Warrior Trading Blog

My first Red Day Recap after a 33 Day Hot Streak +$138k

first red day

My first Red Day Recap after a 33 Day Hot Streak +$138k

What’s up everybody? All right. So we’re going to do our midday market recap. We’ll go over the trades from this morning. So today unfortunately marks my first red day. It was a amazing hot streak, 33 consecutive green days. In those 33 days, I made $138,329.42 which was really quite impressive. Yesterday I made 40 grand and the day before I made 33,000. So I was really hoping to continue that momentum into today and I got overly aggressive on, well, really both DCIX and CBIO. So you guys can see my PnL here for today and kind of see what happened.

Obviously it’s disappointing. I hate having red days. But at the same time, yesterday I lost four grand on KBSF, right? I lost $4,000 on KBSF and I didn’t feel bad about it because I pushed myself all the way to the edge and then when I had that loss, I stepped back. So this is again, I pushed myself all the way to the edge and you don’t know when the hot streak is going to end. So you got to just keep pushing. If you get more and more conservative because you’re afraid of having a red day, then it changes the way you trade. So I continued to be aggressive and then today I gave it back, well, gave back $11,000 worth.

This is not my worst day of the year. It’s a disappointing day but at the same time I made $70,000, $78,000 this week before this day. So still finishing the week up 70 grand, plus or minus. Now interestingly, I was actually up $7,000 on DCIX. This is a little disappointing because it was a really solid trade. So when we look at DCIX, we had our pre-market high of 13.80 and so I said that I was watching this for a break of the pre-market highs. My very first trade was jumping in at 12.65, anticipating the move up to 13. So in this first trade right in here, I was already up 2,200 bucks.

Then I got back in at 13.55, sold at 14.55. Added back at 14.80, sold at 15 and 15.51. Added back at 16, sold at 16.80. Sold a little more at 16.58. Then I added back here at 15.88 and let’s see, I guess I stopped out. Where was the last one? I added at 16.80 and this is the one that I think got me into trouble. Basically, no, actually it was this one here. I added at 16.50 and that was right here. I added right here thinking that we were in a flag pattern and we were going to break over 16.80. So I was adding at 16.50, anticipating a break of 16.80 and we popped up to a high of 16, what was that, my mouse isn’t working here, 16.66.

So it looked good and then it dropped to 14.75. Boom, lost two points. Tried to stop out at 15.73, didn’t get filled. Tried to stop at 15.65, didn’t get filled. Tried to stop at 15.22, didn’t get filled. Finally stopped at 14.75, 14.85 and 14.90 with 4,000 shares. So that cost me 7,800 bucks. Gave back my entire profit on DCIX on that trade. Yesterday, this is the type of stock that would have broken over 16.80 onto 17, 17.50, 18 and squeeze higher and could have been up 11, 12, $15,000. Unfortunately today, it just got rejected really hard. So that was disappointing and I immediately got a little frustrated that I went into red by $860 and the next trade was CBIO.

CBIO, I tried to get in at $6 and 6.13 with 10,000 shares. Had gotten filled on those 10,000 shares, I would have done, well, pretty well on this pop here up to $9.29. That might have been a $30,000 winner. Unfortunately, I did not get filled. It’s halted. It resumes higher and I don’t know, I got too aggressive on it. I thought it was going to squeeze into a second circuit breaker halt and do what OPHC did yesterday and so I was thinking back on my target, 10, 11, 12, maybe 13 or $14 per share. So as it resumes trading, I add at 8 and then I add 9.16, 5,000 shares. Not crazy, crazy aggressive on size and I lost about a point and a half per share, $10,000 in the red.

It’s interesting because today John is up $10,000 and because he got filled on CBIO. He got filled on CBIO down here at the $6 range, 6.20, whatever and he sold up here. I added up here and sold coming down here. So again, this is one of those trades where any one of those days where it was really close to being a third big day in a row and I just was a little off on my timing. I was a little too aggressive on DCIX. Gave back some profit. CBIO, I didn’t get filled and then I was too aggressive chasing it. I thought it was going to squeeze into another circuit breaker halt and open higher at 10 or 11.

