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

Wednesday, July 19, 2006

Looks Like It's "That Time Of The Month" Again...

Gross: +$151.44
Net: +$10.20
Loss From Top: $159.19
Trades: 78
Shares Traded: 132784

Stocks Traded Today (net profit/loss):
Bank of America (BAC): +$201.68
Walmart (WMT): +$106.47
Advanced Micro Devices (AMD): +$60.42
Motorola (MOT): +$56.68
Exxon Mobile (XOM): +$54.30
AT&T (T): +$18.20
Hewlett Packard (HPQ): -$1.93
Corning (GLW): -$89.33
Micron Tech (MU): -$157.89
Home Depot (HD): -$238.41

I've noticed that every month so far in my trading career, I always seem to go through a "rough" patch that lasts about 2 or 3 days in which I'm either negative or where I make very little.

And I've noticed that this seems to re-occur usually during the middle of the month. I can certainly understand why. At the beginning of the month, I'm usually all hyped up and I try to get into the full swing of things with the goal of making it a great month. All my strategies and rules are laid out and I swear to obey them.

But as time rolls along, I start to get sloppy and I start to lose focus. When "that time of the month" rolls around, I'll start forgetting some of my rules, I get emotionally wrapped up in my trades, and my temper often flairs up. When I run into this rough patch, it forces me to wake up and to realize the mistakes I've been making.

Finally when we get near the end of the month, I start getting conservative as I try to preserve as much profits as I possibly can.

With yesterday's and today's poor performance, you can see that "that time of the month" has come right on schedule (I apologize to all my female readers out there....but it seemed like the perfect way to describe what I'm going through).

I'm extremely upset at the way the past two trading days have gone. I'm going to spend the whole night tonight reviewing, updating, re-organizing, and adding to my trading strategies and rules. I believe that if I'm going to evolve into a great trader, I must include longer-term trading strategies (half an hour or more hold times). It's also a great opportunity for me to do my monthly review of my strategies (I haven't done so in almost two months).

Today was a great day if you were long. All the major indices were up almost 2%, however I had trouble finding those great longs. I had 3 bad trades today, all of which were longs and all of which would have turned out to be a great trade if I had the patience.

Tonight when I review my trading strategies, I'm going to widen my stop loss, especially if there is an obvious trend. I'm thinking that I should increase my stop loss from 3-cents to 5-cents. There will be, of course, the odd trade in which I'll try to get out earlier, but I must practice patience in getting out of my trades.

I really hope that today was my last day of my trading "funk" and I hope tomorrow I can get back on track.

Good Trades
10:03AM - Bank of America (BAC) was uptrending while the Futures were also uptrending. There was huge size on the offer at $49.27 (there was over 1500 size). The Futures ripped up, so I went long 5000 shares when I saw that big buy orders were hitting the huge size. I got out as follows: even (100 shares), 1-cent winner (900 shares), 4-cent winner (400 shares), 5-cent winner (1600 shares), 6-cent winner (700 shares), 11-cent winner (100 shares), 13-cent winner (1200 shares) ($314 profit before fees)

Bad Trades
9:33AM - Bank of America (BAC) was moving up and the Futures were also moving up. I went long 3000 shares when I saw some size break, but as soon as I got long, there was a flurry of sell orders that hit the Level 2. I ended up getting out as follows: 3-cent loser (2000 shares), 4-cent loser (1000 shares) ($100 loser before fees)
  • I had a lack of patience here...if I had held it for a split second longer, BAC would have popped right back up
  • It also might have been a little too early into the trading day to put on a trade.
11:02AM - Micron Tech (MU) was fairly flat while the Futures were moving up. There was big size on the bid and big size on the offer, so when the offer looked like it was going to break, I went long 6000 shares). MU just wiggled around and even though the Futures ripped up, MU didn't go anywhere. MU then started falling and I got out as follows: 1-cent loser (1100 shares), 2-cent loser (1000 shares), 3-cent loser (3900 shares) ($148 loser before fees)
  • I should have known MU wasn't going to go's chart was flattening out and it appeared to be heading into a dead zone (where prices don't move)
  • I was watching MU for the better part of the morning and should have known that it was going to behave the way it did (where size looks like it breaks, moves a little, but then size re-appears and pushes prices back down)
1:14PM - Home Depot (HD) was uptrending and so were the Futures. Home Depot looked like it was going to break the $34.00 level, so I went long 4000 shares. The level at $34 initially didn't break, so I decided to hold on to the position because the Futures were uptrending. However, HD kept falling and I finally gave in and exited my entire position for a 4-cent loser ($160 loser before fees)
  • This trade would have been fantastic had I held it for a little long...the worst I would have seen in my blotter would have been a 4-cent loser
  • This trade is the reason why I am now going to implement a 5-cent stop loss, but only if the stock and the Futures are clearly trending


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