Archive for December, 2010

Dec
31

Friday Notes – Final Shopping Day

Posted by: Don Miller | Comments Comments Off

For cash-based traders, a reminder that today is the last day to get a current tax break on business expenses.

Sprucing up the office big-time at this end to ring in the new year with a few toys …. er, I mean equipment.

I’ll clue you in over the weekend :-) .

In the meantime …

Categories : Fun, Personal Trading
Comments Comments Off

A few updates from this end as we continue to walk the bridge from 2010 to 2011.

LBR Webinar Follow-Up - First, my thanks to Linda Raschke, the LBR team, and the 300+ traders attending last night’s Webinar. 

Linda has posted a link to the slides on her home page, and the actual Webinar will also be loaded for viewing shortly.

Content includes my personal “brutally honest” assessment of improvement areas for 2011, along with several topics to help keep this business in perspective as we clean the slate yet once again, including:

- Managing Personal Momentum
- My Perspective on the Concept of “Time”
- Maintaining Perspective Throughout the Year
- Resurrecting the Personal Scorecard (Remember that 58-3 Quarter???)
    … along with my stupidest decision ever as a trader in abandoning it!
- 2011 Reading Suggestions
    … and more.

My apologies for not getting through all the questions due to time constraints at this end, but Linda and I talked about doing a follow-up chat sometime in Q1.

Photon Transition – By Monday, my transition to the Photon order entry platform will be complete as I move my main trading account away from TT. 

As I mentioned last night, reasons for this significant change (I was on TT for eight years)  include automating my key sequences (the brain and reflexes turn 50 in a few months gang!), chart-based trading with further enhancements within a few weeks, and an outstanding support team who I’ve gotten to know quite well.

I’ve spent quite a bit of time with Linda, Damon, Noah, and Mary over the past few weeks who have been of tremendous help, and also want to publicly thank Pat Lafferty at MF Global for his help during the transition and over the last many years.  They’re all complete pros by any definition.

While the move has resulted in delaying the Trading After Dark (TM) launch – which will be resurrected once the transition is complete, I can’t ignore the immediate and long-term benefits of the change.

I’ll share my continued experience with the move as we enter the new year.

2011 Multi-Week Jellie Training – As I mentioned last night, I’m planning to continue to limit the number of live Jellie courses in 2011 so I can continue to focus on my primary trading business.  At this point, I’m tentatively planning one for the Feb-Mar timeframe should there be sufficient interest.

As you may know, I don’t broadcast these things via email blasts, am not interested in simply filling seats, and let past participant response measure their benefit. 

As always, if there’s enough interest, I’ll do one.  And if not, well, you know what I’ll be doing.  Please email me at don@donmillereducation.com if you think you may be interested so we can plan ahead.

A Blink of the Eye – Lastly, and as I mentioned last night, please forgive yourself for any 2010 shortcomings and plan to enter 2011 with a renewed sense of spirit.

In the scheme of things, 2010 – like all the years before it – is merely a blink of the eye.

For the bird hasn’t even arrived yet.

You’ll have to re-read the first paragraph of that link to “get it”.

Comments (2)
Dec
27

Monday Notes – Wednesday Webinar

Posted by: Don Miller | Comments Comments Off

Hi gang.

I hope all had a great Christmas and holiday weekend.

As I mentioned last week, I’ll be giving an online Webinar to Linda Raschke’s team this Wednesday (12/29) after market close at 4:30pm ET.  You can sign up to attend live via this link, or view the Webinar later on the LBRGroup.com home page after its been posted.

The title is “Surviving & Thriving in 2011: Managing your Plan AND Yourself for Sustainable Success”, and I’ll be discussing many aspects with emphasis on managing personal momentum.

Consider it an opportunity to jump start your 2011 trading as we collectively use this final week of 2010 to get our heads on straight for the new year.

Comments Comments Off
Dec
24

Silent Night

Posted by: Don Miller | Comments Comments Off

Comments Comments Off

There’s an old saying that “Time is Money”.

I prefer to say that “Money is Time”.

Today’s video follows up on a slew of emails in response to Monday’s post to reinforce the complete immateriality of short-term results, and why I decided to publicly share the more relevant and longer-term 800% total fund return figure.

On the flip side, of all the stats that I’ve ever kept, the recent 5.26% maximum draw reference in the post may perhaps be among the most relevant … especially in light of recent discussions re: Livermore, Karas, et al. 

