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

Tuesday, April 04, 2006

The "Dead Zone"

Gross: +$519.87
Net: +$416.24
Loss From Top: $27.50
Trades: 58
Shares Traded: 80800

Stocks Traded Today (net profit/loss):
Corning (GLW): +$218.47
General Electric (GE): +$171.32
Citigroup (C): +$105.91
Verizon (VZ): +$29.33
Motorola (MOT): +$20.23
Walmart (WMT): -$37.29
Johnson & Johnson (JNJ): -$92.44

My definition of the "dead zone" is when the markets are trendless and choppy. Everyday there is usually a slot of time in which this occurs - usually between 11:30AM - 2:00PM.

The trick for me is to NOT trade during the "dead zone" in order for me to preserve my profits. And I did exactly that today (unlike yesterday). Almost all of my trades occurred before noon, and I only put on 2 trades during the entire afternoon.

Today's "dead zone" was fairly lengthy and consumed most of the afternoon. It started a little late today...maybe around 12:00PM and I found myself waiting and waiting and waiting...but it never seemed to get out of it.

Currently I'm trying to incorporate larger share size when trading. Thus, stocks I used to trade with 3000 or 4000 shares I now trade with 5000 shares. I will also be working on upping share sizes for the thicker stocks and I will try to first get comfortable trading 6000 shares at a time (I'll do this on stocks like GE, MU, MOT, etc).

From now on, I'm going to highlight my good and bad trades as shown below. Hopefully this will help me separate my thoughts from my trading highlights and hopefully it will make it easier for you folks to read.

Good Trades
10:19AM - Citigroup (C) was uptrending and so were the Futures. Just then, the Futures ripped up, so I got long 5000 shares. Got out of the trade as follows: 1-cent winner (2000 shares), 2-cent winner (300 shares), 5-cent winner (700 shares), 7-cent winner (2000 shares) ($201 profit before fees).

11:30AM - Corning (GLW) was downtrending and so were the Futures. Prices on GLW came down to the $27 level. When the level broke, I went short 3000 shares as got out as follows: 4-cent winner (1000 shares), 8-cent winner (1000 shares), 10-cent winner (1000 shares) ($220 profit before fees).

11:43AM - General Electric (GE) was moving up and the Futures were uptrending. GE approached resistance at $34.50. When the level broke, I went long 5000 shares and got out as follows: 3-cent winner (2000 shares), 4-cent winner (3000 shares) ($180 profit before fees).

Bad Trades
9:52AM - Walmart (WMT) had just finished tanking and the Futures were moving back up. I went long 3900 shares, and WMT initially went up, but I held a little too long and WMT dropped back down. Got out as follows: 5-cent winner (100 shares), 2-cent loser (1000 shares), 3-cent loser (2000 shares), 5-cent loser (800 shares) ($115 loser before fees).


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