Year-End Post - My Greatest Lesson of the 2000s

With all of the "Best of the Decade" lists being published this week, and as I make some decisions as to where to take this blog in the future, I thought I'd join the parade and provide my top personal trading lesson of the decade as we get ready to welcome in 2010.

While I could write a blog on the hundreds of lessons I learn every day (wait, I guess I've already done that), if I had to choose one lesson that's had the most dramatic impact on my trading career -- and ultimately the P&L -- discovering the magic of outliers would likely be the greatest take-away of the last decade.

For such reflects an often-illusive concept that the vast majority (who still don't "get it") fail to grasp. And by "discovering", I mean learning when they occur, stalking them, and ultimately taking action on them.

To illustrate, let's work through four scenarios, using two from the poker table and one from the trading "table":

Scenario "A" (Cash Game Poker):

Player 1: You're a cash game player, great at post-flop play, and choose to play almost every hand to the river Gus Hansen or Michael Mizrachi style, grinding out a consistent income over time by outplaying the other guy from start to finish enough times such that the net result provides a decent living.

Player 2: You're also a cash game player, watch all of the same hands as Player 1 does, yet instead wait patiently in the wings over a long period of time for a premium hand where you also know the "other guy" is trapped, and one time finish the hand with a straight flush when the other guy is holding quads (4 of a kind), and pretty much has to call anything you bet. And then a similar scenario happens on the very next two hands where it's clear you have the "nuts" and the other guy is -- well, screwed.

Scenario "B" (Tournament Poker):

Player 1: You're a strong tournament player, and employ a style that places you "in the money" enough times to grind out a living, as you play conservatively on occasion to ensure yourself of a paycheck.

Player 2: You find yourself at the World Series of Poker or one of the stops on the World Poker Tour, and sense that (a) your "game" is on, (b) you have an evolving clear advantage over the remaining field, and (c) the flops are incredibly conducive to your strength and hole cards. You thus "go for the throat" and win one or two tourneys, spending other time pursuing other interests.

And finally, scenario "C":

Trader 1: You're a short-term intraday trader -- say this "young" guy in the pic to the left without any grays -- and after making it through the steep learning curve and joining the small minority of traders who consistently profit, you earn a fairly consistent $200K+ annually by essentially trading the same way day-in and day-out, grinding out your daily keep by spotting intraday market inefficiencies (the topic of my upcoming NY speech). Not a bad sum, especially in the current economy and in line with many middle- to upper-end salaries working for an "employer", and you're able to support a family of four on one income. In five years, you would have of course earned $1 Million, and in ten, $2M.

Trader 2: You're also an intraday trader, and after making it through the same learning curve, you sense the combination of your trading skill reaching a peak, a market that is conducive to your strength, and the rare opportunity for a windfall profit where you can earn a decade worth of income in a tiny fraction of the time. The rest of the time, you're simply grinding it out, stalking a repeat opportunity, or pursuing other interests.

Now for the question: Who's the "better" poker player or trader in each of the scenarios??

It's of course really somewhat of a trick question, and there may be a few flaws in the details of each scenario (yes, tourney players have to play a lot of tourneys to stumble across those sweet spots and also have to be aggressive at times). Yet the point is that there is really no right answer. For in the long run, Trader/Player 1 and Trader/Player 2 both adeptly perform a unique skillset, and both conceptually earn as much as their counterpart.

Yet I believe that while good players/traders tend to specialize in one style, those that can "morph" into the other style at appropriate times have a chance to capture that element of "freedom" that first enticed many of us to pursue this crazy business in the first place.

At my end, I tend to be the grinder, which I was almost exclusively for much of the first part of the 2000s (the young guy in the Scenario "C" pic). Yet as time went on, I learned how to morph into Player/Trader 2, especially during the last few years. For history shows that when the time was right and market emotion was as rampant as it ever was, I gunned it for all it was worth before finding, and then applying, the brakes and going back to "grind" mode -- a mode which I'm currently in.

The key in my view is to first determine your greatest strength of style and/or market condition, which will take time and vary from trader to trader. For example, on a scale of 1-10, I tend to trade volatile, emotional markets and days after trend days very, very well ... say a 9+, while I trade quieter or "drifty" markets OK, but not as well ... say a 6 or 7. On the other hand, others may excel in those "drifty" markets, as would be the case for swing traders.

The second step is then to know when such conditions exist, and the final step being simply acting on your conviction.

A small minority still refer to my last few years as "luck" (with a career 2.4-1 win/loss dollar ratio over the last decade ... go figure), which is only unfortunate because it reveals that they're missing perhaps the key ingredient in all of trading: The concept of stalking the outlier.

Many of the Jellies discovered this after weeks of pounding it into their brains, as I summarized in the September "Keys to the Castle" post ... which to no surprise is one of the most accessed posts of this year. And the outlier doesn't need to be a single trade. It can be those 1-2 trades a week, those 1-2 months a year, or those 1-2 years over a career where conditions exist where you can supplement the rest of the grind, or simply pursue other endeavors.

Or said another way, outliers provide you with pre-paid life options.

I don't know where this blog will go in the future.

Yet if for some reason these end up being my final written words, they'd all be bolded in red and I'd be screaming them from the rooftop.

For in the 90s and early 00s, I learned how to trade.

But in the late 00s, I learned how to TRADE.

