View Into the Chat Room, Real Time Action and Understanding The Trades

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Once again another wild week in the chat. With increased volatility comes major opportunity. It’s about minimizing the noise, and focusing on the best set ups of the bunch. Once you realize that trading less is more your trading can take on a whole new level. Friday was not typical for me. Everything I expected happened just as I assumed, therefore we reacted to each name as in real-time but sized down when the trade came in as planned – decreasing my risk due to the number of names traded.

Such a simple but yet powerul trading rule !! My best days are always when I focus on the prime set ups vs. trying to nail everything #stocktrading #stockmarket #nyse #nasdaq #daytrade #daytrading #stocks #livetrading #tandemtrader #investorsunderground #investorslive #tradingrules

A post shared by Investors Underground (@investorslive) on Feb 26, 2015 at 11:35am PST

As I’ve said in multiple blogs over and over it’s all about decreasing the watch list and focusing on the BEST set ups only. I’d encourage everyone to try this on the next trading day. Focus on what your strengths are. Remember, you do not need to be in a trade at all times. Sometimes, the best trade is cash. Many times we get into a trade due to the fear of missing out (FOMO) and try to force what we think should happen on the trade and end up either 1.) losing or 2.) wasting a ton of time where energy could have been focused elsewhere. In fact, I did this on Friday with CTRP (which I’ll discuss later in this blog). I anticipated a break that never came, only to sit there from 11AM until 2PM with no other reason but to baby sit this stock that never broke $96!

Friday started out with some amazing opportunities and I wanted to share just how we played them in the room. My goal is to encourage traders to think out of the box and understand set ups. My goal for the chat room is not to tell people what to do but rather share what I do based on the foundation laid out on our trading courses. Everything I do can be referenced back to the trading courses to understand exactly what I am thinking and why.

It’s encouraged to review our trading courses prior to joining the room as everything we do assumes that you have the solid foundation that everyone else in the room has. Once you have this foundation, the chat room takes on a whole new meaning. We aren’t about telling you “I told you so” or telling you to buy now or sell now. At the end of the day, this is about YOU. If YOU want it, we provide the tools. Our goal is different than most out there. Most great traders end up in our room because of how fast we react to news, price, volume, approvals, earnings etc. It’s a one stop shop of live human scanners all focused towards one goal. As you become more and more self sufficient this becomes more and more of a tool for your arsenal.

Let’s take a look at some of the trades I made on Friday and then dive into the chat logs:

FIT was a great trade out of the open where most traders think, “no way it can break the $29 syndicate can it ??” I used to think like this back in the day. I remember on KERX feeling confident that any good dip buys were solid trades because why would it break under that level?

Well, using the morning action as a guide (pre market levels we’ve discussed many times in recent blog post, Tandem Trader and many recent video lessons) I shorted with a risk off the highs made around 8-830AM giving a solid risk vs. potential reward. I started in and added to the winner once they exhausted some of the shorts out of the gate, then snapped it on all the unaware dip buyers providing us with a great cover.

$FIT that time you didn’t think it’d break syndicate and then it faded another $2 bucks?

— Nathan Michaud (@InvestorsLive) November 13, 2015

All covered $FIT great trade! — Nathan Michaud (@InvestorsLive) November 13, 2015

Best to draw a line across the 8-8:30AM highs and see where the risk was based off of

Reactive trade out of the morning wait for lower highs and failure of trend which you can see in the second image

 

You can see around 9:40AM it re-tests toward VWAP and fails, tries again and washes out.

At this point the thought process going through my head is all pops = add and risking on HODs

Perfect fader right into the $27s washout

WTW was the big trade for me on Friday

You can see the late day move on Wednesday. Thursday pretty much had a slow sell all day so any morning ramp for me is a cautious short with a risk off Thursday highs which you can see below shown by [11/12] at the bottom of the chart.

