Started the Trades

Quote from jas_in_hbca:

There was a guy interviewed in TA of Stocks & Comm magazine in June 2010 named Josh DiPietro who is daytrading for 15-25 cent moves. (Had to dig through the digital files to find his name) From what i recall he was doing many, many trades a day. I thought he was doing something similar as you but looks like he's scalping for a bit more.

Not sure this is helpful in any way but thought i'd mention it.
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If I was looking at other stocks, I could probably find more setups to scalp. I suspect that this is what Lescor is doing with trade ideas. I think he has a program set up to buy for him on those ones. 15-25 cent moves would depend on the stock. If DePietro was trading Apple or Google, 15-25 cent scalps would be like a .05 scalp on GS. Unfortunately, my game hasn't progress to that point yet and everyday I am gaining screen time experience. I only have one computer screen and that is on my laptop so right now I can only focus on one stock at a time.

Only time will tell if I will be successful with this strategy. If not, I will go to something else.
 
Quote from DblArrow:

WOW, still don't comprehend the idea of 3 cent trades (I trade futures.)

This is working for you?

With you methodology here you have to keep a high sucess rate going, (perhaps that is why the quick scalp - can't afford to lose) cause the losers will wipe out ALOT of prior work.
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Also isn't .03 cents on 100.00 stock the same as .30 cents move on 1000.00 futures contract move? :confused: Correct me if I'm wrong because I don't trade futures. My game hasn't gotten to that point.
 
Quote from pennystocker:

I am really interested in following your progress, SF. Keep posting. Best of luck and success to you.
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Thanks man.. you too.. I recall reading some post you did before on scalping and that it has helped you. Hope that it holds. Good luck.

Do you trade actually trade penny stocks? High volatility with them but can be very profitable if done right. I was reading about Tim Sykes' blog on his penny stock short strategy over the weekend. Very interesting and very funny. He's a funny guy. His strategy is to short these pump and dump schemes promoted by Jarret Wollstein. This video cracked me up. He basically says that the only hard part about his strategy is finding shares to short. He was totally ranting on RAYS.OB and saying that it's another shell company promoted by Jarret. I went to the RAYS.OB company website and notice how their investor relations page had really nothing but the stock price up. Why would some company focus so much on their stock price on their investor page but not much else is listed. LOL I'm now totally watching it to see if it will crash and burn like he says it will. Apparently he has made a lot shorting it last couple days. He says it'll go from $1.80 down to $0.50 at some point. I'm really curious to see if he is right. He definitely profited from shorting it a bunch last few days.

http://www.timothysykes.com/2010/05/no-borrow-no-cry-a-penny-stock-short-sellers-anthem/
 
Hey SF,

There's a few thoughts I had reading your journal. I'm in the East Bay btw.

1. Being new to this, you don't have the benefit of hindsight and experience to know when a market is good or bad for trading. For <u>equity traders</u> this market is terrible. No liquidity, no *real* volatility, no panic or euphoria. This is a time for grinding and capital preservation.

2. Correlations are at an all time high. This means lack of opportunity for us. The algos have tightened things up so much that everything pretty much trends together, and this sucks. You have probably never seen a market come unhinged but it feels a lot different than what you see today.

3. You have chosen some of the worst stocks to trade. GS and F are terrible algo driven garbage. I know quite a few great traders and I don't think any would disagree (incl Lescor). Stock selection is important, and sticking to one stock, or a small selection can be a great way to learn and survive. I suggest finding stocks that are more momentum driven with liquidity, volume, and volatility. That will give you the best chance in my opinion because those stocks have large percentage moves, and most importantly reasons to move. Your winners have to be big enough to make up for your losers.

4. Trade-Ideas is your best friend, and cheap. It will find you stuff in play, and that's where the money is. Especially when the market becomes wild. Also if you have ideas for automation, you can link up TI and play with your own algos which is the future of trading (unfortunately).

5. An experienced trader makes most of his income during periods of stress in the market. A good trader can do 5-10X his average year in a *good* trading year. This would have been 1997, 1998, 2001, 2007, 2008 in recent history. 2011 definitely isn't included in the list. There will be guys that tell you otherwise, but between myself and the guys I know, this market is no good.

What does all this mean for you and other new traders? It means the odds are stacked way against you, and you need to have realistic expectations about when you can become profitable. Usually you see 6-12 months thrown around as break even, but you are probably looking at longer than that. I can say without a doubt that if I started trading today I would fail. I'll make enough this year to pay my mortgage and feed my family, but it was damn hard and I look forward to better times.

Anyway, good luck.
 
Quote from Dustin:

Hey SF,

There's a few thoughts I had reading your journal. I'm in the East Bay btw.

1. Being new to this, you don't have the benefit of hindsight and experience to know when a market is good or bad for trading. For <u>equity traders</u> this market is terrible. No liquidity, no *real* volatility, no panic or euphoria. This is a time for grinding and capital preservation.

2. Correlations are at an all time high. This means lack of opportunity for us. The algos have tightened things up so much that everything pretty much trends together, and this sucks. You have probably never seen a market come unhinged but it feels a lot different than what you see today.

3. You have chosen some of the worst stocks to trade. GS and F are terrible algo driven garbage. I know quite a few great traders and I don't think any would disagree (incl Lescor). Stock selection is important, and sticking to one stock, or a small selection can be a great way to learn and survive. I suggest finding stocks that are more momentum driven with liquidity, volume, and volatility. That will give you the best chance in my opinion because those stocks have large percentage moves, and most importantly reasons to move. Your winners have to be big enough to make up for your losers.

