Saturday, February 28, 2009

** VIDEO ** Expo Goodies; Top CTAs; Motivation

Tonight I have some fun with the New York Expo, compare the Top 2007 vs. 2008 CTA performances, and discuss what helped motivate me this week. You can also view Friday's post and February recap below.

Please note I'll be gone for much of Saturday, and will check comments when available.

Have a great weekend.

Friday, February 27, 2009

Friday Notes - Closing the Door on February


Dear Diary,

Yes, I'm posting early today as I want to avoid my personal landmines of potentially losing focus (a) late in the day, (b) on a Friday, and (c) at the end of the month ... for those timeframes close what I consider various "trades" (daily, weekly, and monthly). Of course they still mean little except in aggregation as the only relevant figure is that on 12/31.

With respect to today's trade, I did well both during the Globex and normal sessions, with most of the entries reflecting wholesale fades into some extreme panic buying and selling (some of my favorite sequences), with extreme TICKs being helpful during the regular session to help time entries when they coincided with price spikes. And of course I shorted several morning approaches toward 750 which became resistance after ES fell through its trap door in the Globex session. The result was a highly efficient +$12K chip gain on only 958 contracts to close the week out just shy of +$40K. My last trade was closing out a short at 12:38pm ET.

And so this second of twelve legs of the 2009 race comes to a close. Frankly, the only memory I have of it is that damn single day where I caused myself to lose a week or so of earnings which I thought about a lot last night while I was tossing and turning after that stupid poker beat. And perhaps that beat got me invigorated for today's trade, as most know I usually trade more focused when ticked off.

And while I recognize many don't understand why I beat myself up over what others might consider a decent performance, perhaps it's a small glimpse into what makes me tick and why 2008 was ... well, 2008. Being satisfied = complacency = stagnant personal and income growth. And as I said throughout last year's journey, it's not greed ... and if you think it is, you've missed the entire point of eight months of open diary blogging -- rather it's instead an intense inner drive to simply get better day after day and strive for sustained peak performance ... even knowing I'll often fall far short. Have I mentioned I don't like to lose??

btw, given the continued growth and eyeballs (Alexa reported another jump this week), I recognize some new to the journey may already be tired of hearing me babble, and/or consider this some kind of self-indulged ego trip. All I can say is that I've found this diary an excellent way to stay motivated and fully immersed in the market after hours, as well as a way to force myself to be accountable to both myself and the public. As the FAQ indicates, you're always welcome to change the channel.

Having said that, I've recently implemented a comment spam filter where I no longer receive junk comment spam. They're rare, yet that's one risk of being in the public eye that I fully expected and accept. Plus market makers for some reason are disliked in some circles anyway! If you're above board, no worry and keep the comments coming. For after having met with several folks in NY and having had a deeply personal conversation with a trader via phone the other day, I have no plans to drop the diary nor close it from public viewing, even while stepping up security. As long as this diary remains a win/win, the experiment will continue in spades. But I digress.

As for 2009, I remain off my 2008 pace due in part to that lone loss of the year on February 10th, which never should have happened and remains etched in my brain like a late-game NY Giants Hail Mary Super Bowl helmet catch (for it too was a lone blemish for the Pats). And there's a reason I vividly remember the details of all nine horror shows since joining the Merc in '04 ... for it usually causes me to ramp up focus several notches. And frankly, my most vivid memories of last year are those rare, but painful days from hell.

So with 17% of the year now in the books, we'll take one last look at February as I still search for this year's game face (which I still feel isn't there):

February 2009
Daily Gains: $131,561
Daily Losses: -$33,470 - Stupid ... it's amazing what a single distraction can set off
Commissions: -$19,149
Overheads: -$4,945 - Higher than normal as it includes my trip to NY
Net Profit: $73,997 +$83K off the monthly equity low
Daily Win/Loss %: 95% (18/19) - Obviously, the 3.9 Dollar Win/Loss ratio is more relevant
Contracts Traded: 37,534
- Last twelve months actual: $ 1,605,825
- Projected 2009 YTD (Jan & Feb) annualized: $1,037,184
- Last three months annualized: $897,844 - A possible warning flag, except that it reflects pretty much shutting down for half of December; Normalizing for that, 3 Mos / 2.5 x 12 = just over $1M, so I'm not too worried ... yet.

And so as I begin to enter the "meat" of the trading year, I'm still wondering why I feel my foot remains on the brake at times. I know I purposely slammed on the brakes in mid-December, yet for some reason they still feel a bit locked even two months later (which is why I hated to let up, although it was still the right decision in hindsight). Perhaps that's why sports have off-seasons Don ... duh. Yet this week wasn't that bad, so perhaps it's a hint of things to come and that I'm starting to lace up the spikes ... finally.

Like baseball, spring training will be over before you know it, and so it's time to get the game face on.

Game on.

Look for a video and "The Weekend Trader" posts over the weekend as always.

Thursday, February 26, 2009

Thursday Night Poker Notes

10:05pm I just had to post this to vent. First read my earlier post today about pocket Kings.

I made it to heads-up tonight, and with -- you guessed it -- pocket Kings, went all-in and strategically got the other guy with 10-J to call. Nice right?

Then, the flop comes K (really nice now ... trips), Q, 4. Rut ro.

So trip Kings vs a straight draw ... still OK as he only has 8 outs for the straight.

Then the dagger turn comes 9!!!!!!!!!! Damn. And of course the board didn't pair for the then-needed full house or show the case King.

I love poker, and it's done a world for my trading as I've explained before, but this is why I've said by comparison, trading "seems" far easier. For seldom do such suck-outs occur in the market, and even when they do, it's never an all-or-nothing proposition.

Thursday Notes - Good to the Last Drop


Dear Diary,

'Twas an interesting and rather ironic day in that I usually suck in the late afternoon after a long day of trying to stay focused, yet managed well on the late-day range break and subsequent short pullback sequence to turn an early loss (largely the result of blinds and antes as I was providing liquidity, as well as stops after probing the morning attempted break to the north) into a +$8K chip gain. And while still modest, it reflects a +$13K increase over my intraday low.

So call it the exact opposite of yesterday when I got nicked late in the day by trading based on what I viewed as strong trend support, versus today where the same sequence (except to the short side of course) provided the day's take. And such is life where probability is always in the driver's seat. Yea, pocket Kings can get busted, but you still have to bet them every time.

They say a picture is worth a thousand words, so I'll let the chart do the talking (click to enlarge) which essentially reflects the last day and a half of trading. Note the nicely defined ranges, the most recent of which has now expanded from 760-780 to 750-780 (with the prior swing long of 760 providing the initial wall to the north).

