Today Was An Exercise in Discipline...

What's up, everyone? All right, so in today's episode, we're going to talk about how I was able to sit on the sidelines and watch a stock squeeze up over 65% [music] without breaking the ice on it. We had a really nice curl, a really nice break of VWAP. I could have I could have broken the ice on it. I could have traded it, but I didn't. I held discipline. So, here's the deal. Those of you guys who have been tuning in for a while, you know that at the beginning of the month, I suffered a disappointing setback. The biggest loss I've had since October. Read about 78 80,000 dollars over the course of two days. Yikes. That put me red on the month of April. And I've had to spend the last couple weeks digging myself out of the hole. This is nothing I haven't gone through before. For those of you who have been tuning in for many years, you see me go through really nice hot streaks, suffer a loss, put on the guardrails, check myself into trader rehab, and slowly recover until I'm back to a new high. My process of recovery is dialing things way back to focusing on the core setups that I know I have the highest accuracy with. This is the deal. When when I'm kind of up against the ropes, I can't afford to make more mistakes. There's no margin for error. So, I have to focus on the setups I've got the highest confidence in, so I can just start chipping away with some green trades. So, the last couple weeks, I haven't been trading as much as I ordinarily would be, but the market's been a little cooler, and I've had to focus on trade the best, leave the rest. So, this morning when we had this stock that started squeeze up, I had to make a decision of whether or not I was going to break the ice on it. And here's what went through my head. We'll jump on the screen share and start breaking it down. XRTX was the ticker. It's a Canadian company, and look, I have nothing against Canadians. I like denim as much as the next guy does. But, for me, the issue was actually related to the headline. The headline was that they regained compliance. This is not really the most positive headline. If they package it to make it sound good, but would you go to a restaurant that just put out the headline that they're no longer closed by the Department of Health. They're no longer out of compliance by the Department of Health. You wouldn't because it's not really something you want to advertise. So, when a company is not in compliance with the exchanges, they can get delisted. The company gets kicked off the NASDAQ and they start trading on the over-the-counter markets, the OTC markets. That's not a good thing. So, I suppose you could look at it in a positive light that they've regained compliance and they did that by by conducting this reverse stock split right here, which brought the price back above the $1 minimum threshold. So, they put out this little headline that they're now, you know, they're in compliance with the minimum price requirement and that to me is not really a significant enough catalyst for a stock to go up 65% or for it to really hold that level. Essentially, all they did was a reverse split. The fundamentals of the company haven't changed. They're not more profitable, they don't have new contracts, they don't have anything new that's come out. They're just no longer in dire risk of being delisted until the stock goes back below a dollar, which realistically with a lot of these companies it's only a matter of time. So, I was sort of dismissive of the headline. It pops up, as you could see here at 7:00 a.m. and it hits $3 and then immediately sells off. We'll full screen this so you could see a little bit better. So, you see this heavy volume on the sell side? Yeah, that's not very bullish, right? Well, no surprise. So, I pretty much disregarded it immediately. I said, "Nah, nah, nah, I'm not interested in that." I look away, I'm checking other charts and then all of a sudden it's ding, ding, ding back at the high of day, 3:15. And I was like, "What in the world? How? Cuz why? I don't understand. So, for whatever reason, this did curl back up. Now, we have been seeing some really nice curls as of late. However, they've been better when it's on a company or a stock that actually has a good news headline. This to me didn't have a good news headline. So, I thought, "Well, maybe traders are just jumping in the curl because they think that this setup works no matter what. That it that the news doesn't matter." Maybe it's, I don't know. Whatever. So, that's fine. I'm not going to trade it. It ends up going from three here, 310, all the way up to 366, and I'm, you know, kind of rolling my eyes and biting my tongue a little bit, but I'm like, "Whatever. I'm not trading it. It's fine." It drops back down, it pops back up, dips back down, and then drops back down