How to RESET After A Bad Month | Behind The Trades | Ep #10
Alright everyone, so today’s time for episode 10 of Behind the Trades. We’ve taken a little summer hiatus from the Behind the Trades series. I think the last episode we did was in June, and things have just been so crazy, we’ve got so much going on here at the Warrior Trading office that I had not gotten a chance to do another one.
I wanted to bring Behind the Trades back into circulation here as we’re getting into the fall and the winter and just put it on the calendar and get it done.
Today’s episode, episode 10 of Behind the Trades, the topic today is the importance of being able to reset. Now, as many of you know, I had a red month in September, and it was my second red month of the year. My first red month of the year was in April.
April I finished the month down about $4,000 dollars and that was pretty disappointing for me because it was the first red month in well over a year, almost a year-and-a-half of trading. I was definitely a little concerned about what was going on.
At the end of April I decided to get focused going into the month of May, and I put myself into trader rehab. Many of you guys remember this. I said that I wouldn’t be allowed to trade more than 2,500 shares, I had to stay really focused on base hits and consistency, and I end up finishing the month of May with, I think it was $16,000 or $17,000 dollars of profit, which was a pretty good rebound all in all.
So finishing September down about $4,000 dollars, again, I had to step back and ask myself what I did wrong and what I’m going to do differently for the month of October. Alright, so I want to walk you through my process for resetting. I’m going to do that here in one second.
But why don’t we first just take a big picture look at my year. Here we are on November 2nd, 2017, I started the year with $583 dollars. $583 dollars in my account, and as of today, I’m at $176,646.51. I’m not even going to do the percentage gain math on that because it’s just absurd.
And really it doesn’t matter because that percentage gain that I was able to achieve with $500 dollars, I wouldn’t be able to repeat it with $50,000 dollars, because I can’t scale my position sizes in equal increments. If I was going to do it with $50,000 dollars I would’ve had to have been trading with probably 150,000 share positions.
Obviously I’m not in a place where I would feel emotionally comfortable doing that but even financially a lot of these small cap stocks wouldn’t be able to sustain 150,000 shares going in and out that quickly. There is certainly a limit to the scalability of my current strategy. Last year I was at $222,000 dollars so this year I’ll finish the year probably in the two hundreds and I think that may be close to the ceiling.
I think that if I had more consistently green days that were $3,000 to $4,000 dollars, I could maybe put together a half a million dollar year with my existing strategy if I just was a little more aggressive on share size. But I wouldn’t be able to make $10 million dollars day trading, personally. I’m not saying that it’s not impossible, some can, but it’s just a little outside the strategy that I trade.
In any case, that was my … And I’ll put up, get my pointer going here … That was my starting balance at the beginning of the year, on January 1st, and I’m at $176,000 dollars right now. All things considered, pretty good. My goal for all of you guys is to teach you this strategy. Today I’m up $5,168 dollars and this is what you guys wanting to learn. How is Ross making $200-plus thousand dollars a year day trading for one hour a day. That’s what you want to learn and that’s what I want to teach you guys.
Again, big picture, accuracy in the last 30 days, 82%. 82% of my trades have been winners. Profit loss ratio, 13 cent winners versus 10 cent losers. So that’s a 1.3 to 1 profit loss ratio, which is not too bad. I am on today, my 24th consecutive green day. It’s November 2nd, I haven’t had a red day since September. So 24 consecutive green days in a row. My personal record is 56 consecutive green days in a row.
I am certainly going to try to beat that on this hot streak but I’m not totally confident that I’ll be able to do it but I’m definitely going to go for it. Certainly feeling really confident right now with my trading and that is very different from how I felt about six weeks ago at the end of September.
The lessons and the topics for today. The importance of being able to reset. Now, we all have bad days, bad weeks, bad months. This is the reality of trading. Therefore, since it’s the reality of trading we need to be able to reset, refocus, and ultimately rebuild. Today I’m going to show you techniques I use to reset after I finished September in the red.
