Virtual Office, $573. Dow up 30.80.

Misstrade, $2080 on 8000 shares traded.

NYSE Scalper, $804 on 63,800 shares traded.

DehTrader, $568 on 26,600 shares traded.

DenarriTrader, $137 on 8600 shares traded.

One Bad-Ass Trader, -$4 on 18,400 shares traded.

Me, -$379 on 40,400 shares traded.

EvolutionTrader, -$1212 on 40,200 shares traded.

TradeWhileWorking, -$1421 on 1200 shares traded.


The VO managed to stay green today, but it wasn't easy. Only half the members made money.

Misstrade clearly is doing something right. Go check out his blog to see if he tells you any secrets. I am impressed with the Scalper's performance this week. He took a couple of hits but cut his losses to acceptable levels and has fought back hard. Nice job, JC! New member DehTrader had a solid day while DenarriTrader had a quiet but green day... and green is green.

The rest of us were to the downside. OBAT had a learning and churning kind of day. I made a startling error of judgement towards the end of the day that cost me a couple hundred bucks. Idiocy. And I'm sure ET is disappointed with his results. We'll have to check in and see what happened. TWW too had a disappointing day on a day where he said he wouldn't be trading much. Check his site for the full story.

The Noon Glance

Now that I don't keep my P&L up on my screen while I'm trading (it distracts me) I take one glance at noon each day.

For fun, and because I'm losing today and like self-flaggelation, I think I'll post this number every day at noon. I will call these posts (insert drumroll here) The Noon Glance!

Depending on how busy I am each day, this post may only be a number. Today, I am not as busy as I hoped, thus the words.

P&L -$399

New member of the VO

I'm happy to welcome a fresh face to the VO this afternoon, DehTrader.

If you are interested in joining the VO, send me an email. All that is required is that you trade actively, update your blog daily and send me your net P&L and shares traded each day immediately after the close.

For now, I am restricting the VO to stock traders. If you are not a stock trader and can figure out a good way to post your figures, send me an email. Dinosaurs have big ears.

Trade well, DT

UPDATE, 9:15am: Make that 2 new traders. DenariiTrader will also be joining the VO as of this afternoon.

The Turkey Trap

From, How To Make Money In Stocks, by William O'Neil.

A little boy was walking down the road when he came upon an old man trying to catch wild turkeys. The man had a turkey trap, a crude device consisting of a big box with the door hinged at the top. This door was kept open by a prop to which was tied a piece of twine leading back a hundred feet or more to the operator. A thin trail of corn scattered along a path lured turkeys to the box. Once inside, the turkeys found an even more plentiful supply of corn. When enough turkeys had wandered inside the box, the old man would jerk away the prop and let the door fall shut. Having once shut the door, he couldn't open it again without going up to the box and this would scare away any turkeys lurking outside. The time to pull away the prop was when as many turkeys were inside as one could reasonably expect.

One day he had a dozen turkeys in his box. Then one sauntered out, leaving 11. "Gosh, I wish I had pulled the string when all 12 were there," said the old man. "I'll wait a minute and maybe the other one will go back."

While he waited for the twelfth turkey to return, two more walked out on him. "I should have been satisfied with 11," the trapper said. "Just as soon as I get one more back, I'll pull the string."

Three more walked out, and still the man waited. Having once had 12 turkeys, he disliked going home with less than eight. He couldn't give up the idea that some of the original turkeys would return. When finally only one turkey was left in the trap, he said, "I'll wait until he walks out or another goes in, and then I'll quit." The solitary turkey went to join the others, and the man returned empty-handed.

The psychology of the normal investor is not much different. They hope more turkeys will return to the box when they should fear that all will walk out and they'll be left with nothing."

And so it was with me today. I was never having a stellar day, but at one point, I was up close to $400 with not many positions to take me lower. This was around 11:30 which would have been a perfect time to stop trading for awhile. What happened was that I started feeling pretty bearish and so I decided to get short some stock. I never took any big losses or anything, but I don't think I had one winning trade for the rest of the day.

I kept waiting to get back about $300, then $250, then $200 and so on until I lost it all and went negative. Nothing was happening for me today after 11:30. None of my stocks were moving. The mistake I made today was not recognizing this earlier.

As disappointed as I am that I lost my profits today, I'm happy that again I stuck to my rules. My best trade of the day was in TAM, which I bought as it broke it's 60 minute downtrend line.



Even with this loss, I'm regaining confidence and I'm going to start building my positions back up. Here are the stats:

P&L, -$25
Best, TAM $275
Worst, ITG -$97

stocks traded, 21, 7 positive, 14 negative
shares traded, 28,200
total trades, 210 (obvious churn for a day like today)

Virtual Office, $2807

Misstrade, $2670 on 8000 shares traded.
NYSE Scalper, $658 on 58,000 shares traded.
Evolution Trader, $52 on 41,400 shares traded.
Me, -$25 on 28,200 shares traded
One Bad-Ass Trader, -$36 on 3000 shares traded.
TradeWhileWorking, -$512 on 6700 shares traded.

A slow day for most in the VO although Misstrade kept to his winning ways and the Scalper had a nice bounce back from yesterday's loss.

I can't speak for the other traders, but today was excruciatingly dull as far as I'm concerned. I will detail this dullness later in full sparkling detail.

However, for now I must go as I have plans immediately after the close.

So far so slow

I feel like today is much like yesterday. Action in the first 30 minutes and since then, tight, rangebound trade.

Seems like all the sub-prime issues are slowly being forgotten as all of the mortgage type stocks are strong again.

I've had one decent trade in TAM but other than that, all is quiet. Volume is a little lighter than it was at this time yesterday on the NYSE. I think I'm going to walk away for awhile, happy with my small gains and try to find a couple of trades in the afternoon session.

Gonna sip on some green tea and finish Our Man In Havana.

See you this afternoon. For now, check out this Great Moment in Presidential Speeches segment, courtesy of David Letterman.

Happy Monday

Today I sold shit for $243. Okay, okay... I'll explain.

My wife called me downstairs at 9:25 to tell me that "the oil guy is here" to clean the burner. I hate having people I don't know in my house, especially when I know they'll be bothering me while I work and even more when they arrive when the market is about to open. I'm easily bothered, I admit it.

Anyway, sure enough, 2 minutes later, Judy calls me again to tell me the guy can't figure out how to turn on the lights in the basement. I rush down to the basement. The dude, who looks like a "carnie" is standing in my basement in the dark, looking at the cat litter boxes and mumbling something to me about ferrets. I turn on the lights, but clearly, this man wants to talk to me... about his pets.


It must be very close to 9:30, but he begins to ramble. He had a cat, but his lizard ate his cat, so he doesn't have a cat anymore. He has 9 ferrets. I should get ferrets he tells me... he also has goldfish, 3 birds and a turtle. Anyway, I couldn't get a word in to tell him that I had to get upstairs to work.


Luckily, Judy yelled down in her "emergency" voice and I ran up the stairs. There in the middle of our kitchen stood our son, naked, and a pile of shit. He's potty training, but today he had an accident. He smiled at me, seemingly not concerned about the shit and said, "I got socks! You got socks, Daddy?" Judy was flustered. One of our cats, not known for his intelligence, was slowly approaching the pile. Things looked grim. I separated all of the interested parties while Judy took care of the poo.


It was 9:35 and I had missed the open.


As it turns out, I had entered a bunch of orders pre-market. One of them, Buy 200 VMC at open, ended up being my big winner on the day.

I was attracted to this stock for a couple of reasons. First of all, on Friday it had violated its 50-day moving average on light volume. Also, it was very close to an upside break of a trendline I had drawn on a 60 minute graph. So I bought the stock at 115.05. Had I not been in my kitchen at 9:35 attending to a pile of shit, I may have put my stop in at 114.80 and been stopped out at the low of the day. As it turned out, the trading gods smiled at me today. I bought 100 more at 115.25 and then sold 100 at 115.49, 100 at 115.37 and the final 100 at 116.95.

I also did a masterful job of minimizing my losers. Okay, I have to go.

