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

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 day...you'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 part...today 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 today....it 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.

3 Comments:

  • Hey JC,

    I no longer trade between 12:00 - 2:00 pm for the most part because the liquidity is not there, and you oftentimes get chopped up.

    It is so hard psychologically to give money back,and keeping the mental edge is very important in this business.

    Good trading!

    Linda P.

    By Anonymous Linda P., at September 13, 2006 8:14 p.m.  

  • I was curious, whats the payout rate for the prop firm you are working for? and if possible could you name the firm?thanks

    JP

    By Anonymous Anonymous, at September 13, 2006 10:13 p.m.  

  • Linda and JP,

    Thanks for your comments.

    Linda,
    That's definitely good advice. I have similar rules in place in which I use very small position sizes if I intend on trading during market lulls, but I'm not sure what happened today. I think it was because the market lull sort of happened earlier than I had expected (started around 10AM), and as I kept losing money, it kept egging me on to trade more. You're definitely right about the psychological aspect of things...I've got to be more disciplined when it comes to this kind of stuff.

    JP,
    I don't wish to divulge too much in this blog. If you like, please email me and I can send you further details. My email address is: jc_at_trivita@rogers.com

    Thanks and happy trading all!
    JC

    By Blogger J.C., at September 13, 2006 11:03 p.m.  

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