The Weekend Trader - Video Edition

Today's video focuses on some positive reinforcement from my coaching session today (me being the patient/student) and The Power of Full Engagement, both of which remind me -- among other things -- why managing energy and surrounding oneself with positive people and thoughts are so very important for sustaining peak performance.

Also, a brief reminder that we'll be continuing to grow the on-demand video library at www.livestream.com/donmillertv with the intent of further increasing the amount of free "food for thought" content available for traders.  Please bear with us while the content grows ... and remember what ESPN looked like in the 1980s. 

Doing so should help us further balance satsifying the needs of those seeking comprehensive formal education (rare month-long programs), less costly or time-consuming efforts (recorded Jellie training sessions), and those simply seeking occasional snippets of inspirational content.  For there's likely a place for all of them.

Enjoy the rest of your weekend.

The Weekend Trader - Workplace Safety

Almost a year ago, I did one of my favorite posts entitled "Nine Lives" right after what was -- until last week -- my last brain cramp day.  For those new to the blog, that post is a must read in my opinion.

I say "favorite" because I've always preferred to emphasize the pains and challenges of this business over the wins and successes, since the former still seems to get such little press despite a well-known high failure rate in this business.

Quick aside -- Perhaps it's not so ironic that Paul Tudor Jones got whacked for a few million on the day when PBS followed him around during his rare and infamous 1980's interview.

At my end, I usually have 2-3 brain cramp days a year, a count which has been fairly consistent over the years.  And last week -- although I haven't discussed it until now -- I had one of my 2010 days after getting distracted overnight with a rather intense personal health scare.  The details of the health issue would definitely fall into the "TMI" category, and we won't go HD on this one.

Simply put, my head was up my a$$ while trading that day ... both figuratively and literally.  Yea I know, so much for TMI on the health issue ... but I couldn't resist the pun.

A related concept I've stressed over the years is the concept of income distribution, one example of which reflects my stats from a few years ago where each vertical bar reflects the number of days earning or losing a certain amount of funds.  The dollar figures at the bottom aren't really as important as the "outlier" bars to the left and right ... the left ones of which reflect those inevitable brain cramp days.

In "The Tao of Poker" -- one of my favorite books -- Rule 239 refers to it as the "Driver's Ed Film" day.  btw, if you haven't ordered the $10 book, why not??

So how does one get through them?

Well I'd be flat out lying if I said I enjoyed them.  I hate 'em.  Yet two things keep me going.  The first is that time and performance have shown that coming back from hits is one of my strengths, and I can point to several instances over the years -- including the "Story of Grace" post referring back to a 2007 sequence -- as well as that Monday in October 2008 where both major hits established the foundation and fortitude for record runs.

The second aspect that keeps me plugging away is my conceptual business plan ALLOWS for them.  Yes, I hate 'em and work like hell to avoid them.  But they are inevitable.  And considering 250 trading days and a very high win/loss ratio, 2-3 instances out of a huge sample size quickly becomes a non-issue.  Of course the old adage that traders can't eat like a bird and crap like an elephant (oops, another pun) remains valid, so the consistency during the rest of the time has to be able to offset the messes.

Years ago, I almost lost the tip of my thumb to a meat slicer when I got distracted in a kitchen during my college years.  And every day I can see and feel the scar.

Whether it's trading or slicing, rest assured there's nothing wrong with you if you get "cut".  And for newer traders reading, yes, it happens to all of us.  The first few days are typically painful, yet a short-term memory (also a strength of mine according to my wife ... although she doesn't call it a "strength") can work with time to provide the inevitable healing.

Perhaps Jay Leno said it best the other day when asked if recent jokes about his displacing Conan O'Brien hurt him.  He responded (paraphrasing), "How can it?  Being a comedian is like being a fighter ... you hit and have to expect to get hit ... it's part of the job ... if you ask a fighter if it hurts when he gets hit, the answer is 'hell yes, but I'm a fighter ... it's my job to get hit in the head' ".

For those that say traders are like fighters, I'll simply restate it to say that traders are fighters.  And I love a good fight.

A good cut man in your corner doesn't hurt either.

Welcome to the human race.

P.S. The comments have been re-opened.

