Warrior Trading Blog

Small Green Victory +$196! | Ross’ Trade Recap


What’s up, everyone?

All right, well today is the first green day of the week, up $196.

This is slack time, hopefully the bottom of the draw down, getting ready to move back up. That’s what I’m hoping for.

Let’s see what’s in store tomorrow, Friday, as we finish off what has been, for me, a pretty difficult week. Momentum today continued to be tricky, we’ll talk about it during the recap. I’m just going to be careful Friday as we finish up this week, and hope that things really start to pick up next week.

All right, enjoy the recap. As always, questions, comments, leave them below and I’ll see you guys first thing tomorrow morning.

All right everyone. Mid-day market recap here. Not a lot to cover, two trades, one winner, one loser. Net profit, $196. Not a lot to be super excited about. Today’s going to be the fourth day of, I would say, choppiness in the market. It’s important to know when to step back and slow down.

IHT was disappointing, that I went red on that trade, but it’s just part of the deal. This was a scanner alert, squeezing up here, as you can see, surging up. Lots of volume relative to what’s normal on it. I saw a trigger at $2 that gave it room up to a little over $2.50. I saw that there were catalysts on it this morning, so, basically … I guess this was yesterday after hours. So, I jumped in for the break over $2. It hit a high of $1.98, couldn’t break that level, and then it flushed right back down to $1.70, dipped down to $1.49, retracing the entire move before stabilizing. So, lost almost two grand on that.

PHUN came out with news, right here at 9:39AM, squeezes up, gets halted. Coming out of the halt, squeezes up, gets halted a second time. Hits a high of $5.50, and then reverses and halts going down once, twice, and then goes sideways. Really disappointing price action.

Let’s look at a couple others from today. EDSA, this one. Gapping up, looking really good at the open. No trades on it, the risk was too high. This little red to green move, right here, it dipped down, bounced off $11, squeezed up to $12.33, and then dropped all the way back down to $10.50. Two candles later, hits a low of $10.12 before ripping back up to $13.56, and then halting coming down right here. Just wild price action, not easy to trade because it’s so whippy.

KERN, K-E-R-N, we were only sort of watching it. Squeezed up, looked like it was going to halt going up, reversed, dropped back down. Bounced back up, halted going back down, halted going back up. Just very difficult price action.

This continues to be a bit of a slow patch for long biased momentum traders like myself. Short sellers who have good availability of shares to borrow seem to be the ones that are doing better right now, but availability of shares is the ultimate challenge.

When I had my account at Centerpoint, which is the broker that for a long time was the place you would go if you wanted to find shares to borrow of low float, small cap stocks, even there I had a hard time finding shares available to borrow. I’d have to reserve them early in the morning, and often times I wasn’t up early enough to do it. I really found it to be a challenge. It’s something you just don’t have to deal with when you’re trading the long side.

You can trade whatever you want. You want to buy this stock, PECK right now, that’s squeezing up a little bit, you can buy it. You want to short it? Well, you know, only a handful of brokers are going to have shares. A lot of short sellers end up having accounts with multiple brokers because they’ve got to check one, check the other, see what the rates are. It just makes it a bit more difficult.

TTNP also hit the scan, tapped $.95, and I was like, hm, nope, I’m not jumping into that for the break at $2. I learned my lesson, it came back down to $1.70. Again, no shares available to borrow at Lightspeed on that one. It’s just not an option to trade to the short side.

The combination of difficulty finding shares to borrow, the cost to reserve shares, which can be hundreds of dollars, and short sale restriction are, I would say, three tools that the market has used to discourage short selling, and to really encourage traders just simply to trade to the long side.

For me, it has been a big enough hurdle that I’ve just found that even when I’ve had a broker set up specifically for short selling, shares to borrow, cost of reserving, and short sale restriction continue to make it difficult to trade that direction. I give props to the people who are able to do it, it’s great for them, certainly. To each their own.

I think, to a certain extent, it’s being a lefty or a righty. One feels natural and the other feels a little backwards and not quite right. I think more traders align to the long side, but for those that do align to the short side and have found a way to make it work, definitely doing well. Or, you know, that’s great that they’re able to do that.

Of course, you look at the overall market. Being a short seller in a market that, over the last … I don’t know, this isn’t really loading very well, but over the last 10 years has just been generally bullish, you know, you’ve definitely got your work set out for you.

Right now, overall market, gapping up. S&P at all time highs this morning for a moment, there. Small caps continue to be a little choppy, seeing a bit of a lack of confidence. I think a lot of traders are sitting on the sidelines. Disappointing after such an incredible start to the month. I made $50 thousand in the first two weeks of the month, and then this week I’ve given back … I gave back profit on Monday, Tuesday, Wednesday. Today, tightened up my share size a bit, took two trades, didn’t over stay my welcome. Still, wasn’t able to really do that well. I didn’t hit my profit target.

PUHN, I sort of was thinking maybe it would squeeze up to $6 so I held a little longer and gave back profit that I couldn’t locked up if I’d just taken the profit up at $5.50.

So, that’s the way it goes sometimes. But, the good news I’ve still got my head above water, I’m still green on the month and hopefully you guys are as well. Yes, if you take some losses, that’s part of the deal, that’s part of trading, but you keep those losses as small as possible and it gives you a chance to bounce back when things do pick back up. Hopefully, we can finish up strong tomorrow and end up having a nick week next week. That would be terrific, if can finish June strong and then go into July feeling good.

As of right now, I’m up only about $30 or so thousand on the month, $32 thousand. A little disappointing after being up $50 grand, but I’ll bounce back. Just like every other time I’ve had a bit of a rough patch, and on the other side of it I’ll have gained some experience, a bit more. That’s the same thing all of you guys get the benefit of. Every day you’re in the market, you’re getting a little more experience. It just is one of those things that is the more you have, the better your intuition gets for when you’re able to jump in, jump out. The better you’ll be as a trader.

That’s it for me. Short recap today, but we’ll be back at it first thing tomorrow morning.

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