Warrior Trading Blog

Trade Recap: Time to Get Away? -$115.95

get away

What’s up, everyone? All right, so here we are, end of the week. What started as an incredible month of May has, really, things have just slowed down. The last three days have been really kind of choppy and quiet.

 

We haven’t seen really good breakouts. We haven’t seen as many stocks. Halting on circuit breakers, squeezing up 20, 30, 40%, and so it’s kind of been a grind. We went from having really high trading to crickets. Just quiet, slow.

I lost money on Wednesday. I lost money on Thursday. I lost money again today. Today, I’m down only $116, so it’s basically a break-even day. I mean, this is just kind of a scratch day for me, but what’s frustrating is I took four trades. I had three winners on BLNK, and I made 1,600 bucks. Then I had one loser on BIOL and lost 1,700. It’s like three small steps forward, and then one big step back, and that’s probably what’s most frustrating.

That’s kind of what it’s been the last three days is, I’ve had these small little steps forward, average winners, 5, 10 cents, just a little scout. Little winner here, little winner there, doing everything I can just to get that little winner, and then, boom, a 30, 40-cent drop, a big loss, a $1,500 loss, a $1,700 loss, whatever it is.

When you’re in that kind of market, you just have to be patient because if you keep trying to fight and push, you’re just going to keep ending up having those big losses, and so you’re going to stair-step down. Couple steps up, big step down.

Couple of steps up, big step down, and you gotta wait until the market is at a place where your average winners are bigger, and then you’re going to have a couple of big steps up and small steps down on the losers. It’s all about patience, but it can be a little bit taxing having three days in a row that are red, having three days in a row where your average winners are really small and where you keep hitting these bigger losses because of false breakout and stuff like that.

I’m looking forward to this weekend, getting some rest, getting away from it all, away from it all and just relaxing. I’ll be back at it on Monday morning. Hopefully, we start the next week really strong. Anyways, let’s break down today’s trades in today’s Mid-Day Market Recap.

All right, everyone. Time to break down trades from today, Mid-Day Market Recap. Overall, another choppy day of trading, down $116, but all things considered, today’s a scratch day. It’s not a day that, it just doesn’t really matter. It’s a break-even day. I’m still up over $50,000 on the month, which is awesome.

Life is good. This is … It’s been an incredible month. We’re only really a week and, well, I guess we’re at the end of the second week here. We still have three weeks left. This is a little bit of a longer month here in a way, just kind of the way the days lay out. We have, really, almost five full weeks of trading. That’s solid. My goal would be that we finish the month in good shape.

I was hoping … I was thinking we might have potential for a $100,000 month, but just like last month, as I start to get closer to that level, then I start to pull back a little bit. It’s kind of two steps forward, two steps back right now. It’s sort of how it’s felt the last week or maybe actually it was, I don’t know, up 60,000 and then down 10 or 15,000. I don’t know. It’s part of the grind.

There’s no doubt about the fact that any trader would prefer to just make an average of 5,000 a day and be green every single day. We’d all love to just be green every single day and never have to have losing days, but that’s not how it works. You’re going to have days where you make 5,000, $10,000, and then you’re going to have days where you lose 3,000, 4,000, $5,000. Maybe you will have a $10,000 blow-out day.

hat’s just part of the deal with trading. It’s a couple steps forward, couple steps back, couple steps forward, couple steps back. The question is, what are your averages? What do your metrics look like? Are you making more on average than you’re losing? As long as you are, then you’re doing something right.

Right now, I’m kind of in this little bit of a grind here. March, $42,000. April, 54,000. May, right now, I’m at 53,000, so kind of averaging between 40 and 50,000 a month this year on decent months, not including really good months. That’s what I’m grinding at right now. Hey, I can’t complain. That’s really, really good. That’s the result of seven years of studying the market, seven years of trading. That’s that thing they talk about of the 10,000 hours. It takes, they say, 10,000 hours to really master something. If you have 40 hours in a work week, 40 times 52 is 2,000 work hours per year, so it’s like five years to really master something.

