Warrior Trading Blog

Getting Back On The GREEN Track! | Roberto’s Weekly Recap


What’s up guys? Roberto here, and today we are here again talking about my trades from the week. And this week I was mindful of how slow the market actually was, last week already when I took a bit hit on my overall accuracy And so I stepped in and I approached it with even a high kind of level of selectivity in my mind. And so I ended up taking only a total of three trades, and none of those were red. So that’s a good week.

And specially I hit my best rate on Friday. And that goes to show a lot about how important it is to be patient and wait for the market to give you the opportunity. And then really just to follow your plant, jump in and tackle the trade the way you have planned. So that’s enough said for introduction. Let’s jump over my shoulder and review those trades together.

All right guys, so first of all let’s take a look to the overall, kind of overview of the overall month. June hasn’t really been my best month this year so far, but considering how slow the market has been, and considering it’s a month where there’s not a huge amount of earnings. Which definitely is among my favorite catalyst, it’s still fine. And especially when the trades, the three trades that I took this week, we were able to get back above 50% of Accuracy, and more towards my overall goal, which is 60%. While maintaining a decent profit/loss ratio here above 3:1.

So we’re being sad, let’s talk about the three trades from this week. And let’s learn something about each one of those and potentially also learning some new concept for you guys, you can take home and use for your future as trader. Right? So first of all, first trade I took was on Facebook. Facebook lately because of all the news surrounding this new cryptocurrency coin they’re launching has been definitely hitting the press quite a lot. I ended up actually taking a trade last week, and having to realize kind of a contained loss.

And then this week specifically this Tuesday because on Monday I didn’t take any trades. A decent kind of technical setup presented itself, let’s analyze it together. So first of all, we were kind of running up in the last Tuesday here on the top, sorry on the bottom right you can see the daily chart. And you can definitely notice that we were running quite a lot. Especially when considering since this last drop the overall bounce has been above 20%. So there was definitely some volatility there. And I was actually looking for it to eventually have a hit, kind of a bad RAD day, which would amend even just kind of reconciliation pulled back on the daily.

But wherever there is a big potential for volatility [inaudible 00:04:33], that’s when I’m looking to take my trades, because I’m a day trader. So I’m not looking to turn any of my trades into swing trades, that’s a practice I don’t actually like. I don’t recommend to any day traders to implement. So with that being said, let’s see what I actually notice. I notice that despite the gap up we had overnight, this gray area here represent the extended session. And so despite the gap up we had, we started the day with some definite weakness. You see the first three candles, on the three minutes here were showing weakness.

With that being said though, it wasn’t until I notice some confirmation here that I became interested to take a trade. And some people ask me in the chat room, [inaudible 00:05:41] chat room, if I was interested to take this five minutes continuation here. And the reason I didn’t take it short right here at this low, is all about the risk reward. Look, when I look for to take a trade I always kind of project my risk reward. And typically I would risk against the 13 EMA, or the top of the three minutes candle, whichever is higher in this case.

And so when projecting my trade here, and I can kind of plan for my potential entry point here. As you can see there is 191.80 area, so the crack of this one candle. And my stop would have been up here, 193.32. And so first of all I usually plan my size depending on the risk because I want to be quite balanced in the amount of dollars that I risk with each trade. And also, I kind of visualize where my first target would potentially be, right? And when I notice, even visually that my first target which is when this green line here is well below the previous low today, and the overall plan seems to be really out of reach, I really reconsider. I reconsider even the opportunity of entering the trade there. And I wait for the next setup, right?

And so that’s why I didn’t take the trade there. And so later on I waited for a next three minutes here kind of setup. And as you can see here, the risk just took an overall drop down here. Even if you consider the higher the same candle, and the low of the same candle. At that point if you’re entering about here, 191.80, and you’re willing to risk here to the high, or even a little bit about the 13 EMA which coincides also with the view up, your risk is significantly lower in terms of cents, so that means you can go up a little bit more in sizing, risking the same amount of dollars and having your targets here much more into reach. Right?

And so it’s going to higher your opportunity to take your trade right. And so that’s what it’s all about, right? Trading is just a moth business. So you have to be careful and selecting those trades that have high chance of going kind of fulfilling your plan. And just continue to do that consistently. Right? So I ended up actually missing this one entry, but I went for the next three minutes here. I went a little bit anticipating here, I went in at 191.50 is here. And at that point my stop would have just been here at about 192, 191.95/192.

