Here's what's REALLY Happening...

What's up everyone? All right, in today's episode, I'm going to break down a shift that's occurring in the market. It began last week, but is continuing in earnest Monday and Tuesday of this week. In fact, if we look at the market right now as a whole, our leading gainer is up only 58%. It's GoPro 160 million share float stock and they've got a merger catalyst which is fine but the fact that our leading gainer is up only 58% number one and that it's a stock with 160 million share float really says something about the sentiment in the market. So this shift has been a shift from control among buyers to control among sellers. The point of control has shifted from the buy side to the sell side. And so during these periods when the sellers are in control, we as long biased traders have to be very careful. Now August is in the history books. We're now starting a brand new month. And I wanted to begin this month by exercising discipline, staying focused on trading quality over quantity, recognizing that just a few really good trades have the power to create an incredible month. So before we jump into everything from today and talking a little bit more about the shift that's occurring, let's take a look back at the month of August. This is an exercise that I really encourage all of you to do in your own trading. Whether you use Traderview, which is the software that I'm using for analyzing uh my trading history, or you're using a different platform, it doesn't really matter. Essentially, they all do more or less the same thing. They aggregate your trades so you can look at the data and better understand your strengths and weaknesses. I want to look at weaknesses because those are the things that you probably should really stop doing. And if you could stop doing them, they could potentially have a very significant impact on your profitability at the end of each week, month, and year. So, as I look back at the month of August, and by the way, let me just u move this over for one second. So, if I go over to the footer of warriortrading.com, um you'll see my verified earnings down here. I'll just open that into a new tab. And so, my 2026 earnings at the end of each year, I have a audit done that audits all of my uh trading profits. And by the way, our Labor Day sale is underway here at Warrior Trading right now. So, for those of you guys who have been on the fence, thinking about joining, you've done a two-eek trial and you didn't join at the at that time, check out the Labor Day sale discounts on our Warrior Starter and Warrior Pro membership. All right, so if I go over to 2026, you will see all of my broker statements. So, we now have August updated right down here. And so, I began this year with about $96,000 in my account. That was my starting balance at the beginning of the year. In fact, it's very similar to the starting or the current balance in my small account right now. And by the end of August, I had a balance of about $2.1 million. So, the account has grown uh very quickly this year, which is great. However, if we look at the month of August, you will also see a $74,000 red day and a $66,000 red day. Those were two of my biggest red days of the entire year. It's 130,000 $140,000 lost in two days. Now, it's impossible to never have red days. That's not a realistic goal to never have a red day, but it is possible to stop sooner when the day starts going against you. And I made the mistake on this day and then again on this day of getting stubborn and sort of digging my heels in and refusing to walk away and instead continuing to trade even though everything in the market was telling me it was a bad day. And the result was that I made my losses much much bigger than they needed to be. If I had stopped trading on both of those days when I was down only 15 or $20,000, I would have an extra $100,000 of profit here by the end of uh by the end of August. That's a 50% increase in my total profitability having finished as you could see here after fees and commissions at around $211,000. So increasing that by 50% up to 300,000 311,000 that's a meaningful difference. And the only thing I would need to do the only thing is walk away when I'm down 20 grand and not continue trading. None of these days where I'm green, I was down more than 20 grand before recovering to green. So, if I just stopped and I was down 20 grand, that would have eliminated that just those some of those terrible losses. So, we're going to look at the month of August here. Um, let's see. We're going to go to uh just the la last month. And this is includes my small account challenge as well, but that's all right. So, if we look at this, I've got $287,000 of total profit right here. Accuracy was about 65%. Average winners were 6,000. Average losers were 5,700. If we compare that to um the last 12 months, a bigger period of time, you can see that my accuracy declined. My average winners got a little bigger, but my average losers got quite a bit bigger. So, I had a few really big losses last month. That was not good. Let's dive a little bit deeper. So, first thing I always check is accuracy. Is it stable, increasing, or decreasing? It decreased. Average winners a little bit higher. Average losers also a little bit higher. Okay. Then I dive a little bit deeper. Day of the week. Any themes? Anything sticking out? Oh, right there that I'm getting absolutely crushed on Fridays. This is an important observation. Now, if you saw this in your own trading, you would, I would hope, make a correction. So, the correction that I made, which took effect the last two Fridays of August, was tightening up my risk on Fridays and therefore was able to avoid having a repeat of those big red days I had earlier in the month. So, that's one observation. Here's another notable observation that I'm losing money between the hour of 10 and 11. In fact, that I was making the most money between 7 and 8. Although, interestingly, look at this. my frequency of trades. The most trades were between eight and nine, but I