I think as a trader … I know a lot of traders that have been doing this for two years, two and a half years, three years, that really are at a very similar skill level as me. I mean, they’ve got it. I don’t think it takes five years to master this. I think for most, one year of intensive studying, and then your second year of really putting all of that into practice, by year two in a half, three, you’re in pretty much the same shape as me. How much you make is just relative to how much risk you’re willing to take. That’s really the only thing.

John and I have been trading … I think I’ve been trading for longer than him, but he really is trading in the same way as me. It’s very similar metrics. Profit/loss ratios, accuracy, all that stuff. I might make a little more, but I risk more. He doesn’t have days where he loses $14,000 like I do. It’s just … That’s okay. It’s all based on risk tolerance and what you’re comfortable.

Three years ago, four years ago, I really wasn’t comfortable risking as much as I am now, but as you gain confidence, the longer you’ve been sitting in the chair, the better you feel about taking bigger positions knowing that, yeah, you’ll have losers, but you get winners on the other side that make up for them.

I think, as I’ve talked about a million times, one of the things that’s hard for me is walking away on a day that’s choppy. Today, I had a couple trades on BLNK. I had three trades on BLNK and made $1,500. Making $1,500 across three trades for me is actually pretty bad. That’s only $500 per trade winner, and with 5,000-7,000 shares or 10,000 shares, it’s really very small profits.

The first trade on BLNK, I was anticipating a break of pre-market highs, which was 6.09, so I jumped in with 10,000 shares at $6. It hesitates there. There was like a 30,000 share seller at 6. It then pops up and hits 6.09, and I sold half at 6.06, 6.06, and stopped out of the rest at 6.06 basically, and $6. It just didn’t work. I made $500 on that win with 10,000 shares, which is not good risk reward because when you take 10,000 shares, you know you’re risking probably 20 cents, so to make only 5 cents is not a good profit/loss ratio, but it’s what that trade ended up doing. It just hits resistance.

It then pulls back. I got back in for the first one-minute candle to make a new high at 5.95, this time buying 7,500 shares and selling for 10 cents profit at 6.04, 6.09, and the rest at 5.95. 500 on the first trade, 750 on the second trade. Again, for a third time, we double-topped at 6.10. Now I’m up $12,000 on this stock.

Third trade was getting back in at $6. That was right here as it started to pop back up. I said $6 is the spot I’m watching. I got back in at 6. I sold some at 6.10 and 6.18, and then I added back at 6.25. We squeeze up to a high of 6.40. I’m thinking this is going to continue break over the 200 moving average, this purple line on the daily, but it didn’t. It hit that level as resistance, and then it came back down, and so I ended up stopping out at 6.23 and 6.24 and 6.09. On that third trade, I made about 300 bucks, and I finished up $1,595 on BLNK, which, all things considered, is not bad. The only problem is that it was over three trades, each of them having fairly big share size. If any of those had gone the wrong way, I would’ve been at a $1,500 loss.

Then I had my fourth trade. Today, my accuracy was 75%, which is pretty much good. I mean, that’s good for me, but 70-75% is good accuracy. I finally got that one loser, and it’s a $1,700 loser, which is kind of … My average losses are about a thousand bucks, so this one was a little bigger than average but that’s the problem. When you have three winners, and they’re small, that one loser really wipes them out.

On this one, this was a reverse-split stock, a recent reverse split that popped up and was halted at 2.12. It then resumes higher and squeezes up to 2.98, and I was thinking, “This looks like it’s taking off with the reverse split. I’ll jump in,” so I jumped in with 2,500 shares at 2.91, and then I ended up stopping out. It dropped down here back to 3.20, and so I had to stop out on this candle right here as it came back down. I took smaller size, which was fine. My first order didn’t get filled. Filled on the second order, but it didn’t work. That, boom, giving back three trades of profit. That, I think, is the most frustrating thing to have three trades of profit, and then to lose them all in one loser.

