Warrior Trading Blog

Frustrating Red Day -$2,900 on $EVH | Ross’ Trade Recap


What’s up everyone? All right. Well, ah, ah, ah. Another red day. Yeah, this is frustrating. Thursday flat, well, $47, whatever. Friday, no trades. Monday, no trades. Tuesday, red 400. Today, red 2,900. Well, you know what, the loss produced an awesome recap. You guys are going to enjoy it. Watch to the very end. Some really key life lessons about dealing with frustration, being patient and the process of finding success in a market where it feels like you’re only successful when you’re financially well off and there’s no pressure about whether or not you make money. So that’s not fair. We’ll talk about it during the recap. I hope you enjoy it. Comments, questions below. I’ll see you guys first thing tomorrow. You know what, tomorrow 1:00 PM Eastern, we’re going to host a workshop we’re going to talk more about this stuff. So make sure you guys register. You can see the link. All right, see you there.

All right, guys. So recap here today. Second red day in a row. Was down 400 yesterday. Will give back about 2,900 today. This is a little bit of a frustrating day for me on EVH. I really just had a hard time with this one. The first place where I took a trade was right here on this false breakout. I jumped in it for the break of 20. I was in at 15 and 20 and then stopped out at 97, so the last 1,200 bucks. The next entry I jumped in trying to scalp the break over $8 and I … I hesitated to by the break of 20 because I felt like getting in for the break of 20 was, I just didn’t expect it to work. It sort of did a little false break here, false break here, and I hesitated and then it rips up to 58.

I was like, “All right, well, interesting. Should I scalp over 58?” and I didn’t scalp over 58 and then it squeezes up to 8.10 and I jumped in, as you could see here for the break of 8. That just didn’t work out well. I topped out at 8.10 and then just gave back that entire move. So part of me was thinking I would wait and go short and then I was, because I actually did have shares available to borrow, and then I thought, “No, that’s going to be … If I do, if I short this, this might be the one that actually surprises people.” If I’m thinking about going short, then I’m probably way behind like that’s … Because I don’t usually short these. So I didn’t short it. I just was going to take a little scalp off the top for the break of 8, but it reversed as you can see really quickly there.

So yeah, $2,900 in the red. That’s not a great day. This is a tricky stock with a false breakout here. This kind of set up here, which I would have done a lot better on just either shorting or not trading at all. But I think the problem for me is that at an 80 million share float, this one’s just not as predictable. I’m getting a little caught off guard with a false breakout. What I expected would probably be another false breakout here, I hesitated. It then rips through the high and makes what is a pretty impressive 75 cent breakout, which you won’t typically see from an 81 million share stock. So I don’t know, just kind of got on the wrong side of this one.

Better trades would have maybe been … I mean this one, I don’t really know, but this had this con consolidation here. I took a trade for the break over this level. I think that made sense. So that was a $1,200 loss. Getting back in here for the break of 25. I had it mapped out and I thought that that would be too risky because the stock has already done a number of kind of whips where it looks like it’s going to go and then it does a false breakout. So I thought, “Well, let me wait for confirmation.”” But the high was 47 so I was like, “Well now I can’t. I don’t know. Should I really buy it at 47? It’s probably going to drop right back down.” I actually had an order ready to go short at 7.50 and then I thought, “Well, let’s give this a second. This might surprise us. This might be stronger than I thought.”

As it rips up here, I took my starter at 88 and in the same second I was getting filled at $8. This really shows the damage of using hotkeys because that’s a 12 cent difference in the fill in the same second. Now, if I’d filled my whole order at 88 when I was selling and taking some profit at 8.06, that would’ve been a winning trade. But because part of my order filled right at the top at 8, obviously, that was too high of an entry. We hit a high of 8.10 and then reversed off that level. So I guess I’m a little bummed out that I am this far in the red because that’s going to put me down a little over 3,000 now in the month. I was down 300 on the month coming into the day and now this is a good sized loss.

