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Warrior Trading Blog

Trade Recap: $636 in 10 Minutes!

10 minutes

What’s up everyone, alright so here we are Thursday morning, another green day of trading. You know, $600 bucks. It’s a market where I’m taking what I can get. I only traded, actually, for 10 minutes today. I got in, I got out.

 

So 10 minutes, $600 bucks, two trades. Accuracy is good and right now we’re still in that market where things are grinding and so I’m gonna be really cautious. I’m actually trading with about a quarter of my full size, so instead of trading with 15 20,000 shares I’m only trading with 5,000 shares.

So, make a little money here a little money there, when the market starts to pick back up that’s when I’m gonna pull out the big guns start to trade with 10 15,000 shares again and that’s when I’m gonna see the big days. The reality is right now if the best I can do is five cents here, 10 cents there a profit I can’t take 15,000 shares because slippage alone is gonna eat up that little bit of profit. Then if I sell and take a loss it’s gonna hurt a lot. In order to trade with big size I need to be getting 20, 30, 40 cents per share of profit and I haven’t seen a 20, 30, 40 cent per share winner on a low price stock in about a week.

So, right now’s still the time for me to be careful, be cautious, grind, small wins here and there and it’s about treading water until the market picks back up again. Anyways, that’s about it for me. We’re gonna break down all of today’s trades in today’s mid day market recap.

So, just to quickly recap the trades from today really a very simple day. Not a lot of stress. Not a lot of pressure. Went small with the share size so very first trade was on IOFN $431. This one was on our gap scanner, that’s what we look for. It was gaping up 17% right here 1.6 million share flow, alright? Easy trade. There was news on it. Bell rings, jump in for a one minute opening range breakout. One minute opening range breakouts, we buy the high right there. That’s where I get in. My stop is at the midpoint, alright? So that’s my entry, that’s my stop target is retest to pre market highs. We didn’t actually get that high. That would have been $5, but it went up enough to give me $430 of profit. So I’m happy with that.

DEST I underestimated a little bit, 13 million share flow. Wasn’t sure if it would make a big move, but it did a really nice red to green move. The bell rings, it dips down and then it surges back up right here. I wish I’d been able to jump in here, but you know, we’re just not in a market where I felt comfortable being that aggressive. What we noticed certainly yesterday on SCII, was that SCII would pop up five cents and then drop 10 cents.

And then it would go sideways, go sideways and then it would pop up another five cents and then drop 10 cents. So it felt like every time I bought the breakout I was getting stocked out or I’d have to hold through the red until it came back up. That’s what I started to feel was happening on IFON this morning. Really early on when I got into IFON I was noticing that it was popping up and dropping, popping up and dropping. So that made me a little bit iffy, DEST was doing the same thing. Got in at the 47 it dropped down for a second and then it surges up. So it’s kinda testing my stop and then it goes.

Even in this area here you can see it squeezes up and then it drops down. It squeezes up here and then right away drops back down. So it’s having a little bit of a hard time holding these levels. Now one of the things that we talked about this morning was the fact that when you get into a market that is a little bit choppy and a little bit slow, what happens is that inevitably traders start to become more cautious. So even for me, I’m limiting myself to 5,000 shares right now. That’s a third of my full size. My full size is between 15 and 20,000 shares.

So I’m trading right now with about 25% of my full size position and that’s the most I’m willing to go in at right now and I’m just one person. So when you multiply that by 100,000 traders what you have are 100,000 traders trading at one quarter their amount of volume or whatever the ratio might be for them. That means less buyers at these break out points, right?

Even if I’m a buyer at the break out point I’m not buying as many shares and that’s why the volume here is lower. Lower volume break outs mean less of a move, a smaller move and when you start seeing these smaller moves that’s when short sellers will often come in and try to hit them to the short side. Because people that do get in, if they don’t pop up right away they end up selling.

So they sell, plus the short sellers sell and now you’ve got more sellers than buyers so when you end up seeing are these stocks like JRSH kinda did this, that pop up, do not hold their level at all and then come right back down. And we saw it certainly earlier in the month on Jag X, the stock that got me really good. It popped up here and ended up closing the day in the red, right? It squeezes up and doesn’t hold those levels at all and comes all the way back down.

So really disappointing price action there but that’s kinda what we’re seeing. That’s a telltale sign that you’re in a choppy market. So the best way to trade through choppy markets is to reduce share size. That’s what I do. That for me has always felt like the easiest thing to do. Reduce my share size, that way if I do get caught in losses the losses are smaller. I had a red day last week.

I lost $14.28 that was my worst day of the week that week and my best day was $2,400. So, I was trading with small size so that if I did have a loss it would be small. This week I have a loss of $480 bucks. So that’s a little bit bigger this week and my biggest green day is only $960. This week has actually been even choppier than last week. I didn’t think it was possible but it’s happening.

I would say right now we’re in the third, we’re in like the third almost … let’s see, one, two, three, yeah we’re like in the third week of choppy trading, almost fourth week. Five weeks ago was when I had a really good week. I made $25,000. So yeah the last three, four weeks have been a little bit on the slow side and we just have to be patient. That’s just the way it is. The market works in these ebb and flow type of patterns.

It picks up and then it slows down, then it picks back up again and it slows down. The most important thing is that when it slows down you’re able to adjust your strategy so that you’re not experiencing losses during a slow market, but instead just going maybe sideways. Going sideways is totally okay. Making a little bit of profit is totally okay. You’re treading water and then when the market does open up again that’s when you’re ready to pedal to the metal and get aggressive.

