Transcription
What's up everyone? All right, so in today's episode, I'm going to break down my trades from the morning. I am sitting in the green, up $9,972.72 trading in Puerto Rico. This is very nice.
Yesterday, however, was a no trade day, but I did upload my bare market strategies episode where I walked you guys through some of the adjustments that I make in my strategy when the markets cool down. I wouldn't say we're in a bare market right now. Nobody would define this is a bare market. The S&P 500 is still up quite a lot, um, and not down very much off the lows or off the highs, but nonetheless, uh, it's a colder market at the very least for small caps and it is, I suppose, certainly a bare market for crypto traders, but we're not trading crypto.
So, uh, but I would say that the bare market that, um, is occurring right now in, uh, the crypto space and in the price of Bitcoin probably does weigh on a number of small cap companies because as we know, a lot of small cap companies bought cryptocurrency last year when the crypto market was really hot to try to boost up their balance sheet with an asset that would return, uh, you know, potentially they hoped, uh, really nicely over the next couple years and boost their profitability. Which is a little funny that a company thinks they'll make more money by just investing in a cryptocurrency than reinvesting that same money in their own business model. But this is not totally uncommon in the small cap space that these are companies that have been underperforming. And so they were trying to kind of juice the headlines a little bit by saying, "We've bought, you know, a million dollars of Bitcoin and then hope that people jump in because that just makes their stock a little juicier." I think that worked well last year. It is not working at all this year. Obviously, the market in, uh, the Bitcoin crypto space has dropped, uh, substantially.
So, nonetheless, um, in that episode, I broke down for you five steps that I take to help myself stay green even during a bare market. You sort of have three scenarios for traders. One, well, so scenario number one, market's hot and you're making money. All right, that's great. Scenario number two, market's hot, you're break even. Okay, scenario number three, market's hot and you're losing money. If the market is really hot and you're losing money, that's a problem. That tells us that there's something that is not working with your strategy. You may have a strategy that works for other people, but you're not following the rules of it. If you're breaking even or doing so-so during a hot market, again, that speaks to the need to improve your trading. If you're doing relatively well, hitting your daily goals, that's good. That's where you want to be. But what we don't know is, will you also be able to trade well during a cold market? You have some traders who can make great money when the market's hot, but when things cool down, they can't make money. So during a cold market, once again, you've got the three scenarios. Trader who makes money, trader who's break even, and trader who loses money. I have been fortunate to be a trader who makes money both in bull markets and in bare markets. Albeit in bare markets, I make a lot less than I make during bullish markets. However, I'm still making money because of the five steps I walked you through in yesterday's episode. So, make sure you guys check that out if you haven't already.
So a day like today, this is going to be very common in this market. Uh, in fact, days like this week where I either take zero trades like yesterday, no trades at all, or there's one stock that is good enough to trade and that's the only stock I trade. In a really bullish market, you'll see days where I'll trade 10, sometimes 15 different stocks because there's so much opportunity, there's so many stocks moving, there's so much liquidity, there's a lot of volatility that I can capture 20-cent profits, even 50-cent, maybe even a dollar a share profits on a number of different stocks. But when things cool down, I rein it in. So yesterday, no trade day. Tuesday, nearly a red day, but recovered and it was a small green day. In fact, these are my metrics here for the month of March so far. So, Monday morning, uh, took three trades. That's it. I had three total trades and 100% accuracy, which was great, but was only up $2,500 bucks. All right, not a huge green day. And then we had Tuesday. I went into the red before recovering back into the green and finishing up $1,300 with only 60% accuracy. Not as good. No trades on Wednesday and then today $9,000 bucks. Now, to be honest, I was hoping this week would have a day like last week, a $50,000 green day cuz last week was also pretty slow. Green on Monday, green on Tuesday, green on Thursday, green on Friday, but very small green day Friday, but an awesome day on Wednesday. So, when I was, you know, underperforming on Monday and Tuesday this week, I was like, that's all right. Let's still have a chance of having a day like last week right here. And then Wednesday, I missed. So then I thought, well, now we're kind of coming towards the end of the week. I don't know if it's going to happen today. Certainly not as big of a green day as last Wednesday, but it is a good day and it definitely boosts, uh, my morale a little bit. And because I had the discipline not to take any trades yesterday, and if I had, I would have lost money. I'm not recovering from a drawdown. I'm just adding a little bit of icing onto the cake. It's a slow week, but grinding with a little bit of profit, and that's good.
So, let's look at ATPC. ATPC, this is a stock that is actually, um, interesting. Funny enough, it is a B-quality setup. Um, despite what I said yesterday that during a bare market, you really want to focus on only A-quality setups. Um, this is a B-quality setup. What did it lack? A breaking news catalyst. It's a continuation setup. Initially popping up here a few days ago, pulling back, popping back up, pulling back, popping back up, pulling back, popping back up. So, we're in this long consolidation here and we broke out of it this morning right there. Now, I don't know, you know, where that pop really came from. Maybe there was some traders who said maybe this thing is, you know, wildcard day. There's nothing else working today and it's a very low float and, you know, it's nice daily setup for a breakout. Maybe it'll work. So, the only problem is that this day here, most of the move was pre-market. So it opened here and closed here, which means the daily candle was red going down. So it was a red daily candle because daily candles are only based on the open and the close, not pre-market and after hours. And it had 60 million shares of volume. But the problem is on the daily, it looks bad. Now, if you look closer than the daily, you realize it's actually not as bad as the daily would make it look, right? The 5-minute wasn't so bad, but the daily was not great, which I thought might sort of be off-putting for some traders. Nonetheless, this thing pops up, and I'm going to break down the trades that I took on it.
So, when this thing first pops up, we did see this big seller that was sitting on the ask at about $5 a share. But here's what's interesting. As soon as people started buying shares, they canceled their order. Order was gone. So remember, they want to create the impression of weakness with that order. They're not actually trying to sell those shares because soon as people start buying them, they canceled the order and it was gone. They moved the order higher and then the price squeezed up as you could see right here up to $5.40 and they move the order higher and higher and higher and higher. So the order just constantly stayed just above the current price. All right, so I took this first trade, uh, getting in. This was my first trade right here. Uh, we had a pop, a little pullback, and then a push higher. And although it wasn't the cleanest trade, I was able to lock up about $5,000 of profit right there. Not bad. It drops down. It comes back up. And I got back in right here. I didn't get in down here because this was sort of big rejection, but it rallied back up. I got back in right there. That added about $2,000 of profit. Then I didn't take any more trades for a moment. It squeezes up to six here. It drops down. It gets back above six right here. And let's just pull this forward. So, right here, we hit a high of about $6.20. That was our high of day. All right. It dips down. It goes below six, then immediately pops back up. And I got in right in the middle of this candle at about $6.12 and sold on the squeeze up to $6.40. I then added back at $6.37 right here, looking for the push higher and stopped out right there. And that was my one loss. And that was my last trade of the day on this one. And as you can see, uh, right here, getting in at 5, sorry, $6.35 and $6.38 and selling at $6.35. So 5,000 shares I sold break even and 5,000 shares I sold for a 3-cent loss, which is $150 loss. No big deal.
