Weinstein Trading and Fading

Hi Rob,

Before I checked your journal I was thinking I hope he hasn`t lost more than $10,000 with AIG today.

Any trader would empathize but in my opinion your recent trades showed that you were trying too hard to take the account to old highs. Is it possible to take few days away from trading and spend some time with the family? You are vulnerable these days and I`m afraid a major down day that will kill your account is possible if you don`t give a break.

Best
 
I shorted AIG about 2 times today and was lucky enough to walk away from it profitable. From past experience AIG is not a very easy stock to fade with its unpredictable volatile moves. When you are right though this stock can definitely be milked.
 
Robert - I'm sure you'll iron out your recent drawdowns, but I'll offer my advice for the interim: stop trading AIG.

Whatever the reason, there appears to be some fundamental conflict between your trading system and the AIG price action now, and you run the risk of letting emotion dictate your trades in this name now, after this month's events. This is always a bad situation, but it's potentially disastrous given the magnitude of the moves we've been seeing. Best to step back and regroup.

JMHO of course, and best of luck. :cool:
 
Quote from Madison:

Robert - I'm sure you'll iron out your recent drawdowns, but I'll offer my advice for the interim: stop trading AIG.

Whatever the reason, there appears to be some fundamental conflict between your trading system and the AIG price action now, and you run the risk of letting emotion dictate your trades in this name now, after this month's events. This is always a bad situation, but it's potentially disastrous given the magnitude of the moves we've been seeing. Best to step back and regroup.

JMHO of course, and best of luck. :cool:
More...

RW.

Have been following your journal from the beginning, and I am sure you will be up at no time.

I think it has more to do with position size than price action. I faded AIG today too and what I found out is that because of the large percentage move, we should adjust our position size accordingly, so when scaling in/out you do not let your emotion involved. Do not be deceived by the share numbers, play with 200 shares will win/lose thousands on a day like this. If you want to trade AIG, trade small.

Just a thought.
 
Mix it up a bit Rob. Fading big gaps isn't going to butter your bread in a quasi bull market. Also watch out for short squeeze stocks like AIG, might as well go to a casino than trade them long or short.
 
Not much of a day today

I found another mistake from yesterday with SPR after I went home. When I went to see how OSK was doing in aftermarket trading I found out I was the proud owner of SPR from a bid that must have been hit. After getting done with the opening gap trades I went to reading and really dropped the ball with making sure I did not have any active trades on. Of course that also led to my AIG mess up as well. Its kinda like locking the barn door after the cows have been stolen but I have a rule as part of my no scalping rule that if for whatever reason I am in a trade that I don’t have a valid reason to be in that I pay the spread and get out.

I planed on offering SPR near my BE point at the open and if that didn’t get lifted I would hit the bid to get out. Thats what I ended up doing and I exited near the high of the day (not that one trade matters but the point is I followed through with the exit plan). so I gave back some of my gains due to a stupid oversight but as I found out with AIG yesterday paying the spread can be very cheap.
SPR – 44

OSK moved up in the opening today and I started to take stop losses with it. I also scalped it during much of its move today and when it started to go back up into the close I took the hit and closed out. OSK is like only about the 3rd losing trade for my main signal this year so I can’t complain a lot about a loss once in a while even if the timing hurts. Had I been willing to fade the opening or been more aggessive I could have done better but after this month I felt that risk management and getting back to winning even small amounts was the right thing to do. Now flat with OSK
OSK – 8289

I did trade AIG again but I downsized my trading size and my aggressiveness(in general not because it was AIG). I have received a lot of support and messages regarding AIG. I don’t blame AIG for my losses with it this month I blame myself. I feel its things I must correct in my trading that will allow me to improve. If I simply avoid AIG without making changes in what I do then I am right back to talking to myself after the next ‘AIG’ comes along. For example I have found that I am so used to selling the offer and paying the bid that I hate to pay the spread (I know a lot of people always pay the spread and its no big deal to them) but when exiting a trade that I do not have a reason to be in I will now always pay the spread and feel that speed is more important than the tiny price difference. So for the number of shares that I traded I actually did well with AIG today but I traded only a fraction of what I normally would have just a day ago.
AIG + 105

I am now pretty much flat other than a highly deep in the money covered call with GE. I will start the week next week trading much smaller and I expect that will produce consistent gains that are smaller numbers than I have been posting lately. Much like I did last year when going through a tough time.

- 8228
- 30569 Week
- 32694 Month
 

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Unfortunately this is what I was afraid was going to happen. Its definitely time to go back to the drawing board before its too late. Risk management needs to be a lot better and the risk/reward ratio should be looked at as well. You seem like a smart enough guy to find a way to trade with these elements, which are crucial for lasting in the markets. Your strategy now can work if you have unlimited funds, yet the pain you would have to endure would not be worth trading. Best luck to you and your trading.
 
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