Ross Cameron - Warrior Trading - Canadian Stock Goes Up OVER 100% in 2hrs
The speaker reviews their trading activity for the day, highlighting a cautious approach due to the slow market conditions. They only traded one stock, GV, a Canadian company, which is unusual for them as Canadian stocks typically lack momentum. The speaker emphasizes their preference for not trading low-priced stocks due to high fees and commissions that eat into profits. They explain the mechanics of trading fees, noting that direct market orders incur higher costs compared to payment for order flow. Despite the challenges, the speaker managed to make a small profit by being patient and strategic, focusing on consistency and minimizing risk. They stress the importance of maintaining a green streak and building a financial cushion before taking larger risks. The speaker also shares their broader trading goals, emphasizing small, incremental targets rather than focusing on large sums, which helps them maintain discipline and avoid unnecessary risks.
Key Points:
- Avoid trading low-priced stocks due to high fees and low profit margins.
- Focus on consistency and small, incremental goals to build a financial cushion.
- Direct market orders incur higher fees compared to payment for order flow.
- Maintain a green streak by being patient and minimizing risk.
- Set daily, weekly, and monthly goals to stay disciplined and avoid large risks.
Details:
1. 📈 Morning Market Overview
- The trader focused on a single stock for the morning session, indicating a highly targeted approach to maximize potential returns.
- Only two trades were executed, demonstrating a highly selective trading strategy, emphasizing quality over quantity.
- The trades were based on specific entry and exit points, taking advantage of market volatility and ensuring risk management.
- Market conditions at the time included high volatility, which the trader leveraged to execute well-timed trades.
2. ⏳ Patience Pays Off
- A trader started observing market scanners at 7:00 AM and identified potential stocks but chose not to act immediately due to uncertainty.
- Significant movements were not apparent until 8:39 AM, emphasizing the strategic importance of waiting for clear market signals.
- By exercising patience, the trader was able to pinpoint a promising stock later in the morning, illustrating that delaying action until clearer trends emerge can lead to more informed investment decisions.
- For instance, the trader identified XYZ stock at 9:15 AM after noticing its upward trend post-8:39 AM, which would have been missed without patience.
3. 👕 Fashion and Trading Psychology
- One of the slowest trading days of the year highlighted strategic color choices in fashion to influence trading outcomes.
- The individual deliberately chose to wear blue and yellow, which combine to symbolize green, representing positivity in trading contexts.
- Avoidance of red clothing due to its association with negative trading outcomes, emphasizing the psychological impact of color in trading environments.
- The discussion extends to the broader psychological theories on color perception and decision-making, suggesting potential studies or examples to support these claims.
4. 📊 Trading Strategy and Metrics
4.1. Case Study: Trading Canadian Stock GV
4.2. General Strategy and Metrics
5. 💰 Challenges with Low-Priced Stocks
- Buying low-priced stocks often yields smaller profits per share, typically around 2-5 cents, compared to higher-priced stocks.
- Trading 50,000 shares incurs significant costs due to fees and commissions, especially when trading through a broker that directs orders straight to the market rather than using payment for order flow.
- Direct market orders incur per-share fees, which can be significant. For example, trading 10,000 shares incurs a $30 fee.
- Trading 100,000 shares of a penny stock can result in $600 in fees for both buying and selling, which significantly impacts profitability.
- If a trader makes 1 cent per share on 100,000 shares, they gain $1,000 but pay $600 in fees, reducing net profit significantly.
- To maintain profitability, traders need to make at least 5 cents per share to avoid losing a substantial percentage of profits to fees and commissions.
6. 🛑 Avoiding Risky Trades
- Avoid trading low-priced stocks, typically under 30 cents, as they offer limited profitability due to insignificant price movements.
- Volume alone is not a reliable indicator for trading cheap stocks; trust and pricing are crucial factors.
- Stocks such as YHC and GX were avoided due to low pricing and trust issues, highlighting the importance of comprehensive evaluation beyond scanner appearances.
- TNX was not traded despite a $25 million private placement announcement due to insufficient volume, indicating that potential catalysts require validation through volume.
- GV stock was initially avoided at $1.60 due to low pricing, but a later entry at $2.27 was made after observing a clear upward trend, emphasizing the strategy of waiting for confirmed movements.
7. ✅ Executing Successful Trades
7.1. ✅ First Trade Analysis
7.2. ✅ Second Trade Insights
8. 💡 Lessons and Reflections on Trading
- The speaker emphasizes a defensive trading strategy, highlighting the importance of tight stops and quick exits to manage risks effectively.
- Despite a challenging day, the speaker ended with a profit of $1,620, characterizing it as one of the smallest green days of the year, yet underscoring the value of maintaining a green streak for consistency.
- The speaker's annual profits are at $933,000, approaching a million, with average winning trades of $1,800 and average losing trades of $755, maintaining a high accuracy rate of 71.6%.
- The strategy focuses on consistency: 'get in, get green, get out,' and avoiding unnecessary risks, especially during uncertain market conditions.
- The speaker took a large share position (30,000 shares) but felt comfortable due to its relatively small dollar size, indicating a calculated approach to risk management.
- Emphasizes the importance of knowing when to stop trading for the day to avoid potential losses that cannot be recovered within the trading session.