So this is a little bit of an unusual start to a month to be this far into the month and really kind of before today, not feel like I was on the scoreboard at all, four days into the month not being on the scoreboard just being basically flat is not good. Now I’m on the board, but I’m going the wrong direction. So this is just a continuation essentially of July, which is difficult trading. The last big green day I had, two weeks ago today I made $3,700 which really isn’t a very big green day. I mean, relatively speaking. So it’s been two weeks since my last $3,000 day. My last really good day was an $8,000 a day and that was a full month ago. Now on this one, I probably could’ve made 8,000 if I had been a little more patient and had the conviction to hit it to the short side at 8 with a stop at 8.10, but I didn’t have the confidence to take that trade and so I didn’t go short.

I thought it would be safer just to scalp a little profit off the top and ended up losing another $1,500. So in two trades, neither of them were blowout losses, which is good. But neither of them were obviously winning trades. So this right now is going to be continuing a month of trying to just do capital management and capital preservation as much as possible. If I have some days where I do give back some profit, which I expect, then that’s okay. I’m all right with that. I do hope that we start to see some better follow through at some point. It’s kind of, for me, it’s always difficult because I know that this is my worst time of the year and so there’s part of me that’s like, “Why do I … Why am I even bothering? Why am I even going to try to trade through my worst time of the year? I might be better off taking the whole month off, just really don’t even worry about it.” It’s just this last week for instance has been net negative.

But at the same time part of my commitment is to show up every day and trade and look for opportunities and I don’t want to miss an opportunity. There’s some FOMO in that because I feel like the day I don’t show up is the day that we’ll have a stock that ends up squeezing 300% and it’s like, “Oh man,” and that might be the one opportunity for the entire month. That’s kind of I think the fishermen out there trying to catch like the big yellowfin tuna, when they catch a tuna, it’s like a six, $8,000 fish potentially. God forbid they take the day off and they miss that one big fish of the season. I mean, that can make your season. Now, trading as I say, it’s not about one day making or breaking your career. But in the context of short periods of time, a week or a couple days, can feel like, boy, that one trade could’ve made the difference.

Today on EVH, this one trade could have made the difference. Had I had the courage to press the buy button at 25, I just would’ve been riding that profit right up through the highs. Instead, I was timid about pressing the buy button because of the false breakout. So I didn’t want to take a trade on until it had proven strength. But then by that time, gosh, it was really extended and it wasn’t realistic on this one as it turns out to expect that it would really, really open up. I mean it opened up but not crazy. 75 cents is good, but crazy open up would be that it moved up to 8.50 and then it actually held that level. This is a big red candle at high of day.

So this is just the market kicking up some dirt and you eat it a little bit. That’s part of the deal. You just got to embrace that this is part of the careers trader, there’s ups and downs. I have no right to complain being up just under $300,000 on the year. But certainly days like today can wear on you. You don’t love coming to the market and having it be as unproductive as it’s been. But one of the things I mentioned earlier during our watch list was the fact that for me in terms of revenge trading, and this wasn’t a revenge trade by any means, I chased it a little bit and you would’ve gotten away with chasing it here and you would’ve gotten away with chasing it here and just happens that where I took my trade, I didn’t get away with it. This could have just as easily squeezed up to 8.50 and I would have made 2,500 bucks on it.

So it could’ve gone either way. This one just went that way. But the thing is I don’t really have a lot of revenge trading anymore because the stakes have become a little lower, because I can pretty consistently perform really well in the first quarter of each year, January, February, and usually March. It puts me in the driver’s seat for the rest of the year. Now because I’m in the driver’s seat, I don’t feel that pressure that I need to have a really great week, a really great month. I’m kind of like, “If I close the month of August red, it’s not going to kill me.” The very frustrating thing about trading is that you’re not going to get to that place of letting go and detaching from your daily P&L until you’ve achieved some level of success. But that is the mindset that you need in order to achieve success. So how do you get that to that place mentally before you’re actually there financially? I mean, that’s the real struggle.

I would say for me, I obviously was at a point in my lifestyle with cost to living where I tried to bring the cost of living down as low as possible so that I could make it by with as little as $500 a week. So then when I got to the point, yeah … I’m not live streaming on Facebook right now. But so then when I got to the point where I was consistently making 500 a week or 1,000 a week, that was covering my cost of living. I mean, it was actually putting me in a good position. That was a choice I was willing to make. I bet a lot of you guys would willingly make that decision to take a pay cut in exchange for a better quality of life, one where you don’t have to go into a nine to five every day and answer to a boss that you don’t like and to try to help them become very successful.

