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

Monday, June 05, 2006

Coming Away With Something Positive On A Negative Day

Gross: -$444.15
Net: -$603.07
Loss From Top: $991.40
Trades: 69
Shares Traded: 150834

Stocks Traded Today (net profit/loss):
Micron Tech (MU): +$152.22
General Electric (GE): +$105.55
Corning (GLW): +$48.59
Sprint-Nextel (S): -$0.54
Citigroup (C): -$74.11
JP Morgan (JPM): -$124.38
Walmart (WMT): -$218.08
Home Depot (HD): -$233.28
Bank of America (BAC): -$259.04

I've noticed that everytime I lose a lot of money or get shutdown (when the system locks you out because you've lost too much money), I often come home too frustrated to review my day and I don't update this blog.

But I really think that that is a mistake. If I do not review my day and try to learn something from it, I don't think I can ever improve. So what I propose is this: everytime I end the day negative, I must review my day and try to come up with at least one thing I learned during that day.

By forcing myself to write what I learned in this blog, I can hopefully imprint and ingrain that lesson into my head. I often find that the act of actually writing down rules or lessons actually makes them more concrete.

Today we had major problems at the office.

First of all, the branch manager asked us all to use INET RASH (an ECN) because it is cheaper to use. But the first few trades I put on using that ECN, I found that it took forever to cancel orders, my orders were not appearing on the Level 2, and I was getting delayed fills. Many other traders also had problems with this ECN. After the first few trades, I simply went back to using my usual ECN.

It also didn't help that the execution server (the server that handles all buy/sell orders) went down 3 times today.

I could very well blame these problems for shutting me down today. However, I will not use these problems as an excuse for my poor performance because if I always blame other factors, I will never learn or improve.

The first hour of trade went well enough (I was up almost $400 by 10:30AM). But for the rest of the day, I slowly died an slow and agonizing death in which I lost close to $1000 during the day. By no means am I happy with this result.

But I look at it this way: even when you have a bad day, if you are able to learn something from it and take it with you, in the long run, it will be worth it. And on a day like today, it will feel as though the day was not done in vain.

So what happened today? Well these are the things I learned today:
  • I was frustrated with the lack of opportunities today - I started trading big sizes because I just wanted to make things happen (the next time I get this feeling, I'm going to remember how I felt this afternoon when I was shut down)
  • I was also frustrated because it seemed like time after time I would try to short a stock, but it would actually go against me, even though the Futures and overall market were tanking
  • This frustration simply snowballed from there and it got worse and worse. For the rest of the day I was trading on pure emotions
  • When I saw my day go from positive to negative, I started increasing my share size in the hopes of catching a good trade and make up all the profits I lost
  • When nothing seemed to work, I started randomly placing 6000 and 8000 share orders and hoping they would work themselves out - this actually made it worse and I got shutdown
There were many bad trades today - mainly due to poor judgement and to share size being too big. I might as well review all my bad trades today (just to torture myself into realizing how poor my judgement really was today).

Good Trades
10:18AM - Micron Tech (MU) was starting to uptrend and the Futures were uptrending. I got long 8000 shares and got out as follows: 2-cent winner (2000 shares), 3-cent winner (6000 shares) ($220 profit before fees)

Bad Trades
10:33AM - Micron Tech (MU) was uptrending while the Futures were slightly uptrending. I thought a significant level was going to break on MU and a combination of a keystroke error got me long 8700 shares. Then MU started tanking before I could fully book my profit. Got out as follows: 1-cent winner (3000 shares), 1-cent loser (400 shares), 2-cent loser (300 shares), 3-cent loser (5000 shares) ($130 loser before fees)
  • This was the start of my frustrations. Everything looked good on this trade - MU just decided to start tanking for whatever reason
1:34PM - Citigroup (C) was looking strong and was uptrending while the Futures looked like it was going to start turning upwards. I got long 3700 shares and the Futures did pop up. But like a lot of my trades today, C decided to start tanking. I ended up getting long at the high of the day. I got out as follows: 1-cent loser (2000 shares), 4-cent loser (100 shares), 5-cent loser (1600 shares) ($104 loser before fees)
  • This built my frustration up more and more...This was probably the trade that set me off into psycho-trading man!
  • It was another trade that looked good and Citigroup was showing strength even though the overall market was down. When the Futures looked like it was going to start uptrending again, I thought this would have been a good trade...I guessed wrong
2:53PM - Bank of America (BAC) had temporarily bounced up while the Futures were downtrending. Without thinking about it or analyzing this trade, I got long 8000 shares. I got out as follows: 2-cent loser (100 shares), 3-cent loser (7900 shares) ($239 loser before fees)
  • There was no rhyme or reason for this trade - just something flicked on in my brain and it felt as if I was no longer in control over my actions
3:07PM - Home Depot (HD) was trading very volatile and the Futures were moving slightly sideways. I shorted 5000 shares (don't ask for the reason behind it because I don't know either) and I had to get out for a 2-cent loser on the entire position ($100 loser before fees)
  • Nothing much to say about this trade (because there was no real reason to get into this trade). Just wondering why 5000 shares on such a thin stock! I was lucky I didn't get murdered by Home Depot!
  • It was at this point I was spiralling out of control where the loss from the previous trade made me more angry on the next trade, which in turn lost more money, which got me more angry, etc.,
3:21PM - JP Morgan (JPM) was downtrending as were the Futures. Got partially filled long for 2000 shares. Got the entire position out for a 6-cent loser ($120 loser before fees)
  • This trade was flat out wrong - this is kind of like the anti-trade - everything about it was wrong
3:33PM - Walmart (WMT) was moving all over the place while the Futures were downtrending. I went long 6000 shares when the Futures started tanking some more. I got out as follows: 3-cent loser (1800 shares), 4-cent loser (1100 shares), 7-cent loser (2700 shares) ($287 loser before fees)
  • This trade was the final nail in the coffin and I was done like dinner (I was shutdown after this trade)
  • I would love to interview my brain to find out why it thought this trade would work...I guess I might never find out

1 Comments:

  • Yeah, it was a bad day...for me too... Well, anyways, I got many many bad days...:(

    The system made ppl so frustrated. I like the way you always dig problems from your trading while I always felt too painful to do that.

    Tomorrow is another day. You'll make it back. :)

    By Blogger Kelly, at June 05, 2006 11:50 PM  

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