I think one of the things that can be really frustrating as a trader, is the fact that the very same set up that works in a strong market, does not work in a weak market. And so you’re like, “I’m doing the same thing. Why was I making $5,000 a day doing this two weeks ago?” What’s changed is not your trading. What’s changed is the overall market. So, you have to remember that we’re always dealing with that factor.

It’s not something that we can control. We just have to react to it. We have to be mindful of the condition of the overall market and adapt our strategy. So in a slow market, reducing share size, not being as aggressive about doubling for breakouts. And then in a strong market, increasing share size, buying at more aggressive places like as stocks hit the scanner and break through a half dollar.

I wouldn’t do that right now, but in a strong market I definitely would. Even that JRSH stock that hit the scanners earlier. In a strong market, this thing might have gone right to $11 bucks because it’s a recent IPO breakout set up, right? So the high of the recent IPO is 11 and it hit the scanners and it just popped up from 820.

So this is something that momentum traders, in a strong market, would probably have jumped on. But right now we all kind of hesitate a little bit. We’re like well let’s give it a second. When you multiply that by 100,000 traders all giving it a second it ends up not working. We give up, right?

So this is one of those things about trading. You have to be willing to adapt to the market that you’re in. I was talking last night with some people about algorithmic trading and they were asking if algo’s and high frequency trading has changed my strategy over the last, whatever, five years or seven years. When I first started trading I did trade a lot more of the higher priced stocks. I was trading like Apple and Netflix and stuff like that and I was doing okay on some of the ascending wedges and descending wedges and flattop breakouts and stuff like that.

But eventually I found that those stocks became choppier, and choppier and choppier, and that they didn’t respond as well to traditional chart patterns. And so what you realize is that a lot of those stocks are being held by unconstitutional traders, pension fund managers, hedge fund managers, stuff like that. And they’re running algorithmic trading programs on those stocks and on the shares that they’re holding.

So they’re buying and selling, buying and selling. The result is that the chart patterns become … it’s almost like the chart pattern is a reflection of all of these algorithms changing, and shares changing hands. They’re no longer really a reflection of retail traders.

So a retail trader might look at whatever a stock, like Facebook and think, “Oh this is a pattern that I really like.” And today’s not a particularly good day because it is up quite a bit. Facebook’s been pretty active in the last few weeks, but whatever, take a stock that maybe hasn’t been as active and what you’ll end up noticing is that a lot of the price actions start become irrational. It pops up and then it drops, and then it pops back up again and it drops and so they’re not as predictable. That’s when I started trading more and more the lower priced stocks and focusing on the stocks each day that were on the gap scanner.

Here’s the thing, retail traders, we’re all looking for the same thing. We’re looking for volatility, right? We want volatility. We want an opportunity to get in a stock that could move 10, 20, 30%. And so, this morning that’s gonna be this small handful of stocks right here. Within these 10 this is where we’re gonna have the most opportunities today. It doesn’t mean that you couldn’t trade Netflix and potentially make money on it, but the reality is with the spreads being as they are, of course this is a higher price stock. You’re gonna see a lot more false breakouts.

The stock pops up and then some algo triggers and it shorts the stock or whatever it is. The stock drops down you think it’s gonna be a short, some algo triggers and it buys up shares. The next thing you know it’s going up. One algo triggers another one, triggers another one, and that of course is when we had the flash crash, right? Where all the sudden they were all triggering each other and the market dropped 1,000 points in one day.

Since then they’ve added circuit breaker halts and things like that so they can pause the entire market and give people managing those algorithms a chance to press the reset button or do whatever they do so things don’t get out of hand. But the market definitely has changed a lot in that way where a lot of these stocks really are driven, the majority of their volume 60, 70 maybe even 80% of their volume is not traders like us.

It’s actually computer programs just exchanging shares. However, each day the stocks are in the top 10 on this list, they’re the ones that are most likely to have the highest ratio of retail traders, which means their patterns are going to be more logical. The typical chart patterns that we trade will be respected in a better way and we’ll see cleaner follow through. You know, Etsy, really nice move here today first pull back continues higher.

So this is what we want to focus on. Right now we’re still in a choppy market so we have to be a little careful and we’re not seeing, on the low price stocks, the best follow through. This earnings breakout on Etsy is pretty nice, but it’s a higher priced stock and it’s certainly not a break out type of scalping trade. It’s a buy it and hold it for 20, 30 minutes type of trade.

For me, this is too much risk exposure at this price range. So I just leave it and let it do its thing, but yeah really nice to see that opening up in any case. Yeah, so right now I think it’s just a matter of being patient and we will see another parabolic stock. It’s a matter of time before we see a stock like IMTE that goes from $2 to $40. Last week we had TPIV, which was a pretty nice move from $6 to $10 or $11 here.

So it nearly 50% move, or 100% move on that one. So we are seeing them now and then, but not at the same level as we were in April and May. Just gotta be patient. If you can grind on $400, $500 a day you’re doing well and when the market does pick back up gotta be ready to put the pedal to the metal because there will be a lot of opportunities. Once we get that next hot streak. So right now it’s just about discipline, training yourself, stay focused on trying to capture a little bit of profit and that will serve you really well when the market does pick back up.

Alright so anyways, that’s it for me. I hope you guys have a great afternoon and we’ll be back at it first thing tomorrow morning. We’ll finish up the week, Friday, hopefully with another green day and then go into the weekend feeling good. Alright that’s the game plan. I’ll see you guys back here tomorrow morning, 9:00 9:15 for pre market analysis.

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