Midday Trading

Nov 19th, 2008 | By | Category: Mike Bellafiore's (Bella's) Blogs
Share on StockTwits


I had a nice morning trading RIMM on the Open.  Tough stock, but as I like to make sure everyone on our desk knows…. I am fast and agile.  So RIMM is not too tough of a challenge for me.  After the Open, I got up from my desk and took care of some firm business.  And then I sat back down around 11am and made a few trades.  I have to admit I am very tough on myself as a trader.  Perhaps too tough at times.  And I always judge my trading based upon my actions and not my results.  But what I did midday today was unacceptable.

During the midday unless my stock will be in play the entire day, or I see a setup that offers an unusually promising risk/reward, I do not trade.  I spend most of my time sitting on my hands.  I spend most of the midday preparing for my trades into the Close.  I only make a trade if my risk/reward is outstanding.  On the Open I make many more trades.  My standards to make a trade are not as demanding.  It is rare where intraday traders have an edge midday.  The order flow is low and programs dominate.  So I don’t trade much.

And yet today during the midday I lost my discipline.   Losses do not bother me.  Taking a rip does not bother me.  But causing my own losses does.  Losing my discipline is rare for me and completely unacceptable.  And I failed for about 45 minutes today from 11am to 11:45am.

Around 11:45am I just stopped myself.  RIMM was not a good short or long at any moment during this time period.  My gains from the Open were erased.  Actually it was more that I was pretty hungry than I stopped myself.  So I guess then it was a good thing I got hungry.  Because I would have just lost more.

So I went to lunch and I thought about my AM.  Now a ton of new traders at this point may start thinking that you are just not a good trader.  You might let your mind conclude that you just hate that RIMM.  You might blame some kid who sits next to for bringing up the Jets game this weekend.  Some conclude that they are just morons!

I concluded that I made a few mistakes.  I made no conclusions about my trading ability based upon those 45 minutes.  I acted in my own self interest.  I analyzed what had happened and identified my human error.  And I concluded that if I did not overtrade RIMM during that time period that I would have had a nice Open.  I concluded that I can’t do stuff like that again.

Bad traders will let those unfocused 45 minutes snowball.  They will lose more during the midday.  They will continue to rip it up into the Close.  But I just ate some lunch and recognized my errors.  And I had a nice close.  And my brown rice, turkey burger topped with lentils platter, was delicious.  And as I write I am confident that I will trade well tomorrow and have another nice trading day.

GS did not trade below 55 into the Close.  That should offer an interesting level off of which to trade tomorrow.  GS is 2 points away from its IPO price.  That is amazing.  What a new world we live in.

Best of luck with your trading!

Tags: , ,
  • George Klimes

    I am not sure I would eat my lunch I think I’d continue to trade. However, after a few losses or if I feel I don’t have the discipline I take a break to review the trades for the day. I need to get a perspective on what I am doing wrong. This allows me to step back from the market, see the big picture and re-evaluate the strategy and/or tactics. This works like a charm and clears your head. I recognize the erroneous parts in my trading and scribble it down in my notebook for a reference. But I don’t step out. Instead, I sharpen my focus and try to make a few high quality trades. I wait for the better setups which could mean no trades at all. No revenge trading, no overtrading but I do stay in the game.

    I should point out I don’t trade equities, so midday in stocks and your performance during the time is all that matters not to trade. But just wanted to point out a different perspective how to tackle the “snowballing”. It could be applied to any kind of market or time of the day.

    Good to hear you bounced back.

    Good Luck.
    G.

  • George Klimes

    I am not sure I would eat my lunch I think I’d continue to trade. However, after a few losses or if I feel I don’t have the discipline I take a break to review the trades for the day. I need to get a perspective on what I am doing wrong. This allows me to step back from the market, see the big picture and re-evaluate the strategy and/or tactics. This works like a charm and clears your head. I recognize the erroneous parts in my trading and scribble it down in my notebook for a reference. But I don’t step out. Instead, I sharpen my focus and try to make a few high quality trades. I wait for the better setups which could mean no trades at all. No revenge trading, no overtrading but I do stay in the game.

    I should point out I don’t trade equities, so midday in stocks and your performance during the time is all that matters not to trade. But just wanted to point out a different perspective how to tackle the “snowballing”. It could be applied to any kind of market or time of the day.

    Good to hear you bounced back.

    Good Luck.
    G.

  • Bella

    I appreciate your comments. I should have been clearer. During the midday often there is no edge for an intraday equities trader. I was overtrading midday. I had no edge. I was not gonna gain an edge. If I continued I was just gonna manifest results consistent with a lack of an edge. Which would not have been productive. So I just went for a walk. Later I returned and my edge returned. So I had a nice Close.

    But during the Open or Close when I make a few losing trades I stay in my seat. I consider the changes I must make. And then I make them. Like you I focus. As a former athlete my competitive juices flow and I compete. The way that I compete is to make One Good Trade and then One Good Trade.

    I would be interested in further comments from you. Again I appreciate your thoughts. They add value to our blog. Thank you.

smb newsletter
Options Risk Disclaimer    Forex Risk Disclaimer

1. SMB TRAINING is NOT a Broker Dealer. SMB Training engages in trader education and training. SMB TRAINING offers a number of products and services, both electronical (over the internet through smbtraining.com) and in person. SMB TRAINING also offers web-based, interactive training courses on demand.

2. The seminars given by SMB TRAINING are for educational purposes only. This information neither is, nor should be construed, as an offer, or a solicitation of an offer, to buy or sell securities. You shall be fully responsible for any investment decision you make, and such decisions will be based solely on your evaluation of your financial circumstances, investment objectives, risk tolerance, and liquidity needs.

3. This material is being provided to you for educational purposes only. No information presented constitutes a recommendation by SMB TRAINING or its affiliates to buy, sell or hold any security, financial product or instrument discussed therein or to engage in any specific investment strategy. The content neither is, nor should be construed as, an offer, or a solicitation of an offer, to buy, sell, or hold any securities. You are fully responsible for any investment decisions you make. Such decisions should be based solely on your evaluation of your financial circumstances. Such decisions should be based solely on your evaluation of your financial circumstances, investment objectives, risk tolerance and liquidity needs.

4. SMB Training and SMB Capital Management, LLC are separate but affiliated companies.

5. No relevant positions

6. Please note: Hypothetical computer simulated performance results are believed to be accurately presented. However, they are not guaranteed as to accuracy or completeness and are subject to change without any notice. Hypothetical or simulated performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading. Since, also, the trades have not actually been executed; the results may have been under or over compensated for the impact, if any, of certain market factors such as liquidity, slippage and commissions. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any portfolio will, or is likely to achieve profits or losses similar to those shown. All investments and trades carry risks.

Log in | 80 queries. 1.670 seconds.