Warrior Trading Blog

Green to Red -$940 | Ross’ Trade Recap

Ross_8.8

What’s up everyone? All right, well here we are. Man, another red day. Today is frustrating one because I was up over $1,000 and then I took a trade on a second stock and just immediately, I jumped in for a break of pre-market highs, trying to scalp a break in the half dollar. It flushed down and got me real quick for more than 20 cents per share loss and boom, that’s it, down 18, $1,900 on that trade. So went from up 1,000 to down 900 on the day and throwing in the towel. Now, again, losses aren’t fun but losing with grace is important, taking it quickly because there’s no reason to revenge trade. If I had kept trading this morning, I guarantee you I would have gone further in the red, and that’s something I would’ve done eight, 10 years ago when I was getting started. But I’m at a point now where I’m taking the cue from the market.

Now I’m going to show up and trade every single day, but if I’m not seeing action or I go into the red, from that point, I’m stepping back, keeping the losses small because that’ll make it easier for me to bounce back when we start to see things open up and we see that first stock that makes a 100 200% move. So anyways, enjoy the recap today. I’ll see you guys first thing tomorrow morning.

So today’s going to be another red day, which is a bummer. I was up about 1,000 on RBZ and then took a trade on HEB and gave back all the profit. So, I really should have probably just been grateful for the $1,000 on RBZ and not gotten into trade number two, but I did. Again, we’re just not seeing the follow through. It’s a real bummer. So yeah, I did see that post on AWSM. I think. for me, it’s tricky because we’re in this kind of funk with small caps where we are just not seeing good continuation or good follow through. Now, I’ve seen in the comments lot of suggestions of what I should do to be a better trader and things like that, some of them are valid, some of them are good suggestions.

One of the things that’s important is surrounding yourself with traders who are consistent and who are profitable. So the people that I really value the input from the most ultimately are people like Mike and Roberto and Hulk and Selena and John Elten and Vince, and of course Steve, traders who have made a lot of money, traders who have become really successful. To bounce ideas off of them and to say, “Hey Mike, are you having a hard time too? Or is it just me?” To understand that this is something that other traders go through generally speaking and then also more specifically right now, this is something that a lot of traders are going through. So that’s something that’s really helpful.

The suggestion of, “Hey Ross, why don’t you just short stocks all summer long,” for instance. Last year I set up, or was it earlier this year, I set up the account with CenterPoint specifically so I could be focused on shorting stocks and I haven’t been trading in that account and I could set, I could open it back up. I took the money out, but I mean I could start trading there again. It’s one of the things for me, I had a hard time because number one, a lot of the stocks when I had the account open that were moving were really low float stocks like RBZ, which has a float of let’s see, 1.5 million shares. [inaudible 00:04:04] a lot of these low float stocks, it’s hard to find shares available to borrow.

They’re like, “You can call us on the phone or you can message us on Skype,” but that’s not for me an easy way to trade. I want to be able to just go in here, ZVZZT, and go like this and boom, I’ve got 3000 shares. That’s just the way I trade. I want to be able to make the decision at that moment. I don’t want to reserve 3,000 shares four hours ahead of time at, 6 in the morning because I might trade the stock later that day. I know that that works really well for some people. It just doesn’t work well for me. So the main challenge with shorting stocks is that it’s not just as easy as pressing the buy and sell button. You got to reserve your shares. ZVZZT is a test stock, so it’s not going to affect my P&L, which is good.

But yeah, so I mean I think that there’s certainly argument for trading to the short side during the weak summer months, but you’re going to have the same issue that I ran into, which is availability of shares to short. We have broker rebate programs with a number of different brokers, CenterPoint, TradeZero, CMEG, and between those three brokers, you will probably be able to find shares available to borrow of most stocks. You may have to make sure you reserve the shares earlier. You will have to pay a cost, a fee to reserve the shares and in addition to your commission, but between those three brokers you can find a lot of shares to borrow. But then of course you’ve got three brokerage accounts and you’ve got the platform fees on all three of them and you of that, got to remember the taxes on all three of them and everything else. So I don’t know. In the long run, I don’t know, I’m not sure. Maybe it’s worth giving another try during this kind of market that we’re in.

RBZ this morning on this one. Unfortunately, it just did not have a lot of, I mean realistically, not a lot of range. I bought for the red to green move right here as it squeezed up and retested. I was looking for a retest of the pre-market high. It came up to 33 and I sold for a small profit. I then got back in right here, right on this pullback and sold on this move here up to 42 so in total with 9,000 shares, I only made 1,000 bucks. It’s only like 10, 11 cents per share. That’s just not a lot of profit. Then it failed. It rolled over.

Yeah. A good point there, Darren. Of course one of the challenges is also teaching a strategy that is scalable and that’s been one of the issues on a strategy focused to the short side is telling us, a trader that in order to trade the same stocks as me, you’re going to have to open three different brokerage accounts and fund three different accounts and pay $100 a month on three different platform fees. For someone like me, the 300 a month, it’s not going to make a difference. But for me, 10 years ago when I was getting started, $300 a month is a lot of money. I couldn’t afford it. I needed a brokerage account that was as cheap as possible, that would allow me to trade as much as I could. That’s why I’ve ended up using Lightspeed for all these years. The commissions are $2.95 cents for our Warrior pro students. You can trade large caps to the short side, but small caps are going to be limited. That’s just the nature of this broker.

Now, sometimes there have been some that I’ve seen on here that have had availability of shares to short and I think there was one a couple of days ago, I can’t think of which one it was. What was it yesterday? The one that I lost on. Because that one I actually had shares available to short and I still didn’t want to short it. So EVH, yeah. So I mean it’s like that’s just the way it goes. But the suggestion of, “Hey, well, why don’t you just focus on trading ETFs? You could trade TVIX all day long. This moves a lot. You could trade the SPY all day long, UVXY, certainly you’d be able to make a little bit of money.” Again, this would be venturing outside my go-to strategy, one that I’ve been trading for a long time and had proven is profitable. There will be periods where the strategy is hotter and periods where it’s slower.

Sure in a perfect world, it would either be consistent all the time or I would have supplemental strategies that were just as easy to trade, to teach and to adopt as a beginner trader. But that’s a perfect world and that’s not what we’re in right now. So, in any case, yeah, sure, am I bummed out that the market is slow? Yeah. I, envious that Mike has hit a couple of really big trades in the last week or so? Yeah. I mean, he’s doing … He’s had a couple of good ones and that’s great. But he said for him on large caps, the market has been it’s either like one opportunity or nothing. So even for him it’s been a little tricky. So that makes me feel a little bit better about it. But anyways, it’s August. Today is August 8th. Tomorrow is the 9th. Tomorrow I’ll be able to tell you the story of remembering where I was the day Jerry Garcia passed away. So stay tuned for that tomorrow. That’ll probably be the most exciting part of our midday recap. I’m going to lock it up here today and I’ll see you guys first thing tomorrow morning. All right. See you guys later.

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