MAX LOSS transcript

well not such a great day for me sitting below my Max loss the shirt's coming off I'm disappointed first day of November Max loss come on oh that's the worst but you know what it happens and we'll break it down here and I'm doing my recap early today cuz I have to walk away I'm below Max loss I cannot take any more trades my account is locked out I can't literally cannot take more trades so if I just sit here and and I happen to see something make a huge move all I'm going to feel is fomo frustration and there's no reason to amp myself up with that unnecessary emotion so max loss walk away that's the right thing to do so let's jump onto the charts and start breaking it down all right where did things go off the rails today well um prso was the last stock I traded but let's look at the first one and you can see clearly I mean big move up all the way back down in fact it's red on the day right now so it went from Green on the day to red on the day uh the first stock I trade was Co now this one even more dramatic a huge Spike from $3 to $9 all the way back to three wow had news at 8: a.m. receives FDA approval to initiate pivotal clinical trial or clinical study for breakthrough hearing device and even in spite of that news headline it did pop up but it came all the way back down so we got to try to figure out why that happened now this this morning when I first sat down the leading gapper was tox tox this one was up about 40% 50% and I looked at it and I thought you know this is a move that started after hours right so the move started here yesterday goes up a little higher pre-market pops drops and it did pull away right at 7 a.m. look at that Spike of volume I didn't jump in that because I sort of looked at it and I thought well it's really too cheap it's not something I can really trust how much is it really going to go up now yeah it broke through that pivot right there and it went through the pre-market high right here and it went a little higher so it went from about you know 25ish to 240 which isn't bad I mean that's not bad but I didn't take any trades on that I just thought it would be too thickly traded and not worth it so that was tox um GSAT 741 million share float that was on the scanners today no trades on that vssm this one was another one that started the move after hours and I figured not worth it so that was the right call on that one no trades there and really sitting down this morning at 7: a.m. there was nothing on the scans that looked good so that left me pretty much with the same game plan um as yesterday and that I've had um which was waiting for something with breaking news and then jumping on that momentum and of course through the month of October that has been a very successful strategy today is isolated from that but uh and and worth paying attention to but it's been a really um you know really good technique jumping on things with breaking news so co uh CH ends up hitting the scanners at 8: a.m. and when it first hits the scanners this one on fairly light volume starts spiking now by the time I pulled it up it took me a second to pull it up right you know I got to type it in my scanner everything type it in my level two window so it had already gone from 3 to 350 all the way up to 4 so I took my first entry of a th000 shares at 444 and then I added at 489 and at 5 now this ends up going from 5 up to 520 up to 6 up to 650 up to 7 all the way up to a high of $8.99 now what I did on this was I added uh at five I then added at 625 I added at 650 and I added more uh I actually added a th000 shares of this at $8.94 that's pretty crazy high uh you know what I added high is a th shares I added High because well this thing was squeezing I thought next stop $10 uh but I stopped out as it came back down and I stopped out uh for a loss naturally so I ended up losing on it and you know unfortunately this thing spiked all the way up to nine and then just came all the way back down and it it really was like unrelenting it was two four six red candles in a row finally it bounces for a second and then it goes down even further and I mean this just totally like Unwound the whole move which is kind of surprising and so I was trying to figure out like all right that was you know look I mean this was an aggressive trade to you know adding into this Spike and adding High having said that when we look back at some of the stocks that have given us really clean moves uh this month we've seen a number of stocks that have done basically this type of thing where they go from 3 to 6 to 9 to 10 and they've been topping out between 17 and $25 a share so it wasn't unrealistic to think if this got over 10 we're looking at to move up to 15 16 17 but something about this was a little different there was a lot of selling now what I did notice on this was I looked into their filings and they just filed a a shelf registration to sell up to $75 million of stock they just filed it like three weeks ago so now I'm thinking all right I mean you know a lot of small cap stocks have shelf registrations so if you said I'm never going to trade a small cap stock that has a shelf registration you're going to preclude yourself from Trading