Monday, April 30, 2007

Art Cashin and the dog "Dino"

It was a strange day here.

The morning started off slowly. I had no strong feelings and I got in and out of a few trades for little profit. Art Cashin was on CNBC in the morning and said that it was going to be a slow day because tomorrow is May Day and there's a week long vacation in Japan or something.

Anyway, I let Art get into my head. After the first few do-nothing type trades I thought, "Maybe Art Cashin is onto something" and I went and got some tea.

I came back upstairs and still, nothing was happening. I thought about the bags of leaves clogging up my garage and decided I would pack them in my car and take them to the dump. This was at 10:30.

When I was packing up my car, this old dog was running down my street. I had seen him before and tried to call him over, but he kept running. Anyway, I got into the car and drove the 10 miles to the dump. On the way back, about 45 minutes after I first saw him, the same dog was running along a busy road near my house. Cars were stopping and people looked concerned.

Because I had seen the dog already in the morning, I felt some odd pang of responsibility and I turned my car around and found the dog sniffing a tree by the entrance to a beach. I approached him carefully.

Two middle aged women who were out power walking were watching me and asked in an accusatory tone if he was my dog. I told them no, that I was just concerned about the dog. They said I was a "nice boy" and I smiled at them, but not in a genuine way because a second earlier they were prepared to give me a lecture.

The dog was docile enough and I got him into the back of my car.

It took me 5 minutes to drive from the beach back to my house. In that 5 minutes, I talked a lot to the dog. His name, according to his collar, was "Dino" and I explained to him the coincidence of me running a blog called Dinosaur Trader. He panted. I asked him in a funny voice what he was doing running around on busy roads. He drooled. In the same funny voice, I told him that I left a short position in POT and I needed to get back to see if I had gotten stopped out. He didn't care that I traded. He was an old dog, and old black lab with white around his muzzle. I probably wasn't the first random person who had picked him up before. He looked out the window disinterested, smelling strongly of... dog.

At home, I called the number on his collar but no one answered. I threw him in the garage with some water and a tennis ball. He started barking. He wouldn't stop. I ran upstairs and checked my positions. "Oh good, I'm still in POT." I covered 100 shares.

The dog wasn't letting up on the barking so I ran downstairs to the garage and tried to placate him. The owners hadn't called. I took the dog out of the garage and put him in my poorly fenced backyard. I ran back upstairs and shorted a little CNH. The phone rang, but it wasn't the owners, it was my father. I told him about the dog. He said, "What are you, St. Francis of Assisi or something?" I said, "Look Dad, I gotta go, I'm working" and I hung up to go check on the dog.

Dino had escaped from a hole in my backyard fence. I got in the car and caught up with him around the block urinating on a neighbors bush. A friend saw me and asked me what was going on. I said, "I'll explain later, I'm working". I shoved the dog back into my car and brought him back into the garage.

Immediately Dino began to bark again. But I had to check my positions, so I ran back upstairs and saw that CNH had dropped a bit so I covered a little. Still nothing from the owners. I went back downstairs and scraped around the garage and found chicken wire and began to patch all the holes in my fence. I let Dino back into the yard with me.

This was when Judy returned from toddler yoga with our daughter. She got out of the car and walked over to me. She asked, "Why are you fixing the fence? Aren't we tearing it down?"

Then a millisecond later, "Why is that dog in our backyard?"

Very matter of factly I said, "I found him running in the road."

This did not go over well with her. My daughter however, loved the dog. She wanted to pet the dog. She wanted to hug the dog. "We have a dog now?" she asked. I ran back upstairs while my wife yelled questions to me about the dog from the bottom of the stairs.

It was hard to focus on trading.

Nonetheless, the stock gods smiled on me. POT was slowly but steadily going down. I heard Judy downstairs on the phone with the local vet and then, the animal hospital. "They know the owners!" she yelled upstairs.

Minutes later, a pickup truck pulled into the driveway and Dino was gone from our lives.

I credit Art Cashin and Dino with my profits today. It was a slow choppy day and I could have easily overtraded. Instead, I was forced to let my winning trades run because I wasn't staring at them. I can't remember the last time I traded so lightly. Anyway, here's the stats:

P&L, $800
Best, POT, $477
Worst, JASO, -$99

shares traded, 12,400
stocks traded, 14, 7 positive, 7 negative
total trades, 89

Virtual Office, $6027. Dow, -59.08. 13061.61.

Misstrade, $5082 on 13,000 shares traded.
Me, $800 on 12,400 shares traded.
NYSE Scalper, $645 on 30,600 shares traded.
EvolutionTrader, $261 on 36,600 shares traded.
Dehtrader, $255 on 20,200 shares traded.
One Bad-Ass Trader, $98 on 11,000 shares traded.
DenarriTrader, $50 on 1000 shares traded.
TradeWhileWorking, -$1164 on 1800 shares traded.

A pretty solid day for the VO as most members were in the green and Misstrade made excellent money again.

I think overall, volume was down so it was a slow day to end the month. Everyone seemed to think it was a choppy morning and didn't get moving til the market broke lower in the afternoon.

Originally, I planned on keeping monthly numbers for the VO, but I just haven't gotten around to creating any type of template to enter the numbers into, so that will have to wait. Anyway, this marks the end of the first month for the VO. I've been very happy with the VO as it has allowed me to communicate with some very good traders and learn from them. I hope it has helped you as well.

Any suggestions are welcome but remember, I'm a dinosaur...

-DT

"Monday Morning, Praise The Dawning"

I figured I'd start Monday off with a quick post, non-trading related to ease everyone back into the work week. It's enough that right now you're sitting back down, starting at the screen. You shouldn't have to think too hard yet.

Try this on for size. Chipmunks in the White House. Pretty damn funny.

Ever think of buying carbon offsets because you drive a Hummer and you keep your thermostat in the mid 70s all winter long. This NY Times article raises the question, "Are all carbon offsets created equal?"

Oh, and speaking of Hummers...

lyrics courtesy of the Velvet Underground...

Sunday, April 29, 2007

Great Moments In Punditry

Another excellent Tom Tomorrow cartoon.

Price Improvement Coming to a Hybrid Market Near You?

I'll believe it when I see it.

I hope soon we can look back and laugh about the first 6 months of the Hybrid Market and how crazy and unpredictable the trading was... we will see.

Anyway, go check out Hybridtalk for the (possibly) good news.

Saturday, April 28, 2007

Weekend Walk

Here is a little collection of stuff for your weekend viewing pleasure. Again, if you are looking for trading articles, go check the NYSE Scalper's blog. He does a great job collecting articles on trading through the week and then posting them on the weekend so you can review them. Okay, here goes!

Miss Bill Moyer's documentary Buying the War? Tsk. Tsk... see it here.

No Impact Man with an excellent post. Is Environmentalism the new religion?

