Tuesday, June 22, 2010

Mon & Tues Notes - High Tide

I dread these sorts of posts.

For when my trading is going well, my preference is usually to simply remain silent.

Yet since this journal remains to a large extent ... well, my journal, I suppose I need to make some mention of my personal trading as of late.

First, I'll start with the negative.  I've left a lot of money on the table in recent weeks -- which should keep my humility in check -- as the result of playing a great deal of defense.   And anyone following sports knows when you play defense, the scores tend to be lower.

Yet the reward of playing strong defense is that I haven't been "scored upon" for a while.  A long while.  Over 20 days of "while".

And as much as I dread typing these words (call it superstitious or simply not wanting to upset current personal rhythms), I haven't had a loss in over 20 days.

OK, I said it ... so let's focus on the lessons.

For I fully admit that these six weeks have been tough for me from a trading perspective ... and for a number of reasons.

First, the May 6 flash crash hit took me below a trailing equity "reassessment" stop that I'd had in place for a long while.  Frankly, it was the first time I'd dropped below an increasing trailing account stop in years.

Now one could argue the stop was too tight -- which may be true, although the older I get and the less need I have to risk capital, the tighter it will probably get.  Keep in mind at this point in my life, I don't "need" to trade, unless my life expectancy suddenly increases to 120 or so.

Yet the reason I call it a "reassessment" stop -- which the Jellies know should define EVERY trading sequence stop one has in the market -- is that it would trigger a reassessment to avoid an Archie Karras (real) or Jesse Livermore (rumored) type of major long term capital meltdown.

And frankly, for me to fall $60K off my equity highs -- even for the seven figure account size I have -- would be of tremendous significance for this trader given my extremely consistent record over the years.  Essentially, it would signal that something is "wrong".

We of course know that the only thing "wrong" was a 20 minute once-in-a-lifetime market liquidity failure where minutes literally separated a +$60K day from a -$60K day, yet rules are rules, and so it still required that I step back to reassess in a way that I've never really had to do.

And so I kept walking hour by hour, day by day ... yet clearly at less than 100% mental and confidence levels.

My goal during this time?  Simply to build back the confidence by establishing rock-solid consistency over a period of time.

Another reason the last six weeks have been a challenge is given the number of personal events in my life -- most notably the recent graduation and celebratory events, which while being wonderful for many reasons, have adversely affected my focus at times.

Yet speaking of focus, I've discovered some tangible benefits to beginning an Omega-3 and Omega-6 program lately, which has resulted in better sleep, more vivid dreams, and greater sustained trading focus over the course of the day.  So I suppose I should give some credit for the last few weeks to the folks from Nature's Bounty.

Yet here we are on this third day of summer and all seems as it should be.

The tourists and resulting traffic are arriving on the Cape right on queue, the weather is warming, and the trades are flowing alongside the tide.

And while I know the tide will shift over time, I'm going to try my darndest to stay on the board and ride this developing wave as long as possible.


MichaelH said...

Appreciate your summer posts. Thx.

Anonymous said...

Glad your still riding the horse.
Keep fighting the good fight!

Bob said...

Great work on the last 20 days of trading! As a new/struggling trader that milepost (not to mention the majority of your posts) are a great encouragement. Thanks for sharing!