41 Circuit Breaker Halts?! transcript

all right everyone well we're going to go ahead and jump into the recap today if you missed my morning update this morning I sat down to a stock already up 700% big move and the move was really after hours yesterday pre-market this morning and by 5:00 a.m. it had peaked and was starting to sell off and I was like well you know what can I do I kind of missed the move now I did end up trading it it's actually the stock I made the most on today which is great and I'll break down how I traded it but something interesting happened with this stock today it actually got halted more than 40 times as the day went on and a lot of Traders didn't understand this they didn't understand why it was halting so frequently why some of the halts were 5 minutes some were 10 minutes it just was very challenging for a lot of Traders now if we look at the price action here on this stock you could see um asns uh currently up I guess a little over 500% and this is the chart so you can see it made the bulk of the move after hours and then pre-market it surged up peing it must have been 900% but then pulling back here down and when I sat down around 637 to start looking at scanners you know I kind of was like well I've already missed the move so I I was however excited because when you see something up 600 700% even if you don't end up trading that stock it's just a great signal of strength in the market like this is the time to focus okay so I sat down and um I I found that you know it was a little choppy early premarket so I'm going to switch to the one minute chart and back this up a little bit um so we had a couple of different um opportunities on this um which I traded so my first trade on it was actually this dip right here so it squeezed up a little after 8: a.m. and you know really nice move break of vwap pops up but I didn't want to chase that I said I'm going to wait for the first pullback so when I'm talking about first pullback what I'm looking for is green candle green candle first red candle second red candle and basically at this point I'm looking for the first candle to go green right that's a standard bull flag pattern pullback pattern in this case it pulls back one candle two candle three candle and then it kind of bounced right off that 9 moving average so I bought the dip off the 9 moving average at about 420 it bounces up to 435 which was decent and so I got a quick little trade on that it pulls back again bounce es off of 383 comes back up and then right here squeezes up to a high of 448 ends up pulling back it wasn't able to break through the half dollar there tried again here broke the half dollar dropped back down and then it started to pull back as we got closer to the open now there was something about this stock that I knew was going to be a problem okay yesterday the close was below 75 in fact the close was at 49 mindsets why is that relevant well let's go ahead and look at this um page here on my website so under trading terms guide um we've got circuit breaker halts so this is an article that I wrote about how circuit breaker halts work and what you'll notice is that stocks below 75 cents right here will halt every 15 cents so a stock where the previous close is less than 75 cents will halt every 15 cents and those halt levels begin at 9:30 a.m. and continue until 335 p.m. at 3:35 p.m. the halt bands double so we go from 15 cents to 30 cents and that did happen today at uh 335 as we went into the close the halt bands doubled to 30s but because the halt bands were so tight the problem with this is that all of a sudden if it drops goes up or down it's almost immediately getting halted now to help you better understand the way these halts work um I'm just going to move this out of the way here some people think they're very static but they're actually somewhat Dynamic so if the price is at $5 right here then the halt up would be 550 up 10% the halt down would be 450 if it goes down 10% so if it goes to 450 and it stays basically pinned at this price which means that there's a seller on the ask right we've got the bid and we've got the ask so if we have a seller on the ask holding it at 450 it will halt the seller has to sit there for at least 15 seconds in order for the stock to Halt now if it just flashes down to 450 and the ask goes to 475 it bounces back up then we could call that a false halt bounces back up no halt but if it stays at 450 for 15 seconds the stock is going to Halt for a period of at least 5 minutes 5 minutes is the minimum period for a circuit breaker volatility trading pause all right now the thing is the stock literally couldn't drop from five all the way to four in one candle because the circuit breaker halt sets this as the lowest the price can go so the price could drop to 450 but while the stock is halted people can prepare sell orders and if people want to sell they can put a sell order out $425 or $4 and if there aren't enough buy orders to match it then the resumption from a 450 halt could be down at 4 or 425 or or higher or lower depending on the imbalance between the buyers and the sellers that occurs during the F minute halt time so the only thing that's also worth noting is that this would be if the average price over the last five minutes was $5 if the average price over let's say over the last 5 minutes that the price has been squeezing up okay so it's been squeezing up like this you know more or less something like that then let's just