Media Matters does a superb job of critiquing the media. Non-partisan, check it out.

I love this band called The Books. They're really interesting if you like "headphone music". Lots of textures. The site is worth checking out, you can listen to all of their stuff for free. I suggest listening to "The Lemon Of Pink" first.

Project Vote Smart. Non-partisan ass-kickers.

Drink beer? I thought so. How about organic beer?

Did you watch Jon Stewart eviscerate John McCain this week. Check it out.

Spring is here and with spring comes bugs. Deal with it. Pesticides will give you cancer and kill birds. Have kids? Think the pesticides break down like the nice pesticide man tells you? Nope, they're there on the grass and when your kids play on the grass, they'll get on your kids. Why give your kids cancer?

Birding hotspots in the US. You probably live near one. Get out this weekend and enjoy nature.

Hate dogs? I really don't. But if you let your dog bark outside all night long, I may hate you.

Hate cats? I love cats, but some of these comics are funny.

Okay, now GET OUTSIDE!

Friday, April 27, 2007

Yo La Tengo, "Tom Courtenoy"

If I'm in a bad mood, this song will normally pick me up a bit.

When I'm in a good mood, this song puts me in a better mood.

Good end of the week song. A heck of a lot better than that damn Loverboy song...

A good day... finally!

Well, it was bound to happen eventually.

I took advantage of a freaky hybrid trade in CF this morning and caught a good short. Later, I caught a good long in WCG as it bounced off of it's 50-day moving average.





And I just missed what would have been an excellent trade in CMI. Instead, it was my worst trade and my worst stock of the day. I got short a little early up at 105.85, put my buy stop at 107 and was stopped out near the highs of the day. After that, the stock tanked. Well, it happens.



Anyway, after I got "poleaxed" yesterday (to borrow a term from "the Fly" ... Who would think he could build my vocabulary?), I'm pretty happy with today's outcome.

I'm not going to go crazy with analysis here. I'll say that everyone who has suggested I take my P&L off the screen were right. Even yesterday when I lost money and traded close to 100,000 shares something felt right again. I know that seems strange, but something clicked.

So I'm taking this Friday win and running with it. I've stopped worrying about the fact that I'm having my second down month in a row and my second of my 8-year trading career and focusing on the positives. These last 2 days I've traded again. I was in and out. I only thought in terms of opportunities and not in terms of dollars and cents. I quit worrying about how I'm going to manage to feed my family 10 years hence and just worked.

Tomorrow, I'm taking a meditation class. First time. I've been in a base for a long time. I need some catalysts to break me out of it. This blog and the VO have been two positive developments a quieter mind will be a third.

Then I'm really gonna start pulling some Jedi crap out of my bag.



Here's the stats:

P&L $1843

Best, CF $1236
Worst, CMI
-$357

shares traded, 42,800
stocks traded, 26, 11 positive, 15 negative
total trades, 248

Have a relaxing weekend, all. Thanks for reading.

Virtual Office $6687, Dow 15.44, 13120.94.

Misstrade, $5030 on 24,600 shares traded.
DinosaurTrader, $1843 on 42,800 shares traded.
EvolutionTrader, $628 on 32,600 shares traded.
One Bad-Ass Trader, $554 on 26,600 shares traded.
NYSE Scalper, $398 on 33,400 shares traded.
DenarriTrader, $118 on 2600 shares traded.
TradeWhileWorking, -$729 on 2400 shares traded.
Dehtrader, -$1155 on 16,800 shares traded.

A choppy day for the VO. Although most members were in the green and that's always good.

Without the gains of Misstrade, we would have had a very lackluster day. However, if you read this post daily, outsized gains by Misstrade are becoming the norm. I had a nice bounceback day after my trouncing yesterday and ET and OBAT had nice days again. The Scalper wasn't really feeling it today but still had a nice green day while Denarri kept up with his quietly green way of being.

On the downside were disappointing days for TWW and Dehtrader. Go check their sites to see what went wrong.

Have a great weekend. Tomorrow I'll have a list of non-trading links posted. I'm still working on my next history post. It's been a challenge this week to find time to write. Hopefully, this weekend I'll have some time.

-DT

Thursday, April 26, 2007

Buffalo Springfield, "For What It's Worth"

Haven't we traded this market before?

Virtual Office, $7552, Dow 15.61.

Misstrade, $4286 on 19,800 shares traded.
Dehtrader, $1579 on 38,000 shares traded.
One Bad-Ass Trader, $1168 on 14,600 shares traded.
EvolutionTrader, $900 on 22,400 shares traded.
NYSE Scalper, $682 on 34,000 shares traded.
TradeWhileWorking, $381 on 1800 shares traded.
DenariiTrader, $83 on 1400 shares traded.
DinosaurTrader, -$1527 on 91,800 shares traded.

"Some folks float and some are buried alive." Lyrics courtesy of Wolf Parade, "Shine a Light".

A lot of floating in the VO today, probably one of the best days yet. Congratulations!

Misstrade is consistent and has had a great feel for his trades lately. It's showing. Dehtrader had a sweet day on some good volume. If OBAT was a stock, he could have been purchased a couple of weeks ago nice and quietly. In the past few sessions though, volume is picking up and the stock is moonshotting. Nice day again, OBAT. ET and the Scalper are trading like professionals. Each day coming in and pulling nice money out of the market. TWW has shown great resiliency these past few session after getting hit last week. Denarii is the quiet green guy in the corner.

And on the downside... well, to keep with the OBAT stock analogy, let's just hope that my surge in volume today and minor blowup was some kind of bottom. Buy DT, he's a steal at these prices.

One last note, I apologize for the inconsistent blogging the past few days. It's been a busy week for me.

NOonglance

Okay, so I started out this blog a little over a month ago and I was obsessively sweating over my P&L... watching it for every little downtick. Then, I decided that I would remove it from my screen and just check it at noon. I would post the number here in a clever little post I liked to call the "Noonglance".

Well, now, with the help of my spiritual adviser
Misstrade, I'm taking it off altogether and just not going to look at it anymore.

In fact, when the checks start rolling in from my company again, I'll just hand them straight to my wife and be done with them.

I'm looking to turn myself into an impassionate conduit for money. That is all.

Wednesday, April 25, 2007

REMINDER!!!

Go to EvolutionTrading for the Virtual Office stats today.

Cheers!

-DT

Daily Show with McCain last night

Not to get too political... but if Jon Stewart worked for CNN instead of Comedy Central, our country might be in a better place.

I could find no link to this on YouTube, but if you think about things, and by "things" I mean the Iraq war, then check out the interview from last night, here.

Have a good night. I'm off to an event for the rest of the day.

Virtual Office Hosted By Evolution Trader Today

Good afternoon.

Besides trading, I also eat. So this afternoon, I have to leave early for a dinner.