didn't produce as much profit. On fewer trades, I produced more profit between seven and 8 than I produced with more trades between 8 and 9. That is very interesting. So, why is that? I don't have an answer for why that is the case. That I did better between seven and 8 than I did between 8 and 9. I I think that probably it is I would probably attribute it to just the fact that there were some really good catalysts at seven or 7:30 that gave me a few big wins that drew the metrics higher in that window. Um but let's let's check over a larger period of time just to see last 12 months. How does that check out? Does that stay about the same? This is on $4.2 million of profit. So it doesn't stay the same. So, in the last 12 months, I've done better between 8 and 9. So, seven and eight is sort of building the cushion. Eight and nine is really stepping it up, and then 9 and 10 is cooling off, and then I'm losing money consistently after 10:00 a.m. So, at the very least, I think we can say that after 10:00 a.m. for me is a high-risisk no trade zone. And if you saw this again in your metrics, I would hope you would draw the similar conclusion. So, without a doubt, I do need to have a harder stop um at 9:30, 10:00 a.m. Um rather than continue to trade longer and longer into the day. Here's something interesting. When do you think I'm most likely to trade longer into the day? Is it on a day when things are going great? It's not. On a day when things are going great, it's very easy to walk away in the green. I'm more likely to stay longer on days things are not going as well because I'm feeling stubborn. So it's more likely that these trades were on days where I was already feeling emotionally activated. Okay. So performance by time of day. That's a good realization there. So and day of the week is also something worth noting. And that day of the week may also be a little more exclusive to August, you know, summer trading, but nonetheless, what about price and volume? So I want you guys to do the same review in your own trading. So where are you performing the best based on time of day, day, day of the week, price and volume? So price by and large between 2 and 10 was a sweet spot. Not much between 10 and 20. There weren't a lot of trades in that window. Um, and most trades were between 5 and 10 and I did quite well there. Not many trades below $2, but I got a little profit there. I did better when I trade with bigger share size. That kind of goes without saying. Um, these metrics are not super accurate. I I don't really know this. I've I've always I emailed them at one point and they didn't get really giving me a good answer on why the performance by in I was like well wait a second this isn't showing all of my profitability clearly this this would make it appear that I was just losing money where where are the winners they're nowhere to be se I don't get it I I I don't know I'm not sure what that one is whatever okay so then we go to instrument um we could look at the symbols that I made the most money on and the sector that they're in. we can look at the symbols I lost the most money on in the sector they're in. I won't do that now just to save time, but I would encourage you to do that. And if you notice a theme that there's a sector you're doing well in, uh you should ask yourself if that theme is continuing or if that was just a little cycle during that time. So, we did have a really nice theme with some big moves on Chinese stocks, but I think that theme is now behind us. I did best on stocks that had more than 25 million shares of volume as you could see here. more volume, more liquidity, easier to get in and out. Lighter volume stocks I struggled on. So, you know, that's something to pay attention to. And then performance by instrument relative volume did the best on stocks that had at least five times 500% five times higher volume on the day I traded it versus the 50-day average. And these ones were losses. Now, some of these were instances where I was trying to predict and anticipate that a stock was going to make a big move. This is also true with some of these. I got in a little early before it had enough volume before it had the highest relative volume. And I can't say for for sure that I didn't have any success in those areas, but generally speaking, it it didn't work out very well this month. So, um and then market behavior is a little bit less um less of an issue just because that is sort of just tied to the overall market. um it's it's it doesn't usually have a quite a strong correlation here. And then the wind loss expectation, you can see this is a roller coaster that I was on for the month of August. And so this is where I said to myself, I really don't want to continue that for the month of September. I want to kind of try to smooth that out a little bit. So, well, if I stop trading when I'm down 20 grand, I'm a little more cautious on Fridays, I'm I'm careful about the time of day I'm trading, and I'm avoiding stocks with lower relative volume. Those are three or four adjustments that can have a meaningful impact on my profitability. They could actually improve my profitability by as much as 50%. Wow. Are there some things that you could do that could have improved your profitability by as much as 50% for last month? Now, if you haven't looked at your metrics, you have no idea. So, take a few minutes to look at your metrics with and look, I have no affiliate relationship with Trader View or or anyone else. I just I make recommendations based on what I genuinely think is the best software. I've been using Trader View for more than a decade. So I've got more than 10 years of trading metrics all in this same platform. And you know, look, so I've been obviously I've been using it for a long time. I I like it well enough to continue using it. Uh there's a little bit of a switching mode, which is that it's kind of hard to switch when you've got 10 years of data all in one platform. Uh so I do stick with it for that reason. That's nearly $24 million of trading profits