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

Tuesday, August 15, 2006

Somebody Should Be Fired....

Gross: +$136.16
Net: +$21.08
Loss From Top: $344.81
Trades: 60
Shares Traded: 108800

Stocks Traded Today (net profit/loss):
EMC Corp (EMC): +$220.92
Exxon Mobile (XOM): +$54.64
Hewlett Packard (HPQ): +$14.79
Home Depot (HD): +$8.74
Corning (GLW): -$27.89
Bank of America (BAC): -$29.98
Walmart (WMT): -$53.15
CA Inc (CA): -$79.48
Motorola (MOT): -$87.49

This morning we were told that the system had connection problems to the CME (Chicago Mercantile Exchange) and so we would not have Futures quotes or charts for the Futures. Then, at around 2PM, all traders were told to flatten their positions because the system was in "imminent" danger of crashing.

I waited until 3PM, then figured if they can't fix the problem by 3PM, they'll never get it fixed by market close, so I left for the day.

I cannot understand how a company with over 1600 full-time traders worldwide can stand having so many system problems during the month. If it's not the quote server going down, then it's the execution server, if not that, then the charts would go all screwy.

Anytime the system goes down, it goes down worldwide, which must cost the company millions a year (believe me, there are traders in our company that usually put on very hefty positions, and if the system goes down and the position is going severely against them, there isn't a thing they can do about it).

I really do hope the guys in the back office know what kind of serious impact they have on the company. If not, I'd say the company should start swinging the axe.

In my monthly summaries you'll notice I have a stat called "Days Lost Due To System Downtime". If I have to put a stat like that in my summaries, then you know our system is not up to snuff.

Anyways....

The reason for my dismal performance today is not a result of the system issues (it would be too easy for me to blame the system, and if I did then I wouldn't learn anything!). The reason for the not-so-good day was because I insisted on trading during the lunch hour when everything was absolutely flat.

Why did I trade during the stagnant lunch hour? Maybe because I was bored...maybe because I'm dumb. But I put on one bad trade after another and by the time lunch was over, I had lost close to $400.

I was not too happy about today and I was not too happy that the system went down at 2PM, but what can I do about it?

One good trade versus no bad trades.

August is slowly wasting away and I have a feeling it isn't going to amount to much. Tomorrow I'm going to turn it up a notch and try to take bigger risks. If August is going to be lost, then I'm going to go down with it (I'm not sure if this is a good idea to have this kind of mentality...but right now I'm just extremely frustrated with the way this month is going that I just need to start something to give me a jump start).

Good Trades
9:52AM - EMC Corp (EMC) started turning downwards while the Futures were also turning down. There was some fairly big size on the bid (about 500 size on the bid) and when the Futures started tanking, I tried to get short 10,000 shares, but I only got 5000 shares. EMC kept going down and I followed it down. I got the entire position out for a 6-cent winner ($300 profit before fees ; In: 9:52:57AM ; Short 5000 shares @ $10.83 ; Out: 9:54:16)

Bad Trades
None...just lots of small losers during the lunch hour that slowly chipped away at my profits.

2 Comments:

  • Does your prop firm fall into the statistic where 90+% of traders fail within the first year? Or do you think your firm gives adequate training so the success rate is high? About how many other prop firms do you think are out there that are as big or bigger? Thanks

    By Anonymous Anonymous, at August 16, 2006 1:38 AM  

  • Anon,

    Thanks for your comments.

    I would have to say that based on the turnover in the number of trainees, I believe that statistic is more or less true (maybe it might be around 75% - 80% that fail).

    At our firm, usually if one were to fail, it would be as a trainee. Most would simply find it too difficult and move on or they find that month after month they failed to complete the training process, get frustrated, then quit.

    As for the training process...it's not very rigorous...they simply give you a monetary target that you need to hit by the end of the month on a limited number of shares (they start you off with only 100 shares)...if you are not able to meet that target, your profit goes back to zero and you try again the next month. Those who are able to complete the training process have proven that they can be profitable, but still I see some full-timers leave as well for either a regular day job or to open their own branch.

    I know there are other popular prop firms out there, but I'm not too sure of their size. I know some traders at our company have switched prop firms because either the payout is bigger, or they offer other things such as remote trading (i.e. trading from home).

    Hope that answers your questions!
    JC

    By Blogger J.C., at August 16, 2006 7:30 AM  

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