Thursday Notes - Seeing the "Doctor"

There are times in one's life when a challenge is bigger than oneself.  So tonight I discuss my hiring a personal psychologist to help me improve my current transition to block sizes.

Short post tonight as it's poker night.

Wednesday Notes - TV Beta Test Summary

Here are my thoughts on today's TV beta test and where we go from here.

Also, please note that this video -- and all future videos -- will also be archived on the ongoing channel at www.livestream.com/donmillertv, which has some pre-recorded content (including a continual pre-recorded auto-pilot) which I expect will grow quickly over time.

As I mention, I've tentatively scheduled our first true live "program" for next Wednesday after the market closes at 4:30pm ET, which will also be recorded and archived.  Content suggestion comments are encouraged and welcome (and yes, the comment section is open today).

And I promise we'll get back to trading content quickly!

Special Post - Live TV Cap Lifted

Good news ... the good folks at Livestream have allowed us to move forward and have removed the 50 count cap.  So we'll go with demo #2 this afternoon at 4:15pm for another 30-minute BETA test.

Please note today's beta test has ended ... more to follow.

Special Post - Beta Test Result

Well, the Live TV beta test worked great ... except there's a test capacity limit of 50 which I'm currently addressing with the service provider, as we were flooded with viewers.  I'll keep everyone posted.

Monday Notes - Blog Goes High Def with Live TV!

Lots happening at this end as I continue to push the horizon on trader communication technology.

So welcome to the initial HIGH DEFINITION video post (I'm still working on clearing up the audio a bit -- as it sound a bit "tinny"), which briefly explains the upcoming two beta tests of LIVE INTERACTIVE TV -- to be broadcast directly from this blog tomorrow & Wednesday from 4:15pm - 5:00pm ET.  If all goes well, the TV & Chat windows will magically appear when we begin.  If they don't, simply refresh the page.

I'm still working through some kinks -- so please keep in mind this evolution is still in the embryo stage -- but I previewed a demo tonight with about ten folks that indicated it was time to do a larger test.

And you know me ... I don't like to lose ... even if it's to technology.

So join us if you dare, and we'll start talking about trading again!

Special Post - Recommended Webinar

There are times one comes across powerful "enlightenment" that simply jumps out at you, and I just listened to Linda Raschke's December Webinar on mental performance, and I have to say it's one of THE best sessions I've come across in the last few years.

The free audio is available on her LBR home page, and I highly recommend it for everyone.

I'm also currently reading "The Power of Full Engagement" by Jim Loehr and Tony Schwartz, which was recommended by a viewer.

In both cases, the concept that sharp mental focus and "engagement" is essentially THE most important aspect of trading for those in this business for the long run is absolutely on target.

The Weekend Trader - Seeking Suggestions

Note: You may want to consider periodically checking the comments section of this post as the "discussion" unfolds over the weekend ... suggestions which as of Sunday AM continue to pour in and includes my comprehensive response to one "open up the comments permanently" suggestion.

As suggested by one onlooker, I'm toying with the live TV idea today and have set up a demo "futurestv" site at www.livestream.com/donmillertv, also viewable below.  I'll be in and out from time to time playing around with it.

####

While I'll let this weekend's video speak for itself, suffice it to say that I'm seeking your feedback and help in taking this "collective" trading community to the next level. 

Simply put, I have a very strong conviction that despite all we've done over the last few years to promote trader self-sufficiency, industry transparency, and mutual encouragement, there's "something" more to be done to continue to strengthen what has become a very unique trading (and life) community, and I can't quite put my finger on it.

Something unique.  Something important.  Something.

So, the comment feature has been activitated as I seek your input.

Have a restful weekend.

Thursday Notes - Poker Night

Post will resume on Friday.

In the meantime, please note that I've scheduled what I expect will be the ONLY live Jellie effort of 2010 -- and quite possibly my final one before I close the door on the Jellie era -- for four weeks beginning February 22.  If you're interested in participating, please review the content on the educational website & then email me at don@donmillereducation.com.

Wednesday Notes - Video Update

Tonight I discuss potential blog innovations -- including live trading or recorded trade sequences -- and why last night's election ignited a passion in me similar to that of trading -- including the need for complete accountability and transparency.

Special Post - Miracle Accomplished

Stealing a line from Al Michaels ... "Do you believe in Miracles? Yes!"

