What's up everyone? All right? Well here we are: Our second red day in a row. The clinical term is I'm in a slump I mean this is frustrating. Really? that's the biggest emotional feeling is frustration I get angry a little bit when I have a loss, but I think mostly it's frustration and part of that is because what I'm doing right now today and yesterday in a hot market would have worked would have been Big Green Day's my twenty thousand share trade yesterday would have been easily a ten thousand dollar winner and yet we are not in a hot market. So then why is it that I swing for the fences.

Why am I being so aggressive and that's the thing that that I really want to talk about today is that the presence of mind, being mindful and being present right here right now to trade the market we're in. not to trade the market you desperately want to be I would love to be in a market where I was hitting a new record month you know, record Green month or where I was having record green days back to back where I was having five, ten, fifteen, twenty thirty thousand dollar green days of course I would love that. Who wouldn't but that's not the market that we're in right now. and so when I'm trading as if it's that market I'm getting myself in trouble.

Think about this. Think you think about driving the you know new Bugatti the fastest car in the world and you're trying to set a lap record which you know no doubt you should be able to do. But it starts drizzling. It starts raining on the track.

if you go and try to set that lap record. when it's drizzling and then it's pouring rain, you know what's gonna happen. You're gonna spin off the track, you're gonna be in the grass, and you're gonna wreck that car. Now it's very easy as a driver to see that it's raining.

I better go slow. and of course you get pretty immediate feedback. You hydroplane a little, you slide around on the road. So yeah, I'm going too fast I got to bring it down.

And yet as a trader, when the market conditions are, you know the track is is wet and slippery. In other words, we're in a cold market. We're seeing lots of false breakout stocks popping up on what looks like the beginning of a bull flag and then instantly reversing and having a big whip to the downside, then that's not the time to be swinging for the fences. And even though I know that for some reason yesterday especially and we'll talk about today versus yesterday.

but for some reason yesterday, despite the fact that my first three trades weren't that good I decided to go ahead and increase my max share size up to I don't know what I put it up maybe thirty thousand shares or something like that. and next thing I know I'm in with a twenty thousand share position now. Sure, in a hot market. Yeah, that's fine to put the pail of a medal, but we're not in that market so there's something there.

and I bet you guys have experienced this yourself. Any of you who swing for the fences during the worst possible time, give me a comment below. So I know that I'm not the only one that does this. I feel like what happens is a kind of get tunnel vision so like yesterday on MIT oh you know I pull up this stock so I'll pull it up here.

MIT Oh I pull up this stock and I see it squeezing up from 720 to 750 760, 770 780. You gotta be kidding me. This thing's taking off Seven Ninety Eight dollars, Eight Ten Eight, 28, 38, 48, 58 65 It's helped on a circuit breaker I'm buying into the hall in a hot market. a stock like that will open higher.

eight eighty Eight ninety. rip through nine and squeeze up to nine fifty and that can easily be a $10,000 winner. I have a video on my top 25 biggest winners in my career and every single one of them was trading stocks into and coming out of circuit breaker hauls. So MIT Oh, it certainly fit the crime tyria.

but then on resumption for whatever reason, it dropped back down. It came all the way back down to a low of 732 I was still holding shares and then it bounces back up and I'm able to salvage the trade and work my way out of it. Okay, so the fact that it did that big like slap in the face move coming out of the halt, that should have been an indicator to not be aggressive on that stock. It was a close call, narrowly avoided a huge loss, and yet when it started to curl back up, all I was thinking about was the fact that earlier it went from 720 to 865.

it showed it showed the potential to make a big move and I wasn't thinking about the risk. So what is it about our brains that wire ourselves so much to think about potential and not to think about the risk? Because I think Ultimately, that's one of the biggest challenges in trading, and that having the presence of mind to constantly be mindful and aware of the risk in a trade? That's the skill that really takes time to learn. And it's a muscle. and if you don't strengthen it, if you don't exercise it every single day, it starts to atrophy and so coming out of this slump most likely I'll have a nice green streak and then at the end of it I'll start to get a little complacent.