And to close the book once and for all on the 2008 personal benchmarking effort, Futures Magazine just published the 2008 CTA returns this week. The top CTA for funds less than $10 Million came in at +171%, which was a drop over 2007's +205%. Interestingly enough, six of the top ten funds had less than $2 Million in assets, which in my view tends to skew the ROR upwards if excessive leverage is used.

Yet as I've stated many times before and in response to one comment last night, as a trader I don't really target ROR as I only care about Net Income in the form of a "salary" type wage or business bottom line. Nevertheless, it was a fun challenge and benchmarking effort last year to go all out during every trading day to see how one could do vs. the CTA funds. This year, I would expect personal ROR to drop as I'm simply trying to maintain the $1M net.

Poker night tonight, and I'd better be on my game as I've slipped to third (of about 30) in this quarter's rankings with five weeks to go.

I'll also do a month-end video over the weekend as it's been a while.

Wednesday, February 25, 2009

Wednesday Notes - It's Still Just a Job


Dear Diary,

Wowzer ... where do I start? Headfakes, broken intraday supports that were as solid as pudding, and failed intrday trend pullback attempts had me scrambling far more than I'd like (not that the market cares). Hand me the Dramamine.

OK, I ended modestly green at +$6K, but I had to work for it and ended the day off my intraday equity highs as I got a bit sloppy in the last 30-minutes expecting at least one of the afternoon supports to hold -- especially 770 (pudding again) -- and not going heavy enough on providing liquidity to the 2:00pm and 3:30pm panic buyers, so we'll call it the third winning ugly day in a row. At this rate, I consider myself long overdue for a home run after hitting singles and doubles for much of the last two months. And I actually thought I was on my way toward that today before the afternoon market "umpire" ruled that I had to go back to second.

I felt I traded the morning session fairly well considering I was looking for 760 to hold a bit longer than it did, before stopping and reversing hard on the 10:30am short pullback toward both 760 and the 5-minute trend line. And such was the trade of the day at this end that ended up being critical to offset some of the slop later in the day.

Obviously we continue to have bailout "noise" in the background that is causing the roller coaster action, although I continue to trade based on what I see and simply try to minimize the damage when what I expect doesn't happen.

So there it is again ... the good simply outweighing the bad in another day in crazy business. And while I'm sure many did far better today (although I imagine many got their bell rung), I seem to be morphing a bit into Michael Mizrachi -- a.k.a. the "Grinder" -- who makes his poker living by simply grinding out modest win after modest win that by the end of the tournament or year combine for a decent stack of chips. 37 out of 38 days now + ... I still don't get it.

And so with two days left in this second of twelve legs of the 2009 race, at this point I'm simply looking forward to March, which has traditionally been the one month during the year where I seem to find my sea legs and that often sets the pace for the remaining three quarters.

Today was also a good reminder that despite the glitz that too often accompanies this business (I've still never figured out why), it's still just a job.

A job that starts again tomorrow.

Tuesday, February 24, 2009

Tuesday Notes - "Kick Me"


Dear Diary,

I made more mistakes today than Jim Cramer in a stock picking contest, including hesitating several times instead of trusting my instinct in both the Europe and U.S. sessions (resulting in less than optimal wholesale entries) and not recognizing the PM squeeze as quickly as I would have liked. Fortunately, the market provided its typical -- repeat after me -- high probability oscillations on this morning-after-trend day, which when combined with some "getting ticked off" perseverance and finally adjusting to the PM move got me on the right side often enough to scratch out a decent, albeit not spectacular +$8K day.

And here's the irony: Based on the day after trend setup, the chip gain should have been much higher, yet based on my self-graded performance, it should have been far lower. Yet I suppose if it means anything, it's a reinforcement that this business is not about perfection ... far from it ... it's simply a matter of never giving up and making do with your B or C game, which I've had for two days in a row now. Call it winning ugly.

And here's my continuing dilemna ... I still feel I'm just a step off my 2008 game, yet that single step is clearly showing itself in the P&L in the form of a reduced net compared to similar markets in '08, although the performance has been incredibly consistent in terms of 36/37 days now + on the year -- the one day brain cramp notwithstanding. The lower net income pace will be apparent in the month-end and year-to-date #s we'll see at the end of this week. And it's starting to bug me big-time, as I'd much rather have a lower % (I'm usually around 78%-80% ... not 97%) with a higher bottom line, which tells me I may still be trading on eggshells for some stupid reason.

As always, the finger points one way ... backward at me. Yet one thing is clear ... I need some kind of kick in the a$$ to get me out of this funk, and I'd prefer that it not be a real loss which usually forms the foundation for the next run. And yes, the reduced profitability IS a funk and unacceptable to me as it reflects suboptimal performance. As I've said before, I care about one statistic only which is all telling to me ... bottom line.

For many, this year's results thus far would be more than acceptable ... and I recognize that. Yet for me, it's not, and I've got a lot of work to do to fix it.

Maybe I need to walk around with one of those "Kick Me" signs on my back.

P.S. Check out today's Trader Tax Update post below if you missed it.

Special Post - Trader Tax Update

Some have probably already seen this, but it was passed to me from Pat Lafferty (my broker) and is circulating through one of the largest floor trader groups:

Per Todd Harrison at

"For what it's worth and so it's said, I heard from two very credible (separate) sources that the trading tax is DOA. That's good news, Yo."

Seems consistent with what I also heard at the Expo. Here's the background blog link if you need more info on what it's all about.

Let's hope it's true and will keep us focused on trading in the U.S. and not have to get up at 3am to trade Europe!

Monday, February 23, 2009

Monday Notes - Back to Work

6:00pm First, some thoughts on today's performance. Whether it was too much food in New York, a sore back, or just my too-typical Monday doldrums, I had major trouble getting the engine started, and as a result my energy level on a scale of 1-10 today was a minus 3 (hence the red on today's scorecard to the left).

And speaking of the scorecard (which as a reminder remains an experiment), I actually had a tough time grading my size management, as on the one hand, I kept things appropriately light in the morning given the low energy level and as I was providing some long liquidity on the early drop on TICK extremes and divergences to get a feel for the market's pace, yet didn't step it up nearly enough in shorting the 2:30pm abysmal attempt at a rally. So I settled on yellow although I have reasons to shade it both green for the morning and red in the afternoon.

And while I'd like a mulligan on that afternoon climb toward resistance, I suppose I should accept the day which may be best summed up by the offsetting "focus" grade (red) and "avoiding trouble" grade (dark green) ... for they could have easily both been red. Been there, done that.

As is said, know thyself ... and for whatever reason, thyself wasn't particularly sharp-minded today.

