Thursday, July 26, 2007

The Wild East

Don't let anyone tell you that there isn't good action in the stock market right now.

Days like yesterday and today are what you pray for if you are an equities trader.

Here are a few examples of stocks that were great to trade today.






In fact, looking at graphs like these objectively at the end of the day, it's a wonder I only made money on the long side in them. Imagine if I was smart enough to be short... but that's why I posted the Wizard of Oz video before.

Anyway, there are countless examples of graphs like that today. The best news is, WE BARELY BOUNCED. Like I said in the Virtual Office post, there is so much fear in the market right now that no one knows which way is up. This is great for trading stocks.

My day went something like this. I made good money between 9:30 and 10:15 and then gave most, if not all of it back between 10:30 and 2pm trying to "pick bottoms" on a number of stocks, mainly DE and UBB.

Yesterday, it worked when you bought stocks as they traded down to the 50-day moving averages. Today, the market didn't give a damn about technicals... at least initially.

Once the "buyers" moved in at 3pm (or so) stocks that have been strong recently bounced very nicely. This is when I made all my money today. Ironic, because on a day where the Dow is down over 300 points, I made my good trades on the long side.

Unfortunately, I was very skittish when the "real bottom" was made today and so I didn't size into most of my positions as I should have. And the one stock I really did size into, MOS, I got out of too early to really profit. My quotes went all screwy for a little while and so I got nervous and sold a lot before I should have.

I traded a shitload of shares today. There are a couple of reasons for this. First, I did a lot of "churning" between 11:00 and 2:00 pm... a time I normally don't trade much. I should have kept to that rule today, but when the market is down 400 points, you expect there to be movement. And there was, I was just trading on the wrong side. The other reason my shares bumped so much is that I've increased my position size again. When I was struggling I was trading with 200 share positions. I'm back to starting with 500-1500 share positions and adding as I find necessary.

Do I wish I hadn't churned so much in the middle of the day? Absolutely. However, trading that much did help me to get a feel for the bottom when it was made... there's no doubt about that.

Anyway, more fun on tap for tomorrow and probably even next week. At some point soon the market will have to take a breath and we'll have to adjust our trading styles accordingly. For now, enjoy this volatility and milk it for what it's worth.

Here's the stats:

P&L, $5265
Best, DRYS, $1281
Worst, CF, -$548

shares traded, 113,800
34 stocks traded, 23 winners, 11 losers
521 trades



6 comments:

artha said...

Great job once again! Seems like you thrive in this chaos!

I've been reading your blog for several months now and just want to say I really enjoy your writing and your candor. And I'm still waiting for your next history installment :)

Given the high volume you trade, I was wondering what kind of commission you pay? Can you also tell us a little about your home office setup (# of PCs, trading platform/software, type of internet access, etc)? Do you trade Nasdaq or Amex stocks too?

Thanks in advance.

Dinosaur Trader said...

artha,

Thanks for the compliments. I am taking a vacation in August and plan on working on the "history" installments again. This slump kind of got in the way of me being able to do anything except worry a lot.

As for commissions, I pay .0025 a share. I use one PC with 4 monitors, use esignal for quotes, my company's proprietary trading platform, have cable internet access and trade mostly NYSE stocks.

I have begun trading more Nasdaq stocks and will continue to trade them more as I learn more about the companies. The Amex should alwys be avoided, but occassionally I trade a stock from that hole. Currently, I trade BTJ at least once a day.

Thanks again,

-DT

MIsstrade said...

Like old days again today. Keep the volatility going for us all summer and fall!!

Dinosaur Trader said...

Right on, MT.

-DT

TraderCaddy said...

Another good day. Congrats. Your comment concerning making $$ only on the long side was interesting because that's how I made most of my $$ also. Most of my gains were done with QLD. I bought them when I felt like throwing up and sold them when I thought to myself "this is the big bounce." It turned out to be about ten roundtrips with QLD today.

Dinosaur Trader said...

Tradercaddy,

Excellent! Yeah, to be honest I didn't even think of trading the QID but I definitely should have. It would have been an effective hedge as I was buying and being wrong all afternoon until things finally "stuck".

Let's see what tomorrow brings!

-DT