Many of you guys have experienced this, sure, bad day, bad week, bad month, even bad year and you need to be able to reset. Success requires that you follow the rules of the market. Now, one of the things that’s very frustrating is that, for the most part, we’re all at a disadvantage as retail traders because nobody really teaches you the rules. You don’t learn the rules of trading or the rules of the market in school. There’s not a lot of books that talk about it. You have to figure it out on your own. Now, you guys are at an advantage because I will teach you the rules of the market. I’ll teach you the rules but then it’s your job to follow them.
You need to create goals for yourself and then create mechanisms to keep you disciplined, to keep you following the rules. And discipline is one of the areas where I’ve had some trouble and we’ll talk about that when we look at my month of September.
Here we go, these are the September metrics, September 2017. Even if you guys are watching this on YouTube six months from now, or a year from now, it really … This is timeless information because if I have a red month in 2018 or 2019 I’ll have to do the same thing I did here in the end of September and early October. My total gain on the month was a loss of $4,200 dollars. That meant my average daily loss was $200 dollars per day. My biggest winner was $3,700 dollars and my biggest loser was nearly $7,000 dollars. In my opinion, completely unacceptable.
Average winning trade $577 dollars, average loser $1,837 dollars. How is that sustainable? That’s a 1 to 3 profit loss ratio. That really is not impressive at all. My accuracy was 73% and this goes to show that, even with 73% accuracy, you will not make money if you don’t know how to manage your risk, or if you choose not to manage your risk for whatever reason.
Alright, so this is what my month looked like and the site that I use for tracking these metrics is called Trader View. I like using this site, right now it’s the best tool that I’ve found. Again, a year from now there may be other tools out there but right now this has been my favorite tool. What I’m able to do is import, using the import button, all of my trades from my broker. I import my trades and then i can filter. I can look at the entire year or just months of the year.
Right now we’re looking at the month of September. I just showed you the detailed report. This is gross, I’m going to show you net after commissions, and that’s the minus $4,200 dollars. You can see performance by day of the week. Bad on Monday, Tuesday, and Wednesday, cumulative, and then green on Thursday and Friday. Performance by hour of the day, it’s hard to get really good metrics on a short period of time because yes, I lost money at the 9:00 a.m. spot, but we don’t know exactly why that is. If you looked at my metrics over a longer period you would see it’s a little different.
I can look at the price and volume and see that performance by price, under $2 dollars I made some money, and over $10 dollars I made some money, but the typical go-to price range for me ended up being losers. Distribution of trades by price, most of my trades were between $2 dollars and $10 dollars, as you can see right here, although I definitely had some that were above $10. And yes, Trader View does have a free tier but I think it’s $49 dollars a month for me.
Again, when you look at these metrics on a shorter timeframe it can be a little more difficult to truly estimate or understand what you did right or wrong. You can see my biggest loss was on IZEA, actually I’m going to cancel that. So IZEA, FSNN was the second, ALDX was the third, MYOS was the fourth, PYDS … Which is actually the one that I made $4,000 dollars on today, was the fifth, and then so on from there. You can also see, interesting, AKTX, $4,000 dollars, was a stock I made some good money on here. ARDM, ROKU, NLNK, SRAX, so some familiar stocks on here that you guys probably remember from the last month.
The interesting thing here is that usually I do well on stocks that have very high relative volume. That particular month of September I just didn’t do as well. When I look over at … I’m going to go to Overview and then look at the calendar, and I think this is what’s interesting. I had one, two, three, four, five, six red days. Six red days for the month of September, which obviously is just not acceptable. You can see here I started the month with two big red days. I was down $8,000 dollars on the month in the first two days. I made back a teeny amount, and then I went further into the red. As of this day, which was September 13th, I was down about $12,000 dollars on the month. And I was thinking, “What am I going to do? What is going on? This s ridiculous.” You can see cumulative was down $12,413 dollars.