When I look at my average winners over the last couple of days, today, I had four trades, three winners, one loser, and I’m right on the day. That’s disappointing. Yesterday, I had, let’s see, it was like five winners in a row on AWX here, PTI, KOSS, and then I had one loser on FAMI, and that one loser wiped out five winners. It was just, we weren’t having a good market. Those average winners were only averaging 11 cents per share of profit, so I was getting big winners. It was just, I felt like every trade I would get into, it would pop up a little bit, maybe, and then it would just drop. I wasn’t seeing follow-through.

I get in at breakout points, at apex points, and so I want to see a continuation, and when I wasn’t seeing that, I just kept getting stopped out. What I should’ve done is probably stop trading, but I took another trade, and then boom, $2,600 loser, and now I’m back to break even on the day.

Another trade, a $600 loser, and now I’m red on the day. Another trade, $150 loser, and now I’m down more on the day. That’s where it gets frustrating, when you have good accuracy in terms of being right 60-70% of the time, and you’re still losing money. That comes down to profit/loss ratio.

The thing is, in a strong market, it’s easy to have a good profit/loss ratio because everything you get into just breaks out. Everything squeezes, everything makes big moves, but in a market where things are a little bit choppier like BLNK where the moves aren’t as predictable, the winners become smaller because traders are more cautious, more hesitant. They don’t buy with as much size. That means less buying at the breakout. Any sign of weakness, short sellers hone in on, and they hit it to the short side, and you just start seeing stocks dropping more than they’re popping up.

Yeah, we ended up having one expected move on HEAR today. This is frustrating because I didn’t trade it, and you see it make, did this nice five-minute pullback right here. On this one, I was just like, “Well, I have a hard time trusting it because I really didn’t do very well on it yesterday.” Yesterday, it was so choppy. It finished as this doji candle yesterday. That tall upper wick, it shows a lot of indecision, and typically, we don’t see really good follow-through on the second day. If yesterday the market was really indecisive on the stock, why would it be suddenly strongly bullish today? There’s no fresh news. There’s no fresh catalyst, so what creates that bullishness? Usually, it doesn’t happen, so when you see a stock do this kind of surprise move, it’s like, where did this come from?

Of course, my instinct is to try to jump on the momentum, but the problem is, now I’m red on the day. If I jump on the momentum, what’s going to happen if I’m wrong? I go down from being a hundred to being down 500, or maybe I have another $1,700 loss, and I go from being down a hundred to being down 1,800? I would say, “Ross, why did you even bother trading this today when your profit/loss ratio on the day was poor, your winners were so small?”

Yesterday’s a perfect example of this. I was down $700 on the day. I had like 10 trades, seven winners, three loser, and I was red on the day. Bad profit/loss ratio. I thought, “I just want to jump back into something. I want to try to finish the day in the green.” I saw IQ squeezing up. This stock, it just squeezed from $19 up to 23, and I was looking at it thinking, “Well, I missed this pullback right here at 21.50, but right now, it’s consolidating under $23, and this looks like it’s starting to go parabolic.” What happened last week with IMTE and BOXL, also recent IPO stocks making these big breakouts, so I’m going to jump on it. What did I do? I jumped in it with 5,000 shares anticipating the break of $23, and a minute later, it drops down to 22.40, and I lose 2,000 bucks just like that. I finish the day down $3,000 instead of down just 700.

I felt like, “Jeez, Ross. That was so stupid. Why did you take that trade? You were already not having a very good day. You were seeing tons of false breakouts. Why’d you even bother?” It was FOMO. It was feeling like I was missing an opportunity. That’s the same thing on HEAR. I feel like I missed this opportunity, and if this thing goes to 20 bucks today, I’m going to feet like, “Jeez. Why didn’t I just jump in?”

