(Heavy sigh). Heading says it all. Not a good day. It seems that every time I bring my account over $10,000, I get handed a huge, expensive day trading lesson. Today, only thirty-three minutes into the trading day, I lost 30% of my account. By 12:00, I lost another 8%. It was my second worse day since I started trading.
Here’s what happened. I purchased 3,000 shares of MGM premarket (my broker allows transactions before and after the official New York Stock Exchange market hours) at 8:32, right after the Department of Labor released positive figures indicating a decrease in continuing unemployment claims. The data was better than expected, so I assumed that the market would react favorably and go up. But I made two initial mistakes with this purchase. First, I should have waited until 9:30 when the market officially opened and when the great majority of people trade stocks. The premarket volume is very low, and it is difficult (impossible?) to correctly identify a stock’s short term pricing trend with low volume. True day trading is based on a stock’s current momentum and really nothing else. Second, I should not have tried to predict the market’s reaction to news. I ended up being right about the overall market (not hard to do as unemployment figures always have great effect), but being right didn’t matter, because the stock I purchased went down anyway, as you will see.
The market bell rang as usual at 9:30 and it was immediately obvious that I was in trouble. MGM opened at $13.20 and dropped to $13.10 in one minute. With 3,000 shares, I was down $450 in 60 seconds of official trading. Then, over the next 60 seconds, I lost another $300. $750 gone in two minutes. Unfortunately, instead of a rational, objective conclusion based on what was happening at that moment, I started to hope for a reversal. I remembered how many times I had seen this stock drop for a few minutes when the market first opened and then quickly shoot straight back up. Surely, I thought, this would be one of those days due to the great unemployment figures. The overall market was up, and I just needed to be patient for a few more minutes. At this point, I was committing mistakes three and four.
The third mistake was, obviously, trying to anticipate a stock’s movement instead of simply accepting what I saw. It was dropping fast, but I thought it would reverse soon. The fourth was not using a stop loss. I never use them because I trade very volatile stocks, and I have seen that stop losses can get easily triggered during a stock’s normal fluctuations, shaking me out of a trade too early even if I am positioned correctly with the current momentum. But I should use them anyway to avoid catastrophic losses (more than 2% below the entry price, maybe), and I didn’t.
MGM’s price continued to fall at a pace I’d rarely seen, and I kept waiting for the reversal that I was certain would come. By 9:35 I had lost $1,350, and I had decided to get out of the trade and take my loss when it started to rise. By 9:41 I had made back $400 and surely the reversal had begun. But the rise was short lived, and at 9:54 I was back down to a $1,650 loss. Again, I entered a sell transaction in my trading software to exit the trade when the stock started another rise. The overall market was up 50 points and I thought that this was finally the change I had waited for. Then, six minutes later at 10:00 AM, the Existing Home Sales data was reported on CNBC. The figures were much worse than expected. The Dow Jones Industrial Average dropped 40 points in 15 seconds. My stock plummeted. By 10:05 I was down over $3,000 and I sold in order to avoid any more pain.
A few minutes later I tried to make back some of my losses by buying MGM yet again, this time 2,000 shares for $12.37 at 10:10 AM. The stock had bounced 20 cents from its bottom and I thought that momentum had finally changed. But, apparently I was not going to make any money today and I sold 45 minutes later with another $650 loss. The stock continued to drop after that, so at least I did one thing right by taking a smaller loss rather than yet another huge one.
I know that education is expensive, but these mistakes may cause me to run out of money before I’ve discovered how to be a successful day trader. I am therefore very discouraged. But, in an attempt to build from today, I will summarize what I learned:
1. I need to achieve a certain clarity (emptiness?) of mind in order to see a stock’s trend without prejudice from overall market news or the memory of previous movements. But that is hard to do. Really hard. All traders watch CNBC, and most scour the internet for articles and discussions about which way a stock is going to move. But that constant stream of information, or noise as I now see it, clouds my ability to just focus on the data on the screen. What is the stock price at the moment? Is it going up or down? I can’t predict the future. I don’t know when the direction will change, if ever. So, am I in the right position? If not, get out with a small loss. That’s all I should care about.
