Day 5 of the Small Account Challenge +12% on $CNAT and $PTX transcript

all right what's up everybody okay so today we're going to do a uh midday Market recap and talk about uh some of the trades from this morning so today is day five of the small account Challenge and I'm finishing up $148 which um is pretty good I mean that's another 12% gain I started the morning with $1,201 and uh I'll start tomorrow right around $ 1350 so this is up about 130% since uh I started the small account on uh January 3rd with $583 so last week I made a little over $600 and uh my target this week is uh to if I can to make about a, and you know we'll see obviously I need to make 200 you know 250 a day at before Commissions in order to have that happen today I made $212 before commissions so once again commissions are a pretty um you know big piece of my profits right now which is really not ideal all right so I'm going to show you guys um my p&l for today you can see right here $148 profit uh 212 realized before commissions so that means commissions today are about $63 which is pretty brutal I mean you know that's really not ideal I don't like commissions to be that high uh but this is part of the deal with trading with a small account when you trade with a small account your commissions are going to be um you know just a bigger proportion and of your profits so it's uh I think one of the areas where trading with a small account is just that much more difficult you know that um you know every trade you take you have a commission on so you know if I buy what doesn't matter if I I buy 100 shares or if I buy a th000 or if I buy 10,000 I'm still going to pay insure Trader $4.95 per trade all right so and let me drag up uh so you guys can see for those of you watching on screen share that's my p&l for today $148 and yeah so with the with the commissions I mean this is just part of the deal with a small account the commissions are going to be a bigger piece of the pie and that's going to continue to be the case until I can increase my share size now once I'm able to get my share size a little bit higher and start taking you know 2500 shares or 3,000 shares when I make 5 10 or 15 cents I'm going to have a bigger profit from that same move in the stock and that's going to offset the commissions so you know on a day like today commissions are again you know about a third of my profit which is annoying but is just part of the deal with trading with a small account I think the biggest issue though is that for Traders who are getting started and and funding their first account they don't realize you know how the bar and how the odds are sort of stacked against them it makes it so much more difficult to be successful because you have to be really um really focus on every single trade you take so today in the small account I took my 14th trade and it's my 14th consecutive winner I've had 14 trades in a row and all of them have been winners not they haven't all been big Winners some of them have been small winners in fact today um my smallest trade was only a $9 winner so it didn't work out the way I wanted it to but I was able to get out quickly and that's important you know I got in for a breakout it didn't work I stopped out with a 1-cent profit on 900 shares now that didn't actually turn into a profit after commissions it was actually a loss but uh you know it it was still a winning trade in terms of my entry and my exit so you know one of the things that I've been able to um you know kind of do in the last couple days is look at this account as an opportunity to exercise self-control and patience and so today patience was a big one because I had a few stocks on my watch list and I'll go over those in a minute but none of them really panned out none of them really ended up opening up or working so you know by 9:45 10:00 a.m.

I was sitting here and I had I didn't have anything that looked good I think let's see what time was my first trade my first trade was at 952 so that was when I got in 953 uh got in PTX and you know that was usually I take my first trade within the first 15 minutes so to have my first trade be you know not until 20 minutes into the day is a little unusual it's an indicator that the the market is a little bit um you know a little bit slower so and I was saying you know what I don't need need to trade a lot if I can just focus on taking you know even just one trade today one good trade is all I need so I got in cat and I made $84 and I was like all right or sorry I got in um PTX and I made $84 on my first trade on PTX so I'll show you the chart on that one um I was watching it pre-market and it was a gapper so it you know kind of was fitting into my watch list watching it long premarket over uh the high of 321 so I'll show you guys who are watching on the live feed you can see here uh this moved up on Friday up to a high of let's see it looks like 343 it pulled back and then pre-market it was gapping up and had a pre-market high of 321 so I was watching it long over those pre-market Highs but then just before the bell rang it spiked up to 350 the market opened and it dropped down so I was like well looks like another setup that's ruined but then it started to squeeze up here in this candle and I got I jumped in here at 340 and rode this momentum up to the high of 355 so on that one I was able to capture um you know a nice little profit it pulled back I got back in for a second trade on it so total $132 on that name between two trades actually um it was three no it was two trades yeah it was actually two trades um the $84 winner was um that was on cat that I was thinking of so um you know on PTX 130 bucks not bad and I was kind of like all right you know that gives me a little bit