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

Wednesday, June 14, 2006

I'm Rich!

Gross: +$241.63
Net: +$27.93
Loss From Top: $371.12
Trades: 97
Shares Traded: 206158

Stocks Traded Today (net profit/loss):
JP Morgan (JPM): +$158.49
Bank of America (BAC): +$107.82
Walmart (WMT): +$34.50
Home Depot (HD): +$33.94
Corning (GLW): +$28.11
General Electric (GE): +$21.24
Hewlett Packard (HPQ): -$5.39
Motorola (MOT): -$12.58
Micron Tech (MU): -$17.00
Citigroup (C): -$321.20

Well...not really. I only made $27 today! Talk about a difficult day! I started the morning as usual, but throughout the afternoon, all the wiggles and jiggles of the Futures kept forcing me out of my positions for losers.

As we rolled into the last hour of trade, I was down $400. Luckily there was some great moves to the upside during that last hour and I was able to eke out a gain.

But still, I'm not happy. It was mostly a total lack of focus and getting too emotionally wrapped up in what I was doing. I was also straying from the rules I had recently established. This was mainly because I was getting all flustered from all the positions that went against me.

Almost all day, the Futures would quickly move up 3 ticks, then tank one whole handle, then rip back up a handle and a half, only to be followed by a quick 3-tick tank. Bring up any intraday chart of any stock and you'll see what I'm talking about. Or just bring up an intraday chart for the S&P 500.

At one point during the day, my loss from top was approaching $800 (which means I lost close to $800 from my peak profit during the day). One of my problems today was that I was getting into a position and attempted to hold on to it for a big winner. However, because of the nature of the markets today, this literally got me killed.

Surprisingly, all my bad trades were on Citigroup (C) today and the only good trade of the day also belonged to Citigroup. At one point, I lost over $600 on Citigroup alone. The problem I had with Citigroup was that either I was in a position that was too big (considering the kind of market it was today) and there were a lot levels that refused to break no matter what the Futures were doing.

That being said, I've got to work on the following for tomorrow:
  • Concentrate on the task at hand - don't let my mind wander
  • After every trade or every few minutes, close my eyes, take a deep breath, clear my mind, and prepare for the next trade
  • Don't look at my net profit at all (I'm not too sure why, but today I was constantly looking at my net profit - and getting frustrated with the amount of money I had lost)
  • Identify what kind of day it's going to be by observing the Futures movements in the morning - if it is like it was today, get in and out fast and don't overdo it with regards to position size
Good Trades
3:48PM - Citigroup (C) and the Futures were uptrending. I went long 8000 shares when the Futures continued to rip up. Got out as follows: 2-cent winner (2000 shares), 3-cent winner (6000 shares) ($220 profit before fees)

Bad Trades
1:35PM - Citigroup (C) and the Futures were downtrending when it appeared as though Citigroup arrived at some support. There was big size on the bid and when the Futures popped up slightly, I went long 8000 shares. Well the Futures came tanking back down and the support looked like it was going to break so I got out as follows: 1-cent loser (4000 shares), 2-cent loser (4000 shares) ($120 loser before fees)
  • Several problems with this trade - firstly, the size was way too big for this "bounce" play
  • Secondly, I went in basically based on what I saw on the Level 2 - which is never good
  • Knowing how the Futures were behaving, I should have waited until it was clear which direction the Futures were going
2:21PM - Citigroup (C) was downtrending while the Futures were slightly uptrending. I went long 4000 shares, but the Futures came falling back down. I got out as follows: 4-cent loser (3000 shares), 5-cent loser (1000 shares) ($120 loser before fees)
  • This was a frustration play. All day I was getting screwed by getting long on Citigroup and for some reason, the Level 2 tricked me into going long again
  • For most of the afternoon, I wasn't thinking too clearly because the Futures were moving all over the place and in my mind I kept thinking I was missing many opportunities (when in reality, I should have just sat on the sidelines)
2:42PM - Citigroup (C) and the Futures were starting to downtrend. I went long 8000 shares after the Futures had just finished tanking in hopes of a bounce in prices. It never happened. Got out as follows: 2-cent loser (6000 shares), 4-cent loser (2000 shares) ($200 loser before fees)
  • Another mindless trade that was way too big for a bounce play
  • This was the very last losing trade of the day. After this trade, I took a break and went back to following the rules I set-up as part of my new strategy. At this point, I was down a little over $400. Over the course of the next hour or so, I was able to claw my way back to positive territory.


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