May 2008 Monthly Trading Review

DTs monthly results in graphical form... nerdy, eh?

 

(h/t Tyro for helping me with the chart)

At the end of April, for the first time in my 9 year stock trading career, I took a stab at setting some monthly goals for myself. Apparently, forecasting isn't my forte.

I didn't get even remotely close to meeting my modest monthly profit goal, of $6000. In fact, I was down on the month, to the tune of $675. Not good. I'm new to this "setting goals" game, but I guess I should roll my profit goal back somewhat for June.

In May, I set a target of $300 a day. In June, I'll set a target of $250 per day, or $5000 for the month.

Another goal I set and missed was my "win/loss ratio," that is, positive days to negative days. Look at this particular stat as a measure of my sanity. I figure if I can just be green 75% or 80% of the time, I'll be generally happy with work... it won't feel so "grindish." So for May, I set a goal of 3 green days for every 1 red day.

Instead, I was green 11 days of 21... about 1 to 1. Pretty awful. I was probably in a bad mood for most of May. Indeed, reflecting on my actions during the past month, I was a dick.

Nevertheless, in June, I'm going to keep the 3 wins for every 1 loss goal.

So how did I get here? I started the month in a total tailspin, losing 5 of the first 7 days. I lost $915 on my worst day of the month. That's too much. One of my goals for this month was to limit my worst day to -$600. The silver lining is that my second worst day was -$509 and after that, every loss was sub $500 and most, far smaller.

So I limited my losses quite well, overall. I didn't have any crazy blowup days that saw me screaming, red faced, at the computer. That's a positive as far as health and mental stability are concerned, surely. And that's important.

I've started over, basically. Trading a completely new style almost exclusively for the entire month. And it's not just the trading style that's completely different. Trading style goes far beyond watching exits and entries and figuring out which stocks to watch. Trading style also effects the pace of your trading day, and your expectations throughout the day.

Early on in my career, and up until very recently, I actively traded the open, somewhat like a madman. I just don't do that anymore, and I feel the "extra space." Sometimes it feels like boredom and a lot of the time, frankly, it has felt like lost opportunity. It's definitely made it harder for me to focus... because without positions, I feel my mind wandering.

Just look at the statistics. In February, I averaged 24,800 shares traded per day. By April, I had dropped down to 12,900 average. In May, I averaged just over 10,000 a day. So I'm trading half as much as I did just a few months ago. And last year? In May of 2007 I averaged nearly 40,000 shares a day. So transition is occuring. Change is happening, and relatively quickly.

And don't forget... I'm doing this on my own. This blog is my sounding board... I trade remotely, without the benefit of talking to other traders each day. I sometimes wonder if I traded in an office if I wouldn't already be out of this slump. The point is, I think change goes much slower when you do it by yourself and without the group dynamic that an office provides.

However, later in the month, I started to feel like I was finally getting used to the "extra space." I can see how, in the near future, it will be an asset. I'm starting to feel less pressure on the open to be active for activity's sake. I'm slowly becoming more calculating and watching for eventualities and waiting for scenarios to develop and play out. It's a mental shift. I watch fewer stocks, more actively, instead of watching many stocks with less focus devoted to each.

If I can get through this summer and come out in September a more confident, stable, profitable trader, these months of indecision and worry will be worth it. If September comes and I'm not seeing any improvement in my trading, I'm really going to have to start considering a second stream of income. That will be the theme of this blog for the next few months... me continuing to work out the kinks, hopefully getting leaner and stronger as a trader, and all the while imagining what else I could possibly do for an income.

It'll be interesting. Let's see what June brings.

Anyway, thanks to Tokyo Trader, you can see a spreadsheet of the VO members and our stats for the month, here. (Just click over to where it says "VO May 2008..." The first page is just my stats.)

I'm not good with graphs and stuff, but if anyone can explain how I can make a graph of my P&L showing the cumulative results as the month wore on, I'd make it and share it as well.

The Libertines, "Can't Stand Me Now"

Green=good music.

Trading MDR On An Otherwise Quiet Day

My day was really dominated by one stock. I traded several stocks on the day, but all with 100 shares, since I didn't have any confidence in their setups... I was just taking small gambles.

I liked MDR though, and so I watched it very closely, mostly because I didn't feel there was much else happening. Volume today, was pathetic (until the close, that is) and as it was the last trading day of the month, I planned on taking it easy no matter what.

