Hitman Why are you in such a hurry to up the ante? Much better to ease into size gradually. You got plenty of time.
hitman, when you've got a winner going up, do you scale out on the offer, or wait for the end of the move and hit the bid?
There are two ways I pare out into strength, if there is a large BID stepping up, I usually put some of my shares on a trailing stop one penny below it, so as soon as the BID is gone, I am out, this is useful when trading large caps like GE, TYC, etc . . . as they are very liquid and there will probably be a close BID for me to get out. If the stock is thin and already ran up a lot last a few ticks, I would use a trailing stop AT the BID, the BID is hit, I am out, not taking any chances as the next BID can be 30 cents away. If the stock is super thin, or it is a very very high priority trade, I would do market as soon as I see a big print. This is especially useful with shorting, say a stock is stepping down with authority with a 20000 offer, and he is taking out BID after BID, in the end, close to where I think the support may be, the spread widens, boom he prints a really low price with volume, I buy market, by the time that volume is gone, there may be no offer left and next offer for me to cover can be a quarter point away. When you are paring out stuff you want the best possible prices, because that's the whole point of paring out, take some off the table and possibly buy it back at a lower price, if your tape game is poor then it is very hard to have a good paring in/out game, and it will greatly hinder your progress when you trade size.
Magna: I have had a 5000 game back in April and a few multiple K games around that time, and I really look forward to having them again. Nic: Time is not my friend, there is a time bomb ticking in my blood, when it blows up I lose everything, I have to prove myself as soon as possible. Besides, very few traders with my experience level start positions with less size than I do, I mean, my DOT limit is 3000 shares, and I have never touched anything more than 1500, gotta work up toward bigger sizes. Candle: Unfortunately, the day you get your own desk, your own trading suffers and it is very hard for you to improve with all the responsibilities going around. I have to tap as much of my potential as possible before I even think about a trading desk. While it feels good to manage other people when the team is winning, this is a very up close and personal business and people can get very emotional, not sure if I want that yet, my firm offers a hedge fund division, maybe I will take a look at that next year instead . . .
Snapped my 11 games winning streak as the 2PM energy news made me swallow my first loss in more than two weeks. 25500 shares on 9 of 18 shooting, +465 before commissions, -244 after, 2 bullets. It was a total shutdown of a day as I could not put together that one big winner out of 18 stocks I traded today. Last Wed, there was a gift energy run and I bought just 300 shares of BHI and made $300, and Mrs. F scored huge with serious size. Today, we went through the exact routine, took a walk to Chinatown, ate the same $3.50 a bowl wonton noodle soup, came back exact same time, hoped for the exact same thing. It wasn't pretty, but it is awesome to have a friend work you go eat together and you get smoked together, very good psychological support after a down day (she still pulled the game out regardless, one of the most consistent players). Pre-Market: Very light, nothing really caught my eyes 9:30: Saw a huge offer on EPG, and given that I had no idea whether the news at 2PM will be good, and I wanted at least one energy bullet just in case it is downward momentum, and I sold some at 48.1, covered for a 20 cents profit as the index squeezed and he really squeezed and kicked a lot as the sellers eventually overpowered buyers. I churned a lot of him today, but the worst damage came in afternoon. Took SGY on OSX strength, scored half a point on 600 shares for my best trade of the day. Tried NOI and got a dime. Energy tends to be very choppy on Wed's because of the 2PM inventory news, somewhat similar to the broad market on FOMC day's, and I tried very hard to go long in NE but out for flat as the sector eventually came in. Futures ripped hard, I took MMM and when he printed 109.7 I really thought I was golden for a beautiful breakout, but futures came right back in and I was shaken out at 109.40 for a 30 cents loss, happened to be the morning low and he ran hard after that, that was arguably the biggest shot I missed today. 