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

Saturday, September 30, 2006

Trading Statistics For Month Of September

Total Gross for Month of September: +$7,091.20
Total Net for Month of September: +$3,953.21
Total Fees (Gross - Net) for Month of September: $3,137.99
Total Trades for Month of September: 2363
Total Shares Traded for Month of September: 2,673,940

Best Day for Month of September: Fri Sept 15 (+$835.61 net)
Worst Day for Month of September: Wed Sept 6 (-$510.33 net)

Number of Positive Net Days for Month of September: 14
Number of Negative Net Days for Month of September: 5
Number of Trading Days Missed for Month of September: 1 (vacation - extra long weekend)
Number of Trading Days Lost Due To System Downtime: 0 (but throughout September the system was down as some point during the day everyday)

Compared to Previous Month: -$1,132.02 (down 22.3% from last month)
Compared to Same Month Last Year: +$1,953.21 (up 97.7% from same month last year)

Net Profit Distribution (# days):
(Excellent) +$1000 OR MORE: (0)
(**Good**) +$500 TO +$1000: ***** (5)
(*Average*) +$200 TO +$500: **** (4)
(***Poor***) -$200 TO +$200: ****** (6)
(****Bad****) -$200 TO -$500: *** (3)
(**Terrible**) -$500 OR LESS: * (1)

Top 3 Stocks For Month of September(Net Profit):
Home Depot (HD): +$1,982.28
Corning (GLW): +$1,038.65
Walmart (WMT): +$576.06

Worst 3 Stocks for Month of September(Net Profit):
Ford (F): -$529.32
Motorola (MOT): -$309.65
General Electric (GE): -$121.78

Top 3 Most Traded Stocks for Month of September:
(3 stocks tied for first place - each traded on 19 out of 19 trading days)
Home Depot (HD)
Walmart (WMT)
Exxon Mobil (XOM)

Bottom 3 Most Traded Stocks for Month of September:
(4 stocks tied for last place - each traded on 1 out of 19 trading days)
Bell South (BLS)
General Electric (GE)
Sprint-Nextel (S)
Texas Instruments (TXN)

Total Number of Different Stocks Traded for Month of September: 18

List of Stocks Traded During the Month of September (with net profit):
Advanced Micro Devices (AMD): +$220.04
Bell South (BLS): -$8.39
Boston Scientific (BSX): +$20.59
Citigroup (C): +$272.51
EMC Corp (EMC): +$9.62
Ford (F): -$529.32
General Electric (GE): -$121.78
Corning (GLW): +$1,038.65
Home Depot (HD): +$1,982.28
Hewlett Packard (HPQ): +$247.85
Motorola (MOT): -$309.65
Micron Tech (MU): -$66.53
Pfizer (PFE): +$15.19
Sprint-Nextel (S): -$19.83
AT&T (T): +$364.84
Texas Instruments (TXN): +$3.94
Walmart (WMT): +$576.06
Exxon Mobil (XOM): +$546.29

Monthly Recap

What a totally demoralizing month. It looks like another step backwards as far as my trading goes. This was supposed to be a defining month for me as I thought that the so-called summer doldrums would be over and it would be back to business as usual.

But this was hardly expected as I found that this month was one of the more difficult months to trade - one in which my patience was tested and one in which my emotions ran away with me.

You can see from my profit distribution that I had too many "stars" on the lower half of the chart and I wasn't able to pull off any "Excellent" days at all.

At the beginning of the month I had a slow start, but for two weeks I almost felt as though consistency was slowly starting to come back. But the last two weeks of September just turned out to be horrific in nature as I wasn't able to get any traction in terms of profits. Everyday I would come in not knowing whether I'd be able to come away with profits or not and my confidence level sunk to new lows.

This whole month has been a real roller-coaster ride with lots of ups and downs. There were times I woke up full of confidence, ready to conquer the world, but the markets ended up like yesterday - flat, choppy and directionless and I was unable to prove to myself I could do this.

Then there were other days when I woke up just feeling so demoralized and not 100% there, but then the markets would provide opportunity after opportunity, but I'd miss out because I was not 100% focused, which sunk me even lower.

I didn't really want to mention it too much in my blog, but we had a problem-ridden month as far as system downtime was concerned. Sometimes the Level II would be screwed up, sometimes the charts would screw up, sometimes we couldn't use certain ECNs, quotes would freeze, stickies would appear daily, execution would go down, sometimes everything went down at the same time - all of this was happening on a daily basis.

Did this have an impact on my trading? I don't really want to say so. Yea sure I missed out on some moves, or I'd realize my charts were not moving or I'd try to enter or exit a trade and try to hit size that wasn't really there, but all in all it was just bad trading decisions that ultimately led to a dismal month.

Many times I lacked focus and patience - especially when the markets were not providing opporunities. I will admit, in the mornings I somehow manage to do a great job in terms of waiting for the setups - but then my patience would wear thin and I'd start trading. For that point on, it would be all downhill - I started getting angry, reversing position after position. If only I had kept a level head and remained conservative, this month at least would have been respectable.

I just can't wait for October to start. I will be missing about a week in October for vacation so I won't be expecting too much from it - all I want to see is more trend and less chop. If the chopping continues, I'll really have to work on my patience and be able to sit still until a good setup shows itself.

What did I find good in my trading this month?
  • I realized I was having problems trading this month and made a decision to trade with smaller share size and hopefully ride out these choppy markets
  • Patience was a little better in terms of not trading - realizing what kind of markets we had, I made a real conscious effort to trade less
  • Patience was a little better in terms of holding on to winners. I'm starting to see winners in the 10 and 20-cent range and some of the hold times on trades went up as high as 10 minutes (for me that's really long!)
  • Sadly, that's about it - not much else was going for me this month
And what was not so good this month?
  • Emotions, emotions, emotions! At one point, this blog could have been named "The Angry Scalper's Tale"; I just blew up several times and it cost me big money. I've just got to relax a bit more
  • Pressure, pressure, pressure! Too many monetary targets, too many overall targets! I started forcing myself to trade and when time started running out, I felt as though I had to do something. This ultimately led to my blowups.
  • Patience, patience, patience! Though patience in waiting for good trades was a little better this month, there could have been a lot more - I kept trading when I knew I shouldn't. I'll continue to work on this
  • Focus, focus, focus! Too much junk going on in my head ("where is my trading going?", "other traders are doing well, why not me?") and not enough focusing on the task at hand. Many times I felt my mind start wandering and when I'd snap out of it, I'd see something and quickly go in without analyzing it.
  • Rest, rest, rest! There were quite a few sleepless nights in September (late nights trying to figure my trading out, too much thinking and not enough sleeping). Many times I came in dead tired and really too groggy to make trading decisions
  • Way too much "Level II" trading going on (trading based on what I see on the Level II) - I think it's because the charts don't show any setups, but the Level II sometimes just looks so tempting and makes it look so easy to make some money that way - yes, it's easy alright...easy to lose money!
  • Too much comparing myself to the other trader in the office - if I'm negative and I see the guy beside me and in front of me positive, I felt like "Dang it! They are positive and I'm not! I suck!", which led to me forcing trades to make some money
  • I found myself caring less and less about my positions - I cannot believe I actually started to let my losers run! The whole foundation for my trading is based on cutting losers short and here I was breaking that rule! Not good!
Finally, some goals for October:
  • Let's just try to get some consistency back in your trading...this will mean really working on all the things that went bad this month
  • No monetary targets! You want pressure? Try making $5000 on the last trading day on October or try making $1000 when you are only up $200 with 30 minutes to go! Good luck! I won't be surprised if I lose money on that day!
  • Chill man! No need to angry or upset at the markets! Let's try to let go of all worries and troubles at the door and focus on trading this month
  • Take better care of yourself - get more rest, eat healthy and let's exercise more often (September I didn't exercise at all and I felt physically drained all month) - too much pizza, too much chips and pop - this isn't good for me and I sure as hell didn't feel all that good either!
  • No more Level II trading! I don't know how much money it cost you in September but I say for sure that it's a lot!
  • I've got to keep my spirits up! The moment I start thinking of failure is the moment everything associated with the anti-trader will appear
This is my lifelong dream and I sure as hell won't give up without a fierce fight! You want to take me down Mr. Market? Go ahead and try.

Friday, September 29, 2006

Spent The Day Just Paying Fees

Gross: +$37.50
Net: -$59.13
Loss From Top: $123.15
Trades: 73
Shares Traded: 86200

Stocks Traded Today (net profit/loss):
Hewlett Packard (HPQ): +$137.46
AT&T (T): +$68.23
Pfizer (PFE): +$21.37
Home Depot (HD): +$15.47
Corning (GLW): +$7.88
Advanced Micro Devices (AMD): +$7.10
Exxon Mobil (XOM): -$47.70
EMC Corp (EMC): -$130.21
Walmart (WMT): -$138.36

Uhhgg! I was really hoping to end September with a bang and at least try to have one excellent day this month, but all we were given were some very directionless markets today.

