Tuesday, March 24, 2009

Tuesday Notes - Perfecting Imperfection

4:15pm I'm going to take a different twist to today's diary entry based on comments from newer onlookers with common themes I'm seeing over and over again. So, I'll recap today's trading and reinforce my strong convictions in the market in the form of a self-interview Q&A. Seasoned onlookers, please bear with me, but let's have some fun with this.

Q: How do you think you traded today?
A: Terrible ... made too many mistakes on a type of day that's one of my strengths. I'd frankly grade it a C.

Q: So you lost money then, right?
A: No, I increased the chip stack by +$8K.

Q: I'm lost, how can you trade terribly and still make money?
A: Ever see a golfer miss several fairways and scramble to make pars and birdies?

Q: Yup.
A: There's your answer. Plus, I've played today's course a thousand times ... it's one of my favorites and I know the hole placement by memory, which aided the score. I just didn't hit as many greens as I would have liked.

Q: What about this year, how do you think you've traded?
A: At times, terribly, just like 2008.

Q: So you must be pretty much breaking even then, right?
A: No, aside from one very minor ding, I've only had one loss on the year.

Q: I don't get it.
A: I know. That's why I trade and you ask questions.

Q: But there must be days where you don't make mistakes. Last year, for example, you said you netted over $1.6 Million. There couldn't have been many then.
A: Wrong. I made mistakes every day in 2008. No, make that EVERY day. Plus I had one bonehead day last year that cost me $90K, and I've sucked many times this year.

Q: Well, maybe you need to tweak your style. Have you ever thought about altering your trading style by (names a variety of "tweaks")?
A: Nope, and never will.

Q: Why not?
A: As I've said, focus is the only thing that will ever keep me from making money. I have no interest, desire, plan to change how I trade ... ever ... and I turn a deaf ear to anyone who suggests I tweak my approach. Frankly, it gets mentally filtered out the moment I see or hear the suggestion. Let's never forget Seve Ballesteros. It's all and only about focus and execution. Always has been and always will. Said another way, why buy another lock when you know the combination???

Q: OK, let's try this. I've calculated your average point gain per day based on the # of contracts and your stated daily chip gain, and it seems that you make .00000001 points per day on large size (OK, I'm exaggerating, but you get the point). What does that mean?
A: Not a damn thing. Check the posts addressing why the volume is relatively high which includes risk-managing interim insurance scratches. I care about one number ... and that's the net profit on December 31 each year.

Q: Yesterday, the Dow was up +500 points, while today it was even for much of the day before the late day sell off. You must have cleaned up yesterday.
A: Ummm, see my last answer ... you know, the part about "one number". Who the hell cares about the net index gain???? That's like saying the Celtics won by 40 last night ... therefore you must have cleaned up today. It's completely irrelevant data.

Q: Why are you so hard on yourself with respect to your performance? Seems like you're trying for martyr of the year.
A: It simply helps remind me I have much room for improvement which in turn keeps me coming back every day to try to do better. It's what drives me deep down, and I'll be working on improvement until the last trade I ever make.

Q: Why do you reference 2008 so often? You must have had some recent stinko years.
A: Laughing. You can't be serious.

Q: Why the constant comparison to '08 and your current annual $1 Million goals then?
A: They're current personal benchmarks, nothing more. If people are insulted by my using them for motivation, it's a darn shame they're not focusing on their own trading. Talk about misdirected focus and lost potential!

Q: Does blogging negatively affect your trading?
A: Huh? If it did, I'd stop it in a heartbeat. It actually helps keep my head in the market after hours, and keeps me accountable to both myself and others.

Q: But doesn't it add pressure?
A: The only pressure I'll ever feel is from me, which is far more intense than 500+ daily onlookers could ever provide.

Q: OK, thanks for your time, although I admit I still don't "get it".
A: I know. If you're looking for that perfect trader, system, method, setup, etc., you'll have to wait for the next lifetime ... there aren't any in this life. I just try to focus and stay out of my own way ... some days better than others. You can call it "perfecting imperfection" if it helps. And I can give you a million reasons why it works. Side note to onlookers: STOP TRYING TO BE SO DAMN PERFECT!

There, I feel better.

Back at it tomorrow ... the early test of 800 should be interesting.


supersiv said...

Hi Don,
where is good place to aquire knowledge about good day trading sequences/setups. Your books and dvd's don't seem to available anymore. Also your older articles and presentations are not accessible at tradingmarkets.com. Btw, thanks for opening up a whole new world for me and my outlook of the markets.

steve said...

