Here's what's REALLY Happening...

What's up everyone? All right, in
today's episode, I'm going to break down
a shift that's occurring in the market.
It began last week, but is continuing in
earnest Monday and Tuesday of this week.
In fact, if we look at the market right
now as a whole, our leading gainer is up
only 58%. It's GoPro 160 million share
float stock and they've got a merger
catalyst which is fine but the fact that
our leading gainer is up only 58% number
one and that it's a stock with 160
million share float really says
something about the sentiment in the
market. So this shift has been a shift
from control among buyers to control
among sellers. The point of control has
shifted from the buy side to the sell
side. And so during these periods when
the sellers are in control, we as long
biased traders have to be very careful.
Now August is in the history books.
We're now starting a brand new month.
And I wanted to begin this month by
exercising discipline, staying focused
on trading quality over quantity,
recognizing that just a few really good
trades have the power to create an
incredible month. So before we jump into
everything from today and talking a
little bit more about the shift that's
occurring, let's take a look back at the
month of August. This is an exercise
that I really encourage all of you to do
in your own trading. Whether you use
Traderview, which is the software that
I'm using for analyzing uh my trading
history, or you're using a different
platform, it doesn't really matter.
Essentially, they all do more or less
the same thing. They aggregate your
trades so you can look at the data and
better understand your strengths and
weaknesses. I want to look at weaknesses
because those are the things that you
probably should really stop doing. And
if you could stop doing them, they could
potentially have a very significant
impact on your profitability at the end
of each week, month, and year. So, as I
look back at the month of August, and by
the way, let me just u move this over
for one second. So, if I go over to the
footer of warriortrading.com,
um you'll see my verified earnings down
here. I'll just open that into a new
tab. And so, my 2026 earnings at the end
of each year, I have a audit done that
audits all of my uh trading profits. And
by the way, our Labor Day sale is
underway here at Warrior Trading right
now. So, for those of you guys who have
been on the fence, thinking about
joining, you've done a two-eek trial and
you didn't join at the at that time,
check out the Labor Day sale discounts
on our Warrior Starter and Warrior Pro
membership. All right, so if I go over
to 2026, you will see all of my broker
statements. So, we now have August
updated right down here. And so, I began
this year with about $96,000 in my
account. That was my starting balance at
the beginning of the year. In fact, it's
very similar to the starting or the
current balance in my small account
right now. And by the end of August, I
had a balance of about $2.1 million. So,
the account has grown uh very quickly
this year, which is great. However, if
we look at the month of August, you will
also see a $74,000 red day and a $66,000
red day. Those were two of my biggest
red days of the entire year. It's
130,000 $140,000 lost in two days. Now,
it's impossible to never have red days.
That's not a realistic goal to never
have a red day, but it is possible to
stop sooner when the day starts going
against you. And I made the mistake on
this day and then again on this day of
getting stubborn and sort of digging my
heels in and refusing to walk away and
instead continuing to trade even though
everything in the market was telling me
it was a bad day. And the result was
that I made my losses much much bigger
than they needed to be. If I had stopped
trading on both of those days when I was
down only 15 or $20,000, I would have an
extra $100,000 of profit here by the end
of uh by the end of August. That's a 50%
increase in my total profitability
having finished as you could see here
after fees and commissions at around
$211,000.
So increasing that by 50% up to 300,000
311,000 that's a meaningful difference.
And the only thing I would need to do
the only thing is walk away when I'm
down 20 grand and not continue trading.
None of these days where I'm green, I
was down more than 20 grand before
recovering to green. So, if I just
stopped and I was down 20 grand, that
would have eliminated that just those
some of those terrible losses. So, we're
going to look at the month of August
here. Um, let's see. We're going to go
to uh just the la last month. And this
is includes my small account challenge
as well, but that's all right. So, if we
look at this, I've got $287,000 of total
profit right here. Accuracy was about
65%. Average winners were 6,000. Average
losers were 5,700. If we compare that to
um the last 12 months, a bigger period
of time, you can see that my accuracy
declined. My average winners got a
little bigger, but my average losers got
quite a bit bigger. So, I had a few
really big losses last month. That was
not good. Let's dive a little bit
deeper. So, first thing I always check
is accuracy. Is it stable, increasing,
or decreasing? It decreased. Average
winners a little bit higher. Average
losers also a little bit higher. Okay.
