What’s up everyone? All right, so here we are, finishing the morning, and I am in the red. Today is one of the worst days of the year, and right now we’re in this … Well, let me grab my calendar. We’re in this kind of phase where the market has been so, so hot, and I was pushing it. I was being aggressive. My last big red day was Friday the 27th, I lost $12,000.00. Today, I’m down about $13,000.00.

 

I came into the market knowing that I should be a little bit careful, because today is like the fourth, fifth day of this hot streak, and you have to sort of start to ease back at a certain point. We had a stock hit the scanner, it was on our watch list pre-market. It squeezes up. It goes from $2.20 to $2.70, and when I saw it make that $0.50 move, I was like, “This thing looks hot. I’m jumping in.”

I’m jumping in at $2.75, anticipating that it’s going to tap $3.00. It’s probably going to blow through $3.00, because it’s already moved up $0.50 in the last five minutes. What ended up happening is I bought basically five cents off high a day. It hit a high of, I think, 86, and then it came all the way back down to 220. Just like that, I was down $0.50 per share, and of course, $0.50 per share, when you’re trading with big size the way I do, it’s a big loss.

Unfortunately, today I lost in both my main account and in the IRA account, which is frustrating, because we know with the IRA account, I can’t just add more money if I blow it out. I just have to dig myself out of the hole. So, it is what it is. Today’s a red day, down about $13,000.00. We’re going to break it down in today’s Mid-Day Market Recap, because I know you guys learn just as much from my red days as you do from my green days.

These aren’t easy days to talk about, but I do it because I know you guys like it. So, if you like these videos, give me the thumbs up, subscribe to the channel, press the Alert button, and then you’ll get email alerts anytime I go live. Like, pre-market, when I do my watch list, you’ll get the alert, and you’ll be able to watch live as I’m breaking down stocks to watch.

All right, so anyways, let’s break it all down in today’s Mid-Day Market Recap.

All right everyone, so let’s look at the damage. Not a good day today. A little bit frustrating. Today’s a day where I stepped up to the plate, and I was wrong. I got aggressive on the wrong stock, and I got myself into a position with too much size, and had to stop out max loss down $13,293.00. So, a big red day. The way hot streaks often are, for me, they’re really hot until the end, and you get that quick reminder that the market is always right.

So, today is the day where I traded in the main account, and the IRA, lost on both sides. Very disappointing there. Certainly, all things considered, it’s still been a fantastic month, and there’s no reason for me to be that disappointed. I am still up probably $60,000.00 or $58,000.00 on the month. So, you know, I’m in not in no need to feel bad for me. It’s been a great month, but definitely a read day today.

Nobody likes having to talk about the red days, but they happen. So, what went wrong today? Well, you can see I have two stocks I traded: FTFT and QUMU. Pre-market, the watch list was very scattered. We had like five stocks that were sort of on watch. We were watching AMDA. This on was on watch for a possible follow through because it was strong yesterday.

As you can see, the bell rang, and it pretty much just sold off. No action, no trades on it. We were watching BL&K, another one where the bell rang, and it just sold off, stair stepping down, no action, no opportunity. So, those two were on the watch list. They didn’t play out. We had, let’s see … DCIX on the watch list. It was gapping up 70%, but it’s just been choppy, up and down, up and down, not very predictable action, not easy to trade. So, no opportunities on that one.

Then we had FTFT on the list, which looked the best pre-market. This one was still holding up pretty well pre-market compared to the others, so I was watching it long over 250. The bell rings, and I try to jump in with 15,000 shares at 250, I only filled 2,700, and it popped up to a high of 270, which would have been … Well, $3,000.00 of profit at the top, but probably would have ended up being like 1,200-1,500 selling the 50s or in the 60s. It ended up selling at 52 as it came back down. That one didn’t really work out.

Then we had QUMU on the scanner’s pre-market as well. This also was good pre-market except that it dipped down right before the bell. But as soon as the bell rang, it started surging up. This is the thing, I looked at this, it was hitting our high day momentum scanner, it was on the watch list pre-market because I had news. When I hit the scanner here, I looked at it and I was like, “Oh, this thing is taking off,” 220, 223, 230, 255, 260, 270 … You know, when you see a stock rip up $0.70 in basically two minutes, that makes you think, “Okay, this thing has potential.”

Certainly, in the last two or three weeks, when a stock does that, there’s a high likelihood that it’s going to squeeze into a circuit breaker halt, it’s going to open higher, and it’s going to make a big move. So, jumped in. I saw it and I was like, “Yep, I’m jumping in.” I got in with 5,000 shares in my main account at 270, and then I added my IRA and then I added my main account.

So, [inaudible 00:06:12] in my IRA, and then I added in my main account, and I just bought right into a big seller at 275. I mean, it was a hidden seller. That’s what it was. Someone was selling at 275, and I put the orders out, and I was buying. I thought, “Okay, as soon as it breaks 275, we’ll pop. It’ll probably go up to $3.00.” It broke 275, it hit 286, and then more hidden sellers, and it came right back down. This is what happened, two minutes later, it’s back down to $2.16.