$WTW red hit – shorted into the morning rush on $25 covering any/all good washouts

— Nathan Michaud (@InvestorsLive) November 13, 2015

09:14:42 am InvestorsLive: WTW if it can’t bid up just remember what I’ve been saying on scans and past few days in chat if trying to trade it — entry matters
09:33:44 am InvestorsLive: starting WTW into strength ss
09:39:20 am InvestorsLive: WTW note the volume here — 250k vol only so ideally $25 + blow off etc like mentioned on scan but will be choppy given teh vol

I used the morning strength as an opportunity to get short but not with any size YET. You never want to just short into the morning move with size, especially if the volume hasn’t churned over. At this point, it was around 250-300k volume which is relatively low volume to move nearly $1/share, so there is a GOOD chance that once the momentum fizzles it CONSOLIDATES at a lower level. The name is just too big to sustain a move on such low volume. Keep in mind, it CAN sustain it but it’s not LIKELY. So, with that said, I would only take a starter entry UNTIL we see the same thing we saw on FIT (lower highs, failure of trend, VWAP fail) and then for me it’s add into all pops with a risk off HODs or $25 mental. As the trend continues to come in any fast moves or washouts I’m locking in along the way.

 

PRGO is a reactive trade and not meant for new members at all. I always encourage people to be careful with these quick ones. If you’re going to trade them you need to realize two things 1.) it’s the front side of the move therefore size should be less with a wider stop in mind and 2.) any washouts = cover – just like when we discussed nail and bail don’t stay in pray!

Remember this when trading the FRONT SIDE of a move !! (This is trading advice not dating advice) #daytrading #stocks #stocktrading #stockmarket #nyse #nasdaq #daytrade #chatroom #success #profit #learn #tandemtrader #investorsunderground #investorslive

A post shared by Investors Underground (@investorslive) on Feb 10, 2015 at 10:01am PST

 

You’ll notice I could care less what it will do later, it’s about the trade NOW. The trade is reacting to what’s happening at the current moment not looking for a full day fade on some of these other charts we’ve prepared for on over night watch list.

 

JWN – Discussed in the educational courses as an intraday parabolic — letting things exhaust early shorts and rebound traders into a whole/half dollar mark in this case $50-51 towards $52 range the ideal trade for us is that mid level $50s or $55 parabolic. Any trade I make will use $55 as a guide, started in to get a feel for it let it exhaust out, big stuff candle and then add into the winner all while locking into any good washout. Keep in mind this is a trade that must be anticipated due to the SSR.

 

FCX – Here’s an intraday ABCD that I was monitoring with other sector trades and, once they failed, I went ahead and got out of the trade. Rather than “try to make a trade work” there’s nothing wrong with getting out of the trade if the reason why you bought he trade is no longer holding.

I’d encourage you to look at 10:15 to 11:15 AM and see the double bottom trade once this happened it starts to grind up with higher lows allowing us to risk off the prior lows. Nice curl up and the ABCD breakout over $8.80s provided a nice push higher – the unfortunate part is it was short lived only about a 20 minute trade and faded back.

 

JD – One thing I learned a while ago just watching how Phil trades was just because a stock gaps down does not mean that it needs to be avoided. I always used to ignore stuff after it had gapped down but the reality is there’s still so much good action left to be had. Such is the case for this one gapping down. BIDU was gapping down among many other Chinese names. Looked for all pops on this one and got short as you’ll see by the calls.

Beyond my trade I wanted to show the second trade which was also a great set up but I just didn’t take it. There is a lot to learn here. Many times in webinars and Tandem Trader I discussed the whole concept of the basketball analogy and looking at the chart seeing it bounce off support but each rebound has a lower high – looking to join that trend you can see how this unfolded after 11AM, take a look and see if you see the trade as well.

 

 

CTRP I had in my Etrade account on Friday and this is a perfect example of what not to do – not because it was a loser but rather WHY be in the trade? As you progress as a trader you’ll find yourself in positions sometimes waiting, hoping and thinking that you’ve got it right and then notice that 4 hours has gone by and nothing has changed. This was the case for me Friday with a $96 ish average short on CTRP. After I added to the winner, it was up nicely out of the gate and then just sat there all day watching this thing tease me all day. There was (go ahead and count them), at least five times I thought I was going to get paid when it tested $96 only to fail the break down every time.

What I should have done here was scale down or got out – then I’d be outside enjoying myself vs. babysitting a +4k to -4k range bound name five times.

Chat logs are below: