Sunday, June 14, 2009

** VIDEO ** The Weekend Trader

Today, I respond to recent comments asking about my strategies and methodologies (my response should not surprise most veteran onlookers), as well as discuss a conversation I had with one individual who was adamant that "no one" makes money from trading.

Please note with respect to my comment on chart plotting (time was winding down), I'm essentially looking for front-end order entry software that will automatically plot trade executions on a chart for later review or publication, and which would work with an existing clearing firm ... MF Global in my case. I know TradeMaven does which I've used in the past -- so I know it's possible -- yet to use TM you now have to clear with their firm, and I have strong loyalty to the team at MF Global.

Thus far, I've put a few inquiries out there, but to no avail.

Lastly, here's the "Miller vs. Barrons & Cramer" link I reference in the video, and there's also some good follow-up discussion in the comments section, in case you want to check it out.

Enjoy the rest of your weekend.

24 comments: said...

Hi Don,

Have you checked out Ninja Trader? It has a nice order entry system and charting and will plot trades.

All the best


Don Miller said...

Mo -

Yea, I had on my list to give Ray a call which I'll do on Monday.



Don Miller said...

Actually, I just dropped him an email. I'd demo'd it some time ago, and perhaps it's time to check into it again.

Charles A Pennison said...

Hi Don,

Probably your best video yet. The frustrations of trading stirs up a lot of negative emotions in people. It is hard for many to calmly and rationally talk about trading difficulties, but you do a good job at dong just that - thanks.

Sorry that I won't be able to attend the cookout. Sounds like a great opportunity to meet some interesting people in the trading community without the sales pitches.


Severino said...

Hello Don,

Nice foliage.

I know that you have had some dialog with another popular trader that writes for Tradingmarkets, which you have done in the past.

In one of his current public videos he makes reference to you (not by name, but is evident) and your style of trading. I was wondering if you would comment on it’s validity of your style, or rebuke it.

The reference starts about 20:45 if you want to skip to it only.



Ps Also understand if you do not wish to.

Don Miller said...

Sev -

Too funny.

I actually wasn't going to check it out because I really don't care how/what/why other people view what I do, or dare say "try to guess" how I trade -- which as I said today, certainly is as basic as basic can be and neither rocket science nor any great secret -- but I did check it out for kicks, especially knowing it was likely Austin who I've chatted with in the past and respect ... and who will probably read this (hey Austin!)

As I expected, he did a pretty good job -- right down to the 15 size partial lot (gee, I wonder who was he talking about) -- and the only comment I'd have is that rather than distinguish between "retail" and "wholesale" traders (he calls the latter "market makers"), I prefer to distinguish between "retail" and "wholesale" ENTRIES, that in turn separate winning vs. losing TRADERS.

I say this because the term "market maker" is often misused in the industry in the context of telling traders that they could never duplicate it, and thus need to focus on a winning retail strategy.

As I said the other day, I trade pretty much the same way I traded when I first began cutting my teeth trading 1-5 lots, and that's looking for general wholesale opportunities (versus the thought in some circles that I simply sit on the ask and bid all day long and gain the spread which would be 100% incorrect) and making up for the lack of market perfection by trading portions of tradable size.

In general, his trade and risk management sequence example was a fair approximation of one particular sequence strategy I'll use from time to time, or as he put it, "one club in the bag", and his emphasis on lack of precision was solid.

As I said today, successful trading isn't rocket science (difficult? hell yes, but so is not eating chocolate to lose weight ... which also isn't rocket science but is also damn tough to do!!), and the ultimate solution isn't buyable anywhere.

And based on recent comments from onlookers, it seems the light bulb may be going on for some.


YM-Trader said...

Hi Don, Just a note to let you know I appreciate your graphic language at times. No concerns about offending somebody's sensibilities. HaHa. Keep it real. It reminds me a lot of my own inner thoughts and battles to "get it right" in my own head.

austinp said...

... and who will probably read this (hey Austin!)


Now that my email inbox is full, I am. Needed the break from riding a lawn mower in the sun all afternoon anyway (laugh).

I use the distinction "market makers" as traders who pay membership trade costs versus retail traders who pay something greater than $3 per turn. We all draw our lines somewhere.

My general point to the masses is this: step one is to identify probable direction from key inflection zones in the chart and step two is identify key trade entry spots (plural) around those zones. "Retail" traders tend to enter trades like one-club golfers while "professional" traders tend to enter traders like a four-club golfer.