Then I started to get focused, I brought it back together. Had a couple good green days. Had a nice solid stretch here, one, two, three, four, five, six, seven green days. I got myself back up into green on the month, up $6,000 dollars and I was feeling really good on this day. And then, this was a Friday, and on Monday I lost $7,000 dollars. I don’t know if I thought, “Well, I made $7,000 yesterday so I can afford to lose it today if I end up getting too aggressive,” but I got way too aggressive and I gave it all back. And then I lost $7,000 dollars again on the next day. Two days in a row, all of a sudden back down into the red and then I just slowly made my way back into the green but that is not a very pretty month for me. I really pushed it, I got too aggressive.
What were the lessons that I learned from September? Again, everyone, from time to time, is going to have these bad months. So the September lessons. I was swinging for the fences. I was trying to hit home runs. What I did on a lot of these days is I left money on the table because I was green on a trade, I was up $500 or $600 dollars, but instead of taking the profit, I’d end up holding it until it went to break even, and then holding it as it went into the red deeper and deeper and deeper. Taking larger share size and then getting sloppy with my exits. This was a big problem because I went on the two days that I was down $7,000, I went in with full size, 10,000 shares, and I just got slammed back down. The stocks dropped 40, 50 cents in a heartbeat and boom, I’m down four or five grand. I went in with too much share size and then I didn’t respect my max loss.
And I wasn’t content with making $500 dollars a day. I was trying to make $5,000 a day instead. But the reality is, if I had made just simply $500 dollars a day, through all of September, I would’ve finished the month green instead of red. So swing for the fences trying to hit home runs ended up costing me a lot because I closed the month red.
So I set some goals for myself for the month of October. This was me realizing that I needed to reset. For October I said I basically need to put myself back into trader rehab. I need to get focused. I said I need to focus on base hits because if I make $500 dollars a day I’ll do better than I did in September. Forget the home run mentality, just push it out of my mind. I think one of the reasons that I’ve had home run mentality is my best day of the year is $22,000 dollars in profit. I took $583 dollars and turned it into $100k in 44 days. That makes this last … I guess I’m on track to maybe make $100k in 44 days since I’m on day 24 and I’ve made $40,000 dollars.
Realistically, the beginning of the year was extremely good for me. I just had a great beginning of the year and I started getting frustrated in April and then again through the summer when I wasn’t getting home runs. Like Chuck is saying right now in the chat room, $500 a day times 252 trading days is $126,000 a year. That’s a great income, it really is. But I wasn’t content with that $500 dollars a day in September.
For October I said I need to focus on base hits. I need to focus on just making $500 a day. Because if I finish October with $500 a day, I’ll finish the month with $10,000 dollars and I’ll be pretty happy with that. That meant that each morning I needed to meditate and get focused before trading. To take even just two minutes to sit down and meditate. Now I like using the Head Space app that’s on my iPhone, but if I don’t want to use that or I don’t have time, I just sit, close my eyes, take a few deep breaths, even if it’s only for two minutes. Just to slow down. Just to catch my breath, get focused, clear my mind. I usually do it right around 9:00 a.m., or right before the bell. In the last few weeks I’ve been trying to walk you guys through that moment of taking a deep breath right before the bell.
So meditate each morning. Part of this of really getting focused was that I wanted to eat healthy and not have any really sugary, sugary foods right before I start trading. Just eat healthy and have whatever, a handful of nuts or something like that. I just don’t want to have a sugar crash at 9:45 when I’m about to take the next trade. So, eat healthy, sleep well, get well rested. Wake up early enough so I have time to really prepare my morning so I’m not rushed and then meditate. This is all part of me getting focused so I can be in the right head space, mindset to trade.
Then the third, start with smaller size to avoid being in with 10,000 or 15,000 shares and then be a deer in the headlights as the stock is tanking. Start with smaller size, have a better sense of the type of market we’re having on any particular day and really just be more present.
