Day 9: A Nearly Perfect Trading Day… transcript

What's up everyone? Welcome to day nine of my brand new small account challenge. Today was a nearly picture-perfect day. I sat down this morning with about $4,500 of equity in my account. Now, as you know, during this leg of the challenge, all of the trades are using just my cash balance, no leverage. So, while the growth is a little bit slower, this is probably demonstrating a more realistic experience for beginner trader who's not going to be comfortable and rightfully shouldn't be trading using leverage and margin.

So, I'm trading really focusing on just getting one really good trade a day and today, that's all it took. One solid trade using my cash that was in the account and I grew the account by 10%. Well, that's because the stock I got into went up 10%. So, how was I able to predict a 10% move? Well, in fact, it went up more than that. You never capture the perfect, you know, the perfect move from the very bottom to the very top.

So, I got 10% within the window where the stock went up quite a bit more. The way I was able to predict it was that the stock met all five pillars of stock selection and guess what? We've got a brand new scanner that has just been released called Ross's five pillars of stock selection. I'm going to show it to you in today's episode. All right, so let's get on the screen share and start breaking it down. The small account trading strategy, the small account challenge day nine.

So, this is the stock I traded, CYN, locked up $480.24 of profit. Now, the cents matter in a small account challenge like this. As you can see, came in today with just under $4,500 of equity in the account. So, the account is up more than 10% today, which is fantastic. You can see that I do have buying power here, which is uh six times leverage. So, that means it's this amount times six. So, I could choose to use it, but for this leg of the challenge, I'm not using any leverage.

Just to demonstrate what it would look like. Now, generally, my prediction was that if I do a small account challenge using leverage, let's just say here's a small account challenge using leverage, six times leverage, the account's going to grow like this with that leverage. Without using leverage, the account's going to grow like this, basically 1/6 of the rate. Yeah, the account should grow in sort of similar way, but just the the return would be 1/6.

So, my guess was that after the same number of trades, I would have produced approximately 1/6 of the profit. So, during the last small account challenge in 31 trades, I produced I grew the account to $58,000. So, now I'm thinking, all right, well, 1/6 of that, so in uh 31 trades, could this account be up around just under, you know, I guess just under 10,000, nine We'll just say 9,000 for right now. Maybe. It's still possible, although I would say that a variable that I didn't account for was a possible change in the market sentiment.

The market sentiment has been a little bit cooler uh just these last five or six days than it was during the first leg of my last small account challenge. But, nonetheless, let's jump into this stock, CYN. Okay, so this morning, and I'm going to pull up my charts here in just 1 second. What I'm actually going to do first is I'm going to pull up the live trading archive so we can really get into the weeds of this trade that I took this morning.

All right, so what I always do, uh especially for the sake of these small account challenges, is I record my trading. That way, we can go back, we can look over and see, you know, basically what I traded, what I did right, what I did wrong. It's kind of like uh you know, football coach going over the game and being able to review the mistakes. It It's not always fun, but but it is important. Okay, so here at 7:00 a.m.

Oh, and there we go. So, 7:00 a.m., all of a sudden, I'm sitting down here and I'm watching the scans and I'm looking for stocks that are starting to squeeze. So, I've got my top gainer scanner up in the top corner and you'll see that on this scanner, we had a couple stocks that were up quite a lot. ELAB, up 143%, GWave, up 120%. Both of them have low floats and a lot of volume, but they're both a little too expensive for the small account challenge.

And so, for that reason, I said, you know, I just don't think I can trust either of them. Th- They may be suitable for the large account, but for the small account, unfortunately, I think I've got to leave it alone. So, CYN, this is the stock that I end up trading right here and you can see at this moment, it's up uh it's on our top uh Ross's five pillars scanner right down here. This is CYN. It's got 1.7 million shares of volume with a 7 million share float and it has news.

So, the news came out at 7:00 a.m. And as soon as this popped up and I saw this headline, I was like, this is something that I should pay attention to. Okay, so what was the order that all of this happened? The first thing that occurred was CYN hit my top gainer scanner right Or sorry, my higher day momentum scanner right here. And when it hit that scanner, it triggered an audio alert. So, what that scanner is doing, it's searching for stocks hitting new highs.

So, when the stock is hitting new highs at any given time throughout the day, stocks are hitting new highs. But, this is filtering to focus specifically on the price, the float, the relative volume, RV. And if you're not familiar with any of these terms, go back to my small account growth um my full length master class. I'll put a link to it at the end of this episode where I break down all of these criteria. It has to be up at least 10% already and we're looking for news.

So, now all of a sudden, we're looking at all stocks making a new high, but with this sort of filter set. So, we're getting really zoned in. So, now I'm looking at CYN because it hit a new high and it met all those criteria. So, now what do I have to do? I have to check to see what the actual headline is. And I see that they've deployed Drivemode with Pepsi, the largest independent Pepsi bottler in the United States.

So, I'm thinking, that's a pretty big headline for a small company like this. And immediately, as soon as I click on the ticker, I click on the ticker, click it, it populates the the news window here, it loads the chart. So, I'm looking at the chart, I'm reading the news, and then I'm pulling up my level two window. And so, in the case of this stock, this is how I traded it. This ends up popping up right here and I'll pull it up.

You can see it's pulled back a little bit since, but that's all right. So, we trade the front side, we don't want to overtrade the back side. So, it pops up and immediately, as soon as it pops up right here on this candle, when it hits this candle right here, it hit my scanner. So, right in that moment, it hits my scanner. I get the audio alert. So, let's go ahead and pull up that live trading archive and we'll look at the audio alert.

