Warrior Trading Blog

RED Happens, Let’s Learn From It! | Roberto’s Weekly Trade Recap

All right guys, here is Roberto Barbaro, trading educator for Warrior Trading. What a slow week. What a slow week, guys. All right, so let’s just talk about what trading has been like for me this week and how I actually face these kind of times and I can and I will for sure be giving you guys all the tools that I’ll be using to get out of these little route.

So as a matter of fact, this week has been the first red week of the year 2019 for me. So I’m kind of glad on one hand that it happened into April. But on the other hand, of course it’s never really pleasant when you have a red week. So especially coming out of a week when I had three trades, all three of those were red trades. So I took an overall total as you can see here of just three trades and I had to realize losses on the three of them.

So on one hand it may look like a terrible week and it certainly hasn’t been as good as my best weeks. But I know on the other hand that my goal, which has been a little bit of a reached goal has been not to really dig too much for deeper or deep hole. So I know I’m capable of turning green for the month just by hitting a decent trade. So I’m not worried about that. Just focused on what comes next. I was also expecting a little bit of a slower time now that we are past the main earning season, the first quarter. So I’m going to go ahead and look for potential, more opportunities of course starting Monday. But I’m expecting the market to actually become hot again more and more as we go in through, into the next earning season, which is going to start more into the end of the month.

But with being said, I don’t like to complain. I don’t like to blame the market for it. So I always, always preach for, and also to you guys, for finding the time to post process your trading, to realize what you have done good, what you could have done better, and here is today here my own kind of time to sit down and process my trading and I just wanted to do it with you guys. I think it’s enough for the introduction. Let’s talk about the overall, individually of all those trades so that you can understand also and learn from my way of operating and also a little bit of my mistake, especially in the secondary trade that I took. I could have just avoided it in full but let’s just jump into it and talk about that guys.

We’ve got to understand we are traders, but first of all, we are all humans. We all make mistakes and that’s totally fine. What you don’t want to do is really to force, to be forcing too many trades just because you’re in the red, just because you feel like you have to make up for the losses. You have to be patient and disciplined, understanding that there will be slower times. That’s just how this career work and it took me a little while to understand that in the first place when I first wanted to become a professional trader. But that’s definitely one of those lessons you want to learn before getting knocked out of the game.

So in any case, the overall picture is still totally fine. Let’s now jump in into the trades. So first trade I took was in WBA. WBA was on watch on Monday because of earnings, and as you can see here, this is a three minutes chart on the right, on the top left here are the 10 minutes chart, and on the bottom here, right corner is the daily chart. So this thing was down more than 10%, really, really bad look it had right before the market open. It was selling off and it looked really weak. Price action was weak and it had the room potentially to move farther, farther, more but there was something not quite right about actually the … Its pre-market pattern. Now it’s kind of easier to see if we’d zoom in. Even here on the daily chart, I’m sorry, on the 10 minutes chart here as you can see we had these formation which was really just like a 45 degree angle decline, which is not among my favorite patterns for trend continuation.

For trend continuation to be healthy, you really need to see some sort of support and then going up, back up to resistance. We want those drifting patterns, whether it’s a drifting down pattern or drifting up pattern, you want to see. In this case you wanted to see these lower highs and lower lows, low highs, low lows. If we’d zoom in the three minutes chart, you can immediately see here, this one was just going down. It could barely, especially in the last half an hour before the market opened, it could have barely had any push higher. So whenever you see this kind of situation in the set up, you actually got to be extremely careful because the meat of the move may have already happened, especially over extended scenario like this, such a big company such as Walgreen’s.

Of course, when you see something like that happening, I was building my own plan when this thing was here about 58 and I saw potential further decline. But as usual, I wait for the market to open and I was a little bit disappointed here, feeling a little bit of the fear of missing out as well right before the market opened because the move basically already happened. In any case, I always follow the rules on my strategy. So I avoid the first three minutes after the market open and I eventually opened. I mean, eventually open to take a three minutes open range breakdown. That didn’t happen. So it was a little bit of a first flag there. So the second three-minute candle pushed it back up and then on the third candle, we started to show weakness once again. Once we started to show weakness once again, I actually went ahead and take, and I took a short here right below this one three-minute candle.

So I liked the fact that this one was breaking this kind of speed line here. It’s kind of a short term trend line. So I went ahead and I opened up my position short and at first it looked okay but then it couldn’t just continue. It didn’t go back down to retest this 55 area and instead it got bought back up. As soon as I noticed these are [inaudible 00:09:28] price action, I just jumped out here for an overall loss of 25 cents per share and I just waited for a potential re-setup because this still looked like very, very weak. It’s still had the view up above. We still had the 13 EMA here in the 10 minutes. So instead of me kind of letting it go, I cut in my loss quickly and I eventually looked for a next setup.

Now here we are looking at 10 minutes and after watching the price action closely for next 20 minutes, I noticed this thing started to sell off once again. So it’s selling offs once again. Once again, once this 10 minute open here, this 10 minute candle open at 10:00 AM, started to sell off and I jumped short once again, jumped short once again here and immediately after I jumped in, after a little bit of a sell off, this thing once again reversed. It reversed on me and it just confirmed that the price action wasn’t good enough. It wasn’t collaborating. It was just trying to do, trying to hold higher highs. So just to give you perspective, in this case, I was looking for this, for this one speed line here to break here. It would have been looking incredibly good. So anticipate that a little. I got short here at 55, 65. But once again, this thing just reversed.

So in this case I wanted to wait for a little bit longer to see if this area here at the view up in 13 EMA on the three minutes would have held, but instead it didn’t hold and I jumped out here at 55, 95 for one more loss. So I actually in this case stated that on my corrective action, my kind of descriptive area that I have anticipated the first 10 minutes candle to make a new low, that actually happen shortly after and emotionally I wanted to get back on track after the first trade and I a little bit forced it. So I would say that probably if this one, this one trade here who have never seen the light, I would have potentially not even taken this one trade, this one second trade also.

So that’s my point here. That’s why I’m a little bit disappointed. I was a little bit disappointed with myself because this second trade here, this loss was actually avoidable. Sometimes, yeah, sometimes also you never know because sometimes you jumped in. It wasn’t me just jumping in because I wanted the money back. There was a set up, but because of this was not like acting as well on the first try, I actually underestimated its kind of faking out potential and then jumped in again here in 10 minutes when it showed more kind of weakness because it was weak. If you were there witnessing with us the price action, you would be certainly agreeing with me. But from a technical standpoint, there was too much support at that point, too close, too much support. But also too close in price that it would actually be in not worth taking a trade.

So that’s it. The first two trades happened the first on Monday. Then on Tuesday I took no trades. On Wednesday actually, I had to close up my day just half an hour into the day, I had to catch a flight. So that’s funny because that’s the day when the best setup for my strategy during the whole week showed itself and it was on this AMD. I just wanted to spend just a few minutes letting you know which one was the trade I was looking for and also to let you know that a lot of, a lot of members banked out of this just following the overall analysis we have done in chat room before the market opened. That’s great because it means we are creating independent traders through our education. So sometimes you’re going to meet some trades, but the most important is that you build that knowledge, build those skills that are going to help you trading on your own.

So on AMD here. It was gapping up that day and we were above some critical resistance on the daily. As you can see here, that’s the kind of of pattern in pre-market that I like. It’s a gap up and it’s also a healthy gap up because it pushed up, consolidates making higher highs, higher lows and it holds. So it’s not just sort of a parabolic move, parabolic move into the open, whether it’s the upside or the downside, it really lowers the probability to continue to go higher. So I liked this formation because it was more kind of a strong [inaudible 00:16:11] and healthy flag here. You can see there’s a consolidation, they’re going up, more consolidation, going up, consolidation, and then after the open this thing just took off.

It took off and if just playing, the three minutes opening range breakout or even here on this one, if you are a little bit more conservative, you could apply this one flag here, this one flag, three minutes flag here and this thing just continue to go. Just to give you some perspective here, you could have potentially gone along here, even just in the three minutes opening range or here on the third candle after the second red candle risking to the base of the candle here. So entering at about a 28.46, 28.50 and with a stop as close as 20 cents. The reward here, all the way almost to 30, it would have been almost ten to one, almost ten to one profit-loss ratio here for this one trade. So in any case, I didn’t, of course I wasn’t on the market for long enough here on that day. I had to go. So I mean sometimes, just like that, it’s a little bit of a shame because that’s what I always say, you have to show yourself to the market because you never know which one is going to be the day where your setup is going to show itself at work.