Now to respond to a few questions and discussions I had while in New York.

One person comically asked me how that "increasing size" goal was working out for me. Yup ... I'm having a tough time making the move, and fog-brained days like today don't exactly provide the best environment to do so. Remember the classic Airplane quote: "Looks like I picked the wrong week to quit amphetamines" ?? The plan is still there ... I just need to get off the pot.

Another person (two actually) suggested that I have too long of a leash with comments that address the same topic over and over again which lessens the focus on relevant dialogue and current issues. And after thinking about it, I think they may be right. So while I continue to encourage open debate and dialogue in the spirit of strengthening each other, and can probably count on one hand the ones violating the FAQ which I couldn't post, I'll try to do a better job there. And yes, I'm very much aware of when people are creatively abusing the privilege or otherwise crossing the line ... you cross, you lose the privilege to post. Time and energy are both finite quantities in this life.

And speaking of the blog FAQ, here's the re-post of the link to the left as a reminder to all:

What It Is:
- First and foremost, a personal historical journal (diary) and motivational tool;
- A therapeutic forum for me to share my thoughts and opinions or otherwise vent (usually to myself);
- A forum for interested onlookers to participate in the dialogue by submitting comments (see Comments guidelines below).

What It Isn't:
- A commercial site, including a platform for referencing, advertising, or selling services;
- A "Gee, Look How Swell Don Miller Is" site (there's not enough space on the Internet to list my weaknesses);
- A site that in any way suggests anyone to engage in trading or other activities I may pursue;
- A site recommending any particular trading method or style.

Comments Guidelines:
I encourage all to submit comments in the spirit of strengthening each other and engaging in other constructive dialogue, and will publish all comments -- including those that share opposing views -- under the following guidelines:
- Submitters must be registered. The blog "switch" for posting of anonymous comments is off;
- Comments with links (or link requests) to commercial or subscription sites won't be posted;
- Unprofessional, disparaging, or threatening comments won't be posted.

Bottom line is it's a personal journal currently open to interested "onlookers". Those looking for something else are always welcome to "change the channel".

One recent post who asked to remain private "opined" (gotta love Bill O'Reilly) that I may have subconsciously crossed the line at times to blog "coaching", a comment that he/she meant with all sincerity. That one got me thinking -- a lot -- and I don't have a good response for it other than to continually reinforce that we're all wired differently and there are many ways to "paint the canvas". Kevin Garnett gets mentally prepped for a game by screaming at the top of his lungs, while others meditate.

So that's pretty much it. I remain more than willing to share what this soon-to-be 48-year old brain may be thinking about, but don't have any magic potion to sell.

If you're new to this diary, welcome. If you're skeptical of hidden agendas, history in this industry has certainly given you that right.

I just try to get up every day and see if I can make it through without stepping all over myself. That's pretty much my definition of a successful day.

Have a pleasant evening.

Sunday, February 22, 2009

The Weekend Trader - Final Thoughts From NY

Sun 12:30pm Couple of quick notes before I head back. I finally met up with Linda Raschke [hers was the first and only presentation I sat all the way through] and had a good chat. I give her a lot of credit for speaking for trying to squeeze thoughts into a 45 minute presentation, and then for putting up with answering questions to the throng afterwards ... been there done that.

One reason I didn't mind attending her talk is that we share similar philosophies on the market such as the use of multiple timeframes, TICK, scaling out, etc., so the risk was pretty low that my brain would be filled with new market variables that might affect how I trade. She's also stood the test of time which is so much more than can be said for the sad number of fly-by-nights that come and go.

All in all, it was worth the time and expense to make the trip [including the cost of my wife's shopping] as it gave me an updated view of the trading industry. As I mentioned yesterday, there definitely seems to be a thirst for "real knowledge", and while I still feel many of the exhibits and presentations are looking out for their own interests and selling pipe dreams, I had enough discussions with people who I respect in the industry to believe that we may be evolving into a new era in trading ... one based on current and prospective traders desiring to take personal accountability for their income and portfolios, and being able to filter out the truth from the noise.

Perhaps that's one of the reasons that traders have been gravitating toward this diary and similar resources, for maybe there is indeed a place and purpose for what we so modestly started here last July.

The journey and diary will continue on Monday.

Enjoy the rest of your weekend.

Saturday, February 21, 2009

The Weekend Trader - Big Apple Expo Updates

I'll post periodic thoughts over the weekend, adding to this post from time to time, so check back as the event progresses. Posts are newest to oldest:

Sat 7:20pm Continuing to catch up on old times as I chatted with Carolyn Boroden who I hadn't seen in years (we'd helped mentor a common friend in the past who was the former head of cardiac surgery for the Chicago hospitals who passed away a few years ago ... rest in peace Firouz), and also chatted with a few CME employees.

Early impressions of the public portion of the Expo so far is "lots of toys", including mega LCD screens and complex strategies that have my head spinning. I kept it quiet that much of my trading is done on an 11 inch screen, and that I do one thing over and over and over again. So lots of Ferraris are for sale to repeatedly run to the store and back.

I also asked the Futures Magazine folks when the final 2008 CTA performance results will be out, and they said within a few weeks at which point I'll close the book once and for all on the '08 benchmarking effort. Pat did almost spill the beans when he kept referring to me as his "largest individual futures trader" ... need to watch that.

I'm still looking for presenters offering up their personal trading performance records. No luck so far and still seems a taboo topic ... check back tomorrow. I did learn though that a 1-point move in one ES futures contract was worth $50 though.

Seriously though, the Expo folks have done a good job once again rolling out the red carpet for the industry, and it's nice to be among some old friends. And many presenters seem geniune that you can't learn to trade from a weekend event. I've also noticed a lot of the old fly-by-night horse race callers have disappeared, and prices for some "tutorials" have been slashed from $700 to $70. Plus, the chocolate cake at dinner was great.

Missed connections again with Linda, but expect to touch base with her after her Sunday A.M. public talk.

Last update today. More tomorrow.

Sat 1:50pm You won't believe this one. Here I was, sitting in my hotel room flipping through the Expo catalog, when I glanced at the back inside cover and noticed an ariticle entitled "Trading and Svithjod Rock". My first thought was, "hmmmm, who would write about such an abstract concept with which I'm pretty familiar?" ... before I glanced to the right and saw it was a reprint of my January 17 blog post (which is also listed in the key post index in the lower left) along with my pic.

Now I of course have given Tim Bourquin the OK to syndicate any of my posts (Tim's a great guy and we'd connected years ago), yet I was surprised anyway. And if you couldn't make it to NY, you already have one page of the catalog.

And a heads up that the blog site is referenced there, so prepare to get out the welcome mat.

