Wednesday, December 17, 2008

Wednesday Notes - Two Strokes Remaining

4:00pm OK, first I'll address the day which for important psychological reasons I'm going to break into two sessions: Europe (stopped on early break of long support while heavy, was a bit anxious, and didn't trade particularly well at -$22K) and then the U.S. session (finally got my pulse aligned with the market's for the first time in a while, had a good afternoon "feel", and was extremely disciplined -- especially in the last hour -- for a modest +$7K.)

So mentally heading into Thursday I actually feel I've finally regained a sense of rhythm. btw, today was another example of the day's +/- results not meaning squat except in aggregation over the course of the year. I care more about my confidence and how I'm trading than any "number".

Nevertheless, I have some decisions to make as I'm now right at a mental trailing stop on the year's earnings that I intend not to break. I'm not going to disclose the figure yet, but it's essentially a protective control I've put in place to ensure that I don't drop below retaining 97.5% of my equity high. It also allows me to bank a profitable December -- even if modest -- to keep me in a decent frame of mind for whatever January brings.

As I mentioned in last weekend's video, I view this Friday as pretty much my last trading day of the year. And so perhaps it's fitting that the trailing stop is coming into play right as this marathon race is coming to an end, and at a time when the outstanding market rhythms of the fall have given way to lower volumes, poorer pace (for my style that takes advantage of extreme emotion) and sporadic opportunities where it's too easy to try to force things. And yup, I'm forcing things.

I'd be lying if I didn't say I'm disappointed in my performance of the last two weeks. Yet if I remove myself from the immediate moment, I'm frankly stunned that it didn't happen more along the way of this incredible 2008 journey. 49 weeks is a long time to go without an extended funk. And if this simply means my trailing earnings stop gets hit right as the race is about to end, then it's more than acceptable. Who knows, perhaps it's Someone's funny way of keeping me humble for 2009.

And while the ticker says 14 days to go before performance can be measured -- which remains true -- on Friday I'll disclose for the first time all year the annual tally, equity balance, and trailing stop ... and will each day until the ball drops so as not to lose sight of this critical objective. Before, it was inappropriate to do so. Now, it's imperative.

Back to our year-long swimming analogy, I'm now only two strokes from the wall and am getting ready to grab a towel. And so long as I finish above my trailing stop, I'll indeed finish ahead of Alain Bernard to my right!

The journey has been long, we're almost there, and I'm not about to drive the car through the garage door.

It's almost time to cut down the Bamboo.


trader said...

It is not only earning the money, but also the expericence of winning and losing that attract us come into this field. Just like you love poker, right?
Hope for the result you will disclose Friday and the experience you will share.
Plus,the market volume volatility and today is a litte more than last five or six days. We can find opportunities only in such market.

Don Miller said...

Trader -

Yes, the competitiveness is definitely an attraction. I also hate to lose.

Also agree on the volatility. Today the VIX ended under 50 for the first time in what's seemed like ages.

It's another new day and time to adapt again.