Warrior Trading Blog

Day 96 +$1k Day Trading from California

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Day 96 +$1k Day Trading from California

All right guys. So, we’re going to go over our midday market recap. The stocks trade this morning. Three names, green on all three. Accuracy a little bit better than we had yesterday, but the follow through in the market still a little iffy. So, fortunately I was able to hit … well $999, $1000 daily goal. Close enough. Kinda did it in the first, basically the first hour of the day. My last trade was … Well, it was on VLTR, which I’ll pull up in one second.

So, the three stocks I traded: First one was GLYC, and I actually took a trade on this pre-market, which is pretty rare for me. And the reason I did it is because just before the bell rang, it spiked up from 14.50 all the way up to 16.80 on news. And when I saw that, I was like, “Okay, I think with this catalyst this could go into the 20’s today. This is like … anyone who’s short is gonna get squeezed out. It looks like a good catalyst.”

So, I jumped in at 15.94. I rode the momentum up to 16.80, but I didn’t sell, because I was thinking, “You know what? I’m already up a point. I’m just gonna hold this. When the bell rings, this thing might squeeze to 17, 18, 19, 20, and I’m going to be holding from 15.95 or 94, whatever it was. So, I held. It ends up coming down to 15.51, and I’m like, “Down 30 cents, 40 cents.” It pops back up as soon as the bell rings, up to 16.20. I take my profit $160. It was just like, “You know what? This thing is just not doing what I thought it would do, and that’s okay.”

You know you can … it’s important to admit when, you know, you’re wrong. You have a bias, you have a plan of what the stock is gonna do, but if it doesn’t work, you gotta get out quickly. So, I did. I got out quickly, and ended up being a small winner.

So, next one was GLBS. Now, the reason I liked GLBS was because it had a big move yesterday. It’s a former runner, history making big moves, and I thought, “You know, this kinda looks like a reversal off the lows where it’s starting to bounce up and make a move higher. So, yesterday it squeezed from literally like, let’s see, 90 cents per share up to $1.80 … I think the high of day was $1.77. So, I was like, “Okay, this thing is showing some strength.” It ends up gapping down just a little bit overnight, but that didn’t concern me too much, ’cause that’s kinda like just a little bit of a pullback and then getting ready for the next move up.

So, as soon as the bell rang, I jumped in this at 1.55 right here, and this was for a one minute opening range breakout. The high of the first one minute candle was 55; the low was 42. I got in at 55, stop at 42. We moved up to 65 and then all the way up to 75. So, 20 cents versus 10 cent, 12 cent stop. That’s good risk/reward, and I sold three quarters of my position into that move. I held during the first one minute pullback at 9:34, and I added back what I sold at 1.72 thinking that this was a one minute micro pullback, and this would take us back to high of day, which was 1.75. That ended up not happening, and I stopped out at 1.69. It’s important to stop out quickly when those one minute micro pullbacks don’t work, because, you’re getting in something higher. You bought high; you’re hoping to sell it higher, but you know you’re well off support. So, you don’t want to get caught in a pullback.

So, I got out at 69, and it’s good that I did, because this came all the way back down to 45. But right in there was an opportunity to make about $370 on two trades. So, one was green; one was red, but it was definitely worth- even the trade that was red was- it was a good trade.

Now, this kind of brings up the question of: How do you define a good trade or a bad trade? Is a good trade any trade that you close green? Or, can a good trade be one that you close red, but the loss is only small?

And on the other hand: Is a bad trade just any trade that closes red? Or, if you are down $5000 and hold it average down, and it ends up coming back up to break even and is green, is that now a good trade, because it’s green?

And to me, I don’t really base whether a trade is good or bad on whether it’s red or green. It’s, “Did I trade it the right way? Did I keep a tight stop? Did I manage my risk on the trade?” And if I did, it’s a good trade even if I took a small loss on it.

Losing is not a big deal, you know, it’s really not. So, anyways, that was GLBS.

And then I got back into GLYC. I took one more trade on this one, and I like immediately regretted it. I was like, “Oh my god, this one is just not easy to trade.” I got in as it popped up at 10:04 to $16. I got in at 15.95 with a thousand shares, and it pops up to … let’s see … actually, it drops down to 15.77, and I was down like 250 bucks. And at that point of the day, I was only up $150. Oh sorry, I was up $500. So, I wasn’t prepared to risk 3, 400 bucks which is basically what I was risking, because my entry at 15.94. This could have dropped to 15.50 before I knew it, and it dropped to 77 and I was still holding which is a $250 loss.

Well, it comes back up to 16.10. As it came back up, I got out. So, I kind of have this rule where if I get into a trade and it immediately drops, now I’m no longer trying to let it be, you know, let it hold for the big move. Now I’m just trying to minimize the loss, which means if I can get out break even, I’m gonna get out break even. If I can get out for a small profit, that’s fine, but I’m no longer gonna hold it up 10, 15 cents and just let it work. It’s already proven to me that it’s not what I was expecting. Now having said that, this did end up going up to 16.42, but it was choppy. I mean, it was down to 15.85, up to 16, down to 15.85 … kind of bouncing around there.

So, this ended up only adding … I think it added $13 in gains, but probably cost me on commissions. So, wasn’t really a winner on that one.

