A Week Full Of Errors, Yet An Abundance Of Profits

For the week, the S&Ps lost a whopping (not!) two points while the Nasdaq
followed suit by marking time with an eight point move north.  And for you
fellow DAX traders, the German DAX added ten in a trading week that included a
light-volume Ascension Day holiday on Thursday.

In terms of trading rhythms, the last few weeks have been a bit challenging for
some in that the daily and weekly charts have provided decent backdrops as noted
in our charts below (both in downtrends), as of course have the micro-timeframes
(13 minutes and less) which almost always do on an intraday basis (we
scalpers thank you).  Yet the 30, 60, and 120 timeframes — whose prevailing
winds can greatly assist both scalp and swing trader — have remained virtually
trendless for days as indicated by tight Bollinger Bands, low ADXs, or your
range indicator of choice.  As a result, honoring those timeframes currently “in
play” such as the daily and micro periods remains the best guide.

Many thanks to those attending April’s weeklong live trading event, where
participants were provided the rare opportunity to observe a real trading
business on a moment-by-moment basis that netted about six times
participant’s tuition cost.  As I’ve said over the years, I continue to strongly
believe in the value of emphasizing reality over theory and smoke-and-mirrors …
i.e. putting one’s money where one’s mouth is … and continue to encourage that
more industry trading “educators” follow suit.

Yet as I said at the beginning of the effort, the week was never intended to be
about “me”.  What I or someone else do is only beneficial if the overall
concepts can be effectively incorporated at the participant’s end.  I know I
could watch golf on TV until the days when I’ll be using a cane, could take
lessons for years (and have from time to time), and still not get the hips,
shoulders, legs, head, and club all moving in the right direction at the same
time.  I’m just not built that way.  So it is with this business.

Yet as I told the group time and time again, they were getting a rare inside
view of how one runs an effective trading business (there’s that word
again), including every thought, action, and consequence.  Now for a few sanity
checks: Is it the only way to run a business?  Of course not.  Is it the
best way?  No such thing.  Do we dwell on the results of a single week?  Those
of you who have followed my thoughts over the years should know that answer in
spades.  (Although we did have the opportunity to view several market rhythms,
which was the intent of these extended sessions.)  And lastly, do the results of
this or all of the past live efforts elevate me to some kind of guru status? 
Paleeeeeze.

To put the week in proper perspective, let’s highlight some of the efforts over
the course of the week, the details of which may (but shouldn’t) surprise you.

  – Missed a textbook trade sequence to respond to an unscheduled business
furniture delivery.

  – Mis-keyed two trade entries in the heat of the battle.

  – Had to deal with a broker feed outage.

  – Was premature on one particular sequence trading a larger timeframe.

  – Could have managed size better on at least four sequences, “scrambling” to
minimize damage on one.

  – Sat out most of two flat trading days with limited opportunity, as well as
the initial large breakouts.

  – Passed on at least three profitable sequences during times when focus wasn’t
there (typically near the

    end of the trading day).

And while I could list all of the positive efforts (obviously we must have done
something right given the results that included 18 consecutive profitable
sequences of the U.S. E-Minis and German DAX), I’d rather again focus on what
didn’t go right as we’ve done since we began this public trek a few years
ago.  Why?  First, resting on one’s laurels on a micro timeframe (and yes, a
week is a speck of sand over the course of a career) is the sure ticket to
complacency, earnings glass-ceilings, and a host of other career-limiting or
ending results.  Yet more importantly, I want to again stress that running an
effective trading business is more about accepting and dealing with failures
than anything else.  As has often been said, “One plans and then life happens.”

In baseball, perfect games (and a tip of the cap to Randy Johnson) and .400
hitters are virtually non-existent.  Hell, one of the best players of all time
— Derek Jeter — is still batting around .190 for the year.  But
thankfully, perfect games and .400 hitters aren’t necessary for abundant
success, and even one year doesn’t make a career.  Let’s face it, assuming we
define one’s working career (non-athletic) as from age 20 to 65, one year
reflects less than 3% of a working lifetime.  And while the spans of both an
athlete’s and trader’s career are likely less, the point remains valid.

The one question I’ve asked newer traders more than any other, and one that I’ve
had to ask myself at times over the years, is “Why the rush?”.  There is
a path to success folks, yet to mix metaphors, the path is indeed a journey
versus a destination, as well as a road less traveled, due perhaps in this
industry to laziness more than any other single reason.

A week full of errors, yet an abundance of profits.  A rare combination?  Only
if you’ve missed the last several years of columns, define “rare” as a natural
coupling, and/or have been hoodwinked by industry mirrors into thinking that
success means no one ever has a losing trade or that there’s some “system” that
you can ride to success.  If you’re spinning wheels trying to be a .400 hitter
by searching for that perfect batting stance, ask yourself whether you’re trying
to run a business or striving for perfection to impress yourself or others.  I
know a guy on the Cape who runs a fabulously profitable local hardware store and
could retire at the time of his choosing.  The results are certainly not
because he wants to show off!

And while there is no holy grail, in the context of either method or individual,
there is a road to success that can be duplicated provided there
is an deep inner perseverance to accept and adapt day after day after day.  I
applaud all of you who have taken that road, for those whose journey is in
progress will find ample rewards along the way.

Don
Miller

Seminar Feedback
Mailbag

Dear Larry,
I attended the recent
Don Miller Seminar/Training and in my opinion it is the best training I have
ever attended, and I have been to a good number of them!!!  The training
exceeded my expectations and I believe will have a great positive impact on my
trading business.  Don’s energy and commitment was phenomenal, he really taught
from the heart, I had the feeling of being with a dear old friend who wanted to
impart all his knowledge and experience without holding anything back and his
commitment to the success of the attendees came across very clearly.  He proved
that he was a great trader and a great teacher as well. F.T.

Thank you so much for your time and for doing such a great job all week!!! Even
though I wont be trading the futures on a steady basis what I have learned from
you will come in handy in my trading every day.  K.L.