And so as soon as I enter here, the trades just went lower and kind of cracked this one, this one Bar Flag. And I pretty much knew that I had high chance of success. At least to reach the previous lows which ended up being above, sorry below, my first target. So I took profit on my first third of the position. And then of course as for my process, I just went ahead and took the rest of break even, and just be done basically be done for the day. Even though as we can probably notice here, more easily on the 10 minutes time frame here the top right. And can zoom in just to let you see it.

The overall trend was just beautiful. I was beautiful almost all day long. And so that’s the thing, but on the other hand you also got to be careful when you plan your trade on a specific entry and a specific stop are you want to be respecting those no matter what. And so even though here of course it looks beautiful on the 10 minutes chart, and it looks also a little bit shameful that we didn’t stay in for longer. The imperative is always about respecting the reach of your plan. Because you never know how much that a trade will go against you, right?

And so if it’s not within your parameters, so you better stop out at the price or area you were originally planning for. All right? So that’s my take there. And we will also see why it’s important, it’s really important this week. Nice win there, I mean, not a big win but at least closing the trade green was definitely good. Then I want to touch on a little quick on this Adobe. It was on earnings, it was capping up as well as we can see over actually here. And we’re capping up and we’re right below the all time highs. And so whenever we have this kind of setup, I look both sides for the trade. I look both sides, above the pre-market highs, which were here. Or below the pre-market support, which you can clearly be seen around this area here at about 287.

So what did I actually ended up doing here? I waited the first 10 minutes as usual, and then I noticed there was confirmation. And so I was ready to jump in here on the third candle when we had this nice crack below the previous three minutes here. Because I know at that point the likelihood to get taken out and continue downwards momentum is going to be high. I jumped in here at about 285.70, this thing started to work out. And then it cracked even below this 285, but I had my first target right about here, 284.20s probably. And as soon as I noticed this kind of reversal happening here, and whenever I have a situation where my first target, the price gets very close to my first target and reverses. As I said in my latest mentor session, if you are in [inaudible 00:13:53] pro, you are definitely welcome to go back and watch the recordings.

I am just going to be ready to stop out, break even. And that’s what I did. I basically stopped out probably five cents below my entry, which is showing here on the green side. But I’m really considering just a break even trade. But at least I wasn’t holding until I got stopped out. I know that because, I mean sometimes what may happen is that this thing goes like there close to your first target and it reverses. You stop out and break even only to see the thing continue the direction. And that’s always a possibility, but more often than not when I see this kind of behavior happening, I better off just stop out, break even. Because the likelihood to get kind of squeezed the other direction is becoming higher than 50%.

So good idea there to stop out, break even, and not to get heart on a traded. Almost did work out but all of a sudden it reversed back. And so that being said, it comes to today. Today we traded KMX. KMX was a beautiful three minutes continuation, and that setup was just very similar to the one we just analyzed on Adobe. So let’s jump into it. I jump into it because this thing, I got a lot of questions in chat room about this thing.

So we were gaping up into new updated all-time highs. And of course this thing ensures kind of volatility for the day. And that’s what we look for. And whenever we look for volatility, what we want to pay attention to is not making an opinion about a trade that just because it’s gaping higher, about all-time highs, has to go even higher. Has to push even higher. Because when you build those ideas in your mind and you just blindly go long. Like imagine you go long here, right at the open at $88 or higher, and then this thing just crashes into you. Even just to go back to break even you will have to hold the position like going $5 against.

And so what I look for as I always say, is a kind of lower risk, higher reward kind of trade. And that’s when it presented itself. Let me just go ahead and explain to you. So first of all as usual I have my level marked out, this green line, it’s automatically drawn for me because it’s a custom technical indicator I coded myself for trading view. And it’s going to be here, right? 87.80, then I wait the first 10 minutes to eventually, I eventually play the second three minutes. If it goes and makes a new high, if the move is not overextended, and I can see easily this one here down just below the volume charts here.

And on the other hand I’m also preparing myself to eventually get a trade right below the pre-market support. And what is the pre-market support. Well pre-market support, you can clearly see was here about about 85.60s, right? 85.60s was a level support, it’s even visible here on the data chart, this blue lines that you see here are actually trend lines coming from the daily. And it also help the fact that both trend lines were above this kind of support. So that you know that they’re going to go and act as the resistance if the price falls back below.

And so whenever I notice this big red candle, the first three minutes, I get alerted. I kind of get in a situation where I get trade, eventually to take a trade on the next good setup. And when the next good setup actually is? Well it is when I can see this thing, like tested once this level, try to hold and then there were really a couple of tests that I could see in the price action. And then when the next three minutes came up open, and it pushed a little bit and it started to sell, that’s when I know I have a high probability for it to flush if it gets below this level of support.