Here are the stats:

P&L, $683

Best, VMC $243

Worst, WSO -$99

stocks traded, 18, 11 positive, 7 negative

shares traded, 15,400

total trades, 162

Virtual Office, $1141

TradeWhileWorking, $1065 on 2000 shares traded.

Me, $683 on 15,400 shares traded.

Evolution Trader, $438 on 43,000 shares traded.

One Bad-Ass Trader, $67 on 2400 shares traded.

NYSE Scalper, -$502 on 30,800 shares traded.

Misstrade, -$610 on 2000 shares traded.

A decent day for the VO but rather light given the market activity. Our relative volume was light as were our numbers. TWW is rolling right along and has had a great month. I had a decent day which I am very happy about for a Monday. ET kept up his steady performance and OBAT had a small gain. The Scalper had a disappointing start to the week but again, was smart to keep to his loss limit thereby preventing any disasters and maintaining confidence. Misstrade had his first down day since the inception of the VO. Perhaps it's because he's preoccupied with a housing move. We'll give him the benefit of the doubt.

A Wolf in Wolf's Clothing

I told Albert that I was ready to commit, full-time, to trading. The next step, he told me, was to come downtown and sign up with the firm.

I brought my resume and found Albert trading in the small hot room. He was up over $4000 and, as it was the middle of the day, ready to take a break. He stood up from his station and someone asked, "You gonna bring him up to meet Peter?" Albert said he was and I received a bunch of glances that said, "Oh, you're in for an experience." All the guys were snickering. We walked out of the small room, into the tiny gray hallway and made for the elevator. On the way I asked Albert what was up with the guys. He only said, "Well, Peter is a bit of a character."

The elevator door opened into a very large trading room filled with lots of loud voices. There was, however, one voice that was louder than the rest. This voice wasn't coming from the trading floor but from a glass-walled office just off of the floor. It was Peter, the somewhat infamous trading manager of Black Anvil Capital .

The story I later heard was that Peter's entire family worked for "The Anvil" and that he had been handed the small, unprofitable trading division as an appeasement. He wasn't trusted to run anything properly and no one had realistic hopes for the trading operation. He was kind of the outcast of the family, considered a little crazy and reckless. There were rumors of drug use, violent behavior, and multiple automobile collisions. When he took the trading division over, it had only a handful of traders. When I was leaving Anvil only a couple of years later, there were well over 1000 traders and the operation was wildly profitable. If nothing else, Peter was a masterful recruiter.

Albert poked his head into Peter's office. Peter was lecturing a young trader. He stopped mid-sentence when he saw Albert and rose from his chair to grasp Albert's hand. He flashed a brief, wolfish smile, nodded at Albert while looking proud and said simply, "YES!"

The frightened young man exhaled and was visibly relieved that Peter had taken his focus off of him. Peter looked at me while he shook Albert's hand. He stared at me and exhaled heavily, like an angry bull, through his nostrils. Were his eyes crossed? Jesus this guy was freaky looking! I had to look away. Albert began to introduce me. Peter stood there, shaking Albert's hand, staring at me, breathing, when he boomed, "ALBERT, YOU TELL YOUR LITTLE BUDDY HERE THAT YOU'RE GONNA MAKE A MILLION BUCKS THIS YEAR?"

Albert tried to say something, and I was speechless but Peter continued. He reached over and gave the other trader a light smack on the head. The trader, looking fearful that he might be hit again, glanced nervously over. "YOU SEE THIS GUY?" he asked while sticking his finger in Albert's chest. "THIS GUY IS GONNA MAKE A MILLION BUCKS THIS YEAR. HE DOESN'T GIVE A SHIT ABOUT HIS COMMISSIONS!"

Each word was punctuated by a finger jab to Albert's chest... I wanted to run.

"YOU COME IN HERE AND TELL ME YOUR FUCKING COMMISSIONS ARE HIGH?" he yelled at the trader. But before the trader could respond, Peter continued,

"FUCK YOUR COMMISSIONS, I SHOULD RAISE THEM! YOU JUST DON'T WANT TO MAKE A MILLION BUCKS! THAT'S YOUR PROBLEM! COME BACK AND TALK TO ME WHEN YOU WANT TO MAKE A MILLION BUCKS!"

The trader shuffled sheepishly out of the office.