Evolution Trading is being kind enough to post the P&Ls of the VOers today.

So today, go check out his site.

The Noon Glance

Not too pretty today... I've taken too many midrange losers. This will be the last noonglance for at least a couple of days.

Going to experiment with removing the P&L entirely from my ES per advice from Misstrade who has been around the trading block a few times...

P&L -$282

Tuesday, April 24, 2007

A feel good type of day

Well, I'm just happy I was green for a change. It helped also that it was a beautiful day outside and I spent the late afternoon into the early evening on a picnic with my wife and daughter. It's hard not to smile on days like these.

But before the picnic came the trading. The daily battle with the market.

My last week has been tough. I've had 5 or 6 straight losing sessions in a row. Hard to take. But even though I was losing each day, I was losing small and not making too many bad errors of the type that would hurt my psyche.

Overall, I didn't have any huge winners today. I'm still keeping most of my positions very small. So my biggest winner was only for $206, but it was a nice trade for only a 300 share position.

The stock was ALB. I'd show a graph, but for some reason, my esignal graphs are down at the moment. Misstrade did a nice job of posting the setup on his site.

I bought the "bounce" early, at 40, 300 shares. I meant to stop all at a new low, but only put a stop for 200 there and got shaken out quickly for a quarter point loss on 200 shares. But the other 100 shares sat there and the stock quickly bounced back over 40 and I was able to sell the last 100 shares at 40.59 for a small overall gain on the trade.

Later, I noticed the stock stalling and then slowly beginning to roll. As Misstrade points out on his site, the stock made it to the bottom of the Opening Range and started to meet resistance. So I short 200 shares at 41.27 at around 12:30 and then added another 100 shares about 20 minutes later as the trade was moving in my favor. I covered at 40.76, 40.49, and 40.37 for about $200 on the trade. I was pretty thrilled with this because I almost never make any money between 12 and 1pm.

Other than that, the best thing I did today was catch a quick pop this morning early in OSK because I noticed the strength in CMI. They sometimes trade together. I also was involved in a nice CMI short with Misstrade.

But the real story of the day was keeping my losers in check. My worst loser of the day was AG for -$61. I'll take that any day. Especially because it was right off the open and I thought I got kind of screwed. I didn't make any "revenge" trades in the guy though and that was key for me.

Here are the stats:

P&L, $569
Best, ALB, $206
Worst, AG, -$61

shares traded, 22,400
stocks traded, 16, 9 positive, 7 negative
total trades, 130

Virtual Office, $3825. Dow +34.54 at 12953.94.

EvolutionTrader, $1653 on 51,200 shares traded.
Misstrade, $888 on 16,600 shares traded.
NYSE Scalper, $806 on 17,200 shares traded.
One Bad-Ass Trader, $679 on 26,400 shares.
Me, $569 on 22,400 shares traded.
Dehtrader, $500 on 13,000 shares traded.
DenariiTrader, $7 on 14,000 shares traded.
TradeWhileWorking, -$1277 on 7700 shares.

Well it was a pretty solid day overall for the Virtual Office.

ET had another strong day. The lad is on quite a streak. He explains his trades very well over on his site. Check it out. Misstrade has made a real habit out of being green. Someone once said that the best traders do just that, they make it a habit to make money. Well done, MT. The Scalper keeps to his steady ways and enjoys the afternoon as well. Gotta love the spring. OBAT had another strong day. The trend in OBAT-land is up. I benefitted today from fellow VOers, MT and ET and had my first green day in a week. If I have a couple more of those I'll bump up my share amounts again... Dehtrader had another smooth ride greenward while Denarrii had a flat but green day.

One the downside, TWW had a rough day. Go and get the full story at his excellent blog. Even the best matadors are occassionally gored by the market.

One note. It's way too nice outside for me to do my daily post right now. I'll put it up later tonight. Probably between 9 and 10pm.

Top 10 Bush Moments, David Letterman

I thought, #4,3 and 2 were the best. I couldn't figure out #1...

The Noon Glance

P&L $379

It;s nice to be green. Unfortunately, I'm off of my highs which were over $600. Still, if I trade smart in the afternoon, I could score a nice win for the first time in awhile.

Monday, April 23, 2007

Quite a losing streak

In the grand scheme of things, I am in a small slump within a bigger slump. Lots of slumps. Great name for an animal, no?

Anyway, I lost a little money today. Actually, it's been so weird lately how I'm trading so much but coming right in around unched on many days. Trading not to lose and making it impossible to win? Perhaps. But today I had a fat loser that wiped away some decent gains elsewhere.

I'll talk about my good trades first.

I was thinking about ET's day on Friday when I saw oil began to rally this morning. That's when I figured he was probably shorting those airline stocks he loves. So I gave it a shot.



At 10:30 or so, I sold short 500 shares at 28.86 because I felt the general market weakening and oil strengthening. When the trade worked in my favor, I added 200 more shares to the position at 28.72. From that point on, it was simple. Oil kept rising, the market continued to weaken and AMR just slid slowly down. I covered a couple hundred in the 40s, some more in the teens, and then my last 300 at 27.80 at 3:36. It was one of the more relaxing trades I've been involved with in some time. And I remembered that when things work in your favor, this job is much more relaxing than when you're constantly battling.

I had a second good trade in the afternoon. This came in CMI. Let's forget that I missed the 10 points on the long side.



I short 200 shares at 86.91 at around 1:45 because well, for no other reason than I just couldn't believe the stock was up so damn much. I'm nothing if not honest. No reason to lie here.

Anyway, the stock fell immediately and I covered 100 shares a few minutes later at 86.13. Problem was that the stock them ripped straight up and I covered the other 100 shares at 86.95. That kind of hurt. It hurt more when the stock immediately went back down. Angered, I short 200 at 86.08. This was a mistake and I realize that I made the trade more because I was angry that I covered than because I thought it was a good entry. Stupid, but I realized the error of my ways and covered at 86.50 and 86.45 and took the loss. This was smart because the stock ultimately "squeezed" way up into the mid 87s. I was happy that I hadn't held.

But the squeeze into the 87s came on light volume and the stock began to collapse. When it broke through 87 on the downside, I got short again, 200 shares at 86.74. The stock dipped, the trade felt right, and so I added 100 more shares at 86.53. The trade from this point on was fairly smooth to the downside. I covered 100 shares at 85.72, 100 at 85.54 and another 100 at 85.74 making almost an exact point on all shares.

My bad trade of the day was in RAS. I hate to even write about this because this stock has been the bane of my existence for a week. I'm churning the stock. Perhaps writing about it here will help rid me of it's spell.



One lucky trade led me to make many bad trades in this stock. My normal entry size in stocks lately is 300 shares. For some twisted reason, I entered trades in RAS with 1700 shares (the lucky trade that worked in my favor), 2300 shares, 1400 shares and then 2200 shares. It's simple revenge trading. It's stupid and I will not be doing it again tomorrow.