and showing, you know, 68% accuracy, the profit loss ratio. So, all you have to do is go import trades and then you could choose whatever broker you're using. And when you choose the broker, like you choose Thinker Swim, they walk you through how to export your trades and then you just import them. And then boom, you let the import run and then you can go and do the metrics. So, I really encourage you guys to do this. Now, was August a good month for me? It was a good month. Um, and let's just sort this by IRA. So, this is my individual retirement account. Oops. Um, and I'm just going to go year to date here for the IRA. So, year to date, big picture, this was August. This is the year to date, right? So, January was awesome. February, March, April was April was the worst. May improved. June was amazing. July slowed down a little bit but was still set really good. Third best month. And then August has kind of come back down a little bit closer to the baseline. The baseline being around 200k uh a month. You know, a little bit below it but a little bit above it. So that's $50,000 a week, right? So, you know, $10,000 a day. And that that's pretty that's pretty solid. So that's where we were for August. And now the question is what's September going to look like? Is it going to go like this and we're going to finish just with a very sad end of the year? or is it going to go like this and we're gonna have a phenomenal finish to the year? We don't know. We don't know what the market holds for us. But what we can control is how much risk we're willing to take. And so I will take risk when I see good quality setups. So now let's talk about the shift that's been occurring in the last week or so. So, if you recall from last week, we had a few stocks that made some pretty dramatic moves. So, I added um I've got these uh slides here to add to the classes. So, we had Archon from last week that did a round trip. We had FTFT that did a round trip. We had let's see uh which other ones were there? Um I feel like I added a couple others but anyways we well th those two for sure and then we had CR which did that big pop but then pulled back. So we're noticing this theme where stocks are squeezing quickly but they're not holding up. Now uh the biotech sector this is a biotech ETF XBI has done exceptionally well this year. It's had uh its best year in basically since the pandemic. It's been doing really well. This was the pandemic back here. So, biotech has been hot. You had like five years where it was a little cooler and then it's really picked up here 2025 into 2026. So, yes, we are seeing that there's a tailwind behind a lot of these biotech companies. We're seeing bigger moves. When a biotech stock is coming out with breaking news, traders are really quick to jump on it right now. And, you know, I don't blame them. I've always loved biotech stocks. When you have a small biotech company that comes out with good news, this can be a make orb breakak event for the company. This can be the thing that puts this company on the map that makes them a target for a buyout by a much larger company or where they keep the asset they've been developing and they start doing licensing when they go through their clinical trials and then if they get FDA approval. I mean, these these can be really big. However, a lot of these small cap companies, the way they operate is they IPO. They sell shares onto the public market, selling the, you know, the vision of what they're working on, working for a a cure to some, you know, incurable disease typically and investors buy into that. But typically, these things are very difficult, as you would imagine, to solve for. And so months and years go by and the company spends a lot of money on research and development. And during all of that time, they're spending the money that they raised from their initial public offering. And so if we look at the Q2 quarterly filing for BIAF and we scroll down here, you can see that their cash was about $2.4 million on the balance sheet as of June 26. $2.4 million. So, it sounds like they're in pretty good shape until you look at their 3 months ending June 2026 and you see that they're spending over $3.3 million. They've got a loss from operations every quarter. So, that has them going out to $12 million a year. Well, they've only got $2.4 million on the balance sheet. So, what are they going to do? Well, there's only so many things they can do. But notice here that they've got a shelf registration, which they just filed. there's a high likelihood that they're going to take the opportunity to sell shares on the open market to raise money to continue funding their research and development. Now, these companies will sometimes and often will solicit institutional investors. So, go to, you know, a big institutional investor who'll just write them one big check for $50 million. That's easy. If they can find an institutional investor that believes in them, the institutional investor gets a discount on the stock price when they write the check. So they'll say, "Yeah, I'll give you $50 million, but I get the stock at, you know, $2 a share instead of $5." And that's called a private placement. And usually when that happens, it's relatively bullish because obviously this investor wrote them a big check. They're not going to need to raise money anytime soon in a direct offering on the market. And that investor typically isn't going to turn around and sell those shares tomorrow. So usually we can feel pretty confident that the that the float dynamic is going to stay basically the same for a period of time. the company's not going to be selling and therefore we have the potential for a big move to the upside uh during that um sort of window right after the news comes out. But if they can't find an institutional investor willing to write them a big check, then they end up having to just sell the shares on the open market. So on a day like today when the stock has 30 million shares of volume, they could be selling three or four or five million shares right