Monday, October 25, 2010

True Confessions

Before I share one of the most outstanding posts I've ever seen by one of our own TTW contributors, I'd just really like to thank all of you who sent good wishes my way. I'm still floored by it all, and it truly will stay with me through the year. Thanks everybody. 143

Right smack dab during our trading day today, our own Option Doctor aka optntdr dropped a gem that is not only worth reading once, but I think it's such a keeper it needed to have its own place up top on the blog today.  Note that he doesn’t play the victim card in his trading assessment of himself-Eeeeeeesential to good trading, as well as life in general. If you don’t know him, he’s also an incredibly generous human being with his trading thoughts, as well as jumping through hoops to share his TOS scripts with us and more. How lucky are we? (Thank you OD!)

Deep thoughts from a jet-lagged dude getting over the worst case of Malaysia Airlines business-class (#1 in the world my arse) induced EColi poisoning, aka, thoughts from 54K feet:


1. I have been wrong, plain and simple, allowing my macro outlook to influence my trading to a much greater extent than should ever have been allowed. I have been net neutral for two months, making money mostly by scalping and have missed the big moves. The China PMI ramp was too great for me to chase and I missed 120 spoos points, this will not happen again.

2. Over-thinking. Being an innately intuitive person, I really enjoy analysis of the markets. Some might say I am smart, but innuendo aside, I have come to the conclusion that over-thinking is really the death-knell for traders. I believe therefore it is is the surest way to go broke, and when you manage client accounts, a sure way to go bankrupt. "It is what it is," is my mantra from here forward, my personal macro-centric views, even when supported by evidence be damned.

3. Don't fight the much as I believe that it is different this time and that the old-school play-book isn't worth the paper it is printed on, it doesn't matter, fighting the FED is just plain ignorant. The big-boy mutual funds are the ones moving this market, and they play the same tired book they have been playing since they began managing money and believe they have the "silent put;" thus: fighting this flow has been wrong and will continue to be wrong until these old bastards retire or go broke, whichever comes first. 90% of them couldn't care less or even know what the charts are saying, basing all of your analysis on the charts will continue to not work.

4. Watch for bias. I go to the charts right after the close looking for opportunities for my personal accounts. My client accounts are all automated and extremely proprietary using inter-etf arbitrage strategies, so my daily whirlwind is all mine to own. As such, I have made the mistake of allowing my macro views to effect my chart analysis. While Demark rules are succinct, I have found myself often questioning and/or bending some rules simply because my own personal views contradicted what the chart was telling me and I was able to spin said chart bearish using other indicators. This won't happen again.

5. Take all opinions with a grain of salt. It is easy, especially around here due to the obvious cognitive abilities of many of us to allow others to influence your trading. Guess what?, my IQ is well above 160 and that means what you ask, it doesn't mean shit when it comes to being right, wrong, or indifferent. Others views are their own and you MUST have your own to be successful. That isn't to say you shouldn't heed others views, but keep in mind that you have to own your own trades, be accountable personally for your gains and losses, and have no right to think it is others who were wrong. YOU were wrong for whatever reason: now it is time to own up to it, admit it, analyze why you were wrong, and most importantly learn from it.

6. Mistakes: I have been too arrogant to admit my own as I imagine others are as well. Innately, the human mind has become conditioned to believe we are right, we know best, and all others be damned. I have come to terms with the fallacy of the aforementioned, and believe that using your own mistakes, admitting them, and applying them will lead to far great personal and financial mistakes. Thus for all of you: I am never right dammit!

7. Last one since these are off the cuff thoughts from my 17 hours of flying last week. Each and every one of you are truly special people, yes, even Steve (jejejeje), and it is an honor to trade along each of you each and every day. You make getting up int he morning much more interesting, and I for one appreciate all of you for your friendship, contributions, knowledge, sharing and compassion. Keep it up.

8. I lied, I am NOT ending this on that sappy note: kick ass, take names, and let's go make our fortunes in trading together.


Yeah, I know it’s Madonna (pipe down, GG)… but the lyrics fit today’s post rather nicely, plus it was a Christopher Walken movie, so :-P   Good trading tomorrow to us all!  Get ‘em!

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