What's up everybody? All right! Time for a midday market recap. Today's Friday Happy Friday Everyone So I am excited that we're wrapping up the week and I've hit my goal with a small account. Today is small account day four and I made another hundred and fifty four dollars today. So that means I'm finishing the week up a hundred and six percent on this small account which is six hundred and eighteen dollars and fifty one cents in profit from my starting balance of five hundred and eighty three dollars.

So not bad. My goal was to get to a thousand by the end of the week and I'm gonna open on Monday with twelve hundred dollars. So I'm two hundred dollars ahead of my my self a self-imposed target which you know I am my biggest critic and I am definitely very competitive with myself I Want to do better than I did last time? So you know my goal this week was to get to $1,000 Certainly by next week I want to be at 2,000 That means I need to be 250 dollars a day. You know, more or less and maybe I'll have a loss here and there.

So really, $200 250 a day is going to be the target next week. I Actually haven't been able to break 200 any day this week, so that may be a little too aggressive. but I you know I think if I have good setups I'll be able to do it. So let me show you guys my P&L for today you can see here this is on my my shirt trader account so one hundred fifty four dollars and Fifty four cents.

Now the realized profit was $219 before Commission's Commission's today were $65 so you know that was kind of the the issue. I mean I did break 200 but you know, not after Commission So why were commissioned $65 and you know more than 30% of my profits? Well today I I traded a little more than usual and I got a little bit more aggressive and a stock that I got a little more aggressive on what? Well I got I got a little aggressive on on two setups, but really the one that I got most aggressive on in the small account was s KLN. So let's pull up the Skl and chart and I'll show you guys the the thought process on this one. This stock went from 260 up to 340 in a matter of about 15 minutes.

So you know that's a that's a pretty significant move. It's like a 30 percent move in 15 minutes. that's big and that right there is an opportunity as a day trader that's an opportunity to capitalize on volatility and generate a profit. So someone in the chat room called it out.

They're like hey, check out Skl and it's popping up and I looked at it and I was like yes indeed it is I like the look of that so let's see Lee pull this back I Got in this for the break of three dollars. it was already up from 260 and it was up to 280 and I looked at it and I was like okay well you know what if this can break over three dollars, it's gonna start to look really good on the daily chart for a breakout and also kind of keep in mind today we had a big runner which was eat erm and that was sort of the context of trading today that we had this really big runner. but the problem with it and I'll show you guys the chart here. The problem with ETR em is that it made the move pre market.

The move from five dollars up to seven dollars was pre market yesterday. It was pretty active as well, but not easy to trade. It was selling off most of the day yesterday, so you know a big surge right out of the gates and then fading the rest of the day. So when we have a stock that makes a big move like this, we often get sympathy.

momentum. and sympathy. momentum is when you have a stock may be in a similar sector or just a similarly priced stock with a low float that starts to squeeze up because traders are like I missed eat erm but I want to get a piece of something else now I didn't trade eat erm in my shirt trader account because sure trader restricted it to one to one margin. so within a thousand dollar balance I could really only take about a hundred twenty-five shares of that stock.

It's not even worth trading I mean I just it doesn't even. it's just not something I'm even going to touch so didn't trade it with sure trader and I just figured you know I'll wait for the first sympathy stock. the first stock that maybe start spiking up. you know, on sympathy to this big move here.

Ah neat. Erm. So when I saw SK land popping up I was like this might be the one. This is a stock that is a former runner.

Number one, it's a stock that number two has a low flow. So number three, what's the catalyst? Well, that's kind of the issue. It didn't have a standalone catalyst aside from a technical breakout on the daily chart, but it was breaking out on the daily chart. Now one of the things that I will talk about once: I Get my 2016 account statements are all my trades from 2016 and one of the things I've already noticed looking through the reports that I have on trader view is that almost 90% of the stocks that I was trading were trading on very high relative volume.

High relative volume is typically the result of a catalyst, but in any case, relative volume tells us that a lot of traders are trading the stock. You've got average volume. Which is here, an average volume is is is relative. It's what's average for Apple is not average for IBM So each stock has its own relative volume.

Its average relative volume. So if it's trading above that, it's trading high on that particular day. You know for that stock. Every almost every stock I trade in 2016 was having a high volume day relative to what's normal for that company.

That's that's important. Traders like myself day traders like all of you guys, we're looking for stocks with high volume. We're looking for stocks that people are interested in. so my process each day for finding these is of course using the scanners and looking through those scanners.

Now the first thing I can do is is filter out all the stocks as I know I don't care about I'm going to filter out IBM I'm going to filter out Apple Facebook Those are stocks that you can't really day trade. They're not easy to day trade, so the easiest way for me to filter those out is to use a float filter. So first, I only look at stocks with a float of under a hundred million shares. so everything else is gone.

So that essentially weeds out in no, it's 80% of them stocks on the market you 7,000 Now we're down to maybe a thousand or 500 or something like that. and then we don't. We go and add another filter. which is does this stock have high relative volume? Alright, so if it has high relative volume now it's going to filter it down even more.

so when you look at stocks with a float of under 100 million shares that have two times their relative volume. So this is average and they're trading here on the day now, your list is even smaller. Now we go through that list and we try to figure out okay of these stocks, which ones have the most volume, which ones have the lowest float, or which ones have the best daily chart and almost any on any given day. I've narrowed that list down to about 25 stocks and I can go through those and choose four or five that I think have potential in S.

KLN Today was one of those stocks. It came up on my scanners as having low flow and spiking up. It was moving up very quickly so I jumped in it at 3 or sorry to 94 the break of three dollars. Now on this one, excuse me I only took 500 shares I didn't get really aggressive because I kind of felt like well usually I take my first trade sometime between 9:30 and 10:00 So to be taking my first trade at 10:15 it kind of already tells me that maybe I'm not on today or that the markets just slow and it is Friday after all.

so I was like I'm going to just start a little smaller I want to end the week strong and not do anything stupid. so 500 shares in at 290 we pop up to a high of 310 and then we squeeze up to a high of 317. Actually, we go up as high as see my mouse is stuck here. we go up as high as 323.

so you know a quick almost a quick 10 percent profit Right up now I sold as it came back down and locked in about 15 cents on 500 shares. So about $75 in profit and I was like okay so I had one entry that's $5 Commission and then I sold one half. So I sold 250 shares and then I sold another 250 shares. That's fifteen dollars in commission just on that trade between my one entry and my two exits $15 plus the ECM fees.

So it's about a twenty dollar commission and that meant after that trade, I only had about fifty dollars a profit. You know there was a good set up, but only fifty dollars which is the tough thing. So I was like okay, whatever, that's fine, it's you know, a little a little something. maybe I'll get back in now on the candle at 10:18 I Decided to get back in for the first one minute candle to make a new high and this is a setup I use all the time.

So you've got the squeeze up the first red candle now the first green candle. The first cable to make a new high is my entry stop is at the low, but on this one I decided to take a thousand shares I was like okay, this thing has momentum, it's moving I'm gonna jump in and now I've got a little bit of a cushion I've got a fifty dollar cushion so I jumped in but now you know it spikes from let's see from 18 I Got in at 19, it spiked up to a high of 32 and I was like sweet I'm up a hundred bucks Awesome! I put my order up on the ask to sell I didn't get filled on the ask and I started thinking this feels a little a little risky because in the next candle we drop down to 316 and I went from being up a hundred to down thirty I said you know what I'm just gonna pop out of this thing I got out at 322 for 30 cents. Alright for 3 cents. So 3/7 on a thousand shares is 30 bucks.

But here's the problem: I Bought with one order of 500 shares and then I pressed it a second time because I was not sure I wanted to do the thousand at first and then I decided to do it. So one entry, two entries and then I tried to put out in order to sell some on the ask, some sold, but not the whole thing so there's five bucks and then I put out another order sell the rest $20 I really only made about $10 on that trade actually I think I made $8 you know? So I was risking like 100 bucks and I only made $8 she's You know it's better to be breakeven than to read, but it's not exactly what I wanted. All right. So I ended up.

You know, scalping this a couple times. You can see that my total profit is the first $70 plus 35 or whatever it is is a hundred and seven dollars. but after commissions, it was only about fifty bucks. 60 bucks maybe.

So that was kind of disappointing and exemplified why you have to be really mindful about how much you trade. The next setup was GEVO which typically I don't like trading the stock and they just did a reverse split. So as you guys know, I talked about float a lot. Every stock has a float.

Now when a company does their initial public offering, when they do an IPO they're selling shares onto the market. So let's say a stock does a 10 million share. IPO 10 million shares were selling onto the market. and let's say they price it at $10 Well, when they sell those 10 million shares of $10 they've raised a hundred million dollars for the company.

So that's good. That's that's a good fundraiser, right? Raising capital. They can reinvest that in the company. and you know, infrastructure, whatever.