Obviously the public chatroom crowd and your followers here are eager to know exactly how you define entries, stops, exits, etc. I’d wager you scale in and scale out according to “feel” of the overall setup, sometimes easing in and other times laying the lumber depending on what years of experience dictate seems best.

I’d also wager my Dolphins will sweep your Pats this season too, which tells you something about my risk level as a gambler (laugh again). Someone please tip a Sam Adams (or two) for me at the picnic ahead… would love to join you guys, but too busy with graduations events and vacation to follow this summer.

Early congrats on another $1mil profit year: you’ll exceed that mark well before we run out of year to work with. Take great care :)

Don Miller said...

Austin -

As always, a good read (except for the Pats/Fins)!

I'll take that one :-)

Stay well.


Trader Kevin said...


Great video, thanks.

When someone turned me onto your blog I was intrigued by the recent entries, so I printed out and read every entry from day one. Most people don't need to go to this extreme, but you're right, almost all the information people are asking about your trading style and methodology is in the archives.

As for nobody being able to make money trading, I stepped into the pits in 1987 and have had one losing year. That was the first year I transitioned from pit trading to off-floor trading.

You stated (correctly) that one trader's losses are someone else's gains and it's possible to make money even after brokerage fees and slippage. I must quibble ever-so-slightly with what you are implying, that slippage is money that somehow evaporates from the market. Brokerage and exchange fees deduct from the profit pool, but slippage does not. One trader's slippage adds to another trader's bottom line.

Agree with you completely that it's about hard work, discipline, and some relatively simple concepts. It seems the touter/scammers dress up their offering because people want to believe that trading is really complicated and somehow mystical. Who would pay three grand to learn that while trading is a hard way to make an easy living, it's not rocket science?

Finally, I have to laugh at the claims of some people that you're just sitting on the bid and offer all day, making the spread. Anybody who has ever traded ES knows that's death and that someone trading such a strategy would get run over, probably sooner than later.

IRF said...

The X_Study charting add-on to TT plots your trades. You can have the trades plotted realtime as you trade on the charts.

It's free as long as you're running TT's X_Trader 7. A lot a traders I know just use this for their charting.

pinebilly said...

Hi Don..

Ninjatrader will do what you are looking for but honestly for a quick order entry system I doubt you will find it to your liking (in regards to being able to change orders quickly etc, when getting partials..)

Have you thought of having someone code it for you for a small fee? I think that may be an idea rather then having to learn a completely new front end etc.

Just a thought.

Don Miller said...

Kory -

I use TT now and tried X_Study, and could never get the plotting to work after extensive trial.

I'll take another peek at it ... thanks.


Don Miller said...

Kevin -

Agree on the "slippage" comment as after listening to it again, I inadvertently began to mix concepts.

Thanks for the clarification.


Diem Trader said...

Hey Don,

NinjaTrader will do what you're looking for and MF Global is listed as a supported broker.

Diem Trader

procol said...

This may not be what you're looking for, but it would be possible and not all that complicated to plot your tradelog AFTER the fact on a tick or minute chart. No need to change order entry software.

All you'd need is the timestamped log and the chart data. Maybe someone out there already has such a beast.

Don Miller said...

procol -

Now THAT would be something. If there is such a beast, I'd love to find it.


Unknown said...

Aloha from Maui Don:)

Decided to take a few weeks off and renew my vows on the beach and read those 3 books u talk about.

I must tell u and the group that “Golf is not a game of perfect” is the best book I have read on the trading! Great mental ideas with clear ways too improve your thinking!

Im in the middle of Dr. Bretts book and strongly recommend that one too.

Wish I wasn’t so far away or would come to the cookout:(

Thanks for everything Don,


Anonymous said...

Hello Don,

you should explain to some of your friends here that one of the biggest failures is to be underfunded and try to make a living trading with a 50K account. To trade 30 to 90 lot clips like you requires a solid account balance. When we increase the volatility of our P&L, we increase our emotional volatility and that is counterproductive.

Diem Trader said...

what's the third? I'm playing catch up here. Tao of Poker, Golf is not a game of perfect, and ? :)

Don Miller said...

The third was probably Dr. Brett's first book, "The Psychology of Trading."

Trader Kevin said...

The Max Factor: "One of the biggest failures is to be underfunded...When we increase the volatility of our P&L, we increase our emotional volatility and that is counterproductive."

Dr. Brett has made some very interesting posts about this subject at TraderFeed over the past two days.

Diem Trader said...

Thanks Don I will check it out!

E-Mini Player said...

Here's a trader who uses X_Study to plot his trades on the chart: