Road Rage

I gotta say, so far the only negative thing about work is the commute. I'd have to drive about 30 minutes both ways to work if I'm back at Lake Travis. If I leave my house any later than 7:30am it's a total crap shoot. I really don't understand... c'mon people! When the light is green you step on the gas, not wait for 5 seconds and then step on it. And don't slam on the brakes on any little thing. Do you realize what kind of ripple effect that has on the traffic behind you. No joke, on Wednesday I saw three accidents on my way to work. On car simply drove OFF the road down a mini hill and couldn't get out. The cops called out one of those trucks with a winch to bring it out and that severly slowed the right hand lane traffic. If I see traffic backed up and I don't see an accident, I get really upset... If there's an accident, hey, I can understand. If there isn't it's just you fuckers out there slowing me down. If you drive slow, don't drive in the left lane and get the hell out of my way. I am not kidding. At times like that I wish I was in the video game Grand Theft Auto because then I'd just ram them up the ass hard or get out of my car and start smashing it with a baseball bat or golf club.

Patience and Discipline

The top two rules for traders... and I sure didn't follow them today. Today the market made a big jump but the volume is very low. Just like yesterday where it went down but the volume was low as well. I definitely forced things today. I traded so many more shares than I normally do. I did have a few good trades today that were over $15 profit. I've learning to look for signs to hold my winners.

To work on in the future: watching the big offers/bids in U-Quote, how hedging works.

But really... let's really try to be more patient and have the discpline. Look for really good trades tomorrow and hopefully end this week in the positive territory. If I ever feel like I'm forcing trades again I should just get up and take a quick walk.

Ouch!

First of all, in the interest of caution, I'm going to stop listing the name of the stock that I trade. Well, I'm only trading 100 shares at a time so it's not like I have any major influence on the market but still... there's nothing wrong about being careful.

Yesterday I set a new personal high at about $62. Actually, I also had a 100% winning percentage, which even Lawrence says is pretty much unheard of. Go me! I kind of looked over my trades but didn't review them though. Basically the takeaway is the following:

• Hold my good scalping trades a little bit longer
• Once you have a good stop loss, don't cancel it. It'll often save you a lot of money more than you're trying to make

Something else from the email conversation I had with Lawrence:

• Wait until there's a new low for the candle, watch it establish a base or support level and then long. If it breaks that low get out pronto
• Be careful about chasing stocks that keeps going higher or lower--hard to play and whips up and down erratically
• Focus on minimize losses
• Try not to trade stocks that trade in less than $1 range for the whole day and stocks that don't have > 1,000 share on every level of the open book. The profit margin on those is so small it's not worth it.
• Be careful not to press when something's not there
• Keep calling trades out and asking questions

Today... eh, different story. Ended the day down about $100, which really, I could've saved myself $60 if I had done damage control better. Hit my first scalp trade and it went against me but I didn't cover so a $20 loss went to $40, $60, and finally $80 in just a little bit over the minute. Another trade too, is where I did chase it a little bit and it swiped down and lost another $40 in just another short minute. What makes me mad the most is that I get out near the bottom and both of them bounced back to a point where I could make a profit. I think I still did the right thing, getting out, it's just that in the future I need to get out faster. If I can't hit my outs at 5 or 7 cents I need to get out no more than 20... probably just market out to the specialist ASAP.

I did make a good trade towards the close when futures keep ticking down after the minutes of the FOMC meeting couple of weeks ago. It was near the whole dollar and I shorted it and Lawrence actually said that he might go long on it instead. I might have to go over that with him again but judging by the futures and the open book I did think it was going to go down for a nice little profit. I turned out to be right this time but still.... need to do more thinking on that one I guess.

Dominic

Focus on one thing at a time. Once you feel comfortable go ahead and add something else
Complacency factor will be the demise of some people---talk to other people on the floor
Go have a drink with someone, build a relationship outside of work so it's not as uncomfortable to approach somebody
Look who's gapped up and down and maybe where they should be, look for reversals
Disseminate what's good information and what's not
Anticipate news coming instead of trying to figure out what's going on at the last minute

The Week That Was: First Week on the Trading Floor

So it's been a pretty slow week, which is actually typical for trading in August. I know I didn't really update and review my trades the past few days but I think I got tired of writing down all that stuff but I should start again to really help me get over the learning curve.

I believe I could've ended the week in positive territory, instead my last trade of the week screwed me. I hit a U-Quote trade and it just kept going down. Finally after down about $15, $20 I said I had to get out. Similar situation happened in the morning and I held the stock near the whole dollar, hanging on just two more cents after losing $20... that one bounced back to allow me to take a $15 profit, and actually I could've taken a $60 profit I think if I held a little bit longer but given scalping is still foreign territory for me I just wanted to get out. Well, the last trade did bounce back before the close, too, which means I could've done some damage control and at least end the week making $10, $15 all thanks to the personal best day I had on Thursday for a whopping $25.