4. Trade-Ideas is your best friend, and cheap. It will find you stuff in play, and that's where the money is. Especially when the market becomes wild. Also if you have ideas for automation, you can link up TI and play with your own algos which is the future of trading (unfortunately).

5. An experienced trader makes most of his income during periods of stress in the market. A good trader can do 5-10X his average year in a *good* trading year. This would have been 1997, 1998, 2001, 2007, 2008 in recent history. 2011 definitely isn't included in the list. There will be guys that tell you otherwise, but between myself and the guys I know, this market is no good.

What does all this mean for you and other new traders? It means the odds are stacked way against you, and you need to have realistic expectations about when you can become profitable. Usually you see 6-12 months thrown around as break even, but you are probably looking at longer than that. I can say without a doubt that if I started trading today I would fail. I'll make enough this year to pay my mortgage and feed my family, but it was damn hard and I look forward to better times.

Anyway, good luck.
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Dustin,

Very interesting thoughts. I wish I could use trade ideas but that is a service I cannot afford right now but would consider in the future if I do well later on. I know that the market doesn't have the volatility as in the past but I'm doing this because the job market is tough. Many of the jobs have been outsourced and we are a service only job country now. The stock market is the only thing I really see left to get anywhere in this country now. It is certainly better than starting your own business in this economy which requires a lot more capital than day trading or working dead end jobs. A friend could've helped me get a $15/hr job down in San Diego but you're barely getting by and saving on that. I love San Diego and would do anything to go back but I figure to give this my best foot forward and the rewards if done right would be better than $15/hr. That's really all that I'm trying to match or exceed. I'm trading GS right now because I'm looking for a stock where I can get in and out easily and so far I can do that with it. Lightspeed with low commissions allows me to scalp which I wasn't able to do with Scottrade. A transition from F to GS & Scottrade to Lightspeed have helped me in this process significantly. I could trade SPY as well but that moves less than GS. I'm trying to be patient right now. At some point after any consistency, I would hope to either increase share load or trade different stocks at the same time which also requires more computer screens.

I wished that I had ideas for writing algortithms but I'm not a computer guy. I'm not a programmer and wouldn't have a clue how to incorporate setups into them. Obviously there are some higher percentage setups out there but I really don't know how to incorporate it into a program. Going to computer algorithms is probably the last step on my mind right now. As a beginner, I'm still trying to gain consistency. I have improved but still have a long ways to go. Thanks for reading.

Sorry no demo paper trades to post tomorrow. I gotta take my mother to the oncologist and figure to be there most of the day.
 
sf,

I don't trade stocks but i would agree w/ dustin re: stock selection. stocks in the news can be could candidates for liquid momentum plays. look around; try barrons online or yahoo. try demo for a day.

A good read on day trading stocks is One Good Trade by M. Bellafiore

sorry to hear about your Mom.
 
Quote from sfbayarea:

Would you've have been happy to take a scalp on all your losing trades?

People can laugh at scalps but scalps add up because scalps are safer.
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NO - I get more disappointed when I do not follow my system. It says take 4 ticks on the first contracts then scale from there. If it hits four then moves down and takes my stop so be it. Experience has told me over all it will work. So I no longer get happy or sad when trades are or are not profitable - I get irritated if I do not follow my system.

Not laughing - just don't personally comprehend the idea of trading for .03.
 
Quote from sfbayarea:

Also isn't .03 cents on 100.00 stock the same as .30 cents move on 1000.00 futures contract move? :confused: Correct me if I'm wrong because I don't trade futures. My game hasn't gotten to that point.
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Don't know - When I started I looked for the contract that had the highest dollar value per tick move and ended up at the 30yr bond. As I think about it, could be about right, the contract value is $100,000 - but the big difference is it only takes me $1000 to trade.

1 tick is 31.25.

I could say the same I don't and never have traded stocks. My game hasn't gotten to that point.
 
Well, today my ACH went through so I did a few trades. Calling it a day even though the market hasn't closed. I figured after all those up days that either yesterday or today would be a shorting day.

+86

Sold Short 103.49 10:01
Bought Cover 103.22 10:03

Really lucky on this one. Not my usual scalp opportunity since the stock started the day downwards. This spike upward was just too high in my opinion. I actually held on longer than usual before exiting. Guess in hindsight, could've gotten much much more in a few minutes but I'm satisified with it.

Other misc. scalps

Sold Short 101.27 11:21 Sold Short 100.96 11:51
Bought Cover 101.23 11:22 Bought Cover 100.905 11:53

Sold Short 101.12 11:54 Sold Short 100.96 12:48 **
Bought Cover 101.09 11:54 Bought Cover 100.94 12:59

Sold Short 100.60 14:15 Sold Short 100.19 15:01
Bought Cover 100.55 14:19 Bought Cover 100.14 15:04

** - I normally don't like to exit with +.02 but I was waiting forever (got +1.50 on that one.. LOL). +0.03 is usually the minimum. LOL. It was at a crossroads where it could've gone up or down and I learned from Monday. Couldn't wait for it so I thought to just get out. I figured that if it was going down, it would go down real quick which it did after I exited. Oh well.

I don't expect my results tomorrow to be anywhere near today's due to the one lucky short I had early. I'm aiming for the +30 range tomorrow. LOL
 
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