Then I dive a little bit deeper. Day of
the week. Any themes? Anything sticking
out? Oh, right there that I'm getting
absolutely crushed on Fridays. This is
an important observation. Now, if you
saw this in your own trading, you would,
I would hope, make a correction. So, the
correction that I made, which took
effect the last two Fridays of August,
was tightening up my risk on Fridays and
therefore was able to avoid having a
repeat of those big red days I had
earlier in the month. So, that's one
observation. Here's another notable
observation that I'm losing money
between the hour of 10 and 11. In fact,
that I was making the most money between
7 and 8. Although, interestingly, look
at this. my frequency of trades. The
most trades were between eight and nine,
but I didn't produce as much profit. On
fewer trades, I produced more profit
between seven and 8 than I produced with
more trades between 8 and 9. That is
very interesting. So, why is that?
I don't have an answer for why that is
the case. That I did better between
seven and 8 than I did between 8 and 9.
I I think that probably it is I would
probably attribute it to just the fact
that there were some really good
catalysts at seven or 7:30 that gave me
a few big wins that drew the metrics
higher in that window. Um but let's
let's check over a larger period of time
just to see last 12 months. How does
that check out? Does that stay about the
same? This is on $4.2 million of profit.
So it doesn't stay the same. So, in the
last 12 months, I've done better between
8 and 9. So, seven and eight is sort of
building the cushion. Eight and nine is
really stepping it up, and then 9 and 10
is cooling off, and then I'm losing
money consistently after 10:00 a.m. So,
at the very least, I think we can say
that after 10:00 a.m. for me is a
high-risisk no trade zone. And if you
saw this again in your metrics, I would
hope you would draw the similar
conclusion. So, without a doubt, I do
need to have a harder stop um at 9:30,
10:00 a.m. Um rather than continue to
trade longer and longer into the day.
Here's something interesting. When do
you think I'm most likely to trade
longer into the day? Is it on a day when
things are going great? It's not. On a
day when things are going great, it's
very easy to walk away in the green. I'm
more likely to stay longer on days
things are not going as well because I'm
feeling stubborn. So it's more likely
that these trades were on days where I
was already feeling emotionally
activated.
Okay. So performance by time of day.
That's a good realization there. So and
day of the week is also something worth
noting. And that day of the week may
also be a little more exclusive to
August, you know, summer trading, but
nonetheless, what about price and
volume? So I want you guys to do the
same review in your own trading. So
where are you performing the best based
on time of day, day, day of the week,
price and volume? So price by and large
between 2 and 10 was a sweet spot. Not
much between 10 and 20. There weren't a
lot of trades in that window. Um, and
most trades were between 5 and 10 and I
did quite well there. Not many trades
below $2, but I got a little profit
there. I did better when I trade with
bigger share size. That kind of goes
without saying. Um, these metrics are
not super accurate. I I don't really
know this. I've I've always I emailed
them at one point and they didn't get
really giving me a good answer on why
the performance by in I was like well
wait a second this isn't showing all of
my profitability clearly this this would
make it appear that I was just losing
money where where are the winners
they're nowhere to be se I don't get it
I I I don't know I'm not sure what that
one is whatever okay so then we go to
instrument um we could look at the
symbols that I made the most money on
and the sector that they're in. we can
look at the symbols I lost the most
money on in the sector they're in. I
won't do that now just to save time, but
I would encourage you to do that. And if
you notice a theme that there's a sector
you're doing well in, uh you should ask
yourself if that theme is continuing or
if that was just a little cycle during
that time. So, we did have a really nice
theme with some big moves on Chinese
stocks, but I think that theme is now
behind us. I did best on stocks that had
more than 25 million shares of volume as
you could see here. more volume, more
liquidity, easier to get in and out.
Lighter volume stocks I struggled on.
So, you know, that's something to pay
attention to. And then performance by
instrument relative volume did the best
on stocks that had at least five times
500% five times higher volume on the day
I traded it versus the 50-day average.
