Warrior Trading Blog

Day 81 of the $583 Challenge +643.62

Day 81 of the $583 Challenge +643.62

All right, so we’re going to do a midday market recap, go over today’s trades. Today I traded quite a bit. I took 10 trades in total and I was green on 8 out of 10, so 80% accuracy. Average wins were 8 cents, sorry 6 cents each. Average losers were about 5 cents each. A positive profit loss ratio, not by as much as I’d like, but overall it was good enough to get me up to $643 profit after commissions.

As I mentioned, last week obviously we talked about this quite a bit. Today is day four of my self-appointed trader rehab, so during the next … At least the next week and possibly longer, I’m trading with a share size restriction. The reason I’m doing this is to keep me from getting emotional in the way I execute my trades, number one, and to sort of help me recenter after what was a fairly difficult month of April. Now, when I get my April statements in we’ll look at the entire month in full and we’ll be comparing it against my best month of the year.

I already know on the surface two important statistics. Number one, my average losses were the same for April and for February, same average loss. The problem is that in February my average winners were I think around $1,400 per trade. Whereas, in April my average winners were only about $700 per trade. What basically happened is through the month of April I did not get home run trades.

I didn’t get any trades that were those really big winners, the 5, 6, 8, $10,000 winners that would draw up my average for all of my average winners. As a result, my profit loss ratio was negative. I also saw a slight decrease in accuracy, from 68% down to I think 60 or 62%. A little bit of a dip there and obviously those are two things that I wasn’t super happy about. I wanted to sort of lay the groundwork for taking a different approach in the month of May. It’s a new month, so let’s start off fresh and kind of change the goal.

Now, I think in most of April I was swinging for the fences. I was looking for home run trades knowing that that had worked really well through February and March, but the market didn’t give me home run trades and every time I stepped up to swing for the fences, I seemed to get stopped out. With big size I would get slippage and in many cases because I had double, or even tripled adding as the stock was going up I gave up profits by doing that, when I could’ve just taken a small 10, 15 cent gain or whatever it might have been.

The month of May, at least at the very beginning is more about focusing on consistency and by restricting my share size, I’m not really able to go for home run trades. I mean, yeah, I could try to take 2,500 shares, which is my max size and hold it for a full point, but that’s not very realistic and that’s not the way I usually would try to trade with that type of size. 2,500 shares, daily target is 500 bucks, $1,000 is kind of the back of my mind ideal goal, but I think average daily goal is going to be around $500.

Today with 643, I hit my goal and for most traders in our community these are the types of goals that you’re striving for. You’re not striving for home runs, you’re striving for $300 here, $400 there, knowing that 500 or $600 a day really adds up. Now, there’s absolutely no reason that any of you couldn’t have taken 5,000 or 10,000 shares on any of the trades I took today. If you took, whatever, 5,000 shares you’d probably be up around $1,200. If you took 7,500 shares, you’d probably be up around $1,800.

I’m sure John, one of my students who’s done phenomenally well, he’s probably up more than me today because he’s not restricting his share size, so he’s doing well. Then the other side of trading with smaller size is that it makes me work a little harder to get the gains that I get, because you’ve got to keep trading. Instead of just having one trade in the first five minutes with 10,000 shares and 30 cents of profit giving me $3,000, that same trade is only 750, so I’m continuing to look for the next one.

That’s what got me looking at RCL today for a top reversal, which I said I was watching short at 110. Now, I didn’t end up taking this one because the spreads were a little on the big side and I thought that the risk was too high given those spreads, but I was watching the short under 110 stop at high a day. This dropped from 110, as you can see on the five minute chart, from 110 all the way down to 108.71. With 500 shares, or 400 shares, that could’ve been an extra 3, 4, $500. I mean, it was a nice sell-off.

That’s an opportunity that when you trade with 5 and 10,000 shares on average, you stop looking at stocks like these because even if you have no share size restriction, you can’t take 10,000 shares of this stock. You can’t even take 5,000. 2,000, maybe. It’s just a thinly traded stock, it’s expensive, you have big spreads, and so it’s not the type of stock you would look at if you wanted to try to make $5,000 in a single day.

If you were going for maybe, whatever, smaller gain, 400 here, 500 there, it starts to become more realistic. Obviously, there’s of course the issue of account size. I mean, most people can’t afford to take 5,000 shares of this stock that’s half a million dollars. Do you really want to put half a million dollars and most of it on margin into one trade? Probably not.

