Day 68 of the $583 Challenge

 

All right guys, let’s start our midday market recap. The battle with my headset continues today, which is why we’re starting a little bit late. In any case, we’ll go over trades from today. Today was a surprisingly great day, $3,192.48. You know, I wasn’t expecting to have such a green day, I really wasn’t. We had a couple of good setups, I got aggressive and I locked up the profits and with that I had one of the best days I’ve had in over a week.

You can see there for those of you watching on Facebook $3,192. I’m up to 120,000 in my account, tomorrow I’ll open at 123,000. I’m making my way up closer and closer to 125 and 130, 140, 150 and we’ll just see where this takes me. It’s confusing because I’m up $120,000 on the year, in this account I started with $587. For the first two months of the year or for the first month of the year, really the first six weeks when I had a tiny account, I was also trading in my regular account because I traded offshore at SureTrader for the first month or whatever.

I made about $30,000 or so in my regular account. I’m actually up 157,000 on the year. I’ve got an extra $33,000 of profit or so. Whether it’s 120 or 157 either way it’s been a great year and this is the account that I of course started January 1st with a little over $583. A day like today, it’s obviously what I look for as a trader. Just to find stocks I can get aggressive on, had accuracy on three out three trades not have to push it too hard and walk away with anything over $1,000 is awesome. $1,000 is the daily goal.

As of right now I’m up 18,000 on the month of April and of course today is April 11th doing pretty well. That’s not bad considering we still have a solid two and half week left in the month and I’m up 5,700 on the week here. Doing pretty well and staying focused on looking for quality setups and not being overly aggressive. I actually was a little aggressive on PYDS and we’ll go over that trade in a second, but we’ll start with the beginning of the day.

NADL was my first trade of the day and this one, it’s funny because we had this nice little pullback pre-market right here around $2 and I was thinking, “You know, that looks like a nice bull flag, that’s the place that I’d like to get in but I don’t want to buy it pre-market.” It pops up to a high pre-market of 57. Well, I actually decided for maybe the second time this year to take a pre-market trade. By pre-market trade I mean I got in at 9:29 and 50 seconds. I got in 10 seconds before the bell rang using my day plus order.

My hotkeys are scripted to day plus and they will work pre-market or after hours and this had a lot of volume. It already had nearly a million shares when I got in, no issue with liquidity. I got in this one for the break over 250. A half dollar break and I just thought, I’d see where it would take me. 5,000 shares, 250 we popped up to a high of 274. We pulled back, we then squeezed up to 278 and a high of 287. I wasn’t as aggressive on it as I could have, I sold most of it probably too soon but I was able to lockup on that one $807 in the first three minutes.

Basically, in-out 800 bucks in three minutes, I’ll take it and that right there could be my daily goal. I could say, “Look, if I can do that, that’s a great day,” and it’s always better to walk away green than to walk away red. Anyways, I decided I’d obviously keep trading. CBIO was the second one on my watch list and this one had a pretty nice pre-market flag. We had the first pop, the pullback and the second move up. I was watching it long over the pre-market pivot, which is right here at 670 exactly.

We started to popup here, we do a little bit of a red to green move, we dip down when the bell rang and then we start to surge back up. You can see as we surge back up that’s where I got in for the red to green move and we got this move all the way up to 708. I got in at 672, my average was 672. I filled at 670 but then a little at 678, got this pop here up to 708. Another solid trade, 1,000 bucks and that put me up $1,800 on the day and now we’re five minutes into the day.

At that point I was like, “Okay, this is a great start and I’ll just keep watching my scanners.” NADL was obviously on the scanners, CBIO was on the scanners, we also had a couple of others that I wasn’t super interested in, Plug was on there. I don’t trade this one, the float is quite high over 100 million shares so no trades on that one for me. Then we saw PYSD hit the scanner and when I saw it hit the scanner it was right here.

I said, “Well, you know sure it looks interesting. We have resistance at a 172, which is the 200 moving average but yeah it looks interesting, my problem is the volume is too light. If I want to get in this here …” there was only about 60,000 shares of volume by this point here so it was just super, super thin. I was like, “All right, well it looks interesting but I’ll just … I’ll wait.” Other traders saw it and also thought it looked interesting, which is why they first candle to make a new high on this little bull flag got bought up with 179,000 shares of volume.

It went from 164 all the way up to 219 and we got halted on circuit breaker. At that point I felt like, “Well, maybe that’s a little annoying because I was certainly watching it, I just passed because I thought the volume was too light. I guess I could have, I guess I could have traded it, I just couldn’t have taken a big size but in any case,” I said, “That’s fine, I’ll wait for it to resume.”

It was halted at 219 and I said, “As soon as it resumes, I’ve got two approaches. Number one, is that I’ll buy as soon as it breaks over the high before the halt,” which was 221 and then the second was that if it opens even higher than that, if it opens at 245 or 250 I would add around the whole dollar of 250. You guys can see, let’s see right here. We’ve got this move up, a little bit of pullback with a little bit of a rest and that’s the opportunity to be a buyer, we get to move higher.

