Monday, June 8, 2009

Monday Notes - Tidy Day

4:00pm There's no doubt I've been forcing things of late, so just as I finally cleaned my office on Saturday, I'm also working on "tidying" up my trading to eliminate some marginal sequences that I feel I've been taking as of late which have been due to a combination of sloppiness, boredom, and/or forcing things if I've had to miss preceding "prime time" activity.

And so today I seemed to do a decent job of picking my spots by trading very lightly during the Monday intraday chop, before picking it up in the last hour as the market finally showed some emotion. And while I missed the breakout entry (instead preferring to let the market tip its hand as I suck at breakouts and have been forcing a few lately), I did time the 946 short nicely as the last dog was jumping on the dogpile -- when volume died and TICK was losing it -- for a strong wholesale sequence to end the day.

We'll continue last week's change to report net chip gain at the end of the week, yet considering I don't normally trade well on (1) Mondays and (2) after 3pm ET, it's a bit ironic that much of today's green came during that time.

And perhaps it's another small sign that the personal momentum tide is indeed turning.


Unknown said...


Glad you did well in the last hour today. I did the opposite and had my head handed to me. :(

Eventually, I will be able to do much better like you and wait for extreme emotion, instead of being too early.

Thanks for your comments every day.


Don Miller said...

Mike -

Sorry to hear. I've certainly been early on many types of entries a lot lately, and am working on that myself.


B.S.trader said...

There were about 12 reasons till Sunday to short 46, most obvious trade of the day after the runup. Had to figure the biggest chumps in the room were on the other side of that one, no offense to the other poster, just a card analogy.

Don Miller said...

Just a follow up to star's post as even I've been finding myself on the retail/chump side of a few trades more often than I can remember in recent weeks, and/or "just missing" the sweet spot and fouling off pitches instead of hitting doubles off the wall based on either catching the breakout trade OR waiting for the final, final exhaustion surge.

It's definitely been a breakout game lately (not my forte, UNLESS we get a solid quick initial pullback which we didn't this PM) within the longer term range, and very easy to get steamrolled if you're even slightly off your game.

Just my thoughts as always.

Tko said...

Hi, great blog.

Question for you if you don't mind. What do you think allows you to be successful trading the ES where 99%(probably an accurate number) of those that try can't make it work. What are those couple very important attributes do you think?

It obviously can't be your technical indicators or commissions or some secret holy grail system that only you know about. What is that thing?

Just trying to pick your brain a bit.


Unknown said...

Glad you played it well in the last hour. What do you use to watch volume and TICK?


Don Miller said...

Tko -

Who knows, as I've probably made as many mistakes as anyone giving this a go over the years.

I suppose competitiveness, hating to lose (ask my wife), and immersing myself come to mind ... this year being solid evidence of how results can slip when not as committed.

That and maybe refusing to stay down no matter how hard the hit or how sick the feeling. (I guess if I had to pick one, that would be it.)

You're right in that it's not the indicators, although you certainly need to know how to read the dashboard if you're speeding around the track.


Don Miller said...

Ron -

Depends on the setup. In today's case, volume on the 3:34pm vs. 3:24pm (ET) spikes was far lower, and the TICK vs. price divergence (much higher price ... weaker TICK) was screaming.

Most important of all, I saw it, FELT it, and instinctively reacted ... and that's what's been missing from my trading lately.


Unknown said...

Thanks, Don. I wasn't clear, but I thinking about the tools you use. Good information, nonetheless!

tennisguynyc said...


any idea what triggered all of that buying at the end of the day? If the market gapped down on negative sentiment, what would change the mind of the market so differently only hours later?

Don Miller said...

tennisguynyc -

From a trading persepctive, my response will almost always be "I don't know, don't care, and it doesn't matter".

A range was broken, shorts were stuck, offers were lifted, etc. etc.


E said...

Tko asks a great question and Don, as usual, gives a terrific answer.

I think Pros like Don have a sense of high odds reversal areas based on price and time and intuitively understand the nature of one side "capturing profits".

The other 99% of us force the 33, 39 area instead of waiting for 43+ if we were interested in taking the profit taking contra.

It's not just about lines on a chart as they say...

I'm learning a lot from the smart traders who post here.

Steamroll, great analogy.

Rick Honneycut said...

I am fairly new to trading and really enjoy your blog. I had some questions regarding your tick indicator.

What exactly is the tick indicator that you speak of for divergence and how exactly do you use it.

Thanks for the help!

Don Miller said...

Hi Rick -

Probably better to refer you to any of the technical analysis resources on the web. Just google NYSE TICK.

I use it a number of ways to gauge market strength and time entries, including looking at price vs. TICK divergences, TICK retracements during trend moves or breakouts to find wholesale entries, +/- 1500ish extremes after stuck traders have finished fueling a squeeze, etc.

As with anything, it's more an art than science.


roger perdactor said...

What exactly is a squeeze and how do you profit off of it?

Also do squeezes happen in every market(fx, staocks, futures, etc..)

Really enjoy the blog

Stone said...

Roger: Short Squeeze is when you line up a bunch of "weak hand" short sellers who have to buy back the stock at some point... against a group of stronger hands that have a demand for stock that far outstrips the available supply at the time. With all of the weak hand shorts having their buy stops lined up in the same general areas... the exhaustion of selling and continued buying will blow out all the buy stops... creating a huge ZoomZoom effect of buy stops firing off one after another.

I dont know if you'd find that definition on Google... but that's my definition.