I'll start to get a little sloppy. that muscle of discipline will start to atrophy because I'm you know, just enjoying an amazing hot streak and then it's gonna catch up to me and I'll have that trade that gives me the big loss and it forces me to get back to basics. So on. Monday I'm gonna be talking about how to get out of a slump, how to rebuild confidence, not just the dollar amount of the account, but the confidence.

and it's gonna start with mindfulness about trading the market that I'm in right now and so when I've got my pre trading checklist and I go through it. Did I eat well? Did I sleep well? I Can tell you yesterday that when I came into the market at 9:30 I was running a little bit late, my computer was having an issue I I had to restart it. the CPU was maxing out. something was draining a ton of memory so I wasn't in the zone I was just all of a sudden of my kind.

its 929 and 42 seconds. The Bell's gonna ring in 18 seconds and I'm barely ready to trade first dock. it's the watch list I jump into it quickly I lose 700 bucks so I wasn't totally focused and while I was trading I was Ultima multitasking I was dealing with my youtube feed I was dealing with my chatroom feed and so I wasn't a hundred percent with the market and it cost me. Now what happened today is a little different today: I Traded SES SCS was gapping up 95% this morning and if we look at this on the 5-minute chart, you can see that this stock not only slapped long side traders in the face, it slapped some short sellers in the face - this thing was whipping I mean the first five minutes the first five minute candles were five red doji's so if that's any indicator, oops, let me switch to one minute chart if that's any indicator of the type of action that we were gonna see today.

you know I don't know 100% but we basically opened and went Red Red Red I took my first trade right here anticipating the first one minute candle making new high and I lost 500 bucks. So I'm in the red by five hundred. it then rips back up right here and I get back in for the break of 50. It's the break of the half dollar break up high a day it hits 60 and drops right back down and I'm red a second time.

Alright, so now it's got me twice. It then curls up here. over 35, rips through 60 and so in this one I got back in for the break a high a day at sixty it hit a high of 390 I was actually up $1200 and then it comes all the way back down to 350 for I'm now right on the trade, it bounces back up and I get out for a small winner Now I'm down only 200 on the day. All right and I'm like wow, this thing is crazy.

It then comes back up right here and I got back in for this breakout. it failed. it then comes down. bounces off the view app I added the view app for a bounce trade.

it bounces up a teeny bit and I stop out there for a 30 I guess it was about a $3,400 loss. So this is a stock very different from yesterday. yesterday. I was being very aggressive I was bringing out huge share size this one I wasn't taking out huge share size and I'll put my P&L on the screen for you guys to see and I'm down 3,800 on the day $11,000 Read: In the last two days, this one was just a very whippy stock.

For whatever reason, sometimes stocks are like that, but that presence of mind is to say that today things don't feel quite right. It feels like I'm fighting an uphill battle and maybe the best thing to do is just to sit on the sidelines. Now, as soon as I was in my first trade and I was read, you know from that point the focus starts to be getting back to green, getting back to flat. you know, getting back to break-even at least and I tried doing that second trade went further in the red.

Third trade was a small winner and then the fourth trade to me looked like pretty much a no-brainer It was the first five minute candle to make a new high right here that it bounced off the lows showing support down there. three ripping back up to 390 a little pullback here, certainly a little deeper than I would have liked. It was a $0.50 pullback, but then it curls back up 379 I jumped in, they got me I got trapped in the bull trap and sometimes that happens I'll say that I Had a couple comments on my biggest struggles video from yesterday that Ross one of the comments I'll quote you don't have a strategy This isn't a strategy that you trade and out Counter that by saying that I turned less than 600 dollars into over a million dollars trading this strategy a a feature of this strategy I Don't even want to say it's a flaw because a strategy works. but a feature of the strategy is that I am a breakout trader and what that means is that I buy breakout.

