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

Tuesday, July 18, 2006

My New Unlucky Charm: Citigroup

Gross: -$334.60
Net: -$524.56
Loss From Top: $860.70
Trades: 108
Shares Traded: 200800

Stocks Traded Today (net profit/loss):
Motorola (MOT): +$148.36
Advanced Micro Devices (AMD): +$111.32
Walmart (WMT): +$51.75
Hewlett Packard (HPQ): +$12.13
Home Depot (HD): -$16.40
Coca-Cola (KO): -$36.83
AT&T (T): -$261.36
Citigroup (C): -$533.83

Tsk tsk...I thought I was smarter than this...some mental mistakes and two bad trades later and this is the result.

I managed to survive the better part of today's market "jiggle-fest", but late in the afternoon I put on a bad trade which was followed up by several losing trades and I felt myself sinking deeper and deeper in the red.

Last week I described my problems I've been having with Citigroup (C) , and today it really let me have it. So far this month, I've traded it on 7 trading days and lost money on it on 6 of the trading days.

I think I know what the problem is. Since Citigroup adheres to the uptick rule, I cannot short it as easily as some of the other stocks. As a result, I've mainly been going long on it. The problem is that Citigroup has been beaten up the last several trading days and has been tanking really hard. As a result, I've been longing a stock that everyone is selling.

Perhaps I should only trade Citigroup when it's longer-term trend is up so that I'm not going against the grain. For now, I'm going to avoid trading this stock until it's overall trend changes.

I took two big hits (bad trades) today, one on AT&T (T) in which I lost $240 on it and another on Citigroup in which I took a $428 loser on it late in the afternoon. Those two trades alone basically shot my whole day down.

After I took that $428 loser on Citigroup, it shook me up a little and as a result I was really hesitant and when I did get into a position, I ended up losing more money.

I really think that I should be in a position in which these kind of days should not happen any more. I understand that trading will involve losing days and I wouldn't mind if I lost $100 or $200, but today's result is totally unacceptable.

That big losing trade on Citigroup was a stupid trade to get into in the first place and could have been easily avoided. I've really got to smarten up because I cannot keep having these kind of pathetic days.

What did I learn today? Here are just some of the things:
  1. Never put in a big order higher than the current bid/ask even if the Futures are ripping/tanking in that direction (this was the mistake I made on Citigroup)
  2. Just because you missed a move in a stock it doesn't mean you have to get in early to hopefully catch the next move (another mistake on the same Citigroup trade)
  3. Watch your position size - some of my positions today were a little too big considering the circumstances
  4. If you are having problems trading a stock, leave it alone for at least 2 weeks (I should have done this on Citigroup; last week I had already identified my problems with I shouldn't have even traded it)
  5. On stocks that adhere to the uptick rule, I should only trade it if the stock's longer-term trend is up
Needless to say, I've learned my lessons today (the painful way).

Good Trades
9:33AM - Motorola (MOT) and the Futures were moving up. Motorola exhibited strength and when it broke some size on the offer, I went long 5000 shares. I got out as follows: 5-cent winner (2600 shares), 6-cent winner (1000 shares), 7-cent winner (1400 shares) ($288 profit before fees)

Bad Trades
12:52PM - AT&T (T) was uptrending while the Futures were slightly uptrending. When some size broke on the offer, I went long 10,000 shares. AT&T came falling back down so I got out as follows: 1-cent loser (2500 shares), 2-cent loser (2800 shares), 3-cent loser (2900 shares), 4-cent loser (1800 shares) ($240 loser before fees)
  • What was I thinking going long 10,000 shares during the lunch hour? I should have used 5000 or less
  • Aside from the size of the position, everything else seemed to look good on this one
2:38PM - Citigroup (C) was uptrending while the Futures were ripping up hard. I initially missed a great move to the upside on Citi when the Futures exploded to the upside. I kept watching Citi and I saw some large size on the offer about two cents above the current offer. Well the Futures exploded upwards again and I was thinking that I didn't want to miss the next move up, so I put in an order to get long 8000 shares two cent above the current offer (hoping to hit the size). Well I was filled for all 8000 shares two cents above the best offer, so I waited a bit for more of a Futures move. Well, the Futures exploded up again, but Citigroup moved down!!! I got out as follows: 3-cent loser (200 shares), 4-cent loser (1400 shares), 5-cent loser (1800 shares), 6-cent loser (4600 shares) ($428 loser before fees)
  • I was over-anxious because I missed a great move just moments before when the Futures ripped up, and so I got in too early not wanting to miss the next move....well I got a move the wrong direction!
  • I broke one of my trading rules in that I should never put in an order to hit size if it is not the best bid/offer, as a result, as soon as I was long 8000 shares, I was looking at a $160 loser
  • I should have avoided trading Citigroup altogether...I was watching it all day and found that it's movements were not very good; it did just have the one great move to the upside (the one I missed), but aside from that, I found that Citi has been trading very sloppily lately


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