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

Thursday, October 12, 2006

The Path To Success...Is A Very Bumpy Road

Gross: -$367.20
Net: -$446.80
Loss From Top: $446.80
Trades: 43
Shares Traded: 56238

Stocks Traded Today (net profit/loss):
AT&T (T): +$105.50
Exxon Mobil (XOM): +$66.16
Advanced Micro Devices (AMD): -$44.88
General Electric (GE): -$50.33
Home Depot (HD): -$112.09
Hewlett Packard (HPQ): -$156.85
Walmart (WMT): -$254.30

Ouch! Not a very good day at all. I did as I promised and I only traded until lunch. This hurt real bad...after two very weak performances, this was one of the last things I needed to see today.

This morning I was ready to take on anything and my spirits were high (for some reason, I feel like this everyday - which can't be a bad thing!). However, I just took too much risk in a morning market that was very reluctant to go anywhere.

All my small positions went for great winners, but every single big trade I put on really went against me. I never got to see green at all today.

A couple of things that went wrong today:
  • All of my big losing trades today were put on without much confidence and hence I should have used smaller share size
  • I broke a few rules - one trade that hurt was on HPQ - this one had a major level break, BUT it was one of those "One Print Breaks" that I'm not supposed to trade
  • I was being more risky today - however it was more like taking risks blindly ("let me get into this position and hope it goes my way") instead of taking a calculated risk; the Futures and overall markets just didn't go anywhere, which means that there were no good setups
  • Perhaps knowing I'll only trade till lunch really forced me to act because time was running out - I actually sat and watched the market go by for the first hour without trading at all (no good setups); not too sure if this was a contributing factor, but keep in mind, I was prepared to stay the whole day if the markets looked good
It was just one of those days where you flip and flop all over the place and you fall flat on your face right out of the starting gate.

So, I've just got to acknowledge what went wrong today, make a mental note, and then try to forget that this day every happened.

My path to success has been a little longer than I had originally expected and there were (and still are) many bumps in the road. I just hope I can survive these bumps that lay ahead and I hope there isn't that one big huge bump that will forever block my path.

As long as I know that this path leads to my ultimate destination, I will continue to follow it until I no longer have the strength to do so (or until my wife gets fed up and tells me to get a job - just kidding of course!)

Anyways, I also wanted to post up a list of stocks that were included in Phase III of the Hybrid market starting today. They are:

Banta Corp (BN)
Chesapeake Energy Corp (CHK)
Freddie Mac (FRE)
Mastercard (MA)
Office Depot (ODP)
WPS Resources Corp (WPS)
Canetic Resources Trust (CNE)
Chevron Corp (CVX)
Goldcorp Inc (GG)
Noble Corp (NE)
Novelis Inc (NVL)
Toyota Motor (TM)
Agilent Technologies (A)
Cooper Companies (COO)
Texas Pacific Land Trust (TPL)
Willis Group Holdings (WSH)
W Holding Company (WHI)
Enterprise Products Partners (EPD)

Tomorrow (Oct 13, 2006) the NYSE will be adding the following stock to the Hybrid market:

EMC Corp (EMC)

Hrmmmmmmm...EMC eh??? That one's interesting...I shall try my hand at trading this tomorrow. Two days ago I had a taste of the Hybrid market when I traded American Express (AXP) - and it did not taste good (I lost money).

I also want to note that starting today I'm reducing the font size of my posts. My posts are starting to get fairly long now and I get fairly tired of having to scroll down and down and down so much.

Good Trades
None.

Bad Trades
10:47AM - Walmart (WMT) made a near vertical move up while the Futures were moving up slowly. When WMT got to the $48.55 level, I punched in long 4000 shares when I thought it was going to break. Well, after a near vertical move made by WMT, you know what will most likely happen next - it went down and I had to get out as follows: 1-cent loser (1000 shares), 5-cent loser (2000 shares), 6-cent loser (1000 shares) ($170 loser before fees ; In: 10:47:22AM ; Long 4000 shares @ $48.55 ; Out: 10:49:16)
  • For the last little while, the price action on WMT has been horrible - I should have seen this one coming
  • Again, this was another stock that had a near vertical move and here I was trying to get long at the top of the move - not good!
11:01AM - Hewlett Packard (HPQ) was uptrending while the Futures were sideways. HPQ reached significant resistance at the $38.50 level. Just then, the whole level was taken out in one print, and I went long 6000 shares on some left over ECNs. Well, there's a reason I'm not supposed to get in on "One Print Breaks" and this was a prime example. I got out as follows: 2-cent loser (4900 shares), 4-cent loser (1100 shares) ($142 loser before fees ; In: 10:01:50AM ; Long 6000 shares @ $38.50 ; Out: 11:02:23AM)
  • Well - what else can I say? I already have rules about One Print Breaks - why didn't I follow my rules?

12 Comments:

  • Trading always seems to be a work in progress. It reminds me of the game of golf. Just when you fix one part of your game the other part(s) of your game start to falter.

