Warrior Trading Blog

First Day of The Italian Trading Challenge | Ross’ Trade Recap


What’s up everyone? All right, so here we are. Day one of the Italian trading challenge. First day down. Goal is $25,000 and I now have $25,639 to go. Today’s a red day, but only down $639. Not the end of the world. I’ll bounce back hopefully tomorrow morning first thing, bright and early. I’ll be doing the watch list 9:15. I hope to see you guys there.

What’s that by one? All right, so we’re going to go over the trades from this morning, do our midday market recap. Today is first day trading here in Italy. Unfortunately, it’s going to be a red day recap. I think this is the third red Monday in a row, which is disappointing. But the good news is that it’s a small red day down, only about $600. But I suppose what’s even more disappointing is that it’s just indicative of this continued lack of momentum in the small cap market that we’ve seen for the last, I guess the last week or so. It really started last Monday and last Monday was just really … It was just disappointing. Well, all last week, Monday, Tuesday, Wednesday I was red. Thursday was a small green day, Friday was a small green day, and then today it’s a small red day.

So not seeing a lot of action, but I kept share size smaller today. I didn’t go for home runs because I told myself, “You know what, given the fact that the momentum has been choppy for the last couple of days, even something today that looks A quality is not A quality considering in the last five days we haven’t had a single stock go parabolic and really explode.” On that same note, when you have a period of a couple of weeks where you’re seeing stocks left and right going parabolic and exploding, even B quality setups are worth trading because you’re in a strong market. But you got to trade the market that’s right in front of you. As much as I want to keep trading and I want to find something, get myself back into the green or to start building my cushion on this trading challenge I’m working on right now, today’s not the day that’s going to happen.

So VVPR, you can see I lost about 1,500 on this one. I took two trades on it. My first trade was right off the high of day scanners right here jumping in at 1.58 for the break over 60. I was thinking of potential squeeze and a circuit breaker halt. All of a sudden it hits the scanner, it’s squeezing up and I saw that there was news today, so I was like, okay, this is a former runner history of making moves. You can see on this candle back here, it’s breaking out, it’s above our moving averages, looks good. I jump in and it immediately drops back down to $1.35 or $1.30. Pops back up here. But I had to stop out. So just like that, I lost $1,200 or maybe 1,300 on the very first trade on that stock, which was really disappointing.

I then got back in right here, right here actually for the break over 75, thinking it would break 80 and make new highs. So my goal there was to try to make five to 10 cents. It hit a high of 80 but then it didn’t break out over that level. So there’s really no opportunity to get much profit. Then it drops back down, went sideways here and I ended up selling it kind of right in this area at 71 for a four cent loss on 6,000 shares. So lost another $240 on it, putting myself down 1,500 on the name. So that was the worst stock of the day. Again, it’s on the daily chart, looks good, is opening up. It even has news today. The float’s about 9 million shares, relatively low, but it’s just not working.

So that was the most maybe disappointing because it just failed right away. The one that was I would say the most frustrating was our leading gapper in the entire market today, which is NERV, N-E-V-R. This one was not easy. Big move re-market. The bell rings, choppiness and then fails. So it’s just like I don’t trade pre-market and it’s one of my rules. I wait until the bell rings. I had been doing that for a long time to prove that you can be a very profitable trader, trading one hour a day from 9:30 to 10:30 in the morning. My goal here while I’m in Italy is try to make $25,000, US dollars and if I’m able to do that, then in the time that I’m here, I will make the amount that is equal to the average income for one year working here in Italy, the average Italian income is about $26,000 US. So I’m going to to try to make that trading. I’m going to do it one hour a day.

Today’s not the best start, but of course I know it all comes down to averages. Last year finishing at 500 grand was 10 times the average income in the United States, 20 times the average income here in Italy. You can trade the market from anywhere in the world, from right here or from New York City on Wall Street. It doesn’t matter. You don’t need to be on Wall Street to trade.

So anyways, NERV, just disappointing that the breakout kind of happened pre-market. By the time the bell rings, it’s choppy. Now I took two trades on this in this first one minute candle right here. The first trade I got in at 7.88 for the break of $8. It then drops to 7.30, the low of this candle, 7.30 no, at 7.41 and then it rips back up, breaks through $8 and hits a high of 8.32. So I only got a partial fill about 2,200 shares. So I held through the dip down 50 cents a share, down $1,000. It then comes back up and as it came back up and broke 8, I sold and took my profit of about $550. So I was like, okay, that’s not bad, 550. I then got back in it right here anticipating the break over 8. I added back at 61. I sold in the 90s and like that I was up about $1,500 on the day. I made another $1,000 on this trade right here.