2. In keeping with the goal above of getting out of wrong trades with a small loss, USE STOP LOSSES.
3. Only trade during official market hours, and preferably not within the first 10 minutes.
4. While I will turn CNBC off during trading hours, I must still pay attention to the release of potentially market moving news (such as the home sales data mentioned previously), and I must be weary of how that information can effect my current positions, if any. It would be better to not hold stocks before such news is released, and instead trade them based on the market’s reaction.
5. I didn't necessarily figure this last point out today, but it is important enough to mention here. And that is the fact that I am putting my entire account on the line with every trade. Actually, with the 4 to 1 margin allowed by my broker, my risk with each position is increased by a factor of 4. I can't risk losing any more money, so I will have to address this issue by purchasing smaller blocks of shares for the foreseeable future.
I read somewhere that 80% of those who attempt this give up due to their losses. I don’t want to fall into that statistic. I still love the idea of day trading. I’m still fascinated with the concept of trading as a business, or full-time job. I want to make this work. I’m just not sure that I can…
teachtees! (COT 5930 Mini-Project 1)
Site Purpose & Target Audience
For my COT 5930 mini-project 1 assignment, I developed a site that depicts a fictional t-shirt manufacturer providing direct sales to on-line customers. The target market is internet shoppers with young children. The inspiration came from an evening with my family at an ice cream store when I suggested that I print “my shirt is not a napkin” on my then six-year old son’s shirt, with the letters appearing upside down so that he could easily read them. While not yet fully functional (there is no shopping cart), the proposed teachtees.com web site currently features specific product designs on the home page with a full product line shown on the shop page. A third info page answers questions typically asked by online shoppers.
The site was coded in XHTML 1.0 strict compliant code using compliant CSS as well. A small javascript script written by a third party and used with permission was implemented on the home page. The script provides a fading slideshow presentation of three images.
Design Process
I coded the site using Coda, a Mac OS based web development tool which I find to be very useful. The HTML coding was straightforward and took from four to six hours. The creation of the graphic elements, however, was very time consuming, requiring approximately fifteen hours to complete. This was the first time that I used elements that provided mouseover effects, and this was also the first time I implemented a javascript. While the mouseover effect was easy, I struggled considerably with the scripting and I need to study the use of javascript further.
I followed an on-line tutorial at sixrevisions.com built around a 960 pixel grid system. While the tutorial helped, I should have planned the layout in advance better than I initially did, as I redrew my design mock-ups in Photoshop three times until I settled on the current appearance. I prefer modern, minimal web sites based on light grays and white, and I am pleased with the final result.
Future Development
I would like to develop the site further for future assignments by implementing a shopping cart and improved javascript effects (such as zoom features on the shirts). I also feel that the large, feature image on the main page should be more dynamic (changing instead of the smaller banner below), and I would like to add some photography. I also need to further develop and refine the “info” page. Finally, I am considering the using of a horizontal scrolling javascript in order to make transitions from page to page feel more “fluid”.
For my COT 5930 mini-project 1 assignment, I developed a site that depicts a fictional t-shirt manufacturer providing direct sales to on-line customers. The target market is internet shoppers with young children. The inspiration came from an evening with my family at an ice cream store when I suggested that I print “my shirt is not a napkin” on my then six-year old son’s shirt, with the letters appearing upside down so that he could easily read them. While not yet fully functional (there is no shopping cart), the proposed teachtees.com web site currently features specific product designs on the home page with a full product line shown on the shop page. A third info page answers questions typically asked by online shoppers.
The site was coded in XHTML 1.0 strict compliant code using compliant CSS as well. A small javascript script written by a third party and used with permission was implemented on the home page. The script provides a fading slideshow presentation of three images.
Design Process
I coded the site using Coda, a Mac OS based web development tool which I find to be very useful. The HTML coding was straightforward and took from four to six hours. The creation of the graphic elements, however, was very time consuming, requiring approximately fifteen hours to complete. This was the first time that I used elements that provided mouseover effects, and this was also the first time I implemented a javascript. While the mouseover effect was easy, I struggled considerably with the scripting and I need to study the use of javascript further.
I followed an on-line tutorial at sixrevisions.com built around a 960 pixel grid system. While the tutorial helped, I should have planned the layout in advance better than I initially did, as I redrew my design mock-ups in Photoshop three times until I settled on the current appearance. I prefer modern, minimal web sites based on light grays and white, and I am pleased with the final result.
Future Development
I would like to develop the site further for future assignments by implementing a shopping cart and improved javascript effects (such as zoom features on the shirts). I also feel that the large, feature image on the main page should be more dynamic (changing instead of the smaller banner below), and I would like to add some photography. I also need to further develop and refine the “info” page. Finally, I am considering the using of a horizontal scrolling javascript in order to make transitions from page to page feel more “fluid”.
Day Four: +$1,750. And why I am writing about day trading.
I started day trading stocks again this past June. I say "again" because ten years ago, in the summer of 1999, I took $5,000 I couldn't afford to lose and, well, lost it day trading over three weeks. I've been fascinated with the subject ever since. Day traders, as defined by the SEC, "rapidly buy and sell stocks throughout the day in the hope (note that I added the italics) that their stocks will continue climbing or falling in value for the seconds to minutes they own the stock, allowing them to lock in quick profits". That is true. The SEC also says "be prepared to suffer severe financial losses", "day trading is an extremely stressful and expensive full-time job", and "don't believe claims of easy profits." All also true. I've read way too many books that, while providing the basic tools to learn how to day trade, basically say the same thing. My early experience ten years ago confirmed these statements.
But I can't let the idea go, and now that I am taking a year off from work to obtain my Master's Degree, I have the time to try again. And I'm going to write about it, right here, every day that I trade. Not because I want to boast about how much money I make (actually, I've lost $5,000 since July in a rising market - go figure), but rather because I think that someone might benefit from my mistakes or be inspired by my triumphs. I am still convinced that day trading might be the greatest job in the world, electronically participating in the purest form of capitalism, buying and selling stocks like the largest fund managers, right from home. I guess we'll see.
So, today was a good day. I currently focus on the casino stocks (mostly Las Vegas Sands and MGM) because of their high volatility, and I was fortunate enough to catch both in three positive trades. I picked up 2,500 shares of MGM at 8:19 (premarket) at $13.04, and unloaded those at 10:42 for $13.44, or a $1,000 gain. Upward momentum was gone, so I shorted the same 2,500 shares five minutes later at $13.49, and covered at $13.29 at 11:33 for a $500 gain. Unfortunately I covered way too early, as the stock dropped another 50 cents thereafter. That extra $1,250 would have been really nice. I later (12:06 PM) took a long position of 1,000 shares in LVS at $18.70, and finally sold those near the market close at 3:51 for $18.95, or +$250. This was my best day to date, so it was a great way to start this blog. Unfortunately, I have lost way more than $1,750 in a single day (two months ago), and I'll write about that experience soon.
One more thing: I am working on a charting format that I hope to use to visually depict trades, and I will try to post them with next week's transactions.
But I can't let the idea go, and now that I am taking a year off from work to obtain my Master's Degree, I have the time to try again. And I'm going to write about it, right here, every day that I trade. Not because I want to boast about how much money I make (actually, I've lost $5,000 since July in a rising market - go figure), but rather because I think that someone might benefit from my mistakes or be inspired by my triumphs. I am still convinced that day trading might be the greatest job in the world, electronically participating in the purest form of capitalism, buying and selling stocks like the largest fund managers, right from home. I guess we'll see.
So, today was a good day. I currently focus on the casino stocks (mostly Las Vegas Sands and MGM) because of their high volatility, and I was fortunate enough to catch both in three positive trades. I picked up 2,500 shares of MGM at 8:19 (premarket) at $13.04, and unloaded those at 10:42 for $13.44, or a $1,000 gain. Upward momentum was gone, so I shorted the same 2,500 shares five minutes later at $13.49, and covered at $13.29 at 11:33 for a $500 gain. Unfortunately I covered way too early, as the stock dropped another 50 cents thereafter. That extra $1,250 would have been really nice. I later (12:06 PM) took a long position of 1,000 shares in LVS at $18.70, and finally sold those near the market close at 3:51 for $18.95, or +$250. This was my best day to date, so it was a great way to start this blog. Unfortunately, I have lost way more than $1,750 in a single day (two months ago), and I'll write about that experience soon.