I've really got to find better ways to kill time during the day. I went out and enjoyed the weather for almost 2 hours today but I still spent lots of time just trying to sit and be patient, and yet there were literally no opportunities to be had today.

When everything was said and done, I just ended up just paying for the fees for my trades today.

It was also another day in which there were still system glitches (stickies, frozen charts) and I was kind of glad that they appeared (yet again) because it forced me to stop "attempting" to trade.

I really hope that next month most of these problems will be fixed. For the entire month we had to put up with stickies, frozen quotes, and charting problems. And for the last two weeks of September there hasn't been a single day in which we did not encounter these problems.

It could be that they are preparing the system for the Hybrid system (I cannot believe it's almost here!), or it could be server upgrades, I just don't know - but I can tell you that frustrations on the trading floor are getting pretty high - mainly because the markets haven't been the greatest for trading lately - but the system issues just aggrevate everyone even more and I can tell you the verbal outbursts and the pounding of desks from the other traders have been getting louder and louder since these system problems started appearing.

But I'm not complaining :) Believe me, I would love nothing more than to blame the system for my problems I had this month, but I admit that this month has been very challenging indeed and a real test of patience.

I just can't wait for next week and the start of October - many out there believe there should be a definitive move one way or the other next week and I for one, really hope it does.

No good trades nor any bad trades.

Tomorrow or on Sunday I'll post up my monthly summary.

Good Trades

Bad Trades

Thursday, September 28, 2006

It's Like Turning Into Darth Vader

Gross: +$536.00
Net: +$424.83
Loss From Top: $35.84
Trades: 92
Shares Traded: 96200

Stocks Traded Today (net profit/loss):
Advanced Micro Devices (AMD): +$193.63
Walmart (WMT): +$78.51
Corning (GLW): +$54.04
Exxon Mobil (XOM): +$45.03
Hewlett Packard (HPQ): +$43.86
Home Depot (HD): +$18.64
AT&T (T): -$8.90

On the way home today, I was trying to think of an analogy for what I've been going through. And I think I have found one (for those of you who have never watched Star Wars, this post will probably not make sense).

I think of all us traders as being Jedi (from Star Wars). We have basic Jedi (trading) principles and rules in which we must follow in order to be a successful Jedi (trader). There are some master Jedi (traders) with lots of experience and you can tell they can feel the force (the markets) and it almost seems as though they can predict or see things before they even happen.

I know all of us want to be the best Jedi (trader) and we all work very hard in trying to achieve this. BUT, we must resist the temptation of the dark side (the characteristics of the anti-trader).

Soo many Jedi principles can be applied to trading.

Master Yoda once said:

“Fear is the path to the dark side. Fear leads to anger. Anger leads to hate. Hate leads to suffering”

which I believe can be applied to trading. If you are fearing that you'll lose money or fearing you'll miss out on a great move and you lose money, you get angry. The more you get angry, the more you hate the markets. The more you hate the markets, the more clouded your judgement becomes and in the end, you'll lose all your money and suffer.

The last couple of weeks I felt like Anakin Skywalker. I would come in in the morning and say to myself "I want to become the most powerful Jedi (trader) there is out there" and in the beginning, I follow all of the Jedi (trading) principles and the morning goes just great.

But then I'd break a rule or two (like trade when I'm bored or put on a trade that breaks my rules). Then I'd get further seduced by the dark side and make decisions with emotions. The more action I take, the more I spiral out of control and the deeper and more attached to the dark side I become.

By the end of the day, I turn into something completely the opposite of what I started out as. It's like Anakin Skywalker turning into Darth Vader (the ultimate anti-trader).

So today, I tried very hard and not succumb to any of the characteristics associated with the dark side (anti-trader characteristics) and I had to hold myself back from trading several times. I managed to remain patient and there were very few mistakes made today.

I still don't feel very comfortable with the current markets and as a result, I have reduced my share size and I've been getting in and out fast.

Gone are the days of 8000 and 10,000 share positions - my confidence has been shot and the effects of the last two months are still lingering. Once the markets definitively decides which way to go, I'll feel more comfortable with more sizeable positions.

But in the meantime, I'll stick with 1000, 2000 and 3000 share positions for now.

And so, I hope all of us Jedi (traders) out there keep our heads up high and try very hard to avoid the dark side (characteristics of the anti-trader).

Sorry about this silly post - I just thought it described my situation and the problems I've been having lately. I'll leave you with some Jedi (trader) quotes.

"Beware of the dark side. Anger...fear...aggression. The dark side of the Force are they. Easily they flow, quick to join you in a fight."
- Master Yoda

"A Jedi must have the deepest commitment, the most serious mind."
- Master Yoda

"Once you start down the dark path, forever will it dominate your destiny, consume you it will..."
- Master Yoda

"The fear of loss is a path to the Dark Side."
- Master Yoda

Good Trades
None - just put on small positions and got in and out fast

Bad Trades
None - no mistakes were made today.

Wednesday, September 27, 2006

The Anti-Trader

Gross: -$184.16
Net: -$313.88
Loss From Top: $438.19
Trades: 84
Shares Traded: 110600

Stocks Traded Today (net profit/loss):
Corning (GLW): +$203.63
Walmart (WMT): +$19.68
Exxon Mobil (XOM): +$7.02
Motorola (MOT): -$101.6
AT&T (T): -$110.82
Home Depot (HD): -$144.78
Advanced Micro Devices (AMD): -$186.95

Today I did everything that we were all taught that traders are NOT supposed to do.

Let's see:
  • I broke my trading rules
  • I exited my winners too soon
  • I held on to losers too long
  • I was not patient enough to wait for good setups
  • I overtraded on a day when there should have been fewer trades
  • I traded with too much emotion
  • I revenge traded
  • I put on positions that were too big given the situation
  • I started blaming the markets for not going anywhere
  • I started trading like I just didn't care whether the position would go my way or not (i.e. I started saying things like "I don't care if I lose $1000 on this trade, I'm gonna hold this sucker until it becomes a winner")
All of the above describes the anti-trader - the characteristics a trader is not supposed to have.

Overall, just another frustrating day for me. And I can certainly see why it was frustrating - all day we chopped all over the bloody place.

Given my current state of mind, I just got frustrated because the markets were not giving me opportunities for me to try to turn my trading around.

Anyways, I'm going to keep this post short. It was another day in which I knew what I did wrong (everything that describes the anti-trader).

Tonight I just want to get my mind off trading. The more I think about trading, the more it frustrates me and the more frustrated I get, the more stressed out I get.

Maybe tonight I'll just work on my other blog...

Good Trades
10:18AM - Corning (GLW) was downtrending and so were the Futures. I went short when some size broke. I got out as follows: 5-cent winner (300 shares), 9-cent winner (2200 shares), 10-cent winner (500 shares) ($263 profit before fees ; In: 10:18:56AM ; Short 3000 shares @ $24.40 ; Out: Did not record)

Bad Trades
12:44PM - AMD was downtrending while the Futures were flat. I went short at $25.90 hoping that AMD would continue it's downtrend. It bounced high enough to force me out. I got out as follows: 8-cent loser (1000 shares), 9-cent loser (1000 shares) ($170 loser before fees ; Short 2000 shares @ $25.90 ; Out: Did not record)

Tuesday, September 26, 2006

A Problem Ridden Day

Gross: +$166.96
Net: +$22.39
Loss From Top: $108.12
Trades: 102
Shares Traded: 118650

Stocks Traded Today (net profit/loss):
AT&T (T): +$172.41
Home Depot (HD): +$73.92
Advanced Micro Devices (AMD): +$21.64
Exxon Mobil (XOM): +$9.61
Texas Instruments (TXN): +$3.94
Pfizer (PFE): -$6.18
Ford (F): -$10.21
Hewlett Packard (HPQ): -$14.44
Walmart (WMT): -$17.43
Corning (GLW): -$84.49
Motorola (MOT): -$126.39

First of all, let me say that the following problems we had today were not the cause of my poor performance today (my poor performance was my doing!).

But nonetheless, it broke my concentration and tripped me up several times today.

When I got in this morning, the branch manager told everyone that we might have problems with ECNs on the Level II. And boy did we ever have problems with them! All day, we were getting "stickies" that just messed up our Level II windows and made it very difficult to see what was going on.

So what are "stickies"?

It's when ECN quotes show up on the Level II, but do not go away once they are filled. As a result, the Level II may show shares on an ECN, but it might not really be there.

The problem is that since prices on the Level II are sorted in descending order, these "stickies" stay at the top of the Level II window. Unfortunately we had "stickies" on Arca, Inet, and Brut!

What started happening was that all the "stickies" started collecting at the top of the Level II window and if prices really started moving, the real prices were moving further and further down on the Level II window! At one point, one of the stocks I was watching had it's real price at the bottom of the Level II window (when you'd expect to see the real prices at the top of the Level II window).

