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Hey everyone, Ross Cameron here! Today felt like another roller coaster with day trading, not really much different from yesterday. If you recall, yesterday was a bit of a grind. I started off strong, but by the end of the day, I finished with small green, which is how today went as well. My first trade plunged me $1,700 into the red. It felt like things were unraveling again, and I was thinking, “Two days in a row? This is bad.” Adding to the pressure, it was Friday, the end of the week, and the last day of June. There was this sense that I needed to finish the month on a high note. But, spoiler alert, I barely saved the day with my last trade. All said and done, I finished the day with a gain of $487. So, let’s jump into the trades from today!
Morning Gap Scan Analysis
First thing in the morning, I always pull up my phone bright and early to check the gap scans. Our leading gapper was about 30–40%, which isn’t bad, but there weren’t any big gaps. As the morning progressed, we saw a few gappers up to 50–60%, but most of the stocks gapping up were cheap or had a high float. Our top gappers included COSM, which was up 79% by the open, and LUCY up 59%. Both were trading below $2 a share, which isn’t ideal. These cheaper stocks can be tricky. When I see that most of the leading gappers are under $2, it’s not the best start to the day.
First Trade: BENF
When BENF hit my scanners, I finally saw a stock above $2, which got me excited. It popped up, and despite some initial sideways movement, I perceived it as consolidation. I jumped in with 5,000 shares, thinking this was it. The trade quickly soured, and within 55 seconds, I was down $1,700. It was frustrating to start the day in the red again, especially since my max loss is $5,000, and now I’m close to halfway there.
Second Trade: COSM
Next, I turned my attention to the leading gapper, COSM. Although it’s a cheap stock, I noticed an opportunity around $1.24 and decided to add 10,000 shares, over my typical cap. This stock was comfortable to take larger size on due to its price. It moved up but not by much. I exited with a $735 profit. It was a small win, but a win nonetheless. These smaller movements with cheaper stocks are why I generally avoid them. But this got me back to being down only $1,000 for the day.
WHLR & NUWE Trades
Later, I spotted WHLR on my scans. This stock had just announced a reverse split, making its float temporarily low. I cautiously jumped in with a starter position, but it quickly halted up. I added more shares during the halt. When it resumed, I took some profits but got out flat after a small drop. Shortly after, I saw NUWE also moving higher due to a reverse split. I entered with 1,500 shares and managed to secure almost $1,600 in profit. These trades turned my red day into a green one.
Conclusion
These last few days have been slow, and today was no different. The majority of my week’s profits came from earlier in the week, with small gains and losses trickling in towards the end. Nonetheless, I stayed green for the week and, more importantly, for the month and year. We’re heading into a holiday week, so the markets might be even quieter. It’s a good opportunity to study, practice in simulators, and prepare for when the market heats up again.
Remember, trading is risky, and my results are not typical. Always manage your risk and take it slow. I’ll see you back here bright and early on Monday morning. If you’re interested in a 14-day trial with Warrior Trading, you can sign up here. Happy trading!
Leading Gainer Spikes 97% on Light Volume
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Hey everyone, Ross Cameron here! If you’re thinking about diving into the world of day trading, you’ve probably heard that it can be tough. And you’re right, it’s not an easy journey. One of the biggest challenges is the many mistakes that new traders often make. These mistakes can set you back even before you get started. But don’t worry, even if you’ve been trading for a while without much success, it’s never too late to build a solid foundation. Today, I want to share some key insights that will help you get started the right way.
The Blessing and Curse of Trading
Let’s get one thing straight: trading is hard. You might find yourself struggling just to make $10 a day, questioning why something so simple seems so difficult. The truth is, until you have a consistent set of rules, making even small profits can be a challenge. But here’s the good news: once you can consistently make $10 a day, scaling up to $50 or $100 isn’t that much harder. All you need to do is increase your share size as you gain confidence and experience. That’s how I started, and today, I trade with much larger positions. (Results not typical)
Step 1: Learn Basic Trading Concepts
Your first step to becoming a successful day trader is to learn the basics. This includes understanding technical analysis, reading candlestick charts, interpreting level 2 and the tape, and knowing how to read the news. It might seem overwhelming, but trust me, it’s essential. I recommend starting with a trading simulator, which lets you practice without risking real money. You’ll learn about different types of orders like market, limit, and stop orders, and how trading varies between pre-market and after-hours.
One of the most common mistakes I see is new traders diving into real money trading before proving their consistency in a simulator (consider checking out our Warrior Simulator!) Trading with real money too soon can lead to emotional decisions that result in significant losses. If you’ve already lost money trading, consider switching to a simulator or trading with very small sizes to minimize risk while you learn.
Step 2: Learn One Simple Strategy
Don’t spread yourself too thin by trying multiple strategies at once. Pick one and stick to it. When I started, two strategies worked well for me: reversal trades and trend following. The first pullback pattern is my go-to. I look for a stock that’s trending up, wait for a slight pullback, and then enter when the stock hits a new high. This strategy has clear rules and a proven track record, which builds your confidence.
Picking the right stocks is crucial. Focus on those that have high liquidity, strong relative volume, and a news catalyst. I generally trade stocks between $2 and $20. My strategy involves looking for stocks that meet these criteria because they have a better chance of moving in a predictable manner.
Step 3: Practice the Strategy
Start practicing your chosen strategy in a simulator or with very small real positions. Consistency is key. Follow your rules diligently and track your performance to see where you can improve. This will help you get a feel for the market without losing your shirt in the process.