He turned to Albert and yelled, "GO TRADE."

He turned to me and screamed, "YOU, SIT!"

And we were alone.

Trade during the week, rest on the weekend

I trade all week, everyday... so by the weekend, I don't want to think about it. I suggest you don't either. It's just money.

So I've decided to take that spirit onto this blog as well. My weekend link posts will be about anything but trading.

If you are looking for some links about trading, I suggest checking over at Virtual Office member NYSE Scalper's blog. He always does a good job finding good posts about trading.

HOW FAR DO BIRDS FLY NON-STOP?

Ten satellite-tagged Bar-tailed Godwits in the southwestern pacific are providing a glimpse into the migratory powers of birds. One bird left New Zealand and flew non-stop to the northern end of the Yellow Sea in China , a distance of 10,200 km. The Godwit’s flight required about 9 days of continuous flight, and is now the longest recorded non-stop flight of any bird. Three other tagged Godwits have reached China in non-stop flights that lasted between 6.5 and 7.5 days. The progress of the Godwit migration can be monitored here.

ELLIOT SMITH

Great singer-songwriter who died under mysterious circumstances a few years back. If you don't know his music, this is a link to a new song that is being released posthumously. If you like stripped down music with just a singer and a guitar you might like this track.

DAILY SHOW

I am a big fan. If you happened to miss this bit from the last week about the Bush Administration's search for a war czar, check it out. I think it's one of the best segments they've done in awhile... and that says a lot, because I find most of their stuff hilarious.

PROJECT VOTE SMART

They can say what they do best, so I encourage you to visit their site. They work for us all, conservative and liberal alike. If you can, please support them.

Well, that's all for now. Tonight, when I'm not busy rooting the Islanders on, I'll work on a history post and have it up for tomorrow.

Enjoy the day. Go take a walk or something and stop staring at this damned screen!

One last thought...

I found this little gem of a video. It pretty much sums up my week.

Looking at it metaphorically, the market was dressed in blue and I, in red.



I'll finish up a "history" post this weekend and also work on the Virtual Office widget. Perhaps I'll look for an interesting link or two as well.

LTM, the Freaky Hybrid Trade of the day!

I haven't done this post in a few weeks, but today, I couldn't resist. Just look at this crap...



I'm focusing on the trading between 9:50 and 10:35.

At 953:35, the stock trades 100 shares at 50.44. 1300 shares and less than a minute later, the stock is trading 50.13. Almost all of the trading was 100 share prints smacking bids and lifting offers... there was no price correcting by specialists and their "algorithms" to stop the low volume dip in price.

I'm all for fast fills, but back in the day, 1300 shares was a print... a single trade. If a stock was going to drop 30 cents in 30 seconds, it wasn't pushed down by 13, 100 share orders.

Anyway, at 10:00 the stock is back to trading 50.20, but then get this... 2600 shares and 13 seconds later the stock trades 50. WTF?

For the next 25 minutes, the stock calmed down. It traded in a 27 cent range and traded about 14,000 shares. Decent activity. But of course, that couldn't last.

At 10:30:36, 100 shares trades at 49.92 followed by a 100 share trade up at 50.16. 100 shares pushing a stock 24 cents? You have to love a system that allows that to happen.

8 minutes and 14,000 shares later, the stock was up over 50.50. This would be fine if there was some type of "order" to the trade. It's the "airpockets" that exist with the Hybrid Market that make it very difficult to trade. Like the 2 minutes between 10:37 and 10:39 where 2000 shares spiked the stock up 30 cents.

I don't know. I guess you can ask Ray over at Hybridtalk how this type of trade benefits anyone. I can't figure it out myself. The Hybrid Market creates "airpockets" where there is no liquidity. When you hit one of these "airpockets" you get some unpredictable volatilty.

And unpredictable volatility does not breed confidence in a market, that's for sure.

A Good Bad Day

Sounds like a contradiction, I know. But here's the deal... nothing worked for me today. I traded 17 stocks and had only 5 stocks in the green. I just had no winners. Unfortunately, there are days like this.

I'm not going to beat myself up about it because I stuck to my rules and kept my losses small. I didn't add to any losing positions or get angry and fight the market. It was just one of those days where I died the death of a thousand small cuts.

So I'm taking the silver lining and I'm running with it...


Overall volume was lower today than it was for the last couple of days. I continue to be surprised with the way this market always bounces. What a crazy bounce it was too... between 10 and 10:30 there was a total "U" bottom... check it out. Anyway, that action kind of screwed with me mentally. I couldn't really get enthused about the rally due to the light volume.



Anyway, here are the stats:

P&L, -$480

Best: FED $154

Worst: DSL -$127

stocks traded, 17, 5 winners, 12 losers
shares traded, 20,000
total trades, 167

Virtual Office, $3207

TradeWhileWorking, $1667 on 2000 shares traded.

Misstrade, $1400 on 4000 shares traded.

NYSE Scalper, $426 on 68,600 shares traded.

Evolution Trader, $307 on 32,500 shares traded.

One Bad-Ass Trader, -$112 on 4800 shares traded.

Me, -$480 on 20,000 shares

A pretty solid day overall for the VO.

TWW, had a nice day while not trading much. Misstrade keeps on humming along, while the Scalper had a nice rebound from yesterday. ET took it a little easy today but booked some small gains.

Looks like it just wasn't the best week for me and OBAT. Perhaps we'll get our acts together for the earnings season.

Bob Dylan - It's Alright Ma (I'm Only Bleeding)

Based on the pattern of my music video postings, I should be posting a song by a "new" band this week. But I'm just not in that type of mood.

So instead, I'm posting one of my favorite Bob Dylan songs.

Bonus points if any Pavement fans out there can tell me which lyrics from this song they lifted and put into one of theirs.

Only add to winning positions

I made that rule the title of today's post because it's the reason why today was the first day I made money all week. Also, after today, I feel I've learned that my constant violating of that rule is also a major reason why I have been in such a slump for so long.

I'm not saying that I've completely isolated my problem that easily and quickly, but today, simply because I was conscious of adding shares only to winning positions things went much smoother for me.

First and foremost, this rule prevented what could have easily turned into a disaster for me in BTU in the early morning.



I bought 200 shares of this stock near the open at 45.35. I bought it because it had pulled back for the last 2 days on light volume after a strong run-up on strong volume. Anyway, it went up and so I bought 100 more shares at 45.48 a couple of minutes later. I decided to take some profits right away because it broke above .50 and the market (at that time) was acting jumpy. I sold 200 at 45.59 and stopped 100 at the low. I was stopped out of that 100 shares seconds later at 45.27. So, it was a small winner.

The stock bounced off a trend line that I had drawn on a 60-minute graph that had held since last week. So, I bought again and was filled at 45.40. Less than 10 seconds later the stock came down and took my stop out at 45.25.

I bought again, this time at 45.33. Again, the stock broke the low of the day and stopped me out seconds later at 45.17.

The key here is that I only lost $41 in the stock even after getting all choppped up. That happened because I only added to my position once, and that was on the trade off the open that I made money on. On every losing trade in BTU I kept my losses small because I never added to the losing positions.

Most important, because I wasn't adding to losing trades, I never felt like I was "fighting the market". I was losing, yes, but I was accepting the losses and moving on, not building bad positions and getting caught up mentally in them.

Of course, if you check that graph I was basically stopped out near the lows of the day and then the stock ripped 80 cents. Frustrating? Yes, but not debilitating.

I don't like to lose more than 20-30 cents in a trade. It means I get stopped out a lot, but as long as I can keep the losses small, I can make money.

Anyway, so here's my good trade.



I was watching RAS today because I saw he was close to breaking the downtrend line, that has been in place since late March, on a 60-minute graph . When MTG, another stock that I feel is loosely related, began to rally despite a poor earnings report, I bought a couple hundred shares of RAS at 26.21 and then 100 more at 26.23. This was right around 10:05.

This was clearly an example of me anticipating a trade, a topic that Michelle B. tackled today over at Trader Mike's site. The trend line that I was hoping to see RAS break was still a quarter-point away, so I figured this would be a safe place to initiate a position. Even if he didn't break the line I would be able to get out with a small gain or, in a worst case scenario, break-even. And I figured with the market looking stronger and with other stocks in it's sector rallying that it was worth trying to buy RAS a bit "early" in anticipation of a break.