It made it difficult to really see where the prices were.

BUT WAIT, that's not all....

The trading platform we use crashed on me 3 times today - and one of the times it crashed, I was in a position! By the time I got the trading platform up and running again, I was looking at a $100 loser in my blotter. AGAIN - I'm not blaming the system (that'd would be too easy), it was just a bad trade to get into in the first place. I managed to minimize the damage and got out for a small loss.

BUT WAIT...that's not all!

I had to restart the charting software we use 4 times today because I'd be trading, but then I'd realize that my charts were not moving and that they were "stuck" - sometimes for as long as 30 minutes! I was making trading decisions based on charts that were old!


The quote server froze on us several times today (I counted at least 5 times), usually when the Futures or the overall markets were ripping or tanking. I'd try to hit size or get out of a position when the quotes would freeze for maybe 10 to 15 seconds. Once the quotes started up again, the prices would have "jumped" and would often mess up your entry or exit.

Obviously all of these problems are somehow interrelated and I know the guys in the back office were working their tails off to get things stable.

But still - even with these problems, I should have traded less and I should have been smarter with my stock selections. When the overall markets were rallying up hard at around 10AM, I got long a stock that didn't move! I managed to get out of that position, but only with a small profit (when I could have gotten into something else for a much bigger gain).

But once that 10AM move was over, that was basically the day...the rest of the day we moved with such choppiness, I found it hard to find stocks to trade (that and I was constantly having to restart software, re-setup preferences, re-setup Level II windows, and re-setup charts again).

Because of the chaos of the day, I really didn't put on any real big positions and because it was hard to figure what the heck was going on on the Level II, I was in and out fast. Thus, there were no good trades nor any bad trades.

Let's hope the boys in the back room can get things running smoothly tomorrow!

Good Trades

Bad Trades

Monday, September 25, 2006

Mistakes Keep Holding Me Back

Gross: +$480.49
Net: +$270.71
Loss From Top: $236.68
Trades: 159
Shares Traded: 177168

Stocks Traded Today (net profit/loss):
Home Depot (HD): +$289.61
Walmart (WMT): +$281.31
Hewlett Packard (HPQ): +$106.27
AT&T (T): +$78.99
Citigroup (C): -$13.43
Corning (GLW): -$18.75
Exxon Mobile (XOM): -$29.32
Motorola (MOT): -$36.01
Ford (F): -$186.62
Advanced Micro Devices (AMD): -$201.33

Here's a quick overview of what happened today: in the morning made about $500, during lunch I lost over $700 in 45 minutes, during the afternoon, I spent my time trying to play catch up and managed to make $500 back.

This seems to be a re-occurring theme for me lately.

So what happened during lunch?

Well, there was a pretty strong rally that occurred, and I was getting long in all the wrong stocks at the wrong time. The first losing trade in a series of losing trades was done on Ford. This beast suddenly goes down once I'm in a long position, and had me punching out for a $180 loser.

That was followed by back-to-back-to-back losing trades on AMD. This finicky stock had me reversing my position twice. I intially went long, but AMD went down. I got out for a loser and went short. Well, it went up and I got out for another loser and I went long again. Well, AMD went down and I punched out for a loser. I lost over $250 collectively on those trades.

Finally I went long on AT&T (T) - unfortunately I went long 1-cent below the high of the day. Lost about $270 on that one.

I had to smack myself in the face to get me to wake up and for me to realize what I was doing. I also had to cool off a little after losing so much in such a short period of time. I tried to forget what had happened during the lunch hour and managed to get back in the black.

Upon review, here are the mistakes I made during that costly lunch hour:
  • Just because the markets are rallying, it doesn't necessarily mean that all stocks are going to rally - don't blindly get into any stock just because the Futures are ripping! Assess the situation first!
  • Since the rally was relatively strong, this gave me a false sense of confidence and I put on big positions when I should have been more cautious, especially during lunch
  • I put too much trust in what I saw on the Level II - two of the big positions I put on during lunch were done because of this
It seems lately, every time I put on a big position, they always seem to go against me and puts me in a hole that I have to dig myself out of. The Ford trade was on 6000 shares and the AT&T trade was on 10,000 shares.

I think I do quite well when I use 2000, 3000, or 4000 shares. This is probably what I should stick to in the next little while. Today could have been a $1000+ day - the morning and afternoon trading were done on positions no larger than 3000 shares and I made over $500 in the morning and over $500 in the afternoon.

But it's those blasted mistakes I have to avoid because they have been very costly to me lately.

Let's see....

Last Wednesday I lost $750 during the course of the afternoon, last Thursday I lost $800 during the course of the afternoon, last Friday I had lost $300 (but made some back) in the afternoon, and today I lost $700 during lunch (and made $500 back).

That means that over the last 4 trading days I lost $2550 because of mistakes - either getting too emotionally involved, simple judgement errors, or just simply ignoring my trading rules.

I'm just glad I'm putting it all out there in this blog, which forces me to see what I'm doing wrong. At least I won't have to spend $2550 to see a shrink to figure out what's wrong with me - I already know what I'm doing wrong - I just have to work harder to avoid them.

And why is it that I seem to be soo moody lately? It really takes a lot to get me upset or angry (ask anyone who knows me!), but why is it that in such a short period of time I've blown up? Hrmmmm....

Could be that I'm just frustrated with the way September is going...I guess we are deep enough into September for me to know that there will be no improvement in my trading this month. In fact, you can probably just say that I'm frustrated with the way the past couple of months have been going.

I had really expected to be much much further along....especially when I see some of the new traders that have been at it for a much shorter period of time doing well. It gets me even more upset to know that those new traders don't do anywhere near half the work I put into this - they come in the office late, ask what's in the news, what numbers are coming out, then go out partying all night long...

Ahh well, maybe I'm just thinking or stressing about stuff too much. I just gotta give this thing more time....

Good Trades

Bad Trades
12:17PM - Ford (F) was moving up while the Futures were ripping. I saw lots of big sizes suddenly show up on several levels on the bid and when some big size on the offer was breaking, I went long 6000 shares. As soon as I got long, all the big sizes on the bids disappeared and huge sizes showed up on the offer and pushed prices down. I was forced out for a 3-cent loser ($180 loser before fees ; In: 12:17:22PM ; Long 6000 shares @ $8.10 ; Out: 12:19:27PM)
  • Ford is always tricky during lunch, and this was no different
  • I should have known that something like this was going to happen...why would there all of a sudden be big size suddenly show up on several levels on the bid....
12:59PM - AT&T (T) was uptrending, but flattening while the Futures were strongly moving up. AT&T already looked like it was stalling and that it wasn't going to go much further. I saw something on the Level II, and I went long 10,000 shares. AT&T moved maybe 1-cent higher, but then came back down. I got out as follows: 2-cent loser (3000 shares), 3-cent loser (7000 shares) ($270 loser before fees ; In: 12:59:01 ; Long 10,000 shares @ $33.75 ; Out: Did not record)
  • Too big - this position was too big for a lunchtime trade and also since the Futures had had a strong move that could reverse at any time - I should have used smaller share size
  • Again, I believed what I saw on the Level II and went in

Friday, September 22, 2006

Ooops! I ALMOST Did It Again!

Gross: +$487.51
Net: +$404.34
Loss From Top: $157.10
Trades: 75
Shares Traded: 70000

Stocks Traded Today (net profit/loss):
Advanced Micro Devices (AMD): +$280.16
AT&T (T): +$162.35
Home Depot (HD): +$86.47
Exxon Mobil (XOM): -$0.87
Boston Scientific (BSX): -$18.00
Corning (GLW): -$19.49
Walmart (WMT): -$86.25

Another day, and ALMOST the same result as the previous two days.

This morning I was very careful (as I usually am), but when the afternoon rolled around, it felt like Mr. Market was prodding and poking me, as if trying to egg me on and tried to get me to start trading angry again.

And it almost worked!

I started losing money and I could feel myself getting all stirred up again. I managed to catch myself and I went out for a long walk (for a whole hour!).

When I got back from my walk, I had calmed down again and I hardly put on any trades in the afternoon (as there were no opportunities).

I think if I had stayed and not gone for a walk, I could just "feel" that another bad day would have been in the works.

I'm just glad I had the patience to wait things out...and believe me, there was lots of waiting. Yesterday someone had left a comment about how trading is supposed to be boring and I remember reading that from somewhere too. And quite honestly, I sincerely believe it's true!

Almost all the good days I've had as a trader, I've always felt that they were kind of "boring" in a sense that very few mistakes were made on those days and the reason there were few mistakes was because I was willing to wait for the right conditions and there was complete focus on when NOT to trade.

Though today was not particularly spectacular, I am quite pleased considering that the biggest position I had on today was only 3000 shares. Had I traded like my normal self, the profits from the good trades would have been much larger - the AT&T (T) trade I'd usually go in for at least 5000 shares and the AMD trade I would have usually gone for 2000 or 4000 shares (see good trades below).

