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Being Aggressive, Managing Risk And Trading The Market You're In

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Being Aggressive, Managing Risk And Trading The Market You're In

I think there’s been enough trading days in the new year to officially say that 2019 is off to a fairly solid start. I’m on a 12-day streak where I haven’t finished in the red and, just this Wednesday, I banked $6,500 on 3 trades.

However, along with the good comes the not-so-good, or at least the stuff that could have went better. The market hasn’t necessarily been on fire and quality set up have been a little scarce. That’s why I can’t really call my 12-day rally a “green streak,” because on Tuesday I decided to just sit on my hands for lack of any A+ setups. Up to that point, my profits had been slowly declining in the month, starting at a $2,000 day, to a $1,700 day down to just $650 this past Monday.

Then, Wednesday happened. And although I’m happy with coming away with a little more than $6,500, there was a point I could have rung the register for nearly $9k. What’s more, the perfect trader inside my head is still thinking about how Wednesday could have been A $40k, or even $50k day.

But, we’re not perfect, and January has simply been one of those months that you have to embrace the market you’re in, not the one you want.

Wednesday, like most of the first seven trading days of the year, just didn’t generate anything on my premarket gap scanner, which looks for stocks up 20 percent or more from their previous close. The candidates we’re either too expensive, didn’t have the right volume, or just seemed too crowded by the time the bell rang.

I did take a trade in one of the gappers later in the morning, SAExploration Holdings Inc. (NASDAQ: SAEX), but I started with a stock I missed a run on in Tuesday’s session, CLPS Inc. (NASDAQ: CLPS). CLPS had solid levels and I watched it as the open got underway. I jumped in once it started spiking up from $6.20, buying at at $6.38, $6.49, $6.88, and I wanted to keep adding.

Unfortunately, because of the stock’s volatility, CLPS is listed as restricted to cash accounts only. That means no margin. And, since I cleared my profits for 2018, I only have about $46,000 in my account. So even though I was in a great position to be aggressive, as CLPS hit a high just over $7 and I had gotten in early enough to add as it climbed, I just didn’t the buying power and I ended up selling right near the top for $2,600.

That’s when SAEX popped up on my high-of-day momentum scanner. It climbing and approaching a circuit-breaker halt, which generally means it was going to keep climbing once trading had resumed. I got filled for 1200 just below $3, and then kept adding at around the $3 level and again at $3.70. I wound up in a 15,000 share position. I got out once it started retreating for $6,200 in profits.

This ended up just being a really solid trade that, if I had really pressed my luck, could have easily been a $15k winner. Because, after the stock sold off below $3.60 and I had exited, it rallied again back up to $4.

My last trade in OpGen Inc. (NYSE: OPGN) was similar to SAEX. But in this case, I pressed my luck and lost nearly $24k.

Like SAEX, I hopped into OPGN at $1.90 just before a halt, continued buying once it resumed and got up to a total of 15,000 shares. It broke just over $2 before it collapsed and I had to sell out around $1.80.

An aggressive day, and one that sort of cut both ways. I talked about it in my video recap, but putting my foot on the gas was the reason I was able to make those first two trades as successful as they were. Even though that meant I didn’t hit any grand slams, I came out ahead by remaining consistent with the type of market it wss and sticking with appropriate risk management techniques.

Posted-In: Warrior TradingEducation General

 

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