Tuesday, September 16, 2008

Tuesday Notes - Buck Naked

5:34am - Dear diary ... remember that Driver's Ed video discussion over the weekend? Well, after being properly cautious throughout yesterday's session, last night was Exhibit A, as ... well ... ummm (stalling) ... an accidental order entry error resulting in a significant sizing error compounded an overnight loss. (I'll spare the diary the details ... we'll simply cover up the corpse and route traffic around the accident. Kudos to my broker though for helping me through it.) Talk about being accidentally aggressive at the wrong time. Ouch. Nothing I can do about it now as it's history and back to work over the coming sessions to grind it out. Sometimes, it really sucks being human ... but I suppose it beats the alternative.

btw, for those new to looking over my shoulder -- and the numbers peaked yesterday (must be the market) -- please remember that yes, these are my personal notes and will include the good, the bad, and the ugly that surrounds this particular trading journey. And yes, there is an ugly component to this business that can't ever be fully escaped that requires a strong stomach, short memory and faith in oneself over the long-run. Wish as we may, we can't have the good without the bad and ugly ... which I suppose allows the good to feel ... well, "good". The way I look at gains and losses, they simply allow one to either buy or give away time. Soooo, I've grown a few days younger and get to play the last few sessions over again one trade at a time.

11:56am OK, as gawd-awful as the overnight miscue was, today's monster of all day-after-barf sessions has been almost a mirror opposite. I was going to say like "night and day" ... then again, I guess I just did. Outstanding reads, executions, size management, and holding time at this end including buying the open strong taking it out on the first pop, and re-loading on the pullback (TICK hadn't yet bottomed) and taking the second one out on the TICK approach to zero. (Note to self: For once, I didn't hesitate at the open ... take notice!! Of course I was pissed as all get-out and you know what happens to my focus when I get mad.) Also a good read in shorting the unsustainable 11am AIG bailout-related spike into the resistance brick wall.

1:56pm FOMC news coming up. I might trade the initial overreaction, but that will probably be it. Nothing like throwing fuel on the fire in terms of volatility.

2:20pm Interesting no extreme TICK on the first move ... price extreme only. Passed.

2:36pm TICK can't hold above zero ...

2:38pm ... but AIG news and the mother of all whips as shorts got caught bad. 25 pt ES spike.

2:59pm VIX 15-min turning down (shorts beware). Just watching ... too many cross-currents, no solid triggers, and no way to manage risk. Late-day shorts may get toasted like late-day longs yesterday.

3:14pm Finally took a scalp long ... if it ain't going down ...

3:17pm Yup, shorts are stuck.

3:20pm One more thrust and I may short ... want a TICK extreme and final panic cover move ... might not get it, but 1220+ would be a gift.

3:22pm Oh well ... wanted the more controllable exhaustion spike. Maybe it's a one and done?

3:51pm Traded lightly to keep my head in the game toward the end, but nothing with size and pretty much watching most of it. Essentially, I played defense much of the PM.

OK, today should have been a doubleheader sweep. Instead, I got beaned in the first inning of the first game by a fastball by stepping in front of the plate. Fortunately, it was a glancing blow that just missed my eye and I was able to play in the second game. The single worst and best sessions of the year in the same day ... too funny.

I could look at today as a draw, which it was ... but again, any day's results + or - are only relevant when added with the other 249. At this end, I'll count it as two sessions with a strong performance in the second game. And believe it or not, I'm still positive for the week ... almost impossible to believe after the night session ... I had to check twice. So the streak begins anew at one. Mind games?? You bet. You think Tiger thinks about his last hole when he hooked it badly into the woods and took a triple bogey? And no, I don't think I'm the Tiger of trading ... let's not go there.

I imagine Steve's probably wondering why I continue to trade the DAX and Globex ES if for some reason that's my weak link?? So I'll save him a comment and ask myself, "Can't you see a trend in this blog???" Point taken. And yes, I can be a stubborn SOB sometimes. Trading last night wasn't the mistake though. My fat fingers were. I will say this, the error -- and it was ssiizzaabbllee -- really didn't faze me other than piss me off. You do this long enough, and nothing fazes you.

Someone asked me the other day how people could tell if my postings were "for real". If only today's wasn't. You can't make this stuff up.

Said another way, you see me buck naked ... and sometimes it ain't pretty ... just ask my mirror :-).


Unknown said...

You seem to rely a lot on divergence in TICKs during the day session. Obviously TICKS are not present in the overnight Globex session. How do you compensate?

Steve0617 said...

Nah - certainly not going to jump on you at all.

But a LONG time ago, pre DAX, you used to call NY premarket tiny contract trading as simply 'shooting layups warming up until the game started. - Getting your head in the game' before 0930ET.

Do you still do that even when you're DAX trading?

Maybe you need Barbara's 'Magic' barking indicator! ;-)

Matt said...


I wanted to thank you for being so open about sharing what's going on in your head throughout the day.

I'm new to trading (been doing it seriously for less than a year) and was thinking of doing something similar to help me keep track of my goals. Do you use any special software to post throughout the day or just the standard blogger stuff?


Don Miller said...

Joe - Price is pretty much as we have to go by in the overnight session. If Eurex is trading though, it can be a decent indicator for ES until the U.S. session take the lead.

Steve :-).

Matt - No special software in terms of notes ... just the Blogger. I do use Quickbooks to post my daily tally and Excel for various analytics and tracking.

Unknown said...

Don, I guess my question is really - don't you feel you are giving up a lot of your edge in trading Globex e-minis - because of the lack of VIX and TICK readings? Your IC studies were always about giving yourself as much as an advantage as possible. just curious

Don Miller said...

Joe -

I suppose it depends. Some times -- and under certain conditions -- the overnight market may have as much opportunity and a better flow than the day session. It's the exception, but it does happen. Day-after-trend days are good examples where that first pullback may only occur overnight.

I also firmly believe I could trade a chart based on price alone without the TICK and VIX alone ... although it's definitely tougher. Trading ES off the DAX can also work, so the DAX essentially acts as a solid indicator for ES.

I suppose the question may be does one give up such incremental opportunity or simply forgo it to focus on the main session?

On 12/31, I'll take a look at all the stats and ultimate outcome and try to draw some conclusions for 2009.