Wednesday, January 21, 2009

Wednesday Notes - Head Faked

6:10pm This may be the strangest post of this blog yet, but I'm frankly finding myself almost hoping for a hard hit now to snap me out of what I feel has been a lackluster and sub-optimal performance over the past few sessions, as I continue to try to match at least some of the intensity of 2008. And for those who wondered why I refused to slow down while in last year's prolonged zone, this is exactly why as I knew once I slowed down that it would be difficult to restart the motivational engine.

And if that didn't sound strange, try this: My extreme displeasure is despite the fact that I've yet to have a losing day in '09 as the consecutive day chip gain streak reached 15 today. Yet my performance clearly continues to lack the spark and sizzle of last year.

I really thought today would do it. My favorite pattern, increased volatility, etc. Yet I stumbled and bumbled a bit in the morning, and incurred the cost of several scratches and stops (including getting shaken on the attached 10:25am head fake with decent size) before finding at least some rhythm to end the day with an OK, albeit sub-optimal gain.

And while I'm sure I'm not alone on trading the morning rhythm poorly which took almost a full hour to finally continue the hourly downtrend after the overnight downtrend pullback gap and trap (highly unusual for it to take that long on the morning after trend day ... case in point Europe today which peaked in its first 20 minutes), I don't normally get faked out. Oh sure I reentered and eventually made it back and more, but I initially felt like a basketball player leaving his feet on a pump fake as the opponent -- the market in this case -- went right around me and scored. If you entered and held, nice job and I tip my hat to you.

Most might look at my performance this month and call it a great success, especially since I purposely began the year by scaling back and catching my breath. Yet as I try to restart the engine, I'm not pleased. My sizes are too light at times and my "desire" continues to be spotty as noted on the performance chart to the left. I frankly almost feel as if I'm bored at times.

My car (named "Grace" for those missing last August's post; that's a whole story within itself) was in the shop for the past two days getting a new valve. I discovered the problem when I was getting a foul odor inside the car. Grace was moving OK, but clearly not at peak performance and it smelled bad.

Sounds like my current trading.


E-Mini Player said...

Don, when will you be posting P&L again? I enjoyed reading the daily chip gain in 08' :)

Regarding the lack of motivation; do you think it may be due to the $1 goal for 2009? Maybe it's holding you back? If the goal really is $1; then aren't you simply following your plan of not being too aggressive?

Unknown said...

Hi Don:

I've recently been following your Journal and could use some background on terminology and more about what your trading strategies are (e.g., what are you buying?). Don't want to get over wordy here but do you have something published for someone a notch above total neophyte?
Thanks a lot.

Steve G.

trader said...

It's nice that you have turned you early loss to a decent profit. As you said, it is a morning-after-trend-day and what I have only to do is stop-loss and stop-loss! But as I was trade in a daytrade firm, so I was cut down because of net loss restriction.
Would you do me a favour to describe you stop loss principle? For exameple, by how many ES point you would stop loss in general? Would you think it is make sense to trade one lot of the ES under the 400 net loss restriction?
Hope for your reply.

Symmtrical said...

if u can improve your trading do you look at this from other trading systems ?

Don Miller said...

Steve G -

I'll try to do a post on that again soon, although the concepts are likely sprinkled throughout the diary, especially in some of the posts where I do a live play-by-play of trade sequences.

At the same time, please keep in mind [per the FAQ that I'm not "teaching" or recommending any specific strategies as there are many ways to trade.

Stay tuned.


Don Miller said...

Hi trader -

Normally, I manage risk with size and scaling in and out vs. a stop loss. For example, if I believe a 60 contract position is appropriate for a sequence, and I'm only in for 15 as I scale in, I don't believe in a stop unless the initial trade premise has broken. The risk is essentially managed with a reduced initial size.

Once "fully sized", if I get a sense the trade isn't heading in my direction (no set # of points), then I'll try to get out either in full or by scaling out.

I also sometimes manage risk with immediate scratches to get flat and reassess, followed by subsequent re-entries if appropriate as I did today (and at some cost). Of course my CME member commissions are low, which reduces the impact of transaction costs.

So I don't really have a set # of points per se.


Don Miller said...

Symmtrical -

If I understand your question, other systems are irrelevant to me as the indicators and market sense I use have worked for years. It's simply a matter of personally executing them to my best ability which is my current problem.

Re: your unposted question on emailing, I rely on the blog comments to communicate with traders for a number of reasons, including allowing all to follow the dialogue as well as to limit emails to other purposes. I hope you can understand.



Don Miller said...

E-Mini -

Re: the P&L, I'm continuing to experiment with the scorecard color code concept (light green +$1 to +$7,500; bright green +$7,501 to +$15,000; dark green > +$15,000), so that should give you a general feel. It's still too early for me to get too caught up in the exact #s.

Re: the $1 goal, yea I've been thinking about it ... along with a lot of things in terms of restarting the engine. As I said in the radio interview, my competitive juices are starting to flow again, and perhaps I need a true $ target out there.

I'm giving a lot of things thought right now, including restarting Europe trading which despite its break-even status last year, seemed to get me fired up for the U.S. session.


momo said...

hey Don, was surprised you didn't comment on the afternoon turn and subsequent short covering rally from hell. Curious how you did?

Don Miller said...

Hi Moritz -

I'd stepped away for part of the move, but do remember one decent short scalp shortly after 3pm ET.

After the early oscillations played out and the market was consolidating (prior to the PM rally), I stayed on the sidelines.