Warrior Trading Blog

Red Day Recap -$15k Yikes!


Red Day Recap -$15k Yikes!

All right everyone, today we’re gonna go over trades in the morning. Red day recap, unfortunately. This is my second red day here for the month of November. What’s frustrating is that the two red days I’ve had for November have both been pretty big red days.

I’m kind of in this place right now where I have had the best month of my trading career. On the one hand, the reason that I’ve had the best month is because I’ve been willing to be aggressive. That’s why in two days I made $73,000. The other side of being aggressive, and sometimes the darker side, is that you can end up having some pretty big losses.

That $73,000 in profit … I mean we always know that profits offset losses in trading. There’s no one that trades at 100% accuracy. That just doesn’t exist. We all have losses. I lose about 30% of the time and I’m right about 70% of the time, which is pretty good, but it doesn’t change the fact that on a month like this, when I’m swinging big and being aggressive, the winners are big and the losers are also big.

One of the things that we do here [Warrior 00:01:23] Trading is the daily midday market recap. We do it every single day. This year starting with $583 and building this account up to just under 300,000; where it is now … Or I guess 250,000 or something like that. You guys have been able to watch along the way and kind of take part in the journey.

On the days where I’ve made a lot of money, you’ve been able to see what I did right. On the days where I lose money, you’re able to see what I did wrong. One of the things that we always say is that when you lose money in a trade, you lose the money and you gain a lesson and you gain an experience. The hope is that from these losses that we gain enough that eventually the losses become smaller and smaller, and we’re able to really mitigate the risk.

I would say I’ve been able to do that for the most part, but this month especially has been kind of crazy, because I’ve been super aggressive. That’s why I’m up as much as I am this month, but it’s also why two Fridays ago I lost $11,000 and here today I’m down $15,000.

You can see the P&L for today. Obviously, a little bit of a disappointing day. It’s my second worst day of the year. Or it might actually be the worst day. The worst day I was down exactly 15. That was in, I think, January or February. For sure it’s not the type of day I like to have.

I think the value of this recap is an introspective recap on the day. It gives me an opportunity to sort of look over the trades and see where I went wrong. As I gain a lesson from this loss, I hope that you guys are able to as well. You benefit from it and it’s certainly not for nothing.

Let’s look at how things started today, because things actually started with a pretty good trade right out of the gate on DPW. Very first trade today was DPW. Long, as you can see. 5,000 shares at $3. On DPW, we had a pre-market high on this right around … I guess the pre-market high was like 380, but we pulled back. We came back up and we were consolidating around 307.

307 was the pre-market pivot level. We dipped down and as we popped back up I jumped in for the break of … basically for 307. I got in at $3. Long as you can see right here at $3. 5,000 shares. Sold half at 305, sold a quarter at 309, sold another quarter at 315, another quarter at 319, and the rest at 315.

Right there, on that very first trade, I made right around $400. $450. Not a bad trade. Not a bad start to the day. Next trade I tried to take was MARA, M-A-R-A, at 948. You can see here I tried to go for 7,500 shares. Which, in hindsight, was too large. I think that type of position was a little too big for MARA. In any case, that was right out of the gates. It ended up popping up to a high of 1003 right here. Then look, 1003 and then it dropped all the way down to 890.

That was a pretty big rejection. I mean that was really not pretty. Then it continued all the way down to 807. It dropped two points over the course of three or four minutes, which was really not very nice. I didn’t get filled there at 48. That might be for the best, because you can see how it hit 980 and dropped down to 914. Then it hit $10 and then dropped down to 809, so I don’t know if that would have really been a good trade.

DPW, I get back in it at 325 with 10,000 shares. This has sort of, as you’ve seen, been my kind of standard share size in the last few weeks. It’s been because the market has been so strong. 10,000 shares you make 50 cents, boom, you got $5,000. I’ve been a lot more aggressive. So DPW I got back in this at 25, which was pre-market highs, right here, or the high of day. I got back in at 25. We squeezed up to 340. I sell half at 340. I tried to sell half at 347, didn’t fill. Sold at 331, then 340. Then I added back at 340.

Oops. Hold on.