I lost $571 in RAS. That hurts on a day where I'm barely down. What it means to me is that absent all the boneheaded trades in RAS where I broke my rules, I would have had a decent day. Now for the stats:

P&L -$27

Best, AMR $441
Worst, RAS -$571

stocks traded, 16, 4 positive, 12 negative
shares traded, 38,600
total trades, 148

Virtual Office, $4636. Dow -42.58.

Misstrade, $2892 on 9300 shares traded.
NYSE Scalper, $712 on 20,800 shares traded.
EvolutionTrader, $653 on 56,600 shares traded.
Dehtrader, $447 on 42,000 shares traded.
TradeWhileWorking, $101 on 1700 shares traded.
DenariiTrader, $76 on 6200 shares traded.
Me, -$27 on 38,600 shares traded.
One Bad-Ass Trader, -$218 on 17,600 shares traded.

Lots of green in the VO today!

Misstrade started off this week where he let off at the end of last, with more green. The Scalper seems to be gaining some momentum with his disciplined style and EvolutionTrader had another nice gain. Dehtrader had a nice bounceback day and TWW has put a stop to the bleeding. And Denarri also found himself on the good side of the ledger.

On the downside, I had a weird day in that I finally had a few decent winners (I haven't been able to find any recently) but one bad loser and many small losers sabatoged my good trades. OBAT seems to have had that "one bad trade" that led to a down day.

All in all, an excellent way to start the week!

The Noon Glance

P&L $95




NYSE Downgraded

Given my heavy criticism of the Hybrid Market, I thought the GS downgrade of the NYX to SELL was pretty interesting today.

11:09 (Dow Jones) Nasdaq (NDAQ) will continue to take market share from NYSE-Euronext as the exchanges implement SEC's Reg NMS, Goldman Sachs says.Upgrades NDAQ to buy from neutral; downgrades NYX to sell from neutral. NDAQ will benefit from Reg NMS as a low cost provider and robust electronic trader,firm says. Sees NYSE continuing to lose hybrid market share as it implements the new regulation in an "increasingly challenging environment for specialists," Goldman says. NYX down 4.1% to $88.57; NDAQ up 3.5% to $33.27.(CWH)

In other news, a 6 mile long asteroid just smashed down near the Yucatan Peninsula.

Heavy dust clouds have blacked out the sun here and this Dinosaur is feeling a little chilly.

Swing trading may be in this Dinosaur's future.

The crap that drives me nuts and makes me poor



This is the stuff that's doing me in right here.

I saw that on Friday WCC was stabilizing and I thought there would be a little pop off the open as it broke a minor trendline that was in place for the past couple of trading sessions. I put in a buy stop at the trendline and as the stock opened above the line, was filled at the opening price of 62.35. To add to my conviction, the stock was upgraded pre-open.

On the opening print of 23,300 I was the 300. The opening print hit my tape at 9:30:53.

3 seconds and 2200 shares later, the stock is trading 61.86 and I am down a half point or, $150 on my first trade of the day. Thank god I've cut my size... I ask again, absent of not trading the open, how can a trader manage intraday risk in the
Hybrid Market?

Pre Hybrid Market, stuff like this just didn't happen. How could I have avoided this loss?

Ray, from
Hybridtalk, if you're reading, really, WTF?

I just don't know...

Earth Day

Well, it's that time of the year again. The time when everyone in the US sits back and reflects on how much carbon they've released into the atmosphere in the past year. Families get together, sit around the table and calculate their emissions, trying hard to imporove on their numbers from the previous year.

NOT!

Ah well, perhaps in the future. For now, check out this map of the US.

Click on your city to see how "green" it was in the last year. The cities are ranked from 1 to 72 or so...

Happy Monday!

Sunday, April 22, 2007

I've been a bad blogger

Apologies. Nothing new to see here.

I had such a busy weekend socially (if you ever have the opportunity to try something called a "Tsunami Martini"... don't!) and it was such great weather that I just haven't had the time to sit and write my next "history" post.

I will flog myself tonight as a reminder that it's not about me, it's about you.

Expect an active week going forward. I'll try and get history #7 done by midweek.

For now, another classic song by Bob.


Saturday, April 21, 2007

Weekend Walk

No post for yesterday, my apologies. We had a night out last night (thanks to the grandparents) and we stayed out much later than expected.

Here are some interesting non-trading related links for you to peruse. But really, who's inside today? Spring has finally arrived.

If you're looking for some trading links, check out the NYSE Scalper's site. He always has some good ones.


1. Do you watch the Daily Show or the Colbert report? If so, consider yourself a knowledgeable American.

2. If you missed the CNBC segment on the
mind of a trader, I suggest you check it out. We're actually a bunch of sensitive introspective guys! Who thought?

3. Check this out. This
blogger keeps an attitude index. I just calculated mine... for the year,
I'm -72...

4.
The Conet Project. Creepy. Play audio from old "numbers stations". The way that spies used to and still communicate all over the world. Featured on the Wilco album Yankee Hotel Foxtrot.

I'll try to get a history post up late sometime tomorrow. Enjoy the day!

Friday, April 20, 2007

Upcoming

I'll post my daily post later tonight.

Tomorrow I will have the "Weekend Walk" links.

Sunday, if all goes well, I will have another "History" post up.

Virtual Office, $4138. Dow +153.35

EvolutionTrader, $3631 on 38,000 shares traded.
Misstrade, $1010 on 15,000 shares traded.
One Bad-Ass Trader, $265 on 25,800 shares traded.
NYSE Scalper, $86 on 25,600 shares traded.
DenariiTrader, -$41 on 3200 shares traded.
Me, -$312 on 47,400 shares traded.
DehTrader, -$501 on 21,100 shares traded.
TWW, did not trade today.

I must say that one of the more satisfying things about doing this VO is always having at least a little good news to report.

ET had a pretty huge day today and I for one will be checking his blog to see what worked. Congrats on a great day ET, especially since Wednesday you got roughed up. Misstrade is a little like the market... going relentlessly higher. OBAT continued the strength he flashed yesterday. Also his volume is on the rise. Something in the water? Scalper had a mushy day but as I like to point out here, green is green.

The rest of us couldn't put together the pieces today. Perhaps the weekend will prove restful and we'll all be green on Monday.

Get outside and breathe some air this weekend!

P.S. I have plans immediately after the close and will not be doing my daily post until later this evening.

The Noon Glance

P&L -$442

There will be a day where I can manage to make money again, but it may not be today.

Thursday, April 19, 2007

Animal Collective - Flesh Canoe

I let you off easy last week with a Bob Dylan song. It's been a tough week here, so I threw up a slightly more challenging piece for you to absorb.

If you're not familiar with Animal Collective well, get familiar.

