Back on the horse +$1,356.95 on a $YUMA Short Squeeze!

All right, guys. We’re going to do a little midday market recap here. This one’s going to be on the early side and go over the trades from this morning. Finishing the day, today’s the 129th day of the year, up $1,356.95, which is great. Back to the daily goal, $1,000 a day, and back on the horse. Yesterday was a red day. Obviously, I did my YouTube video on it and talked about it during our midday recap. Difficult day, maybe a little bit frustrating.

I think the rule that I broke is that I kept trading when I was down more than 1,000 bucks, and although I had given myself the okay to do that this year because, realistically, being down 1,000 bucks is like being down 100 when your good green days are $8,000 and $10,000, so I felt like just because I was down 1,000 didn’t mean I should stop trading for the day, but the reality is my emotions change when I’m in the red, and yesterday, I really wish that I had just stopped trading when I was down past 1,000 bucks.

A new rule for me is if I’m down past 1,000, I’m done trading. Because I get aggressive on my first trades, sometimes I take 5, 10,000 shares on trade one, it does mean that at 9:35 I could be down $1,000, and I’m done for the day, but at the same time, if that’s how my day starts, that’s not usually a good sign for what the day’s going to be. It doesn’t mean that … It’s tough, because you might get a surprise opportunity at 10:30 AM.

You’ll be like, “Aw, man, why did I stop trading. That was a perfectly good opportunity,” but are you able to see those opportunities through the same lens when you’re in the red because when you’re in the red, it colors the way you look at the market because you start thinking, “Oh, well, this looks decent. Maybe I’ll jump in this,” or “This looks decent.” Suddenly, your A quality standard has gone way down. You’re getting more aggressive, increasing share size, and that’s not a good combination.

My new rule is if I’m down more than 1,000 bucks, I’m just going to throw in the towel. I would certainly would have loved yesterday to have only lost 1,000 instead of having gone as deep into the red as I did. Obviously, a little disappointing there, but that’s part of trading, and part of trading is also learning to get back on the horse because we’re all going to have red days, and even though yesterday was a disappointing day in a lot of ways because it was my first red day of the month and my first red day in 12 days and my biggest red day or biggest single trade loss since I think April, despite all those things were frustrating, that is part of trading, and it will happen again.

Inevitably, I’ll get into a trade, even if I’m totally good with my emotions, I’ll get into a trade with some size and it’s going to turn the wrong way on me, and suddenly, I’m going to be down 5 or 6,000 bucks, and it’s going to be like, “Oh, my God. I’m back. It’s happening again. How? Why? Why me?” It will. That’s just part of the life of a trader.

One of the things I was just mentioning to you guys, and I want to say again because this is going to be recorded and put on YouTube, is you have to normalize the experience of having red days. Red days are normal. It’s okay. Thirty percent of my trades are red, and I’m a pretty good trader. Seventy percent accuracy is pretty decent, but it still means thirty percent of the time I’m wrong. I need to get really good, and I think I have, but all of us need to be good at experiencing losses, whether it’s a loss intraday or a red day and being able to get back on the horse the next day.

One of the things that I mentioned is that, yesterday, if I had spent the whole day sulking and just really frustrated and disappointed in myself, and then today, let’s say I got into a really good trade and I made back $8,000. Let’s say I ended up seeing an A quality setup and today ended up being one of my really good days. Would I feel stupid for having spent all of yesterday sulking, because the reality is these dollar amounts seem big. I know losing $8,000 sounds like a lot of money, but when my worst red day of the year is -15 grand and my biggest green day is +22 grand, anything in between is just average really.

Yesterday was a red day, but it only gave back about four days of profit, so those are four steps up, one step back, and that was an 11-day hot streak. I didn’t give back the whole hot streak. I gave back four days of it, and now it’s back in the green today, back on the horse, back focused on the $1,000 a day goal, $1,000 a day. There’s about 250 trading days in a year, so $1,000 a day is 250 grand a year. Last year, I did 220 grand, so a little below 1,000 a day. This year, on day 129, I’m at 165,000. Let’s see 165,000 divided by 129 is $1,279 a day. That’s a good average. Obviously, that’s my average. I’ve had huge green days, and I’ve had huge red days, but average is 1,279.

One of the other things I mentioned yesterday is that when you have a bad day, it’s very easy to get hyper-focused on that individual day. The example I gave you was zooming in here on this red day, this red candle on the SPY. If I zoom into this candle … Let’s see. Let’s say today’s another red day. This is all you’re thinking is, “Oh, my God. Today’s a red day. Look at it. It’s horrible.” Oops. Let’s see. That’s what you see, and that can be really demoralizing when you’re so focused, so tunnel visioned on today, but the reality is you have to be able to step back a little bit.

What’s the bigger picture? When you start to zoom out and look at the bigger picture, the reality for me is that I’m just consistently moving up. Yesterday was a little bit of a one red day, but that’s a blip, and it wasn’t even my worst day of the year. Red days are going to happen. You’re going to have times where you’re just on the wrong side of the trade. Maybe you got a little frustrated, whatever it is. You just can’t avoid it entirely.

