Warrior Trading Blog

Locked In a 2nd Green Day +$367 on $DMPI | Ross’ Trade Recap

ross_8.13

What’s up everyone? All right, well, locking up my second consecutive green day. We saw some pretty big action today. A surprise move on MTC, which I really underestimated, because yesterday this was stock that was opening and hit a hype around eight and dropped all the way down to $2.50. And it just totally sold off. Today, it bounced all the way back up to $13. You just don’t expect that on that type of daily chart, but, hey, you’ve got a big move.

So that was cool to see. I walked you guys through some of the one minute ABCD setups and things like that. The trades I took today, a little more conservative, but it was really important for me to lock up a second consecutive green day and not take unnecessary risk. At the beginning of the MTC move it felt very risky with big spreads, and I just wasn’t in a place to take the risk. So, I was conservative today, but, hey, I’m walking away green and I’m happy with that. And I’ll see you guys first thing tomorrow morning. As always, questions, comments, put them below. And I’ll see you guys in the morning.

All right everyone. So we are going to do our midday market recap here. Go over the trades from this morning. Well, $367.00 of profit on DMPI is not bad. MTC, boy, this one, 300% breakout. The thing is, this stock all day yesterday, and I mean all day yesterday, was selling off. This thing went from $8.00 yesterday down to 2.50, and it kept hitting the scan or getting halted going down. And so, when I saw it this morning, bouncing up right here, I thought, no, no, no, no, no, this is a bounce off the lows. This is a dead cat bounce. This is not something that I have any expectation that we’re going to get a big move out of. And I was wrong. Typically, though, this is not a pattern that we see work out really well. So, right out of the open, it did this consolidation here. It popped up to 4.94 and then dropped back to 3.21, and had 50 cent spreads, literally 50 cent spreads.

So I looked at that. At that time I was only up $367.00, and I thought, “You know what, Ross? You can’t afford to take the risk that would be required to take this trade.” And I was watching it at 3.50, and I often do this, I’ll type in MTC, and then I’ll enter my order right here, 3,000 shares. So, I had my order ready to go at 3.50. And I kind of put my hand on the buy button like this. And I was like, “Don’t. Don’t do it.” Because man, this one, if you take 6,000 shares and it opens up to a 50 cent spread, you’re going to lose $3,000. I cannot afford to take that type of loss right now. I wish I could, but I can’t.

And so, I held my hands, and sometimes I clench my hands together because I want so badly to take the trade and I just can’t do it. So it breaks 3.50 and it squeezes up to 4.00, 4.26. It then flashes back down to 3.55 here for a second. And I was like, “That’s right. That’s why I’m not trading that stock because of these types of drops.” And then it rips up to 5.50, and I was like, “God dang it.” As quick as I was patting myself on the back for maintaining discipline, I was beating myself up again for missing a great opportunity. Little false breakout right here. It then pops up back to 5.30, and goes through this period of consolidation.

And during this period we were coming to the end of the first hour of trading, and I only had $367.00 to show for it. My 367, just so we don’t lose our place on MTC, was on DMPI. So, DMPI here, this one was popping up, you can see pre-market pulled back. It jumped up right here to 2.00. I hesitated on it again on this one. Had kind of big spreads for a cheap stock. The spreads were $1.91 by $1.98, which is kind of big. So I didn’t take the trade here. It squeezes up. I then took this trade right here, and I took this trade right here.

So my first trade I made only 50, and my second trade I made 3.20 or whatever the case is. So I’ll put that chart back over there. And DNPI, I found it right off the high day momentum scanner. Also, I’ll just put up RKDA for one second. RKDA, this morning, yesterday continuation, through after hours this thing squeezed up to almost nine bucks. But this morning the pre-market session began and it sold off quickly, dropped back down. The bell rings and it pops up for a second, but I said, “Guys, this is a five minute long bear flag, I’m not buying into this. And I can’t short it because I don’t have shares available to borrow. So I’m just going to sit tight.” And it sold off quite a bit.

So that one’s dead. And MTC, DMPI failed pretty miserably, because DMPI is now back down at, let’s see, $1.83. So when MTC first popped up, I just thought, “DMPI is failing, RKDA has failed. I just don’t have much confidence in buying this setup below the 200 moving average into daily resistance after yesterday’s big sell off.” But, man, it broke that level, and broke through the highs of 5.50 and squeezed all the way up to 9.17. It actually broke yesterday’s high, which is really impressive. So that’s great to see that type of follow through. Now it’s coming back down. And I regret not being able to be aggressive on it. At this time, I was like, “Well, it’s the end of the first hour, I’m locking it up.” It then pulls back here for a second. And I just thought the risk is too high. Now the spreads are still big, we’re seeing right now 20 cents. Right now it’s a 20 cent spread. We’re seeing big spreads, and that means, as soon as you get in here, you’re down 15, 20 cents on the bid. So, for me, I wasn’t in a place to take the risk.

Now, the people that were in the place to take the risk on it and who made money on it were probably the people that least needed the profit on the month, because the only way you would’ve felt comfortable taking risk is most likely if you already had a good cushion. And that’s always a frustrating thing. I know for beginner traders and students in the room that might happen to be red on the month that I’m green, they’ll feel like, “He’s green and he’s got all this money, so he can afford to take this risk, and I can’t afford to.” Well today’s a day where I’m on that side, where I felt like I couldn’t afford to take the risk. I had to be more disciplined. I had to be grateful for $367.00 of profit, because last week I was red. And anytime I have a red week I’ve got to come back to center. I’ve got to cut out those high risk trades and focus on what I feel 90% conviction in. And even though I had, at moments, a high level of conviction in MTC, the spreads in the daily chart and the lack of news made me feel like I couldn’t take the risk. So, that’s fine.

Second green day is good. That’s exactly what I wanted for today. Just to continue this green streak. If MTC ends up continuing higher, at a certain point, it’s up 200% on no news. I just don’t know that I’m going to feel comfortable taking… That I would feel comfortable taking trades on it because you start to get into potential T12 halt risk, a stock being up this much with no news, especially after yesterday’s sell off. It is definitely a technical bounce off the low. This stock is going to have highest volume. And this is what we would call a surprise move. And sometimes surprise moves are the best. And unfortunately today I just wasn’t in a position to really capitalize on it. So I’m a little disappointed there, but I will live to trade another day and I’m going to walk away with a little more money in my pocket than I started the morning, which is always a solid day.

So, I’ll be back at it first thing tomorrow morning, Wednesday, see if we can get a third consecutive green day for myself. And I will see you all right around 9:15 for our pre-market analysis. All right, I’ll see you guys tomorrow.

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