And these ones were losses. Now, some of
these were instances where I was trying
to predict and anticipate that a stock
was going to make a big move. This is
also true with some of these. I got in a
little early before it had enough volume
before it had the highest relative
volume. And I can't say for for sure
that I didn't have any success in those
areas, but generally speaking, it it
didn't work out very well this month.
So, um and then market behavior is a
little bit less um less of an issue just
because that is sort of just tied to the
overall market. um it's it's it doesn't
usually have a quite a strong
correlation here. And then the wind loss
expectation, you can see this is a
roller coaster that I was on for the
month of August. And so this is where I
said to myself, I really don't want to
continue that for the month of
September. I want to kind of try to
smooth that out a little bit. So, well,
if I stop trading when I'm down 20
grand, I'm a little more cautious on
Fridays, I'm I'm careful about the time
of day I'm trading, and I'm avoiding
stocks with lower relative volume. Those
are three or four adjustments that can
have a meaningful impact on my
profitability. They could actually
improve my profitability by as much as
50%.
Wow.
Are there some things that you could do
that could have improved your
profitability by as much as 50% for last
month? Now, if you haven't looked at
your metrics, you have no idea. So, take
a few minutes to look at your metrics
with and look, I have no affiliate
relationship with Trader View or or
anyone else. I just I make
recommendations based on what I
genuinely think is the best software.
I've been using Trader View for more
than a decade. So I've got more than 10
years of trading metrics all in this
same platform. And you know, look, so
I've been obviously I've been using it
for a long time. I I like it well enough
to continue using it. Uh there's a
little bit of a switching mode, which is
that it's kind of hard to switch when
you've got 10 years of data all in one
platform. Uh so I do stick with it for
that reason. That's nearly $24 million
of trading profits and showing, you
know, 68% accuracy, the profit loss
ratio. So, all you have to do is go
import trades and then you could choose
whatever broker you're using. And when
you choose the broker, like you choose
Thinker Swim, they walk you through how
to export your trades and then you just
import them. And then boom, you let the
import run and then you can go and do
the metrics. So, I really encourage you
guys to do this. Now, was August a good
month for me? It was a good month. Um,
and let's just sort this by IRA. So,
this is my individual retirement
account. Oops. Um, and I'm just going to
go year to date here for the IRA.
So, year to date, big picture, this was
August. This is the year to date, right?
So, January was awesome. February,
March, April was April was the worst.
May improved. June was amazing. July
slowed down a little bit but was still
set really good. Third best month. And
then August has kind of come back down a
little bit closer to the baseline. The
baseline being around 200k uh a month.
You know, a little bit below it but a
little bit above it. So that's $50,000 a
week, right? So, you know, $10,000 a
day. And that that's pretty that's
pretty solid. So that's where we were
for August. And now the question is
what's September going to look like? Is
it going to go like [snorts] this and
we're going to finish just with a very
sad end of the year? or is it going to
go like this and we're gonna have a
phenomenal finish to the year?
We don't know. We don't know what the
market holds for us. But what we can
control is how much risk we're willing
to take. And so I will take risk when I
see good quality setups. So now let's
talk about the shift that's been
occurring in the last week or so. So, if
you recall from last week, we had a few
stocks that made some pretty dramatic
moves. So, I added um I've got these uh
slides here to add to the classes. So,
we had Archon from last week that did a
round trip. We had FTFT that did a round
trip. We had let's see uh which other
ones were there? Um
I feel like I added a couple others but
anyways we well th those two for sure
and then we had CR which did that big
pop but then pulled back. So we're
noticing this theme where stocks are
squeezing quickly but they're not
holding up. Now uh the biotech sector
this is a biotech ETF XBI has done
exceptionally well this year. It's had
uh its best year in basically since the
pandemic. It's been doing really well.
This was the pandemic back here. So,
biotech has been hot. You had like five
years where it was a little cooler and
then it's really picked up here 2025
into 2026. So, yes, we are seeing that
there's a tailwind behind a lot of these
biotech companies. We're seeing bigger
moves. When a biotech stock is coming
out with breaking news, traders are
really quick to jump on it right now.
