RamtaJogi— Hacking Life for Money and Fame.

No, I didn’t disappear after my last post. Once again, I had few personal things to sort out and I couldn’t trade. Additionally, I transferred money in IB to go past the 25,000$ mark and it was kept on a 4 day hold. [Can someone at IB explain to me why do you to keep the money on hold?]

Today was the first day I could trade without PDT restrictions and here’s what I did.

I got up early at 7 and was studying charts for dayrangers as well as potential short watches posted on InvestorsUnderground. At 8, started watching pre-market action to decide on what to trade. DRYS crashed by almost a dollar in pre-market and started moving up again. I kept it on my watch list. There were quite a few other stocks moving in pre but I could only play DRYS.

As soon as the market opened, DRYS tanked and I shorted 1000 shares 6.81. When it reached 6.70, I realized that I had 100$ profit, so I covered my position for 90$ profit after commissions. Looking at the chart and action on Level II, I decided to short again. This time I shorted 2000 shares at 6.60. I feared that may be I did mistake by shorting again, so I closed at 6.55 for another 80$ profit after commissions. After watching DRYS price action, I figured that it was a mistake that I covered. So I shorted 2000 shares at 6.55 again. This time, I covered only 1000 shares at 6.50 to lock in some profit. As I had to leave for work, I covered remaining 1000 at 6.30 (20 cents a share)! Total Profit So far: 400$.

When I shorted DRYS at 6.55 and I was waiting, I saw BAC moving up after touching 52 week low. I decided to go LONG 1000 shares at 4.25. Covered at 4.35 for nice 90$ profit. I had no choice but to cover because it was time to leave for work and I didn’t want to leave my position un-attended.

At work, I was watching DRYS and I saw that it is hitting solid resistance at 6.60. I shorted another 1000 shares at 6.60. Covered 500 at 6.50, another 500 at 6.47.

Later during the day, I again shorted 1000 shares at 6.50, covering 500 at 6.40 and other 500 at 6.35.

I know, I know, you are bored by now but I couldn’t believe how easy it was. DRYS was bouncing between 10 cent range (6.60 to 6.50, 6.50 to 6.40) and I kept shorting it and printing my 100$ bills.

Yes, it was not that I didn’t do any mistake. I got carried away by my DRYS success and I shorted BAC at 4.75 (resistance during the day) and BAC moved up and I covered at 4.87 for 65$ loss. After that, I left BAC alone.

Overall, a fantastic trading day for me. I made total of 696$ after commissions! That’s more than all the profit I have made since I started trading in October.

The lessons learned:

1. PDT Sucks. It forces your mind to worry about things which don’t really matter. Trading with PDT Rule is like competing with other Olympic champions in 100m sprint with your feet tied up!

2. Interactive Brokers ROCKS. They are extremely cheap, I did total of 19 trades and paid 90$ in commissions. That’s less than 5$ per trade. Not only that, they have great borrows so that you can play in either direction without worrying.

3. InvestorsUnderground is an extremely valuable service. I signed up during the initial phase and it costs me 39$/month. For 39$ a month, you get to talk one on one with Muddy and other pro traders and pick their brain. Not only that, you get to learn about potential movers. ‘GS’ from IU has been sharing his knowledge about DRYS and how it is doomed and it might go bankrupt soon. He has been short DRYS from 80$. Thanks to this knowledge, I was extremely confident about shorting DRYS. Thank you GS, I owe you a beer buddy. Also, when you are just getting started in trading, you are not sure about whether to enter a trade or not. At this phase, a confirmation from Muddy and other pro-traders can really help you gain the confidence. Also, the owner InvestorsLive (dude, I hate calling you by the name IL, can we have your real name please?) is very diligent in updating pre hits, stocks from various scans etc. so you save all that time and can concentrate on trading. If you are serious about trading, signing up for Investors Underground is a no brainer.

Trade Well,

RJ.

Status as of end of Feb 5th:

Positions closed for Gain: DRYS (681$), BAC (15$)

Positions closed for Loss: None

Open Positions: None