Warrior Trading Blog

Hit my Max Loss then Bounced BACK +$577

After Hours Trading

Hit my Max Loss then Bounced BACK +$577

All right, everyone. Time for our midday market recap. This is a later recap than I usually do. It’s 2:00 in the afternoon. Usually I do them around 10:30, 11:30, 12:00. But, today, I ended up trading a little bit longer than I normally would and it was because I fell into the hole right away. First trade of the day, I went red and I spent the rest of the day trying to dig myself out of the hole. Finishing up $577 feels like a big accomplishment because it was recovering from a low of being down $2,600.

Now, today I did something a little different which was right after that big loss, instead of walking away which I normally would do, I would say, “That’s it. I’m done.” Instead what I did is I took a deep breath and I said, “All right. I’m in the red and I’m not going to get out of it with one big home run trade, but I can get myself maybe not back into the green, but I can recover some of this day just by taking small trades, small bases. One trade here. One trade there.”

I did that until I was down only 1,200 bucks and then I was down only 900 bucks and I was down only 600. Then I was up $87. Then I was up $300 and now I’m up $577. Today was a day that I dug myself out of the hole. As soon as I fell into the red, I knew that this was a day that was going to be an opportunity for me to exercise discipline and patience, to see that I could stay focused. Although it’s overtrading and trading more than I might trade on another day that I wasn’t in the red or a day that I hit my daily goal in the first 15, 20 minutes, it showed that I was still able to find good quality setups and that’s what’s important.

For me, the thing that I really try to avoid is getting into that mindset where you start swinging for the fences at anything that moves. You jump into this. You jump into that because that’s often when you’re not applying the same quality standard to each trade you take and you’re allowing yourself to take poor quality trades and inevitably your accuracy goes down.

Today, my accuracy was 71%. For the month of October, my accuracy is 83%. My accuracy is still really good. What was disappointing today was that I started a day with one big red trade. Let’s look at that trade since this is the one that really got me into a tough spot this morning. DFFN. DFFN here, you can see pre-market some nice consolidation. This one, it really did look pretty strong pre-market. I thought it looked totally decent. We had pre-market consolidation around 240. Those of you on Facebook, you can see here. Consolidation through this area, it was our number one leading gapper. It pops up here over 240 pre-market up to 268. Then it squeezes up to a high of 292.

It was pretty natural that as soon as the bell rang, I was looking to take a trade on DFFN, anticipating a break of pre-market highs and a break over $3. I jumped in along with 10,000 shares at 287 and we popped up to a high of, as soon as the bell rang, 297. I was up about a thousand bucks which is fine but I was really planning on having it break over three bucks. That’s what I was thinking would happen. It would break over three. It would pop up to 305, 308, 310 and I would sell on that move. 1,400 bucks in the first five minutes and that could’ve easily happened. But what ended up happening is we just were unable to break over that $3 spot.

I ended up selling and starting to scale out on the ask as I could see that this wasn’t looking as good as I thought. I sold 2,500 shares on the ask. I tried to sell more on the ask. I kept putting my shares on the ask to try to sell them pops. 200 shares at 90 and then finally, all of a sudden, it really rolls over hard and that’s where I had to bail out. It’s always disappointing when that happens because it can happen so quickly that you’re suddenly at this really big loss that you were not planning on and you weren’t expecting.

You can see in this first candle we’ve got our opening range breakout candle and then as the low of this candle broke which was 76, we dropped all the way down to 242 in one candle. That’s a really big drop. We never like to see that. It popped back up a little and then consolidated lower. We’re currently at $1.96.

This is one of those stocks that we’re going to look back on and we’re going to say, “Well.” The last time it gapped up and had a big gap, what did it do? It faded. The whole gap got faded and it dropped down and it ended up closing near low of day which is what it looks like it’s going to do. It’s going to be hard to trust this stock again for a while because of this big move.

