MAX LOSS MONDAY transcript

What's up everyone? All right, in today's episode, I'm going to break down the biggest gainers in the market this morning. I'm going to walk you through the trades that I took and I'm going to share with you my outlook for the rest of the day. As we sit right now, I'm in the red and I'm getting beaten up. September has been hands down the worst month in over a year. It was a year ago, first week of October, that I took a $175,000 loss.

Yikes. And I spent the rest of the month trying to just get back to zero on the month. I finished that month up like 20 or 30 grand. So, I ended up finishing green. And that was the worst month I've had since right here. So, it's been almost a year since I was faced with that type of emotional battle of a huge loss, a slow, painful recovery in a colder market. Now, I will say I've had a few big losses this year, but the market has overall at those times been strong enough that I was able to recover those losses very quickly and that seemed to have changed towards the end of August and coming into September here.

August I did have a few big losses as you guys saw, but I was able to bounce back pretty quickly and then September things kind of fell apart. So, as I'm sitting here today, it's a max loss red day for me. Let's go ahead and jump on the screen share and start breaking it down. So, I'm down $31,000. I'm not happy about it. This is Look, it's discouraging. This is the hardest part of being a trader is coming in for, you know, waking up early, sitting down, losing 30 grand, and feeling that there's really no chance of recovery.

Now, that's my feeling. Others might trade differently. Others might say, "You're down 30 grand. Why stop there? You could certainly make back some of this. There's, you know, it's only 9:30. there's going to be other stocks moving. And while that's true in theory, what I'm noticing, uh, and this is actually quite an interesting pattern, is that, you know, my first trade was Vwave, second trade was MSGY. So, small winner, smaller winner, then I traded MTech for a $9,000 loss, traded LABT, then to PMAX.

So, my losses seem to be generally moving in the direction of getting bigger. Now, when you're in that kind of um you know area or kind of trend or theme or whatever you want to call it where the losses are getting bigger and bigger and bigger, you need to at some point say enough is enough and I'm going to stop. You know, you don't want to keep going further into the red. Um, obviously what I would prefer to have happen is, okay, maybe I had a big loss and then the next one's smaller and smaller and smaller and now I'm going to start working on, you know, a little bit of a recovery and maybe it kind of looks like that.

That's that's more what I would be willing to work with. Unfortunately, as we sit right now today, I started with, you know, a couple of tiny green trades and then flipped to red, uh, deeper red, and then much deeper red. So, the only way that I can turn this around right now is actually, uh, going to seem counterproductive. It's to reduce share size. So, you might think reducing share size is not going to help you recover this loss.

And on the surface, you would be right. Uh, but it's actually exactly what I need to do because what happened even just on this last trade of Pmax is when I started selling, I sold the first 10,000 shares at 224 and the rest I got out at 194. I got 30 cents of slippage on 20,000 shares essentially because the price dropped so quickly, I couldn't unwind the position. So, not only was I wrong on the trade, but I had so much size that the amount that I lost became larger due to slippage.

Now, when you're winning and everything's going the right way, you can kind of make up for the slippage just in the fact that you've got big momentum, but slippage is always a factor. So, what it means is the difference between where you press the buy or sell button and the price you actually get filled at. And so on winners they're going to be a little smaller because of slippage and losers will be a little bit bigger and in this case quite a bit bigger.

So this is an unfortunate aspect of trading that makes it so to a certain extent the cards are always stacked a little bit against you between you and the market makers because of this factor of slippage. So when it's cold slippage can make it even worse. But you have less slippage when you trade with smaller share size. And so ultimately what I really do um you know need to accept is that in order to make this recovery the first thing I need to do is stop losing so much and I wouldn't have lost nearly as much today if I'd been trading with a quarter of my position sizes.

So instead of you know 50 and 60,000 shares if all my trades today had been you know 10 to 15,000 shares obviously I would have lost a quarter as much. So instead of being down 30,000, I'd be down more like 7500. But I would argue I'd probably actually only be down around 5,000 because a lot of the loss was due to slippage. And with smaller share size, you get faster execution on your orders. Right? So this is something that when the market's hot, I size up.

