Warrior Trading Blog

Well Here We Are -$3K | Ross’ Trade Recap

-$3K

What’s happening, everybody? Well, here we are, Friday, finishing the week in the red. Ugh. Lost $3,000 today. Two trades, right out of the gates, within the first two minutes, I was down three grand.

First trade was on NSYS. It was a gap and go trade. Great catalyst of a share buyback, which is so rare among small cap companies. As I started to see some volume come in, I jumped in. As soon as I got in, I realized I bought from a hidden seller. There was like an iceberg order. It popped up 7 or 8 cents. I started unwinding the position. Lost 260 bucks. Not the end of the world.

Then I jumped right into FFHL, which was also on our gap scanner and squeezing up. What I saw on that that I liked was, it was either a 15 or maybe a 19,000 share bid on, sitting on the bid, so a big buyer sitting right there. I saw that, and I was like, “Okay, that’s kind of like a backstop.” I jump in. It pops up maybe 10 cents towards high of day, and then it drops 50 cents. It drops all the way 2.60, and I’m sitting there holding 60,000 shares. It drops to 2.60, it pops back up 2.70, and then it drops to 2.62 or 2.58, so I was like, “All right. Well, that’s it. Writing’s on the wall. I gotta bail out,” so down $3,000. Ugh. 157th day of the year.

It’s like this week has been red on Tuesday, green on Wednesday and Thursday. Made 2,500 on Wednesday, 2,000 yesterday, and then lost three grand today. It’s like couple steps forward, couple steps back, couple steps forward, couple steps back. I lost 1,900 on Tuesday, so I’m down $1,000 on the week. Made 8,000 two weeks ago, 4,000 last week, down a thousand this week. What’s going to come next week? Down 5,000? Down 8,000? I can’t let that happen. I’ve gotta keep the stops tight.

One of the things today that a couple of traders mentioned, they’re like, “Ross, it’s 9:32, and you’re down three grand. Are you really going to stop trading?” I said, “Yeah, I really am going to stop trading because here’s the deal. If I keep trading now, and I take another trade, and I lose another $2,000, then I’m going to be down five grand.”

Maybe I’ll see some good. I think it’s a great opportunity, but if I keep losing, the red days, unless I just have winners, the red day’s going to get bigger and bigger and bigger. I’d rather look back on my calendar, the one I write down here, the one on Traderview, and be able to look back and say, “Okay, my biggest red days or two, three thousand dollars.” Maybe a 4,000 gets away from me here or there, but that’s my cap. Those are the biggest red days, and then when I look at the green days, $13,000 green days, 16, $1,700 green day, $4,700 green day, $2,000 green day, $8,000 green day.

That’s what I want to see, $2,900. Big back-to-back green days. That puts the red days in perspective, $14,000 green day, and then the red day’s 1,500 bucks, 1,200 bucks, 1,900 bucks. That, to me, is managing risk, capping the losses. Even though I’d love to have been able to bounce back and finish in the green today, I didn’t want to risk going further into the red. You gotta draw that line in the sand. When you cross it, that’s it, you’re done.

Follow the rules today. The rules of August, right here. Tight stops. Well, kept the stop as tight as I could on that one. Three red trades, you’re done. I only had two red trades. $2,000 max loss. Followed the rules. Then shut off your monitor after the recap.

That one, I certainly will do. I kept watching the market even after 9:32 because it was just so early, I just kept watching it. Some days, I would leave the office, and I’m out, and I’m done. I’m like, “Nope, that’s it. I’m out of here,” but today, I kept watching, and that was fine. I wasn’t tempting to take any more trades, and I couldn’t anyways without picking up the phone and calling my broker because I actually have a max loss on my account. If I’m down more than two grand, I cannot take another trade, so that’s good.

Not the way I wanted to finish the week, but this is August. It’s one step forward, one step back. I’m grinding, and that’s where my equity curve goes up, up, up, and then goes sideways. Right now, I’m down a thousand dollars for the month. In 15 or 20 days of trading, whatever it is, I’ve just been going like this. Going sideways is going better than going down. Going sideways, getting ready for the next leg up. Hopefully it comes soon.

That’s it for me. I hope you guys enjoy this video. Give me a thumbs up if you enjoy it. Red day recaps are not fun to do, but we do them every time. Comment. If you have questions, put them below. I’ll come back through and answer them this weekend. See you guys on Monday.

