Barry Manilow, "Copacabana"
Awful. Worse, I'm not even sure if I'll get that history post up tomorrow. Time has been short.
Wednesday, February 11, 2009
The RO Report, "Surfing" Edition
When I surf, I generally use my longboard. And waves that are good for longboarding tend to be more forgiving than a good shortboarding wave which is typically steeper and faster.
Due to some utter stupidity during my last hour of trade, I nearly "manservanted" myself on a day I knew wasn't good for trading. As punishment, I took my shortboard out and head to the shore. I'm an awful shortboarder and I took some nasty wipeouts...
Anyway, the RO managed to have a solid day. The early morning run in gold and commodities was played well by a number of traders.
Out of 28 traders today, 17 were gross positive or 68%. 6 traders made over $1,000 gross and 4 traders lost over $1,000 gross. I was #23 of 28. Disgraceful.
"Lucky Pierre" - Trader A, $12,907 on 75,800 shares traded.
2. Trader D, $7,245 on 123k shares traded.
3. Trader B, $6,164 on 129k shares traded.
4. Trader C, $2,813 on 74,400 shares traded.
5. Trader E, $2,508 on 20,100 shares traded.
"Chambermaid" - Trader Z, -$2,720 on 49,300 shares traded.
2. Trader P, -$2,319 on 24,200 shares traded.
3. Trader 10*, -$1,811 on 2000 shares traded.
4. Trader V, -$1,671 on 59,200 shares traded.
5. Trader R, -$694 on 37,500 shares traded.
Click here for the heatmap.
And here for Brian's take.
"Starfish Hitler" Slows Publication of "Sympathy For The Maria" History Post
I made a valiant effort, but was unable to defeat this thug in time to publish my weekly history post. It will be up tomorrow.
For the remainder of the day, I will resort to my third-tier blogging skills to provide you with enjoyment. Perhaps I will punish myself by watching a Dennis Kneale segment.
Tuesday, February 10, 2009
The RO Report, "No Squeeze" Edition
If you were bearish on this market all day and waiting for an opportunity to get short, you were likely frustrated. There was no bounce, no squeeze, just steady selling.
The internals were completely disgusting. The XLF was down 10%. Crude oil is pinned. We are poised precariously over the lows made about a week ago. After that, we go to the November lows.
I turned CNBC on today for the first time in months. I was all about listening to Geithner explain The Plan. I was unimpressed. I also wasn't big on the dog and pony show afterwards, when he did his live interview with Brian Williams and Steve Leisman.
It made me very afraid. I feel very dark.
There is no doubt in my mind now that we'll be revisiting those November lows soon. After that I'm not sure what the fuck is going to happen, but I don't think it will be pretty.
Despite all the gloom and doom, the RO had a great day and I repaired at least a little of the damage that I inflicted upon myself recently. Out of 30 traders today, 25 were gross positive or 83%. 16 traders made over $1,000 gross, and 3 lost over $1,000 gross. Solid numbers across the board. I was #13 of 30. Very happy.
NOTE: I am trying hard to get the history post up tomorrow. If it doesn't happen, it will be up Thursday.
"Lucky Pierre" - Trader Z, $18,168 on 228k shares traded.
2. Trader B, $17,141 on 335k shares traded.
3. Trader H*, $10,329 on 18,100 shares traded.
4. Trader P, $9,746 on 262k shares traded.
5. Trader C, $9,219 on 149k shares traded.
"Chambermaid" - Trader 10*, -$2,927 on 2,900 shares traded.
2. Trader 6*, -$2,618 on 100 shares traded.
3. Trader G, -$1,749 on 110k shares traded.
4. Trader U*, -$831 on 3,700 shares traded.
5. Trader 9*, -$498 on 2,000 shares traded.
This heatmap looks like a bad joke, but it's real.
Richard Dennis: Market Wizard
I read the Richard Dennis interview from Market Wizards during the tumult of last week. I can say surely, that had I listened to one particular message from the interview that I could have saved myself $5,000. Schwager asks what to do when things aren't going well. Dennis cautions that, "a certain amount of loss will affect your judgement, so you have to put some time between that loss and the next trade." Indeed.
Since my troubles from last week are still rather close-at-hand, I can say undoubtedly that my judgement was clearly affected by my losses.
For example, at one point last week, I was going to war with GS. Just shorting it over and over again because I thought the move up was overdone and that the stock should be going down. When I looked back on my trades in GS, I was surprised to see that it was perhaps the strongest stock on the exchange the day I was shorting. Was I expecting it to go from the strongest to the weakest or something? Hoping to get lucky?
That wouldn't have worked... according to Dennis, luck accounts for "absolutely zero" when it comes to trading success. Instead, it was like I entered into a little bubble of hate and GS was the only stock on the exchange to trade.
Furthermore, when I was involved with these "unlucky" trades, I couldn't imagine it going higher when it was trading $89. Then at $90 I thought, "it's just gonna pop above and scum back down to trap longs."
At $94, I don't remember what I was thinking, but I'm sure it was dark.
This illustrates another important point made by Dennis: "You should expect the unexpected in this business; expect the extreme. Don't think in terms of boundaries that limit what the market might do. If there is any lesson I have learned in the nearly twenty years that I've been in this business, it is that the unexpected and the impossible happen every now and then."
Had I been able to take a couple steps back, clear my head and have some perspective on the trade, I could have saved myself thousands of dollars. If you get into this situation, take Dennis's advice. I'm not sure how much time needs to pass, but do something to clear your head, trade another stock and do something different than what you are doing.
It doesn't come as a surprise to hear that Dennis (like Marcus and Kovner) lost money initially. But despite his early setbacks, he had "a need to try to succeed." People ask what a trader needs to do well. Some people think you need a "good head for numbers" or "an ability to analyze data." That stuff won't hurt you. But first, a potential trader must have that desire to try to succeed on his own.
Dennis reserves a certain amount of vitriol for the stock market. He says stocks are "random" and that they didn't offer enough fundamental information to create a real trend to trade. Or, as he succinctly puts it, "There is not enough information, not enough fundamentals. Just nothing going on."
Damn commodity traders!
But despite his adoration for commodity trading, he bemoaned the growth of computerized trend trading and all the resulting false breakouts he believed were due to too many people watching for the same patterns. He then made a rather dark prediction, "There will come a day when easily discovered and lightly conceived trend-following systems no longer work."
Man, I thought... everything I do is lightly conceived! But I also thought of Trader X, and his new patterns and this made a lot of sense. The patterns are constantly changing and it's our job as traders to find them.
His critique of Keynesianisam is interesting and oddly enough, timely given the current environment. "Keynesian economics was a solution to the problem of over-saving and under-consumption, which was a fair enough attempt to pull us out of the Great Depression. The problem now is the exact opposite: under-saving and over-consumption."
Market Wizards was published in 1989... can you imagine how much worse the problem of under-saving and over-consumption has grown in the last 20 years? The best you can say is the the near future should prove to be a very interesting time to live, though not necessarily comfortable.
Finally, Dennis throws at least one specific trading rule our way, and while I'm not a swing trader, it makes sense. He explains, "it is important not to have a short position with a loss on Friday if the market closes at a high, or a long position if it closes at a low."
Okay, with that I leave you to go and make a million bucks.
But despite his adoration for commodity trading, he bemoaned the growth of computerized trend trading and all the resulting false breakouts he believed were due to too many people watching for the same patterns. He then made a rather dark prediction, "There will come a day when easily discovered and lightly conceived trend-following systems no longer work."
Man, I thought... everything I do is lightly conceived! But I also thought of Trader X, and his new patterns and this made a lot of sense. The patterns are constantly changing and it's our job as traders to find them.
His critique of Keynesianisam is interesting and oddly enough, timely given the current environment. "Keynesian economics was a solution to the problem of over-saving and under-consumption, which was a fair enough attempt to pull us out of the Great Depression. The problem now is the exact opposite: under-saving and over-consumption."
Market Wizards was published in 1989... can you imagine how much worse the problem of under-saving and over-consumption has grown in the last 20 years? The best you can say is the the near future should prove to be a very interesting time to live, though not necessarily comfortable.
Finally, Dennis throws at least one specific trading rule our way, and while I'm not a swing trader, it makes sense. He explains, "it is important not to have a short position with a loss on Friday if the market closes at a high, or a long position if it closes at a low."
Okay, with that I leave you to go and make a million bucks.
Monday, February 9, 2009
The RO Report, "Sleep" Edition
We were locked in a low volume 100 point range today as the world awaits The Big Plan To Save The World.
It's funny, but reading "the Fly" last night and how he spoke about Reagan and deficit spending blended nicely with my reading of the Richard Dennis interview in Market Wizards, which I'll be discussing here tomorrow. In the interview, Dennis says that deficit spending is going to ruin the country.
Perhaps, 20 years later he will be proven right.
Anyway, more on that tomorrow. Not much to discuss. Everyone traded light and the RO did an exceptional job of preserving capital.
Out of 27 traders today, 21 finished gross positive, or 78%. While that sounds great on the surface, there were many sub $200 gains today. No one did much. The RO was rangebound. I placed very few trades and was flat, minus a small overnight from Friday that gave me a loss on the day. I was #24 of 27, which seems almost unfair on a day I did absolutely nothing...
Trader B pulls off another "doubledong" as he and his swing account gain the top two spots.
"Lucky Pierre" - Trader H*, $3,045 on 12,000 shares traded.
2. Trader B, $2,624 on 82,000 shares traded.
3. Trader D, $2,418 on 100k shares traded.
4. Trader C, $1,869 on 60,200 shares traded.
5. Trader N, $1,329 on 76,600 shares traded.
"Chambermaid" - Trader A, -$1,571 on 187k shares traded.
2. Trader 9*, -$621 on 3200 shares traded.
3. Trader M*, -$606 on 0 shares traded.
4. Trader S, -$104 on 4,571 shares traded.
5. Trader V, -$72 on 41,000 shares traded.
Brief Thoughts On A Bad Week (or two)
So each Monday I post and explain a good trade from the previous week. Unfortunately, after de-balling myself last week, I find I don't have much to work with.
Instead, I will say the following. I had a real war going on with myself, trying to decide whether I was pushing myself out of some "comfort zone" as far as my position sizing or if I was really fucking myself up, psychologically. Ultimately, I believe I will look back on the last two weeks as a positive. It is always good to push yourself in this occupation and I learned a few things about myself regarding discipline and focus. Namely, discipline isn't my strong suit and it's better for me not to "focus lightly" when trading.
While having somewhat precise rules is comforting to a certain extent and makes the job less stressful on many levels, I found that they stripped me somewhat of my instinct. Instead of getting out of winning positions, or at least "lightening" them, I found myself holding for larger rules, as long as I wasn't getting stopped out per my rules.
In short, I had a hard time balancing my rules versus my instinct.
However, and this is really what caused my massive losses, when positions went against me, I often didn't exit fast enough, because I began believing in my positions too much. So I was using the rules to keep me in positions, but not using them properly to exit positions... a rather deadly combination...
I will leave you with two final thoughts that I heard last week.
First, from my father, who knows that when I start thinking about money, I cripple my ability to trade. He said, "If you are thinking about the money, then you are not focusing on the right thing which is the trade. Instead, you are trying to make back the money you lost and this is irrelevant to the trades you are making today." I thought this was pretty insightful from a man who has never read a book on trading and who still doesn't truly understand what I do each day.
Second, "Trader P" related a thought from the Charles Longstreet book (which, incidentally, will be the third book in the Dinosaur Trader book club). Longstreet said he'd rather be right 60% of the time and execute his plan 90% of the time, than be right 90% of the time and execute properly 60% of the time.
We'll see how this week goes. I'm going to work hard on keeping a positive mindset and starting each day with a blank slate.
I sometimes think of myself in graphical form. If I looked at myself on a 10 year chart, this would be a minor pullback. Last week I made a huge red candle with a tiny wick off the bottom. This week let's hope for a big green one closing at the highs.
(Tomorrow I will have a post on "Market Wizard," Richard Dennis. He also offers a few insights on trading slumps.)
Sunday, February 8, 2009
Sunday Space
For de little stealin' dey gits you in jail soon or late. For de big stealin' dey makes you emperor and puts you in de Hall o' Fame when you croaks. If dey's one thing I learns in ten years on de Pullman cars listenin' to de white quality talk, it's dat same fact.
-Eugene O'Neill, The Emperor Jones
Saturday, February 7, 2009
What You Missed The Week Of February 1st, 2009
There's no getting around the fact that this week was very hard on me. For the first time in my 10 year trading career, I find myself down on the year. I'm heading out of the house for the weekend and then will return late Sunday afternoon to (hopefully) get in a surf session. Perhaps my victory Friday with the surf session will get my head straight.
Anyway, I started last week with a post about a good trade I made in FAZ. Since I got so blasted this past week, I don't think I can find any particularly good trades to highlight for this Monday's post. Instead, I'll post a bit about the negative mindset I found myself in later in the week.
Each Tuesday I've been highlighting a chapter from the trading classic Market Wizards, and this week I wrote about Bruce Kovner. Coming up this Tuesday, I'll discuss Richard Dennis.
On Wednesday I served up a history post about the trader I called "Char." Since I've had a lot of questions about these posts, let me clarify... all of these characters are based on real people but they are mainly caricatures.
On Thursday, frustrated by the influence of all the powerusers on Digg, I wrote an open letter to these powerusers, asking them what they wanted from me. Many people questioned my sudden obsession with Digg. To you I say, Thursday was a wonderful day for traffic around here.
Finally, on Friday I gave back to the Internets with a large post of links. However, I couldn't help myself when I came across this video of Jon Stewart tearing into Dick Cheney, the worst person on earth, so I had to post it.
