From the Boardroom to E-Mini Trading Room
Recently,
Brice Wightman sat down and talked trading, among other
things, with daytrader Don Miller.
Brice: How Don: About five Brice: How Don: I was part Brice: What Don: I continue I have an accounting/finance background and had been style=”FONT-SIZE: 10pt; mso-bidi-font-size: 12.0pt”>size=2>Brice:
did you get involved in the stock market?
years ago, I came across the notion that there seemed to be some profit
opportunities buying and selling on a fairly short-term time basis. When I first
started dabbling — I won’t even call it trading because it does the word
“trading” a disservice — I realized, “Hey, this stuff is moving. How can I find
out what’s really going on here and position myself to take advantage of those
price swings?” Online trading was just starting to emerge. I hooked up with a
couple of Internet firms that were fairly intensively involved in teaching
traders and eventually got to a point where my trading was fairly consistently
profitable. I was fortunate to be taught some very strong fundamentals right
from the get-go, with respect to trade management and stops and that kind of
thing.
did you learn?
of an online teaching room at that time and did a lot of reading (Mark Douglas’
books really stand out). I’m one of these guys who just gets in and experiments
with what works, what doesn’t work — getting beat up enough times to realize
what doesn’t work. Ultimately, I was asked to co-run the room. I was making
calls; I was known for reading opens; I got pretty good at it. Since then, I’ve
been in another room, which I just left. In both cases, I was a volunteer
teacher trying to pass on some of the trading skills and insights that I had
developed early on and still continue to develop.
are you doing now?
to trade my own account. Again, I recently stepped down volunteering at another
site to focus on teaching and mentoring a small group where they have a direct
line to me for six-and-a-half hours a day. I spend a lot of time in the
after-hours trying to help them develop their skills. I’ve been at this now for
about four years.
in a corporate career for about 17 years when I started this. I had a flexible
schedule so I could trade opens, and once I got good at it, realized the cash
flow opportunity and could prove to myself that I could be successful, then I
decided to make the switch to doing this full time. The one rough spot I’ve had
— and the only drawdown month — I’ve had as a trader, was the month that I
stopped doing this part-time and I started doing it full-time. I had access to
the markets for eight hours a day and now needed to put bread on the table, and
there were some stresses and breaking of trading rules going on — and I was
teaching at the time, so it was kind of funny. I went through my own personal
pain, and I had to realize that I had to focus back on the skill and not the
income.
trading?
style=”FONT-SIZE: 10pt; mso-bidi-font-size: 12.0pt”>size=2>Don: It’s evolved fairly recently. For
the longest time, I was a fairly heavy scalper, and what I will call an
oscillation/reversal trader. I use the Nasdaq futures as an indicator for
everything that I do. Entries and exits are all based on the futures —
anticipating a reaction to the futures — whether they may be trending at the
beginning and you can get in on the trend early, or whether it’s providing
signals that it’s exhausting and about ready to turn. For the longest time, most
of what I did was to look for reversals, and arguably I still do that. For a
long time though, I was more of a scalper. The futures would be trending up,
there would be some topping formations, they’d be about ready to turn — I could
go short a stock like Juniper. As the
futures would move down — and there’s often just a very subtle lag between the
futures and the cash equities — I could profit quickly, you know, a quarter
point, a half a point, three quarters of a point. There was that sort of rhythm.
style=”FONT-SIZE: 10pt; mso-bidi-font-size: 12.0pt”>size=2>Lately, with the change to
decimalization, I’ve had to change my style a bit. I trade the QQQs a lot more
any individual stocks now. The change to decimalization has really changed the
rhythm of a lot of the stocks out there. It requires a different type of
trading. It’s more purely chart-based, and you have to let time work to your
advantage more so than you could in the scalping days. The QQQsstyle=”mso-spacerun: yes”> move 1:1 with the futures because they just
represent the cash value of the same futures index that I’m watching, so I’m in
essence a futures trader, trading the QQQs, rather than trading equities. I’m
largely looking for changes in trends, oscillations, trading ranges, shorting
tops and buying bottoms and doing so in a way where my risk is fairly minimized
through trade management.
style=”FONT-SIZE: 10pt; FONT-FAMILY: Arial; mso-bidi-font-size: 12.0pt”>face=Arial size=2>Brice: What learning
curve did you go through?
style=”FONT-SIZE: 10pt; FONT-FAMILY: Arial; mso-bidi-font-size: 12.0pt”>face=Arial size=2>Don: The biggest adjustment
is allowing time to work to my benefit. Looking for very strong chart
formations. Finding a good signal and allowing it to work out. It’s really using
time as an asset a lot more than I ever had before. I compensate for a little
bit of the old scalping mentality by doing a lot of scaling in and out of my
positions. Today we caught a nice pullback at the open and I went long. As it
starts to move up, and as it’s getting to the first possible point of
resistance, I’ll go ahead and lighten my load at that point and leave the rest
of the shares in the trade to take advantage of whatever further momentum or
trend may emerge at that point. That satisfies that scalping urge thatstyle=”mso-spacerun: yes”> is still in me.
style=”FONT-SIZE: 10pt; FONT-FAMILY: Arial; mso-bidi-font-size: 12.0pt”>face=Arial size=2>Brice: Do you
trade other stocks as well?
style=”FONT-SIZE: 10pt; FONT-FAMILY: Arial; mso-bidi-font-size: 12.0pt”>face=Arial size=2>Don: Over the past month or
so —