Warrior Trading Blog

How I Recovered from my Worst Week of the Year: Behind the Trades | Ep #5

How I Recovered from my Worst Week of the Year: Behind the Trades | Ep #5

Transcribed Behind the Trades Episode #5

Oh hey guys, I didn’t see you there. Well, you guys may not know this, but one of the things I enjoy doing on a bad day is trimming my bonsai tree. It’s been a pretty bad week. There’s actually not much left of it. It’s pretty much dead. What happened this week? Well, I lost about $15,000 over the course of four days. It was my worst slump in 2017, but the good news is, I’ve bounced back. I bounced back yesterday and I bounced back today and I’m on the way back up to $100,000. Today is our episode five of behind the trades. We’re gonna talk about how I recovered from one of the worst weeks of the year, all right guys? We’re gonna jump right in, you guys can see the slides, for those of you watching on screen share in the chatroom.
For those of you on Facebook, I’m gonna set you up here, so you can sort of see. You won’t be able to see 100% but you’ll be able to see fairly well what’s going on. Let’s see, let me get this set up here. Again, this will be all uploaded to YouTube, so you guys can watch the whole thing a little bit later today or tomorrow if you prefer. All right, let me just adjust my computer here so you guys have a little bit to work with. All right, so I guess that works pretty well. Okay guys, looks like we’ve got a great turnout today, which is awesome. I’m glad so many of you have stuck around for this episode of behind the trades. It’s been a couple of weeks since we did this. In fact, the last episode we did, episode four. I think it was three lessons from how I made $60,000 in one month. You know, what a change from episode four to episode five here. Episode five of course being how I recovered from my worst week of the year.

The Red Streak

Although I lost $15,000 over the last four days during that slump. My worst day of the year, my worst single day is a $15,000 loss. The thing is, I ended up bouncing back two days later, with a $22,000 winner, so it didn’t even end up being a red week. But this is a red week, and actually this might be, I’d have to look through but I’m almost positive this is my first red week of the year. I’m closing the week down, $7,200. The cold streak started at the end of last week and then continued into Monday, Tuesday and Wednesday.
Today we’re gonna talk about an overview of my weekly stats. What I did right, what I did wrong. We’re gonna talk about the best trade of the week, we’re gonna talk about the worst trade of the week. Then, the main topic today is how I recovered from my worst week of the year. Now, our special reminder guys, today is Saint Patrick’s day. I’m sure some of you are celebrating and you may need to watch this a second time when you’re a little more sober. Also, a reminder that we are hosting our 30% off store wide sale, which expires tonight. Coupon code lucky30 for chatroom memberships and those of you who are interested in our courses, all of that is available now.

The weekly stats. Well, my January 1st starting balance, as you guys all know, is $583.15. I did break a $100,000 last week. I got up to $101,000 on day 44, which was last Wednesday, March 8th. But I then started my slump last Friday. I went red on Friday, I lost about $3,500 and so I opened on Monday morning with $98,003. My total weekly gains this week are actually a loss of 7,200 and so I’m ending the week at $90,737. Obviously, this is a little disappointing. You know, one of the challenges for me is you know, this whole challenge has been so public. I had someone, a troll, if you will, ask if my challenge was to take $583 and turn it into a 100 grand and then take a 100 grand turn it back into $583. At this point I’m not 100% sure.

A Transparent Journey to $100k

I don’t think that’s the goal, but the problem is there are definitely people that were kinda hating on me for the last four days because I had four consecutive losing days. It’s embarrassing. It is embarrassing. On the second day I was like, all right, whatever. I’ve had two red days this year, back to back before, not a big deal. On the third day, I was like okay, this is getting a little ridiculous. On the fourth day I was like, all right, I think I’m gonna go out into the woods and just sit by myself for a while. This is just really frustrating. That’s the challenge.

