Warrior Trading Blog

Tech Issue Leads to Biggest Loss of the Month! -$4.3k

tech issue

Tech Issue Leads to Biggest Loss of the Month! -$4.3k

 

 

All right, guys, why don’t we do our midday market recap. Today is by far one of the most frustrating days here because of course I’m in the red, taking one trade right out of the gates, promptly losing my internet connection, and then … whatever the issue was, and then selling for a $4,000 loss. Now, when you trade really volatile stocks and you trade with large size, obviously your risk is higher.

These stocks move so quickly that if you lose your connection for five minutes and you can’t get reconnected, in five minutes these stocks can go up 20%, down 20%. They can move very quickly, so it’s always a good idea to have built-in redundancies; which I do. I still wasn’t able to get a secure connection to my broker, which is unusual. I don’t know. They said I guess there’s some internet issues, downstream or upstream from me, or however you say it. Which maybe was a contributing factor today, I’m not totally sure.

Definitely when you’re trading stocks that move very quickly, just little moments … Two, three, four minutes where you can’t connect, a lot can happen. Even when you have a redundancy, the time to get on mobile and enter the trade; either way, you’re looking at a loss. That’s what happened today, which is disappointing. I’ll go over that trade, but before I do, a reminder that today’s the last day of our back to school sale. 35% off. School35 is the coupon code.

That’s not combined with any other coupons or any other discounts, so that’s off the full price for chat room, trading simulator, trading courses, et cetera. Anyone who’s in the back to school season, getting ready to get back into the market, back into trading, or wants to upgrade their subscription, you can do that. Coupon code School35.

Okay, so now we’ll jump in here and go over the trades. First trade and only trade of the day was CVM. Long, as you can see. 10,000 shares at 361. I got into those one because it looked to me, it was our leading gapper with a catalyst. We love that. That’s what we like to see. It was the number one leading gapper, gapping up the most with news. Obviously as you can see, it did not hold those levels. You could say that this is a trade that simply didn’t work. There were a couple of minor concerns pre-market.

The first one was this big doji candle at whatever time this was, the one that squeezed up to a high of 450 and then dropped back down; and then rejected with this red candle. A little bit of weakness there, and then dropping down further. Definitely a little cause for concern there, but as it popped up here to 371, just before the bell rang, I thought, ‘It’s not going to take much for this to get back to $4,’ so I entered here as it popped up in the first one minute candle at 360. Target was $4. Now, my stop at the time was just underneath the half dollar of 350. I figured as long as it held the half dollar, we should be in good shape.

I jumped in and it looked like nothing was happening. I thought, ‘Huh, well maybe there’s just not a lot of volume or whatever.’ Then I realized is I wasn’t getting a … I wasn’t streaming my level two. My level two was not moving at all.

For a minute, or a couple few seconds, you’re like, “Oh, okay. I guess the stock’s not moving.” Then you’re like, “Wait a second, something’s not right.” That’s when I looked over to eSignal and I realized my eSignal level two here was still moving, but my broker level two was not. I knew I’d lost connection.

Now at that point, I’m kind of looking back and forth and I’m like, “Okay, well, I look over here and it’s at 50. And then I look over here, it’s nothing’s changed.” I see it pop up to 60 on this one minute candle, 69, and I’m up 900 bucks. I’m like, “Okay, all right. This looks good. It’s probably going to be fine. I’m just going to hang onto this.” I look back over here, and then boom, it’s down at 26. I’m like, “Whoa. What’s going on?” All of a sudden I’m down like 2500 bucks. I’m looking back and forth, and I’m like, “Okay, I need to try to get myself reconnected so I can sell this.”

By the time I was reconnected, it was still in the 20s here, and I was like, “All right, well, I’ll give it a second.” Then, it dropped back down here and this is where I sold. It’s like someone mentioned in the room earlier. It’s certainly frustrating when you have a big loss. Nobody likes to have a big loss. What’s even more frustrating is when there are outside forces that contribute to that loss, and there’s just feels like ‘What could I have done differently?’

It’s like when you watch those reality shows and you’ve got ‘The Deadliest Catch’ fisherman. It’s hard enough for them to find the hot fishing, find the place with all the crabs, and to bait the pots right. When they end up having something like all of a sudden, a really important part of the engine breaks, and now they’ve got to go into town and get it fixed and come back out.

What’s the result of that? Well, it costs them money. It costs them fuel. It costs them time. It costs them maybe 10 to 20,000 dollars to go all the way back to get this part to get it fixed, to come back. During all that time, they’re missing this fishing. That’s frustrating because it’s a little bit out of your control. You can do as much as you can in preventative maintenance. You can do as much as you can with redundancy systems; but there are times where something out of your control comes in and boom. All of a sudden, you’re at a loss, or you’re taking a little bit of a hit. That’s certainly frustrating, because trading is hard enough without having to deal with these external forces that can make it more difficult.

