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

Saturday, July 22, 2006

Jumping Ship Too Early (Fri Jul 21 Results)

Gross: +$981.67
Net: +$845.25
Loss From Top: 0
Trades: 93
Shares Traded: 140506

Stocks Traded Today (net profit/loss):
Hewlett Packard (HPQ): +$623.75
Advanced Micro Devices (AMD): +$358.34
Motorola (MOT): +$100.75
AT&T (T): +$28.16
Corning (GLW): +$23.31
Exxon Mobile (XOM): +$9.85
Walmart (WMT): -$15.34
JP Morgan (JPM): -$130.78
Home Depot (HD): -$152.80

I started option expiration Friday on the wrong foot, but during the rest of the day, I managed to make a comeback, even though I left the day early.

On the very first trade of the day, I lost close to $200 on a trade on Home Depot (HD) that was put on way too early (considering how volatile it was). But I paced myself and I tried to implement my new strategies and by the end of the day, I came out on top.

However, I found that whenever I tried to get in on a trend trade (one in which I intend to hold for a longer period of time - at least 5 minutes), I was always too quick to exit a good trade. In other words, I kept jumping ship way too early. Everytime I saw the slightest bump or obstacle standing in the way of my trend trades, I was quick to exit an otherwise great position.

As a result, I didn't take many big winners (though I did take many $100+ profitable trades).
Both HPQ and AMD were very profitable for me on Friday. HPQ had some very nice movements that were fairly easy to pick up and I had a great time shorting AMD all day

I still found myself reluctant to put on bigger position sizes as well. So for next week, those are the two things I will work on: holding on to those trend trades and using bigger share sizes.

Only one good trade versus one bad trade.

Good Trades
10:20AM - (M) Hewlett Packard (HPQ) and the Futures were uptrending. There was some big resistance at the $30.50 level that was breaking and at the same time, the Futures were popping up, so I quickly went long 4000 shares. As soon as the $30.50 level broke, HPQ surged up and in less than 10 seconds I took a huge profit. I got out as follows: 10-cent winner (2100 shares), 15-cent winner (1900 shares) ($495 profit before fees)

Bad Trades
9:36AM - (M) Home Depot (HD) opened and was very volatile while the Futures were tanking. The Futures started tanking some more, so I went short 2000 shares. HD was extremely volatile and as soon as I got into this position, prices went against me almost 15-cents!!! Prices were moving back and forth so rapidly, I got out when I could and ended up exiting as follows: 7-cent loser (300 shares), 9-cent loser (1700 shares) ($174 loser before fees)
  • HD was so volatile on option expiration Friday that I should have stayed away from this stock (especially if you look at an intraday chart of HD during the first 30 minutes of the trading day)
  • I shouldn't have trusted what I saw on the Level 2 during this volatile period...I saw some size break on the bid and so I decided to go short


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