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

Wednesday, August 23, 2006

Scalping Ford Motors

Gross: +$591.05
Net: +$345.16
Loss From Top: $250.42
Trades: 76
Shares Traded: 275600

Stocks Traded Today (net profit/loss):
Ford (F): +$405.17
Motorola (MOT): +$171.75
Corning (GLW): +$88.11
Exxon Mobile (XOM): +$38.77
Bank of America (BAC): +$5.20
Walmart (WMT): -$16.03
Hewlett Packard (HPQ): -$24.47
Gateway Inc (GTW): -$67.26
General Electric (GE): -$256.08

Finally we get some nice moving markets...if only I didn't lose most of my profits trying to trade during the lunch hour!

Today I really tried to focus more on scalping Ford (F) and I had some success. It also helped that it was up today since it is much easier to trade on the long side than short (this stock is not on the SHO list, and so adheres to the uptick rule for shorting).

At one point I was up almost $700 on Ford (F) alone, but I insisted on trying to trade during the lunch hour and ended up giving most of my profits from the morning back.

Within the first hour and a half I thought today would amount to a good day as I was up almost $600, but by the time the lunch hour finished, I had practically lost it all.

Serves me right! I usually would go out for a lunch time walk (just to kill some time and to get me off the trading floor), but this morning when I woke up, my allergies were at it's worst (damn you ragweed! damn you!) and my nose kept running, eyes kept watering, and I was sneezing non-stop. As a result, I decided against going out for my usual walk (for fear of making these symptoms worse)...well that was a $600 mistake!

Anyways, I think I'll continue with scalping Ford (F)...it's very comfortable since every price level is so thick I can get in and out with big positions. I would really like to use 20,000 or more shares on this stock (which I may attempt tomorrow).

During the day, I got a chance to chit-chat with the former head trainer at where I work. He helped me open my eyes about a few things and we discussed a little about how the other traders at the office are doing...some really motivating stuff. If I want to pull off the numbers some of those guys are doing, I've really got to get out of my comfort zone and really start taking some serious risks. Rewards are given to those who take the risks right?

Two good trades and one bad trade today.

Today there was more patience practice and I'm now seeing that my hold times for my trades are getting a little longer. I was also more willing to hold a temporary loser to give it more time to work in my favor (normally I'd jump out quickly if it went against me). We'll see what tomorrow brings.

Good Trades
10:55AM - Ford (F) and the Futures were moving up. Ford was approaching it's intraday high and resistance level at $7.75. When it was about to break, I went long 10,000 shares. I got out as follows: 3-cent winner (5000 shares), 6-cent winner (5000 shares) ($450 profit before fees; In: 10:55:41AM ; Long 10,000 shares @ $7.75 ; Out: 10:59:38AM)

11:37AM - Motorola (MOT) looked like it caught some support and was turning up and the Futures also looked like it caught support and was also curving up. Since this trade did not fit all my trading criteria, I only went in with half what I'd normally do...I went long 5000 shares. I got the entire position out for a 4-cent winner ($200 profit before fees; In: 11:37:09AM ; Long 5000 shares @ $22.70 ; Out: 11:42:33AM)

Bad Trades
11:51AM - Motorola (MOT) was up but flattening while the Futures were flat. I went long 5000 shares when I saw some big size appear on the bid. Ha! I believed size on the Level 2 during lunch! The size disappeared and prices fell back down. I got out as follows: 1-cent winner (100 shares), 3-cent loser (4000 shares), 4-cent loser (900 shares) ($155 loser before fees; In: 11:51:11AM ; Long 5000 shares @ $22.82 ; Out: 11:53:31AM)
  • Both MOT and the Futures were flattening...if I had wanted to go long, I should have waited for a good up move on the Futures or MOT
  • Lately I've been believing in size too much...I should instead focus on price action

7 Comments:

  • Hey JC,
    Nice day. It would be interesting to hear how other traders are doing, I guessing many thousands of dollars a day? It would also be interesting to know more about your trading enviroment. Did the trainging cost you money? Also one more thing, you seem to be very good at limiting your losses, any tips?