Well, from that point forward, every single day that we're trading, we're trading out of that pool of 10 million shares. 10 million shares is a fixed pool. So when I buy and sell them, trading out of that same pool of shares. Well, at anytime a company can do one of three things.

The first they can do is a secondary offering. It's like they have their first IPO and then they do a second IPO. But it's not the initial. Now it's a secondary.

They do the secondary. So they let's say they decide to raise and they want to raise another hundred million dollars. So they sell another 10 million shares onto the open market. So you know they raise the money, They sell the shares, and now the float has gone from 10 million to 20 million.

So a secondary offering dilutes the value of the company because you're releasing more of it onto the market and usually the price goes down. It's not usually good for long term investors. It's something we see a lot with small caps. On the other hand, the company could do a share buyback program.

You'll most never see this with small caps because small cap companies don't have the money to do a share buyback. But a share buyback is something that Apple did not too long ago. It's when they decide to actually pull some of the float out and buy it back. We're going to buy back some of those shares that we released.

When they do that the float gets smaller. Alright, so we know that stocks with floats under 100 million shares are more volatile. They make bigger moves. So it's possible that a heavy float stock can go down and float due to share buybacks and that a low float stock can go up and float due to secondary offerings.

Okay, so those are the two things that we see fairly often. Now, a third thing that we see are splits. A stock split. So you guys know about Apple Doing the 7 to 1 stock split.

The stock was priced at $700 They did a 7 to 1 stock split and it dropped the price from 700 down to $100 per share. So if you were holding a thousand shares at $700 you're now holding 7 thousand shares at $7 It's a split. Doesn't actually change how much you own, but it does change the float. It changes the number of shares in that pool.

And obviously it changes the price. Well, NYC and Nasdaq require all companies to maintain a minimum price of $1 per share. So if a stock starts dropping down below $1 they can get a warning which is hey, you need to get your stock back up above $1 and you know that this is the time where you have to do it by. If you don't do it, you're going to get delisted.

You're gonna get pulled off the exchange. That's not good for for any company, right? That's not good for a stock. So they want to get their stock back up above $1 They can do that by doing a reverse split. So let's say the stock is priced at $0.10 They can do a ten-to-one reverse split where if you own 10,000 shares at $0.10 now you own a thousand at $1 Ok, so they're reverse splitting or going up well GEVO just did a 20 to 1 I believe it was 20 to 1 reverse split.

so it was trading below $1 They do the reverse split and now it's trading above $1 It's actually you know, open today at $4 or whatever. Now, a lot of times when we see these companies do reverse splits, they end up squeezing kind of on the day of the split or within a couple days. they just sort of make this big move. I think maybe traders are just sort of all of a sudden see this new stock and they're like it's a low float stock.

and guess what? The float when you do that reverse split, those 10,000 shares turned into a thousand. so the float got smaller. all right. So now these stocks are even more volatile.

They can make even faster moves and this is a stock GEVO that went from 350 today up to 535. That's a big move. So I jumped in on this one and with a thousand shares and I grabbed 11 cents of profit which you know wasn't the biggest move ever. You could see this is the spike here.

it spiked up and came all the way back down and you can see my profit there. 112 dollars. so you know I'm happy with that. It was good.

You know, decent trade and you can see here how if you look at the chart sort of the big picture has just been getting weaker and weaker and weaker. I'll fullscreen this, it's just been selling off. now. Another stock that does reverse splits is GBS N and you could see GBS n o Actually this is really interesting.

Did they did they switch to OTC because now I can't this charts not right? So well in any case, they're another stock that did that's done a lot of reverse splits and the price just gets lower and lower and lower. So if we go back to GEVO you can see that every time they do the reverse split the stock pops back up. You see a couple of these pops here and if you go back far enough you realize that you know Sometimes people ask me, is it true that GEVO used to be priced at a hundred and three dollars and the answer is no. It's because of all the reverse splits that it looks like it was priced that high at one point GBS I mean you can see look I mean you could ask At one point was this price to eight thousand dollars a share because that's what it shows here.

But the answer is no, it wasn't It's the reverse splits that they keep doing that make that price make it seem like it was priced higher. So this is something that's a little bit. you know it's kind of a weird thing, the stock that the companies are able to do. and you know we do see it fairly often in the small caps.

but I don't usually trade stocks below $1 anyways. So when they pop back up above $1 you know it because if it's from a reverse split or something else and then I'll take the trade. Alright guys, so um, here we are happy. Friday Burning the celebratory candle.