And such will be one of the cornerstone concepts I discuss during next Wednesday’s Webinar for Linda Raschke’s team at LBRGroup.com.

Comments (5)

Nearsightedness, or myopia, as it is medically termed, is a vision condition in which close objects are seen clearly, but objects farther away appear blurred. - American Optometric Association

Every now and then, it’s appropriate to regain some perspective in life.

And based on some recent mail, it’s time to once again try to put my ongoing babbling into perspective … using my favorite concept of “time”.

Throughout the last decade, I’ve likely preached more about the concept of “time” more than any other single topic.

Two prime examples include the famous January 2009 “Svithjod Rock” post (which was subsequently asked to be syndicated and appeared on the inside cover of the 2009 International Trader Expo Directory among other places), and one of the first slides of the Jellie Training series which states, “Trading is all about a Long-Term Accumulation of Short-Term decisions”.

The main reason I tend to get “soapboxy” about this concept is that the vast majority of people on this planet – and traders-in-training and losing traders in particular - continue to miss the point as they remain interested primarily in short-term, microwave-type results.

Such is why (1) I revised the tone of this diary some time ago from immediate data/results intensive to more substantive intensive, (2) I’ll only offer live trader training over an extended four-week period which MUST include my live trading, and (3) I’ve been so cautious with the Trading After Dark (TM) launch so as not to provide even a single hint or inference that results over a single day, week, month, year, (insert other microscopic time period), etc. matter … because they don’t EXCEPT in accumulation over a very long period of time.

I was reminded of this again twice over the weekend when (1) I was getting ready for a Webinar that I’ll be giving Linda Raschke’s team next Wednesday, and (2) I received requests over the weekend asking for some detailed statistics and the posting of daily results.

The latter of which falls in the “give a mouse a cookie and he’ll ask for a glass of milk” category since I’ve sliced & diced both micro and macro results via an array of published statistics, tank transcripts, diary entries, 38 weeks of live team trade narration in 2009-10, and actual trade plots ad infinitum over the years.  And I’m STILL looking for someone else to publicly share their horror days. But I digress.

You see, short-term numbers – whether good, bad, ugly, or indifferent – mean absolutely nothing. 

Zero.  Nada.

Let me try the following analogy.

Many outside of New England don’t care for Bill Belichick.  His press conferences are dull, he wears the infamous “hoodie” instead of fancy sideline garb, is almost robotic in nature, and his tone never waivers whether they won, lost, played well, or stunk up the joint.

He’s not fancy or flamboyant, and his players follow suit.

Oh, and over the long-term, he wins.  Boy does he win.

Yet most in this world would apparently rather see the “pizzazz” and “excitement” of  a Rex Ryan.  Or dwell on current-day results. Or simply see how their “fantasy” team is doing.

And such is true with trading as many traders continue to care about the “glamour” of trading, especially in the context of the immediate trade, day, week, month, year, (again, insert microscopic time period), etc. of both their results and the results of their “fantasy” team.

And while I’ve tried to say it before a thousand different ways, I’m going to try yet one more time.

ANY of these more than 800 diary posts by themselves means nothing

Each extended streak during 2001, 2002, 2005, the self-imposed “challenge” year of 2008, and parts of 2009-10 by themselves means nothing. (btw, note the gaps gang!)

The July 7, 2008October 6, 2008, and May 6, 2010 Days From Hell (among others) – while published with clear intent – by themselves mean nothing.

My burnout during 2006, mid-2009 and lack of trading interest/passion during parts of 2010 by themselves mean nothing.

Yet I share each of these micro-instances with the hope that it’s the ENTIRETY that onlookers “get”, and therein lies the ONLY value of this ongoing babbling.

And yes, even I must be reminded of this during times when I’m staring at the “performance” tree and not the forest … or more appropriately, the world.

Which in fact happened this weekend when we were doing some longer-term fund comparisons to the Barclay benchmarks, when I was reminded that through all of the micro-timeframe snippets noted above, my main fund has generated a Total Return to date (as defined by Barclay) of over 800% over the last several years (including pre-blog years).

btw, the worst peak to trough drawdown (again, as defined by Barclay) over the last five years?  5.26% … a figure that probably means more to me than anything as “defense wins championships”.

I debated long and hard about sharing these figures.

And while I’m sure they’ll get twisted, distorted, doubted, misinterpreted, etc. by a few who again just “don’t get it”, it’s the best way I know to properly “bind” each of the 800+ pages of this electronic book with emphasis.

