Hey everyone, Ross here! Today was a huge day in the market, with meme stocks like GameStop (GME) and AMC Entertainment (AMC) back in the spotlight. These stocks are hot right now, but they tend to get choppy and crowded as the move progresses, making it easy to overtrade and lose profits. With that in mind, I felt the need to strike while the iron’s hot today. Let’s dive into the recap!
A Conservative Approach
Yesterday, I took a more conservative approach. I felt some disappointment for not stepping up to the plate in certain areas, but overall, I stayed disciplined, which proved beneficial. It was a green day, albeit without a big win. Yesterday saw some early pre-market trades in GameStop, but it didn’t pull away significantly. By the time it showed some movement, I decided not to chase it due to the larger spreads. Given that I was recovering from a substantial loss last Monday, I aimed to avoid any risky moves that could put me deep into the red again.
Analyzing GME’s Price Action
I woke up early this morning, around 4:15 AM, and noticed GME trading in the $40s. The volume was impressive, with 300,000 shares in the first candle and high trading activity. This all kicked off from a single meme post by “Roaring Kitty” on Twitter, which just goes to show the power of social media in today’s market.
GameStop has a short interest of around 20%, which translates to about 50 million shares shorted. For every dollar the stock price goes up, the collective losses for short sellers are astronomical. A 10-point move can result in a multi-billion dollar loss for those holding short positions.
Morning Trading Session
I sat down at my computer around 6:30 AM, anticipating the retail traders coming online at 7 AM. Just as expected, there was a pop right at 7 AM. I got in as GME started to pull away, initially hesitating but then deciding to take a starter position.
Unfortunately, I faced a significant issue with my orders getting stuck. My sell order was hanging, and I couldn’t cancel it. I contacted my broker, Lightspeed, and had to wait for them to resolve it manually. This was incredibly frustrating, especially as I watched the stock’s price fluctuate significantly during this time.
Eventually, I was able to get out at $64 per share, up $16,000, though the stock continued to climb higher afterward. This missed opportunity gnawed at me, but I was glad to exit with a solid profit, given the circumstances.
Trading Other Meme Stocks
After dealing with the issues on GME, I turned my attention to AMC, which also experienced several halts. I managed to squeeze a decent profit of around $1,500 from it. CTNT hit my scanners later in the day. This stock saw wild price action, going from $2 to $6.50 in no time, despite an offering announcement. I capitalized on this move, taking my profits off the table before it pulled back. I also had smaller trades on KOSS, MULN, and HOLO, ending up green on six stocks today. All said and done, I finished the day with a profit of +21,000. Not bad!
Position Sizing and Risk Management
Given the volatility, I traded stocks with larger floats than usual but capped my position sizes to manage risk. My biggest position today was around 5,000 shares. This strategy helped me stay in the green despite the roller-coaster price action.
Today’s performance significantly boosted my monthly stats. After a tough last Monday, I had already recouped my losses by the end of the week, but today’s gains took me even higher. This is a reminder of the importance of showing up every single day because you never know when a big day will come.
Platform and Execution Issues
The market’s high volatility led to some platform issues, with routing problems and lagging systems. It’s critical to manage these risks by maybe sizing down a bit and keeping a close eye on orders, as these technical issues can make trading even harder.
Final Thoughts
To sum up, it’s essential to manage risk, especially on volatile days like today. Emotions can run high, so being cautious with position sizes can save you from significant losses. I ended the day up $2,352, a solid performance given the circumstances.
For those interested in joining a trading community, I highly recommend checking out the two-week trial offer where you can access charts, scanners, my broadcasts, the chat room, and more. You can learn more and sign up here.
Remember, trading is risky. My results aren’t typical, and there’s no guarantee of success. Trade smart, manage your risk, and I’ll see you in the market tomorrow.
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Warrior Trading was founded by Ross Cameron in 2012. Today Warrior Trading is a thriving community of thousands of day traders learning to trade under the curriculum designed by Ross.
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Disclaimer: The results shared are based on my personal trading experiences and are not typical. Trading involves significant risk, and past performance is not indicative of future results. Always practice in a simulator before trading with real money.