Friday, October 30, 2009

Friday Notes - Interview with Matt Davio

I'm a bit exhausted after today's profitable trade and lovely pick-up in volatility.

Can you say 2008??? :-) Let's keep that VIX over 30!

So in the meantime, feel free to check out my recent interview with Matt Davio at misstrade where we talk about everything from my growing up to my evolution as a trader.

Matt did a great job and you'll find that we share many similarities.

Thursday, October 29, 2009

Thursday Notes - The Emperor's New Groove

OK, let's see a show of hands of everyone who "didn't believe" today's action.

Such was the topic of this afternoon's team wrap-up where many referred back to their prior trading selves when they would have gotten destroyed trying to short today's market. Yet none of the team got hurt today, most made money, and one teammate from the last Jellie effort maintained his incredible run of 22 out of 24 days profitable ... which is starting to approach my ridiculous 58-3 Q1 2009 run ... keep it up Marco!

So how did the team avoid trouble?

Well, the day -- which started shortly after 4am ET -- began with a strong short bias on any approaches toward Wednesday's key resistance points. And such worked very well during the Europe session (1044 resistance) as well as after the GDP data broke (1050ish resistance) as shorts paid nicely.

Yet as the U.S. session wore on -- and after one stopped short sequence on a double top attempt -- it became crystal clear that the bias was long on price & TICK pullbacks or coiled breakouts in light of (1) a five-minute trend that was strong as an ox, (2) NYSE TICKs that barely could tick below the zero line, and (3) a VIX that remained in a downtrend on our key chart all day.

And while mirrored days like yesterday and today are indeed rare market anomalies, our job is to simply act based on the data before us, and not get into arguments with the market about whether something makes sense or not. As has often been said, "it is what it is".

One of the Jellie Webinars (still available at a discounted price until 10/31) discusses what I believe are four phases in reversing a backward mindset and, in turn, a losing P&L. The first phase is not believing something and losing by trading what you believe vs. what you see. The second phase is still not believing it, yet simply not trading at all. We'll call this the "stop the bleeding" phase. The third phase is disregarding what you believe and simply trading what you see (long by midday in today's case), and the final phase is doing the same thing, except with conviction and size.

Some traders never make it out of phase one. They spend year after year fighting the market, often taking huge financial and psychological hits during those times when the market acts in a highly unusual manner. And so today's late-day team recap was full of war stories about prior hits we've taken. Fortunately, those days are long gone for the team, and we had the mental dexterity to recognize what was happening and adjusted our plans accordingly.

Some still believe my Q1 run was fiction. Others may incorrectly believe Marco's current run is similarly bogus. How on earth can you be profitable almost all the time? Simple. It's calling paying attention to the market with a sharp, focused mind that's nimble enough to adapt on the fly.

I've often said there's only one thing -- and one thing only -- that will ever prevent me from making money trading. And that's lack of focus ... whether it be due to lack of motivation or burnout (my Q2 & Q3 challenge after the record run), or simple distractions.

Yet right now as I transition back to full-time trader, I'm as focused as ever. The result is performance and an equity curve which are both breaking out of one helluva coiled consolidation ... and hard.

Call it The Emperor's New Groove if you must.

And speaking of Emperor, perhaps I'll indeed dine at Marco's castle in the not too distant future.

Wednesday, October 28, 2009

Wednesday Notes - Resting Up ...

... for tomorrow's monster MATD (Morning after Trend Day).

Thursday's post should be interesting.

Tuesday, October 27, 2009

Tuesday Notes - Welcome Back

Welcome back, your dreams were your ticket out.

Welcome back to that same old place that you laughed about.

Well the names have all changed since you hung around,

But those dreams have remained and they’re turned around.

Who’d have thought they’d lead ya (Who’d have thought they’d lead ya)
Back here where we need ya (Here where we need ya)

Yeah we tease him a lot cause we’ve got him on the spot, welcome back,

Welcome back, welcome back, welcome back.

Dear Diary -

I wondered when it would happen.

I wondered when everything would click in such a way where I'd regain the motivation, excitement, rhythm, confidence, and personal performance momentum of 2007-early '09.

I also wondered if the labor of the last three months -- which was meant to both rekindle my personal trading passion while giving back on two fronts: Trader Education and a Charitable Cause -- was truly worth the interim sacrifices of personal time, focus, and trading profit.

Well now this stubborn, impatient trader has his answers:

When? October 27, 2009.
Was it Worth It? Asbolutely.

Mark it down. For after dancing in complete step with the market over the last few weeks, including today's high-probability textbook morning after trend day (MATD) where I entered or exited trades within a tick of the swing high or low eight times, the passion and performance are both back in high gear.

And yes, it's been a while since I'd enter each day just "knowing" ahead of time that I'd nail it.

Swagger? Perhaps, although I prefer to use the term Confident.

And yes, it took this stubborn, impatient trader longer than he expected, which brings me back to a rather scary parallel (with advance apologies to those outside of New England).

