Episode #5: Managing the Day

By Don Miller

Today’s episode (about 37 minutes long) uses my personal trading of August 5, 2011 to illustrate trade sequence and time of day management from a liquidity provider’s perspective.

I begin by walking through two key sequences where I help provide market liquidity in a thin market, after which I share my personally developed time-of-day management charts which helps me manage my intraday performance.

The two sequences reflected the bulk of the day’s $14,460 gross performance, with lot sizes never exceeding 20 S&P E-Mini contracts in a fairly thin market.

Important Note: Please take note of the important follow-up discussion re: the use of stops in the comments section of this post.

Categories : Low-Stakes Trading


  1. Duane says:

    hey badger, great vid! thanks for the time…

  2. Jeff Carroll says:

    Thank you, Don, for posting this. I’ve been trading futures for one year, but spent 20 years in the risk management/project management industry, so I truly appreciate your proselytizing about managing risk and how you handled such a day.

    I won’t dare speak as a trader yet, but much of what you say echoes good development management. It is almost never about the BIG decision. Yes, you have to choose a path, choose a trend, but it is about the small decisions made on the course of that path, and how fast you recognize errors and deal with mistakes. “Process not Profit” is what I have prominently displayed next to my monitor, and your TAD videos help reinforce that for me. Thank you again.

  3. Paul says:

    Hey Don, nice vid as usual but cant help it to comment this: unlike you I ALWAYS use stops and like you I`m happy with my way to trade. It took me about 10 years to understand a very simple thing and that is there’s no right way or wrong way to trade the market there is only one way your way once you found it. What I agree with you on this vid is that this is a simple business funny part is that it took me 10 years for that. Now for those people reading this comment I will reveal my secret strategy (hahaha): most of the time I have absolutely no clue about what the market is doing or where is it heading (i strongly believe that most people are like me but they keep on trying to understand and predict it) however every now and then the market is yelling at me about its direction and I just jump in – as soon as i understood this my trading changed, my pocked changed and my bank account also and I`m really happy I only trade when I`m happy, btw. Funny again is that I believe nobody will take me seriously on this…I would let them think making money requires a lot of intelligence, knowledge and diplomas but you spoil my game ;)

    • Don Miller says:

      Hi Paul and thanks for the good comments.

      Of course it’s difficult to get into all of the aspects and nuances of proper trade management in such a short snippet … thus the continuing intention to show a variety of conditions over multiple episodes and the disclaimers throughout the TAD site and early in the video.

      Yet to try to clarify and reiterate, I of course believe 100% in risk management (day and career) which is the trader’s and market maker’s life preserver. I also somewhat agree that there’s no single “right way” to trade (“somewhat” meaning there are several asterisks in that certain fundamentals including overall risk management and adding to winning positions at appropriate times simply can’t be ignored) as pointed out in the Jellie program which begins by laying out the various ways to trade trading channels and market inefficiencies from a wholesale perspective.

      The Jellie course also describes the effective use of premise-based (NOT some arbitrary point-based stop which ignores the true trade premise) as as one of the ways to accomplish this, and the late July PivotPoint client stops I discussed in last week’s PivotPoint Investment Briefing which allowed clients to completely avoid a subsequent 10% market crash were prime examples.

      Another variable in strategy is the single vs. multiple entries and exits, where as a market maker I emphatically choose the latter to make up for market and trader imperfections even as I acknolwedge that some successful speculative traders use the former … which of course ties directly to the choosing an applicable and appropriate stop methodology.

      Havng said that, I’ll go to my grave knowing that the topic of “stops” and how/when to use them is so misunderstood by the masses, it borders on ridiculous … one example of many points being if they’re used, they’re more momentary “reassessment points” where a trader should simply reevaluate … possibly with an immediate re-entry … perhaps a reversal … or even a “no immediate action” decision. This concept is especially critical as a professional market maker in the S&P E-Mini Futures which I’ve been doing since 2004.

      In terms of providing highly short-term wholesale liquidity at optimal and excessive market points which was the case in the first sequence example, historical statistics (Larry Connors has done some great work in this area) prove that using them to exit trades as the final traders are getting shaken out is flat out wrong and costly over time … even when considering the aspect of variance.

      In the first sequence example, which we see over and over again in trading extreme futures markets, clearly using the most recent low or high AFTER the market had already reached an optimal zone (i.e. 3rd or greater push with air galore that shakes the weak) as a complete uncle point is a losing proposition over both the short and long run.

      Yet I suppose my main point was to open the eyes of many to looking at risk management in a different light.

      For as in chess, one can sacrifice a large number of pawns to protect the queen.

      10 points on 5 contracts (the pawn) is the exact same “financial risk” as half a point on 100 contracts (the queen).

      And as I’ve said in many public talks, varying bet size for me is undoubtedly THE largest contributing factor to my performance reaching the upper levels of the industry for my asset class in recent years.

      Again, great note and stimulating dicussion … hope this helps.

      Stay well.


  4. Bill J. says:

    Don, I’ve been excited for TAD #5 and it didn’t disappoint. In fact I pulled it up on the 42″ TV just to get a better view. Great stuff and thanks as always for your transparency.

    I think my problem has been addressed here. I’m playing the “Queen” far too often and getting played – mostly because my premise was right but my timing was not. It hurts psychologically and makes playing catch-up that much harder.

    So it is in golf, as you have said many times as well. When a bad shot occurs, forget it! You stay in the game by adjusting to the conditions and by staying with your strengths.

    This was thoroughly enlightening and enjoyable and I can’t thank you enough.

  5. Lynn says:

    Great, great video. Thanks so much for effort it must take to do this. Practical examples so helpful. No matter how much homework and practice I do, nothing takes the place of this. Especially helpful to see samples from a volatile session.
    Thanks again!

  6. Paul K says:


    I’ve been following you since the beginning and believe what your sharing is a GREAT thing…especially the latest episode of TAD:)

    It would really be extremely helpful if one day you would show one of your losing sequences and how you handled it… as my personal opinion is that many of us struggle with admitting that were wrong and let the loser get larger then it has to & the emotional damage that goes with it…

    Many-Many thanks from all of us!

    • Don Miller says:

      Absolutely. As detailed and documented extensively in the blog over the past 3 years and during 12 years of public speaking and making a market in the S&Ps, draws as the result of market and/or trader variance are a critical part of the business that needs to be openly discussed, and more importantly, fully embraced.

      Transparency remains at the heart of everything we do on the blog, at PivotPoint, and as TAD continues to grow.

      This Episode … like every one of the tens of thousands of trade sequence I’ve ever traded, actually shows several suboptimal decisions along the way. Using the “when in doubt, get smaller” rule of thumb of course helped as it should. Accepting our imperfections is critical in trading as it is in life, and forgiving ourselves as we strive to improve admist our human limitations is paramount. There’s really no such thing as “wrong” in life … unless it’s just doing nothing. For every step we take is providing us experience we wouldn’t otherwise obtain.

      The initial blog is of course full of detailed draw examples and my personal and candid reaction to them over both the short and longer term. Accepting the concept of variance (recall the Annie Duke interview) is key. Draws are simply expenses required to generate income as is the case in any business.

      Our late July PivotPoint client stops which resulted in a small loss prior to the market’s crash as discussed in recent posts and last week’s Briefing are of course a longer term example of positioning based on an existing premise that simply changes, and I’ll work at getting other short term futures trading examples on TAD as well.

      In the meantime, if you closely at each sequence and every one I’ve ever made, they ALL could have been done better.

      Such is the case in our temporary life until eternity opens its doors.

  7. David says:

    In this video I heard you say that we were watching your TT platform. I recall that at the beginning of the year you mentioned moving to the PhotonTrader platform and that you were planning to partially automate exits on some of your most common trading patterns. Have you switched back to TT, and if so, why?

    • Don Miller says:

      Hi David -

      I actually have both TT and Photon. I like many of the features of both, although many of my mechanized statistical reporting and trade capturing charts that I use for personal auditing and teaching (including the graphs you saw at the end of Episode #5) are programmed for TT … which I found priceless in terms of performance monitoring and improvement.


  8. Hans says:


    nice video and commentary
    You do a great job. Thanks for sharing your thoughts
    I would like to ask you, if time and sales are important for your scalping activity
    or you consider more interesting and useful watching at $TICK intraday
    From what I understood most of your scalp trades are also based on instinct
    Is that true or I am totally wrong?

    • Don Miller says:

      Hi Hans.

      Instinct? Well, experience for sure … which leads to what I call acquired instinct (admittedly a bit of an oxymoron).

      Technical analysis and simple price ation provide the foundation however … TICK is one of the tools in the toolbox, but I don’t rely on it that much.


  9. Erwin says:

    Hi Don

    Great presentation as usual.

    I long to see a high stakes trade where you add to your winners.

    Thanks as always

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