The problem is, jumping in yesterday cost me 2,000 bucks. If I jumped in today, what would’ve happened on here? Eh, maybe I would’ve made money, and that’s what’s so difficult. You don’t have consistent responses to actions. You’ll have times where you break the rules, you do all the wrong things, and you make money. Then you have times where you follow the rules. You do the right thing. You say, “You know what? I’m down a hundred bucks today. I’m having really bad profit/loss ratios. The market just doesn’t feel strong for me. I’m done trading,” and then you see a stock from $12 to $15 without you, and it feels really frustrating.

That’s probably the hardest thing with the market is that you’ll follow rules, and you can get punished for it because you miss opportunities, and you can break rules, and you get rewarded for it. It’s like, well, what’s the point in having rules if this is the way it is. I’d say the point in having rules is that even though on a day like today, maybe it’s preventing me from having a big winner. On a day like yesterday, it would’ve stopped me from going deeper in the hole.

Overall, over the long term, the days that you’re stopped from going deeper in the hole most likely are going to save you a lot more than the days where you get a little further into the green because the best days of trading, you’re hitting your goal in the first 30 minutes. Those are the best days. It’s very, very rare that you kept some big afternoon move, and that turns into the daily goal.

In fact, the $25,000 winner I had, whenever, a week ago, that was the biggest winner I’ve ever had in an afternoon trade. I mean, it was almost just luck. That never happens to me. It never, ever happens. In seven years of trading, it’s never happened that I’ve gotten that type of winner in the afternoon, so I can’t count on it at all. I have to just expect that afternoons are choppy, and I haven’t hit my profit target by 10 a.m., that right there, I should have a red flag that goes up at 10 a.m. if I’m not at 2,000 of profit because it’s just like, “Hey, this is not a strong market.”

Today, the red flag is up. It’s saying, “Hey, Ross. Four trades, and you’re red on the day despite 75% accuracy. Don’t keep trading. Be done. Be done for the day, and come back tomorrow, come back on Monday.” When I’m back at it on Monday, if we see good follow-through, if we see good opportunities, I’ll be up three, four thousand dollars in the first 30 minutes.

Look at my P&L from Thursday. $29,000 in two hours of trading. Friday, $8,500 in an hour of trading. Monday, $5,000 in an hour of trading, and Tuesday, $4,000 in an hour of trading. Wednesday, down 13,000 in an hour of trading. On Wednesday, would it have been smart for me to keep trading past that first hour? No, I don’t think so. That would be stupid. That’s how I finished the day down, 30,000. On Thursday, I’m down 700 in the first hour of trading. I decide to keep trading, and I close the day down 3,000 bucks.

Today, I’m down $115 in the first hour of trading, and I’m closing up shop. I’m following the rules, and if it means I miss here, it means I miss here. Most likely, though, this would be that one outlier that ends up working but statistically, it’s following the rules.

That’s what it really comes down to, not focusing on individual trades that may have worked, but focusing on your averages, focusing on your statistics. On average, how much money do you make, let’s say, for instance on stocks over $25 a share? When you start to look at the averages, then it’s like, okay, maybe I feel stupid that I didn’t trade LFIN on the day that it went from $70 to $140 a share because, jeez, people are talking about making huge profits on this, and I’m the guy that just sat on the sidelines and didn’t trade it, but let’s look at my metrics. Was there a reason that I didn’t trade it? Let’s look at price and volume.

Where do I make the most money? It’s on stocks under $10. This right here is almost a million dollars on stocks under $10. How much have I made on stocks over 20? Over 20, I have a net loss of down, whatever it … Now I’m on the next page, down $12,000. It’s because trading these higher-priced stocks … Look at this. It’s an $11,000 loss on NETE. That was pathetic.