Discipline is as important as having a good strategy. Your success heavily depends on your ability to stick to your rules. Trust me, even after more than 10 years in the market, discipline is something I still struggle with sometimes. Emotional control is crucial in trading, and resources like the books “Trade Mindfully” by Gary Dayton and “Quit” by Annie Duke can be very helpful. You can also find a list of my favorite books here. Personally, I’ve found that exercise, meditation, and reducing my caffeine intake have made me a more disciplined trader.
Step 4: Evaluate Your Metrics
Tracking your trades is essential. I started by writing down every trade in a ledger, but today, I use an Excel spreadsheet. Analyze your data regularly to identify patterns and areas for improvement. You’ll learn which times of day are most profitable for you, which types of stocks you trade best, and more.
Step 5: Transitioning to Real Money
When you’ve built a good track record in the simulator, it’s time to switch to real money trading. But don’t jump straight to large positions. Start small, with perhaps 100 shares, and gradually scale up as you gain more confidence. One key milestone is experiencing and recovering from your first drawdown in the simulator. This builds emotional resilience, preparing you for the ups and downs of trading with real money.
Common Rookie Mistakes to Avoid
Here are some rookie mistakes to watch out for:
- Not tracking metrics: If you don’t know your win rate or profit factor, you’re flying blind.
- Investing in expensive tools too soon: Start simple. Fancy tools won’t make you profitable; your skills will.
- Relying on alert services: Learning to trade independently is the only way to become a successful trader.
- Waiting for “hot” markets: The best time to learn is now. Markets go through cycles, and learning to trade in varying conditions will make you a better trader.
Essential Tools for Getting Started
You don’t need a $2,000-a-month Bloomberg terminal. Basic charting software and stock scanners will do, and you could consider using Day Trade Dash. Start with a simple laptop or desktop with one to three monitors.
Realistic Expectations for New Traders
Trading is risky, and my results aren’t typical. Discipline and a solid strategy are crucial. You also need some basic skills like computer proficiency and analytical thinking. Trading is great for those with flexible schedules, but even if you work a 9–5, dedicating an hour a day can make a huge difference.
Next Steps for Aspiring Traders
If you’re serious about day trading, start learning now. Download strategy guides, consider educational programs, and most importantly, start practicing. Remember, the more you learn, the better prepared you’ll be.
Final Thoughts
Day trading is a challenging but rewarding endeavor. It requires discipline, a solid strategy, and emotional control. My results aren’t typical, but by following these steps, you can build a strong foundation for your trading career. Start small, track your performance, and keep learning. If you want more tips and strategies, subscribe to my channel and check out my resources. Happy trading!
Everything You Need To Know To Start Day Trading in 2024
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Warrior Trading was founded by Ross Cameron in 2012. Today Warrior Trading is a thriving community of thousands of day traders learning to trade under the curriculum designed by Ross.
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Hey everyone, Ross Cameron here! Today wasn’t a wild card Friday, but it was still a very exciting day in the stock market. Three stocks soared over 100%, which is always nice to see. When I first sat down this morning and looked at the scanners on my phone, I noticed that low-price penny stocks were leading. Despite their appeal, I’ve learned to be cautious with these stocks throughout my years of day trading. They rarely contribute significantly to my total profit. Let’s dive into today’s recap and talk about my trades!
Low-Priced Stocks Performance Analysis
Over the years, I’ve observed that trading stocks under $2 accounts for less than 2% of my total profit. That’s less than $200,000 out of my $10 million in total profit. The data clearly shows I don’t do well with cheap stocks. Seeing low-priced stocks trending made me skeptical from the get-go.
SPEC Stock Analysis
The first stock, SPEC, had an interesting day. It began its explosive move after hours, jumping from 35 cents at around 5:00 PM to 85 cents. It pulled back slightly, going sideways until around 7:00 PM, before breaking out again. By 7:30 PM, it hit an after-hours high and later even broke over a dollar. It’s rare to see a stock perform like this after hours.
But at 4:00 AM, high-volume selling kicked in — 600,000 shares in just the first two minutes. Traders were ready to sell. With a float of 3 million shares and a history of nasty red days on its daily chart, it was clear this stock had a high chance of failing. I even took a screenshot for future reference, because such price behavior is something to avoid.
The catalyst for SPEC was an 8K filing about an agreement with a law firm to adjust legal fees. While the headline didn’t seem strong to me, I tend to trade based on price action rather than news. When the market opened, SPEC saw more selling. Some traders bought after hours hoping for a gap up, but many sold their shares early in the morning, causing the stock to plummet.
AREB Stock Analysis
The next stock, AREB, also saw significant movement. American Rebel Holdings announced a distribution agreement with the state of Connecticut, spiking its stock price. It went from 30 cents to 80 cents, mirroring SPEC’s movement. I traded AREB, taking a position at 70 cents, and saw it squeeze up to 85 cents. It later pulled back and hit resistance at the 200-day moving average.
I couldn’t ignore the 200 EMA resistance, which is a common hurdle for many stocks. Last week, KAVL managed to break through its 200 EMA, which was impressive, but typically, stocks struggle at this level. AREB was no exception.
KAVL Stock Update
Speaking of KAVL, today it experienced a big gap down due to a secondary offering priced at $1.53 for $6 million. This wasn’t unexpected as there was a shelf registration update last week. It serves as a reminder that even strong stocks can face sudden downward pressure.
