Upon reading DT’s comment about our TraderInterview I felt compelled to express my gratitude for his unequivocal abilities as a mentor. I mean just read over these insightful quotes I pulled directly from his blog. Genius!!!

Working less is one of my goals in life.

Trading is a great job when the money is pouring in.

Hint… I’m the raccoon.

10 minutes later I can look back and know that throwing my water bottle against my windshield only hurt myself

So on Monday, the futures closed near their lows… I think.

Yep, “the subprimers” are out picking up their 6-packs of Bud while we speak. Party on subprimers, party on.

What an inspiration! So here’s to you DT, I will let the following video speak for itself.

This is the kind of stuff that really makes me mad. All these CEOs and government officials continue to say everything is going to be fine. Just two days ago Bear Stearns CEO Alan Schwartz was on CNBC saying everything is fine. In the video it says he is in Palm Beach, FL. The company is losing billions upon billions, investors are getting robbed and he is in Florida playing golf.

Here are some really funny quotes from Alan Schwartz…

“We don’t see any pressure on our liquidity, let alone a liquidity crisis”
“We have $17 billion or so excess cash on the balance sheet”
“Bear Stearns’ balance sheet, liquidity and capital remain strong.”

Now he is saying…

“Nevertheless, amidst this market chatter, our liquidity position in the last 24 hours had significantly deteriorated.”

Take a look at this article at Bloomberg. It seems that someone is finally admitting how bad it really is out there. Here is a snapshot of the BSC puts today. Somebody made a killing being short the Bear with puts. I don’t think I’ve ever seen a stock sell off this much intraday without being halted. The chart below says it all.

Today was really rewarding, and very frustrating at the same time. I took three trades, all short, for -$52, +$702 and -$188. The rewarding part was obviously the money I made, but the frustrating part is a little more difficult to analyze. I recorded my trade in X, which was my big winner but I didn’t catch the loss in MOS at the end of the day. Here is the X video.

X (03-10-08) from ainkurn on Vimeo.

I stayed cautious the rest of they day and continued to stalk setups. I noticed that DE, MON, MOS and several other ags were setting up for a short play. I got short MOS at 96.10 with 200 shares and then added 400 shares at 95.90. In the back of my mind I was thinking that I needed to preserve my profits at all cost, even if that meant getting stopped out at break even and missing another great trade. I know eventually I will have to be able to continue trading, but I am only in week four of Trading Probation, and not quite to the point where I can fearlessly continue to take trades when I am up a nice sum.

Anyway, MOS started to move down nicely and I was up $240 or so as a nice spike in volume came in. Against my better judgment, I added the remaining 400 shares as per my trading plan. I moved my stop down from 96.33 to 96.02 and you can guess what happened next. I get stopped out, letting a $240 winner turn into a $188 loser. Idiot! All I had to do was stick to my rules, but when I have something like 25 rules to consider in every single trade, it becomes difficult to remember them all. The second chart is what MOS looked like after I got stopped out.

Of course I don’t expect to get my system down perfectly in the first month, I am just still in the learning phase and the expertise will come with time. Apparently, someone decided thy desperately needed 165,000 shares and were willing to pay any price for them. MOS did eventually close lower, but there was no way I could’ve held through the chop. I should have kept my size smaller maybe 400-600 shares and moved my stop to break even.

I took two trades today, one non system buy and one Holy Grail setup. My first trade was in COIN as it was breaking to new 52-week highs. I got in with 200 shares, set my stop and forgot about it. After about an hour of being in the trade, mostly in the red, I got out with $24 just before the move that I was looking for materialized. I really wanted to get out on a break above $16, but my lack of patience finally won out. Here’s the chart.

After getting out of the COIN trade I only had to wait 30 minutes for my next setup. There was a lot of action out there and some really good moves, but not a lot of HG setups. I finally got a signal for long FLR. I recorded the entire trade with Camtasia which generated about a thirty minute video. I spent the better part of 2 hours editing it down, cutting out all the profanity and stupid comments and ended up with a twelve minute video. Unfortunately, this goes over YouTube’s length rules and my upload was rejected after 20mins of uploading. So I’ll have to try to figure out another way to get the video up here.

The early action today was hard for me to take advantage of. I just sat and watched the action most of the morning. Today was one of those days where you could have sold the gaps down, bought the gaps up and held on for a few hours making money both ways. I did neither. I kept waiting for a trade to come to me and at 11:02 I got a setup in SKF that looked promising. I missed the initial move, but got in as the next 5min bar started to sell off (against my better judgment). Here is the video of the live trade.

In hindsight, I should not have taken this trade. I wanted in SKF while it was trading on the 20-SMA, but it moved up so quickly that I couldn’t get in. I decided to wait for a pullback on the next 5min bar to take my entry and all the time I was thinking this could be a revenge trade. I should have followed my intuition and just left the trade alone after I missed the initial move up. Still, it wasn’t a big loss.

Not two minutes after I got out of SKF I saw FLS setting up an IHG. This one had setup nicely earlier in the day and this second opportunity looked promising. I didn’t get the best entry in the world, but I was able to set a reasonable stop and keep with my plan. I contemplated adding to the trade at better prices, but I forced myself to wait until the trade stared to go my way. After a few minutes of sideways action, I realized the trade was probably doomed and I tightened my stop. The market was in no-man’s-land and finally broke higher causing me to be stopped out with an average-sized loser.

No big mistakes today, just difficult market action and two losers. The cold hard fact is: no matter how small your losers are, if you don’t have any winners you will still have a bad day. Being that it is my birthday tomorrow, I might just take the day off to relax (if my wife will let me). BTW… I think the video quality is better now after taking HPT’s advice. However, the quality is still not where I want it to be. I am working on a solution, and should have something better by the end of the week.