I accept the slippage. But because the market's so strong, it's forgiving and I can still do really well. But when it cools off, man, I'm never quick enough at taking my foot off the gas. I always think I should have slowed down sooner. And so, you know, Friday was a red day. And I came back this morning and the first stock that I traded was VWave. So, let's look at Vwave to start the morning or to start the recap. So, V well, it started the morning as well.

So, Vwave, this stock ended up doing a full round trip. It's now down 10% on the day. So, we rally up and then to seven and come all the way back down. So, on this one, I did break the ice and take my first trades on it, but I was a little bit, to be honest, I was a little unsure if it was going to work. Um, this one initially pops up right here to a high of about 560. It pulls back on a higher volume red candle and a topping tail.

Then it pushes higher with one, two, three more topping tails. Then it drops back down. And then it comes back up right here. And I took my first entry right at this level for the breakthrough this double top. And that was pretty risky. Buying at the top of a topping tail right in this area could be a rejection. Now it ended up going to seven and I was able to get out but not with a lot of profit. I only made 400 bucks.

So first trade was not that impressive. Didn't work out very well. It rejects back down and then that's that. There's no more trades. Then MSGY pops up on the scanner and I said to myself, you know, I yes, this made a really big move on Friday, but it pulled back quite a lot. On the other hand, uh it is rallying up here this morning. So, as it started to squeeze right through here, I jumped in for the break of 8. It breaks 8, it goes all the way to 840 and then it flushes down to 740.

I mean, I could have easily lost quite a bit on that and I got in at the half dollar whole dollar, but I ended up making $261. Then we had MTech that came along. MTECH hit the scanners. This one started squeezing up right here. And I jumped in right at the top of that candle right there. This was a flat top breakout setup. That's the flat top. And I got in right up. Oops. Sorry. Um I got in right there. And I bought 60,000 shares on that trade.

It's a cheaper stock. And one of the things I had said is that with these cheaper stocks, I really can't make good money unless I take big size. So I got in at 190. I was looking for a quick squeeze up to 6 60 sorry um 220 205 1015 you know 6,000 $9,000 9 roughly something like that. Um anyways jumped in and immediately it rejects and I'm down 10 grand on it. I cut the loss I had to right that was the right move. So I cut the loss on that.

Then LABT pops up. LAT and you know you could see like the writing was clearly on the wall. Um, and I probably should have stopped sooner. LABT also did a full reversal. Came all the way back down. So, on this one, it initially pops up right here. It pulls back. I get in down here for first candle to make a new high. It rallies up here and I'm up four grand. Then it pulls back right here and I get back in for this one minute candle to make a new high and I lose six grand.

So, I go from green to red on it and it unwinds. And so, at that point, I was down $11,000 on the day. Then PMAX comes along and Pmax I didn't trade it initially because the market had been a bit cooler this morning. So I thought I don't know if I should trust it. Let's just see what it can do. However, I looked at this and I said realistically we've got a target here on this of about um uh 288. So it ends up popping up here.

I missed this entire move. So it goes without me because I was already in the mindset of ah this morning's not going so well. I think I'm just going to hold off. So, it pulls back here. It rallies back up. Then it pulls back. It dips down. And I ended up getting in this now. Where was it? Um Oh, let's see. So, that was 80. Trying to remember where I got in this. Let me Oh, let's see. We could probably just quit my order.

So, I got in at 250. Um, and that was at 833. So, is that right through right here? Yeah. So, I bought this right down here and I was looking for the pop back up. uh first one minute candle to make a new high and then we immediately flushed back down and I sold in this candle right here. Just absolutely terrible, just terrible. And so, you know, it just gosh, what a what a disaster. So, that was just awful. And so, I ended up having two, four, five terrible terrible trades today.

I mean, the first two trades weren't great either, right? The only one trade that was good was LABT. So, basically today I was green. I was I had one out of six trades that were good. Uh and that's pretty that's not acceptable. I'm not going to do well maintaining that type of accuracy. There's just no way around it. And I'm certainly not going to do well with that accuracy when the average losers are as big as this.

So something's got to change. Now what really needs to change is the market. I mean I I'm going to point I'm not going to look inward. I'm going to point outward to begin. I'm going to say the external factor is that the market's cooled off quite a bit. All right. So the market needs to change. If the market was hot, today would be very different. Okay, so yes, the market should heat up. I would love it to heat up, but you know that it will when it when it wants to.

