Monday, February 2, 2009

Monday Notes - Lack of Market Emotion

4:15pm Like sports and poker, trading can be intriguing in that often the end score often doesn't reflect one's performance. (Tell that to the Cardinals though!) And I actually felt good about today's trade even though I'm slightly negative after commissions to the tune of a whopping -$158.

Yes, it will go in the books as the first net chip loss of '09. And I'm glad that's finally out of the way as it was starting to toy with my brain, although the # will only show on the P&L in terms of commissions exceeding the daily gross gain as I continue to await the first gross loss.

Of course the daily #s continue to mean nothing except in aggregation 332 days from now, and so we'll continue to focus on instead evaluating mindset and execution. And once again, the afternoon performance exceeded a morning loss thanks to short scalping the 2:15pm mini-bull trap retracement toward resistance ... which again ended up on being limited to a mini-trap as once the high-probability extension occurred, the market refused to cave further.

Suffice it to say that today's trade paid primarily to the early gap buyers, range traders, and 1st pullback micro-trend traders who were on their game. Breakout mavericks and second pullback traders likely drew down.

Not much else to say as we await a break out of the 810-830 ES logjam to stir at least some semi-violent emotions to provide more fertile ground for those of us who maximize opportunity by trading off others' emotions.

Right now, it feels like a market full of androids.


NQJ said...

Thanks for your thoughts Don. I found it very hard to fade the extreme moves, which got even more extreme. Scalped for 1 point moves today (paper trades).

Was wondering if i could post some newbie questions for you or other experienced traders reading this blog.


Unknown said...

Don, you recommended I read "The Psychology of Trading". I'm trying to work on the emotional aspect of my trading, as I tend to exit positions too early. Is Enhancing Trader Performance a better book on this subject? Thanks.

Don Miller said...

Post away J.

Just keep in mind all I do here is share what I do, vs. recommend a specific approach, and that I may direct you to prior posts as well.


Don Miller said...

Hi Anthony -

I actually haven't read Dr. Brett's second book, but recall a few passages in his first one addressing that.


Unknown said...

Don, I went to Borders to pick up "The Psychology of Trading" and it wasn't in stock so I bought "Trading in the Zone" by Mark Douglas, which was pretty good.

NQJ said...

Thanks Don.

Had a few questions for Don/or other experienced traders reading his site.

1. Trading platform recommendations for a very small time scalper
2. Any simulated / practice platforms, or is it better to learn trading real time. The platform i am using is giving me fills that i am sure don't exist in real-time (good fills).
3. Good books / web sites for learning all about E-minis trading
4. What are the best times to trade / times to avoid.

Thanks in advance for all the replies.


Don Miller said...

Anthony -

Yes, I remember Mark's book that came in handy when I struggled with discipline problems earlier in my career (and when I still visit the neighborhood from time to time).

It still sits on my bookshelf, and is probably one of only 3 or 4 that I consider truly worthwhile.


E-Mini Player said...

Trading in the Zone is a classic, and a must-read, as is Dr.Brett's book. I started reading Golf is Not a Game of Perfect this morning, and the lessons in that book can easily transfer over to trading, or any high-performance field.

Symmtrical said...

Hi Don,

i must have blown you away ? :)

anyway if your still thinking about it let me know. If your not interested please get back to me either way.



Don Miller said...

Symmetrical -

I did read your post but didn't post in the general forum given your request for privacy.

And while I appreciate the inquiry, I prefer to continue to limit my market activities to personal trading and babbling to myself via the blog :-).


Charles said...

RE: Anthony's comment about "exiting trades too early"...I too do this often...and then proceed to yell at myself violently(but in a relaxed way of course)...

so Don, I feel like learning 'when to enter' is the easy does one go about mastering(or close to it) 'when to exit'?

Don Miller said...

Charles -

I'll let you know when I get there. [And that comment is more serious than you'll ever know as I'll be working on it until I leave this crazy biz.]

Dr. Brett has some great stuff that address making sure the same trader making the trade is also exiting the trade. I suppose remembering the type of trade one is entering [e.g. extreme emotional scalp, 1st pullback in a range, 1st pullback in a breakout] can also help gauge the expected spread between wholesale entry and retail exit.

Yet I think most pros trying to make keep daily regardless of the day's backdrop will tell you they always exit too soon. For breakout swing traders who don't re-enter as part of their process, exiting too soon can be a killer. For the rest of us, there's always another bus coming soon.

For me, scaling out helps reduce the need to kick oneself as the imperfect market reminds us that no one on this planet can predict the optimal exit for any given trade sequence, so why try?

And I've found accepting the imperfection of both the market and myself helps keep the hindsight demons at bay.


adam said...

HEllo Don. I am new to your blog. I would like to know if you have considered doing some trainning or seminars or even writng your methods of trading in your blog. I am a struggling trader who has blown my account many times over in the past few years. I still have the will to continue my journey in this field. Any advise or direction from an established trader like yourself is greatly appreciated thanks for your time.

Don Miller said...

Hi Adam and welcome to the blog.

While I used to do some teaching in the past, I don't currently do so and am instead simply sharing my personal trading diary with interested onlookers. [The FAQ link in the left hand column may help clarify what the blog is and isn't about.]

As you check past and future posts, it should become apparent how I view trading and the markets though.