Leap Of Faith Pays Off…

Both the S&P and Nasdaq will open next week testing multiple pullbacks into what
have been strong daily downtrends throughout the month, so next week may hold
the key as to whether the daily leads the weekly out of its narrowing
seven-month range. 

Let’s hit the charts and then revisit the issue of a CME lease along with a few
trading office tweaks at this end.

Today marks the end of my first six-month CME lease, and thus a pause point of
sorts along one particular road I chose to pursue in February.  As I wrote
earlier this year, the decision to add a monthly overhead business expense in
the context of a fixed lease component was a business decision that — while
warranted at the time given that my trading volume had been exceeding the
breakeven requirement — reflected somewhat of a leap of faith.  After all,
plans and reality sometimes take two different roads themselves and trading
volume is often largely dependent on market conditions, opportunities, prolonged
personal focus, and a few other likely variables.

Yet I can say at this rest stop that the decision was justified and so the lease
will extend into the foreseeable future.  In addition to the commission cost
savings, I’ve found my experience with those whose paths I’ve crossed at both
the Merc and my FCM to be highly pleasurable.  So if you’re trading above the
needed breakeven volume threshold where lease cost is offset by commission
savings — a level that will of course vary based on what you’re paying your
current broker — it’s a decision that could flow right to your bottom line, all
else being equal.

Another decision I made this week was to upgrade my trading station to allow for
improved simultaneous monitoring of multiple markets, as well as providing the
ability to record several live trading sessions — charts, broker log, audio,
and video — for the purposes of continuing trader education.   The simultaneous
monitoring issue is one I’ve long debated as I continue to believe in trading
simplicity, yet I’ve found just enough times where the DAX or EC are “in play”
and I’ve been napping watching ES paint dry.  In fact it happened again just
this morning.  Consider the decision another leap, and time will again tell
as to its fruition.

In terms of education, more details will be coming soon, but basically it’s in
response to requests from those whose schedules don’t permit attendance at the
annual weeklong trading event.  As I’ve said before, theory is fine, but there’s
nothing like the bumps and bruises of realism as an effective teacher and so
we’re going to do our best to duplicate it to the extent possible.  Stay tuned.

Anyway, I’d like to welcome a new Dell Optiplex with 3 Gig Mhz and 1 Gig of RAM
to the trading office, along with two 20.1″ LCDs.  That brings the number of
CPUs to three and monitors to six — or said another way, will require a second
lead vest and a higher A/C setting.  I suppose time will also tell if my feet
start glowing over time.  And in perhaps the most interesting stat of the week,
the CPU and monitors combined cost was still only about half the price of my
first Macintosh in the early 80s.  Amazing.