There we go. We've got our eighty-five diesel. The smell of a 1985 diesel engine smells good. Smells like exhaust.

It's great smell. So I'm feeling good about the week. 106 percent gain. you know, 618 dollars? That's not bad.

618 dollars a week? I Mean who wouldn't be happy with that? The incredible thing is that I did it with only 583 dollars starting balance. so it's a good week. Next week we'll see what I can do. My target for the end of the month end of January is at least four thousand dollars, so you know that means next week.

I mean I'm up at a thousand. So I've got three thousand to go. So a thousand a week for the next three weeks is fine. probably next week.

I think I could beat four thousand. I Actually I really do I think next week might be in the seven hundred to a thousand range. but then as my account gets a little bit bigger, I'm gonna have more leverage and that's what I talked about yesterday. The fact that you know with every dollar that I make right now, I'm getting an extra six dollars in buying power.

So you know today, as of right now, I've got seven thousand, one hundred and sixty dollars in buying power and I can take two thousand shares of a three dollar stock. so that's pretty good. Now the only risk is that if I lose 20 cents, I'm gonna lose 200 bucks and I'll lose. You know, twelve hundred dollars in buying power.

So as it goes up, it can also come back down very quickly. And so until I have I think I need a minimum of about 10,000 dollars in buying power. Twelve ten, twelve thousand to trade pretty much the way I trade On any given day, we'll look at my trades. when I do my recap for the month or for the 2017 2016 trading year, we'll see what my average position size was.

I'm just looking right now, looks like my average position size for the last few months has been about $26,000 per trade. you know, so? but that's with an average share size of 7,000 shares. you know? So, I'm not going to Oh Actually sorry, that's the wrong call I think it's it's still probably somewhere around there. Let's say, average share size.

It's actually 5,000 shares. But you know, in any case, I'm not going to be able to trade with that kind of size in the first few weeks or probably even the first month. And even if I had the buying power, I wouldn't want to risk the 20 or 30 cent loss on that kind of size because it's going to, you know, knock me down too far. and I'm not going to be able to afford it.

so you know for right now, I'll keep keep myself a little bit more moderate. But I think once I have ten, fifteen thousand dollars of buying power, I'll feel like I can start to be a little more aggressive. and once I get up to twenty twenty-five thousand in buying power I'll feel pretty pretty confident. So remember, as soon as I have you know, four thousand dollars in cash times six, right? Four times six, my buying power is really going up.

So you know four thousand, four times six will be twenty four thousand and buying power five thousand will be thirty thousand and buying power. So by the end of the month, really, I'll be able to trade almost the same as I was trading last year in my Speed Trader account. The challenge is all about building the account. in the first few weeks and I knew that that would be the hardest part.

The hardest part is the first couple weeks and then once you have that buffer then you've got some room to work. So in a lot of ways I've been fortunate the first. Let's see so far this week in my speed my shirt trader count. I've traded Let's see one, two three four five, six seven eight.

Let's see eight, nine, ten eleven eleven trades and I haven't had one loser. I Mean that's a little bit of luck to be on an eleven trade hot streak, but you know I've been very, very specific and very very. You know picky about what I'm willing to trade I haven't been trading as much I mean only eleven trades? it's you know not haven't been taking a lot of trades I've been really like. has to be a quality set up or I'm not going to take it at all.

Alright, so I'm seeing I'm gonna look at a couple of the comments you guys are posting. Now for those of you watching on Facebook let's see I'll check your comments to look at G Sat G SAT Now I can tell you right now that I'm actually not the biggest fan of this stock. If we look at the float on G Sat and I'll show you right here. It's a 406 million share float stock.

so remember when I said my float is I don't like anything under over a hundred million? Well, this is over a hundred million and on a typical day it trades pretty much sideways I Mean this moved a little bit. It's had a total range today at fifteen cents, right? But look it, Let's just scroll back and look at yesterday. That's how it traded yesterday. It's like I mean it's just pinned right between this price and then look at the level two.

You've got so many buyers and sellers on either side. This just isn't a stock that makes big moves all right. So that's not one that I would use for a day trade regardless of the daily chart. it's just it's too thickly traded.

It doesn't usually make make good moves. So for me, I can reduce my risk as a trader by only focusing on the stocks that have the potential to move you know, 20 to 30 percent intraday. And granted, it doesn't take a lot for a dollar 50 price stock to move 30 percent. but I still wouldn't generally go for 4G Sad.