But on the other hand, it’s okay. It’s part of the deal. Sometimes you’re just going to miss some opportunities. You just realize that, to move on and that’s going to be okay. I just wanted to let you know the difference here because in the same day, was the same name, we also had a potential move today. But look at the difference between this pre-market pattern to the pattern that we had today. So today on AMD, we had this kind of situation with … As you can see here, we were going to the open and instead of having that kind of healthy consolidation, this thing was showing shorter consolidation on each move up. So move up and then shorter consolidation and then next move up right into the open and what ends up happening here is it’s opposite. This thing just flushed down.

Even though it looked good on the daily chart for a potential long before the open, here as you can see, here this thing was opening above the previous day high and potentially it had room to move higher. But because of this formation here, I just decided to stay away and not touching it for the day and it ended up being a good decision to take. Eventually, this one could have been playing to the short side but looking at the how slow this week has been, I just sat through the sideline and not taking the trade. But once again here, I want to show you the difference in the pre-market pattern because sometimes while you are preparing your day, you think about this is a very, very good bull flag which when instead, this is just an over extended scenario here and especially not a very healthy pre-market pattern.

Then we can come to my last trade of the week which was on MU. MU, It happened yesterday and we were gapping down. We heard the news. Pretty important downgrade, usually I don’t really love downgrades, but it was from a well respected firm so I wanted to give it eventually a shot if the right set up would have presented itself. It was looking okay also from the daily chart. Was about to open yesterday below the daily 200 so I was fairly comfortable about the possibility for it to continue go lower. Once again, the market open here. We have this kind of consolidation pattern that was not bad looking. But the market opened, this thing pushes up, pushes up. I don’t take trades in the first three minutes. So I couldn’t be feeling good, too good on playing along because of all the hover and resistance and instead I waited patiently for eventually reversing back down to take a short.

So what did I do? In this case, when I want to take a short, I have to wait for the tree measure level of support. So the 13 EMA here, this orange line, the 13 EMA, the three minutes, the view up and the 13 EMA on the 10 minutes, which is this yellow line that I plotted also in the three minutes candle. But we can see it better here on the 10 minutes. It’s the same line here this time. This one candle here just sold off and we can see the action. We rejected here the [inaudible 00:22:27] day. It never closed the 10 minutes candle above it and it started showing weakness. Started showing weakness, it goes back down below the 13 EMA on the 10 minutes. In here, on this next candle is where I took the trade.

Just to give you a perspective, at that point I was looking to take a trade on the retest and fail. That’s where I like it. I like to see a retest and fail of the level. So as you can see here, this thing sells a lot, selling off. It held. You retest. On this three minutes here, bear flag is where I actually took my trade. I took a trade here at 42.58 and immediately after entering, this thing continued to sell and I was feeling good. I mean, this thing was looking very good for continuation. But as much as this week has been really tough in terms of giving some strong, clean moves, right after that, this thing decided to just reverse, just reversed. It’s clearly visible what happened here. On the 10 minutes chart, you can actually have a look. The 10 minutes chart, this thing just reversed. It reversed and then it continue a little bit like nonsense all day long.

But as soon as it reversed, I respected my overall plan. I had my, actually my original stock price at 42.74. I ended up stopping out just one cent above and call it a day. So definitely a slow week. To putting though into perspective, actually, I can operate for you the March 20 result. As you can see here, when I hit decent trades, I’m quite easily going to turn things around and I’m just looking for next weeks to be giving those opportunities and to be turning that month for good. But for now, that’s actually it. I’m actually glad to some extent to be showing that this is day trading, guys. It’s not perfect science and it’s all about, it’s really all about taking those trades and managing those the best possible way.

So if you’re consistent with your process, if you are confident about what you’re doing, you are going to eventually keep going higher. So that’s just my tip for this week and I hope to see you guys back again on Monday morning in chatroom. I’m going to be there 110% and if you have any questions, just feel free to comment down below. I’d be making sure I’ll get back to you, to every one of your questions. So thank you guys for joining and you have a great weekend.

Oh, hey, I didn’t see you there. I was just working on the dream board for my next home run trade. Hopefully it comes soon. Until then, make sure you subscribe to get email alerts anytime I go live or upload new videos. Until then, happy surfing.