Tuesday, June 19, 2007

The Go! Team, "Grip Like A Vice"

A New Approach, But... Not Really

At 9:30am I slipped the Skygreen Leopards into my disc drive, leaned back in my chair and watched my screens blink madly at me. I imagined them angry at me for not engaging them. They must have wondered why I wasn't cursing at them.

But I was impassive and watched CNH with a bit of amusement as I imagined all the traders who got their balls ripped off in him trading the open. It made me feel smart. What a freaking lunatic!

For my first trade of the day, I shorted 100 shares of AMG at 129.73, this was at 9:46. As you can see, I didn't have to endure much pain in this trade, it worked in my favor almost immediately. I only threw in 100 shares because although it looked short term overbought I thought it possible he may get all the way up to 131 and I didn't want to risk too much right off the bat.

Anyway, I covered at 10:00 at 128.57. I'm still not sure if I should have. I mean, the first big question I need to answer about this new style is whether or not I should actively cover, trail stops down, or just leave my original stop in. In this case, ultimately, the stock went lower on the day.

It's already late so I can't get into everything about my day (I'm waking super early again tomorrow) but there were a couple of other trades that bothered me and that I didn't handle well.

The first was SPG which was my biggest winner of the day.

I bought 500 at 96.13 and figured if I put my stops just below the low of the day that I'd be risking about a half point. On the daily this stock has been crushed because it's a REIT and I guess it sold off with the rising interest rates. Anyway, I sold out early. 100 shares at 96.18, 200 at 96.37, and 200 at 96.85. But all of these were nervous sells. I mean, I was never as much as a dime out of the money on the trade but I was nervous whenever the market looked like it was weakening and sold really, because I was scared to lose.

It gets worse. Check out this beautiful graph for AB.

At 11:24 I bought 300 shares at 85.10 just before the breakout... right before the stock ripped straight up for 3 points. But guess when I sold... at 11:28 at 85.18. I really wanted to lock that 8 cent gain in... awful.

Finally, I get to my big loser on the day, CF. I short 500 shares at 56.50 at 2:20. When it broke the lows from 12:30, I thought it could break and follow the downward path that TNH, another fertilizer stock, was tracing. Anyway, 2:20 was basically the afternoon low on the S&P and the stock followed the futures up and squeezed me out at 57.15 for a $300 loser.

So anyway, I lost money. But I realized something that explains the title of this post. The way I've been trading for the past few months is just wrong. Everyone who has told me I was overtrading was exactly right. I am churning positions when I really don't need to.

I picked some good stocks today and had I let them run instead of getting nervous and covering, I would have made good money. I think it's a matter of readjusting and regaining confidence that I am actually buying stocks at decent levels. I mean, my entries weren't the big problem for me today, it was my exits.

It's the old rule, "Let your winners run".

What I realize is that this isn't really a huge change to my trading style. It's just calming it down... a lot. I don't need to reinvent the wheel, I just need to let the old wheel roll a bit and gain momentum and maybe it won't fall over so much... it's late and I'm going to let that corniness about the wheel slide. Hopefully you understand what I mean.

Oh, and GO LNN! Beat and raise! Beat and raise! Please! I held into earnings.

Anyway, here's the stats:

P&L, -$102
Best, SPG, $193
Worst, CF, -$297

shares traded, 9600 (about a third or a quarter of a "normal" day for me)
stocks traded, 9. 4 positive, 5 negative.
total trades, 78

Virtual Office, $6700. Dow, +23.09, 13635.91.

Misstrade, $5066 on 6300 shares traded.
Denarii, $768 on 3600 shares traded.
Evolution, $544 on 58,800 shares traded.
HPT, $423 on 30 futures contracts traded.
Me, -$102 on 9600 shares traded.

It was a big day for the VO, especially for MT who caught a nice drop in my old friend TNH.

Denarii also stepped up to the plate, Evolution had a solid bounce and HPT got off to a green start here in the VO.

I was the sole player in the red today. Although I'm happy enough with the results since I tried a completely new trading style.

My daily post will come later this evening. For now, I am chief babysitter.

Russell Rebalancing On Friday

If I recall last year this was a huge event. Things can get crazy.

Ray over at Hybridtalk deals with the issue in this post. If you're interested in trading this event on Friday you should check it out.

The VO Is Expanding

I would like to welcome High Probability Trader to our esteemed Virtual Office.

As regular readers know, the VO is a daily compilation of some active bloggers trading stats for the day.

HPT is the first non-stock trader that will be posting here, so bare with me if I screw up some futures terms now and then. I am looking forward to learning more about futures trading from HPT. If you haven't checked his site before, check it now. It is very informative and useful.

Blitzen Trappen, "A Lover Loves"

I woke at 4:30am today and went surfing. I haven't surfed in a decade. It's seriously the best thing I have done in a really long time. Sometimes, you get so far away from a good place that you forget how to get back there.

Life moves quickly if you let it. You have to slow it down.

Let's see if it helps me make money. Even if it doesn't it will probably help me not care about losing it so much!