Being aggressive is what helped make me $40,000 yesterday. Today, being aggressive costed me a little bit of money. So I took a huge step forward this week, plus $78,000 and now I’ve taken an $11,000 step back. So the net is obviously still ridiculously positive and it’s still a fantastic week. This is my PnL here for the last 33 days, for the 33 consecutive green day hot streak that began on September 27th. So you can see right here, obviously, I mean, just averaging a couple thousand dollars a day, $5,000, $6,000 here and there. Remember, I wouldn’t have risked as much today if I hadn’t had an amazing hot streak the last two days especially and if the market hadn’t been so strong this week. So big push there on those last two days.

So this is the gross, the net, PnL, 138,000. Average winner 1,200 bucks, average loser 600 bucks. Accuracy, 75%. Average hold time on winning trades, 15 minutes. Average hold time on loser, seven minutes. That’s kind of the breakdown, the big picture. I’m not surprised that, I guess I got signed off, but let’s see if I can sign back in but I’m not surprised that on our 100K challenge that I have the biggest winner and I have the biggest loser. I kind of anticipated that that would probably be the case because of how aggressive I can get where I really push it and that can work out very well. It can work until it doesn’t work.

So fortunately, because of John’s big green day today, I think we’ll still be hopefully green as a team but today could be the first day that we’re red as a team and it would be unfortunately my fault. We’re trading as a team here. We benefit from the big days but then if one of us has a big draw down, it hurts us all but we’ll see where we finish today once everyone updates their PnLs. I’m still having a great month. It’s a fantastic month. Not quite 100,000 but we still have just about two weeks left so I’ve got a chance for redemption. You know what, the market is humbling because as quick as you make 40 or $50,000, you can give it all back if you’re too aggressive.

I think today, we certainly saw a shift in the momentum where stocks were popping up and then getting faded back down fast. KBSF, let’s look at this one. Pop up, fading back down pretty hard. IPDN, the pop up and then you’ll see it fading back down. So this is kind of what we consider as the market self-correcting. We’ve had some real exuberance the last two days especially and now we’re starting to come back into equilibrium, coming back into balance where maybe short sellers are like, “I’m going to get aggressive on this. These things are all rolling over. Look at DCIX. It broke down. It’s going weaker.” I’m sure there’s people that are short on this up at 17 or 16 and this is going to be their redemption trade. They might have had two really brutal days this week getting smoked out on this short squeezes and now today is the redemption.

It’s an ebb and flow on both sides, whether you’re on the long side or the short side and today for me is a little bit of a draw down but if I peaked out right up here and I dip down $11,000 off my all time highs, I can handle that and I can work my way back up. I mean, you guys have seen me go through it all this year from multi-week red streaks, red months to the biggest green months of my trading career. This week is the biggest green week I’ve ever had and this month will be the biggest green month I’ve ever had, at least it’s looking that way right now. So I feel really good about that.

Coming back on Monday morning, I’m just going to get back to it, focus on one trade at a time, $1,000 goal. With DCIX, I definitely pushed it a little bit too far I guess, adding 5,000 shares or 4,500 up here at 16.50. I really thought it looked good. Yes, it was a bit extended but this was a one-minute pull back, the break over 16.80. If we broke 16.80, it would be at 17 and then we’re we’re going back to high of day, 17.36, squeezing up 17.50, 17.80 and halted on another circuit breaker and the next thing you know it’s resuming around 19 or 20. I mean, that could have been a great winner.

