Saturday, July 19, 2008

The Weekend Trader (Saturday Edition)

Random thoughts to refocus for the coming week:

British Open - Watching Greg Norman at 53 leading the British Open after three rounds is quite an inspiration to this 47 year-old trader.

CaddyBlog - I could actually rename this blog "CaddyBlog". Since I have no trading caddy/coach [and no desire to do so], the blog is my way of talking to myself and staying in the right mindset both during and after market hours. And while I've occasionally worked with a trading coach in the past to work out a few kinks, it frankly comes down to reading the greens -- er, I mean the market -- staying focused and making shots.

December 31, 2008 - If I have one objective for the rest of the year, it's to simply get to December 31. Of course, I have a 2008 earnings objective -- including one very specific milestone. But it's no where close to time to focus on the score yet as so much work remains. As Bill Belichick says [in my best monotone voice], "We take one game at a time." [and oh by the way, don't lose focus on the last game! See what happens when the Defense takes a two-minute break after 18 games of perfection??]. It makes for boring news -- and possibly blogs -- but it's a requirement for any degree of sustained success. The only score that matters to me is the final tally on December 31.

Blog Comments - I welcome and encourage your comments. I know this can be a lonely business and if we can form a cohesive group to support and strengthen one another, all the better. If this evolves into a small community of mature, professional traders -- all with a common goal -- we'd really have some fun. So far, access to this blog has been solely via word of mouth and one brief mention in my friend Dr. Steenbarger's blog. In the meantime, I consider this a great vehicle to log my personal diary. If it's only read by me and I accomplish my goals, it will have served its purpose.

The Right Trading Method - There ain't one. If experience has taught me anything, it's that there are many ways to trade the same market -- the key is knowing the bias, staying focused, and executing. The chatrooms of the 1990s and early 2000s did this industry a great disservice, and their leaders and owners made a ton of money from unsuspecting people who had no business trying to trade. Pay no attention to that man behind the curtain. Show me tangible results with your own money over a sustained period of time, and I may listen.

When I first started writing and coaching at the request of a few publications years ago, one seasoned trader told me to speak with him again after I had been in the business for a decade and had the scars to prove it. [I'll leave out the actual more colorful language.] He was right.

Things I Can Do Better This Week - Too many to mention. I had a decent week, but in many ways my entry timing, holding time, and sizing could all have been much better. When you feel you've made it, watch out. It's always about tomorrow. And If I don't feel this way heading into each trading day, I should hang 'em up right then.

Last Week's Lessons - Tuesday and Thursday were great examples of two things: (1) Extreme market trends almost always last longer than one expects; and (2) Sometimes fading is the only entry. I was early in both going long on Tuesday's panic selling and shorting Thursday's panic buying. Yet sometimes incurring short-term pain seems the only way to profit from extremes. Case in point was a clear lack of a double top on Thursday's post-open panic buying where ES did an 8-point elevator shaft dive for 12 minutes after reaching its high. By the time one of my 1-min indicators turned down, ES was already five points off the high.

Visualization Time - As I manage each and every trade for the coming week, this is the state of mind that I must be in:

I will let the market drive trading income like a stretched bungee ready to snap. In doing so, I will see my Chinese Bamboo Tree grow larger than I could have ever imagined.

Time to water the tree.


Anonymous said...

Hi Don,

From time to time I still read the Bamboo Tree story that you gave us in the inner circle. It's funny that you mentioned it because I just read it the other day. Here is the link.


Don Miller said...

Hi Frank. Yes, thanks for the link. Of course there's nothing like personal experience to make a concept like that really "take root". It's an amazing concept. Stay well. Don