Two years ago, Tom Brady and the Patriots set the world on fire with a 16-0 season to end all seasons. Then a miracle helmet catch on a last minute Super Bowl Hail Mary seemed to trigger a series of setbacks that included a torn up knee, subsequent infection, year-long rehab, dealing with a few crazy paparazzi, and finally some "shake off the rust" average-at-best games (overthrowing everything in sight) before getting "back to business" and reestablishing his prominence with 80 unanswered points. OK, it was against Nashville and Tampa who are a combined 0-13, but stay with me on this one. So for the fans in New England, the world is spinning on its axis once again.

And while I'm certainly no Tom Brady, the journey over the last six months at this end has been similar, at least from a performance and psychological perspective. For while I didn't blow my knee out (although there was of course that infamous bump on the head), I'd simply lost my motivation and burned out after a $2 Million run, before taking much longer than I expected in my version of "rehab", which was to create and train the Jellies, most of whom now trade alongside me.

Yet the events of the last few months have indeed rekindled everything that, well, needed to be "kindled" -- if that's even a word.

And now, with a few dozen new teammates and a few dozen less pounds for this body to carry around, there's a spring in my step (and certainly the P&L) that I haven't felt since May.

Welcome back Don.

It's great to see you again.

Monday, October 26, 2009

Monday Notes - Blog Break

Posts will resume on Tuesday

Sunday, October 25, 2009

The Weekend Trader - 2009 Lessons

While this year hasn't officially ended, a good part of mine has as I mentally begin yet another phase of my trading career. btw, do we really need a calendar to define when something begins and/or ends?

So as I turn another page, here are some trading and life lessons I've learned -- or that have been reinforced -- over the last several months.

The concept of outliers is critical. In my view, and in terms of trade population, optimal trading is all about 50% modest wins, 30% small losses, 15% home runs, and 5% bonehead moves. Yet in terms of net trading results, the 15% home runs will often exceed the 50% modest wins. And it doesn't matter whether you're talking about a trading day, week, month, year, or career, as the impact is the same. The same is of course true in spades in Poker. Do a blog search on "outliers" for related concepts.

When others criticize, you're probably on the right track. Some in this world will always try to tear others down, and nothing you can do will ever change that. To this day, many continue to ignore the lesson of all lessons of 2,000 years ago.

Not everyone likes a winning team. Consider this one a warning to the Jellies in the ongoing networking trading room. Every winning team has its haters -- whether it be the Celtics, Lakers, Yankees, or Patriots. Don't expect it to be any different in trading. On the other hand, those that are smart will try to emulate the success.

Traders looking for trading to satisfy a social or ego outlet need will never be successful. Fact.

You don't have to be a star to contribute to (or benefit from) a team. Some of the top performing Jellies were of the unsung and quiet type.

A good team will often encourage open, healthy debate. In the spirit of determing the best course of action, multiple sets of professional eyes looking for the same thing are often better than one ... so long as it doesn't detract from an individual trader's eventual conviction to act.

When in doubt, go with your gut. It helps keep overthinking to a minimum, whether it be a trade or business plan. Plus, an experienced trader's "gut" is often simply the unconscious bubbling up of years of pattern and profit recognition.

No streak, good or bad, lasts forever. I tried to preach this over and over during my 2008-09 run. As I said at the time, zero losses in January, and only 3 losses in the first quarter is not normal. Neither was the summer funk. Enjoy the good times and bank it just as squirrels store up the acorns. It will help you deal with the occasional funk.

When in a funk, reach out to others. Friday's post says it all on that one.

Don't try so hard. I'd say more about this, but I stink at it and try not to talk about things I don't do well.

In everything you do, give it your all. There will be time to rest when we retire. Yea, I know ... me retire? Right. Well, maybe when I'm six feet under.

Effective teaching requires as much commitment, focus, and intensity as effective trading. I was often exhausted at the end of each day of the Jellie efforts, which is the main reason some of the blog posts didn't appear until midnight.

Don't ever let others define your goals. It's likely because they were unable to define their own.

Truly good traders will earn far more from trading than teaching. From a pure bottom line perspective, this is why my return to the educational field was always and only intended on being interim. Nothing has changed there as I begin my transition back to full-time trader.

Take time to rest. Again, my commenting on this would be like the coughing doctor telling you to quit smoking. All I'll say is even God rested on the seventh day, and that by itself should be enough to tell me to slow down at times.

Students are often the best teachers.
Sometimes teachers need to be better listeners. That's one area where I could have done better over the last few months.

The market is an even better teacher. Solid formal education can and should significantly reduce the cost of real-world lessons, yet the market often provides the best lessons.

Take care of your body. OK, I'm slowly learning on this one.

48 is not old. Thanks to all those reminding me of this one.

I'm sure there are more, yet suffice it to say that when this year is officially over, 2009 will have been more personally satisfying than 2008.

After all, I'll hopefully be another year smarter.

As for the P&L? It's just fine :-).

Friday, October 23, 2009

Friday Notes - Finding Oneself

It's often said that when you're struggling, sometimes the best thing you can do is to focus on others, during which time you may very well "find oneself".