Obviously, on the days where, I had big green days. When I hit my $100,000 goal, I guess the fun part of having this whole challenge be so transparent. That you guys are able to see every single day that led up to that big moment. But then it’s just like trading. You have to take the good with the bad, and so part of being really public about this whole thing is that you know, there will be people that give me a hard time. When I have good days, they think I’m making it look easy or it’s not fair. There’s also people that are gonna have a hard time when I have a bad day. They’ll say I’m stupid, I made stupid mistakes and stuff like that.
I definitely got a good amount of that this week. I mean, I was feeling frustrated and I think that knowing that there’s going to be a number of people watching my every trade adds more pressure. Because it’s like performance. You want to do your very best and so it’s always disappointing when you have a bit of a public setback. That’s I suppose what the last four days were. In any case, I’m gonna talk about this more in a moment, when I really talk about what I did to turn it around. Just in terms of weekly stats, accuracy this week was 60%, but here’s the problem. There’s two sides to the coin with accuracy. You’ve got your accuracy, and then you have your profit, loss ratio. My profit, loss ratio, my average winners were only five cents, and my average losers were ten cents.
If we look at this graph right here. For those of you watching on Facebook live, I’ll show you. When you have a one to two profit, loss ratio, you need to be 66% accurate to break even. Now, fortunately, I was able to … Well, I guess I lost money here. But even in the last two days, with 60% accuracy, I made money. I made money today. 1,500 and I made 2,000 yesterday.
You can make money with lower accuracy if it just so happens that the one trade you got aggressive on happened to be your winner. But obviously this week, with a negative profit, loss ratio and with only 60% accuracy, I was below the break even point. I came in, down $7,200 and last week I made 17,000 so I’m up 15,000 on the month right now, 14,900, so it’s still a decent month. But last month I made 60 grand and that’s just not gonna happen here in March.

Revised Goal for March

March is, my goal for March now is just to get myself back up to 100,000. That will be somewhere around 23,000 or I guess 25,000 since I’m about $10,000 off that level. That may take me the next two weeks at $5,000 a week. That’s fine. If I get a really good trade, in one day I could have a big winner, but I just have to take what the market’s willing to give me. As of recently, certainly this week, it’s meant I’ve had to be a lot more conservative. That’s the big picture of the week. Thank goodness I broke $100,000 before this slump. I just broke over it and then the next day I made, I think $300 and the day after that I lost 3,000.

At least I got over that level, I hit my goal and at this point, there’s not really a goal in sight. Some people have asked if that’s why maybe I haven’t been doing as well, because I haven’t been focused on the goal, but I think it’s really just have been the market. Let’s look at some of the trades for the week. Best trade of the week is actually tops, so this was a trade that I took yesterday. It was really just a very clean pattern and you can see the move from $1.20 all the way up to 2.40. You have your first pullback here, you have your second pullback here.

Live Trading on PULM

Yesterday I finished up $2,000 and this was a really great redemption trade. It was easy, smooth, very clean. Now, tied for best trade of the week is my trade on PULM that I took today. I’m actually gonna put up my video of this trade. This trade on PULM was super simple. Those of you watching on Facebook, you can see the one minute chart right here, where we had one, two, three, four, five, six, seven consecutive green candles. Then we had one, two, three candles of pullback. I said guys, I’m watching this for the first candle to make a new high, and that’s my entry. This is a one minute pullback.
The other thing that this setup had going for it, was that it was at the whole dollar or three dollars. We knew we were gonna get the first one minute candle to make a new high, plus we were gonna get the break over, the whole dollar. As we watch this here. I’ll put this back down so you guys can see. Again, you’ll be able to see this probably better on YouTube, for those of you watching on Facebook, but anyways, I’ll just play this here. I’ve got my order ready here. I believe I use a hotkey, so I’m long, long bear at 98. I mean, this is a very quick trade. I jumped in at 98. It pops up to 312.
You could see here, the first one minute candle to make a new high. It was such an easy trade. That one trade, already I’m up $777. Still holding 938 shares. At this point, we had 1.3 million shares of volume. You can see, if you look for these types of setups. You know, the first candle to make a new high, it’s so predictable that that’s where you’re gonna get the break out. That was a quick move, 7,500 shares from three dollars up to 312 and I’ll finish this trade with right around $900. Nice, easy trade. Off the high day scanner. You know, if I could do that three, four times a day, I’d be a really happy camper. It’s just unfortunately this week, we haven’t seen as much of that really clean follow through.
All right. I’ll stop this video for now. I’ll switch over and we’ll look at the worst trade of the week. I should probably edit this video because of the place I but the intro is kind of like the worst spot possible. Anyways, I’ll fix that. Jumping back in here. Best trades of the week. Tops, number one and then number two we had PULM today. The worst trade of the week. I mean, I probably have five trades that are all tied for the worst trade of the week. I chose SNGX, which actually I took on Friday. But this was the beginning of the red streak. Or the cold streak.