May you exceed all of your trading and life goals in 2010 and beyond, and may God bless you and your families beyond your wildest dreams.

For these are my final words **.

** At least of this decade :-).

Special Post - ADA Tally Update

As we close the books on 2009, I'm pleased to report that we've now raised $14,292 for the the American Diabetes Association as a result of the 15% Q3 "jump start" Jellie Video campaign and 5% Q4 effort.

A reminder that 5% of all ongoing net proceeds from the Jellie educational videos will continue to go to the ADA in 2010.

My continued thanks to all who have been involved in this worthwhile effort.

Tuesday Notes - A Different Kind of Tank

Call it a temporary "isolation" tank as I try to combine some R&R and secluded focus heading into the new year. I expect normal posts will resume shortly.

Monday Notes - Blog Decisions

Like many traders, this week will be a light trading week for me.

In the meantime, tonight I spend some time thinking out loud as to the evolution and future of the blog.

The Weekend Trader - Striking a Balance

Teaching vs. Trading.

It's been a long-standing industry debate for decades, and an internal debate at my end since I was first asked to help train traders in the late 1990s ... especially as I find myself faced with continued inquiries from traders and brokers to help train.

At the industry level, the debate has long focused on the fact that most successful traders don't want to have anything to do with teaching for three reasons: (1) A perceived loss of edge, which to me is a cop out beyond proportions -- but that's a topic for another day ... a long day, (2) a true loss of income, as good traders will indeed earn less from teaching than maximizing trading, and (3) the most effective training takes a great deal of time during live markets in all conditions ... which of course brings us back to #2.

At my end, the internal debate has focused around two other areas. First, I find myself at the end of a long line of generations of teachers. Great-grandparents, grandparents, both parents, my lone sibling ... they all taught and sacrificed financial gain and other pursuits for the benefit of others. I, on the other hand, chose early in my life to pursue entrepreneurial efforts, from climbing the corporate ladder on a fast-track executive development program where I found myself running companies in my mid-30s, to eventually finding my way to trading ... which as I described in a 2004 Stocks & Commodities interview, is what I continue to call the "Ultimate Entrepreneurial Experience".

The second internal debate at my end is my long-standing belief that the best trainers are usually those who continue to prove their merit on the battle field -- and in current markets. I say "usually" because there are rare exceptions, including in my opinion the good Dr. Brett who again recently indicated that the daytrading grind wasn't for him, yet who has made strong contributions to trader education over the years, including "The Psychology of Trading" which I believe is a classic. On the other side of the spectrum, there unfortunately have been -- and continue to be -- outright frauds in this biz, which too many of us have witnessed firsthand.

So all for these reasons, it's usually difficult -- if not impossible -- to balance both. And perhaps such is why I too have struggled with the internal debate at my end as how and whether to balance both. For am I a trader or an educator?

Ironically, the decision would actually be fairly simple if either was a bust (not the case), if I simply liked one more than the other (I enjoy both), if I had aspirations to be the world's best trader or educator (which I don't), or if financial gain was the sole motivator (which it isn't). Yet it's a debate that seems to only intensify as time goes on ... especially as what I had planned as merely an interim return to trader education over the summer with a single experiment with the Jellies evolved into a 2nd, then 3rd, and then an unpublicized and very quiet (intentionally) 4th effort at the request of both traders and brokers.

Over the last decade, I've balanced the two primarily by shifting emphasis back and forth.

One example is when I voluntarily stopped doing a popular daily column and other educational efforts several years ago for TradingMarkets (many past articles btw remain avalaible there) ... a difficult decision at the time given my respect for -- and association with -- Larry Connors. Yet the efforts were simply infringing too much on my trading focus at the time.

And then again in 2006, when I stopped all teaching and speaking efforts to focus my market energies 100% on taking my own trading to the next level ... which continued until the 2008 public diary launch and 2009 Jellie experiment.

And yet as I mentally cleanse the brain over the next week, I'm faced with strong momentum on both fronts: personal trading performance where I'm planning on climbing to the next plateau, and surging educational demand.

Some have suggested I consider getting some help (no, not that kind of help, although I'm sure some will think I've always needed it!) by building a staff to help on one or both fronts. Yes, this is all just me ... every letter, graphic, & silly analogy in the blog, every trade with my broker, every blog email response, and every dotted "i" and crossed "t" in the Jellie efforts. I may be one of the few speakers in NY without an entourage.

It's long been said that career choices and options are good things, and I admit I consider myself to be in an extremely fortunate position from that perspective. Yet choices can also result in incorrect decisions and priorities, not to mention sub-optimized focus if one tries to be a jack of all trades, but master of none.

And while time will provide the ultimate answers, my guess is that I'll continue to try to strike a meaningful balance between the two, perhaps taking a periodic break to work with people as I did at times this fall, while continuing to make the Jellie videos available as I spend most of my of my time actively trading the markets, aiming for even higher goals, and continuing the never-ending journey of self-discovery.

If I were to envision my year-end post for 2010 a year from now, I would hope it will mention that I continued to improve myself as a person and as a trader, while finding time to help others along the way.

For as was the case in Mr. Holland's Opus, I imagine the rest will take care of itself.

For the world needs both directors and players, even if choosing between them may be difficult at times.

Have a restful weekend.

Silent Night

Special Post - Another Night to Dance

Fahoo Fores! Dahoo Dores!
Welcome Christmas, Come this way!
Fahoo Fores! Dahoo Dores!
Welcome Christmas, Christmas Day.

