How I Recovered from Yesterday's MAX LOSS Red Day transcript

all right everyone so we're going to go over the trades from this morning I'm pleasantly surprised that we had some nice momentum today I wasn't too sure you know after yesterday yesterday obviously being a red day my first red day since uh June and yesterday I had a little bit of a hard time you know being optimistic cuz I was I was disappointed that I had that red day and I I over traded and you know I I just it well you watched the recap I'm sure you watched the recap it wasn't a great day for me uh at the same time I said to myself rather than being you know glum and disappointed about the loss maybe I should focus on celebrating what has been a really terrific hot streak and today is a red day but red day is happen and the kind of exciting part is that now I can get myself in the zone of getting back on the horse and beginning to rebuild there's always sort of some excitement um you know after you have the loss and it's kind of said and done when you sit back down at your trading station it's like okay now I've got some ground to make up it's like you know time to get straight to business and make a little bit of profit so what I ended up doing was um I got out my whiteboard right here and I I took some notes for myself um so this is this is what I this is what I wrote um this and this helped me uh this morning so I wrote go slow $11,000 cushion right 5,000 shares 20 until Momo returns and that's on an intraday basis batten down the hatches right now I kind of like this um you know analogy of of having to really hunger down and wait until things get better and you know the thing with like hungering down through a storm is like obviously your priority shifts you're not going to get as much done During the period of there's a big storm passing through I'm thinking of people that are you know doing like outdoor um you know Adventure seeking type of things but it's like the the New Order business is like survival and there's something kind of you know exciting about that as well so right now it's just about survival it's okay that I'm not you know making any gains because this is sort of the new Focus so batting down the hatches till things get better and then I just kind of remind myself you know that's my Equity curve for the last 90 days and I'm right here yes it's a little bit of a dip but it's tolerable and then the second thing I said was um stop at 9:30 a.m. and the reason was because yesterday I had a great day and then at 9:30 a.m. my whole day fell apart um I said cap at 5,000 shares which again is just a reminder that 5K cap until I'm up over a thousand focus on small green days and reminding myself that I didn't have any meaningful gains past 9:30 and then I did this um sort of blue line which you might not think carries a lot of meaning but um oh it carries a lot of meaning so so this is what I was thinking if you watch my recap yesterday I said that in a way I almost don't think um it's in a sense it's almost possible almost to never have green days if you trade momentum the way I trade momentum and you're taking at least 15 to 20 trades a day and maintaining accuracy of 65% 70% because the reason is let's say on you know you got so let's see 3 4 5 6 7 8 9 10 let's just say 10 so every day you've got 10 trades so it may be you know your Fortune like it was for me yesterday that you start with the first trade as a loser and the second trade's a loser too but as long as you haven't hit your max loss statistically if you're still going to take eight more trades and your accuracy remains what it's been historically then you should see out of this you know approximately six winners maybe you'll have one more loser in here um but you should see six to seven more winners and then at the end of the day you should be green now the only thing that's going to throw this off is if for some reason there's something happening in the overall Market that reduces the number of opportunities that are available to you and that's kind of what happened to me yesterday I tried and tried and tried and I just ran out of opportunities and I said to myself realistically my next best chance for a good trade is probably going to be tomorrow it's not going to it's it's going to be tomorrow but then I actually thought you know there is a chance that we could have some news after hours so I actually was still here cuz I had done my recap so I was watching after hours to see if we would have any breaking news and we did have some breaking news we had um asns that had breaking news after hours this one popped up um we had let's see ride R yde squeezed um into the closeth and popped up a little after hours um and then there were a couple others that did um but of course you know my luck I ended up taking a trade on sup after hours which pops up here to 180 and then immediately reverses and so I ended up starting the day and ending the day on losing trades yesterday and I just ended up digging the whole deeper and I was like you know what this is just stupid so I'm just going to walk away so finally I gave up and walked away and then I said all right well so my time here started you know kind of ended at like 4:30 p.m.