All right, everyone. It’s time for our Mid-Day Market Recap. Here we are at the end of another week. It is August, and it is a grind. This has been a difficult month for me. I mean, it’s just no doubt about it. It’s been the hardest month of the year besides February, which February, I even cut it out, I keep looking at it, I remember cutting it out of my calendar and burning the month because I was red I think eight days, and I only traded 15 days, so it was just a bad month. My accuracy was horrible. It was so strange because I made $117,000 in January, and I came off the best month ever and had a red month.

I was just being really aggressive. I was trying to swing for the fences on every trade, and I kept getting stopped out. I was able to turn things around. As you guys know, the rest of the spring was really solid. I had some great profits, so turned things around, which was great. Came into the summer feeling pretty good. Made I think $36,000 in June, another 50,000 last month in July. Starting to open up a little bit thinking, all right, August is going to be great.

First week of August, I lost $12,000. I feel like I’m starting August the same as I started February. Second week of the month, I made back $8,000, so I was still down four grand. Third week of the month, I’m, or third full week of the month, I made back 4,000, so was break-even, and this month, I am, this week I’m down a thousand bucks.

I’m back to down 1,000 on the month, which is obviously not where I am usually wanting to be coming into the last week of the month, but it is what it is. One of the students mentioned earlier this week in the chat room, he said, “Ross … ” or he didn’t say it to me. He was reminding himself, or he was giving someone else words of encouragement. If you have a little bit of a hard time when you start trading with real money, remind yourself that you’re the same trader who made money in the sim for last three months, or whatever the case may be, for the last month. Just, as that pep talk, even though you’re losing money right now, you’re the same trader who’s been making money. I’m just going to … Remember, guys, not to share personal info in the main chat room.

I’m the same trader who made 100K in January. I’m the same trader who took $583, turned it into $100,000, blah, blah, blah, blah, but what it feels like is that you’re only as good as your last trade, you’re only as good as your last green day.

I’m sure you know that’s what Tom Brady was saying when they lost at the Super Bowl and he missed that super easy catch you think almost anyone could have caught. People are saying, “Tom, you got all these Super Bowl wins under your belt. It’s all right. You’re still that same guy,” and it’s like, yeah, okay, but … Maybe that softens the blow a little bit, but you still feel that kind of, ugh, you’re only as good as your last trade.

You guys know that I like to watch The Deadliest Catch in Discovery, and one of the things that one of those captains said at the end of the season is that you’re only as good as your last season. With that type of work, I’m sure that feels very true because if you have a bad season where it takes you forever to catch your totals, to catch your quota, that means less money for you, less money for your crew, blah, blah, blah, blah, it feels like, I’m sure it feels like you’ve got that pressure on you. It doesn’t matter that I had a good season two years ago. I need to do a good job every single year back to back to back.

For me, there’s certainly some of that feeling, and I talked about it a million times, but just that feeling of when you start to have a little bit of slow patch that you’re only as good as your last trade, so if you have … How many back-to-back red months can you have before you really start to freak out?

I guess the good thing for me is that since I’ve now been through these kind of hot streaks and cold streaks so many times, I’m kind of at a point where I’m not getting really that stressed out. I’m really not stressed out that I’m red here in August, or I’m down a thousand bucks, whatever. I’m not that stressed out because I’m kind of just like, you know what? Yeah, I am red, but I’m not worried that oh, no, something’s happening in my strategy. I’m not going to be able to pay my bills anymore. I’m not worried about that because I’ve had this happen so many times at this point that I know that I always come out on the other side.

These are my stats here for the month thus far. This was the first day of the month. Lost nine grand. Made back four, lost four, or five. This is kind of where I’ve been. Today’s going to be another red day. I’m just basically down to like here. 5,000 is kind of that line there, trying to keep losses not lower than that.

But what you’ll see from this month is that the market has not been giving big winners. Here’s the problem. The average winning trade, only $640, whereas the average loser is 1,000. Now, this is not an abnormally large average loser. If we look at my average losses for the entire year, you’ll see that my average losses are about that, so I take pretty much the same amount of risk on every trade. That’s good. I didn’t blow out my max loss. I’m not risking 5,000 per trade. My average losers aren’t higher. The problem is that my average winners are lower. How do you … That’s the challenge. How do you acclimate to average winners being half the size as average? Percentage of success, it’s not that different. 67%. The problem is I’m not getting the big wins.

