February Trading Journals

To clear things up more about bullets. A bullet is a married put how do I know because I was a prop trader in the past and used at least 5 a day. Second the married put is a hedged position the clearing firm has in inventory from there stock loan department. Third of all the CBOE encourages the use of bullets to offset the volatility of option expiration days and make the market more stable on the third friday of every month.

 

Hitman,

In the past I have encouraged you to load up on volatile big cap NDX names and hold for a big move. Today's debacle in VRTS, EMLX, SEBL and others certainly makes me look like an idiot and confirms the wisdom of your defensive game. There was an opportunity to exit before all-out disaster hit, but you had to be quick and willing to absorb a big loss.

 

Yeah I have been trading tyc since the news days. At first I was intimidated because it ripped my head off. Then I spoke with a guy in our SF office who traded 500,000 shares of it one day and made a fortune and I said if he could do it I could do it. I get in, if I am wrong I get out immediately. If I am right I get out of half for a profit and try to catch a big winner. Just reading tyc's market and taking lots of shots. It can be frustrating but I have been making good money on it the last few days. However, the news cycle/ liquid trading aspect of it seems to be dying off.

In terms of trading it reminds of trading the presplit qqqs at the nasdaq highs--- only tyc seems to be less technical. If you have not traded that kind of stock I would say to start off very very small.

 

I'm surprised you say the liquid aspect of TYC seems to be trailing off. The stock only traded 200M shares yesterday and had a 5pt range. How liquid do you want it?

 

I may not have chosen the right words. A few days ago the NYSE specialist was dealing with so much volume at once, he could drop the bid 50cents to a buck frequently and the stock would trade all over the place for a few minutes to an hour. As the days have been progressing the stock is trading more orderly and consequently the quick sometimes profitable pops happen less often. Although it is still pretty good trading.

Hitman I apoligize for getting off topic here.

 

The good news is I have finally got better with gap and trap games, the bad news is once again my lack of execution prevented me from getting the most out of my bullets.

18300 shares on 8 of 11 shooting, +1522 before commissions, +881 after, 3 bullets (got 3 more shared). Had an amazing entry on CCU this morning and literally a carbon copy of yesterday's move, and I promised myself yesterday that if I get another trade like that I will hold on for the ride, yet once again I churned that bullet instead of scoring a home run.

That said, I can see how daily charts greatly enhances intraday trading when done properly. A strong daily chart makes for good intraday long's, a weak daily chart makes for good intraday short's. When you know there is a seller in the stock you can milk it all day long, and you are a lot more likely to get big spreads in your favor when the daily chart is in your favor.

I saw with my own eyes how stocks with weak daily simply could not tick up despite of the massive squeezes on futures, and they just make low risk trades on gapper's. This has been a missing piece in my overall game and I am glad it finally came together with my intraday game.

When you have a weak stock on a downtrend, you gotta milk it everyday, while you are not a swing trader you can still bullet it everyday with confidence that the seller will show up at some point to give you a nice move or two. An uptrending stock gapping down in the morning you can probably get an easy gap-fill. Daily's are not so much for entry's and exit's, but are very useful for overall trend determination. This is crucial when I am trying to milk the same stocks everyday.

An example would be the rediculous move on XAL this morning, weak daily and that move was an easy fade, sellers eventually came out of the woods and if you are wrong your damage is usually greatly reduced. If a stock is weak, pound it everyday until it shows any signs of life.

Pre-Market: Crude oil price up but with OSX in a range I was not interested in it. I had a few stocks with weak daily's in mind.

9:30: Went long CRA and took out 10 cents. Very risky trade, BTK was up, but this has been one of the weakest sectors there is. Now I can see why back then I had incredible luck with those every day in December but suffered big time in January when those stocks were on a downtrend. Went long a little SPF but home builders came in and I got out for flat. Two wasted positions basically as I really should have been getting into my game plan instead of wasting precious seconds plugging away with those little trades.

9:35: For whatever the reason CCU gapped up more than 1 point and that was a no brainer, I started my short with 500 shares at 44.40, then shorted more near 44. Futures chopped the stock could not tick up and it was obvious that if the futures gave up it would tank hard, why I only pulled $400 out of the stock, churned on the way down instead of holding was a mystery to me. I cover some everytime he hit the offer instead of just hold on. It really didn't squeeze much at all. Bulleted APA off the open gap as I thought XNG has been weak but APA had a really strong daily and I lost $50 after commissions and many churns. COX gapped up and with a daily like that, an upgrade is just a bull trap and I bulleted it 35.50, and somehow someway I only took $175 out after commissions, and all of that came during the final sell-off at 3PM as I lost money on him in the morning.

10:05: Took a long position in HP and out for flat as OSX could not sustain the strength. Tried to pick FMC bottom a few times (decent looking daily and chemicals were up) and gave up a few bucks after commissions as I went very light on him.

11:58: Very bearish on the market I went long very little BJ, ACF and HI which would have worked out great but I pulled out just 15 cents a piece on small positions as I had a short biase. Went long LM and it went nowhere despite of being a very strong broker.

3:00: Bulleted COX but I had just 600 shares, he really deserved a full position with something that looks so good but I lacked aggression.

I am looking for a statistical breakout, I feel good about the way my game came together last week or so, and I feel like I have learned something (particularly the way you handle gap and trap's).

I know I am capable of bigger games, I have been way too defensive with stops, I need to loose it up a little bit, and be more confident about my trades, and HOLD.

That said, everything will come in due time, if I can overcome this mental cap I have a feeling I will finally be a legit contender and carry this team on my back.

 

What debacles are you referring too?

 

That is actually a conversion.

A bullet is a long stock /deep in the money put executed electronically with no slippage.

 

It might help if you don't think at what Price you get a bullet at. It is a hedge position. In fact I will usually get bullets premarket (NYSE doesn't have one) so there are no prices.


I apologize to the others for repeating a post of what a conversion/bullet is but hadn't finished scaling down the list seeing that others had already replied.