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

Thursday, April 05, 2007

Three Mistakes In Rapid Succession

Gross: +$114.00
Net: +$90.05
Trades: 44
Shares Traded: 60200

Stocks Traded Today (net profit/loss):
Ford Motor Company (F): +$62.70
Titanium Metals Corporation (TIE): +$32.97
Valero Energy Corporation (VLO): +$26.22
Altria Group, Inc. (MO): +$18.91
The Greenbrier Companies (GBX): +$13.53
Johnson & Johnson (JNJ): +$5.63
NBTY, Inc. (NTY): -$20.39
Champion Enterprises, Inc. (CHB): -$23.86
CONSOL Energy Inc. (CNX): -$25.67

Today I didn't really see much to trade...I just had to hang in there and try not to do anything stupid. Unfortunately with the market lull, it was only a matter of time.

There were three mistakes on my part today and they were all put on back-to-back-to-back and it cost me quite a bit in terms of actual profit and in terms of lost opportunity.

So here I was....I had just finished my lunch and nothing appeared to be doing anything.

Then I caught wind of that offer for the Chrysler unit from DCX and by the time I switched over to take a look, most of the move was already in.

A few minutes later, GM followed suit by rallying a good amount too. But the GM move just seemed too wild and I didn't really want to get involved with it.

Then I switch over to Ford (F) and at the time, Ford hadn't done anything significant yet, so I sat there and watched for it to make it's move.

Then Ford (F) starts moving up and when it took out the $8.00 level and when it did, I quickly went long 10,000 shares. It popped up, but then came back down again and it kinda spooked me a little and I bailed for a 1-cent loser ($100 loser).

That was mistake #1 - bailing too early and getting spooked too easily.

I would eventually get back in again at the $8.00 with another 10,000 shares and made some of that loss back and then some (though it could have been a lot more).

Another trade that coincided with all of this was my trade on NBTY Inc. (NTY). I was watching it for some time and it appeared to be making an ascending triangle (see 5-min chart below).


On the first break of the $52.00 level at around 1:20PM, I went long 300 shares and held it even though it moved back and forth for quite a while. At the time, I was thinking that the $52.50 level would probably be the level I'd like to aim for.

Well on the 2nd break of the $52.00 level at around 1:30PM, I thought that that would be the break I was looking for and I added another 300 shares at $52.07.

Unfortunately it came back down again. Then my scalper mentality crept back in again and even though I knew that the trade still looked good (i.e. nothing significant indicated that it would reverse), I decided to just get everything out at around the $51.94 area.

Well, you can see what happened shortly after I got out....and it hit that $52.50 area that I was targeting too!

That NTY trade was another case of using the wrong entry for the wrong exit....that entry was meant to be a longer-term trade, but for some reason my scalper attitude interfered with the trade (in actuality, my heart was still pumping after the Ford trade and I think I still had the adrenaline in my system).

Thus, mistake #2 - wrong exit strategy given the setup.

After those two trades, I switched over to Johnson & Johnson (JNJ). It was moving up and testing the intra-day high and even though a lot of shares were going off, JNJ just appeared as though it wasn't going to go up any further.

So, I decided to get short on it. Not too sure why...the chart at the time wouldn't indicate anything in particular....I guess it was just because it didn't seem to want to go up any further and thus I decided to go short.

Not a good idea....JNJ would move up, break it's intra-day high and I'd have to take a loser.

And hence, mistake #3 - trying to pick the top.

All three of these trades were sort of inter-laced with each other.

I was in the NTY trade when I executed that Ford (F) trade and I put on that JNJ trade immediately after I exited that NTY trade.

Aside from those mistakes, things pretty much were the same as they were yesterday....only that I found that there wasn't as many opportunities. And had I avoided some of those mistakes I made today, it might have even been a better day than yesterday (key word here is *might*).

Oh well - the grind will continue next week....

Have a great long weekend folks!

Good Trades
(trades in which I make $200 or more)
  • None

Bad Trades
(trades in which I lose $150 or more)
  • None

Labels:

2 Comments:

  • Good work on coming away with something today. I know it was a tough day for most of the people in my office, including me. I just have a question about your labeling your charts. Do you copy the image from bigcharts.com then use photoshop? Thanks, have a good weekend.

    By Blogger Edwin, at April 05, 2007 7:11 PM  

  • Edwin,
    Thanks for your comments. I take the charts from Bigcharts, I then hit "Print Screen", then I just basically use good old mspaint to do the labelling (after cutting and pasting the image of course).

    Hope it helps!

    By Blogger J.C., at April 08, 2007 7:34 PM  

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