That’s the indicator of a choppy market. The only metric here that’s different, the only metric here that’s different is the average winners. You can’t control how big winners are going to be. If you don’t have stocks that are squeezing up 50, 60, 100%, you’re not going to have these really big winners. We’ve had some, a couple nice trades, but in general, a lot of the trades have been these small wins. Ends up only being 200 bucks, 300 bucks, maybe a thousand, and then another round of small ones.

This is what I’m dealing with right now. The profit/loss ratio is inverted. It’s negative. It’s actually almost exactly 1:2 versus what we aim for of at least 1:1 or 2:1, but you can’t control how big the winners are going to be. The only thing you can do is control the losses and know that you will come out the other side of this streak, whatever it is, red streak, a more disciplined trader for following the rules, for keeping your accuracy about the same, for not getting super, super aggressive, et cetera, et cetera.

I’m trying to find my … Let’s see. Overview. Do, do, do, do. Detailed. I always … Every single time, I look for it, I struggle to find it. Let’s see. Win/loss expectation.

This right here is my, this is my equity curve in the last two years. Since I started with $583 in my account, not to harp on the amount, but $583, this has been the equity curve. I had a period … I wish they would let you blow it up a little bit more without me having to zoom in in my chart like this, but in any case, as you guys know, first few days, I was making a hundred dollars a day, 150 a day. These were the first couple of days of that challenge. These wins were tiny. It’s hard to get the mouse there. $156. Finally started to open up, but then during the summer of 2017, it was kind of slow. I was kind of grinding here. I was making money, but not making a lot of money. I only made like $30,000 across three months of grading.

Then all of a sudden, things really opened up in the fall. October and November, things started to peak up, made this really nice push. Had like three weeks of sideways, and things opened up again big time from December all the way through the end of January, January being the best month I’ve ever had of trading.

Then things were sideways in February. I lost about $10,000, so I didn’t go super red, but I lost some money, and then things started to open up. A little setback. Things opened up again. A little setback, opened up again, a little sideways, opened up again for a really nice month here of June and July, and now this is August, sideways.

What I will just say is that it’s always better to go sideways and even go down slightly than to have steep drawdowns. You know that there are traders out there who have these types of moves where it drops down big time. Then maybe it opens back up, and then it drops way down again. For me, being a trader who’s doing this for income, I’ve always gone for consistency. It doesn’t mean that I won’t have red days, because of course, I will, but it means that generally, I cap my losses, I know when to throw in the towel, and I try to walk away quickly.

This, my peak drawdown has been losing a total of $22,000. That was in May. That was right here. That was the bottom of my drawdown right there, and that’s the biggest drawdown I’ve had since creating this account. Drawing down from 600,000, from, sorry, 624,000 to 602,000. I mean, I’m not sure what percentage that is, but it’s not even, it’s like a couple percent. It’s a really small drawdown. It’s, let’s see, 10% would be 60 grand, 5% would be 30 grand, so it’s like a 4% drawdown on my account. Then you can see here, moving back up.

This is what’s important. Here, I lost about 12,000 in early August. I’ve gotten it back. I had a couple dips here, but nothing serious. I’d like to try to keep the drawdowns maybe a little bit lower. Going down 20,000 is, it feels disappointing to go down that much, so whatever. Right now, I’m kind of flat, and I’m just hoping that things open up because this is the line that I’m really watching. $583 to $1 million. I was hoping to hit that by December, so … Well, by December 31st, by the end of the year, but I’m not sure if that’s going to happen. We’ll see. If I have to go like this a little longer and then break through in February, whatever. That’s fine.

The trades today, really not a lot to show. NSYS and FFHL. NSYS was on the gap scanner this morning. Jumped … Basically, it was on the gap scanner with an interesting headliner that was share buyback, which is very rare among small cap companies, but a share buyback. It’s gapping up. It has a nice pre-market high of 4.70. Out of the gates, it starts to pop up here. You see that green candle as it squeezes from a low of 4.13 and pops up? I jumped in it at 4.30, and as soon as I got in it, I knew I was buying from a hidden seller because I was buying 6,000 shares, and it was showing like two shares on the ask or something like that, and it wasn’t moving.