Tuesday AM Notes - Expect a Miracle

Special Post - Critical Mass. Election

Updated Monday 11:39AM ET

Many may not know about Tuesday's special election in Massachusetts for the late Edward M. Kennedy's vacant Senate seat, which has turned into a huge pivot point for the entire country's economic future as traditionally liberal Massachusetts voters have put surging GOP candidate Scott Brown ... I can't believe I'm about to say this ... in the poll lead!

Here are the latest intrade election market prices ... thanks for forwarding Angelo.  And be sure to check Green & Company's ongoing blog for ongoing trader tax legislative updates.

Why is this election and sudden turnabout (after trailing by as many as 30 pts in past polls) critical? And why am I posting this on what is largely a trading journal??

Because he represents a critical swing vote in the Senate, and may very well be key in helping stop the current tax-laiden freight train that includes long-term trader transaction tax implications.

If you're a registered Massachusetts voter, PLEASE make sure you cast your vote on Tuesday and spread the word to other Mass. traders. (I have a call and email into Bob Green's office to see if he'll mention it as well.)

Do your research and vote your conscience of course ... just as I'll be doing.

You can call it the Boston Tea Party ... Part 2.

The Weekend Trader - Start Spreading the News

In today's video I discuss the status of my own trading transition to block sizes, last week's popular "puzzle" post, my plan to limit live Jellie efforts to a single event in 2010 so I can spend most of my time trading, and the upcoming NY Expo.

And speaking of New York, we're indeed getting close to my return to the "physical" public podium after a long self-imposed travel hiatus to focus on my own trading. As of now, we're scheduled for the Julliard Complex (5th Floor) for 10:30am - 11:15am on Monday February 15, and I encourage everyone to get there early as we'll have a lot of info to cover.

I also expect to be in the Marriott Marquis lounge Sunday evening for those interested in meeting in person. I believe several of the Jellies will be there as well.

A reminder that we'll be giving away a free full 16-hour Jellie Educational Video at the end of the presentation, and here's an advanced copy of the MF Global entry form which you'll need to complete if you plan on attending and want to be entered. The entry forms will also be available at the MF Global booth prior to the event, as well as at the door of the presentation.

And lastly, here are some additional online jigsaw puzzle links that the site owner mentioned in his email to me earlier in the week. As I mention in the video, perhaps we're becoming the "Oprah" of site recommendations ... at least on some small scale:

http://www.train-puzzles.com/
http://www.free-jigsaw-puzzle-downloads.com/ (the one I mentioned in Tuesday's post)
http://www.airplane-jigsaw-puzzles.com/
http://www.download-jigsaw-puzzles.com/

So far, I've completed 15 puzzles during the slow times ... which goes to show you that most of the trading day is spent in cash stalking those key "PJOs" (Prime Jellie Opportunities) where you can take advantage of unsustainable market inefficiencies.

Enjoy the video and weekend.

Friday Notes - It's Coming!

Yes, the Weekend Trader will be published shortly.

Thursday Notes - Poker Night (& Another Win)

Another long but productive night ... will get back to blogging again on Friday (seriously!)

Wednesday Notes - Blog Break

Posts will resume on Thursday.

Tuesday Notes - A "Puzzling" Thought

You'd think that trading almost every day of the year would satisfy my "puzzle" craving ... a craving that began when I was young and couldn't get enough of brain-teasers, logic problems, and -- especially -- jigsaw puzzles.

Yet think again, as I stumbled across a stellar SOOT trading tool (SOOT = "Stay Out of Trouble" ... one of our coined Jellie terms as described in a recent post) in the form of free web-based jigsaw puzzles.

So far, I've done six of them during yesterday and today -- including the one pictured above -- as I monitor the market during the slow times.

I personally prefer the "hard" version, which has about 300 pieces and takes around 45-70 minutes to complete, depending on complexity and how aggressive I want to be in timing myself. Remember, I'm the guy who recently discovered competitive cooking shows!

Benefits?

- It provides a useful diversion as you monitor the market during the slow times;

- It keeps the mind active;

- It helps subconsciously strengthen your "pattern recognition" mindset; and

- It can satisfy "mouse-click" urges for those challenged with discipline during slow markets.

And if that's not enough, you'll never lose a piece.