So, the news has come out and right there, I pull up right there at 7:02 and 33 seconds, CYN hits my scanner right there. I click on it, I pull it up, and I immediately see this little setup. So, it hit a high of $6.10. I pull up my broker window, I type in the ticker, and now I'm ready to take a trade. The stock is already up right now, it peaked at 10%. I'm watching this dip and I add right there 696 shares, which is a relatively small position.

The stock does have lighter volume, but that's okay. I'm probably one of the first people to see this stock that just put out fresh news. So, now what I'm looking for, I'm looking for the pop up over 610, over 620. So, now as it's squeezing up, it's hitting the scanners again at 633. Right? Because it's moving higher. So, it hits a high of 637, it hits a high of 660 for a moment. So, we go up to 660, we then dip back down and then we come back up right here to 670.

So, now in this my question is, how much higher is this going to go? Now, there's two issues with this stock. The first issue is that it's Now, that wouldn't maybe be a problem except for the fact that today, we already had several other stocks that were up quite a bit more. So, the fact that it's up only 22%, I was a little concerned about whether or not this was going to be obvious. Now, the fact is, from $6 to 660 is still 10% and of course, I end up taking the profit and locking it up.

So, I still get that 10% return, but in order for this stock to become obvious, it probably needs to be up 50% or higher. So, now the question is, we've got news on it, but is it going to be received well enough the stock goes all the way up to $8, $9, 10 and higher. And the fact is, what ended up happening on it is it is it pops right here. So, we go to six, we go up to 610, we go up to 670, 680, then we dip back down, then we come back up right here, but we weren't able to get back to this peak.

And so, I ended up selling it right around here at about 660. It popped up, it pulled back, it wasn't able to break through the high and then it dipped back down. And I said, you know, I just I don't want to get caught holding this thing. Now, it ends up hovering kind of around that same price. It comes back up to seven, it dips back down, it ends up coming back up again. And so, although it did hold up relatively well for the next hour or so, I just felt like it wasn't moving fast enough for me to justify getting back in.

And then at about the same moment, we had JDZG hit the scanner. And so, another stock hit the scanner and initially, I'm thinking, it's a the company, it's probably not worth trading, but just like CHN yesterday, this thing ended up squeezing. And so it ends up going from, as you can see here, about $2.50 up to 2.75 to 3, up to 3.25, 3.50. And so traders start focusing on this instead. And this is something that we often see in the market, that traders will jump from one stock to the next.

So after CYN had been up and increased in volume, it was uh showing on my Ross's five pillar scanner. This is the new scan right here that we've just released. This is a scanner that's going to show you stocks at any given moment that are meeting my five pillars of stock selection. The only one that we've got to cross-check is what the news catalyst is. So SSKN, for instance, this one right now, you can see it's hanging out it's slightly below the volume weighted average price.

You could argue that in this moment right now, if it's below VWAP, we shouldn't trade it, but if it can pop back above VWAP, then I would consider it. So I'd keep it on watch. GWave right now, this one, you know, again, kind of in similar position, right below VWAP, but the stock meets the criteria from the perspective of float, the percentage change, the relative volume. It's got news and and obviously it's a stock that it is is priced between 2 and 20.

So, you know, it's it's it's right from that perspective. So the cutoff on this scan is $20. If it's a higher price stock, it's off the scan, I'm not going to look at it. So today, and this is looking really at the top five each day, the top five leading percentage gainers. So GWave, SSKN, RDGT, this one, you know, it could work if it gets a little bit more volume, but we got to see what the catalyst is. WKEY, another one, it could work, it's worth paying attention to, and then SDST, another one that's holding up pretty well.

So this is a more filtered and kind of refined version of our top gainer scan, but I wouldn't replace the top gainer scan. I use it in addition to that. Because I like to have context of what is going on in the market, because even though I'm not interested in EDHL being a little too cheap, and even though I'm not interested in URG UGRO or ELAB, I should be aware of the fact that these stocks are up quite a bit and other traders may pay attention to them.

Because if other traders are focusing on them, then that's going to take away that same attention that would otherwise be on the stock that I'm planning on trading. So each day, I want to trade a stock that is on the five pillars scan, and I would like it if that stock was also the leading gainer in the entire market. Because that means not only is it perfect for my strategy, it's also the most obvious stock for all traders out there.

That's not always going to be the case. It was not the case today, but it will be the case on some days. And those are the days when I'm going to get especially aggressive. So that's kind of like looking for multiple levels of confirmation. Not only does the stock meet the five pillars of stock selection, it's on that scanner, you know, not only does it have a decent catalyst that's moving higher, not only is it above the VWAP, is the MACD positive, you know, these types of things, but it's also the leading gainer in the entire market.

That gives it extra attention. Or let's say that catalyst is right on theme with what's been working recently, whether right now it's biotech or crypto, you know, or maybe even Chinese, it could be one of the three, but it's on that sector in that theme that's been working really well. And that's where we get kind of multiple levels of confirmation that's going to give me the confidence to be even more aggressive. So today is just a great example of a nice day, some nice trades locked up over uh 400 and well, just over $480, over 10% return on the account.

And so I'm going to be back at it tomorrow for day 10. Now those of you guys who have not already checked out a free trial here at Warrior Trading, sorry, I said free. It's a two-week trial. It's actually $20 because you have to pay for your market data. So you're paying for your market data, that's all you pay for. And you'll get access to these charts, real-time data, scans, newsfeed, and you'll get access to my chat room and my live audio video broadcast.

So make sure you guys check out that two-week trial. If you haven't already watched my full-length masterclass training on the small account growth strategy, I'll put a link to that up here. And I want to remind you guys, as always, that trading is risky. My results aren't typical, so please manage your risk, take it slow, and practice in a sim before putting real money online.