Transcription
What's up, everyone? All right, so in today's episode, I'm going to break down my trades from the morning. I was able to break the ice. I got a few trades today, but I didn't make a lot of progress. It was a fairly choppy day.
So, here's the issue. The market obviously is very cold right now, and it seems like even stocks that have decent news, people are too nervous to jump in. And so, there's not a lot of people buying. And actually what's worse is that a number of brokers are restricting trading on a lot of these small cap stocks. We're seeing it at Weeble, which we hadn't seen previously. We're seeing it at Thinker Swim. We're also seeing it with some of the offshore brokers. And so what that effectively does is it blocks off that stock from anyone being able to buy it.
But you know, one of the things is usually short sellers are not using Weeble or Think or Swim. They're using these more obscure brokers. And I would suspect that those brokers are not disabling trading. So essentially what you have is almost a systemwide imbalance that's more to the sell side on some of these stocks because of the restrictions. You just don't have as many buyers that can participate in the market. So it reduces total demand, the supply being what it is, and then additional short selling flips that balance. And that's why we're not seeing as big of moves.
Now, of course, if we ended up having a stock that had a really great catalyst, even if not as many traders could participate in it, the underlying catalyst being so strong, would likely send the stock higher and shorts would get squeezed out. We just haven't seen that happen yet.
So, this morning, I got a little excited when we had a stock, ALBT, that was up over 100% on the day. This was pretty impressive. I'm going to jump on this um on the screen share. We can start breaking this one down first. So, ALBT is a little too cheap. As you can see, this is not my go-to price range. I don't usually like trading these lower price stocks. However, I can't deny the fact that this thing went from 40 cents a share all the way up to A110. I was impressed.
And so as I watched it, it first broke a dollar. And usually when stocks break over a dollar, that's when I start getting interested because when they trade over a dollar, they trade down to uh just one penny spread. So in other words, it's a 07 by 08. Oops, sorry. 08. Um, however, when it was down at 88 cents, for instance, it could be 88.15 by 8816, every penny trades down to the one 100th of a penny when they're below a dollar a share. So, below $1, this is what am I doing here? Below $1, that's I'll just do the arrow that's easier to see. Below $1 and then above $1, we get um, you know, one cent spread. And this is uh I'll just do it like this 100th of a penny spread. And so the result is that on these um lower price stocks when they're down at you know 75 80 cents a share they tend to move a bit more slowly.
Now as the case was this morning on ALBT this one popped up so quickly that it sort of jumped all of a sudden from 40 cents to 50 to 60 all the way up to 75 80 cents and then as it squeezed up here to a dollar it broke through really nicely. So when it when I first when I saw it moving that quickly, I pulled up the scanner right here after it hit or I pulled up the chart and was looking at the level two after it hit a $110 and I was watching for a dip and it hit a $110. It dipped down to $1.7 and I was like h I hesitated. I was like maybe I I I could and I said you know what it's really not the right price. What are the odds that this thing actually squeezes? And you know what? It ends up going from a $110 right there to a $130 and I missed 20 cents a shareh bummer.
So then it pulls back and I'm watching it here and I drew this line right connecting those two dots. It's an ascending support line and right here it dips below that line and then I thought it was going to sell off and it gets right back above that line. I say you know what I'm going to punch it. I jumped in there to $118. I was looking for an immediate break through 125 and a retest of A130. It went up, as you could see here, only to about a $123 before stalling out and I sold it. I made $48.76. All right, that's a very small winner. Uh, however, I will be red on it due to fees and commissions because I'm not trading with commission free brokers. So, this ends up being a small red trade.
Then it dips down a second time and then it comes back up and then it breaks through. Well, that was what I wanted to do right here on this candle, but it couldn't. So, then it ends up going sideways here for a little bit. And as we've gotten now into the opening bell, it started to pull back and is right around $1 a share. So, $48.76 on my first trade today. And on my second, I'm up $13.15. I am setting records. This may be my smallest uh green day of the year. And I'm green in uh gross profit, but I will be red here in net profit after fees and commissions. This is of course in my uh my light speeded account.
So on NDRA, this one was on the scan earlier, had news at 8 a.m. So NDR comes up with headline here. Uh it was at 8 a.m. and it's got a sub1 million share float. It's a US company, healthcare, medical diagnostics, and screening. And I'm like, okay, that's good. I pull it up. It hits 58 and then sells off. And then uh ALBT ended up taking the focus. That one went higher over here. So, this one didn't really do anything. And then after the opening bell, it came up and hit the scanner again. And I pulled it up and I realized, well, we're actually right back next to that pre-market high. So, this would be a gapandgo trade. And the setup is a break of the pre-market high right here. And so, I said, you know what? I'm going to go ahead and punch it. And I did. I punched it and I had a pretty decent entry right down here at about um 458ish and it squeezes up into a halt right here at 495 and I'm like nice.