And, you know, I don't blame them. I've
always loved biotech stocks. When you
have a small biotech company that comes
out with good news, this can be a make
orb breakak event for the company. This
can be the thing that puts this company
on the map that makes them a target for
a buyout by a much larger company or
where they keep the asset they've been
developing and they start doing
licensing when they go through their
clinical trials and then if they get FDA
approval. I mean, these these can be
really big. However, a lot of these
small cap companies, the way they
operate is they IPO. They sell shares
onto the public market, selling the, you
know, the vision of what they're working
on, working for a a cure to some, you
know, incurable disease typically and
investors buy into that. But typically,
these things are very difficult, as you
would imagine, to solve for. And so
months and years go by and the company
spends a lot of money on research and
development. And during all of that
time, they're spending the money that
they raised from their initial public
offering. And so if we look at the Q2
quarterly filing for BIAF and we scroll
down here, you can see that their cash
was about $2.4 million on the balance
sheet as of June 26. $2.4 million. So,
it sounds like they're in pretty good
shape until you look at their 3 months
ending June 2026 and you see that
they're spending over $3.3 million.
They've got a loss from operations every
quarter. So, that has them going out to
$12 million a year. Well, they've only
got $2.4 million on the balance sheet.
So, what are they going to do? Well,
there's only so many things they can do.
But notice here that they've got a shelf
registration, which they just filed.
there's a high likelihood that they're
going to take the opportunity to sell
shares on the open market to raise money
to continue funding their research and
development. Now, these companies will
sometimes and often will solicit
institutional investors. So, go to, you
know, a big institutional investor
who'll just write them one big check for
$50 million. That's easy. If they can
find an institutional investor that
believes in them, the institutional
investor gets a discount on the stock
price when they write the check. So
they'll say, "Yeah, I'll give you $50
million, but I get the stock at, you
know, $2 a share instead of $5." And
that's called a private placement. And
usually when that happens, it's
relatively bullish because obviously
this investor wrote them a big check.
They're not going to need to raise money
anytime soon in a direct offering on the
market. And that investor typically
isn't going to turn around and sell
those shares tomorrow. So usually we can
feel pretty confident that the that the
float dynamic is going to stay basically
the same for a period of time. the
company's not going to be selling and
therefore we have the potential for a
big move to the upside uh during that um
sort of window right after the news
comes out.
But if they can't find an institutional
investor willing to write them a big
check, then they end up having to just
sell the shares on the open market. So
on a day like today when the stock has
30 million shares of volume, they could
be selling three or four or five million
shares right on the market at, you know,
$7 a share. So that could raise them,
you know, 20, $30 million just by
selling those shares. But the problem is
it has a real effect on the price of the
stock. All that selling is pushing the
stock down. This is very common with
biotech companies specifically. So if
the news is really really good, it can
overcome the company selling into the
stock price. Typically, if the news is a
private placement and typically a
private placement is also released at
the same time as a fundamental catalyst.
So they're like, we have great news and
we have someone who's funding us. Those
come out at the same time and the stock
usually is very positive, goes up quite
nicely. Those are scenarios where we can
get some really clean price action. But
in this instance, you know, we've got a
headline where they're expanding on a
market. It seems like a kind of vague
headline. So, initially I was like, I I
don't really know how
well this is going to work. Um, the
stock ends up squeezing, but we also
know they just filed a shelf
registration like 3 days ago. So, I was
hesitant and I said to myself, you know
what? Quality over quantity. Having
three candles going up is awesome. And
if you can be quick, you can absolutely
jump in and jump out and profit from
these. And I often will. But being the
beginning of the new month and having
seen as many round trips as we've seen
recently, I kind of wanted to just hold
tight for a second. So, it popped up to
646 and I said to myself, it barely even
has half a million shares of volume. I
don't know. The volume's too light. Then
it pushes a little higher, drops back
down, pushes higher, drops back down,
pushes higher, drops back down. Was
watching it right there for the break of
eight and thought, I just don't know.
It's a little extended. You've got that
higher volume red candle. I'm going to
wait. Hits 850. Then it dips down
and that was the whole move. Just like
that. That was it. Then it rallies back
up here and rejects off the double top.