When you’ve got 15,000 shares from 275 and you’re down at 225, you’re down $7,500.00. You’re down at $2.00, you’re down $10,000.00, and that’s pretty much what happened. This is one of those times where when I look at the trade, what could I have done differently? Well, I think that … I know that because I was in in my IRA … Whenever I take a trade in my IRA, I’m like committed to the trade.

It’s no longer just a scalp, a quick in and quick out, it’s “I’m holding this with a goal of like $0.40-$0.50 of profit.” That’s my goal for the IRA. I don’t do scalp trades, I do longer hold times. So, once I’m in the IRA, I’m committed. Now, I’m in with the main account with big size, and so I’m sort of committed on both sides. I don’t want to just bail out, I want to really see it through.

Basically, this is a worst case scenario for the IRA when I get into something that I’m expecting will squeeze possibly into a circuit breaker halt, and then it just tanks, that’s when I just really get smoked. So, yeah. Obviously, buying a stock that’s spiking up, anticipating a halt, certainly, that’s a risky strategy. It’s a strategy that we will not trade every day, but we trade when the market is hot.

Because when the market is hot, what you find is that stocks that squeeze up like that, they get halted, and they open higher. The next thing you know, you’re seeing these stocks go from exactly what we had here. $1.80, it was halted, and it squeezes up to 255. That’s what I was expecting, this type of move, that it was going to halt around 280, 290, $3.00, and open and squeeze higher. That’s what we’ve been seeing.

It was logical for me to take a large position anticipating that. This one just didn’t work. Again, I’m not going to say that it was … I wouldn’t say it’s a bad trade. If this was a bad trade, then the trade yesterday on AMDA was also a bad trade. The trade the day before on BL&K was a bad trade. The trade last week on BOXL, where I made $29,000.00 is also a bad trade.

It’s not a bad trade. It’s just a trade that didn’t work. The only thing that was bad about it, really, was that I had such big size that when it did this rejection and quickly pulled back, it hurt a lot more. But that would have been the same for any of the stocks in the last two weeks. Why I didn’t cut my losses sooner on this, I really try to wait for the first one minute candle to make a new high, for the most part.

I don’t like to sell into flushes. I like to wait for a bounce, and give it a chance. I think the other side of is that once I’m in with my IRA, I feel more committed, so I can’t quickly just bail out and then get back in because I only have three trades a week. Once I’m in with the IRA, it’s like I’m really in it to see it through, and in this case, on this candle it dropped from 279 to 227.

That’s a really sharp drop. I was like, “Okay, well let me give it a chance to bounce back up,” and then it dropped to 16. So, it’s one of those things where in hindsight, you might say, “Well, I should have stopped out sooner,” but even with a live stop order with slippage, I would have ended up getting probably the same loss. I wouldn’t have lost less.

Of course there was a possibility that the first one minute candle made a new high around 60, and went right back up to $3.00, and then you’re off to the next leg up. So, I try to see them through. It’s not always the right strategy in this case. You know, it ended up resulting in a bigger loss, but I’m not sure I would have done anything a lot differently if this trade came around in another 20 minutes.

I think the only thing I could have maybe done differently is not sized up quite so much because you know, yesterday was good, the day before was good, but they weren’t incredible. Maybe this wasn’t the right day to take 20,000 shares. Of course, 10 minutes later NCTY ends up going from $1.06 all the way up to $3.50, and then it gets halted on three circuit breakers.

So, maybe I just picked the wrong one, and maybe that’s just the luck of the draw. Sometimes you don’t have the right one. This was a recent reverse split. That’s certainly a strong setup, but the pre-split float was $47 million shares, and typically those ones don’t open up as much. I’m just not really sure … This one sort of surprised me that it was as strong as it was.

You’ll see here it popped up to 34, it pulled back … first one minute pull back. So, if I bought into this squeeze up at 34, and then drops down to $1.50, that’s again one of those times where it’s like, “You know, I don’t know if I want to sell it because this is still a strong setup. Yes, it just pulled back, but let me give it a chance for the first one minute candle to make a new high.”

Then, when it works, boom, that’s what you’re looking for. And that’s what I thought still could have happened on QUMU on that first drop, is that it could have popped back up. You know what? Like I said, my accuracy … When you look at my trades over long periods of time, and we can pull up the metrics here, just so you guys can see them … Let’s see, let me log in here. Let me just type in my log in first.

All right, there we go. Reports view … You know, over the long haul, and I mean, this right here is over $917,000.00 of trades. That’s 2,000 trades. I have 70% accuracy. The biggest winner, $31,000.00, biggest loser, $12,000.00. I’ve definitely been flirting with some of the biggest losers this month, but I’ve also been flirting with the biggest winners, and that’s what happens when you’re in a hot streak. You get aggressive, you swing hard, you get big wins, but you also get some strike-outs.

