Warrior Trading Blog

Red Day Recap! Trading through choppy markets cost me -$2k

choppy markets

Red Day Recap! Trading through choppy markets cost me -$2k

 

 

All right guys, time for our midday market recap. We’ll go over the trades from this morning. We week has been kind of a grind. It’s been a little bit touch and go. I was red on Monday, bounced back on Tuesday and Wednesday and now I’m red again on Thursday, so just not making a lot of progress. It’s kind of like I start to get up and then I fall back down. I start to get up again and then I fall back down.

So the good news is I have a nice cushion from last week, so even if this week ends up being flat or even being slightly red, it’s not really that big of a deal. It’s not the worst thing in the world. On the month I was up just under 10,000 as of yesterday and now today losing like two grand I’m going to be up 7,500 or 8,000 or whatever it is. Obviously percentage wise a little bit of a setback considering this has been a fairly slow month, but the good news is that I’ve had a really great year so far.

Even if I have a couple slow weeks these are just the ebbs and flow of the market. Not every single week is going to be a $10,000 week, as much as I’d love it to be that way. Going over the trades from today, today’s a day where I took a total of four trades and I made money on only … Sorry, I took five trades and I only made money on one of them. So my accuracy was a little on the low side, but generally it was that I got into trades and they just sort of immediately went the other way, even on what I would typically consider to be decent setups.

We just didn’t have really good follow through. Follow through is what we refer to when we buy a stock at a breakout point and the breakout works and it pops up 10, 15, 20 cents and then continues running. That’s follow through. When you buy a stock and it just ends up going sideways for five minutes and then dropping, that’s no follow through. That’s what we saw today on four out of my five trades.

The very first trade today was on CAPR and this was on our watch list because it was our leading gapper. Now it had a lot of volume pre-market and I was a little concerned that it was going to be crowded, but what I said is that I like it over $1.50 because you can see here that if it breaks over $1.50 it will be breaking over the VWAP. Well, you can see right here if I scroll this back just a little bit, on the one minute I jumped in as soon as the bell rang for the break over 1.50.

We pop up to 1.53 and then we drop down to 1.40. It was like okay, well that’s not really what I wanted to have happen. We only pop up three cents and then we drop 10. Then it pops back up to 54 so now I’m up four cents. I had 7,500 shares on this so being up four cents is being up 300 bucks, but I’m risking 700 to make 300. That’s not good risk reward. I wanted to make 750 to maybe 1,000 on this trade. I was thinking it would go from 1.50 up to 1.60, 1.65, 1.70. Target ultimately was to retest at pre-market high, 1.76.

When it just popped up to 1.53 and then had a lot of resistance and couldn’t continue any further, I just kind of started to get a little unsure about it, so I held through here. It pops up to 55. I actually was able to sell 10 shares at 54. I sold 10 shares. Trying to sell on the ask and the rest I had to stop out as it dropped down on this candle right here.

On that trade I lost $350 roughly, which … Actually I lost 299, so about 300 bucks. Not a big deal on that trade. Relatively tight, small loss. I could have probably sold for a profit of 50 bucks and maybe I should have because it was just bouncing around here for three minutes. This three minutes was kind of within the breakout or bail out timeframe. If it doesn’t go right away, you just kind of have to bail out.

I probably could have stopped out of that a little bit sooner. That was my first trade. Second trade of the day was NAKD. Now NAKD pops up on the scanner and all of a sudden I see it starting to squeeze up and I was like okay, this looks interesting. I jump in here on this one. I have an average of 68 right around here. It pops up to a high of 82 and I had 5,600 shares. I was trying to take 7,500 but I got a partial fill so I was up like 600 bucks on this trade.

I was like good, looks great. We got a break over 85. Then up towards $2. Now you see what happened was it hit 82, it pulled back to 71, so now I’m just above breakeven and on this candle it hits 66. I’m kind of like well, do I want to stop out of this? I’m not sure. It drops down here to 57. It pops back up to 70 and on that pop back up I sold on the ask. I was fortunate to get out of this with just a little bit of profit. It’s $148 so I guess my average was a little lower, but a little bit of profit on this one. It just didn’t end up being what I wanted.