I was like all right I'm out of time today so I'm not going to recover today but what I know is that big picture big picture as long as I'm able to stay calm cool and collected it is only a matter of time before I make my recovery so you know yesterday was from here to here and it just turned out that 4:30 p.m. you know came and went and kind of ran out of opportunities so I had to kind of pause overnight and then come back and start again this morning I came back I start again this morning and first trades right out of the out of the gates winner green 1,000 bucks second trade green 1,000 bucks now I'm up 2,000 on the day third trade green 1,000 bucks I'm up 3500 on the day got myself up to 3500 then had a loss then another winner then I had another small loss things got a little bit choppy then we had another stock that started to pop up and next thing you know I'm up 5,000 6,000 7,000 8,000 $9,000 came up to just shy of $10,000 on the day and then stopped now actually my last trade was a loser I gave back $100 off the top no big deal so that's where I'm finishing right now here today and again this point it's quarter of noon I'm not out of time I could continue to trade through the day but what I kind of know from my experience yesterday and generally speaking is that I'm more profitable in the morning and the reason that is is because in the morning we have stocks that are responding to breaking news headlines that came out overnight so we have breaking news that comes out the next morning that's when we're getting the response or we're getting the breaking news that comes out first thing uh pre-market which which happens as well well so I sat down this morning and so you can see my p&l right here this is where I sit for the day 9,934 so nice solid Green Day can be feeling pretty good about that uh and the first trade of the day I sat down and as always I pulled up the scans on my phone so pulled up the scans on my phone um and at about 6:30 I was disappointed I was like yikes I'm not seeing a lot that I'm like here um bkyi I can't remember if this was on the scan now um I guess it no it wasn't that one popped up at 825 um we had a couple lower price stocks on the scan nothing was up more than like 40 or 50% so I was sort of already a little bit like oh boy I'm I'm going to be in for a slow day today um but I had a bit of excitement because I was like today is day one of rebuilding with discipline and staying calm cool and collected and I also something that I often do um wrong camera is I'll take um sometimes I'll take notes or I'll just kind of go for a walk so yesterday um after I finished trading at like 4:30 I walked um down on my garden where I've got my uh tomato plants and pick some tomatoes and anyways um and I took some kind of notes on my phone this is something I used to do a lot back in uh 201 um 12 2013 I remember going for drives I lived uh it's a bit of a drive from town so I was driving quite a b quite a bit and I would sometimes record like a voice MMO like you know H man today was such a tough day and I found that talking out my day was really helpful kind of like therapeutic just like talk out what I did right what I did wrong so I kind of took some notes on yesterday and I was like you know red started the day nicely R thanks to getting tricked a little bit by some level two action big bids the bids got pulled um today would have been the 48th consecutive Green Day but you know hadn't been counting but you know counted once I checked and uh then you know kind of talked about took notes about how frustrated I was to recover from minus 5,000 all the way up to 10,000 or $10,000 a profit of 5,000 on the day and then go back down and what I said was um my biggest risk for tomorrow is whether or not I will have the strength to maintain the discipline necessary not to gamble and therefore have a second huge red day it would happen if I try to make back all of yesterday's loss in one trade if I can accept that I will not make back today's loss this week or perhaps it'll take four days averaging you know a couple thousand a day then my only job tomorrow is to see if I can make $2,000 and do it while maintaining presence of Mind of the condition of the overall market and focusing on high ACC accuracy success tomorrow is discipline so that um was kind of my meditation yesterday and so when I came in this morning um initially I was a little disappointed not to see much on the scan that looked good but then SMX um right at 7 a.m. all of a sudden pops up and when it started popping up initially I I assumed that it had news because it just went up basically like 100% really quickly uh but in fact I wasn't able to find news news on it and I don't know that anyone was so kind of you know it's always a little odd when that happens but um in any case this squeezes up right here and so this at that moment perfectly met the profile of the type of stock I'd like to trade based on the float less than a million shares that's fine based on the price between 2 and 20 and it's on the lower end of that which is fine um based on the fact that it was squeezing up already 20 30% by the time it I it popped up which made it the second leading gapper on the day and so so my first trade on this uh it squeezes up right here that might have been a nice entry but I missed that it pops up right here and I bought that pull back right there so I got in right there I got in with 25 200 shares uh at 416 and then I added at 420 it goes up here to 440 450 right here just over 450 so I took my profit out that gave me 20 cents a share 5,000 shares I'm up 1,000 bucks it pulls back I bought this dip right here again No so at this point I said there you go buddy you just got your first, bucks you can increase your share size so on that second trade I did take 5,000 shares again um and that was getting in at 455 