Too funny.

Sat 11:25am I've already chatted with Pat Lafferty, and Tim Bourquin wants to squeeze me into one of his studio interviews which I'll link on this site if we make that happen.

So far, attendance seems to be strong, and I'm definitely seeing a heightened thirst for "real" knowledge. I'm also finding it cool attending as an attendee vs. a presenter, as I've simply sat in the back row of a couple of early CME presentations. The bulk of the Expo starts tonight and is held on Sunday.

Pat reinforced his views that Mr. DeFazio has no clue as to how markets work, and his tax proposal as written would shut down the futures markets. Yet I agree with recent comments and my personal views that we need to unite and make a strong stand anyway.

Linda Raschke has also asked for me to speak to her trading team and has been trying to connect with me, so I hope to close that loop today as well.

More as the weekend unfolds ...

Friday, February 20, 2009

Friday Notes - In Transit to NY

6:00pm I'm on my way to NY care of Amtrak, so will keep much of this to shorthand as I don't know how long my battery will last.

Quite the full day as follows:

First some decent initial feedback on the resurfacing of the trader tax bill:

Pat Lafferty (My broker at MF Global who is a MAJOR player in the futures industry and who I trust with my life and will be meeting in NY): "Word around here is that this thing has ZERO chance of getting through. Nobody is worried about this at all."

Tim Bourquin (Founder of the Expo and who I'll also be seeing in NY): "My sense is that there is enough lobbying power in the CME and others to defeat this so I’m not terribly worried."

Nevertheless, part of the reason for my change in heart to go to NY is to hear this firsthand.

Now, on to today where thanks to finally seeing some pace and emotion in the market ('bout time), I closed out an acceptable +$27K weekly chip gain with a decent +$11K Friday performance in this short week. And as is usually the case when we have emotion, I made much of it in "catcher mitt" mode when first longs were giving it up after lunch and had to sell to someone, and then later when shorts were following suit, having to buy from someone on the post-2pm panic covering. Imagine if the tax goes through ... who will they have on the other side of the trade when they need to get out???

The interesting part of today's trade for me is that I was distracted at times booking my travel and making other last minute changes for the weekend (we made the train by 10 minutes!), yet I had an exceptional energy level today and was able to still focus on the task at hand as the market gave us some solid emotion in the afternoon session.

Just when you think it's darkest in terms of market pace and stupid legislators, days like today provide us continued hope.

I'll update the performance grid to the left shortly and continue to post throughout the weekend. If enough folks are interested in some drinks in NY, I'm buying.

** Change in Plans; Heading to N.Y. **

In light of the tax issue and since my broker will be in New York this weekend, I've decided to treat my wife to a weekend in the big city and will heading there late tonight & stop by the Expo on Saturday and Sunday.

For interested folks, we could schedule an impromptu get-together in the lounge if you'll be there.

More shortly, but right now I have to book some last minute travel.

** Will update more on the train ride to NY later this PM **

Thursday, February 19, 2009

Special Post - Trader Tax Update

Following up on Monday night's post, and if you're not aware, the potential financial transaction tax was reintroduced in the House last Friday, Feb. 13th by U.S. Congressman Peter DeFazio (D-Ore.). Here's Green & Company's latest update from today's blog.

As stated in Green's blog, "Thankfully to date, Congressional leadership has said “no” to DeFazio and his co-sponsors. Please keep saying no." I couldn't have stated it any better as if passed, this would flat out put most of us out of business and kill market liquidity.

Words can't express how utterly ridiculous this bill is, especially taxing the gross traded amount which would exceed what most traders make in earnings. It would kill the futures trading business.

Here's the current online petition if you care to join. I'll certainly be petitioning it and encourage all to spread the word.

I can't believe it will pass, yet I didn't think the VIX would climb above 80 last year.

And I thought this was land of the free.

Thursday Notes - Chip Stack Recovered

4:00pm Well, it took me seven trading sessions, but last Tuesday's brain cramp and lone loss of the year has now been fully offset and I can get back to the business of growing the darn chip stack once again.

And while I'm surprised it took as long [recall last year's October mess -- which was the largest of my career -- was recovered in three days], I suppose I shouldn't complain too much given the often pathetic market pace the market has dealt us lately. And I swear today often felt like trading the Globex session at two in the morning as volume was pathetic with a capital P. Did they implement the trader tax already without telling us???

Anyway, the wound has healed and I'll try my darndest not to stab myself with the pen again. Losses are one thing -- a fully expected and budgeted part of the business. A stupid loss resulting in a week's worth of lost time is just that ... stupid. Let's hope that was the brain cramp for the quarter, if not the year.

Other than that, there's just not that much to say about the current market conditions, except that it's not ideal for traders who rely on strong market emotion. Headfakes are the current name of the game, and as such, I've been guarding my chips carefully over the past week. I'd post a chart, but picture a three-year old scribbling on an etch-a-sketch, and you get the idea.

Personally, I'm waiting for pocket Queens or better.

Poker night tonight ... and I've slipped from first to third. Got some work to do there too.

Wednesday, February 18, 2009

Wednesday Notes - Using the Full Dashboard

5:00pm Like the New England weather, if you don't like the current pace, just wait. And today was such the case as we indeed got the high-probability morning-after-trend oscillations with Tuesday's trend resistance providing a helpful guide to the north. As I've said before, there's nothing wrong with chop if you know it's likely coming. I encourage new folks to do a blog search in the top left for "morning after trend" or day after trend" ... you should find a bounty of posts on the topic.

And following up on many of the comments regarding the usefulness (or not) of the TICK, I thought today was a great example of the TICK providing a rock solid guide for entries as fades were the name of the game, as they often are after a monster day.

However, here's my take on its overall usefulness. As was mentioned by some providing comments last night, I find the TICK to be incredibly helpful ... provided you take the whole picture into consideration. And such is exactly why you don't drive a car by staring at the speedometer and forgetting to look out the windshield!

I've seen many studies and articles over the years disputing the relevance of every technical indicator out there ... specific examples include Moving Averages and stochastics. Yet the problem with most of those studies is that they isolate the specific indicators and don't include their accompanying brethren. Put another way, would I trade solely based on MAs? Stochastics?? TICK??? VIX???? Time of Day????? My answer is I wouldn't trade solely based on any of them. But I'll damn well trade based on the overall picture they collectively portray, and such is the judgment that all too frequently can't be built into programs or those "random walk" market theories.

One area I could have improved today was sizing, as I was probably just a bit gun shy after yesterday and was also keeping initial size down unless we got close to 800 again early in the morning, which we didn't get. As a result, I often traded partial positions. Yet partial is better than nothing and I'll take the day's five figure chip gain, which has now all but buried last Tuesday's brain cramp.