NXL Stock Analysis
The third stock, NXL, surged unexpectedly. The volume spiked without any clear catalyst, going from $1.33 to $2.80 within a short time frame. This stock had been in play earlier this week, and today it gained from almost no volume to 5 million shares. The lack of a clear reason for the jump kept me cautious.
My Performance for the Day
In total, I locked up $1,662.84 in profit today. I traded two stocks: MINM and AREB. Initially, I felt cautious due to a close call the day before, but MINM surprised me. Despite its poor daily chart showing a history of false breakouts and red candles, it jumped from $3.50 to $4.80 quickly. I took advantage and made a good profit from this volatility.
Risk Management Discussion
I always emphasize risk management. Today, I was up $900 after six trades on MINM but noticed my average winners were tiny. I realized that one wrong move with excessive size could wipe out all my gains. Hence, I tread carefully, taking smaller positions and aiming for base hits rather than home runs.
Performance Metrics Comparison
As of June, I’m sitting at $258,000 in profit for the year. Breaking down my performance, here’s some key metrics:
- Average daily gain: $2,300 this year vs. $1,200 last year
- Accuracy: 62% this year vs. 64% last year
- Average winning trade: $624 this year vs. $413 last year
- Average losing trade: $613 this year vs. $500 last year
These metrics show how markets can vary, and while accuracy is slightly lower this year, the average daily gain is significantly higher. As always, my results are not typical!
Commission and Fees Analysis
Fees and commissions are a big deal in trading. Last year, I felt a lot of frustration seeing how much these costs ate into my profits. I paid $63,000 in ECN fees and another $20,000 in commissions, totaling $80,000. That’s a significant cut from my profits, and it made me rethink some of my trading strategies.
Broker Considerations
Over the years, I’ve tested various brokers, including E-Trade, Ameritrade, and Interactive Brokers. I keep returning to my current broker mainly for their reliable and fast platform. Yet, the high commission costs have me considering other options. It’s important to find a balance between a good platform and reasonable fees.
Closing Thoughts
Today was a good day, but remember, my results aren’t typical. Trading is risky, and it’s crucial to manage your risk. Consistency in day trading requires showing up every day and learning continuously. Thanks for reading. If you enjoyed this post, check out my YouTube channel. See you tomorrow!
https://www.youtube.com/watch?v=Dn3n63MEBVw
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Warrior Trading was founded by Ross Cameron in 2012, and is now a thriving community of thousands of traders. You can learn more about joining the Warrior Trading community here.
Why Asking For Help Is Missing The Key To Your Success
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Hey everyone, Ross Cameron here! This Friday was a wild card in the day trading world. I didn’t expect much, but it turned out to be a roller coaster ride. We had some intense action, including a 400% squeeze in under 30 minutes. I made a decent profit of $6,800 but could have made more if I had been a bit more daring. Given the cold streak earlier in the week and a red day yesterday, I played it safe and missed out on bigger gains.
[https://www.youtube.com/watch?v=lJfwVkpR1gk]
Breakdown of Today’s Trades
Today, I traded four different stocks and ended up green on only one. The key takeaway is the importance of good risk management. My losses were small because I was quick to exit trades I didn’t like. This approach left me with three small losses and one solid winner, resulting in a net profit of $6,800.
Trade #1: LGVN
I started with LGVN, even though it had burned me yesterday. It was moving up fast in the morning, so I thought it had potential. My first trade was a 10-second micro pullback at around $3.70. I bought 5,000 shares, which is my max position until I’m up over $1,000. The stock climbed to $3.90, putting me up $1,000 for a moment. However, it quickly bounced up and down, and I sold when it dipped back, resulting in a $344 loss. I avoided re-entering it, labeling it as garbage.
Trade #2: KAVL
Next, I traded KAVL, which hit my scanners at $1.65. Initially, I was cautious because there was no news and the stock recently registered to sell more shares. Remembering recent pop-and-drop patterns, I hesitated. But when it broke $1.80, I jumped in.
I bought my first micro pullback at $2.38, and then added more shares at $2.60, $2.75, and $2.80. The stock climbed to $3.25, and I took some profits. I added again on a micro pullback, and the stock went up to $4, where it halted. In pre-market action, it pulled back and retested levels. I re-entered and rode the wave up to a high of $7.93. This trade alone boosted me up $7600 for the day.
Other Trades
Today, I also traded VLCN, which ended in a loss. Interestingly, I didn’t trade CNSP, which moved well from $5 to over $8. REBN showed some movement but didn’t hold my interest. My cautious approach saved me from bigger losses but also made me miss some opportunities.
Week Summary
Overall, this week was a bit of a miss for me. Monday was a no-trade day, and Tuesday was a small green day. Wednesday and Thursday were red days, but Friday brought a $7,000 green day, ending the week on a high note. The disappointment from missing out on GameStop last Friday lingered throughout the week, but I had a change of perspective over the weekend.
June has been slow so far, but today’s wild card action gave me some hope. It’s important to focus on the technical aspects of day trading while keeping an eye on the fundamentals.
Expectations for Next Week
Looking ahead, GameStop has a shareholder meeting on Monday, which could bring some volatility. We’ll see how that plays out. My plan is to stay focused, manage my risk, and avoid overstaying my welcome in any trade. Sometimes, forming a bias can make you miss the action right in front of you. So, it’s essential to stay flexible and trade the price action as it unfolds.