All right, so $9,972.72. I'd say that's a pretty solid day. We had something moving. That was number one. The float was right. The price was right. And I would say based on my five pillars, what we know is that there can be stocks that are on the edge of the five pillars of stock selection where they technically meet it, but they don't meet it super well. So, if you check out yesterday's bare market strategy episode, I have a link where you guys can download my five pillars of stock selection. So, I'll put a link to that video at the end of this episode here. Go watch that if you'd like and then download those five pillars so you know exactly what I'm talking about. But let's say we have a stock that's a 19 million share float is $19 a share and is up only 8%. Well, let's say it's up 11% cuz my minimum is 10%. So it technically meets three of those pillars for price, float, and percentage change. And let's say it has news. Um, and let's say the relative volume is six. So it, it technically meets all five pillars, but this stock was a better candidate. Even though it didn't have news, it met the other pillars in a much better way. The price was better, the float was better, the relative volume was better. So this was a better setup. Uh, and that could be a little confusing because if you just go straight by it, either it meets the pillar or it doesn't, you could have the perception that, well, this is a B-quality setup, uh, because it didn't have news. It met, it didn't meet that one pillar and another stock has all five but doesn't perform as well because the way it meets the five pillars are different. So you also have to be able to think critically about each of the pillars and how important they are to the potential for this stock to make a big move. And this ended up, um, not realizing its full potential. Um, but it still ended up having a pretty decent move as you can see up to $6.43. It pulled back. It rallied back up to $6.43 just after the open. It pulled back again. And who knows? I mean, if the stock is able to continue to hold up, then maybe there'll be, um, you know, continue continuation on it even into tomorrow. You don't want to underestimate a sub 1 million share float because we know that these can make big moves. Do they always? No, not always. But they have before and that's where that kind of wildcard comes from. Like, you know, if this works, next thing you know, this is the type of stock that we've seen make big moves before. It may not happen, but it's the right type. So you got to be careful shorting that type of stock because you know, certainly in a more bullish market, these things can really open up quickly but overall sentiment is a little bit weaker right now and that's also the biggest difference between why, um, this probably isn't up 200% or more. You know, if right now the overall market is lacking, um, I would say we're lacking, we're lacking momentum, we're lacking volatility. But what drives momentum and volatility? It's fear and greed, FOMO, right? The fear of missing out. I, it, it creates the impulse and the urge to buy stocks that are high. And I fall into the same, you know, I category of traders that buy high and sell higher. I'm looking for momentum. And so when we have a really hot market and things are moving, I'm much more aggressive. But the sentiment right now is, is so poor that people are just sitting on the sidelines. So we have a headwind as long bias traders. Uh, but at the same time, short sellers are going to make more money when you've got more volatility as well. So if the market is really cold, it's bad for everybody. Shorts don't make money. Longs don't make money. There's nothing moving. So what we all really rely on is volatility. It's actually, um, a myth that short sellers will always make more in a colder market, uh, than they would in a hot market. A cold market is not good for anyone. A cold market means there's less volatility and there's less liquidity. And so that's not good if you're a short seller because you can't take big size because there's not enough volume. Yes. Certainly when we see big sellers like this, there are people that are cutting in front of them and, you know, shorting into the strength and thinking that this will roll over. And in a colder market, that may be more likely to happen, but in a colder market, you don't see the 500, 1000% moves. And when you get a bigger move, you've got just a bigger piece of the pie where you can try to get slivers of profit. And when the total opportunity is only 50 cents a share, it's just not as easy to make money whether you're long or short. So, we'll all do better when the market heats back up. And ultimately, we don't know what's going to be the catalyst that creates the next wave of momentum. But, uh, we do know that obviously the crypto markets are down quite a bit and that's weighing on small caps because of the number of companies that did take on these crypto treasury strategies last year. So, uh, it's, it's going to take some time and so in, in the interim, you will continue to see me being more patient, waiting for good quality stocks, um, and then trading them aggressively when the windows open and then foot off the gas completely. And by doing that, I hope, and this is optimistic, but I hope that I'm able to maintain metrics that are, you know, sort of like this where, um, I have small green days or even no trade days and then, you know, decent sized, uh, green days periodically. That, that's best-case scenario. And this would be very good execution, um, in a bearish market. But it does require a high level of discipline, self-control, and self-awareness. Um, and today I did get a little stubborn at points, so I, I do have to be careful. Um, even myself.
All right, so with that, make sure you guys check out the, uh, full-length bare market episode. I'll put a link to it, um, right up here. I think you guys will really enjoy it. And, uh, I will be back at it streaming bright and early tomorrow morning at 7 a.m. Eastern Standard Time. Reminder, as always, trading is risky. My results aren't typical. So manage your risk, take it slow, and I'll see you in the morning for members at Warrior Trading.