Well, a funny thing happened during these past three months of intense Jellie team training efforts which concluded today. I found myself.

For after months of wrangling with a loss of motivation, enthusiasm, and at times sub par performance after a mind-blowing 15-month run, somewhere amidst the recent 500+ hours of non-stop focus on people other than myself -- including 40 Jellies and the American Diabetes Association -- a personal evolution and restoration took place.

Oh, it wasn't immediate. Is it ever? In fact, like my recent 25 pound weight loss, I can't pinpoint exactly when it happened. Yet I can in part point to two conversations I had last week, where two astute Jellies observed a hitch in my own swing that I hadn't quite been fully aware of. And such seemed to result in finding the final missing piece to my own puzzle -- which to that point had seemed almost complete -- and which in turn helped me recapture my seven-figure performance pace.

Imagine that.

In the process of helping others, the favor was returned in a most unexpected way.

And perhaps equally ironic is that the final puzzle piece was found when I simply stopped looking for it.


What an amazing gift.

What an amazing journey.

... which continues on Monday.

Thursday, October 22, 2009

Thursday Notes - Pursuit of Excellence

We had a very "intriguing" discussion in the tank toward the end of today, as I was getting on the team's case (including mine) for getting a bit sloppy when we did our midday briefing session for the afternoon. For while a few of the traders participated in the consolidation break, some didn't which was largely a result of sub-par "what if" planning before the move happened.

As I've stressed to the team, trading is all about visualizing the likely scenario and "what-ifs" ahead of time, such that when they occur, you simply execute the trade like shooting an easy lay-up two feet from the basket. And such was certainly the case during today's Monster MATC (Morning After Trend Close), where I often make the entire week or month's income off such high-probability sequences, as happened this morning -- after visualizing the sequences ahead of time -- when I danced the market dance of all dances and scored a few solid home runs by selling every early rally and buying every spike down from 3AM to 11AM on only three hours sleep.

Yet trading is only and always about looking ahead, and we frankly could have done better in our afternoon planning. Much better. And suffice it to say that this afternoon was likely the toughest I've been on the current team since we began ... call it extreme tough love ... which caught some of the team off guard.

You see I needed to push and make a statement, for I realize how precious opportunities for "in the zone" outlier days are, as well as what it takes to truly reach one's fullest potential -- which is to work harder and longer than the vast majority of traders who constantly shift their capital to the small minority of traders who are consistently successful over the long run.

Yes, I had a very good day trading a pattern that I've long excelled at. Yet the opportunity cost of not being properly mentally prepared prior to the afternoon session was high. Of course, we properly stayed away from shorts at the squeeze was occurring, so we're just talking the loss of potential income vs. a loss of tangible capital. Yet such cost is equally "costly".

As I told the team at today's close, I'm a very intense person. Yea, I know that's the obvious statement of the decade! I care deeply for this business, as well as all those I work with and their bottom lines. I push myself extremely hard -- because that's what it takes to reach the top -- which in turn translates to my pushing others around me who have entrusted me with helping guide them toward a similar journey of self-actualization

Frankly, toward the end of today's trade, I was a major nuisance. Yet as I told the team, I'm hopeful that my words will echo in their minds for years to come, and if my being a royal pain for a few minutes helps just one Jellie prepare better the next time, any feeling of discomfort incurred this afternoon will be well worth it.

For me, trading and life are both about continual improvement and the pursuit of excellence.

If we want to reach our goals -- and mine are always high -- we simply have to want it more.

We have to work harder than everyone else.

We can't let up.


Wednesday, October 21, 2009

Wednesday Notes - Resting Up

I'm actually going to pass on doing an extensive post tonight as I'm mentally and physically preparing for tomorrow's Europe and U.S. sessions. Specifically, I'm heading to bed to make sure I'm well rested and alert for what should be a monster MATC (Morning after Trend Close) beginning at 4am ET.

And to respond to a few emails as well as follow up on my October 10 post on the future of the Jellie training efforts, I will be working with a few traders from 10/26 to 11/20, which I expect will be the last group training effort for a while as I migrate back to full-time trading. If you're still interested in participating -- and it will be a small, intimate group with simulcast to the existing Jellies -- please let me know by end-of-business Thursday via email to, as viewing the eight 2-Hour Study Session Videos will be a required prerequisite.

Tuesday, October 20, 2009

Tuesday Notes - Sending Forth

To all those I've had the honor working with over the last three months:

I've done all I can. Now it's YOUR turn.

May God Bless you and your efforts as you explore the vast new ocean.

I'll be there in spirit.

P.S. I look forward to dining at YOUR castle.

Monday, October 19, 2009

Monday Notes - Video Update

It's late, so I thought I'd go to the video to follow up on last weekend's posts, my trying to qualify for the Foxwoods World Poker Finals, as well as discuss whatever else is rambling in this crazy trader's mind.

Sunday, October 18, 2009

The Weekend Trader - Rabbit Feedback

Wow. Suffice it to say that the response to yesterday's post about "Catching the Rabbit" was overwhelming, and here's the current feedback, which ranges from nothing to do with trading to everything to do with trading, with my comments in italics.

And based on one suggestion below, I've momentarily reactivated the comments ability for today's post as a trial, with the caveat noted next to the suggestion below.

Non-Trading Related

Take that Europe trip with my wife for a prolonged and spectacular change of scenery.

Take my poker game to the next level by playing some Pros online. btw, I did briefly sit at a high stakes game at Foxwoods yesterday before I played in the Foxwoods World Championship feeder events, which was quite an experience.

Take at least 30 days without doing ANYTHING trading related. (No trades, no email & even no talking or thinking about trading.) Could I handle the withdrawal symptoms?

Take a year and travel the world. But trade from your laptop throughout the year as you are able to fit it into your day. How do you say Sony Vaio in Italian? Or is "Vaio" already Italian?

Enroll in a course at the BMW Performance Driving school. I thought I was already doing that on the freeway off-ramps. And does trading on the laptop while driving officially fall within the "no texting" law?

Think of something you're afraid of doing. Do it now! Well, I hate snakes and flying. Perhaps I should watch "Snakes on a Plane".

Begin training for an athletic achievement ... Marathon ... 400lb bench press ... 500lb squat ... long distance swimming. I'd have to start small on that one, as the exercise bike in my trading office is buried under multiple layers of dust.

Take a Bikram Yoga Class. I had to Google that one.

Become an investor in a smaller budget film Indie type film. As long as it's not about snakes.

Mentor a youth.

Start an annual Poker Charity Event.

Take your knowledge of trading and attempt to break it down into an automated trading system. Interesting, but probably not possible since I believe in trader discretion and adapting to the markets on a moment-by-moment basis.

Write a movie script. Have I mentioned it wouldn't include snakes?

Trading Related

Redefine my goals to reflect "stretch" goals just as Jack Welch did with his executives at GE. i.e. view myself at the beginning of my journey, vs. the end. Very solid advice.

Put up some live video of your trades on YouTube.

In advance, pick a few days a month out of a hat, whatever money you earn that day gets donated to a charity. I'll go one even better. How about if I draw down, I donate twice as much as the loss to charity in an Antonio Esfandiari - Phil Laak sort of way. For those who aren't familiar with their ongoing bets, Antonio recently agreed to pay Phil any time he didn't comply with his reestablished poker regimen.

Evolve the blog further in some dynamic way.

Reactivate the Blog comments feature, keeping the prior spam filter in place. Consider today a trial. As I've said before, I'm not going to waste life's precious energy engaging in useless debates or responding to those who believe the Blue Wall is Red. Unprofessional or disparaging comments will be screened before they reach me.

Elaborate more on my early days in trading.

Start an fee-based online monthly trading room for traders on a monthly budget, allowing past Jellie participants to post real-time and others to observe. (Multiple suggestions.) Doubtful, as I've avoided it like the plague as a trader and because I believe in individual trader focus (including mine!), and limiting teaching to encouraging self-sufficiency ... not to mention the administrative hassles. Would there really be interest in something like this and more importantly, would such a "squawk box" be productive??

Set aside X amount of dollars as your stop-loss. Then triple your position size. Now this one has me thinking.

Thanks to all emailing comments.

You've got me thinking.

Big Time.

Saturday, October 17, 2009

The Weekend Trader - Catching The Rabbit

As I approach the end of yet another indescribable year, I can't help but look back at the recent past to find clues as to where my energies should be focused for the future.

Most who have been following this trek over recent years know that I need motivation at the depths of my soul to spur me to productive action, and the last few years of intense personal commitment, trading, blogging, and interim return to trader education all reflect that.

Yet like any decent trader, I need to focus primarily on the road ahead -- using the past solely to provide clues for the future -- and so as I approach the end of yet another personally satisfying year where I met and overcame various unexpected challenges (this time far more than simply financial goals), I find myself this evening wondering what road I should take in 2010.

Shortly, I expect my return to intense live trader education to end as the Jellie efforts and remaining ripples conclude. And as my eyes look to the future, I ponder where my energies should be directed in 2010 and beyond.

For some reason, I've been put in a position that most would envy ... that of having both the freedom and resources -- as I find myself only a stone's throw from the magical age of 50 -- to do, well, whatever I want to do. It's that carrot at the end of the proverbial stick that all traders constantly pursue, or that rabbit that racing dogs pursue that can't ever be caught. Except there's one key difference at my end. I caught it.

Personal trading goals? Met and exceeded. Retirement Positioning? Check. Trying to Make a Difference? Perhaps the jury is still out on that one, although spending a few months working with other traders and the American Diabetes Association has hopefully helped to some small extent.

Those who trade alongside me know one of my strengths is immediately forgetting about the last trade and moving to the future. Such was the case on Friday as I got caught a bit buying the DAX's fourth push down, only to see the bottom fall out for a highly unusual fifth push, before quickly rallying my trading to more than offset that early ding in less than an hour.

And such is the case as I look to 2010 and beyond. I must forget the past to focus on the future.

Yet I'm currently finding planning the road ahead more difficult than simply planning the next trade.

You see, I caught the rabbit.

Now I have to decide what to do with it.

Ideas welcome ... feel free to email me at

Thursday, October 15, 2009

Thursday Notes - Posts Will Resume on Saturday

Poker Night Tonight.

Wednesday, October 14, 2009

Wednesday Notes - Avoiding The Sucker Trap

One of the aspects we discuss in the tank each time the classic MATD sequence (Morning After Trend Day ... or in this morning's case, After Trend Night) plays out, is not falling into the trap of what I refer to as "sucker pullbacks" on the smaller timeframes as the "air" (see Monday's post) between price and true support begins to disappear.

Today's open as noted in the attached 1-minute charts (click to enlarge) provided a textbook example where such pullbacks and brief pauses should typically be waited out in terms of covering final short positions or establishing fresh long trades. Note the three-line break insert (lower left) provided continuing confirmation of the immediate short trend despite the pauses, as the larger timeframes caught their breath.

Such visuals provide for a powerful combination which provides the continuing confidence to effectively trade MATDs and their brothers.

In today's case, the attached trade execution chart -- which I share daily with the Jellies in the tank -- shows how I took advantage of the ideal setup. Note the chart reflects auto-plotting of my actual trades directly from Trading Technologies' order platform. Triangles pointing right open the sequences, dashes reflect interim transactions (both position adds and covers; most of the higher dashes are adds), and triangles pointing left close the sequences. Red colors reflect short sequences, while blue (not pictured) reflect long sequences.

As for the Random Walk Theory??

I'll provide you with a few million reasons why it's as bogus as a 3-Dollar Bill.

Tuesday, October 13, 2009

Monday, October 12, 2009

Monday Notes - Jellie Dictionary

As the live Jellie trading tanks have evolved, our traders have developed a rather unique version of "Jellie shorthand" which allows us to describe and communicate various market conditions via audio or text with ease in such a way where all immediately understand the conditions.

Here's a sample of some of our "Jellie-isms", using today's market to provide some examples:

"Air on XX" - Reflects the fact that price is stretched on the stated timeframe ("XX") such that visual "air" exists between price or VIX and defined trend support. Example: "Air on 60" is shown on the attached chart (click to enlarge) and provided room for the market to trade out of its 2pm consolidation breakdown toward its hourly trend support. The result was a strong visual guide for potential short profits, as well as caution flags on early long fades prior to a reversal trigger on a lesser timeframe.

"SOOT" - Stay Out of Trouble mode. Reflects conditions reflective of minimal trading opportunity. Example: Today's 11:00am - 2:00pm consolidation chop.

"SOH" - Sitting on Hands. Describes what most Jellies are doing while "SOOTing".

"NML" - No-Man's Land (with apologies to our female traders). Reflects an "efficient" market that is trading mid-range where minimal opportunity exists for wholesale entries and subsequent profit potential. This is often best defined by our 1500 Tick Range chart per the attached.

"3LB" - Three Line Break. Reflects one of our trend detection and turn signals. Primarily used on a 1-minute basis, it's often an oustanding "SOOT" indicator during extreme trends to avoid premature reversal attempts. May times, a simple "3LB" reference in the tank alerts us that the turn signal has triggered.

"PJO" - Prime Jellie Opportunity. Reflects those 1-3 trades sought over the course of the day that reflects the highest probability and opportunity to profit. Reflects our moment-by-moment mission to find our three solid meals for the day. Example: the 1-Minute 3LB turn at 2:50pm provided a trigger for those trading long in line with the 60-Minute trend after the "Air" in the hourly chart had disappeared.

"IIAGD (or IIAGU)" - If It Ain't Going Down (or Up) conditions. Reflects the current path of least reistance, often defined by bull/bear tails and traps indicating trapped longs or shorts whose exits will help fuel price movement in the opposite direction.

"IFT" - Inverse Fade Theory. Reflects some of our traders' desire to ride the immediate short-term trend during times when we issue "No Fade" warnings, as is often the case late in the day when we warn of potentially disastrous late-day fade entries.

"DMI" - Don Miller Indicator. Coined by the first Jellie team to reflect my general interest in trading current market conditions. A low value often coincides with SOOT and SOH conditions.

Like a Tom Brady to Randy Moss wink at the line of scrimmage, such Jellie shorthand allows us to quickly communicate conditions and/or our current trading intent quickly and efficiently, while enhancing -- rather than distracting -- trader focus.

Saturday, October 10, 2009

The Weekend Trader - 500 Reflections

Some thoughts on this fall weekend as the leaves and Red Sox begin to drop.

500 Reflections - On this, the 500th post of this trader's open journey, part of me wonders why this online diary has attracted so much interest and staying power since we began this trek in July 2008 -- especially over a period of time when the markets have tested the very souls of all traders, often leaving a path of reckless abandon in its path.

Yet as we look back -- and more importantly, ahead -- here are a few thoughts as to perhaps why hundreds of traders continue to check in on a daily basis.

As most hopefully know, one of the reasons I decided to begin blogging my experiences last year was that I wanted to open share all aspects of this trader's life -- or as I've stated time and time again, "the good, bad, and ugly". Not just the winning days and triumphs, but the far lesser discussed (in terms of the general industry press) difficult times when trades and days don't go your way, or when you slip on that virtual mental banana peel. The recent -- and later syndicated -- "Necessary Mistakes" post probably says it best, which I encourage you to read if you missed or skipped over it.

Such a premise has always been a fundamental cornerstone of my writings -- and in the subsequent Jellie efforts on a moment by moment basis -- to a point where some onlookers indicated that they were growing tired of hearing what they perceived as "depressing" writings.

Yet an interesting evolution has taken place in terms of both blog onlookers and Jellie participants. For over time, it's become crystal clear that those who have remained loyal blog readers -- and by no surprise those who have been the most successful in the Jellie efforts -- have been traders who, as I've stated in the past, "get life". And as a result, this virtual community has grown in strength day after day.

What do I mean by "get life"? Well, they're the people who simply understand that life -- and trading -- is what it is, man's (or woman's) continual struggle to fight through the curve balls that are thrown at them every second of every day. Call it the neverending game of Dodgeball.

Over the last sixteen months, some onlookers have come and gone after growing weary of stories of how this nonfiction account of success was time and time again built on foundations of failure. Examples include a personal record loss to jump-start the run to end all runs. A burnout period that sparked an evolution in how traders are trained. A prior-day (or morning) loss that provided market data or helped tighten the mental belt for the subsequent successful trade the next day (or afternoon). Which by the way occurred just yesterday in the tank as an unsuccessful late-morning breakout attempt was followed by a successful afternoon sequence.

Yet those who have stayed, "get it".

CME Lease Prices - They continue to drop and I'm just about ready to lock in a 60% reduction in my monthly lease cost for the next six months. So for those who have long debated whether CME membership makes sense for modest trading volumes, I encourage you to take a hard look at the new prices. For when volatility picks up again, you can expect a return to higher prices. Here's the link to the CME membership page.

Future of the Jellie Efforts - I admit I'm at a bit of an unexpected crossroads right now as the result of additional requests to continue with further 4-week live efforts. It's frankly a situation that I never planned for, anticipated, or expected, as I've been planning on simply going back to focusing my market energies 100% on my own trading. For the plan has been for me to take my place alongside the mature Jellies as peer traders in November, leaving the educational side to the 16 hours of Study Session recordings which will remain available and continue to represent the best value of any pre-packaged teachings I'll likely ever produce.

So here's my quandary. On the one hand, feedback suggests the intense four-week format works. btw, by "works", I of course don't mean that 100% of the participants will end up maximizing their potential -- as such is never the case when teaching anything, whether it be an Executive MBA program, a golf-swing boot camp, or an intense trader training program. Yet clearly, participant feedback and results indicate we've made a difference in how traders are taught. And on that same hand, it's also clear based on mail and various discussions with traders that the need remains.

On the other hand, continuing with the efforts wasn't in "my plan", although 48 years of living reminds me that "our" plan isn't always the "right" plan. Which of course brings us full circle back to the Jellie concept of continual evolution in trading and in life.

History has long taught us that it's not wise to throw out something that works, simply because it "seems" to have run its course. Does anyone even remember "New Coke"? And so I'm not going to tinker with the current direction and -- like a decent trader -- rather than trying to impose my will on the market, I'm going to let the market make the decision for me.

So, the invitation is there for those interested in participating in the 4-week effort -- simply email me at with some contact info. For you and you alone will decide my course of action.

As I mentioned to the team on Friday, I have an incredible passion and unquenchable thirst (pun intended given the Coke analogy) for this business. After all, who would be crazy enough to log 500 deep inner thoughts on a daily basis for all the world to see ... warts and all. The fact is that I simply love trading, talking trading, and helping other traders. It's just in my blood.

Yet I'll close the invite with a word of caution. The live effort -- like the blog -- will remain an intense effort to openly share and discuss all aspects of trading. No smoke. No mirrors. No hiding of the bruises and battle scars. No "feel-good" easy road to riches. Simply reality and hard work, which combine to reflect the only ticket to the door of success.

500 posts. $2 Million plus and counting. 40 Jellies ... and counting?

And if the market decides otherwise?

I'll be on the playing field ... playing dodgeball.

Enjoy the weekend.

Thursday, October 8, 2009

Thursday Notes - Blog Break

Posts will resume over the weekend.

Wednesday, October 7, 2009

Wednesday Notes - "Time" to Trade

One of the concepts I've been drilling into the concept of both Jellie teams is that of understanding that S&P futures trading is far from a 9:30am - 4:15pm ET business. In fact, one could argue -- and I certainly would based on this year's market -- that some of the best opportunities are now occurring outside of the "regular" U.S. session based on cues taken from the overseas markets.

Frankly, much of my recent ES income has come from trading between 4:00am and 9:30am ET, and my DAX trading has been far more profitable this year than in 2008. This has especially been true recently as I've ramped up the "seriousness" of my personal trading by getting to bed earlier or sacrificing some sleep to mirror some of the dedication and commitment I showed during the 2007-early 2009 stretch, before deciding to restore the body and soul over the summer.

