Tuesday, January 20, 2009

Tuesday Notes - Mobile Trading

6:30pm I thought today was one of the more interesting days in the following respects:

- It was a Tuesday, but really a Monday (my least favorite day of the week for obvious reasons).

- It was inauguration day. I hate possible midday market moving news ... did you see that 12 point ES cliff drop after the swearing in?

- I was forced to be away from the markets during the early and late action.

- I had to trade the 10:30am short pullback sequence from my car on the highway, which provided the bulk of the day's take. Thank goodness for Sprint Wireless.

- It was a trend day (also not a favorite for liquidity-providing traders who need frequent re-entry points), yet with marked volatility in terms of price swings and not always easy to time short re-entries.

In fact, you'd have to reverse each bullet point above to provide my preferred trading backdrop. And yet despite such obstacles, the day was somehow another modest success (updated peformance chart to left updated) as we get ready for -- everyone repeat after me -- possible m-o-r-n-i-n-g a-f-t-e-r t-r-e-n-d d-a-y.

In terms of charts, the attached 15 minute VIX and ES charts (click to enlarge) were solid guides, and following the TICK was often critical in terms of timing entries.

And while today wasn't a typical day in my trading life given the backdrop painted above, and I thus shouldn't draw many conclusions from it, I still sense I'm somewhat sleepwalking through the month and am wondering if will take a hard hit or heavy win for me to get the adrenaline pumping again.

I should find out either way very soon.


E-Mini Player said...

Mobile trading on the kind of size you put on is definitely "adventurous" :)

Don Miller said...

Did I mention I was driving alone and it was also lightly snowing?

I did pull over twice though when things got interesting.

True story as always.


E-Mini Player said...

Dude you are crazy! I thought trading on the train was crazy but you got me beat.

Don Miller said...

I'll concur on "crazy" ... I think all traders have that gene tucked away somewhere :-).

Actually, it was pretty safe and I did keep sizes relatively light at the time.

E said...

If talking on a cell phone while driving is illegal...

Can you get the trade "busted" if you get "busted"?

Amazing. Do you have your screens on your GPS?

I'm so conservative, I don't even chew gum while I drive.

Technical_Trader said...

Hey Don,
I'm a quiet lurker of your blog, but thoroughly enjoy reading your posts each night. Although it's not directly related to todays action, I would really appreciate if you could expand on how you use the VIX each day. I haven't found too many articles that explain how it can be used in correlation with the ES for trading. Thanks and Happy Trading!! -Scott

Don Miller said...

Hi Scott -

I essentially use it as a general backdrop indicator. As many know, the VIX typically trades the opposite of ES, so when ES is in a solid uptrend with declining volatility, the VIX chart usually looks the exact opposite (downtrending in this case).

So in that respect, it's a good confirming trend indicator. Of course like a price chart, it too can become stretched and try to revert to its mean. In fact the VIX generally is "mean reverting", which can sometimes be a more relevant predictor than its raw number -- the latter of which got a ton of longer term traders in trouble last year when they tried to buy the market when the VIX hit 40+ on its way to 80+.

Another way I sometimes use it is to help gauge market "pace". Tuesday was a good example where it was definitely breaking to the upside which suggested larger price swings and a "spikey" rhythm with a thinner market depth (not that I was able to match it as much as I would have liked).

I have the 15-min chart in the corner of my screen at all times. Yet like other indicators, it's only one gauge and is usually most helpful when used in combination with everything else.

I hope that helps.

Happy "Lurking".


Derek said...

i don't care what anyone says, i love the pic of your mobile trading office ... that was just too cool :)

Don Miller said...

Omni -

The pic was actually a generic one from the internet ... not my car or laptop.

I agree it does look cool though!


Charles said...

Don, just found your blog...likin' it, will return regularly. I just read your comment to Scott on the VIX, thanks for sharing knowledge...I too trade the S&P's, and was wondering: do you pay attention to the bond market...and if so, in what way? -CU

Don Miller said...

Hi Charles and welcome!

No, I don't use the Bond Market at all. Just trying to keep things simple I suppose.