Warrior Trading Blog

Starting Off September Grateful! :) +$334!

grateful

What’s up, everyone? All right, so here we are, first trading day of September, finishing the day in the green. I am happy with that. Now, I’m only up $334, and if anything, this kind of is indicative of how being even slightly green feels so much better than being just slightly red.

 

I feel 100 times better than if I was down $150 today. And that right there hints at that kind of trigger that you can get when you go red on the day, and then you try to get yourself back to green. You always know it feels better to close the day green. Now, at the end of the month, it doesn’t really matter if you have a couple of red days, even if they are down a thousand bucks or more, because that’s just part of being a trader.

So it doesn’t really matter if I had started the month red. I could still finish with a really great month. But starting in the green is better, so I’m happy with that. Today’s the day where I trade three stocks and I’m green on actually one of them. Made about $695 on NCTY, I lost one dollar on another stock, and $360 on the third. So not a lot of really good momentum today, definitely still a little bit of a choppy market, things do pick up on the other side of Labor Day. But there are probably some traders who took a long weekend, maybe they’re not back yet, so we’ll probably see things start to pick up a little more slowly, not just like right away the first day back. And I’m okay with that. Today, I followed the rules. So we’re going to break it all down in the Midday Market Recap, and as usual, any questions, any comments, leave them below and we’ll come back through and answer them later today. All right, enjoy.

All right, everyone. So we’re going to go over our Midday Market Recap here for today. And this was a green start to the month, which is great. I’m up $334 in only 15 minutes of trading. So that’s all good. But $334 is certainly below my $2 thousand daily goal. So I’m a little bit below the goal, but at this point, I just say, “Happy to be green and following the rules of the month.” Which is really important. So one of the things that we talked about during our pre-market kind of break down this morning was me wanting to make sure you guys have prepared your rules for the month of September as well. Now, for those of you guys that have just joined us over the weekend and you’re brand new to trading, the biggest rule is to trade in the simulator for the entire month.

Don’t trade with real money. Don’t trade with real money until you’ve proven you can be profitable in the sim. Now, the sim obviously is going to be a little forgiving in terms of fills and slippage and stuff like that. But if you can’t be profitable in the sim, you really don’t have any business trading with real money. So first step, trade in the sim. Now, if you’ve been trading for a couple of months, or weeks, or whatever the case may be, and you did trade in August, then you can create a set of rules for the month of September based on what you did right in August and what you did wrong.

Now, no doubt there were some trades that you look back on and think, “Well, I could have done this differently or better,” or whatever the case may be. So for me, the rules that I’ve put together for the month of September are going to be a continuation of the rules of August. Number one, shut off the monitor after the midday recap. So when I finish my midday recap, I’m going to shut off the monitor. That way, it’s better for me if a stock does take off in the middle of the day that I just don’t even see it at all. Because if I see it, then I’m going to start to fixate on it, and feel like I’m missing an opportunity, and then FOMO kicks in, and the ability to maintain composure for me is not as strong in the afternoon as it is in the morning.

One of our students last week said he was a professional soccer player, and 90 minutes is long enough for him to compete against the market. Which I thought was a really like spot on way of looking at it, because when you’re trading against the market, you’ve got to be at peak performance. You’ve got to be super-focused, you’ve got to be just in the zone. And it’s not reasonable to expect that you can be in the zone from 9:30 in the morning until 4:00 PM in the afternoon. That is not realistic. So for me, I’m in the zone … Well, today it was actually only 15 minutes. But for most days, it’s from 9:30 until 10:30 or 11:00. So right around that 90 minute mark, which is short enough that I’m really able to stay focused, but long enough that I’m able to really capitalize on the opportunities that present themselves at that time of day.

So rule number one, shut off the monitor after the recap. So when I finish this recap, I’m going to shut off this monitor, I’m not going to look at it again until tomorrow. Number two, $2 thousand daily max loss. So with a $2 thousand daily max loss I’m basically saying, “I’m cutting my losses at a certain amount.” If I have a day where I’m going down, I’m going to stop it at 2 thousand rather than continue to go down, and down, and down, and down, and down. Maximize … Have a max loss on your account. That’s really important. Now for me, I called Lightspeed and had them set it up on my account, so I don’t have to think about it. If I’m down more than two grand, I cannot take another trade.

Rule number three, if I have three red trades in a row, three back to back losers, I’m done for the day. So that I have to do myself. That’s not automated with my account. But that one’s a really important one, because if I have those three red trades in a row, I start to get frustrated, annoyed, and then I’m just so likely, if I keep trading, to just start to spiral. And so these are really all based on techniques for me to prevent going into that emotional place of trading. For anyone who’s traded before, which is almost all of you except for some that are watching maybe on YouTube, Facebook, or some that just joined us in the last week or so on the Labor Day specials and things like that, which are still … We’ve extended them through today, so you’re welcome to go check out the website. You’ll see the coupon code LaborDay, one word, will save you 30%.

But these are really about that emotional control. Because what I’ve certainly come to learn, and many of you who’ve traded for awhile as well will learn, you have these two parts of your mind. You’ve got the emotional side, and then you’ve got the intellectual side. And when the emotional side takes over, that’s when you start revenge trading, FOMO trading, chasing stocks. You just start getting more and more amped up and you can be in such tunnel vision that in a period of an hour or two hours, you can just throw away tons of money chasing stocks and just making tons of mistakes.

And then you step back and a day later you’re looking at your trades and you’re saying, “What was I thinking?” And the problem was you were not thinking. Your intellectual mind was hijacked 100% by that more primitive emotional mind, that fight or flight … Fight, flight, or freeze. Very just instinctual kind of mind. And the freeze one is one that we don’t talk about very often, or maybe you don’t think of it, but it happens a lot in trading. And that freeze instinct, if you’re ever driving down the road and you see chipmunk just suddenly freeze in the middle of the road. That is a survival mechanism. And we do it sometimes when we’re trading. We’re suddenly in a bad trade and we freeze and we just watch it go lower, and lower, and lower. And that’s that emotional mind. And so for me, what I do is I kind of look at the triggers that can allow my emotional mind to hijack my intellectual mind. And these are all based on that.

Rule number four, tight stops, 30 cent max loss. If I have a 50, 60, 70 cent loss, that’s going to start to trigger the emotions. Number five, if I give back more than half my profits after hitting my $2 thousand daily goal, I’ve got to walk away. So if I make $2,300, and then I lose 15 hundred, that’s disappointing, but I’m still green, I need to walk away. Now if I say, “Well, now I’m up only 800 bucks, I’m going to try to get myself back to up 23 hundred,” that’s where I get myself into trouble. So one of the things I think more than anything else is for you guys to develop a sense of awareness of your emotional state while you’re trading, because it can really impact your performance. I mean, really, really, seriously impact it in a negative way.

So these are me kind of learning my triggers and I kind of wave the red flag and say, “No, no, no. Get out of the market before you just go all into the emotional stuff.” Now, when you’re in the heat of the emotional trading, it can be very, very hard to pull yourself back to the intellectual mind. But one of the things that you can do, which will help you, is if you just put it on your monitor, either with a sticky note or whatever, close your eyes for a minute and just breathe, just separate yourself, breathe, bring it down, and then your intellectual mind is going to start to take back over and it’s going to pull you away.

But it’s really hard to do once you’ve kind of crossed that tipping point, that point of no return. So I have these rules for me to help me from getting to the point of no return. So today is a day where on my very first trade, I lost $359. So this was a day where the watch list was a little on the light side, and this is kind of the funny thing. Today we’re talking, so far, mostly about the emotional stuff. And one of the things that we say is that trading is kind of 50% skill, 50% emotions. You can have traders who have all of the skill. They know all of the things that you need to know about trading.

They know how to press the buttons, how to scan for stocks, all that stuff. And yet they continually lose money. And it’s not because they don’t know what they’re doing, it’s because they emotions get in the way. They keep having these days where they give back all their profits. They give back three weeks of profits in one afternoon, and it keeps happening again, and again, and again, and again, and they’re not able to break that habit, and thus they’re not a profitable trader. So I do like to think that we try to emphasize the emotional stuff quite a bit because it is such an I’m component.

So the gap scanner this morning, MNKD leading gapper. Not a stock I like, the float’s too high. TA, five cent tick. CDZI, too expensive. REPH, interesting. The float’s 16 million shares, that’s fine. When I pulled it up I saw that it was already selling off pre-market. So I didn’t like it. So pre-market chart was bad. DMPI, too cheap. NCTY, 8 thousand shares of volume pre-market. All right, so I pull it up and I see, “Announces a share purchase plan by the chairman and CEO.” And I’m like, “Okay, that’s interesting.” So I open this up, where is it? Over here. And I just take a look because a lot of times these are going to be like purchasing small amounts. And I look at it. To purchase $3 million worth of the stock.

$3 million of stock priced at … Well, as of yesterday, a dollar? How many shares is that? You do the math. That’s a lot of shares to be buying, and he’s going to buy them on the open market. So when I saw that, I was like, “Wow, that’s a significant headline.” Now, the float on it is 24 million shares, so if he buys 3 million shares, the float’s going to drop down to 22 million shares. It’s still a pretty big float. It’s not like he’s buying half the float back. But it’s substantial. And that’s a huge vote of confidence. That’s shareholders saying, “My money is better off in this stock than in the overall market.”

And so that’s a real vote of confidence. So we always like to see that. So this was great headline. Now, on this one, you can see I made 700 bucks on it. I was a little iffy on it. The bell rang and the volume was kind of like nonexistent. First three minutes it traded on basically no volume at all, and then all of the sudden here it pops up to $1.40. I got in as it broke the pre-market high of $1.30, but I took only 3 thousand shares on it because I really wasn’t totally sure. So my entry was here at 3 thousand shares. And when I took that entry, I was already down $360 on the day. So I was already saying, “Look, don’t triple down on the next stock, go easy on the next stock, let’s just see if I can get maybe a little bit more profit.”