Welcome, Welcome Fahoo Ramus
Welcome, Welcome Dahoo Damus
Christmas day is in our grasp
So long as we have hands to clasp

Fahoo Fores! Dahoo Dores!
Welcome, Christmas Bring your cheer
Fahoo fores! Dahoo Dores!

Welcome all Who's Far and near

Welcome Christmas, Fahoo Ramus

Welcome Christmas, Dahoo Damus
Christmas day will always be

Just so long as we have we

Fahoo Fores! Dahoo Dores!

Welcome Christmas, Bring your light.

Dear Diary.

Like most traders, my year for all intents and purposes is complete as we get ready to welcome in Christmas, then New Year's Eve, and finally 2010.

And like all traders and all years, 2009's journey brought its own bundle of challenges, new learnings, disappointments, and accomplishments at this end. btw, a heads-up for diary onlookers who don't care to rehash the past ... while this reflection is important to me and needs to find its place in my diary, you may want to skip this post.

As so as I take one final look back at the last 12 months, I'll summarize key trading events in various categories so as to again try to use past lessons to navigate the road ahead.

Greatest Irony - As I stated at the end of 2008, I had planned on taking a long break in Q1 before ramping things back up. Instead, I couldn't ignore the continuing personal momentum and instead kept pressing the accelerator to the floor for another five months until the energy tank ran bone dry toward the end of Q2. Which reinforces the continuing adage that the market and your performance dictate breaks and respites in this performance-based business ... not your desired schedule. So what was initially planned as a Q1 mental break instead was postponed until Q3.

Most Memorable Moment - Yes, it's that infamous bump on the head and ride in the ambulance just before dozens of traders who I'd never met were to show up at my front door at the Boston Bamboo trader picnic.

Greatest Disappointment - "Landing on the Moon." For while I did initially want back to back 08-09 Million dollar years, I had to settle for it on an average vs. absolute basis as the result of overshooting the '08 target and undershooting '09. As I said a few weeks ago, last year I shot for the stars and found myself in a completely different galaxy, versus this year where I shot for the stars and instead hit the moon. For most, '09 would have been a Bamboo year. For me, it was simply "solid".

Then again, after looking around, I also learned that the moon is a pretty cool place.

Greatest Frustration - Not being able to restart my energy & motivational drive mid-year as quickly as I would have liked. And while I knew once I shut it down, it would take a while to restart, I underestimated its duration and was disappointed in my inability to quickly recapture the spirit and intent of the fictitious draw concept. Essentially, I found it very difficult to get "appropriately angry".

Greatest Trading Regret - Not trusting my gut and adjusting my personal scratch/re-entry risk management strategy at various times when volatility was low. Essentially, I sometimes didn't trust my reads as the market took its time to do what I expected it to do. Sort of like a golfer reading the green right, then backing away from the putt with some hesitation. It's frankly rare when I can't read a market, and I should have let time be a better partner.

Most Unexpected Event - This one's a tie: (1) Losing 25 pounds and getting back to my wedding weight from 1985; and (2) Deciding to finally shut up about simply moaning about the lack of quality trader education and using my Q3 "break" to launch a full-scale & multi-faceted live training program which became the Jellie effort ... which leads to ...

Greatest Satisfaction - Creating and now trading amidst a team of traders who I would trust with my life, and helping the American Diabetes Association in the process.

Stupidest Decision - Abandoning the personal scorecard after it contributed to a mind-boggling 58-3 record in Q1. A decision that may rival Bill Belichick's 4th and 2 decision in Indy.

"Coolest" Moment - Working closely and trading stories with a former NFL quarterback, who was part of the charter Jellie team and continues to trade alongside the team. He's a class act, too, and I've learned a great deal from him.

Hardest Lesson - Learning to apply the brakes. As I've often said, this Type A sucks at taking breaks and vacations, and was figuratively dragged away kicking and screaming toward the beginning of the summer. So this year, I discovered my car had a brake pedal ... although I was definitely using the Fred Flintstone "foot-dragging" approach for much of the time.

#####

And so another "day" comes to a close, and another "night" is upon us. If you're new to this trek, I view each year as a single "day" or "trade". And if you're wondering why I've entitled today's post, "Another Night to Dance", it's a follow-up to last year's year-end motivational post to remind me -- along with all onlookers - that each year -- no matter what the result -- is indeed a cause for celebration.

For me, 2009 was in some ways more gratifying than 2010, as I had to learn a new skill (brake pedal pushing per above), hone a long-abandoned skill (trader education after a multi-year hiatus), and somehow balanced continued capital growth with preservation ... the latter of which is becoming important for me as I rapidly approach the half-century mark.

And while I had my share of setbacks in 2009, today is a good time to remind ourselves that the "Grinch" we call the market, our pundits, or our inner doubts and fears, will never be able to take away our spirit and hope for the future.

Whether you had a Bamboo, moon landing, or more challenging year, I'll leave you with the same thought from last year, "If someone ever tells you "you can't", they're dead wrong. If you're breathing, you can and you will. Regardless of what the pundits say or how much the temporary pain may sting, don't ever let anyone take away your spirit and joy for life. Who knows, 2010 may very well be your personal Bamboo year."

For it is indeed another night for all of us to dance.

