May 2021 is done, and it means that I’m officially 1 year into trading! I can’t believe it’s been an entire year since the first time I heard about Tim Sykes and day trading in general. Super grateful for everything Tim Sykes and his community has given and keeps giving me to improve every single day. It has been an incredible journey so far that I’m planning to continue it for many many years; this is what I want to do in life; nothing else, at least for now. Also, I want to thank all my new friends, or so-called trading buddies, without whom it would be 10 times harder and more boring to keep pushing myself in this marathon. Shoutout to Sam H, Josh, Zander, Lance, Sam T, and James. They know who they are. Very blessed to have such a great little community of hard working young people where we can share and bounce our ideas off each other.  

Now let’s talk about the month in general. May was different from March and April. March was when the market dramatically changed, and I failed to adapt which caused me to lose a lot, then April was primarily a studying/learning month with a few trades, and May was a month where I tried to put all my new knowledge gained from April into practice. In April I started to learn more about breakouts, particularly OTswizzles, as I see the best pattern in this market for me. The reason is because my two other best patterns, morning panic dips buys and overnight FGDs still don’t look consistent enough for. So, as I said last month, I learned to trade these OTswizzles using Tape and L2, so this month I had two great trades on this pattern that I’ll go over. In addition, I want to add an interesting fact: before, breakouts weren’t really my pattern, I lost on them pretty often, but this month, they were 5 out of my 6 trades, so it’s cool how sometimes your worst pattern can become your best pattern.

Overall, in May, I lost $19.88. I’m not mad or discouraged by any means, I’m not focusing on the money, only on the process and by the way here’s another even more interesting fact: my real PnL this month excluding commissions is +$71.3! Just imagine that, I made $71.3 but I lost overall because my commissions are $91.03. Therefore, what it means is that I can feel free to say that I was profitable this month. Commissions are completely negligible in the long run, and let me show you a good example explaining it. So, this month I made $71.3 without commissions, and I never used a position size more than $450. The commissions are usually $15 and they will be even less once I make more trades. So, it means if I make 10% on $400 position ($40), it’s 37.5% of my profit taken away, and if I lose 5% ($20), it’s another 75% added to my loss. Now let’s imagine in the future when I take $4000 position sizes (10 times the size). Important note: commissions will stay the same unless I scale in and out, etc. So, if I make 10% on $4000 position ($400), it’s only 3.75% of my profit taken away, and if I lose 5% ($200), it’s only 7.5% added to my loss. See how dramatic these numbers can change. They will be even lower if we use bigger position sizes. So as you can see that’s the main reason why I don’t care about commissions at all, and I count my stats using my nominal PnL. 

Now let’s talk about my trades this month. I’ve only made 6 trades this month, so I’ll go over some of them.

 

BFARF $20.15 (05/10/21)

Bought this decent FGD on a dip into the close. Goal was to get a gap up on Monday. It was a crypto-related company with news about uplisting to Nasdaq. Kyle alerted it first in the B/B room, but I didn't want to just follow the alert and buy right away, so I waited for a dip and got in. By the way, Jack also bought it. Then surprisingly, it started to drop into the close and closed pretty weak, I was down 4%, but I still believed that the good news would spread over the weekends. On Monday when I woke up, I saw that it didn't move at all, so I got a bit scared. Then, I checked, and I saw that they release a PR at 4 am about an upcoming conference, so I thought it might cause a gap up. So after a while, I saw bidders coming in, and right at the open, there were good bidders making that gap up. Right at the open, I was waiting for a morning spike, but as soon as I saw red prints, I got out right at the open price at 6.74. After my sell, it quickly started to drop, and I saw Kyle saying that he will hold through his dip as it may bounce. So after a little dip, it indeed started to bounce and went all the way to 7.33. So I learned that sometimes you need to hold through the morning dip to get the real move, but I doubt I'll ever do it because I know, have seen, and even have experienced big panics where I have zero chance of getting out. However, I think that holding through the dip on a stock that has news and is a higher-priced can be a good thing because they won't really have massive % panics due to their range. Well, I will live and learn. 

Trade Grade: A-

HTZQG -$9.35 (05/12/21)

Bought the first fakeout breakout at $5, it dropped right away to $4.9 and was consolidated there for a long time. Stuck to my risk but then just got frustrated and got out for a small loss. Then I forgot about it, and it had a convincing breakout and spiked to $6.2 without me while not breaking my $4.85 at any time. Missed out on a 15-20% gain. A full analysis about this trade is in my last blog post here.

