PropTrader - Daily exploits

Quote from DEM BONES:

Thanks for the thread.

When trading C and the like have you had any success trading the spread with size or do you generally scale into a position at different levels?
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Good question, it's interesting because I was just discussing this issue in particular with TokyoGhetto.

Yeah I have tried spreading with size. I also know someone who has spread it with 1m shares... yes 1 million shares!! This person made a ton of $$ in 2009 and early 2010. Not now though and hasn't done for a while.

The problem is that some days it comes back... other days it just stay up/down there and never comes back to your entry. Today was a good day to scalp .86s -.88s a couple of times.

However this trading just doesn't work for me... I always find the fees generated in executing this trade mean that if I get it wrong once then it cancels out 2-3 of my good trades.

Honestly you never know when the specialist is going to bang 2million+ shares on the next level right after it has gone through one level. So I find the % is just not there for me to be profitable like that.

I prefer to take a bit smaller size.... like 20k and add as it goes with me to something like 50k position. Sometimes I won't add to ensure I don't get shaken out.

example... this morning on C I bought 20k @ $4.80 it went through .81 and then cleared almost all of .82.... I'm thinking great! awesome!! good trade... then... bang!!! As everyone is buying .82s someone (specialist / some institution) slams the .81 and the .80's in a matter of seconds... then slams the .79's a couple seconds later. How the hell can you predict that? I got out as this is normally VERY BAD price action in Citi. But it recovered and I had banged out at the worst place and my trade would have netted $2k by the end of the day. Thats why I prefer scaling in as I only took a small loss and prob would have been killed trying to spread any of that
 
A great trade on SIRI and awful trading on F is the summary for today...

Guess as I'm a positive person I will start with the positive. I shorted 40k @ $1.73 on SIRI in the morning. I did mainly because I saw no reason what so ever for it to open @ $1.73-74. It didn't make any sense other then someone wanted to get out and tried to squeeze the shorts. The thing is there was NO BUYING... I watched it go through the level... come back up ... hit $1.74 but that is when the buying should have stepped in. This big buyers in the past 3 weeks were just not there. So after it held the .74 level and then after a while hit the .73 this is when I took my position.

My size although decent was larger then I have traded it since the initial break out from the $1.40s. I was 100% confident of my trade and therefore was willing to wait for my prices. Ended up covering 10k @ $1.71 and 25k @ $1.6950 and then the remaining 5k @ $1.70. Up about $1,200 after fees on the trade. Very satisfied!

Now this is when I should have just left as I didn't think the FOMC minutes would have much action and it would be a boring day. Anyway I got bored and took a couple of trades (mistake 1). When I saw the numbers come out for Ford it initially popped to 17.55 and then pulled back to 17.45... I thought about buying it for a quick scalp but it popped up to the .50 level and I waited it then came back down and broke towards the lows of the day. This was a clue not to trade it on the long side but I didn't heed it. I bought some @ 17.38 in expectation of support around the 17.35 level (Mistake 2). I quickly lost as it failed to hold and was stuck wondering where to get out. Ended up trading out of the position but ended up losing about $200 on it.

I then made another mistake (Mistake 3) and decided that it was over sold. I continued this bias all the way down to $17.00. Losing small amounts at a time. I then gave up on the long and sat there.... this was of course the time that it did start popping. I had lost about $550 on these trades. I decided to take a small position just because I knew that because I didn't want to go long it was probably the best time to jump in. I only took it for a little bit and ended down $400 on the symbol. Of course it easily went all the way back up to $17.30ish.

3 mistakes and very bad trading on it. Thought I had really done away with these sorts of mistakes but not so. The size of the loss was about the only mistake I didn't make as I never took large size on it.

Including a couple of losses on other symbols I managed to turn my $1,200 into $580 by the end of the day... my fault but thats why I have this journal. To make sure I confront my mistakes

Was only down $500 yest not $550 so I'm green for the month / year woooohooo hahahaha...

Date: 04/01/2011
Net P&L: +$580
Month Balance: +$80
 
Thank you for this post.

ES

Quote from PropTraderMTL:

A great trade on SIRI and awful trading on F is the summary for today...

Guess as I'm a positive person I will start with the positive. I shorted 40k @ $1.73 on SIRI in the morning. I did mainly because I saw no reason what so ever for it to open @ $1.73-74. It didn't make any sense other then someone wanted to get out and tried to squeeze the shorts. The thing is there was NO BUYING... I watched it go through the level... come back up ... hit $1.74 but that is when the buying should have stepped in. This big buyers in the past 3 weeks were just not there. So after it held the .74 level and then after a while hit the .73 this is when I took my position.

My size although decent was larger then I have traded it since the initial break out from the $1.40s. I was 100% confident of my trade and therefore was willing to wait for my prices. Ended up covering 10k @ $1.71 and 25k @ $1.6950 and then the remaining 5k @ $1.70. Up about $1,200 after fees on the trade. Very satisfied!

Now this is when I should have just left as I didn't think the FOMC minutes would have much action and it would be a boring day. Anyway I got bored and took a couple of trades (mistake 1). When I saw the numbers come out for Ford it initially popped to 17.55 and then pulled back to 17.45... I thought about buying it for a quick scalp but it popped up to the .50 level and I waited it then came back down and broke towards the lows of the day. This was a clue not to trade it on the long side but I didn't heed it. I bought some @ 17.38 in expectation of support around the 17.35 level (Mistake 2). I quickly lost as it failed to hold and was stuck wondering where to get out. Ended up trading out of the position but ended up losing about $200 on it.