Fahoo Fores! Dahoo Dores!
Welcome Christmas, Bring your light.

Tuesday Notes - 'Tis the Season

OK, first things first ... my thanks to Marco from Team Jellie #2, who I first referenced in my October 29 post, as I just learned he's the answer to my weekend question as to who sent me the 40 pound package.

And it wasn't wine ... it was a full case of champagne. Umm, shouldn't I be sending you the case?? Congrats again on your victory, and I hope indeed to dine at your castle some day. I'll save some of the champagne for that very occasion.

Second, the time and date have been set for my return to the speaking stage after a self-imposed five-year hiatus to focus on my own trading. The CME Group and MF Global will be sponsoring my appearance at the New York Expo on Monday February 15 at 10:30am, and the topic will be, "Profiting from Intraday S&P Market Inefficiencies". There will be no fee to attend, and you can check out the MoneyShow Expo link for a more detailed description. I'm also thinking about getting some space Sunday night for those interested.

Third, as I mentioned recently, I'm indeed thinking about resurrecting my personal color-coded daily trading scorecard for 2010, and am currently making a few adjustments before re-launching it here. One of the mistakes I may have made in 2009 was abandoning it in the second quarter after a successful experiment in the first part of the year. Hell, you don't mess with -- or remove -- something that's working, and it's likely not a coincidence that the 58-3 Q1 score came at a time when I was self-rating performance daily.

Lastly, please check out Green & Company's latest petition on the Trader Tax effort. I added my signature today.

As I've said recently, let's NOT turn the U.S. trading markets into a ghost town.

Monday Notes - Blog Break

Posts will resume on Tuesday.

The Weekend Trader - Blizzard Edition

In light of the raging blizzard, I'm going to have some blog fun today, so check back for updates & random thoughts, including more pics and some last minute trading gift ideas.

Heck, I'm certainly NOT going anywhere today, and just hope Cape Cod doesn't break off from the mainland.














Here are some last-minute holiday gift ideas for traders:

Stocking Stuffers:

The Tao of Poker - Still the best $10 I've ever spent in my trading career, and a mandatory read for all Jellies.

Life Learning Device (a.k.a. a motivational "Staples Easy Button" that changes daily) - The best $20 gift I've ever received. Note - This company was founded by one of the Jellies who has a vested interest. Regardless, I still think it's one of the coolest gifts I've ever received and highly recommend it. I have the "Secrets of Life & Words of Wisdom" version, which provides a great boost to start each day, and there are other inspirational versions available.

"Under the Tree" Gifts:

CME IOM Lease - Now down to $500 a month!! The breakeven point continues to drop in terms of traded contracts, so count your volume and check it twice. This could be the gift that keeps on giving.

And here are some pics of my trading "air traffic control" center, since you usually only see the door behind me in the videos. And yes, that's a bamboo behind the sofa in the last three pics.

P.S. I'm very curious as to who sent me a 40 pound wine package that FedEx and I keep missing connections on. I'll find out on Monday.

Friday Notes - The Weekend Trader Early Edition

Two weeks.

One of the reasons I began exposing my trading journal to the public in 2008 was because I felt it would help strengthen my accountability, especially in the early stages of the blog when I used this as a tool to document the results of my day, often in painstaking detail.

For while it's one thing to fool oneself -- which we all do at times when faced with any challenge that involves intense discipline and self-control -- it's pretty much impossible to fool a group constantly looking over your shoulder. Especially a group that quickly and literally evolved from dozens to hundreds to thousands who have chosen to visit these pages on a daily basis over the last 18 months.

Those that recall the first few pages of this virtual diary know that this blog initially began as somewhat of an experiment. For I wanted to see how my trading results would be both pre- and post-blog. Later on, I began experimenting with a public color-coded scorecard. Looking back, both experiments proved successful based on both personal perception and financial reality.

Of course the blog evolved a bit over time as it began to focus more on motivating others than myself -- although even in the early days, making the diary public was intended as just that, along with of course the accountability factor.

Yet now as I approach perhaps the most significant step in my trading career which will require as intense focus and commitment as any point in the past (including the self-imposed '08 million dollar goal), I feel I may need to return to the blog's roots a bit in terms of documenting my day-by-day journey ... perhaps even resurrecting the scorecard.

There are of course risks in doing so, which the last few years have reinforced in my mind. For some may view strong performance days as "there he goes chest-pumping", and sub-par days as "I told you he sucks". And then there's the statistic factor, in terms of both dollars and various stats, which have been twisted more ways than a bagful of pretzels, and distorted more ways than a Tiger Woods interview on family values.

Yet I continue to accept such risks as I move forward, with the continued commitment that every letter, word, phrase, and figure ever posted in this journal will remain 100% accurate and auditable, and that every feeling, thought, motivation, PO'd rant, will remain 100% genuine.

The Jellies I continue to trade alongside will tell you I'm not satisfied with my current game in terms of aggression. And one high-stakes poker player recently told me he's reached the same point in his poker career as he tends to get sloppy in small stakes games, while being markedly focused in higher stakes games. Both of us have essentially the same problem ... we've reached a level where the financial motivation is no longer relevant and we could go lie on a beach for the rest of our lives, yet want to continue to push ourselves. And such is the reason I've chosen to ramp up size.