That seller was not moving, so that’s how I knew I bought into a hidden seller. Right away, I tried to unwind the position, tried to sell half at .36, half at .30, hitting the bid when I saw a good bid, and reducing my risk, but I ended up selling the rest of it down at 4.10, so I lost 260 bucks on that trade, but that’s not that big of a deal. That’s pretty good risk management to be able to get in, notice the hidden seller, and unwind the position. I was prepared to add over 4.50 if it opened up, but it was kind of stalling out right there.

Then FFHL was also on the scans right here, gapping up 20%. I wasn’t super into it. I really wasn’t. I didn’t think a lot of it, but right out of the gates, the first candle, it starts to squeeze up, hits a high of 3.14. It pulls back. As it came back over 3, I was like, “Okay, I’ll get in at 3.05.” I’m anticipating the break of 3.15, and then thinking, over there, we’ve gotta move up towards 3.20 in the pre-market highs.

I jump in at 3.03 and 3.04. It pops up for a second to 3.10, and 10 seconds later, it’s at 2.60. That’s always really hard to control your risk when a stock suddenly drops 40 cents. It drops 40 cents, and then I end up stopping out 2.58. There just really wasn’t a lot I could do. It hit a low of 2.55.

Now, it did pop up here to 2.81. That’s 30 cents on 6,000 shares. That’s 1,800 bucks. I could’ve held, but at that point, I was starting to get worried it might get halted on a circuit breaker going down because it’s just, went from 3.10 to 2.50, and if you don’t cut it when it breaks 2.60, then where do you cut it, and so on that one, I was just like, “Yeah, this doesn’t look good. I think I gotta get out.” In hindsight, maybe I could’ve held back up to the 70s or 80s, but I just cut it. With that, down three grand in the first two minutes trading. That was disappointing.

GEVO, I saw … Not GEVO. GERN, I saw this one squeezing up. Didn’t take a trade on it. Couldn’t because I’m below my max loss. It would me FOMO to trade it, but … FOMO and revenge trading and breaking rules, which I can’t do, but I saw right here under five consolidation, there was like a 70,000-share seller sitting at five. As I watched it go 70, 60, 50, 40, 30, 12, 11, 10, and then it pops, I was like, “Oh, that looks interesting.” Pops up to a high of 25. Pulls back. Nice one-minute micro pullback here, and then it ends up going up to a high of 5.80, which is really surprising for a stock with a float of a hundred and, let’s see, 59 million shares, but put in a really nice move.

For me, one of the things that’s hard with that price range is that it’s hard to read the tape because the orders are going through so fast, it’s just really hard to see what’s going on. On that one, I don’t know if I would’ve traded it, but in any case, I followed the rules today, and so even though I’ve got a red day, I get a pat on the back for following the rules and not giving into FOMO, not trading past my max loss, and just, it is what it is. It’s a red day, but when you can cap all of your red days that you’ve ever had at a certain amount, that’s when you’re really doing something good.

Obviously, on the first day of the month, I still had on, well, I still had a $5,000 max loss, and I was down 4,500 bucks, and I took trade number four, whatever it was, and just like that, I lost another $5,000. It’s really frustrating when that happens. It’s FOMO. It’s the emotions that we all deal with from time to time.

This is now my sixth red day of the month. I’ve got more red days here than I’d like. June was solid. July was pretty good. May and April weren’t great. I had a red streak here at the end of April, carried into the beginning of May. February was awful, but January, March were good, and really, all this will be is another red day in just a sea of trades. I mean, it’s just like, this is just, there’s always going to be little clusters here and there, a little cluster here, a little bit here, but that’s just the way it is.

October, this is rare to have that kind of month. That was nice, but in the whole month, we can just look at the month of October real quick. It’s not like I killed it. 31, 2017. It was a good month, but it wasn’t like the best month of my career. Detailed. I made, net, $35,000. 80% accuracy, which was good, but the average winner’s 800, average loser’s 700. I wasn’t pushing it. I wasn’t being as aggressive. If I’m going to be aggressive, I might have a month where I make 70, but I do have a couple of red days. I think that’s okay. It’s okay to fall down as long as you get back up and keep working it.

Anyways, that’s it for me, red day recap, but we’ll be back at it first thing on Monday. I hope you guys have a great weekend. Students, we’ve got class starting in about an hour at noon time, so we’ll be continuing here with the Day Trade course, chapter nine. All right, I’ll see you guys in class in an hour. Everyone else, I’ll see you first thing tomorrow morning. Monday morning.

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