Friday, June 12, 2009

Friday Notes - Emerging Performance Trend

4:00pm As I mentioned yesterday, today was expected to be "stay out of trouble" mode for me, and I managed to pretty much accomplish that while adding a small daily chip to the stack (the result of a few range fades along with taking the 2:38pm bear trap extension long) to close the week at +$26K on 5/5 trading (that's # of days + for newbies). And while still not up to my standards, the 5/5 was important for my psyche, as was the doubling of the prior week's results which allowed me to continue to put some distance between the current stack and the protective $2.0M trailing stop implemented a few weeks ago (chart updated on lower left).

It's still clearly not where I want to be, yet while the market remains rangebound with limited emotion, at least the personal hints of stabilization and momentum remain in place as another performance uptrend tries to take hold.

I wish I could say the same for my poker game last night, as I thought I had it in the bag after flopping a Queen high flush (against the #1 ranking player just slightly ahead of me). She went all-in on the flop, I called expecting to take the bounty points right then (she won last week) and knock her out of first place, before she revealed she also flopped the flush ... with Ace high. Argh.

Lastly, a reminder the Boston Bamboo Trader cookout is only two weeks away, and I wanted to remind all who are planning to attend to please RSVP per the link so we can get an accurate count. By then, I highly doubt there will be any rain left on the planet as we've been getting deluged for two straight weeks now. No worries though, as I've ordered an ark.

Over the weekend, I'll share a phone conversation I had with an individual last night who refused to believe it was possible to make money from trading. I think you'll find our discussion and my comments quite interesting, so look for another Weekend Trader video.

Until then, have a great Friday evening.


davidmcdavid said...

I had a few questions for you if you dont mind

What exactly is the bear trap you look for?

How do you fade range bound moves and do you fade against a strong trend?

thanks for your help

Don Miller said...

David -

Any time the bears try to push the market down and can't, it often results in what I call a bear trap where shorts are stuck with a losing position, which often shows on the chart as a bullish cup and handle with trend support to the south.

Vice versa of course for bull traps.

Re: "fading", there's no easy answer and we have to be careful with that term as "fading" one trend may very well be in line with another trend.

I instead prefer to essentially define entries as "wholesale" price points. i.e. As with hockey, it's about anticipating where the puck WILL be for exits vs. where it is now.


Enzo said...

...a "trader" that doesn't believe you can make money trading. That's like a priest that doesn't believe in Heaven. The Weekend Trader should be fun.

Don Miller said...

Enzo -

Point well taken. I've changed the post to reflect "individual". :-)


Andy4 said...

Hi Don,

firstly please don't feel any need to publish this, unless part of it is useful to you.

Actually, firstly should have been a big "thank you" been reading your blog the last week or so (heard about it on ET) wow man, thank you, been great. I've been trading (trying to :-) over many years, the last couple part time and making it work, this last fall was full time and it really worked out good, though had to finish up an already commitment this spring and so am starting back live again.

I scalp the YM and that's part of my thanks to you, have seemed to hear so many na sayers go on about scalping doesn't work etc, reading how you trade has really be motivating. I'm not a heavy trader was avg' about 750 RT's a month, but making on avg' over $10 a RT after commissions, so pretty good money from what i use to make.

Please excuse my waffling a little, and I understand if you don't want to even get into answering etc.

Anyway because of the other commitment I had (building a home) I started trading the ESTX, did good for a month, up just before 3am, done by 6 to get kids off to school and me off to build. Had a bad day and gave 95% of my profits from ESTX back and just stopped trading till the house was complete (was still up about 30K from Oct, so felt it was a good place to stop)

Well house is complete, office set up and I've started back on YM again this week, but man it's killing me. I spent last week on a sim' because I switched brokers and charting and thought that would get me back into the flow, though I just don't seem to "have it". Even took today off just because I felt so beat up with this week, two winning days and two losers but losses were bigger.

Anyway because of the new set up and after so many years to finally trade fulltime I realize taking a month or two to work my way back up is no big loss, maybe smart. A question I had when I had been trading YM well and started to increase size a little from 2-5 to 4-8 contracts I started getting partials, because I feel I need to relearn YM for how it's behaving now or how I'm trading now, should I look at switching to ES so down the road, increasing size won't be an issue ?

My trading style was pretty much finding an entry, breakout/break dwon, then I called it "fighting for the line" would reverse a few times sometimes, but then try to ride what ever trend there was in and out for avg' 3-5 ticks, of course lossers would be a little bigger, but overall for 4 months it worked well. I used a profit target for the day (I know a lot is written about that's not a good thing to do, but hey they say that about scalping) so if I got to 1K I would stop, some days might be use a couple of hundred dollars, but if it was getting close to 11am I'd stop till 2pm or just call it a day.

Has the market changed that much (Oct08 to Feb09) from then to today ? Or is it just me getting back into the swing ?

I know I had a lot of "hope/dreams" built up and so maybe that has some to do with it, but I've not felt so "lost" watching a chart this week than I had when I fisrt started.

Any wisdom be much appreciated :-)

Sorry to go on so long, if you have the chance to answer any, my email (if it doesn't show it ) is

Either way, I thank you already for the effort and time you've given.



p.s. if I was still making it work how I was you'd have my RSVP for the cook out :-) Maybe next year :-) Thank you.

Unknown said...

Hi Don,

Are you willing to entertain strategies & set-ups on your blog?

I have some thoughts about price action set-ups that I'd like to bounce off you...



Don Miller said...

Walter -

If you'd like to get other traders' feedback, that would be fine.

At my end, I have to block out all everyone else is doing (or recommending) and simply play my own game.


Hay Farmer said...

Don- after reading the first post I was wondering do you (or anyone else) have an opinion on which book is better -Tech Analysis of the Finacial Markets or Tech Analysis of Stock Trends?

Have a great weekend!

E-Mini Player said...

+$26K is SOLID! Looking forward to the Weekend video :)

E said...

Here is a chart that may help david visualize Don's "bear trap" response.

From 3 am to 7 am you may be able to see the reverse cup and handle Don mentions.

I always keep a non-spaghetti chart as well for clarity.

Hope that helps; still learning here, not of Don's caliber fwiw.

Great week Don; knife has to stop falling before it rebounds.

Have a great weekend all :)

James Edwards-Marche said...


Those months you mention (Oct 08-Feb 09) were good for me too. In fact, I haven't been able to make a consistent profit since early March...

I've asked myself if it's me or a change in the market- it's likely a bit of both. The more experienced traders will still be able to generate a profit in this market environment but, so far, I'm not one of them.