Wednesday, October 8, 2008

Wednesday Notes - 86% Recovered

4:00pm Where I do I even start. How's this ... I decided to cover my last Globex short at 6:53AM to take a shower. When I got back, ES had shot from sub-1000 to 1040 on the interest rate cut. Funny thing was ... and I kid you not ... I was thinking in the shower that I should have some small swing long position at the ridiculous ES Globex levels on just in case we got a cut. Who'd have thunk buyers missing that would have had another chance in the regular session -- and at even cheaper prices.

That was about the only thing that went wrong today, and while I don't normally use the "proud" word, I'm extremely pr... pr ... (nope, still can't go there) satisfied with my performance over the last two days -- and today in particular. Perhaps my response in last night's comments says it all in terms of post-debacle EESM mode (which I've been in twice this year, "mini" modes not included) meaning that it means I step up the focus more than anything. And my brain feels it as I'm fried right now.

Suffice it to say that I had my second best day ever and was able to ramp up recovery of Monday's car crash to 86% in less than two full sessions. That's like being in a real crash where your car is totalled, and then waking up in the hospital two days later with a band-aid on your finger. Most of the gains came on shorting the rate cut news in the 1030s, buying the open and adding as the market climbed in my favor, and then shorting the monster climb on its approach to the 15-min resistance. Talk about the monster of all day-after-trend days. While I still don't get why the market gave up its earlier 7AM interest rate cut gains and more BEFORE the open, it's not our job to figure out why ... we'll let the talking heads on CNBC figure that out. Our job is to react, period.

I won't ever be able to fully describe why I trade better and more focused after a draw. I just do. I'll be frank as always -- Monday would have destroyed most. Capital, confidence ... you name it. I got caught in a once in a century tidal wave in a raft. And yes, I purposely didn't disclose the # and have only talked in % terms over the last two days (until today ... more on that below) -- not to hide a darn thing, but to keep my mind focused on the task ahead. It was comeback time again ... this time for real.

Such is life. Yet by comparison, it pales compared to real life issues. Consider these: I likely wouldn't have even been born if my parents didn't have a devastating still-birth before I came along. I once almost lost my spouse to a massively burst appendix a few years ago. As I mentioned last night, my daughter was diagnosed with Type 1 diabetes at the age of 11. I broke my ankle and had a massive virus just before entering 12th grade and missed our basketball team's championship run. I almost went broke when I gave up my executive career a decade ago to trade full-time.

You see, for some reason, and with all due humility, I'm used to coming back. I can be nicked, stabbed, kicked, wounded, ridiculed, challenged ... you name it. But you can't kill me. The strength doesn't waver ... it only intensifies. And I'll again be frank -- my faith in God and the abilities He's honed over years of occasional hardship has a lot to do with it. While I purposely don't choose to flaunt my faith, none of this year's Bamboo Tree experience would have been possible without lots of Hand-Holding along the way over the last 47 years.

The end-of-month and end-of-year charts will show a Monday draw of -$94K (or 5% of my capital), followed by comebacks of $25K on Tuesday and $56K today. Monday shouldn't have happened ... at least not to that extent, and I'll again learn from it. (Find that admission in any chatroom!) Yet it did and life goes on ... step by step. Now, less than two days later, it's essentially as if it never happened and we can start talking about the Q4 bonus again.

The wound has healed remarkably fast.

It's truly a Team effort ... if you know what I mean.

I just wonder where this darn band-aid on my finger came from.

See you in the lounge tonight. Look for the room in PalTalk's Business & Finance / Trading section ... it will be clearly labeled and I'll open it around 6:30pm ET for some audio testing. I'll be the guy with the dark circles under my eyes.


Anonymous said...

congrats on 2nd best day ever- i had my best day ever. im dreading the trading volatility squash coming in the next few months
p.s. since u mentioned god- i just saw religulous- a must see

Anonymous said...

Great comeback Don! Very inspiring...don't know what else to say!

Anonymous said...

Hi Don:

Whoa... that's my intial reaction. What an experience you have had this week. Write it down, record it, and forget about it til next time. Great to hear that you came back frorm chip giving to chip stacking. A question regarding Monday's events.. do you have daily lost limits in place such as a max dollar amount that you would reach and then shut down and leave? Or is there anything in your battle plane that removes you from the game after X number of consecutive losses?
It will be fun tonight to meet you all. I have to drop the kid at basketball at 6pm CST so will be 5min to 10min late....


Derek said...

wtg on the take down ... we knew you had them right where ya wanted 'em. reminds me of NO Saints' Coach Sean Payton and QB Drew Brees - they consider each other eternal optimists (glass half full guys) and feel like being down 21-0 is the ideal situation for them. this analogy would have more zip to it if the Saints would have won this weekend, buy, hey it is what it is. Maybe this week's NFL analogy should be Colts coming back from 27-10 in the 4th with 4 minutes to go to win the game.

either way, kudos. and, as always, thanks for taking us along with you.

take care -


MK said...

Outstanding effort Don!! When you view it in $'s...looks pretty big. When you view it in %, doesn't seem so bad. Maybe a consistent shift towards strictly a % view of performance would be an asset, both from PnL perspective and from a drawdown perspective. Like I said yesterday...your ability to make a lot of money fast while in EESM is nothing short of amazing.

Unfortunately, I will not be able to attend the lounge. As I live in Pacific/Asia, that is during my trading times. Enjoy yourselves.

With kind regards,

Anonymous said...

Thanks again for your thoughts Don. As you trade well after a draw, I find I trade well when I expect nothing out of the day. When I think I will kill it, it never pans out. Thus I mentally enter every day thinking it will be slow and I will be offline early. It is an amazing mental process.