You know, when things heat up, they heat up. And when they cool off, they cool off. So now I got to look back inward. What can I do right now? So reduce share size. I don't want to, but it's the right move. Reduce share size because what's going to happen if I keep just going, you know, full throttle is I'm just going to keep hitting my head on the ceiling. I'm just going to take these big losses. So reduce share size number one.

Um an alternative is reduce um account size. So if I reduce my account size, then I simply can't afford the shares here. So these are two different approaches. If you're with a broker that doesn't allow you to put a max share size on your account, then I would just reduce the account size. Because the problem is you can say, "Oh, I'm only going to trade with 10,000 shares." Which is what I had actually said today. I was going to do 15,000 shares.

And then MTech pops up and I'm like, "Well, this is so cheap. Um, I'm probably going to need to take bigger size on it." So, the next thing you know, I'm in 50,000 shares of this thing or whatever it was. And then once I'd broken the ice with that bigger trade, uh, you know, and I was red on it, LABT, I did 30 40,000 shares of it, whatever it was, right? And so then 40,000 shares of PMAX and now I'm just trading with big size. uh arguably if I didn't have the buying power that would have been a better solution for today.

So, uh you know, these are the two things that I'm both considering. Um drawing money out of my account to reduce the account size. Um yes, reducing uh share size, but I already know that I have a hard time um sticking with that because in the moment I'll see something that makes me think otherwise. And this comes back to an issue of, you know, discipline. So, what can I do to increase my discipline? Sorry, I'm not very good at writing while I'm speaking.

So, if I can if I can increase my discipline, um because right now my discipline is probably a little bit on the low side, right? I you know, overrode this max size today. Kind of got a little stubborn. So, increasing discipline. Um you know, guided meditation. Um so guided meditation on you know FOMO, frustration, anger, disappointment those are really helpful. Any kind of meditation is good. Um less well exercise is another one.

Um you know working out and then another one is you know getting out of the office. Um and this is important because it separates you from the thing that's triggering you so much uh just to help you kind of cool down. But you can only distract yourself so much. You still will need the discipline in in the moment when you're trading. And I'm going to need that tomorrow. So, my plan for right now, um, this is not what I was hoping for on Monday morning.

Look, it's that's the truth. I wasn't hoping to be read $30,000 today, [sighs and gasps] but I am. So, now it's a question of I've dug the hole. So, now how do I get myself out of it? And you know, the re the reality is what I just walked you through is is the best approach. And that's not fun. It's not fun to have to accept that I won't be making any big gains for the next, you know, few days or maybe longer because I'm going to be throttling myself back with smaller share size and this and that.

Um, but that's the way to chip away at a loss and to make it back. That's the right way to do it. So, this is where I'm at here. And uh you know September, as I said, it's been a rough month, but this is this is the hand that we've been dealt. So it is my failure to not have adapted and adjusted uh more quickly to what is clearly a colder market. So that's where we're at here. Um as the day goes on, you know, you've got a couple higher price stocks, you got a couple lowerric stocks.

Um, sometimes when things are cold in the pre-market session, you will see more opportunities at the open. Um, but I generally find unfortunately because of the halt levels that trading at the open is actually quite difficult. So, no doubt traders will be looking at some of these stocks popping up. But if you're thinking about holding during halts, just make sure you're managing your risk and thinking about your share size because once you're in the halt, there's nothing you can do. you don't know when where or when it's going to open and you know you could end up being stuck for a while.

So just try to take it slow, manage your risk. This is a colder market and we just got to get through it and get to the other side. So with that, I'll remind you as always that trading is risky and my results aren't typical and there's no guarantee you'll find success whether you trade with me or learn on your own. So please manage your risk, take it slow, and I'll see you back at it first thing tomorrow morning. I'll be streaming at 7:00 a.m. for members at Warrior Trading.

And if you want to check out the twoe trial, of course, there's a link pinned at the top of the comment where you can do that and you can join the chat room right now and continue to listen to the commentary that John is offering uh for members who are still streaming. So, come on over and check it out and I'll see you guys in the morning.