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

Wednesday, July 05, 2006

Motorola And It's Bag Of Tricks

Gross: +$375.00
Net: +$108.87
Loss From Top: $288.18
Trades: 111
Shares Traded: 248800

Stocks Traded Today (net profit/loss):
Walmart (WMT): +$406.16
AT&T (T): +$401.72
Micron Tech (MU): +$176.56
Bank of America (BAC): +$93.19
General Motors (GM): +$11.56
Sprint-Nextel (S): -$4.72
Citigroup (C): -$19.22
Exxon Mobile (XOM): -$25.76
Hewlett Packard (HPQ): -$49.66
General Electric (GE): -$95.56
Corning (GLW): -$149.01
Motorola (MOT): -$636.43

Not exactly the kind of start to the month I was looking for, but considering the circumstances, I'll take it.

I started the day as aggressive as ever and before I knew it, I was throwing 10,000 share orders left, right, and centre! Unfortunately I was fooled twice by Motorola (MOT) and I ended up losing over $600 on it over the course of the day.

And the way Motorola (MOT) fooled me was exactly the same in both instances. Like the saying goes "Fool me once - shame on you, fool me twice, shame on me" and there was no way in hell I was going to let Motorola fool me for the third time.

All day Motorola would show big size on the bid on several levels and when it looked like it would start an uptrend, all the size on the bid would disappear, then big size would show up on the offer and the stock would come tumbling back down.

I should have been weary of it the first time it happened, but I fell for it a second time. The second time was even worse because I was double-filled long for 16,200 shares and I ended up taking a $441 hit on that trade (see the trade at 10:36AM under "Bad Trades" below).

For the rest of the day, I was tempted many times to take a position on Motorola, but time after time, I saw Motorola do this same trick throughout the remainder of the day. I'm glad I only fell for it's bag of tricks twice and not more.

Overall, I would say I was happy with the amount of aggressiveness that was displayed on my part today. However I must be smarter to avoid some of the tricks that many of the thicker stocks play (GE, MOT, TWX, F, MU). I was also not too happy about how most of my positions really didn't go anywhere (partly because the markets themselves felt like they didn't really want to go anywhere).

Today there were 2 good trades (profit of $200 or more) and there were 3 bad trades (loss of $100 or more).

I've got to wake up and smell the order to reach my goals for this month, I only have 8 days left for screw-ups!

Good Trades
9:44AM - AT&T (T) looked like it caught support while the Futures were downtrending. Just then, the Futures popped up so I went long 8000 shares. I got out as follows: 1-cent winner (2000 shares), 2-cent winner (2000 shares), 3-cent winner (2000 shares), 4-cent winner (2000 shares) ($200 profit before fees)

10:12AM - AT&T (T) and the Futures were uptrending. AT&T broke a level so I went long 10,000 shares and got out as follows: 2-cent winner (6000 shares), 3-cent winner (4000 shares) ($240 profit before fees)

Bad Trades
10:16AM - Motorola (MOT) was downtrending while the Futures were flat. It looked like Motorola was about to start uptrending when suddenly huge size showed up on the bid (about 900+ size) and lots of 400+ and 500+ sizes showed up on the bid just below this huge level. I saw this and went long 10,000 shares. Well - I was duped...once I was long, all the sizes on the bid disappeared and they appeared on the offer (one 1000+ size showed up on the offer and several 500+ sizes showed up just beyond that level). I quickly got out as follows: 1-cent loser (5000 shares), 2-cent loser (5000 shares) ($150 loss before fees)
  • I was watching Motorola for most of the morning up until this trade and didn't know it was a trap
  • In any event, this was the first trick of the day on Motorola, and unfortunately I was on the recieving end of this trick
  • Also, conditions at the time would not have really warranted a trade - if I had stuck to my trading criteria, this trade would not have been put on (I guess you can say this was just an aggressive trade)
10:36AM - Motorola (MOT) had just curved upwards and looked like it was going to start uptrending while the Futures were flat. Suddenly, huge sizes appeared on the bid (again, it was another 900+ size on the bid, followed by several 500+ sizes just below it). Size on the offer was getting hit, so I put in an order to get long 10,000 shares. It looked like all the shares on the offer were gone and I thought I wasn't going to get filled, so I hit some shares on Arca. I got 6200 long shares off Arca, so I tried to cancel the other 10,000 shares. Unfortunately I was filled for it too! Overall I was long 16,200 shares. And guess what - all the sizes on the bid disappeared and big sizes showed up on the offer! I got out as follows: even (3400 shares), 1-cent loser (500 shares), 2-cent loser (5000 shares), 3-cent loser (1200 shares), 4-cent loser (500 shares), 5-cent loser (5600 shares) ($441 loser before fees)
  • Duped again! I should have realized what was going on when the exact same situation occurred again. It was so uncanny that even the sizes and the way the stock reacted was exactly the same as before at 10:16AM!
  • I learned my lesson after this trade and avoided trading it for the rest of the day. I did see this similiar situation occur several times throughout the remainder of the day
1:41PM - General Electric (GE) and the Futures were uptrending. There was some big size on the bid (over 1000+) so I decided to go long 10,000 shares. Well, the size disappeared so I quickly got my entire position out for a 1-cent loser ($100 loser before fees)
  • I might have jumped the gun when I saw the size on the bid disappear (I was fearing another Motorola-like move)
  • This was just one of those trades that didn't work out, but because of the size of the position, you just lose so much more when you do lose


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