The False Breakout & The Beginning of the Red Streak

On this trade, this was really interesting because I got into this setup thinking there was a really big bidder. Thinking that this stock had really good support. I think there was a 20,000 share bid, right at 280. I jump in, it pops up to like 285 and I’m in with 10,000 shares. Pops up at 285 and suddenly that bid is gone, and now that same share size is up on the ask as a seller. The stock just came right back down. Anyone that was in it just bailed out, because that seller really held it back. The issue here and the issue several times this week, was that I was jumping into trades without waiting for a pullback.

I think that in the last, especially in February, I got kinda spoiled, because it seemed like anything you bought went the right way. Even if you didn’t have the best entry, even if you bought it extended, it continued higher. But here we are in March and now it sort of testing our habits and making sure that we didn’t make some or create some bad habits. That’s I think what I did in March, or February. I created some bad habits. Which was just jumping in, add stocks or squeezing.
This month, what’s happened on several trades is that I jump in into the squeeze right at, basically when I see a big bid, thinking it’s gonna be a short squeeze. Or right out at half dollar or a whole dollar, and what ends up happening is it pops up a little bit and then it rolls over hard. This was a really big rejection, I lost $3,500 on it. 10,000 shares, 30 cents. That was it. I was faked out. What I should have done to avoid this loss, was wait for a pullback entry. It’s really that simple. Because once this got a pullback, you would have said, well, it’s not clean. It’s not a good setup and I’m just gonna leave it. This happened on multiple trades this week.
This happened on SNGX, it happened on AKAO, it happened on, gosh, I mean it just happened again and again and again. That really is what created this downward spiral for me. I just kept getting into trades and I kept getting stocked out. Now, let’s kind of transition here now into the topic of the day. Recovering from my worst week of the year.
Now, for me, you know, I’ve had red days. I obviously had a day this year where I lost $15,000 in one day. I bounced right back from it. But this was the first time, I think probably in more than a year, that I’ve actually had a four day losing streak. Where I lost money on four days back to back. $15,000, you know, for me isn’t necessarily a lot of money to lose. What’s more frustrating is having four red days in a row. Because the accuracy is just horrible.

What Did I Do Wrong?

The question is, what was I doing wrong? How was I able to get out of that rut, to recover about $3,500 of that loss in the last two days? To finish the week strong, on what are typically my two worst days of the week.
In all of February, Thursdays and Fridays were mY worst days of the week. Here, this week I was able to really redeem myself, be disciplined and recover some profit. For me, you know, there’s a couple things, you know that were really on my mind. This is what I do anytime I have a loss. I’ve had, it’s been a long time, but I’ve had months, of course, like probably all traders have, where I lost money. At the end of that month, I remember, one of the last times this happened was a few years ago. I was kind of looking at my trades at the end of that month and I was like, where did I go wrong?


I did something very simple and this is what I explained to all of you guys the other day and I’ll explain it again now. What I did is I went through my statistics and I looked at my metrics. I broke down my trades. I asked myself the question, what am I doing right and what am I doing wrong? I started sorting my trades by winners and by losers. Because of the fact that I’m really meticulous about my record keeping and I can, I go back and see, oh, this was a momentum trade, this was one minute setup, this was a five minute setup. This was a bull flag. Whatever it is, I can now sort that data, and I can data mine my own trade history. That’s what I did.
I go in and I data mine my history and I start to draw conclusions. Okay, guess what. All of my losers, my biggest losses were chasing a one minute setup before waiting on a pullback, right? If I know that about myself, I need to make an adjustment. After the first two days, I didn’t really think a lot about it. I just was like, well, market’s not on my side, but I’m not really doing anything differently than I did the previous week, where I made 17,000, so I’m not gonna change anything in my strategy.
The third day, I was kinda like, all right. This is interesting, kind of still seeing really bad follow through. Maybe I need to reduce my share size and just kind of ease back a little bit? Then after the fourth day I was like, okay, I need to really sit down and look at my metrics. What I realized I was doing wrong, was, well, I mean if you say it’s wrong I don’t know. It certainly worked well in February. But what I was doing that was leading to the losses, was chasing one minute setups. Instead of waiting for the pullback, I was just buying.
Now I can show you a bunch of examples. I’ll show you, I could show you, I’ll bring one up in one second. Of stocks that last month just completely squeezed and never gave us a one minute pullback. Because of that, I sort of got into this habit of I’m just gonna jump in because I don’t want to miss the opportunity. That’s the fear of missing out kicking in. It’s that fear that you’re gonna miss the trade, encouraging you to just go ahead and jump in at a price that’s really way too high. You can get away with that and that’s the tough thing about the market is that sometimes you’ll get away with being sloppy or taking too much risk.
That’s what encourages you to think, well, you know, sometimes it works, maybe this time it’ll work. But when you’re in a market that’s a little bit more tricky, which is definitely what we saw this week. Those bad habits are really gonna show their face. What I had to do is make the decision that I wasn’t going to take trades unless I had a clean pullback. If that meant that I was gonna miss a setup, it would be better to miss a setup than to mismanage risk. Especially given my accuracy right now. I implemented that on Thursday. I said, okay guys, here’s the deal. Today I’m gonna focus on only buying pullbacks and I’m gonna reduce my share size a little bit.
I’m gonna scale back, but I’m only gonna trade pullbacks. I will trade a pullback on the one minute chart and I’ll trade it on the five minute chart. I don’t care what time frame it’s on, but it needs to be a pullback entry. Just the way we saw on PULM. That was a perfect pullback entry. We pulled back and that was a great setup. A very easy way to manage risk. By doing that I was able to really get myself out of the rut. By focusing on, by understanding, number one, what was causing the losses and then number two, you know, what I was doing to generate the few wins that I had. I was able to adjust my strategy a little bit. The adjustment was I’m only gonna trade pullback setups, I’m not gonna chase.