Then I got back in this right here at 90 thinking it was doing a one minute consolidation here. I literally got in on this red candle at 90. The high of this candle was 90 and then it dropped down to 7.25 and like that I lost everything I had made, except for $120 of profit. I then switched over into the trade on NERV I believe it … Or no, when was this? I think this was after NERV. So I think when I took the trade on NERV, it put me down about maybe … I can’t remember actually how much I was down on the day or when I took these trades. Sorry, this was NERV. VVPR was the one that I took the trade on and lost on. Maybe that was in between those two trades. Yeah, it must’ve been.

But in any case, so made some money, then was down like 700 bucks and then lost a little bit more. Giving back profit on NERV. A small trade MLNT, only $26. Not impressive, obviously. Took that trade for the break over the half dollar right here. It actually broke the half dollar … Well, I took two trades. The first one was right here, that one dropped down. It then came back up and broke it here, squeezed up to a high of 75 but I just, I didn’t do well on that one. I sized kind of wrong and it didn’t get good entries or good exits.

Then the last one was AVGR, a reverse split stock today that hit the high of day momentum scanner for squeezing up 8% in the last five minutes. So on this one I jumped in, made about $750. It squeezed up to a high of 93. It got halted on a circuit breaker. It resumed to hit a high of 4.04. It then dropped right back down. It popped up for a second. I was able to get partial fills in the 90s and then hit the bid at 80 as it dipped back down, $750. Not bad I guess, but that was a 9,000 share position. So generally today, obviously didn’t make a lot of progress. A little bit more red than green and I guess that’s kind of a profit loss ratio issue because my accuracy, I’m green on three out of four names, but the reality is VVPR, lost twice on, MLNT, I lost once on and NERV, I lost once on, which leaves four losers and then a winter on AVGR, a winner on NERV and a winner on MLNT. So I’m actually only right on three out of seven trades today.

It just happens that I am green on three out of the four names, but really not super, super hot today. You can see on the high of day MOMO scanner, nothing else is really moving. I mean, we’re just dealing with the market being dead right now, which is tough and this isn’t a summertime thing necessarily. It’s not seasonal. It’s cyclical. We had some amazing momentum the first two weeks of June. I made 50 grand in two weeks, made the average income in the United States in two weeks of trading. Now, we’ve come into this a little period where the momentum is just not on our side. And I think what’s probably causing part of the problem is that the leading gapper the last few days has been getting knocked down. NERV, leading gapper selling off. AXGT, was that it from yesterday? I think it was or Friday. AXGT, the leading gapper got sold off.

So you sort of have this market where if you’re trading to the short side, even if you’re kind of wrong on your entries, the leading gappers are still fading. Now there will be a time where we see one of these leading gappers like a GEVO type stock that … Remember the time when it was gapping up like 100% from 2.50 to 5, the bell rang, it got knocked down to like $4, went sideways and then it ripped up, broke through 5, hit 5.50. Gets halted on a circuit breaker. Resumes, squeezes higher. It literally hit a high of $21 within a period of less than an hour. So the stock all of a sudden took off and just exploded, was up 500% on the day. Well that’s what long bias traders like myself love. That’s amazing opportunity and what creates that incredible opportunity is the fact that people will be shorting that stock early in the day and early in the move and they’ll get squeezed out and they’ll be forced to cover it as it moves higher.

That’s going to create a double amount of buying pressure, buying from long traders, FOMO traders, triple buying power, and buying from short covering. What you’re seeing right now is sort of more of the other side where everything that pops up seems to fade and so short sellers are more aggressive about hitting things to the short side. Long traders are more conservative, rightfully so. I’m being more conservative with my share size. I’m not trading with 15 or 20,000 shares. I’m trading with six to 9,000 because I know that half of these stocks, yeah, maybe they’ll squeeze up five or 10, 20 cents and I’ll get a little profit, but the other half are just getting hit and knocked right back down. So it’s not the time to be super aggressive and it’s a hard thing to really embrace because as traders we feel like our job every single day is to make money.