I don't think trading on some of these stocks that I am familiar with like KO, MO, BBY is really worth it. They don't really move that much and I've basically gone away with them half way through this week. Currently my strategy is to hit u-quote scalping at the open and close. I tried out a few momentum trades today but it didn't work out that well. A few cents of profits/loss here and there. If there is something trending down, I should probably look for the volume and open book to make sure it's a worthwhile trade instead of getting in and get hit by a small pullback or reversal. I've also been using my stops to set alerts to where I think would be a good entry point so I don't have to think about that stock and move on to find other opportunities and that seems to be working out well.

What's for next week? I'm not sure... I need to think a little bit more and review about this u-quote scalping and momentum trades from today.

Still, looking back, I think I've made much improvement compared to Monday. Everything makes more sense to me know and I have a better idea what to look for and where my entry points should be. I made a person best on Tuesday for $5 and I topped that again on Thursday for $25. Small amount, yeah, I know but it's still something positive to pat myself on the back for I guess.

I've been kind of obsessed about trying to read and learn whatever I can get my hands on about trading lately. There are just so many books out there. My gosh! I need to start studying for the 55 as well. On top of that I can't seem to fall asleep well lately b/c my mind keeps on wondering and thinking about different trades etc even though my body is weary. I just randomly pass out on the couch for a few hours after I get home now.

Andy Kershner #2

Finding your own style of trading and talk to coaches of that style and that person might be different from your original coach
Meet new people and see what works for them
Programmable keys
Don't really use market keys
Reading the tape better: see which side the specialist is printing on, the bid or offer side
The more you trade, the more you'll learn instead of stretching out your learning curve (including the keys)
The people that ask the most question and do the most work and join with teams always do a lot better
Psychologically stay positive.
Try to be more aggressive--scalp closer to the last print
Learn new things, try different trades, try it out in small shares what's working for other people

What is This, I Made Money Today??

Woot! Made money today. Let's not get ahead of ourselves too much here. It's only 5 bucks. Still, it's good to end the losing streak.

BBY (11:02:26)
Entry price: short 44.47
Expected gain: 15-20 cents
Expected stop loss out: 5-7 cents
Actual stop loss/gain: gain 18 cents @ 44.29 (11:09:45)
Reason in: broke out of its resistance level for today and it reached it twice yesterday as well (actually, didn't notice the last part until Lawrence told me), couldn't really decide if I should go long or short but saw that open book had more offers so I picked my stop loss and decided to short it. Worked out well, adjusted my stops and everything through out the trade.

BAC (11:18:21)
Entry price: long 51.36
Expected gain: 12-15 cents
Expected stop loss out: 5 cents
Actual stop loss/gain: gain 6 cents @ 51.42 (11:21:51)
Reason in: establishing a base, sees many bids in the open book. at least 2-1, maybe 3-1 risk/reward ratio. Stock almost hit target, adjusted the sell lower stop to automatic sell @ 42 and it got hit on a small pull back.

WM (13:02:20)
Entry price: long 38.04
Expected gain: 20-30 cents
Expected stop loss out: 8 cents
Actual stop loss/gain: loss 10 cents @ 37.94 (13:03:40)
Reason in: Broke through the whole dollar, thought it would continue to go up and it did rapidly briefly which is why I got in at 04 instead of 02... reversed and got automatically stopped out.

DKS (14:06:48)
Entry price: short 59.94
Expected gain: 30 cents
Expected stop loss out: 6 cents
Actual stop loss/gain: gain 4 cents @ 59.90 (14:07:07)
Reason in: sense resistance at the whole dollar, risking little to trade back down, if it didn't go my way I was going to reverse b/c I figured if it did break here it'd run a lot more the other direction. The stock quickly went down after I enter the position, took my profit when I noticed a big 1000 bid came in at 87 and thought it won't fall as much as I wanted it to and got out. It did trade down to 61, near my target though... need to figure out why this was

TGT (15:32:28)
Entry price: short 59.95
Expected gain:
Expected stop loss:
Actual stop loss/gain:
Reason in: trading near resistance level and sees a lot of offers on the open book, same reasoning as the DKS trade. someone yanked the offer at 04 out and rose quickly. tried to get out and was only able to get out at 10.
Lawrence: when I see that offer gets yanked I would've just taken my two cent lost and get out. If that was the reason I get into the trade and when that offer is gone I no longer have any reason to stay in it.

BAC (15:39:54)
Entry price: short 51.37
Expected gain: 12 cents
Expected stop loss: 5 cents
Actual stop loss/gain: gain 6 cents
Reason in: Futures tanking, reverse trend, got in and when it doesn't seem to break 30 and I knew that I chased this trade in a little bit I took my profit and got out.

Monday's Trades

KO (11:49:46)
Entry price: short 54.46
Expected gain: 14 cents @ 54.32
Expected stop loss out: 54.52
Actual stop loss/gain: gain 4 cents
Reason in: holding steady at resistance level, futures lowering, a lot more offers (big ones as well) than bids. Seeing a big offer at 54.50 makes me feel pretty good about it and after not moving for a long time I decided to take profit just so I can be on the positive for the day and really I know I should've stayed in it.

M (13:53:22)
Entry price: short 30.98
Expected gain: at least 18 cents @ 30.80
Expected stop loss out: 5 cents at 31.05
Actual stop loss/gain: loss 5 cents
Reason in: can't seem to break through resistance level, sees lots of offers on the open book, futures trending down.

MO (15:00:25)
Entry price: long 67.29
Expected gain: at least 18 cents @ 30.80
Expected stop loss out: 7 cents at 67.22
Actual stop loss/gain: loss 7 cents
Reason in: trending up on higher volume, futures breaking out to new highs

Friday's Mess

LEH (9:43:24)
Entry price: long 59.72
Expected gain: 28 cents; to the whole dollar at 60
Expected stop loss out: .12
Actual stop loss/gain: loss 22 cents @ 59.5 (9:43:43)
Reason in: futures inching toward new high after a small pull back, thought it could be a full rally mode

MO (9:46:12)
Entry price: long 67.82
Expected gain: 30 to 60 cents
Expected stop loss out: I don't remember exactly where I see the big bids at on the open book, but I think I gave it somewhere between 7 to 12 cents
Actual stop loss/gain: loss 25 cents @ 67.57 (9:47:15)
Reason in: after a sharp drop on low volume I believed it would go back up to its highs or at least somewhere between 1/3 to 1/2

BAC (10:06:21)
Entry price: long 51.32
Expected gain: 30-40 cents
Expected stop loss out: somewhere around 10 cents
Actual stop loss/gain: gain 14 cents @ 51.46 (10:10:01); I set a sell higher stop at 51.68 if I remember correctly, Billy said it triggered my sell lower stop on a bad print
Reason in: sharp drop at relatively low volume, thinking that people are taking profit from the early rally and the stock would go bounce back at least 1/3 to 1/2 from the low, possibly even make new highs, although I was chasing it a little bit here.

KSS (10:35:25)
Entry price: short 59.2
Expected gain: 20 cents to the whole dollar at 59, optimistically at 58.80
Expected stop loss out: 7 cents
Actual stop loss/gain: loss 11 cents @ 59.31 (10:35:56)
Reason in: Futures were at new lows, many other retailers are trending downward as well, felt after a bounce back this would be a good entry point

MO (10:43:17)
Entry price: short 67.04
Expected gain: 24 cents to 66.80
Expected stop loss out: 6 to 9 cents; I remember eyeing my outs at around 67.10 and 67.15
Actual stop loss/gain: loss 24 cents @ 67.28 (10:45:56)
Reason in: (need to look at BB Flashback) I thought I saw a lot of offers on the open book and it'll fall through the whole dollar with futures setting new lows still. In retrospect this really was a terrible trade near the whole dollar. I chased it and either someone just put in a huge bid at, if I remember correctly, 66.98 after I am in the position or I didn't see it before I get in and I hesitated when it hit my stop loss and exacerbated the loss.

XOM (10:50:20)
Entry price: short 82.61
Expected gain: ??
Expected stop loss out: Don't remember exactly at all, but I do try to keep it to 7 to 10 cents
Actual stop loss/gain: loss 13 cents @ 62.74 (10:51:17)
Reason in: Saw all the oil stocks and OIH falling and decided to short. I think at this point I was pretty frazzled and wasn't thinking clearly

HOT (11:05:02)
Entry price: long 54.61
Expected gain: 40 cents or 60 cents to the previous two levels of consolidation
Expected stop loss out: around 10 cents
Actual stop loss/gain: loss 31 cents @ 54.3 (11:08:07)
Reason in: Futures bounced back nicely, looked like the stock would pull back with it, thought it's time to switch back into rally mode

BID (11:16:09)
Entry price: short 37.59
Expected gain: 60 cents, to the whole dollar, somewhere halfway between the day's low and bounce back
Expected stop loss out: I think I was willing to take on a little more risk on this one about 12, 15 cents
Actual stop loss/gain: loss 27 cents @ 37.86 (11:17:49)
Reason in: Saw the previous volume was significantly higher and a fore coming reversal. Looking back maybe should've been more patience and pull the trigger and short it near the 38.10 level

David Lopez

• Try to get better at what you know how to do and become more and more efficient
• Monitor your downside
• Look at briefing, gapping up/down, economic news
• Review trades, look at the big winners and losers
• Review big movers of the day, IBD
• Learn your keystrokes
• Narrow focus on your strategy: find something you know you can do and make money, keep doing it instead of trying tons of different strategies
• Make incremental changes and branching off of what you do well
• Watch top traders during the open, see how they react to different situations
• Talk to top traders, take your career in your own hands and don't expect to be spoon fed
• Learning how to make money and be consistent at it and once you start making money you start making a lot of money
• Don't get caught up in comparing yourself to others, focusing on doing your best and beating your best
• Confidence is key... when you're hot put down on the gas pedals; slow down when you're in a slump
• Follow your discipline and your rules
• Take a day off after a huge loss, clear your head
• Have your outside life in order
• Be in check with your emotions