With the right mindset and strategies, I hope to turn next week into a more profitable one. Thanks for tuning in, and I’ll see you back on Monday. Manage your risk, take it slow, and let’s aim for some solid trades next week.
Hope you enjoyed this week’s breakdown! Don’t forget to subscribe to my YouTube channel and hit that thumbs up. See you on Monday!
https://www.youtube.com/watch?v=lJfwVkpR1gk
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Warrior Trading was founded by Ross Cameron in 2012. Today Warrior Trading is a thriving community of thousands of day traders learning to trade under the curriculum designed by Ross.
Day Traders Often Ignore This One Topic At Their Peril
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Hey everyone, Ross here! In today’s post, I want to touch on the controversial and often illegal practice of naked short selling. This has been a hot topic recently, especially with stocks like AMC, GameStop, and Bed Bath & Beyond catching the public’s eye. Naked short selling takes a real toll on companies, their shareholders, employees, and the entire financial system. Most importantly, it affects individual retail traders like you and me who are simply trying to make a profit day trading in a market that seems unfairly skewed in favor of hedge funds and investment bankers. Now, let’s understand naked short selling better and see how it affects us all.
Understanding Short Selling vs. Naked Short Selling
First, let’s recap what traditional short selling is. Short selling involves borrowing shares of a stock and selling them at the current market price, hoping to buy them back later at a lower price. If it goes as planned, the trader profits from the difference.
So, if I short 1,000 shares at $20 and they drop to $2, I make $18,000. But if the price goes up, the losses can be infinite. The most I can gain is if the stock goes to zero, but if it rises to an extreme, like $500, I’m in deep trouble with a significant loss.
Naked short selling, on the other hand, short-circuits this process. The trader sells shares they haven’t even confirmed exist. They skip the borrowing step, which is not only risky but also illegal. Yet, due to the digital nature of trading, it’s frighteningly easy for big players to do it with the click of a button.
The Mechanics Behind Naked Short Selling
Here’s how it works. In a regular short sell, brokers ensure shares can be borrowed before the trader sells them. But in naked short selling, this verification is skipped, leading to the sale of non-existent shares. When firms fail to deliver the shares sold short, it creates a “failure to deliver” in market terms. This means that the shares sold were never actually in the market in the first place.
This unregulated selling pressure artificially drives down stock prices. When more shares are shorted than actually exist, it results in a downward spiral, as seen with stocks like GameStop. For instance, GameStop had 140% short interest at one point, meaning more shares were shorted than were available.
The Impact on Retail Traders and Companies
Naked short selling wreaks havoc on companies by driving their stock prices down to unsustainable levels. For companies, this results in reduced market stability and can even lead to bankruptcy. Shareholders see their investments plummet, and the broader financial system suffers from this artificial manipulation.
For day traders like us, it’s like battling a phantom. We’re out here trying to trade fairly, but naked short selling creates a playing field that’s anything but level. We can’t compete with these massive sell orders hitting the market, driving prices down, and squeezing out any potential profits from our day trades.
Regulatory Efforts and the Challenges
Regulatory bodies like the SEC have put measures in place, such as the uptick rule and Reg SHO, to curb naked short selling. However, enforcement remains a challenge. Hedge funds and investment banks find creative ways to get around these rules. For example, Goldman Sachs paid a $15 million settlement over allegations of using “auto-locate” buttons to facilitate naked shorting. But these penalties are mere pocket change to these giants compared to the profits they rake in.
The GameStop Saga
Let’s talk about the GameStop saga, which was a turning point. Retail traders banded together on platforms like Reddit to fight back against the naked short selling of GameStop, causing a short squeeze that rocketed the stock price from $3 to $500 in 2021. It was a rare win for the little guys, but the party didn’t last long. Regulatory actions and broker restrictions, like removing the buy button on trading apps, quickly followed, highlighting the systemic imbalances we face.
Conclusion
Naked short selling is a serious issue that undermines the integrity of financial markets. For day traders like us, it introduces an unfair element that makes it even harder to succeed in an already challenging field. While regulatory efforts are in place, effective enforcement remains a key concern. As retail traders, we need to stay informed and advocate for greater transparency and fairness in the markets.
If you found this post helpful, please share it with your friends and fellow traders. Also, remember to subscribe to my YouTube channel for more insights and updates on the financial markets. Happy trading!
Naked Short Selling on GameStop (Deep Dive)
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Day Traders Often Ignore This One Topic At Their Peril
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Hey everyone, Ross Cameron here! If you caught my recap yesterday, you know I was down $10,000 on GameStop after a mistimed day trade. I felt like the only person in the world who lost money on it, except, of course, the short sellers. The stock price shot up, but somehow, I managed to buy at the top and get stopped out not once but twice. Let’s talk more about what I learned from the experience!
Previous Day’s Performance
Yesterday was rough. I bought into GameStop at $44 a share, aiming to catch the breakout. Unfortunately, I got caught in a red candle and stopped out. Later, I bought in again at $47 after hours, and the same thing happened — another red candle took me out. In total, I lost about $9,000, mostly because I oversized my trades given the range.
To make matters worse, I watched the stock squeeze after hours. It went up to $48, then $52, $54, and all the way up to $68. I was left lamenting my soggy lettuce hands, regretting not holding onto my positions. Had I held, I could’ve been up $20,000 instead of being in the red.
Early Morning Observations
Despite the rough day, I couldn’t ignore GameStop. I kept an eye on its after-hours prices using Robinhood. Around 4:30 AM, I refreshed my phone and saw it hit $65. Well, at least it wasn’t skyrocketing to the $70s or $80s. By 6 AM, I noticed it was pulling back. And then, boom! It dropped all the way to the $20’s. What happened?
Earnings Report and Shelf Registration
The big news was that GameStop reported their Q1 earnings earlier than expected. Here’s a quick rundown:
- Earnings per share: Missed estimates by 3 cents, coming in at -12 cents.
- Revenue: Missed estimates by $113 million, clocking in at $881 million.
- Net loss: Trimmed a bit from the previous year, down to $32 million from $50 million.
- Cash and cash equivalents: Currently stand at $1 billion.
They also announced a shelf registration that allows them to sell 75 million shares at market value. If sold at current prices, this could raise billions but would dilute the current float by about 25%. That’s significant.
Concerns and Uncertainties
This move left me with mixed feelings. It feels like retail traders are getting the rug pulled from under them. Imagine buying shares, only to find out the company is flooding the market with more shares. The short interest is supposedly around 20%, which doesn’t seem enough to create a big squeeze. Plus, there’s this talk about 12 million option calls, which could force the purchase of 12 million shares. However, we don’t actually know if those shares are already owned or not.
Roaring Kitty’s Live Stream
Now, all eyes are on Roaring Kitty’s live stream at 12 PM. Here’s what I’m hoping to get out of it:
- A clear thesis: Why is GameStop a good buy right now?
- Stock valuation: Explain the rationale behind its current valuation.
- Short interest details: Is 20% short interest enough for a squeeze?
- Impact of option calls: What does buying 12 million shares mean for the market?
- Cash requirement: How is he planning to execute the calls needing $240 million in cash?
Trading Strategy Considerations
Given the uncertainty around GameStop potentially selling shares, I need to manage my risk carefully. I’ve noticed that buying dips seems better than chasing breakouts. Even though I lost money yesterday, I’m still green on the week, thanks to Monday’s successful trades.
Daily Trading Plan
So, here’s my game plan for today:
- Watch news at market open: Be ready for any new developments.
- Monitor momentum stocks: Look out for other stocks showing strong movements.
- Tune into Roaring Kitty’s live stream at noon: Listen in and analyze his insights.
- Evaluate trades based on live stream information: Adjust strategy accordingly.
Day trading can be a rollercoaster, but it’s all about learning and adjusting. I hope you enjoyed that recap, and happy trading!
GameStop NEWS Posted this Morning! GAME PLAN
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Warrior Trading was founded by Ross Cameron in 2012. Today Warrior Trading is a thriving community of thousands of day traders learning to trade under the curriculum designed by Ross.
You can learn more about me on RossCameron.com and Tirekickers.com
Check me out on Business Insider and Entrepreneur
Make sure to follow my YouTube Channel
Check me out on Facebook
Watch behind the scenes on Instagram
Stay connected with me on X
Hey everyone, Ross Cameron here! Tuesday morning brought an unexpected thrill for day traders as we witnessed an astonishing 700% surge in the stock MLGO. It’s hard not to be impressed by such a remarkable move. Yesterday, GameStop showed a significant jump of 80%, starting at $27–28 per share and climbing about $20 per share. While GameStop’s dollars-per-share increase was noteworthy, MLGO’s percentage rise steals the show.
MLGO’s Price Action
MLGO saw a massive spike, pushing the stock price up to $4.75. However, it didn’t follow the classic stair-stepping pattern that we traders prefer. Instead, MLGO exhibited big green candles followed by long periods of chop, making it challenging to trade effectively.
For example, the stock put in big green candles, followed by extensive choppy periods. Traders who missed the big green candles found themselves trading during the chop, which isn’t profitable. Choppy trading zones are just frustrating and can lead to losses, and MLGO had been doing this all day long.
Preferred Price Action Pattern
What I look for in day trading is a sustained, stair-stepping pattern. This pattern involves a pronounced move up, followed by a smaller pullback, and then another move higher. This predictable pattern, with orderly bull flags, makes trading more secure and predictable.
Here’s a breakdown of the ideal stair-stepping pattern:
- Big green candles
- A few small pullbacks
- Another leg higher
You can easily spot opportunities to buy on these pullbacks. Unfortunately, MLGO didn’t follow this clean pattern. Instead, it had erratic pops followed by choppy periods, making it difficult for traders to dial in and profit from.
First Trades on MLGO
I missed MLGO’s initial move from $2 to $5.50 early in the morning. I wasn’t at my desk at 4 a.m., but I wish I had been. By 9:15 a.m., I drew a support line based on previous price action, looking for ascending support. Here’s how my first trade unfolded:
- Bought at $5.02 off ascending support
- The price squeezed up to $5.40
- I took my profit as it seemed too risky to hold
After this initial trade, the stock showed a lot of chop. The price action became unpredictable, with sudden drops and brief pops.
Watching for Resumption After a Halt
When a stock halts, my strategy is to watch for a “dip and rip” pattern. This means looking for the price to dip after the resumption and then quickly rebound. Here’s how it played out with MLGO:
- Attempted to get in at $6.50 on the dip after the halt
- My 5,000 share order missed and the stock jumped to $7.70
- The stock then got choppy, with brief pops and drops
At one point, MLGO reached $8, a level of previous resistance. I attempted to buy on a dip off this support, but the price action remained unreliable and choppy.
Managing Choppy Trades and Emotion
Dealing with choppy stocks is a test of a trader’s patience and discipline. MLGO had some nasty jackknife candlestick patterns, where the price would sharply rise and then suddenly drop. These moves add stress and make the stock untrustworthy.
Despite these unpredictable moves, MLGO impressed me by rallying back up. Traders need to exercise caution and manage their emotions during such volatile sessions.
Consistency and Discipline in Day Trading
At the end of the day, I was up $1,000. It’s not a massive win, but it’s a positive return. Consistency and managing risk are key. I traded three stocks and ended in the green on all three, which means I’ve done my job well.
To give you a quick recap, here’s my approach to day trading and risk management:
- Start each day at zero with a maximum of 5,000 shares
- Aim for a daily profit target of $5,000
- Once up $1,000, increase position size to scale profits
- If I go back to flat, reduce position size again
- Use small steps to cap downside risk while allowing upside growth
Having a disciplined approach is crucial. For example, if my first trade goes bad with a large position, the day’s goal can quickly become unattainable. Starting with smaller positions mitigates that risk. Once I’ve built a cushion, I can trade more aggressively.
Dealing with the fear of missing out (FOMO) is also essential. There will always be other opportunities. Today’s MLGO move might have been missed by some, but another day will bring another chance. It’s important to avoid chasing trades out of desperation.
Final Thoughts
Despite MLGO going up nearly 700%, it was a challenging stock to trade with its erratic and choppy price action. Managing risk and staying disciplined prevented significant losses. Day trading is all about hitting base hits consistently. When a stock doesn’t connect as expected, it’s crucial to walk away with a small profit rather than a big loss.
If you want to watch me trade live, join me for a free trial. Remember, trading is risky, and results aren’t always typical. Take it slow, manage your risk, and stay tuned for future trading insights!
After GameStop Yesterday, an 850% Short Squeeze Today!
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Warrior Trading was founded by Ross Cameron in 2012, and is now a thriving community of thousands of traders. You can learn more about joining the Warrior Trading community here.
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Hey everyone, Ross here! In today’s blog, I’m going to walk you through how to use MACD (Moving Average Convergence Divergence) in your day trading. My goal is to help you avoid false breakouts, focus on trading the front side of the move, and prevent over-trading when the price action becomes congested. Regardless of whether you trade stocks, Forex, futures, or cryptocurrency, MACD is a well-respected indicator that forms part of the universal language of technical analysis in financial markets.
Using MACD in Trading
Avoiding False Breakouts
False breakouts occur when the price moves beyond a support or resistance level but doesn’t continue in the intended direction. These can lead to losses if you enter trades based on them. MACD helps identify genuine breakouts and avoid false ones. By comparing its fast and slow-moving averages, it can signal the beginning of a new trend or warn when the momentum is failing.
Trading the Front Side of the Move
The “front side” of the move is the initial upward trend following a breakout, while the “back side” is the period when the price starts to stagnate or decline. Trading on the front side is more profitable as it captures the price momentum at its peak. MACD assists by showing clear bullish and bearish signals, helping you capitalize on the strongest part of the move and avoid the congested price action on the back side.
MACD as a Universal Indicator
MACD’s versatility makes it applicable across various markets, including stocks, Forex, futures, and crypto. It provides a standardized method to analyze price movements, making it an essential tool for day traders everywhere.
Case Study: Recent Trade with MACD
Let’s look at a recent trade where I successfully used MACD to lock in $5,000 profit. The stock was showing sideways movement until breaking news sparked a rally.
I use the 1-minute and 5-minute charts for my entries and exits. When news broke, the stock popped up on my scanners. I wasn’t relying on MACD initially because breaking news tends to spike prices. But a few minutes in, I started focusing on MACD to confirm my trading decisions.
MACD showed an initial spike (divergence) and then a pullback (convergence). When MACD crossed back over, I knew it was a signal to enter. My exit was timed by watching for MACD convergence again, ensuring I didn’t overstay the move.
Using MACD to guide my entry and exit points, I managed to secure $5,000 in profit. The indicator’s reliability in confirming trends helped me avoid false breakouts and trade confidently.
Overtrading and Knowing When to Walk Away
Overstaying your welcome in a trade is a common issue. MACD can help you identify when to exit by showing when the price momentum is slowing or reversing. When MACD crosses against your position, it’s often a cue to get out.
Time Frames and MACD
As an active day trader, I prefer the 1-minute and 5-minute charts. However, MACD works across all time frames. Whether you’re a swing trader or position trader, you can use MACD effectively on your relevant chart time frame.
Understanding MACD
MACD stands for Moving Average Convergence Divergence. It measures the difference between fast and slow-moving averages. When moving averages diverge, it signals strong momentum; when they converge, it indicates weakening momentum or a possible trend reversal.
Moving average crossovers are critical in technical analysis. They signal a significant change in trend. For day traders, these crossovers can be observed in shorter time frames to make timely decisions.
Foundation: Moving Averages
To grasp MACD fully, understanding moving averages is essential. Imagine a stock price slowly climbing, then pulling back before pushing higher. During this move, the moving averages trail below the price, indicating support areas.
A Simple Moving Average (SMA) calculates the average price over a set period, while an Exponential Moving Average (EMA) weights recent prices more heavily for quicker response to price changes. In day trading, EMAs are preferred for their sensitivity to price movements.
MACD Settings
Keeping MACD on its default settings (Fast Length: 12, Slow Length: 26, Signal Length: 9) ensures you see the same signals as other traders. Standard settings are crucial for avoiding confusion and ensuring you make decisions based on widely accepted signals.
Changing MACD settings can lead to different signals, potentially isolating you from the market consensus. Stick with the standard settings to trade in sync with others.
Breaking News Trade Example (SGBX)
When SGBX popped up on my scanners due to breaking news, I began watching it closely. The initial price spike was expected, so I didn’t rely heavily on MACD right away.
A few minutes into the trade, MACD began providing useful signals. The blue line crossed above the signal line, and moving averages diverged, indicating strong momentum. When the MACD lines converged, it was a clear signal to exit.
Using MACD, I focused on trading the front side of the move and avoided overtrading. Trading on the front side maximizes profit by capturing the strongest momentum, while avoiding trades on the back side minimizes risk.
Another Trade Example (BNF)
In another trade with BNF, the stock squeezed up without any news. MACD crossed over positively, signaling a strong upward trend.
I bought the dips as long as MACD remained open, signaling continued momentum. When MACD crossed against the position, I stopped trading, ensuring I didn’t get caught in a false breakout.
Visually Enhancing MACD on the Chart
Sometimes, dragging and dropping MACD directly onto the chart enhances visibility. Customizing the colors and boldness can make it easier to interpret the signals, especially for beginners.
Consistent Use of MACD
Consistency is key. Following MACD signals on every trade improves accuracy and trading outcomes. It could be a good idea to use it consistently for a few weeks to see if it helps you avoid false breakouts and improve your overall trading strategy.
MACD and the Bear Market of 2022
In 2022, the bear market was tough. Nearly a 30% pullback made trading challenging. MACD helped me avoid false breakouts and improve my trade accuracy during this period. It’s a tool I’ve relied on ever since.
Closing Thoughts
Using MACD in your day trading can help you avoid false breakouts, focus on the most profitable parts of the move, and prevent overtrading. Stick to standard settings and use it consistently across your trades. I hope you found this blog helpful, and stay tuned for the next one!
How to use the MACD Indicator (with ZERO experience)
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Warrior Trading was founded by Ross Cameron in 2012, and is now a thriving community of thousands of traders. You can learn more about joining the Warrior Trading community here.
Check out my new book, How To Day Trade: The Plain Truth.
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Hey everyone, Ross Cameron here! It’s been a wild ride in the market today, folks. Meme stocks are back in play, and today felt like a golden opportunity. Let’s dive into what made this day stand out and how I navigated the ups and downs of the market.
Meme Stocks Making a Comeback
Seeing meme stocks roar back to life fills me with both excitement and caution. These stocks often show the cleanest moves at the beginning of their runs before becoming choppy and crowded. It’s easy to overtrade and give back profits if you’re not careful. Today, I knew I had to strike while the iron was hot.
Yesterday, I was a bit disappointed that I didn’t capitalize on some moves. I stuck to my discipline, which kept me in the green, even though I missed out on big wins. This cautious approach stemmed from a big loss I faced last Monday, which made me wary of going deep in the red again. Although I played conservatively, it paid off by avoiding risky trades.
GameStop ($GME) Analysis
Early Pre-Market Activity
This morning, I woke up at 4:15 AM and just out of curiosity, checked the market. GameStop was already climbing into the 40s — a good sign. With decent volume early in the day, I expected more movement when retail traders came online at 7:00 AM.
The Catalyst
Roaring Kitty posted a meme on Twitter, and like wildfire, GameStop took off. With a short interest around 20%, equivalent to about 50 million shares shorted, the pressure was on. Every dollar increase meant substantial losses for short sellers, adding fuel to the fire.
The Squeeze at 7 AM
At 7 AM, when retail brokers come online, GameStop saw a significant pop. I waited for this moment to make my first move. I got in as it started to pull away, aiming to capitalize on the initial squeeze.
My First Trade Entry
I bought my first shares at around $7.96 and added as it squeezed up. I was quickly up $2,500 to $2,700. It was a solid trade, or so I thought until my order was rejected.
My sell order got stuck. I couldn’t cancel or sell. I contacted my broker’s service desk immediately. They confirmed a routing issue with certain routes being broken.
Eventually, my broker manually sold my shares at $64, netting me $16,000. Although the stock went higher, I was relieved to exit. This unexpected issue made it a nerve-wracking morning.
Adjustments and Continued Trading
To adapt to the routing issues, I changed my hotkeys to use routes that were working. Testing with one share confirmed that my orders were now going through.
I continued to trade GameStop, though more cautiously. After giving back some of my gains on trades around the $80 mark, I made a few smaller trades.
Once GameStop halted up, I turned my attention to AMC, which was trading in tandem. I bought at $8.87, and after a couple of halts up, I netted a nice profit of around $1,700 on AMC.
CTNT hit my scanners, and seeing the momentum, I jumped in. From $2 to $6.50, it was a wild ride. Despite the news of a stock offering, the stock soared. I took my profit off the table, making another significant gain.
Risk Management Considerations
Today, the volatility justified trading stocks with higher floats than usual. Meme stocks like GameStop and AMC are thickly traded but offered enough movement to make it worthwhile.
With no leverage available on GameStop, I traded within my cash balance, which limited risk. Smaller positions helped manage emotional trading, especially given the day’s volatility.
Today’s roller coaster required emotional control. High volatility means high risk and high reward. Adjusting position sizes and sticking to my strategy helped navigate the swings.
