Monday, February 11, 2008

Red Hot Chili Peppers, "Knock Me Down"

Fighting Frustration

My day was spent trading stocks in the coal sector, and in the insurance sector.

I traded the coal sector because, once again, those stocks are on fire.

I traded the insurance sector because AIG pretty much "shit the shower."

In the end, I lost money. However, I did learn another important lesson. One that's much more important for me than for you. A lesson that is really untranslatable. Pretty much, I "felt" myself go "on tilt" in the afternoon. I started throwing market orders in and pretty much was trading desperate to try to make back the $300 I was down. As it turned out, I nearly doubled that loss in the last 30 minutes.

I'm starting to get a real feel for when I'm in a bad frame of mind to trade.

In fact, I wrote the VO post so shortly after the close because I was in a rush that I can tell that I was in a bad state of mind. If I'm not in control of my emotions, I just can't trade right. Anyway, I was angry at myself towards the end of the day because I had given back early gains (AGAIN) and went negative.

You can't trade angry and expect to make good trades, plain and simple.

Interestingly enough, in the morning, when I was making money and trading in control, I was using mostly limit orders. Towards the afternoon, I was using "angry market orders." Tomorrow I am going to make it my goal to use only limit orders to enter positions.

Anyway, my best stock of the day was ACE, although I gave back half of my gains in the stock in the late afternoon.

I short early on and made a half point when the stock was dropping in sympathy with AIG. I short again when it was about to break $56 and covered near the lows. This was totally a sell momentum play off the AIG. No pretty patterns unfortunately. Just quick, ugly trades that worked.

But guess what? My worst stock of the day, was another insurer, MET. The trade in these stocks was early. After that, they all just chopped around in a tight range for the remainder of the day. Often, I'll get mentally sucked into a sector if they move early (especially if I largely missed the move) and overtrade the stocks later in the day. This is what happened with me and MET. Pretty much, I was trading a trendless stock in the afternoon and I took a small loss.

I allowed myself to get discouraged today because I started thinking about the money I've given back in the last week. I've had a -$800, a -$600 and now a -$500 day in the last 4 days. Very depressing. However, I can't allow myself to get negative as that will get me nowhere. So tomorrow, I'll just get up, do my research and try to be more disciplined during the day and trade smarter. No market orders to enter positions, especially if I'm down on the day.

Anyway, here's the stats:

P&L, -$543
Best, ACE, $224
Worst, MET, -$161

33,000 shares traded.
20 stocks traded, 8 winners, 12 losers.

Virtual Office, $1365. SPX, +8.70, 1339.00.

Dehtrader, $820 on 6020 shares traded.
Sanglucci, $454 on 42,400 shares traded.
$445 on 7800 shares traded.
Timmay!, $137 on 600 shares traded.
OBAT, $67 on 5600 shares traded.
Wincity, $62 on 600 shares traded.
Misstrade, no trades.
Denarii, -$77 on 1000 shares traded.
Me, -$543 on 33,000 shares traded.

I have to say that I'm a little discouraged by the volume in the market these last few sessions. We traded less than 1.4 billion shares today on the NYSE and the VIX moved down a bit.

Meanwhile, lawsuits notwithstanding, it was a good day for our new VO member Equine Trader. Despite the fact that I hate horses, (a horse bit my great-aunt Bessie to death) I let her into the VO.

In other VO member news, I suck.

Well, I have some familial obligations to attend to immediately after the close so I'm keeping this short. Any VOer who didn't get their P&L in, just throw it in the comment section.

Obama's Momentum

As if things weren't going good already, now he has the added benefit of being attacked by President Bush... on a foreign policy matter no less! Can you say, slam dunk?

Equine Trader Breaks The VO Gender Barrier

In an odd twist, Equinetrader joins the VO and almost immediately afterwards, sues Dehtrader for sexual harassment because of this post.

Here is some exclusive footage of her from her past employer's Christmas party... needless to say, it's pretty clear why she moved on...

Anyway, please welcome our first female member of the VO.

Morning Link-Love

And finally, masked hoodies. Anti-social or wave of the future?

Good Morning

Time: 7:11
Mood Thankful

Thanks to BDC for doing such a "first-tier" job of blogging around here this weekend. Seriously excellent.