Number four. Try to just simply be green every day, even if it’s only $10 dollars. Now I know saying trying to be green everyday for an entire month is a pretty big challenge in a lot of ways … October was the first month in 2017 that I didn’t have a single red day, but as you can see that focus on consistency paid off really well. I stayed focused, small gains, and if some days turned into big gains that was certainly great.
And then focus on consistency, which is really tied in with number four.
I wrote these down as my goals for October. I also said that my max loss would be $1,000 dollars. If I was down more than $1,000 dollars on a day I wouldn’t keep trading. If I was down more than a $1,000 dollars on a trade I would just market order out of it. For the most part, I was pretty good at that.
Let’s look at how implementing these five steps right here helped me for the month of October. In October, I made $35,573 dollars. I didn’t have a single red day. My accuracy was up to 81% which was really solid. My average winning trade went from $500 dollars all the way up to $800, which was good, but even better was that my average loser went from $1,800 dollars does to $772. I shaved over $1,000 dollars off my average loser. And I had 13 losing trades. So $1,000 dollars times 13 losing trades is $13,000 dollars. I saved myself. I literally put an extra $13,000 dollars in my pocket by cutting my losses faster.
Now I did have one bigger loss, $2,700 dollars. But, my biggest winner was $6,300. So it shows you that switch where this was the opposite for the month of September where my biggest loser was twice the size of my biggest winner. So I switched it around and this ended up being a much, much better month. You can also see that I focused on quicker trades. Five minute average time, eight minute average time for losers. I was in quickly and out quickly.
One of the things that I talked about earlier this week is my risk tolerance. I’m actually very risk adverse. I don’t like taking a lot of risks. Certainly not with my money. I feel that the money that I’ve made is hard earned and I don’t want to lose it. That might sound strange since I’m a day trader. But I actually, in a lot of ways, feel much more comfortable with day trading than I do investing in individual stocks for long periods of time or even the overall market. With day trading, I feel like I’ve got a lot of control. My strategy, which is based on momentum, is getting in stocks at the point that I feel is the apex point. The price that … I’ve got a 90%, 95% confidence rating that it will go up if I get in there. Then as soon as I’m up, I start to take profit. And because I have such high confidence and my accuracy is really good, and because I take profit when I am up, even if it’s only 10 or 15 cents, my accuracy is really high. That, of course, builds my confidence.
I minimize my risk by taking really short trades. Getting in and then quickly getting out, and doing it again and again and again. Now, that’s a little different from the way other traders in our community trade. Mike, he holds trades longer, and he’s willing to risk $4,000 for the potential to make $20,000. I understand that. That profit loss ratio makes sense, but I don’t want to risk that. I don’t want to risk. I don’t want to risk … I honestly, if you said, “Ross, you can risk $4,000 dollars to make $20,000 dollars. You got to put the $4,000 dollars on the table.” If you said I had a 50% chance of being right, I probably wouldn’t want to take the trade, because I don’t want to lose the $4,000. If you said I’ve got a 75% chance of being right, I’d probably say, “I only want to risk $2,000.” I just want to reduce the risk as much as possible because I know there’s a good chance that I’ll be wrong.
With my current strategy, with my accuracy at 82%, I feel confident taking those risks. But even so, my average risk is only $700 dollars per trade. It’s just the way that I trade. I just don’t feel comfortable taking a lot of risk. Again, Mike has a different strategy. Jeff, he has a swing trading strategy, so he’s holding these stocks overnight and, obviously, in some of these he’s risking $5,000 to make $10,000 or $15,000. All three of us are profitable, it just depends on your risk tolerance.