On this topic, I've received a wide mix of mail lately. One recently recalled a quote from James Cameron discussing the movie Avatar, which stated, "If you set your goals ridiculously high and it's a failure, you will fail above everyone else's successes." Another loyal onlooker who I greatly respect recently suggested that the drive and motivational tone in recent posts may be evidence of reduced spirituality.

On that last point, let me be clear for the record. As I've stated many times, anything I've ever accomplished in the past, or will ever accomplish in the future, is done in spite of myself, and fueled by strength from God. Hopefully, there's some clear unwritten text "between the lines" of most of the posts as I choose to let actions speak over words.

Time may tell me I'm not supposed to push myself beyond my current comfort zone, or that my focus belongs more on non-trading activities. Yet the internal clock continues to tell me that the fat lady hasn't yet sung.

And I'm not quite ready to write that post yet.

Two weeks.

Have a restful weekend.

Thursday Notes - Concert Night

It's Christmas concert night at our high school, so posts will resume on Friday.

Wednesday Notes - Breaking Some Eggs

Following up on yesterday's video discussing my ramping up sizes in 2010, one significant mental aspect I need to work on as I move forward is stepping up my risk-taking. For if I were to hand out final self-grades for this year, I'd grade myself an A for capital preservation, B for capital growth, and a C for risk taking. And it's the C in risk taking that reduced the capital growth grade from an A++ in 2008 to a B in 2009.

And while a B -- and the solid gain it represents -- would be acceptable to most in this pay-for-performance business, it simply isn't at this end. For too many times this year I found myself trading on eggshells as I balanced incremental capital growth with preservation of a decade worth of work.

I was reminded of this as I watched the recently-surfaced 1987 video documentary of legendary trader Paul Tudor Jones (a must see for newbies) yesterday. Paul as you may know has made hundreds of millions trading, although the documentary includes a chronicle of one particular difficult day where he lost $6 Million.

I was also reminded of this as I reviewed my trading records over the past six months where I rarely had a large losing day, yet the wins were equally modest. Contrast this with my aggression in the prior 12-18 months where I incurred some of my largest losses, yet continually overcame them with larger gains. Lest we forget that infamous October week ... and no, it wasn't just the change in volatility!

As I mentioned recently, my 2009 daily win/draw ratio (in dollars, not simply # of days) will clock in at around 2.7-to-1, which although below 2008's 4.0-1, will still rank ahead of my career average of 2.4-1. Conclusion: You're still on your game, so simply ramp up the size Don.

Yet I know such is far easier said than done, and we can throw out all of the psycho-babble books that say it's no different trading 300 vs 30 lots. It's a lot different, which is why many who attempt to break out of their comfort zone fail to excel at the next level.

As one reader emailed me last night, and in the words of T.S.Eliot, “Only those who will risk going too far can possibly find out how far one can go.”

I'm about to find out how far is far.

It's time to lose in order to win, and I'm about to break some eggs.

Tuesday Notes - Size Increase Planning

Tonight I discuss my current plans to increase trading size, while putting the blog's motivational content in proper perspective and touching on the upcoming New York Trader Expo.

Monday Notes - Remember & Forget

As we enter the final weeks of the 2000-2009 decade, I encourage you to join me as I continue to mentally purge the trading mind to prepare for the next leg of life's journey.

The personal trading challenges, heartbreaks, successes, and tremendous blessings of the past ten years at this end are just that ... past. For they have no bearing on the future, aside from the valuable lessons which will serve us well on the next leg of our journey.

Remember the victories so as to repeat them ...
... Now forget them to avoid complacency.

Remember the losses so as to learn from them ...
... Now forget them to avoid believing they reflect your potential.

Don't let anything -- or anyone -- ever stand in your way of personal and team victory.

Prepare for greatness.

Friday Notes - The Weekend Trader Early Edition

As I'll be on the road this weekend attending some family gatherings, here are my current thoughts on a variety of topics.

Current Trading Environment - As I've mentioned many times this year, the most fertile - in terms of momentum - S&P trading environment continues to occur between the hours of 4:00am and 9:00am ET. And such was once again the case today as Europe broke nicely from its Thursday range and trended up, complete with three pushes on multiple timeframes which were extremely tradable from both sides. Many of my highly profitable trading periods have occurred during those times, as opposed to the U.S. general session which has often been rather lackluster in terms of market pace and rhythm.

For those able to set their "trading store hours", you may want to consider adjusting them accordingly if your P&L is suffering.

Trader Transaction Tax - I've added the ghost town photo from Thursday's post to the left hand margin to help us all keep this critical fight prominent in our minds.

ADA Update - I'm pleased to announce that I'll continue to donate a portion of Jellie Video Trader Study Series proceeds to the American Diabetes Association in 2010. The total donation, including both the 15% "jump start" of Q3 proceeds and 5% of Q4 proceeds, now stands at $13,744.

2010 Personal Trading Goal Update - I've made one adjustment to my personal goals for 2010, which I recently deemed "Year of the Iceberg", which is to remove the specific dollar target, which will allow me to initially focus on the critical task of exponentially increasing size. More to follow in future posts as I continue to mentally plan for the transition.

Fruits of Labor - Of everything I've accomplished in the trading world over the last decade, none of the accomplishments even come close to that of seeing my two daughters grow into young women.

And like my trading career, the real kudos go to my wife Debra, who has often sacrificed major portions of her own life and is the constant, supportive rock of our family.

As I said in Wednesday's post, dare to dream girls.

