Warrior Trading Blog

Small Red Day -$594 | Ross’ Trade Recap


What’s up everyone? All right, well, I didn’t achieve my goal of having a, well, I guess a five day green streak. Today is a red day, but only one trade, one loss, down $594 and at the end of the day, this is a good red day in the fact that it’s probably going to be, well, one of the smallest red days here of the month. Let’s see. Yeah, this is the smallest red day of the month and that’s an achievement. You know what I mean? Not that you’re going for red days, but if you’re going to have to have a red day, keep it as small as possible because then tomorrow, if I’m able to have a green day, if I make 500 or I make a thousand, I’m right out of the hole. I’m back in the green.

Yet the frustrating thing is, especially at the end of the month or the beginning of a new month, having a big loss because it just takes a lot more time to recover from it. So anyways, a little bit of a small day here, red day. That’s all right. Be back at it first thing tomorrow morning, 9:15, pre-market analysis. As always, questions, comments, leave them below. I’ll see you guys in the morning.

All right everyone. Well we’re going to do our midday market recap here for this morning. Not much to go over, just one trade and a red trade. We just didn’t get a lot from the market today. It’s disappointing not to see more follow through, but this is what we’ve kind of come to expect here from the last couple of weeks. Just slow trading. My only trade was on AYTU on this five minute set up, which ended up being a false breakout. You can see here I bought the first five minute candle to make a new high. It failed and I cut my loss quickly selling right about here. Yeah, I sold at 82. So I was out right there. So in terms of managing loss, I managed it pretty well. I was in at 88 and 90 so I was in right about here. Stopped out here. Saw a pretty tight stop considering how much it dropped, but it just is kind of the nature of the way we’re trading right now or the type of follow through we’re seeing.

Think of it is going out and surfing and the water’s totally calm today. There’s not a wave in sight. So you can sit around paddle on your board, but you’re not going to catch a wave when there’s nothing there to catch. So that’s kind of the way it is today. Now I could get myself frustrated and kind of keep going for opportunity after opportunity. Other opportunities that we saw VLRX. I said, “Guys, I think this is going to be a false breakout,” and false breakout is exactly what we saw. So I didn’t get myself caught in it. I didn’t even touch it. I left it alone.

Now this one had a couple more red flags on it for me. It was already stair stepping down pre-market and it was below the volume weighted average price, the VWAP. So I really didn’t think this had a home run potential and home run being the potential for a big win like $5,000, $10,000. So on this one I just didn’t even go for it. AYTU, I didn’t think it had big win potential, but I thought it had potential to go at least from 1.88 up to 2 and then a break at the pre-market highs, maybe move up to 2.10. That’s kind of what I was thinking, back of mind, maybe we would get to move up to 2.10 and I was wrong and it was a quick trade. Less than a minute in the trade. So in at 46.09, out at 47.22. Someone had asked yesterday about how orders fill, they usually fill in small blocks like this. So kind of slowly executing until your whole order is filled.

But yeah, you know what though, what’s good is that even though this is a red day, it’s only about 25% of my daily max loss. My max loss is $2,000 so I didn’t hit my max loss. I didn’t keep trading. I didn’t keep going for things that were hitting the scanners that I just suspected would be false breakouts. I’m just right away recognizing the market that we’re in and I’m not interested in trading in it. I’m not going to be aggressive. I’m not going to trade the large caps and switch over. I looked at BYND, but I’m not going to trade it. This is way too expensive for me. The risk is way too high. That would be crazy to go outside my typical price range and try to trade something like this.

So just being a little conservative. Yeah, I could’ve gotten a little smaller. With this price range, the thing is the volatility is usually lower. I didn’t really want to risk much more than 500 and I didn’t lose much more than five. I lost an extra hundred bucks. So lost about 600 versus what I was hoping to only risk but to be able to risk 500 with 9,000 shares for me, it was kind of worth it because I was thinking $500 of risk. My profit target was to sell around 2.05, maybe 2.08 and that would’ve been about 13, $1,400. So it’s about three to one a profit loss ratio, could have certainly been two to one. So I’m okay with that. Being aggressive for me starts to get up to 12, 15,000 shares.

I was considering adding and getting myself up to about 10,000 shares over 2. It needed to break 1.95. That was the first spot that needed to break. That didn’t happen and so I didn’t end up adding. But yeah, maybe it was … I mean hindsight’s 20-20. Because the thing is if this had broken over 2 and squeeze up to 2.10, 2.15, I would have gotten a nice $1,000 of profit and at least, and that would have been pretty much the daily goal in one trade. I was just thinking I probably only have one good opportunity today and this was probably the best opportunity and I didn’t get anything on it.