Again, looking back on last year, obviously I finished the year in really great shape, but I did not make money every single day of last year. I wonder if I actually have the metrics of how many days out of last year I was green and how many I was red. Just out of curiosity. Let’s see if I can log into trader view if they have that metric. Because at the end of the day it is all about your averages. But for us, I know for all of us who are traders, it feels any day to be red like such a defeat. If you’re red three or four days in a row or you have a red week or red month even, it feels like you’re just kind of at the bottom of your sort of emotional confidence. But the thing that will make you feel better is just reminding yourself that it always comes back.

Momentum always comes back in the market. So even if we have slow periods and we can’t make a lot of money, it always comes back. Then during that period when it’s hot, you can make more than enough to cover up the losses. So, all right. Let’s see. So let’s look at win versus loss days for 2018. So okay, so there’s 179 winning days last year and 56 losing days. So 56 losing days, I mean, would’ve been terrible to have them all in a row, but that was spread out over the course of the whole year. So about 200 and let’s see, 230 trading days of the year, just about 200 something like that, 25, 230. But it wasn’t without red days. On those red days, those 56 red days combined, I had $200,000 in losing trades. My accuracy on red days, only 42%. Accuracy is not hot on red days, makes sense.

Average losers. This is what I don’t like to see is that the average losers are so much bigger than the average winners. Even on a red day, you like to see a better profit loss ratio just to show you that you’re managing your losses a little bit better. But of course then on the winning days, a solid two to one profit loss ratio, 75% accuracy on winning days and $767,000 of profit on the winning days. So the net profit is the combination of the two minus commissions. But just kind of as a reminder for you guys who some of you are newer to trading and you have a red day or a red week and you feel like the sky is falling, it’ll probably still feel that way even after months and years of being profitable. But you learn to keep it in perspective that it’s only one day. It’s only one week, it’s only one month and month of the year.

Let’s look up here at the calendar for 2018. 2018 calendar right here. I actually I want to see it. Well, you can see February was terrible. I mean, absolutely terrible. What I was going to show you there was that I was red in the month of February last year and I remember feeling like, oh my gosh, this is terrible. I just had my best, the best month of my career followed by my first red month in over a year of trading. What’s going on? It was just one month. It was an anomaly and I bounced back. The summer was pretty good. June, July were fine. August was slow, September was slow, but things picked back up. So this is the ebb and the flow and the ebb and the flow and it’s just part of the deal with trading.

I’m sure it would be nice to be able to just get paid the same exact amount every single day we come to work. But to get that you’ve got to compromise and that would be basically accepting working at like a nine to five job instead of being your own boss. Being your own boss, no matter what the job career is, you’ve got those ups and downs. Being a freelance contractor, you’ve got projects and things slow down, you get a new project and then you have a dry spell. Things just kind of get slow and we give up the security for that freedom to be able to make our own schedule, to be able to, for those of us that have jobs that you can do from anywhere in the world, to be able to do it from anywhere in the world.

It takes that sort of emotional fortitude to be able to see through the red, to see through the choppiness out to the horizon and other things will always get better on the other side. So hope that makes you guys feel better, those who maybe are also red for the last couple of weeks or yesterday or today or Friday or whatever. Momentum will pick back up and when it does, you’ll see me in mornings where we get a couple of hot stocks and I’m going to make five, $10,000 within the first 15 minutes of the day. You guys know it’ll happen because it’s happened before and it will happen again. It’s just the way it goes.

So right now, can’t be super aggressive, have to kind of hold back, be more conservative. Yeah, I probably could have finished that 500, maybe $1,000 if I hadn’t jumped on VVPR quite so fast and if I hadn’t gotten back in NERV. So a couple of slight adjustments today could have been the difference between being red and green for sure. I could have been green today and for that I’m a little bit disappointed, but today was not going to be a home run day. Today was not going to be a $5,000 green day. That just wasn’t going happen. It wasn’t in the cards. So anyways, that’s it for me. I’ll see you guys first thing tomorrow morning. Well, it’d be 3:30 in the afternoon here when the bell rings, but be back at it tomorrow and we’ll hope to see some nice stocks on the scanners and hopefully we can lock up a green day. All right, see you all first thing tomorrow morning. Bye everyone.

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