10:00: Tried hard to go long, but every time I thought the futures would go up it would come back down, had PPG, GE, HON, LXK, FD, ROH at various points, broke even on those trades but churned away a lot of commissions. Market felt strong, but the double top pattern completed and closed down on me and I got out of all of my longs. Energy started to go down and I bulleted EOG, what a strong stock, needless to say I tried too many times to short him today, bad idea, biggest loser of the day. A look at my P&L I was down $50, no big deal but psychologically it made a difference going into the energy news. 1:28: Came back from lunch with Mrs. F and had a great time, it is funny how when I go out with the light of my life I always try to pick the most impressive restaurants, but I enjoy those little places just as much, the place we went to, Wonton Garden was a very small, very cheap, very warm, almost family oriented spot. We had the same thing last week and we thought it will help to "align the planets" in our favor. The problem was, almost immediately I noticed that the energy rallied before the announcement, and I thought they would throw a curve ball with a classic sell-on-the-news, nevertheless, EPG printed 100K at 44.38 and showed up with a BID, I thought the seller was done as he bounced off yesterday's low, index going up and still 30 minutes left before the announcement, I like trades like that, I took 600 market and he filled me at 44.50, he printed some massive size at 44.50 and my heart went cold I realized he will not tick above that, he did tick above .50 for a few prints to blow stops, and all that time he was actually getting short, bad read, quickly out for a dime loss fortunately there were some bag holders left in the stock. Energy started to tick down, I bulleted just 400 shares of EOG and decided to hold it through the announcement, too confident there. Took LM as XBD lagger long and got 30 cents. BTK went up and futures was hitting new high's, took DNA at 54 after some size prints and pared out most of my shares for a 15 cents profit but still held 200 as I didn't believe he had enough gas with futures started going down. 2:00: I was in the money by 10 cents or so on EOG and energy continued to tick down, I really thought it was the insiders selling because they already knew the result (last week, it squeezed before going up for good) I sold a little more and I saw a big green bar on SLB (OSX leader), I covered market immediately for a quarter loss on EOG. Market started to go down hard, while energy indexes are independent of futures, when everything else is falling, I shouldn't have been so aggressive on the longs. I took 700 shares a piece HP, SGY, EPG, EOG, and I saw some other traders jumping in after I did, taking the long side, even when stuff were ticking up a little I had this instinct that I was already wrong, that I took too much, because many many times, when the inventory news is insignificant, you get a pop, then the energy stocks give back all of their gains almost right away and you get killed by the spreads. I immediately sold half of everything I had for tiny losses, but then SLB came in hard and I was late to get out of the other half, by then what I had left in DNA already went against me by almost half a point because it was a 200 share position and I couldn't get to it with all the energy stuff I had. I did excellent damage control, as after I got out of 3000 share's worth of energy I had long I was down just $600. Unlike the FOMC meeting, based on my experience, many many times, there is no third leg for energy stocks on this news announcement, the first move is often 90% of the gains, followed by a big pullback, a very small pop then chop and churn rest of the day, this is especially true on afternoon's as I have rarely if ever seen any serious energy move after 3PM after oil price stops ticking at commodities trading. 2:40: Composure is everything, it is very important to take a few small scalps when you are down $600, as just a few more bad trades on size will put you at that dreaded $1000 deficit mark and on a day like today I don't think I could have came back from that. I tried to short EOG/EPG again and I covered immediately at market because I realized that I was desperate and I needed to stop the bleed. Took a small scalp in TYC and a small scalp in GE, and all of a sudden, SLB hit a new high, and I saw all energy stocks ticking up again, took HP at 29.10 for a very nice 50 cents move, and SGY at 37.75 for 30 cents, two trades with sufficent size and instantly I was able to cut my deficit down to just $200. Had those two trades went the other way even a little, I could have been blown out. Yes, oils made a huge leg after I got out, but it was part of my defense when my stocks weren't working, I have no complaints there even when I got out the second half of my positions near the bottom (except EPG which tanked hard, that seller crammed him today), the only complaint was that I took way too much in the first place. 3:08: Took BR at 36.3 on a breakout, thought XNG may have another leg but as I said before, out of my entire career at Worldco I don't think I have seen a serious into the close move for energy, out for flat as I recognized that it won't happen. Thought futures will do a double bottom and took TYC for a 15 cents scalp and IBM for a 30 cents scalp, I was down just $50 on the day but the double bottom didn't happen as I exited into strength. 3:30: Ahhh, unneccessary damage, I tried way too hard to save my streak and I basically gave $200 to the market for nothing. I somehow hoped for a rally and bought GE/MMM even when I thought the futures made a lower high and looked very vulnerable, got out immediately. Why didn't I go short instead, I guess I am spoiled with bullets and rarely if ever does natural's anymore . . . Tommorrow will be very important, even with this loss I am still up $1750 for the week, my best week last three months was a $2500 week I had in October, I must win tommorrow's game to keep the momentum flowing, and I have a real chance to top it here.
