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

Tuesday, April 25, 2006

Wow - It's Been A While Since I've Seen Red...

Gross: - $121.95
Net: -$338.86
Loss From Top: $727.46
Trades: 76
Shares Traded: 220200

Stocks Traded Today (net profit/loss):
AT&T (T): +$542.85
General Electric (GE): +$256.51
Johnson & Johnson (JNJ): +$130.66
Home Depot (HD): +$40.17
Walmart (WMT): -$131.07
Hewlett Packard (HPQ): -$160.04
Motorola (MOT): -$164.92
Pfizer (PFE): -$219.52
Citigroup (C): -$553.11

My goodness! Today was a very terrible trading day for me. I haven't been negative since the first trading day of April, so I am really disappointed with today's results.

Lack of focus and discipline were the root causes of today's horrible numbers. And look at that horrible "Loss From Top"! I managed to lose over $700 over the course of the afternoon!

For most of the morning, I was doing OK and I was up almost $400 by noon.

But what happened was that at around 1PM the markets tanked hard, then quickly ripped back up...and it did this three times within a short period of time (within 30 minutes).

Well guess what - I was severely beaten when this occurred - I had big positions and was shaken out for some hefty losses during this up and down period. It felt like the market was trying to shake a coconut tree to see how many coconuts would fall out. Well, looks like I was one of the unfortunate coconuts that got hurt by all that shaking.

It was at that point, I started to trade with way too much emotion (it was more like rage trading!). For the rest of the afternoon I was flinging 8000 and 10,000 share orders left, right, and centre without thinking twice about my trades.

And thus the downward spiral started and I continued to trade with rage until the end of the day. I should have known better...I should have taken a break and let myself cool off (on previous days, cooling off did wonders), but today I did not, and it cost me.

Today I had some really great winners, however they were more than offset my numerous bad trades. I lost a lot of money on Citigroup (C) today - mostly because of revenge trading. This was truly disappointing to me because this is the first trading day in April in which I lost money on Citigroup.

The lesson of the day: NEVER TRADE EMOTIONALLY!

Good Trades
11:01AM - AT&T (T) was uptrending strongly had broken resistance at $25.75. I got long 8000 shares and got out as follows: 6-cent winner (4000 shares), 7-cent winner (2000 shares), 8-cent winner (2000 shares) ($540 profit before fees)

3:22PM - General Electric (GE) looked like it caught some support, so I got long 8000 shares. Got out as follows: 1-cent winner (2000 shares), 3-cent winner (4000 shares), 4-cent winner (800 shares), 5-cent winner (1200 shares) ($232 profit before fees)

Bad Trades
10:12AM - Pfizer (PFE) was uptrending but Futures were flat. Got long 5000 shares, but Pfizer went down. Got out for a 3-cent loser ($150 loss before fees)
  • I had Pfizer on my "Do Not Trade" list - why I decided to trade it today, I will never know...unfortunately, this was not the only time I traded PFE today....
10:25AM - Pfizer (PFE) was now in a downtrend as were the Futures. I got short 8000 shares, but as usual, PFE never seems to go with my trade. I got out as follows: 1-cent loser (4000 shares), 4-cent loser (4000 shares) ($200 loss before fees)
  • Again - I should remind myself - DO NOT TRADE PFIZER! The Level 2 makes it soo easy to get long or short, but ultimately, it is very difficult to trade
12:58PM - Citigroup (C) was uptrending slightly while the Futures were chopping around. I got long 6000 shares because some support showed up on the bid. Well, like a lot of trades today, this one went against me - got out as follows: 3-cent loser (1200 shares), 4-cent loser (200 shares), 5-cent loser (1900 shares), 6-cent loser (2000 shares), 7-cent loser (700 shares) ($200 loss before fees)
  • It was around this time I was starting to feel frustrated and was randomly getting into positions whenever I could...I should have slowed down to collect myself, but unfortunately this was only the start of things to come...
2:31PM - Hewlett Packard (HPQ) was uptrending strongly. I looked at the Level 2 and saw so much support to go long (there were 4 levels on the bid that had 500+ size on it!). I got long 8000 shares. HPQ then continued to run upwards! The sizes on the bids kept moving upwards and looked like I was going to capture a 10-cent move or more! Along the way up, I got some shares out, but then suddenly, all the sizes disappeared and in a blink of an eye, prices dropped more than 20-cents in just a few seconds...I had to get the rest of my shares out....Got out as follows: 8-cent winner (1500 shares), 6-cent winner (2000 shares), 7-cent loser (3000 shares), 11-cent loser (1500 shares) ($165 loser before fees).
  • I shouldn't have been too greedy on this trade. At one point I was looking at a $700 winner, but I kept cancelling my orders and kept placing them higher.
  • But honestly, I've never seen anything like it - bring up an intraday chart of HPQ and you'll know what I'm talking about - a huge run up, then a sudden drop
3:41PM - Motorola (MOT) was downtrending slightly, but the Futures were chopping around. I got long 8000 shares, and got out as follows: 2-cent loser (3900 shares), 3-cent loser (4100 shares) ($201 loser before fees)
  • This was a pure revenge trade and a classic example of what can happen when you're trading angry
  • There was no reason for me to get into the trade in the first place - all I saw was some size on the offer that could handle an 8000 share trade, so I just went long.


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