um a little bit of a cushion you know that's kind of me getting started at the same time I was watching etrm etrm is the stock that uh today is up another 100% uh prear Market high was $140 and this squeezed up to just under $19 um per share so I'll show you that one as well now the problem with etrm is that it's on restriction at sure Trader so I'm not able to use my margin on it all right so with my account here I have $1,200 in equity and I've got 8,057 in buying power that's the buying power right there but I can't use that on uh etrm I'm not allowed to I can only use uh the amount that I have in equity so $1,200 times a $12 stock I can only buy 100 shares I can't make money on that I cannot make money with 100 shares I can't make enough to to overcome the commissions unless I make you know 50 cents or 60 cents per share but that's just it's setting the bar too high so I said forget it I'm not going to trade that one and the problem is that you know this ended up squeezing up another you know 100% today and I think everyone's attention was on etrm the problem for me was that even to trade in my regular account etrm was not a clean stock it was not it really wasn't easy to trade youd look at it and you think oh this must have been super easy it really wasn't so I'll show you um for those of you here watching um right here the stock I was like okay I like this at $120 for a break of $15 I got my order ready to get in at 15 it pops up here to 1520 and let's look at the one minute chart this is what it did at the breakout point at the breakout point it broke it squeezed up to 1520 and then it dropped down to 1430 that's one of those moves that just can make you take your laptop and throw it out the window because it's so frustrating it makes no sense it's not logical it's not what you expect to happen at the breakout point it breaks drops and then starts to open up and when you look at the one minute chart you can see a lot of these candle wicks where it squeezed up dropped down squeezed up dropped down and it was just super super choppy so I did end up taking one trade on that in my um Regular account and I promptly lost like 290 bucks so you know what doesn't matter my focus right now is trading the small account I don't care too much about um you know if I make or lose 100 bucks or 200 bucks in my big account that one you know I got in etrm looking for a bigger move and not trying to scalp five or 10 cents but I wanted to see like you know 50 cents or a point or something like that didn't happen so whatever but you know the problem with ERM is that everyone's attention was on that stock everyone's attention was on a stock one of the ones that was the most choppy and difficult to trade today and so as a result uh other setups didn't end up working out very well this was kind of like let's say like the new Jungle Gym on the playground you know it was new last week but everyone's still really excited about it you know and someone today brought in a new a brand new seesaw it's brand new but people are like listen I don't care about a seesaw on any other day people would have been like oh this is a new jungk this is the new thing on the playground I want to I want to check it out but because etrm is so cool every is still focused on that one you know what I think the majority of traders who traded this today probably lost money on it and you know if you finish any day in the market green even if it is only by $148 in my sh Trader account statistically you're doing better than 90% of the Traders out there 90% of the Traders out there will not make money consistently as a Trader so you know what even if you do only make $50 or you're only making a $100 you're doing something right the problem is stocks like etrm um you know they trigger that fear of missing out right and that's that's that greed that emotion that starts to rise up because you see this stock making a big move and you want to get a piece of it and then you're sitting there thinking how am I the only guy who didn't get a piece of it you know you see people on Twitter stock twits saying yeah I made $5,000 I made $8,000 and you're like you know gosh this is so frustrating I'm the guy who couldn't get a profit on it or who sat here just staring at it while it went up higher and higher and higher if you didn't have what you thought looked like a safe entry then you shouldn't have taken the trade and you did the right thing by sitting on your hands so you know I took a stab at it today it faked me out and whatever no big deal I didn't you know bet the farm on it I was very conservative with how much I was willing to risk because I knew this one was going to be choppy so I lost a couple hundred bucks I'm not going to sweat it but you know the the bigger frustration was that this made the other stocks I was watching like PTX and cenat um you know less active less volatile because everyone was watching etrm so PTX you know nice little follow-through trade on that a small profit and then cat started popping up on the high day scan this one has a nice daily chart because of the way it's come down to the nine moving average and is now uh bouncing off that level you can see here this is what I like for daily chart breakout um so you know a good setup but it just you know couldn't really hold those levels over 550 I was able to still make 80 bucks on it so you know today's a day where like I said I'm closing the day green it's a good day in the sh Trader account yes commissions relatively are a bigger piece of the pie for every trade I take that's going to continue to be the case for you know the first few weeks as I'm building up this account and it's just something that I have to deal with I mean I have to be very very