Wednesday, May 30, 2007

Worst Trade Ever

This one broke my spirit. I didn't know it at the time, but I was already down over $600 on the day. Here's what happened.

14:05:44 Short 800 @ 47.32 (-800)

14:12:49 Buy 300 @ 47.86 (-500)

14:16:46 Buy 200 @ 47.87 (-300)

14:19:19 Buy 300 @ 47.89 (flat)

At the time, DE had dropped a point in 10 minutes and so I was playing the pair. The first mistake I made was entering a market order. I entered the order when the stock was trading near 47.55. I was filled at 47.32. It's a force of habit that makes me enter market orders still but I need to learn not to do that anymore. The hybrid market eats me alive when I do.

So, I was filled a penny off the low of the move on my short and then got immediately squeezed for over a half point and lost $450 on the trade. This one felt awful and I basically closed out my remaining positions and walked away knowing that my account was firmly in the red again.

After waking this morning in the green with 2 trading days left in the month, my plan was to take it easy. But basically, the trade I highlighted in CNH happened to me over and over in him. I lost $885 in that one stock today. It was one of those days where nothing went right for me.

To make matters worse, I had a couple of trades that really would have worked for me had I hung in there, mainly ITU and CPT.

Anyway, I feel gross. I just can't trade this market on the long side right now. Especially with the gap down off the open, it just added to my bearishness. So I was way too skittish on my long trades, getting out at the slightest hint of a downturn and too stubborn on my shorts. Disaster.

And now I go into tomorrow staring at my third negative month in a row.

Anyway, here's the stats:

P&L, -$1213

Best, ITU, $72

Worst, CNH, -$885

shares traded, 41,400

stocks traded, 13, 4 positive, 9 negative

total trades, 157


Bluedog said...

You're not alone, DT. The gap downs threw me for a loop, too. I kept focusing on trying to find a good short, I blinded myself to some great long opportunities. C'est la vie. I should have just dumped everything into AAPL ($4.42 gain/share today).

On the plus side, we saw some good movement in NYX today. I hope it holds until Analyst Day at NYSE-Euronext next Wed.


Dinosaur Trader said...


Yeah, that drop in February really played with my head. Haven't gotten a check since because I keep waiting for the bottom to fall out.

Need to lose conviction. Kind of funny, but true.