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

Friday, March 02, 2007

Taking Big Profits & Taking Big Hits

Gross: +$454.00
Net: +$309.08
Loss From Top: $35.45
Trades: 70
Shares Traded: 143000

Stocks Traded Today (net profit/loss):
The Goodyear Tire & Rubber Company (GT): +$645.09
Motorola Inc. (MOT): +$128.96
Domtar Inc. (DTC): +$96.61
Health Management Associates Inc. (HMA): +$54.31
Seagate Technology (STX): +$35.09
EMC Corporation (EMC): +$29.77
Pfizer Inc. (PFE): +$19.19
Advanced Micro Devices Inc. (AMD): -$0.44
Alcatel-Lucent (ALU): -$76.12
American International Group Inc. (AIG): -$77.05
Time Warner Inc. (TWX): -$91.14
The Gap Inc. (GPS): -$116.97
Micron Technology (MU): -$338.22

There was a lot of ups and downs today and my trading seemed to reflect that as I tried my best to weather the volatility storm.

The S&P Futures were moving up and down like a yo-yo for most of the morning and I found that this affected many of the trades I put on.

Even if the stock I was trading was in a nice trend, the wicked chops of the S&P Futures also led to some chops on the stocks I was trading. I tried to give the stocks I was trading a little more room than usual to move, but many of the chops were just too much for me to feel comfortable with and I ended up bailing on many trades for losers.

At around 11:15AM or so we were alerted to the fact that Micron Technology (MU) was jumping on some possible buyout rumors. But that's when I made a mistake.

I had gone in twice on MU and both times I came away with losers. I took a big hit on the second trade on MU and looking back, I should have been more cautious and more alert as to what was going on.

On both occasions, I seemed to go long at the worst possible moment. On that first MU trade, the stock already had made a significant move upwards and I went long just at $12.10 just at the moment MU began retracing a bit. I should have known better to wait for a better opportunity. It was a good thing I went in only with a 2000 shares and didn't take a serious hit on that one.

But the second trade on MU was even worse. After MU started chopping around a bit, I should have realized that the buyers and sellers were duking it out and that I should have used smaller share size and I should have traded MU with caution.

Instead what do I do?

I smack MU with 4000 shares....and guess where I hit it long....right at the high of the day at $12.16 and would result in a big loser (see bad trades below).

Again, my timing was all off on those MU trades and by the time I saw the alert, it was probably too late for me to get in. Instead what I should have done was to wait for a better opportunity to present itself on MU instead of thinking that I was missing out on the action.

Shortly afterwards I more than made up for those bad MU trades on a trade on Goodyear (GT). I've been watching GT with great interest lately mainly because it seems to move nicely and you can short it on a downtick. It's also thin enough that it can make some nice moves but at the same time it's thick enough to put on a reasonable-sized position on it.

Anyways, at around 11:45AM, I was watching GT as it was testing the $27.00 level for about 15 minutes. When it broke, I went long 3000 shares and just held it.

Once I was long, I refused to give in to the temptation to quickly take my profits and even when GT briefly came back down below where I got in, I refused to get scared out of my position (I did have a 5-cent mental stop loss in place).

I held it for about 15 minutes, but then GT just started making wild moves all over the place which made me a little nervous, at which point I started scaling out. However, I would still make a nice gain on that position (see good trades below).

I had to remind myself a few times today about what kind of trading environment we are now in and that I had to continue to adjust to what the markets were presenting us.

The afternoon was just a bunch of waiting around for me as I couldn't really find anything interesting to trade. I literally fell asleep waiting for something to happen.

Then at around 3PM we were told that some branches were having execution problems and we were advised to get flat. I took that as a sign to call it a day (since I was no longer focusing at the task at hand).

Hopefully I can start getting into the full swing of things soon since it's been a lousy ending to February and a slow start in March.

One good trade versus one bad trade.

I've got lots of stuff to post on the weekend (and maybe tonight), so be on the lookout! After the wild week we've all had I hope everyone gets a restful weekend! I know I really need it!

Good Trades
11:45:03AM - Goodyear Tire & Rubber (GT) was strong in the morning and it was testing the $27.00 level. There was some pretty big size on the offer at $27.00 and when it broke, I went long 3000 shares. I was fairly patient with this trade and didn't immediately jump out as soon as the trade went against me a few cents. I began exiting the trade when GT started making wild swings to the upside and downside, which made me antsy. I got out as follows: 20-cent winner (2200 shares), 26-cent winner (800 shares) ($648 profit before fees ; Long 3000 shares @ $27.00 ; Out: 12:02:02PM)



Bad Trades
11:32:42AM - Micron Tech (MU) had exploded to the upside moments before and looked like it had difficulty going further up. I don't know why, but when it continued testing the high, I went long 4000 shares at $12.16. Bad move...this would be the high of the day and I it quickly went against me. I got out as follows: 5-cent loser (2000 shares), 6-cent loser (2000 shares) ($220 loser before fees ; Long 4000 shares @ $12.16 ; Out: 11:33:38AM)


Labels:

3 Comments:

  • Hey J.C,
    Nice to see you stop bleeding and continue your profitable trading again.

    btw, delete away those negative comments. Don't waste your time entertaining them!

    Have a great March!

    Gav

    By Anonymous Gav, at March 02, 2007 9:09 PM  

  • Gav,
    Thanks for your comments and I want to personally thank you for all the support you've given me in the past. Happy new year to you and I want to wish you a prosperous year!

    By Blogger J.C., at March 03, 2007 5:08 PM  

  • Hey do not get whiplashed by few bad days, i trade in the same company different office:). this is no time to take a break, its the best time to learn and make progress to a better trader. Learning to take hits and keeping it up and coming back is one of the most important parts of trading, it will do wonders to you, if u stick it out and adapt. Off course with some changes. Its like a trade thats getting bottoming out and now gonna go up, so you should not miss it. :) Ahh well thats how see these periods and have been rewarded in terms of learning and fresh perspectives, it told me lots about myself and helped in the long run. I hope it helps you too

    By Anonymous Anonymous, at March 14, 2007 6:49 AM  

Post a Comment

<< Home