Tuesday, August 07, 2007

Today's Trades


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I made a few trades in the Nasdaq 100 eMini Futures (NQ).

637a: Long NQ @1954, stop@1952, exited @1956, profit=2pts

1038a: Long NQ @1962.25, profit=2.25pts

1127a: short NQ, 2.25pts profit

1132a: short NQ, 1.25pts profit

1158a: short NQ, 2pts loss

1205p: long NQ, 3pts loss

1215p: long NQ, scratched.

In between Trade1 and Trade2, I made several boredom trades which wiped out my initial gains. After that, I took a break and left my office. I came back thinking focus, focus, focus.

Once the Fed made their long anticipated interest rate announcement, I came out swinging and scalped NQ as it chopped its way down to 1942.
On Trade5, I was making a play of a potential double top. As it turns out, I was shorting without waiting for confirmation. So I was basically calling for a reversal which never happened, but I was okay with that, since the amount risked was acceptable to me. However, the last 2 trades (Trade6 and Trade7) were basically mistakes. In those two trades, I was betting on a continuation of the 30pt run-up that NQ had just put in. I actually had a sense that it would make one "last gasp" rally before topping out and reversing. The question would be how much of a pullback would occur before that happened. Again, I was premature in jumping in without waiting first for confirmation of continuation of trend. I thought it would only pullback 2 or 3 points, but it was actually much deeper than that. The last one was especially annoying because I was playing with my stops too much. I should have given the trade a wider stop because I was anticipating a 5 or 6pt last gasp run-up. The last trade was actually a correct decision to enter (broke out of the pullback), but the trade was mis-managed.

So the moral of the story (with which I am still struggling to improve), is to wait and wait, and then wait some more the for the low hanging fruit which inevitably appears. Following this rule would have avoided making Trade6, which would have saved me a couple points. For that last trade, I need to plan out the trade more carefully the next time, and improve upon my analysis of the stop placement.

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