Then I added back at 340, 7,500 shares. I sold it at 348, 347, and 343. Through those trades, I made about $2,000. Or I made maybe $1,500. It put me up $2,200 on the name, which was pretty good. At that point, I was up $2,200 on the day and I was thinking, “Okay. Not bad, not bad. Good, green day.”

Then I jump into SSC on the scanner. So let’s look at that one. SSC. SSC was on the scanner. I jumped in this at 75 for a one minute micro pullback, which was right around here. It hit a high of 84 and then it dropped all the way down to 420, which was obviously not pretty at all. I got in at 75 and then I decided to sell at 78, 76, and 74 because I saw big sellers up on the ask. 20,000 share sellers at 80 and 88, so I thought, “All right. I gotta get out of this,” so I got out of that one. I ended up making $40.

Then I took this trade on EYES. This was sort of where things started to turn south. EYES I looked at. I’m gonna mute this thing. All right.

EYES, even as I pulled it up I was like, “Oh I don’t if I really like this one. I don’t usually like this stock and it’s kind of hitting the 200 moving average,” but I sort of thought, “Well it’s popping up and we’ve been seeing stocks like this pop up and then kind of take off.” I kind of thought getting in at a half dollar might make sense. So I got in with 10,000 shares, which was probably too heavy. It hits 47 and then it drops $.20 and I’m down $2,000 on it.

It pops back up to 29 or slightly to 29 and I sell it at 29. On this one, I end up losing $1,600. I go from up 2,000 to up like $300. At that point, I think I was frustrated. I was like, “EYES got me. That was not a good trade. I was too aggressive there.” I was already up $2,200. Why was I taking 10,000 shares? I guess it’s because I was trying to … I was thinking, “Well maybe this will be a $3,000, $4,000 day the way we’ve seen in the past. I’ll just keep being aggressive,” but that one rejected hard. IT dropped all the way down here to a low of 116. I mean a very hard rejection. I got stopped out on that.

I got back in DPW at 97 and $3. I sold it at 305 and 304. That only gave me like $200 of profit. There was nothing exciting on that one. Even on that one, it did a hard rejection, where it broke over 3 and then dropped all the way down into the 70’s and 60’s, that you can see here. That was … Where was that? That was right here.

It popped up. It broke over 3 and then it dropped all the way to 260. Then it dropped all the way to 220 and 219. Another really hard rejection.

At that point, I think I was up $300. I was trying to get myself back in to the green or back into the thousand dollar range. Back to where I was; $2,000. I saw a grow and I noticed that this one had given us a good … couple of good one minute pullbacks in this area. I saw it pop up here and hit 89 and then pull back. I got in for the first … Actually I got in at 65, 70, and 74. Then I added at 90 for the first [kiln 00:10:40] to make a new high. We popped up to a high of $.90. We double topped at 90. Then we dropped all the way down to 630. I was down $4,500.

That was the one that really put me in the red here. Down 6,000 on it. I held it for a minute. It pops up to 58 on the ask. Then 12 on the bid, 13 on the bid. I sold that at 613. Then that one I lost 6,000. At that point, I was down 5,500.

I was frustrated, because I felt like at that point I’d gone from green on the day to red and I was too aggressive on EYES, I was too aggressive on grow. We weren’t seeing follow through. I’d taken a couple of trades, several false breakouts. Now I kind of had to figure out how I’d get myself out of the hole. That was down 5,000.

In hindsight, maybe I should have … This is the thing where this month I’ve had several days where I was down 4,000 or 5,000 and then I got myself back into the green and I finished the day up 2,000 or 3,000 or even 4,000 or 5,000. I mean I’ve had that happen on several days this month.

Because that’s happened, I’ve lifted the not trading past max lost, because I’ve been able to get myself out of the whole. It’s been because we’ve continued to see opportunities. Yes, I got stopped out on the first of second trade, but then we would see things start to really open up and take off. I would have the opportunity to make the money back.