No more no more action on that. Sells
off. And then coming into the open, it
rallies back up and we get a move all
the way up to eight, which was nice. It
pulls back. Then it comes back up to
eight and then it halts uh going down
right back here. It was right here that
it halted going down. So, it really
reversed hard and now it's just selling
off more. So, is it possible the company
is selling shares or through an
underwriter they're selling shares
today? It's very possible. I don't know
that that's what's happening, but it's
very possible. So unfortunately BIAF is
this all ties into this shift in
sentiment where we were quite bullish
through June, July and August. But then
toward in August we were seeing some
tremors. We were seeing a few more round
trips, some really dramatic round trips
where we'd have a stock that squeezed up
and then came all the way back down. And
some of these were violent, you know, 5
10 point moves and then all the way back
down. And so it was pretty scary. And
certainly if you got caught on the wrong
side of that, you could get completely
destroyed. And what happened to me on
some of my biggest losses in August was
that I would miss the first move up here
because it happened so fast and on
volume that I felt was too light. And
then I'd start jumping in it here and
here and just catch these huge
rejections and I was right on the stock.
And so today I said I don't want to do
that on BIAF. if it continues higher,
there might be an opportunity, but I
didn't see one right here before the
opening bell. And so, I did not take any
trades on this in my main Roth IRA. I
just said, "No, I'm not going to do it."
I didn't take any trades on it in my
small account either because I just
didn't feel good about it. And then the
bell rang at 9:30. And of course, we did
get some continuation there after the
open, but nonetheless, in this window
here, I just said, "Nope, it's not
happening." MACD went negative. It sells
off some more. But the problem was that
was our leading gainer. We look at what
else was on the scan. We had SSM. Well,
look at this chart. Big squeeze after
hours. Same thing. You get a big pop,
three candles, and then it kind of is
sideways and that's it. You get um L um
L fly E, fly E, whatever. They make
electric bikes. All right, so price of
oil is up. Electric bikes are hot. All
right, whatever. Uh big pop rejection
and now it's all on the backside coming
back down. So that's no good. RDAC, you
know, this one popped up, reversed, then
comes up a little bit here. And so my
feeling right now is that the sellers
are in control. And that's been the
shift, the shift of point of control
from buyers to sellers. So when the
sellers are in control, I've got to kind
of batten down the hatches. I've got to
trade with smaller size. I've got to
keep light on my toes. And rather than
assume that things are going to work,
assume that they won't work. If it
starts to work, if it starts to surprise
me, then I can reconsider. And it's not
to be pessimistic, it's to be realistic
that the current the current sentiment
is is on the sell side. And so, is this
the time to take big risk and, you know,
throw hailmary passes? And you should
never really probably do that, but if if
you were going to, this certainly is not
the time to do it. When the market's
really hot and you're seeing backto-back
300, 400, 500% moves, that might be the
time to go out on a limb and take some
risk. And I will do that, but it's not
right now. So, I'm going to be trading
less while it's cooler, but I'm going to
wait for stocks that actually prove that
they can hold up because I'm going to
assume that we're going to continue to
see more of these pops and reversals,
and those are layups for a short seller,
right? And you know, it goes up and it
comes right back down and shorts win on
that. Something like BIAF.
This was probably an easy double top
rejection for a short sellers. It came
back down and then rejected 850 again
and and drops back down. So I don't want
to feed into that weakness by buying and
buying and buying up at the top buying
shares that are being sold to me by a
short seller. Right? So I don't want to
I don't want you want to contribute
liquidity to that move. I just want to
sit completely on the sidelines. And
more traders will do that. More traders
will sit on the sidelines and they'll
say, "You know what? I'm not going to
jump into this." Now, there are a lot of
beginner traders in the market that in
the last few months got spoiled from the
big momentum of, you know, June, July,
and August, and they're going to keep
buying anything that pops up. Something
spikes up and they're jumping in it. And
they're going to realize when they keep
catching these, you know, roundtrip huge
rejections that maybe maybe that works
in certain markets, but it's not working
right now. and I got to take my foot off
the gas. I got to slow down. And as they
stop buying, then the moves get smaller
and smaller. Shorts get more and more
aggressive until we reach a point where
the second something pops up, shorts are
hammering it and it actually ends up
going red in spite of having news. We
will see that. There's no question about
it. We've seen that in previous cycles.