Now I just need to keep the motor running as I look for the right time to step on the accelerator.

Tuesday, February 17, 2009

Tuesday Notes - Tip of the Hat

6:00pm Well, if you traded well today, I tip my hat to you in a major way as I felt today was one of the more challenging days in recent years from a technical analysis and pace perspective.

At this end, I fouled off several pitches during the day -- especially early as I helped provide liquidity on the long side during the early nosedive as the TICK approached -1000 -- but managed to stay at bat long enough to somehow eek out a slight green day thanks to a late day short sequence just south of 800 which reflected both a technical and psychological line in the sand the whole world was likely watching. I would have bailed on a trade above it.

Yet aside from the two early and late day surges -- both of which offered little in terms of a second chance to fade them at wholesale prices (the PM provided a small 1 min divergence, but 'twas getting late) -- most of the day lacked solid opportunities for this trader.

Monday, February 16, 2009

Special Post - Proposed Financial Transaction Tax

Well, I don't normally do three posts in one day, yet I felt that given the ever-increasing exposure this blog is getting, I might as well use it to help all of us further circulate the attached links discussing the proposed financial transaction tax that Luke referenced in today's comments, as well as the excellent response and assessment by Robert Green of the trader tax specialist Green & Company firm.

1/12/09 NY Times Article
Full Paper from the Center of Economic and Policy Research
Green & Company Response

Please note I don't want to fill the blog with a national debate on this -- let's keep focused on trading -- yet the effort is certainly something we all should be aware of.

Seems it may be time for all in the trading industry to unite once again.

** VIDEO ** Keeping a Level Head

Today, I follow up on this weekend's posts and discuss a few excerpts from the book, "When Supertraders Meet Kryptonite" by Art Collins.

Monday Notes - Holiday Thoughts

First, please note the correction to the beginning of Sunday's post. And since the piece generated several responses and comments, I thought it would be helpful to further crystallize my thoughts for the record. While I realize some of the material is rehashing old thoughts, I thought the timing was appropriate.

- My decision a few years ago to rededicate myself to trading was just that ... a personal choice. There would have been no right or wrong had I continued to teach (assuming it was done correctly, promoted self-sufficiency, and with the right motives of course). Similarly, my decision to forgo the speaking and writing circuit in recent years was also a personal choice that allowed me to keep the market side of my mind 100% focused on the task of trading -- even during non-market hours -- as I felt driven to first pursue closing an incomplete chapter in my trading life that ultimately led to the 2008 journey.

- I believe quality trader education is a necessity. As I've said before, I come from a long family of teachers ... grandparents, parents, sister, etc. And while experience will always remain the best teacher and reinforcer, I believe good teachers in this or any other business are sorely lacking and that a solid foundation of market theory, technical analysis, and behavioral science is a must.

- I didn't mean at all to infer that expos and lectures are not a good thing. As Tim Bourquin pointed out in his comments yesterday, there are a number of benefits of being amongst fellow traders, and there are a few people in this business where I'd personally pay top dollar and beyond just to share a cup of coffee with.

- Yes, I've been very vocal about certain pockets of this industry that are primarily selling glitz, don't promote self-sufficiency or probability concepts, and aren't held accountable ... and will continue to speak out about it. 'Nuff said.

- Lastly, please always keep in mind as noted in the FAQ that this blog was never intended to teach. It's simply documenting my experiences and views, some of which is personal opinion. Indeed, one of the potential dangers of blogs in this age of the "new press" is that they could be viewed as the one and only end-all cure, or else morph into giving the author some sort of self-proclaimed expert status. And should I sense that is ever beginning to happen here, the virtual pen will be quickly laid to rest.

I'll likely post a video later today. In the meantime, enjoy the rest of the long weekend.

Sunday, February 15, 2009

The Weekend Trader - A Line I Won't Cross

All - Please note I've made a correction to the first paragraph of this post after exchanging notes with Tim Bourquin, as he's indicated attendance at next week's NY expo is expected to increase. While my broker has kept me posted on the recent expo environment and attendance trend, I trust Tim's response as co-founder of the original Trader's Expo, and you can find his comment at the end of this post. As traders, we're to correct errors immediately, and so I apologize for the misstatement that was based on another source.

As many of you know, one of the annual trader expos will take place next weekend in New York. And while some expos have dropped in attendance reflecting the industry roadkill left from the hollow promises of the late 1990s and early 2000s -- not to mention the slaughter many experienced in 2008 -- Tim Bourquin has indicated that attendance at this year's NY event is expected to increase in part as the result of people deciding to take personal control of their portfolios.

By the way, I find it interesting in that Poker is now going through an evolution of its own, in that after the initial hype and tremendous exposure received in the early 2000s as the result of increased TV coverage, hole-cams, and of course the Internet, most people are discovering the reality that few will ever be able to master such a difficult skill on a sustainable level, despite the hollow promises of Internet sites and celebrity marketing.

Yet back to trading, I'd like to touch on a topic several have referenced since the blog began -- that of my own evolution from a former trader teaching life -- and explain why you won't find me in New York this weekend.

As many of you know, many years ago I was asked to help teach/coach/mentor (pick a word) traders as the result of my personal record. The requests came from chatrooms, publications, and a global trading site where I ultimately began doing a daily column, and later co-developed several trader training tools -- including simulations that I felt had been sorely lacking in the industry. At one point a while back, I was even named "Director of Trader Development" for a brokerage firm, and often spoke at the national expos.

And while I was very proud of the work that had been done in terms of breaking new industry ground related to trader education (which I insisted always include some component of live trading), it was becoming clear to me as time went on that I was bordering on crossing a line that I vowed I'd never cross in terms of morphing into one that was dedicating more time to selling picks and shovels than locating the gold. Frankly, I was risking becoming a pot to the black kettle, as well as converting my house walls into glass, while at the same time maintaining an arsenal of stones.

In addition, as I was inching toward that line, I was also becoming increasingly frustrated with the challenge of teaching traders, as I took it very personally whenever those under my tutelage struggled. Extremely personally, as I felt their pain. For it was becoming clear to me that despite best intentions and efforts, a tiny minority will ever make it in this business. Further, it also became apparent that many people simply shouldn't be pursuing a trading career, and that it takes far more than a book, CD, DVD, weekend seminar, or a year in a chatroom to fully understand what only experience can ultimately teach.

As a quick aside, many of you have heard me say that I pray my kids don't decide to become traders or marry traders -- for as a parent, it would be hard for me to see them go through the difficult times. Yet I've also said should they make their own independent decision to do so, that I'd support them 100% and arm them with the best knowledge base and seat belts possible, including making sure they watched the classic car crash videos from Driver's Ed. And such is how I approached my trader teaching years.