Key Posts - A reminder for newer onlookers that there is a list of Key Blog Posts in the lower left hand margin, which include posts which I or others felt were worth marking for future reference. And while I continue to get requests to write a book, I continue to feel that the free ongoing blog is a better way to go.

Jellie Broker Feedback - A quick note of thanks for continued broker feedback from various Jellie traders, including Russell Levens at Velocity Futures who recently emailed, "I take my hat off to you that you have been able to teach veteran traders like (name withheld) how to trade the S&P profitably." While there are always varying degrees of success in any educational venture, such feedback continues to tell me we remain on the right path in terms of making at least a small difference trader education.

Team Jellie Update - Yes, many of the Jellies continue to trade alongside each other and network throughout the trading day. We've recently migrated to the Omnovia platform, which allows us chat and share charts throughout the course of the day, while remaining focused on our individual trading businesses. I'm also now using Omnovia to help a few traders work through some kinks (in what essentially evolved into a last-minute quasi-Jellie effort at the request of a few folks which I didn't publicize), and am very pleased with the product's capabilities, which include the ability to stream live charts, text, and audio throughout the day.

My thanks to Kevin and Jeff from the Jellie team for their help in transitioning the ongoing team to the new platform, as well as Lou at Omnovia for his help during non-business hours last Sunday in helping me get a teaching room up and running quickly.

Tiger Woods - No jokes at this end ... simply compassion for all involved. While unfortunate, it's a good reminder that we all fall short in this life. Hopefully, something positive will come out of it.

Have a wonderful and enjoyable weekend.

Thursday Notes - No Ghost Town

It's poker night tonight, so normal posts will resume on Friday, including one responding to the many inquiries asking me how I plan to ramp up my trade size.

In the meantime, here's a link to an outstanding piece in the Wall Street Journal this week rightfully attacking the lame proposed trader transaction tax.

Let's keep the pressure on to ensure the U.S. markets remain world class.

As for the bill's title, 'Let Wall Street Pay for the Restoration of Main Street Act', it should be retitled to, 'Don't Let Congress Turn U.S. Markets Into a Ghost Town'.

Wednesday Notes - Dare to Dream

To my daughters Courtney & Chelsea:

For one moment this evening, and as I mentally prepare for the next leg in another deeply personal trading journey in 2010, I'm finding myself viewing life through your eyes.

Courtney, I can't believe you'll soon be entering your Senior year at college. And as you get ready to study abroad next semester, I can't help but envy you as you continue to blaze your own trail and visit new worlds. We're a lot alike in terms of being unconventional mavericks and speaking out at times. Don't ever lose that passion.

Chelsea, in a few short months, you will have completed your high school journey, and it indeed looks as if your dream of graduating as valedictorian will come true. You've overcome so much in your life, and have proven to the world that there's no such thing as a handicap. Seven years ago, the doctors said there's nothing you won't be able to pursue. Not only have you proven them right, you've turned those comments into vast understatements.

Some ask where I obtain my inspiration and motivation.

A great deal of it is from you.

Dare to dream.

Dare to be great.





View other motivational videos in my October 20 post.

Tuesday Notes - The Joy of Trading

Tomorrow, a new day will dawn, a new year will be born, and we'll get to start over. 2009 won't care about 2008 just like today didn't care about yesterday and tomorrow won't care about today. We'll all get a do-over ... a mulligan ... another chance to wipe the slate clean and make fewer mistakes than yesteryear. At this end, I've ended this particular journey and will trade largely for enjoyment as the year begins.

Yes, these are the words printed in this very blog almost one full year ago, in the infamous "Night to Dance" year-end post, which remains an enduring motivational post for all who choose to dream.

Yet there's one word in that paragraph which haunts me as I prepare to close this chapter of life called 2009. Enjoyment.

For that was the plan ... to enjoy 2009. To trade for fun.

So what happened Don? Why did you detour to all-out Q1 work, Q2 burnout, Q3 Jellie launch, and Q4 trading restoration before finally arriving at "fun" almost a full 12 months later. Sort of like those Family Circus cartoons where Billy takes a 50 yard jaunt through a series of enticing distractions before arriving at his destination which was only 4 steps away to begin with.

As the answers are undoubtedly scattered among the 338 blog posts of 2009, I won't bore onlookers with trying to answer the question in this brief post. Suffice it to say that certain words are foreign to me, including "can't", "impossible", "failure", "complacency", and yes, I'm afraid from time to time, "enjoyment".

And so as I get ready for yet another bold step in my trading, I feel I must recapture what brought me to this business over a decade ago. Enjoyment.

Don't get me wrong ... I thoroughly love this business, and the passion which was momentarily lacking earlier this summer has returned in spades, thanks in part to the Jellie effort which continues to grow tentacles in many unexpected ways.

Yet I need to begin enjoying it more.

I wholeheartedly agree with many onlookers who said that I was far too hard on myself this year. Far too hard. And as I look back, despite all of my moaning and complaining at times, I must now acknowledge to myself that I had a damn good trading year, and am better prepared for my planned increase in size than I was at this time last year.

And then there's momentum, as it appears I'll be closing the year on my equity highs, and will have maintained a strong 2.7 to 1 win-to-draw ratio on the year. As for the initial self-imposed back-to-back million dollar years? I guess I'll have to instead settle for a two year average well into the seven figures. Not a bad way to fail I suppose.

Last year, I of course shot for the stars and found myself in a completely different galaxy. This year, I shot for the stars and hit the moon. And next year? Well, the plan is to add some solid-fuel rocket boosters in terms of sizing.

Soon, a new year will dawn, and yes, I've once again placed some lofty stretch goals out there.

And the toughest personal goal of them all?

To fully embrace the joy of trading.

For that will likely be my greatest challenge.

P.S. Thanks to those writing in support of yesterday's Chip and a Chair post. Seemed we stirred a few deep feelings with that one, and I've added it to the key post list in the lower left hand margin.

Monday Notes - Chip and a Chair

As I mentioned on Friday, I spent most of the weekend at Foxwoods, where the following odd series of events proceeded to happen:

Tournament #1: Went all-in with pocket 10s after correctly reading my opponent had a lesser hand (pocket 9s). A nine of course hits on the flop, and I got no help from the turn and river.

Tournament #2: Went all-in with the best hand, only to have my donkey opponent call and chase a straight to the river. Of course he catches one of two outs on the river to hit his straight, leaving me with a single 500 chip after starting earlier with 15,000. And this was right before a 15-minute break where I simply wanted to head home in disgust ... disgust with both my opponent chasing his hand and the incredible bad fortune of his hitting one of two possible cards.

So I stewed for 15 minutes, and then stood up with my jacket on as I of course put all of the chips ... er, I mean the chip ... all in blind where I tripled up with a sick 8-3 (flop came 8-8-5). Great, let's simply delay the inevitable. Then, I repeated the sequence twice more, doubling up with A-Q (flop came A-A-Q), and then quadrupled up a sick 8-6 (flop came 5-7-9), which brought me back above 12K. In no case, did I even look at my cards.

And while I eventually bowed out later in the tourney, I was left puzzled over how or why things sometimes happen the way they do.

Needless to say it was frustrating to see the higher % hands lose time after time to some of the sickest suck-outs you'd ever seen. Yet frankly, it was even slightly frustrating to see me then perform a monster comeback (from 500 to over 12,000) in just three hands with some of the worst cards you can be dealt (aside from the decent A-Q) and absolutely zero skill. I say frustrating, because despite the wins on the comeback trail, I was simply left shaking my head, which I essentially did on my entire two-hour drive back home.

It's often been said that poker is short-term luck and long-term skill, and yes, short-term luck (good or bad) can run in incredible streaks. For me, Saturday was Exhibit A.

As I tried to make sense of my weekend lessons in terms of trading, about the only relevant analogy I could come up with was that sometimes you have to hit bottom and simply cry "uncle" before clinging to that final "chip" of hope.

Sometimes that "chip" comes in the form of a friend. Or a mentor. Or perhaps, it the form of that one break ... not unlike the struggling batter who keeps hitting line drives into fielders' gloves before a broken bat bloop single breaks the slump for good.

Some day, I imagine in our next permanent life, "Someone" will fully explain Saturday's events to me ... as well as all of those other times in earlier my life when I seemed to be down to a single chip.

My guess is the response will go something like this: "It's not that you were down to a single chip, or what you did or didn't do to get there, rather it's what you -- and I -- did with it after you seemed to lose all hope."

If you're struggling in trading or, more importantly, in life ... hang onto that last chip.

For it might be the start of something you never expected.

And result in something you'll never forget.

Friday Notes - The Weekend Trader Early Edition

Some random thoughts before I head to Foxwoods for the weekend.

Consecutive Outside Days - I can't remember the last time we had two consecutive outside ES days (higher high and lower low vs. prior day). You can probably count on one hand the # we've had in the past year or two. The whippy action reminds me of those final toppy days in 2000, as well as those bottoming days earlier this year. Then again, I just care about the next 5-15 minutes ... but it's good lounge talk anyway.

Suffice it to say days like this reinforce the need for premise based stops ... meaning when your premise is no longer valid, get out of dodge. Those that were able to do so today at worst will live to fight another day. The good news about these times is that such markets provide plenty of second chances, which was the case for me as I had a good day despite fouling off a few pitches.

Trader Transaction Tax Update - Despite Pelosi's babbling today, Pat Lafferty (my broker at MF Global) told me that the folks at their end still feel the tax portion of the proposed bill will never fly. Of course if rational minds prevail, it won't. Nevertheless, let's keep the heat on so stupidity and ignorance don't accidentally wipe out U.S. market liquidity, or force traders into seeking international opportunities. And I thought we were trying to keep jobs in the U.S.

Trade Size Update - I seem to be getting lots of onlooker support for my planned increase in trade size in 2010, and have exchanged notes with one trader in a very similar situation who fully understands the challenge in migrating from 50-100 contracts, which both of us could trade in our sleep, to 200-500. I of course could take the easy road and stay where I'm at and continue to make a very nice living. Yet as I've said before, I don't do "easy", and am continuing to gear up mentally for the change. More to come, so stay tuned.

Webinar Unbundling - A reminder that at the request of many, I've unbundled the Webinar sessions to lower the tuition fee to a single point on a 15-lot ES trade. Several have taken advantage of the change, and I'm pleased to be able to help those on a tight budget. I'm also getting ready to cut another check to the American Diabetes Association before the year is out, so look for an update over the next few weeks.

