Archive for October, 2010
I had the chance to meet and chat with Barry Greenstein (see pic) at this year’s World Poker Finals currently taking place at Foxwoods.
If you’re unfamiliar with the game, Barry is one of the best and classiest high stakes poker players in the world, and gives most of his tournament winnings to charity.
As always, he was extremely generous and courteous with his time during our chat, and I’ve tried to model much of my involvement with the trading industry after his efforts.
I also was fortunate to be able to spend time watching Howard Lederer, Gavin Smith, and Eric Seidel close up as they battled amidst the final 69 as of Saturday morning.
In terms of my play over two days at the cash tables, I mixed initially playing poorly with some just terrible luck … a bad combination in any competitive endeavor.
One example includes losing an all-in Ace-high flush to Quad Jacks on a river suck-out. On that hand, I played it properly yet was up against the always-dangerous tourist who shouldn’t have called me, but had his poor play reinforced by hitting the 5%’er. I’m sure he’s lost all those chips and more by now.
And then there was the one hand that I just terribly botched when I should have just called the river thinking I had the best hand after hitting runner-runner trips, but instead raised all-in. That was simply stupid and showed my rust at having been away from the game for a bit as there were SEVERAL hands that could have beat me.
Turned out he also hit runner-runner (we were both thinking we were surprise trapping the other guy for a big pot as the rest of the board was lame), but had a better kicker.
That was simply a hand that should have been called, but NEVER raised.
The good news is after having just simply a terrible two days at the tables, I pretty much kept the net loss to just those two hands (and under four figures) over about ten hours of playing. I just didn’t have the outlier gains (such as flopping quad sevens into a tiny unraised pot … a reminder to re-read the earlier Weekend post) to offset the poor play … as is a requirement in both poker and trading.
The other good news is that the weekend reinforced key trading concepts, one of which is the concept of never bringing a knife to a gun fight.
Or, simply think about that great scene in Indiana Jones where Indy shoots the guy with the whip!
Such was evident in my late play when I was playing against players with much larger stacks.
And such a concept is soooooo critical to this world of trading where you have to be properly capitalized to avoid trading on eggshells which is the sure ticket to Loserville.
Glen Beck was pretty outrageous though, dressing up as a king to mock the current administration.
One thing is certain, which is I’m looking forward to implementing my reinforced weekend lessons when the market opens on Monday.
For such was was one of the last light bulbs that came on during my trading development over the years, and allowed me to reach the top of the industry for my asset class a few years ago.
What do I mean by conditions being right?
Well, at a micro level, it could be that one prime setup for the day that you’ve been stalking.
Or on a macro level, it could be that one month/quarter/year where your personal rhythm and intensity matches that of the market day after day and week after week.
For example, let’s say that you were asked to compare the performance of the following two traders over a five year period in terms of effectiveness:
Trader A made $15K consistently each month year after year, netting $180K annually.
Trader B on the other hand had many dry spells where he/she was simply treading water, yet appropriately pushed hard when “conditions were right” and as a result had two $500K bursts over short periods of time.
And while there’s probably no right answer and one could effectively argue that Trader A was “efficient” in all market cycles over five years (and essentially in step with the Jellie concept of effectively adapting to ALL market rhythms) I’d argue that over the long haul, Trader B was just as effective, and perhaps even more so, because he/she pushed when conditions were right which in turn freed up time to pursue other interests.
Again, there’s likely no right answer (comments welcome as always) as both arrive at the same place financially.
Yet like an option, Trader B has more upside/windfall potential for which I’d personally pay a premium. Consider it a trade with minimal risk but huge potential upside.
And as a result, I’d be entirely comfortable having Trader B manage my assets.
At my end, I’ve had the good fortune to alternate between both Trader A and B at various times in my career, and in doing so, I – like many others before me – have grown surprisingly comfortable with the “B” mindset as my career has progressed.
Perhaps it’s because B uses his/her time more efficiently, whether it’s the CME Local who pushes hard for the first hour before heading to the links, or a seasoned Jellie who stalks for that one outlier of the day or week while letting the rest of the industry grind it out the rest of the time.
Regardless of what you may think, one thing is clear.
And that is that Trader B has to effectively sense when to push.
Considering gaining such a sense can only come from years of experience, it should come as little surprise that many seasoned traders find themselves morphing into Trader B over time.
Some might argue that compared to Trader A, Trader B should be graded, well, a “B”.
I’d argue that B may actually be the wiser one.
Full Weekend - Lots going on at this end as I head to Connecticut for the weekend to (a) sharpen the trading/poker skills at an all-day Saturday cash marathon game at Foxwoods, and then (b) head a few miles down the road to Mohegan Sun to attend Bill O’Reilly’s Bold Fresh tour stop Saturday night.
GrowUganda.org - Finally, and as I mentioned in the mini-blog update earlier on Friday, I’ve decided to begin funneling some of the Jellie charitable funds generated through the sale of the Jellie Webinar videos to an effort called GrowUganda, and have done so for several reasons.
First, while continuing to support the diabetes effort which will always remain close to my heart as the result of my daughter’s situation, a recent powerful 60 Minutes segment reminded me of the decision made by the Bill & Melinda Gates foundation to give to causes where their dollars would do the most good.
Another reason is that GrowUganda is an incredibly worthwhile effort started by some very dear friends of mine who exemplify the term “giving” and “compassion” more than I’ll ever be able to do.
And just as some may look to me and others to help guide their trading, I frankly often look to John & Cherie Norquay as models for, well … life.
Yes, it’s certainly true that you and I don’t have the billions that Gates does.
If you’ve ever benefited from this blog, I ask you to consider helping them fund their upcoming November trip with a donation via their site, no matter how small.
Consider it tossing another starfish in the ocean.
Have a joyous and pleasant weekend.
I was struck this morning by the content of this morning’s Upper Room’s Daily Devotional.
Clearly, the ability to not look back applies to each and every trader on this planet, whether it’s forgetting about the successes or the difficult times.
Let’s make it a great day.
And don’t look back.
Tonight’s videos (I forgot a few comments on the first one), addresses several topics including current market rhythms, the need to effectively plan and trade those 1-2 KEY sequences a day, a T.A.D. udpate, a follow-up to Tuesday’s incredibly heartfelt Starfish post, and a response to the myth that “daytrading” is dead.
First, my trading sucked today.
Oh, I read the market really well, but the hand/eye/brain connections seemed severed as I woke up feeling out of sync.
In fact, it was as out-of-sync as the supposed all-world Lebron & Company (a.k.a. Miami) Heat were in tonight’s NINE point first quarter against the Celtics.
The good news is I know why – which I’ll go into at a later date, although it had to do with talking to another trader - and will be taking corrective action immediately.
Other good news is that I didn’t do any great capital damage, and also kept fighting to the end, tallying 1,700 contracts on the day.
And even though, as The Next Iron Chef (one of my favorite shows) emphasizes each week, even world-class chefs have bad days, I was feeling pretty disgusted about today’s trading … and frankly, today in general.
Now, before I continue, let me reinforce the fact that this blog has always been about 100% balanced reality.
Scroll through the last 28 months of blogging and over ten years of industry columns and speaking, and you’ll see soapbox after soapbox about my trading screw-ups and errors.
I do so because even though such periods of poor performance are far surpassed by the successes from a financial perspective (and for those who still don’t “get” this business, that last sentence FULLY defines the business of trading), the defeats are a very real and necessary part of this business that few ever want to share.
Having said all that, I’m going to share a heartfelt email from a longtime blog onlooker (a non-student who I’ve never met) that I’ll say right at the top is in no way intended to be self-promoting.
Yes, I’ve formally educated traders off and on throughout the last decade and may continue to do so from time to time. Yet right now, I’m simply in trading mode. And if you missed the above content, I’m human and gaffe with the best of them … although I do “get” the definition of trading referenced above, and perhaps therein lies the difference.
Yet tonight, I admit I was feeling rather “low” and needed a morale boost.
Then this came:
Given that you are about to take the generous gift that is the sharing of your knowledge to another level again with the Trading After Dark project, I feel that now might be an opportune time to express my wholehearted gratitude for the help that you have given me over the last few years.
I have spent the last ten or more years learning to trade and in the process trying every conceivable method and instrument, blowing up many trading accounts and much blood, sweat & tears along the way, not to mention giving up an established professional career to drive a delivery van on the graveyard shift to be able log the valuable screen time I needed.
Through trial and error I got to a point where I realised I was best suited to trading futures on a short term basis (i.e. lost the least amount of money) in a fashion extremly similar (though far less successful and disciplined) to yours.
Having said this, I spent another couple of years in the two steps forward, six step backward phase graduating to the two step forward, two step backward phase you have mentioned. In about August 2008 just as finances and my very patient family’s support both started to waver I happened upon the blog.
I was captivated by this trader who was confirming everything that it had taken me so long to learn about what was really important when it comes to trading but wasnt just talking the talk, he was seriously walking the walk. Though I hadn’t found consistent success by this stage I had learned enough to be able to distinguish the “smoke from the mirrors” and I knew I had found the real deal.
I devoured every word, hitting the blog so often I feared being perceived as some kind of deranged cyber stalker. With your inspiration and your words ringing in my ears I continued on (while resuming full time work to feed my family). Now I can’t say a light bulb went off suddenly, but over a period of time slowly things started to change. Wholesale/Retail. I had probably read these words a hundred times in your blog without any real insight but somehow, something finally clicked.
The profound effect that this new mindset had on my trading once It finally sunk in to the absolute core of my understanding and not just on a superficial level has been nothing short of amazing. Sure, I could read the chart patterns but what I didn’t realise was, for example, waiting for some form of “trigger” before entering the trade, (as is continually taught) nearly always had me entering on the verge of retail. Confirmation = Retail!
Now that my mindset has changed I rarely take more than a few ticks of heat on a great majority of my entries. It has taken away the pain (emotional & financial) of always feeling I was constantly on the wrong side of the market and getting stopped out just as the market turned back in my direction. With the patience and discipline to take only “my (wholesale) price” or nothing and varying my position sizes to “maximise the good and minimize the bad” I have managed to record 6+ month results that include only one losing week since April this year.
Of course I am constantly vigilant about staying focused and I know I need to continue working even harder in the future. (I have the Og Mandino quote posted to my office wall). But having said that Don, even the results I have managed to achieve so far have made a huge difference to my family and I. The extra income derived from my success has already enabled me to provide opportunties for my two young daughters that would have otherwise been unavailable.
I can state unequivocally that had it not been for your inspiration I would not have kept going and if not for your teachings I would not have figured it out.
So thank you Don, from the bottom of my heart. For your unbridled generosity. I can only hope that in the future I might also be able to give back in someway just as you have.
In closing I would like to attached a favourite parable of mine that I think sums up what you have done and what you are continuing to do for the trading community better than I could hope to. Perhaps we just need to change the word starfish to jellyfish!
There once was a wise man who used to go to the ocean to do his writing.
He had a habit of walking on the beach before he began his work.
One day he was walking along the shore, as he looked down the beach, he saw a human figure moving like a dancer. He smiled to himself to think of someone who would dance to the day and he began to walk faster to catch up.
As he got closer, he saw that it was a young man, and the young man wasn’t dancing, but instead he was reaching down to the shore, picking up something, and very gently throwing it into the ocean.
He called out, “Good morning, what are you doing?”
The young man paused, looked up and replied, “Throwing starfish into the ocean.”
“I guess I should have asked; why are you throwing starfish in the ocean?”
“The sun is up and the tide is going out. And if I don’t throw them then they’ll die.”
“But, young man, don’t you realize that there are miles and miles of beach and starfish all along it. You can’t possibly make a difference!”
The young man listened politely, then bent down, picked up another starfish and threw it into the sea, past the breaking waves and said …
“It made a difference for that one.”
Yes, I’m human … in every aspect.
After reading this, my day admittedly got a whole lot better.
I guess it makes all this babbling worthwhile.
May we all get sore arms from throwing starfish.
Have a pleasant evening.
We’re getting closer!
Efforts continue in earnest as we eagerly anticipate our Trading After Dark (TM) launch in the coming weeks.
For those familiar with the Poker After Dark program, we’re using its “Directors Cut” weekly recap as a template for the final production.
Click on the image below to view a video update via Windows Media Player.
My continued thanks to the widespread industry support as we look forward to breaking new ground.
Yet in my view, it ultimately comes down to interpretation via judgment and “feel”.
So this morning’s tank transcript and trading remind us of:
(1) The importance of the “S” in last week’s “Sense-Trust-Act” post, as well as …
(2) The importance of raising and pressing your bets HARD when you … well, “feel” it.
For it’s never about how many pots you win … rather it’s how much you win when you’re right.
Some random thoughts as the leaves continue to change.
Foxwoods World Poker Finals- I’ll be at Foxwoods this weekend to play in some cash games and a feeder tournament for the World Poker Finals. As I do, I’ll also be working on sharpening the “aggressive” portion of this trader’s “tight-aggressive” nature which has been lacking lately.
I actually haven’t played much poker lately, and am hoping a marathon session at the table will help reinforce the importance of “raising” one’s trading position when right.
Change of Scenery – I’ve mentioned recently that I’ve been considering a change from my long-standing TT front end order entry platform, and have been studying the Photon platform extensively recently.
Last night, I had the priviledge of viewing a personal demo by Linda Raschke and Damon Pavlatos from FuturePath Trading, and thank them for their graciousness as I plan the future.
The platform itself is world class, is extremely visually appealling, and includes chart-based order entry. The developers did a fantastic job, and future enhancements are planned shortly.
As I mentioned in the recent video update, the current plan is to capture a week’s worth of trading, which would then be subsequently parsed to capture the “essence” of the week to be viewed in a 30-60 minute video.
After the initial beta is produced and feedback gained, I’ll then decide whether/how to proceed further.
I still anticipate a rollout sometime this fall, so please be patient and stay tuned.
As I mentioned in the video, when done, it will be done right.
Jellie Congrats- A quick note of congrats to William from the last Jellie team who recently emailed me stats showing he’s been trading at a 81% win/loss clip. Nice going W.
Here are a few relevant excerpts from his email:
Just remember to keep looking at the moon.
For the guy pointing the finger is irrelevant.
Enjoy the weekend and wish me well at the tables.