on the market at, you know, $7 a share. So that could raise them, you know, 20, $30 million just by selling those shares. But the problem is it has a real effect on the price of the stock. All that selling is pushing the stock down. This is very common with biotech companies specifically. So if the news is really really good, it can overcome the company selling into the stock price. Typically, if the news is a private placement and typically a private placement is also released at the same time as a fundamental catalyst. So they're like, we have great news and we have someone who's funding us. Those come out at the same time and the stock usually is very positive, goes up quite nicely. Those are scenarios where we can get some really clean price action. But in this instance, you know, we've got a headline where they're expanding on a market. It seems like a kind of vague headline. So, initially I was like, I I don't really know how well this is going to work. Um, the stock ends up squeezing, but we also know they just filed a shelf registration like 3 days ago. So, I was hesitant and I said to myself, you know what? Quality over quantity. Having three candles going up is awesome. And if you can be quick, you can absolutely jump in and jump out and profit from these. And I often will. But being the beginning of the new month and having seen as many round trips as we've seen recently, I kind of wanted to just hold tight for a second. So, it popped up to 646 and I said to myself, it barely even has half a million shares of volume. I don't know. The volume's too light. Then it pushes a little higher, drops back down, pushes higher, drops back down, pushes higher, drops back down. Was watching it right there for the break of eight and thought, I just don't know. It's a little extended. You've got that higher volume red candle. I'm going to wait. Hits 850. Then it dips down and that was the whole move. Just like that. That was it. Then it rallies back up here and rejects off the double top. No more no more action on that. Sells off. And then coming into the open, it rallies back up and we get a move all the way up to eight, which was nice. It pulls back. Then it comes back up to eight and then it halts uh going down right back here. It was right here that it halted going down. So, it really reversed hard and now it's just selling off more. So, is it possible the company is selling shares or through an underwriter they're selling shares today? It's very possible. I don't know that that's what's happening, but it's very possible. So unfortunately BIAF is this all ties into this shift in sentiment where we were quite bullish through June, July and August. But then toward in August we were seeing some tremors. We were seeing a few more round trips, some really dramatic round trips where we'd have a stock that squeezed up and then came all the way back down. And some of these were violent, you know, 5 10 point moves and then all the way back down. And so it was pretty scary. And certainly if you got caught on the wrong side of that, you could get completely destroyed. And what happened to me on some of my biggest losses in August was that I would miss the first move up here because it happened so fast and on volume that I felt was too light. And then I'd start jumping in it here and here and just catch these huge rejections and I was right on the stock. And so today I said I don't want to do that on BIAF. if it continues higher, there might be an opportunity, but I didn't see one right here before the opening bell. And so, I did not take any trades on this in my main Roth IRA. I just said, "No, I'm not going to do it." I didn't take any trades on it in my small account either because I just didn't feel good about it. And then the bell rang at 9:30. And of course, we did get some continuation there after the open, but nonetheless, in this window here, I just said, "Nope, it's not happening." MACD went negative. It sells off some more. But the problem was that was our leading gainer. We look at what else was on the scan. We had SSM. Well, look at this chart. Big squeeze after hours. Same thing. You get a big pop, three candles, and then it kind of is sideways and that's it. You get um L um L fly E, fly E, whatever. They make electric bikes. All right, so price of oil is up. Electric bikes are hot. All right, whatever. Uh big pop rejection and now it's all on the backside coming back down. So that's no good. RDAC, you know, this one popped up, reversed, then comes up a little bit here. And so my feeling right now is that the sellers are in control. And that's been the shift, the shift of point of control from buyers to sellers. So when the sellers are in control, I've got to kind of batten down the hatches. I've got to trade with smaller size. I've got to keep light on my toes. And rather than assume that things are going to work, assume that they won't work. If it starts to work, if it starts to surprise me, then I can reconsider. And it's not to be pessimistic, it's to be realistic that the current the current sentiment is is on the sell side. And so, is this the time to take big risk and, you know, throw hailmary passes? And you should never really probably do that, but if if you were going to, this certainly is not the time to do it. When the market's really hot and you're seeing backto-back 300, 400, 500% moves, that might be the time to go out on a limb and take some risk. And I will do that, but it's not right now. So, I'm going to be trading less while it's cooler, but I'm going to wait for stocks that actually prove that they can hold up because I'm going to assume that we're going to continue to see more of these pops and reversals, and those are layups for a short seller, right? And you know, it goes up and it comes right back down and shorts win on that. Something like BIAF. This was probably an easy double top rejection for a short sellers. It came back down and then rejected 850 again and and drops back down. So I don't want to feed into that weakness by buying and buying and