pretty much every small cap stock so you know just because something has a shelf doesn't mean it's going to be selling on day one but this one was selling hard on day one so you know we look at the latest um quarterly earnings statement you know and I see that um the float also I'll observe on this is a little higher 6 million shares I mean look drug which went up 2,000% % was 4 million shares so 6 million shares is still a very low float but you know in this case it's uh you know it's it's not as low as some of the others looking at their um quarterly earnings statement um total assets uh their cash is declining from um the end of the year so it's like all right cash is declining uh looks like liabilities are going up their earnings um total operating loss is substantial so you know this is a company that clearly is in need of raising Capital it's it's very clear to me now it's not untrue of a lot of biotech stocks and you know these stocks are working on these different therapeutic devices and things like that so you know look I mean this is kind of the risk of trading this sector and you know on balance when I look at the risk versus the reward I'm clearly ahead of the game uh in capturing the reward but there's no doubt that this one was pretty nasty so you know I was I was in profit uh on it unrealized and I kind of you know sized up for what I thought might be a bigger move you know I I stepped up to the plate a little bit and I got stopped out so took my loss on C uh and then I did try to take another trade for a bounce off of three down here uh and I lost again on that trade even though I had the right idea sort of it really didn't bounce in a meaningful way as you can see it's basically flatlined right back at three so I I almost feel like that why but why didn't it Go lower than three right Why didn't it go down to 250 or or to two and to me this is where I kind of feel like there's now you know we'll find out down the road if we if we see a headline of you know a secondary offering and you know this and that but sometimes what we'll see is that um anytime the stock is above a certain price they're just unrelenting selling but it doesn't go you know lower than a certain level and that to me is like a a strategy that some of these institutional uh Traders may use who are selling shares for the company that you know anything they can sell for anything above you know $3 but don't don't push it down because we don't want the stock to plummet so don't sell down to a dollar a share for instance so when you're down at three you know the selling kind of stops so basically you had a a spike here of course on the news and then right into that selling selling selling so when we talk about how these big moves happen there an imbalance between supply and demand but on this one all of a sudden basically in immediately upon breaking news there was a surplus of Supply that came on the market and that Supply pushed the price right back down to where it came from so interesting for sure all right so down $6,000 on the day on COC and some of you will say well Ross that's already below your max loss of 5 grand now I have my Max loss set hard Max losses at 7500 so yes it's true that $5,000 is my Max loss it's also true that I've been averaging over $10,000 a day for the last 30 days so being down 6,000 at 8 8 whatever this was 815 820 I'm kind of like all right well you know I let's give it a little bit of space and see what happens but I know if I'm I go below 7500 that I'm actually locked out of my account and I cannot take any more trades so that which is the current case right now so so I'm now it's you know 815 820 whatever and I'm thinking all right well let's see if anything else pops up now naturally this is going to put a little damper on momentum today and I was aware of that and so what I was thinking was you know I probably need something um something that's going to have news and maybe curl and so I was thinking back on um th from uh earlier in the week and if you recall this stock this one initially popped up um actually no I'm thinking of I'm not thinking of this one I'm thinking of a different one let me just check my calendar hang on so we had a stock that popped up and initially retraced the move and then rallied was it Lucy no I don't think it was Lucy either but we'll just check Lucy just popped up as well yeah well uh I guess we could look at am this one this one did this but it's not the one I was thinking of but it's fine we can look at it anyways so Ami you know initially pops here and I kind of thought well maybe today I I should just be avoiding the initial pop let it pop whatever happens and then take that next leg up which is the curl and so that's what I was kind of thinking is I'd wait for the curl and when prso uh popped up and we had a couple other Stocks by the way that popped up and I was like no it's not worth it I'm just going to leave that alone uh but prso pops up and all of a sudden this one goes from 220 and I pulled up the level two when it was at 240 right here this is when it hit my scanner and I was like should I buy a 240 um I don't know I don't think so I don't see any news on it so I said no so it