And so whenever I notice this push, and it’s starting to sell off and I had all this, all possible resistance up here. I didn’t even have to struggle to know how much of a size could I possibly use, because I have this one other technical indicator. You guys have asked about this a lot doing the previous weekly recap. And this is called sizing guide, and if you download it and use it for yourself, you can set up pretty much which one EMA, or you can use just zero for view up you are basing your sizing guide off of. And I use the 13 EMA, so basically what this indicator is doing for you, is suggesting you live real time how much size you would possibly have to use in order to size your trade, and to risk the amount you are putting here.

So here I just select the amount of dollars, for me it’s basically $400 that I’m comfortable risking for one trade. And this things are just going to turn different colors, kind of reflecting what the divergence is. So if it’s yellow I know it’s overextended, so I may be a little bit more worried. But it’s basically the same I’m doing up here. I just want a different color to make sure I’m aware when I’m about to take a trade if that’s overextended or not.

And also, you may want to tackle this one, if not, to put the kind of max size by price here so that the maximum possible size is not going to screw up the whole scale. And that’s it. So the other thing is, I use the low or high, depending if you are above or below the 13 EMA. So that basically this is going to calculate how much size do I have to use here, depending, sorry using the 13 EMA on one side. And the low, or the previous candle on the other side.

And so here, this candle here, the one that I played, I pretty much knew I could use about 700 shares in order for me to be risking this $400. So I just wanted to spend a little bit of time here, let you understand how this technical [inaudible 00:22:40] can be used. It’s free basically, all you have to do is go down in description you find a link to trading view. You just go ahead if you want and subscribe to any of their paid subscription, and then you can go ahead here in the indicators and just type in “sizing guide”, and you can go ahead and download it for yourself. And also drop a like if you like that specific indicator.

So with that being said, this is just to really go in detail and explain to you guys the process of taking the trade. Why is that exactly 700 shares. And why it’s not 2,000 or 50 shares. And that’s basically because of that, all right? And so as soon as I jumped in this thing just flashed. It flashed below. And as I said to other traders, I anticipate that a little bit because it was really the third test happening. And so I felt confident about jumping in, anticipating that a little bit. But even entering here on confirmation at 85.50s or 40s would still have been a decent entry for sure. And there was plenty of time to do it.

But with that being said, I knew my entry was there. My stop at about 86.20s, and then all I had to do is to wait for my levels to get eventually tested for taking profit. So I put our the first order, 84.75ish, and I got feel for my first third of my position. And second third of my position here at 84.20s, and look at this cover guys. I put out the third order here, 83.30, and I just nailed the bottom. Like literally four cents above the bottom. And then after that this thing just shoot up in the opposite direction. And the up stopping all the rest at 85.50s, practically break even.

And now you can see on the 10 minutes, and you can actually that this thing ended up reversing quite strongly. And so despite that, there was still plenty of time here to take profit off of this beautiful technical setup, right? Because if you enter here guys at 85.50s or so, or even a little bit lower, this thing like 15 minutes later, it’s trading $2 below your entry. So there’s plenty of time to take profit.

And despite the fact that this thing really ended up reversing, it even enforces what I said in the beginning of the video about the Facebook trade. Guys, there is no point in watching the chart afterwards and saying, hey well, this thing that follow it, the 13 EMA and the 10 minutes, right? Incredibly nice. And of course I agree with that, I disagree with the fact that it was necessarily a good hold, waiting here during this push up consolidation. If it’s not part of your original plan. Right?

So for example, if you just basically trade here against the 13 EMA on the 10 minutes, and you end up getting stopped out. Right? And so just long story short, if there is not a perfect plan that works every time for everybody. What you have to look for is kind of your identity, your way to see the markets, your way to plan your trades. And just be faithful and follow that process until the end. Because in the end, as I always say, the goal is not about being green on each trade. The goal is to have clear your plan before entering the trade and execute the plan every single time. And then just measuring the results.

All right? So that you can in the end readjust your approach over time depending on your own strengths and weakness. So that’s it for today, guys. I really hope you enjoy the video. If that’s a yes, please just drop a like button so I know I can go ahead and continue with this series. And with that being said, I am not going to be in chat room next Monday. I’m in the middle of a move, so please understand. I’ll be back then on Tuesday, and in meanwhile as I said, if you’re interested to get trading view, just don’t hesitate. Go back below into the description, click on the link that you find. And if you’re interested to get my exact layout after having subscribed to their service, just drop me an email, I’ll be glad to send it for you, for free.

So thank you so much for watching and I’ll see you guys next week in chat room.

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