Tuesday, February 26, 2008

Daily Summary


I chopped myself up in the morning and was down around $170. I took some 300-600 share trades which did not work out so my losers were larger then usual. I caught a nice winner in CNQ later but only had 200 shares. I went long at 73.65 and got out at 74.50 and 74.53. That trade brought me back to break even. I traded lightly afterwards but did not catch anything.


bstay said...

I really like your blog because I traded similarly with small size lots of 200 shares and up. How do you decide when to use 200 shares and when to go for 600 shares? I've seen traders going 1500-5000 shares but I'm not there yet.


OBAT said...

Right now my share size is still based on a gut feel. I will add more size if I see volume and chart confirmation, like a breakout with volume.

It also depends on the stock I am trading. If I am trading stocks like MON, MOS, MA, I'll go with 100-200 shares because those have pretty high volatility.

Right now I haven't gotten a good trade with increased size like 400-600 shares. In most of my good trades I only have 200 shares. If I had my pnl would be a lot better. I think I am still not comfortable with my convictions yet.

OBAT said...

Before the nyse hybrid my average size was 500 shares and I took 800-1300 share positions pretty frequently. I think back then I have a good idea where my stops would be filled if they get hit.

I think this is how I increased my size before the hybrid. I started trading with fix sizes like 300 shares for a few weeks until I got comfortable with the size. Then I would boost it up to 400, then 500 and so forth. I will try to take at least one 1000 share each day.

Nowadays with the hybrid it is very hard to rely on stops. I've had many instances where I lost 20-30 cents more after my stop is hit because of slippage, so I've learned my lesson.

I have been trading for a year with average size of 200-300 shares and I don't feel like I am making good progress. I may try boosting my size again and keep it fixed until I build some tolerance. I think it is like weight lifting. You got to keep increasing the resistance if you want to improve.

bstay said...

i find the market actions choppy for several months now and i set my default share size to 200 or 400 shares, depending on my "readiness". i'm not fast enough to calculate share sizing using risk units, so quite similar to your gut feel system. i hope to get advise from you once i see you increase the share size comfortably. thanks for your reply.

About Me

I have been trading for 5 years. It took close to a year before I became profitable. I find that I am improving gradually each year. My method of choice is scalping. My edge lies in tape reading NYSE stocks and staying on the side of the specialist. That is the method I learned when I started. As I build up my capital I will try new styles and trade new markets. In late 2006 my trading hit a rough patch after the introduction of the NYSE Hybrid system. For most of 2007, I have been on a search for new strategies that would help me adapt to the market.