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

Monday, December 04, 2006

Did I Let A Dummy Trade Slip Through My Fingers?

Gross: +$407.80
Net: +$330.75
Loss From Top: $103.72
Trades: 69
Shares Traded: 105240

Stocks Traded Today (net profit/loss):
Bank of New York (BK): +$315.84
EMC Corp (EMC): +$73.56
Home Depot (HD): +$68.63
Pfizer (PFE): +$64.54
Walmart (WMT): +$34.95
AT&T (T): +$15.72
Advanced Micro Devices (AMD): +$3.07
LSI Logic (LSI): -$53.56
Ford (F): -$195.01

You might have noticed several stocks that I don't usually trade in my "Stocks Traded Today" list. In particular, Bank of New York (BK), LSI Logic (LSI) and Pfizer (PFE) (well, OK, for those of you who have been following this blog from the beginning, you know I put PFE on my "DO NOT TRADE LIST" - but today was an exception).

That's because for the last little while I've been observing stocks that were in the news and/or gapping up/down and trying to get a feel of how these various stocks move when they do gap.

And lately I've been paying closer attention to those bloggers who post up their trades based on gapping stocks and/or Dummy setups.

Today was the first time I really tried focusing on these gapping/in-the-news stocks and trying to make the best of any opportunities that showed themselves.

The stocks I mentioned (BK, LSI, and PFE) were all in the news this morning (I was also closely watching Mellon Financial Corp (MEL), but didn't find many opportunities to get in on it).

Late last week I also made the decision to focus only on stocks that were trending (and not stuck in a range). For the last little while I noticed I've been trying to trade stocks that had longer term movements that were sideways and as a result, I noticed that I was losing money on these stocks.

Today I also found myself trading very cautiously and had some success in the morning with LSI Logic (LSI) - in fact, I think I might have caught a Dummy setup (perhaps those that do Dummy trades, you can correct me on this via comments).

At around 9:45AM, LSI appeared to make a small candle (on a 3-minute and 5-minute chart) and on the break of this small candle, I managed to get short 1500 shares at $9.48 (see 5-minute chart below).

Well, I didn't hold this position for too long - I got a 5-cent winner on 500 shares and 7-cent winner on 1000 shares....there was a wicked chop back up to the $9.50 level that scared the begeezes out of me and I quickly bailed...as you can see there was a lot more downside to the move.

I then kept trying to get short when LSI kept going down and I was a little upset that I let a good move slip through my fingers. Unfortunately I couldn't get filled short and missed out.

A little later on in the morning I goofed up on a Ford (F) trade in which I wasn't really thinking...I had just come back from the washroom and basically put a trade on it without really assessing it...all I saw was that Ford (F) was making a strong push upwards and quickly went long...this trade would cost be close to $200 after all fees.

I had a fun time scalping Bank of New York (BK) today! I'm really starting to like these thinner stocks (thin meaning that the sizes on the bid and ask are small). Whenever BK broke levels, it had some nice follow through. Unfortunately I didn't use big enough size and I wasn't nearly patient enough to capture big moves. Lots of $50+ and $100+ trades on BK today.

And MAN ALIVE! Pfizer (PFE) was a real beast today! Almost 300 million shares traded on it today and I should have traded it more than I did. I only traded it once, but I kept observing it and either I'd be too slow in getting into a position (i.e. I missed a move because I was too slow) or I was skeptical about what I was seeing and didn't take a position. I shall continue to watch this stock for the next couple of days.

As you can see, I tried being patient and tried waiting for the trades to show themselves (hence the lower-than-normal number of trades). Unfortunately I kept trying to trade LSI late in the day and I was met with loser after loser. Upon reflection, I should have known better than to trade this stock late in the afternoon - it wasn't moving anywhere at all!

Part of the reason was because my charts were acting up late in the day (either frozen or blank charts) and so I had to base my trades purely on what the Futures were doing and what was being printed on the stock. Another reason was that I was probably a little stubborn with LSI and kept thinking it was going to break certain levels (it never did).

Anyhow, no good trades today and one bad trade.

Hope you folks did great out there (any big Pfizer winners out there?).

Good Trades
None.

Bad Trades
10:15:30AM - Ford (F) was starting to move up while the Futures were up, but starting to curve down. I had just come back from the washroom and I saw Ford's strong move up and without thinking, hit it for 5000 shares long. Wll folks, that was 1-cent below the high of the day and I had to get out as follows: 2-cent loser (600 shares), 4-cent loser (4400 shares) ($188 loser before fees ; Long 5000 shares @ $8.06 ; Out: 10:19:20AM)

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2 Comments:

  • JC, keep at it. You are smart and pay attention to things that keep you from losing money. That will take you much farther than anything else in this biz.

    Jeff

    By Blogger Jeffrey, at December 05, 2006 7:35 AM  

  • Jeffrey,
    Thanks for your comments and thanks for the encouragement! Hopefully I can figure it out sooner rather than later.

    Anyhow, good luck to you in December and happy trading!

    By Blogger J.C., at December 05, 2006 4:32 PM  

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