But today I just wanted to stop the bleeding because if I had another down day today, I would have done a lot of thinking over the weekend. At least with today's results, I can hopefully relax and enjoy the weekend.

I must be a stronger person and not let my emotions get in the way. If I simply follow my rules and keep a level head, consistency as a trader should not be that hard to achieve. I also must realize that if I want to achieve this, I must have patience.

I should start doing or bringing something into the office that can occupy my time when the markets are not ideal for trading. In the summer it was easy - I could just go downstairs and go for a walk. But winter is coming, so I'll have to kill some time in other ways.

Anyways, I hope you all have a great weekend. I, for one, am completely exhausted, both mentally and physically from this weeks' trading. I'm gonna get myself some good rest and so that I'll be ready for Monday!

Good Trades
9:38AM - AT&T (T) was moving up very strongly while the Futures were flattening. When AT&T reached the $32.50 level and it broke, I went long 2000 shares. I took half of my position out for a winner, but the move on AT&T was so strong, I went long another 1000 shares at $32.58. I got out as follows: 5-cent winner (2000 shares), 12-cent winner (1000 shares) ($220 profit before fees ; In: 9:38:34AM ; Long 2000 shares @ $32.50, long 1000 shares @ $32.58 ; Out: 9:43:10AM)

10:01AM - Advanced Micro Devices (AMD) was tanking hard and so were the Futures. I tried to get short when AMD broke the $26.00 level, but missed it, so I got short 1000 shares at $25.99. This stock just tanked down really hard and I held it until I felt that the move was over. I got out for a 29-cent winner. ($290 profit before fees ; In: 10:01:43AM ; Short 1000 shares @ $25.99 ; Out: 10:05:22AM)

Bad Trades

Thursday, September 21, 2006

A New Day...With The Same Problems

Gross: -$242.43
Net: -$394.53
Loss From Top: $811.71
Trades: 127
Shares Traded: 136714

Stocks Traded Today (net profit/loss):
AT&T (T): +$395.28
Motorola (MOT): +$41.28
Hewlett Packard (HPQ): +$7.10
Bell South (BLS): -$8.39
Exxon Mobil (XOM): -$12.90
Sprint-Nextel (S): -$19.83
Home Depot (HD): -$35.27
Advanced Micro Devices (AMD): -$193.94
Walmart (WMT): -$218.60
Corning (GLW): -$349.24

In an almost near-repeat performance of yesterday, I found myself battling with the same problems.

And it was uncanny as to how this all unfolded...all very similar to yesterday.

I made some money in the morning and I was up about $400 when the afternoon rolled around. A few bad trades later, I was trading on pure emotions.

Because of the rather choppy markets, I couldn't get a real good grasp on any real good trades. Every trade in the late afternoon broke practically every rule I have.

I traded when there was no trend, I got into big positions without any real confidence in them, I took trades that were opposite the trend of the stock.

I got more and more pissed off and I was revenge trading like there was no tomorrow near the end of the trading day. My share size got bigger and bigger and there was a few times where I just didn't care about the trade.

When everything was said and done, I had lost over $800 over the course of the afternoon. Upon reflection, I know what I did wrong and it was a total lack of discipline and I simply lost control over my emotions.

And so, tomorrow, this is what I've got to do to avoid sinking into the same trap as today and yesterday:
  • When the markets are choppy, reduce share size and be sure to get in and out fast
  • Do a two-step check before getting into any position: first check the chart of the stock to make sure it is trending, next check the Futures to see if it too is trending
  • If the two-step check fails, use very small share size
  • Feeling pissed off? Go and take a walk, go get some coffee, or just do anything to get you away from the trading desk for at least 5 minutes
  • If there are no good opportunities or the markets are very choppy, you don't have to trade - on Monday and Tuesday I did fewer trades simply because I had to patience to wait for the trades
  • Always maintain in control - I've been doing this long enough to know that discipline is paramount; all of the losing trades in the afternoon SHOULD NOT HAVE OCCURRED
  • The patience I had on Monday and Tuesday was great, but for some reason it fled on Wednesday and today...let's look for my patience tomorrow to pull out a profitable day
  • Let's scale back a little on the share size so that I can get back on track (and so that I won't get tripped up on a big position that goes against me)
  • Losing focus is bad - yesterday and today I traded too many stocks because I was jumping from stock to stock looking for opportunities; I had more success when I focused only on a few stocks
With yesterday and today in the books, it looks like September is going to be shot and will probably be another month in which no progress has been made in my trading.

It was kind of unfortunate too. I though consistency was beginning to return with several $700 and $800 days. Quite honestly, I thought getting those $700 and $800 days seemed fairly easy to come by - as long as I was willing to be patient and not succumb to my emotions.

The only problem with those $700 and $800 days is that I was extremely bored on those days. I think another problem that has plagued me the last two trading days is that once I had some profits from the morning ($300 yesterday, $400 today), I started thinking about aiming for a $1000 day...this is probably where my problems begin. I'd start wanting to get into a big positions and when I saw that the trading day was winding down, I started really rushing into things.

I recorded in my trading journal two bad trades versus one good trade. I think there might have been another one or two bad trades near the end of the day, but I was too pissed and too busy trying to extract some revenge on some stocks to write them down.

Let's see if I can make some money tomorrow.

Good Trades
10:45AM - AT&T (T) was moving up strongly and the Futures were also moving up. I went long 5000 shares and held it for quite a while. I got everything out for a 7-cent winner ($350 profit before fees ; In: 10:45:25AM ; Long 5000 shares @ $32.40 ; Out: 10:53:38AM)

Bad Trades
10:07AM - Corning (GLW) and the Futures were downtrending. GLW reached the $24.00 level and when I thought it was going to break, I went short 4000 shares. Thousands upon thousands of shares were traded at the $24.00 level, but it just wouldn't break! When it was clear this level wasn't going to break, all the shorts bailed out and popped prices up! Luckily I got out half my position for evens. I got out as follows: even (2000 shares), 10-cent loser (2000 shares) ($200 loser before fees ; In: 10:07:03AM ; Short 4000 shares @ $24.00 ; Out: 10:10:15AM)
  • Ahhh - I should have known this was going to happen. For the last several weeks, GLW always seems to subbornly prevent levels from breaking, even when the overall markets are tanking like crazy...
  • Seemed like a great short and if it were any other stock, I'd probably put on the same position
  • One thing I could have done better was to recognize that the level wasn't going to break and try to get my entire position out (and not just half of my position)
3:26PM - Walmart (WMT) was slightly uptrending while the Futures were chopping. I went long 5000 shares for the heck of it. Didn't really care about this position, I was just trying to extract some revenge on WMT. Oh well. I got out as follows: 4-cent loser (1000 shares), 5-cent loser (4000 shares) ($240 loser before fees ; In: 3:26:28PM ; Long 5000 shares @ $48.35 ; Out: Did not record...was too pissed off)
  • Just another revenge trade...I was actually preparing to go long another 10,000 shares when I saw prices going 5-cents against me (all I had to do was press "Enter"), but thought better of it
  • This was just pathetic...the last two days I just blew myself up and threw all my discipline out the window.

Wednesday, September 20, 2006

Losing Your Cool Is NOT Cool

Gross: -$224.56
Net: -$451.50
Loss From Top: $752.73
Trades: 130
Shares Traded: 206134

Stocks Traded Today (net profit/loss):
Corning (GLW): +$496.46
Advanced Micro Devices (AMD): +$57.76
Ford (F): +$35.15
EMC Corp (EMC): +$33.56
Home Depot (HD): +$19.56
Citigroup (C): -$14.10
General Electric (GE): -$121.78
AT&T (T): -$139.66
Exxon Mobil (XOM): -$148.00
Walmart (WMT): -$228.35
Motorola (MOT): -$442.39

OK - I'll admit that I lost my cool shortly after the Fed made the announcement. And it was because I lost my cool that I lost $750 after the Fed (see my Loss From Top, which is the amount I lost from my peak net).

So what happened?

The morning and early afternoon I really had a hard time finding opportunities, but I tried to be very patient and I tried very hard to keep the profits I had accumulated.

By the time 2:15PM rolled around, I had been careful and picky with my trades and I was up about $300.

When the Fed was about ready to announce, I was cracking my knuckles and rubbing my hands together, waiting for all the opportunities that were about to come.

But what happened?

We got choppy and sloppy moves after the Fed announced no change in rates. All stocks were messy in their movements and the Futures kept chopping up, then chopping down.

What the hell! I had waited all day for this?!?!

The first few trades I put on after the Fed announcement were for losers as I was chopped every which way. This got me angry because I was so careful in protecting my profits and now I had lost some of it within a short period of time. So the next couple of trades I was thinking in my mind "Dang! I've got to make some of my money back".

