Tuesday, July 7, 2009

Tuesday Notes - A Rare Breed

4:00pm Tight, solid, play at this end today (I know ... what a novel concept) for a modest win largely as the result of getting up early at 4am for the Globex trade and trading ES long off Monday's late day 890 support with the DAX doing a decent job as lead/confirming indicator (see charts; ES on top, DAX on bottom; click to enlarge). And today was one of those days where the Globex trade provided the only trade off prior-day late support, as once that played out, ES was already tired when the U.S. regular session opened.

And it seems I heeded my own blog post yesterday in terms of patience, as I traded minimally over the rest of the day, fading a couple of TICK and price spikes after the mini-retail move where I seemed to have located some of my timing and confidence. What I really need is to string several of these tight days together to set the universe right at this end and get off my current P&L see-saw. I plan on doing so.


Now for an update on the Jellyfish effort. I spoke with a compliance expert this morning who helped set me straight on what's allowed and what's not in terms of pursuing such an endeavor. And while I plan on verifying what he told me with the CFTC, I'm comfortable continuing to proceed with planning the implementation, built around the regulatory roadmap and ensuring I don't overstep required boundaries. And as I mentioned before, to that extent, it won't be an exact duplication of the "Turtles". On the other hand, that wasn't the intent as Jellyfish don't have to come up for air.

I'd also like to respond to a few private messages asking if (1) I'm trying to clone "Don Millers", or (2) trade my trading for teaching. We'll take the second one first: No, never. That was easy.

Now in terms of cloning, the hopefully oh-so-obvious answer is of course not. Nothing has changed in terms of my fundamental belief as stated over a full year of yakking -- and years before that -- that every trader on this planet will trade somewhat differently, even with similar methods, that self-sufficiency rules, and that no method -- whether discretionary, system-related, or combination of both -- necessarily has an advantage over another, as they're all about probability. And again for the record, I don't have a monopoly on processes that work over time.

And while I'll be using how I trade as a primary point of reference, the greater emphasis will be for participants to live like a trader, think like a trader, and view the market like a trader ... minute-by-minute, 24x7, and over the long haul ... so they can become self-sufficient and not reliant on anyone but themselves. And doing so will take nothing less than complete immersion on the part of the team. Yet I am NOT Willy Wonka, these are NOT golden tickets, and there is NO such thing as an "Everlasting Gobstopper" ... whether it be candy or trading strategy.

Last night, I spoke with a former NFL quarterback about his experiences, and he relayed a story about how newer quarterbacks have to "think" through their passing route options as they unfold, while experienced ones can see the whole field at once as it becomes largely intuitive. It's my hope that three months of full immersion will help accomplish that from a trading perspective.

Next, today I firmed up plans to transition completely out of my non-market endeavor by the end of July, which will allow me to be 100% dedicated and committed to both my own trading and making the Jellyfish "come to life" ... so to speak. So there's no life preserver, and I'm going to have to swim along with the other jellies.

Lastly, given the overwhelming interest, I've given a great deal of thought as to how to allow those not able to participate in the in-depth effort to somehow benefit without diluting the intended concentrated effort, and I may have found a win-win. The idea would be to make available a weekly after-hours topical "webinar" offering at a lower cost to highlight key points of emphasis over the course of the twelve weeks that would be open to all interested. I've not settled on the concept, yet if the prevailing feedback is that it would make sense, I'll consider pursuing it. Simply put, I like win-wins where all benefit, the sheer volume of inquiries is too great to ignore, and several have other commitments during the day.

And should I do that, I'll commit to donating a portion of any webinar proceeds to the American Diabetes Association to help fight Type 1 diabetes (for those new to this trek, my youngest daughter was diagnosed with diabetes at age 11, and here's her own inspirational and public story as documented in our paper last year).