Let’s look at the month here of October in Trader Views. So the month of October, put this up 10/30 through 10/31. Alright, started actually very slow. First day of the month I only made $57 dollars, actually, after commissions. So started really small. Then slowly building up, $600, $1,300, $900, then you can see a couple of big days here, a day that was very small … I had to be very careful after that big green day because what happened after the big green day I had in September? I lost the whole thing. So I was very careful on that next day. Then continued strong, strong, strong. This is what the equity curve looked like. Just nice and steady, moving up.
Obviously, for this month it’s hard when you look at the behavior … We can look at the biggest loss, DFNN and YOS, OPTT, SPCB, ANY, so those are the ones I lost on. DRIO, ACHV, CLNT, CASI, those were some of the ones I made money on. But if we try to look at price and volume and stuff like that, well, obviously for the most part it’s all going to be green because I was green for the entire month. Again, this doesn’t help me a lot. It’s more helpful when I back out and say, “Well, how did things look from, let’s say, the beginning of the year?” Let’s say 1 and 1. I haven’t imported my trades here for November yet so this is minus November’s profits which is about $5,500.
Now we’re looking at the entire year. Now, this is 626 trades, we’re looking at the big picture, 69% accuracy overall. Unfortunately, my profit loss ratio is negative. It certainly didn’t help having a month like September. I’ve got to work to rebuild that. Biggest win, ten grand. Biggest loser, $7,100 dollars. We can see here the majority of my profits are in stocks between $2 dollars and $5 dollars. Not surprisingly, the profits are when I trade more volume. 20,000 shares is getting in, getting out, it’s not just one position. It’s the cumulative volume. I made the most money on stocks that had in-trade price ranges of more than a dollar. That’s a big in-trade price range, right? That means the stock went from $3.50 to $4.50. So those were obviously the ones I did really well on.
Days and times. Made the most money on Mondays. Made the most money between 9:00 and 10:00 a.m. Obviously between 9:30 and 10:00 since I don’t trade pre-market. You can see my two red months. $4,200 in April, and $4,200 in September. All things considered these months don’t represent incredibly concerning draw down, when you look at my overall equity curve. They are pull backs but they’re not dramatic, they’re not beyond my risk tolerance, but of course, I would prefer that I was green on these months instead of red.
So, you can see big, big push, $60,000 dollars in February from this one account, I made another $10,000 in my other account, so great month of February, great month of March and then this sort of period here was really slow and I was trying to swing for the fences, getting frustrated, I wasn’t having big wins like I had at the beginning of the year, and then as a result, losing my focus. Refocus for October, great month, and I’m looking forward, hopefully, to having a strong month in November and a strong month of December and finishing the year in really good shape.
That’s sort of the big picture of my statistics and, again, showing you and walking you through the tips or the techniques that I applied to help myself reset.
I want to answer a couple of questions that you guys might have. I’ve got three questions that were submitted this week, so I’ll answer those and then if there’s other questions from those of you in chat I can answer those as well.
First question. This is from Jason and he asked, “How do I set up stop orders for my trades?” And Anthony, caps only for tickers. So, let’s see, how do I set up stop orders? So, Jason, it’s a good question and one of the things I do is … And this is for better or for worse, I use mental stops. So this is an area where I question whether or not that’s the right decision. Today I’ll scroll over, this is my P and L for today, $5,000 dollars, but what I typically do is I use a mental stop. That means if I’m getting in at $3.37 right here, I’m going to tell myself, my max loss is $3.25. Now, obviously, if I set an actual stop once that max loss hits I will be out of the trade, which is the benefit of using an actual stop order. Using a mental stop, if it goes to $3.25 and I keep holding it, I’ll just keep losing more and more money. I’ve certainly done that on more than one occasion.
One of the things that I did in Lightspeed is I went to Custom Orders, go over here, Custom Orders. And I put a couple of stop orders out. So let me create a new one and show you how you do it. You can say, “Stop order here,” create new command and … Oh, actually, let me switch to … We’re going to do a different type, we’re going to do a custom order, create new command, stop minus, let’s say, 15 cents. The market I’m going to use is stop, I’m going to use through is 15, like that, so 15 cents through the bid and then the tier would be my full position. Or I could do quantity in closeout, but I believe I use … I’ll double check the other one. Actually, let’s use close out and we’ll use full position. So this would set a stop on the full position down 15 cents and it’s going to be a sell order right here.
