Tuesday, June 16, 2009

Tuesday Notes - Making a Choice

4:00pm This is one of those days for me where the charts simply don't tell the story of a trader's daily life. Specifically, I'm sure some traders cleaned up holding a mid-day short entry and/or pressing the morning range breakdown for a home run (if you did, nice going!). Yet I chose a different path as I didn't feel particularly focused or in sync with the market's rhythm, and so I purposely accepted a modest day's take on the early oscillations while choosing to play defense in the afternoon given to preserve the ammo for a time when I felt more alert and ready to press things.

Some may wonder what the hell I was thinking in light of the afternoon chart action. Yet given there are approximately 250 trading days in a year, of which I may take two or three off (OK, last year I don't think I officially took any off, but let's not go there), there are going to be days when you simply "feel off" and have two choices -- take the sure gain early and play it tight to the vest to live for another day, or press things and risk giving back a week's or month's chip gain. Been there, done that.

So I made a different kind of choice today, one that usually doesn't appear in all those cottage industry "Trading for Dummies" textbooks.

On that topic, I find it interesting that someone has been asking me for all sorts of statistics lately and criticizing my style. Yet to reinforce, I care about one person's single statistic and one stat only: Personal (not someone else's) net annual income (not average profit per trade or any of the other thousands of irrelevant statistics) on December 31. Everything else is noise and meaningless. And yes, there remains a significant reason for that silly countdown clock to the left.

As always, it's not about popular convention or what others do. It never is.

It's what you do.

btw, the CME just announced a change in its fee structure today that is "supposed to" help high volume traders and which takes effect on September 1. Suffice it to say that I'll believe it when I see it, and will be spending some time mulling over the change.


Kareem said...

Hi Don,
I have been reading your journal for a couple of months now.Very helful, thank you. I agree with you, in trading only one statistic matter at the end of the day, and it happen to have a $ and a + in front of it. Best of luck with your goals.

Charles said...

[This is too ironic, as I actually wrote the comment that will follow this parenthetical note earlier today, while the mkt was slow. Once you read the comment you will see the irony. BTW, Don, just wanted to say, after reading today's post, your level of honesty/candor is just tremendously valuable for those of us still trying to "find our way" in this biz -- thnx man.]

here it is:

Mon. Max Factor remarked that he thought Don has a good sense of the order flow...my thinking was similar. Seems Don does have a great deal of feel for the ebb/flow of the mkt and I remember asking him a few weeks ago about switching from ETF's to ES(though I trade other futures now also, and lovin' it), and he replied: it's the same charts, with a different "feel".

Now, being a few months into the switch, I can begin to understand what he meant. And fortunately, I can also say that I have a better sense of "feel" for the flow of ES than I did ETF's. It's just a different kind of mkt. Right now I'm thinking the ETF trading was a little more "technical" for some reason, though I haven't yet thought through why that might be, if at all. At the very least, the last 18 mos. of trading these crazy mkts has given me an enormous appreciation for the value of intuition.

good trading all,


B.S.trader said...

I additionally would like an apples to apples breakdown of the new volume breaks on rates. I am guessing cme sliced it to be revenue netral or slightly positive to them now and encourage long term volume growth. Any additional thoughts Don?

kleenup2 said...

Hello Don and keep plugging away at that goal. It is amazing how many amateur traders focus on everything but the PNL statement. You and I both know that trading books are idealized versions of actual trading and causes newbies to focus on ideal entries, exits, profit factor, risk/reward etc. In this game, business, or whatever someone wishes to call it...profits are all that matter. There is more than 1 way to skin a cat.

B.S.trader said...

One more thought on new rate structure before I put it to paper. Is it intended to support equity membership and cme group pps as well as be a long term revenue and volume generator? Could be one more nail in the coffin for the floor.

Charles said...

I was actually just curious if anyone here has any opinions/thoughts on the difference between TradeStation and NinjaTrader?


Anonymous said...

Hello Charles,

I use both and since I am a technical trader I appreciate the different look (chart outlays etc.)they have from each other...... it is like comparing a BMW to a Mercedes... sometimes one is better than the other. I would say that my fills are a bit better with Ninja (IB).... o.k if you pin me to the wall I would say TS is more Retail and Ninja more esoteric.