Ross Cameron - Warrior Trading - Day Trading WATCH LIST for Monday!
The speaker discusses their approach to day trading in a bear market, highlighting the importance of focusing on high-volume, momentum stocks that have the potential for significant gains. They recount a recent successful trade with ARB, which rose over 400% on a day when the market was down significantly. The speaker emphasizes the challenges of shorting stocks due to borrowing difficulties and suggests focusing on long trades, even in a bear market. They provide a watch list for the upcoming week, including stocks like ARB and BJDX, and discuss the importance of monitoring stocks with a history of big moves. The speaker advises caution when trading high-volatility stocks and stresses the importance of managing risk to avoid significant losses. They also mention the potential for market recovery plays, such as trading the VIX or buying options on major indices, but caution against trying to trade everything and instead focus on clear opportunities.
Key Points:
- Focus on high-volume, momentum stocks for day trading, especially in a bear market.
- Avoid shorting stocks due to borrowing difficulties; prioritize long trades.
- Monitor stocks with a history of significant moves for potential gains.
- Manage risk carefully to avoid losses, especially in volatile markets.
- Consider market recovery plays like trading the VIX or buying index options.
Details:
1. 📋 Weekly Game Plan & Strategies
1.1. Weekly Game Plan
1.2. Bear Market Trading Strategies
2. 📉 Market Analysis & Recent Trades
2.1. Market Analysis
2.2. Trading Strategies
3. 📈 Trading Recap: Big Winners & Losers
3.1. Overall Market and Trading Performance
3.2. ARB Stock Performance
4. 🛠️ Trading Strategies in a Bear Market
- S&M stock dropped by 32% with a low volume of 2 million shares, indicating limited trading activity despite the significant decline.
- Another stock also experienced a 31% drop with even lower trading volume of 1.5 million shares.
- Stocks with gains showed much higher trading volumes, such as 80 million, 115 million, and 90 million shares, highlighting a trend where substantial gains are accompanied by significant trading activity.
- Stocks that increase by 400% offer a greater profit potential than those that drop by 30% or even 90%, emphasizing the advantage of targeting high-gain opportunities.
- Traders face challenges such as difficulty borrowing shares, lack of leverage and margin, and shorting restrictions in cash accounts, which influence a preference for long positions.
- Despite being in a bear market, trading to the long side is preferred due to these limitations and the potential for high returns.
5. 📊 Momentum Stocks & Scanning Techniques
- In a bear market, significant stock movements can still occur, as demonstrated recently with ARB being the biggest gainer. This highlights the importance of monitoring all market conditions for opportunities.
- Traders should focus on stocks with potential to 'squeeze' and avoid those moving sideways within narrow price ranges (15-20 cents), as these are less likely to yield significant gains.
- High trading volume in stocks is crucial for ease of trading, as low volume stocks can present liquidity challenges, making them more difficult to trade effectively.
- Private placements differ from secondary offerings in that institutions conducting private placements carefully vet companies, suggesting a more informed and strategic investment decision. This can signal confidence in the company's prospects.
6. 🔍 Analyzing Stock Movements & Patterns
- The company secured $2.5 million upfront, with a potential for an additional $8.5 million, highlighting robust financial support.
- Initially, the stock price was low at $345 and $2.95, resulting in a decline, but it later rallied unexpectedly, demonstrating volatility.
- Earlier in the week, the stock exhibited significant movement with initial lighter volume and halts, followed by a dip and a sharp rise.
- On Friday, the stock achieved a new high, surpassing $5 and reaching approximately $5.50, forming a daily bull flag pattern, indicative of potential upward trends.
- A scanner is used to identify former momentum stocks, which are known for past significant moves, by lowering filter thresholds to find new opportunities, enhancing strategic stock selection.
7. 📅 Watchlist & Market Predictions
- ARB was an early trade opportunity that yielded great results, illustrating the value of identifying and acting on early market signals.
- After-hours top gainers include BJDX, a low float diagnostics company, potentially signaling a continuation into Monday, making it a candidate for side chart monitoring.
- ARB remains on the watchlist despite recent offering news due to its ability to maintain strength, suggesting potential for another daily bull flag.
- ICCT showed significant movement on Friday, reaching the 200 moving average at $7. Its ability to hold this level is uncertain, highlighting the need for careful monitoring.
8. 🚀 Continuation Scanner & Stock Picks
- ICCT is a potential stock to watch; however, it's categorized as a 'maybe' due to existing uncertainties that could affect its performance.
- ARB, with a 19 million share float, recently charted over 14. Despite the higher float being a challenge, its status as a recent IPO could lead to success, indicating a potential opportunity for investors.
- TIVC shows promise if it breaks above 6, suggesting a strong potential for growth if this threshold is crossed.
- ALMS is a hard 'maybe' due to concerns about its float impacting performance. This stock should be approached with caution but remains on the radar as a possibility.
- CGTL, though a recent market entrant, lacks volume, which might impact its trading potential. It is placed on a watchlist for further observation, indicating that investors should monitor its volume changes.
- Ford Industries, distinct from Ford Motor Company, needs a catalyst to incite movement. Currently, it's up 39% with light volume and low float, suggesting potential for significant gains if a news event occurs.
- The broader market is experiencing a downtrend, contrasting with small cap names that are seeing increased volume. This divergence signals that small caps are attracting more investor interest despite broader market conditions.
9. ⚠️ Risk Management & Trading Advice
- The market is experiencing significant volatility, with stocks like Netflix, Apple, and Tesla showing movements that largely align with overall market trends.
- When the market shows signs of a bounce, consider buying the S&P 500 or shorting volatility products like UVIX or UVXY, as these tend to drop when the VIX decreases. Notably, the VIX recently spiked from $22 to $40, causing a 100% increase in UVIX.
- Going long on SVIX during a market bounce is a strategic move, as this is effectively a short on the VIX. This could lead to gains of several dollars per share when the market rebounds.
- Significant economic or tariff news can trigger market bounces, resulting in substantial stock movements. Capitalizing on these events involves strategic stock and options trading.
- Consider using options on the S&P 500 calls or investing in liquid stocks like Nvidia or Tesla during market bounces due to their high volatility and liquidity.
- Risk mismanagement can lead to severe losses, particularly with high-priced stocks if not part of a well-defined strategy.
- Focusing on outlier stocks that make significant moves, rather than attempting to trade every stock, often leads to success in a bear market.
- Traders frequently incur losses by chasing every market move, which can result in FOMO and continued financial setbacks.
10. 🎯 Focus on Outlier Stocks & Final Thoughts
- To maximize trading success, focus on identifying and trading stocks with specific catalysts or favorable daily chart patterns, rather than attempting to optimize strategies for rare extreme market conditions.
- It is acceptable not to trade on extreme 'worst days' as they are infrequent, emphasizing risk management and a measured approach to trading.
- Understanding that trading results are not typical is crucial, and managing risk appropriately remains a core strategy.
- Educational resources such as day trading strategies and technical analysis guides are currently available, with limited-time promotional offers.
- Warrior Trading provides a supportive community for traders, with scheduled live streams for continued learning and insights.