That ended up happening a little bit on AHPI. On AHPI, I made $4,500 on this. It was on the scanners. It popped up on the scans and I got in it at $3. Now you can see here I got in 7,500 shares at 3 and I added another 2,500 at 26 and 29. So now 12,000 shares; a little more aggressive. It pops up to 57. I sold half. High of day on this was 75. I sold half. I think I added back here at 47 and sold at 65 and 62. That ended up being a decent trade. There was a circuit breaker halt in there, but I made back $4,500 so I was down only $1,100 at that point.

I was thinking, “Okay, $1,100. I might be able to get myself back into the green.” Continuing to trade, looking for opportunities. Took a scalp on MARA. Made $400 on it. M-A-R-A. This one’s a little further down, but this was as we broke here over this kind of resistance. Did a one minute pullback. Popped up to 65 and then we dropped down. Another hard rejection. Only made $300, $400 on that one.

Then we had ORPN. ORPN hits the scanners. Here’s another trade on DPW. ORPN, I jumped in at 72. Look at this thing. I mean this is kind of the market that we’ve been in today. It squeezed up to a high of 306 and I was adding at 77 and 96. I tried to sell at 308. I didn’t get filled. I ended up stopping out as it came back down and losing $1,700 on it.

Now I’m down $3,000 again or something around there. This was another kind of hard rejection. We see PXS hit the scans. This one I was watching at 45. I didn’t take the trade. It squeezed up to 84. It got halted on a circuit breaker, so it was halted. Resumed higher and I jumped in. I ended up not even getting in for the break of 3. I thought I just wasn’t sure. It pops up to 343 and so I thought, “All right I’ll jump in this thing at 350, and then 358 for the break of a half dollar.” I was thinking it would squeeze up and possibly get halted on another circuit breaker, but it would probably hit $4.

Target was $4. It popped up to 73. I put orders out at 408 and 424, 428, thinking it would continue going up and that’s not what happened. It quickly reversed. It broke $3 and dropped down to 266. It’s now halted on a circuit breaker because it dropped 10%. It’s going sideways on resumption and then it drops down to 228. I was trying to sell. You can see the orders here. I tried to sell. Sold partial. Tried to sell, tried to sell, sold more. I mean I couldn’t market order on this with 10,000 shares, because the slippage would have been so bad. I just kept trying to piece out. I finally sold the rest of it at 213 for the single, probably, worst loss of the year right there.

On this one, I would say the mistake that I made was giving into FOMO a little bit. I got in it really high thinking it would continue higher. I mean I got into it basically a dollar higher than I really probably wanted. I wanted it at 245, but at the time the volume was light, so I figured, “Well I’ll just leave it alone.” Then it squeezes up [inaudible 00:16:46] keeps going. I get in at 350, thinking it’s gonna just keep going the way some of these other ones have.

The rationale for this type of strategy or for being that aggressive is stocks like this, that squeeze. They get halted. They resume higher. They squeeze, halted, resume higher. Squeeze, halted, resume higher. From $4 all the way up to $24 and yes, that was last week or really the week before. We saw a little bit of it continue last week; Monday, Tuesday and Wednesday. Not a lot, but a little bit of it.

Today, what seemed to be more of the pattern was a squeeze up and then a big rejection. So big rejection there. EYES. The squeeze up, the big rejection.

This is where we’re seeing the tide start to shift a little bit. Now as it stands today, after this loss, I’m still up about 80, $85,000 on the month. It is still my best month of the year. The reality is I feel good about that. It’s been a great month. Having said that, I have pushed it, I think, to the edge, to the limit, and I’m starting to get burned a little bit, because I’m pushing it too hard. I need to step back a little bit and kind of ease up on the throttle.

That’s the thing you have to be able to do, is you have to be able to go, pedal to the metal, and push hard when the market is strong. That’s how you make $40,000 in one day, but you also have to be able to adapt to when the market starts to slow down and we stop seeing those exuberant squeezes, because you have to be able to scale back and then reduce your size.

I wasn’t quick to do that Friday the 17th. Even on Friday the 17th, I knew on that day that could have been a 10, $20,000 green day. I just didn’t get filled on one of the trades and then I chased it higher. Sort of like what I did on PXS. The people that got in that at 250 were loving it that I was buying at 350, because I probably bought their shares. I kind of did the same thing two weeks ago or a week and a half ago.

The 17th could have been a green day, but I started with a red trade on Monday. Another red trade last Tuesday. Got myself back into the green on both days, from down 5,000 back into the green. Wednesday I made $2,1000. Here on Monday I could have made 2,000 and scaled back, but I was just pushing it a little bit too hard. Then I let the frustration get the best of me and instead of saying, “Just throw in the towel. Down 3,000 whatever. Down 2,6000, just be done with it.” I saw this stock pop up on the scanner and I thought, “Well maybe this is the one. Maybe this is the one that’s gonna go and it looks good.” It surely did move from 250 all the way up to 370 and I just got in too high. I didn’t take the profit in the 70’s when I had it, I held it. Then of course it was very difficult to sell because I was in with too big of a position.

I would say that I should probably make an adjustment to my strategy starting now, because I went to being up 100 K on the month and now I’ve given back about 19,000. So I’ve given back almost 20% of my gains. That’s a max. I really can’t give back more than that. That really is too much to give back on a month.

Yes. Of course you can say, “Well I’ve got the cushion for it. You risk money to make money,” blah, blah, blah, blah, blah. That’s true. I’m still up 80 plus thousand dollars. It’s still a great month, but a couple more days like today and I’m gonna be up only 45,000. Sure 45,000 is still great. I could still say the same thing, but I’d really rather keep this money in my pocket.

I need to make a little bit of an adjustment going into tomorrow and as we finish up the month. The goal is no longer to try to get myself over 100 K and hold myself over 100,000. I think that that would be putting too much pressure on myself and to try to do that I’m gonna have to keep swinging for the fences, because I need to make 15,000; you know 17,000. To make 17,000 in three days, thought it’s certainly possible, would require three really great days of trading and being aggressive. I don’t wanna put that expectation on myself.

Instead, I think that I will not try to get over 100 K. I’ll instead just try to have green days for the next three days and make $500 a day. Bring the size back down. I think one of the things that is very difficult when we see these shifts in the market, is that some of the entries last week and the week before didn’t make a lot of sense. They weren’t really logical entries. They were playing off the emotions of other traders just all around the world.

When you see stocks like CHFS go from $4 to $24, traders are just jumping into it. It’s like, “I’m just gonna throw some money at this and see what happens, because gosh it’s so strong.” You have stocks behaving like that and then it happens on 15 other stocks. That’s exactly what we saw.

That is a slightly different … It’s a different strategy. It’s a strategy designed to capitalize off of the imbalance of fear and greed in the market. When things start to come back into balance, like we saw early last week and today, these entries, like my entry on EYES at the half dollar, these are no longer acceptable entries because we’re simply not in the market where we can allow ourselves to do that. This wasn’t a one minute pullback. It was an entry anticipating the break of the half dollar and continued squeeze, knowing that a week and a half ago those stocks would go to $2 and 225. It would just go crazy.

Right now, we’re seeing the market correcting. As soon as these pop up they get slammed back down. This might be where short sellers are making back some of the money that they lost a week and a half ago. They’re kind of coming back into control, which is fine, but it means we need to adjust and stop trading these types of setups, because right now they’re not working.

That means going back to focus on the good, clean pullbacks. The one minute pullbacks, the five minute pullbacks, et cetera. JMEI, for instance, this one was a pretty clean one minute pullback right in this area here. I mean this was pretty decent at 338. Nice pullback and a nice break out. That would have been a fine entry. Then the pullback was fairly dramatic.

Buying a stock like grow, where I got it, this was a sort of higher risk entry because we were a little bit more extended. The five minute was getting stretched out. We didn’t really have a good five minute pattern, so double checking, “Do we have a five minute setup and a one minute setup?” Or even reverting back to focusing primarily on the five minute wouldn’t be a bad idea during these types of … the markets where the tides are changing.

That’s sort of almost when it’s the most difficult is when the tide is shifting, because you’re used to one thing and now you’re having to adjust. I just need to try to smooth out this adjustment period. For me, that’s gonna me scaling back on the size, my share size, for the rest of the month and going into December. If I have to trade with max share size of 2,500 shares for the month of December, that’s fine. I don’t really care. I’ve made so much this month that I don’t need to even trade next month. I mean I really don’t. It’s more important to rebuild confidence and just keep myself limber and in a good mental space and wait for the next opportunity where we see insane momentum. During that opportunity I’ll be able to capitalize, make a bunch of money, and then slow down again.