disciplined I have to be very um smart about the stocks I'm willing to trade because every single trade I take I'm paying that commission so if it's not a trade that has the potential to give me a 4050 or $100 winner I can't take it because even if I make $50 after commissions it's probably only going to be 35 and you know I'm fine with a $35 winner but the problem is let's say I make $50 before commission and I was like well I'm going to I'm going to risk 50 to make 50 but then the winner is only $35 because of the commission but guess what the loser is 50 plus commission is 65 so now I have losses that are much bigger almost twice as big as the winners and I need to be at 65% just to break even and 75 80% in order to profit right now the cards are stacked against me and that's what happens to a lot of beginner Traders they don't realize the impact that commissions are going to have as they're getting started and how you know how much more difficult it makes it so at this point for me I have to focus on taking one to two trades a day maybe three to four if I'm having a really good day or I'm seeing a lot of setups and then um you know slow down step back take the profit be happy with the profit and wait for tomorrow so that's kind of the game plan obviously for today happy to finish with 150 bucks or whatever it is um you know and the approach is just looking at the stocks that are gapping up that have volume the relative volume leaders almost every single day the stocks that make the 20 to 30% intraday moves will have the highest relative volume in the market that's important High relative volume that means lots of Traders like all of us are watching these stocks stocks and that means when they have the proper bull flag or Flatt top breakout they're more likely to resolve in the direction we expect now it's not always true there are certainly times where you know we get false breaks like we got on etrm that's more common on stocks as they get crowded um stocks that are kind of overdone that are running on no news you know that kind of thing but on stocks that are you know a fresh breakout fresh news fresh headlines that's usually when we see the clean follow through so for me all I need to do is look at the top you know top five gappers I expect that they'll be also the top five relative volume leaders those will be the top five stocks with the highest likelihood of moving 20 to 30% intraday and then my job is just to find the entry to find the first pullback the first bull flag the first opportunity to get into the strong stock and ride that momentum if I can do that twice a day I can do well and you know even here in the first week the first 5 days of trading in the sh Trader account in these five days I'm up now about $760 I mean that's putting me on track to make $335,000 uh a year even if I didn't increase the size of the account if I kept drawing out money and resetting it to $500 every single week which I'm not going to do but even if I did that that would put me on track to making you know $35,000 which is fantastic from a $500 account size what I'm going to do is build the account up once I get to $4 $5,000 I'll probably keep it at that level and then start drawing profits out of it saving the profits to put them into a speed Trader account with $25,000 all right so in any case um that's about it for today a couple notes that I had um the biggest one was about commissions as I said so so uh make sure you trade smart and try to not let that fear of missing out really get to you you know the people that put stuff on Twitter they put their winners and stuff like that you're seeing a disproportionate amount of winners because people don't usually put their losses on Twitter so when people have a loss they're not going to talk about it so what you end up seeing are all these people who made money but that's not an accurate representation of the way trading works most Traders lose money so if you're walking away today with even $10 or $50 in profit um you're doing well I mean that's a step in the right direction it's just about doing that consistently once you're consistently making $50 a day the only difference between making 50 a day and making 100 a day is share size that's the only difference increasing your share size and you start to see bigger profits and that's I that's good because once you're consistently profitable you can start making three four five $600 a day the frustrating thing is that for Traders who are like look I only want to make $50 a day I'm not being you know crazy about my expectations it's frustrating because once you have the skill to make 50 a day you're going to be able to make 100 200 300 the skill even just consistently make $20 a day is what we're all working towards that's the hard part and I know that that's frustrating but um you know I'd encourage you guys to um you know keep keep checking out my watch list each morning I'm going to be looking at the top five stocks that I think have the potential to move 20 to 30% uh and trading those in the first two hours so right here at lunch hour I'm done trading for the day going to lock it up so today's day five $148 up 130% on that account and up 12% on the day so overall pretty good day um now I want to make sure I answer um some questions that you guys have um so Richard asked why would sure trade Trader put restriction on etm and they're doing that because sh Trader is trying to mitigate risk I mean they don't want to have any of us trading there blow up their account and do something really stupid so you know they're like well we're going to taper back the margin on this one because it's a really volatile stock it's a stock that most beginner Traders are probably going to lose