Monday, June 25, 2007
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:
Best, VMC, $606
Worst, CF, -$523
shares traded, 32,000
stocks traded, 28, 10 winners, 18 losers
total trades, 165
Misstrade, $3560 on 5500 shares traded.
HPT, $1638 on 75 contracts & 4100 shares traded.
Evolution, $733 on 13,400 shares traded.
Denarii, $598 on 2800 shares traded.
Me, -$604 on 32,000 shares traded.
If you just looked at the final figure for the Dow today, you wouldn't be getting the full story of the market. The market suffered a complete reversal today and at one point was down almost 200 points from it's top. In other words, it was an ugly day to be a bull.
Nevertheless, despite the woes of the market, the VO managed to have a pretty good day. Misstrade tacked on some more gains while ET and HPT kept up their recent streaks. Only 13,400 shares today ET? Perhaps the market took your reluctance to trade as a bearish indicator. Denarii also had a nice day.
On the downside, I had a couple of good trades, a couple of bad trades and 2 mistakes that really cost me.
Just in case you have never used it, Google Blogsearch is the best way to search inside of blogs.
Oh, and Dylan Ratigan.
You may ask, why is Dinosaur Trader suddenly so obsessed with Dylan Ratigan? I tell you what, lots of people search for this man on Google and this blog has become sort of a niche marketplace to come and find nothing about the man at all. And my female readership is spiking, just look at this graph.... see?
This is good, because so far I find girls leave much more thoughtful comments.
People come searching for Dylan Ratigan and they leave with some Dinosaur.
A reader, Bluedog, pointed this stock out to me. I see no news...
However, they seem to be in a good industry. They operate in "clean energy technologies." Still, the run since mid-June is crazy. Anyone have any color on this stock, please leave it in the comment section.
Time to leg into a short here, MT?
UPDATE: Stockbee has a small post on the price action that's interesting.
According to my tape, at 12:04:27, TNH traded from 125.92 up to 127.06 in the same SECOND!
Honorable mention today goes to FLR!
The market may be getting faster, but that doesn't necessarily mean it's getting BETTER...
Dinosaurs hate watching things go extinct.
Check this list of birds that are in decline. Can you imagine waking up and not hearing birds? It would depress the hell out of me.
Anyway, before you remove that tree or spray that pesticide, please think twice.
I expect this week to be somewhat dull. Next week should be completely dead.
However, at least this morning there could be some interesting follow through in the names that moved most on Friday's Russell Rebalancing.
Other than that, we have the existing home sales number at 10. May be worth it to watch the interest-rate sensitive names, especially REITS.
We'll see. Anyway, here's a great song from a Scottish band.