It’s almost like the periods in between really strong momentum are your training periods. You’re training. You’ve gotta be disciplined. You can’t be crazy, crazy aggressive. You’ve gotta be conservative on your size. You’ve gotta be really mindful of perfect entries. Then that’s your training period and then yeah when we come into a day where we see a stock like HMNY for instance, go from $2 to $10 or $12, then that’s the one that you can get aggressive on and you can make some money. In between those days, we’ve gotta be training.

If you wanna call it trader rehab, then that’s fine as well. You know whatever you wanna call it. For me, trader rehab is when I max my share size and I usually cap out my max losses. Certainly on grow, I held it too long. It was allowing frustration to get the better of me and it’s easy to get frustrated when you buy something at high of day with 10,000 shares, because your in was such a big position and now you’re looking at your whole day going away. To bring down the emotions a little bit, and just kind of get back to discipline and focus, bringing down the share size.

Now some of you guys may have finished the day green. I know John finished the day up $3,000 and he trades the same strategy as me. He just was different on his entries and didn’t push it as hard as I did. He’s up $49,000 on the month right now, which is a absolutely fantastic month. He’s only got one red day. I would wager that his month might be a little less stressful than mine, because I’ve had the stress of swinging for the fences, stepping up to the plate, and that’s a lot of pressure.

It can definitely be very stressful to have days where you lose 10 or $15,000. Yeah, sure. I had days where I made 33,000 and 40,000, but those big green days, for some reason and I don’t know why this is and maybe it’s just me, but for some reason those big green days don’t feel as good as the red days feel horrible. The emotional wave is like, “Oh I’m up 40,000,” that’s almost like the same as being up 10,000. It’s like, “Okay, whatever.” Being down is like a real dip. I don’t know. It feels that the red is always more difficult than the green. The emotional swings and so having days where you lose 3,000, 4,000, 5, 10, 15 can be a little bit disappointing.

I’m a little bummed out today, but at the same time I’m very mindful of the fact that I’ve had an incredible month. There’s no reason to be that disappointed. You don’t know how big of a month you’re gonna have unless you push it.

The reason I made $85,000 is the same reason I lost 15 today. It’ because I pushed it, but that’s just what comes with the territory. You guys can all trade on your own risk tolerances. Some of you guys aren’t in a place where you can handle these swings, so you’re gonna trade with smaller size. That’s totally okay. We’re all in slightly different places with risk profile, and strategy, and stuff like that.

This month has been crazy. I’m gonna try to finish the next three days of the month by just scaling back on position size. Not trading less or anything like that. Just bring the risk down a little bit to bring down the emotion that gets in the way, especially as we’re seeing this kind of change in the tide.

That’s about it for me today. Again, certainly not the best day of the year, but a day that is important to review, and to go over so you guys understand what I did right, what I did wrong. My hope is that you’re able to learn a lesson from this loss. Just as I’m trying to learn a lesson from the loss and take the cue so I don’t do the same thing again tomorrow, I hope that you guys are able to as well. That’s part of the value of being in this community where you don’t have to do it on your own. We’re all here and we have green days, we all have red days, so to kind of talk it out I think is really important.

Anyways, that’s where we’re at here for today. This is the 200 and … 211, 12, 13. 214th day of the year. We’ve got just about 4 weeks, 5 weeks left in the year. Yeah, you know I’d like to get myself back over $300,000 and that would be setting basically a $15,000 goal between now and the rest of the year. That’s totally reasonable. Sure, if we end up seeing another wave of really hot momentum that would be great, but I think that we’re gonna have a longer period of having to focus on really solid patterns. I think that’ll be actually kind of nice, bring down the stress a little bit.

Anyway, that’s we’re at today. I hope you guys have … hopefully had a decent day. Better than me. Have a good afternoon and I will see you all first thing tomorrow morning.

All right. Bye everybody.

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