An NYSE Scalper's Tale - A Trader's Diary

Wednesday, February 22, 2006

The Dreaded "One Print Break"

Gross: +$624.80
Net: +$529.42
Loss From Top: 53.43
Trades: 64
Shares Traded: 89490

Stocks Traded Today (net profit/loss):
JP Morgan (JPM): +$321.74
Pfizer (PFE): +$235.06
Boston Scientific (BSX): +$56.96
Seagate Tech (STX): +$51.05
Corning (GLW): +$20.04
Merck (MRK): -$37.44
Hewlett Packard (HPQ): -$118.01

Once again I managed to break one of my trading rules today. And it cost me $150! The rule I broke involved the dreaded "One Print Break". A "One Print Break" occurs when a support or resistance level with significant size is wiped out in one print, but the S&P Futures (overall market) is flat or trendless. And I have specific rules about not getting into a trade if this occurs.

Today it occurred on Hewlett Packard (HPQ). Late in the afternoon (2:55PM), prices for HPQ were slowly approaching the $33.00 level. There was large size on the ask at the $33 level when all of a sudden, the entire ask size was filled in one print. The futures were not doing anything at the time and my trading rules specifically state that I should not get into a position when large size breaks in one print. But I couldn't resist. There were some Supermontage shares leftover, so I went long 3000 shares at $33.00. Well as soon as I got long, prices went up maybe a penny, but then came screaming back down. I got out of my entire position for a 5-cent loss ($150 loss - not including fees!!).

And so the dreaded "One Print Break" strikes again, and I was the unlucky fool who got caught.

Traded a lot of Pfizer (PFE) today. There was a lot of big size that kept appearing and pushed prices up. One of the best trades on PFE for me occurred at 1:06PM when a huge buy order appeared (about 3000 size - that's 300000 shares!) and pushed prices up. I quickly went long 4000 shares on some crossed ECNs and the big size kept moving upwards. I kinda panicked (it is Pfizer after all) and exited a little too early. I got 2000 shares out for a 3-cent winner and the remaining 2000 shares out for a 5-cent winner.

J.P Morgan (JPM) was also good today too. The best trade on JPM occurred at 11:17AM. Prices approached the $41 level. It had big size on the ask that tried to break several times earlier. Finally the futures ripped up and I got long 3000 shares at $41. I exited my trade as follows: 4-cent winner (1400 shares), 5-cent winner (100 shares), 7-cent winner (700 shares) and 9-cent winner (1200 shares). From the intraday charts, you can see I could have made a lot more on this trade. That will be something I will be working on...

My biggest losing stock today was Hewlett Packard (HPQ) and as mentioned above, the bulk of the loss came on that losing trade.