I jumped in this right at 221 as soon as it resumes, it actually resumed at 220 and as it popped up I got in right as soon as it resumed. It was 230, 240 and my average was 243. We popped up to a high of 260, we pulled back and then we went up to a high here of 265. It wasn’t the best trade ever. I made 1500 bucks on it and with that trade it got me up just over three grand on the day. Which was good but it wasn’t exactly what I wanted. I was thinking over 260 we would have a move up towards three and it would potentially give me another one of those days where I’m at five, eight or maybe 10,000.

1500 on it is not bad, it wasn’t a bad trade. It just didn’t really work out as well as I wanted. The thing that of course made me nervous is that as soon as I got in with 10,000 shares it dropped on this candle down to 215 or something like that. I was like, “Okay, well is this going to be the trade that I …” I had a great day going and then I get into it and it suddenly drops and now I’ve just thrown away a good day.

I said, “Well, I’ll wait for the first one minute candle to make a new high,” and when that happened right here the new high was over 250, which was at the whole dollar or the half dollar and that’s when we got that follow-through volume, a high of day volume and that’s when I said, “All right, I’m back into the green, I’m out of it and I’m taking my profits.”

That’s what I meant on that one by saying I was a little more aggressive and it’s interesting when you’re sitting and you don’t plan to be super aggressive and then suddenly you’re in with 10,000 or 15,000 or whatever 1,000 shares that’s higher than usual. I just saw it starting to spike and I just pressed my hot key and the next thing I know I was in and it was looking great and then all of a sudden it dropped 20 cents. It can happen so quickly that you don’t have a lot of time to react and the next thing you know you’re at a big loss on the name.

I was glad that it bounced back up and I was safe from having to take a loss on it. Today is my seventh consecutive green day. I’ve been green so far, every day in April, which is nice. Like I said with March, March was my rollercoaster, where I had some big ups and some big downs. It was a bit stressful because it was just all over the place having $10,000 willing days and then losing 15,000 in a couple of days. Just a lot of big swings in the P&L and that creates stress and frustration.

Then that, of course, brings out the emotional trader and encourages you to start doing things that you get a little too aggressive or you’re frustrated, you take it out on your account and that’s not good at all. My goal for April was to scale that back a little bit and try to be more consistent. Even if I only had 500 or $1,000 a day that I would be just consistently green and that over the course of 10 or 15 trading days that that would actually maybe yield more profits. Than having the days where I have a big push up but then the following day where I have the big drop.

So far, it’s paying off, I’m up 18,000 on the month and last month I finished with 29,000. Of course, the month of February was 68,000 both of these months seem like they’re going to be in the shadow of a really great February. I don’t know why February was just so awesome, it was just really, really good trading but that’s part of the deal with trading. You have some really great days, some really great months and then those have to tie you over until … Knowing inevitably that things will slowdown and you will have a lull in the market where you just have to sit on your big green trades from the previous month.

It’s like if you’re trying to sail across the ocean, you may have a couple of days where you make a lot of progress and then four days where there’s no wind you’re just floating there. That’s part of the deal, you can’t plan for it. You have to just know that at some point that could happen and not to let yourself get bent out of shape when it starts to slow down. Fortunately, April isn’t showing really any sign of slowing down.

I mean it seems like we were getting good opportunity this morning. The only thing that’s interesting is that the opportunities are really from 9:30 to 10.00 a.m. and by 10:30 things have been really slowing down. My last trade was at 9:59, I haven’t traded past 10:00 a.m. today and I don’t know that I traded much past 10:00 a.m. yesterday. At the same time working from 9:00 to 10:00 a.m. isn’t too bad either.

This is the thing, I know that it’s easy for me to say, “You know, well, this is easy you just get in here, you get out there.” For me though this is really easy. The hard part was strategy development, the hard part was the two years that I spent trying to figure out this strategy that I trade every single day. This strategy includes a set of rules, the type of stocks I trade, the characteristics of those stocks from a technical perspective. What’s their float, what’s their volume, what’s their daily chart look like, what’s the position to the moving averages?

These are the things that I have to look for, is it a former runner, they have a history of making a big move, does it have a good catalyst? I go through that checklist and then I look at the chart. Today I looked at the pre-market chart on CBIO. Obviously, I liked it, I thought it looked strong. We had another one this morning that was gapping up CBIO I was like, “Yeah, that’s a good chart, it’s worth trading, there’s a good chance it will work.” A chart like GLBS was also a gapper but I could tell that the risk on this was too high, it wasn’t a clear pattern.

Getting to the point where you’re able to find stocks to trade every single day, apply a sense of risk management to those trades where you’ve got max loss and you have a profit target. Then having the ability to find exact entries using patterns like bull flags, five top breakouts, all of that is what took me years to develop. Obviously, you guys are fortunate that for those of you that are in our classes and we have a class again tonight at four. I’m basically able to teach you everything that I know about the market and it took me years to learn. Through the course of a 90-day class you’re able to pretty much get up to speed with where I’m at.