Of course I had $600 that I didn’t lock up on it because I thought it had more potential. Of course I didn’t have that $600 profit for very long. So NAKD, a little disappointing. It tapped the 200 moving average, which I was aware of, but I thought it would break over that level and continue higher. It didn’t. That was my one winner of the day and it wasn’t obviously the best trade. Next trade was I believe NBRX. On NBRX on this one I got in for the break over $1.50. I’ll pull this one back as well.

On this one here I got in at, sorry, $2.45 right here, looking for the break of $1.50. I get in at 2.45. It pops up to a high of 2.48. I’m up three cents. Again, I’m not doing this to make three cents so I didn’t take profit there. I was waiting and then on this candle here it drops back down to 40. I had to stop out. Lost 100 bucks on that one, a relatively small loss.

At this point here I’m down like 300 bucks on the day or something like that. Then I see CAPR coming back up and I’m thinking okay, this might give me an opportunity for a red to green move, so I got in this at 1.40 right here. It pops up to 1.43. Once again up three cents. This is not what I’m looking for. It drops back down to 38 and so I say you know what? Just forget it. This thing is not working. It’s too heavy. I stop out and lose another 100 bucks with 5,000 shares.

A minute later it squeezes up to 54 and then up to 64. Luck of the draw on that one that it did end up working, but I kept my stop tight, which was probably the right thing to do and I was just a little fed up with that trade. Two losses on CAPR, one loss on MBRX, one small win on NAKD and then we have DCIX. Now this one was a reverse split and so I was aware of it pre-market and I was thinking over 1.30 was a pretty important level to watch.

I saw it selling off and I thought okay, if it breaks back up over $1 that could be the spot where it breaks over $1 and then it starts to get a little bit of a squeeze. That’s what I was thinking. At the same time DRYS was also squeezing up. I thought okay, well with DRYS squeezing up right here, squeezing up about 30%, and DCIX starting to move that sympathy, these two usually move in tandem. I jumped in DCIX here with 10,000 shares.

Now since it’s only $1.08, I felt fine taking slightly bigger size. Got in $1.08, pops up to 1.14, so I’m up 600 bucks. It pulls back for one second and this is what I thought was going to be the one minute micro pullback. One minute micro pullback is what I’m looking at. Let’s see right here. Oops, for some reason I’m having a hard time drawing my trend line. Right there and right there. So it’s like okay, one minute micro pullback and then on this candle when it dropped to 1.01 I was like that’s not what I wanted to see, but at the same time do I want to just bail out on this?

I’ll give it a second. So it pulls back here. It taps the 20 moving average, which is our typical support level right through here. I thought okay, as long as it holds the 20 moving average, I’ll hold onto this. It pops back up to 1.04 and then on this candle here as it broke the support line, that’s where I sold and unfortunately I got filled at 90 cents. So I got five cents of slippage because I pressed the sell button at 95 and I got filled at 90.

What probably should have been just $1,000 loss or 1,200 ended up being 1,700 because of slippage, so I went from being down $300 on the day to being down 2,000 because of that one last trade. That trade put me over the max loss on a day and so now I’m done for the day. In hindsight, maybe this wasn’t the best entry right here. I sort of just jumped in it as it was squeezing up. If I had waited for a clean pullback I wouldn’t have taken this trade.

Having said that, the reason I don’t always wait for clean pullbacks is because oftentimes we see these stocks go from zero to 60 or squeeze into a circuit breaker halt and they just continue higher and they never give you that pullback.

That’s why I am more inclined on some of these stocks that I think have that parabolic potential to jump in a little faster. That’s the same thing I did on NAKD. Unfortunately NAKD also wasn’t able to hold the level, so this just happened to be a day where we didn’t have very good follow through. Using the same exact strategy on another day with something like DCIX we could have just as easily have seen this on this one minute pullback break over 1.15, hit 1.20, 1.23, 1.24, 1.25, 1.30, halts it on circuit breaker.

