Friday, May 7, 2010

Friday Notes - On the Rebound

Some quick thoughts as the day and week wrap up.

- Today's checklist coming into this morning's trade: Keep it tight, keep the feet moving, stay out of trouble, and finish profitable.  Check, check, check, & check.

- 'Twas very nice to see the market give me a chance to re-buy yesterday's sales just south of 1100.  I did want those back -- if only for a few minutes!

- Also nice to see other liquidity providers not taking a 10-minute break this time around and the market depth holding.  They must have been well-rested after yesterday's 2:45pm nap.  Of course they also helped facilitate the early MATD and triangle plays in the context of the hourly downtrend.

- Why does NASCAR get such great ratings?  It's the crashes.  Same thing here I guess as yesterday's video is now over a record 1,000 trader views, and the blog traffic spiked to a 12-month high yesterday and an all-time high today.  Where've you been?  :-).  btw, I'm working on close-up photos of the ambulance.

- Greatest Hits: The October 2008 Monday meltdown still ranks as my largest hit at 5.5% (recovered by the end of the week).  Comparatively, yesterday's registered "only" 1.9% (thank goodness for a partial 12% size!), although it did briefly tag 4.8% when ES traded 1060. 

So the way I look at it, yesterday's draw was already 60% recovered by the end of the day, and I'm now simply working on the other 40%.  Hey, anything to keep the confidence.  Some early career draws of course clocked in higher with far smaller accounts, as is typical when starting out.

- And the VIX closes at 40+.  In '08, it took a day to get the eyes adjusted.  Let's hope yesterday was a similar eye exam.

Lots more work to do of course, but it's a start.

More thoughts over the weekend.

Thursday, May 6, 2010

Thursday Notes - There's No Crying in Trading

My candid (as always) perspectives on today.



And some needed levity:

Wednesday, May 5, 2010

Wednesday Notes - Monster MATD

Here are some brief thoughts on today's monster MATD, along with my perspective on the recent increase in volatility and a general blog update.

Saturday, May 1, 2010

The Weekend Trader - Delayed Gratification

I mentioned the other day that I was having a hard time coming up with things to blog about lately.

And as we near the two-year mark on this 670th post of what began as a temporary experiment, I admit new words remain a bit of a struggle.

As most know, this journal has evolved a few times -- hopefully for the better, but that's not for me to decide -- since its mid-2008 inception.

Initially, the blog was a balance of (1) documenting & sharing new insights I'd learned when was off the grid in the mid-2000s, and (2) a blow-by-blow daily diary recap of my trading day.  The idea at that time was to present all of the aspects that comprise this trading business, including as I've often said, the good, the bad, and the ugly.

And while there's been lots of all three -- which I'm always conscious of trying to balance before writing each day -- some will probably tell you that from time to time there's been too much of any one of them.

And they're probably right, for this reason.  For even as this journal has evolved into more of a motivational tool over time, the entries still reflect my ongoing thoughts, and in many cases my diary.  As such, the alternating periods of extended in-the-zone trading, pratfalls, burnout, sleepless nights, boredom, heath challenges, educational emphasis, and spiritual rebooting ... well, they simply are what they are -- life's cycles.

One underlying theme that I truly hope has come across in the blog, is emphasis on the long-term.  Three posts immediately come to mind, the recent Focusing on the Comma post, the most-referenced Chinese Bamboo post, and the 2008 Svithjod Rock post which was later syndicated in various places including the 2009 Trader Expo Directory.  And I do so because I believe such emphasis is one of the least discussed, yet most important aspects of one's trading career. 

And one's life.

Such is why even the live Jellie efforts are spread out over a month's time (and the first beta one on which the Webinars are based, two months).  For it's the non-technical & non-immediate aspects that have received the strongest feedback.

Like the market, trading and life go through cycles.  You see the ebbs and flows clearly in stock or futures charts, and I suspect if you were to graph your own trading performance -- and even your life -- you'd see similar patterns of plateaus, breakouts, consolidations, troughs, low volume (interest), etc.