A reviewer wrote once that he never understood Animal Collective until he had their stuff on while he was driving through a massive thunderstorm in the middle of the night. Lightning was flashing, his wipers were swiping as fast as they could, there were deep puddles on the road and he was scared.




Enjoy your weekend. Get outside.

An afternoon walk to clear the mind

At 4:00, my house was attacked by toddlers. I surveyed the situation. It was well outside of my control. The market broke me today and if I hung around the house, the toddlers were going to finish me off.

So, I fled to the woodlands in search of birds.

I walked around this pond that's not far from my house. Spring migration has begun and the early warbler migrants have arrived. After a short search, I was able to spot a few Palm Warblers springing out from the tops of trees, snagging insects. It was peaceful. I watched them for about 45 minutes.

During that time outside, listening to the water move and watching the birds I completely forgot about how much the market sucks.

So tomorrow, when I'm in the thick of it, hopefully this picture of a Palm Warbler will help me keep my head together.



If that doesn't work, there's always the pictures over at the Trading Goddess.

The market hates me and I hate it.

It's been a real battle here lately.


This morning I was down about $700 or so and then rallied and went up $600. Then, I went back into the red a little but by lunch had pulled into the green again. Most of the morning activity I had was in WSO. It was nuts. Check the graph.


The afternoon saw me churn, get frustrated and go back into the red. Another small loss. I can't seem to find winners lately and I think it's because I'm trading not to lose more than trading to win. Any advice? Dinosaurs have big ears.


I need to get away from the computer for the rest of the afternoon. Today is "playgroup" day at our house so there are 8 toddlers tearing my living room apart downstairs and 8 mothers drinking tea and eating cookies. I have to get out of here... quickly. Here are the stats:


P&L -$205


Best, JASO $155

Worst, RAS -$77


stocks traded, 22, 7 positive, 15 negative

shares traded, 43,200

total trades, 282

Virtual Office, -$951. Dow 4.79.

EvolutionTrader, $809 on 22,600 shares traded.
DehTrader, $354 on 37,000 shares traded.
One Bad-Ass Trader, $314 on 18,400 shares traded.
NYSE Scalper, $111 on 63,400 shares traded.
Misstrade, -$177 on 5100 shares traded.
Me, -$204 on 43,200 shares traded.
DenarriTrader, -$325 on 5400 shares traded.
TradeWhileWorking, -$1833 on 5600 shares traded.


The VO took a hit today. Like yesterday, we had 4 positive posters and 4 negative. Let's hope tomorrow we all finish out the week strong.

Nice bounce back today for ET. I know that when you get roughed up one day there's nothing like coming back strong the next. Dehtrader had another nice gain, consistent gains like that lead to nice years. $500 net a day means $120,000 for the year. Also notable today was the strength demostrated by OBAT. After a couple weeks of small losses and small gains, he pulled it together today for a nice win. Scalper spent the better part of the day paring losses but closed green, always the right way to end the day.

I still can't believe the market is going up.

The Noon Glance

Been all over the map today thanks to some wild volatility in WSO which I am now out of. It was my worst stock of the day but now is my best.

Lots of movement today. No idea what's gonna happen here though... the market just keeps edging higher from the open and I just keep feeling more and more bearish.... go figure.

P&L $242

Wednesday, April 18, 2007

The stock market hates you

This may seem funny but it is an important rule to remember and it is very true... the stock market and all of the stocks that comprise it, hate you. Had I remembered this simple rule today I could have avoided some of my losses.

I lost a total of $379 today but I lost $534 in just one stock, RAS. My next biggest loser was for $58...

Why did I lose so much in this one single stock? Because I over-traded it.

Why over-trade it? Because I've had good success in this stock recently. I thought I "knew" the stock...

Wrong. Anyway, I won't get into all the details of my trades in RAS because not one trade really stands out as awful. I just lost small in the stock, over and over again. I kept going back because I kept thinking, "This is the time I win". I've included the graph here with all the little lines I drew on it so you can laugh along with me. And I may make a new personal stock trading rule... if I draw more than 3 trendlines on a graph I should probably just leave it alone.




Other than RAS, I made one other error towards the close. I decided to "do an MOC" or Market on Close order in SKT. At 3:40 they published 500,000 shares to buy. That was some huge percentage of the daily volume in SKT, so I jumped on it and was filled around 41.80. At 3:50 when the updated numbers for the MOCs comes out I was completely shocked to see the entire order had been filled, "No Market On Close Imbalance SKT". Normally, if a stock with the daily volume of SKT has an imbalance of over 100,000 it at least has a little left for the last print.


Not this time. The stock dove. Once you enter an MOC order, you're locked in so there was nothing I could do but watch helplessly. So, the worst thing about this trade was that I was transfixed by it for the last 20 minutes of the day and I probably missed a couple of other things that could have made me some money. Luckily, the stock did print up to close at 41.75 so I only lost $50 but still... I lost.



Other than that, the day was pretty quiet here. I babysat between 2 and 3 because my wife had a dentist appointment and that kind of threw a wrench in my afternoon. Who knows? Maybe that was a good thing. And I got to hear all about the parrots at the aquarium.

Anyway, here are the stats:

P&L, -$379
Best: FED, $110
Worst: RAS, -$594

stocks traded, 28, 12 positive... 16 negative
shares traded, 40,400
total trades, 250

Virtual Office, $573. Dow up 30.80.

Misstrade, $2080 on 8000 shares traded.

NYSE Scalper, $804 on 63,800 shares traded.

DehTrader, $568 on 26,600 shares traded.

DenarriTrader, $137 on 8600 shares traded.

One Bad-Ass Trader, -$4 on 18,400 shares traded.

Me, -$379 on 40,400 shares traded.

EvolutionTrader, -$1212 on 40,200 shares traded.

TradeWhileWorking, -$1421 on 1200 shares traded.


The VO managed to stay green today, but it wasn't easy. Only half the members made money.

Misstrade clearly is doing something right. Go check out his blog to see if he tells you any secrets. I am impressed with the Scalper's performance this week. He took a couple of hits but cut his losses to acceptable levels and has fought back hard. Nice job, JC! New member DehTrader had a solid day while DenarriTrader had a quiet but green day... and green is green.

The rest of us were to the downside. OBAT had a learning and churning kind of day. I made a startling error of judgement towards the end of the day that cost me a couple hundred bucks. Idiocy. And I'm sure ET is disappointed with his results. We'll have to check in and see what happened. TWW too had a disappointing day on a day where he said he wouldn't be trading much. Check his site for the full story.

The Noon Glance

Now that I don't keep my P&L up on my screen while I'm trading (it distracts me) I take one glance at noon each day.

For fun, and because I'm losing today and like self-flaggelation, I think I'll post this number every day at noon. I will call these posts (insert drumroll here) The Noon Glance!