And perhaps improve our collective “vision” in the process.

Let’s keep our eye on the ball as we enter 2011 gang.

It’s the only way we’ll ever hit one out of the park.

Comments (8)
Dec
17

The Weekend Trader – Is it Time?

Posted by: Don Miller | Comments (9)

Some random thoughts as I’ve essentially closed up trading shop for 2010.

2,000,000 Contracts - In the relatively meaningless statistic category department, this eye-popping figure reflects the number of contracts I’ve traded since taking my last significant break four years ago.

Two million. 
Over it actually as I passed the mark this week.
 
In terms of volume ranking, the years rank 2008-1st (duh!), 2007-2nd, 2009-3rd, and 2010-4th.  I’m told that 2008 ranked among MF Global’s top non-institutional clients … again fairly meaningless, although they’re the largest clearing firm in the world!

At this end, two thoughts come to mind: First, that’s a lot of muscle memory.

Yet second, all muscles need a break, and it may be time for a brief sabbatical as 2010 will also rank 4th in terms of profitability.

I made such a move in 2006, backing away from the markets a bit to turn my attention to non-market efforts.  During such time, many will recall that I went “off the industry grid” completely … and remained out of the public eye until 2008.
 
Looking back at 2006, it was the best decision I’ve ever made as a trader, and provided the renewed energy and focus when I returned to go on the sustained and at-times ridiculous multi-year run, much of which has been fully chronicled in this diary.
 
As I’ve often said, market profits do one thing and one thing only: They buy time.
 
And good fortune has blessed me with, well a ton of time compiled over the last four years.
 
Livermore unfortunately ran out of it … all of it, figuratively and literally.
 
I don’t plan to.

Christmas Giving – I’ll be giving 25% of all proceeds from all Jellie Webinars issued between now and the end of the year to the GrowUganda.org effort.

Check out a recap of part of their recent mission trip … inspirational!

For those new to this site, the material reflects my most comprehensive (and likely final) “packaged” trading educational material ever produced, and chronicles the eight two-hour evening sessions of the beta 2009 Jellie team as we recapped highlights of each trading week along with formal lecture.  You can view a complete syllabus of the covered material here.

Life Choices - On a related topic, Last week, I had a few phone and email exchanges with a trader who had literally lost hundreds of thousands of dollars trying to “learn” trading by essentially paying market tuition, yet refusing to invest one penny in education.

While I won’t recap the entire conversation, here are some relevant excerpts from my response:

I would simply encourage that if you’re TRULY serious about this as a REAL BUSINESS and profession to pursue formal training as anyone pursuing the skill-based careers of physician, pilot, athlete, or similar profession would.
 
From my perspective – and taking my own educational efforts completely out of the discussion for the moment – it seems that you’re still trying this “on your own” via experimentation without investing in any quality education, while willing to pay the market far greater sums in continued losses … which is like a doctor literally killing patients in an attempt to “learn” the business.  I know that may sound harsh, but it’s the honest perception (and you’re not alone), and I would simply ask you to step back and try to look at your situation objectively. 
 
Psychologically, there are many good quality resources out there from Steenbarger, Douglas, Dayne, Raschke, and my stuff … and there are good prop firm environments that can also provide capital, discipline, etc … yet please understand that ALL involve at least some cost.  Traders MUST plan, budget for, and invest in education — both initially and ongoing — and as is the case in any business, past expenses or losses are simply “sunk costs” in that they’re irrelevant with respect to future decision making.  A good benchmark for traders is to budget about one year’s worth of college expense for education and tuition.  Personally, I budget $5K a year for continuing education.
 
It’s in this light that I’d suggest assuming that Monday will be your first day of your “trading” business, and ask you to think about how you should go about structuring it from an infrastructure, educational, and strategic perspective.  For taking a comprehensive and holistic view of building a real business stands a far better chance of trying to both stop the bleeding AND heal the patient via a band-aid.
 
Absent a change in comprehensive business approach, I’d suggest any such prospective trader change their pursuits.
 
Harsh perhaps, but I mean this with all due respect and believe they’re words that must be heard.
 
All my best.
 
As many know, I don’t have many regrets over my trading career.  I’m simply not a “regret” guy … you live, learn, and move on.

Yet I will say that I regret some of the “trial and error” portions of the early days (and even some of the latter) that literally cost me hundreds of thousands of dollars in “market tuition”.

Frankly, I would have paid $50K for a solid college-type education, as the net savings over time would have been huge.