The best analogy I can make to where my career was heading is to that of Howard Lederer who was -- and still is -- an excellent poker player (he's three years younger than me), yet who became more of a businessman than a player as he co-founded Full Tilt and increased his television analyst work. Frankly, our stories and paths are incredibly similar, up to the point where I decided to stare that line in the face, do an about face, and instead rededicate myself to trading. And deep down, I believe last year's personal mission was in part to prove to myself that I indeed could not only walk the talk, but run it at full speed.

So you won't find me in New York selling shovels and maps next weekend.

I'm a trader, and I'll be at home quietly locating the gold and trying to further toughen the calloused hands.

Enjoy the rest of the long weekend.

Saturday, February 14, 2009

The Weekend Trader - Nine Lives

While I believe in rarely if ever looking back at my trading "life", I couldn't help doing a small amount of research to determine how many days I've had in recent memory that I would classify as "brain cramp" days that resulted in a significant loss. And so I decided to look back at my records since I joined the Merc in 2004 to see how may days I'd figuratively lost my lunch. Although in some cases it may have been close to literally.

The answer? Nine, which includes this past Tuesday. (btw, while Tuesday was a tiny dent %-wise, I'd still classify it as a brain cramp day as I let the distraction send me into the Maverick Top Gun nose-dive). So nine times out of the last 60 months or 1,260 trading days, I coughed up a major hairball. Whether you call it going on tilt, revenge trading, or whatever, it happened. And it hurt.

Now most know that I don't trade a "system". Frankly, I hate systems as they often preclude one from using experience and judgement. Plus, there's no room for personal creativity. I was reminded of this the other day when I was watching the current Poker After Dark re-runs where they have all the math guys playing a tourney against each other. It was like watching six robots play against each other with no creativity, and the game pace was atrocious.

So I instead prefer personal judgment. As I mentioned in last month's interview with Tim Bourquin (of which a free online transcript is now available), I consider myself a discretionary trader who bases his decisions largely, but not solely on technical analysis. Simply put, as my career has evolved, I've learned to simply trust my judgment and interpretation of current market action.

Yet since that judgment is of course not always correct, perhaps I am trading a system. A system based on probability that my judgment is right. A system that expects and allows for the times when I'm not on my game or my decisions are skewed. A system that provides for times when I don't react quickly enough, or worsen an initial poor decision.

Based on comments to the blog, many new seem fascinated by the 2008 Bamboo year and the early 2009 winning streak. And to some, it may seem incredibly easy and pain-free. Well, here's one of the main reasons I chose to go public last year with my trading diary: It's not. As I've said ad infinitum, I make suboptimal decisions every hour of every day. And from time to time -- nine over the last five years to be exact -- my "system" broke in a major way. Nine times, I've been socked in the gut in ways that challenged my very soul. And yes, earlier in my career I was in tears a few times and all but quit.

I find it interesting that the final 2008 "Night to Dance" post is running #2 in terms of ongoing visits even to this day. The #1 accessed archive post? The October 2008 personal meltdown. And I think that is a very good thing, as it tells me that onlookers are indeed balancing the good with the bad, perhaps placing even more emphasis on the bad. And if that is indeed true, then the blog may be accomplishing its intended purpose of trying to help lift the veil of an industry that is hyped and marketed to death. btw, I suggest you also read the subsequent posts of that October week to put everything in its proper perspective as the week ironically ended with a gain. You have to pick yourself up ... no matter how much it hurts.

Simply put, you can't experience the joy of the dance without going through the inevitable initial and occasional ongoing pain. For no one has ever reached significant performance levels in this or any other skill-based industry without first incurring a helluva lot of personal pain and self-reflection, and then revisiting the neighborhood from time to time.

Such is why this deeply personal diary is public and non-commercial.

Sometimes we even need nine lives.

More to come over the weekend, including a likely video and update on the Boston Area Trader Group.

Friday, February 13, 2009

Friday Notes - Small Wins

6:00pm Well, while this week will go down as a very rare -$17K chip loss due to Tuesday's brain malfunction, I seemed to have steadied the ship somewhat by avoiding the beginning of a potential downward spiral. And as is often said in sports, if you know you've lost the game at halftime, at least try to win the next quarter or two, and that's essentially how the week ended as I held my own to recover more than half of the brain cramp by week's end. Yea, it shouldn't have happened, but it did and there's certainly no sense in stewing as the season has still just begun.

In terms of today's action, I found it a bit "chippy" in terms of market pace and opportunity, with ES doing its best to frustrate early pullback buyers with the old shake-and-bake (see attached chart; click to enlarge), which resulted in some scratches and re-entries at this end and limited the day's P&L to a very modest gain. I did pick up a piece of the attached pullback, along with a similar entry during the early PM session, but wasn't too interested in much else ... and apparently not too many others were either.

Nevertheless, all eyes remain on the road ahead as I plan to follow through on the sizing adjustments I referenced yesterday.

So a short post today to close the week, and I'll follow up with more thoughts as usual over the weekend. I'll also likely post a video.

Thursday, February 12, 2009

Thursday Notes - Transition Day

5:30pm - Today was quite the interesting day and mix of rhythms as I was a step slow for much of the first 2/3 of the day before finally aligning myself with the market rhythm in the latter part of the session when we finally had some market pace (yup, there's that word again). I actually spent most of the day providing liquidity instead of focusing on speculative entries, and as a result had only a modest chip gain due to a fairly high transaction cost day.

And today may have been a transition day in more than one sense, as in addition to the strong shift in market sentiment late in the day with a world of stuck shorts causing the futures to spike, I'm currently making plans to make a rather significant shift in my standard trading size for the first time in several years. As a result, I'm going to view the rest of February as an investment and trial period without much emphasis on the end-of-month bottom line.

This is a decision that I've weighed for several months now, and while I'm sure many have wondered why I'm typically trading only 15-60 contracts with a $2.5M account, the correct answer has always been ... "because that's how it GOT to $2.5M".

OK, so why the change? Suffice it to say that I've decided that I need a new source of motivation to keep the fire burning, which became clear after Tuesday's abysmal performance which was due primarily to an initial distraction and terrible subsequent focus. In other words, I can trade my current size in my sleep and sometimes get lulled as a result of the complacency. So I have to rid myself of the complacency factor.

I also have consistency going for me -- aside from Tuesday's aberration -- in terms of 31 of 32 days in the black. Besides, Tuesday also put one of the 2 or 3 days from hell everyone has during the course of the year immediately behind me, so I figure the timing is right.