Technical Issues and Platform Limitations
My experience with the stuck order underscored the importance of reliable tech. Technical failures can lead to significant losses, making it essential to have backup plans.
If you’re offline and the market moves against you, the repercussions can be severe. On days with high volume and volatility, trade smaller to mitigate these risks.
Performance Review
All said and done, I finished the day with a profit of +21,003! The swings were nerve-wracking, but the strategy paid off. One big day can dramatically change your monthly performance. Today’s gains have given a substantial boost, reinforcing the importance of showing up every day.
Today’s lesson? Stay adaptable and keep your emotions in check. The market can be unpredictable, but preparation and discipline are key.
Final Thoughts
Today was a roller coaster, but I’m grateful for the gains and the lessons learned. Trading is risky, and my results aren’t typical. As always, remember to manage your risk and trade smart. If you’re interested in learning more, join our trading community for insights, charts, scanners, and more. Thanks, and happy trading!
+$21k Day Trading GameStop, AMC & Meme Stocks
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Warrior Trading was founded by Ross Cameron in 2012, and is now a thriving community of thousands of traders. You can learn more about joining the Warrior Trading community here.
Check out my new book, How To Day Trade: The Plain Truth.
You can find me on Apple Podcasts.
Make sure to follow my YouTube Channel
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Hey everyone, Ross Cameron here! Today marked a pivotal shift in my week — an exhilarating green day after a series of challenging trading sessions. Trading five stocks, I managed to finish green on four of them — a stark contrast to my earlier trades in the week. This post is a deep dive into today’s trades, the strategies that led to success, and the lessons learned from the day’s activities.
A Breakthrough with REBN: My Main Score
REBN, surging 102% on remarkable news, was by far my standout stock. The trading day kicked off with breaking news released at 8:30 am, which triggered my first investment close to $1.90. I was cautious, starting with smaller amounts given the volatility of the past days.
As REBN’s stock price accelerated, peaking over the $2 mark, I seized the opportunity to glean profits. I maintained a strategy of adding to my position on pullbacks, still keeping my size modest. But as the market’s excitement began to ebb, so did REBN’s predictability. The appearance of topping tails and large red candles were my cues to exit. Despite the choppy end, REBN was a valuable player, contributing significantly to my portfolio today.
Technical indicators also favored my decisions. With REBN breaking the 200-day moving average and facing no substantial resistance ahead, the setup was almost textbook — until the market dynamics shifted, reminding me that no trend is entirely predictable.
Other Noteworthy Trades of the Day
SLNH provided a robust start to my trading at 8:00 am. With news breaking right at the hour, I entered at approximately $3.14. SLNH’s price action was clean and offered a seamless climb to around $3.80. My exits ranged from $3.40 to $3.80, allowing me to bank $1,400 early in the session.
Following the trend set by earlier trades, TIVC came into the limelight with fresh news at 9:00 am. The price movement from around $1.80 to $2.60 was swift, and I managed to capture gains efficiently, adding another $1,586 to my tally. However, TC couldn’t sustain its peak levels, a common theme in such volatile settings.
Unfortunately, not all was smooth. IVP, which reported a reverse split, initially spiked from $3.60 to highs near $4.93. I entered at $4.50, but the stock quickly reversed these gains. This trade ended in the red, costing me $1,500 — a stark reminder of the market’s volatility.
Reflecting on the Differences from Monday and Tuesday
The beginning of the week was lackluster, with no compelling stocks to trade in the pre-market sessions. This lack highlighted today’s success, driven by clearly strong leaders like REBN, SLNH, and TIVC, which were evident from the get-go. Unlike the previous days, I adhered strictly to my discipline, avoiding the temptation to overtrade.
Lessons from This Week: The Importance of Discipline and Obvious Setups
This week was a mixed bag, but it emphasized several crucial points:
- Target obvious setups: Always look for stocks that every trader has their eyes on. The more obvious the play, the higher the chance of a successful trade.
- Capitalize, but conserve: Knowing when to walk away is as important as knowing when to enter. Tuesday’s decision to stop trading was vital, despite the market’s slow pace.
- Handle drawdowns wisely: After a prosperous April, this week’s initial losses were disheartening. However, employing strategies like meditation helped maintain focus and avoid a downward spiral.
Stepping Forward: Metrics, Mindset, and Mastery
Today’s trades will boost my metrics significantly, but it’s just a start. My trading journey is about consistent application of learned lessons and measured risk-taking. I’ll continue to refine my strategies, ensuring each trade aligns well with both market conditions and my personal trading philosophy.
As the week progresses, my aim is to build on today’s success, staying alert to both opportunities and pitfalls. Remaining disciplined, patient, and focused on quality setups will be my guiding principles.
Recapturing the essence of what made today a success will be crucial for future sessions. Each trading day offers lessons, and today was a testament to the resilience and adaptability needed in the fast-paced world of day trading. Thanks for reading, and happy trading!
Shares of Reborn Coffee ($REBN) went up over 100% in 60 Minutes!
Stay Connected
Warrior Trading was founded by Ross Cameron in 2012, and is now a thriving community of thousands of traders. You can learn more about joining the Warrior Trading community here.
Check out my new, How To Day Trade: The Plain Truth.
You can find me on Apple Podcasts.
Make sure to follow my YouTube Channel
Check me out of Facebook
Watch behind the scenes on Instagram
Stay connected with me on X