Yes, we all have to pay some, experience will ultimately be a solid teacher, and we all ultimately have to find our way.

And yes, it’s fun building our own custom car.

Yet we shouldn’t waste time, money, or energy building the tires or engine from scratch … over and over and over again.  For such work has long been done by others who preceded us … and often at their expense.

Plus, getting run over by our own vehicle – as well as our shortsightedness – simply adds insult to injury.

Have a peaceful and pleasant weekend.

Some thoughts on the heel’s of Friday’s video on Jesse Livermore before yet another big football game today (Pats-Bears … call it CME New England vs. CME Chicago).

More “Reminiscences” – Great feedback via both comment and especially via email (a reminder to please use comments so all can view).

In terms of the “Reminiscences of a Stock Operator” (ROSO) book itself, while I certainly agree with many of the insights which will remain timeless, parts have clearly become outdated with respect to current markets where high-probability short-term market inefficiencies abound on a daily 24×5 basis, and where transaction costs have dropped substantially to allow for highly profitable short-term businesses.

At this end, I frankly find far more value in the untold ending, where ultimately, Livermore’s inability to adapt - arguably THE most fundamental and important attribute of being a trader - plus his inability to follow his own rules resulted in his losing whatever he’d made … as well as his life.

As I’ve long said publicly, anyone can make a good trade or have a good run. 

Yet only a tiny few – a group that doesn’t include Mr. Livermore – can retain it, grow it further when the rules or rhythms change, and/or know when to quit.

And sometimes, you simply have to know when to quit, or at least back off substantially.  Where are all the trading books and seminars on that???

Just ask Archie Karasand Brett Favre.

In the end – and the end-game is all that matters - Livermore ironically turned out to be one of the world’s worst traders, and his death provides one of the greatest reasons for the need of a permanent trailing stop on one’s equity curve (and yes, I have one which has saved my a$$ twice).

Perhaps a far more valuable book would be how to avoid the ultimate & unwritten ending … which frankly remains one reason for sharing this ongoing and thus far incomplete journal of my own trading journey.

Skeet Shooting - Yes, the optimal “Jellie“ trader definition may seem a bit overly cute at times – a small few may even say obnoxious … lol - yet one of the reasons for its existence and strong industry feedback can be found in that unwritten final demise of Livermore.

For as I said above, I consider flexibility and adapting THE most important aspects of sustaining this business on a long-term basis.

Perhaps the best way to describe trading is forever shooting at a moving target.

Call it financial “Skeet Shooting”.

And not only on a long term basis, but on an immediate basis as well.

It’s as if the virtual clay pigeons are not only moving, but also changing in size.

And such is why the ability to both read – and adapt to – the market’s rhythm on an immediate and longer-term basis remains the cornerstone of this trader’s beliefs and educational efforts.

For example, some still suggest that my Q109 of three losses in a full quarter (58-3 win/loss) was luck or based on one particular market rhythm.

Yet data shows that the quarter actually reflects one of THE most diverse group of daily rhythms we’ve seen in terms of chop (alternating up/down days) and both mini bear and bull runs (consecutive up or down days).

Simply put, it’s one of the best illustrations I can show in terms of the importance and reality of trader flexibility, as the virtual pigeons were continually moving and changing size.

And like those incredible athletic zones like the one Brady’s currently in (and Manning clearly isn’t), it’s a period that I often reference during periods of doubt, losses of confidence, or burnout.

On a larger term perspective, this trader has had to adapt numerous times throughout the last decade.

And while the list is likely too long to print, a few that come to mind include:

(1) Migrating from a highly profitable stock spread scalping business to ETFs when decimalization killed that business by reducing profit margins twelve-fold,
(2) Migrating from ETFs to Futures when my skill more fully evolved & my high ETF transaction volume resulted in excessive commission costs,
(3) Migrating from non-CME member to CME member to further reduce excessive transaction costs,
(4) Slamming the trading accelerator to the floor in 2002, 2003, 2008, and early 2009, and
(5) Moving the foot from accelerator to brake when market rules or personal rhythms dictated.

Even now, I’m making a transition in order entry platform from TT to Photon which will be complete on 1/1 (which btw is one of the reasons for holding off on an immediate Trading After Dark launch) to further reduce costs and add some mechanization of my methods as my reflexes slow over time.

For in the end, it’s all about flexibility and adaptability.

Unfortunately, it’s a lesson that can best be told through the demise and death of a once great trader named Livermore.

Comments (2)