And then the last trade was DLTR. Surprisingly, my best trade of the day on an $80 stock. So, this is sort of a little unusual for me to trade these high priced stocks, but I saw this stock … Whoops, let’s see … Of course, as soon as I move my mouse around it screws everything up … Let me pull these scanners back up … 5 minute reversal, and there’s that one, as well.

Okay, so let’s see. So, DLTR, I’ll show you guys who are watching on screen share. DLTR came up on the high of day scanner right here with nine consecutive one minute candles. So, anytime I see a stock with nine consecutive one minute candles, and basically this really big move, you know, I’m starting to think, “Okay, there’s a potential for this to reverse.” And so then I’m starting to think, “Okay, well, at what point is it likely to have a reversal?” And I’m usually thinking about half dollars and whole dollars. Those are kind of logical places where we often see stocks turn around.

So, then I look at the daily chart and I realize that $81, right at this level, we had had some resistance. That was the high of day on May 16th. It was also the high of day on the 22nd, and on the 23rd we opened just below that level and then sold off. So, I thought, “As we come back up to 81, there’s a good chance we’ll hit resistance there.” So, that’s a place where I’m thinking about shorting this. Now, as it’s squeezing up towards that level, this is the problem with these stocks. If you wait for confirmation, say the first candle to make the new low, a lot of times by the time that candle makes the new low, you’re already 20, 30, 40 cents off high of day. So, now the risk is much higher, because if it goes back to high of day, you’re gonna lose that much … lose 40 cents.

So, on this one I decided, “You know what? I really think it’s gonna reverse off 81. I’m gonna put out an order to short 500 shares at 80.95, and if it breaks over 81, I can stop at like 81.20, which is like a hundred, you know, a hundred bucks … whatever, a hundred twenty bucks. That’s not bad.

So, my stop is 81.20 right up just a little higher, and I’m short at 95. Now, I also thought if it goes up to 81.10 or 81.12, and then comes back down below the whole dollar, I would then double as we cross back down through and break the support of 81. Whole dollars are usually support or resistance. So, if we break through resistance, but we can’t hold above it, and we come back below it, I would short there, but I decide to short in anticipation of this potential move right around the 81 spot. We hit a high of $81, and then we pulled back down to 79.85. So, with 500 shares, I made $465. I mean, that was an awesome trade, and that got me from being up $500 on the day to just about a thousand bucks.

So, that became the trade that really made my day, which was awesome. So, I was really, really happy about that. I always … I love to take really clean reversal trades, and you guys know that I don’t trade reversals a lot. I don’t trade the high priced stocks a lot, but when I do, it’s because I see something that I really feel confident in. Now, despite feeling confident, I was still only prepared to take a thousand shares full size, because that’s $80,000 in the trade. 500 shares is 40 grand. So, I didn’t want to put in 3, 4, 5,000 shares. I mean, that’s just too much money to put into a trade. Not that … I mean, I know that it’s a company and I’m not just throwing the money away and I can sell the shares or cover them, but it still feels like a lot more risk, compared to buying 5,000 shares of a $4 stock which is like 20 grand in the trade.

So, that’s kind of, for me, one of the limitations and the reason that I don’t usually … it’d be pretty rare for you to see my 5, 6,000 dollar days be as a result of trading a high-priced stock, because the only way I would get that type of gain would be if it moved 3, 4, 5 points like almost immediately. But of course, if a stock was going to move that much, I probably wouldn’t even be comfortable taking a thousand shares, because obviously volatility is higher, risk is higher. So, I would probably scale down to like 500 or 400, which means to get $5,000 we would need like a 10 point move.

So, again, if a stock could move 10 points, I’d probably be scaling down to like 200 shares, so that’s just the thing with the high priced stocks for me. You know, one of the things we talked about yesterday is that goal to try to capture 20, 30 cents of profit out of the market each day. If you can do that with 2,000 shares, that’s your $500 daily goal pretty much. And so you think, “Well, maybe I should trade stocks like DLTR, because that pulled back a full point.” And that’s true. It did. It had a much bigger range, but you have to remember that when those stocks don’t work, your stops are that much bigger. You can’t usually get a 10 cent stop on an $80 stock. A lot of times your stop is 20, 30, maybe even 40 cents which means your profit target needs to be 60, 70, 80 cents. So, you’re no longer gonna take that 20, 30 cents profit. You’re looking for bigger windows.

So, I just find it a little bit easier to focus on the low-priced stocks, tight stops, quick 15, 20, 30 cent profit targets, and then with the higher-priced stocks I just scale down with smaller size, and sometimes like on a day like today it adds a little icing to the cake … ends up being the trade that kinda gets me up to my daily goal, but usually not the trade that would get me a home run. But good base hits on these high-priced stocks for me and DLTR. I mean it was low risk; it was easy; it was no stress at all, and it just worked immediately. Pretty much instant resolution, which is awesome.

All right, so that’s about it for today. Day 90 … What is today? Day 96. 96th trading day of the year for me, and trading still on the road … in California now. I’ve been on the road since the end of April, actually. Between being in Italy and then being in New York City for a week, and then being in Las Vegas. So, I’ll be here through the rest of the week, and then I’m gonna fly back on Saturday.

All right, so next week I’ll be back in my home office, which is going to be strange to have really big monitors again, but I’m sure I’ll get used to it. All right guys, that’s it for me. I’ll see you first thing tomorrow morning. All right, bye guys!

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