Well the next couple of trades after that I was chopped up for losers again. Now I was starting to get really mad because all of the profits I had so carefully protected during the day were now gone. I was now thinking "Damn! I've got to make a couple of big trades to get me back to where I was before the Fed announcement".

The next couple of trades were on bigger share size I was I hoping to quickly make my money back. It didn't work as I continued to get chopped out of my positions. I was then starting to get really pissed off. I was then thinking "God damn it! Let me put on a couple of trades that will get me out of negative territory".

Finally, the last couple of trades were more daring in nature and were on bigger share size, but I continued to get chopped out of almost every single bloody position. There was a point in which I was putting on trades because I was so pissed at several stocks I was trading and a couple of revenge trades were put into the mix. At the end of the day, I was totally and utterly fuming mad. At that point I was thinking "Damn this f**@*# sh@#*! What the f*@# was that!"

I stormed out of the office, not believing I was waiting all day for some crappy moves made after the Fed announcement. Seriously folks, what the hell was that? I'm used to seeing maybe an initial chop, but then a clear cut direction after a Fed announcement, but today I saw a market that didn't have a clue in hell as to which way to really go.

Anyways, I hope you guys are learning something from this. The lesson of the day? Never lose your cool. Because if you do, you could end up losing $750 like I did after the Fed announcement.

By losing my cool, I spiralled out of control...and it just got worse and worse as I got more and more angry and as a result, my trading decisions were also getting worse and worse.

I should have and could have been more careful. Upon reviewing my trades made today, most of the trades after the Fed announcement were not ones I should have put on in the first place.

I'm still a little peeved at what happened today so I think I need to "chill out" tonight in the hopes of getting my "cool" back.

Good Trades
9:47AM - Corning (GLW) was moving up strongly and so were the Futures. I went long 1000 shares when size at $23.95 broke and because GLW was so strong, when the $24.00 broke, I got another 3000 shares. I got out as follows: 5-cent winner (1600 shares), 7-cent winner (1000 shares), 8-cent winner (900 shares), 9-cent winner (500 shares) ($267 profit before fees ; In: 9:47:40AM ; Long 1000 shares @ $23.90, long 3000 shares @ $24.00 ; Out: 9:49:23AM)

Bad Trades
3:07PM - Walmart (WMT) was choppy all over the bloody place and the Futures were also chopping all over the damn place. When WMT looked like it was going to break the $49.00 level, I went long 6000 shares. It went up one cent, but then took a tumble. I got out as follows: 3-cent loser (600 shares), 4-cent loser (3100 shares), 5-cent loser (900 shares), 6-cent loser (1400 shares) ($271 loser before fees ; In: 3:07:51PM ; Long 6000 shares @ $49.00 ; Out: 3:09:08PM)
  • Don't know what the hell I was thinking taking this position - it didn't fit my criteria for a level break and in the back of my mind I knew I'd get chopped on this position since every bloody thing this afternoon was chopping
  • This trade was in the midst of my trade rage and come to think about it, I didn't even remember making the decision to get into this one...I just saw something, said "Ah screw it" and went long without really thinking about it
  • This one really plunged me deep into negative territory and after this trade came a series of brainless trades...I'm surprised I didn't blow myself up by losing more

Tuesday, September 19, 2006

Waiting For The Fed...

Gross: +$519.00
Net: +$426.33
Loss From Top: $69.37
Trades: 91
Shares Traded: 79000

Stocks Traded Today (net profit/loss):
Corning (GLW): +$368.28
Advanced Micro Devices (AMD): +$70.88
Motorola (MOT): +$52.87
Walmart (WMT): +$34.54
Home Depot (HD): -$48.31
Exxon Mobil (XOM): -$51.95

Aside from the fun slide we had near lunch time when Yahoo (YHOO) warned, I found the rest of the day extremely boring. Couldn't find really many setups or stocks that fit my criteria for trading, so I ended up dilly-dallying with some stocks on small share size just to pass the time.

I couldn't take the boredom so today I left 20 minutes early. Most of my gains were made on one trade in which I rode the coattails of the YHOO warning when the overall markets began tanking.

And look at the paltry number of shares traded today...sheesh!

Tomorrow should really wake me up as the Fed is announcing whether they are raising rates at 2:15PM. I just hope the prelude to the number is not too boring!

Anyways, I'll keep this post short...I hope some of you out there were able to catch the YHOO move and make lots of $.

In the meantime, I'm just sitting here waiting for the Fed to kick start the markets one way or the other...

Good Trades
11:38AM - Corning (GLW) was starting to fall while the Futures were starting to move down. YHOO had just warned and the Futures looked very shaky. I went short 1000 shares when a level broke at $23.35 and then the Futures just started puking down...I managed to get another 1000 shares short at $23.33. I held this sucker for what seemed like an eternity and I got out as follows: 13-cent winner (900 shares), 17-cent winner (100 shares), 20-cent winner (1000 shares) ($334 profit before fees ; In: 11:38:50AM ; Short 1000 shares @ $23.35, short 1000 shares @ $23.33 ; Out: 11:49:45AM)

Bad Trades

Monday, September 18, 2006

NYSE Stocks & Their "Personality"

Gross: +$852.76
Net: +$705.56
Loss From Top: 0
Trades: 88
Shares Traded: 128776

Stocks Traded Today (net profit/loss):
Motorola (MOT): +$449.66
Home Depot (HD): +$109.48
Exxon Mobil (XOM): +$81.72
Hewlett Packard (HPQ): +$74.94
Walmart (WMT): +$30.48
Advanced Micro Devices (AMD): -$40.75

Since I don't have much to say about today's trading (was fairly boring...I just followed my rules and I focused on when NOT to trade), I thought I'd share with you some of the "personalities" of some of the stocks that are traded on the NYSE.

What do I mean by a stock's "personality"?

Well, as you all know, each stock traded on the NYSE has someone called the specialist. The specialists' main job is to match up buy and sell orders, to trade from his/her account to dampen volitility, and to maintain orderly markets.

Since each person is different, in a way, each stock is different. When I say "personality", I mean things like order execution, ease of cancelling orders, and how fast (or slow) the specialist reacts to sudden movements in price.

Before I go on, let me review some aspects about NYSE stocks (in case you don't know).

First: Price Improvement. Sometimes on the NYSE, if you put in an order to buy or sell, you can sometimes get a better price than you had expected because the specialist can price improve you. An example, let's say I'm long at $1.00 and let's say I put in a sell order at $1.10 (for a 10-cent profit). Now let's say there is a sudden influx of buy orders that push prices up. Instead of getting $1.10, let's say I get filled at $1.15. I've just been price improved by the specialist (instead of a 10-cent profit, I got a 15-cent profit).

Another thing is this: if you put in an order that goes to the specialist (or your order is routed to the specialist) and you decide to cancel your order, the specialist has to acknowledge your cancel order before it becomes official. BUT, if the specialist is too busy filling a big order, he/she may not acknowledge your cancel and he/she may fill you! (Note that this does not occur if you use an ECN).

Lastly: if there is an influx of buy/sell orders, there will often be a slight delay as the specialist figures things out and tries to match up orders and decides at what price he/she should price improve.

Please note that the following is based on my personal observations and I mainly use Walmart (WMT) as a benchmark. When I first started as a trainee, I traded WMT for 6 months, and as a result, most of the following comparisons are relative to WMT.

And now, I'll review with you four of the stocks traded on the NYSE and their "personalities".

Walmart (WMT):
  • I would consider this stock to be average all around
  • When there is an influx of buy or sell orders, I would say that the specialist gives just enough of a delay for you to react accordingly while he/she's busy filling orders
  • I would say that the specialists' price improvement is average, but I have a feeling that the specialist tries his/her best to dampen the volitility (hence only the average price improvement)
  • For the most part, the specialist on WMT is pretty good in delaying long enough for buyers and seller to put in orders so that he/she can match these order up - as a result, WMT is not as choppy as some other stocks
  • It's hit and miss when it comes to cancelling your orders when prices are moving fast...sometimes the specialist will cancel your order before it gets filled, other times he'll fill you