P.S. While the pieces begin scattered and you can rotate them, all of the pieces are actually aligned properly. It took me two puzzles to figure that out. (Remember, I love "edges")!

Monday Notes - Airport Trip

Posts will resume on Tuesday as I'm in Boston tonight dropping my older daughter off at the airport. She's on her way to London to study abroad for her second Junior semester.

Special Post - This Trader's New Year Prayer

Note: The author of the following is unknown as it appeared in last week's service. As always, it relates to both trading and life.

Eternal God, who can make all things new, we humbly bring before you the record of our lives in the year now ended.

Where life has been good to us, do not let us take more of the credit than we deserve.

Where we have been good to others, help us to forget all thoughts of honor and reward.

Where we have fallen short, forgive us, and free us from brooding over what is past.

Cleanse us by your mercy, guide us by your truth, fill us with your love, and lead us forward in your all-conquering hope.

All this we pray in the name of our Lord Jesus Christ.

Amen.

The Weekend Trader - Poker, Trading & Focus

It's all about focus.

In fact, it's only about focus.

Let's start with last night's odd series of events.

After about going through the roof early in last night's poker tourney as the result of getting called on an all-in where my opponent was chasing a single #$%&#$ card in the deck (the most pi$$ed I've EVER been playing cards) and of course catching it, I was able to somehow come back after that hand knocked me from $8,000 in chips to $1,200 (I had a few more chips than her before the hand ... more on that below) and actually win the event about three hours later.

Incredible.

First the hand. I'm the dealer and had 4 & 5 of Diamonds pre-flop, which came 6-7-Q with one Diamond. One of the three in the hand proceeds to bet about 1/2 of a decent sized pot, which was called by player #2 and myself (I had grown my stack from the starting $4K to $8K, so the % risk/reward seemed OK).

The turn then comes 3 of Diamonds. Bingo. I've got the straight, there's no full house possibility on the board, and on top of that, I've got a flush draw. So essentially, absent some kind of bizarre suck-out, I've got it. Player #1 places a minimum bet (yes!), player #2 raises (double yes!!), and I of course make the easy decision to push all-in ... which was a mammoth raise over both the bet and raise. Player #1 calls (he only had top pair ... not a worry), and then player #2 also calls holding 5-9 and is risking a mammoth chip stack chasing the 8 for the higher end straight.

Sooooo, with three eights already having been folded (we found out later), there's only a single card in the deck that can win it for Player #2. The odds are heavily in my favor ... over 90%. And of course, she hits the case 8 ... and it took all of my sanity and professionalism not to launch the cards across the table and scream, "You bet your whole stack and risked your entire tourney on a chase??" Keep in mind most know I'm a pretty tight player and would never make that move with two others still in the hand unless I had the goods.

Yet as they say, it's often darkest before the dawn, and like December's "Chip & a Chair" post few months ago (one of the more popular posts), I somehow fought back from the brink to ultimately win the event where I was dealt pocket Aces and K-Q suited for the the last two heads-up hands of the night.

The final hands played out like this: On the pocket Aces hand, I was the shorter stack & small blind, and simply called pre-flop (while I'd raise with more players at the table, I was going for the monster trap play). The flop then came K-8-9, my opponent checked, and I went all in. He then asked me if I hit the King, and I said no. After some discussion back and forth where he didn't believe me, I told him "I didn't hit it, and will show you." So he called with his pocket 10s, and I took down the hand after two blanks hit the turn and river. And true to my word I said, I showed him that I didn't "hit the King"!

That put me in the chip lead where I was then dealt K-Q suited, for a flop that came K-10-8. I checked, he bet with a ten, and I went all-in where he immediately called. The turn and river again were of no help to him, and the odd night ended rather "easily" ... at least compared to events a few hours earlier.

OK, so what are the trading lessons?

I suppose the first one reflects a combination of perseverance and focus. Yesterday's trading was a good example where I entered a solid pullback shortly after 3pm with size, and then had the rare "displeasure" of a late-day news item release touting interest rate risk which immediately shot the market down 4 points through the "previous resistance = new initial support" level ... which is similar to the 90% poker play from last night. In both cases I lost the "hand". Yet in both cases, I stayed focused and kept moving forward, and ultimately more than made up for the far lesser probability occurrences. As they say, "sheet" happens.