Yet in a trading business where so much focus is placed on the "now" -- including both the immediate action and one's immediate performance -- it's all too easy to focus on laying the single brick vs. the 100-story building.  And most of what is discussed in this all-too-hyped & need-for-immediate-gratification industry seems to discussing the brick.

So I've tried to compensate just a bit.

Why do I feel this way?  Because I fall into the same trap at times.

And let's face it, immediate gratification has become entrenched in today's society.  Microwave ovens, fast food mega-empires, 800 channel cable TV packages, never-out-of contact Blackberries/Ipods/Ipads (& yes, my Sony Vaio), and everything linked to the Internet -- ranging from the wonderfully good to the terribly bad -- is all about both immediacy and speed.

At this end, it took me close to a decade of starts, restarts, tweaks, priority shifting, etc. to refine performance to a point where I was satisfied I'd begun tapping full potential, and it's still a constant daily battle.

And as this new month begins, I'll remind everyone -- including this trader with his hands on the keyboard -- that there will be 20 trading days this month, as well as in months to come.

Twenty days to carve out a monthly income -- which as the Jellies hopefully know by now, could very well come in the form of a single trade outlier with the rest of the time spent fishing or playing defense.

Twenty days.  One trade.

When you look at it that way, trading goals suddenly don't seem too daunting.

In fact if you approach every day or month with that perspective, you may just find yourself producing a year's worth of crop -- or see the Bamboo shoot up before your eyes -- in a single month as if by accident.

And isn't it highly ironic that by seeking to delay gratification, you may actually be accelerating it?

Have a great weekend.

Wednesday, April 28, 2010

Wednesday Notes - Keep the Feet Moving

For those who have asked, I'm here ... and trading.

It's just that I'm struggling a bit with what to talk about these days.

I also just got up from my post-MATD late afternoon/early evening nap.

Oh, we could talk about today's monster MATD ... which I chose to get up at 3am to trade both the Europe and early U.S. sessions.

Or we could talk about the need to always be flexible and alert ... as was the case when the Spain news broke just before noon.

But I settled on sharing one particular bugaboo I have from time to time in my trading, which is the tendency to get a bit sloppy and out of rhythm whenever interrupted and needing to leave my trading station, resulting in my needing to scramble a bit at times to find it again.

And today's time-based P&L (below ... click to enlarge) says it all as my trading -- and rhythm -- were both interrupted by a 7am ET chiropractor appointment, after which time I found myself on the retail (a.k.a. "stupid" or "losing") side of a few sequences ... which is clearly reflected in the extremely unusual 3 consecutive bars of losing 30 minute intervals.

As I mentioned recently, the bars reflect profit or loss incurred during each 30 minute interval that begins with the time noted in the chart.

In today's case, I went to bed early last night as I felt the Europe session would provide some of the better oscillation reads & opportunities (trading both the DAX and Globex ES), and planned on pretty much being done by noon -- in part because the afternoon of MATDs are often coin flips, and in part because of the FOMC trade wild card.

It's funny ... the sequence actually started with my being on the right side of the bull move that began just before 7am ET, which I entered via my remote Vaio and inappropriately scratched (error #1) before then settling down at my trading station and being far too early on a couple of short sequences (error #2).

Yet as always, trading isn't about one trade, trade sequence, day, hour, or 30-minute interval.  Rather, it's about the entire collection of work over one's lifetime.  To put the latter in perspective, there are approximately 6,500 30-minute intervals in a year, assuming 13 tradable hours between Europe's open and the U.S. close & 250 trading days a year, so each interval is 0.015% of the year. 

Or said another way, trading -- like life -- is about simply keeping the feet moving.

So as you can tell, I'm having some fun using the automatically generated time-based P&L to analyze the day.

As they say, a picture is worth a thousand words.