Exxon Mobil (XOM):
  • The specialist on this stock is very fast and will execute and fill you fairly fast
  • Price improvement is pretty good on this stock...mainly because the specialist is soo fast whenever there is a big buy/sell order, he'll fill them fairly quickly, price improving people along the way
  • The specialist is also pretty good in cancelling your orders...there have been several times I put in an order to hit size on the offer, but then decided to cancel it right away...most specialists will fill your order, but the specialist on XOM seems fairly good in cancelling
  • Also, since this guy works pretty fast, if there is a large market order, he'll price improve the hell out of you! He'll move prices enough to absorb the market order, but then prices will often move right back
  • Since this specialist fills orders pretty fast, whenever the stock moves sideways, it gets really choppy because whenever there is an influx of buy orders, even before sellers can react, the specialist has either filled everyone already or he's moved prices the time sellers realize this, prices have already moved and as a result the sellers put in their sell orders (hence pushing prices back down)
Johnson & Johnson (JNJ)
  • When markets are flat or moving slowly, this specialist does the job just fine....
  • BUT, when the markets start moving fast, this specialist is slow as hell! Whenever the Futures move up/down fairly quickly, you'll see the orders come in on the Level II, but the specialist on this stock holds your orders for what seems like forever!
  • Often times, when I see the Futures pop up, I'd put in orders to get long...but the specialist takes his sweet time and as a result, either more orders come in ahead of mine (at prices that are ahead of mine), or the move in the Futures is already over and I no longer want the shares
  • I'd say the specialist on this stock is pretty bad when it comes to cancelling orders...whenever the markets move really fast, he tends to hold all orders that come in and I think the specialist prefers to have all orders that want to come in to come in so that he/she can fill everything in one print
  • I used to trade this stock a lot, but whenever I did and I had outstanding orders to be filled, I would often find myself saying (or screaming) "Do something already!", or "Print something specialist!!!", or "Well?? Are you going to cancel my order or not!!!!"
  • Price improvement on this stock was pretty good simply because the specialist often held orders for soo long that if the overall markets were really moving your way, the specialist would print at a price that reflected demand (by the time the specialist decides to print, they'd be an over-influx of either buy/sell orders)
  • I have since stopped trading this stock because it's more stress than it's worth
Advanced Micro Devices (AMD):
  • This specialist is also quite fast in filling orders and his/her speed can be compared to Exxon's
  • I'd say price improvement is only average on this stock
  • Because the specialist fills orders very fast, movements on this stock tends to be choppy...the reason is because if there is a sudden influx of buy orders, the specialist will fill them very quickly, before the sellers can react...once the sellers see that prices have already moved, they quickly put in their a result, you get a lot of up and down movements on this stock
  • If AMD is strong, then the movements are pretty good on this stock, but in sideways markets or slightly trending markets, this stock will chop you to hell (mainly because of the speed of the specialist)
  • As for cancelling orders...this one is kind of hit and miss - sometimes you'll get filled, but sometimes the specialist is kind enough to acknowledge your cancel order when things are moving fast

Anyways, this post is getting quite long, so I think that's enough for now.

With the Hybrid system coming in soon, I'm sure that the "personalities" described will probably change.

I don't know how useful the above info is to you (since most of you are probably longer term traders and not really concerned about how your order is executed), but I figure that this game is hard enough as it is already and any possible "edge" you can find is probably useful, right?

Good Trades
10:13AM - Motorola (MOT) was uptrending and so were the Futures. MOT had just broken the $25.00 level and when I saw an opportunity, I went long 5000 shares. MOT tried (fairly unconvincingly) to move up, and I got out as follows: 4-cent winner (3400 shares), 5-cent winner (1600 shares) ($216 profit before fees ; In: 10:13:54AM ; Long 5000 shares @ $25.05 ; Out: 10:21:55AM)

1:22PM - Motorola (MOT) was uptrending and testing the $25.50 level and the Futures were uptrending slightly. When the $25.50 level looked like it was going to break, I went long 5000 shares. After moving up a few cents, it looked tired and I felt uncomfortable, so I got my entire position out for a 4-cent winner ($200 profit before fees ; In: 1:22:29pM ; Long 5000 shares @ $25.50 ; Out: 1:25:47PM)

Bad Trades

Friday, September 15, 2006

Like Watching Paint Dry

Gross: +$1,033.00
Net: +$835.61
Loss From Top: 0
Trades: 147
Shares Traded: 158000

Stocks Traded Today (net profit/loss):
Walmart (WMT): +$508.15
Home Depot (HD): +$312.49
Advanced Micro Devices (AMD): +$69.04
Exxon Mobil (XOM): +$68.59
Motorola (MOT): +$1.77
Corning (GLW): -$124.45

Today I really focused on only trading when stocks were trending. Unlike the last two trading days, I was willing to wait and to be patient for these stocks to start moving today. In fact, my trading rules specifically state that I should not trade if there is no trend (on either the stock, or the Futures).

But on Wednesday and on Thursday, I tried to be patient, but most of the stocks I was watching never really had any good, smooth moving trends to trade and as a result, I tried to trade them (even though I knew I shouldn't). I wish I could have the previous two trading days back.

I would rather do very few trades and make some decent profits (but be bored out of my mind waiting for something to happen) than to have the days I had on Wednesday and Thursday.

Today I focused in on only a few stocks so that I could watch to see if a trend was about to begin. When they did start trending, I'd wait for confirmation of the trend, then I'd scalp them on their way up (or on their way down).

Because I was willing to wait, for most of the day, I just sat there and watched the charts and the Level II prices. Everyone else around me was tapping on their keyboards, slamming their fists on the desk and swearing out loud...but I was just sitting there, watching.

I sometimes wonder if the other traders think that I hardly trade at all. It would seem to them that everytime they walk by my trading station, I'm not in any position and I'm just sitting there watching.

You may think that doing about 150 trades a day is quite a lot, but most of the other traders at where I work average 200 - 500 trades a day.

The trader who sits beside me once asked "You don't trade very much do you?" and my response was "I'm just waiting for the charts to show me something", to which he replied "Man, I couldn't do that...I would need to do something". He must have thought that watching the charts for about 80% of the time was like watching paint dry.

Don't get me wrong...I get bored too and quite often I'll trade, breaking my rules (and usually end up losing money), but today I made it a point NOT to trade. By doing this, all I'm doing is just improving the probabilities that my trades will work in my favor.

Walmart (WMT) and Home Depot (HD) has some nice intraday moves and I was able to take advantage on some of them. I really goofed up on Corning (GLW) today...I tried trading when a trend emerged, but it just moved so choppily that I eventually got chopped out several times.

Two very good trades versus no bad trades. I was quite surprised that both of these big winners came on smaller share sizes (one was on 2000 shares, another on 3000 shares). Upon review, I really should have used a bigger position...I'll need to work on that next week.

In the meantime, enjoy your weekend and I'll see you all back here on Monday.

Good Trades
9:46AM - Walmart (WMT) was moving down and so were the Futures. I got short 1000 shares at $48.61 when some size broke and when the Futures started tanking, I got short another 1000 shares at $48.60. The Futures really tanked and so did Walmart. I got out of my position as follows: 14-cent winner (1000 shares), 15-cent winner (1000 shares) ($290 profit before fees ; In: 9:46:22AM ; Short 1000 shares @ $48.61, short 1000 shares @ $48.60 ; Out: 9:48:08AM)

11:54AM - Home Depot (HD) was downtrending and testing the $37 level while the Futures were also downtrending. I missed the initial break of the $37 level, so when then Futures started tanking, I got short 3000 shares at $36.99. At first, it looked like HD wasn't going to move, so I got 1000 shares out too early. Well as soon as I got 1000 shares out, HD just went into a freefall! Huge market orders to sell were hitting HD and I got price improved on one of my orders and held the last 1000 shares I had. Then another market sell order hit, so I got price improved yet again. I got out as follows: 1-cent winner (1000 shares), 19-cent winner (1000 shares), 24-cent winner (1000 shares) ($440 profit before fees ; In: 11:54:58AM ; Short 3000 shares @ $36.99 ; Out: 12:00:32PM)

Bad Trades

Thursday, September 14, 2006

Nobody Likes Change...

Gross: +$298.68
Net: +$73.59
Loss From Top: $52.77
Trades: 178
Shares Traded: 182200

Stocks Traded Today (net profit/loss):
Corning (GLW): +$152.95
Home Depot (HD): +$119.73
Boston Scientific (BSX): +$38.59
Exxon Mobil (XOM): +$17.05
Walmart (WMT): -$43.98
Advanced Micro Devices (AMD): -$210.75

As I delve deeper into the new Hybrid market that is to be implemented at the NYSE, it would seem that I am coming across a lot of complaints and concerns from many traders.

And it's not inexperienced traders that are bringing up these's the guys with lots of experience and who read through every document the NYSE has submitted to the SEC with regards to the new Hybrid system.

From what I can gather so far, yes there are going to be differences in execution and yes stocks may begin behaving a little differently, but I guess we're just gonna have to suck it up and adapt!

Judging from what's been going on lately, the NYSE appears to have their hands full as they try to handle complaints from their customers and have already been forced to make last minute changes in the way certain things will be handled in the new system.

But I can definitely see where a lot of these trader complaints are coming from. Imagine you've got a profitable system that you've worked out after years of development and have been using it for several years with great success. Now imagine that a Hybrid system is going to be implemented that could jeopardize all of that...I don't know about you, but I'd be pissed.

I cannot even imagine the furor there was back in 2000 when they got rid of fractions and priced all stocks in decimals. I was not active in the markets back then, but from the articles I've read, it almost spelled doom for a lot of daytrading firms. BUT, traders adapted and those who did not had to go and get a regular job.

I doubt the Hybrid system will have as big an impact as decimalization, so lets all hope the rollout goes smoothly and the transition won't hurt as much as many expect. I, of all people, hope I can adapt because I don't want a regular job!