But as it resumes it got pretty heavy and there were some big sellers on the ask and I got a little stubborn. I said you know there's sellers on the ask. I'm going to buy those shares. I really think this has the potential to make a bigger move. I'm looking for 550 half dollar then a move up to six. Maybe this thing starts to open up. After all, it's a sub 1 million share float with a news catalyst. This has got high relative volume 300x. It's got lots of room at the 200 moving average. It's the right type of setup to give us a good move. And so I got a little stubborn and I kept adding and adding adding. I was getting really frustrated. And this is something that I was cautioning you guys on even actually just this morning before I took this trade. And then even I fell into it. And so I I got stubborn and although it ended up squeezing up and I did uh make some money on it, I ended up giving back some profit as it came back down.
And so, you know, at the end of the day, I sit here and I feel like asking myself, was it worth it? You know, was it really worth it? And the thing is, you just never know. This felt like the type of stock that did have the potential to make a bigger move. Maybe on a hotter in a hotter market on a better day it would have. And it's not to say it didn't make a move. It it did. But I thought it had more in it. And I got a little uh emotionally compromised. I got stubborn and I got I got frustrated and I I just kept adding and you know so unfortunately you know and I'm look I'm glad I'm glad I got out where I got out. I'm not still holding it obviously. So you know I I got out and um you know and I was tempted to get back in you know I was after I got out I was like oh maybe I should maybe I'm going to get back in right here as it pops back up maybe. And then I just you know just let's what am I doing? What are we doing here?
So, this is kind of the problem sometimes with breaking the ice is once you once you break the ice, it's easy to keep trading. And sometimes it's better just to say, "I'm not going to trade at all." And in hindsight, today this probably could have should have been a no trade day, just like yesterday. Yesterday, I said probably should have been a no trade day. Monday and Tuesday were no trade days. But after three no trade days in a row, you know, four no trade days in a row, you start getting a little antsy. You know, what's going on here? This is very unusual. It is unusual. Uh, and I let that pressure get to me a little bit. And so I broke the ice and then it wasn't opening up as much as I thought it would. And I I got stubborn. And I'm I'm lucky that I'm green on it because getting stubborn on a stock like this, which is now back at its low, uh, in spite of news, you know, this this if I kept adding as it kept going lower, kept adding and adding, well, that's how all of a sudden, you know, things can really fall apart. And so I'm grateful that, you know, we had a good month of January. Things cooled off in February a bit. And I'm grateful that I didn't have one of those days, you know, $50,000 red day or whatever. Um, but if I continue to get stubborn when something's not working, rather than just cut the loss, whatever, get out. If I keep adding and adding, adding, then I'm going to get into a position where I'm going to have 50,000 shares, you know, or 100,000 shares in one of these. It's going to drop. It's going to halt down. I'm holding full size. Then it resumes lower, halts down a second time, right? And then all of a sudden I I what do I do? I sell at the very bottom, right, before it bounces. Well, it's not like I can keep adding if I already have full size. So I cut the loss and all of a sudden there, what do I do? I give back, you know, 30% 50% of what I made in January. So this is kind of, you know, this is this is definitely a big risk um with trading in a cold market. you've been, you know, it's like how long can you be patient for? And you're patient, you're patient, patient, and then you then you break the ice, it doesn't work, and then you just sort of spiral. And it's almost like being on um like a diet or something. I I would, you know, like you you're dieting and you're being really really really strict and then you're just like screw it. I'm like I'm just going I'm throwing it all out the window and now I'm just you know it's and it becomes emotional and it's like this is just not good. So I I don't like seeing stocks that do these kind of round trips. Um, you know we even had a stock earlier this morning um I don't know where it is on the scans now. What was that ticker BC? Was it BCP? Um no BPC. U maybe someone can type it in the chat room and remind me of what it was. Um, but we Oh BGL. We had that ticker BGL this morning. So, this stock comes out with news of a $10 million strategic investment for at $4 a share. So, someone invested $10 million at a share price of $4 a share. Usually, that's bullish. That sets the value in a way at $5 a share, right? $4 $4 a share. Uh because usually when we see these types of investments, they're like, I'll give you 10 million, but I want it at 50 cents on the dollar, right? So, I want it at a 50% discount from the current trading price. And that way, I have a cushion. So, if you guys screw up, I can still probably get out break even. And if it goes well, I make even more. Usually, investors don't say, "Yeah, I'd like to pay a premium over the current market price of 100%." Yesterday, this was trading at $2 a share. Well, it's back at $2 a share now, but someone while it's trading at $2 a share said, "I want $10 million worth at $4 a share." So, that's usually a big vote of confidence. And even that headline didn't work. That's very unusual. So, it definitely speaks to how cold the market is. Um, and it it's it is very hard to be patient, you know, during these during these conditions. And you know, as I was sort of alluding to before, I think that the imbalance has definitely swung to the short side. You know, the bears are in control right now. The bears are in control during, you know, the bull markets, 2020, pandemic, 2021, GameStop, bulls were in control. 2022, 2023, the Bears regained control. 2024, the bulls regained control. And through all of 2025, I would say for the most part, the bulls were in control. uh right up until things cooled off a little bit around um the decline in crypto that occurred in sort of October, November. Uh December and January were okay and now February has really cooled off and we're coming all of a sudden into the last uh last day of the month tomorrow. So what will March um hold for us? And I don't know uh if March is anything like the last week has been, it's going to be pretty slow.
