Trade Review 3-6-08

Some general pondering here...

While playing ping pong and over hearing someone talking about a trade, it gives me the idea of putting some orders way out of the market and hoping someone will panic and get hit for a favorable print. I don't know if it'll work or not and it seems like a high risk idea. There's a possibility that I will have to hold the position over night and there's no guarantee that it'll go in my favor the next day.

I did get a chance to talk to Zach today. He trades EEM a lot. At first it doesn't seem like what he said is anything really that profound. It seems like what he's doing is trading the trend. Like today there's just weakness in the market and he's been shorting the bounces in the toward channel, which makes sense when I see the chart (but I wouldn't have thought of it at the time...). I gave it a try towards the close when futures made a small bounce, but not quite as high as the previous one and it worked pretty well. Although I should've held it a little bit longer though. He also says he tries not to chase it but instead maybe go in the other direction and wait for the other people to panic and cover. He also commented on trading it in comparison to the Dow, futures and SPY and the .IV value... but I need to think about what he said a little bit longer.

So I think what I'll try to do for now, is trade the trend, with less shares, maybe just 200 shares and give it about 20 cents. Oh and Zach says he tries to not trade it more than 5 times a day and I think that's a good idea. Although I might set a different number for myself but I think that'll force me to find good entries. It's like knowing if I only have bullets in my gun I would have to make nice shots. I've been trading SLV more lately off of GLD and I might enforce that rule on that stock as well.

Aite, some of the more interesting trades for today:

8:40am - FNM is tanking on news of a failed deal I think so I shorted FRE. I see that FNM started to bounce (but it didn't really... it just kept getting hammered) I got out of FRE. It did bounce quite a bit and I might've been stopped out as well if I stayed in it. I dunno, that was a tough trade. But eventually it did break down like FNM as well.

SLV... I need to be really careful b/c the book is thin and spread is big. It seems like it tends to go in my favor when the spread narrows, as if someone else out there is trying to get short or long the stock but didn't want to pay the spread. I really shouldn't add to my losers and need to have a predetermined absolute out in my mind before getting in the trade.

I had two trades in FLR and FCX, one break down and one break out trade respectively but I got wiggled out. I need to figure out a better way to trade break down and break outs, especially with these high dollar, fast moving stocks... right now I'm not trading them well at all.

Down maybe at most $100 today after commission. Not that bad... Still up for the week. Only trading half day tomorrow since I got to go to Houston so let's try to make smart trades.