Anyway, it worked. A few minutes later, RAS ran up to 26.50, breaking the trend line and stopping me into 100 more shares at 26.52 so I had 400 shares of a stock that was acting how I wanted it to. When he traded below 26.50 for a couple of minutes without breaking it's uptrend line for the day, I took the opportunity to buy 200 more shares. So now, I had 600 shares and the stock was breaking the 60-minute downtrend line. I felt pretty good about it.

When the stock advanced to 26.67 but then slowed, I sold 400 shares at 26.61, taking some profits. But I kept my eye on the stock. When it broke 26.67 I added again to my position at 26.70 and again at 26.78 bringing it back up to 400 shares. I held through a base between 11:30 and 1:00 and once the stock broke out of that base, I was in the clear. I sold towards the end of the day at prices ranging from 27.30 to 27.47. All told, it was the best "feeling" trade I've made in a long time.

Anyway, here are the numbers:

P&L, $543

stocks traded, 16: 8 positive, 8 negative
total trades, 172
volume, 15,000 shares

Virtual Office, $4349

Evolution Trader, $1677 on 70,200 shares traded.

TradeWhileWorking, $1472 on 3000 shares traded.

Misstrade, $1,000 on 4000 shares traded.

Me, $543 on 15,000 shares traded.

One Bad-Ass Trader, $172 on 4200 shares traded.

NYSE Scalper, -$515 on 17,000 shares traded.

A good day for the VO overall, as we had 3 traders break $1000 in daily profits. Evolution Trader worked hard for his money today as he traded over 70,000 shares, while TWW and Misstrade booked good profits while trading very lightly. There are many ways to crack the nut.

Me and OBT finally broke out of our mini-slumps and the NYSE Scalper had a half day since he hit his loss-limit and split. I have big respect for those traders who are disciplined enough to follow their own guidelines in that way.

So far, so good

Outside it's gray. The rain is beating on the windowsills. But, for today at least, inside the cave things are quiet and warm.

I haven't broken a rule today and things here are about as calm as they get. I even managed to make a "good trade" in RAS which I'll share in some detail after the close. For those inclined to make swing trades, you may want to take a glance at the 60 minute graph for this stock... it broke a downtrend it's been in since late March in strong volume.

I went back to an old practice from when I started trading, that is, I took my p&l off of my screen. It helps me focus less on the money and more on making the right trades. I know I'm not up size or anything... it's hard to be up size when you're trading with 2 and 3 hundred share positions, but I'm happy and not panicked, which is nice... and rare lately.

Another thing I used to do was walk away from my station for at least an hour a day in the middle of the day. I'm going to do that now, sip some green tea and read a chapter from the book I'm reading, Our Man In Havana.

Strict Buy and Sell Rules Today

After yesterday's debacle, it is time to stop the bleeding. I began this blog after I got smoked badly twice in early March and spent the rest of that month having to make money back. I can't let that happen this month.

So today, I am starting all positions with 200 shares only. If I am in the money in a trade I will allow myself to buy 100 more shares. That's it. I'm starting over, if you will. Trading light... float like a butterfly, sting like a bee.

I was working on my next "history" post last night. I'm at a point in the history where I'm studying for the Series 7 and papertrading once a week or so at the office. Everything then was so wide-open with possibility, there was so much potential. Anyway, just thinking back on it gave me a sense of hope.

Sometimes I feel like I've already written the end of my stock trading story. Based on my performance since December that the ending goes something like, "And then the hybrid market came, he couldn't adapt, and blew up." But I can actively work to change that ending. It doesn't have to be the meteor that mades this Dinosaur go extinct.

RIP Kurt Vonnegut

An early favorite author of mine. I remember taking Welcome To The Monkey House with me away on a vacation when I was 12 or 13... it was the first book of short stories I had read like that. I was hooked and hit Slaughterhouse 5 and Cat's Cradle soon after.

Then, I hit video games and put down books for a few years... too bad. Wasted time.

Anyway, voices like his are hard to come by.