For sure, we have not been in a really, really strong market here. July was not super great for me. It was really good the first week. Second week was red, third week was really good. Fourth week was red. It was like back, and back, and back. Then, the first week of August was really choppy. I had two red days. My first two days of August were both red days. Last week, I made back like two grand or something like that, 1800 bucks. Now today, down $4,000. It definitely feels like, as far as trading goes, if I didn’t have bad luck, I’d have no luck at all. For the way things are going right now, it just is a little bit of a kick when I’m already down. Annoying, frustrating.

What could I have done differently? Well, yes, I suppose I could have live stops on all my trades. I’ve never done that. This is one of those times that it would have helped me. This dropped so quickly on this candle. This one minute candle went from 69 to 26. Boom, 10%. It just really dropped very quickly. The only reason it wouldn’t have gotten halted on a circuit breaker is because the circuit breaker rules in the first five minutes are … or in the first 15 minutes are wider. It’s doubled. It would have to drop 20% in one minute, basically, two minutes. Yeah. Even if I had a live stop at 49, I probably would have gotten filled at 30, or 28. The loss would have still been pretty bad. Maybe had this ended up dropping all the way down to 299, and 280 in one flush, then sure, in that instance it would have gotten me out sooner.

Yeah, so live stops are one approach. I personally don’t really like using them. A second approach is making sure you’ve got your redundancies built in, which I do. Those don’t really account for what happens if you can’t connect to your broker but you can connect to other things. I was having an issue getting a secure connection. I don’t know. Maybe there wasn’t a problem with the internet, or maybe it’s something going on with them. I don’t really know. I think today’s just one of those days where you can do as much as you can to prevent these things, but sometimes you just get on the wrong side.

This was not … It ended up obviously not being a good trade. It didn’t hold those levels. I was concerned about 377 being the 200 moving average. I definitely was concerned about that, but I thought this would have the strength … like with the volume in the first 15 minutes to break through that level. The fact that it tapped 69, yes I was a little nervous but I thought that it would be able to get over that level of 71 pre-market. I was wrong. This maybe wasn’t the best quality set-up. I’d say, as far as gap and go set-ups, it was maybe … I mean it’s maybe not an A quality set-up because of this, but probably a B+. We just in a stronger market, could have easily seen this do something really nice, and it just didn’t. A little disappointing there.

Now, my swing trades … I stopped out at GEMP on Friday by accident, because I used a stop order … or a sell order instead of a stop order. You can see, this continued here today for my 850 entry up to a high of 909. That’s pretty nice there. [WIN 00:10:12] my other swing trade, this one is just still flat-lining near the bottom. We’re not seeing a lot of follow-through on that one. It’s only down three cents from my initial entry, but it’s just not working. Nothing there. [TEVA 00:10:25], my other idea, this one is … It got a little bit of a bounce today, but it seems too weak; so just not seeming like that one has the strength.

That’s about it for today. Once I finally got myself … Now, it’s interesting, I was able to get myself connected here enough to sell this position. Then, I logged off, tried to restart, and I couldn’t reconnect until 10:00 a.m., or 11:00. I don’t know, I guess it’s 11:00. I was able to reconnect for a while. I finally got reconnected. Yeah, I didn’t take anymore trades today below my max loss. Probably wouldn’t have wanted to, anyways, just because when you start the day like that, it’s not really a good indicator of what type of day you’re going to have.

I suppose a good lesson to anyone taking large position sizes is to just to remember that even though you might think, ‘Well, I’m only risking like a thousand bucks,’ or, ‘I’m only risking 500 bucks,’ if you lose connection with that really big position and you’re trading a volatile stock, you can suddenly get caught with it going against you. It’s good to learn this on stocks like CVM, because when we have a market where we’re seeing stocks doing this and getting circuit breaker halts going up 10, 20, 30%, then those losses can add up very, very quickly. Just a word to the wise there.

Yeah. Today’s obviously a little bit of a red day. It’s not helping me on the week. It’s definitely not helping me on the month. I will get back to it tomorrow morning. Goal, just same old thousand dollars a day, and keep grinding, grinding up; even though it’s a little bit of a drop back down here the last couple weeks or whatever … Well, really just … I mean I was green last week, but a little bit of a drop down.

That’s just part of the ebb and flow. Hopefully we get into some stronger markets where we see better opportunities. I know right now hasn’t been easy, but we just have to exercise patience, wait for those really good set-ups, and do everything we can to avoid the losses. Today I maybe didn’t do as well as I could have on that, but I’ll be back at it first thing tomorrow morning. That’s about it for today, and I will see you all tomorrow morning. All right, thanks guys.

Oh hey, I didn’t see you there. Well, 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.