Warrior Trading Blog

Day 90 LIVE from Las Vegas with our Inner Circle Students

Day 90 LIVE from Las Vegas with our Inner Circle Students

All right. So, we’re going to do a midday market recap. We’ll go over the trade from today, obviously not a bad day. So, if we look at our … and obviously those of you watching on Facebook, we’re in Las Vegas. I’m no longer at the house, and these are all of our students smiling and waving. Roberto is in the back, there.

All right. So, this morning’s watch list, we had XGTI on watch. Right. 6 million share float continuation from yesterday. CETX was on watch, 5 million share float, gaping up this morning about 15%. VJET was on watch as a maybe, with a 2.8 million share float. So, I finished the day with just under 900 bucks. I made 530 on CETX. I started with $246 on my first trade, got myself up to 630 and then gave back a hundred bucks. So, I finished the day 530 on that one. And I took a midday surprise move on CCCR and made $368.

So, just under $900 on the day which is not bad. So, This morning when we were going over the watch list, one of the things I said was that is “there’s nothing I’m really, really crazy about.” You know, CETX was really interesting, but we had the issue with the 200 moving average being at 4.17. Now, … or it was 4.11. What was interesting about that one is right before the bell, it squeezed up to 3.75.

So, for those of you that are on the chat room, I’ll put up the screen so that you can see 3.75. CETX, you can see how it popped up to 3.75 pre-market. So, as soon as the bell rang … Actually it was as high as 3.77. So, as soon as the bell rang, I was looking at that and I was like “you know what? I’m going to take a stab at it over 3.79, 3.80, break the pre-market highs, because I think its going to make a move up to $4.”

Now, at the same time I think as soon as it hits 3.90, 3.95, and people see it on the high of their momentum scanner their going to be like “Okay, wait. This has a 200 moving average at 4.11, I don’t want to be a buyer.” So what I was thinking would happen is that it would pop up to four maybe 4.01, and then fade back down. But, from 3.79 to $4 is 20 cents.

So, one of the things we also mentioned earlier is that the fact that my job as a day trader is to really look for one or two opportunities each day where I can capture even just 20 cents of profit from the market. 20 cents with 5,000 shares is a thousand bucks. You do that twice a day, that’s $2,000. So, obviously you’re not going to have an 100% accuracy.  You’re not going to find that perfect move or perfect window everyday, but that’s what we’re looking for. And did CETX have that opportunity from 3.79 up to four? And the answer is yes, it totally did.

So, the market opens, the bell rings, I jump in at 3.79. It pops up to a high of 3.85. I only got in with 2,500 shares. Now, the reason I traded with smaller size was because it wasn’t an A-Quality set it. It wasn’t A-Quality because of the 200 moving average at 4.11. That was my concern. So, I jumped in, sold my 2,500 shares on the push up to 3.85, locked up a total of $246. That was in the first like two minutes. All right. So, the first two minutes is done.

Then it pulls back a little bit, and we start to get a little bit of a flag. So, for those of you in the chat room, I’ll show you the spot where I added. Let’s see. So, it was the first one minute candle to make a new high. And that was over 4.13. Over 4.13, I added. We obviously squeezed all the way through four. Pulled back over 4.13, I added. Looking for the break over 4.20. We got the break, we moved up to 4.25.

On the second trade, I took 5,000 shares. I was being a little bit more aggressive, because I had a little bit of a profit cushion. And this stock at this point was over the 200 moving average. So, it was over the level that was concerning me. So, I was like “Okay, well clearly its strong, I’ll give it a try.” So, jumped in and sold that for you know, another 250 bucks.

Last trade was getting in at $4.39 for the half dollar break, it popped up to 4.45 and then dropped back down. I sized down and only took 2,000 shares on that trade. So, I only lost a hundred bucks.

So, what I basically did on CETX is; I tested the water in my first trade. You know 2,500 shares, let’s see if this thing is going to work. Then I increased my size on my second trade, and then I scaled back down on the third trade. So, by the end of those three trades, I was up 530 bucks. So, I was like “Okay, well. You know, I’m in the conference room, my internet is not as fast as it usually is. I really don’t want to lose a bunch of money in front of all of our students, so maybe I’ll just take this and be happy with that. You don’t want to push it too hard.”

So, I was just kind of scanning, watching what was on the you know, trade idea scanners and the next one that popped up was CCCR a few minutes later. Actually it may be 20 minutes, 30 minutes later. And when I first saw it pop up, I was like “Well, CCCR what does it have that I like?” Its a former runner, its a low float, has a history of making big moves, and it is spiking up right now. That’s all good. Well, can I manage the risk on it? That’s the question that I always have to ask myself. What am I risking on this trade?

