Sunday, May 31, 2009

The Weekend Trader - Perspective Shift

OK, after a long weekend of intense private reflection which included eight hours at the Foxwoods cash games today, I think I've regained at least some perspective on life and the last month thanks in part to E's comments, along with several heartfelt discussions with some very close industry peers.

Here are the highlights of both the external and internal discussions:

- In 17 months, you've slowed down at times, but never taken an extended break;
- You've earned in 17 months what it would take many at least four decades to earn;
- December's slowdown aside, you've finally hit an extended performance wall ... recognize it;
- Above all, protect what you've accomplished ... you're at a point in life where preservation may be more important than growth;
- Lessen focus on the 12/09 target ... simply take what the market and your performance give you and allow yourself time to address your back issue and enjoy some of the summer.
- Damn it Don ... relax, put some fun back in your trading, and take some real time off, will ya? You've more than earned the right to do anything you darn well want now, and can choose when to "play the game" ... if at all.

OK, this bull-headed trader is listening. And while I'm not going to shut down, I am going to implement the following change in mindset which will hopefully sync with my highly-driven personality (which ain't gonna change).

- View the last year and a half as a continuous game that remains in progress until ended.
- Decrease emphasis on the time element in my trading targets and simply let the protective stop and any future gains do the work and tell me when it's time to stop. The stop (which is a month-end stop) remains as I suggested on Saturday ... $2.0M. The game ends when the stop is hit.
- So long as the game remains in progress, replace the specific 2009 earnings target with a realistic accumulated earnings (beginning 1/08) target range. And that range will initially be $2,500,000 - $2,700,000.

All of these changes are reflected in the new chart to the left. And if you can figure out why I've chosen to show the chart upside down -- which is intentional -- drop me a comment!

Please understand my intent since restarting the engine in January 2008 was always to continue on full speed until -- and not before -- peformance told me otherwise. And now that seems to be happening.

So the great game continues, albeit with some slight shifts in perspective.

I know this ... it can't get any worse than May's tepid profit.

If it does, the protective stop will ensure it doesn't get any worse than $2 Million.

I can see the heads nodding. Just don't hurt your neck "E" :-).


sunnyv1 said...

having blown myself out of the game in the late 80,s and again in 2000 I relate to what you are going through.As you know the hardest battle is the one that goes on between our ears.The fact that you feel you traded badly and still came out +30K for the month is positive not negative for me.You are still in control of the choices you can make and that is the freedom that we all would like to have.Be kind to yourself, moderation and the middle way sometimes is best.Peace

Jason Elfenbein said...

Is the chart upside down to get an assist from gravity (keep the wind at your back, so to speak)?

Don Miller said...

JE -

Bingo! A variation of the fictitious drawdown chart, except it should be even easier for this thing to "fall".

Nicely done.


Jean H said...

Don, Am curious. Are you a self- taught trader or did you take classes in the beginning and have various mentors guide you along the way?

stephens said...



It almost seems like you are asking for the stop be hit. I've been reading your diary since inception and never once have I felt that you were going anything other than full speed.

You of all people know that this is not a half speed business.

In my opinion, if you feel that it's time to move than so be it.. but I would think that you would want to make that decision, not have it made for you.

I know that you are infinitely better than a ~2% stop.

Again, I have nothing but respect for you and your accomplishments.


Unknown said...

What's going on in euro markets this am?...why the continuation of rally, any idea?
It is hard to imgaine market likes GM bankruptcy filing so much. Either that or someone knows something about spending/income/ISM data due sometime during early US hours.
Your thoughts please !

Don Miller said...

Steve -

Thanks for the comments. I've also had a few others question the strategy via email, yet am comfortable it's right for me at the current time ... including a possible pending back surgery, where this will mentally prepare me to let the capital lie for a short while if I need to.

Aside from that, little has changed as with my style, I shouldn't hit the stop if I trade anything near to what I'm capable of.

As with trading, I'll of course reevaluate over time, and can of course shift gears at any time.


Don Miller said...


I rarely, if ever, think about the "why". The markets broke an extended range at the Friday close, stops were triggered, and we've moved to another price level for the moment.

The "why" is irrelevant.


Don Miller said...

One clarifying point ... the stop is a month-end stop, and I've added the comment in the initial post. That may help some think I haven't totally gone crazy.

Consider it a three-line-break philosophy where the period has to close below a certain point for the "trend" to reverse.



Hi Don

Having followed you for about 8 months you've given me a nudge back on track. After 10 years of trading in London i left to work for myself and ended up getting lost in all thid R:R nonsense. I took a little break over Christmas and re-evalutated and am now back on track.

It seems to me that you're in need of some change, as at them moment your hitting your head against a wall, neither making loads or doing your conkers. Maybe a few days away from the markets completely may do this. Would a doctor or most other professions be allowed to work this intensly for such a long period without a (proper)break.

sorry for the ramble, just saying that sometimes the solution is so close you cannot see and need to step back to focus.


Gullible said...


I'm no psychologist, but it really sounds like you should just go away for a couple of weeks -- camp in Yosemite, volunteer to help re-build New Orleans, lie around and eat rich food in Provence, whatever. No trading, no blogging, no poker. Just ... something else.

E said...

LOL yes bobble head here.

Learned the hard way Don, gave away a bundle in real estate when i was young and immature. (now old and immature.)

"Experience is the comb that life gives us after we have lost all our hair."

I am now not as stubborn and can even listen to (gasp) my wife's point of view.

When in a slump, choking up on the bat has always been helpful...