The second may sound odd, but in my case it's highly relevant and all about momentum. You see, my trading and poker usually go hand in hand. I can't describe why, but they will forever be intertwined. For example, my poker game reached a peak in '08 and '09 when I won several local tourneys, and had both personal focus and good fortune on my side for a long period of time. And the same was true for my trading.

And then as I hit the mid-year 2009 bump, performance in both areas seemed to suffer. I'd often get hit by incredibly bad beats at the table, while at the same time experiencing trading events where I had dentist appointments and critical phone calls at the worst possible moment ... not to mention forgetting to duck last June!

Yet as I get ready to pursue a trading "stride" of sorts on 2010, my focus over the last few days feels ... well, "sharp". It was sharp last night -- especially in the hours that followed the bad beat where I frankly played my a$$ off -- and it was sharp today on a trading day where early precision was mandatory. And it's going to HAVE to be sharp as I continue to work through the process of increasing ES sizes to block status. And believe me, making sure one is constantly focused is an absolute prerequisite for increasing trade size.

Bad beats? They'll happen.

Yet I believe one constant that will help keep you grounded when they do occur is focus.

Focus on the long-term in a business where time and probability do the heavy lifting.

Focus on the short-term as you play each hand or trade each sequence ... both of which stand alone and aren't dependent on prior events.

The rest is just a blur.

An appropriate blur.

Have a wonderful weekend.

Thursday Notes - Poker Night (& Win)

Late night after winning a tourney tonight ... will get back to posting shortly!

Wednesday Notes - Blog Break

Posts will resume shortly.

Tuesday Notes - Facing the Bridge

Just north of Vancouver, British Columbia (one of my favorite places to visit when I lived in the Seattle area in the 80s), you'll find the Capilano Suspension Bridge. The bridge, which was originally built in 1889, stretches 450 feet across and 230 feet above Capilano River.

It's an awesome wonder amidst the incredible beauty of nature. It's also scared me to death.

You see, I suffer from Acrophobia ... which is an irrational fear of heights. And while it's never kept me off an airplane (I've flown hundreds of flights over the years, and it's not as bad if I'm in a moving vehicle), tall buildings and -- yes -- narrow suspension bridges hundreds of feet above rocks, bother me.

Now you can imagine all of the trading analogies -- both conscious and subconscious -- which could literally and easily fill up dozens of blog posts. And yes, I'm confident there's a direct psychological effect on how I perceive my equity curve that contributed to my creation of the fictitious drawdown concept late in 2007, along with other conceptual ceilings over the years.

I loved that bridge. And I hated that bridge.

I did cross it once, but each subsequent time, I simply sat on the bench and allowed my guests to cross while I took pictures.

And so as I find myself facing the final trading challenge of my career -- trading major block sizes -- I'm admittedly reminded of my days in the beautiful Northwest when I visited that majestic site in North Vancouver.

I wish I could tell you the memory it brings back is that of the time I crossed the bridge. But today, it's not. For at this moment, the memory it brings back is that of standing in front of the bridge ... with camera in hand.

Today, I should have crossed the bridge. We had MATD (Morning After Trend Day), and I chose to look for the unsustainable break of the first hour range on which to short 400 contracts for a targeted 1.5 points. (I couldn't get size on the previous and more-preferred long fade into Monday's support when the economic data hit, as the price action was simply too rapid to go all-in at the time.) The Jellies will tell you such a sequence is one of my favorite high-probability entries and like a comfortable slipper for me that I could trade in my sleep. Hell, we even had divergences out the ying-yang. Volume, stochs, TICK ... you name it. In basketball terms, it was an unguarded lay-up. In "Capilano" terms, there was no wind and no one swaying the bridge.

Yet I hesitated as my focus slipped for the moment, perhaps because of a bit of a head cold, and by the time I acted, only got 75 on before price fell below which I felt was an acceptable high-probability wholesale entry price.

Sure, the trade was profitable, but that's of course not the point.

I knew this last jump in my trading wouldn't be easy. Dr. Brett highlights such a critical struggle in his own trading in his acclaimed book, The Psychology of Trading (page 264 of the chapter entitled "A Session at GunPoint"), and anyone who wants to psycho-babble their way through telling you there's no difference has likely never placed a trade in his/her life. And I respectfully ask for no "home remedy" emails of how to increase size over time ... I of course know what has to be done, have done it and taught it before, and simply need to follow through consistently.