On the following point, I want to be crystal clear: I don't expect the transition will be easy. Frankly, I expect it could very well be the toughest challenge of my career and as a result, my goal will be breakeven during the transition period, which could last a few weeks to up to a month.

I haven't yet determined the exact sizing adjustments, and will use much of the upcoming weekend to think through it.

But it is indeed time.

Time for a new challenge to fuel the fire.

Time to put myself to yet another test while I still have my sanity.

Time for a new journey.

Fasten your seat belts team ... it could get a bit bumpy.

Wednesday, February 11, 2009

Wednesday Notes - The Sun Came Up

3:30pm An amazing thing happened today ... the sun came up after all. And yes, I'm posting early as I've closed the day to avoid the potential "screw the whole day up in 30 minutes" pitfall after recovering 42% of yesterday's mess thanks to the classic morning-after-trend-day oscillations and a renewed commitment to focus.

A reminder that my self-assessment of daily performance can be accessed by clicking the scoresheet link to the left. It is usually posted shortly after market close.

Actually, I'm working on only three hours sleep as I intended on trading both the Europe and U.S. opens (well, I couldn't sleep!), and both cooperated nicely by providing strong fade opportunities on the first retracement back towards Tuesday's resistance points. So fade, cover, and repeat was the name of the early game as both opens chopped around, which as we all know is the expected -- albeit not guaranteed -- rhythm after a monster trend.

Perhaps I needed yesterday to finally stop trading on eggshells and move forward to more intense trading. Case in point: Last time I had a major bonehead day, it provided the foundation for the $700K Oct-Dec 2008 run. Maybe I needed that major butt kicking to make the fictitious draw feel real again. Who knows.

All I know is I always trade my best after a draw, both because large draws are usually based on signficant market moves which rarely repeat on consecutive days (thus providing high probability sequences on day two), and because it essentially coaches me into getting my act back together.

It's amazing that it often takes one large step back to move several steps forward.

But the sun feels nice.

Hand me the sunglasses.

Tuesday, February 10, 2009

Tuesday Notes - Wastebasket Day

4:00pm I'll keep today's diary entry brief as I got distracted during the mid-morning drop with size and bungled my way to a major wastebasket day ... as in, today goes immediately in the trash can and is already forgotten. The scoresheet when posted will show more red than a bed of roses, and will accurately reflect a day when I simply didn't have anything close to my game face on.

If you're new to this trek, welcome to the human element, and I hope this puts to rest once and for all the notion that I can forever escape the pain that will always be part of this biz. And for those asking me to change how I write my notes, please keep in mind the blog remains my personal diary and the only reason I openly share it is so those looking over my shoulder can catch a glimpse as to the reality that exists behind what is too often clouded by industry smoke and mirrors. I've always said I'll share the good, bad, and ugly ... and today was a capital "U".

Today was also strong reinforcement that this biz is so much more than about technical analysis. Trading is a mental sport -- nothing more, nothing less -- and is primarily about the execution. The charts today were clear. Very clear. Crystal clear. My head on the other hand was simply elsewhere.

I've often said trading results do one thing ... they buy or sell time.

So, I'm a couple of weeks younger today.

The 30-day streak is officially over, yet tomorrow is a new day and the ticker says we have 324 days before the score matters.

Have a pleasant evening.

Monday, February 9, 2009

Monday Notes - Oscillation Day

5:30pm Not much to say about today except that we had the fairly predictable "morning after prior-day trend" action where short-term oscillations were the name of the game as longer term trends (30 & 60-min) held their own throughout the day.

At this end, I had to tend to non-market commitments a couple of times today which pretty much resulted in a wash in terms of a less than optimal morning return (due to focus and size limitations) offsetting a forced stay-out-of-trouble PM where I could have easily forced a few trades. Still, the result was a modest gain to start the week thanks to the late morning continuation of Friday's supporting trends, and considering my historical pattern of poor Monday personal performances, I'll accept it and move on.

All eyes now focus on the 850-875 zone to see if Friday's foundation was built of rock or sand.

No Longer Under the Radar - It's interesting in that yesterday's post -- which I almost didn't make as I was on the road -- was visited by more traders (1,086) than any since we started this trek just seven short months ago, and the trend of onlookers continues to steadily climb. Welcome to the "new press", I guess. Maybe a lot of folks simply Googled "Cramer and Education" ... if so, talk about an oxymoron. In any event, it seems we sparked a few emotions in the market yesterday, and it will be interesting to see the response if Barron's does a similar piece on Suze Orman.

On that thought, I'm usually purposely careful not to reference specific names on my rants out of respect for the industry and since this blog is largely a one-way dialogue -- although a reminder that I do posts contrary comments per the FAQ -- yet Barron's simply made it too easy yesterday by both teeing it up for me and putting the club in my hand.

btw, if you're new to the blog and looking for the sales trap door, keep looking and pleeeeze read the FAQ to the left.

As I've said in the past, I'll never mince words which I'm sure will get me into trouble with more than a few at times. And at the current rate of site growth, all I can think is that when I finally have that 2009 bonehead day -- which will occur -- I'll get to line up in front of a helluva line and scream, "Thank you sir, may I have another."

Boston Trader Group - A reminder for those in the New England area to check out Saturday's post. The response has thus far been positive and I'll keep you posted.

Sunday, February 8, 2009

The Weekend Trader - A Huge Disgrace

I hadn't planned on doing a piece this morning as we're having a great stay in Boston, but a peek at Barron's today got my blood boiling.

And just when I make a momentary vow in Friday night's video to take a hiatus from advisory and guru bashing, Barron's (the only after-hours market reading I ever do, and even that's limited to two sections so as not to inject a variable which could mess with my head) leads today's edition with "Cramer's Star Outshines His Stock Picks".

The article provides an extensive analysis of Mr. Hype's abysmal performance results, includes the quote, "The only regrettable thing about any of this is that CNBC and Cramer won't meaningfully discuss how his advice pans out", and goes on to reference various staunch defenses of Mr. Hype's actions by CNBC which included severely restricting Barron's access to both the network and the hype machine.

And while I agreed with much of the content, I took significant exception to the following quote: "IT IS RARE THAT ANYONE BEATS (their caps, not mine) the market over time, so there is no disgrace in the underperformance of Mad Money's stocks. Barron's then goes on to admit that even their "picks" were wrong.

No disgrace? No disgrace?? [as my wife wonders why my face just turned beet red]

Here we go again.

Here's my rebuttal.

I remain sick and tired about how "accepting" most in society are of mediocre performance. In schools, we dumb down education to the lowest common denominator such that those with the potential to make a huge difference in this world are encouraged to underperform. We give everyone awards at the end of the year for "participation", so as not to exclude anyone from "feeling good" about themselves, including below-average Johnnie who skips out of school yet whose parents are head of the PTA.