buying up at the top buying shares that are being sold to me by a short seller. Right? So I don't want to I don't want you want to contribute liquidity to that move. I just want to sit completely on the sidelines. And more traders will do that. More traders will sit on the sidelines and they'll say, "You know what? I'm not going to jump into this." Now, there are a lot of beginner traders in the market that in the last few months got spoiled from the big momentum of, you know, June, July, and August, and they're going to keep buying anything that pops up. Something spikes up and they're jumping in it. And they're going to realize when they keep catching these, you know, roundtrip huge rejections that maybe maybe that works in certain markets, but it's not working right now. and I got to take my foot off the gas. I got to slow down. And as they stop buying, then the moves get smaller and smaller. Shorts get more and more aggressive until we reach a point where the second something pops up, shorts are hammering it and it actually ends up going red in spite of having news. We will see that. There's no question about it. We've seen that in previous cycles. And then you'll have a stock where actually the news is good and maybe short sellers kind of, you know, were a little overconfident just hitting it to the short side. And this is a company that, well, you look at their filings and they actually don't need to raise money. Maybe they have a shelf registration, but they've got enough cash on their balance sheet that they don't need to raise money. Or maybe they have a private placement and so they're not going to raise money because of that. Whatever the reason is, the stock which everyone expects will fail goes higher. And now all of those shorts that have sold heavily into the bid thinking this thing was going to roll over now as it starts to pull away are getting forced to buy back their shares. And so typically the way these um shifts occur, they shift from cold to weak with from sorry from cold or weak back to strong with one stock that makes makes just an exceptional move. It ends up going up like 500 or 700% in one day because shorts got stuck. They got stubborn and they keep adding thinking the market's been so strong. We've been in control and then next thing you know it's going higher higher higher higher higher. The problem is often I end up missing that one stock because I don't expect it either. And the move often ends up happening like later in the afternoon or even after hours where shorts kind of held it all day long, just kept thinking it was going to roll over and it just kept not and then finally they're covering into the close or into after hours and they're getting squeezed. So, I typically miss that one. However, all traders end up paying really close attention to what were the dynamics of that stock, what was the country code, where was it located, what's the sector it's in, what was the catalyst, and they start thinking, where's the next stock that's similar? And that begins a round of sympathy momentum where you have another stock that pops up that's very similar, same country, same sector. Shorts are nervous because they don't want a repeat of what just happened on the other one. Longs are aggressive because they don't want to miss a big move. FOMO has now been ignited and now you start having a wave of big moves and now the point of control has shifted back into the hands of the buyers. And it'll stay there for a while until you have buyers that are so confident they'll jump on even the most mundane headlines which really are not fundamentally material for the company and the stock still goes up 50 or 100%. And shorts realize this is ridiculous. We're going to start shorting these because a lot of them are coming back down anyways. Even the companies are selling shares. and the point of control shifts a little bit more subtly where the they get sort of weaker and weaker and weaker until people give up. The shift from hot to cold is much more subtle than the shift from cold back to hot typically. It's not always the case. Sometimes the shift is a little bit subtle going from cold back back to hot, but usually it's more of one big stock um becomes spark that ignites the next round of momentum. So that is a deep dive into the shifts that we are seeing in the market from cold to hot back from hot to cold. And right now we've definitely seen a shift from hot to cold. It's cooled off and it could stay cold for a few weeks. It could stay cold for you know maybe just a few days. We don't know ultimately we don't know how long it'll be before we have that one stock that surprises us. And the realistically the longer it's cold, the bigger the move will be when that stock does surprise us because shorts will be so confident. The sellers will be in so much control, they won't even think it's possible to have a move that big. So you almost have to have all the recent memory of those big moves from June and July and early August be forgotten in order for the next one to occur. Um, but that also means sustaining a longer period where it's slow. And during those periods, the way I trade is I just focus on trading less, trading with smaller size, getting my base hits, and not overstaying my welcome. If you want to watch me doing that live every day, check out the link for the twoe trial. It's pinned at the top of the comments, posted in the description. And if you want to actually become a full-fledged member, well, check out our Labor Day sale. Labor Day sales are currently active here at Warrior Trading with special discounts on our Warrior Starter and Warrior Pro memberships. So, I hope you guys check them out. You can come over, click the join now button, and you can see our memberships. So, please check them out. But I'll remind you as always that trading is risky and my results are not typical. And there's no guarantee you'll find success whether you trade on your own or learn from me. So, please always practice in a simulator before putting real money on the line.