The good news is I'm pi$$ed at today's "camera snapping" effort, and in the past, that's precisely the state of mind I need to move on.

For those new to the blog, a reminder that this personal journal is 100% reality and I'll never sugarcoat anything. You'll find no balloon boy or Tiger perfection marketed hype here. Frankly, right now I'm fighting one final, but extremely critical personal battle. The battle to make that quantum leap from seven to eight figures.

To get me to that "other side" of trading.

To get me to the other side of the bridge.

Don't look down.

Monday Notes - First Steps

Not much to report on today's "first step", as I worked primarily on making sure my footing was secure so as to avoid a Wes Walker type knee blowout on my first step of the new year.

And so I again experiment with my color-coded scorecard as the year begins, trying to replicate the consistency that I've traditionally set in Q1 of recent years. The true test will come in upcoming days to make sure I rid myself of that orange aggression score.

With respect to the scorecard, it's a modified version of the one I used in early '09, and I'll touch on the various categories over time. In the meantime a reminder that the top section of trading environment categories -- along with the "perceived opportunity" line item in the lower section -- reflect my preferred environment and patterns ... and can vary greatly by trader.

The Weekend Trader - Ten Million Steps

The following is a excerpt from Jeff Rennicke's review of the book, Ten Million Steps, as written in 2001:

On New Year's Day 1998, M.J. Eberhart began a ten-month, northward odyssey that would take the 60-year old retired doctor along the length of a continent and deep into his own soul. The story is a roller coaster of geography, a whiplash of emotions. In other words, it is a true account of a real hike along the Florida Trail, up the Appalachian Trail, and finally along the International Appalachian Trail into Quebec.

Some hiking books play up the good days and gloss over the bad. Not this one. It's all here: the sore legs, the rain, the doubts, the sunshine, the friendship of other hikers bearning trail names like Skookum, Yettle, and Old Goat. We witness Eberhart's pain and joy, as well as his physical and spiritual transformation in a collection of journal entries that feel so fresh it seems like we're peeking over Eberhart's shoulder as he scribbles away.

-- Jeff Rennicke

And so twelve years to the day after the beginning of M.J.'s journey, I find myself packing up camp and restarting my own trading journey ... a journey that after great reflection I've decided will also consist of -- you guessed it -- a total of ten million steps. Ten million reflecting my main trading account's target account balance, or roughly four times an amount that I've set aside for this journey.

In some ways, this journey will be different from recent travels -- such as the 2008 race documented in these pages that spilled into 2009 -- in that there will be no published timetable for completion, aside from an internal one which I've chosen for now to keep private. Suffice it to say that I consider it to be aggressive, yet it spans multiple years which will keep me busy for "a while".

For this time, I expect there will be a combination of sprints, marathons, and periods of rest to briefly enjoy life's passing scenery (yes, my wife does want that trip to the Greek Isles for our 25th anniversary this fall) or to help others find their way. There will also undoubtedly be storms and sludges of mud which will slow and set the journey back at times.

Yet as was the case during my previous travels, this journey will be serious and aggressive in its own way. For I've decided I need to keep moving forward and pursue even greater heights of this industry, or in the words of Andy Dufresne, get busy living instead of getting busy dying:



And so it's time for me to plan a much longer journey, while adjusting my sights and moving the decimal point to the right.

And when all is said and done, I would hope that if Mr. Rennicke ever came across the last 18 months of blog entries, as well as any of the still-unwritten future text, his review would go something like:

Some trading blogs play up the good days and gloss over the bad. Not this one. It's all here: the sore legs, the rain, the doubts, the sunshine, the friendship of other traders bearing trail names like Ziad, Danny, Kevin, and O.T. We witness Miller's pain and joy, as well as his physical and spiritual transformation in a collection of journal entries that feel so fresh it seems like we're peeking over Miller's shoulder as he scribbles away.

God-willing, I'll make it to my destination while continuing to share portions of the experience along the way in the hope that it inspires others.

It's time to lace up life again.

It's time to head toward Zihuatanejo.