My Biggest Current Trading Bad Habit - Playing way too tight and periods of less-than-optimal focus after extended sessions ... just like my poker game. Such is one reason I'm heading to Foxwoods for the next few days to work on that part of my game(s). Of course loving the continual challenge of poker doesn't hurt either.

Other Mailbag Tidbits - I got a kick out of one email from a longtime onlooker saying I'm now #1 on Google's search list for "Don Miller Blog" ... Don Miller being a very common name, as I once got another D.M.'s grades in error at college. Which means zilch at this end. As I've said from day one of opening up this diary, I'm not interested in eyeballs or popularity. I'm simply interested in documenting my journey and continuing to grow as a trader and person. If others want to listen in, great. If not, I'll keep writing to myself ... which is how this whole thing started.

Each week, I also tend to receive a few emails thanking me for the continued inspiration, such as Tuesday's post which referenced Robert Ballard's journey. A while back, I received one saying he likes the blog because I rarely reference trading strategy, which would pollute his own effective thinking. Which is one reason for the segregated educational site.

Of course, as I mentioned in Wednesday's video, I also get an occasional note asking for more varied content. To those folks, I respectfully remind them this is my diary, I don't have an editorial or support staff, and they've always been welcome to change the channel at any time.

For this is my story.

And as always, it will continue to be non-fiction and, hopefully, inspirational.

Perhaps that's the Google search I'd like to be found in.

Enjoy the weekend.

Thursday Notes - Poker Night

Posts will resume on Friday.

Wednesday Notes - Mid-Week Video Thoughts

Today I describe my agreeing to speak at the New York Trader Expo in February, the impact of recent changes in CME lease and commission prices, and the current evolution of my personal trading and the blog.

Tuesday Notes - Continual Discovery

Sunday night's edition of 60 Minutes (also viewable on the web) devoted two thirds of its show to chronicling the life and travels of Robert Ballard, the world reknown explorer who discovered the Titantic, the Bismarck, and PT 109.

At the end of the story, there was this following exchange between interviewer Lara Logan and Mr. Ballad:

One of the things we noticed about Ballard as we tried to keep up with him darting around his ship is that he still has the enthusiasm of a man fulfilling his boyhood dream.

It turns out the shipwreck he discovered during our visit was a rare find: only one wreck from the 7th century has ever been excavated in its entirety, and that was 50 years ago. This wreck appears to be better preserved, and archaeologists are excited by the possibility that it could shed new light on one of the most important periods in maritime history.

"In all these years, is it the same passion now that inspires you" Logan asked.

"Oh yes, of course. Discovery is an unbelievable, unbelievable feeling," Ballard said.

"And it never loses its magic?" Logan asked.

"No, because it always could beat the last one," Ballard said. "People say, 'What is your greatest discovery?' And I say, 'It's the one I'm about to make.'"

In a nutshell, this closing exchange aptly described why I -- and likely many others -- pursue trading.

Fulfilling a boyhood dream. The journey of self-discovery. The inspiring passion. They all fit. Especially as I now gear up for what may be my final and toughest journey as referenced in the last few blog posts.

You see for me, this business is about constant discovery. Certainly discovery about the markets, yet more importantly, discovery about who we are.

At my end, the last few years have been an incredible period of discovery. For in the last two years alone, I've discovered the following:

- Focus all of your energies on a specific mission and target, and you can be as good as anyone in your field of interest. ANYone.

- I'm human. Duhh! You can't sustain peak levels of performance without at least one extended break each year. As I've said before, the summer of 2009 taught me why sports have off-seasons.

- Continual multi-tasking may result in you being a jack of many trades, but a master of few. While the Jellie participants and their brokers will probably disagree, I imagine that at times my continual and simultaneous mentoring & trading ended up sub-optimizing both. Nevertheless, since I believe that the only bona-fide and credible way to teach this biz is to do so live on an extended basis (would you ever listen to a smoking doctor tell you to stop smoking??), it's still undoubtedly the best approach.

- Motivation fuels focus, and in turn, peak performance. When I'm motivated, I trade my best. When I'm not, I'm a combination of lazy, apathetic, and ... well, suffice it to say that I simply suck during those times.

- Motivation may need to change over time. Years ago, I was motivated to turn a highly successful executive corporate career into an equally successful trading career. Then, early in my "new" career, I was motivated to migrate my trading abilities from stocks, to ETFs, and finally, to futures.

Then I was motivated to speak to others about the challenges of such a transition via a host of speaking, writing, and interview engagements. Later, I was motivated to go off the "grid" to focus 100% on optimizing my own trading, before being motivated to share my live journey via this diary (with its own crazy movie & sports parables for motivation) while throwing out a crazy Million dollar target at the age of 47 to further fuel the competitive juices.

Then, when my brain said "enough", I was motivated to establish and train a trading team to recapture my own passion and look at this business through another lens, while allowing others to benefit as they began/continued their own journeys.

And now, I'm motivated to complete what I believe will be the final leg of my trading journey ... that of placing some substantial, sizable bets at high probability times, while at the same time protecting that which I've worked so long to build after the last dozen or so years.

I'll talk more about the evolution in size as it evolves, yet for now I'm working on closing the year the way I began it ... with as perfect a month as possible to book-end 2009, while using the post-Jellie consistency as the springboard for January's changes.

I'm sure I'll discover more about myself and the markets over upcoming months.

Yet like Robert Ballard, if you were to ask me what my greatest trade was, I'd say "It's the one I'm about to make".