Waiting for a Pull Back Entry

Now, I will just pull up this chart here on NOVN. This is one that we had last month, so I’m gonna have to scroll back a little ways. This is the stock that went from four dollars to eight dollars without pulling back. There’s no pullback on this. By the time you got the pullback, the bulk of the move was over. From four to eight, back down to six and then back to seven fifty. This is one of those times where you totally got away with chasing. But with that said, you know, there are still ways to get into somebody’s strong stocks, at least somewhat safe entry point.
On a stock like this … Again, I’m gonna have to scroll back here a little ways. This was on February 15th. All right, so here’s February 15th. All right. Here we go. On this one, there was no pullback on the five minute chart. That’s the reason that I’m saying, even if we only have a pullback on the one minute, that’s fine. I’ll take a one minute pullback. I’m not gonna restrict myself to only trading on the five minute timeframe. Because if I do that, I’ll miss trades like this. But I would only get in in a place like this right here. This is a one minute pullback at 617, that’s the place to get in.
I wouldn’t get in as it’s squeezing up here. I’m sure someone got in right here at the very top of this squeeze at 559 and then as it pulls back here down to 535. You know, on 10,000 shares, you’re suddenly down $2,400. It happens very quickly. This is why you wait for the pullback. I suppose this would have been an okay pullback too. This would have been okay and this would have been okay. One minute pullback. I will trade one minute and five minute pullbacks but I’m not going to just buy into the extension. Even though in a very strong market that works. In a market that’s a little bit choppier, it doesn’t work well at all. You have to be able to kind of taper your risk and adapt your strategy to the environment that you’re in.