at 260. So, yeah, no surprise. So, then it pulls back, and then right here it gets back above the volume weighted average price. Now, again, this is another curling pattern. So, when a stock is below the volume weighted average price, it's obviously dominated by sellers. So, we had this uh initial pop, sell-off, rally back up. I say, "No, I'm not trading it." Then it goes all the way back down to 230. Again, a second time, all the way back down to this level. And then it comes back up right here, and I looked at that and I said, "I'm not I'm I'm not interested. I'm This is At this point, there were two issues. The stock still had a sub-par catalyst, and now there were a lot of sellers. It was very thickly traded. And the sellers didn't really surprise me because, after all, the company didn't really have a very substantial headline. So, it pops up here to 340, then it dips back down, and then all of a sudden right here it spikes back up, as you could see, to 350. And then it pulls back again, and then it comes back up right here, and on this candle it goes from 310 to 360. That's a 50-cent spike in one candle. I mean, that's a million shares of volume right there. Could I have punched that for 50,000 shares and, you know, made a quick 15, 20 grand? I could have. There was the volume to do it. It had a big spike and I didn't. I saw ascending resistance right here. I recognized it just didn't feel like the type of stock that really had that much potential and I left it alone. So, I didn't take any trade on it and then all of a sudden look at look at this again. It rips back up right here, does a little micro pullback right above VWAP, and again goes from 320 up to 370. So, I could have done it again. I could have gotten a 50 cent pop out of it. At least a 30 cent pop. And I said, "You know what though? It's going to have I think it's going to have a double top at the high." And the problem is as it was consolidating right here, it was very heavy. It was very thickly traded. The level two, you could just tell how stacked it was. And I thought, "You know, this just feels to me like the type of stock that's going to struggle." And what it's going to end up happening is all of a sudden a couple big buyers are going to come in. They're going to punch 100-200,000 share buy orders. What's that going to do? Now the market makers see the big buy orders coming in, so they pull their sell orders off the book. The spike The stock spikes up. And then as soon as it comes into the double top, the sellers are going to fill right back in, profit taking, and it's going to reverse. And that's exactly what happened. So, could I have traded it right here? I could have. Could I have traded it right here? I could have. And at this point, I was tempted because it was now 9:15 and I hadn't broken the ice. I hadn't taken a single trade yet. So, I was starting to feel like, "All right, you know, now we're getting to kind of a precarious time of the day where you know, it it looks like I'm not going to have a single trade." And I was feeling a little bit of um I guess you could say desperation, right? I'm starting to think I I don't want to have a no trade day. You know, I would um obviously much prefer to have a nice um you know, a nice green day. And maybe I'll just jump in this. So, I So, this is what I do. So, I'm looking at it. I type in um X XRTX. And I'm like, "You know what? I'm just going to bump this up 5,000 shares. It's not going to cut it. I'm going to do 10,000 share position just like that. Oops, not 100, 10,000 shares. And maybe, you know, maybe I'll just click click click. Send three, four orders, 40,000, 50,000 shares. Just 10, 15 cents a share. It's all I need. And I said, no. Don't do it. Cuz here's what's going to happen. Yes, in order to make money on a stock that's trading in a smaller range like this, you're going to have to take 40, 50,000 shares. But you know what's going to happen? You're going to end up buying from a hidden seller at the very top. And the second after you get in, it's going to swoop down. All of a sudden, those market makers see my buyer come in. And you know, it's like clockwork. It flushes down. And next thing you know, I'm stopping out with a 20 cent loss. And I'm red $8,000. And I'm thinking, what just happened? I just went from a no trade day to red $8,000 at 9:15. I'm an idiot. And there's no chance to recover at this point. The window's closing. And that's an important thing to recognize. You know, if I go red early in the day, I still have time to recover. If I go red at 9:15, 9:20, I don't have a lot of time left up until 10:00 a.m. pretty much. And there wouldn't have been any recovery on this one. It didn't rally to the highs. It didn't keep going higher. Because, you know what? In my heart, I knew that this one didn't really have the potential to do