This morning we had problems company-wide because the NYSE upgraded their data center overnight and apparently there were some incompatibilities. As a result, we could not see the NYB (New York Book) on the Level II for the first hour. The only quotes we did have were the Level I quotes and the ECNs.

I tried trading during this hour, but I soon realized it was a lot more difficult without knowing how many shares are on the book! Needless to say, I lost some money.

As the day progressed, I reduced my share size because the markets were excruciatingly boring! I swear, if the markets were like this everyday, every trader would die of extreme boredom and we'd be compared to accountants! (sorry if I offend any accountants out there...).

Almost every trade I put on were only partial setups because the Futures never really trended at all today. For a good 6 hours today, I was going from chart to chart trying to find a stock that was moving, but instead, I was left with choppy trading conditions all day.

Mid-way through the afternoon, there was a trader alert for all traders telling us that the NYSE was changing the fees for using ARCA (an ECN). The new fees start October 1st and is as follows:
  • 0.003 cents per share for removing liquidity
  • 0.002 cents per share credit for adding liquidity
  • 0.001 cents per share for orders that are routed away from Arca (i.e. if you use Arca route)
All I can say is WOW! It'll now cost me $3 on 1000 shares for removing liquidity! It's a good thing I rarely use ARCA...the only times I'll use Arca is if a level is taken out and there are Arca shares left OR I am trying to get short on stocks that adhere to the uptick rule (which in this case, I'll get a credit for adding liquidity).

These new fees are coinciding with the rollout of Phase III of the Hybrid markets....

Hrmm.......change is coming.....I can feel it......and I'm already starting to feel queasy....

Good Trades was too jiggly today to pull off any real good trades...

Bad Trades
None...I was just jiggled out many times today...

Wednesday, September 13, 2006

I'll Have A Crap Sandwich...With Extra Crap Please

Gross: +$266.85
Net: +$117.08
Loss From Top: $267.52
Trades: 121
Shares Traded: 122200

Stocks Traded Today (net profit/loss):
Home Depot (HD): +$358.53
Corning (GLW): +$40.50
Advanced Micro Devices (AMD): -$9.75
Motorola (MOT): -$23.28
Exxon Mobil (XOM): -$33.39
Micron Tech (MU): -$62.57
Walmart (WMT): -$152.93

Talk about a tough trading day...

The first trade of the day for me was a good one and bagged me $300 in profits and the next trade was a small, but respectable winner.

But after that, it was one losing trade after another. From about 10AM all the way until about 2:30PM I just couldn't get things going and I had several strings of losing trades and several break even trades during that time.

During the 10AM - 2:30PM period I knew I shouldn't have traded (nothing was trending), but I couldn't resist. Almost all the stocks I was watching were simply chopping up and down, yet I thought I could pull out a profit on them. That was a mistake because it cost me almost $500 during that time.

By the time 2:30PM came around, I was down a little over $100...

I got very frustrated because what had started out as a good day (up almost $400 after 2 trades), I had lost it all and then some.

So in the remaining hour and a half I started being very picky about my trades and I managed to pull myself out of the red and just squeek out some profits. It also helped that many of the stocks I was watching started moving in nice trends again in the last hour.

I would describe todays trading day as a crap sandwich. Some good trading at the beginning, lots of crap in the middle, then back to some good trading near the end.

In fact, I would describe almost every day as a crap sandwich because usually the first and last hour or hour and a half are great for trading, but the middle part of the day is not so good. Depending on the day, sometimes you'll get more crap, sometimes you get less crap.

But today I felt it was loaded with extra crap and the good part was very small (I'd say the first 30 minutes were good for me and maybe the last hour was also good).

There was a nice gradual uptrend during the day, but it moved up so slowly and so choppily (is that a word?) that for a trader like me who lacks patience, I never tried to take advantage of it and I got chopped out of my trades so many times.

Almost 70% of my trades today were for losers or break even. Most of those trades came because I insisted on trying to "enjoy" the crap, but this made me lose money and made me sick to my stomach from losing all that money (as any crap sandwich should).

So let this be a lesson to all of you...if you don't like eating a crap sandwich everyday, just know what parts to eat (just eat the bread). In other words, don't try to trade when things are not trending during the middle of the'll save yourself a lot of pain and suffering.

And also try to be more aware of when you are starting to approach the crap I didn't realize the good part was done and I kept trading, which made me lose money, which made me want to trade more crap.

And so we come to the question of the day: do you enjoy eating crap? If not, then DON'T TRADE!

(Sorry for the number of times I used the word CRAP in my posting was just a very frustrating day for me...)

Good Trades
9:41AM - Home Depot (HD) opened up strongly upwards and the Futures also started moving upwards. There was some resistance at the $37.00 level on the offer and when it looked like it was going to break, I went long 2000 shares. Home Depot rocketed up from there and I got the entire position out for a 15-cent winner ($300 profit before fees ; In: 9:41:19AM ; Long 2000 shares @ $37.00 ; Out: 9:44:49AM)

Bad Trades
None...just several strings of small losers and break evens.

Tuesday, September 12, 2006

Hybrid Is Coming! Will You Be Ready?

Gross: +$984.93
Net: +$757.10
Loss From Top: 0
Trades: 156
Shares Traded: 189372

Stocks Traded Today (net profit/loss):
Corning (GLW): +$299.79
Motorola (MOT): +$276.46
Home Depot (HD): +$189.75
Hewlett Packard (HPQ): +$79.30
Advanced Micro Devices (AMD): +$22.12
Citigroup (C): +$19.72
Walmart (WMT): +$9.96
Exxon Mobil (XOM): -$20.40
AT&T (T): -$119.64

No...I'm not talking about hybrid cars...I'm talking about the new hybrid system that the NYSE is currently testing.

Right now the rollout of Phase III is to commence at the end of this month and the new hybrid system is set to roll out at the beginning of next year. It's aim is to bring in a more electronic component to execution similar to Nasdaq, but will try to keep some of the advantages of the NYSE.

Last night I was poking around on a blog called Hybrid Talk, which discusses the current phases of testing and the final hybrid system.

MAN! There is a lot of things I really need to catch up on! I currently know a little bit about the current testing phases (in other words, I know just enough to get by), but going through the Hybrid Talk blog made be realize how unprepared I will be when this gets implemented.

I am also quite surprised that there isn't much mention both online and on TV about this new system. Maybe for the regular, longer term traders, the new system will not have too much of an impact, BUT for scalpers like myself, where execution and every penny counts, it has a tremendous impact.

Replenishment points, book sweeps, new order routing, new price improvement, new Direct+ restrictions (auto-ex), new fees, new types of orders...arrrghh! I'm gonna have to really sit down one weekend to go over everything about this new system from the NYSE site.

I really hope that when this Hybrid system gets implemented, there isn't too much of an impact on how I trade (well, if the impact is positive, then I'll be all for it!). If it does, that means I may have to start learning how to trade from scratch again.


Today was another day in which I was careful and tried to follow my trading rules. I started the day aggressively, but as the day wore on, I became more and more conservative (in terms of share size). I didn't even really notice how conservative I was being until near the end of the day.

Corning (GLW), Home Depot (HD), and AMD had some great intraday trends and I scalped whatever I could on all of their up-moves.

I hope I can continue with this same kind of consistency.

Surprisingly there were no good trades (trades in which I make $200 or more) nor were there any bad trades (trades in which I lose $150 or more).

Tomorrow is another day and one step closer to hybrid! (ahhhhhhhhhhh! I'm not ready!!!!!!)

Good Trades

Bad Trades

Monday, September 11, 2006

Scrambling For The Exits

Gross: +$873.96
Net: +$704.24
Loss From Top: $64.70
Trades: 152
Shares Traded: 141454

Stocks Traded Today (net profit/loss):
Exxon Mobile (XOM): +$531.11
Walmart (WMT): +$375.03
Home Depot (HD): +$183.26
Corning (GLW): -$14.61
Advanced Micro Devices (AMD): -$15.50
AT&T (T): -$23.56
Motorola (MOT): -$39.12
Micron Tech (MU): -$40.04
Hewlett Packard (HPQ): -$252.31

Do you know those scenes in movies where there is a group of people that are in a mall or a bank and then fire is detected or gunfire is heard? And you know the thing those people in the movies always seem to do?

They start throwing their hands up in the air screaming, tossing their shopping bags all over the place and they all start running towards the exits. They begin pushing and shoving others and they don't care who they trample or who gets hurt - as long as they can get to their ultimate goal: to get out of there!

Well that's what happened to me today. Not literally, but in a trade I was in. And believe me, I always hate having to scramble for the exits because it means that the position I am in has gone seriously wrong and that I'm about to lose a ton of money.

There are some traders who exit a trade calmly and with ease, even if the trade is about to become a serious loser. But for me, I hate losers with a passion and I'll do anything to get out of a really bad matter what the price and no matter what the cost.

