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

Thursday, December 14, 2006

Thin Is In

Gross: +$904.00
Net: +$742.33
Loss From Top: $87.69
Trades: 129
Shares Traded: 138000

Stocks Traded Today (net profit/loss):
US Bancorp (USB): +$267.65
Celanese Corporation (CE): +$239.35
Citigroup Inc. (C): +$156.05
ConocoPhillips (COP): +$127.64
Worthington Industries Inc. (WOR): +$7.71
The Gap Inc. (GPS): +$7.24
Advanced Micro Devices Inc (AMD): -$14.99
CSX Corporation (CSX): -$22.36
Safeway Inc. (SWY) -$25.98

Wow....what an interesting day! The markets bore us to death yesterday and today they wake us up with all this activity!

Today could have been a lot better (well then again, everyday could have been much better!). I left quite a bit of money on the table and I lost quite a bit of money trying to trade the choppiness when nothing was going on.

I don't know about you, but today it felt like the markets and all stocks were stuck in fast-forward all day. Everything seemed to move very fast and it was because of this quickness, I felt I needed to be quick to exit my positions.

Another market rant: I hate Advanced Micro Devices (AMD)!

It had a huge run up and if one ever wanted to know how a Hybrid stock moves, then one should have traded AMD today.

Even though it had clear trends all day today, it did a lot of 2-cents up, 1-cent down, 2-cents up, 1-cent down. Every now and then it would run up several cents, then come back down again and there were soo many prints going off, I felt I had to get in and out fast.

Thus, during the big run AMD had today, I kept going in, then getting out for 1 or 2 cent winners and I felt as though I couldn't hold onto any positions for too long on this stock. This was because I know AMD and this is a stock that can turn on a dime.

Anyways. I had made close to $300 on AMD alone (just took a lot of 2-cent winners on 2000 shares), but then when it started moving sideways (starting around 3PM and lasting about 10 minutes), I kept trying to trade it....and I kept getting chopped out!

Within 10 minutes I had lost more than $300 on AMD on several trades! Grrrr....AMD is great to trade when it's really moving, but please folks, avoid it like the plague when it's chopping sideways.

Anyways, I managed to re-coup some of the losses on AMD, but I just didn't have enough time to erase that "Loss From Top".

Despite my disappointment at trading the choppiness and for not really letting my winners run, I was quite pleased with the progress I'm making in trading the thin stocks (thin meaning the bid and ask sizes are small).

I'm still testing things out hence the small share size (500 shares) and I caught a great move on Celanese (CE) (see good trades below).

Once I get more comfortable with looking at and trading these thin stocks, I'll start upping my share size on them.

The thing I like about these thin stocks is that you know pretty quickly whether the trade is going your way or not.

As most of you know, I used to trade a lot of General Electric (GE) and Motorola (MOT) (really thick stocks - stocks with big sizes on the bid and ask) and I'd get in with 5000 to 10000 shares at a time. The problem with these stocks is that sometimes they go nowhere fast.

And most of you know I don't have the patience to wait it out and as a result, I often have to take a 1-cent loser or break-even on those thick stocks because I just couldn't wait for it to make a move.

But with thin stocks, once I'm in, I'll usually know by the next print if it's going my way or not. Once these thin stock move, all I got to do is ride along and just get some orders prepared to exit if I feel the move is over.

Another thing is that since I'm using small share size, I don't mind if it temporarily goes against me. If I've got 500 shares and it goes against me 10 cents....then big deal! It's only $50! (of course, most of you know that I don't like losers and I usually cannot tolerate losing soo many cents on a trade...I'd usually be out if it goes 5 or more cents against me).

I'm really beginning to like trading these thin stocks. It seems so much more relaxing than most other trades.

Why is it more relaxing?

With other trades, I get jittery once I'm in a position and it moves only 1 or 2 cents. Also with the thicker stocks, there is a lot of pushing and shoving and because I don't have the patience to wait out the pushing and shoving, I'm usually bailing out at the slightest hint of resistance.

With these thinner stocks, once they move, they really move and once my position is comfortably in-the-money, I feel much more relaxed and all I have to do is sit back and enjoy the ride.

Anyways, incorporating these thinner stocks to my trading is a definite benefit and I shall be looking to increase my share size on these kinds of trades soon.

Two good trades versus no bad trades.

Hopefully you folks were able to catch some good moves out there...

Good Trades
9:49:24AM - US Bancorp (USB) was trying to push higher on the open while the Futures were moving up. Just then, the Futures ripped up and USB was going to break it's intraday high, so I went long 2000 shares at $35.58. The Futures ripped up hard and I took out half my position when USB seemed to stall. I then started feeling uncomfortable with the position and for a while USB didn't seem to want to go up further. So I punch out the rest of my position when the Futures continued it's monster rip (I would eventually get back into a position on USB again). I got out as follows: 11-cent winner (1000 shares), 12-cent winner (1000 shares) ($230 profit before fees ; Long 2000 shares @ $35.58 ; Out: 9:52:42AM)

11:13:24AM - Celanese Corp (CE) was moving up while the Futures were sideways. CE had come up to the $25.00 level where there was some resistance. When the level broke, I went long 500 shares. As soon as it broke, CE just flew. I don't know why, but I exited 200 shares a little too early. I held onto the rest of the position until CE started falling again. I got out as follows: 26-cent winner (200 shares), 41-cent winner (300 shares) ($175 profit before fees ; Long 500 shares @ $25.00 ; Out: 11:20:46AM)

Bad Trades
None.

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3 Comments:

  • you might try to pay attention to identify the break-out pattern where you could get most profit in a short period of time. pattern means much than indicators...

    By Anonymous Anonymous, at December 15, 2006 7:53 AM  

  • Anon@7:53AM,
    Thanks for your comments. Good point...it's something that I'm currently working on and I seem to be having some success. I've just got to put in more time testing out new strategies.

    Good luck!

    By Blogger J.C., at December 16, 2006 9:39 AM  

  • J.C

    your blog is a great idea and an inspiration for starting daytraders. Keep up the good work.
    Are your net $$$ are after the split form your prop firm or you still have to deduct from your net $$$ the % for the company ?

    By Anonymous Anonymous, at January 18, 2007 11:01 PM  

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