B The Trader

In the last video (Trader Therapy with Jack Kellogg and Kyle Williams), a subscriber asked us how to track winning setups and what criteria we use to track them. Kyle did a great job answering that question, but I just wanted to show you how I do it with a specific Excel example. Before we get into it, let me just say that there’s no right or wrong way to track strategies. As traders, we all work in different ways and prefer different things. I’m also not a huge fan of Excel, but I love analyzing trading strategies, and I found spreadsheets to be the best way to record setups in order to find the edge. First, I have a separate tab for each strategy that I track. Within each tab, I list all tickers that appear on my radar (this list depends on the strategy). For each of the tickers, I write out specific criteria that matter to me - volume, support level, open, close, high of the day, low of the day, etc. The idea is to find an edge  - a culprit, a common pattern that will help me decide if the setup will work for me. If I don’t see an edge, maybe my criteria are too broad. Or sometimes I just need to look at more information and cross-reference it with what I already have to find a pattern. Watch the video to see me explain my tracking method on an EDAP ticker example. Was this video helpful? How do you track your strategies?  

Jack Kellogg, Kyle Williams and I had a great conversation about the challenges of day trading that both beginner and experienced traders face. We talked about January trading; all three of us have a green month so far. However, Kyle mentioned that while he was still profitable, he took more losses in January than he did in all of December. Jack pointed out that he already had two red Mondays because he was so eager to trade at the beginning of each week. For me, Mondays are also generally the worst day of the week, and Kyle had some challenging Wednesdays. It is really interesting how the same principles never work exactly the same for different people. For example, I love the PnL challenge that I’ve been doing throughout December and January, but both Kyle and Jack agreed that it makes them mentally add numbers since they’re not supposed to look at the chart to know if they’re up or down. We answered a number of questions from subscribers. We talked about the dos and don’ts of day trading (gotta love Jack’s opinion on OTC stocks), what keeps us motivated after big losses, and what we wish we knew back when we only started day trading. We also talked about tracking winning trading setups and finding the edge. Kyle gave a great answer, and I’ll expand on that question in my next video. Subscribe to my channel to get the best day trading tips from me and other profitable traders!

Day trading seems easy at first, right? But soon you realize that you won’t get too far just looking at the price chart alone. You also have to keep the volume dynamics in mind. Let’s say we have a stock that’s topped out. It’s at $1.80 and it’s creeping up to $2. It’s obviously going to break the $2 mark, but you need confirmation before you enter the trade. That’s where the volume chart comes in, that’s your indicator. In this video, I describe 4 different volume dynamics as the stock hits a $2 mark: No change in volume. Because of the lack of interest, it goes back to $2 and holds there for a little bit. No volume means that no one is interested and it’s unlikely that the stock will continue going up. Most probably, it will hold at $2 for just a few minutes and will break down soon. It breaks out with a huge volume - which is a great sign - and then goes up to $2.10, and then immediately goes back down with a huge volume too, maybe even below $2. That’s a sign that there’s a lot of sellers out there, and a lot of people took an opportunity to get out at a great price. It’s a fakeout breakout. It breaks out with a huge volume and goes to $2.40, but you’ve missed it. At this point, you’re better off missing it altogether rather than chasing it, because more times than not it’s going to come back down. But keep an eye on volume: if it spiked at a huge volume and went down with a low volume, it means that there’s still a lot of interest out there, and the stock will most likely go back up over time. If it breaks out at a mediocre volume, stays at $2 for a half-hour and then picks up more volume, that’s an indicator to get in as the price will most likely go up. Volume represents interest. It describes the supply/demand curve that constantly effects the price of the stock. It also describes market expectations, giving you a hint when to jump on the bandwagon and profit from the trend. If you’re trading without looking at the volume chart, you’ll miss out on all these dynamics. You need both the volume and price charts to make an informed decision.    01:22 Case study: the stock is breaking out at $2

