I’M NOT A TRADING ROBOT!

It was on my watch list really but I wasn’t really watching and then at that time when i was watching it happened really quick it just moved over $101. Now $101 was the high of ATVI which is also a whole number we always like to buy stocks over whole numbers because there’s a lot of people who are trying to sell at whole numbers. If you’re not familiar with that until now if you’re new to this room or something you should always notice whole numbers. There will be a lot of buyers at all numbers when the stock is coming down there will be a lot of sellers whole numbers when stock is moving up.

That’s not always true, that’s generally true. So if you’re looking for a long you better wait until the stock moves over a whole number like in this case $101 and look what happened right afterwards. I have to say I did not play this trade correctly I took the partial was relatively too quick I didn’t I didn’t think it can make it really but it moved quite a bit and I moved out at the time and that’s it. I do have one loser today CGC; looked really good moved in under $42.

1. Yogi posted this trade. I followed him. I really liked it the daily of CGC looks good at some time it did come down under the lows, but then it bounced. What you need to remember from CGC is the following and it’s a good example and something to learn from you know sometimes you have losing trades you have nothing to learn from, sometimes you have winners you have nothing to learn from but this in this case it’s a losing trade and there’s something to learn from.

Well, it does not matter how the daily looks and the daily does look good the intraday also looked good so I really liked CGC short when I took it that does not mean it’s going to work out you know my average success rate is around 68% and that means that I’m losing money even if I’m thinking sometimes that I’m doing the right thing, so you know stocks does just have life of their own but what can you learn from CGC? Originally, when I moved in, my stop was right here.

Look at the point where we moved actually it was here not as pointed there just a little bit left so when we moved in right here the stop was over $42. 80 and look at this resistance over here it looks like that would be the right point to move out if it moves higher so I knew I was risking approximately 40 cents and I was hoping to get the same minimum 40 cents if it moves down. Now, stock started moving sideways yes at some time it came under the lows the wrong thing about it was at that time the market was coming down.

If you take a look at the S&P 500 you can see that when CGC was going sideways the S&P 500 was in fact coming down very, very clearly and you can see the fact that CGC did not want to come down with the market, yes it moved then another three cents under the lows no big deal but the market kept coming down and CGC, although it did move under the lows, came back up again retested the lows once more, came back up again now immediately with the stock is not going with the market, although CGC was to start with was weak today you know CGC started weak it looked like a nice gap and go it looked like a nice move down if you watch the daily but it kept going sideways well when something like that happens you know the thing with us traders we don’t like to live we don’t like to move out of trades we feel like we let’s say in this case we shorted the stock, we feel like if we’re going to move it leave it if we’re going to move out then there’s a very high likelihood that you know 30 minutes later we’re going to be extremely sorry just crash down and why did we move out it’s it goes all on in our head.

You know we like to continue hoping, you know people like to hope, I mean human beings are hoping every time for for better that’s something very human so we hold on to stocks even though nothing is happening. But there is one thing you should do, there is one thing you should do. Okay, you don’t want to leave the stock? You should have left the stock. I should have left the stock. I did not. I did not want to leave the stock, fine. I mean at least what I can do is have a tighter stop.

So if my original stop was 80, now it moved to 60 and I did have some reason for the technical reason look at actually it was 63. So you see right over here. So instead of having a 40 cent loser I would at that point reduce it to 20 so fine so I cannot leave. I’m feeling like I’m going to miss the best trade of my life. Okay. I’m stupid enough to stay in the stock. |It is seriously I should have moved out I mean that’s the right thing to do I’m not saying I can do that I mean it’s I’m human and I’m doing mistakes but it kept moving sideways the least I could do is have a tighter stop loss and I did.

So look at the results here it’s smaller than my smallest winner you see so I did lose - 20 something cents. But it was not as big as it could have been if it would have moved over 80. Now take a look at the result here you see CGC really doesn’t want to come down it’s in fact starting to move higher, so when the market was coming down it showed us that it doesn’t really want to come down so yes it kind of tried to move lower the market was really coming down, CGC was going sideways sometimes some sellers took it down a little bit but then when the market finally started to move higher a little bit just to pull back from the lows CGC did that.

So you see when the stock really wants to move higher and the market’s coming down it’s holding when the market’s now moving higher a little bit stock really wanted to move higher I mean I’m talking stock as if it was leaving but there are people there who are trailing in and somebody’s just getting ready to do something and this person, whoever they are, started buying when the market was pulling back up. We learned a lot about this in the first lesson of the Star Trader Course when we talked about the S&P 500 and the way you should follow the S&P 500 and CGC really really reacted to that small move in the S&P 500.

BA was a very, nice trade because it was trending lower very, very clearly I watched the airlines at that time I wasn’t sure about the airlines what the airline’s going to do I was a little bit reserved about BA. I wasn’t really sure about that but the end result was beautiful and BA just crashed down was a beautiful trade and just kept going. So that was a nice short. There was another short which I think is very interesting education wise. Take a look at U.

What you’re seeing in U is a trade that I missed. I was following it it was on my charts the moment I opened my trading my trading platform today. I was watching U and U was initially coming down then it moved up it was a big gap of course and then went sideways. This red candle was too quick for me to move in I should have shorted it here I was ready to short somewhere under 131 and I missed it and then it just came down it was a huge drop and all the way down to here so that was a big move in U.

