I'm a discretionary trader. Which means that I enter on patterns(art). However, position sizing for me is systematic (science). Let me explain: I'll notice a pattern forming (lets say a double bottom for example) I will only enter when I have determined what price action will negate the pattern. I then use the difference between this price and the entry price to set my position size (see my previous post). This way every single trading idea gets the same treatment. I don't pick and choose because I've learned that if I knew or had confidence in one trade more than another, then why would I trade the others?! I treat them all the same, because I don't!
I don't know, a stock like DNA you can easily lose half a point on no matter what, and a stock like GE it is very hard to lose half a point. Sometimes I want to take a position but I know I am way early, I would just get say 300 shares and see where he fills me etc . . . In a volatile stock the blown stop is likely to hurt a lot more than a non-volatile stock, that quarter point stop you set can easily be a 40 cents loss, it adds up . . . Not to mention I trade a large number of stocks and a lot of my decisions are done within just a few seconds, very hard to calculate a systematic stop . . . For example, this morning I sold 600 shares of IRF because there was no offer so I want to be short but not the full bullet, it tanked 1 point immediately. In the case of BR there was an offer and I sold 1000 shares and it turned in my face . . .
Monumental mistakes turned what should have been my first 4 digit game in a month and half into just an average game. After a sizzling open I did not short into a total bull crap squeeze and missed a huge move to the down side. The afternoon saw me cutting winners short and holding on to losers as I was not aware of the speculation on surprise rate cut. I allowed a huge opportunity to slip through my fingers today . . . Some new rule of thumbs: 1) Take the scalps during the open, but look for swings between 10 and 11:30 . . . I still pride myself for having one of the most reliable strategies off the open, but that swing game must improve. I played the open flawlessly, but did not follow it up with the swing short when things calm down after that violent squeeze. Volume is weaker it is harder to lean on BID/ASK etc, just let it ride! 2) Never ever trade if you even have a slightest doubt about whether you should still be trading. I had a good open almost $800, I wanted to protect that, I wanted to go home but I stayed, as a result every trade that went my way became very depressing as I ask myself "why the hell did you stay for?" . . . Either you really really want to play and play your heart out, or don't play at all . . . 3) BELIEVE, I would have scored huge if I BELIEVED in my calls today, I knew all along the market will close on the low but it did not act upon it enough . . . 4) The safest time to be selling is into squeezes, the best time to be long is on pullbacks. 8900 shares on 3 of 7 shooting, +911 before commissions, +505 after, 3 bullets. +600 for the pay period with 15 games left in this month . . . Need to pick up the pace and put together a few big games . . . I know what I am capable of, gotta put up the numbers to show for it! Pre-Market: Various upgrades and downgrades, but on a day like today, there was only one thing on my mind, bullet the weakest sectors, ask questions later. Still, I wanted to avoid CEX/RLX because there were a few upgrades in each. 9:30: Big BTK gap-down and DNA / CRA opened unchanged, bulleted both and took 50 cents out of CRA, 80 cents out of DNA . . . CRA had the weaker daily so I kept an eye on it. Bullet in BSC didn't work so well stopped out for flat. 10:04: Saw a OSX pop, long HP and took 7 cents, sold market when I realized this is a broad market sell-off and I must concentrate on the future sensitive stuff. Futures made a rediculous reversal and hit the upper band, as it faded I knew it will come back, shorted DNA for a 30 cents profit, but did not trust myself when there was this overwheming urge to short and hold . . . That was the biggest mistake of the day, not capitalizing on a day like today is a crime. Market tanked and all 3 of my bullets would have worked wonders. 11:00: OSX pop, took HP long and lost 7 cents, time to take a break. I didn't know if I wanted to trade the Friday afternoon given a great start . . . 1:36: Saw an offer on BSC, sold some market and got filled 20 cents lower, why didn't I cover immediately when I had the offer? Not to mention I should know by now the best time to short is on a squeeze, never ever chase as stocks always squeeze! Instead I allowed it to hit me for 40 cents! It was 300 shares, but it still hurts when I could have avoided it easily. Shorted some DNA at 43.42, why didn't I get out? I allowed this turn into a 80 cents loss on 400 shares! Sure there was no volume, but it doesn't need much volume to push it up . . . Chart (held intraday support twice), tape (BID stepping up) all say get the hell out after at most a quarter point loss, yet I held? The problem with those two trades is that futures already moved below the low band, and I was chasing . . . 1:56: Shorted IBM on high band bounce, put in a hard stop stopped out for 25 cents loss and it tanked 80 point from there almost immediately, this guy is brutal and I really hate him. Shorted BSC again this time for a nice 30 cents profit off a mid -band bounce. Shorted QQQ off the high band for a pullback to-midband for a 20 cents scalp, covered half held other half which stopped out for break even, no complaint there, I was looking for a full sell-off. 2:37: Oh, bad use of BB, any time something pulls back from high band and bounces off the mid band and comes back to the high band, don't short it! It will probably be a break out and I was hit for 10 cents on a QQQ short. Took BSC long at 49.25 and out half at .40, what happened to hold the other half when the XBD looked like a flawless double bottom? Shaken out at .35, missed half a point move . . . Fortunately my execution on LM was better, took a nice 30 cents move . . . 3:05: Churned my bullet in CRA a little more. Gotta hate it when I really expected a smooth sell-off and some idiot came out with speculations on a possible fed. cut between meetings . . . Time to put together the mistakes I made this week and hit a big week . . . Play on!
