Day 59 of the $583 Challenge +$114.34

Alright guys, so time for mid-day market recap here. Today is day 59 of the $583.00 challenge. And today it seemed like momentum really slowed down. I am only up $114.00 on the day. I hit $1,300.00 and then I gave back, I guess, $1,500.00 and then worked my way back up to green, a hundred bucks.

So, today’s the day where we just didn’t see quite as much follow through. And we’ve had a really good run for the last four or five days. But, for whatever reason, today it slowed down a little bit. So, I’ll go over the trades from today. I’ll show you my P&L here on StockTwits. Let’s see, the stocks I traded today: ETRM, HTGM, KBSF, NYMX, and TNXP. You can see my P&L right there. So, P&L for today, $114.32. Traded five stocks. Red on two out of the five. Green on three out of the five. So, definitely didn’t see a lot of accuracy. Small win on ETRM. A bigger loss on HTGM and KBSF. A small win on NYMX. And a decent size win on TNXP.

So, this morning when I got set up I saw that, 1. CBIO was gapping up, and so I was thinking, “all right, well, I wonder what this is gonna do?” You know, yesterday we had this crazy move up to $18.00 and then pre-market we had a high of $20.00. So, that made me start to think, is this going to do something like the RYS? Is it gonna go, you know, open at 20, squeeze up to 22, 24, 26, 28, 30? Is this going to be one of those ones that really just totally goes parabolic?

But, as we got closer to the open you could see it was getting a little bit weighed down and then right when the bell rang, it dropped like three points. So, from 18 down to 14 within 20 minutes. So, it just sold off. It was really heavy out of the gates and we didn’t get that follow through. So, no trades on it. And I think that that probably weighed a little bit on some of the other momentum stocks because when you have this one that’s been kind of leading the way all of a sudden roll over it can make traders a little bit nervous.

Now we had TNXP on the top of the gap scan this morning and I was like “This looks really good”. Over 750 here, this kind of pre-market flag. But, I want to trade it pre-market. I wanted to wait for the bell to ring. By the time he bell rings, we had gotten a pre-market high of, 785 pre-market. And I felt like if I’d just jumped in this thing at 785 or 775, I wasn’t really managing risk. I would just be buying it at high of day. It didn’t feel safe. So, I decided that with already two million shares of volume, I would wait. I was also concerned because the news on this was almost the same exact headline that was out a couple weeks ago. So, there wasn’t as substantial to headline as some of the other stocks in the last few days.

So, anyways, the bell rings and it quickly pops up to a high of 940 and that’s on the 5 minute chart. And so, on the one minute chart (which I’ll scroll back on), although I could have gotten in for the break of $8.00. And I was definitely thinking about it. I decided that that would be a little bit too risky. And so instead, I let that first one minute candle form.

And the first one minute candle, very similar to what we saw yesterday squeezed up, (let’s see, let me make this a little bit bigger), to a high of 873. So from 775 $8.00, we squeezed up to a high of 873 on that first candle. Second candle was red. And I bought the third candle as it broke the high at the top of the red candle. So, I got in actually at 850 in the anticipation of the break of 860. And there we squeezed up to 940.

So, that was the same set up I took yesterday and on that trade I was able to make thirteen hundred bucks. So, that was solid. Not a lot of risk and I was thinking that would give me my first trade on the name. Help me build the cushion and then hopefully we would see continuation.

That ended up not being the case. We rolled over. That was high of day.

So, I got one good trade on it, whereas managing risks. So I can feel good about that.

Once I finished that trade I saw KBSF hit the scanners. And this one I completely missed yesterday. It had made a pretty big move yesterday. From a low of $5.00 to a high of 737. So, when I saw it hitting the scans this morning I was like, “you know what, I’m just gonna jump in”. I’m not going to be as aggressive, but I’ll just jump in.

So, I got in at 2500 shares at 750 and it popped up to a high of 738. Now, on the one hand you’d think, “well, that’s almost a dollar per share. You should take the profit”. The problem on this one is that the spreads are really big. So, it was like $8.11 on the bid and 838 on the ask. And I didn’t want to sell right away because I thought breaking above the 200 moving average, that this one might have the potential to become a really good momentum trade and it might get up towards 9 or even $10.00 a share based on the daily chart.

So I held it. We had the first candle make a new high. We had the pull back first candle make a new high, was right here up to 831. We couldn’t break high of day. And on this candle, we dropped all the way down to 717. And then I stopped out with an $820.00 loss.

So, its very frustrating to go from being up 80 cents per share to being down, I guess the loss was 33 cents per share. But, that’s kind of what comes with the territory with that type of stock. That’s why I size down to reduce my risk. I think it had the potential. It just didn’t go. It certainly didn’t help that TNXP at the same time was selling off. And that CBIO was selling off. So, momentum was kind of shifting when I jumped on that trade.