But on the other hand, it really only takes one good trade. You know, in a hot market, one good trade a day. I mean, I could do incredibly well with one good trade a day. But one good trade a month for $40, $50,000, one good trade a week for $40, $50,000, you know, that that that can that can work, you know, and that can happen in a colder market. And the thing there that's tricky is it goes hot cold hot cold hot cold cold. So it or it's more like cold cold hot cold cold hot. So duck duck goose. So you just don't know what day is going to be the goose. And all of a sudden you get a stock like the one that we had this morning NDR with a sub 1 million share float. And the shorts keep adding and adding and then next thing you know it rips through six 650 and is halted up and showing a 750 resumption and shorts are covering. It opens, dips and rips, goes up to eight, nine, and just like that, we've got a stock in one day that went from $2 or whatever, $4 to10 a share. And then the next day it'll be totally dead. And the next day it'll be totally dead. And maybe it's dead for another week. And then all of a sudden, boom, we get a big move. So that that is sort of typical of colder markets that it's cold, cold, cold, cold, cold, and then you get a big move. But usually when you get that big move, that big move becomes the catalyst, right? So you finally have a stock that makes a big move and then the next day traders are like, "Okay, well, what was the profile of that stock?" Price, float, news, catalyst, location of the company, you know, whatever. So they create the profile and now they're looking for the next one. And so now short sellers are like, "Oh, well, they pay attention to that profile, too. better be a little careful shorting the next one because did just get smoked here on this huge short squeeze. So then the dynamic kind of shifts, the control sort of shifts from the bears back towards the bulls and then you can have essentially um a little hot streak that goes for um you know it well it it depends. I mean, but this is usually the way the sort of hot and cold streaks begin with a big catalyst and then they end with moves getting exhausted. Stocks that really have no business being up, still going up 200%, they become a great target for short sellers. They end up coming down. Shorts are shorting earlier and earlier and earlier until things stop going up and now bears are in control. But this has generally been my experience that it's primarily bullish with shorter periods of um of cooler trading. So, you know, we're in a cooler period right now and obviously waiting for the next catalyst. I thought maybe NDR had the potential to be that. Uh if it didn't have news, I wouldn't have uh traded it at all. But because it had a catalyst, it's in the right spa sector, you know, the p everything checked out on it. it met the five pillars of stock selection very well and it still didn't work and that I think is is also a reflection of the market because um you know trading the five pillars which would constitute an Aquality setup um you know hot market well I mean last month I think I was averaging 72% but I was also trading Bquality setups which are setups that meet four out of the five pillars and I might have even traded some Cquality setups so my blended average was actually 72 82% last month. Um, but it's probably likely that if I just trade a I'd be at like 80%, this might be 70% and this might be 60%. And I didn't take very many, but it sort of blends to this. Whereas in this was, you know, hot market and then over here we'll do cold market. So now cold market, um, even a quality setups maybe are only, I don't know, like 60 68%. And then B quality are like, you know, 50 53% and then C quality is like 40%. I don't know. I'm just, you know, sort of, you know, but everything seems to be performing not as well, even A quality setups. So now you have really no choice but to drop these off because if you trade all of these, you're going to be down at like 50% accuracy, right? Or maybe whatever. So that's not going to work. You're going to be losing money. So then you say all right well in this market I to totally have to forget about that and maybe I need to forget about that too. Um so then I try to keep at 68% trading just a quality setups but you know each month let's say how many you know or well yeah sure each month let's just say for instance there's um you know 30 so 25 20 trading days roughly. Um so if we said there's two maybe three so maybe maybe there's like 60 A quality setups each month um in a hot market and then in a in B quality setups maybe there's like twice that 120 C quality setups there's probably like 500 but you know your accuracy kind of declines. So then in a cold market, I mean I would wager that I mean it feels like we're seeing a quarter of this, you know, so all of a sudden we go from 60, you know, down to like 15, you know, less than one a day, right? This is, you know, maybe 30, but again, the accuracy is not that great. And this is, you know, maybe 125, whatever. But um so now all of a sudden you're sitting in a month where in order to achieve 68% success, you've got to only focus on a quality setups. Um and that