Friday, March 27, 2009

Friday Notes - Time to Exhale

5:00pm I'll say right off the bat that some may wonder why today's scorecard reflects dark green accross the bottom section with only a light green bottom line, yet I felt I managed today as well as any day I have in a long time in terms of trading a market that was no where near condusive to my preferred backdrop in terms of pace, volume, pattern ... you name it.

So with both the 5-Min and 15-Min ADX readings nose diving worse than A-Rod's batting average in October, an opening gap down that had all the potential for a strong pop off the 60-min support that never really materialized, and market chop that I'm sure felt to some like death by a thousand paper cuts, I'll bank the +$7K chip gain on what was again extremely light personal trading volume that has me both closing on the week's equity highs at +$32K as well as wiping out Wednesday afternoon's give back.

Those that have followed me via this blog or over prior years know I hate complimenting my own trading more than 2o degree weather in late March. [Warning, make sure you're sitting down for this.] Yet as we approach the first official 2009 lap turn at the end of Tuesday, I'm going to take one momentary breath of relief for somehow managing the last two days of virtually flat action pretty darn well and heading into the first turn still having incurred only two losses in the first 59 trading sessions of this year ... with February 10th's momentary loss of focus continuing to serve as a powerful reminder of what I shouldn't do.

Case in Point: Consider this excerpt from my February 11 post on the day after the only signficant loss of the year:

Perhaps I needed yesterday to finally stop trading on eggshells and move forward to more intense trading. Case in point: Last time I had a major bonehead day it provided the foundation for the $700K Oct-Dec 2008 run. Maybe I needed that major butt kicking to make the fictitious draw feel real again. Who knows. All I know is I always trade my best after a draw, both because large draws are usually based on signficant market moves which rarely repeat on consecutive days (thus providing high probability sequences on day two), and because it essentially coaches me into getting my act back together.

And it's no surprise to this trader that since that date, I've been on a $241K run with a single $2K daily loss. Simply put, I know what fuels me, and it's getting pi$$ed off at a stupid sequence as happened that day.

OK, it's off my chest ... y0u can beat me up now. Yet while last year I held my breath for the full year and allowed myself one momentary pat on the back on December 31, this year I'm going to take four breaths. So consider this the first one as I expect to be in gain protection mode much of Monday and Tuesday.

Of course it still means nothing until 12/31, and I have to approach Monday as if today and this week were disasters. And I will. Yet you have to understand how hard it was for me to restart the engine after the 2008 run and mid-December shutdown. The challenge is of course evident in many of the ealry '09 posts, yet remains difficult to fully explain. Frankly, this quarter was one of the hardest for me ... ever ... on the heels of last year.

So it's time to exhale ... but only for a moment.

We hit the first turn on Tuesday.

More over the weekend as usual.

Also, in case you missed it, Tim Bourquin syndicated Tuesday's "Perfecting Imperfection" post on the MoneyShow.com site.

5 comments:

Lord Tedders said...

Don,

Seeing today's market, I knew you would be posting something full of interest at the end of the day.

Major cudos to you for trading so well during what you state in your own words isn't the best market action for your style. After all trading well isn't just about doing well on easy days, but trading well even when you don't feel it.

I can understand the challenge you are facing with trying to make Q1 2009 your best, when things were such fireworks late last year. I will be watching you closely and hopefully derive some insights from your mindset. Which, by the way I find inspiring.

When I trade each day I think about what you would say if you were watching over my shoulder. Keeps me motivated and focused. Thanks for sharing your thoughts.

LT

Angelo said...

Hi Don,
Today was tough. Nice day. I am happy I finished green. A few months ago a day like today would mean hitting my stop loss.

Kevin said...

"I expect to be in gain protection mode much of Monday and Tuesday."

For what it's worth, I expect Monday to be a good trend day.

Kevin said...

Kevin: "For what it's worth, I expect Monday to be a good trend day."

Too bad most of it happened before the U.S. markets opened!

Don Miller said...

'tis why I stay away from the prediction business Kevin ... reacting to the present is the name of the game.