Mike, Nick, and Alex started day trading about 6 years ago. Having worked as busboys and waiters, they knew the value of a dollar and were looking for something to make them more money. They pulled money together and started an account with $1000. On his first trade, Mike scored big with Rite Aid stocks, effectively doubling their account within one year. At first, they traded big caps and well-known names. However, those stocks didn’t move as much, so eventually, they moved on to OTC which provided more opportunities. In 2014, weed got legalized in several states, so there was a lot happening in the cannabis niche of the stock market. The Stock Snipers had multiple big wins, but they also experienced multiple big losses once the market started to calm down. Their trading journey includes many stories of high profits and heavy losses, but one thing that they learned to do is how to move on no matter what and stick together. They’ve been trading together for years, and now they educate other traders and pass the knowledge and experience that they’ve accumulated over time. Their journey taught them to cut losses on time, stick to the plan, and learn how to be OK with occasional missed opportunities. This is their advice for beginner traders: It takes between 50-100 traders to start getting a feel for trading, be patient and prepare for “survival mode” L is for learning, not loosing What was your takeaway from this interview? And would you start a trading account with your buddies?

During the month of December, I challenged myself to avoid my PnL chart and only look at it at the end of the month. December turned out to be profitable, but not as much as I would like it to be. This is a tip for beginner traders who are still in search of their strategies and favorite setups. As a short seller, you constantly get hit with various fees. Over time, they cut into your wins quite a lot. However, if you’re buying long, you don’t have any fees, so you’re trading for free. That’s why I’ve been recently dabbling into long buying myself. I’m still getting a feel for it, so I’m only risking $10 at most. Getting more experience with it will be my January focus. Another thing I’ll focus on will be taking my full 3R and cutting my loss at 1R. Additionally, I will still ignore PnL chart for another month and see what it does for my trading habits. In this video, I wanted to talk about Price Action and its importance. Recently I’ve been noticing a trading pattern where a stock goes up (I find it through biggest % gainers), I do my research looking for news, check SEC for any warrants, offerings, and ATMs. Finding a warrant would immediately make me a short-bias trader (on top of me leaning to sell short more times than not). In this scenario, I would completely ignore price action and often take a loss. The last time it happened to me, I wasn’t stubborn in that trade and I cut my losses quickly. However, that trade made me think that I should focus more on the Price Action than the research and expectations. Watch the full video to learn more about waiting for confirmation and Price Action signs. Do you ever struggle with following the news and pulling the trigger too quickly? Comment below, I’d love to know!  

James is a day trader, MIC moderator, and an entrepreneur. He’s been trading for almost 2 years, and December has been one of the best months of his career. We talked about a new approach that led him to have a great month. His new strategy is to wait for confirmation before entering a trade instead of jumping in out of FOMO or anticipation. James shared a 30/70 rule that protects him from getting hit with big losses upfront and how he’s choosing consistency and predictability over hitting the highest numbers possible. His philosophy is that you can hit a 50c win by gaining 10 cents 5 times or winning 50 cents at once - but choose whatever suits you best. We talked about adapting strategies and rules from other traders and making them yours. The point is to make trading work for you, not the other way around. As a day trader with a full-time job and an entrepreneurship side hustle, James can only spare mornings to trade. He likes to be done by 10:30 am to be able to focus on the rest of his life, and he has adapted his trading style to do just that. Having a busy life outside of trading hours gives James another benefit - he can truly appreciate how relatively fast he can generate income with just a few successful trades in comparison with other revenue streams. He also discovered that as an experienced trader, you stop trading for your ego, you stop caring about other people’s opinion and praise. You start trading for yourself, and that’s when the real results start pouring in. Check out the video below to learn from this amazing young trader! What was your favorite interview moment?  

Alex is a long-bias trader who focuses on penny stocks while learning more about trading big caps. Over 2019 he took his biggest loss, which prompted him to cut down his account to half of its size. After that, however, he realized that “the worst” - loosing big - has already happened, so he started to trade a full size again. As a result, he had to make peace with heavier average losses, but that also gave him a chance at higher average gains too. In 2019 he’s been breaking into trading big caps. We talked about the transition from small to big caps and the difference between the tools and skill set necessary for them. For example, you need more capital to trade big caps, but you don’t face liquidity issues as you do with small caps. Additionally, following the market is much easier, so it makes sense to focus on 20 or so big names and trade them since you now know how the company operates and what to expect. We talked about his big loss of May 2019 and how it changed Alex as a trader. We chatted about commission changes for long traders, getting over significant mistakes and moving on with a clear vision from both losses and wins. We had a great discussion about your ‘Why’ as a trader, a possible burnout, and curbing your expectations when you live your life (as you travel, have kids, have other obligations) while trading full-time. Alex described his 2020 goals, and (spoiler!) it’s not just a single $ goal. Watch the video to learn more about his goal-setting and his biggest challenge for the new year.  