The next one I got into was HTGM which was another quick loss. This one was 5000 shares and I lost … I guess, let see, I got in at 860 and stopped out at 846. So, a little disappointing there. Sorry, 760. I got in looking for this to continue up. Looking at the one minute chart. We had this sudden kind of burst of momentum. And I was like “okay, I’ll buy the first one minute pull back”. Which was right here. I got in for the first candle to make a new high, which was 760. We popped up to a high of 781, right here. And then all of a sudden we dropped back down.

So, couldn’t hold the level. Disappointing. Stopped out. Just frustrating. So, with those three trades done, TNXP up to 1300, KBSF went down to only two hundred bucks or three hundred bucks, and then HTGM, I’m now in the red. I went from being at my daily goal to being in the red on the day which is never something that I like to have happen. And I am aware that that’s something that can trigger me to get really frustrated, aggressive, and start to be kind of an emotional trader.

So, at that point, I was like, “okay, I need to slow down”. Number one, clearly I’m either not timing my trades right or maybe the market’s just not on my side. But for whatever reason, I’m not in the zone and I need to step back. And so, I step back and close my eyes for a second, and I was like, “Ross, in the last seven days, you’ve made $22,000.00. If today you lose $200. It doesn’t matter.

It’s not a big deal. Don’t get bent out of shape because you’re up a thousand and then now you’re down 200. The big picture’s that it’s no big deal. Take the hint that momentum is shifting and slow down”.And so that’s what I did. I slowed down for about 45 minutes. I didn’t trade at all. I didn’t trade anything.

And then we had ETRM come up on the scanners. ETRM popped up on the scan. It was squeezing up and I was like, “okay, well this looks decent.” You can see obviously it retraced the entire move. So, on this one I said, “okay, nice strong move. I’ll get in”. First one minute candle, right here, I was in this at 625. We popped up to a high of 645. Right here, 20 cents. And, I … For some reason, didn’t sell it.

I thought it could break over 650. And it could really kind of open up a little bit. And then all of a sudden it came down to 616. So, I went from being up 20 cents to down 9 cents. And my stop was 615, the low of the candle that I entered on. The high was 25, that was my entry. The low was my stop. So, basically testing my stop. And then I said, “well, I’ll either stop out at 615 or it will bounce of this level”. It did. It came back up to 634. And I got out with $200.00. So, a little bit of a close one there. And then, of course, it sold off.

Now, something that we noticed today on a couple of other stocks. IMMY. You’ll sorta see this pattern. The squeeze up and then back down. Pack B, squeeze up and back down. So, you are seeing the moves getting reversed a little bit, little faster in the last few trades than we were earlier in the week.

So, NYMX. This one started popping up and did the same thing. I was like, “okay. Wait for the pull back. First one minute candle to make a new high will be my entry”. We pulled back right here and I got in for the break over $4.00. I was in at 98. We popped up to a high of 410. So, right there, another 8 cents, whatever it was. [inaudible 00:10:38] capture quick profit, put me in the green. And then I said, “okay, well, I think at this point I’m just going to be done”.

So, with commissions and everything else, only $114.00 of profit. But, green is good. So, closing day 59, its a green day. Day 59. Plus 114.34. And it doesn’t get me much closer to the $40,000.00 goal I kind of had for the end of this week but that’s an arbitrary goal. If I don’t hit it its not the end of the world by any means.

So, anyways, that’s kind of where we’re at. I think that it’ll be really important tomorrow and Friday for me to kind of stand on the sidelines a little bit as the market opens just to kind of get a sense of climate. Are we gonna have momentum coming right back in the way we’ve had on Thursday, Friday, Monday, Tuesday? Or are we just gonna see every spike get shorted?

Today was the day where it seemed like short sellers were able to do really well. Because for a long biased trader, all of a sudden a stock spikes up like this, there’s not really time to get in it for the first spike. I mean, I don’t even know what causes the first spike. So, you get in on the first pull back. But, when the first pull back pops up and then gets quickly rejected, you end up losing on it. So, the people that do better on these one’s are the short sellers. And that’s kind of where you see that tug-of-war in the market.

You know, for the last four or five days, the long biased traders have been doing fantastic. I mean, APOP, HTGM, CBIO, GBR, a few others. I mean they’ve just been going crazy. And so anyone who’s been trying to short those moves have been having a hard time. But, today seems like a day that we’ve kind of reversed roles where the short sellers are probably doing a little bit better. The long biased traders are feeling a little frustrated that stocks aren’t holding up as well as they had been.

One of the things you need to do is be able to kind of taper back your aggression and be a little more conservative when things start to slow down. So, during the hot streak of those four days, I made $22,000.00.

If we do go into a little bit of a low here at the end of the month or the beginning of next month, that’s fine. I just don’t want to drop down $15,000.00 again. I’d rather just be sideways for a couple days and wait for really good opportunities to come back and then jump on them once we start to see signs of life.

Those are my two cents for today. I know some of you guys did pretty well on TNXP. Those of you who are more aggressive getting in right out of the gates. I felt like it might have been … I kind of was like, “I wonder if this I going to be a trap?” Like, because in my mind, my emotion mind is saying, “just jump in at, as soon as the bell rings and take 20,000 shares, and just hold it and maybe it will run 10 points like APOP, HTGM, CBIO. It looks like the one.

You know, it’s got a headline. It’s gapping up. Just get in and do it.” And I was like, “you know what, when you start to get emotional like that and think that because the last three did it, that this will do it, that’s usually why it does the opposite”.

And so, I thought a little bit more and I looked at the headline and realized that it wasn’t the most substantial headline. Realized that this was already trading on two million shares of volume pre-market. So, big part of the move had already happened. And at that point, I said, “you know what, I’m gonna taper back my risk. I’m not going to do something crazy.

I’ve already had seven consecutive green days. I’m due for a red day. And I’d rather not have that happen today”.So, today’s day … 1, 2, 3, 4, 5, 6, 7, 8, 9, 10 … Today is actually the 10th consecutive green day. Which is … I mean, that’s fantastic. It was almost a red day, but 10th consecutive green day.

So, I would rather aim for consistency and small wins and that means really being quick to taper back the risk. But, when I see opportunities and we see that, those stocks starting to squeeze, 20, 30, 40 percent. That’s when I’ll just put the pedal to the medal and jump right back in and get aggressive.

All right guys so, the answer your questions, I see a couple questions on Facebook Live.

The scanners I’m using, those are all by Trade Ideas. Trade Ideas is kind of like, its a software for stock scanning that provides some templates but also allows you to address any of the filters the way you want. So you can really create your own custom scanning strategies, inside trade ideas, or you can use some of the default ones that they’ve preloaded.

So, I’m using Trade Ideas on the left for scanning. East Signal on the right for charting. And then Speed Trader for executing my trades.

In Speed Trader I don’t even use my charts. I only use … All I have are level two windows. Basically, like this and then with level two windows because the charts aren’t very good. So, I’d rather use East Signal. Save the money on commissions by using a discount broker, like Speed Trader. And then put some of those savings into good tools like East Signal and Trade Ideas.

That’s kind of the thing, you have to use the right tools. I was saying this last night in our class. Last night we had class 2 of the Day Trade course on Risk Management. It was three and a half hours long. Another awesome class. And, one of the things I said was “if you want to be a successful trader there’s a couple of things you need to do”.

1.You need to master risk management. Absolutely, first and foremost. Every single trade needs a max loss. And you need to know that max loss before you get into it. And it may not be a bad idea to set a live stop as soon as you get into a trade so you don’t get into situations where you are suddenly down 30, 40, 50 cents per share. So, 1. Risk Management, absolutely critical.

2. Is using the right tools for the job. It’s so important for you to use the tools that are designed for active traders. The type of broker that I’m going to trade with is not the same as what a swing trader would trade with. Or not the same as what a college student trading from his iPhone is gonna use. I have to use the tools that are best suited for the type of work that I’m doing. So, I give suggestions, of course, and recommendations of the tools that I’m using to all of our students because it’s important.

So, if you make the decision to use tools that are different from what I suggest then you have to be aware of the fact that that could directly impact your ability to trade the same strategy that I’m trading.

If you don’t have hot-keys, if you don’t have the ability to see good charts, if you don’t have level two, if you are trying to trade on your iPhone or your iPad, that’s going to put you at a real disadvantage.

So, anyways, and then to answer your question why I didn’t get into pre-market. I just have a rule about not trading pre-market. So, even though this is one that certainly had enough volume to take a pre-market trade down here at 680. You don’t have as much liquidity. Your orders usually route slower. You can’t take as much size. So, the risk is higher. And this is one of those cases that I could have done it. I just followed my ruled on that and don’t trade pre-market.

So, that’s kind of where we are at here for the lunch time recap and I’m just happy to be kind of, out of the market for the day. Not feeling it. So, I’ll come back tomorrow and hopefully we’ve got some better opportunities. Glad I was able to avoid having a red day, though.

So, anyways, that’s it for now. And I will see you all first thing tomorrow morning in the chat room. And students, I will see you at 4pm in the classroom. All right, thanks guys.

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