Saturday, June 6, 2009

** VIDEO ** The Weekend Trader

Today I talk about general trading and motivational perspectives, respond to recent dialogue on the EliteTrader thread, and touch on the upcoming picnic on June 27 (RSVPs required).

And yes, I finally got around to cleaning the desk behind me and getting a haircut!


Yankees all the way said...

Since you don't really want a bias for the trading day. Do you really pay much attention to the longer term charts(hourly, daily) other than the key levels in them?

Do you just go into each day and react to what the market is doing that particular day?

Don Miller said...

Yankees -

I do keep in mind the hourly chart as the next day begins, and perhaps most importantly, how the prior day traded to set up a possible high probability morning reaction the next day.


JEB211 said...

I'm the one who started the "No Fantasy - ES Scalping Reality" thread at EliteTrader. I started it in response to another thread in the "Index Futures" forum titled "1 ES point a day". With the ES normally having a daily range of more than 20 points it is a tempting thought that it should be easy to take 1 ES point a contract per day out of the market. This 1 ES point a contract per day theme has come up before at EliteTrader. The reality is very different and I used your trading statistics for 2008 to make the point that even a successful professional ES trader cannot easily take 1 point a contract daily out of the ES market. The other reality that losing and many profitable traders don't want to hear is the reality that all the market has to offer on a sustained basis is slim profits per contract and not robust ones.

I know exactly the reality of professional futures trading as I was a member of the NYFE and a floor trader from 1982 to 1985. On the floor every trader fights for every tick because they know that at the end of the day their average net profit is only a fraction of a tick per contract.

Some people who don't like the reality of futures trading say the equivalent of "Oh, that Don Miller guy is just a high frequency scalper, any good trader can do much better per contract than that". OK, so exactly where are all these other traders that are doing better? As far as I can see they are all in hiding.

As far as criticism of you at EliteTrader due to my thread, I know you just ignore it. When the message is unpalatable it is always easiest to beat up on the messenger.

I don't think you realize what a public service you have done by posting your actual trading statistics for the year 2008. I am not aware of any other publically available trading statistics from any other professional indivdual futures trader from any year. Your statistics point out the reality of what is available from the futures markets on a sustained basis with maximum effort and not the vast riches promised by the futures trading dream merchants and snake oil sales people.

Don Miller said...

Jeb211 -

Thanks for the post ... good stuff. I have a lot of respect for the ET community, and have no problems at all with any perspectives that may or may not involve me.

As for posting the stats, I've long been outspoken about analysts, gurus, and "public" traders never posting reality under the guise of a thousand excuses (somewhere buried in these posts, there's one long soapbox on that topic), and it's just backing up desire for more transparency in this crazy biz where ego and self interest rule.

As you know, talk will always be cheap, especially when it's easy to criticize anonymously in this virtual space of ours called the Internet.

I simply try to listen to the P&L, as its opinion is the only one that matters.

Stay well.


Trader Kevin said...

JEB211: "I know exactly the reality of professional futures trading as I was a member of the NYFE and a floor trader from 1982 to 1985."

Fellow NYFE alumni. Started there in March of 1985, clerking for Chris Paladino and Pete Stubben. Later worked for John Curtin (FAT), who put me in the pit in January 1987. Filled paper and traded there until August 1991.

What was your badge? Where did you stand?

JEB211 said...

Trader Kevin: My NYFE floor badge was JEB. In 1985 I was standing in the futures options pit.

I remember both Chris Paladino and Pete Stubben as we all used Goldberg Bros as our clearing firm. John Curtin (FAT) rings a bell, but I can't remember the face to go with the name. I can remember many faces from the NYFE, but the badges and names are almost all blanks.

I guess you must still be trading futures if you are reading Don's blog.

JEB211 said...

Don - Thanks for the comments.

Your attitude is why I like to read your blog. You know what really counts for a winning trader - the P&L. Just keep doing what you do and increasing your stack of chips.

Trader Kevin said...

JEB211: "In 1985 I was standing in the futures options pit."

In late 1986 one of our customers sold position limits (5,000 contracts each) in one-month out-of-the-money puts and calls. We sold them for around a buck each ($500 per contract).

The market traded sideways and the locals got murdered on the trade when the whole mess expired worthless and my customer pocketed $5 million in premiums.

Richard Fielding blew out during the crash of 1987. Tony Rago from CRT bought volatility from him that fall every time he opened his mouth. It cost Index Futures eight figures to cover the debit in his account.

"John Curtin (FAT) rings a bell, but I can't remember the face to go with the name."

Our booth was in front of the closed elevator bank, on the opposite side of the room from the windows. John was huge (400+), thus the badge FAT. He had a beard. Great guy, passed away a few years ago.

I think Rich Gordon (OIL) is trading options on NYMEX, don't know what happened to the other locals like Eric Moore (ME).

Unknown said...

Have you ever thought about or have an interest in automating your trading style?

Trader Kevin said...

Quant Trader:

"Have you ever thought about or have an interest in automating your trading style?"

I think it would be very challenging to quantify Don's "market pace" style of trading and distill it to an algorithm.

There are dozens of factors that go into a trading decision when you're scalping. The patterns become ingrained to the point that they become almost automatic.

It might take Don ten minutes (or longer) to explain all the factors that went into a decision that was made in half a second. (I'm speaking from my experience as a floor trader.)

Don, I'd love to hear your thoughts about whether or not you think it would be possible to automate your thought process.

Don Miller said...

You couldn't automate what I do, and I'd never want to.

As I've long said, I don't like to fly on autopilot, and prefer discretion ... knowing I have to accept the times when it's not possible to sustain focus on a long term basis.

Automation will never be able to adapt to moment-by-moment conditions on the fly.

Trader20 said...

Hi Don:

I have tried to find this on your site but perhaps I am just not being diligent enough. Someone posted that you have posted some place your results for 2008. Can you tell me where I can find those results on your site? Best regards, MM