goes to 240 to 275 to 280 to three and I was like gosh darn it so I said you know what I'll take a start here at 3 so I took a starter at 3 and it rips up to 350 and I'm like sweet okay awesome and then literally comes all the way back down to 290 and in the next cand is at 270 and I didn't take the profit off the table and so now I'm in at three and here's the thing at that at that moment my p&l see right here it says only closing orders so I'm down more than 7500 so I can so now what I know is if I close this trade and it rips right back up I can't get back in because I'll be below 7500 so I said you know what I'm going to hold it for a second and the only reason I did that was because I knew that if I cut my loss I was done for the day officially locked out and so I said I'll just I'll just hold it so instead of cutting the loss right here down 10 cents a share which with 5,000 shares would have put me down 7500 I held it and if drops all the way to 40 and I'm still holding it comes back up and I'm thinking well let's see if we get first candle to make a new high here back up over 85 and then you know my average is three so I could add to it we'll see what it does and then it comes back down here and I stopped out so I ended up losing like 70 cents a share on 5,000 shares which is a much bigger cents per share loss than I typically would take uh and you know it was just cuz I kind of got a little like well if I cut the loss I'm done for the day I don't want to be done for the if this does end up working that was such a big move maybe this one does curl and so anyways now I'm down 9400 so I am locked out of my account I can't take any more trades today and I gave back what I made yesterday yesterday was a $10,000 Green Day so I gave that back today you know I I was up uh 999,000 on the week coming into today so this gives back 10 10% of that um it is the first day of November so now I'm down 10,000 on the month of November which is kind of a drag um and in fact it might be the biggest um you know the deepest red I've gone on a month so far this year just because it it just happens that you know this is a larger red day I mean $10,000 is not a small red day for me if we look at my um at my calendar my my red days is you know this is kind of the the max of how much I will typically lose on a red day around 10,000 uh so this last one was 3500 this one was 7500 this one was 11,000 right so I'm kind of you know it's a bigger red day but in the grand scheme of things of where especially where I've been in the last month it's it's not a big deal so um so basically what I have to do is just kind of you know just remember look you're only giving back what you made yesterday yes the numbers are bigger but you've been trading bigger size so you know you've got to be able to handle the bigger losses that come with trading bigger size that's just the way it is so coming back on Monday morning you you know how do I approach things well you know is today U just sort of the exception that it was a slow day and you know that drop on COC was maybe because of the offering you know the Shelf registration that they've got I don't know you know I'm not really sure ultimately I don't know I can speculate but I don't know um prso that one dropped as well so how are Traders going to feel on Monday I'm going to be a little cautious right shorts might be a little more confident so maybe we do have to be a little careful on Monday and see you know what's what's the what's the trend I mean if we have 10 more moves like this then clearly Traders are going to stop buying any of these breakouts right and anything that pops up shorts are going to hit a lot harder and what'll end up happening if that happens is we'll end up going into a colder cycle where everything that pops gets reversed until you have one that pops shorts try to hammer it back down but the buyers are there because the underlying news is really so strong that this is going to go higher and then shorts get squeezed out and you get that massive second push and then that pull back and then next thing you know it's it's you're getting another stock like drug that goes up you know 2,000% in one day so I mean of course that's the the like most extreme sort of version of that but anyways um so any you know what what's going to happen on Monday time will tell of course um but my plan on Monday for the most part is to come in um pretty much you know the same as today looking for stocks with breaking news because of course that does work well and we'll see what the momentum looks like we'll see what the volatility looks like a monitor the spreads and if I think I can manage risk and we've got something that's got breaking news and you know it meets the profile the float the price everything else I'll take some trades and we'll see what I can get now of course if I have a second red day on Monday you know two red days in a row then that's when I end up putting myself into a Trader rehab going into Tuesday which you know I obviously don't want to do could I put myself into trade a rehab right now I could but is it really necessary not really you know today is a red day but Monday could end up being a $50,000 