MDR was on the HCPG watchlist last night for a move up to $62. However, they added a caveat that they thought the stock needed "more time." Apparently, the stock didn't want to wait. It spiked nearly 2 points in the first 15 minutes of trade before taking a breath, at around $61. At this juncture, the stock needed to base before it could move much higher, and so it was time to chill and watch.

About a half hour later, the stock worked its way back up to $61 and I bought a few hundred shares with an average price of $61.05. He moved up and so I bought 100 more at $61.20. Now, I threw some sell limits out there up in the $61.80-$61.90 area, but they weren't hit.

Instead, the fucker reversed.

I wish I had sold out of all my shares, but I wasn't quick enough. This is a problem I have with the target system... if I'm expecting the stock to trade higher, and it fails, I'm not quite sure how aggressively I should be moving my stops up. I probably shouldn't have held my position as the stock dipped below $61, but I did.

In fact, I bought a little more at $60.89 and $60.90. So I had 600 shares, which lately, is a large position for me.



But man... that's when "the stand-off" began. For the next 20 minutes or so, the dude traded in a dime range. My "out" was $60.80, and so having "the toad" (Wincity's technical term) trade pennies above this level for such an extended period of time wore out my nerves. I flaked and sold 300 shares at an average price of $60.86. The remaining 300 I left stopped at $60.80.

I noticed on the 15 minute graph that MDR was making some NRIBs, or something... I went over to Jamie's site to see what I could find... some answer or something. From what I could figure out, he liked the setup (meanwhile, Jamie, if you're reading, am I right to think those are NRIBs on the 15 minute graph from 11:00-11:30 today?). So when the stock cleared the top of the first 15 minute bar in the "set" I bought 200 more, at $61.17. So I had 500 again and the stock began to move in my favor. I actually felt confident that I was going to be right with this one.

Still, I flaked and sold 100 at $61.34 and another near the morning highs, at $61.42.

But with my last 300, I held, and I was fairly satisfied with the results. I limited 200 of the 300 out at $61.90 expecting resistance at the old high of $62. So far, so good. The last 100 shares, I really wanted to hold, so I set my stop low, at $61.25, giving the stock plenty of room. As it traded up, I moved the stop below the previous 15 minute bar.

After the stock cleared $62 with some "brio," I decided to move my stop just below the most recent price level. The low of the move, at 12:55, was $61.86, so I put my stop at $61.85.

Well guess what? The motherfucker came down and stopped me out, filling me at $61.78, the low of the fucking move. After that, it sailed back up over $62, reaching a high of $62.72 before reversing lower to close at around $62. So I was pissed. A good trade, but I still managed to get myself stopped out at the low of a move for some shares.

I finished the month with a green day, and so, I'll take it. But man, I'm itching to start sizing into these positions more. I felt confident with this trade after it cleared $61.17 the second time around... perhaps I'll start getting that feeling more.

Also, the fact that my worst trades of the day were made with small size I also take as a good sign.

Tomorrow I'll post a "monthly review" since I set some monthly goals for myself in May, I want to assess how I did. Also, bloggerdotcom has been teasing me with some new post that he may or may not have written... that will drop, eventually.

Have a good weekend, stock market bitches.

Here's the stats:
P&L, $122
Best, MDR, $243
Worst, RIG, -$89

4200 shares traded.
9 stocks traded, 4 winners, 5 losers.

Virtual Office, $2. SPY, +0.24, $140.26.

Me, $122 on 4200 shares traded.
Tokyo, $60 on 793 shares traded.
OBAT, -$89 on 9000 shares traded.
Denarii, -$91 on 3400 shares traded.

Wow, we did 40% of today's volume in the last 20 minutes of trade. There were loads of imbalances... obscure, little stocks, with huge imbalances. Not sure what to make of it all. But it was a heavy volume, strange close. I lost $50 just playing around... normally, when there are that many imbalances, they work. Not today.

Anyway, speaking of imbalances, I'm looking forward to the upcoming Russell Rebalancing... guys in my office are already salivating over the possible gains and losses.

Until the close, we were on track to trade less than a billion shares on the day. So it was largely quiet out there. The VO was largely absent and not much of a force to be reckoned with in trading.

I have to say, that trading without the "aid" of CNBC is much nicer. It's quiet, unemotional, and fun. Turn off the TV and just watch the graphs... better for the blood pressure levels.