My 10 trades today, the average dollar amount of each trade was $5,700 and my average share size was actually 2,100 shares, because I traded smaller share size on some of those trades. I mean, this is a $670 day using at most $8,000 in buying power. Definitely not using a lot of buying power, trading small size, going for consistency. 80% accuracy is definitely good with consistency. The average winners weren’t as big as I would’ve liked, but we’re still kind of in a little bit of a choppy market where we’re not seeing incredible follow through.

Now, we saw decent follow through on this reversal and we saw decent follow through on CCCR. This one was surprisingly good, the move from 2.10 up to 2.70. We saw pretty good follow through on MTBC. This one from, let’s see, sort of surprise move here from 1.60 all the way up to 2.80. Notice on both of these, these are both sort of surprise moves. This wasn’t a stock that was really gaping up significantly or was really probably on a lot of people’s watch.

Neither was CCCR, but then at a certain point once the bell rang they took off and traders jumped in. I think that’s something to sort of be mindful of. Where is the stocks that have been kind of gaping up on the watch list? Like this one, the market opens and they sell off. I think … Oh, this was another surprise move, APHB, only made $34 on it, but surprise move from 2.80 to 3.80. I mean, it just squeezed up a full point out of nowhere. These are opportunities and the question is whether or not you have a strategy that will allow you to capitalize on them.

In addition to trading with smaller size, I took out a bunch of money from my accounts. I brought it down to $30,000 and I’m working on building it up to 50,000, so 20,000 is the kind of the amount of money that I need to make to hit that target and hopefully I’ll be able to do that here during the month of May. All right, so that’s about it. I mean, today was just a pretty easy day of trading.

If I look … I’ll show you kind of in detail the couple of trades I took. APHB, I just jumped in this one with 400 shares on a one minute pullback over here. I got in at 65 and it squeezed up to a high of 89, so small size on that, only made 10 cents. Didn’t want to risk much on it, that was the last trade I took. The first trade was on CCCR and on this one I said, “I need to wait for a clean one minute pullback,” which I did and that’s why I got in right here at right around 2.30. We got this move up to 2.45 and then a little bit of a pullback here. Another move up to 2.48, pullback. Another move up to 2.62 and a little bit higher.

I traded CCCR four times and I actually traded MTBC four times as well. MTBC you can see just kind of took off and then I started looking for pullback opportunities and things like that. First five minute candle to make a new high was one of the trades I took, although it didn’t work out as well as I had wanted. I think this is one of those times where it got so extended before the bell rang, that … Or before this first pullback, that it just wasn’t really well suited.

It was too extended. We had this little micro-pullback here around 2.43, which is when it was halted, but then just, I don’t know, something about it wasn’t as clean as I was hoping it would be. That was that. Then ITCI, this was a gap-down reversal, sold off, and I took a stab at it, moving back up, but I stopped out, 2 cent loss. Got in, got right back out, wasn’t feeling it and that was definitely the right move, because it was pretty choppy.

Those are my trades from today and just kind of happy to have a good start to the month of May. One green day and it was nice because I was able to start my first three trades of the day were green trades, so right away I was able to build up a cushion up to about $500, which is always a nice way to start the day. Usually the best days start with hitting your daily goal in the first 15 minutes.

I mean, really those are the best days. A day when you’re red right away, even if it’s only by $50, is definitely a warning sign, it’s a red flag. A day where you, in the first 15 minutes are up only 50 bucks, that’s kind of a red flag, or a day when in the first 15 minutes you haven’t even seen something worth trading, that tells us the market’s kind of slow. Kind of being able to sense that and be aware of it in the moment can allow you to adjust your risk for the rest of the day.

Now, I felt like this was a good start to the day, being able to hit 500 bucks in the first 15 minutes, but it wasn’t incredible, because we didn’t get any really, really good trades. If I’d been able to hit 1,000 I would’ve been feeling more confident to continue to be more aggressive through the morning. Anyways, that’s it for today. I think today is day 81 of the $583 challenge, so 81st trading day of the year and the first day of May.

All right guys, so let’s see, I’ll see all of you first thing tomorrow morning. Just a reminder, today we’re running a 50% off special, trader 50 is the coupon code. Trader 50, that’ll give you 50% discount on chatroom subscriptions, trading courses, or the trading simulator. All right, so if you’ve been thinking about joining us or getting started with becoming part of the community, this is a great time to sign up.

All right, so with that I’ll let you guys enjoy your afternoon and I’ll see you first thing tomorrow morning. Let’s be honest, if you made it this far you must’ve really enjoyed that video, so what’s stopping you? Subscribe right here and get email alerts any time I upload new content. Until then, happy surfing.