say it went from 475 to or let's just use these numbers let's say it went from $450 to $5 and let's say the average price over these last 5 minutes is 475 then it's actually plus 10% from the average price over the last 5 minutes which puts the halt level up here at you know approximately five you know 20 23 or 22 something like that 225 approximately right and so this average price is being recalculated approximately every 30 seconds so as the stock continues to move these Hal bands are constantly moving around the price whatever is the average price over the last 5 minutes that's 10% above and below now it's 10% above and below for stocks that are priced above $3 okay so if I pull this back down here for stocks priced above $3 the halt bands are uh 10% so in other words if the stock is at $5 550 if the Stock's at $10 and the H level's at 11 right it's 10% if the stock is priced between .75 and $3 the halts are every 20% so lower price stocks tend to have more volatility so they give them a greater band volatility band so it's every 20% that the stock would halt but stocks under 75 cents will halt either every 15 cents or 75 cents but when it gets up to sorry 15 cents or 75% but once it gets up to three four5 a share it's not going up 75% in 5 minutes it's going up 15 and so unfortunately what that means is that a stock like this is essentially going to Halt you know if it goes up approximately 15 cents so now let's go back to the open now because I knew this I knew that it was basically going to be impossible to trade once the market opened all right so the Market opens right here and the opening price is 371 and then we drop drop to 352 and we halt down all right so now we're halted down for 5 minutes so halts are 5 minutes standard then it resumes right here and it halts up it only goes up like 15 cents I mean literally it goes from a low of 303 up to well let's see so the average price it goes up to about let's see the low was 303 the open was 310 and it halted up at 325 so it halt up and then it resumes lower and halts down goes down again halts back up and and this continues all day long and these are extremely difficult to trade because all of a sudden you can be getting in you could think that the pattern looks good whatever you get in and then one person throws a market order out for 50,000 shares the stock drops 5 cents another person puts out a couple more sellers it sound 8 cents next thing you know people are like oh God it's going to Halt they start panicking and now it's halted and you can't get you're stuck and it happens that fast so you can get trapped and you get trapped both long and short it's just the nature of these halting as frequently as they do personally I think that these halt thresholds should be updated because they don't really control volatility in fact they make it more difficult to move in and out of stocks which reduces liquidity which creates I would say more risk so what's really interesting here I I think this is you know not something I would bring up at like a cocktail party but what I think is really interesting is that you could have a stock um just like this one today so asns um priced at you know $5 was halting every 15 cents right so it goes up to 515 at halts it goes down to 485 at halts but you have another stock and that's because it its previous close was less than 75 but you have another stock that was at a dollar yesterday it also squeezes up to $5 but because it was between the price of 75 and $3 its halt levels are every 20% this one's every 15 cents this every 20% so now this can go all the way to $6 before it halts or all the way down to well 10 yeah I mean I guess technically even though that'd be a 25% drop I don't know it's the average price so I guess technically so you know I mean these are H in any case you get the idea that 550 halt up or 485 halt down that's too tight but then this is almost kind of too big so you know to me I wish they were able to make these halts Dynamic based on the price of the stock but I I think that that's a level that they're just not at yet of sort of changing what the thresholds are in real time you know what I mean so like it's based on the previous close so if you had that that spot where a stock goes from you know $2 to 350 and it crosses over that $3 price now the halts you know should they change and yes they probably should but they're just this A System's not set up to adjust in real time for that so anyways this is what we're stuck with and um and that's fine I mean we just you know this is the market that we're in so it's not a big deal but unfortunately for me it made asns more or less untradeable at the open uh nonetheless I did get some trades on it um pre-market I'm up $3,515 sense today which overall is a solid green day I'm green on let's see 1 2 3 4 five out of six stocks I traded accuracy pretty solid here today um you know I was happy with this price action for the most part but one thing that I'll say uh so asns was clean pre-market and then got choppy as the day went on because of the halt um the second stock I trade xti this one was kind of insane this went parabolic pre market and then came all the way back down so I rode the momentum you know as a momentum Trader I look for something that's moving I jump on the momentum and that's exactly what I did I took my biggest position on this at I think it was two let's see I'm trying to remember um let me go back and look so okay so it was at um so I