Thursday, August 7, 2008

Thursday Notes - Blinds, Antes & Patience

11:29am A bit choppy on the seas this morning as clean triggers have been few. Did OK in the Globex session but struggling a bit with the U.S. open as the best wholesale entries have fallen into what I call the "fade and wait" category, which is a blind fade on the extreme spikes and then a hold while the market takes its time to revert toward the mean or range end. Continuation triggers are tough since the market really isn't clearly trending on any decent timeframe and the trigger premiums eat into much of the profit potential, and even the 1 min charts have been sloppy. Pace and feel is incredibly important to me -- more so than chart patterns.

That early 8 point post-open plunge likely caught more than a few gap faders, although early and late day summer dogpiles shouldn't a surprise by now.

11:52am Bought a few tops and sold a few bottoms providing liquidity in this range ... not a good strategy :-). Laying low for a while. Don't have the personal rhythm today so shaping up to be a draw day. Goal for the rest of the day will be to keep today's antes and blinds cost manageable.

The 10am-3pm intraday opportunities continue to be almost non-existent as the summer gets late. September can't come soon enough. Having a hard time remembering the last time I had a 100-contract position on!

1:13pm VIX on the fence ... no help there.

This weekend, I'm going to think out loud about imperfection in the maketplace, and more importantly imperfection at the trader end.

2:16PM Looks like a blinds & antes round today at this end. Nicked up a bit ($4K) but not too bothered with attempts ... gotta get in the pool to swim. Tomorrow may not be much better in terms of volume and pace. Considering taking the day off if this keeps up.

2:47pm I want this pullback short! Sitting at 7525 and 7550.

2:50pm Took 7500 short. Cover orders in 73s. Stop on 1 min 3LB turn.

2:55pm Added 7550. Looking for a elevator drop. Lots of size spoofing and finally a range break. Shorted into a phony sized bid.

2:59pm Covering on the drop. Flat at 7250.

3:03pm Here we go again with the last hour. Careful Don ... not your strength. Not many market supports out there if this implodes. Watching.

3:10pm Doing some wholesale scalping; Strong 1 min TICK divergence last drop. Hmmm ... volume bars ... almost forgot what those looked like.

That might be it. Tough market when there's maybe just one or two meaty entries all day, and you have to be there and be ready to hit it hard. Could have sized larger, but tough when you've had chop all day. Very similar to yesterday in that regard.

3:22pm VIX sneaking up. Early Friday entries may not be bad after all. Flat and watching.

3:27pm Nice rhythm down here ... TICK very helpful on overextensions for short covers or quickie wholesale longs.

3:33pm Bottom falling out; VIX leading the way.

3:49pm OK; nice scalp sequences to end the day. Decided to trade when the market said to, despite the last hour. Who'd have thunk? Kept things tight though. Nice comeback to end slightly green.

Looking forward to the open.


Anonymous said...

Don - I came across your blog in Brett Steenbarger's blog. Since I found it I have read all of the back issues and learned a lot although I think I need to re-read some of the entries so more material sinks in.

I currently trade commodity spreads & outright futures but am looking at some more short-term strategies as well.

Your journal has been very informative and useful, especially the parts related to the effort that you put into keeping yourself in the proper mindset to be consistently profitable. This is an area I am working on as I seem to get sloppy, especially after a large winning period.

I had a question for you related to your comments about how you have historically performed better than normal on days after a large trend. Any idea why this is? Have you used a reporting process like TraderDNA to identify any other trends in your results?


Don Miller said...

Hi Eric and welcome.

I think we all tend to get sloppy or simply "relax" when doing well. Anything we can do to counteract that is a plus. Even with my drawdown chart, I find myself thinking on occasion that "it's not real" ... which I have to fight daily.

With respect to typically doing well on days after trend days, I suppose it reflects a balance of my preference to help provide market liquidity -- which by its nature requires multiple trade sequences over the course of the day -- with a matching "fertile" ground where such a strategy can prosper.

For example, on trend days, multiple sequences can be tough because re-entry opportunities at wholesale prices may "appear" tough as the trend gets extended. Plus, trend days aren't typically the norm so I may simply be geared toward a pace which occurs more times than not.

Providing liquidity also requires me to fade the market at perceived retail extremes, which can of course become more extreme on trend days where I can become one of those being squeezed.

I've gotten better at trading trend days over the years, but I'm simply most comfortable with that first sequence or two on the day after a strong afternoon trend.

I'm not familiar with TraderDNA, but do have a pretty good feel for my personal strengths and landmines as I've paid lots of tuition over the years to figure that out :-)

Hope that helps.


cal_trader said...

Love the blog. Glad to see you've separated from the Borg. Hard to find real Traders despite the enormous amount of published information out there. Keep it up!

Added to my list of daily reading along with Brett and Trader Mike.

Don Miller said...

Thanks cleon.

Today reminds me bit of the Borg ... the market kept adapting every time traders got comfortable.

Resistance is futile!