Great run so far Hitman... pity about yesterday, but that's just the law of probability. I am in Europe, but the last time I was in the USA, my trip happened to coincide with Chinese new year. The next time you are in China Town, you gotta check out the Tofu (vegetarian soya) Chinese restaurant ... it's straight out of the 1970's hippy culture... I am a meat-eater but I tell ya something, that veggie Chinese stuff tastes better than any meat I have ever tried! The restaurant is on the main parade and near to the end adjoining the highway...
Serious technical issues this morning as our order entry system went off at literally the worst time of the day, 9:45 - 10:15, and I didn't realize I had a backup order entry system via good old DOT . . . Fortunately the market went up but I missed the critical breakout. Afternoon proved to be uneventful as I did not believe the market will tank so hard but it did. I spend a lot of time looking at paired trading this afternoon, it really took a lot of brain twisting to get into the concept, but once you get it. I did NE/WFT pair today but I got the direction wrong. I was supposed to long NE short WFT but I went long WFT and shorted NE, good thing it was on 100 shares and good tape reading allowed me to pull out ten dollars after commissions No doubt about it I would explore this method further, makes sense and with good execution this can be a very good strategy. The biggest problem is that I have not found a formula to properly calculate whether the spread of the stock is worth the risk and reward (preferably on a chart so I can see it visually). 7600 shares on 6 of 10 shooting, +375 before commissions, +191 after, very light as I could not take advantage of the 10AM rally, but next time I will know the backup route Pre-Market: Again, no serious news . . . 9:30: BTK opened up and I took some DNA and quickly jumped out for flat as the market started going down. DOW opened down with a gap and I bought a fill-the-gap when futures came back a little and I scored a quarter there. Took FD at 34.55 and ADI at 45.58, RLX and SOX are going up . . . Took some PPG on CEX strength, took DOX too . . . Bam, system went down and it was a real nail biter as futures hacked around. I was really thrown off my rthyme as a lot of my stocks were near breaking out level but as soon as the system came back I sold them. 10:30: Took some GS for a quarter, I held ADI from the morning but it would not break 46, should have sold half there at resistance but I was upset about the morning issues, so I stopped early as I do not want to play when I am frustrated . . . 2:00: Took that NE/WFT trade . . . long WFT 35.50 and short NE 29.4, first of all I should have shorted NE and longed WFT, and in reality with OSX going down I should have took the short side first, oh well, I will work on this more with 100 shares before I put some more size into it . . .
Just as important as your trading is knowing the correct places in Chinatown to blow off steam. After we put on the morning trades and are trying to figure out where to go for lunch some choices are: a. Pho Nha Trang on Centre St. - best Vietnamese in town b. Thai Restaurant on Baxter (best Thai in town) and for dessert: a. Hong Kong Cake Factory on Mosco St. b. Any of the bubble tea places on Mott. Bubble Tea seems to be particular to Chinatowns and is the strangest drink I've ever had. Also, for excellent Ground Zero cuisine try (the best Mexican restaurant in town), "The Little Place", on Warren and W. Broadway. This hole in the wall (seats about 8 uncomfortably) has unbelievable food. Just reopened after being shut down since Sept. 11 and the fans have been rallying behind it. The guy doesn't speak English but has loyal customers from all over Wall St. Just my two cents. Forget trading from 11-2 and enjoy quality food and atmosphere.