And as I write this tonight, I see ES has broken out of its intraday logjam, and yes, I've been trading it.

As is typically the case, we reap what we sow, and the extent of our trading earnings is a direct reflection of the time and effort we choose to put into this business. Such was the case during the recent $2 Million stretch where I made sacrifices few would ever think of making, before easing off the accelerator over the summer.

As has often been said, one has to fish when the fish are biting, which is why I devoted multiple portions of the Jellie Study Series Webinars to the critical relationship between Europe and U.S. markets during the 3:00am - 9:00am timeframe.

And lately, the catch of the day has often occurred while most frustrated intraday traders have been sleeping.

Tuesday, October 6, 2009

Tuesday Notes - A Little Past Playing Good

Many who have followed this blog -- and all of the Jellies -- know that the best trading book I've ever come across isn't a trading book at all. It's a poker book entitled "The Tao of Poker" by Larry Phillips, and is mandatory reading for the Jellies and anyone who trains with me.

The $9.95 book, along with my having taken up poker two years ago, is one of the reasons my trading results exploded over the last few years. And I found myself having to reference it again last night following a modest draw and lackluster performance where I seemed to be one step ahead of myself from a pattern perspective as I jumped the gun a bit on trading the emerging 60-minute bull cup pattern put in place with the morning climb ... a pattern which is normally followed by an expected back-and-fill retracement toward the 15MA handle support, which then sets the stage for the next leg up toward the right rim of the cup.

And while I had the pattern nailed all day long -- and my reads have been exceptional over the last several weeks -- I fell into the trap that Rule #270 from the Tao "bible" describes as, "A little past playing good is playing badly."

Specifically, page 186 states that once a player has arrived at a certain level of expertise, "he finds that by simply thinking ahead one more step ... he can be back once again in the territory of bad play". And such was the case Tuesday afternoon where I didn't wait for both lesser timeframes (1 and 5) to confirm the expected bull cup extension move in the early afternoon, which finally occurred toward the end of the day and followed through during the overnight session (I'm typing this as of 6:00AM on Wednesday).

As Phillips correctly describes, the trap is subtle, and I believe likely afflicts seasoned pros more than amateurs as we make a living by thinking ahead and can typically sense the market bias with regularity. However, it can strike at any level.

As has often been said, the line separating brilliance from mediocrity is razor thin.

Yet while we occasionally all get cut by the razor, it's no excuse to stop shaving.

Monday, October 5, 2009

Monday Notes - A Year After The Fall

As we rapidly approach the 500th post of this diary this week, I can't help wonder about what the future holds in terms of the blog's direction. Frankly, part of me wonders what else I can say via text or video that I haven't already said.

It started off so innocently on that day some fifteen months ago ... using the blog as a tool to electronically document my trading journal and provide self-motivation while allowing interested onlookers to look over my shoulder. Then we added video posts ... 49 of them to be exact. And along the way, onlookers saw this trader's daily life with its intended 100% transparency: the self-driven goals, the challenges, the successes, the falls, the insane records and streaks, the burnout, the cookout & bump on the head, the birth and growth of the Jellies, and recently, the recaptured personal motivation and mind/body resurrection.

And during this trek, posts have been syndicated, interviews have been requested, and debates have raged about everything from my statistics to my style to my interim return to try to make a difference in trader education. Ironically, I feel that many of the hundreds of daily onlookers know me better than some of my family members!

I sometimes wonder why this journal and its content have generated so much interest and struck such a huge worldwide chord in this dog-eat-dog industry. And while I may never know the answer, I hope it's because of the "T" word mentioned earlier: Transparency. For however onlookers feel about this diary's content, its evolving format, or the author in general, one thing is certain: it has always been and will remain 100% authentic and from the heart.

Speaking of which, tomorrow will mark the one year anniversary of my largest loss ever at -$94K. To say it was uncharacteristic and never shouldn't have happened to this tight, risk-averse trader is the personal understatement of my life (I simply screwed up and hadn't yet adapted to the never-seen-before volatility). But it did, and I needed to share the gory details for the world to see, just as I'd shared every other aspect of this rare look into a trader's daily life.

Yet as I mentioned to the team tonight, this business requires continual and instantaneous personal forgiveness, recovery, and renewal.

In my case, that Monday was one of the darkest days I've ever had in my trading career, and frankly I was as deeply disappointed in myself as I've ever been. Yet as has often been said, it truly is darkest before the dawn, and Easter indeed does come after Good Friday. And it was out of those Monday ashes one year ago that arose a rebound of all rebounds as I gathered every ounce of inner strength to analyze what had gone wrong and implement an immediate fix to instead profit from the surging VIX. The result was that I recovered the loss in just three days, before finishing the week positive by +$40K, and the month positive by +$315K. And just two months later, I'd finish my first month ever without a loss, before finishing Q1 2009 with only three losses for the entire quarter.

I was fortunate. Many didn't recover, including some veteran traders who simply couldn't adapt to the never-before-seen environment.

Yet as I mentioned in my September post on mistakes, which was later syndicated by, perhaps the greatest lessons come from our pratfalls ... in trading and in life.

And since my guess is I've got a more than few more mistakes to make, perhaps there will indeed be more to write about as I continue to share my journey in the hope that all can benefit in some small way.

And so the journey of humanity and life continues ...

Sunday, October 4, 2009

The Weekend Trader - Trading With a "Chip"

On the heels of my 12+ hour poker marathon yesterday, I take some time this morning to take the camera from Andy Shepherd and personally more fully explain some of the recent tone in my "Blue Wall" posts. btw, if you haven't watched that 5-minute video from The American President, please do so, replacing the words as suggested in Monday's post. The speech is an all-time classic and truly reflects my final and firm response to those trying to attack my character.

Specifically, today I explain why I need to trade in a somewhat aggravated, "chip on the shoulder" manner to maximize my productivity and results. If your own productivity or profitability has been waning, you may want to consider a similar approach.

Enjoy the rest of your weekend.

Friday, October 2, 2009

Friday Notes - The Riverdance

It's getting tougher again to hide.

As many long-term followers know, I chose to go "off the grid" a few years ago to buckle down on my own trading. Then came the diary-turned-blog. Then came the run. A record one. Then came the personal wall & burnout. Then came the concept of doing something new and imaginative -- something big (do I ever do anything small?) to reignite not only my own enthusiasm, but that of others. 20 others. And thus the Jellies were born. And then 20 became 40. And now the 40 are maturing before our very eyes.

And now media and broker inquiries are becoming the norm, with yesterday's ADA press release hitting the wires, TradingMarkets joining the list of those picking up the story in tonight's edition, and my receiving a note from one Jellie broker thanking me for helping teach his client to trade the E-Minis profitably and asking what he can do to further help the team.

And yes, I can see where this is going with the skeptics. Yet as history often predicts the future, it may be helpful to first do a quick history lesson.

Last year, some laughed at my personal one-year million dollar trading goal at the age of 47 in an age dominated by computers, algorithms, and Goldman Sachs bullies. Hell, forget "laughed" ... make that "scoffed". Yet my resolve remained firm, and I didn't waver. Ironically, it turned out "they" were right ... I couldn't make $1 Million in a year's time. I underestimated the goal by 60% to finish at $1.6M.

Then some laughed ... er, I mean scoffed ... at the concept of the Jellies. "He can't trade anymore, so he's trying to teach. What a rip-off!" Oh you should have seen some of the emails and attacks I received. And even to this day, some lamebrains insist the Jellie concept is one giant marketing gimmick, and that one can't make money scalping the E-Minis unless one has virtually free commissions and trades hundreds of contracts at a time.

btw, to that point, let's put that ridiculous myth to rest once and for all, as I received a note from a member of the second team today -- after only his first week in the tank --indicating he'd strung together five consecutive four-figure days for the first time ever, on only 20% of the number of contracts he'd traded in the past. I'd say myth busted. Congrats Marco.

Thankfully, the vast majority of the financial community, along with 20 traders, thought otherwise, seeing the blue wall as, well, blue. And then another 20, most of whom had been exposed to the Jellie Study Sessions, convinced me to do a second effort. And now -- and pardon the pun -- the Jellies are Gellin'. And yes, Don Miller -- the same guy who burned himself out in May and was looking for a reason to trade again -- managed to preserve his capital and is again back to his old 2008 & early '09 self with five figure days.

Last year and earlier this year, I danced the solo market dance of all time. Now, we're dancing a collective Riverdance, as evidenced by the team's trading during today's monster MATD which we prefaced in last night's post where we were in lockstep with the market's beat all morning long, buying the bottom and selling the top of each oscillation as they unfolded, until we stopped just before noon to simply watch everyone else fight for the table scraps in the remaining day's chop.

Some won't believe it and will continue to fight it.

Yet here's one word of caution for the skeptics.

I wouldn't short the Jellies.

It's an emerging breakout pattern, and I'm going long.


Thursday, October 1, 2009

Thursday Notes - Welcome October!

A short post tonight before I head out and accept second place (ick!) in last quarter's poker tourney.

October got off to a solid start in both Jellie tanks with a heavy bear trend bias once the hourly triangle broke to the south shortly after open, and from there all eyes were on looking for high probability retracement shorts and unsustainable fades into the midday push. In terms of the market pace, the VIX pop to new recent highs helped us sustain the bias throughout the day, while ushering in what is traditionally the best trading month of the year.

With respect to tomorrow's anticipated trade, traders who have been long followers of this site -- and all Webinar attendees and both Jellie tanks -- should know by now that today's closing action sets up a potential monster MATD (Morning After Trend Day) for tomorrow in terms of the expected high-probability morning trade. So let's get some sleep and come ready to play with our "A" game on!

Lastly, here's today's official press release as issued by the American Diabetes Association with respect to last night's donation. Thanks again to all who participated, and I hope to be able to present them with more checks going forward as access to the Study Series expands.