Wednesday, April 22, 2009

Wednesday Notes - See-Saw Day

4:00pm Today was a fairly unusual see-saw day for me in that I had a surprisingly strong morning, which I'd grade an A (+$10K), a horrendous midday session that I'd grade an F (-$18K), followed by a decent afternoon comeback (+$5K) on again heavy volume to end with a slight nick -- due primarily again to the trade volume.

I pretty much followed yesterday's logic in providing heavy liquidity without doing much on the speculative side until my head clears. The midday hit was largely the result of my beginning to provide long liquidity on the drop a smidge too soon. And before any newbies ask why I provide liquidity, someone has to and the losses when they do occur due to mistiming simply go with making a market so others can trade. Those losses never bother me, and are more than offset by net speculative wins over time.

As I mentioned a few days ago, I'm essentially just looking to survive April with capital in tact as I continue to hammer my way through a flat earnings period and recover from the flu. At this point, any earnings will be a bonus.

I actually felt pretty good about my reads today, and feel I'm starting to get back on my game.

Again, the daily net is pretty meaningless as always.


Severino said...

A good article That Dr Steenbarger passed on today called.
“The Definitive Guide To Trading Mastery & Success”
It could have just as easy been called, How To Build A Bamboo Tree.

A summation of the article and the tree.
“So putting it plainly, to become a successful trader, you need to invest at least 10,000 hours of your time doing just that… trading.”


Charles said...

re: "provide liquidity, someone has others can trade"

Always the altruist, you are ;-)

who the heck is this Doctor Brett Steenbarger you speak of?? He's not the most prolific blogger amongst is he?

No seriously Sev, thanks for the synopsis of Dr. Brett's post. This theme of "10,000 hours" has been swirling around lately(like in Malcolm Gladwell's latest book and other recent "hi performer studies") the contrarian trader in me thinks, since it is becoming so damn "conventional", I hereby declare it...HOGWASH!

Well, at least I hope so, since I gotta A LOT of hours to go...maybe I'll come up with a way to accelerate the path to expertise...and as Don likes to say, time will tell.

Don, sending out healing energy...


Dennis said...

Good Evening Don,,

Hope you are feeling better today. I usually trade the ES. I am trading out of Chicago. But next month, I will be unavailable during the day trading session, I was wondering if you can recommend another market that is active and trades similar to the ES (similar leverage as well) during the evening or early morning chicago time. thanks for the input Don.


TST said...


i think you are still recovering from the flu....the medication alone can make the mind swirling.

john piper jr. said...

Don, what would happen if you didnt provide liquidity for a week or two.

Why do u have to provide liquidity? I, sorry i don't understand, I am very new to trading.

i know in stocks they have market makers who provide liquidity for there perticular stock , but how does it work in your case

thanks for your help and I love the blog

Don Miller said...

Dennis -

No help there as I'm mainly familiar with ES and the Eurex market.

Eurex might be an option, but I believe every market has its own unique rhythm and liquidity characteristics which take a while to learn and is as important as patterns.


Don Miller said...

John -

I'll always provide liquidity to some extent (buying on bid selling on ask) just to keep my head in the game. It's just in my blood like many market makers, is profitable over the long run, and helps me feel the market's rhythm.


Don Miller said...

Guys -

Back on the liquidity issue, please refer to the "Providing Liquidity vs. Speculating" key post in the lower left hand margin.

That should help.

Has nothing to do with being altruistic ... it's part of the long-term profit strategy.


Anonymous said...

Hi Don: You mentioned that you use the 3 Line Break chart; what type of time frame do you have it on; tick, 1 min, etc?

Also, you mentioned that you use $TICK for ES; so I assume during night trading TICK is not available, so what do you use to replace it?



Don Miller said...

Dominic -

1 min TICK right under my 1 min price chart.

Keep in mind that TICK and 3LB are supplemental indicators only. I could trade -- and often do -- only using a price chart as is the case overnight.