Hitman, thank you again for publicly posting your daily journals. I was wondering what you use as your leading indicators prior to entering a trade. Do you follow the TICK & TRIN closely? Sector leaders? What? Thanks again!
Had to swallow my worst defeat since late September as what could have been my best week in a long time turned sour. The market wants to run but the bears kept on smacking it back down and it bounces right back up every time, the most frustrating aspect of intraday trading. I did not get adequate sleep last night as I went to bed at 3AM and it cleared showed in morning defense. Fortunately I did not lose my composure in the afternoon as the market would chopped any comeback attempt into a serious blown out, still, this was a very very damaging loss . . . 16700 shares on 4 of 14 shooting (cold hard total shutdown), -378 before commissions, -890 after. Didn't feel like doing pair trading today for obvious reasons. For some reason I can not get First Alert to work reliably at all and I really really didn't like the interface of the program. A lot of strange data losses and I finally gave up on it this morning. I think maybe it is because of the MIS department but I seem to lose data very often and the program is just not intuitive. I gave up my second computer back to the firm (I hate wasting space and resource) but gave that monitor to Mr. M, my other best friend (along with Mrs F) at work who got his account reset a while ago but desperately needed a third monitor. Four monitors is more than sufficient for me, and real time scans don't seem to work for me. Pre-Market: Downgrade on DD made me putting up a bullet on PPG off the open. Some insurance bad news . . . Energy inventory cut . . . 9:30: Bulleted PPG and took a quarter loss when futures took off. Bad defense because I had some chance to at least cover half. Tried to bullet BJS because energy all gapped up and I thought they would fill the gap, churned a lot of him today and took small hits for the worst stock of the day. Went long EPG at 49.43 on XNG strength when I figured energy would breakout for good and covered my energy shorts, stock tanked half a point and I took a 40 cents loss, ouch . . . Then I watched that print been the bottom and stock going up 2 points. I missed my typical lagger SGY on the long side and by then I already knew I was out of sync with the market today. Mr. M passed me a EMR bullet and I have never traded stock before but I thought it was a lay-up because last night we went to Chinatown together and had some really good Vietnam beef noodle soup, even gave all of our changes to homeless people along the way thinking it would bring some good karma (I should have done the old fashioned pray-to-the-princess instead), that turned out to be a hot potato of a bullet as I got burnt when he squeezed, even when I covered in time I still gave up a lot of churns. Everything just didn't work today . . . I tried to take KMI on XNG/UTY relationship and it really didn't do anything. Looked down on my blotter, I was down 1K . . . Because my mind was a little tired from last night's inability to sleep, I didn't slow my tempo down in time and especially didn't cover fast enough on that future rip. 10:00: Churned some of Mr M's DO bullet and churned some more PPG, took some CCU and DOX long on futures pop and took scalps. Went long in LOW and stopped out for flat. Futures quickly came in and I was back to where I was, down more than 1K. OSX pulled back and I shorted BJS/DO with the bullets I splitted with Mr M, got half a point on DO as my best trade of the day and the only trade that worked to cut the deficit down to triple digit. Churned some TYC and AOL, this future is just not going to do anything today. Break time . . . 2:00: Some DRG rally, took a couple of hundred FRX and LLY, out for flat on both, took a 20 cents scalp on EMR and it was obvious that I could not make it today, tough defeat but I must swallow it. Me, Mr M, Mrs F, all smoked, but friends who get smoked together and can smile together, will come back strong together, Monday, can't wait for the bell, I was a disgrace today, but I will try to make my ground on Monday, for her . . . Happa: I watch futures and indexes, sometimes I look at TICK/TRIN but most of the days they are not useful.