Trade Grade: B

 

NWBO $41.4 (05/17/21)

NWBO was my top watch for today. I saw that yesterday it had a nice gradual FGD and closed at its highs. It had a multi-month resistance at $1.87, which it's held for about 7 months. So I put in on my watch for a potential breakout and OTswizzle. I want to add that NWBO was a good former runner, and I watched a TWIST episode with Dom from October 2020, which was that former runup where they all talked about it being a good stock for OTswizzle, so my plan was a breakout and/or maybe an afternoon OTswizzle which would have been better tbh. So coming to the market open today, I had its chart pulled up at all times and started to see its little uptrend in the morning to $1.8 level. I wasn't very focused on this one because my plan on it wasn't right in the morning, and I had other stocks to watch. So, after 20 minutes, when all morning plays slowed down, such as morning panics and spikes, I noticed that it was still around $1.8 level, but I still didn't pay much attention to it because I really thought it would just go sideways and have a longer OTswizzle. However, when I once looked at it with one eye, I suddenly saw that it broke $1.8 short swizzle and was at $1.84. At that moment, I knew that I didn't quite miss the perfect entry because I knew that it was the trigger and it will go higher. But I also didn't want to chase, so I tried to buy on the bid, and with my small size, I got executed pretty quickly. Tbh at that moment, I didn't even think that the breakout level was $1.87, but it doesn't mean that I would have waited for it because lately, I've been good at trading these OTswizzle type of plays where I buy before the actual breakout. So after my buy, it went up a bit and then slowed down near $1.87 breakout level, but still pretty easily broke it. Before breaking that level, it formed a nice support level at $1.85 where I eventually moved my risk. The next challenge was to break $1.95 where there was a huge wall of sellers. It once topped there and had a pretty decent dip to $1.87, and it perfectly held that level. Therefore, I again moved my risk there. So we also broke $1.95, and the major level was $2. It took some time and also broke that level with big volume and spiked to $2.04, pulled and rebroke out but very briefly to $2.05. At that time, I was thinking about putting my sell order at $2.07 as ArtOfWar does, but then when I carefully analyzed the PA and overall situation, I realized that it just made a solid +10% move on a low range stock, and we were heading into midday. As Kyle always says, it's better to sell or not buy during midday. In addition, I saw that the volume was becoming significantly lower, and the buyers on L2 were drying up; therefore, when there was only one bidder at $2.02 left, I just hit him and got out for a very solid gain. Interestingly enough, about 10 minutes after my sell, it broke down then bounced and dropped more, so it was a very smart and reasonable decision to sell right where I did. Overall, very great trade that I was fully prepared for the day before had not the best entry but the best exit, so I'm super happy with this very solid profit.

Trade Grade: A+

 

MRMD ($40.5 05/24/21)

I found MRMD in Jack's weekend watchlist. When I saw its daily chart, it was so nicely setting up for a multi-month breakout over a big round number - $1. However, the ONLY problem was that it was pretty illiquid and had only like $1M volume. So, I wrote in my watchlist that it needs a big volume to breakout. I put it on my watchlist, and it was one of my main watches that morning. So, right at the open, it spiked a bit to 0.985 and cons. below. I had its chart pulled up at all times. After a few minutes, it broke that high, BUT I didn't want to buy there anticipating the $1 as I did with other stocks because MRMD wasn't liquid enough and $1 is a very strong level, so I said to myself that I'd wait for the confirmation and buy at $1.01-1.02. Meanwhile, I asked Kyle about it, and he answered, "too low volume for me but nice daily for sure." So then I realized that he said "for me" because if he wanted to trade, he would have bought like $20,000 position size, and since I'm taking way smaller size positions, I knew it can still be a good trade. So after the $1 break, I put my buy order at $1.02, and got in with a $450 position at $1.01. My risk was 0.97 or higher, as I feel along with the trade. After my entry, it spiked pretty quickly to $1.05, then $1.07, and then started its very long 30 minute consolidation. The lowest it got was $1.03, so I felt pretty comfortable during consolidation. I even moved my risk to $1.03 because enough time passed to consider it a new support level. During all the consolidation, $1.07 was a big level that it tried to break several times and failed all the time. So, it started to form an ascending triangle with the $1.07 top, and then it finally broke it with some nice VOL candle. However, after it broke $1.07, I expected it to spike to $1.10-1.15 pretty quickly, but it just went to $1.1 and stuffed there. At the time I started to think about selling because it was the same situation as with NWBO when I sold before the drop. So I waited a bit, it spiked to $1.12, I tried to sell there, but no fills, so I finally sold at $1.1 for a solid profit. It then tried to $1.12 several times, like $1.07 before, but it couldn't, and right now, as I'm writing, it's at. Overall, I'm very happy with this trade. If on NWBO, I didn't have the best entry but a great exit, on MRMD, I had the best entry and exit, so supper satisfied. Not a big $ trade, but so much knowledge and confidence gained.

Trade Grade: A-

 

Key Lessons:

1. Sometimes the worst is the best

If you have a pattern that doesn’t work for you, don’t throw it out completely because you never know what the future market will bring you and this pattern may become your go-to.

2. Learn from alerts but do not get influenced by them

I personally NEVER follow the alerts, meaning I buy right after the alert without any thinking done, but I can get influenced by it, meaning I become biased, and that’s one of my goals for the future to avoid it.

3. Commissions are nothing

In the beginning with small size, it may and will be tough, but stick with it because when you eventually size up, commissions will be negligible.

(Note: all my stats are based on my nominal PnL not including commissions)

Finally, I want to say that I'm super grateful for this year, and I'm looking forward to many more. Can't wait for next month. Excited and ready to go!

Cheers