Friday, January 9, 2009

Friday Notes - Efficient Day

4:30pm 'Twas a very intriguing day and week from my perspective, that I'll touch on briefly now, and then more in a later post tonight and again over the weekend in "The Weekend Trader". I say "intriguing" largely because my personal trading volume all week as noted on the matrix was far below my normal volume -- and certainly most weeks of 2008, as I could probably count on one hand the number of days last year where I traded less than 1,000 round turn contracts which was the case today.

And yet I'd describe today as being highly "efficient" in terms of the few trade sequences I did choose to trade, the last of which I closed at 11:28am ET, and the net bottom line -- which while not a home run -- was rather surprising given the relatively low # of contracts and the fact that my holding times are usually pretty short.

So to that end, I'm going to do something tonight that I rarely do, and that is to chart each entry and exit on the day and see if I can make some sense out of it. I say "rarely" because as I've often said in responses to questions asking if I track specific trades, such an analysis is usually meaningless to me as (1) I often trade a high # of contracts with repeated scratches, re-entries, etc. where such a graph would be a giant mess, and (2) I make it a point to hardly ever look back to keep the eyes and mind focused solely on the road ahead ... for tomorrow remains the only day that matters to me.

Yet since today's volume was so low, it shouldn't be too difficult of an exercise and may actually provide some helpful insight for once, which I'll post when complete (probably later tonight). One of the former trading platforms I used actually posted trades on charts mechanically, but TT has had continuing problems with auto plotting.

I also find the "trend" of the attached matrix rather interesting as more green cells appeared as the week went on. Not sure what that means, but it could be a decent sign that my head is starting to get back into the game. I also tend to be a rather tough grader and want to look back to make sure I'm not being too easy on myself. One of the dangers of grading any green at all is that I may not feel the productive "pain" which I need to stimulate motivated performance. It's simply how I'll always be wired.

In terms of today's action, it was pretty obvious from minutes after the opening bell that the bias in the day session was to find a decent panic long wholesale entry or preferably a pullback short entry, and I pursued both which may become clearer when I plot the trades.

So look for more tonight and of course over the weekend as usual.


MK said...

Hi Don,

May I ask why you only graded the size management as light green? I am curious what separates it from being yellow, bright green, or even dark green. I guess I don't really understand this category very well and the different levels of grading it.

Thanks in advance,

Don Miller said...

Hi MK.

I'm not sure I'll ever grade my size management dark green as I'll probably be working on it until I breathe my last breath.

I think that's part of the art of the sport that one never quite masters ... at least those of us who believe in varying sizes given conditions. It's what keeps me coming back I suppose.

Yet I did want to really load up on a short today on any sharp retracement after the early breakdown, but never got the prime deep pullback so I managed with what I had as you'll see in tonight's post. I probably could have graded it higher, but I don't think any trader is ever fully satisfied with size.

Essentially, the category reflects my desire to increase size when I feel trade probability is high and the odds are really in my favor versus keeping it down when I feel it's lower (or I'm pressing).


MK said...

Good 'eve Don,

Based on that definition, I am not sure how you can ever grade the size management category anything but strong green unless it is graded with hindsight. At the time, you are assessing probability and making a trade size decision. At the time, this is a perfect assessment - no? Hindsight may prove otherwise. Is it fair to grade the subjective real-time, market feelings of probability based on hindsight? Non-rhetorical query and just a thought. Have a very enjoyable weekend. Thanks for keeping the journal alive in 2009!

All my best,

Don Miller said...
This comment has been removed by the author.
Don Miller said...

Oustanding points MK.

I can see times where it wouldn't be green though, for example if I went on "tilt" and started throwing size around in frustration, substantially undersized a strong entry because I was simply timid or lacked confidence, or added heavily to a losing position under the wrong circumstances.

In today's case, I probably could have gone up a shade after I reviewed the plotted trades tonight.

Yet I don't want to go into any trading day feeling I'm doing well. You know me by now :-).