The risk-reward on it is always tough because look at the volatility. In one candle, we went from 16.35, well, two candles later we’re at 14.15. I mean, that’s hard. That’s two points. So 4,000 shares, it’s a $9,000 lost. Fortunately I only lost seven grand on it but it could have been worst. CBIO, I’m frustrated I didn’t get filled on it. I was a just a little too slow. Could have been an amazing trade. I was lined up, ready to go. I knew the stock. This is one we’ve traded in the past. I knew it had big potential and because I thought it had big potential, I really thought it would continue into a second circuit breaker halt. I’m actually pretty surprised that it did this.

This could have been such a great trade. She’s the one that got away. But what can you do? I can’t beat myself up for that. That’s silly. It’s been a great week ending with a little bit of a humbling lost. But it keeps me grounded and that’s good. This is kind of the way my strategy works. When I have a losing day, I mean, this is probably the second biggest losing day I’ve had of the year. $11,000, yeah it’s disappointing but in the context that I made so much yesterday and the day before, it’s okay for me.

But you got also realize that traders, you have to be so careful about this because the traders, there’s traders out there who have very different risk tolerances. You’ll see them on Twitter showing PnL of losing 80, 90, $100,000 in a single day, $200,000 in a single day. When I see that, most od the time, it’s traders who are shorting stocks like these. Shorting CHFS type of stocks that go from just for no reason at all, it’s not logical, I don’t know why it went from $5 to $25 but I guarantee you there’s people that lost six figures on this. You have to have risk tolerances. You have to have max loss. When you start shorting, you start getting in front of a moving train like this and you get into that habit of adding as it goes higher and trying to [top ticket 00:14:25] for the reversal, it can be really ugly. This is one that just exploded.

CBIO could have done that. It’s just today it didn’t happen to. So yeah, of course there’s people who shorted up here in the 8.50’s and they’re probably feeling pretty good. It’s a great trade. Moved back down. But you got to remember, if it goes back to high of day, you got to stop out. You can’t say, “Oh well, I’ll just add more at 10. I’ll add more at 12. I’ll add more at 15. I’ll add more at 25.” What do you do on a DRYS type of stock? You’re going to add more at 50, at 60, at 70, at 80, at 90, at 100, at 110? What about the WINs type of stock or WIN? You’re going to add more at 150, 160, 170, $200 a share? This hit $225 a share.

So with small cap stocks, you have to be incredibly careful about using that averaging type of approach. That’s something you’ll see from me, I never average down. Could have I added the CBIO as it dropped? I could have. I could have gone from 5,000 shares at 8.50, added another 5,000 at seven, thinking if it pops back up, my new cost basis is eight and then it drops down to six and I add another 5,000, now I’ve got 20,000, 15,000 shares long and if it keeps dropping, I’m going to lose 15, 20, $30,000 on it, maybe more. So that’s one of the things that you have to be so mindful of.

Now, I know those of you that trade higher priced stocks will get into piecing into trade, averaging in but that’s different because you’re trading large cap stocks, Netflix, Tesla, Facebook. These stocks are not going to go up 300% in one day. So your risk is much more confined by the very nature of that type of stock. So I tried to lead by example and obviously today you might say, “Well, you lost money. You’re a bad leader.” But I minimize my risk relative to the profits I’ve had in the last few days and what I was comfortable potentially giving back.

No, I didn’t want to lose $10,000. I would have preferred to be up 10,000 or 20,000. I got a little bit on the wrong side of couple of good potential trades and took a little bit of a hit. But also, the [inaudible 00:16:51] that goes to show you how that, for those of you that are also red, how that small little shift can be the difference between being down 10,000 and being up 20 or 30,000. If I had gotten filled on CBIO right here when I’m adding at eight bucks, I would have been up $20,000. When I added at nine, I would have been up $30,000 if I’d gotten filled. I should have said, “Look, I missed the train. I missed the boat and I shouldn’t chase it.”

But the reason I was willing to chase it really was because yesterday, what happened to OCHI. OCHI hit our scan. What was that stock? I’m losing my mind here. OPHC, thank you, OPHC yesterday. Yesterday, doing what I did today worked really well on OPHC because what happened after the first halt, we squeezed higher and I was adding. I was adding right in this section. I added up on the move to 7.10. Now, doing that today, I stopped out back here down to 5, I lose, whatever, two points. Yesterday, it went all the way up to 14.