I'll have a daily post up later this evening and over the weekend, a monthly recap, of sorts.

QUESTION: Is my blog load time all fucked up? And can you see the "recent comments" widget? It seems to have disappeared...

Flaming Lips, "The Abandoned Hospital Ship"

I don't watch or listen to CNBC anymore... I just have my iPod on shuffle. I figure, if I'm not going to make money, at least I can listen to good music.

Anyway, this song came on today and seemed somewhat relevant to my situation. Despite the odd title, it seems to be about someone who has come through some ordeal, and is looking back on it from the other side. So perhaps it's not relevant just yet, but maybe soon, it will be.

Robots Set To Colonize Antarctica

So they've already taken over the stock market and now they're onto Antarctica.

I mean, I love the game of Risk. I always start in Indonesia and then creep my way into Asia and take over the world. I'm pretty sure that the robots are using Antarctica as a springboard to launch their global war of death and destruction.

Arctic Monkeys, "I Bet That You Look Good On The Dancefloor"

From now on, if I'm "green" on the day, even on by $1, I'll allow myself to post good music. However, if I'm down, I'll post music I don't like, to punish myself.

This is a great song. The guy dancing is signing to it... pretty neat.

More Hope For The DT Fire

I made no money today, but nonetheless, it was a good day. I thought I showed a little growth in a couple of areas.

First of all, I made decent trades in HUM, ARD and had a good entry in BDC. While the trade ultimately worked, I wasn't involved for the run. He didn't make it easy.

Second, I really felt at the beginning of the day that I knew what I was going to look for, and what stocks I would be trading. So I had a bit of a plan.

Finally, I felt myself get angry with the MON trade and I just walked away instead of revenge trading.

So yeah, I'm still broke, and down on the month, but I'm searching for silver linings here. However, if I'm still at this point 8 years from now, wake me up from my trance and tell me to get a "real job." I mean, most people here on the Internets are like, "go get em buddy" and "you can do it" but everyone needs to face reality at some point.

So anyway, my best stock of the day was HUM. I bought 400 shares at $51.08 when it "broke out" at around 9:40. I was watching $51 on the daily... I don't think this was an HCPG pick, but I could be wrong. For now, I'll take credit. This was a pick from the highly secretive and sought after, "DT Watchlist."



It ran up on decent but by no means excellent volume. So I took a quick dime on 100 shares and 30 cents on another 100. So I had 200 left and ensured myself a winner. I moved my stop to $51 and watched. The stock ripped up to $51.85 but then had a nasty reversal. So I sold another 100 at $51.64.

You all know how I'm trying to work on holding my winners... since the stock had only gone up since my purchase, I decided to just put my last 100 shares at the buy point, $51 and try to wait it out. Well, the mofo came down to the fig and took me out. I thought it was a good idea even if I was stopped out. Again, it's uncanny to me how I often get stopped at the lows of moves, but that's just the way it's been going for months now... eventually, I'll get lucky.

This next trade was a bit of a heartbreaker for me... BDC $40. This has been on the watchlist for awhile. While HCPG hasn't discussed it recently, they put it on in early April I think, so I was still watching it.

It opened and was trading pretty poorly. It's really thin. So immediately, I knew I would be going with small size. After about a half hour of trade, it had chopped itself up to the $40 area and then chilled out for a few minutes. I bought on the break and was filled at $40.11. I wasn't thrilled with the fill, especially because the stock had an initial move up to $40.29 but then re-based, coming awfully close to my entry. The stock was so thin that I felt pretty sure that should it break $40, I would get an out below $39.90. I was nervous, even with my paltry 200 share position.

That nervousness caused me to fuck up a bit... because at 10:30 when the oil number came out, the market tanked and I sold 100 shares since I thought the general market weakness would bleed over into BDC. It didn't. The stock crept up to over $40.50 before reversing lower. By this time, I had moved my stop up to $40.25 and it was hit.



Meanwhile, the stock ultimately tested the $40 level and then ripped up to $41 on better volume. So I missed the bigger move.

My worst stock of the day was MON. With this guy, I was looking for a run to $126. He got there, but then reversed. I'm glad I walked away, because he never crested $126 like I felt he "surely would."