money on and you know this is a day where if I opened our simulator um and looked at the stocks that people are trading I would guess that a lot of people that our biggest losses would come from uh trades that people took in um on etrm I'm going to open up the simulator here just to take a look so you know they do that on a lot of stocks some stocks even sort of have a running um restriction where it's just always restricted but again it's to prevent Traders from blowing up their accounts and it helps them you know reduce the likelihood of being on the hook for a Trader who did something stupid all right so let's see um so the leaderboard [Applause] today let's see so this is our fcy stock Trader leaderboard look at some of the biggest losses this guy's down $30,000 on etrm down $32,000 um that's brand let's see we've got Chad down $42,000 on etrm and you know likely is that well he's actually just been trading this a ton so tons and tons of Trades and he's probably still holding some short positions from last week a lot of Traders get into that habit they're like oh this thing's up so much it's got to roll over this Trader's down $27,000 and you think gosh that's a crazy amount of money doesn't take much to lose $27,000 I mean it really doesn't you know with a stock this volatile it's up 100% today so you know the biggest losers are on etrm the biggest winners um if I look here they're also errm so again that shows you this one's up U 13,000 on etrm this tells you that yes this is a stock that you can make money on if you're smart about how you trade it but the potential be wrong and you know the the result of what's going to happen if you're wrong is that you could lose a lot of money so today in the simulator we've got um looks like 242 Traders and0 are green and 120 are red so right about 50% which uh is actually for beginner Traders not that bad considering uh most Traders will fail to make make money at a rate of only 10% succeeding so it's actually not horrible there but in any case yeah that's one of the that's that's the reason um sure Traders going to do that to protect from having Traders do really you know crazy stuff um etrm no no options on that one a lot of these thinly traded stocks don't have options so you wouldn't be able to trade it trade options even if you wanted to um and yeah thanks Vlad I saw what you said there about being um consistent and that's kind of the thing right now is just trying to be super consistent um you know not trying to push my luck just one trade at a time $80 here $100 there knowing that that all adds up for those of you on screen share I'll just um show you the leaderboard here I wasn't showing it on screen share a second ago so you can see um bigest BG winners up 12,000 10,000 6,000 and the biggest losers and the stocks that are generating those big uh you know whips etrm and we see this every time there's a big stock whether it's drys or it's glbs whatever it is that's the stock that people want to trade they see the potential but it's very very difficult to trade it properly all right so um let's see what else um yeah and you know Andre that's the thing etrm it draws you in you see this potential and that's the fear of missing out that's that emotion taking over you look at it and you're like oh man this thing it's I've got to be able to get a piece of it I mean it's just running up it's moving faster and faster and it draws you in but it's a trap almost always it's a trap you end up buying way too high and then stopping out and taking a big loss on it so um I took a stab at it uh in my regular account lost a couple hundred bucks and I'm fine with that I didn't do anything crazy I didn't take a lot of risk on it but um you know most tra a lot of Traders will get into being overly aggressive on those setups and then that's when they really get into trouble because they've mismanaged risk and that's the thing listen for me I could be a Trader right now I have 100% accuracy in my sh Trader account 14 trades and 14 winners but you know what if I mismanage my risk on the 15th trade I could lose in one trade 1,200 bucks and I could blow up the entire account I could be a Trader who has 99% accuracy and has blown up his account that's the thing you know that's the hardest part about trading is that it only takes one lapse in judgment to throw so much progress out the window and I I know that I mean I know that every day I'm sitting down here that I have to be super careful about about what I'm going to trade and so it's good that etrm is restricted because that's the type of stock that you know you could very quickly lose 50 cents or a dollar with a th000 shares and you know that's like I showed you that breakout point where we went up to 1530 and then down to 1430 that's a $1,000 loss with 1,000 shares now granted I don't have $15,000 in buying power and by the time I have that my account will be larger so if I did take $1,000 loss it wouldn't blow me up but it would still be pretty bad all right so um any other questions that you guys have um and yeah I publish the watch list uh for students each morning so that's available uh on our website you guys you guys can um go to Warrior trading and then check out the free trading tools and um and load those those watch lists let's see any other questions J yeah you know with the reverse split uh we traded that on Friday I didn't want to trade it today I mean I wasn't I was I thought maybe it would be okay over 470 pre-market but then the bell rang and it just totally dropped down so I'll show you this one here you know Market opened and it just it just rolled over so no trades on that one didn't give me the opportunity you know I'd love to have a trade that I can really sink my teeth