How To Fine-Tune Your Business

As I’ve noted in the charts below, determining the intraday rhythm of each day
was critical given the longer-term chart clouds, and the 13 & 60 tandem
cooperated nicely.  Trader flexibility between days was paramount to profits as
short trends reversed to long trends — to use a local Boston term — “wicked
hahd”.

So long as the daily and weekly pictures remain a bit cloudy, booking profits as
they occur on solid intraday setups while avoiding marginal trades remains the
ticket.  And while such advice sounds ridiculously obvious — thanks a lot
Don for that sage advice — this week’s action was a solid reminder
of the age old “greed kills” principle.

Let’s hit the charts and then talk a bit about business.

There won’t be any column next week due to the Virtual Pit effort that begins on
Sunday.  For those that have signed up, I greatly look forward to our time
together as you get a rare opportunity take an inside and detailed look at one’s
trading business, from the basement wiring to the roof shingles.

For the rest of the folks, I encourage you to consider ways to fine-tune your
own trading business.  Seek, define, and acknowledge your weaknesses, and find
ways to improve them.  I said years ago when I left the comfortable corporate
executive chair that this business is the ultimate pay-for-performance effort,
much more so than even professional athletes who can — at least for a time —
rely on salaries and contracts that were created based on past
performance. 

In this business, we’re judged and paid continuously based on performance, and
since we’re solely accountable for results, it’s imperative that we seek out our
weaknesses and continually work on improving them.  I know my weaknesses in
spades, and suspect I’ll be working on them until the tombstone is written as
perfectionism isn’t something that exists in this lifetime.

Think your business is going well?  Performance looking great?  What about cost
reductions?  Does it make sense to consider joining the CME to reduce commission
expense?  (A topic some brokers likely prefer you don’t learn about
given the sharp reduction in rates.)   Are there other ways to improve your
bottom line?  What about continuing education to keep abreast of industry
changes or otherwise increase your performance?  Are unnecessary overhead
expenses eating into profits?

At the risk of repeating myself for the hundredth time since we began this trek
several years ago, I view trading as a business, period.  I don’t view it as a
game and I don’t care to join those that like to perform cartwheels after
ringing the cash register. (Picture the hardware store owner jumping up and
down after selling a hammer, or heaven forbid, a box of hammers to a
construction crew.  Sales are supposed to happen … it’s called revenue, duh).

Yea, some have called these concepts “stupid” — and I chose the kind word. 
Fine, whatever.  All businesses are indeed unique and up to the CEO as to how to
run them.  Like partying while customers are asking for service and revenues are
at risk?  Whatever.  (Ever notice that those who criticize usually run a
business of supplying the party favors?)

Which brings me to one final thought before we call it a week, directed toward
those who may be struggling with non-support of peers, friends, family, etc. in
pursuing this crazy business.  (Heck, you ought to see some of my mail from
phony email addresses, brave souls that they are.)  I once said in this
space that we embrace your critics, for they’ll make you stronger than they’ll
every imagine.

Flash back to last weekend when A-Rod was batting under .200 and had to endure
the wrath and jeers of thousands of Red Sox fans as he was going
0-for-the-series and committed several mental errors.  Hmmm, I wonder who I’d
rather have on my team, a skilled performer who worked like heck over the years
to refine a difficult skill who happens to be in a slump (rewind to the
perfection comment above), or the beer guzzling pot-bellied fan with dripping
mustard on his shirt shouting “Yankees Suck!”. 

Success requires risk.  My applause for those of you that have pursued your
dream by overcoming all obstacles placed before you.  We’ll check the batting
averages in September.

Don Miller