Monday Notes - "Considering ..."

4:00pm Well, considering (1) ES was rangebound most of the day (I don't trade ranges well), (2) today was a Monday (lest we forget my atrocious 2008 Monday statistics), (3) ES had a false post-2pm breakout of a tight range (a time of day when breakouts are often strong as traders return from lunch), (4) ES often had what I would call a "spikey" rhythm that shook small-timeframe trend traders, (5) it was one of the few days during the year where the market really never found a solid 5-min rhythm, and (6) the intraday 15-min VIX spent most of the day on the fence and thus provided little guidance ... I'm not quite sure how I ended the day in the black, albeit minimally.

I did get chopped up a bit midday and my win/loss (which I don't track) was likely pretty poor, but the 10:00 - 10:15am and 1:45 - 2:05pm long sequences apparently were enough to offset the cost of the midday chop. Interestingly enough, my last trade execution was a wholesale ES long exit at 934.25 on the ask at 2:05:35pm, which turned out to be the day's high, and I was hesitant on buying a subsequent pullback as -- for lack of a better description -- it just didn't feel right. In hindsight, I was probably more lucky on that read than anything as I would have sat out the extension ... yet the breakout volume and intensity seemed to be lacking.

And while I'm still working on a daily grading scorecard, I'd grade the "staying out of trouble" aspect pretty high today. I'm also satisfied that I didn't incur many 1st day-of-year jitters in terms of not trading at all, although I kept it pretty light at 1,360 contracts (680 x 2). I really considered today the first day of 2009 as most were gone last Friday. The daily P&L of course will be highly irrelevant for a while as we just completed a whopping 0.4% of the trading year ... thus my desire to begin the year with a non-financial scorecard.

All in all, there were no sprained ankles on this first step of the new journey, and I'll take that as a small psychological win.

7:19pm I'll post some thoughts on a great read suggested by Ziad in Sunday's post shortly.

The Weekend Trader - Housekeeping

A couple of final thoughts heading into the new week and first full week of the new year.

Blog FAQ - Given the continued growth in blog interest and recent comments asking for advertising or link exchanges, I've created a blog FAQ and comments submission guideline link in the left hand margin. Apparently, there was mention of this site in Yahoo Finance over the weekend (unknown to me), which was one cause for the most recent surge in interest. So much for staying under the radar. The link may also be a good reminder for all of us.

Chinese Bamboo Link - I unfortunately learned today that the domain that hosted Eric Aronson's Chinese Bamboo link that we've referenced dozens of times over the last year -- and which is embedded in several blog postings -- is no longer valid. That's too bad as it was a great perspective of the concept, and I'll try to find an alternative source.

My Mentor - I've often said my primary trading mentor over the past decade has been the market ... and that's certainly true. Yet here's the true mentor of my life -- my Dad. The pic of the two of us was snapped after my sister's wedding yesterday. He's a man of deep thought and integrity, was an educator for over 40 years, and has survived two heart attacks ... one where the EMTs had to literally "bring him back".

If I ever stay out of my own way long enough to become half the man he is, that would be a true accomplishment.

Needless to say, I've got a lot of work remaining to get there.

The Weekend Trader - Sunday Edition

I continue to think about my goals for 2009, both as they relate to trading and life in general. And following up on my recent "Crossroads" theme, I'm indeed reaching a point in my life where a few key non-trading priorities will outweigh any immediate trading objectives I may have.

For example, 2009 will be the last full year before my wife and I enter the early stages of our "empty nest" years, as our youngest daughter will be off to college in 2010. Someday, I'll share that full and inspiring story which some of you know. Suffice it to say several years ago, she was experiencing a major health crisis and diagnosed with insulin-dependent Type 1 diabetes for life. She's now blossomed into a beautiful young woman, and is a scholar-athlete-musician with a strong chance to graduate at the top of her class. She's already embodied the Bamboo concept far better than I ever will. One of the blessings coming out of the 2008 journey was that she won't need to worry about funding for her college education, especially if scholarships dry up in the declining economy. Yet for 2009, she deserves my time before it's too late.

I also want to devote more time in 2009 to my non-market business (completely unrelated to trading or the markets) which I've referenced in the past, and which provides that ideal annuity income stream that I've always encouraged others to pursue if they choose to take us this crazy business called trading. And since that might also be a mini-Bamboo in the making that hasn't yet broken ground, I need to remain patient and diligent with it. Diversification is of course typically a good thing.

In the big picture, if I viewed 2008 as an intense "all-out" race to test my trading abilities and fund the future, I initially view 2009 simply as a "keep your head in the game" year. And to do that, I've decided to initially start off by trading a small capital balance of about $60,000 and seeing what I can do with it.

Doing so will accomplish a couple of things. First, it will ensure 2008's funds are safely tucked away (lessons from Archie Karas). Second, it will force the "fictitious drawdown" concept into my brain ... a concept which may have lost its mental effect as last year's race drew to a close and the real dollars were tallied. Third, several of you thought it might be interesting to see how I might do with a smaller balance. And while that's not why I'm doing it, we may be able to learn several lessons along the way. Who knows, it could be a complete bust ... but we'll find out.

I'm also working on a "grading" matrix to better track and evaluate my personal performance instead of the daily chip count gain or loss references. For as the year begins, much like a new trading day, I don't even want to think about $$ until the year gets well underway. And while like last year, the dollars will at some point become important, they won't for a while. I'll share whatever I come up with when it's finalized.

Life is of course full of changing seasons. The beauty of this business is that we can set our own goals and shift gears at any time as we so choose. We aren't bound by traditional thinking and restrictions, and we're certainly not bound by what others "pressure" us into doing. This industry has an uncanny way of trying to force us to do things, whether it be tempting us to take the emotional and unprofitable part of a trade, rely on others instead of ourselves, or peers wanting us to fit "their" mold or approach. I'll take "Stand Apart From the Crowd" for $200 Alex. At this end, the more heat I take, the more I figure I may be on the right track.

I've long said that trading income & losses do one thing ... buy or sell "time". Yet they also buy or sell flexibility and freedom.

I too often lose sight of the second part of that, and am going to work on correcting that in 2009. I can also always ramp trading back up to full tilt at any time.

Have a great trading week.

The Weekend Trader - Saturday Edition

A few thoughts before I head off to the wedding.

Blog "Index" - A few months ago, I posted an "index" of sorts with links to some of my favorite posts. Since there seems to be yet another new crop of onlookers joining us, new folks can find the index at this link. The only other favorite I'll add to it was the December 6 post that referenced the "One Thing" concept from the City Slickers movie.

The full archive index of course appears in the left margin.

2008 Is Past - Soon, I'll drop the 2008 personal challenge results summary from the left hand margin as the year needs to quickly become a distant memory as my focus turns to the present and future, and I return to the "trading from behind" mentality for those times I choose to trade. I mention this in case you wanted to print the final monthly "digging out of hole" and "chip count" tallies, which I've linked to the stats for now. You can also access the direct link here. Some have asked me to repost them so they can incorporate the concepts into their own trading, so I've put them back up for a short time. They're both Microsoft Excel graphs.

S&P vs. Other Markets - I was reading an article the other day about how trading the Russell was "so much easier" than the S&P due to fewer stop-triggering spikes. Someone also mentioned in a comment to last night's video that he was surprised I did well by focusing primarily on the S&P. All I can say is I'm just very comfortable with the S&P's rhythm and it works for me. I'm not a good currency or Russell trader, and have had marginal success at best with NQ and the DAX.

Perhaps like Internet poker players, it's the hundreds of thousands of "hands" that burn the rhythm into one's brain. For example, I traded 586,184 ES contracts in 2008, or 92% of all trades. The other 8% was pretty equally split between the DAX and my attempt at learning the FESX rhythm.

Yet like anything, what works for one might not work for others. Also, please keep in mind I lease a seat on the Merc and as a result have low member commission rates, which greatly helps the bottom line even when just providing liquidity and scalping Ticks.

Enjoy the weekend.

** VIDEO ** Crossroads

Tonight, I reflect a bit on transitioning to 2009 and dealing with a crossroads in both my continuing trading journey and the blog.



Enjoy the weekend.

Special Post - Initial 2009 Thoughts

Some thoughts as the two-week Holiday respite officially ends for most traders on Sunday.

2009 Plans - I still haven't decided how to approach 2009 in terms of personal goals, extent of trading activity, blog changes, etc., and figure like most things in life, it will become obvious at some point ... which it hasn't yet. I'm leaning toward trading a smaller account for fun and extra cash, but until then, I remain on a bit of a mental vacation and am enjoying some peace in my life, the duration of which remains unclear. I suppose it's always good to have choices in life.

I've obviously restarted the countdown clock to the left, to at least keep my mind in the game if nothing else for now, and will keep you posted. (And yes, I did make a small trade early this morning.)

Comments to my Final 2008 Post - You may find some interesting dialogue in the comments section if you're so inclined, especially the last few addressing blog comment postings in general and thoughts on benchmarking. The only thought I'll reinforce on top of my responses is that this blog diary remains a balance of (1) a personal historical journal (beats writing in a hardbound diary, especially with my handwriting), (2) a personal motivational tool which takes the form of both cussing at myself and recognizing goal achievement, and (3) an opportunity to share my thoughts and opinions with those interested.

And yes, I have celebrated the 2008 personal goal accomplishment as I did my high school basketball state championship, my graduation from college and grad school, and other significant milestone goals into which I poured significant personal effort ... and will never apologize for it. And if you've reached any of your own goals, hell, put the trophy in the trophy case, throw a party, and scream from the rooftops ... you've earned it. I'll let the rest of my responses stand.

Like TV, if anyone doesn't care for the content, they're always welcome to change the channel :-).

Congrats to My Sister - I'll be attending my sister's wedding tomorrow (Saturday), so will be away from the blog for much of the day. That goal dwarfs anything I've ever done, or will ever do in my trading career. And she's getting married for the first time at 51 ... talk about waiting for your Bamboo to sprout! Congrats sis.

I'll try to squeeze in a video later tonight.

Special Post - Blog FAQ & Comments Guidelines

Due to the continued growth of blog interest, here's a reminder of the blog's intent and guidelines for submitting comments:

What It Is:

- First and foremost, a personal historical journal (diary) and motivational tool;

- A therapeutic forum for me to share my thoughts and opinions or otherwise vent (usually to myself);

- A forum for interested onlookers to participate in the dialogue by submitting comments (see Comments guidelines below).


What It Isn't:

- A commercial site, including a platform for referencing, advertising, or selling services;

- A "Gee, Look How Swell Don Miller Is" site (there's not enough space on the Internet to list my weaknesses);

- A site that in any way suggests anyone to engage in trading or other activities I may pursue;

- A site recommending any particular trading method or style.


Comments Guidelines:

I encourage all to submit comments in the spirit of strengthening each other and engaging in other constructive dialogue, and will publish all comments -- including those that share opposing views -- under the following guidelines:

- Submitters must be registered. The blog "switch" for posting of anonymous comments is off;

- Comments with links (or link requests) to commercial or subscription sites won't be posted;

- Unprofessional, disparaging, or threatening comments won't be posted.

Please note posters violating these guidelines will be prevented from posting in the future.

Bottom line is it's a personal journal currently open to interested "onlookers". Those looking for something else are always welcome to "change the channel".

Thanks.

Don