I’d already had two losses in a row right here. So I really was like, “I don’t know.” And then it ended up opening up from 330 to 340, 350. Okay, consolidates there. And then from 355, squeezes up to $2.00. 75, 80% move. So that was our big mover today. And remember, every single day, there’s a stock that moves 20 to 30%. The trick is finding it early in the day. And we certainly did find NCTY early in the day. But then it’s about getting your entry and holding as long as you can. And for me, that’s where today, my entry was decent. I sold it at 150. I didn’t get back at 55 because it did a false breakout on this candle right here. It went up to 56 and then dropped back down to 47.

And it looked thick. It looked like there were a lot of sellers. And so I though, “I don’t know.” And then boom, it takes off right here, and I almost jumped in at 70, right here. It did a little one minute micro pullback at 170. I’ll pull this out here so you can see. And I hesitated on it. And I saw Jill, she jumped in there at 170. It was a good entry. I was being cautious today. And you know what? I’m okay with that. It’s the first day of a new month, and I didn’t do super well last month. So right now, it is about being a little bit more disciplined, being a little bit more cautious about my entry. And in this case, yes, I could have gotten in here at 170 on this micro pullback, and boom, it goes up to two bucks. I did the safe thing and I hesitated.

I could have gotten in at 79, and then I felt like at that point, if I’m not going to get in at 70 and I get in at 79, then I’m really chasing it, so now I just got to wait. And my last entry was a scalp. This one was a one minute pullback right here at $2.00. And it popped up to a high of 205 and then dropped back down. So I’ll show you the order. So very first trade on it, on this one I’m in at 130. And then, I go from 3 thousand shares to 9 thousand shares at 150, because I was like, “Look, if it breaks over the half dollar, it’s going to take off.” That’s what I thought. And that’s typically what happens. But it didn’t, so I end up selling basically back out at 49, and the rest at 48 and some at 40 and some at 52.

So it ended up not being the biggest winner. I was kind of disappointed with it. So on that first trade, I made like 400 bucks. Or something like that, I think I made $550. And it went … It put me green on the day. Okay, so the first trade of the day was CHEK. This one was also on the scanner right here. On this one, it’s kind of disappointing. Headline out pre-market, it has a flag right here. I jump in at 45 for the break over the half dollar. I basically just punch the order right away from the break at the half dollar. It taps a $1.50 and it does not break that level. So I’m in on this one, where did I get in? I got filled a little early on that one in there, and then I stopped out at 39.

So with 9 thousand shares, fortunately kind of dodged a bullet by stopping out quick. As soon as I realized there was a hidden seller at 150, I was like, “This doesn’t look good. I’m ready to bail.” And as soon as it started to drop, I punched it. It dropped all the way back down to $4.00, popped all the way back up and all the way back down. Just a wild stock. So that was my first trade of the day. That was red. Then I had NCTY. And then I had a quick trade on ATAI where I jumped in it at the half dollar of 51, partial fill at 54, sold at 54 and 48, $1.06. So whatever. Not much there. Got back in to NCTY here for the break of two. Thought we’d see a big break. Ended up selling these shares breakeven and the rest at like two, and some at 186. Just wasn’t the biggest break and then that was where I was like, “You know what? I think I’m just going to take the profit, be green today, and be happy with that.”

So finishing the day up $334. This is not the biggest day of the year for me obviously. It’s below my $2 thousand daily goal. But it’s green. That’s a good way to start a new month, so I’ll be happy with that and I’ll just kind of keep easing into the market a little bit, see how it is tomorrow, if we see good follow through, if we see good momentum, I’ll increase my share size. But if it continues to be choppy, then I’m going to be really cautious. So today’s the 163rd day of the year, plus $334.69. On Friday, I made $685, so we’re still kind of in a little bit of a slow market. We expect on the other side of Labor Day that things will pick up. But it’s not necessarily on day one.

Sometimes it takes a few days. So it’s just kind of about sitting tight, waiting for those good opportunities, and making sure you stick to the rules. That’s really the most important thing. Follow the rules. These are what guide you and these are what kind of keep you in line and keep you from having those big red days. Obviously, if I have a day tomorrow where I lose $5 thousand, this is great, but then if I throw the rules out the window tomorrow, then I’ve got a hole to dig out of.

So I got to keep it going, slow and steady, one trade at a time. All right, so that’s it for me here today, 15 minutes of trading, $334, not going to overstay my welcome. Green is good. And that’s it. So I’ll be back at it first thing tomorrow morning, I’ll see you guys all back here in the chatroom, 9:00, 9:15, pre-market analysis will start and for those of you on YouTube or Facebook who have been thinking about joining and you haven’t joined already, coupon code LaborDay will save you 30%. So hope to see you guys in the the chatroom tomorrow. All right, that’s it for me, I’ll see you guys in the morning.

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