Wednesday, July 2, 2008

Coal Stocks Drop Hard


-coalfall

My goodness... the moves in the coal, steel and ag names were epic. I didn't trade those moves...

Instead, I caught a nice move in SWN early, and pretty much scratched after that.

For whatever reason, I can't save esiggy charts to blogger right now, so I'll just describe the situation.

I was watching SWN to crest $50. This has been on the HCPG watchlist for the last couple of weeks. The stock opened at $49.75 and then based around that level for a few minutes. At 9:34, the stock traded $50, I entered at $50.10 and the thing just went vertical. I exited a couple hundred shares at $50.43 and then a few hundred more just over $51.

It was 9:36 and I was up nicely.

I got a little greedy though, and decided to try to play the short side of oils when they started to roll. I was early to the trade though, and barely missed huge moves.

So I gave a little back from my early morning highs, no big deal, and chalked up another win.

Again, the RO had a gigantic day.

Two guys in the RO were up over $25 grand, and a number of other players traded into the mid-thousands.

However, I want to share a little tidbit from some of the chat today. I know a lot of people are thinking, "Geez, idiot... these guys in your office are making such huge money, why don't you just do what they do?" It's because I can't deal with the huge drawdowns that are necessary to trade like they do...

Here they are talking about their P&L swings today...

Trader A: my pnl went from -20 to +15 to -4 to +26 here. what was the biggest drawdown for u?

Trader B: was up 8 then went flat.

They're talking thousands of dollars...

If I think of this job as a career, it's all about the slow build back right now... while it's tempting to doubt myself after days like yesterday and today, I'm thinking 5 years out, when I'm not burnt out and stacking coin every day, just like the good ole days.

I'm not saying those guys will be burnt out... I'm just saying I can't take those swings anymore. So I'm gonna keep trying to make a few hundred a day, and slowly build it up to a few thousand a day...

If I can do that, in 5 years, I won't give a damn about missing the coal shorts today.

Good music will drop with the sun.

2 comments:

wincity said...

Good attitude, DT. I'm convinced that we can have multi thousand dollar days without the huge swings. Same as you, I'm building myself up towards that day.

It's amazing how they kill the commodities in one go. Even oil stocks got killed when crude was up $3.

Adrian said...

I can't believe how badly some of the former high fliers fell. Even PCX which barely put in a down day in months dropped double-digits. No idea what this is going to do for swing traders like me. Not gonna be buying dips for a while, that's for sure!

I might kick myself for not catching the moves that added 20%, 50%, 70% onto strong moves, but I'm never going to kick myself for not picking the top and shorting them down. You can never catch every move and over the past year they've hurt a lot more shorts than they've rewarded.