Holiday trading is different as there’s a lot more volatility in the holiday market.   Short selling is challenging in the last week of December. I saw on Twitter that a lot of people were trading and taking big hits. This is my theory: everyone is off at home on their computers, there are many new traders on the market who are more familiar with the long selling, and a lot of squeezing is happening, so you have to be careful when selling short.   I didn’t have very successful trades on Monday and Tuesday, but Friday was profitable as I followed my trading plan and waited until I hit my target before cutting it.   So if you’re trading short, be extra careful during the holidays and all the way up to the New Year. Wait for a clear signal and don’t waste your time on mirages that take your time and attention away from the real A stocks. Be careful trading pre-market and watch out for squeezers.   Watch the video till the end to learn how I adapted my trading and daily routine now that I have a full-time day job. I also share the news about new exciting guest interviews!

We met with Matt over 9 months ago, and, funny enough, I didn’t know who he was at first despite listening to his show.  Matt found out about trading when he was in high school. He started trading in the summer of 2017 after the freshman year of college (he studies software engineering); his parents helped him to join the Tim Sykes challenge. 2 years later, November 2019 was his best month yet. Matt switched to big caps despite starting with the small caps as he didn’t like the volatility and the fact that one loss could easily wipe out multiple wins. We talked about the benefits of trading big caps such as easy and reliable automation, low chance of sliding, and generally slower pace that allows traders to make rational decisions instead of acting impulsively. Matt shared his plans for May 2020 when he graduates. We talked about the benefits of trading part-time, and how spending less time in front of the screen makes you a more disciplined trader. We chatted about the biggest challenge Matt faces when trading and his plan to work on it. We also talked about his accomplishments - this student trader has already managed to get over the PDT by trading and working hard during his internship while going through the senior year of college. Watch the full interview to see what ticker we both successfully traded the week before. Check out his podcast Beyond The PDT on your favorite podcast platform! as I will be appearing there shortly.

As you guys know, I got a job about 2 weeks ago and I’ve been officially trading part-time ever since then. I wasn’t planning on trading much during the first week. The trades that I did take were very safe, I only risked a quarter of what I normally do. I did it with range order - it’s when you set up the profit target and the stop loss, and once one of them is hit, the other one cancels out automatically. It worked out well for me, and I’ll keep using automation to manage my trades while I’m away at work. I don’t really know how much I’ve made on that trade. The whole month of December I didn’t look at my PnL as a part of the challenge that I’ve created for myself at the beginning of the month. The question is, how do I know if I’m doing well? Well, at the end of the day, you always know if you’re up or down. And the benefit of not knowing exactly how much money I’ve made is that trading stopped being all about the money. I’m not tempted to trade less than ideal setups just to get the profit. The trade that I’m still in - CBIO - is the trade that I’ve executed differently thanks to this challenge. I got in at the $7.70s after a big squeeze and not seeing much interest from other buyers. I covered most at the $7.30s and $7.10s, and I’m still waiting for the $7 to crack. It might not crack, but it’s fine since I only have ⅕ size still in the trade. Before the challenge, I would have gotten in earlier. Most probably, I would have been one of the sellers who got squeezed. I would have chased one of the minor spikes out of FOMO. The December challenge helped me with the fear of missing out. I’m not trying to instantly make up for the losses incurred, and I’m trading just to trade well while focusing on the risk/reward ratio. I’m really excited to see how this month turns out! Do you have any questions regarding the PnL challenge or any other topic? I’d be happy to answer them - hit me up on Twitter or in Youtube comments!