Anyway, so I only made $67, but I feel like I'm making progress. However, I need to sit down and come up with some realistic timelines for when I'll be forced to put this all to rest. Unless I get another bonanza August, or start making consistent (even if it's small) money, I'll be finding a new job by 2009.

I have a fancy "cocktail party" to attend this evening. As you can imagine, I'm not "good" at such events. Surely, I will say something awkward to offend some well-to-do female or get into some politically inspired debate with a powerbroker or something... in fact, as you read this, I am at the party... I'm just autoposting this shit.

Think a good thought for DT...

Here's the stats:
P&L, $67
Best, HUM, $118
Worst, MON, -$157
3600 shares traded
6 stocks traded, 3 winners, 3 losers.

Virtual Office, $948. SPY, +0.84, $140.15.

Tokyo, $645 on 5009 shares traded.
Timmay, $105 on 600 shares traded.
OBAT, $88 on 5400 shares traded.
Me, $67 on 3600 shares traded.
Denarii, $21 on 8600 shares traded.
Tardo, nada.

Just take a look at the volume figures today for the VO. Surely times have changed when Denarii is the "big swinging dick" in terms of total volume traded. Meanwhile, Tokyo took a vacation from his vacation just to embarrass the rest of the VO with their inadequacy.

But hey, disparage the VO as a bunch of pikers, or whatever (fuck you if you do) but we've all been green for the last couple of days. I'm starting to feel that we've bottomed out. Naturally, that assessment is subject to change.

The market finished in the green on decent (1.2 billion... har, har) volume. However, that afternoon reversal is probably enough to give the bulls a little pause, especially with oil down nearly $5 on the day.

Oil was odd today... a huge drawdown and the price plummets... I didn't have CNBC on all day (perhaps why I'm in a good mood) but I imagine they were talking about "profit taking" and wondering whether "the top" has been made in crude.

Does anyone else find it really difficult to trade in the Spring? I just want to be outside. I'll have a daily post up later...

NOTE: Top dog in my real office today was up over $7,000.

Feeling Vengeful

So, I'm gonna walk away and enjoy the day. Just know this, MON will probably trade up today without me... I got in at $125.50, watched it run to $126 on huge volume and then got stopped out at $125.30 when it came back down.

So, I was pretty sure I was just getting fucked, so I bought back at $125.28 and then got stopped out again just below $125.

The whole thing made me kind of angry. I feel pretty confident that it's going over $126, but I guess I'll have to miss out on the bonanza.

I'll take my $200 and move on... I don't see too much else for me and I don't want to give all my money back today getting angry with MON.

Obama The "Magical Negro"

Here, the Daily Show, in their inimitable way, discusses possible VP candidates for Obama.

Blur, "For Tomorrow"

I made money today... so I won't punish myself with Phil Collins...

Virtual Office, $725. SPY, +0.64, $139.23.

Timmay, $378 on 1700 shares traded.
Me, $344 on 4200 shares traded.
Denarii, $21 on 6000 shares traded.
Retardo, nothing.
Tokyo, vacation.
OBAT, -$18 on 6400 shares traded.

I can't say much, since I was absent most of the day. However, I'll say this, my real office had a nice day... I think they caught some of the nice moves in the oils, coals and ags. There was some decent movement out there today...

Tomorrow will be a regular posting day. Right now, it's time for dinner.

Oh, and fuck Tim Sykes for edging me out of the top spot...

Happy Birthday To Judy

I was surfing in the ocean today at 5:40, when most of you zombies were probably still sleeping. It's Judy's birthday, and I had to get in and out so I could be home in time to cook her breakfast and massage her feet.

Unfortunately, our fucking cat threw a wrench in that plan. He peed all over my daughter's "friend hippo." Frankly, I wasn't too upset at saying goodbye to the hippo, he was too big and animated looking for my taste. I like my stuffed animals to be subdued-looking and huggable. But that's another story altogether...

Anyway, since it's Judy's birthday I only worked the first hour and let one position ride. We then took our bikes into town for a picnic lunch. Now, she's teaching yoga and I'm watching our daughter for the rest of the day. Later we're going out to dinner, so the VO will be up but that's likely all for the day.

Back to your regularly scheduled blogging tomorrow.

Phil Collins, "Against All Odds"

I'm gonna start posting "non DT" music until my P&L improves. Think self-flagellation.

Virtual Office, -$154. SPY, +1.17, $138.81.