For me, when I look at the big picture, I’m reminded of the fact that today’s just a day where it’s just part of this, it’s just part of this minority of the time where things just didn’t line up for me. Maybe I was a little too aggressive, maybe I just picked the wrong one, maybe I could have stopped out a little sooner, but realistically, I’m probably going to keep trading the same ways I traded today on the next stocks that start to squeeze up, when we’re in a strong market again because it works more than it doesn’t.

It’s tough because I know any of us that we want to be consistent, we don’t want to have big red days, but they will happen. Someone asked about my profits year over year. I said, “November, December and January are usually my strongest months. September looks like is my worst month overall.” Here we are in May. It’s been a good month so far. Statistically, it’s, I guess, the fourth best month. So, that’s nice.

June, July and August 2016, they were strong. 2017, they were a little slow. We’ll see what 2018 holds for us. It’s not necessarily seasonal as much as it is cyclical. We go through hot cycles, and then we go through cold cycles. Yeah, you know, like I said, today is a little bit of a tough day. It’s not a day that I’m really excited to be sitting in front of, but it is what it is. I’m not going to beat myself up for it. I’ve still got $57,000.00, $58,000.00 on the month, and I will bounce back just like I always have.

Red days happen, but I think that the biggest lesson from today is maybe just when you have … When the first five minutes are a little slow, just to be a little bit more careful on share size. But then of course you had NCTY, if I had jumped into this with 20,000 shares, well we’d be sitting here talking about how it was another green day. The only reason I didn’t trade this is because I hit my max loss.

At a certain point, you gotta walk away. If you don’t walk away when you’re down $10 grand, will you walk away when you’re down 20? What about when you’re down 30? What about once you’re down 40? 50? 60? 70? How far down are you going to go before you finally say, “Enough is enough.” For me, if I’m down more than 5,000 on the day, I just don’t keep trading. If I have a blow out and I just lose $10 grand in one trade, I’m done.

It’s like one of those things, you’re getting ready for the big race, the big day, and you come out of the starting gates, and you fall on your face. It’s like, “You know what? I’m going back to bed.” Could I try to get myself back in the race and maybe finish in fifth, sixth or tenth place? Maybe, but I think I’m just going to be done. It’s just when you start off so badly, it can be really hard emotionally to bounce back from that.

What most often happens is that you start trading emotionally, you start trading impulsively, you jump into something like NCTY with 30,000 shares, because you’re thinking, “Well, the quickest way to make back $10 grand is a 30,000 share position, and $0.30 a profit, $0.40 a profit, right? What happens when you buy it at 230? Let’s just say I bought 30,000 shares right here at 212, and then suddenly it does a false break-out. It drops down to $1.80, and is halted on circuit breaker going down.

It resumes, and I’m selling at $1.50, and now I’m down 15,000 on that position that was supposed to be my bailout, and now just doubled or even tripled my loss. That’s how it happens. It happens really, really fast, and it happens when you’re focusing just on the potential to get yourself out of the hole and not on the risk that the hole is going to get bigger, and bigger, and bigger.

Today, yeah, down $10 grand in this, 13 total. I’m going to have to dig my way out. It’s going to take a couple of days. We’ll see what tomorrow has in store for us, but you know, it’s the place I’ve been 1,000 times before, so I’ll just be digging out one trade at a time, 2,000 here, 3,000 there, and we’ll get out of it and we’ll get back into the green, or back to all-time highs before you know it.

Just a lesson there on needing to remember to be in touch with the strength of the market. When you have a lot of stocks moving, it can be a little bit tricky to know which one’s in play. Account in IRA’s going to go from 20,000 down to about 18, 17,800. That’s disappointing, but again, it’s just part of the deal. Keep building, keep growing. A couple setbacks, but it’s not going to stop me.

DCIX, yeah to answer your question on this, it’s a stock that historically I haven’t really enjoyed. It’s very heavily shorted. Every time it pops up, you have lots of people shorting it for the next leg down. You look at this stock over the course of months, or years, and it’s extremely weak. I mean, it’s one of the ugliest charts you’ll probably ever see. Look at this. It just keeps going down. You keep having to scale out to see how much it’s gone down.

It’s not a joke. It’s insane. So, does that surprise you that people just want to short it every time it pops up? Every time it pops up, people want to short it. So, it’s just too weak. It’s too heavy. You have the potential of a short squeeze, where traders who are short will get forced to get out because it squeezes up a lot, but we’re so far away from the place where anyone would really feel pain to the short side, that it just wasn’t there for me.

If it gets over $10.00, maybe people are going to start to feel some pain on the short side, but I just think right now it’s just very weak. Anyways, that’s about it for me. We’ll be back at it first thing tomorrow morning. Tomorrow’s a new day, and hopefully we’ll see some good trades, some good opportunities, and we can finish up this week strong.

All right, that’s it for me. I’ll see you guys first thing tomorrow morning. If you’re still watching, you must have really enjoyed that video. So, why not subscribe and get email alerts anytime I upload new content? Remember, when you subscribe, you become a member of the Warrior Trading family.