Monday, March 23, 2009

Monday Notes - Pinch and Squeeze

4:00pm I'm not sure which pinched more today, long-term shorts (or traders not able to read today's tape) or my neck as I've been dealing with a significant pinched nerve over the last week or so that worsened over the weekend (yes, I'm seeing my chiropractor who's worked wonders for me in the past, but we haven't been able to lick this one yet as I was born with two neck vertebrae virtually linked together that I don't notice 99.9% of the time).

So suffice it to say that I wasn't particularly focused as noted on today's scorecard, although I must have been focused enough to stay out of trouble on one of those once or twice a year +/- 50 point ES days while growing the chip stack a very modest +$4K. And need I say again that I never expect to make much keep on monster trend days given the lack of solid wholesale entries as the move accelerates ... it's that darn day after and I'll need to significantly ramp up the focus tomorrow if I have any shot at taking advantage of it. So get out the Ibuprofen Don.

Actually, I read the market pretty well, yet was a bit too light on size even knowing I'd likely only have a handful of low-risk wholesale entries once we gapped higher and held. I also got into a bit of trouble in the Globex market trying to jump the gun on the long entries in the 8:00am - 9:30am chop, so at least I was able to finish near my equity high on the day.

For me, the work begins tomorrow as usual.

btw, if you're at all bothered by the Dow being up 500 while your trading equity treads water on one of these once-a-year days, a reminder that the only movement that matters is your long-term trading capital curve. Don't get sucked into thinking you "missed" anything ... that's a rookie/newbie/Cramer way of looking at the market.


Positive Gamma said...

Don, This is my first post on your blog but from the month or so I have been reading you it does seem you make more money on rangey days and less on trend days. I suspect this comes from your days fading moves on the floor.
Maybe you should add a systematic trend component to your process to add some diversification to your trading style?
You could always fade your trend process too.

George "Winace" Swanson said...

Hope all is well, good luck with your neck, it is hell trying to focus while in pain (but somewhat fun cursing at your screen while taking prescription pain meds!). Last week has been my best week of the year, and this week setting up to exceed that even. I just wanted to drop in and wish you well.

Peter Coussement said...

Hello Don,

Regarding your neck pain. You've tried "Voltaren Emulgel"?

I sometimes suffer from stress in the Trapezius muscle, and Voltaren Emulgel is really the best medicine for me.

Happy trading!


Don Miller said...

Hi Positive G -

Thanks for the post.

Keep in mind though I never traded on the floor so I'm not a 100% fader, although I do certainly provide liquidity at times electronically.

I simply prefer to save my ammo for the day after the monster trend, since I'd rather have the market first tip its hand on the previous trend day since large trends are the exception by far and I'd rather trade the higher % and more frequently occuring setup.

First pullbacks on trend moves are actually a favorite intraday entry of mine.


Don Miller said...

Nice going Winace.

Don Miller said...

Peter -

Actually, there's no pain in my neck ... rather I have tingling and numbness in my right arm and two fingers which is the result of a pinching in the neck.


E-Mini Player said...

"Don't get sucked into thinking you "missed" anything ... that's a rookie/newbie/Cramer way of looking at the market."

Very well put! We sometimes needlessly get sucked into the "woulda coulda shouldas" when looking back at the price action. Truth is, it's all easy in hindsight, and if I truly COULD have, I WOULD have, so I try not to beat myself up through hindsight analysis :)

Market Viewer said...

Hello Don,

I am greatly enjoying your posts!!
Coud you please explain your "day after trend" setup?

Thank you in advance,

Trader's Life said...

"Don't get sucked into thinking you "missed" anything ... that's a rookie/newbie/Cramer way of looking at the market."

I like that line too!
A good trader can trade in any market condition.

Keep up the nice blog. Reading it everyday!

Don Miller said...

Hi Dave -

It would be best to do a blog search for "morning after trend" or "day after trend" as it's been discussed many times since we began the blog.

Hope that helps.


Charles said...

Howdy Don,

If one of your objectives with this blog is to "give back", then you are doing just that my friend.

Also had a question for you ever feel like the creation/maintenance of this blog is detrimental to your trading results. I'm sure it is satisfying or rewarding in its own way, but is it ever a "distraction"(OR does it actually enhance your performance)?

(if this question is too personal, please ignore)


Market Viewer said...

Sorry Don, did not see a detailed explanation, but now realize that you did mention oscilation on "after trend" days. So I assume that means that trend day is most likely followed by a range day. Please let me know if my assumption is incorrect.


Unknown said...

Shuffle up and Deal me a new day Don!

I struggled thru this day too...

I FINALLY perfected my analysis of
"woulda coulda shouldas" E-mini :)

Don Miller said...

Hi Charles -

I firmly believe it's helped my trading by keeping my head in the market after hours and forcing accountability to others in addition to myself.

If I ever thought this "experiment" that begain last July hindered it, I'd stop it in a heartbeat.


Don Miller said...

pk -

I'll always take high % days for 200 Alex. 500 Dow point days are rare and it wouldn't have bothered me in the least if I'd experienced a draw on Monday.

It was simply one of 250 trading days of the year, and the net index move on the day will always be 100% irrelevant.


Jason S said...

I can't tell you how revolutionary today's post was for me. Almost an "Aha" moment. For years I have agonized over missing the boat on these huge trend days. Today I finally realized, "So what!" I do well enough range trading. I've been killing myself trying to find a way to switch from range to trend mode so I grab those big moves... unsuccessfully. Now I know why and what I need to do, or rather not do about it.