Friday, June 5, 2009

Friday Notes - A Stabilizing Week

3:55pm Whew.

Let the record show that I had a far from spectacular performance this week, yet I accomplished what I absolutely had to do in order to stabilize the recent situation and turn momentum back in my favor which I felt was slipping away from me for the first time in a few years as May drew to a close.

And so the changes implemented last weekend, including taking all focus off the daily P&L, ditching the scorecard, and adding the longer-term perspective "game in progress" chart on the left (updated through today) all helped to put in a very modest, yet enormously stabilizing week.

For me, this week wasn't about earnings, and performance was far from perfect, the take is well below "usual" gains, and well below the $1M annual pace at only +$12K on 4/5 trading. Yet in my view it's huge, for as powerful as the 2008 and early 2009 performance momentum was, a downward spiral can be even more powerful (ask Archie Karas, 99% of traders, and every Internet bubble paper millionaire-gone-broke) ... and the current waning momentum had to be stopped in its tracks.

As with the market, the personal P&L can't begin going back up strongly until it stops going down -- and yes, I view a flat or slightly delining equity curve an emergency -- and this week was all about solidifying the footing ... period. Interestingly, last year it was that one-day October -$90K hit that was the "test of the year", yet which became the ultimate kick-in-the-a$$ and springboard for the record fall. Time will tell if surviving the last few weeks will have a similar effect.

Last weekend, I didn't sleep well at all, and Monday couldn't get here fast enough. Ask my wife ... I wasn't particularly pleasant and she was probably more than happy to see me spend all of Sunday at Foxwoods.

This weekend should go better.

And yes, the longer the coil, the harder the eventual move.


btw, I captured 3rd place in the poker tourney last night, but lost my grip on first place for the more important quarter (winner gets a buy-in to Foxwoods) by the slimmest of margins as the final three were all 1-2-3 in ranking and one got additional bounty points for taking out last week's winner. The good news is I played extremely well after someone tried to put me on tilt, and was able to come back from a single chip with ten players remaining to take the 3rd and stay in the overall hunt. The parallels to trading continue to be strong.

Also, a continuing reminder that all are invited to the upcoming June 27 cookout here on beautiful Cape Cod. Just please be sure to RSVP so I can gauge food. Remember, I'm buying!


Gullible said...

Personally, I feel like I happen to be a week behind you ... and really need to accomplish next week what you accomplished this week. Thanks for taking the time to put it into words -- it's very pertinent to me right now.

momo said...

nice work, Don. Hey, would love to join for the BBQ. Next time maybe. Which golf course do you live near by, out of interest?

Don Miller said...

Moritz -

There are a ton around here. Blue Rock is the nation's top rated Par 3 course which I abut.


Hay Farmer said...

Don, I had a meaningful up day today! A very significant day because of the past 30 days of scratches or tinny loses/gains. I've only been trading a year and have been mostly down but 3 months ago I almost had it all back, I was on fire, thought I had it figured out. Then I had a train wreck and gave it all and more back. I contribute the change in my "attack" on the market partly from reading your blog. It has helped me to see some things from a different perspective. I realized I have to go about my trading like I have gone about anything else I've been successful at in life- with passion. I'm all done with my "just tryin" attitude, now I'm just doin, it's all business; just like when I was makin my $ back before the train wreck. I know its just one day (I will live in reality), but there is a little voice inside that says "it will be done", I have herd it before. Thanks, Don and everyone else that comments or asks questions on Don's blog.

E-Mini Player said...

Well done! Wish I could make it out to the Cookout. Have a nice weekend.

E said...

May we call your wife the day before the cookout to find out if you are going to be "particuarly pleasant" or not?

LOL (joke)

Nice adjustments made last week Don, pullbacks are part of life.

I even been seen in a few sand traps now and then...

Speaking of traps, good one today at the new yearly high pre-market.

Good weekend to all.

Charles said...

Don, your big bad day in oct. '08...

almost seems outside the realm of possibility for it to happen to you(not meaning that I doubt that it happened).

Were you in any sort of slump then, or did it come out of nowhere?

I'm thinking you were probably throwin' around size during that period, but were you trading on tilt that day?

I'm curious 'cause I know what you mean by the power of a downward spiral and how it has to be squashed pronto. I've had a few blowup days like that where I felt like I reached tilt myself.

BTW, my biggest one also came in oct., but then in nov. I killed it...ahh, the Comeback Mindset in action.


PS- Hay Farmer, appreciate the sentiment...the comments section is solid stuff.

Don Miller said...

Charles -

The link on that day is at

'twas a Monday, and you'll likely want to follow all the posts for the entire week to put it in perspective (I finished the week nicely positive).


Charles said...

Heading back to oct. right now Don.

That month was easily the most intense for me personally, having had the biggest up AND down days of my career(and life) this ought to be a pleasure to relive it through your daily recaps.

I was also wondering, is there a way to access your older videos?


Don Miller said...

Charles -

All of the videos are marked in the general blog index in the lower left section with asterisks.


robert d said...

Great blog.

Given that you are an active trader and a member of the CME I would certainly appreciate your insight into many of the abnormal end of day trading one sees in equities. Market will be tanking and then in the last 30 mins. put on a spectacular run to the upside.

Who is doing what?

Better than Vegas,


George "Winace" Swanson said...

Hi Don, haven't stopped in for a while. I just posted an article I wrote regarding the markets evolution, a game with some newly added rules. I was really intrigued by some of your comments within your own post which heavily reflect the changes I have seen within the market. Take a peek at the article if you get a chance. I know it will mean alot more to you, with your knowledge base, than it will to 95% of the people that read it. The markets are going to make things a little more difficult for most traditional types of traders. Good luck (skill, for a better term) to you and all. If you like the article, feel free to post the link, I do believe you know the web address. Enjoy your weekend, I know my lack of patience for Mondays arrival will make my families weekend a wee less enjoyable!

Don Miller said...

Hi Robert -

I've never frankly put much thought into it ... i.e. see my recent responses to questions about last Friday's closing action.

I only care about reacting to the action versus the why.


Don Miller said...

Thanks Winace -

Interesting view. For me, it will always be about trading market participant emotion, even if just on a 1 or 5 minute chart.

And so long as we have humans (and machines programmed by humans) trading, that should never, ever change :-). Been that way since someone made that first trade.

Stay well.