Now when the stock is spiking and it’s very important just listen out to what I have to say now. When this stock is spiking there are ripples afterwards. Meaning it’s going to come down strong and then it’s probably going to bounce back up. It’s like whatever you throw from a window if it’s not a dead cat then it usually hits the floor and then just bounces up somewhat and so if you look at U, that here was the bounce from the lows. You would expect it to continue down after the bounce.

You would expect it to continue down. Now, taking it on the bounce is much more dangerous than take it taking it the first place. I missed that trade so I felt like I should join in this trade. It’s not a wrong thing to do and it did work out you see I’ve got a $1,700 winner in U, so it did work out. It bounced. Took it as it was moving higher and then came down a little bit and then it came down quite a bit so that gave me plenty of space to take it for the short side and that worked out nice.

So, remember there’s two ways in moving into a stock one of them is taking it where you should which is the technical breakdown formation but it just happened too quickly and I was a little bit surprised to see how fast it worked and I just couldn’t join this one the first time it moved down and then the second one would be on the bounce. This bounce is what we call a re-test it was re-testing the breakdown point. When you have a support and the support is broken then when the stock is bouncing back up it’s likely to get very close actually it moved a little bit over the breakdown point which was support now becomes resistance for several reasons which I’m not going to talk about right now and then it came down again and that was a good, turned out to be good trade.

Now I’ve got small size left which is great because look at this huge upside move here. That was another spike. A huge spike to the upside. Now, here comes another one and it’s actually the same idea as I just mentioned you watch this big spike up and you’re thinking well I should have a stop loss right well yes the stop should have been somewhere around here I would say $132. Not more than 132, but when the stock is spiking up this way, I never move out.

I just never move out. Now sometimes you know when it’s spiking up you don’t know where it’s going to stop you watch it spiking I don’t have a hard stop I do not work with a hard stop, I am working with a mental stop and usually when stock is spiking up, it’s very rarely would go up that much it just kept going that was $132 and the stock moved all the way to $135, so another three points. It was a huge upside move and I had 400 shares so I was almost at zero with my profit in U when U just picked up this way, but you have to wait for the bounce.

You remember when it crashed down there was a bounce and it returned lower when there’s a big upside move there will be a bounce you never know when now the boss could have been at $132 and then it could have come down to a new low definitely could have happened had lots of trades like this you never know where it’s going to spike when it continues up another three points that’s a lot. You don’t really expect that, but once it happened and it’s very rare so don’t take this as something that usually happens if that happens every once in 10 spikes that I go through then that’s fine because in the last nine spikes the spike could possibly be all the way down to up to $132 and then come down maybe $131 maybe $133 and then come down, so every once in a while, quite rare, I’m getting a big spike which I hate, I don’t like, but that’s why I have my partial you know I have this perfect cushion - I can’t go wrong, I could go to zero I could have gone to zero in U, but I couldn’t go to red territory again that’s why I have my partials that’s why I have my profit cushion so the stock came all the way up to $135 and then I just have to wait patiently for the return lower and it did come down and it went all the way down to $132.

So at that point I couldn’t have known if it was going to continue down or as it probably should continue higher. Why it probably should? Because it spiked up over the highs then probably this is just the pullback and the continuation which was. I didn’t know how far. I didn’t think it was a good trade, but it turned out to be a good trade if somebody took it some of you guys noticed it and probably took it, but at that point once it comes down to $132 I’m waiting, I’m waiting at that point it’s just a small loser for the rest of my 400 shares and then you should have a very, very tight stop so as long as it comes down that’s fine just wait for this pull back wait for this pullback it’s like a 40% pullback from the from the total move over here and just wait maybe it’s going to continue maybe not but if it just moves up like 20 cents or so stop it and get out so if my original stop was supposed to be 132 I got hit only at 130 to 30 or 40 I can’t remember, something like that, so after waiting for the bounce, for the bounce, for the stock to come down again and again they will bounce after waiting for it to come down again you have now a very small trailing stop.

If it moves up against you just a bit; get out, but wait for the pullback. Now this huge move up again is very, very rare but even this move up which was extremely rare three points more than I expected I still played it in a way that it didn’t quite hurt me so maybe a few cents right but remember the spikes wherever they go they will be extremely rare the way it just happened here most of the time you just you just look for the you just wait for the spike and sometimes it would even you know return lower and you’ll end up having a bigger winner.

Most of the time that’s the right thing so if you just work the statistics you should wait for the spike to come down, wait back to the point where you like it and then move out with maybe a little bit bigger loser than you expected but go through the spikes don’t have a hard stop. If you have hard stops you’ll be taken out lots of times and you know how many of you guys felt like hard stops are taking them out of good trades every once in a while. well happened to me a lot when I started out as a trader I just couldn’t believe my eyes all the time I mean I had the house stopped in the systems and yeah it always happens it just takes you out all the time and you just you know you had a stop just two cents above the right price or below the right price and that’s it it just took you out and you’re losing a good trade that’s why we’re using mental stops and not hard stops so just remember these spikes don’t get out on spikes and sometimes you can use them now that happened twice in the same stock.

Big spike down use it in order to short and join the trade a little bit more dangerous than the first one so don’t do it too often just where you really think like something interesting is going to happen and the same applies for the stop so it happened in the same stock which is extremely volatile today as you can see twice. Well that’s it for today and that’s it for the week, not quite I’ll meet you guys some of you are today in the Star Trader Course; today we’re going to learn about trading gaps.

So that should be interesting looking forward for that and just enjoy the rest of your day and have a great weekend traders and as I said earlier I’m flying to Cyprus on Monday so I won’t be trading on Monday. I’ll see you on Tuesday in the Trading Room. Bye guys. .