Then at that point it’s just a matter of practice, which is important. You can’t underestimate experience but that’s something that is certainly more productive when you’re practicing a strategy that someone else is using every single day. If you’re practicing a strategy that you’re just like shooting from the hip like a little of this and a little of that. The odds are your consistency is going to be pretty low and that’s what I see with most students. Even if I open up our trading simulator today we can see where most students are trading.

Sonia, the reason GLBS had higher risk was for a couple for reasons. Number one, you could say, yes it was a low float stock with a history of making big moves. Yes, low float, yes, a history of making big moves, yes, it had a catalyst that’s all true but number four the daily chart is not very good. You’re coming up into resistance. You can see how, those of you on Facebook watching, you can see how this stock was opening here and coming up into all these levels.

Each one of those moving averages is like a little ceiling, a little ceiling here, a little ceiling here, a little ceiling there and that creates resistance. In contrast, a chart like CYCC, which we traded yesterday. This one on the daily chart, it’s above all of those lines. It’s above resistance, that’s good, it’s actually bouncing off those lines and they’re creating support. That’s a much stronger daily chart. That was my primary reason I didn’t like GLBS was because the daily chart was bad.

The second reason maybe was because the stock has been a little over traded. You can see in the past how many times it spiked up. It’s just a little overdone but that’s not maybe as critical as the daily chart right now just being not so great. Let’s see, that’s what I when I saw GLBS on the one hand I thought it looked interesting but on the other hand I thought the risk was high. For students on the simulator today we have, let’s see, 501 traders that traded on the simulator today and of the 501, let’s see, only 183 are profitable.

Those are 183 of our students are profitable and this again exemplifies the fact that these are students who are practicing, learning to refine their strategies, some of them like this student here Daniel. He’s a little further down, he traded CYTX, CBIO and PYDS he’s green on all three, P&L very similar to mine, he’s doing well. As soon as he’s going to be able to graduate out of this simulator and start trading real money.

Sebastian, he’s got a couple of trades he’s still holding some longs, some short etcetera but inevitably a lot of students who are beginners are still practicing their strategy, doing a little of this and a little of that. What’s going to be really common is that we’ll see the accuracy being on the low side and that’s understandable for where they’re at. Here you’ve got accuracy … She traded the same stocks as me but odds are her entries weren’t as dialed in. She might have gotten in a little too high or gotten out just not quite the right place. That comes down to being able to understand proper entries and proper exists.

All of that you can understand in theory the right way to trade a stock but then it’s actually executing that theory and making it in practice that you actually follow the plan. In theory, I know what it looks like to do a back flip skiing. In practice, I physically can’t do it. It’s basically if I really wanted to get that done I just need to keep practicing and practicing and practicing and eventually I’ll get there. As long as I don’t break my neck along the way, I should get there.

It’s the same thing with trading, you have an understanding of, “Okay, I get in at the first candle to make a new high.” Go back to PYSD … Let’s say for instance this one had more volume because this is the pattern … If this had half a million shares of volume I absolutely would have been a buyer here, it’s just the volume is a little too light but the pattern is good. Let’s say just looking at the pattern you know the entry point is the first candle to make a new high. If you know the entry point is that apex point, that price. That price on this pattern is 162.

If I look at this and she bought at 180, I know that she chased it by 18 cents. I know that that would be a bad entry. Being able to get the right entry means being quick with your hot keys, being quick to type the orders, being able to anticipate breakout spots so you’re sending the order just a moment before the break instead of a moment after the break and those things are that ability to just make those slight adjustments. Those are things that come with experience but she is trading the right stocks, which is a step in the right direction.

That’s one step and she’s a couple more steps away from dialing in those entries and then she’ll see the P&L follow suit, it will improve. Anyway, that’s about it for today. Trying to make the most of this short trading week and at the same time just be really disciplined about taking a quality setups. I do feel like I was a little too aggressing on PYSD and I need to be careful on that one. Maybe part of the reason was because I was …

It’s frustrating when you’re watching a stock and then it runs 20% and you’re just sitting there watching it. It’s like I might have felt a little fear of missing out, frustration that I missed that whole move. I was like, “I’ll get in on the first pullback after the halt,” but then I just got in a little too high. I was getting a little emotional on that. That might be for me just a note to self to be a little more careful on stocks coming out of circuit breaker halts.

Anyways, that’s it for today for this lunchtime recap and we’ll jump back in at 4:00 p.m. for class 10 of the Day Trade Course. Today we’re going to be talking about level two in hotkeys and we’re going to have lots of live examples of me trading and how I responded to something that I saw on the level two. That would be a great class for you guys. I will be over in the classroom at 4:00 p.m. All right, until then I’ll let you guys go grab some lunch and see you in just a little bit. All right thanks guys.

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