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

Thursday, November 30, 2006

A Level II Trade

Gross: -$372.00
Net: -$443.51
Loss From Top: $443.51
Trades: 37
Shares Traded: 66700

Stocks Traded Today (net profit/loss):
Time Warner (TWX): +$48.94
AT&T (T): +$24.90
Advanced Micro Devices (AMD): +$8.91
Home Depot (HD): -$22.82
Walmart (WMT): -$26.53
Ford (F): -$169.05
Motorola (MOT): -$307.56

What a nice miserable end to a garbage month!

Well? What can I tell you...another month in which I couldn't get anything consistency, no big profits, and no real accomplishments this month (I don't even think I learned a thing!).

At the beginning of the month I was laughing at how pathetic October was...who's laughing now? I won't be surprised if I didn't make as much as last month.

I'll post up my end of month review either on Friday evening or on the weekend.

I won't bother telling you about the morning problems with the system...this is becoming routine now, so you can probably expect it to happen daily. In fact, as the days go by, the problems just seem to get worse and worse.

Oh well - I can't blame the system for my lousy trading...others were able to make money, so it's probably just me.

I missed a couple of nice moves on Ford (F) (level break at $8.20 at ~9:40AM) and AT&T (T) (break of $33.50 at about the same time) in the morning because the system was down....oh well - I guess I have to blame lady luck on that.

When the system stablized (around 10:30AM or 11AM), I felt I just had no rhythm in my trading. It could have been because of the garbage moves the overall markets were making.

I guess it serves me right trying to trade when nothing is going on...I'd like to thank my brain for thinking "Dang it! I missed many great moves this morning! I gotta do something!" - you did a great job of losing money brain! Way to go!

The one that really killed me was a trade on Motorola (MOT) (see bad trades below).

Motorola (MOT) was moving up and the Futures were doing diddly squat. I had intended to go long 2000 shares (since the overall markets weren't doing anything and MOT was moving in a choppy fashion).

But then I saw big size on the bid suddenly appear and for whatever reason, I decided that that was a cue to get in with a bigger position - so I went long 6000 shares.

Ha! There you have it! Level II trading at it's finest! I managed to lose $300 on that trade and from there I wasn't able to recover.

I continued losing more and then around 1PM, I decided I had enough of this garbage and I decided to go home (I didn't want to see how much money I could lose).

Am I upset about today's trading? No, not really (hence the sarcasm in my post) - in fact, I probably deserved what I got. I don't know why I keep falling for the same trap. I wish I could take a knife, cut out that part of my brain that thinks Level II trading is good and smash it to pieces!

Okay - I'm starting to sound a little frustrated....lemme just forget today ever happened and see if I can get December off to a good start tomorrow.

Good Trades

Bad Trades
11:02:07AM - Motorola (MOT) was moving up while the Futures were sideways. There was some big size on the offer at the $22.06 and I was waiting to get long 2000 shares if it broke. Suddenly big size shows up at $22.05 on the bid and so I quickly upped my order size to 6000 shares and I got long. MOT went up one cent, then came back down...I got out as follows: 3-cent loser (300 shares), 4-cent loser (2700 shares), 6-cent loser (3000 shares) ($297 loss before fees ; Long 6000 shares @ $22.06 ; Out: 11:03:55AM)

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  • Hi JC,
    Sorry you had a bad day. Honestly, I don't know how you can trade when the system goes down so much. Trading is hard enough without the technical problems. I'd go nuts. And I'm not even a scalper!
    Hopefully they'll get their act together soon or you can find a better firm.
    Good luck in December.

    By Anonymous Anonymous, at November 30, 2006 11:36 p.m.  

  • does that trickery happen often enough to trade against it...i have no idea myself, but i have heard that market makers will post large size to scare people out of their positions, or to give traders a false sense of security...if you have any thoughts i would be glad to here them

    By Anonymous Anonymous, at December 01, 2006 12:12 a.m.  

  • To stop being tricked by the Level II data, why don't you just close that window? Is that possible with your office software?

    And with all the morning software problems, why not look into trading with another firm? You could even trade remote, if there are no other firms in your city.

    Good luck--Boyd

    By Anonymous Anonymous, at December 01, 2006 12:33 p.m.  

  • Ugly,
    Thanks for your comments. Your right about the tech's already hard enough to trade when there are no problems, but the tech issues just add more to the mix. We've been promised that the system will be fixed very soon (they say it's because they upgraded hardware). We'll see!

    Thanks for your comments. This kind of trickery will happen quite often. Keep in mind that I do actively look for big size when I trade, BUT I'm looking for big size to break (which means that the shares are real). The ones you have to be careful of are the ones that suddenly appear. If you see that happen or if you see several big sizes suddenly appear on several levels, then you know someone's fooling around. I think I got tricked because in my mind I was thinking that I needed a big trade and seeing that big size suddenly show up just seemed like the excuse for me to make something happen. Hope it helps!

    Thanks for your comments. I guess I could do that. I've been putting together some new trading rules and hiding the L2 may probably be part of it - but only if I'm in a position. Until I can get used to holding positions longer, I'll still need the L2 data just so that I know my position won't immediately go against me. I could look for another firm, and I may consider that in the future, but I know they'll get the problems fixed soon and the folks over there are great.

    Good luck to everyone in December!

    By Blogger J.C., at December 01, 2006 6:10 p.m.  

  • I like your very interesting post. As an economics student I do understand with such articles that the economic models being taught in the classroom are too simplistic.

    By Anonymous how to trade shares, at September 28, 2015 4:49 a.m.  

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