I then made another mistake (Mistake 3) and decided that it was over sold. I continued this bias all the way down to $17.00. Losing small amounts at a time. I then gave up on the long and sat there.... this was of course the time that it did start popping. I had lost about $550 on these trades. I decided to take a small position just because I knew that because I didn't want to go long it was probably the best time to jump in. I only took it for a little bit and ended down $400 on the symbol. Of course it easily went all the way back up to $17.30ish.

3 mistakes and very bad trading on it. Thought I had really done away with these sorts of mistakes but not so. The size of the loss was about the only mistake I didn't make as I never took large size on it.

Including a couple of losses on other symbols I managed to turn my $1,200 into $580 by the end of the day... my fault but thats why I have this journal. To make sure I confront my mistakes

Was only down $500 yest not $550 so I'm green for the month / year woooohooo hahahaha...

Date: 04/01/2011
Net P&L: +$580
Month Balance: +$80
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Sigh!!! Tough trading, there is a little bit of volume but no real movement. I have been waiting for a particular trade for a while... I took it but it didn't want to go. Let you know if I get it in the next few days.

Nothing of note to mention other then I just lost a couple hundred on a few stocks. No real risk taken but can't seem to get anything going again.

I'm taking my size down again tomorrow as I don't feel like being in a hole for the month and nothing seems to be working out at the moment. I'm conscious that this time last year involved big gross days but flat/negative on a net p&l basis. So I think reducing my size until something starts to happen is a good idea.

You can tell that the shorts have given up in this market and the longs really don't have any reason to be covering. Not until this imbalance rights itself and we get a big pull back will there be much action. Late Jan but probably more likely in Feb is my prediction.

It's a yawn until that time!!

Date: 05/01/2011
Net P&L: ($700)
Month Balance: ($600)
 
Quote from PropTraderMTL:

I'm a complete discretionary trader using charts and reading the tape for entry and exits. No overnight positions and never trade pre or post market.

Feedback, questions and comments are welcome but I don't want any of the annoying drivel that I see on many threads
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Before you enter a trade on C and BAC, do you also view the top holdings in the XLF in a watchlist? And is there a criteria for entering based on what those holdings are doing (example: they must all be in synch for the day, or long the ETF while short the stock as a hedge, etc). The current top 5 holdings in the XLF by percent of assets are as follows:

JPM, WFC, BAC, C and BRK.B

Thanks for feedback.
 
Quote from ScalperJoe:

Before you enter a trade on C and BAC, do you also view the top holdings in the XLF in a watchlist? And is there a criteria for entering based on what those holdings are doing (example: they must all be in synch for the day, or long the ETF while short the stock as a hedge, etc). The current top 5 holdings in the XLF by percent of assets are as follows:

JPM, WFC, BAC, C and BRK.B

Thanks for feedback.
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Thanks for the question.

Firstly I don't use hedges. I don't see the point to be honest. If I'm not sure about the trade I will take less size or scale in. I can understand hedging with inter-day trading (due to gap ups/down) but not intra-day trading which I do exclusively.

I always look at C, BAC and XLF. But what I have found is that just like when the market moves there are sectors that lead the market I have also found that there are stocks that lead the financial sector. When there was a lot of stuff like the SEC investigation it was GS that lead the financials. So I always had this on my screen. For quite a while it's been BAC due to all of the mortgage problems there. I have also found that watching C can give clues to the market / other stocks in general... this makes sense to me as its the most trade stock in the NYSE/NASDQ ie Goldie, Merrill and UBS are all taking positions in it as well as the market (they can also take very large positions due to it liquidity... a big advantage)

I don't have a watchlist that monitors the XLF components besides my ones that keep track of the most traded stocks. As a side note I have found the market really follows certain things... these are always changing but to give an example the market was always following the FXE (Euro / USD) etf... so I have that on my screen. Its kind of diverged since the euro crisis isn't as big an issue.

In terms of: do I have a criteria as to what the other financials are doing?... not really. I pay attention to my stock. Its the most because thats what matters. But it gives me more confidence in a trade to be long C if BAC and the XLF are at their highs or the FXE is ripping. Having said that I have been short C and the XLF, BAC, SPY and everything else is tanking and I haven't made a cent.

Hopes that helps or clarifies things for you

btw I don't think I have ever put BRK/B on my screen except when I played it as it went into the index
 
Zzzzzzzzz... This market never ceases to amaze me when it comes to new levels of boringness

Also Citi is trading really weird the past week or so... Breaking one level and then clears everything on the level below. It's making zero sense to me and hence why I'm playing really low size or not at all.
 
Reduced size today... hmmmmm... well I was positive all the way till the end of the day when a brain fart happened and I tried to short SLE on the pop... bad move. Gave back my day and went slightly negative.

This market is really boring and many stocks are acting very strangely. I honestly don't understand some of the moves. Citi group as mentioned earlier is top of my list.

Nothing seems to be working... the big boys are getting in and out of positions at the moment. Until they are done this market is going to be a snore.

I'm not going to trade tomorrow as I'm a bit frustrated and don't want to give any $$ in that mood.

I will come in next Monday and see how things go

Well done to anyone who is making $$ trading this market because its pretty tough! For me, it's time to sit tight and wait for a better opportunity and then size up

Date: 06/01/2011
Net P&L: ($100)
Month Balance: ($700)
 
I said I wasn't coming in today but...I'm in today for one reason... its the only stock I'm trading. I don't want to say anything for obvious reasons but today could be a good day if it works out. Fingers crossed! Hopefully update you on it at the end of the day
 
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