on the top side. From 3.75 to 4.85 that’s I mean … The window is from 3.40 to $5, that’s a really big window and I was able to capture from 3.75 to 4.85 which is a good portion of that window, which is super, super solid.

If we go back and look at the one minute chart here you can see it started to pop up, got this one, two, three, four, five, six, seven candles in a row, we got the pull back, I got in for the first candle to make the new high, we popped up, we didn’t sustain that level, I stopped out, gave back 500 on that and then I got back in for the first five minute candle to make a new high at 4.18, anticipating that break. It popped up to 4.25, couldn’t break over that level and it sold back off.

Now the fact that we were below the VWAP, this orange dotted line, was a little bit of an issue for this entry down here at 4.22 or 4.20 but I thought it was worth it. Anyways, in total $4,000 on this setup. I wasn’t being incredibly aggressive, but we had a huge move, which is exactly what you like to see as a momentum trader. Then we had the trade on CARV, and on this one I saw it popping up but I was like, well the volume even as it was popping from 4.50 up to 5.50, the volume was still quite light. I said, “I don’t know, I like it but it doesn’t have enough volume for me right now.” Ends up opening, halting on a five minute circuit breaker, opening higher, opens at let’s see 5.78, I got in at 6, and sold into this spike here. We got a high of 6.61, so from 6 to 6.61 that’s 10% in two minutes. I mean this again, these are great opportunities.

I wasn’t aggressive on share size, I only made $560, but I got in at the whole dollar as we squeezed up coming out of a halt, so a good trade there. Then the last one was DELT which I jumped in as it was spiking. This one was maybe a little too aggressive, and that’s when I decided to kind of taper back. I saw it popping up and I saw it at 1.98, and I was like okay, I’ll jump in for the break of $2. Jumped in with 7,500 shares and so I started getting a little more aggressive because I was having a good day and I was like okay, I’m going to see what I can do here. I get in with 7,500 shares, it pops up to 2.08 and I’m up $750 and then all of a sudden you start to see the selling. It drops down to 1.96 and it pops back up to 2.03. I got out at like 2.02, so $274 and kind of narrowly avoided a potential loss on that one. That’s when I was like, you know what, maybe now is the time to taper back.

That was between 10:00 and 10:05, so the first 30 minutes a couple good opportunities and then by 10:00 things started to slow down. Yes, DELT did give you kind of a couple of other opportunities and ended up hitting a high of 2.30 or 2.29, but I just didn’t feel like going back at it. Those are the three stocks I traded today. Green again on I think four out of the five trades, I had one loss on PTX but it was a small, well $500 but relatively small.

Since then I said, “All right guys, well I’m going to step back a little bit, I’m going to answer a couple emails, stuff like that.” I’ve got my audio alerts on and my headset, so anytime a stock hits this scanner I can quickly look over and look and decide if it’s something I want to trade. DELT I knew I didn’t want to trade. TINH didn’t have enough volume so those ones I didn’t touch.

These other ones ASPS was higher priced, didn’t care about that, SPU I didn’t like the daily chart on this one because it was below the 200, also below the 50, the 20 and the 9. That one I said no, not interested. These other ones were heavier float. XRM, by this point it was lunchtime or whatever so not interested in this one when it was first hitting I guess at 12.02. That’s it for today, $4,600 that is a good way to finish the week. Always nice to finish on a green trade and just kind of carry that positive energy into the weekend and then back into Monday.

Hopefully we have some good opportunities on Monday. Usually I do really, really well on Mondays and Tuesdays, so I would sure love to have a $4,000, $5,000, $6,000, $7,000, $8,000 winner on Monday or Tuesday, but I’ll take what the market’s willing to give me. Today I honestly wasn’t sure I would have much. I mean I saw PTX and I saw CARV, but both of them had light volume so I didn’t think that anything would happen.

Our gap scanner was primarily higher float stocks like STV, which has a float of I think 48 million shares or something like that, 45 million. I was kind of like the gap scanner has some higher float stocks today number one, number two it’s Friday I don’t have a history of trading particularly well on Fridays. Maybe I should just not trade. I put on my calendar, I put question mark, I said no trade? I was thinking maybe I just won’t trade today because I was like I don’t want another red day in a row.

I mean this week I was green on Monday, red on Tuesday, green on Wednesday … Sorry, green on Monday, red Tuesday, green Wednesday, red Thursday, green Friday. Green three out of the five days this week but that’s not the type of consistency that I like. Obviously I’d like to be just green everyday. One red day is fine but I figure that I’ll hit my max loss once a week. That’s what I figure and that I’ll have four red days each month on average. This month the thing is I already have one, two, three, four red days. I’ve got four red days right now this month, so I’ve kind of already used up my red day allocation, which means next week I really need to be green everyday or I’m going to be behind on my red to green ratio target.

Can I do it? Can I have five red days in a row? I mean I had five red days in a row on the first week of the month, so yes it’s totally possible. I just have to be disciplined about trading the right setups, not getting too aggressive, and be willing to not trade. This is something I talked about yesterday and I talked about a lot in our classes. For me as a day trader I come into the market every single day and I’m expecting to trade.

I want to find trades, and I’m not really okay with having a day go by where I don’t take a trade. I’m not really okay with it. Clearly I’m not okay with it because I almost never, I mean literally I don’t think there’s been one day in the last year … I can think of one day that I might have thought to myself at 10:30 at 11:00 like wow, I haven’t taken a trade today. I wonder if I won’t trade, and then I think I ended up taking one trade.

I don’t think there’s been a day in the last year that I’ve actually come into my office, sat down in front of a computer, and not found something to trade. Does that mean there’s an A quality setup every single day and I happen to find it, or does it mean on some days I trade with kind of like a grading curve where there’s no A’s so the B is the new A or the C is the new A? I take the best of what’s there and I think that is what I do at times.

As a result I end up taking some unnecessary losses. At the same time, some of those trades unexpectedly end up working out really, really well. I could have said PTX and CARV were both too light on volume for me to trade, but I knew both of them had potential and they were worth a try. They weren’t A quality, they weren’t, but they were B quality and upper B’s, B+ and PTX was better for sure than CARV. PTX because it’s a former runner, one we’ve traded in the past, I felt more confident on.

Today’s a day where it worked out and we’ll see what next week holds. Hopefully we’ve got some good opportunities. Obviously I didn’t trade CBLI today, just I’m not going to trade that one at least until it comes down to the nine moving average. Despite it going from $1 to $5 in three days, I’m the guy who lost money on it. I just wasn’t able to trade it very well. Annoying but it’s sometimes like that with certain stocks. SAEX is another one that I traded and I didn’t do very well on.

This had a day where it went from something like $10 to $50, let’s see what day that was. It was actually $7 up to $49 and the next day up to $75 which is ridiculous, but even in that move the spreads were so big it wasn’t particularly easy to trade. There’s a couple others that have been like that. I can’t think of off the top of my head.

Sometimes you have a stock that makes a big move but it never really gives you clean entries, and so that’s something that I’ve kind of been noticing. When I see setups that look really clean and then all of a sudden they break out prematurely, before the flag has really formed, I wonder if that’s beginner traders in the market just kind of marketing in with big orders and then it screws up the pattern for everybody is what it really does because now you’ve got a broken pattern and traders like myself are like oh I don’t know, kind of fakes people out.

I wonder if that combination of different skill levels trading stocks can create some more difficult trading. I’m not sure, that’s just kind of a guess but I can’t think of why some of these stocks break out in completely the wrong place and then ruin the pattern for everybody, but that’s definitely something that we’ve been noticing on some of these, definitely on the heavier volume ones like SNGX, CBLI, ITXG, IDXG. These ones were particularly sloppy.

I don’t know, maybe it’s an algo that’s used only on really, really high volume stocks like this or maybe it’s just newbie retail traders doing kind of crazy stuff with big orders. Not sure what it is but something to be a little mindful of. Something that I kind of look for is I look for stocks that have news obviously, I look for stocks that are gapping up, and I like to be one of among the first group that are seeing the headlines, seeing the stock. I want to be getting in in the first move, in the beginning of the move, or after the first pull back, but beyond that it can start to get a little bit crowded.

Knowing the difference between the front side of a move where we’re still moving up and then when we cross over our moving averages and we’re coming back down, being able to differentiate those two sides of a trade when you should be on the long biased and when you have more of a short biased. On the backside, any pop is an opportunity to short for the move back down, so that’s where you start to have a short bias.

If you’re going long on the backside you’re usually going to be buying into resistance and it’s going to jam back down. Being able to differentiate the front from the back, and then also being able to see the place where volume has increased a lot but we’re no longer seeing big moves, we’re seeing choppiness, that shows you there’s more of a tug-o-war. High volume but no movement is tug-o-war, and of course decreasing volume on any pattern is a problem as well.

Anyways, things to keep an eye on for next week and yes that’s about it here for day 75. My goal really is to yes, I’d like to hit 130,000, that’s kind of my next threshold, but it doesn’t make the biggest difference when I hit it. If I do it by the end of the month that’d be great, but if it takes a couple more weeks that’s okay too but 130 is the next target. Yes, we’ll see what we can do starting on Monday. Over the last 30 days my daily average has been low, it’s only been about $500 a day. Interestingly my daily average on the year, have to grab my calculator but I’m up $148,000 on the year right now in 75 days. I don’t know what that averages out to but that’s where I’m at right now.

My average obviously in 44 days to make $100k was over 2,000 a day, so I had a great average for 44 days and now for the second 30 days my average has dropped significantly. I want to try to get that back up over the next, well the rest of April and then going into May. Then I’m also really hoping that we have some solid trading in the summer, the way we did last year. Anyways, I guess that’s about it for now and I will catch up with all of you guys first thing Monday morning. All right, I hope you guys all have a great weekend, I’ll see you on Monday. Thanks guys.

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