This is certainly true with trading, but it’s true with a lot of other things as well. One of the things we talk about from time to time is my mild obsession with the television show the deadliest catch. There are days on the deadliest catch, where you know, the seas are really choppy and they have to kind of adjust their goals based on the fact that weather conditions are bad, the risk is higher. Then there are other days where they’ve got smooth seas and they can work a 24 hour stretch and really make a lot of progress on their goals, whatever those might be.
That’s really the same with trading. There are times when the market’s on our side, we can put the pedal to the metal and be aggressive. There are other times where we have to step back, ease off the throttle and wait for things to improve. This week has kind of been that for me. I didn’t ease off the throttle as quick as I could have. In part because, again, this technique has been working really well for me so far this year. I’ve had a couple of red days back to back. I’ve even had a big big red day, and I’ve been able to bounce back quickly just basically doing the same thing and then the next time I get into it, it works.
But having four red days in a row, forced me to step back a little bit, slow down and as we go into next week, my goal is just to continue steadily build back up, to break over $100,000. One of the things that you would notice on my equity curve if you looked at it, is that I kinda went from $500 all the way up to $100,000 and I had a couple pullbacks along the way. But now here I pulled back from 100 down to a low of I think 87,000. Now I’m making my way off that level. Hopefully gonna break back through high of day of a 101 and make my way toward a 120, 130, 140, 150.
I have to be able to adapt to the market conditions. I can’t just throw 10, 15,000 shares at everything that moves, when the market is choppy. It seems like we’ve kind of been in-between parabolic stocks for whatever reason yesterday, the shippers were back in play with top, sorry, T-O-P-S, tops and GLBS was also pretty active yesterday, you can see on the daily charts. That gave us the opportunity to generate some profits yesterday. Today we had PULM. Fortunate to have one or two, but I’d really like to get another stock that goes from $2 to 8 or $10 and it just gets really explosive, because that’s what usually starts the next round of momentum.
Those types of stocks bring out that fear of missing out that traders get. That encourages them to buy them higher and higher and higher and that’s what creates these bigger and more dramatic squeezes. That’s really all about collective trading mentality and how the emotions of fear and greed impact traders and impact the decisions they make. Yes, the last week or so has been a little bit of a setback for me. I was on the wrong side of one too many trades, but I’ve made some adjustments. I’m tapering my risk back a little bit until I start to see cleaner action and I think that’s the way to do it.
The interesting thing is that really in the last month, I’ve been trading four figure days. I mean, my winners are between 2,000 and $8,000 days. My losing days are between 1,000 and 3, 4,000. Maybe 5,000 at the most. I’ve been trading with big size, and that means either big green days or big red days. The last two days, today I’m at $1,500 and to me this honestly feels like a slow day. I’ve kind of gotten spoiled. I’ve gotten into the habit that a green day should be 5 or $6,000, which is obviously a ridiculous amount of money. The problem is that it’s kind of changed the way I look at some of these trades.
Because I look at them and I think, well, there’s really, what’s the point in taking a trade to only make 400 or $500. I don’t see the point. I’m looking for opportunities to make 2,000, 3,000 or really 5 or $6,000 on a trade. If I get two of them in one day, that’ll be a $12,000. If I have four of them in one day, I’ll have a $22,000 day like I had in February. That’s what I’m looking for, so to have a couple trades today, where I made $200. 275 on ARGX, 273 on DFFN. That’s basically, I mean it’s like a break even trade, it’s like nothing.
But at the same time, I shouldn’t maybe think that way, because $1,500 a day certainly does add up over the course of weeks and months. I’m not gonna have a $60,000 week or a $60,000 with $1,500 days, but I can still have, easily a 20 to $30,000 month. Which just a year ago, would have been one of my best months ever. You know, it’s just interesting how your perception can change. I don’t want to lose touch with the reality that $1,500 a day is still very good, still respectable.

Big Wins & Big Losses

That’s kind of where we’re at right now. The big wins, the big losses, all a result of trading with big size. The big size is the result of increased confidence, which I’ve gained over the last year, probably. Certainly culminating with that $100,000 challenge, from $583 up to a 100 grand.


Next week I’m gonna be hosting a webinar where I talk really just specifically about the $100,000 challenge. Right now, I just really wanted to talk about this slump that I’ve been in for the past few days, because I think it’s really good for you guys to learn how I bounced back from it. How I get back on the horse. This is something every trader is gonna go through at one point or another. Beginner traders certainly have more red days and slumps than more experienced traders. This is part of doing this challenge in a very public way, that you guys see the wins, then we celebrate them, we talk about what works. But you also see the losses and you understand what I did wrong. The things that I did wrong this week, number one was being a little too aggressive. Maybe forcing trades. Taking position sizes that were a little too big and not stopping out quickly enough.
The problem for me of course is that when I get into something with 10,000 or 20,000 shares. It’s not always easy to just get right out. You have to peace in and peace out and so by the time you’re getting out. Even if you want to get out, break even, you know you’re probably gonna lose 10 cents and it’s gonna be a $2,000 loss. You really don’t want to cut that loss until you know it’s not gonna work. You definitely don’t want to stop out and a minute later it goes right back up. I think interestingly, some of the trades I took this week, would have been winners with 2,000 or 3,000 shares, but were not winners with 10,000 or 15,000. Right now is the time to scale back until we see maybe that next really strong momentum name and just play it smart.
All right, I’m glad that I’m finishing the week on a green day. The last two days, it does feel like a little bit of redemption, even though I’m only 10% of the way out of that, the rut or whatever it is. But it’s nice to finish green and it gets me recharged and refocused for going into next week.
All right, let’s see, I’ll take this off. Let me get back in here, all right. Okay guys, that’s it for today. I hope you’ve enjoyed this episode five of behind the trades and again, if you guys have any questions or comments, I’ll post this on YouTube and the podcast will go on the iTunes podcast store, whatever it is. It’s free but whatever it’s called, and you guys can ask questions and stuff there. Anyway, that’s it for today and I’ll see you all first thing tomorrow morning. Or Monday morning. All right, thanks guys, enjoy the weekend.