So a stock like this that is consolidating on one minute pullback. I buy the breakout down here or back earlier today. I Buy the breakout. Now the advantage of being a breakout trader is that the time you spend in the market is very short and I can tell you that not just as opinion, but I'll actually pull up my trade review stats here and show you the average time during my $1,000,000 challenge.

The average time I was holding a trade was about 5. Actually 10 goes 10 minutes long. So I'm go to reports View: I'm gonna go to detail I'm gonna set my start date at January 1st 2017 and I'm gonna filter this data. That's a net profit of 1 point 1 7 million dollars with an average winter hold time of 7 minutes.

Now for me: I'm actually risk adverse I Don't like to take a lot of risk and I find that holding a stock for a very short period of time, even if it's a larger position, is less risky than holding a small position for hours at a time. right? Exposure risk is that the amount of money you have in the market multiplied by how long you're holding a stock. And so I found that these patterns like pullback patterns red to green moves. When you dial in the breakout point, it's an apex point and you know it to the penny.

and when it works, it's instant gratification, which is awesome. A great trade can be an instant reward, but because I'm a breakout trader inherently I'm buying stocks that are high. The the belief of you know, buy low, Sell high doesn't really work very well as a day trader and it certainly doesn't work as a breakout trader. I Buy high.

Which means I'm buying a breakout with the intention of selling higher now. I Can tell you that I've got 68 percent accuracy behind that strategy, so it does work. But a feature of that strategy is that occasionally you will have a false breakout such as this one and it can hurt, especially when sighs up for that breakout right at the wrong spot. And so ultimately in order to improve accuracy, you need to have a system of self-awareness and of basically a internal knowledge of when is the likelihood of a false breakout so high that it shouldn't take the trick? So why don't you guys comment below with some of what you see as indicators of a possible false breakout? I'll give you two of them and you can fill in with some others.

One I would say would be if the stock has already had to clean pull backs because then when you're getting into the third, fourth fifth, it starts to get overplayed and the second would be I would say usually when the volume is in excess of five million shares ses today has 21 million shares. Right now it's up a hundred and seven percent. but it's becoming more of like a tug of war and you might think more volume is a good thing. But what I've actually found is that when you get to a certain level of volume, it's almost like rush-hour traffic.

You've got so much volume, it becomes congestion and the stock no longer has clean breakouts. It's becomes more unpredictable. It zooms and then it stops and then it drops and then it bounces. It's just not as the the price action just becomes a little bit more difficult to read as the volume gets higher and higher and higher.

And we've seen some stocks like this that have traded 50 60 million shares of volume on the day. I Usually do the best when it's less than 5 million. anywhere between. I Don't know a million shares and 2 or 3 million is a good spot.

You've got enough volume to take good size, share position, but not so much that it becomes crowded. and so that's of course why. The first and second pull backs often are the cleanest. But part of being a breakout trader means you know being okay with the fact that sometimes you will have a decent-sized loss.

It's not to say that other strategies don't have that same feature or that same flaw because pretty much every trader if you're a reversal trader and you like to buy weak stocks or short strong stocks, sometimes you get in a wool too early and that stock squeezes you out or you buy a little too soon and it just keeps selling. So I think counter trend trading reversal trading is a particularly high risk one because you're literally trading against the trend trying to predict the reversal. I Prefer to trade momentum. but I don't like to buy dips and buy pull backs quite as much.

The reason that I don't like it as much is that when a stock is pulling back like for instance, SES when it's pulling back here at the 9:00 moving average I don't feel that there's any strong confirmation that it's gonna bounce off this level. So when I'm getting into a trade without confirmation I inherently feel that there the risk is much higher. which means I'm not comfortable taking 10,000 or 15,000 shares just to hold without confirmation. The confirmation is that first candle that makes a new high the breakout over a resistance point.

