Tuesday, February 12, 2008

Just Missed A Big One...

At 10:00 am, I started writing my fellow office mates about ALB. All of the chemical stocks were strong. ALB had gapped up at the open and traded near $39 and then traded off on light volume to $38.50. I started to pick some up and built up 700 shares of stock by the time it traded back up to $39 by 10:15.

To be cautious, I sold 300. I figured it would trade $39 and then pull back a bit before advancing higher. Of course, I wasn't expecting the move that developed.

Shortly after the stock traded over $39, news hit that BASF, a German company might make a $4.9 billion bid for Albermarle.... I was bullish already, and this made me even more bullish, but I had just sold another 200 shares at $39.40. With only 200 shares remaining, I didn't want to buy more and completely screw up my cost basis while the stock was spiking. It was frustrating on a certain level, but nonetheless, I was happy to catch a good move.

The fact that I had 700 shares at about $38.80 and only made $494 in the stock is a little depressing since it never came back to that level. Had I bought, left my desk and closed the position at 3:59:59, I would have made about $700. Again, I screwed up my exits.

I'm working on it.

I also had a nice trade in ESI early when I just about bought the bottom. Here, I made $400 on a 500 share position, so I did much better with my exits.

And the coal short was a thing of beauty today. Check out the index. The problem is that I was a little "early" to this trade. All told, I only made $300 in my coal shorts despite the massive reversal.

I'm happy with my bounceback after 2 bad days in a row. I need to keep working hard and staying positive. I also used a higher percentage of limit orders today versus market orders.

Meanwhile, I have a couple of new ideas for the blog.

First, I'm going to update my daily research post to include stretching. If you trade all day every day, you need to stretch. Since I think this is very important, I'm including it in my research post so I make it part of my routine.

Second, I'm going to try to come up with an idea each day to trade and post it on the blog between 9:00 and 9:15. It will be a simple post with a stock or sector to watch. That's it. No buy or sell recommendations, just a stock or sector that I think will be on the move. I hope that including this post in my daily repertoire will help force me to crystalize my research into concrete ideas.

This blog is a wonderful discipline tool for me and I'll continue to use it in that manner. Hopefully, it helps you as well.

Here's the stats:
P&L, $1286
Best, ALB, $494
Worst, ACI, -$167

23,400 shares traded.
16 stocks traded. 10 winners, 16 losers.

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