Depending on how busy I am each day, this post may only be a number. Today, I am not as busy as I hoped, thus the words.

P&L -$399

New member of the VO

I'm happy to welcome a fresh face to the VO this afternoon, DehTrader.

If you are interested in joining the VO, send me an email. All that is required is that you trade actively, update your blog daily and send me your net P&L and shares traded each day immediately after the close.

For now, I am restricting the VO to stock traders. If you are not a stock trader and can figure out a good way to post your figures, send me an email. Dinosaurs have big ears.

Trade well, DT

UPDATE, 9:15am: Make that 2 new traders. DenariiTrader will also be joining the VO as of this afternoon.

Tuesday, April 17, 2007

The Turkey Trap

From, How To Make Money In Stocks, by William O'Neil.

A little boy was walking down the road when he came upon an old man trying to catch wild turkeys. The man had a turkey trap, a crude device consisting of a big box with the door hinged at the top. This door was kept open by a prop to which was tied a piece of twine leading back a hundred feet or more to the operator. A thin trail of corn scattered along a path lured turkeys to the box. Once inside, the turkeys found an even more plentiful supply of corn. When enough turkeys had wandered inside the box, the old man would jerk away the prop and let the door fall shut. Having once shut the door, he couldn't open it again without going up to the box and this would scare away any turkeys lurking outside. The time to pull away the prop was when as many turkeys were inside as one could reasonably expect.

One day he had a dozen turkeys in his box. Then one sauntered out, leaving 11. "Gosh, I wish I had pulled the string when all 12 were there," said the old man. "I'll wait a minute and maybe the other one will go back."

While he waited for the twelfth turkey to return, two more walked out on him. "I should have been satisfied with 11," the trapper said. "Just as soon as I get one more back, I'll pull the string."

Three more walked out, and still the man waited. Having once had 12 turkeys, he disliked going home with less than eight. He couldn't give up the idea that some of the original turkeys would return. When finally only one turkey was left in the trap, he said, "I'll wait until he walks out or another goes in, and then I'll quit." The solitary turkey went to join the others, and the man returned empty-handed.

The psychology of the normal investor is not much different. They hope more turkeys will return to the box when they should fear that all will walk out and they'll be left with nothing."

And so it was with me today. I was never having a stellar day, but at one point, I was up close to $400 with not many positions to take me lower. This was around 11:30 which would have been a perfect time to stop trading for awhile. What happened was that I started feeling pretty bearish and so I decided to get short some stock. I never took any big losses or anything, but I don't think I had one winning trade for the rest of the day.

I kept waiting to get back about $300, then $250, then $200 and so on until I lost it all and went negative. Nothing was happening for me today after 11:30. None of my stocks were moving. The mistake I made today was not recognizing this earlier.

As disappointed as I am that I lost my profits today, I'm happy that again I stuck to my rules. My best trade of the day was in TAM, which I bought as it broke it's 60 minute downtrend line.



Even with this loss, I'm regaining confidence and I'm going to start building my positions back up. Here are the stats:

P&L, -$25
Best, TAM
$275
Worst, ITG -$97

stocks traded, 21, 7 positive, 14 negative
shares traded, 28,200
total trades, 210 (obvious churn for a day like today)

Virtual Office, $2807

Misstrade, $2670 on 8000 shares traded.
NYSE Scalper, $658 on 58,000 shares traded.
Evolution Trader, $52 on 41,400 shares traded.
Me, -$25 on 28,200 shares traded
One Bad-Ass Trader, -$36 on 3000 shares traded.
TradeWhileWorking, -$512 on 6700 shares traded.

A slow day for most in the VO although Misstrade kept to his winning ways and the Scalper had a nice bounce back from yesterday's loss.

I can't speak for the other traders, but today was excruciatingly dull as far as I'm concerned. I will detail this dullness later in full sparkling detail.

However, for now I must go as I have plans immediately after the close.

So far so slow

I feel like today is much like yesterday. Action in the first 30 minutes and since then, tight, rangebound trade.

Seems like all the sub-prime issues are slowly being forgotten as all of the mortgage type stocks are strong again.

I've had one decent trade in TAM but other than that, all is quiet. Volume is a little lighter than it was at this time yesterday on the NYSE. I think I'm going to walk away for awhile, happy with my small gains and try to find a couple of trades in the afternoon session.

Gonna sip on some green tea and finish Our Man In Havana.

See you this afternoon. For now, check out this Great Moment in Presidential Speeches segment, courtesy of David Letterman.

Monday, April 16, 2007

Happy Monday

Today I sold shit for $243. Okay, okay... I'll explain.

My wife called me downstairs at 9:25 to tell me that "the oil guy is here" to clean the burner. I hate having people I don't know in my house, especially when I know they'll be bothering me while I work and even more when they arrive when the market is about to open. I'm easily bothered, I admit it.

Anyway, sure enough, 2 minutes later, Judy calls me again to tell me the guy can't figure out how to turn on the lights in the basement. I rush down to the basement. The dude, who looks like a "carnie" is standing in my basement in the dark, looking at the cat litter boxes and mumbling something to me about ferrets. I turn on the lights, but clearly, this man wants to talk to me... about his pets.


It must be very close to 9:30, but he begins to ramble. He had a cat, but his lizard ate his cat, so he doesn't have a cat anymore. He has 9 ferrets. I should get ferrets he tells me... he also has goldfish, 3 birds and a turtle. Anyway, I couldn't get a word in to tell him that I had to get upstairs to work.


Luckily, Judy yelled down in her "emergency" voice and I ran up the stairs. There in the middle of our kitchen stood our son, naked, and a pile of shit. He's potty training, but today he had an accident. He smiled at me, seemingly not concerned about the shit and said, "I got socks! You got socks, Daddy?" Judy was flustered. One of our cats, not known for his intelligence, was slowly approaching the pile. Things looked grim. I separated all of the interested parties while Judy took care of the poo.


It was 9:35 and I had missed the open.


As it turns out, I had entered a bunch of orders pre-market. One of them, Buy 200 VMC at open, ended up being my big winner on the day.





I was attracted to this stock for a couple of reasons. First of all, on Friday it had violated its 50-day moving average on light volume. Also, it was very close to an upside break of a trendline I had drawn on a 60 minute graph. So I bought the stock at 115.05. Had I not been in my kitchen at 9:35 attending to a pile of shit, I may have put my stop in at 114.80 and been stopped out at the low of the day. As it turned out, the trading gods smiled at me today. I bought 100 more at 115.25 and then sold 100 at 115.49, 100 at 115.37 and the final 100 at 116.95.

I also did a masterful job of minimizing my losers. Okay, I have to go.

Here are the stats:

P&L, $683

Best, VMC $243

Worst, WSO -$99

stocks traded, 18, 11 positive, 7 negative

shares traded, 15,400

total trades, 162

Virtual Office, $1141

TradeWhileWorking, $1065 on 2000 shares traded.

