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

Monday, January 29, 2007

From 3 To 5

Gross: +$1,165.00
Net: +$1,132.10
Loss From Top: 0
Trades: 55
Shares Traded: 38200

Stocks Traded Today (net profit/loss):
USG Corporation (USG): +$381.11
Bristol Myers Squibb Co. (BMY): +$228.63
Tyson Foods Inc. (TSN): +$190.60
Mattell Inc. (MAT): +$155.02
NBTY Inc. (NTY): +$64.54
Countrywide Financial Corporation (CFC): +$46.15
Chemtura Corporation (CEM): +$44.55
Hewlett-Packard Company (HPQ): +$22.45
The Stanley Works (SWK): -$0.97

For the last month or so I've been using 3-minute charts to trade (originally, I only used 1-minute charts).

Well today I changed all my 3-minute charts to 5-minute charts. And I thought the 3-minute charts did a great job of clearing out the "noise"...the 5-minute charts did an even better job!

The trends and movements of the stocks I was watching were more easily identified, which helped me in determining which stocks I should trade.

With this transition to longer time-frame charts, I'm finding that my hold times for my positions are slowly increasing as well. In the past, I used to hold positions for a maybe 30 seconds or for a minute or two.

But now I'm finding that I'm starting to hold my positions for 4 or 5 minutes now.

Now, what I really need to work on is a good exit strategy. I'm still finding myself jumping out of positions too early and I'm not giving them enough time to run. Even though I scale out of all my positions, I find myself being scared out of that last scaled position.

One reason for this might be because I'm starting to trade thinner, faster moving stocks and it kind of hurts to see a 40-cent winner retrace to become only a 20-cent winner and I feel the need to book that last chunk of profits before it becomes a loser.

And even if the charts still looks great and everything says to continue holding, I still get scared out of that last portion of my position. I'll work on this - my main problem is probably that my mental trailing stop loss is a little too close and it gets hit rather quickly.

Today I also came out a little more aggressively and I am starting to risk more. When I would normally use 500 shares, I found myself using 2000 shares today.

There were several stocks with good moves out there today...I'm glad I was not hesitant in pulling the trigger...now what I've got to work on is capturing more of those moves by holding onto them longer.

One step at a time....one step at a time.....

Three good trades versus no bad ones. I think I'll only post up charts on the really good trades and on the really bad trades, so today there's no charts.

After lunch I left the office...I had some errands I had to run. But it looks like I missed a nice little tank at around 2PM...Oh well...tomorrow is another day.

Good Trades
9:50:03AM - Tyson Foods Inc. (TSN) opened up strong and I went long 2000 shares at $17.60. Prices continued moving upwards but then there was some wicked chopping moves that spooked me out of my last scaled position. I scaled out of my position as follows: 5-cent winner (500 shares), 7-cent winner (500 shares), 11-cent winner (500 shares), 15-cent winner (500 shares) ($190 profit before fees ; Long 2000 shares @ $17.60 ; Out: 9:53:25AM)

9:56:58AM - Bristol Myers Squibb (BMY) started taking off and when it broke through the $28.00 level, I went long 2000 shares. BMY went up a little further, but then exhausted itself and so I scaled out as follows: 1-cent winner (500 shares), 10-cent winner (500 shares), 17-cent winner (500 shares), 18-cent winner (500 shares) ($230 profit before fees ; Long 2000 shares @ $28.00 ; Out: 10:00:01AM)

10:19:44AM - USG Corp (USG) just started falling apart and was tanking hard. I noticed USG only after it had already made a significant move downwards so I was conservative and went short 1000 shares at $53.39. USG just kept tanking and when it approached the $53.00 level, I started getting antsy because it felt as though it were levelling off. I don't know why, but I just felt uncomfortable and jumped out of the position....as you can see I could have had another 50-cents. I got out as follows: 10-cent winner (100 shares), 26-cent winner (500 shares), 32-cent winner (400 shares) ($268 profit before fees ; Short 1000 shares @ $53.39 ; Out: 10:23:08AM)

Bad Trades
None.

Labels:

13 Comments:

  • hi,jc
    I ought to congratulate you,because I think you have made a great progress.AND apparently, your vacation had a good effect for you.
    TODAY,IN China,many branchs or all ,have got an very slow rate at senting order.
    finally,I hope you keep it on!

