Warrior Trading Blog

Wednesday Winner + 4K! | Mike’s Trade Recap

Mike_7.10

Hey, good afternoon guys. Well a really nice momentum trade today after what’s been a very slow couple of days just after the July 4th holiday. But again today, we’re able to take advantage of a stock that had a really great technical set up, good news catalyst, and we were able to lock up just over 4,000 bucks on one single trade. So I want to take a few minutes here to talk a little bit about that trade and a special technique that I use to extract the most profit possible out of one single trade. So stick with me, and let’s cover it in today’s recap.

All right, good afternoon guys. Some decent trading today, and the market, definitely at least on the name that we we had on watch, and that’s this L-E-V-I. They had earnings today, and definitely presented us with an interesting set up here coming into the open. And then once the market did open, it started to gain a little bit of momentum, and set up for us in a way that we could capitalize on this move. Let’s take a look. We were able to lock up just over 4,000 on it. That’s really nice to see, especially after it’s been kind of a slow choppy last couple of days to a week. I really haven’t taken many trades at all, and this is one of the better ones that we’ve seen present itself to us for some actions. So definitely a really good trade at just up over 4,000.

My weekly goal is anywhere from that five to 10,000 mark, so in one trade we’re over halfway there, about halfway there. All we need is one more and still two days to do it. But nonetheless, it’s still a really great day, to lock up a really nice winner on one single trade.

Let’s take a look at this chart and talk a little bit about what was going on here. In the morning we had this gap down, it was actually after hours yesterday. We got the earnings release moving lower, drifting lower into the open, and we started to see that this thing had a really interesting technical setup on the daily. One, being that it was breaking back below this ascending support line. If this got below this level, this is the spot that I wanted to look to take it short, because then we started to get into this pivot point at 2040, and then if we took out that, a big window opens up down towards 19. The fact that we were breaking back over the moving averages, we were trying to break this trend line.

It had a pretty good chance of continuing lower, some pretty well identified technical. So what I wanted to see is basically a break below this 2120, 2130 zone for me to look for a short on this, and try to take it down towards 2050 and below. All right, so very straightforward, ascending support was breaking below the moving averages and room to move. Really important factors there to look for when trying to determine if it’s a stock you’re going to trade.

So back to the inter day, you could see what happened here out of the open, definitely a little bit of a volatility on the open, but once we were able to confirm the turnover, and we were starting to push back down through pre-market lows and coming through the moving averages, I watched the fast time frame and that’s where I determined that I was going to get short on the trade. If we switch to the fast time frame, I’ll show you exactly where I liked it. And back to the open, which you can see here again is the initial move. And we always want to wait for what I like to call a pivot in the direction we’re looking to trade. And all that is is simply just a for a short trade, it’s a going to be a lower high.

And we had that after this move right here. So we had the move down, right? So we look at this in real time. There’s never a pivot created until we actually take the trade. So we get the initial move down, we come back up. All right, there’s your first pivot that’s put in. So now that we have this, we have something to work off of, right? That’s kind of your initial reaction on the open, but you either need a pivot, lower high, or a pivot higher low to make a decision.

Since this trade has set up to be a short sighted trade, we want to look for a pivot lower high. All right, so moving forward here, we start to pull, we go through lows. Good sign. We now wait for the relief move. Here’s a relief move right here. We start to turn back over. All right, so as soon as I saw this starting to occur on my fast time frame, my 24 second time frame, as soon as I saw that starting to occur, I’m starting to enter the trade. Now in a normal situation, I most likely would not have taken this until we broke the trend line. However, the stock was hovering right at the short sale restriction point where when a stock goes down more than 10% there’s a restriction put on it that you cannot short market into the stocks.

You can’t short into it on the bid. You have to actually get filled on an uptick. But since we were hovering just above that 10% mark, we were only down about eight or 9% at this point. Right here I started getting short, anticipate that we would actually break this because we were putting in a lower pivot high. All right, so being that I saw the way a lower pivot high, we are starting to come back towards that line. We had already taken out lows once. I anticipated that we would take out lows again. So I started getting short. I was able to short on the bid, short market because it wasn’t in short sale restriction yet. So I got filled at 2140s and 2130s and that’s where I sat with it for quite a while. All right, so we moved forward here, moved forward.

