Day 99 – Last day of May +$955 on more solid Momentum

All right everyone, so time for our mid day market recap. We’re going to go over trades from today. Last day of May, and finishing it up with another just under $1,000. So, $955.00 in the first hour of the day, really didn’t trade past the first hour. So, I’ll show you my P&L here for those of you who are in chat. Let’s see. So, there’s my P&L. Those of you watching on Facebook, I’ll show you my P&L. There’s my screenshot on StockTwits, this is my live trading platform over on the other computer. All right, so finishing the day up, $1,418.00 on CBIO, and down $463.00 on ETRM for a net of right around 955.

So, you know, that’s not a bad way to finish the month. I mean, obviously this has been a month where I haven’t had a lot of those big home run trades. You know, I’ve been looking for those trades that, you know, I can get in, and instantly get 40, 50 cents, maybe 80 or $1.00 per share. And with 5,000 shares, those are going to be some quick three to $5,000.00 winners. But that just hasn’t been the case this month. We haven’t seen a lot of those trades. Today CBIO was good, and it was kind of the best that we’re getting right now.

So, to go back and look at CBIO, the chart, I got in this. I had a great entry in at 450. So my entry of 450, why did I get in there? Well I was watching this pre-market. It had popped up, it was obviously really active pre-market, it was consolidating below the nine moving … or below the nine moving average, but more importantly, below the VWAP. And I was concerned about that. I could tell that it had moved all the way up to a pre-market high at 494 and then came back down to 450.

It was kind of like right at the 50% retracement, you know, going up and then retracing about 50% of the move, which is … 50% is like, the most it can retrace and I’m still willing to take a trade. Anyways, the bell rings, and right away it’s kind of choppy. It pops up for a second up to 56, then it drops down to 35, 435. Then it pops up to 459 and then drops back down.

During this time I was trading ETRM, and I was just like of like, “You know what? I’m just going to let this sit here. I’m not sure I feel good about it.” So I let the first five minute candle close, and the first five minute candle was a dogey. It squeezed up. It dropped back down, and ended up closing right about the same place it opened.

The second candle was also a small dogey. So I was like, “Okay at this point, we have two candles in a row. I’m going to be watching for the first five minute candle to make a new high.” And what’s really nice is that’s going to coincide with a break over a half dollar. Half dollar entries and whole dollar entries are something I really like because we know when stocks break over those psychological areas of resistance that they can usually get at least a ten, 15 cent pop, which in this case will bring us right back to high of day, which was 459 at high of trading hours … high of day.

I got in at 450, and 2500 shares, not being super aggressive, and immediately pops up to 472, and I’m up, you know, 500 bucks. I’m like, “Awesome. That’s a great trade.”

I start to take some profit off it. It ends up squeezing up to a high 487, and I sell the rest into that squeeze. So you know, right there I got a good $600.00 of profit. Now that got me back to green on the day for my $463.00 loss on ETRM, but only up by 100 bucks or something. So it’s like, okay, that’s good, but now I’m ready for the next trade.

This pulls back for a second, and then we get a one minute micro pull back. I got back in at 477 for the first one minute candle to make a new high. 477, and I sold right up here at 492. So on the first trade I got an average of 15 cents per share, and on the second trade I got an average of 15 cents per share just about 15 cents per share, so two really solid trades right here back to back. I got in this one a little early, I think around 75 or something.

So then we’re seeing this one minute consolidation, and I’m like, “Okay, I’m going to wait for the first five minute candle to make a new high. This is showing strength, so I’m going to let it pull back down to the nine moving average, and then first candle make a new high will be my entry.” So the entry … this red candle, the high was 82, so as soon as we start to pop up, I jumped in at 78.

I was like, “This looks good. I think it’s going to go.” I got in at 78, and it immediately pops up to $5.00. 20 cents of profit just like that. So I sell most of my position into that push. I pull back for a second. It would pop back up. It would break from five to go up to a high of 520. So again, I mean, this was a really clean … Yeah this was 40 cents.

So with 10,000 shares that would have been $4,000.00 from the bottom to the top of the move. You never get the bottom to the top, so if you get half of it that’s 20 cents, and that’s 2,000 bucks. With share sizes had potential to be a bigger winner, I was a little bit more conservative with my share size again. I took 3500 shares because I just … you know, I wasn’t … I don’t know. I want to not screw up at the end of the month. I just want to get a couple good trades.

That popped up there, and then it pulls back on the five minute chart. Again, I scalp here, the first five minute candle to make a new high, which was from 515 up to 520. And that was a small, small gain. So for those of you watching on Facebook, I’ll show you this chart.

Basically what we have here was the stock that was strong … you know … right at pre market just squeezing up, but then consolidating … consolidating down. Right here we have a red degree move. First candle making new high was my entry at 450, so I got in right there, sold them a push up to 492. Pulls back, first candle making new high. This is now the first five minute pull back after a fresh break out. Got back in right here, 478 for the break of 482. Sold on this push up to 520.

So those were two really relatively low-risk trades with good reward potentials, so risk reward was there, and my accuracy on this one was … Let’s see. I took a total of five trades, and I had one loser where I got in at 499. I got in at $5.00, and I stopped out at 499. That was right … I think that was right around … where was it? It wasn’t here. I can’t remember where that was. It was maybe right … right around here, actually.

It was this one minute pull back here where we popped up first candle making new high was over five. It popped up to 506, dropped down to 495. I got a little nervous, and I was like, “I’m just getting out.”

Once that loss loose 25 bucks, that’s fine with me. I just don’t feel … I’m just not feeling it right now. I’m just going to get out. So that was my one loss on it, but you know, overall, some really solid trades. I captured about 42 cents of total profit per share on this move.

Again, this is a move from a low of 450 to a high of 525, so it’s a 75 cent move. It’s very hard to capture the entire move, right. We know that. If you capture half of it, you’re doing pretty well. If you capture more than half of it, you’re doing really well. So I captured 42 cents per share. That’s pretty good, I’d say. You know, the only thing is that my average share size was only, you know, 2500 shares or 2800 shares.

I mean, it wasn’t aggressive, so my profits are reflect that. And that’s the big difference between this month and, you know, say, the month of February or March where I was trading with much larger size. Now, I was in a market … we were in a market where we were seeing really good follow through. We were seeing just, you know, fantastic opportunities, and so it made sense. You know, it’s kind of like everything you touch works; get more aggressive. Swing for the fences a little bit, and then you also have to know when to scale back, when to slow down, so that’s what I’ve been doing. Scaling back and slowing down.

That was my goal for the entire month of April. Where I start April, or it was for the entire month of May. I started May in Italy, and said, “Look guys, I’m going to be traveling here for most of the month, and I just want to take it down a notch. I don’t want to get too aggressive. I don’t want to have big losses when I’m on the road. I just want to focus on a couple traits here, a couple traits there, quality versus quantity, smaller share size, and that’s worked.”

My share size this month has been half of what it was in the month of April. Average share size in the month of April was 7500 shares. Average share size this month has been about 3200 shares. So, I wasn’t conscientiously cutting my share size in half. I was just scaling back, but that’s actually what it shows, that I almost cut it exactly in half.

So my profits at the end of the month here, right around $17,000.00, which is not bad, you know. $17,000.00 a month consistently is $200,000.00 a year. Now I’m already up over $150,000.00 this year, and we’re five … five months in starting the sixth month of the year. This has the potential to be 250, $300,000.00 year if we have a really good summer or if we have a really good fall.

It only takes a couple of really, really hot months of being aggressive to have some big profits. In February, I made $17,000. You know, if I have a month like that this summer or in the fall, that’s going to immediately put me up towards 220 if it happened right now. If it happens later on, it could put me up over 300, maybe over 350. But you know, I’m playing the long game.

I mean, it’s not … I’m not trying to just get into the market, make a million dollars as quick as I can, and then be out. I want to do this for the rest of my life, so that means I have to pace myself. I have to be aggressive when we have good windows of opportunity, and I have to scale back and slow down when trading is slow.

By scaling back and slowing down, I prevent draw down. Which is, you know, an interesting topic. I touched on this yesterday, but I had four losing days in the month of May. The losing days totaled a $33.00 loss, $856.00 loss, a $700.00 loss, and a $120.00 loss. Those were my four losing days. About $1000.00 in total losing days.

In contrast, the month of April I was being very aggressive. I had a losing day in the month of April where I was down $7,700.00. I had another losing day where I was down 2900, so I mean, my losses this month were 10% of what I had in April, and those were just two days. I had another day where I lost 4400. I mean, I had some really good green days too, but you know, being aggressive was, you know … at the end of the month it just wasn’t worth it.

Now it was worth it in March and April or … or February and March, but April just wasn’t as good. So I decided to scale back in May. That was the right decision. Finishing the month with $17,000.00 or right around there after commissions, and I’m … I’m really pleased with that.

I think that you guys all saw me go through, you know, a difficult month in April. It was my first red month in a very, very long time in, you know, years. I mean, it was kind of crazy to have a red month, and at the very end of the month I was, like, kind of break even. And I kept, you know, swinging for the fences. Stepping up, and swinging for the fences. Looking for that big … that big trade to get me back up to … I was looking for a ten or $15,000.00 winner. Knowing that that would … that would recoup my month, my losses. Ended up finishing the month down four grand.