No confirmation window, so let’s say, “Map key now,” and now I can choose which key I press to make that 15 cent stop goes through. And as soon as I get into a trade, I can press, let’s say control T, and set a 15 cent stop, and now I have a live stop on the order. If it drops 15 cents, the stop is going to fire and I’m out of the trade.
Now, I think that there’s a lot of benefits to doing that because you don’t have to worry about deer in the headlights. You don’t have to worry about staring at a stock dropping more and more and more. You do have the times where stocks drop 20 cents and then pop right back up and you have to remember that you will get slippage, so if it drops really fast you might lose more than 15 cents. You might lose 20 or 21 cents. That can obviously be an issue. For that reason, I prefer not to use stops and instead I just use mental stop orders.
But, again, I’m not sure … What I would probably have to do is go through a long period where instead of using mental stops I just use live stops and then at the end of it, AB test, basically compare how did I perform against when I was using mental stops. And the times when I got stopped out and it went right back up, did they cost me more than the times where it saved me because I stopped out and then it dropped a whole lot more.
For a beginning trader who’s having trouble maintaining discipline, live stops are definitely a good idea. But once you are a more experienced trader and you have the confidence that you can actually follow the rules and have the discipline to respect your 10 cent or 15 cent stop, then you may be able to move into a place where you use just mental stops. So just wanted to walk you through that. Again, I’m a big advocate of you need to have a max loss on every trade. If you can’t follow it by pressing the sell button then you have to delegate that responsibility to your broker. So that was question number one.
Question number two from Anders, and I don’t know if that was Anders or Anders, but let’s say Anders with a hard “An”, he asks show how I pick from the high a day scanner. The high a day momentum scanner. Let me just pull this scanner up. The high a day momentum scanner, there it is, okay. High a day momentum scanner. When I see a stock hit the high a day momentum scanner, the first thing I look at is the color of the alert. This is a scanner that I’ve customized and these settings are available only to our Warrior Pro students. So you can see this has several strategies. Two, four, six, eight, 10 unique strategies that are part of this scanner.
I can see by strategy name what the strategy is that’s creating the alert. Each one of these rows is an alert. This says, “Massive volume, medium float,” this says, “Medium volume, medium float.” Massive volume, medium float is interesting but the ones I really like are massive volume and low float. These are the ones that can move very quickly. High volume and low float, the ones in yellow are the ones that capture my attention.
And the column here, the percentage change from the close, this stock was up 69% from the close. So that’s up a lot and this is magenta to really capture my attention. You can see that PYDS is actually hitting, at that moment, three different scanners. It’s hitting massive volume, low float. It’s hitting up 8% in the last 10 minutes, and it’s hitting the daily breakout scanner. So that’s a stock that I should probably be watching. Of course, I did and that’s why I’m up $4,044 dollars on it.
Let me show you the chart. When PYDS first hit the scans this morning, we already had it on watch because it was on our gap scanner. So it was gapping up pre-market. That means it was going to be opening higher than it closed yesterday. Although it did not have a fresh catalyst such as news, it did have the benefit of no daily resistance, so lots of potential.
So the bell rings and immediately it spikes up here to a high of $3.13. See that spike there to $3.13? When it spiked up to $3.13, it hit our scanners. So let’s go back here. It hit the scanners at $2.94, $3.12, and $3.10. So I saw it on the scanners, although it was already on my watch list, I was already aware of the stock, I saw it on the scanners, and then I knew I wanted to get in and I’ll show you the exact entry. So it hits the scanner … If I’m already familiar with the stock, I’m obviously going to be really quick to jump in it.
A stock that hits the scanner like PI, well, this is actually dropping 8%, it’s not actually a high a day stock, it’s just a very volatile stock. So this one I’m not familiar with so I might be a little slower to look at it, it’s a $21 dollar stock. This one here, NCTY, it’s a medium float at 48 million shares and these ones don’t usually move quite as fast as low float stocks, so just instinctively I know that these ones don’t perform as well.
The colors really help me a lot. But anyways, PYDS, let’s change this back to a 10 second chart. 10 second, alright. So we’re going to look at a 10 second chart on this just because I want you to see that little micro pullback that I saw. Alright, so scroll back, scroll back, scroll back. Alright, so, let’s go back a little further. It’s a lot of scrolling when you’re looking at 10 second candles. Okay, so this was the first pop right here up to 90, we then popped up to 13, and right here we dropped down at 13 and as we popped back up, that’s where I jumped in. You can see here 25,000 shares of volume, I got in that, and I was actually half the volume because I got 10,000 shares. 10,000 shares at 10, 12, 13 and 13.
So in with 10,000 shares because I knew this was a strong stock and boom, up it goes all the way up to $3.60. That’s $5,000 dollars of profit. I held some of it through this consolidation, adding back, et cetera, in total walked away with $4,000 dollars profit, which was really, really solid.
So that’s basically my process. If I see a stock hit the scanner and it’s in yellow, I’m going to look at it quickly. If I’m not familiar with the stock … Obviously, PYDS was all over the scanners this morning, we can look at another one that came up on the scanner that I didn’t trade. IZEA, I pulled this one up. I saw $4.25, it was also on our watch list for a possible trade because it was gapping up continuation so I pull up the scanner, I’m watching it, I’m going to switch this back to a one minute chart, I pull up the chart, I’m watching it. And on this one by the time I saw it it was on this candle here that hit up to $4.35. I didn’t see it here. So, at this point, I said, “Well, okay, this is the high a day and I’ll wait for a little pullback,” but then it ended up dropping all the way back down to here. So, it didn’t give me an opportunity to take a trade.
Okay, so again, the colors here, the colors horizontally are based on the scanner, the actual scanner that is being fired, and I’m going to remove … Well, I am going to remove the down 8% scan from this window. The vertical columns here, colored float, the yellow is high value, green to light green to white, white is basically I don’t even care about it. Again, here yellow is high, magenta is critical to really check that, that’s a lot of volume in the last five minutes, so that’s the way those are colored.
Let’s scroll up here, IZEA on the scans. CPSH. So right away I look at it and I know it’s around a dollar and what do we know from my metrics? What stocks do I make the most money on? Now, if you guys know your metrics you’ll know this about yourself. I know that I make the most money on stocks that are between $2 dollars and $4 dollars. Under $2 is not really my specialty, it’s not really where I do as well. Okay, so under $2 and definitely under $1.50, I’m going to be a little bit careful. I look at it, I see it pops up and drops back down, there’s nothing there. I see it hitting the 200 moving average on the daily chart, that’s resistance, so there’s nothing to trade there.
So that’s there. HIVE, H-I-V-E, it’s medium float, so the float being a little bit higher not my favorite. I end up seeing it but just thinking it doesn’t look particularly interesting. It’s got the resistance also near the 200 moving average on the daily chart.
So this is pretty much my process. SECO, this is another one, it hits the scanner, it’s in yellow, I look at it. This one I was actually tempted to get into. It pops up to $8.20 on that candle and then it drops all the way down to $7.81, and I felt like that was too much of a drop. So at that point I said, “Oh, well, it dropped too much so I’m not going to trade it.”
Alright, so, Anders, hopefully that answers your question or gives you a good sense of it. I do cover this in a lot more detail as part of class eight of the Warrior Pro Trading course. Right now it’s class eight anyways, sometimes we add new classes, but we have a class that’s dedicated to using the scanners and learning how to write your own scanner codes.
Then third question, I’ll answer Anthony’s question about wiring profits out. I’ve only taken out profits from this account once this year. I took out about $70,000 dollars. I just wired out $70,000 grand and I just took that money out and put it into longterm investments. That money is now reinvested in the S&P 500, so SPY I put that in in April, after I had that big drop, or when I went red in April, so that money went in when the market was around 235, market’s up at 256 right now. So that money, that $70,000, is up about 10%. Granted that’s only $7,000 dollars in six months, but I didn’t have to do anything. I just put it away and now it’s in longterm. So that’s fine, I’ll do that occasionally, take money out, but I don’t really take out money on a regular basis right now from my trading account. I just let it rollover or I’ll take it out at the end of the year to pay for taxes and stuff like that.
Anyway, that’s what’s up with the longterm accounts. But again, this is totally … It’s whatever you want. When I was a beginner trader, and once I was just starting to turn profits, I would take money regularly. I would take it out to pay myself. To pay my bills and all that stuff. Over the years, I’ve built out my investments, both in the market, in real estate, rental properties that I have, and I no longer depend on the income from day trading exclusively. I can let that money rollover and grow.
Ultimately, I think that’s a goal for every single one of us is to build out as many sources of income as you can because that’s what creates longterm self-sufficiency. I know John, he’s working on … He’s got a couple of side businesses, JohnL10 who’s a moderator in the chat room, he’s got his real estate, he’s got a couple other businesses, and that also helps supplement if you have a bad month in real estate. This month I have to put in a new boiler in one of my houses and that’s going to cost $7,500 bucks, so that’s a little bit of a hit and whatever, got to do it. So, that’s this month. That’s fine, that’s just part of the deal. It’s one of those things you just have to do.
Same with trading though. You might have a month where you’re red on trading and then you’ve got another month where … And in that same month, maybe you had a really good month with one of your other sources of revenue. It’s knowing that the average millionaire has seven or eight separate streams of revenue, and you’re not dependent on just one, whatever it is. We’ve all got our areas of expertise. You guys, obviously, wanting to learn more about trading, I’m happy to teach you. If you’re really good at, I don’t know, really good at math you become a math coach. It’s your side hustle, it’s how you make a little extra money, and if it’s what you love to do you’re going to be good at it. So you should focus on it.
For me, trading is what I love doing, so it’s what I do, whether it’s building Warrior Trading so I can teach as many students as I can how to be successful traders, so I can build trading simulators to help you guys be more profitable. I love trading, this my thing, but for some of you guys trading might be just what you do to pay your bills and what you really love is fixing up cars. If this gives you enough money to buy cars, fix them up, and then resell them, then hey, do it for an hour a day and let that be some extra cash flow to go towards doing what you really love. It’s whatever you love.
I really believe if you are passionate about what you’re doing you’re going to be successful. For me, it really is the market and for you guys it may be something different. It may also be the market. This may be your passion also. It has been certainly for Mike and John and Roberto and Sam and that’s why they’ve become part of the team helping teach you guys how to be successful traders as well. Anyways, just food for thought there.
Let’s see, so I answered a couple questions and let me just flip back to our slides. So you guys can, of course, be part of the show. You can submit questions on warriortrading.com/show. Love for you guys to follow on YouTube, follow the podcast, every time I do a mid-day recap, every time I do a Behind the Trades episode, you guys can listen to it on your phone. We’re on the App Store in the iTunes, we’ve got our podcast there, so check us out on Facebook, YouTube, the podcast, and definitely add questions or comments and we will answer them as soon as we see them.
Alright everybody? Again, this was a little bit of a long hiatus between this episode and our last episode of Behind the Trades, but I hope you guys enjoyed it. And, we’re going to have another episode coming next week where I talk about the November Challenge. The November Challenge to make $100,000 dollars. That’s coming in the next episode of Behind the Trades.
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 any time I go live or upload new videos. Until then, happy surfing.