So that’s just to help you understand why I did what I did today, why I thought that risk was worth taking. Today I was wrong but today it doesn’t mean that Monday morning we won’t see a stock do the exactly this, OPHC. Maybe because you have some short sellers that got a little redemption today, they’re going to short this after that second halt or after that first halt. If it does, squeeze up and get halted a second time. They’re going to start to feel the pain. I don’t like to think of trading as a battle between long side and short side because we’re all out here trying to make money in the market. I mean, we should all be on the same team for the most part.

But you have to think about I want to be a buyer where a short seller is going to be covering where they’re experiencing max pain. They think about it the same way. They think I’m going to short this right at the spot where a long trader is he needs to bail out because that’s when you get those kind of big moves that drops to the downside, because long traders like me are bailing out or pops to the outside because short sellers are bailing out. So if you can anticipate those levels, those ranges of where those max pain points would be, you’ll start to see, “Okay, that’s why on LEDS two days ago, all of a sudden in the middle of the afternoon, it just took off and made a second move.”

It broke over the VWAP right here and where do you usually set your stop when you’re short? You set it at the VWAP. So when a stock breaks over that level with strength, what happens? Boom, right here, this is sort of the moment of truth. If I was short, I’d be like, “Yeah, stop at 7.20.” What happens when it breaks 7.20, boom, up to 7.80, $8, 8.50, $9, 9.50, all the way up to a high of 10.49. So this comes down to anticipating levels, understanding levels and getting better and better at reading charts. It’s something that you guys are all gaining this experience everyday you sit here watching the recaps, trading in the morning, watching the videos at night and that type of thing.

So anyway, I never liked to end a week on a red note. I’m disappointed that my 33-day hot streak has ended. I was hoping to get to 56 consecutive days but I’ll start over on Monday. The reason my control Z didn’t work was because I think because it was dropping so fast that even though have an offset of 10 cents on my order, it was just dropping faster than that offset was working. I mean, if I did a market order I probably would have gotten filled faster in this case. But I think that was the reason that order wasn’t filling.

All right. So anyways, that’s about it for me today. I hope you guys didn’t get too beat up today or hopefully some of you guys got into CBIO at 6 and sold at $9 or at least made some money on that. Hopefully you made some money on DCIX and a lot of you guys might be green today and I just pushed my luck a little bit too much. But I’ll be back at it first thing Monday morning. Humbled, refocused, goal, 500 to $1,000 a day. The only goal tomorrow or Monday is to be green. I don’t need to make $11,000. I’m not trying to make back the loss from today. I will make back the loss from today and I’ll make over the next couple of weeks most likely. If tomorrow or Monday things go back to regular trading then I’ve got a $1,000 daily goal and $5,000 by the end of the week.

By the end of November, I’ll be back up at 200K, yeah, I guess 200K in this account and 300K in my total profits on the year. All right, everyone. So again, I hope you guys have a awesome weekend and get some rest. Those of you that are in the classes, I encourage you to do some studying, make sure you’re prepared because these opportunities that we saw, if I took these three days off, I mean, literally, 33% of my profits from the year come from three days. $33,000 on Wednesday, $40,000 on Thursday and $22,000 earlier in the year. Those three days, almost $100,000. So no days off except for maybe the day after Thanksgiving. Half days don’t really count. We don’t usually see good opportunities.

But yeah, it just goes to show, you never know when you’re going to see a big move. So anyways, hopefully we’ll see some good opportunities next week and be able to go into Thanksgiving with a little bit of a cushion. I’ll see you all first thing on Monday morning. Enjoy the weekend, everybody. Let’s be honest, if you made it this far, you must have really enjoyed that video. So what’s stopping you? Subscribe right here and get email alerts every time I upload new content. Until then, happy surfing.