Me, $683 on 15,400 shares traded.

Evolution Trader, $438 on 43,000 shares traded.

One Bad-Ass Trader, $67 on 2400 shares traded.

NYSE Scalper, -$502 on 30,800 shares traded.

Misstrade, -$610 on 2000 shares traded.

A decent day for the VO but rather light given the market activity. Our relative volume was light as were our numbers. TWW is rolling right along and has had a great month. I had a decent day which I am very happy about for a Monday. ET kept up his steady performance and OBAT had a small gain. The Scalper had a disappointing start to the week but again, was smart to keep to his loss limit thereby preventing any disasters and maintaining confidence. Misstrade had his first down day since the inception of the VO. Perhaps it's because he's preoccupied with a housing move. We'll give him the benefit of the doubt.

Sunday, April 15, 2007

A Wolf in Wolf's Clothing

I told Albert that I was ready to commit, full-time, to trading. The next step, he told me, was to come downtown and sign up with the firm.

I brought my resume and found Albert trading in the small hot room. He was up over $4000 and, as it was the middle of the day, ready to take a break. He stood up from his station and someone asked, "You gonna bring him up to meet Peter?" Albert said he was and I received a bunch of glances that said, "Oh, you're in for an experience." All the guys were snickering. We walked out of the small room, into the tiny gray hallway and made for the elevator. On the way I asked Albert what was up with the guys. He only said, "Well, Peter is a bit of a character."

The elevator door opened into a very large trading room filled with lots of loud voices. There was, however, one voice that was louder than the rest. This voice wasn't coming from the trading floor but from a glass-walled office just off of the floor. It was Peter, the somewhat infamous trading manager of Black Anvil Capital .

The story I later heard was that Peter's entire family worked for "The Anvil" and that he had been handed the small, unprofitable trading division as an appeasement. He wasn't trusted to run anything properly and no one had realistic hopes for the trading operation. He was kind of the outcast of the family, considered a little crazy and reckless. There were rumors of drug use, violent behavior, and multiple automobile collisions. When he took the trading division over, it had only a handful of traders. When I was leaving Anvil only a couple of years later, there were well over 1000 traders and the operation was wildly profitable. If nothing else, Peter was a masterful recruiter.

Albert poked his head into Peter's office. Peter was lecturing a young trader. He stopped mid-sentence when he saw Albert and rose from his chair to grasp Albert's hand. He flashed a brief, wolfish smile, nodded at Albert while looking proud and said simply, "YES!"

The frightened young man exhaled and was visibly relieved that Peter had taken his focus off of him. Peter looked at me while he shook Albert's hand. He stared at me and exhaled heavily, like an angry bull, through his nostrils. Were his eyes crossed? Jesus this guy was freaky looking! I had to look away. Albert began to introduce me. Peter stood there, shaking Albert's hand, staring at me, breathing, when he boomed, "ALBERT, YOU TELL YOUR LITTLE BUDDY HERE THAT YOU'RE GONNA MAKE A MILLION BUCKS THIS YEAR?"

Albert tried to say something, and I was speechless but Peter continued. He reached over and gave the other trader a light smack on the head. The trader, looking fearful that he might be hit again, glanced nervously over. "YOU SEE THIS GUY?" he asked while sticking his finger in Albert's chest. "THIS GUY IS GONNA MAKE A MILLION BUCKS THIS YEAR. HE DOESN'T GIVE A SHIT ABOUT HIS COMMISSIONS!"

Each word was punctuated by a finger jab to Albert's chest... I wanted to run.

"YOU COME IN HERE AND TELL ME YOUR FUCKING COMMISSIONS ARE HIGH?" he yelled at the trader. But before the trader could respond, Peter continued,

"FUCK YOUR COMMISSIONS, I SHOULD RAISE THEM! YOU JUST DON'T WANT TO MAKE A MILLION BUCKS! THAT'S YOUR PROBLEM! COME BACK AND TALK TO ME WHEN YOU WANT TO MAKE A MILLION BUCKS!"

The trader shuffled sheepishly out of the office.

He turned to Albert and yelled, "GO TRADE."

He turned to me and screamed, "YOU, SIT!"

And we were alone.

Saturday, April 14, 2007

Trade during the week, rest on the weekend

I trade all week, everyday... so by the weekend, I don't want to think about it. I suggest you don't either. It's just money.

So I've decided to take that spirit onto this blog as well. My weekend link posts will be about anything but trading.

If you are looking for some links about trading, I suggest checking over at Virtual Office member NYSE Scalper's blog. He always does a good job finding good posts about trading.

HOW FAR DO BIRDS FLY NON-STOP?

Ten satellite-tagged Bar-tailed Godwits in the southwestern pacific are providing a glimpse into the migratory powers of birds. One bird left New Zealand and flew non-stop to the northern end of the Yellow Sea in China , a distance of 10,200 km. The Godwit’s flight required about 9 days of continuous flight, and is now the longest recorded non-stop flight of any bird. Three other tagged Godwits have reached China in non-stop flights that lasted between 6.5 and 7.5 days. The progress of the Godwit migration can be monitored here.

ELLIOT SMITH

Great singer-songwriter who died under mysterious circumstances a few years back. If you don't know his music, this is a link to a new song that is being released posthumously. If you like stripped down music with just a singer and a guitar you might like this track.

DAILY SHOW

I am a big fan. If you happened to miss this bit from the last week about the Bush Administration's search for a war czar, check it out. I think it's one of the best segments they've done in awhile... and that says a lot, because I find most of their stuff hilarious.

PROJECT VOTE SMART

They can say what they do best, so I encourage you to visit their site. They work for us all, conservative and liberal alike. If you can, please support them.

Well, that's all for now. Tonight, when I'm not busy rooting the Islanders on, I'll work on a history post and have it up for tomorrow.

Enjoy the day. Go take a walk or something and stop staring at this damned screen!

Friday, April 13, 2007

One last thought...

I found this little gem of a video. It pretty much sums up my week.

Looking at it metaphorically, the market was dressed in blue and I, in red.



I'll finish up a "history" post this weekend and also work on the Virtual Office widget. Perhaps I'll look for an interesting link or two as well.

LTM, the Freaky Hybrid Trade of the day!

I haven't done this post in a few weeks, but today, I couldn't resist. Just look at this crap...



I'm focusing on the trading between 9:50 and 10:35.

At 953:35, the stock trades 100 shares at 50.44. 1300 shares and less than a minute later, the stock is trading 50.13. Almost all of the trading was 100 share prints smacking bids and lifting offers... there was no price correcting by specialists and their "algorithms" to stop the low volume dip in price.