However, during my scramble to the exits, I often times hurt myself more than I should. How? Because whenever I desperately want to get out of a trade, I'll usually place my order a good 10 or 20 cents worse than the current best price (because I know the specialist will fill me at the best price possible and that since my order is at a price that is way worse than anyone else's, I'll have more priority than others). Unfortunately, when others see my order hit the Level II, others begin selling off too by placing orders at prices that would be ahead of mine and as a result, I end up helping push prices in awkward directions.

This morning on a trade on Hewlett Packard (HPQ), I went long 4000 shares at the $36.00 level and when it was clear the level wouldn't break, prices began falling fast. Before I knew it, I was looking at a big loser and so I started scrambling for the exits. I started throwing sell orders left right and center and I placed orders that were 5 to 10-cents worse than the best bid.

But whenever I put a sell order that was maybe 5 to 10 cents worse than the best bid, it would show up on the Level II, then suddenly I'd see other orders appear that are at a price lower than mine! When the specialist finally prints, he would have printed the other orders, but not me! Then I'd put in another order, then others would try to put their orders ahead of mine again!

I was like one of those people in the movies trying to get to the exits and the other orders were probably from other people who were trying to do the same. We were pushing each other, and we were trampling over each other and we didn't care who got hurt, as long as we got out.

I finally got the last of my shares out for a 19-cent loser! Check out an intraday chart of HPQ. Look at the prices at around 9:51AM to about 9:53AM. See that sudden drop? That was me trying to scramble for the exits and I got out right at the bottom of that sharp drop (at $35.81).

I could have done without that bad trade (which cost me over $300) and perhaps I panicked a little too quickly, but I find that my behaviour has saved me more times than it has screwed me. Unfortunately today it kind of screwed me a bit because after I got out (at the bottom!) it bounced right back up.

But the day ended up being a relatively good day. I put on a great short on Exxon Mobile (XOM) this morning, which I could have taken for a lot more profit (could have gotten more shares, could have held it longer).

Walmart (WMT) was also fairly strong today and I had a good time scalping it all day.

Today it seemed like I was taking more risks than usual and I think I should continue to trade the way I did today and I could have made it a $1000+ day if it hadn't been for that big losing trade on HPQ. If I intend on taking more risks in the next little while, it will probably mean I'll have greater swings in terms of profit, but I think it's about time for me to do this....afterall, I can't keep playing it safe.

Good Trades
9:40AM - Exxon Mobile (XOM) was puking down while the Futures were relatively flat. On the Level II, I saw lots of sellers and lots of big size coming down on the offer so I tried going short. I managed to get short 1000 shares at $66.06 and I got short another 200 shares at $66.05. At that point, XOM just went straight down and I couldn't get any more shares. This stock just went for a freefall and when there was a little bit of a pause, I got out as follows: 34-cent winner (200 shares), 35-cent winner (1000 shares) ($418 profit before fees ; In: 9:40:05AM ; Short 1000 shares @ $66.06, short 200 shares @ $66.05 ; Out: 9:43:04AM)

Bad Trades
9:51AM - Hewlett Packard (HPQ) was moving up, but in a choppy fashion while the Futures were starting to downtrend. There was huge size at the $36.00 level on the offer and when it looked like it was going to break, I went long 4000 shares at $36.00. When it didn't break initially, prices hung around for a bit, but then the bottom fell out on it. It dropped 3 cents and that's when I started scrambling for the exits. Prices got pushed and I tried to get out where ever I could. I got out as follows: 1-cent loser (300 shares), 2-cent loser (200 shares), 3-cent loser (1000 shares), 7-cent loser (1000 shares), 11-cent loser (1000 shares), 19-cent loser (500 shares) ($312 loser before fees ; In: 9:51:02AM ; Long 4000 shares @ $36.00 ; Out: 9:52:27AM)
  • Ummm...ok. Tried to go long on a major level break WITHOUT the Futures' help...not a good idea, especially when the level had huge size on it (which means if it doesn't break, they'll be a lot of longs that will want to get out)
  • It was also one of those "One Print Breaks" (see one of my earlier posts from February)...I should know by now that "One Print Breaks" don't have a good probability of working out.
  • I guess I could have been a little more patient with this (as prices did eventually come back), but hey, I just hate hanging on to losers!

Saturday, September 09, 2006

My Interview At StockTickr

Recently I was interviewed by Dave over at StockTickr. If you haven't been to Dave's site, you should (it's one of the blogs I visit regularly; link is on the sidebar). He's interviewed several great traders, some of whom have authored books (in fact, I have some of their books in my library!), and some of whom have made their presence known both online and television. It's kind of like an online "Market Wizards".

When Dave first approached me for an interview, I was already quite familiar with the work he had done and I was very honored to be included in his list of interviewees.

So if you want to know more about me, my style of trading and how I got started in all of this, then you can read my interview here. I have also included a link to the interview under the "About" section in the sidebar.

Friday, September 08, 2006


Gross: +$219.34
Net: +$35.40
Loss From Top: 0
Trades: 156
Shares Traded: 146364

Stocks Traded Today (net profit/loss):
Advanced Micro Devices (AMD): +$162.88
Walmart (WMT): +$151.95
Exxon Mobile (XOM): +$45.70
Home Depot (HD): +$18.04
Citigroup (C): +$5.06
Hewlett Packard (HPQ): +$2.73
EMC Corp (EMC): -$3.34
Motorola (MOT): -$347.64

Today I left the office around 1:30PM as I had to return home so that contractors can do some work on the house.

As I made the journey home, there were only a few people on the bus and the quiet of the day had me half daydreaming and half thinking as I stared out the bus window. I started thinking about what I was doing all this for and what my dreams and goals in life were.

So what are my dreams?

I dream that in the future I live in a great house with a swimming pool in the back. I also dream that I can travel anywhere in the world at anytime so that I can see the best this world has to offer and I can meet the people of this world. And when I die, I'll have a smile on my face knowing that I can truly say that I have lived on this world and I got to see the wonders of human kind.

I dream that there is a smile on my wife's face everyday, knowing that she is taken care of and that she no longer has to worry about whether we can afford nice things or not. I dream that I can take my wife and family out to dinner or lunch as often as we please without having to worry about the bill. And I feel so great that my family knows that I'll be there to look after them financially if needed.

I dream that I get to do something I absolutely love for a living and that I jump out of bed every morning excited to get the day started. I dream that I can take the day off whenever I please and that I can leave for vacation or leave during the middle of the day on my own free will.

I'm guessing that you all know that the last paragraph is currently reality for me. But I'm really trying to work on the rest and I sincerely hope that the old saying "if you're doing something you love, money will follow" is true.

I figure that you are only here on this Earth for a limited time. This is YOUR life and you only have ONE shot at it. If you waste time or screw it up, tough luck...there is no dress rehearsal. I think no one should lay on their deathbed and think "Boy, when I was younger I should have...or I could have...". Well guess what, by that time, it's too late and you can't turn back time.

I think less than 0.1% of people have their dreams become reality. Well I don't want to be that 99.9%...I'm going try real hard to do this...if I fail, at least I can say I tried.

I truly hope the path I am currenly on leads me to my dreams. And I hope that all of you reading are on a path that leads to your life goals and dreams. Then comes the question: are you doing everything in your power to reach those dreams?

As you can probably tell, there isn't much for me to say about today's trading. I did have a slow start in the morning and within the first 30 minutes I was down $475! That was the slap in the face that got me to see the light and I managed to make it back to eek out a positive day.

No real good trades today, but there was one bad trade that almost had me shutdown again today.

Good Trades

Bad Trades
10:01AM - Motorola (MOT) was uptrending while the Futures were slightly downtrending. I went long 1000 shares at $23.47 initially when I saw a level with some decent size break. There was some moderate resistance at the $23.50 level on the offer (about 800 size), but then the Futures popped up and then suddenly I saw a huge buy order (1000 size) show up for the price of $23.50! I tried to get as many shares at $23.50 and managed to get long another 3800 shares. BUT, that was the end of the up move and things started screaming back down. I got out as follows: 1-cent winner (1000 shares), 3-cent loser (1000 shares), 11-cent loser (1000 shares), 13-cent loser (1800 shares) ($364 loser before fees ; In: 10:01:02AM ; Long 1000 shares @ $23.47, long 3800 shares @ $23.50 ; Out: 10:03:18AM)
  • In the excitement of everything, I broke one of my trading rules, which is to NEVER get long if the resistance/support level is 2 or more cents away from the best bid/offer (in this case, prices were at $23.48 when the buy order appeared)
  • I should have also been very weary about this one, even with the big buy order...since the offer showed 800 size while the buy order showed 1000 size, this had a good chance that everything would be filled in one print (that dreaded "One Print Break!")
  • I also felt I was missing out on a great move my Motorola; I watched it uptrend strongly during the first half hour and I didn't want to miss the next move made by MOT