Friday, January 23, 2009

Frustrating trading today - FAZ and MON

Today was very frustrating.  I finished in the black but I was close to having a remarkable day if I'd just made the most of FAZ and MON.  I had great timing on my trades but was too careful to book profits instead of hold for real money.  Examples are below. 

Trades not taken: MON long - likely $2-3 gain with about .10-.20 cents risk.  Should take that trade every time.

Trades taken that I didn't make real money on: FAZ short.  The financials have gotten clobbered and were due for a bounce after gap downs.  I shorted FAZ at the perfect moment about 6 minutes into the trading day.  Covered for a nice little gain.  But... I settled.  I should have covered half, and let the rest run.  I thought the stock would fill the gap and it eventually did that and much more.  No reason for me to not ride that trade and make 10 points or so.  Later in the day I initiated another FAZ short, once again with perfect timing.  I closed it too for a quick little gain but if I'd held through the end of the day I'd have made 6 points and the stock never went any higher than where I covered.  Frustrating to have the right ideas but for some reason lack the conviction to stay with them.



Flag and Wedge said...


How about buying WYE and getting out with 25c of profit (for no reason) and watch it rip up straight for 2+$. I think a lot of people did not expect how much buying frenzy was going to come due to the chop of last few trading days.

Blue said...

I should show you my charts of ESI short and CME long on Wed. ESI at the open, CME at the close. I literally stopped out 1min early on ESI then it was all downhill. I had 1000 short at 112.65 (open price). That was the closest I've ever been to $10,000 in two trades had I even been 1min more patient. I gave up after my stops kept getting blown up. MM's jacked the ESI price up 4x's its bid/ask swing as it was tanking to hit .06 above he open price one last time before it plummeted. Someone got a good short fill on that 30sec. fuckery and I got stopped out for a tiny loss.

FAZ and SKF swing big. It takes a lot of courage to be confident in the direction and hold through those drawdowns. Holding 500 to 1000 of either is a major gut check, but big money if you're patient enough.