right here and then took profit on the squeeze up to five then we hit a high of about 515 as you can see right there and so it dips down and I end up buying this dip right down here at 5 25 so let's see where was it so we go up here we pull back um was it right here it was right here as we came back up um bought I guess it was a double top breakout bought that breakout right there we got the squeeze up to 540 so made a little bit of profit on that it dips down and I got a couple of dip trades through this area um we ended up pulling back and then coming back up and sort of peeking right here and I gave back maybe $100 off the top I know I was up over 5,000 on it at one point so up 4,9 151 on it but overall did pretty well now through this area it starts consolidating so now we'll switch to the 1 minute time frame so on the one minute chart we get that first surge up and really the only entry on it was micro pullbacks so those of you guys who know my micro pullback strategy because you watched me trade it in the chat room or you've attended uh my warrior Pro classes and you've seen me Teach it micro pullback right there micro pullback uh right around 420 which was like in here and then we got that surge up to 540 pulls back pulls back and then pushes higher then it dips down right here the macd crosses over and I was like okay it's time to wait so I said I'm going to wait I'm going to wait I'm going to wait now I noticed um right in this area ascending support I connected the low here with the low here and so I said all right that's kind of interesting it's kind of interesting and I noticed another uh student at Warrior trading said I'm going to buy this dip down here and I looked at that and I thought you know I was kind of thinking the same thing I I was wondering partially if this is just a bare flag A selloff and A be flag uh but does seem to be holding up macd is kind of curling uh this could be interesting so I looked at the level two and I saw there were some big buyers down here around 460 and I said you know what I'm going to go ahead and take that trade so I got in about 472 added at 482 and added at 492 gave me an average of 82 7500 shares uh actually that might have been 10,000 and then I took profit up here as we got up to about 420 or 520 so that was nice uh after that it dipped back down below vwap was sort of struggling in this area so I I didn't take any more trades on it got below this ascending support line and then I was like no that's unfortunately it's it's done so and now it's come back down quite a bit so anyways um there was some nice volatility there early uh but but that was really sort of your window it was sort of in this area here so that's fine that was our opportunity so took some trades on SMX um then we had BL MZ hit the scans and bmz uh you know it hit the scans yesterday as well it's a continuation setup has strong day on Friday pushes up again on Monday and now here on Tuesday pushing higher uh so I did take this trade for the break of three uh but I managed to get in get stopped out and then it ripped which was kind of obnoxious I but nonetheless lost 500 on it and I was like you know what that's I'm not going to overstay my welcome and I kind of said I'm going to start each stock I trade I'm going to kind of reset at starting with 5,000 uh shares and if I can get a cushion on that stock I'll size up but if you know I don't want to go because now I'm like well I could take 20,000 shares this but I was like yeah maybe I shouldn't do that maybe I should start just build my cushion on that stock first and then if I feel comfortable with that stock then up which is not something I typically do but I thought about today so anyway so wasn't able to get a cushion on uh bzm uh then uh got a couple more trades on SMX and then let's see um then bkyi comes up so bkyi ends up coming out with news this morning it pops up initially here it dips down as it curls back up I got in for that curl back higher and you know I'm really kind of impressed that this um was as clean as it was so on this one however um it's a cheaper stock so my starter on it was 10,000 shares so I bought 10,000 shares uh right around 55 here to anticipate the breakr 60 it goes to 60 6570 I'm adding into that move we got a high of 190 I take some profit so that was a couple thousand bucks it pulls back here I add back and on this one actually did take 20,000 shares squeezes through two goes up to 210 and I'm up 4,2 $257 on it it's like wow that was awesome so going into the open it ends up uh pushing higher and I was watching this but I also said be careful at the open you don't want to overstay your welcome and and this did end up being um you know I mean it ended up moving but anyways I I just kind of didn't feel like taking the risk on it so and then let's see I had a trade on zap Z that hit the scanners this morning um that one didn't hold but was able to get in and get out quickly and then whlr got a trade on that one um had a nice a couple nice moves got in got out fairly quickly on that didn't make much money on it but you know in in total this ended up being a better day than I expected now one of the things I was telling myself last night was um you know in regards to Trader rehab some of you guys are familiar with this program that we have so one of the things that you know of course I learned pretty early on was that um uh trading is very can be very emotional and so at Warrior trading we have a trading psychology program we've got of course day trading the basics and day trading strategies and scaling uh starter includes access to the basics and Warrior Pro gives you access to both of those classes plus all of these classes below and a Trader rehab is a class i t have taught with Ted um Ted runs the trading psychology program here at Warrior trading and Trader rehab is specifically