    By Anonymous WJ, at January 29, 2007 6:24 PM  

  • WJ,
    Thanks for your comments. Yea, I was talking to one of the business analysts at lunch and he was telling me that they were having lots of problems in the morning. I told him that I didn't have any problems and he said that they can fix head office problems quickly, but not the other 120 branches. Hopefully it will be working for you guys tomorrow! Good luck!

    By Blogger J.C., at January 29, 2007 7:17 PM  

  • Hi!

    Congrats on the transition from 1 min, to 3 min, to now 5 min! It seems like its working out for you quite well! Maybe I should go on a vacation soon too :) I have never used a 1 min or a 3 min chart before, always stuck to a 5 min and a 13 min.

    By Anonymous Anonymous, at January 29, 2007 7:19 PM  

  • Anon@7:19PM,
    Thanks for your comments. Hopefully this transition to longer time-frame charts can lead to longer time-frame positions...at least that's my hope. You're right about vacations...it seems like every time I come back from a vacation, my focus and concentration improves (at least in the short term). Best of luck to you!

    By Blogger J.C., at January 29, 2007 7:26 PM  

  • Congratulations on a solid trading day. I personally find that constant range bars and tick charts help me filter things nicely in the futures markets, but if I had to use minute bars it wouldn't be anything less than 5 min.

    Tedders

    By Blogger Lord Tedders, at January 29, 2007 7:50 PM  

  • Lord Tedders,
    Thanks for your comments. I don't know why I didn't use anything greater than 1-minute charts before...maybe it was one of those things that I got used to and never bothered changing. But I'm glad I'm starting to fiddle around with the charts and I'm finding that both the 3-minute and the 5-minute charts are helping. We'll see where I go from here - perhaps one day I'll be using 30-minute charts (like some of the other bloggers out there). Good luck to you and happy trading!

    By Blogger J.C., at January 29, 2007 7:57 PM  

  • prop traders usually use 1-min charts as 5-min charts might get them stop-out if the noise is huge. as long as you have enough stop-loss limit, 5-min charts will serve you well.

    By Anonymous Anonymous, at January 29, 2007 8:54 PM  

  • Anon@8:54PM,
    Thanks for your comments. I think that's one of the key things I have to remember when I'm trading...now that I'm using 5-minute charts, I have to be willing to set my stop loss further than what I'm used to. I'm finding that when I used to use 1-minute charts, I was constantly jumping in and out without really taking any good gains (maybe just 2 or 3 cent winners). With longer-term charts, the trends are more clear and it gives me courage to hold onto my positions longer. Hopefully I can adjust to these new 5-minute charts and start capturing bigger moves. Good luck to you and your trading!

    By Blogger J.C., at January 29, 2007 9:02 PM  

  • USG is still a question mark company to me. When are we going to see some earnings strength?

    Maybe Buffett was wrong about this stock.

    By Anonymous TJP, at January 29, 2007 9:32 PM  

  • tjp,
    Thanks for your comments. Yea, not sure where USG going in the long run. Perhaps Buffet is going to give this stock some more time to work itself out. I guess only time will tell. Best of luck to you and your trading!

    By Blogger J.C., at January 29, 2007 10:16 PM  

  • JC,
    I was catching up on my reading and I came across this post. First off, congrats on the nice days lately.

    In regards to profit taking, I think the first method I listed on my post on profit taking strategies would fit your style well. Basically you move the stop up after a candle closes above the previous candles high. Take partial profits on the way up and this stop method lets you hang on for one leg up. Shoot me an email if you want to discuss.


    DT

    By Blogger downtowntrader, at January 30, 2007 8:06 PM  

  • Downtowntrader,
    Thanks for your comments. And thanks for the advice! I think I've got focus more on the charts rather than the Level II...it's just that sometimes those thinner stocks really chomp up back and forth. I'll be watching for more of your insightful posts and I'll continue working on holding those winner! Good luck and happy trading!

    By Blogger J.C., at January 30, 2007 10:02 PM  

  • More of the same.

    By Anonymous QUALITY STOCKS UNDER 5 DOLLARS, at April 11, 2013 12:24 AM  

Post a Comment

<< Home