Comments of course remain welcome as I continue to work this through.

btw, the official plural for jellyfish -- or "jellies" which may be more accurate since they're technically not fish -- is "swarm", which per Wikopedia "implies some kind of active ability to stay together". It's almost as if they're describing that "rare breed" called traders.


Max Ghello said...

Hi Don!

Congratulations on that transition.This is great!

Severino said...

You can make a fishing pole out of Bamboo, you can even make a bike.

Try that with a Jellyfish.

spooztrader said...

Hello Don, I notice you reference following the Dax as a leading indicator in the early morning hrs quite often. Have you ever looked at the Euro price action during this time of day? I've found the Euro to be an excellent leading indicator for the S&P during regular market hours.

Don Miller said...

johndgeddie -

Thanks. I haven't looked at or used that particular relationship. I've pretty much stuck to the European indices to trade ES overnight.


E said...

Geez, leave you guys alone for a few days and look what happens. (LOL)

I had a wonderful holiday with family, hope all of you did too.

Would Tiger Woods be the Master he is if he was named "Kitty"?

Now jellyfish...that just strikes terror in me...

Whatever you do, I am sure it is not to be missed.

The Bamboo Boys I am sure would agree.

Best to all.

Ken said...

Congratulations on your decision to move forward on your idea/concept. As a person living with Diabetes, I appreciate your generosity in giving to the ADA. There is plenty of exciting research ongoing and we can expect new, improved and different treatments and perhaps cures forthcoming. Great article on your daughter.

I watch the EurJpy specifically to track the ES as it seems more closely tied to risk:reward whereas the Euro contract is highly correlated to the USD or $ 4 $. I've never watched the Dax that closely but will in the future.

Stingrays are interesting sea creatures a well. Dueling Jellies and Rays???-Teams working to together to conquer different areas of the the markets-maybe?

Veda said...

Hi Don

I've never posted here before but want you to know how much I enjoy this blog and respect your authenticity.

May I offer a suggestion in regard to your Jellyfish venture? You may have already done this but in my experience an essential ingredient to making a team successful is "knowing what success would look like" BEFORE you begin. Imagine yourself a year, two years from now - what would tell you that the experiment had succeeded?

Russ_OK said...

This is my first time to post.

I recently coming across a training CD I had stuffed away by Don Miller (How I Trade the E-Minis). Then I was fortunate to came across this blog. And will be following it closely.

Have you looked at putting a 21 period RSI on a 2 min. ES chart along with your three indicator described on your CD. I got the idea from Chris Manning (he uses it as a trend detector. If the RSI is over 50, trend is up under 50, trend is down). If used today it would have captured most of the move down. And would have filtered some of the false moves yesterday.


Don Miller said...

Hi Russ and welcome.

I do use ADX on occasion which also helps detect trending vs. non-trending markets.

I was admittedly probing for some pre-break moves yesterday based on mini bear or bull traps which simply didn't materialize.


Don Miller said...

Veda -

Good suggestion indeed. Thanks for sharing.


Don Miller said...

E -

Well, I'm scared to death of getting stung by one of those!!



Andrew said...

The weekly webinar for single polyps not part of the main cluster sounds good.

Jason S said...

I really appreciate you thinking of those of us who cannot yet make the full-time plunge. I myself have been trading actively for 6 years and approached the point of a consistently flatline equity curve. My age, station in life and family obligations prevent me from trading full-time, but I do have a business plan to work towards that goal.
Anything you can do to include us part-timers would be greatly appreciated. (Although part-time may not be accurate as for the last several years I've spent more hours building my trading business each week than I have at my full-time hob).

joelliew said...

This is my first posts and Don I really enjoy this blog. Since we are talking bout Jellyfish, I remember that the Box Jelly has the deadliest venom among them. I was sea/cave canoeing 1 time in Thailand and came across a few of them. Our guides says that a swedish girl died in a matter of just 5 minutes after being stung by 1 of them box jellies. Funny how thats the amount of time I stay in the market for most of my trades. I can only hope that I make a killing rather than be the killing.