Reopens, 1.35. Squeezes up to 1.40, 1.44 and I sell right around the half dollar, 3,000, $4,000. That was the back of my mind potential on this trade. It just didn’t happen this time. That’s part of for me, 30% of the time when I take trades I’m wrong statistically. This is over the course of years of trading metrics. My accuracy is pretty consistently at 68%. I was 68% accuracy today’s a day where I certainly have more than my fair share of losses, but then days that I’m really on and that the market is really strong I’ll be green on five out five names.

My accuracy will be 100% because everything is giving us good follow through. That’s kind of what we see. We either have days that are fantastic or days that are just kind of like today where we don’t have follow through. I think that maybe the thing I should be just more mindful of is that the moment I go into the red I should just instantly be very, very careful about even taking another trade, even if I am only red 200 bucks, because the fact that I’m red is an indicator that we’re not seeing follow through today.

That maybe is a sign that today’s not the best day to be aggressive or to even keep trading. I certainly would have been better off today if I had just called it quits down 300. I was thinking about it, but then I saw this squeezing up and I think maybe I got a little FOMO and thought well, it looks like it’s going to go. This one has potential. It’s probably the last opportunity of the day, so took a stab at it, but today just wasn’t a very strong day in the market. Traders were a little more cautious, not as many buyers. Follow through wasn’t there and so that’s the way it is. That’s the luck of the draw.

Up here, yeah, I guess I could have sold at this inverted hammer on DCIX or on this Doji candle, but the thing is I had just gotten in. I basically had just gotten in and then to get right back out, it’s kind of like selling any of the other ones for three cents profit. I really was looking for more than that and I thought it had potential for more than that.

Changing your bias is, you have to be able to be quick to adjust when you see things like Doji candles forming. Obviously after this five minute candle closed I was like well, that’s not a good sign because we’ve got Doji on the five minute. Either way I’m taking a loss on this trade most likely, so maybe I should have cut it a little bit tighter, but in any case, cut the loss at the point of it breaking support, which was definitely the right place to sell from a technical perspective.

Maybe I could have sold a little sooner, but didn’t hold and hold and hold, so all of that is good. As I said, this is just kind of a week where it’s been a little bit of a grind. Like one step forward, one step back, one step forward, one step back. Not making a lot of progress this week, but that’s just part of the deal with trading. Some weeks are like this. Last week was fantastic. The week before was also choppy. This hasn’t been the most impressive month for me, which is funny because last June I made 34,000. Last July I made 32,000.

Yeah, it’s just the way it goes. Last summer was fantastic. This summer has been just a little choppy. We haven’t seen really good follow through so we have to make due with smaller gains and that means for me finishing the month up 7,000, 8,000, 10,000 and being content with that until we get another really solid month. Fortunately my best month of the year is just under 70,000 so I know when we have good opportunities I can capitalize on them, but if we don’t have those opportunities there’s really not a lot I can do except for sit tight and take the small gains as they come.

That’s about it for today. It’s not a day where I’m particularly frustrated or bent out of shape. It’s just yesterday was a step forward, today’s a little step back. Anything between being down 15,000 and being up 22,000, anything in between that range is just sort of an average day at this point because those are the extremes of this year. My biggest losing day, negative 15. My biggest green day, plus 22. Anything in between is kind of whatever, especially anything in between being down 3,000 to up 3,000, that range is very just average.

Today is just an average red day, nothing special. No follow through, but we’ll bounce back tomorrow. Hopefully we’ll see some decent opportunities for Friday. Fridays are hit and miss. Sometimes they’re fantastic. Most times they’re a little slow. Maybe slow on Friday. See if I can capture one or two winners right out of the gates and then shut it down by 10:30 tomorrow. That’s the game plan here. Those of you who are going to trade through the afternoon, make sure you trade smart. Keep your stops tight. It does seem to be a choppy day for trading.

Really taper back on your risk. If you’re in the red and you’re desperately trying to get yourself back to green, this is probably not the day to do it. You want to do that on a day that we have good opportunities. All right guys, that’s about it for today. I’ll see you all first thing tomorrow morning. All right, bye.