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

Sunday, June 04, 2006

Lucky To Walk Away With A Small Profit (Fri Jun 2 Results)

Gross: +$299.47
Net: +$129.64
Loss From Top: $3.85
Trades: 82
Shares Traded: 167600

Stocks Traded Today (net profit/loss):
Micron Tech (MU): +$283.66
Corning (GLW): +$146.82
Citigroup (C): +$110.80
JP Morgan (JPM): +$103.01
Walmart (WMT): +$9.60
Motorola (MOT): -$6.06
Bank of America (BAC): -$9.61
Home Depot (HD): -$88.44
Tyco (TYC): -$134.57
Hewlett Packard (HPQ): -$285.57

On Friday, I was lucky to come away from the day positive because in the morning, I made several mistakes that cost me big.

Right at the start of trade, I messed up and fell face first on the ground, losing $266 on the very first trade of the day. This set the tone for the rest of the morning, and it seemed like almost every trade I put on were losing trades.

By lunch, I was down by close to $500. At that point, I seriously considered just going home for the rest of the day because nothing seemed to be working at all. I went out for a nice long walk after lunch, collected myself, and managed to make it all back and then some.

What was the problem in the morning? I think because I lost a lot of money right from the start, it somehow changed my state of mind and I started to break all of my trading rules. I kept trying to go long in a falling market and I ended up losing even more.

I'm not even sure why this happens. If I follow my trading rules and strategy, everything would have been alright - but sometimes when I get fazed (like I did on Friday morning), I sometimes am not even aware I'm breaking my trading rules. When this happens, it's usually the emotions that have taken control.

I'll probably have to update my trading rules and strategies to include a break (whether it's a walk, or read the newspaper) whenever I put on a big losing trade. That way, I can clear my mind and just prepare for making the next trade.

Friday was yet another day without any good trades ($200 or more trades), though I did have many near $200 trades. The reason for this is that in the morning, I noticed quite a bit of volatility, so in the afternoon I decided I must get in and out of position quickly. I did however, have many bad trades.

I've had a very busy weekend and I'm nearly falling asleep as I write this, so I will have to post my month end statistics sometime during this coming week.

Good Trades
None - but several $100+ trades

Bad Trades
9:39AM - Hewlett Packard (HPQ) was uptrending while the Futures looked like it was starting to downtrend. I saw a level break on HPQ so I got long 5400 shares. The Futures tanked and I had to get out as follows: 4-cent loser (400 shares), 5-cent loser (5000 shares) ($266 loser before fees).
  • It was a bad mistake as I should have waited for the Futures to continue moving up if I had wanted to go long.
  • I based this trade mainly on what I saw on the Level 2, which is not good - I need more criteria before getting into trades
10:51AM - Bank of America (BAC) was uptrending while the Futures were choppy and volatile. I went long 4800 shares, but the Futures tanked. I got out as follows: 3-cent loser (4000 shares), 4-cent loser (800 shares) ($152 loser before fees)
  • I should have realized that the Futures were volatile and I should have taken my profit when I briefly saw it (at one point, this trade was good for a 2-cent winner, but I just sat and watched, hoping for more profit)
11:18AM - Tyco (TYC) was downtrending as were the Futures. For some reason I got long 5000 shares. The Futures continued to tank as did TYC. I got out as follows: 1-cent loser (1300 shares), 3-cent loser (3500 shares), 4-cent loser (200 shares) ($121 loser before fees)
  • This was just one of many trades that were performed within an hour and a half. During this time, I put on several long trades, even though the Futures and the overall market was downtrending
  • This (along with several other trades) were probably all done on emotion (because this and the other trades did not fit my criteria for putting on a trade)


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