Warrior Trading Blog

Red Day From Over Trading On Day 2 Of The 1/4 Million Dollar Challenge

red day

Red Day From Over Trading On Day 2 Of The 1/4 Million Dollar Challenge


All right everybody. So, there we go. The Facebook Live feed should be up and running, and looking good. So, yeah, let’s go over midday recap for today. As you can see, today is a red day recap. It’s the second day of the quarter million dollar December challenge, and definitely not off to the start that I wanted. I hate having a red day at the beginning of the month.

Today is frustrating, not just because it’s a red day, but because as you can see, I’m red on five out of five stocks I traded, so I’m just red across the board. Today is a day that the market just was not on my side, and what’s kind of frustrating as well is that I was green on two of these names before I went into the red, and so I over traded. I was too aggressive, and I gave back some profit from it.

Anyways, let’s look at PXS, because this is the one that is probably the most frustrating. My trades on this one, first trade was long at 5.80, right in there where I’ve got the blue box. My target was a break of the high of day, which was 6.15, which came up and hit a high of like literally 5.90, and then we dropped. I got stopped out of that trade, that didn’t work, I was a little bit frustrated. Ended up getting back in it over here at $6.00.

On this one, you’ll be able to see I got in at 6, selling at 6.29, adding back at 6.89, selling at 7.15, adding back at 8.20 and 8.55, selling in the 9 area. I was actually up $3000 on this stock, adding at 9.48. My worst add was up here at 11.40. Basically what I was doing on this was I kept adding and selling, and then adding and selling, adding and selling.

That’s typically what I do with these types of stocks. I had this bias on this that after it squeezed up to a high of 12.10, it pulled back, that it was going to go all the way back up over 12.10 and squeeze up towards like 14-15 range. Adding here as high as 11.88 and 11.96 is what got me into trouble. Because what ended up happening was we got a false break, and we dropped all the way back down, and I stopped out at 11.16.

So, what ended up happening was on that very last trade, I had an average of about 11.75 with 5000 shares, because I have added, and I stopped out for a 65 cent loss, and lost 3200 bucks. I went from being up $3200 on the trade, on the name, to down 3200, and then I added right here in this little pullback consolidation area and proceeded to lose another 1100 bucks.

So, just really frustrating because I had profit on the name, and I over traded it. I overstayed my welcome, and obviously I had a great entry down here at 6, and in hindsight I could say, “Well geeze, why didn’t I just hold my entry from 6?” But the thing is, this stock, as you can see, in even one candle can move as much as 80 or 90 cents. So, if you’re up 70-80 cents, you want to start taking profit, and that approach usually works pretty well but on this one, what I am supposed to do is reduce my risk the further I get into the move.

So, I’m not taking more risk on the last trade than I took on the first trade. Basically I took the same level of risk on my last trade as the first trade, and I didn’t scale back. Part of that is because I felt like I was a little bit too conservative at the very beginning of the move, and so that’s why despite a six point move, I was only up like $3000. I was trying to use that cushion that I had to leverage that into a 3 or 4, $5000 winner, on that last trade, which I thought was going to blow through 12, 12.50, 13, 14, and I was just wrong on it.

I was too aggressive and that was a little bit frustrating. So, lost profit on PXS and on ACST, or … Sorry. ASTC, I was actually green on this stock, but I decided to add up in this area because I thought with PXS running that this one would be strong as well. We would get good sympathy opportunity, and that just was not the case. It popped up to 5.09 and then dropped down, and so on this one I gave back the $1000 of profit I had. I lost $1500 which was about 30 cents with 5000 shares.

At that point I went from being … I think after PXS, after I lost on that one, I was breakeven on the day, ’cause I was still up 1000 on ASTC. Then, I lost that profit on that one, I got into LMFA, and I got into CPSH. Both of them sympathy, trying to jump on stocks thinking that we would see momentum and I was just, I was wrong. Today is definitely a little bit of a frustrating day. Losing 3500 bucks is in the grand scheme of things, it’s obviously a small amount of money versus making 80,000 last month, but I don’t like having red days, period.

A red day, whether it’s red 500 or red 3000 is a bit disappointing because we want consistency and that consistency means that every day is green. So, accuracy today, I really had a good start to the day with six green trades in a row. Actually no, I had three green trades in a row, one loss, and then three more green trades, and then I had five losses in a row. So, basically the market just said, “No, this is not your day. You’re not seeing it right.”

If I kept trading I could probably get that up to six, seven, eight losses in a row, and you have to learn when to take your cue just to step out of the market and say, “You know what? Today’s not the day. I’m not feeling it. I’m being too aggressive. Things just aren’t working the way I’m expecting them to, so I need to scale back.” Today is a little bit frustrating, definitely not the type of day that I like to have at the beginning of the month, because it now puts me red on the month by about three grand.

But at the same time, we’re early enough in the month that I’ve got a lot of time to get myself back on the horse, into the green, slow and steady, and that’s going to be really the way I do it. I’m I think mostly disappointed today that I had one loss that exceeded my predetermined max loss. Of course, it was on PXS, and of course it was up here when I was adding at the 11.80-11.96 level, and you can see how quickly it dropped.

I would say that I managed my risk well enough because this did drop all the way back down to a low of 9.55, so certainly selling at 11.16 right here was better than selling at 9.55, but it was just tough with these. When they get to be that volatile, the risk gets higher and higher, so you’ve got to scale back the share size, and instead I just kept being aggressive. And so in any case, I know a lot of you guys traded this one are green on the name, because you practiced the right strategy, which is reducing your risk as it gets more and more extended.

I think for me, I had a little bit of FOMO on this one because I missed the move on Friday, and I guess I was trying to compensate for that and I just had a little bit too much of a long bias on it, that it could be as strong as it was. The reality is I gave back some profit, I’m down 1100 on that stock, and these other ones, it was just jumping on, thinking that we would see continuation, and we didn’t. This is the funny thing. We saw stock here go from $3 to $9 on Friday, nothing else for continuation.

Here today, a stock goes from $6 to $12 and we’re not seeing anything else pop up on the scanners and give us continuation. I mean, we saw a little bit of a move on LMFA, but it didn’t really hold that level very nicely, and ASTC was choppy as well. So, I think that we’re definitely still in the market where we have to be a little bit more conservative and not try to pull out the big share size, which I didn’t. I kept myself at 5000 shares which was good, but that’s the only thing, I suppose, is also good today, is I didn’t go up to 10-15,000 shares. I kept my size reasonable.

But yeah, so anyways, I got myself a little bit of a hole that I’ve got to dig out of, and really the month of December in a way is about rebuilding from the couple of losses I had at the end of November, and today doesn’t help that, but that’s okay. Sometimes in this market it can feel like two steps forward, two steps back, two steps forward, two steps back, until we really start to see some good, solid momentum and we can really grind forward.

What we’ve got to do during these periods of consolidation in the market is really exercise discipline. Today for whatever reason, I just didn’t exercise it in the way I wish I had, so I’m sure you guys will all have that from time to time where you just ask yourself, “Why did I get as aggressive today as I did? I really shouldn’t have,” and it’s just kind of part of the deal. Anyways, tomorrow’s a new day, we’ll be back at it first thing, bright and early tomorrow morning, with the pre-market watch list, right around 9:00 a.m. and we’ll see how we do.

Hopefully we’ll see some better opportunities. Today’s gaps scanner wasn’t very good so we were really depending on the High Day Momo scanner, and just wasn’t as super excited about that. Anyways, I’m hoping tomorrow we see some better opportunities and right now I’m going to let people update their December challenge for the day, ’cause we still have a bunch of people that haven’t updated it yet, and I’ll go over it tomorrow morning during our midday recap.

All right, so tomorrow morning, we’ll get back at it with pre-market watch list, and hopefully we’ll see a couple of good opportunities to get that $500-$1000 daily goal. You know, today’s the day where I had the $1000 daily goal, I had it in my hands, and I gave it back. I hate doing that. It’s almost worse to do that than to just go red on the first trade, because you feel like, “Dang it, I had the goal, and I didn’t appreciate it. I got aggressive and now the goal’s gone. Now I’m red.”

Definitely a good wake up call at the beginning of the month just to stay focused on those small gains, slow and steady, and not try to swing for the fences, ’cause when you do it, the market, if we’re not in a really, really hot market, you’re going to strike out. That’s what happened today, but anyways, that’s it for me and I will see you all back here first thing tomorrow morning. All right, I’ll see you guys in the morning.

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