Warrior Trading Blog

Quiet Summer Trading Continues

Quiet Summer Trading Continues

All right guys, time for our midday market recap. Go over the trades for today. We are in slow summer trading weeks here. We’ve seen a few opportunities, but not the way … not what I look for, not what I typically would expect. So we’ll go over the trades from this morning. I only took one trade today, although I tried to get filled on MNK at $37.94; 4,000 shares, MNK, $37.94. Let me pull up the chart on this one.

This one was a little disappointing. I tried to get filled right down here at $37.94, it popped up to a high of $38.50. So that might have been a couple thousand bucks, but obviously didn’t get filled, so canceled my orders. That was a little annoying.

So, that was on MNK. The other stock I traded today, or the one that I actually got filled on was CLRB. And this one was a little disappointing because we had a decent pre-market chart, gap-and-go setup. Now, I said I was a little concerned about two things on this. I was concerned because we were coming up to the 200 moving average, which is at $2.30, and I thought that that could represent possible resistance right up there, that purple line, and pre-market we were a little on the weak side, and I was a little worried about that.

So, when the bell rings I said, “You know what? I’m just gonna try to scalp this. My target entry is $2.” Entry is $2, target is to sell at $2.10, maybe $2.15. So as soon as the bell rang, tons of volume came in and it squeezed up to $2, and I was like, “This looks good, I’m just gonna jump right in.” I jumped in with 10,000 shares and added another 5,000. You can see here, I’m red on the trade. Got in, let’s see, pull this up.

So, filled at 99. It pops up and I try to sell, and look at sell order rejected, rejected, rejected. I’m using my hotkey to sell. Finally, I get filled 7,500 shares at 93. I try to sell again; rejected, rejected. I sell another half at 91. I try to sell again; rejected, rejected, rejected, rejected. Those are all of my orders getting rejected. Finally, I was able to … again, rejected, rejected, rejected, rejected, rejected.

All of my orders to sell were getting rejected. That’s how many orders I was placing to try to sell this dang stock, and my orders kept getting rejected. Finally, I was able to sell the rest at $1.89. You know, this is one of those things where you just … I mean, it’s just part of the deal. You know? It’s like your car breaking down. I mean, sometimes these things happen.

I called the broker. This has never happened to me before, and I’ve taken 15,000 share positions multiple times. It said the error message that I was exceeding gross participation or something like that, and they said that I had a limit on my account of 10,000 shares. And I was like, “Well, maybe that’s true, but I’ve taken more than 10,000 shares a ton of times.”

So, this is the first time that’s happened. It cost me an extra, you know, whatever, $500, $600. What can you do? It’s annoying, but that’s just what it is. It’s not the best time to have an issue with my platform, but just simply because I’m already red on the month from red trades on Wednesday and Thursday. I was green on Monday and now red again today on Tuesday. So I’m just kind of in a little bit of a slump, not seeing a lot of follow through in the market.

As soon as I jumped in CLRB I could tell there was a hidden seller on the ask. I jump in and I see all this buying, at like 250,000 shares of buying, and I’m like, “This looks great.” All this buying going through at $2 and there was a seller for like 200 shares, and it wasn’t moving. So people buying, buying, buying, buying, buying, and this guy’s not moving. He must have sold a quarter million shares at $2, and then finally all those people who bought said, “All right, forget it. I’m throwing in the towel.” They give up and boom, it drops down.

And I tried to get out quick to minimize the loss on that false break, but then because the orders getting rejected, ended up being a bigger loss. So it ended up coming back up and snapping over $2 and then dropping really quickly, probably trapping some more people who got back in. And you can see, this thing’s just been fading all day. So talk about a weak move. Just really disappointing.

And how was CLNT yesterday? Right? Our gap and go stock yesterday, how did that one trade? It was red all day long. I mean, it just, it popped up and then faded. So, this is the market that we’re in. The one stock today that was really active was MYOK, and clearly the best potential entry was right down here at 32 on this flag. I was sort of half watching it, but the problem is, this one has been … I mean, the spread right now is 15 cents and this is actually fairly tight. This is a fairly tight spread. It’s been 30 cent, 40 cent spreads.

It just trades really wild and I’m not really comfortable trading stocks with those types of spreads. You can see earlier this morning, right here, this drop from $32.40 all the way down to $31.10 and then back up. So I’m sure there’s some people that got smoked on both sides of this, the long side and the short side. The way to trade these is to try to buy on the bid as it’s dropping, and sell into the moves on the upside. I’m not really good at that strategy, I like to buy on the ask, I like to buy into strength not into weakness. That’s just the way I am, so it’s a little counterintuitive for me to buy this down here at 32.

And then I look away, I look back, and you can see on this one candle it popped from $32 up to $32.75 and then boom, it just continued from there. So at this point, I wouldn’t trade this 5-minute setup. This one might have been okay to scalp, but again, when you scalp, when you’re a scalp trader, you’re taking small gains. You’re trying to take like 15, 20 cents of profit. As soon as you buy this you’re down 25 cents because of the spread. So that means you can’t really scalp. I mean, a scalp on this stock is like a 40 or 50 cent winner, and that’s still a pretty good size winner.

So to me, what would be the safe share size? 1,000 shares probably, at most, to start. And then I start to think about the risk/reward and then I’m like, “Well I’m risking $300 to make $300 or $400. Could I make a couple thousand on this? Maybe, but I would have to hold it for a long time.” It’s just not gonna be that easy to move in and out of. So on this one I just didn’t feel comfortable, so no trades for me and no trades on it yesterday. Being 5 cent tick makes it pretty much not interesting to me; although, it’s obviously shown some opportunity.

So that was that. MNK, the other stock I was watching for that bottom bounce. Put out my order and I didn’t get filled just because I was a little bit too slow, I guess. My entry was for the first candle to make a new high right here, so you guys can see this is a really simple setup. First candle to make a new high after that consecutive down stretch, and we got a little relief bounce, 50 cents.

So, not the biggest winner ever, but 50 cents with 2-3,000 shares is not bad. I was trying to take 4,000. Even though I was below my max loss — my max loss is $1,000 — I kind of felt like, “Well, you know, this was sort of a fluke or a strange issue that happened this morning. This looks like a good setup, I’ll take the trade.” But after this opportunity I sort of just felt like, “You know what? I’m not feeling it. Not having a great day so I’ll just come back tomorrow, refreshed, and hopefully catch a couple good winners out of the gates.”

But the reality is, on a good day, if I see a really good quality setup, A-quality setup, I can make $4-$5,000. So I don’t want that one day to be getting me out of the hole from all of these days where I’m just kind of taking these low quality setups and then getting smoked. I’d rather not trade and then just take the A-quality setups. So I didn’t trade on Friday, there was another day last week or the week before that I didn’t trade, and that’s kind of how I’m feeling right now.

It’s just not worth it. Now, I’m also looking at some swing trades to take for myself because the month of June and July have just been really slow for day trades, so I’m starting to think I’ll take a couple swing trades and if those help me make an extra $1,000 here or there, that’s gonna be pretty good considering the month is … these few months have been so slow. And day trading has been a little bit more frustrating just because we’ve seen so much choppiness, where stocks pop up and get slammed back down, and drop down and then squeeze back up. And trading an inconsistent market is definitely much more difficult than trading a market that’s consistently strong.

So, stepping back a little bit away from the 5-minute charts and focusing on daily charts is not a bad idea for any of you guys. It kind of slows things down a little bit, allows you to kind of generate maybe a little bit of passive income, little more hands-off. And then yeah, when we start seeing really good opportunities, well, that’s the time to get aggressive. So far this week the only one that was on my watch list for a swing was Facebook.

I was considering it, but I was like, “Well, it’s awfully expensive.” And that’s 100% true. 1,000 shares of this is $170,000. I’ve only got $60,000 in my account so I’m not gonna swing trade on margin. So I’d really prefer to find a smaller, lower price stock. A small cap if possible, but … And I, you know, the calls, the trading options on this one would have been a possibility, as well. But I kind of like to keep it simple, not have to worry about time decay, just take simple, outright stock trades. You know, buying at $10, stopping at $9.80, target’s $10.40 or whatever it is, just kind of keep it simple and not make things too complicated.

Anyways, that’s food for thought. But right now, just sitting tight here as we come into the lunch hour and hoping that we see that really good opportunity either later this week, or into next week. I mean, I just would really love to see some good opportunities. I’ve talked to a lot of traders in the last two months, both who have a long bias and who have a short bias, and I haven’t seen that traders who are short are doing incredibly well.

I’ve seen a lot of traders who are short who got chopped up in July and lost money, and same with June. So I don’t think it’s necessarily that, “Oh, well they traded a long side, it’s not working. I should just switch short.” It seems that it’s choppy on both sides and so that’s why I’m kind of thinking, “Focus on day trading the best quality setups and then step back a little bit and take a few swing trades on setups that look decent.”

And you know what? Maybe the swing trade will basically mean: I’m looking for really, really good quality daily charts and if I get in it and it ends up going 20% intraday, then yeah, that’s great; trade, I’ll take the profit. But I’m also prepared to hold it for a couple days based on the daily setup.

So that might even strengthen the quality of the day trade just because it has a stronger daily setup. That’s, again, some thought. You know, I’m just trying not to get irritated that the market’s slow, or that I had the misfortune of not getting my orders filled properly today. It’s just part of the deal. All right?

So, that’s it for today. Warrior Pro mentor session for beginner traders, beginner students, students who are in classes 1-5, will be at 3 p.m. eastern today. So, students, I’ll see you in class at 3 p.m., and everyone else, I’ll see you first thing tomorrow morning back here in the chat room. All right. Thanks guys, have a great afternoon.

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.