We then take this concept and continue it in the adult world where everyone continues to believe that "average" -- or far worse in this case -- is also acceptable. If we were to believe the continual written and visual financial press, we're to believe that everyone should be making money only if everyone else is. If the market is down, we all should be down ... and you'd better not be up for fear of skewing the curve. Sounds just like 9th grade science.

I could write for days on this, as it attacks one of my strongest-held core beliefs that we should neither listen to the screaming hype-machine masses that are only looking out for their own individual interests and pocketbooks, nor accept the strengthening standard of mediocrity in this world. It's as if we've completely lost the ability to think for ourselves which brings us full circle back to "Johnnie" needing self-interest snake oil "gurus" to tell him what to do when he's an adult -- at least in body.

Here's a novel concept ... how about if we all get off our asses, think for ourselves, roll up our sleeves, and take some responsibility for self-improvement so that the bar eventually gets raised for everyone?? My wife is cheering.

Yes, it is a disgrace.

A disgrace that none of us should accept.

We need far more Bamboos and fewer Bonsais.

Saturday, February 7, 2009

The Weekend Trader - Boston Area Traders

I'll keep it short today and let Friday's notes and evening video provide food for thought over the weekend as I'll be gone until late Sunday.

Boston Area Traders - OK, I'm moving ahead with starting a group for folks in the Boston and New England areas to get together every so often to support each other, talk shop, play cards, and otherwise have some occasional fun together. If you're interested in participating, please email me.

For security reasons and to avoid potential clowns from responding, I ask that you include (just cut and paste into the email):

Full Name
Address & City
Email address
Contact phone number (cell is probably better)
Trading Experience
Do you play poker? (I'm also putting together a local group of serious players for that)
Whether or not you're willing to share the info with others in the group

In return, you have my 100% assurance that the data will always remain private and never be used for commercial purposes. Also please note I don't use email for general conversations with traders, and instead prefer to use the blog so all can benefit from the discussions. The email will only be used for communication relevant to the local group.

The invitation is open to anyone within reasonable traveling distance of southeastern Mass. And once I gauge interest level, we'll figure out where to go from there.

If it's a bust, it's a bust. But my guess is it's a low-risk, high-probability entry point.

Enjoy the weekend.

Friday, February 6, 2009

** VIDEO ** Time and Math

Tonight I share a few thoughts on using "time and math" to drive substantial results, two references from the great book, "Think and Grow Rich" by Napolean Hill, the recent win streak, Friday's trading action, and more thoughts about getting something going in the Boston area.

Enjoy the weekend.

Friday Notes - The Elephant in the Room

4:00pm OK, first things first in case you missed my Thursday PM comment. Despite yesterday's post about sometimes needing to fold a strong pair, I didn't fold A-Q on an all-in bet at last night's final table, and even though I read it right and had my opponent crushed (he had A-10), lost the tourney when a 10 hit on the flop. So the night ended with me going out in 7th, and temporarily losing the grip on the #1 seed for the quarter.

Now, fast forward to today where I held what I also believed was a strong hand (shorting the early approach to 850 for one last short sequence) when the market rocketed north without stopping for a breath. Yet once again, I was able to overcome the early deficit -- this time a five figure initial chip loss as I was heavy and the market provided little opportunity to nimbly scale out -- by nailing the first subsequent pullback along with a similar afternoon sequence to again end the day positive. See chart; Click to enlarge.

All I can say about the morning is that was one helluva thrust that caught a lot of shorts -- including me -- which left us with two clear choices: (1) cower and whimper about how unfair life is, or (2) cash the tuition investment in quickly knowing that the harder the unexpected move, the higher the probability that there's a ton of traders needing to buy any initial pullback which should drive the price back up. btw, I've tried cowering ... it doesn't work.

And by shortly after noon, I was back in the black before trading lightly in the afternoon to end the week with a chip gain of just under +$28K. And yes, I think it's safe to begin talking about weekly gains now that we're five weeks into the 2009 journey. Daily math still means little though except in aggregation.

Which brings me to the "Elephant in the Room" that I've tried extremely hard not to dwell on ... although I've referenced it as of late. And that's the fact that there seems to be another Bamboo growing this year, which while it won't likely be nearly as tall as 2008's as I try to have a life this year, seems to be emerging from the ground with a thicker trunk. And that "trunk" now symbolizes 29 consecutive days of gross chip gains (I double-checked my records and had actually miscounted earlier), with only two in the red after commissions by a combined -$600. The streak is by far the longest of my career.

Even scarier, since the very day I locked up 2008 and set the earnings trailing stop (after a modest draw), daily chip gains have outpaced losses by a "sick" 140 to 2 ratio.

As I've mentioned in recent posts, I normally could care less about these sorts of things -- and to a large extent I still do as the bottom line remains the only number I care about. Yet something is going on here that is worth documenting in this personal diary as I've made a few changes over the last few months that may be having a greater impact than I first thought.

Think about the blog over last few months. What's different?

Well, first, I started the color-coded scorecard concept in the left hand margin to begin the year. And since then, I've not had a poor late afternoon bonehead sequence. Coincidence? Second, I've signifcantly reduced Europe and overnight U.S. trading and am sleeping more normal hours. Third, I've taken a great deal of the 2008 "race" pressure off myself, although the feeling is beginning to stir again as I'm stepping up sizes slightly and finally got around to setting a bona fide target for 2009. Fourth, and this isn't necessarily a positive, my trading volumes are down about 15%-20% from last year.

As was the case last year, I never expected this. Never. Hell, I was taking a "break" in January. As I mentioned in my '08 stats, I normally trade at a 78% daily success rate. And my 2008 daily win/loss ratio ended at 4-1. Not virtually 100% and 70 to 1.

Now of course this is only over a relatively short period of time and may look completely different when the full 2009 stats are reviewed at year-end. In fact I expect the final ratios to look very similar to last year's when all is said and done. And the bottom line again is trailing last year's record year. Yet the data tells me I now have a major decision to make: Do I step up size now that my head seems more into trading now than on January 1, or do I simply continue as is with no tweaks??

I don't have an answer ... yet.

All I know is there's a large gray animal in my office that I may not be able to ignore for much longer.

And oh yes, Monday begins by believing this week, and today in particular, was a terrible disaster. It will be a rough weekend as I prepare to heal.

I'll check and respond to comments tonight and post again Saturday morning before heading to Boston Saturday afternoon and Sunday for a weekend getaway. So keep the comments coming and I'll post and respond as I can.