it because of the catalyst. It's not just because it's Canadian. There's again, guys, there's nothing wrong with the Canadians. We like Canadians. We like maple syrup. We like denim. Whatever things are there to like about Canada, you name it. I mean, I I just counted two things. Two phenomenal things about Canada. So, it's not because it's Canadian. So, just get that out of your head for the last time. Has nothing to do with the fact that they're Canadian. It's because the headline wasn't that great. So, I sat on the sidelines today. And my P&L is zero. And I exercised discipline. And at certain point, I shut it down. And I say, "You know what? It's not happening today." Now, I will acknowledge that there was some momentum on a few other names today. If we sort by volume, uh-oh, LOBL, LOBO, a penny stock. RPGL, another penny stock, right? So, we've got a lot of volume on a couple penny stocks today. They were back in focus. Maybe for lack of anything else, they came back into focus. So, we had some penny stock attention. CLIK, this one popped up early here, and then just kind of, you know, sold off. Um we had um let's see, EFOI pop back up uh today. This one was the one that moved on Friday. And I said, "You know, guys, I I don't know. I'm not trying to be a Debbie Downer here, but is this really going to work?" Now, it's the first daily candle to make a new high potentially. I I can get on board with that kind of setup in a hot market. But, the volume on this day always pales in comparison to the breakout day. And it works better when the company has put out a second catalyst. You know, sometimes the company will try to fan the flames or fan the flames a little bit and put out additional catalyst, but but in this case, um you know, they they they didn't. Um so, I I kind of just felt like it's it's not really um it's not really going to work. And I'm glad I didn't fall into that trap. That popped up and then reversed. In fact, if you go back on the scanners today, you'll see a number of stocks that popped up and had short-lived moves. They popped up just for a second and then reversed. And so, it did take discipline to not break the ice on some of these stocks. I know some of them were tempting. This one, you know, from a dollar up to a dollar 70 and then back down to 75 cents, Edible Garden. Um FGI, you know, another one that popped up is holding up relatively well. I don't know, guys. I just felt like it wasn't worth it. SPRC, this one popped up earlier this morning as well and then rolled over, started to move after hours. So, yeah, it took it took a fairly high degree of discipline to be patient. Tomorrow, I am really hoping that we can get a good catalyst. That's all I need. I need a company to put out a good headline and then I've got something to work with. But if we don't have good headlines, then, you know, I I I'm kind of just left with scraps. And there are times when the market is hot enough that even just on those scraps, I can make some money, but I don't think that's the situation that we're in right now. So, let me remind you guys, uh in case you had forgotten, our anniversary sale here at Warrior Trading ends tonight. And the pattern day trader rule is ending on June 4th. That's pretty exciting. So, it's right around the corner. So, you've got about 45 days to get yourself in gear, to get yourself up to speed so you can make the most of the volatility and the heightened volume that we experience, likely starting in June. It's my expectation that the PDT rule going away will result in more trading volume in the market and increased volatility, especially among the type of stocks that retail traders really like, lower-priced stocks, penny stocks, etc. So, I think it would make a lot of sense if you spend the next 45 days studying as much as you can. It would have been better if you could have started a year ago. It would have been better if you could have started 6 months ago. The next best time is now. So, I hope you guys take the leap, check out the special discounts we have on our Warrior Starter Membership and our Warrior Pro Membership. The Pro Membership right here includes a 7-day satisfaction guarantee, which gives you the chance to test it out and see whether or not it's a good fit for you. So, join us for the next 7 days as a Warrior Pro member. You'll have access to this software right here for charting, scanning, breaking news. You'll have access to a simulator, and you'll have access to my live audio video broadcast. And even on a day like today, when I may not break the ice and take any trades, I'm still sharing my commentary and walking you through what I'm looking at and what I like. So, thank you guys as always for tuning in. Reminder, trading is risky, so take it slow, and I'll see you guys streaming first thing tomorrow morning at 7:00 a.m.