February Trading Journals

Originally posted by Hitman
The daily looked incredible, the stock felt weak, but I could not hold that thing all the way through like what I must do if I want to be a legit contender
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The reason this continues to cause you difficulty is because there is a conflict in many situations between pure tape reading and chart trading... the moment you saw a strengthening bid and some buying orderflow, your tape-reading instincts told you to cover... maybe you should come up with some personal guidelines to enable you to break your tape-reading rules under certain circumstances.

I believe that you already ARE a legit contender in a scalping time framework... attempting to switch between time frameworks for a trade in order to juice it more can be done on a discretionary basis, but you must be aware that you are also switching strategy (from tape reading to chart trading)... the situation can therefore become confusing... on balance, I believe that you should exit your trade when the reason you entered the trade starts to be mitigated... most of your trades are entered on a tape reading basis, it seems, so those exits should be determined by tape reading too....
 
Candltradee

You hit the nail right on the head. I've noticed the same thing about Hitman's trading. It appears to me that he does about 99.999999999999999999999999999999999999999999999999999999999999999999999999999999999999999999% tapereading and .000000000000000000000000000000000000000000000000000000000000000000000000000000000000000001% chart reading.
 
I was going to suggest that he subscribe to tradingmarkets.com and go through Kevin Haggerty's daytrading course to hone his chart reading skills, understanding of intra-day dynamics and entry/exit skills.
The guys at TM are less focused on scalping and more focused on helping you capture solid trend moves like today. Actually, a readthrough of Toni Turner's A Beginner's Guide to Day Trading Online may be helpful. She uses many of Haggerty's concepts ie. looking for setups off daily charts, use of a simple 5 minute chart intra day etc. and she does not focus as much on scalping either.
 
Hitman, it seems like you use a lot of bullets but churn them instead of waiting patiently for the stock to drop at least a point.

I've been reading your past posts and it seems like bullets cost you $60 for a 1500 share bullet. If the most you can lose from your bullet is the $60 you paid for it, why not be patient and WAIT? If you're totally wrong and the stock just goes up, you'll only lose $60, right?

I might be wrong about bullets, but in a chat with Commisso and others it sounded like the most you can lose is what you paid for it by letting it expire at the end of the day unused.

Please correct me if I'm wrong. If I'm right I can't understand why you're not more patient with your bullets.
 
Originally posted by hapaboy
... If you're totally wrong and the stock just goes up, you'll only lose $60, right?

I might be wrong about bullets, but in a chat with Commisso and others it sounded like the most you can lose is what you paid for it by letting it expire at the end of the day unused.

Please correct me if I'm wrong. If I'm right I can't understand why you're not more patient with your bullets.
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You have unlimited risk as soon as you drop one side of your hedged position.
 
Originally posted by hapaboy


I might be wrong about bullets, but in a chat with Commisso and others it sounded like the most you can lose is what you paid for it by letting it expire at the end of the day unused.
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Hapa,

You misunderstood, if you buy the bullet and never initiate the position, than yes the most you will lose is the cost of the bullet...BUT if you buy the bullet and initiate the short position then the risk is unlimited, it would be the same as putting on the short position without the bullet...

I hope you understand now

PEACE and goodtrading,
Commisso
 
OK, but why the heck would you initiate the position if you weren't in the money?!? Say you set up a bullet at 100. Why would you initiate a position if the stock was at 101?!? Wouldn't you wait for the stock to move down fifty cents or $1 in your favor before deciding to utilize it?

Maybe I'm not understanding something about bullets. If you have a 1500 share bullet and you sell only 100 of those shares, does that mean the remaining 1400 shares are "in play" so to speak and thus at risk if the stock moves higher, just like a regular short position?

Please clarify!

Thanks! :)
 
hapaboy..

a bullet is just a married put.. it gives you a synthetic long position to allow you to sell the common short without the normally required uptick.. think of them as buying the right to short a stock on a downtick, not actually taking a position in the underlying stock..

-qwik
 
A bullet is a) a short call in combination with a long put at the same exercise price PLUS b) a long position in the stock initiated at the same exercise price as the option combination... essentially, the option combination provides a synthetic short and this is totally offset by the long stock, producing a market neutral position... since you are long the stock when you own a bullet, you can sell your stock on a downtick... when you sell your stock, the synthetic short option combination is activated and your position is no longer market neutral, but is a synthetic short.
 
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