means you're only taking 15 trades. You're only taking a couple trades a week. So that can be hard to stomach and that's where it feels really, you know, it's like it's hard to be patient and I struggle with it too. And I think today's a good example of that where I part of me was like I someone asked Ross, are you going to take any more trades past the opening bell or you going to switch to the Warrior Pro room? And I was like, yeah, I don't think I'm going to I don't know. I don't think I'm I think I'm going to give up. And then NDR hit the scan and I was like, well, I you know, okay, actually, no, this one maybe maybe we're just going to get that surprise wild card and it's during regular trading hours. It's not a pre-market move. But uh yeah, that's that ended up being what it is. So I feel disappointed. Um it's and I I feel a little bit frustrated that I or disappointed I feel disappointed on the uh to the degree that I gave into that uh sort of emotional impulse of being stubborn. And I know that when I get stubborn like that, while it can work out, uh, and I guess you could say this is working out, it can also go horribly wrong and I can get completely smoked. And if that happened right here, I would feel pretty I would be pretty upset with myself. So maybe I call today, you know, um a caution flag, you know, little caution flag like, whoa, slow down. That was that could have been really bad. Um we're coming to the end of the month, you know, what should I do? Should I size should I size I mean, you know, should I take money out of my account? That's the thing. you could say size down. Well, I wasn't planning on taking as much size today as I took. So, the only way to avoid that is either to literally take money out of my account. Um, or you know what I can do, and I will do this from time to time. Um, let me do it on this window. So, I'll go into trading and then warnings and I can set a max position size, which I have set right now at 255, 501 share. Um, it's been there for months. Uh, so what if I bring that down to like 10,000 shares? I mean, should I even go to 5,000? I mean, I I don't know. That seems pretty tight. But but on the other hand, the market doesn't seem to be calling for me being aggressive and today was a close call. So doing this, I can say do not allow when quantity is too large or when position is too big. And then if I say okay on that, um, if I try to take a trade and I'll just put out just try to do an order for 10,000 shares and I'll show you what it says. So, um, so let's see. All right. So, I'll just show you what this window looks like. So, each time I press that, it says, uh, max position size, max order size exceeded. So, it it would let me take 10,000, but not more than that. Um, so yeah, I don't know. Um, as long as I don't, you know, override that in the middle of trading, that that certainly works. Um, taking money out of the account is the uh safest thing because you can't change that in the middle of a trading day when you're frustrated. Uh, so yeah, I don't know. Something for me to think about a little bit. But um as we sit here uh it's we're definitely these are we're in the trenches right now. We're definitely in the trenches and it is um it's tough to see, you know, this kind of market and it absolutely 100% feels night and day from the hot market. It feels like someone turned off the faucet. Like it's just what happened? It's a light switch off, gone. But that's the shift that occurred in sentiment between the bulls and the bears. And that shift is u significant when it occurs. And right now we've got some you know circumstances in the overall market with AI with crypto that are all um you know factoring into what we're seeing. So, you know, I think that this is uh going to be a time where I need to exercise patience and uh and and perhaps really it would be the best thing for me to move money out of my account and say, "Hey, good job for January." Grateful we had that uh whatever I got in January, put that aside and now just kind of reset to a smaller account. I had reset at the beginning of January to 100,000 in my account. I grew it, did well, and maybe now I reset it back to 100 grand and or even 50 grand. And then I can't take big big size on anything even if I wanted to. The downside of doing that is on that one day a month that we actually have something that's working, I don't have enough buying power to trade it well, and I won't have those $50,000, $75,000 green days. So, that's that can be a problem. Uh and and of course, you know, I could still take 50,000 shares of a penny stock, I suppose, uh but I wouldn't be as worried about losing big big money on a lower price stock either. So, in any case, something for me to think about, something for you guys to think about as well. We're coming to the end of February, so it'll be a chance for us to look back at the performance for February and ask ourselves, what did we do right, what did we do wrong, and what could we do better in March? So, with that, let me remind you as always that of course trading is risky. My results are typical. So, manage your risk, take it slow, and I'll see you guys back here bright and early tomorrow morning at 7:00.