Thursday, May 3, 2007

All Chop And No Play Makes For A Dull Day

When I have time to start rhyming my post titles, you know it's been slow...

All the pain of my day was over by 10:00am because that's when I stopped trading AGU.

It's also a perfect example of why trading is a hard job. You have to stay focused. I had 4 up days in a row... first time that's happened in a really long time. And I think I got soft... that's how fast it can happen. I think I thought, "I'm Back!" and mentally, I went on vacation.

I didn't even know that AGU reported earnings today. Had I known, I probably would have avoided $276 in losses. At 9:45, the stock started to spike up to near the level of yesterday's close. So I thought I could throw in a short with minimal risk. Wrong... maybe on a regular day, but not on the day the company releases earnings... I short 300 at 38.80, covered 100 at 39.15 and then 200 at 39.27. Not a debilitating loss, but an ugly one.

And as it happens often... one bad trade led to another... still not aware of the earnings report, I threw in a "revenge trade" and tried to short again. This time, I short 400 at 39.17. Only seconds later, I covered 200 at 39.24, then 100 at 39.30 and the last 100 at 39.47.

Done yet? Nope. I went for it again... the trifecta. I short 300 at 39.47. 30 seconds later, nervous because I had been squeezed twice already, I covered at 39.49. Whew, I learned a lesson.


I short again 2 minutes later at 39.55, 300 shares. I covered 100 at 39.64 and 200 at 39.88. Oh, and to add insult to injury... that 200 shares at 39.88? High of the day. I was that sucker.

3 awful trades that I may not have made had I done a little research. Those 3 trades accounted for more than half my total loss on the day.

Other than that, it was choppy out there. My best winner came in an early morning short in CIG. Nothing doing. I should have been outside enjoying the weather.

Here's the stats:

P&L -$540
Best, CIG $157
Worst, AGU -$276

shares traded, 33,800
stocks traded, 20, 6 winners, 14 losers
total trades, 177


wincity said...

Ugly loss on AGU and not entirely your fault. Your software should've marked each stock which releases numbers that morning and the night before. It's not hard. Mine does. But I write my own software.

Dinosaur Trader said...

That's great that you can write your own software. I'm a Dinosaur, stuck in 1997. I just learned that if you hit Ctl-Alt-Del at the same time, you can shut down stuck programs.

In all seriousness, taking responsibilty for trades, good and bad is the single most important aspect to becoming a better trader, despite what software you may use. For me, that means I have to sit down at my desk before 9am and do a little homework.

Hope you were able to find some profits today!