Friday, September 12, 2008

Friday Notes - All Good Things ...

10:52am Well, I sensed it was coming (see yesterday afternoon's comments). Being in lockstep with the market never lasts forever and I find myself this morning definitely off my game and unable to match the market's pace as the choppy rhythm of Thursday afternoon has bled into today ... due in part to traders transitioning to the December contract. And unlike other days this week, I'm not expecting to make up much ground on this Friday.

The early morning bounce off Thursday's 15-min support did eventually occur, but was choppy as hell (I was positioning long at the open with fairly good size which is usually a strong % play and got spit out by the meat grinder). I've said before that market "pace" is incredibly important to me -- more so than any other market aspect -- and there's been little of that since noon yesterday. Looking at the charts, you can see both longs and shorts getting frustrated in a pace very similar to July and August where it looks like an interim top or bottom has been put in right before a surge out of nowhere that triggers stops. Longer-term, the climbs certainly feel like salmon swimming upstream.

So, I may simply lick my wounds today (-$10K) and call it a week. -$10K is somewhat of a warning signal for me ... and since I view each day as a singe trade, it's my way of trying to "minimize losers".

So the 13-day streak comes to an end and I get to start a new one on Monday. While I despise Friday draws, I supposed I can draw on several positives this week including a strong week overall and the fact that, even today, my DAX trading was + .

12:03pm Hmmm ... I may have spoken too soon as ES finally finding some pace. Got a couple of good rhythm scalps on over-extensions and let's see if I can at least whittle this draw down.

12:20pm Not trusting this climb much ... VIX on the rise. Maybe we finally put in a right shoulder top??

12:48pm ES Breaking south on volume.

1:05pm Shorting this pullback 44.25-44.75 (December contract) modest size.

1:09pm Took partials and free-riding rest looking for 40.50.

1:24pm Did OK ... best cover 41.75. Resistance now at lower end of last break at 1248 and will reload if we get close.

1:33pm Shorted up to 47.25 ... covered down to 45.75 and free-riding small again.

1:37pm Closed at 44.00 (helluva wholesale fill) and closing down!

Incredible ... now green on the day by just under $1K ... flippin' ridiculous. These occasional days of piss-poor early AM performance have got to stop.

Here's the chart for that last couple of sequences (click to enlarge) ... page #1 in Trading 101.

By the way, I titled today's post before the afternoon session, but thought I'd leave it. Perhaps all good things indeed come to an end ... apparently today wasn't the day. Still shaking my head ... sort of like catching the gut-shot straight on the river.

A good week, but plenty to work on as always.

I'll do a couple of text and video posts over the weekend.


Steve0617 said...


Is it possible that all the early, early mornings with the DAX is finally starting to wear you out? Or the pressure you've placed on yourself to reach your 1MM mark is grinding down your focus? You've stated more than once here (and in the TM weekly sessions previously) that you don't do vacations very well.

No doubt the pace is lousy today, but since one can't even figure out the pace until after it's passed, maybe you're being a bit hard on yourself and fatigue is setting in? Your writings are all about gearing yourself up for the 'fight' and the tension of coming back from your fictitious draw in order to reach the goal. Maybe it's catching up with you and tripping up your morning sessions?

Dunno. Some thoughts out loud on a slow, gray Chicago Friday

Don Miller said...

Hey Steve.

Great question [and this where the blog can admittedly help me when an independent party can see a pattern].

On some days, I'd say you'd be absolutlely right. Today though, I'd say it was pretty much the result of simply entering a very high probability opening pattern that chose to act itself out in a rather quirkly manner. [The same setup on Wednesday played more to form.] The contract cutover and fact that much of Thursday's climb was news related may have come into play ... who knows. I've gotten a good night's sleep both of the last two nights, and have entered each day fairly refreshed.

I'm actually feeling more energized now than mid-July when I definitely hit a mid-year wall ... in which case pressure might have been building and I probably needed a break. But lately, the performance momentum seems to be energizing me and I can see the end of year in sight.

Having said that, YOU KNOW ME ALL TOO WELL :-) and yes I still stink at taking time off and tend to place enormous pressure on myself. Good reason to spend the weekend focusing on fun! (I'm actually getting a kick out of doing the videos ... I guess it uses another side of the brain or something.)

Keep the observations coming.


Anonymous said...

Don, Tried to buy your dvd but it was sold out?

Don Miller said...

Hi Ronin.

Interesting. No clue here but I can contact the TradingMarkets guys who helped produce it ... they may simply not stock it anymore but I'll check.


Anonymous said...


Can't I just buy it from you directly?


Don Miller said...

No, they actually control the inventory (whatever's left if that's an issue) and sales channel ... I tried to stay out of that :-).

They may simply have not duplicated any more after a point in time ... it was made some time ago.

Anonymous said...

Hey Don,

How do you size your account? Do you keep the bare minimum in the account or do you keep for example $10K for every ES contract traded? DO you treat it more like cash game or tournament poker? When do you sweep your accounts for profit? Sorry for all the questions. Just trying to compare notes. Thank you.
I am also in Chicago.


Don Miller said...

Hi Ronin -

No problem with the questions.

For this year, I've simply let the chip stack grow as in tournament poker and have not swept the account at all for profit. Mentally however, I really do trade as if I'm playing with limited chips after a bad beat and haven't done a chip count since June 30 -- which aside from two days this year, has kept me out of trouble.

It may also be worth noting that unlike tournament poker, I've kept my trading sizes fairly constant as the account has grown -- so I'm risking less as each day passes -- and will likely do so at least until the end of this year's journey and I measure the results on 12/31.

Obviously, if I was after consistent % returns -- which much of the world is -- I'd be adjusting sizes as the balance grows. Yet for me, I'm mostly concerned about absolute $ growth and am thus purposely limiting such an assessment and adjustment to once a year.

Maybe it's because I'm too well aware that the vast majority of people accumulating large chip stacks in poker, trading, and life end up losing most of it. So my strategy -- even if only psychological -- is built around protection as much as it is growth.

btw, I'm actually in the Northeast as I trade electronically on a remote basis.