So LXU, higher float stock, volatile here, sort of squeezed up, dropped back down. I saw a couple of traders try to scalp it on this break of 5.25 but I didn’t go for it. The 200 moving average was right here. The float’s 55 million shares, oh actually it’s 25 million shares. I just didn’t think it would do much. Anyways, maybe could have taken a stab at it. But left that one alone and it was a very short lived move. So, yeah, unfortunately just not seeing a lot of follow through. VLRX as it comes back up at this point, it’s got 4.5 million shares of volume. Sure, if it breaks over $3, that that would be significant. I would agree. But I’m not going to hold my breath that it’s going to make a big move.

I just think a lot of traders at this point have probably bailed out. They’re frustrated, bored. We’re not getting the action that we want. So best bet is close up shop and come back tomorrow. It’s just not worth continuing to take risks on good money in poor market conditions. When the market is hot, I’m willing to take a lot more risk and I’ll get a lot … I’ll make a lot of money and I have great weeks and great months and all of that will tide me over during the next slow period. This is the slowest period that I’ve had. Well, I mean, I’d have to look back at my calendar to really say definitively when the last period was it was this slow. It’s been a while for sure.

I mean obviously in March I was red. I’m green here in July. So by that measure, this is a much better month than March. I mean March was worse, but the thing me is that March, we were actually seeing a lot of good opportunities. I just got really, really aggressive on a couple of the wrong trades and took some big losses, which is different from what we’re seeing right now. Right now we’re not seeing a lot of opportunity. So I’m just kind of grinding like this. So I’ll be green on the month as long as I can finish up tomorrow in okay shape. But yeah, it’s just a little … It wears on you a little bit and you gotta be careful of that because that can get you into FOMO, where you start to see moves and you start to chase them because you’re just, man, you want a piece of the action, you want to get a win and then you end up getting yourself into trouble.

So be patient, sit tight. We will see opportunity. It’s the way it always is. It’s the ups and downs. When things are down, it feels like they’re never going to go up again. When they’re up, it feels like your … Things will never go down. I mean, it’s just it’s the way it goes with trading and you go to try not to stare into the bottom of the downtrend and stare into the top of the uptrend and just see the horizon through all of it. Remember that a day like today, this is neither my best day of the year, nor my worst day of the year. This is just the in-between stuff. It doesn’t matter. This is just one day. So when you get to that point in trading, you’ve transcended. You’ve gotten to a point where you’ve got confidence in your skill. You know what you’re doing and you just recognize that this doesn’t happen to be a market that’s especially strong for small cap trading and I have to be more cautious.

Now on the large cap side, there had been some more opportunities this month. Mike has kind of been … It’s sort of been like either huge opportunities or nothing. Last week he had a $10,000 day on Tesla. The next day he made another, I think it was six grand on Twitter. So he made $16,000 in two days. Today though, he’s down 300 bucks. So today’s a day where kind of like for me, there’s just nothing happening for his strategy. So you go to just learn to lose gracefully. Learn to step back and say, “Today’s not my day.” There is no sense in taking any more trades. There’s no reason to just throw money away. I’m not going to light money on fire. But if I keep trading, that’s essentially what I’d be doing to on a day like today.

So learning to take those cues from the market as early as possible. In the past, especially when I was a beginner trader, today’s a day where I would be fixated on closing the day green and I would keep trading. I would see a stock like VLRX and I would take this trade and I’d lose another thousand bucks on that and then I would see CLRB pop up on the scanner. I would jump into that and I lose another thousand bucks on that. At the end of the day, I’d be down three or $4,000 and I would just be like, “What is wrong with me? Why didn’t I walk away when I was downloading 500, when it was 10:00 AM and I hadn’t made any progress on the day? Why didn’t I stop them?”

That’s when I started creating the rules for myself of this is where you’ve got your thresholds. If it’s 10:00 AM and you’re not green, you better walk away. If you’ve had three red trades in a row, you better walk away. If you’re down more than $2,000, you better walk away. You guys set those rules for yourself. Of course you can use the rules that I’ve created and adjust them for your own dollar amounts, then that’s totally fine. But you got to do it because there are just days where it’s not worth it. You’re much better off getting outside, get some sunshine, getting some exercise, clearing your head, come back this afternoon. Study if you want to study. Watch the live trading archives. Practice is fine, but not a good day to take a lot of risks.

So anyways, that’s about it for me. I’m going to work on the classes for students the rest of the day. So I’ll be in my office, but I’m going to close down the charts, closed down my broker platform and just focus on the work that I do for you guys. So that’s it for me. I’ll see guys as usual first thing tomorrow morning, 9, 9:15 pre-market analysis. Let’s hope we finish up the month of July with a green day. That’d be a nice way to finish, but it’s going to be 500, $1,000 day type of market, most likely. So I’m not expecting anything super exciting. All right, so that’s it for me. I’ll see you guys first thing tomorrow morning. If you’re still watching, you must’ve really enjoyed that video. So why not subscribe and get email alerts anytime I upload new content? Remember when you subscribe, you become a member of the Warrior Trading family.