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

Monday, August 21, 2006

Shake, Rattle and Roll

Gross: +$82.50
Net: -$114.15
Loss From Top: $336.43
Trades: 78
Shares Traded: 224700

Stocks Traded Today (net profit/loss):
Motorola (MOT): +$249.20
Micron Tech (MU): +$173.15
Ford (F): +$48.10
Walmart (WMT): +$37.15
Hewlett Packard (HPQ): +$1.71
Bank of America (BAC): -$13.01
Lowe's (LOW): -$15.12
Home Depot (HD): -$46.13
Corning (GLW): -$46.71
Advanced Micro Devices (AMD): -$72.74
EMC Corp (EMC): -$119.93
Time Warner (TWX): -$309.82

Dang! All day long I was shaken (out of my positions), I was rattled (my confidence was), and I was rolled (for my profits I had accumulated over the course of the day).

Not very happy about my results today. There were numerous times that I shouldn't have traded (no trend). My net P/L was bouncing around just as much as the market was today. I would be positive, then negative, back to positive, then back to negative again.

I lost $300 on the last trade of the day, which pushed me into negative territory where I ended the day. The bad thing about it was that I shouldn't have lost $300 on that trade - it was a winning trade, but I got greedy, cancelled my order to get out of my position in the hopes of making more, but ended up taking a bad loss.

So what were the things I did wrong today? Well I reviewed the day and here's what I came up with:
  • I tried trading stocks when they were completely flat and that were not going anywhere (in particular, I kept trying to trade Ford (F) when there was no clear trend on it)
  • I have got to learn to keep my hand away from the keyboard when the overall markets are not going anywhere in particular - today I kept trying to trade when I shouldn't have
  • I got greedy near the end of the day on Time Warner (TWX)...I had a clear exit point on a good trade, but got greedy and cancelled my order (when it was fairly clear that TWX wasn't going to go any higher)...part of the reason was that I started seeing $$$ in my eyes and for some reason I thought I'd make 100's of dollars more on this trade (when it was evidently clear it wasn't going to)
One thing that was good about today was that I was trading big sizes for most of the day. I have recently come to realize that one of my main fears is losing money. I would use smaller share size because in the back of my mind I would be thinking "If I used 10,000 shares and if this position went against me by 5-cents, I'd lose $500!".

Well I cannot recall how many times I missed out on great trades because I used only 3000 shares instead of 10,000.

Today I didn't think about the loss that could possibly happen and I found I was much more comfortable and more quick to react. There were a few times today I even tried to go long 20,000 shares (but never got filled).

All day the overall markets traded in a very tight range (which is not very good for my style of trading) and there was a lot of chop in both directions (also not good for me). I realized this and I really tried to trade less....but boredom got the best of me and I still tried to trade during the afternoon chop.

But in all honesty, I should really develop some kind of strategy to trade these kind of markets. A good and consistent trader should be able to make money in up, down, and sideways markets. I'll have to work on something to fix this...

One good trade versus one bad trade today.

Tomorrow is another day and I hope August goes away soon....

Good Trades
3:29PM - Ford (F) and the Futures were moving up. There was a fairly large level on the offer at $7.55 (there was about 2000 size on the ask). When it broke, I went long 10,000 shares. The level didn't break initially, and when it finally looked like it was going to break, I tried to get long another 10,000 shares, but I didn't get filled. I got my position out for a 2-cent winner ($200 profit before fees; In: 3:29:42 ; Long 10,000 shares @ $7.55 ; Out : 3:31:09)

Bad Trades
3:52PM - Time Warner (TWX) was uptrending while the Futures were moving up slightly. TWX seemed to be going up quite strongly in the last 30 minutes of the day, so when there was an opportunity, I went long 10,000 shares at $16.55. I had placed an order to get everything out for a 2-cent winner because there was a significant level $16.58 (about 1500 size on the offer). Once I was long, it was great! Big buy orders came and flooded the Level 2, but it was around this time I saw $$ in my eyes and I decided to cancel my order. Well prices went up to $16.58, but then came back down. I tried exiting, but kept chasing prices down. I ended up getting everything out for a 3-cent loser ($300 loser before fees; In: 3:52:17 ; Long 10,000 shares @ $16.55 ; Out : 3:54:27)
  • I think I used the excuse of "Let's try practicing patience" to cancel my order, when in reality I was just greedy
  • Entry was OK, it's just my exit that was bad...and I should really know better - thick stocks like TWX will only move a few cents and not 20-cents (when I was cancelling my order to capture more profits, I remember thinking "It'd be great if I take a 10-cent winner on this!")

2 Comments:

  • J.C., trust me, you are doing fine. I would keep increasing my knowledge, sure, but truth is, you cannot make money in every kind of market. Some days (like today) you just learn to walk away and deal with those rare occasions in which your analysis "woulda" made you a fist full of dollars but didn't. Today the only folks who entered positions today and made money were the lucky traders - not the good traders.

    Hang in there. You are way ahead of the curve.us

    By Anonymous Jeff, at August 21, 2006 11:32 PM  

  • Jeff,

    Thanks for your comments and comforting words.

    I guess you're right. It's probably just frustration at work and since it hasn't been a great August (so far) I guess I was just venting a little.

    I'll see how the rest of this week goes and if it still continues the way it has been on Monday, I might decide to take a few days off.

    Happy trading!
    JC

    By Blogger J.C., at August 22, 2006 7:11 AM  

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