    By Blogger Glenn, at August 23, 2006 8:24 p.m.  

  • EliteTrader has a P/L chain posted daily. Of couse nothing is certified.

    By Anonymous Anonymous, at August 23, 2006 9:03 p.m.  

  • Glenn,

    Thanks for your comments.

    While chit-chatting with the former head trainer, he was telling me that one of the traders at our branch (there are over 80 branches worldwide) has made well over $100,000 this month alone. There are a couple of guys making about $5000 average per day with an occasional $10,000+ day...Yesterday, one of the traders out of the Montreal branch made $53,000 in one day - a new single day record at our company!

    We have a list of trader records and the best month (net) by a trader was the guy in Montreal...one month he made over $500,000 net!

    As for our trading environment we use in-house software and charts (though most people pay for eSignal for charts). The traders basically sit in rows with trading stations along those rows...it kinda like when you see someone from Goldman Sachs or Bear Stearns do an interview and behind them you see rows and rows of computers with people manning them...something like that. We've got TV's all over the trading floor...most of them tuned into CNBC (with the sound muted).

    Once our company welcomes you aboard, training is free and the length of the training depends on how well you do (it took me 6 months to finish training...all WITHOUT pay). They say that the average training period is 5 or 6 months...of course the good ones finish earlier while I know of some other trainees who have been at it for over a year!

    As for my losses...I would consider myself a very risk averse and conservative trader and I usually only get into a trade if I'm expecting it to immediately go in my favor. If it doesn't immediately go in my favor or if it starts going against me, then I just punch out either for even or for maybe a 1-cent loss. While this may work for a scalper, it may not be so good for longer term traders (you'll be stopped out way too much).

    Currently I'm working on holding on to trades longer which means I may have to hold a temporary loser. In these types of trades, I'll only get in if the stock and the Futures are trending in the same direction. If there is support behind my trade (i.e. size on the bid or offer just behind my position), then that will be where I get out if it looks like it may fail. Another thing I will look for is to look at the candles on the chart...if the candle breaks the low or high of the previous candle against me, then I'm out. But remember, I usually work in a very small time frame and while this may work for me, it might not work for longer term traders.

    I hope it helps!
    JC

    By Blogger J.C., at August 23, 2006 9:12 p.m.  

  • Anon,

    Thanks for your comments.

    That's true...in fact, I take a quick look everyday at the EliteTrader P/L thread (just to see how I fared compared to those who post).

    I especially like Rearden Metal's P/L...last week he was up $500,000 in one day! (of course, nothing is certified)...I've also seen him lose a lot in a single day (one day he lost over $200,000 in a day).

    If you haven't done so, have a look at that thread...it's called "Trader P/L 2006" at EliteTrader (link is at the sidebar) either for amusement or for motivation.

    JC

    By Blogger J.C., at August 23, 2006 9:19 p.m.  

  • Hi JC,

    What is the name of the company your are trading at? Do they have any branches in the Niagara area? Can you tell me what is the fees and commissions structure and how is it split?

    Thanks!

    By Anonymous Anonymous, at August 23, 2006 11:27 p.m.  

  • Hi JC,

    What is the name of the company your are trading at? Do they have any branches in the Niagara area? Can you tell me what is the fees and commissions structure and how is it split?

    Thanks!

    By Anonymous Anonymous, at August 23, 2006 11:28 p.m.  

  • Anon @ 11:28PM,

    Send me an email and I can send you further details (I don't wish to divulge too much on this blog).

    My email is:

    jc_at_trivita@rogers.com

    However, I do not think they have a branch in Niagara Falls yet, but give me an email and I can send you the website.

    JC

    By Blogger J.C., at August 24, 2006 8:22 p.m.  

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