And so, when I looked at it, I saw a 75,000 share bid pop up right around 2.40. And when I saw that, I thought “Okay, that’s uncommon to see a bid that large.” 75,000 shares is a really big order. So, that gave me the confidence to get in at 2.45 with my stop at that big buyer. So, I got in at 2.45, what happened is as soon as I got in, we dropped to 2.38 by 2.42 and I was instantly down like 6 cents. And I realized that that big buyer may have been a fake order. Someone who put out that big order to get someone like me to jump in it and then they would instantly pull the bid and the stock would drop. Well, it dropped for a second, but it popped back up and it surged through 45, 55, 65, 75 and went all the way up to 2.85. And so on that push there, I sold into the move, $368.

So, in total just about $900 today trading four stocks. But, … Four individual trades and I had I think today a total of like 22 individual executions. Because you think this first trade was one buy, but then it was probably two or three sales. So, that’s three orders. This one, you know, I bought 2,100 and then I doubled. So, that was two buys. And then one scale out, three scales out, four scales out, you know. Again I’m building up to four, five orders per trade. The good news is that it’s only 2.50 per a trade with light speed. So, I’m not really … I can afford to use this strategy.

This strategy of scaling out aggressively doesn’t work really well if you trade with like 500 shares. If you trade with a really small size, your commissions are just going to eat you up. But, when you increase size, especially up to 5,000, 10,000 or 15,000 shares you need to be able to take some profit into the move. It’s easier to sell when the stock is moving up, ’cause you can shares on the asks and they get picked up by a buyer. When you’re selling on the bid an you’re bailing out, you know, it’s like everybody’s rushing for the exit and your fills aren’t as good and you get slippage.

And that’s the one reason that I’m a little more cautious about using trailing stops because when the trailing stop hits, the stock is going down. So, you always get slippage on the way down. Having said that, if you hold your entire position like, you know, 5,000 shares or whatever it is, and it ends up going up 40 cents, well you’ll still stop out with 30 or 28 cents a profit. So, I mean, it’s still good, it’s just not … You know, it’s just something to be mindful of. And especially right now, we’re in a market where you know, if you get a 20 cent pop on the breakout -on the first full fight , the first can make a new high, you kind of want to take it. Because we’ve seen a lot of opportunities where it goes up 20 cents and it comes right back down. And we did see that. That was, I think it was the last trade, one of the last … No, it was CCCR.

It was the second trade on CCCR that was a false break out. And the reason I was not surprise to see that false break out on a five minute candle was because number one; we were really extended off the nine moving average. Actually, number one is because of the doji on the five minute. It was that doji candle on the five minute, that was the biggest issue. And then the second biggest issue was that we were extended off the nonmoving average. So, for those two reasons, it wasn’t an A-Quality set up to buy in the first pull back. And as a result, it popped up and then it rolled over pretty hard.

So, in any case, you know today I kept it pretty simple. I traded those two stocks and that was it. VJET didn’t end up materializing. XGTI sold off out of the gates, suddenly popped up 20 cents, but wasn’t … I didn’t catch a trade on it. Mike traded Jack, higher price stock that he shorted right around 112. Covered on the move down to 110. Which was an fantastic trade. Obviously higher price, you know with that higher price you have, you know, bigger spreads and some more risks. You mitigate that risk by trading with smaller size. So, you reduce your share size. You’re not going to trade 5,000 shares -most likely. Especially as a beginning trader, but this is the things I was mentioning earlier as well.

You know for me, I want to capture let’s say 20 cents each day out of the market with 5,000 shares. That’s a thousand bucks. That’s my thousand dollar daily goal. Now, if Mike has let’s say a thousand dollar daily goal as well, but he’s trading higher price stocks that are like $100 a share, he’s not going to take 5,000 shares, maybe you’ll take a thousand, maybe 2,000. But, let’s just say a thousand shares of $100 stock, cause that’s $100,000 in the trade. That’s a lot of money. Verses 5,000 shares of a $4 stock is 20,000 in the trade.

So, in terms of dollars in the trade, the higher price is more, and in order to make that thousand dollars you need to get a full point, a full dollar per share. So that means you have to dial in your entries. You have to have a really good entry. Now Mike is really good at that, but it shows you that there is a little bit more challenge in getting a full 50 cents or a full dollar per share, than finding a 20 cent move. 20 cent moves are a little bit easier to find, but you know on the other side, when you’re trading with big positions like 5,000 shares, if you don’t sell the right spot and you end up being down 20, 30 cents, the lost become astronomical. They can become really big.

So, this is risk-reward and that’s kind of, you know, one of the things we’re always measuring as traders. But, that’s the recap. That’s today’s midday market recap. And one of the things that we’re going to be talking about in just a few minutes with all the students here. We’re going to talk about the challenges that you guys face as traders.  And one of the things that I really want to touch on is the struggle with trading from fearful place or trading from a place of greed. And how those two different emotions can very negatively impact your trading if you’re not aware of them.

Okay, so that’s coming up in just a moment. And those of you who’ve been watching on Facebook, I will see you all first thing tomorrow morning in the chatroom or back here at noontime tomorrow for the midday recap. All right, bye guys.

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