One more thing: I am working on a charting format that I hope to use to visually depict trades, and I will try to post them with next week's transactions.
A few AJAX resources. Actually, 197 of them.
I found these great lists of AJAX resources while poking around some of the sites I mentioned previously:
• 20 Excellent Websites for Learning AJAX.
• 37 Great AJAX CSS Tab Based Interfaces.
• 80 AJAX Solutions for Professional Coding.
• 60 More AJAX and Javascript Solutions for Professional Coding.
• 20 Excellent Websites for Learning AJAX.
• 37 Great AJAX CSS Tab Based Interfaces.
• 80 AJAX Solutions for Professional Coding.
• 60 More AJAX and Javascript Solutions for Professional Coding.
Three Amazing CSS Resources.
I love these websites, both for their beautiful designs and for their wealth of content:
1. Six Revisions. Check out 20 Websites to Help You Learn and Master CSS.
2. A List Apart. Here's a CSS topic search.
3. Smashing Magazine. Don't miss this.
1. Six Revisions. Check out 20 Websites to Help You Learn and Master CSS.
2. A List Apart. Here's a CSS topic search.
3. Smashing Magazine. Don't miss this.
Four Steps to $10 Million. Web 2.0 Style.
1. Pick a totally.awe.sm, URL shortened domain name at domai.nr.
2. Design a cool, Web 2.0 logo. Don't forget the obligatory reflection and "beta" badge.
3. Develop your pitch at bullshitr. You'll also need some buzz (refresh repeatedly).
4. Finally, submit to Techcrunch. Wait six months. Count your money.
2. Design a cool, Web 2.0 logo. Don't forget the obligatory reflection and "beta" badge.
3. Develop your pitch at bullshitr. You'll also need some buzz (refresh repeatedly).
4. Finally, submit to Techcrunch. Wait six months. Count your money.
Day Two.
Not trading today, so no updates in that area. The SEC has a rule that limits daytrades to only 3 trades in 5 business days for accounts under $25,000, and I therefore can not trade until this Thursday, September 17th. This rule (which SUCKS, btw) makes my goal significantly harder.
This Template.
I found this Blogger template at Bloggertemplatesblog.com. I just couldn't deal with the standard templates, or themes, that Blogger provides. There are hundreds of layouts available, some great, some not so much. Check them out if you're interested.
I wonder if I'll keep this one for the whole semester. I tend to get tired of such things rather quickly. We'll see...
I wonder if I'll keep this one for the whole semester. I tend to get tired of such things rather quickly. We'll see...
Lost.
Well, not exactly lost. But close. Despite the prerequisites for COT 5930, I am taking this class with no prior HTML / CSS experience. So I am forced to learn fast. Very fast. I've always been that person at work that people came to for help with their computers, and I would say that I have a high proficiency in general computing. But being great with operating systems, Microsoft Office, and whatever is different from knowing HTML or how to program. So, the next few months will be quite interesting.
Here is an example of my progress so far: Fun Assignment One. My first web site. I learned more about HTML and CSS the night I prepared that assignment than I could have from reading three books (at least I think I did). I can't wait to learn more.
Maybe I can become a web designer if the daytrading thing doesn't work out.
Day One.
Why "Sixty-Four Days"? It's the number of business days between today, September 14th, and December 11th, the last day of the Fall 2009 semester. As a current graduate student at FAU, semester end dates are certainly important. But I am just as focused on the fact that 64 days represents the number of days the US stock exchanges will be open from now until 12/11, as my goal is to grow my trading account from $10,000 to $25,000 by day trading stocks by that date. Day trading has been a passionate interest of mine for more than 10 years, and I finally have the time to pursue my personal goal of becoming a professional trader. I'll share my progress along the way as practice for a bigger goal next year.
Oh. Almost forgot. Since this blog is being created as an assignment for COT 5930 - Advanced Web Technologies, I'll also share my thoughts on HTML, CSS, Javascript, AJAX, and other course related material.