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.