designed for Traders uh like myself cuz I put I created it because I needed it um who need sort of an acute intervention to stop really destructive trading Behavior where you're just spiraling it's like red day after red day after red day you're getting more and more emotionally fueled you're getting so angry every every time you finish trading you're ready to break your keyboard throw it out the window you're just like that's where you're at emotionally and for that are in that place the first order of business is to stop the bleeding you have to stop the bleeding and there's two ways to to do that number one is to stop trading real money and to switch to the Sim and the other is to discipline yourself to size down now discipline is very hard it's very hard to hold yourself accountable and say I'm not going to trade with more than x number of shares you know until I've done this or proven this for 5 days whatever it is it's it's incredibly hard for Traders to restrain themselves in that way uh but it's an important exercise because one of the things I've said about discipline is that it is a muscle it's not a skill like learning to tie your shoes that you have it forever it's a muscle that will strengthen the more you exercise it but will also weaken the more you ignore it so the first order business is to stop the bleeding now after yesterday I knew I needed to be very careful because it's very common after one big red day that you'll come in the next day and you're trying to make it all back in one trade you'll take obscene risk it goes wrong and next thing you know you have two huge red days in a row you're Max loss you know below Max loss in an instant and it's just like you know that's it so knowing that that was a risk um I someone said Ross are you going to put yourself into Trader rehab for tomorrow and I was like well so hold on hold on just one second on that um you know I I had a I I am read today and I am below my Max loss but also let's kind of put it in context what happened uh and I was like you know I I did go red on my first two trades um and then I recovered and made $110,000 on sin which was fantastic and it was absolutely the right move for me to be trading aggressively and I did really well and then in two trades I gave it all back okay so I overstayed my welcome caught a couple big losses and then after that I had that a couple final trades that set me even further red because I started to spiral so I was like yeah clearly I made some mistakes there and and so coming into tomorrow or which is now today I need to be very mindful about not letting myself spiral but do I go all the way to checking myself into trade or rehab which is to apply some of the most restrictive guard rails where I say I'm not allowed to take more than one trade and I'm capped at 5,000 shares for that one trade and the goal of that is to try to have one green day just to like break the you know kind of break the red streak and just have like one nice Green Day um and I felt like I don't think I'm at a place where I need to do that uh I think it's very possible that we could have another stock like sin today and we did we had two stocks just like it and if those are strong there's no reason I shouldn't try to capitalize on it but what I do need to remember is to not take more than 5,000 shares on that first trade and to focus on waiting for a good quality setup on a stock that perfectly meets my profile so yesterday I broke the ice on Riley which was a stock with a slightly higher float and then the next one I lost on also had I can't remember what it was if it was price or float but something also on that one wasn't quite right so I said you know if you start the day by focusing on stocks are really within your wheelhouse I think what you really need to do is sort of go back to basics in a sense just to kind of like get a little bit more rained in not all the way to Trader rehab but with some guard rails and then if you can build your cushion open up see what you can do now if I'd had two three four consecutive red days then you get to a point where you just need to break the streak you just need a green day and if that means just taking one trade getting green and shutting down then you come back the next day and you're like okay at least I broke the green the the red streak and I'm green now but that's not where I was at today though the stakes were pretty high to make sure I didn't have day two of a capitulating spiral cuz when you go into day two or day three or day four and I once had I think it was six consecutive red days you get you get really emotionally bent out of shape you're like what am I doing do I even know how to trade anymore you know having a red week it happens having a red month it happens I tend I tend to figure I'll have one red month a year and many years I've had two red months this year you know it's possible that'll happen I was had a couple close calls earlier in the year and these last few months have been really good but you know who knows I could have a red month at some point and look if it happens most likely it's because I took a trade that was just one terrible loss and then it threw me off my game I wasn't able to rebound and kind of get centered so I just kept reminding myself that um right now the key to my success is 100% discipline the losses yesterday were not a fault of my strategy they were a fault of my stubbornness I got stubborn I didn't want to cut my losses quickly enough they got bigger and then I didn't want to close the day read so I kept trading and it capitulated and look I'm human and these are the emotions that we feel when we trade and we do the best we can to not act on them but then there are times where it just creeps up on you next thing you know you've crossed that point of no return and now you're trading from a position of being