So once we have confirmation I feel comfortable taking big share size. but that means I'm in at a higher price. Which means as soon as I'm up 30 or 40 cents, I'm gonna feel the need to sell half and take some profit even if it ends up going up a dollar two dollars a share as soon as I've got a little profit I want to take some off the table so my winners often end up getting a little smaller. but I make up for it because my accuracy is high and that's because I wait for confirmation.

Of course. today's a day where confirmation and SES was meaningless because it kept doing false breakouts. Some stocks are like that and you know what you do with them. You put them on your no trade list.

Give me a shout out of stock strung you're no trade list I Can tell you SES is on mine. Let's see a couple others. I believe a DNA is on my no trade list I think opt TD FFN are now on it. L.e.d.s is pretty much now on it GPR is on it.

Dr YS is on it tops is on it. So I've got a bunch of stocks that have hit the no trade list because I've had days like today where they just frustrated me, they didn't work and I say you know what, That's it. You're dead. You're dead to me.

I'm never trading you again and it's off the list I don't trade it anymore now of course sometimes months or we sir years later a stock might come back in and be worth trading again. But this is one and now look this is. it's so hard to watch this because now it's at 401 by 407 and one of the reasons I wanted to do this recap now is because I was afraid that I would I would get convinced I would convince myself to take a trade on it and you know as it squeezes up the FOMO kicks in, it's that feeling of dang, you know I The way I traded this today was all wrong. It's up a hundred and thirty three percent.

There's a twenty five thousand share buyer at twenty, This is just gonna be one that goes down for me is a stock that was really tough to trade and even though I could have bought this little pullback here at 77, what would have led me to believe that? you know 2:00 in the afternoon? this setup would work when it, you know, got me so badly right here between 9:30 and 10:30 during the hours that I usually trade the best. So am I gonna regret sitting on the sidelines? Maybe so. But the good thing about the market is that it will be here and I will live to trade another day. And so when I'm feeling this level of FOMO the fear of missing out for me, one of the things that's important to do is go ahead and shut off that monitor.

Stop looking at it because there will always be another opportunity and it's better to wait for the next one than to jump into this when it's now up 150% And let's look just for a moment as it's hitting its high a day. At a couple of the real slap in the face moves it did earlier, we've got this drop right here. This one right here where it dropped. Oops, that was a bad one.

This was a terrible one. That was a 50-cent drop in one minute. and this was a really bad one. and that was a bad one.

So that's your downside risk. When a stock is squeezing up, it's easy to only think about the opportunity. The next resistance points is dollarz What supports it for that's 50 cents away. The risk is too high.

so this is not gonna be a home run stock. Not at this point of the day. not with this amount of volume. So what I'm gonna do is I'm gonna walk away I'll leave to trade another day and Monday morning I'm gonna focus on bouncing back by being calm, cool, collected, doing my pre trading checklist and not trying to swing for the fences, but just hit a solid base hit.

One thing I just want to add on SES is this really funny thing with trading that if I had taken that trade at you know, 132 o'clock if I had taken it and I have lost money I would felt like what the heck is wrong with me I'm already down 3,800 on a day $11,000 read in the last two days, why am I trading at 1:30 in the afternoon? This is insane and yet if I had traded it and made money, it's just easy to feel like hey, good work. The market will sometimes reward negative behavior, poor behavior, and because of that positive reinforcement of a bad behavior, it can encourage you to do it again in the future. That's one of the most difficult things about trading. so you have to have a set of rules.

You have to follow them. And by following the rules, rather than letting the market positively or negatively reinforce your rules, you just simply have your rules. And you know that over the long term of a career as a trader, those rules. Those are what are going to keep you in the market.

As always, you guys have questions. You have comments. Leave them below. I Personally respond to every comment.

Every question that's posted. All right. See you guys on. Monday If you're still watching, you must have really enjoyed that video.

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