Monday, June 25, 2007

Silver Linings

Yes, I lost money today but I'm going to focus on my good trades for a change.

My bad trades were not good, but they weren't bad in the way they used to be bad. In the past, when I had a big loser, it was normally because I was in and out churning the stock all day. Today, my worst stock was CF and the losses came in two trades. So, while I didn't trade the stock well, there was no fighting the stock or revenge trades... I'll take the $523 in losses and learn from them.

So on to the good stuff.

At around 11am, I noticed MLM break it's opening range from the morning. So I took a look at VMC, a related stock to see how it was acting. It was struggling to regain it's highs. I threw in a short order and was filled at 118.84. Only 300 shares. I covered 100 at 118.11, 100 at 116.32 and 100 at 116, netting just over $600.

This was a good trade for me because I didn't rush to take my profits. After I covered the first 100 shares (which as happens now, I realized was a mistake) I trailed the stock down with stops. It moved nice and smoothly. What I could have done better was add to the position.

My next good trade was in FLR which I highlighted earlier. After that lunatic plunge I began to watch the stock. My first hint that something was wrong with the stock was that buyers didn't rush in to pick up the relative "bargain". After the initial steep sell-off just after 11am the stock couldn't regain it's footing.

I watched it chop around 104 the whole time that the futures were rising. Once the futures started to break, I put in a short order and was filled around 104 for 300 shares. Once it dropped a bit, I added to the short, another 400 shares at about 103.65. This was a good thing that I failed to do in my VMC short.

Anyway, I covered most of the short under 103 making this my second best trade of the day at $585.

The thing that really hit home today was that I could have good winners with not many shares if I let them run. So tomorrow, I am going to initiate my positions with less size and add when they work in my favor. My old way of trading saw me buying most of my shares right off the bat. Since I'm allowing myself greater movement in the stock before I cover I need to work on position sizing so that when I'm wrong (like in CF) I don't take big hits.

Here's the stats:

P&L, -$603
Best, VMC, $606
Worst, CF, -$523

shares traded, 32,000
stocks traded, 28, 10 winners, 18 losers
total trades, 165


Anonymous said...

i turned a .60 winner in cf into a .50 loser today. very proud moment.

Dinosaur Trader said...


Yeah, he got me twice for bad losses and both times I started off in the money.

It happens.

BTW, why not set up a blogger account so you can stop posting anonymous comments? At some point, I may only disallow anonymous comments because I end up getting crap a lot of the time from them.