And then you'll have a stock where
actually the news is good and maybe
short sellers kind of, you know, were a
little overconfident just hitting it to
the short side. And this is a company
that, well, you look at their filings
and they actually don't need to raise
money. Maybe they have a shelf
registration, but they've got enough
cash on their balance sheet that they
don't need to raise money. Or maybe they
have a private placement and so they're
not going to raise money because of
that. Whatever the reason is, the stock
which everyone expects will fail goes
higher. And now all of those shorts that
have sold heavily into the bid thinking
this thing was going to roll over now as
it starts to pull away are getting
forced to buy back their shares. And so
typically the way these um shifts occur,
they shift from cold to weak with from
sorry from cold or weak back to strong
with one stock that makes makes just an
exceptional move. It ends up going up
like 500 or 700% in one day because
shorts got stuck. They got stubborn and
they keep adding thinking the market's
been so strong. We've been in control
and then next thing you know it's going
higher, higher, higher, higher, higher.
The problem is often I end up missing
that one stock because I don't expect it
either. And the move often ends up
happening like later in the afternoon or
even after hours where shorts kind of
held it all day long, just kept thinking
it was going to roll over and it just
kept not and then finally they're
covering into the close or into after
hours and they're getting squeezed. So,
I typically miss that one. However, all
traders end up paying really close
attention to what were the dynamics of
that stock, what was the country code,
where was it located, what's the sector
it's in, what was the catalyst, and they
start thinking, where's the next stock
that's similar? And that begins a round
of sympathy momentum where you have
another stock that pops up that's very
similar, same country, same sector.
Shorts are nervous because they don't
want a repeat of what just happened on
the other one. Longs are aggressive
because they don't want to miss a big
move. FOMO has now been ignited and now
you start having a wave of big moves and
now the point of control has shifted
back into the hands of the buyers. And
it'll stay there for a while until you
have buyers that are so confident
they'll jump on even the most mundane
headlines which really are not
fundamentally material for the company
and the stock still goes up 50 or 100%.
And shorts realize this is ridiculous.
We're going to start shorting these
because a lot of them are coming back
down anyways. Even the companies are
selling shares. and the point of control
shifts a little bit more subtly where
the they get sort of weaker and weaker
and weaker until people give up. The
shift from hot to cold is much more
subtle than the shift from cold back to
hot typically. It's not always the case.
Sometimes the shift is a little bit
subtle going from cold back back to hot,
but usually it's more of one big stock
um becomes spark that ignites the next
round of momentum. So that is a deep
dive into the shifts that we are seeing
in the market from cold to hot back from
hot to cold. And right now we've
definitely seen a shift from hot to
cold. It's cooled off and it could stay
cold for a few weeks. It could stay cold
for you know maybe just a few days. We
don't know ultimately we don't know how
long it'll be before we have that one
stock that surprises us. And the
realistically the longer it's cold, the
bigger the move will be when that stock
does surprise us because shorts will be
so confident. The sellers will be in so
much control, they won't even think it's
possible to have a move that big. So you
almost have to have all the recent
memory of those big moves from June and
July and early August be forgotten in
order for the next one to occur. Um, but
that also means sustaining a longer
period where it's slow. And during those
periods, the way I trade is I just focus
on trading less, trading with smaller
size, getting my base hits, and not
overstaying my welcome. If you want to
watch me doing that live every day,
check out the link for the twoe trial.
It's pinned at the top of the comments,
posted in the description. And if you
want to actually become a full-fledged
member, well, check out our Labor Day
sale. Labor Day sales are currently
active here at Warrior Trading with
special discounts on our Warrior Starter
and Warrior Pro memberships. So, I hope
you guys check them out. You can come
over, click the join now button, and you
can see our memberships. So, please
check them out. But I'll remind you as
always that trading is risky and my
results are not typical. And there's no
guarantee you'll find success whether
you trade on your own or learn from me.
So, please always practice in a
simulator before putting real money on
the line.