It’s impossible. It’s just simply impossible. You have to be able to rebound quickly, bounce back quickly, be able to have a sense of presence of self to not allow one bad day to roll into a second and a third and a fourth and a fifth. You just have to have that reset button where you’re like, “Okay. I’m stepping back, and I’m going to reset.”

Yesterday, went for a bike ride. I did about 20 miles, and I had a great ride. I think I got the best 5-mile sprint that I’ve had on that route that I take, so I was able to push some of that frustration into my bike and burn it off a little bit and just come back today and even yesterday afternoon refreshed, feeling better and ready to get back on the horse this morning.

When I came back into it this morning, even though there was part of me that was like, “Oh, I hope that we have an awesome opportunity. I mean, it sure would be awesome to get a trade where I can make, whatever, 5,000 bucks or 10,000 bucks,” I was also telling myself, “Don’t be aggressive. Just my only job today is closing the day green. If I can get my $1,000 daily goal, that’s great, but I’m not going … This is not the day to swing for the fences.”

Also, think about this. When I have a green day and I do really, really well, I’m more likely the next day to continue and be super aggressive. Yesterday, out of my three trades, all of them got slammed back down. Short sellers did really well yesterday. They might have gotten a little overconfident. They carried that into today, and they’re going to maybe continue to just slam the bid when they see stocks popping up or try to top tick them or whatever it might be.

If I think about that, it may not be the best day for me to try to get really aggressive when they’re just getting into the swing of feeling confident. You have to think about that market sentiment. It’s not just you. It’s what are the other traders doing? What’s the perception and the attitude among the thousands of other traders out there.

This morning, when we had YUMA popping up, and you guys can see my PNL here, PNL up in the top, the three stocks I traded, the last couple trades, small size, scaled out down to 189 shares. On YUMA, on my last trade, 1,000 shares in and out on the final trade, so not being super aggressive, but this trade on YUMA, suddenly we got this 5-minute breakout right here. This is an opening range breakout.

The top of the first 5-minute candle is the top of the opening range. The bottom is the bottom. As this broke 194, it squeezed up all the way to 187, and really, that was the cleanest move, that first move, and from there, it’s just been choppy, but during this consolidation, you can tell that short sellers were trying to hammer it back down, thinking that what happened yesterday with stocks going all the way back down to the lows would surely happen again today, and that was the same as maybe why I got as aggressive on one of them yesterday. I just figured we would continue to see this again, and I was wrong.

In this case, it ended up consolidating and then bursting through the highs, so anyone who’s short on this in the 60s ended up being down 30, 40 cents per share, which with 30,000 shares or 40,000 shares, the way some of these guys like to trade, it’s going to be pretty painful. I thought this one might have potential to short squeeze a little bit more. I was trying to keep buying at those breakout points, just be another buyer adding at high of day, encouraging that short cover and that squeeze, and we didn’t really see it to the extent that I hoped, but nonetheless, it was a good trade.

In total, 1,000 bucks profit. Pretty easy opportunities on this, both on one-minute micro pullbacks and five-minute pullbacks. My entries were at 68 in this first push. Right here, the first five-minute candle to make a new high. Let’s see. That was 75, sold at high of day at 87 or whatever it was. Consolidation, got back in at 75, sold on this move here as we squeezed up.

I was able to do pretty well on this one, but I wasn’t super, super aggressive on my share size. I wasn’t super aggressive with the way I was trying to scalp it. I just had a goal of trying to be green on the trade.

YUMA, to answer your question there, Kevin, came on our scanners. It was on watch at 93, 94. I just didn’t seriously think it was going to continue because I thought without a catalyst and because of how weak the market was yesterday that this wouldn’t work. It surprised me. It ended up being stronger than I thought. Maybe that’s a good indicator of the way we’re going to finish this week, hopefully with another strong day on Thursday or on Friday, but yesterday was a little weak, but other than that, the last 12 days, aside from just yesterday, have been fantastic. Hopefully, we’ll see that momentum continue into Friday and then into early next week.

Next week, for me, will be pretty much a regular week, and then I’m going to go to California for two weeks. I’ll trade from California for a last week of July, first week of August, which will be fun, but I’ll be on the road doing some stuff, going to Napa Valley, San Francisco again, visiting some of the team, the California team, the Warrior Trading folks out there and enjoying the warm weather. All right.

Anyways, I wanted to do this early, midday recap, and I’m going to get back to my bike. I’m going to go for another ride here at lunchtime, just clear the slate again. Today was a good day, but just clear the slate, put this day behind me, get back at it first thing tomorrow morning, and hopefully, we finish the week really well on Friday. Although I’ll be in California, I know I’m going to be super busy, we are going to have our next Inner Circle, will be in New York City.

The dates have been scheduled, although we haven’t announced them yet, but it’ll be in the fall, so anyone who does want to meet me and come and trade side by side with me, New York City, fall 2017. All right. We’ll keep you guys posted on that, but in the meantime, I’ll let you guys enjoy the late morning/early afternoon, and I’ll see you first thing tomorrow.

That’s it for now. See you guys in the morning.

Hey, I didn’t see you there. 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.