emotionally compromised and so that's what ended up you know happening yesterday but today I was able to keep myself um really in check really focused and really focused and uh and and yeah so so now you know red yesterday in net green today in net um and now we've got of course tomorrow and then we've got um Thursday right and then we've got Friday so we still have you know and who knows how many trades I'll take each day I might end up taking 50 trades tomorrow or I might end up taking just 10 trades on you know Thursday I don't know it'll be depending on the quality of the market but knowing that I'm right here and that within the next 10 days most likely there's going to be a hundred more trades for me to take with 65 to 75% accuracy which is only achievable if I stay focused on trading stocks that meet my profile of the five criteria for stock selection and that really look clean but I can do this I know I can and if I can maintain the 2 to1 profit loss ratio that I've been maintaining for the last two months which is going to be the result of this um sort of new risk management technique that I've been using which I talked about in yesterday's class then it's really only a matter of um time before you know my accounts of course back well to alltime highs and I'm you know really feeling like another sort of boost of confidence and I'm you know in the middle of another hot streak if every day had you know I could take 10 or every if every day I could take a 100 trades then then it is quite possible that I wouldn't have red days because there would always be enough time to recover but realistic Al the way I trade I don't see a 100 trades in a day um very often that's pretty rare and of course those would be just days where the Market's really hot and what we also know is that there are days where the market is um is really cold and when the market is cold you know try as hard as you want you're just not going to find dozens and dozens of good opportunities and if you try to trade that aggressively what most likely is going to happen is you're going to start digging yourself a hole cuz you know like let's just for for example say look at this stock qmm all right so this just hit the scanners so qmmm so if I pull this up right now hit the scanner if I buy that right now at 664 I'm already down 22 cents on the spread so I could buy Here Sell there and I'm instantly down 22 cents with a th000 shares it's 220 bucks right 10,000 shares is $2,000 and if you tried to buy 10,000 shares of the stock you would probably get 5 cents of slippage getting in you know there's I don't even see 10,000 shares here you get some slippage getting in and then you get some slippage getting back out so that 20 cents but you add 5 cents on the you know buy side 5 cents on the sell side it's 30 cents you're losing 30 cents basically just buying and selling because of slippage and uh the spread so who wins on that of course is the market maker so this is a stock where there just isn't the liquidity to trade and there are some days where there's not a lot of liquidity or volume in the market and so try as you might you just there's there's nothing to trade today if we look at the volume we've got 156 million shares on qh this one's a little bit lower price so I didn't break the ice on it but um you know nice moves on that one 123 million shares of volume on bkyi now there weren't you know I mean there there were only so many good quality setups it went higher but um you know that if you're particular about your setups even a stock like this how many good setups were there today you know there were a couple of good setups in this area there were probably a couple in this area um you know maybe break a vwap and then squeeze up here maybe a little dip here but that didn't work out super well another dip down here maybe a dip off that sending support so you know maybe like 10 105 trades if you really got dialed in on this one I mean I'm sure there's people that traded it more than that but if you're looking for really good quality trades SMX um you know I got whatever it was five six seven trades on this one but it ended up you know pulling back whlr this one I saw some people trading it pretty actively you know popping up popping up popping up so there were more opportunities on that one but yeah I mean I guess we'll see in total how many trades I ended up taking today I don't uh I don't recall and I could check to see how many trades I took yesterday I don't know if I've imported them yet um let's see got to add this tag to it so yesterday I mean I I took a lot of Trades but but what I suffered from yesterday without a doubt um was both lower accuracy I suspect but certainly an inverted profit loss ratio cuz I had you know three or yeah it was like three or four kind of big losing trades and that that unfortunately just that's not good for the profit loss ratio so you know whatever that happens but looks like yesterday I took a total of 51 trades I took 45 on Friday 43 on Thursday 27 the day four so yeah could have been uh could have been better um but but of course could have been worse as well so anyways um yeah so my my I guess words of wisdom for you if you're struggling a little bit is to focus on discipline and that I really think it's going to be discipline that helps you in your recovery so as always if you want to uh join our community and trade side by side with me you can check out twoe trial it'll be a link pinned at the top of the comments you can learn more about my strategy you can take some my classes as part of that trial and you can use the software right here while you're um a member in the community so looking forward to seeing you guys I'll remind you as always trading is risky easy come easy go so manage your risk take it slow and always practice in the simulator before you put real money on the line