Not a big loss, not really a big deal, but you guys watched me go through that. Of course, you know, we did these mid-day recaps every day that … of that period, and the Facebook Lives, and you guys were able to see me regear, refocus, and then come out of that cold streak with this new plan. The new plan was to focus on base hits one trade at a time to go through a period of trader rehab, where I would be trading with small positions and then slowly scale up from there. This is something that every trader will go through at one time or another.

You will have a cold streak. You will have a rut that you get stuck in, and you just try to keep doing the same thing, and it’s not getting you out of it. So I hope that you’ll be able to pull it back on some of those videos that I was making in April and see some of the techniques that I used to get myself out of that rut. All right, I mean, it happens to the best of us. It’ll happen to me again at some point in the future. I can guarantee you.

It’s not about not having loses, it’s about being able to bounce back from them. It’s about being able to adapt your strategy to a changing market, and that’s what I did, so anyways, my one loss today … I didn’t go over that one yet. That was on ETRM. This one I jumped in out of the gates. Actually, I really thought it looked decent. Again, that red dogey right before the bell, maybe not the best thing ever.

It sold off one, two, three candles. I got in for the first candle, make a new high right here. I wanted to get in at 57. I used my hot key, and got filled in at 64 which, you know, I pressed the hot key probably as soon as 57 was breaking. It was probably 58 or 59 on the ask when I pressed it. Got filled at the top of my limit order, 64. And it went up to a high of 70 with 2500 shares, and then instantly it was down to 40, 45. So I stopped out about, you know, 18 cents in the red. Something like that, and obviously a little bit of an annoying trade there, but had the right idea.

I just got some slippage on my entry, and of course the trade didn’t work, which made my loss that much worse. So, it is what it is, but I was able to bounce back from that and find a good trade.

And I didn’t take, you know … What I could have done is I could have looked at CBIO, and been like, “Okay. I’m in the red. I need to get out of the red. I’m going to take 10,000 shares right now at 450.” And I didn’t do that because I knew if I did that, I could potentially have my worst day of the month losing another ten cents or 20 cents on 10,000 shares, I could be down 2500 bucks like that. So I said, “No.”

Be calm. Be patient. Take a small stab, 450. If it works, you can add, and that’s what I did. I worked myself up to a $1400.00 winner on the … on the name. Got myself out of the hole, you know. Calm, cool, and collected, composed, and so this is a really good day.

One of the things we talked about during the inner circle seminar that we had in Las Vegas was, we were talking about how you define a good trade. Is a good trade a trade that’s simply green, and it doesn’t matter if you mismanaged risk? Or can a good trade be one where you loose money on it because you kept a tight stock?

And to me, a good trade doesn’t have to be green. It goes against what we think of as being a good trade, but a good trade can be a trade where you cut your loss when you’re down, whatever 15 cents, and 300 bucks. You keep the loses small, and a good trade likewise, a trade where you use revenge, aggression to take 20,000 shares and try to make 15 cents, and it works, and you make $3000.00 is not a good trade. It’s a high risk trade, and just because it’s green doesn’t mean it’s good. Just because it’s red doesn’t mean it’s bad, so changing the way you think about good trades and bad trades is … is not a bad idea if you’re in that habit of if it’s green it’s good.

All right. So that’s it for today. We’ll do a full recap on the month of May, probably … probably be next week once I have my broker statements in. Probably around … I’ll get them around June fifth or sixth. So around the ninth. Next Friday we’ll do a recap for the month of May.

All right. So that’s about it for today, and you guys can watch this recap again on YouTube, and everyone on Facebook that’s Live Streaming, I can see the comments, so I’ll answer some of these questions that you guys are posting here.

One question is, what broker do I use? So this platform here is Lightspeed Trading, and you can go to lightspeed.com. The reason I switched over to Lightspeed is because we got a group rate for everyone with Warrior Trading. It’s $2.00 per trade for students, and 2.50 per trade for regular chat board members. All right, so that’s Lightspeed Trading. Let’s see.

Rolandis is good job finding the opportunity, thank you. Yeah, there wasn’t a lot today. The other name that was traded was Kor. Sorry, Kors Michael Kors, K O R S. Mike trades this, and he did a really great job at that. He’ll go over that in his mid day market recap which will also get uploaded to … to YouTube.

Sloan watched the $1000.00 to $100,000.00 in 44 days which is awesome. Yes, I mean, that was the right time. I mean, that was just the right timing. We were at such a strong market there. I was really able to capitalize, and do an awesome job on that.

And yeah, Jeff, what I’m doing in the room is, I call out pre market, the stocks that I’m watching. The stocks I’m watching and why I’m watching them. So I’ll say the levels I’m watching. So I’m … CBIO, I said that I’m watching this, and I like it over 450 because that’s the first candle to make a new high. Then I say, “Okay, I want to get over … now I’ liking it over whatever it was, 482 because this is the first five minute candle. This is the bull flag pattern.”

So I try to articulate those thoughts and let you make the decision of whether or not you want to take the trade based on understanding of these patterns and your risk. I don’t want to give you trade alerts because I don’t want you to follow everything that I do because following doesn’t teach you to be a successful independent trader. I mean, you can learn some by following, but you really can’t learn a lot because you inevitably just follow without really understanding why. So that’s the model of the chat room right now. This is a place for education where you can learn why I take the trades I take, and then of course, I need more detail during the mid day market recaps.

John, that’s a good question. My first 18 months of training was total trial and error, and I was losing money. In the first two years, I didn’t turn a profit, but at the end of the first 18 months, I started to notice a pattern in the market. That pattern was that almost every single day, there’s a stock that moves 20 to 30%. Almost every single day, it seems crazy, but it’s true.

Today we had CBIO, you know, this move from 450 up to 520. We also had Kors which of course was very volatile higher priced stock, and ETRM had some opportunity as well. Those are just three. We probably had five or six stocks today that made moves in excess of 15 to 20%, so I realized that if this is happening almost every single day, there’s got to be a way that I can find these stocks before they make that big move and not just see them in hindsight.

I started using these stock scanners that I’ve got up on my screen share for everyone in the chat room, and these are scanning the market, the entire market, for stocks that are moving up right now with volume, that are spiking up. Now they might only be spiking up only three or four percent, but that’s of course, could be the beginning of a bigger move.

And so, I look at those, and I look at the daily chart. I look at the catalyst. I look to see if there is a catalyst either by checking in the chatroom or by checking on, you know, Market Watch or another newsfeed, asking people in the chat room. I find out, okay, why is this stock suddenly moving up? Is the daily chart strong? Does it have any resistance?

If it doesn’t have resistance, and it doesn’t have a catalyst, I might still take the trade. If it doesn’t have resistance, and it has a catalyst, I’m going to be very inclined to take the position on the first pull back, really, as early as I can. Just jump into it knowing that it may already be up five or ten percent, but I can ride that for another five, ten, 15%, and on a good, really quality trade, I might even get 30, 40, or 50%.

We’ve seen stocks move 200, 300% in a single day, which seems crazy, but it happens. That’s kind of … my focus each day is finding those stocks, the small handful that have potential to make big moves. And that means on a daily basis, I’m not trading Facebook, I’m not trading Apple, I’m not trading Tesla, I’m not day trading those stocks because they’re not making really, really big percentage moves on any given day. I focus on the small handful of stocks that are making the big percentage moves because those are going to be actively traded by traders just like me, looking for opportunity.

Day traders look for volatility, so we need to find stocks that are moving, and of course, we want to understand that there’s a reason for the move. Whether it’s earnings, you know, it could be a bio tech with some FDA announcements or some clinical trial news for pharmaceutical companies. Could be activist investors taking a position. I mean, there’s a lot of different types of catalysts, but that’s essentially what I’m looking for when I see stocks that are starving to make the move. I want to understand why is it making the move, and is it going to continue higher.

So these scanners are all powered by Trade Ideas, but the cool thing is that you can create your own scanner settings, and that’s what I’ve done. These are all my custom scanners using their platforms, so they gave you the tool where you can create all these filters to scan the entire market. You can scan … you can create an infinite combination of filter sets based on, you know, the flow, recent earnings, position 52 [inaudible 00:23:59]. I mean, there’s … there’s thousands of combinations. Infinite combo, really.

All rights, so anyways, I guess that’s about it for today, so again, finishing the day up $955.00. Not bad for … not bad for a Wednesday. Not bad for the end of the month, and tomorrow will be the first day of June, so hopefully we get June off to a good start, and we start to see a little bit more momentum coming into the market.

What I’m going to be really excited to see is the next stock that makes that 200, 300, 400% move over the course of two or three days. It just goes absolutely insane. I think that will probably start the next wave of really good momentum.

Right now we’ve kind of been trading some of these stocks like CBIO. Sort of, you know, one of the former runners that we’ve had on watch and traded a few times in the past. At this point kind of looking for that next really big move, and it’s just a matter of time. I mean, it’ll … it’ll happen it’s just waiting for that opportunity.

Okay. All right. So, that’s it for now, and I will see you all first thing tomorrow morning. All right. Bye guys.

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