into that I can take 2,000 shares with my small account and make 30 cents make have a $600 winner so far I haven't had one big winner in the small account it's not because I haven't been looking at the right setups it's just because I don't know none of them have really opened up none of them have really worked so it's only a matter of time all right I keep stepping up to the plate eventually something's really going to connect but my strategy right now is to get in for the breakout so I get in at the the Apex point the point where I expect that volume is going to come in so the bull flag that's the first candle to make the new high that's my entry stop is at the low or 10 cents whichever is closer small risk if it pops up immediately 30 cents you know that's awesome but lately we've only seen them pop up 10 or 15 cents I sell half adjust my stop to break even or sell the whole thing depending on how it looks um and yeah Lee I'm not using Market orders these are all limit orders so I use a limit order to control the price that I'm willing to pay if I use a limit order then I can put in the limit let's say of 155 I press the buy button and if it suddenly spikes to, 1550 maybe I won't get filled but I definitely with a market order would get filled and I might get filled at like 1535 or 1540 or even 1550 and suddenly you've totally thrown you know your profit loss ratio out the window because you got filled you know 5050 cents higher than you were expecting right and your stop is now that much further away so that's why I don't use the market orders and uh Stefan explaining the break even so for me Break Even will be the price that I got in at so if I get in at 350 and it pops up to 365 maybe I'll sell half and put a stop break even at the rest so you know that means I took a little profit off the table and if it comes back down and stops me out break even so be it at least I walk away green on the name by using that strategy anytime I get into a stock at the Apex point and it does break out 15 20 30 cents it's almost guaranteed that it'll at least be a small winner and that's what's been working well uh in the shirt radar count it's just been unfortunate that we haven't had one um you know here in the first few days that's given me that big 20 30 40 Cent winner that would would help me a lot right now because my account's so small and every extra dollar I make increases my buying power times six so when I make you know $100 today or whatever it is 150 when I make that it's multiplied by six and that's my new buying power so you know that that makes a big difference today my buying power because of today's profit my buying power is going to increase by about $900 so that means tomorrow you know on a $3 stock I can take an extra 300 shares and I might be able to get up to 2500 or 2600 shares if I'm going to go um you know and be aggressive I'll be aggressive when I see the a quality setup and take you know large size um we just haven't happen to have seen a lot of really good setups and good setups that are within my price range because that's the thing we had a couple like xgti this morning I liked xgti uh it was gapping up here I I liked it over the pre-market high of 195 that's a perfect Gap andgo setup an entry right here pre-market high of 195 as soon as the bell rings right that's the pre-market High you buy when the bell rings and we squeezed up from 195 all the way up to 220 the problem is that I can't trade that in sure Trader because you get no margin on stocks below $3 so no trade you know I mean I could trade it in my regular account but my focus right now is building the small account and seeing you know how how long it takes me to get to $25,000 I mean I want to do it as quickly as I can obviously but at the same time it's more important that I do it in a way that's um that doesn't risk me having something really bad happen so I've got to be smart about every trade and if I can only make a 100 a day or 200 a day it'll take a little longer but that's the smart way to build an account all right so um and you know when I'm selling I do the same thing with a limit order I put out the limit order but I put it below the bid so if the bid is 350 my limit order is at 345 it's a 5cent offset below the bid that way if it does start to drop I can still get filled right I'll I'll still get my order filled but I won't hopefully just have a giant wash out this is a problem though on stocks like etrm because they can drop more than 5 cents really fast and then I might not get filled so you sort of again when you're trading stocks that are really volatile like that you have to recognize that if you try to sell when it's dropping the loss is almost always going to be magnified all right guys so um that's where we're finishing today overall a decent day decent start to the week green is good and I'll be um anxiously awaiting uh the opening bell tomorrow at 9:30 hoping that we have some good-looking gappers on the watch list um and stocks that I think have the potential to open up and give me um a nice winner and you know I'll have $1350 in my account tomorrow about $8,000 in buying power so I'll be able to take 2,000 shares on anything between $3 and $4 kind of a small range there and then uh a th000 shares and anything up to $8 I won't trade uh anything less than 500 shares which means my Max price would be $16 if I was able to use full margin but on a stock like etrm with no margin I'm restricted to my current equity which tomorrow will be 1350 all right guys so I will see you all uh first thing tomorrow morning if you guys have questions feel free to email me Ross at Warrior trading.com let's be honest if you made it 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