Apologies in advance for the Disco pic, but it fits the theme of the day.
Thoughts on today’s trading, continued Trading After Dark prep work (and related personal video review), where not to put your stops, and my first Photon trade.
Suffice it to say that there’s lots of excitement at this end as we look to keep the mojo going and hit the ground running in 2011.
Please note my reference to today’s early prices of “1105-1104″ meant “1205-1204″.
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Don is an intraday S&P E-Mini Trader, Member of the CME, and Christian who has educated traders and advocated for industry transparency since 1999. Long-term performance of his privately traded fund ranks among the industry's best at over +800% from its 2004 inception to 2010.
His 2008 performance of +214% +$1.6 Million bested the industry's top CTAs.View Don's complete bio.
Don is the Chief Investment Officer for PivotPoint Advisors, LLC and is also the father of a Type 1 Diabetic daughter who has been the inspiration for his work with the ADA.
Well said tonight – especially with stops! Thanks
Thanks Don for insight. I find it great that the Pro’s I listen too have same view of markets.
Same view regarding Risk Management that is. Control Risk with size, etc.
Congrats on the new Photon platform! Glad to hear you like it!
The hardest part of the day was that there really was no price retracement after 9:00AM & it was even more rare to have 2 trend days in a row back to back along with a 50 handle move in 2 sessions. Kind of feels like 2008 these past two days without the massive volatility gyrations.
Hey Don, are you thinking of releasing a program tailored specifically for longer time frame traders/investors. Alot of us don’t have the ability or mindset to trade intraday. Not sure if you have been sucessful on longer time frames, but i’m guessing you would need to do that eventually given your account size continues to grow?
Cheers
Yes, I expect to be forwarding some info after the first of the year as I’m working with an established firm that already has a good track record (and strong ethics), and we’re incorporating many of the successful intraday strategies into longer term account management efforts for those who can’t or are unable to trade, or who prefer a more longer-term view.
It is interesting that you took a long trade, found out you got in too early, withstood the big loss potential and then got out at or near break even. It seems we all have that incredible urge to get out of those trades to “stay alive”. Myself included.
Denise Shull (google her if you do not know her work) talks about acknowledging your feelings by expressing them out loud (yelling them out) or by writing them down so that we do not act them out. It also seems that by “staying alive” we have given up on our conviction of our initial bias in the market. In addition it also seems that we expect too much perfection in our entry prices. Ever since I read “Golf is not a game of perfect” not once but twice, my trading has improved. I can now laugh at myself when I entry price sucks. I couldn’t before.
When the flash crash occurred, I took a loss because I wanted to “stay alive”. I did not have to take a loss that day if I had yelled out my feelings (this dampens the urge to act on those feelings), if I held onto my market bias conviction and if I expected imperfection in my entries.
Just thought another point of view would be helpful here.
Agree with parts, but definitely not the part about “staying alive” being a trading ill.
Keep in mind those pros who manage the risk of certain sequences with scratches and reentries (as do most highly successful pit traders) instead of size (which I actually do most of the time, although for experienced traders it’s a combination of sizing and scratching) are constantly “staying alive” purposely by escaping to cash with the intent of getting right back in after reassessing. Once an entry has been made, whether a trade sequence was profitable or unprofitable is completely irrelevant (except in aggregation over the dozens of sequences over the course of a day or tens of thousands of trades over a career), and it would make more sense to instead gauge the exit points to see if they were at relative wholesale levels … which they were in both days you mention.
Fading wholesale extremes of course requires management with size vs. stops, the latter being highly detrimental as has been proven by Larry Connors’ extensive work.
So I certainly wouldn’t change anything from yesterday once the orders hit or that other “day” you mention as the intent was always to reenter and the exits were well off the retail barf points and back at relative wholesale levels.
Now barfing it out at the “uncle” point is of course another issue and very wrong, but even experienced traders will find themselves doing it on rare occasion.
Agree with the thinking out loud concept in general as we discussed in the live courses and as Dr. Brett discusses as the “Internal Observer”, as well as my fav “Golf is Not a Game of Perfect” book!
Stay well.
Good points Don.
It seems it comes down to a judgement call as to whether to use the scratch, reassess and reenter method or to stick with the initial entry conviction especially when the market bias is still intact. It also seems that the conviction approach takes more nerve to execute.
Well, I agree it takes nerve to pursue this business period, regardless of method
.
Stay well.