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

Monday, May 29, 2006

Happy (American) Long Weekend! (Fri May 26 Results)

Gross: +$454.20
Net: +$345.77
Loss From Top: $56.11
Trades: 64
Shares Traded: 107420

Stocks Traded Today (net profit/loss):
Bank of America (BAC): +$364.61
Micron Tech (MU): +$86.48
Walmart (WMT): +$85.27
Boston Scientific (BSX): +$34.04
Home Depot (HD): -$21.74
Citigroup (C): -$33.38
General Electric (GE): -$45.34
Hewlett Packard (HPQ): -$123.56

Happy Memorial Day long weekend to all my American viewers out there! This weekend I'm enjoying the excellent weather and trying to do as much outdoors as I can.

No trading today (Monday) because of the long weekend. And perhaps it's good that I didn't have to get into work today - the Toronto Transit Commission (TTC) has gone on strike! No transportation (trains, buses, streetcars) for all of Toronto! This was all of a sudden with the unions taking drastic action. I wonder how long they'll strike. If it continues till tomorrow, I'm not sure how I'm getting into work - I do have a car, but I can't imagine the traffic and the parking...we'll just have to see.

I used to work for the TTC for three years as a Systems Analyst (programming, developed and managed TTC's tracking and monitoring system), and the sense I got while working there was that the unions had a little too much power. Not only that, the majority of them (I hate to say this) were rather lazy. I'm glad that when I was working there, I was not part of the union (though many times the union interfered with our work by blocking us from entering buildings and verbally abusing the Management & Professional employees during strikes/disputes). As soon as any of the union leaders has any bone to pick with management, they would ask the rest of the unions to jump and unions would ask "How high?".

Sorry for being so caught up in this. It's just that when I was working there, the TTC had so much bitter politics going around (not only between unions and management, but between the various departments and even within departments and specific groups themselves) - I sometimes wonder how they get any work done.

Anyways, let's get to business.

On Friday, I found that there weren't as many opporunities as there have been for the last little while - probably due to the coming long weekend. There was some action in the morning, but the rest of the afternoon didn't amount to much.

Because the volatility seems to be decreasing lately, on Friday I started using bigger share sizes. In the morning (fearing volatility), I was getting in and out of positions fairly quickly and missed some great trades because I got out too early. In the afternoon, I couldn't catch any significant moves (markets were at a standstill), so I decided to take off a little early for the weekend.

Good Trades
11:24AM - Bank of America (BAC) was uptrending as were the Futures. A significant resistance level broke so I got long 6000 shares. There was a flurry of buying once the level broke, but I quickly got my entire position out for a 4-cent winner ($240 profit before fees).

Bad Trades
10:53AM - Hewlett Packard (HPQ) was steeply downtrending and the Futures had just tanked. I don't know why, but I thought I could catch the bottom or perhaps catch a bounce, so I went long 3000 shares. Well everything tanked again, so I got out as follows: 1-cent loser (300 shares), 3-cent loser (1000 shares), 4-cent loser (1700 shares) ($101 loser before fees)
  • Why do I always try to catch a bounce or the bottom? My trading rules strictly forbid me from doing this, but yet I still try to catch a falling knife.
  • I think from now on, I will never attempt to catch the bottom or try to catch a bounce - from what I can see, I'm only successful in catching a bounce maybe 25% of the time...the odds of which are not good enough for me


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