Hitman, Have to agree about the idiot speculating on a fed rate cut......market would have sold off anyway after the spike! Didn't get burned by that move (didn't really know about it either), just followed the charts. Good trading!
Excuse my naiveté, but what is a bullet? I don't work at a professional firm, but imagine it's the process of taking a momentary long of a small position in order to sell a larger position short, effectively bypassing the uptick rule. Yes?
Sallyboy Goto http://www.elitetrader.com/vb/showthread.php?s=&threadid=340&highlight=Bullet+definition Tom
Serious setback today as I churned a $200 deficit from lunch time into a $900 deficit. Had a very bearish outlook going into the game and the entire afternoon I tried to short and long and just got nowhere . . . REDUCE THE AGGRESSION, a huge alarm today, this market is better than August but by no means the type of market to go for serious size in, take what the market will give you and avoid afternoon churning at all cost. My worst game in a month and half . . . Am I concerned that I am now down $250 for the month, in the opening month to the new trading year? Absolutely, because I was up in the morning and I was NOT selective with my shots. I was unhappy with a $200 gain and it was a $1100 swing to the wrong side. Tonight is a good time to lick my wounds and go to bed early to heal mentally and come back to play tommorrow. Keep the composure, be selective, I had this wrong mentality that I should be making size as soon as the calendar say September, and I pushed myself too hard which led to over-trading, slow the tempo down, this is a marathon, not a sprint. I know I am capable of turning up the heat at any given time and explode for multiple K weeks, but in the mean time I have to preserve. 18400 shares on 6 of 16 shooting, -328 before commissions, -876 after . . . Stop thinking size, think survival, I need to attack this market the same way I attacked it back in summer time, CONSERVATIVE. Our firm upgraded to Windows 2000 today and there were some technical issues early that caused some chart errors and prevented me from doing a quality research, still, no excuse, I was up $200 after the open, I lost it all . . . Still, it was very frustrating that I lost a lot of document files permanently that weren't backed-up, in fact no one notified us that the upgrade will happen this past weekend. Pre-Market: HMO upgrade but index opened down big 9:30: Shorted AGN and lost half a point immediately. Took SGY long on a fake OSX pop and lost 5 cents. Futures rip, took IRF for a 70 cents move and GE for a 30 cents rip on 1000 shares. Unfortunately it was my intraday high and it was all downhill from there. 10:00: Took HP on OSX long, lost 5 cents, energy sectors have been totally untradable lately, so choppy. Took some CVS long on RLX strength and lost 15 cents on a failed breakout. Took PVN on financials rally and out for flat. Tried LOW and lost another nickle. Very frustrating as my shots were not working. Tried HP and VTS on another fake energy pop and lost another 5-10 cents. 2:00: Shorted CRA and AGN on BTK/DRG breakdown, lost another 10-15 cents. 3:00: Ugly, churned IBM/GE/NSM/HD (all futures sensitive stocks) and I was chopped up. I kept on thinking futures will break down the bands but it just didn't happen. Way too many trades, Rest and heal . . . tommorrow's game will be critical. At least $400 of the losses should have been avoided . . . when you are cold, STOP . . .
Don't get discouraged. This market sux and my emini robot just had a 4-day losing streak after the big day on 9/4.