My average is telling me not to trade those stocks, not to even bother because, statistically, I don’t do well on them. When you see the one that ends up working, you can think, “Oh, jeez. Of course. I should’ve traded it,” but same with your metrics. When do I make the most money? It’s been 9:00 a.m. and 10:00 a.m., up before 11:00. Yeah, I have a little bit of profit at noon and a tiny amount of profit, this is one trade basically, in the afternoon. A couple of trades. I mean, how many trades do we actually have here? We’ve got probably like five trades. One big lucky winner, and then the rest is just choppy stuff.

That was luck. I got a “Get Out of Jail Free Card” on that trade, and whatever, I’ll take it, but statistically, afternoons are not my time. Remember, I traded in the afternoon on that day, but I was already up five grand on the day. It was already a good day of trading. It wasn’t a day like today where I’m choppy and break-even. It was a strong day.

Have faith in your metrics and follow your rules. Create your rules, and then follow them. If your rules say, “Don’t trade past 11:30,” then don’t trade past 11:30. You made those rules for a reason. Will you miss opportunities? Yeah, sure, but you’ll also save yourself the headache and the heartache of having days where you go from being profitable to being in the red. Follow your rules.

For me, today, I kind of felt like one of my rules was I went from being green on the day to being red. I’m just going to cut it right there. I’m not going to keep trading because I feel like if I go from green to red, I’m just going to go farther into the red. I don’t feel like it’s really likely I’ll bounce back to green, especially at this time of the day. That right there could be a new rule. If you ever go from green to red, the moment you flip back into the red, you’re done. You don’t take another trade. You just say, “That’s it. I’m done.” That, for me, worked well today.

Look, it’s the writing on the wall. If you go from being green to red, that tells you the market is choppy, so throw in the towel. Tomorrow’s a new day. Today is not the day that I should be aggressive and trying to swing for the fences. I’m not going to hit a $30,000 winner today. That’s not going to happen. If I’m not going to have big winners today, if we’re not seeing A-quality setups, then what’s really the point of trading?

This month, I have two days where, combined, I made $60,000. Everything else has just kind of been noise. Make a little money, lose a little money, but follow the rules. That’s what it really comes down to.

The thing with BIOL is that, and this is obviously the challenge with trading small caps and trading low float stocks is the volatility is insane. These can move 50 cents in a minute. It’s not because you want to lose 70 cents per share. Obviously, risking 70 cents per share isn’t ideal, but the reality on these is that this is how much they can move in one minute. This went from a low of 2.32 to a high of 2.98. If they kept going, it could’ve gone right up to $4, and then boom, it’s a winner, but you just have to manage your risk. You have to expect that these types of stocks, when they go the wrong way, you could lose 50 cents or a dollar.

That’s why my profit/loss ratio usually ends up being closer to 1:1. I have lots of winners. They’re about a thousand bucks each, but my average losers are also about a thousand because you know I’ll get knocked down by a trade like that.

Being a scalper, being a trader where you get in and take quick profits, typically, your accuracy is going to be really high because, look, it’s easier to predict what a stock is going to do in 10 minutes than what it’s going to do in five hours. When you’re trading on really short time frames, five minute, 10 minutes, things like that, it’s easy to have high accuracy, 60-70%. You can get away with having a poorer profit/loss ratio because you make it up with the accuracy.

But with a stock like HEAR, your stops probably would’ve been 20, 30 cents, but you could’ve gotten a 50-cent flush. It’s just the way these stocks often trade. A little bit more risk, but we also have more reward on the upside when they are working well.

Anyways, that’s it for me today. I’m going into the weekend just ready for a couple days off and relax, take a break, and be back at it Monday morning. It’ll be a new week, and hopefully, we can get things off to a strong start.

Those of you watching on Facebook, YouTube, love for you guys to give us a thumbs up. Throw down comments below. We’ll come back and answer them later. If you like these videos, subscribe to the channel. That’s it for me. I’ll see all first thing on Monday morning. All right, enjoy the weekend, everybody.

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