You almost had me, I thought that girl had done the interview! The message I got from your post today is that if you are going to try to perfect anything, work on perfecting focus.

E-Mini Player said...

haha I liked the interview Don! You should link it under the "Key Posts" on left side bar.

"Q: I don't get it.
A: I know. That's why I trade and you ask questions."

Got a kick out of this one! Keep on doing what you're doing :)

"Tribulus" said...

Hi Don,

"Q: Have you ever thought about altering your trading style?
A: Nope, and never will.

Q: Why not?
A: Focus is the only thing that will ever keep me from making money. I have no interest, desire, plan to change how I trade ... ever ... and I turn a deaf ear to anyone who suggests I tweak my approach. It's all and only about focus and execution. Always has been and always will."

This answer intrigues me. I've read it before in your blog. I'm coming to a similar state in my own trading. I go to a live trading room for a few days to see if I can add some new toy and leave. I learn only that I already know more technicals than I can use. It's as you say, the focus and execution!

So, please write more on the focus and execution skills you believe are essential for a trader and how you sharpen them.



Don Miller said...

supersiv - Tough question to answer ... as the top traders typically aren't selling or teaching (they're of course trading). Not sure I can help much there.

Steve - Good words of wisdom.

E-Mini - Goes to show perhaps even a blind author can find a good joke. I was going for impact on that one ... guess it worked.

Stewart - Repetition and experience. Sort of like playing poker ... does one really need someone leaning over your shoulder shouting "you have pocket Kings" in your ear as you plan to play them?


E said...

This has to be one of your best ever...

Speaking of Seve B, I was thinking...
maybe we could have helped Lee Trevino fix his swing and he would have been even better!

Gettin' it up and down is the name of the game.

Be well all.

Being said...

Good lines in your interview, made me laugh, nod my head, and say "aha" !

Focus for 6 hours a day is beyond what most are willing to do.

Jules said...

For the first time, Don, you make me laugh :-) I mean, you're usually apologetic, really hard on yourself, and far too kind! LOL!

I get in my way every moment every day in all my trading days. And my evil twin just can't shut up. Focus is a challenge. I blame my methods instead. Easier.

I really like what goes on in your head. Thanks for sharing them.

Benjamin said...

Hi don,
Your simple and effective trading style reminds of an interview i read recently with with a highly experienced martial arts instructor. He had an arsenal of literally thousands of different self defense techniques to draw on but when asked the secret to coming out on top in a real life altercation he replied "learn to hit #$%^&* hard!

keep on fighting your good fight

JEB211 said...

I enjoyed the Q&A format of today's post.

I happened to run across another blog's post called "How to Fail As a Trader in 10 Easy Steps" http://www.tradersnarrative.com/how-to-fail-as-a-trader-in-10-easy-steps-824.html

I suggest that the people who don't get what you are trying to do as a trader read "How to Fail As a Trader in 10 Easy Steps" and compare that to what you are doing to succeed and improve as a trader.

YM-Trader said...

One of your best today, Don. Yes, its all about FOCUS on our own plan. There is so much as-of-yet-unused potential just in executing my own plan (I grade myself a "C") its no wonder I could give a rats patooty whatever the heck trading rules you or anybody else uses. I will cut & paste (i.e. steal) your post today and pass it on.

Anonymous said...

Love this post!....keep 'em comin'..

TST said...


really hit me

Panama said...

I think you need better balance in both your trading objective and your self evaluation. Recognize and build on what you do so well as well as work on problem areas - always remembering to not let your successes go to your head, but also not let your problems go to your head.

mtcx2009 said...

This post gets to the heart of the matter. Trade for the love and challenge of trading. Keep notes on how your performance is and analyze the mistakes, focus and mental state. If your trading your system well, the money is a wonderful bonus while the satisfaction should come from discipline and performance.

Trader Kevin said...

The opening line of questioning reminds me of coming home from a day of trading in the Dow futures pit during rollover. I traded back months and calendar spreads, so rollover was the time we harvested our ticks...

Wife: How was your day?

Kevin: Horrible. I traded as poorly as I have in months.

Wife: How much did you lose?

Kevin: Lose? Oh, honey, we don't price these things to lose money. But I only made about a quarter of what I should have made.


Exactly. Trading is very frustrating for a perfectionist. You can trade like a star and still leave huge piles of money on the table. Ce la vie.