"A man is not finished when he is defeated. He is finished when he quits."

Tuesday, March 10, 2009

March 10th


"Did you ever have one of those days where...?"
You know how that saying goes. Well that was a great description of my day. First of all, I traded SKF only today and went 15 for 22 successful trades for a 68% win rate. Not bad, except that one of the 7 losses was a painful $4.44 per share!
The first loss of the day was an inadvertent short sale because I changed my IB order entry to one-click processing. Why I had not made that change earlier, I don't know. But, today I did and I happened to forget and institute an order I did not want. Oh, well. To be expected. What wasn't expected was the fact that SKF at around 11:00am or so no longer had shares to short, on the best shorting day in months! So, forced to only go long on this, of all days, I felt as if I was running a race on one leg (my second choice, SRS, was also listed as "no shares to borrow" at IB). I think, in the face of a financials recovery, this is going to be the norm and not the exception. With the inability to short SKF, I found myself playing a dangerous game, going long into a big down day and it came back on me during the big 11:54 am down draft. Playing an intra-candle bounce, I got washed down with the big drop. I did not sell even though I had a chance to get out with about a $1 per share loss. I was stubborn and expected the up-move to occur. Any other day, I would be short on this move. By the way, that $4.44/ share loss could have been as little as a 6 cent loss had I held less than an hour more. But, selling my position sooner rather than holding longer would have been the correct course of action here.
Later: The ultra-low volume candle popped back up today as a reversal sign, see the 2:42 pm candle; preceding a nice trade-able long-side move of up to $3.74 /share followed directly by an opportunity to get as much as $ 4.97 per share before the candle closed in the red.
At this point in the day, I was down substantially but decided to bare down going into the close and see what I could put together. I did ok and closed up by 4 cents per share gain.
A couple things: 1. My best play today was a losing trade. Late in the day, I saw that I was on the wrong side of a trade and promptly bailed on it without thinking and watching for confirmation. I took a loss of 4.9 cents per share but avoided the bigger loss moments later. I liked my reaction time and the fact that I saw the writing on the wall quickly. My best move of the day was playing good defense.
2. The second best thing I did was not giving up to a big loss. I clawed back and essentially broke even for the day. I felt like I was tied in to the market toward day's end and it was really pretty fun. Had I NOT taken the big loss, I would have had a gain of about $4.48/share; as good a day as I've ever had since I began sim-trading the ETFs. Yes, I know it sounds like, "Other than burning down the kitchen, it was a great meal." I traded the loss and it counts. But, I like that it was one event and not a pattern of bad trades. Just a few weeks ago, I got demolished on some big-move days trying to trade against momo. I liked my performance today better. I saw all the same signals today that I've been seeing the past few sessions, and for the most part, I traded ok as a result.
Summary: It was very frustrating to not be able to short the high-ADR ETF's today. It really threw a wrench into the works for me. I scoured for other, non-inverse ETF's but didn't like the action. One thing I know, if the present volatility ever goes away, I am in a tight spot! I just haven't mastered playing for the longer term intra-day moves yet and that is exactly what will be required if this awesome price action ceases
15 for 22 wins, 68% success. Gain of $.04 cents per share.

March 9th

No trading for this Monday, just watching the mkt while I do my "Day Job" duties.