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

Thursday, March 16, 2006

Back To Basics

Gross: +$620.80
Net: +$515.77
Loss From Top: 0
Trades: 76
Shares Traded: 94600

Stocks Traded Today (net profit/loss):
Walmart (WMT): +$289.64
Citigroup (C): +$161.69
LSI Logic Corp (LSI): +$56.92
Pfizer (PFE): +$35.17
Bank of America (BAC): +$16.87
US Bancorp (USB): +$5.22
Sprint-Nextel (S): +$4.46
McDonald's (MCD): -$16.12
The Williams Companies (WMB): -$13.06
Coca-Cola (KO) : -$25.25

I apologize for not posting my results on Tuesday March 14. For the past week or so, Blogger seems to keep going down and I was unable to login and post my results. I tried twice that night, but afterwards that I was in no mood to reflect upon what happened that day. You see, Tuesday was my 2nd worst trading day ever (I lost $477) and so I took yesterday (Wednesday) off to review my trading journal and to review my trading strategy.

Did you folks out there catch what I was doing wrong? Did you notice that when I started talking about trading larger share sizes that my performance suffered? After a day of reflection, this is what I could gather went wrong from my trading journal:
  • I found that I was trading when not all of my trading criteria were met; I did this because of my larger share size - I was thinking "Gee, well some (but not all) of my trading criteria are met and right now I could go long (or short) 6000 shares...I better put on a trade now while it is still possible to get that many shares"
  • Also the last few days I was too obsessed with trying to make $1000 (which I thought was now easier, since I was trading larger share size), I ended up taking too much risk in certain trades and I was expecting to hit a home run on every trade
  • A combination of the above points led me to do a lot of "revenge" trades (where you try to get back at a stock for making you lose money by trading wrecklessly or by trading even larger number of shares to try to make back what you lost); this is what caused me to blow up on Tuesday when I went long 10,000 shares of MU (because I was pissed off at MU for making me lose money!) - that specific trade lost me almost $300!
So today I went back to basics and went back to trading like I was before. I traded smaller sizes (4000 shares max.) and I made sure that trends were present before getting into trades. My update and review of my trading strategies also helped tremendously - I would recommend you do this at least once a month (though everyday would be better!).

Since I'm using smaller share sizes, I'll have to re-define what a good trade and a bad trade is. I'll consider a profit of $100 or more a good trade. A loser of $100 or more will be considered a bad trade.

On that note, there are a couple of good trades that occurred today. As you can see, the bulk of my profits came off Walmart (WMT). Today WMT was on fire! Lots of buying in this stock went on today and I was able to take advantage of it a couple of times.

I hadn't bothered to look at WMT until roughly 11:30AM when I noticed that WMT was trending strongly. At 11:39AM, WMT approached the $46 level and when it broke I went long 4000 shares. It seemed to have trouble going up much further so I got out of my trade as follows: 3-cent winner (3000 shares), 7-cent winner (1000 shares) ($160 profit before fees).

Later in the day at around 2:10PM, I saw a lot of buying going on in WMT and every level of resistance just melted away. So I went long 3000 shares and got out as follows: 1-cent winner (1000 shares), 2-cent winner (1000 shares), 10-cent winner (1000 shares) ($130 profit before fees).

Also put on some good trades on Citigroup (C). At 12:36PM, there was some size on the ask and all of a sudden, a huge order appeared on the bid (2000 size suddenly showed up!) - I quickly went long 3000 shares and prices popped up quickly - I took my profit as follows: 4-cent winner (1600 shares), 5-cent winner (1400 shares) ($134 profit before fees). The big order then disappeared.

Shortly afterwards, it happened again on C (the 2000 size shows up on the bid again!), this time at 12:40PM. I went long 4000 shares this time and took my profit as follows: 1-cent winner (1000 shares), 2-cent winner (2000 shares), 4-cent winner (1000 shares) ($90 profit before fees).

Today could have been bad for me today (as it appears to be a little choppy), but after a day of review and going back to basics, I would have to say that I'm happy that I was in the green today.

Not too sure if it should worry me, but I noticed that the number of trades today was a little high. Oh well, I hope I have a repeat performance tomorrow...


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