HMNY was the same way for quite some time. We had days where it was gapping up and it would gap and sell off and it made it very hard to trust when it did it multiple times in a row. It did it here and it did it again here. Unfortunately, DFFN is doing that but it doesn’t mean that it couldn’t do one of these in a month or two months because it could. We could see a move like this. I don’t know. But it’s not impossible. Unfortunately, today was just definitely not the day.

That was really disappointing. It cost me 2,600 bucks right out of the gates and it just could happen very quick and right away I was having to decide, “Okay. Well.” What time was that? I bailed out of the last of it at 9:31. One minute into the day, I’m at my max loss. I thought, “Okay. Well, I’m at my max loss here and I really shouldn’t keep trading. Maybe I should just walk away.”

I remembered how the last time I had a day where I hit my max loss and I walked away at 9:32, there were certainly opportunities later that day. I just wasn’t in the right head space to be a good trader and so that’s where today I said, “Well, can I bring myself back into a good head space where I can continue to be a good trader in spite of this loss that I just took?”

That’s where I brought myself back to center and I took … You could see here about 10 minutes before my next trade. I didn’t jump right into the next one. I stepped back, pulled back a little bit and then I saw [Arkhan 00:07:20] pop up and I jumped into that one at 2:25. It was a good looking trade that I would have taken on any other day. I didn’t do anything differently on this one. I jumped in. Even though I didn’t make $2,600 on it, I was willing to take profit when I had it.

This started to pop up here, a little consolidation here in the 20s which is where I jumped in and we got to squeeze up to a high of 248. In fact, I was holding part of that position until, let’s see, 49 which is right on that candle. I held some of it all the way through 48 and then sold a little as it came back down. Overall, it was not a bad trade at all so a thousand bucks on Arkhan.

At that point, I was like, “Okay. Well, I’m down $1,600. I’m still in the hole but I’m working my way back out of it.” Immediately, I was no longer thinking that I need to try to get back all of that loss in one day or anything like that, just instead reminding myself that one trade at a time. A small winner here, a small winner there adds up and I will get myself back out of this and into the green whether it’s today or it’s tomorrow.

I finished the Arkhan trade and then we saw OPTT popping up. I jumped in OPTT at a $1.50 and on this one, it popped up to a $1.53. Actually I got in at 48 and 49. Popped up to 53. I sold at 52, 49 and then I sold the rest as it came back down at 46 and then 39. I ended up losing $140 on that one but, again, not a bad trade because I got in looking for the half dollar break which we got and then I didn’t hold the whole thing.

I was very quick to start scaling out and getting out of the way when it wasn’t working. Again, when you’re taking profit and selling half or a quarter at 52, you’re doing the right thing. You’re paying yourself for being right. What I have done in the past on days when I’m in the red is I don’t sell the position at all. I hold the whole thing because who cares about making 200 bucks when you’re down 2,000? But, 5, $200 winners and you’ve cut your loss in half.

That was my OPTT trade and then I jumped into … I tried to get in XNET at 555. My order didn’t get filled so I ended up not getting filled on that at all. That was at 48 or something like that just before 10:00 a.m. I was looking for a little break out here, a flag break. I thought this was going to break to the upside over high of day at 66 but it didn’t get filled and so no order on that one. But, I did get in down here as we were curling back up. I got in at 51, 53 and 54 right here as this broke over 545. That was at about 10:30 in the morning. This to me looked like a good trade for a move back up towards high of day. I was looking for a move back to the high and I jumped in there. We squeezed up to 60 up to a high of 73. That ended up being an $800 winner which was a solid trade.

After that trade, I was down around I think 600 bucks, down right around $600 at that point or maybe it was not quite 600, down, I don’t know, 800 bucks or 900 or something. In any case, I was like, “All right. Another decent trade, decent winner and now scale back or maybe look for another one.” In any case, I’ve reduced my losses by a lot today so feeling good about that and then we had NEOT pop up.

NEOT I jumped in at 136. This was at 11:30. I’ll pull this back here. 11:30 as it’s popping up, we got to pop up, a little pull back. I jumped in for the high day break and I was anticipating the move up to the half dollar. I thought this was going to squeeze up to 150. It ended up not going that high and so I sold at 141 and 138. Made a little bit of profit on it, sold the rest, breakeven, but it wasn’t a very exciting trade.

At that point, it was 11:30 and I was done for the day and I was down 600 bucks. I figured, “Well, maybe that’s it. Maybe I’ll keep trading.” But, for right now I had a couple of meetings to go to, work with a couple of students that was during the lunch hour, was still watching the market and then it came back here at around 1:30 trying to see if there’s anything that looked good.

At that point, I saw DEST which was popping up and setting up a little bit of a flag. You can see how this was going in these waves up and down, up and then back down. I jumped in for this wave and the move higher, only ended up making 20 bucks on that one. That was a small winner but the really good one was on NEOT. NEOT, I pulled up the chart or I still had it up. I looked at it and I thought this was just a picture perfect five minute set up right here. Entry will be 151 as you can see here, 150, 151, 152. Stop is going to be the low, that last candle which is 46. At 46, we had 27,000 share seller and at 45, we had another 17,000 share buyers. I thought, “Okay. We’ve got a little bit of support there. That’s my stop.”

Target is high of day. You can see here we’ve got the move not to just high of day which was 64 but all the way up to a high of 77. My best exit was at 70. With that, I went from being red on the day, up into the green and so I finished the day up $577.73 which was good. I was happy with that.

Today is my 13th consecutive green day. 13th day, it’s always the hardest. That’s what they say. I’m finishing the 13th day here in the green barely. It feels like a victory because I made back $3,120 plus or minus from where I was at 9:31. I really dug myself out of the hole. I don’t have a lot to show for it but this is a day that I was able to exercise some discipline. Discipline not in the sense that I walked away but in the sense that I was able to keep trading despite that feeling of frustration. I was able to put that frustration aside and not trade from an emotional state of mind. That is really a bigger victory than the dollar amount.

Granted, any day that I could hit 2 or $3,000 in the first hour, I’m going to take the money and I’m going to leave because that’s the thing to do. These trades in the afternoon, NEOT was the easiest, but DEST wasn’t clean and afternoon trading is often choppy. You don’t usually see really good follow through. Today happened to be decent and I’m glad for that but I really have no issue 9 out of 10 days trading just in the morning. It is always tricky, Roy, when you have a max loss and you decide to keep trading and that’s when you have to be really careful.

My general school of thought is just to walk away and it’s to walk away for two reasons. The first is that if you start the day with a really big red trade, you’re starting the day with the wrong mindset. All of a sudden, you’re now going to be frustrated and more emotional, more apt to make bad decisions. For most traders, continuing to trade, you’re going to double your loss. The loss is going to get bigger and that’s even for myself what often happens.

Today was an opportunity for me to practice being in the red, dealing with discomfort and continuing to be the best trader that I could be and it’s not something that I would have been able to do four, five years ago. I know that I wouldn’t have been but today I was able to and so I’m glad for that. I’ll just take it each day at a time. Tomorrow I might hit my max loss at 9:31 and be like, “That’s it. I’m done.” Because I’ll just be so frustrated it happened two days in a row and I won’t have the mental capacity to try to recover myself without revenge trading. That’s the challenge but everyday is unique. We’ll see how tomorrow goes. Hopefully, we’ll have some good opportunities right out of the gates and we’ll be able to hit that daily goal by 10:30. Today, we definitely had the last stocks moving but that leading gapper that we’re really watching, it just didn’t play out at all which was disappointing but whatever.

Anyways, today is day 13 of the hot streak. It’s the 189th trading day of the year and it’s my, let’s see, well, one, two, three, four, five, six, seven, eight, nine, 10th day of the month. We’ll be back at first thing tomorrow morning and hopefully we can get off to a little bit of a better start. All right. I’ll see you all tomorrow morning.

Oh, hey. I didn’t see you there. I was just working on the dream board for my next home run trade. Hopefully, it comes soon. Until then, make sure you subscribe to get email alerts any time I go live or upload new videos. Until then, happy surfing.