Green Day like last Monday was so it's really going to depend on the quality of the news headlines that we get on Monday and if we have some really nice news headlines we have some stocks that really meet the profile that has worked so well through October then you know I think Monday will be fine we do also have the election of course coming up this week uh so that's going to throw a little bit of a wild card out there it could at least um depending on what happens so you know that's something that we've got to be aware of some volatility around U around the election uh we've had some momentum coming into the election but the market was down yesterday um quite a bit so that might also have hurt momentum a little bit this morning and it is you know look it's the day after Halloween and it's the last day well it's last day of sort I mean it's the first day of November but it's also sort of the it's a Friday you know so H maybe today just you know it's sort of just an off day and and we'll be back in the groove on Monday but I think um the the safer bet um for those that are a little bit more risk averse that don't want to take the risk is going to be to watch for curls and to see what holds up and wait for that really clean first pullback right so you know like this is a move where you didn't really get a super clean first pullback you got to move from 10 to 24 and you know then kind of it gave you some more moves but the real clean move was that first one and sometimes that happens and if you're going to miss the first move waiting for that first curl and you might miss it but waiting for this pattern either on the one minute or the five minute is fine but you know let that first pop happen see how much it pulls back and then look for the curl uh like I said the only downside is that in that first pop when something goes from 750 to17 that's $10 a share there's a lot of opportunity in that first pop so the only time that I'm willing to sacrifice that is when I'm really not feeling confident and if the volume is really light and I'm just like I don't know if this I can trust this and in fact you know the one from yesterday I fumbled as well um so yeah anyways um that's kind of that's kind of where I'm at right now so going into the weekend definitely on a red day but as far as red days go emotionally not feeling not really feeling super activated just kind of like Ah that's a bummer but that's about it you know it's I'm not that frustrated I didn't take too many trades today I didn't really like I wasn't fighting and fighting and fighting and then finally had to give up I just you know I accepted defeat pretty quickly and you know that's it so look you know this is this is trading easy come easy go and um I'm going to be definitely curious to see how next week plays out if I start to go into you know multiple red days in a row that's where all of a sudden I'm like okay got to stop the bleeding pull money out of my account you know take the profit off the table from October really protect those gains because I've seen some Traders do of course is you know they'll start to lose and then they just it starts to really unwind and then in a month you know or even in a couple weeks they could give back months and months of progress and I've done that before so I I know the steps I need to take to avoid that if I start seeing that happen but it's also important to be able to just get right back on the horse if you get knocked down you have a red day you know just get right back on the horse because you spend all this time overthinking it putting yourself in a Trader rehab and getting really bent out of shape over one red day eh it's kind of silly it doesn't really make sense the strategy is not broken you just had a red day so don't need to read into it too much more than that um and there's times where I've had a red day and then you know the next day is just another $255,000 Green Day or whatever it is in a hot market and it's like yeah that red day is gone it's water under the bridge immediately so I don't know for sure uh having a red day on a Friday you know kind of I'm not able to bounce back from it immediately you know tomorrow so I kind of got to sit with it and then Mondays can be slow as it is because Traders kind of you don't have a lot of fomo that carries excuse me from Friday into Monday so kind of resetting for a whole new week so probably the the safest bet for me would be coming in on Monday um you know just to be just to be a little cautious try to build that cushion and then if I get the cushion pretty quickly and pretty easily then I'll be like okay time to size up and be aggressive but if I can't get that cushion um you know easily than just stay with small size on Monday so that's probably the safest beted just to size down a little bit Monday try to build the cushion beginning of the week before I do anything too crazy all right so that's it for me thank you guys as always for tuning in I hope you enjoy this recap I know it's a red day but I hope it's helpful and I'll remind you as always trading is risky my results aren't typical so manage your risk take it slow I'll see you guys back here bright and early on Monday morning