Monday, September 29, 2008

** VIDEO ** Crash Reflections

Here are a few thoughts on today's historic events, including why today's crash magnified my strong views on managing risk with size and the importance of self-reliance.



Stay safe.

4 comments:

Fast_Trader said...

Thanks for the video. If you don't mind answering, when you first began trading full-time, how long did it take you to become consistently profitable?

CharlesTrader said...

After the political issues and markets settle down, it will be interesting to see how many hedge funds are still around.

It is also interesting to watch the markets everyday lately and see just how thin the markets have become. I never thought that I would see just 15 contracts or less routinely on the S&P 500 futures contract. Very thin.

Charles

Don Miller said...

Hey fast.

Tough question only because I went through what most traders went through including bouts of consistent profitability mixed with the large loss or changes in market dynamics that brought me back to square one.

[Changes in dynamics included when stocks (which I'd previously been trading) went from fractions to decimals that ultimately led me to trade the ETFs and then the futures.]

But this is probably a pretty good synopsis of my career:

Years 1-2 Consistently profitable before going full-time, then initial rough road once I went full-time. I've done several articles and given a number of speeches on this period, talking about how difficult and different it is to trade as one's sole source of income.

Years 3-4 Had to reinvent myself given change to market decimalization; Initial move to futures trading a difficult time ... including overspending on commissions prior to joining the Merc.

Years 5-9 Pretty decent after joining the Merc, but definite periods of burnout [I was writing and teaching during certain periods] and the occasional blow-up.

Year 10 Blessed beyond belief.

There's the decade in a nutshell. I firmly believe Years 1-9 -- including all of the hard knocks -- had to happen to plant the seed for what has taken incredible root this year. I'm just hoping the roots remain strong enough to sustain the continual changing winds going forward.

Hope that helps.

Don

Matt said...

Don - thanks so much for sharing your thoughts. I find it interesting that although I trade a different product (equities and equity options) with a different style, I have shared many of your same thoughts/results/experiences. September has been historic. Times when you scaled back have been times that I did (or should have) scaled back. Times when you have reached aboverage gains I have. Several other parrallels present. Thanks again for the insightful posts.