I'm all for fast fills, but back in the day, 1300 shares was a print... a single trade. If a stock was going to drop 30 cents in 30 seconds, it wasn't pushed down by 13, 100 share orders.

Anyway, at 10:00 the stock is back to trading 50.20, but then get this... 2600 shares and 13 seconds later the stock trades 50. WTF?

For the next 25 minutes, the stock calmed down. It traded in a 27 cent range and traded about 14,000 shares. Decent activity. But of course, that couldn't last.

At 10:30:36, 100 shares trades at 49.92 followed by a 100 share trade up at 50.16. 100 shares pushing a stock 24 cents? You have to love a system that allows that to happen.

8 minutes and 14,000 shares later, the stock was up over 50.50. This would be fine if there was some type of "order" to the trade. It's the "airpockets" that exist with the Hybrid Market that make it very difficult to trade. Like the 2 minutes between 10:37 and 10:39 where 2000 shares spiked the stock up 30 cents.

I don't know. I guess you can ask Ray over at Hybridtalk how this type of trade benefits anyone. I can't figure it out myself. The Hybrid Market creates "airpockets" where there is no liquidity. When you hit one of these "airpockets" you get some unpredictable volatilty.

And unpredictable volatility does not breed confidence in a market, that's for sure.

A Good Bad Day

Sounds like a contradiction, I know. But here's the deal... nothing worked for me today. I traded 17 stocks and had only 5 stocks in the green. I just had no winners. Unfortunately, there are days like this.

I'm not going to beat myself up about it because I stuck to my rules and kept my losses small. I didn't add to any losing positions or get angry and fight the market. It was just one of those days where I died the death of a thousand small cuts.

So I'm taking the silver lining and I'm running with it...


Overall volume was lower today than it was for the last couple of days. I continue to be surprised with the way this market always bounces. What a crazy bounce it was too... between 10 and 10:30 there was a total "U" bottom... check it out. Anyway, that action kind of screwed with me mentally. I couldn't really get enthused about the rally due to the light volume.



Anyway, here are the stats:

P&L, -$480

Best: FED $154


Worst: DSL -$127

stocks traded, 17, 5 winners, 12 losers
shares traded, 20,000
total trades, 167

Virtual Office, $3207

TradeWhileWorking, $1667 on 2000 shares traded.

Misstrade, $1400 on 4000 shares traded.

NYSE Scalper, $426 on 68,600 shares traded.

Evolution Trader, $307 on 32,500 shares traded.

One Bad-Ass Trader, -$112 on 4800 shares traded.

Me, -$480 on 20,000 shares

A pretty solid day overall for the VO.

TWW, had a nice day while not trading much. Misstrade keeps on humming along, while the Scalper had a nice rebound from yesterday. ET took it a little easy today but booked some small gains.

Looks like it just wasn't the best week for me and OBAT. Perhaps we'll get our acts together for the earnings season.

Bob Dylan - It's Alright Ma (I'm Only Bleeding)

Based on the pattern of my music video postings, I should be posting a song by a "new" band this week. But I'm just not in that type of mood.

So instead, I'm posting one of my favorite Bob Dylan songs.

Bonus points if any Pavement fans out there can tell me which lyrics from this song they lifted and put into one of theirs.

Thursday, April 12, 2007

Only add to winning positions

I made that rule the title of today's post because it's the reason why today was the first day I made money all week. Also, after today, I feel I've learned that my constant violating of that rule is also a major reason why I have been in such a slump for so long.

I'm not saying that I've completely isolated my problem that easily and quickly, but today, simply because I was conscious of adding shares only to winning positions things went much smoother for me.

First and foremost, this rule prevented what could have easily turned into a disaster for me in BTU in the early morning.



I bought 200 shares of this stock near the open at 45.35. I bought it because it had pulled back for the last 2 days on light volume after a strong run-up on strong volume. Anyway, it went up and so I bought 100 more shares at 45.48 a couple of minutes later. I decided to take some profits right away because it broke above .50 and the market (at that time) was acting jumpy. I sold 200 at 45.59 and stopped 100 at the low. I was stopped out of that 100 shares seconds later at 45.27. So, it was a small winner.

The stock bounced off a trend line that I had drawn on a 60-minute graph that had held since last week. So, I bought again and was filled at 45.40. Less than 10 seconds later the stock came down and took my stop out at 45.25.

I bought again, this time at 45.33. Again, the stock broke the low of the day and stopped me out seconds later at 45.17.

The key here is that I only lost $41 in the stock even after getting all choppped up. That happened because I only added to my position once, and that was on the trade off the open that I made money on. On every losing trade in BTU I kept my losses small because I never added to the losing positions.

Most important, because I wasn't adding to losing trades, I never felt like I was "fighting the market". I was losing, yes, but I was accepting the losses and moving on, not building bad positions and getting caught up mentally in them.

Of course, if you check that graph I was basically stopped out near the lows of the day and then the stock ripped 80 cents. Frustrating? Yes, but not debilitating.

I don't like to lose more than 20-30 cents in a trade. It means I get stopped out a lot, but as long as I can keep the losses small, I can make money.

Anyway, so here's my good trade.



I was watching RAS today because I saw he was close to breaking the downtrend line, that has been in place since late March, on a 60-minute graph . When MTG, another stock that I feel is loosely related, began to rally despite a poor earnings report, I bought a couple hundred shares of RAS at 26.21 and then 100 more at 26.23. This was right around 10:05.

This was clearly an example of me anticipating a trade, a topic that Michelle B. tackled today over at Trader Mike's site. The trend line that I was hoping to see RAS break was still a quarter-point away, so I figured this would be a safe place to initiate a position. Even if he didn't break the line I would be able to get out with a small gain or, in a worst case scenario, break-even. And I figured with the market looking stronger and with other stocks in it's sector rallying that it was worth trying to buy RAS a bit "early" in anticipation of a break.

Anyway, it worked. A few minutes later, RAS ran up to 26.50, breaking the trend line and stopping me into 100 more shares at 26.52 so I had 400 shares of a stock that was acting how I wanted it to. When he traded below 26.50 for a couple of minutes without breaking it's uptrend line for the day, I took the opportunity to buy 200 more shares. So now, I had 600 shares and the stock was breaking the 60-minute downtrend line. I felt pretty good about it.

When the stock advanced to 26.67 but then slowed, I sold 400 shares at 26.61, taking some profits. But I kept my eye on the stock. When it broke 26.67 I added again to my position at 26.70 and again at 26.78 bringing it back up to 400 shares. I held through a base between 11:30 and 1:00 and once the stock broke out of that base, I was in the clear. I sold towards the end of the day at prices ranging from 27.30 to 27.47. All told, it was the best "feeling" trade I've made in a long time.

Anyway, here are the numbers:

P&L, $543

stocks traded, 16: 8 positive, 8 negative
total trades, 172
volume, 15,000 shares