Alright, so any other questions to give you guys a chance to ask some questions. Theodore Talking about a gold stock. So I'm not a big fan of trading commodities I Just you know what? I Go for our stocks that have an actual catalyst Like a like a commodity is going to have sector-wide catalysts. or maybe global catalysts.

So like when you trade oil or you trade gold or still you're trading kind, it sounds like a derivative because you're trading the price based on the price of something else. So like when the market goes down, gold goes up usually. so you could be like oh I'm buying gold because something else is doing something and derivatives are just a little bit trickier for for most day traders. I'm some like them but I'm not the biggest fan.

so let's see what else do you guys want me to look at? GEVO Mohamed Yeah, I mean not. There wasn't much there. Oh Canf yeah, that's one of those ones that you can see. This one is it's kind of a stock that has just been selling off for a while.

It's fairly weak. I Mean it's a 245 right now, but the float on it canf is twelve point three, eight million shares. So I they used to be lower, so I would say they've probably done a secondary offering at least once or twice to get the price or to get the float that high. You know it's one of those stocks that when it has a catalyst, it's worth jumping on.

but until then I don't usually trade it. Oh there's another one live li ve live ventures, this one. They've done some reverse splits on as well and you can see since they did their reverse split the price went up to 32 dollars a share and since then has just been selling off. Now it's at 18.

All right. So let's see. hey Darryl and why I can check that one I'm not familiar with that stock though. an ET RM at this point I wouldn't trade it going into the afternoon.

Yeah, so a NY is a is it penny stock and I don't trade stocks below a dollar? I'm not sure. Let's let's see. um I'm not sure what market it's on, it doesn't I don't think it's OTC I'm not sure. but um yeah.

I wait for them to get above a dollar and really above three dollars is better. And that's especially true with this shirt trader challenge because I can't trade stocks below $3 No margin margin restriction is three dollars and up. Anything below $3 is one-to-one So my sweet spot zone right now is between $3 and $6 because those are stocks that can definitely take a thousand shares on and some of them I could even take 1500 or 2000 with the buying power of seventy one hundred. anything.

seventy one hundred seven dollars and ten sixteen cents or lower I can take a thousand shares on. so those are ones that I would be willing to trade right now going well so far building up that cushion off the five hundred dollar minimum. That was the hard part I knew you know the first couple days I needed to have really good accuracy and a little bit of luck. you know I actually thought today that possibly GEVO with a thousand shares at $5 would squeeze up to 535.

My target was 550 and I was like this could be the one that gives me that $500 winner because you know five times six that'll increase my buying power by $3,000 that's pretty big I mean that's that's a really big deal. If I can get a $500 winner, a thousand shares with $0.50 it's all I need I thought that one could be the one. it just didn't open up. so you know I'll keep searching and it's all about right now.

Being very very, you know very very patient. it's hard. it's an exercise in patience and you know this morning every morning so far this week when I've sat down I've been feeling like a little nervous because I really don't want to screw up this. I mean I know that we've all had losses and I'm transparent about my losses I mean I talk about my best days in my worst days, but it's been a long time since I was trading an account that if I had a bad day I might have to put more money in in the first four days.

You know the first five 10 days are the hardest of this challenge you know they talk about with trading. Here's the thing, let me give you an example. if you have a hundred thousand dollar account and you lose 50% of it, you're down to fifty thousand. What percentage gain do you need to make in order to get back to where you started? You lost fifty percent.

And now what do you need to make percentage-wise to get back to where you started 100 percent? Now you need to double your account. That's hard. That's not me. It's really hard.

It's easy to lose half and then it's really hard to double. So you know this is just the area where the odds are stacked against you and you have to be almost like you know, superhuman and just a master of your emotions to come out every day ahead of the market. So I'm feeling good today and happy to finish this week. Green Today I over traded a little bit seventy dollars in commissions.

you know earlier in the week I wasn't scaling out I was just one entry, one exit and today I scaled out a couple times and you know I did that because I wasn't as confident. but I felt like you know what? I could sell the whole thing right now. But then if what I've done is I've capped the potential of this trade because now it's definitely not gonna be like a $500 winner or something. So I was like I'll sell half and then if it keeps running, I'll get a profit on the rest.

and if it doesn't, well at least I got a little something. So being a little you know, letting things ride a little bit more since I have a bigger cushion and I think that's that's okay. Alright so alright guys. Well that's where we're at today.

Any questions, feel free to email me otherwise I will see you first thing on Monday morning I Hope you guys all have a great weekend. All right! Thanks everyone.