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

Friday, July 07, 2006

Too Chicken To Put On A "Real" Position

Gross: +$744.50
Net: +$611.45
Loss From Top: 0
Trades: 93
Shares Traded: 113300

Stocks Traded Today (net profit/loss):
Walmart (WMT): +$446.15
Home Depot (HD): +$160.15
Advanced Micro Devices (AMD): +$10.76
Motorola (MOT): +$6.92
Bank of America (BAC): -$1.11
General Motors (GM): -$11.41

Boy oh boy! Did I ever see a lot of smoke and mirrors today! Lots of tricks, fake sizes, price levels that never break, and just plain weird moves made by stocks today.

It was because of all these games being played that I never pulled enough courage to put on any real big positions. I was very cautious as I was always afraid someone was going to pull a rabbit out of a hat and pull a fast trick on me, and as a result, I never really felt confident for most of the day, and so I used smaller position sizes.

Walmart (WMT) was good for me again today. This stock has been taking a beating the last few days and has been a fairly good short.

Around 2:30PM, there was a nice move downwards in the overall markets, but unfortunately, almost all the stocks I was watching never really moved down during that time! The only thing that was a clear short was Walmart (WMT), since it had been also been downtrending with the Futures.

Although I missed my goal again today, I think one of the things I need to be is consistent. If I cannot make my goal of at least 10 days of $1000+, I'd still be happy as long as some consistency returns.

There were many $100 or so winners today. But because of all the trickery that was going on today, my mentality today was get in and get out fast (and so I didn't really let any winners run).

Anyways, I've had a long day and I'm nearly falling asleep as a write this, so I'll relax, enjoy the weekend, and get myself ready to do this all over again on Monday.

Good Trades
9:35AM - Walmart (WMT) and the Futures started the day downtrending. Walmart broke a price level, so I went short 4000 shares and got out as follows: 3-cent winner (1000 shares), 8-cent winner (200 shares), 9-cent winner (2800 shares) ($300 profit before fees)

Bad Trades
10:03AM - Advanced Micro Devices (AMD) was uptrending while the Futures were falling. I was watching AMD when all of a sudden, I saw many big sell orders show up on the Level 2 that were several cents lower than the current bid. I just decided to throw out an order to go short 1000 shares since it looked like the next print would be several cents lower. Well I was filled short 1000 shares, but then the Level 2 got even messier...I saw several big buy orders suddenly show up. During the entire time, the specialist didn't fill anyone. The next thing I knew, the specialist put the next print several cents against me. I got out for a 10-cent loser. ($100 loser before fees)
  • This whole situation was messy to begin with...I'm just glad I used only 1000 shares
  • AMD was strong after gapping down in the morning...I should have been more cautious with this one
1:10PM - Walmart (WMT) and the Futures were tanking hard. There was some size on the bid at the $46.20 level. The Futures started tanking, so I went short 6000 shares at $46.20. That price level was unusually strong, even though all the size on the bid was filled. I waited even more to see if it would go down further. The Futures tanked again really hard but surprisingly, WMT refused to go down! There was hardly any size on the bid and for several cents below it, but for some reason it didn't go down. The Futures tanked again for the third time, but WMT again refused to budge. I got out as follows: 1-cent winner (1000 shares), 1-cent loser (100 shares), 2-cent loser (2000 shares), 3-cent loser (2900 shares) ($118 loser before fees)
  • This is a classic example of the perfect setup and everything about the trade would suggest that this is a great short...unfortunately WMT decided not to cooperate
  • This is also a good example of how losing trades are part of trading. No matter how perfect your trading strategy is, there will always be trades like this that just seems to defy what should happen


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