Thursday, February 19, 2009

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.


Unknown said...

Another frustrating day for me. Drawdown on the first series of extreme TICKs as I thought the support level was intact. Put myself in at the second support level and extreme TICK and like an idiot over thought the situation and bailed with a minuscule profit (could have walked away positive). And finally for the last trade, forgot to look at the big picture and down trending resistance line and put myself in right at the top (another drawdown).

I guess I've been delusional in thinking I could be successful trader in a year. The good thing is the market hasn't beaten me yet, I enjoy this too much (maybe a little to much according to my wife).

Hey Winace,

Thanks for the suggestion. That is exactly what I am doing. I've decided to stick with the DIA for now until I feel comfortable to switch over to the futures. I’ve tried the different sizing positions thing. Funny enough I don’t even pay attention to the actual $ amount I’m trading. Its always been about the drawdowns. I’ve actually tracked the days I’ve backed off a trade only for it to go the way I thought it would. I’ve been right more times than I have been wrong. The problem is I’m dealing with that typical emotion of being wrong once and then not knowing how to recover from that. As of late, any time I’ve put on a trade I start with one or two drawdowns and then shrivel up in a corner and not do anything to try and recover. My latest thing is to try and increase my stops to give things a little more breathing room. We’ll see how that works.

Get In Get Out said...


Wanted to know if you look at or if any of the weekly/monthly economic indicators effect or take into account your view on trading strategies coming into the day such as weekly jobless claims, PPI/CPI, retail sales, unemployment claims, consumer sentiment readings, e.t.c. Also same for Companies Quarterly Earnings that come out pre-market or through-out the day. Is a well prepared trader supposed to view how these reports can effect a trading strategy for the day? or is it irrelevent for a day trader to look at?

Don Miller said...


I usually know (or had better know) when the economic reports are due, and typically don't trade around those times.

I print's economic calendar at the beginning of the week, and glance at it at the start of each day.


B.S.trader said...

Problem with trading news now is that Obama speaking is economic news. Just press sell. Once he is done the trend turns to mush like a fart in the wind.

After about 6 months into Iraq war, Bush speaking would beat the market like a rented gerbil. At least we would have some continuation or a quick reversal and on with business.

Point being, we are in an entirely new context for intraday trading, one I really don't have a solid, recent frame of reference for. Being aware is half the battle, the other half is evolving and adapting.

Thanks for letting me rant...

Get In Get Out said...


Wanted to know your hardware set-up referring to how many pc screens you have set up and the size of the monitors? Also wanted to know the amount of ram you have so the streaming news and charts dont freeze up. Do you have a DELL. I figured you would not mind since you shared your "DashBoard" with us. I currently trade off of 2 sony vaio laptops 1 with a 17" screen, it came with 1 gb of ram and had to install 2gb of ram to prevent streaming freeze ups of charts & quotes. My 11" vaio TX that we both have, I was thinking about getting a 22" or 24" monitor and have to figure out if such a small laptop would be able to handle a 24" monitor. I know this one guy who trades crude oil spreads and spent 10K on a Dell with 2 quad core, 8 quad processor with 32GB of ram with 6 monitors. For a newbie just trading ES that might be a little too much of a configuration. Thanx Don for sharing.

pranz said...

Hello Don new to the blog.. Also online poker player as well. Took down the 70K guaranteed on starts a few weeks back.. (Brag Post). Can you list your trades for the day or is that something you usually do not do. Thanks Pranil

Don Miller said...

Welcome to the blog Pranil.

No, I don't list trades, although I've occasionally narrated to sequences if I feel I need to step up my focus, and you'll see that from time to time.

Also please keep in mind that as a liquidity providing member of the CME, and since I scale in and out, the list would be long and difficult to interpret. It would also be pretty useless for me in terms of improving performance.

Hope that helps and again welcome to the journey.


Don Miller said...


Frankly, after toying with various configurations over the years, it's become crystal clear to me that one doesn't need a whole lot aside from a fast internet connection, a solid order entry platform, a backup PC, a backup internet provider, some memory, and a decent size monitor.

I could literally (and often do) trade with my small laptop, so the PC specs are relatively unimportant in this day and age where most PCs have more than enough power.

Plus, the more screen space I have, the more opportunity to cloud my mind with meaningless data.

One market and a handful of indicators ... don't need too much for that.


For every fancy station out there, I'll show you a high probability that the fancy car does little for a trader's finely tuned mindset.


Unknown said...

Yes Don,

Im waiting for those pocket queens the last few days and getting nowhere...

Getting chopped up but even- too confused to bet those chips with confidence (like u) and havent been able to adjust to this abnormal deal.

Maybe friday will be a bit clearer Don...

Small advice for apprazzer: keep making more trades without making the stop bigger as its the best way to practice your playing without dumping too much in any one mistake.

George "Winace" Swanson said...


Try purchasing deeper "In the Money" options. It costs a little more capital, but the draw-down will be smaller on a percentage basis (to the overall utilized capital in the trade). A draw-down is a negative dollar value of the current trade. A loss is when it is realized. I see draw-down in almost every position I enter, sometimes extensive even, but I have not taken any losses in over 3-400 trades. Emotion is the factor of which I exploit. You will almost always be right, eventually! The question is, have you cost averaged (scaled in), and can you sustain the rate of draw-down long enough to realize profit? You need to proportionately allocate your capital in increments, giving you the staying power to endure the cycle.