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

Monday, February 27, 2006

Early Mistakes Costly

Gross: +$291.54
Net: +$183.30
Loss From Top: 0
Trades: 52
Shares Traded: 91060

Stocks Traded Today (net profit/loss):
Hewlett Packard (HPQ): +$301.04
EMC Corp (EMC): +$137.53
Tyco (TYC): +$23.03
Disney (DIS): +$13.75
Walmart (WMT): -$2.20
Pfizer (PFE): -$9.80
Time Warner (TWX): -$48.91
Corning (GLW): -$76.39
Bank of America (BAC): -$154.74

Some early morning bad trades basically set me up for yet another insignificant day. I put myself in a hole early and I basically had to spend the rest of the day trying to get out of it. It seems like many traders are having difficulty in the month of February and I myself am finding it difficult to trade as well. Guys that are used to making $2K-$5K a day are finding themselves being negative or only up slightly for the past week or so. I don't know what it is, but I don't like it!

The first trade of the day was on Bank of America (BAC) and ended up being the worst trade of the day. Right from the opening bell, BAC began an uptrend when it encountered some resistance at $46.00. There was about 2500 size on the ask so I waited for the opportunity to get long. At 9:45AM the Futures were also going up and when it looked like the $46 level was going to break, I went long 3000 shares. Once long, the Futures continued to go up and size on the ask continued to get smaller. There were still some SuperMontage shares left at $46, so I thought "What the heck - if nobody takes them, I will!". So I went long another 3000 shares (altogether I was long 6000 shares at $46). But unfortunately the $46 level was never able to break and I had to get out. I took a 2-cent loser on 4000 shares and a 3-cent loser on 2000 shares ($140 loser before fees).

I almost repeated that mistake at least 3 more times throughout the day on BAC! In the afternoon, BAC continued to test the $46 level, but it seemed like no matter how strongly the market went up, that $46 level just never seemed to be able to break.

The trade that salvaged the day was on Hewlett Packard (HPQ). All morning HPQ was moving up when it finally reached the $33.00 level. There was only mild resistance at this level - about 500 size on the ask. At 11:09AM the Futures then popped up so I quickly went long 3000 shares at $33.00. At first HPQ didn't appear to want to move, which made me panic a little, so I got 300 shares out for no profit. Then HPQ finally began moving and I took my profit as follows: 5-cent winner (900 shares), 6-cent winner (100 shares), 14-cent winner (700 shares), and 16-cent winner (1000 shares) ($309 profit before fees).

Unfortunately for the rest of the day, I put on trades that I usually don't put on in an attempt to make something of the day after a rough start. As a result, I probably lost more than I should have.

Oh well - one more day and then February will be over with!


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