And today, it likely tells the story better than I can.

Monday, April 26, 2010

Monday Notes - Remembering Who We Are

First, my congratulations and best wishes to our good friend Dr. Brett, who announced while I was gone that he'll be ending both his blogging and part-time trading efforts to focus on the growth of other traders in a private environment, and in turn, further growth in himself. 

Brett is one of the good guys in this industry, and I wish him well as he goes off the grid.  I can personally relate to the challenge of balancing various interests, including the tremendous time and effort it takes to blog in a no-B.S. manner for the trading community in a free forum, and I wish him Godspeed on his new journey.

#  #  #

Now, for what I consider one of my more difficult posts -- in terms of what to say -- on the heels of three days and four nights of full spiritual immersion and intense reflection.

Frankly, I've thought long and hard about what I'd publicly say about this past weekend, including seeking counsel from those with whom I spent considerable time over the last 72 hours before I hit the post button. 

One reason for my apprehension, is that I'm aware that there are many risks in "speaking" after a personal emotional or spiritual event, including coming across as holier-than-thou, better-than-the-rest, acting in snap-judgment fashion, or having the words and thoughts misinterpreted as a way to try to market one's business or sell services.

I'm also aware that the vast number of onlookers who visit these virtual pages follow various faiths.

So I considered several options, ranging from saying nothing to saying everything, before settling on something in-between ... although it's probably the longest post I've ever done.

Is this the right approach?  I don't know. But I do believe that saying nothing would have clearly been the wrong choice and defeated much of the weekend's intent, so I'll simply speak from the heart and let it be what it is.

And as you read the following thoughts, I ask that you forget for the moment that I have a trading education business.  Similarly, at this end, I've purposely refrained from adding any of the usual cute graphics, pictures, or linked text, and have turned off the comments for this one post so we don't turn this personal diary entry into the "great faith debate".

So with that said, here are the highlights of my story:

As I've hinted in the last few entries, parts of the last few weeks have been difficult from a personal and energy perspective, with the events of my family being blocked from reconnecting in London three times -- by of all things, a volcano in Iceland -- resulting in tears and cursing on both sides of the Atlantic.  No one certainly died or was sick, yet the series of events was still extremely frustrating ... especially on the heels of other personal issues.

I've also been bored and restless at times, which I'm sure has also been reflected in various diary entries referencing block trading goals, continued dissatisfaction with trading education in general, starting a formal trading university, etc.

At the same time, I've been tangling (a nice way to say "fighting") with God.  Arm-wrestling would be polite ... picture spiritual kick-boxing.  And while I won't go into all of the details, we all know who wins those battles.

And then, while certainly not a calamity, after having traded successfully Thursday morning and purposely shutting down at 2pm so as not to know how the market closed (to keep any opening trading sequence thoughts completely out of my head on Friday), my weekend sponsor's car radio -- which was only on to get the traffic report as we were in a one-hour back-up to get off Cape Cod due to bridge construction -- happened to announce the closing Dow figure.

Of course the minute I heard it, I knew that it meant that the day had ended in a strong trend fashion off the early lows, which would in turn set up several classic MATD (Morning after Trend Day) sequences for Friday's Europe and U.S. sessions.  Call it a very likely monthly income-producing trading bonanza.  And for a few moments, I felt like asking Bob to turn the car around, and run back for my Vaio.  After all, I'd have time to at least trade the Europe session and still not miss any of the key Friday morning events.

But the weekend rules were clear. No PCs, internet access, cell phones, or watches.  For this was to be a rare opportunity to participate in a wonderful program offered only twice a year to help people reconnect with God and rededicate one's life to Christ, and my only job was to do whatever I could to simply shut down my small portion of the world for three days.  And here I was struggling with even doing just that.

Not a great start.

I said little as I continued to sit in the back of my sponsor's Jeep Cherokee ... feeling completely frustrated and helpless. Sitting in traffic. And more traffic.  (Ever try to sit in the back of  Jeep for two hours with a bad back?)  And then the skies opened up.  It poured.  Buckets. And the jeep just crawled along as walkers -- yes walkers -- were passing us.  Frankly, this impatient Type A would have felt more comfortable in the dentist's chair.

I felt, well ... "caged" would be a pretty good description.

Yet I continued to proceed on faith that recent events were "leading" me to where we were headed.

What I didn't know would be the impact the next 72 hours would have on me.

For as we turned onto the highway leading to the retreat center, the rains ended and out popped ... you can't make this stuff up ... the largest rainbow I've ever seen that looked infinitely better than Plasma or HDTV.  Vibrant colors and both ends.  Further, as we looked more closely, it wasn't just a single bow.  For next to it, was a second fainter one.  It was sort of like that classic Ocean's 13 scene where George Clooney and Brad Pitt were brought to tears while watching Oprah.

And while I know it wasn't there "just for me", I did have a sense of peace come over me that -- over the next 72 hours -- would become a personal flood beyond anything I have ever experienced.

As I mentioned, the event was called "Walk to Emmaus", which is taken from the biblical journey Jesus took with two of His disciples after He had been crucified.  The "walks" reflect spiritual reconnection weekends that are periodically held throughout the world.  And while you can search the web for more info, words will never be able to describe the incredible depth and breadth of God's love that four people in southern New England and hundreds of people throughout the world -- backed by literally thousands of prayers -- experienced this weekend.

At this end, of all the many lessons, light bulbs, and other powerful reminders we received during the three days, perhaps the greatest one was provided by our table leader -- a wonderful older tough-as-nails Christian man (Bill) who had spent years in the Navy and as a commercial fisherman. (btw, he gave me enough fishing/trading analogies for the next year!)  For he explained one time he was also in a major battle with God before he had his prayers answered far beyond his limited human expectations.

As he told the story, the end result was God reminding him, "Remember you're Bill and I'm God.  And please never get the two confused again."

Lesson tucked away for this impatient, control driven Type A.

At the end of the effort, we all had a chance to speak during the closing service.  Now I've spoken before hundreds of audiences over the years, including on highly emotional or energized issues to various legislative bodies, commissions, state regulatory agencies, town meetings, trading audiences ... you name it.  And I've never "lost it".

Well, that evening I lost it ... at least for a few minutes before composing myself enough to share the full extent of my weekend experience.  For I was both humbled and overwhelmed by the combination of grace, power, and love that God had shared with us -- and through absolutely no doing of my own.

And while I could go on for days, I guess I'll leave it at that in terms of details and will close with the following.

I went into the weekend seeking a brief rest.  Instead, I was renewed and refreshed beyond understanding.

I missed a short-term income producing opportunity.  Instead I was rewarded with riches beyond measure.

And I certainly didn't expect a rainbow. Instead, the grace of God provided two.

Yet this isn't the end of the story.  Nor is it the end of the task.

It's just a renewed beginning.

As always, it's how we share the gifts that's important.

It also helps to remember that we're who we are, and God is God.

We should never overestimate our own power or strength.

And certainly never underestimate His.

They that hope in the Lord will renew their strength,
they will soar as with Eagles' wings.
  -- Isiah 40:31


Lord, make me an instrument of thy peace;

where there is hatred, let me sow love;
where there is injury, pardon;
where there is doubt, faith;
where there is despair, hope;
where there is darkness, light;
and where there is sadness, joy.

  -- Excerpt from Prayer of Saint Francis of Assisi

As always, this 49 year old's journey remains a work in progress.


And so much work remains.

DeColores.

Thursday, April 22, 2010

Thursday Through Sunday Notes - Hearts on Fire

As I head out on my retreat, I'll leave you with a visual of my weekend expectations.

Call it "Hearts on Fire" for the soul, and simply replace the physical aspects of the video with that of the spirit.

I'm the guy in the barn.

See you Monday.