got in U 500 shares at $187 um I sold at a12 and then I added back at 250 sold at 258 added back at 270 and this is where I added then at 285 and 290 for the break of three and we got this nice squeeze here up to only about 305 but nonetheless uh you know I made 1,600 bucks on it trading with relatively small size because it was sort of thinly traded and I wasn't sure about it but you know I got green on that I was happy and one of the things I said was let's trade the front side of the move right here and leave the back side alone so once we get that macd crossover I'm like nope not interested in it so traded that on the front side gwave um this one choppy price action um not not super clean but did give us a little bit of a move pre-market I got in um let's see we got this cup and handle formation right there so I took a trade in this move um had a nasty rejection there and then at the open squeezed up a little bit more but rejected again so a couple Big Jack knives on that one nvv lower price stock I bought this at $1 ended up squeezing up um to A110 right here and then pulled back and then came back up and went from a dollar all the way to a160 $1.70 it's pretty good move but a little choppy and in this move here I felt like it was too extended and I was worried about getting caught in a halt going back down um let's see jwf Jewel so this one I took a trade on it um let's see $56 actually this was a um this was an after hours tra or no it's was a trade going into the close um that was right here I just took a small trade on that nothing nothing really that exciting um and then Yash yo this one um bought small size 250 shares on it pre-market it started popping up and then it goes all the way down to 260 I don't even know what to think about this but like some of these stocks are really wild and that's why I just break the ice with small size and then if they work I'll lean into it as I did on Atia or xti and if they don't I just cut the loss quickly get out and move on and that that works pretty well most of the time occasionally I'll still get a bigger loss even with small size but uh the thing is in this market when things move they can move so quickly that if I'm not quick to jump in I can end up missing the whole thing so I'm trying to jump in fairly quickly I peaked today at about 4500 gave back 1,000 off the top and you know I didn't hit any max loss today or any triggers that I had to stop but I just got to a point where I was like well I'm not really making money anymore I did stick around a little longer today just because I had things I was doing on my computer and working on some videos for um for the classes and for YouTube for later in the week or or next week I guess probably but uh so I I kind of kept an eye on charts and I was wondering what asns was going to do after hours specifically once the halt levels went away and you can see it curled up here but then that news came out so we got the news of that um exercising warrants so $3 million in Gross proceeds this is you know it's not uncommon and they priced it $2.75 a share so um you know again not surprising there these companies usually do need to raise money but you know what is interesting overall Market S&P 500 alltime highs wow so overall Market Blue Sky alltime Highs Nvidia amazing super strong and now I'm really regretting that I didn't buy a little bit here when because this was the thing I I I said this like oh I should you know take a position here I'm I am holding some shares in my long-term account but I don't feel like that counts I I really wanted to be like you know getting a position here and using some maybe options but I anyways missed it if I see this a couple more times I'll get more confident in it but yeah they announced the news of the split and now it's up 20% uh so uh nice to see but again I'm glad I'm I have a position in my long-term account so at least I'm participating a little bit but I was hoping that I'd be able to um do something you know in my day trading account and just take a position or buy some options and and let it ride but anyways I didn't I didn't want to mess up my accuracy doing something a little outside my wheelhouse so instead of taking just a small bite I just left it all didn't take anything so that's fine but you know the big picture here is that uh the market is looking really nice right now so this is great to see I you know I'm feeling I'm feeling pretty good about the market and although we're still at the very beginning of June you know I'm I'm building a nice cushion on the month up 14,000 on Monday uh yesterday was a smaller Green Day about a th 3500 today so you know my weekly goal has and my weekly average has been around 15,000 to 20,000 so I already hit that this week and now I just need to hold it together and see if I can add a little icing to the cake and it's nice to have a a nice start at the beginning of the month um that doesn't always happen so I'm going to be grateful for it here and you know as always live to trade another day so I want to thank you guys um who have uh already ready hit the Thumbs Up And subscribe to the channel if you haven't checked out our twoe trial there'll be a link pinned at the top of the comments and in the description so make sure you check that out and I'll remind you as always that trading is risky my results aren't typical so manage your risk take it slow and Warrior Pro members I'll see you live streaming bright and early tomorrow morning