    You are not alone when it comes to breaking your rules, we all do it from time to time. Trading ultimately comes down to how well you can keep your game plan in tact throughout the day without breaking your rules and keep all facets of your trading in equalibrium (ying and yang if you will). Tiger Woods does that better than anyone in the game of golf.

    Yoda may have some words of wisdom too ;-)

    By Anonymous StockRoach, at October 12, 2006 6:39 PM  

  • StockRoach,

    Once again, thanks for the support and encouragement! Like you said, it's all about balance and right now I'm just trying to juggle the many aspects of trading. One day, I gonna be like Tiger - one day...

    Let's all have a great trading day tomorrow - Friday the 13th!

    By Blogger J.C., at October 12, 2006 7:16 PM  

  • Well, no matter how bad the last few days have been, you've got the basics down. Such as getting out of losing trades, not doubling down, etc. You have setups that clearly work with high probability. That's a great foundation that will give you time to work out the rest of the kinks. You are doing the best thing possible in this phase, which is thinking hard about what's happening with your trading. You're gonna make it.

    So, about today. You said "there were no good setups." Here are some example ways to follow up that statement:

    - "...so I watched that DVD I've been meaning to see."
    - "...so I took my wife out to lunch."
    - "...so I tried out some new ideas in my platform's demo mode"
    - "...so I traded anyway and lost a lot of money"

    For some reason, all of us have this ego that makes us want to pick that last one. We think we can find a way to make money when there are no good setups. The ego says "of course I will trade--how will I make money if I don't trade?" But, it's like flipping a double-headed coin and thinking we can make it come up tails anyway through willpower. Trading bad setups loses money. That's why we call them "bad." :-)

    I don't claim to know what's best for anyone else, but once I had the basics down, I strived to monitor my thoughts during the day. After a while, it got easier to weed out the irrational ones, and ignore them. Example irrational thoughts:
    "I can trade just fine even though my quotes and charts are laggy right now"
    "This action is too exciting to pass up"
    "I might as well trade this one, since I've been looking for an hour and I don't see anything else."

    By Anonymous Richard, at October 12, 2006 7:44 PM  

  • it takes balls to post all of your shitty trades. I can just make shitty trades and not have to tell anyone about it. Good luck

    By Anonymous Anonymous, at October 12, 2006 8:52 PM  

  • Richard,

    Again thanks for the advice. Wow - your comments can actually be a post all in it's own! Seriously, some really good words of wisdom and something I will try hard to strive for. I think I still have a lot of pent-up energy because I feel as though I need to prove something. I've just got to take this one trade at a time and really try to focus on making those high probability trades. Just gotta shake off bad days like today and not let it get to me.

    Good luck and happy trading tomorrow!

    By Blogger J.C., at October 12, 2006 9:00 PM  

  • Anon@8:52PM,

    Thanks for your comments.

    Hehehe - that's true. Anytime I get crappy days like today, it's always hard to post. But by posting, it gives me a chance to see what I did wrong. And when I have bad days like today, when I leave the office, I keep thinking "Crap, I'm going to have to document this and everyone's gonna see it", but I kind of got used to it and I hope it's a learning lesson not only for myself, but for others out there as well.

    Good luck and good trading!

    By Blogger J.C., at October 12, 2006 9:06 PM  

  • Maybe you should trade between 9:30 to 11:00, then go to somewhere for a sleep, and come back to trade after 2:00pm.

    Good luck

    H

    By Anonymous Anonymous, at October 12, 2006 9:52 PM  

  • H,

    Thanks for your comments. I've been thinking about doing something like that - maybe I just need something to do to kill a big chunk of time. When the weather was warmer, I think this was a little easier to do (I go head outside, walk around, window shop, etc), but winter's coming and I'm more and more reluctant to head outdoors :-)

    I'll try to figure out the best way to approaching this in the coming days - I just wish they had cots or beds at the office; I'd probably make good use of them!

    Good luck to you and your trading!

    By Blogger J.C., at October 12, 2006 10:13 PM  

  • JC,
    I really like this "..As long as I know that this path leads to my ultimate destination, I will continue to follow it until I no longer have the strength to do so "

    How true. And that says the words in my mind.

    All the best to you.

    Gav

    By Anonymous Gav, at October 12, 2006 10:56 PM  

  • Gav,

    Thanks for your comments.

    I guess I need to think that way to stay motivated. I absolutely love doing this for a living and when things don't look like they are going to work out, I just have to remember where this is heading and where I will one day be. This usually gives me the strength to carry on.

    I wish you the best of luck!

    By Blogger J.C., at October 13, 2006 6:45 AM  

  • JC, Here's sending some positive energy your way. I have been following your blog and I sincerely wish that you do well. Reign in your impulses and let strategy dictate your trades. Much Good Luck!

    By Anonymous BD, at October 13, 2006 10:26 AM  

  • bd,

    Thanks for the very encouraging comments! I still need much discipline when it comes to my emotions and impulses, but hopefully I can get them under control soon. Also like to thank you for your support and visiting regularly - it is you guys that keep my spirits up when I feel down, so thanks a million!

    Good luck to you and your trading!
    JC

    By Blogger J.C., at October 13, 2006 5:44 PM  

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