So I get that because that was what I did. I said, “I’d rather make less money and move back up to Vermont than keep living this life of working 10 hours a day in New York City for just so I can afford $2,000 a month in rent and the leasing or paying for my car to be in a parking garage. You know what I mean. It’s like $24,000 a year just to cover housing. So you need to make 36,000 a year, whatever before taxes. Then you want to cover, you want to get food in there, you want to get some doing fun stuff. You’ve got to be making 50, 60,000 a year. Right out of college, that’s just not happening.

So anyways, so I was willing to say, “You know what, I’m going to just live a more simple life. I’ll take the pay cut.” That means I’d have a period of time where I’m not going to have all of the newest and fanciest things. I’m okay with that. So that’s how I lived for a while. Then the pressure was off and I just adopted this mindset of I am a successful trader. You adopt that mindset and you do what successful traders do, which means you don’t stress when you have a bad day. I’m down 2,900 bucks today. This is not a great day, but I don’t stress about it. I just let it go and I have a detachment.

For me, I’ll take money out of this account a couple times a year and then I’ll have that money saved aside. So it’s not like I’m taking money out at the end of each week and if I don’t make $2,500 this week, that means I’m not going to be able to pay this bill or pay that bill. That’s what starts to get you into that really short term mindset of need to do this each week. That’s not realistic. You’re going to have months in the market where, and we looked at this in our mentor session for Warrior pro students last night where in three months of in 2016 June, July, August, I made about $96,000 and I finished that year with 220 grand. So I made 40% of my profits in three months. I mean in 2017 going into 2018, I had an $80,000 month, an $85,000 month and then $115,000 month three months back to back. It was November, December, January. So in three months, I made, what was that, 160, 275, $280,000 in three months.

So when the market is hot, I am going to be pedal to the metal and I’m going to be aggressive and you’re going to see three, four, $5,000 days back to back to back. When the market is cold, I need to be more conservative. I really wish that I hadn’t jumped into this way up here. I should’ve restrained myself and just said, “You missed it. You missed. You didn’t take it at 25. You didn’t take the break of the high of day. You didn’t buy this first pullback. You’re just getting into high and just leave it alone.” But I thought there was a little more meat on this one and it could go just a little further. So today that wasn’t the right move. In a hot market, it might’ve gone further, for sure. But we’re not in a hot market right now, so you can’t trade the hot market strategy in a cold market.

So anyways, high of day volume on a red candle, big rejection, false breakout here, false breakout here. Both of them got me. That’s what happens when you trade an 80 million share float stock. You get faked out and it got me. So that’s fine. Live to trade another day. Never let one trade have the power to make or break your career. So if you miss a day, you miss a day. If you have a bad day, you have a bad day. But you get back on the horse. You roll with the punches. This is going to teach you. Ultimately, those are lessons that are going to serve you really well in life. When you get knocked down a few times, your car breaks down and then you … Just one thing after another. I don’t know. I remember when I was living up in Vermont, that’s type of stuff where I was right on the edge of that poverty line and then my dog gets sick and that’s $1,000 vet bill.

Then the car, the axle brakes on the car and it’s $150 to buy a new axle and it’s … The car’s out of commission for … It’s just like you’re doing the best that you can to stay ahead and then you get knocked down, you get knocked down, you get knocked down and what are you going to do? You’re just going to sit and wallow and be depressed and deflated? I mean, it’s okay to be that way for a little while, but then you got to pull yourself together, get back up and get back to doing what you’re doing and trying to make the dream a reality. It can happen. It happened for me. It didn’t happen overnight, but it happens. So it was all worth it.

But anyways, so that’s where I’m at today. I’m disappointed because this is one, two, three, four, five days into the month and I haven’t had a single good green trade. I mean, this is unprecedented. But at the same time, not shocking for August. Will I get a green trade tomorrow? Time will tell. We’ll see. I’ll be here 9 AM, 9:15 to do the watch list and I’ll try to find something. So keep showing up. Keep trying to find something and it will connect at some point. So anyways, I’ll see you guys first thing tomorrow morning. If you’re still watching, you must’ve really enjoyed that video. So why not subscribe and get email alerts anytime I upload new content? Remember when you subscribe, you become a member of the Warrior Trading family.