Retardo, nothing.
Timmay, no trades
Tokyo, vacation.
OBAT, -$22 on 2800 shares traded.
Me, -$41 on 6400 shares traded.
Denarii, -$91 on 5200 shares traded.

Goodnight market... sleep tight... don't let the bed bugs bite.

Really? Who has bed bugs anyway? Poor people? Well, I guess I might as well get used to them.

From here on out, assume volume sucks. Guess the NYSE was wrong about the hybrid increasing volume... and whatever happened to all that "added value?" It's still full of static and shitty low volume price spikes and fills.

Again, we just missed a new volume low on the year. I'm strongly considering just booking this month as a loss and enjoying myself the next few days.

Perhaps June will be different.

Wait... who am I kidding? This isn't some aberration... we're talking long term trend now.

Last year at this time, we were trading between 1.3 and 1.6 billion on the NYSE each day. Truly, the NYSE is fucked. No one wants to trade here anymore. The hybrid market is killing the NYSE. It's been clear for the last year and a half. It will never become a true news story I guess since CNBC is up the ass of the NYSE... reporting from there and everything... but it's a fact.

So what do you do in these slow times if you're a prop trader? Wait. Pray. Go to the beach. On that note, I'm looking forward to surfing tomorrow. No daily tonight... I get the feeling that stock traders/stock blog readers are still on vacation...

The Market Is Hungover

We're about halfway through a very dull trading session. Volume is below Friday's pathetic levels and the market is flatlining. It's dead.

I'm going out to mow my lawn. Even the blogosphere feels dead.

Preserve your capital today... don't get stuck in this low volume chop.

Great Weekend

Man, we had a very full weekend around here.  We went to barbecues, went out on a boat, hung out on the beach with hipsters, strolled around town and gawked at the "dig-me" crowd... just about everything that you're supposed to do on Memorial Day weekend in these parts.

I felt like I had a vacation even though I didn't stray more than 10 miles from my house.

So I feel recharged and ready for the week ahead.  Now I just need a good night of sleep.

See you tomorrow.

Neil Young, "Ohio"

"Four dead in Ohio..."

Same Ole Story...

Great entries, poor execution of my exits.

There really wasn't much to look at today, and I planned on taking it easy. However, SLB opened up with good volume, and since he was hovering above $100, I decided to watch him closely should he start to show weakness.



Look at that... I made $50 in the stock... meanwhile, the thing never looked back from my second short entry at $101.47. Depressing.

I took another trade in GES and received an awful fill on my entry. For the last two days, I've really felt a lag in my esignal quotes, and today I think it cost me about 20 cents on this trade. I went to sell when my esiggy quotes showed 38 and was filled .22 cents lower... given that I was looking for a run down to $37.50 before the stock hit some support, this kind of took the steam out of the trade. I covered 100 immediately at a small loss, and then the other 300 when the stock bounced off of the $37.50 level. So I made nothing, but I seemed to have the right idea.



Other than those two, I had a lot of small losses. The volume was really light today and with the holiday looming, it's not surprising that there wasn't a lot of follow through. The other stocks I traded, IPI, WFC and DHR didn't have great movement, and I didn't miss out from my entries. I took small losses in each which isn't a problem.

The thing I can't take is the missed opportunity in the SLB. I absolutely must learn how to hold these winning trades when they come or I'll never break out of this +200, -$200 grind I currently find myself in.

Anyway, I'm looking forward to the three day weekend. I don't plan on posting much, if at all. However, the mysterious Internet force known as Bloggerdotcom contacted me with tales of a new post... I will let you know when it will drop. Presumably next weekend, but I guess it could happen this weekend as well... you never know with bloggerdotcom.

I plan on going to a lot of barbecues this weekend. I told Judy, "Listen, take any invitations and accept them all."

So we've already got one tonight and tomorrow to attend. If I can't make money, at least I can mooch off friends for free meals. I also plan on watching my normally quiet town get taken over by "cityots" (mix of city and idiot). I will sit in town, sip a coffee from a bench, and quietly take notes on their actions, like an anthropologist watching monkeys or something. They always do something entertaining. Hopefully, we get a blog post out of it.

Be safe.

Here's the stats:
P&L, -$60
Best, SLB, $48
Worst, DHR, -$60
7200 shares traded.
8 stocks traded, 3 winners, 5 losers.