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

Tuesday, July 11, 2006

Afraid Of Losing Money

Gross: +$919.70
Net: +$707.61
Loss From Top: $29.61
Trades: 98
Shares Traded: 194994

Stocks Traded Today (net profit/loss):
Home Depot (HD): +$277.28
AT&T (T): +$186.73
Micron Tech (MU): +$184.91
Hewlett Packard (HPQ): +$92.54
Walmart (WMT): +$20.82
Exxon Mobile (XOM): +$14.44
Bank of America (BAC): +$4.67
Citigroup (C): -$15.03
Corning (GLW): -$58.76

What a rally there was today starting at 1:30PM! The Dow rallied almost 100 points while the S&P Futures rallied up over 12 handles during the course of the afternoon!

That being said, I should have made a lot more than I did. There were at least 3 trades that I was in that could have made it a $1000+ day. Unfortunately, I was afraid....afraid of losing money.

Recently, I've been taking a peek at my net profit during the course of the day (just out of curiousity) and it was because of this that I got out of my positions too early and didn't ride my winners.

What happened was that if I saw I was just a little over $600, I would be so afraid that the next trade might be a loser and bump me back below $600. As a result, as soon as I saw a profit, I would quickly try to take it, and thus only taking 1 or 2-cent winners.

Considering the extent of the afternoon rally, I'm very disappointed at myself of missing out on so much free money.

Well, I've learned my lesson - I won't look at my net as often during the day (i.e. I won't look at it after every trade!) and hopefully it won't mess with my mind too much.

Today I was a little more daring in terms of share size and I tried to force myself out of my comfort zone when taking a position. It helped a bit and I was able to make a few good trades and several near-$200 profit trades.

There were 2 good trades versus 1 bad trade today.

I'm beginning to miss seeing a $1000+ day (I'm starting to yearn for one!). I really hope one comes soon if I want to reach my goals this month.

Looks like it's time to push myself a little harder the next little while. Gotta use good position size, gotta be willing to take some risks, gotta ride my winners longer and I've definitely must NOT be afraid of losing money!

Good Trades
12:07PM - Home Depot (HD) was downtrending all morning while the Futures were rather flat. Home Depot reached the $34.00 level when the level looked like it was going to break. I went short 6000 shares at $34.00. Once the level broke, all hell broke loose! The Level 2 became so messy with huge buy and huge sell orders being flung all over the place. Home Depot tanked straight down, the ripped straight back up! I managed to get most of my position out for a winner, but I had to chase my profit back up. I got out as follows: 6-cent loser (200 shares), 1-cent winner (1000 shares), 3-cent winner (500 shares), 4-cent winner (800 shares), 9-cent winner (2200 shares), 10-cent winner (1300 shares) ($373 profit before fees)

1:57PM - Micron Tech (MU) was uptrending while the Futures were in a middle of a massive rip up. A level broke on MU, so I went long 10,000 shares. I was "afraid of losing money", so I got out of my position prematurely. I got out as follows: even (2000 shares), 2-cent winner (4000 shares), 3-cent winner (4000 shares) ($200 profit before fees)

Bad Trades
10:32AM - Home Depot (HD) was downtrending while the Futures were downtrending. The Futures tanked really hard so I went short 4000 shares. The Futures continued tanking and all other stocks were tanking as well....except for Home Depot! The Futures tanked 2 handles down, but yet Home Depot was moving up! I was forced out of my position and had to get out as follows: 3-cent loser (3300 shares), 4-cent loser (700 shares) ($127 loser before fees)
  • This was another case of the perfect setup, perfect criteria, and perfect entry...the only thing was that Home Depot didn't want to cooperate!
  • Not much can be said here...this trade will work 9 times out of 10, but as I said before, trading will involve losers; as long as you can control your losses, you should still come out on top at the end of the day.


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