We come back up. We did kind of come back up and test VWAP here, but I was okay with it because I was kind of using backup at this level, 22, before I was really going to stop out of the trade. All right. And we made lows. It looked good. My first target was 21. We didn’t get there for quite some time, but we were in trend. We were making lower highs, right? Lower highs. We were making lower lows and right there I took off half. Okay. I took off half entry at 2140 I took half off at 21. All right. That’s 2% right? 2% trade. That’s a big move. It’s a relatively big move. I know it’s only 40 cents but it’s a $20 stock. 2% is a good move. All right. If you have 2% of 100,000 right? That is a 2000 bucks, right?

That is really, really good. So I took half off here and then I just kind of sat with it and wanted to watch you know, the price action and see what type of movement we were going to get. So as we consolidate here around 21, kind of came back up, retested the trend line. I said, you know what? This actually looks interesting for for an add back. So I might add back the half that I took off because we now have a confirmed rejection of the trend line and we’re starting to pull back in here. So now that we… Again still in trends, still making lower highs. Still below this trend line and we’re starting to come back towards the low. It was right here that I added back to my position. All right, so I added that half that I took off over here. I added it back.

So I added that half back and shortly thereafter we started to break down through 21 and right here as we took out the lows, right as we took out 2090s and into 2080s I got filled 2083, 2085, for another half. All right, so now I’m back to half position again, and then I held the balance of the trade. My target was down here at 2040 and being that we were continuing in trend, there was no reason to exit this full position until we saw some exit signal. Okay, so what do I use for exit signal? Well, I look for the pivots to be taken out. You can see here that says your first pivot high second pivot high, lower high, all right. Continue to make lower highs. Third pivot, lower high. Fourth pivot, lower high. So until one of those is taken out, I’m still going to be in the trade and potentially add back just like I did here.

So as we continue to move, continue to move. Now I had bids out at 2050 and 2040 to be taken out the balance. All right, we got really close down at 2060 and then we started to bounce back up. Kind of consolidated there for a while. Still making lower highs, right? Still in trend. We haven’t taken out this last relative high pivot. We started to roll over again here into the afternoon and I took the balance off as we got just over here, right around noon time. If you look, let’s see where it was. Right here. So once we got this pop back up, it kind of flat lined for awhile, but if we condense this chart, you can read this a little bit better. So it was kind of your last relative high that we had right in through here, right?

So being that we had this kind of top, I said, all right, well if we get back over this 2080 I’m going to get out because we’ve now breached that final, relative high and we’re not making lower lows. So I’m going to take the balance off. So as you can see, we rejected it several times, looked like we were going to roll back to lows. But then we bottomed out again, started move back up, took out that relative high. I said, you know what, I’m going to end the trade there. We got that really nice move out of it in the morning. We were able to get an add back, which was virtually like having a second trade on it and we were able to pull a lot of good profit out on it. So took that balance off and from there the stock had just kind of bounced around the rest of the day, kind of rebounding here in the afternoon.

But all in all, good trade. Again, just stick with the trend, guys. It’s definitely the easiest way to trade, especially on these high momentum names and we were able to get it today on this L-E-V-I. Good example of an add back, which I will spend more time on in a future video of how to basically press a trade, right? If a trade is moving your direction and it’s trending properly, the price action’s good and there’s still room to move. You want to press these trades because this is where you can really extract a lot of profit. You want to squeeze the most you can possible out of every single trade. If you have something that’s working for you, stick with it and continue to really extract the most that you can out of it, because that’s where you really get the big wins.

If this continued today and started to break down through this 2040 pivot, we could have really seen this thing open up and it would have been a huge, huge winner. So you always have to position yourself for those huge wins and then when they do hit, you will be there to take part in it. Today we got really close, we broke the trend line and we started to look really good. We started to roll over right in through here. This was a really good sign and I was really hopeful we would see the lows be taken out and bust through this and then just a free fall start to happen and that would’ve been a really, really huge win. But it just didn’t want to continue there today. However, we positioned ourselves properly and was still able to pull a nice one out of it. So good example there today guys. Hope everyone was able to catch a piece of that and that we’ll be back here first thing tomorrow morning looking for another trade.

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