Thanks for reading. Tomorrow I'll have my new "Sunday Space" post up.
Friday, February 6, 2009
The RO Report, "Trader Z" Edition
Trader Z went away for the last week and a half or so and missed all the death in the RO. He comes back, and the RO makes money again.
From now on, if he's taking off, I will stay away from the markets. He must be blessed or something.
Anyway, I have to split, so here are the quick numbers.
Out of 28 traders today, 22 finished gross positive, or 79%. 12 traders made over $1,000 gross and 1 trader lost over $1,000. Good numbers to finish the week. Nice for everyone. I was #8 of 28. I'll take it!
"Lucky Pierre" - Trader D, $12,079 on 466k shares traded.
2. Trader A, $10,951 on 228k shares traded.
3. Trader Z, $9,359 on 305k shares traded.
4. Trader P, $7,135 on 475k shares traded.
5. Trader F, $4,769 on 148k shares traded.
"Chambermaid" - Trader 9*, -$1,394 on 200 shares traded.
2. Trader J, -$844 on 68,000 shares traded.
3. Trader M*, -$398 on 0 shares traded.
4. Trader L, -$86 on 81,400 shares traded.
5. Trader K, -$32 on 74,400 shares traded.
The Week In Review
Attitude Trader found this great BBC trading show. He must think he's some sort of elitist, watching the BBC. Also, looks like he's working on a bit of his history as well. Check it out, a fantastic read.
You can hate on big government all you'd like, but when companies are left to police themselves, bad shit happens.
Perhaps they should regulate breasts. These are too big.
Trader X has changed up his site a bit. Looking forward to it. It's all about simplification over there. Just check out his "Five Rules For Life" and you'll understand why. For the record, my 5 rules would be very similar to his except my life is all about complexity.
Five Rules would be an interesting site even without Trader X's submission. Most everyone agrees that one of the most important rules is to read this blog each day... weird.
Obama's cabinet... in MUPPETS!
Speaking of Obama, just in case you needed another reason to love him... he hates cats!
Some worry that the bailout creates a moral hazard, and that the banks will take undue risk with the money. But is the problem the opposite?
Rush Limbaugh, the great hope machine.
Shit Parenting magazine.
...and idiots are stupid.
Asian Teen Has Sweaty Middle-Aged-Man Fetish.
The Fly has added a new tab. Cronkite has a straight-up news bent. I think it's a great direction for them... adding another third-tier stock blogger would have been a mistake.
Mug cake... Disgusting? Or delicious? (h/t Trader C)
Even the apostrophe is suffering during this downturn.
The Superbowl was rated X this year. (NSFW) Good thing they banned that PETA advert.
Sad but true, "Wall Street" is now an epithet. Now I know how it must feel to be a lawyer.
Bats are dying off. That is very bad if you don't like mosquitoes. I have a bat house in the backyard and I highly recommend you pick one up. They can eat 600 mosquitoes an one hour.
Oh, and finally... DIGG POWERUSERS EXPOSED!!! Thus my letter yesterday. (h/t WSF)
Thursday, February 5, 2009
The Homosexuals, "3am (Pink Pony)"
How can you not love a band named the Homosexuals? You know the drill, I post bad or "gay" music when I lose money... I'll let you decide which this is.
The RO Report, "Dead And Deader" Edition
It's hard to explain how completely mindfucked I've become in just a few short days.
The destruction continues.
The best way for me to look at all of this is to say, "Well, I've been at this for 10 years, and most likely will be at it for another 10." Hopefully, in February of 2019, this past two weeks will be a blip.
Anyway, it's not like the RO had it easy either. It's just not an easy environment. There's a lot of news driving trade... we have employment data out tomorrow... and now it looks like Geithner will be dropping the details of the "comprehensive financial framework plan" on Monday.
Just lots of static.
Out of 28 traders today, 15 were gross positive, or 54%. 5 traders made over $1,000 gross and 7 traders lost over $1,000 gross. I was #25 or 28. Charred.
Blog note: Please Digg this post if you haven't already.
"Chambermaid" - Trader A, -$10,966 on 203k shares traded.
2. Trader C, -$9,472 on 177k shares traded.
3. Trader N, -$4,963 on 59,600 shares traded.
4. Trader S, -$4,011 on 146k shares traded.
5. Trader F, -$3,520 on 28,800 shares traded.
"Lucky Pierre" - Trader D, $4,431 on 364k shares traded.
2. Trader H*, $3,435 on 5,700 shares traded.
3. Trader 6*, $1,241 on 900 shares traded.
4. Trader J, $1,223 on 24,800 shares traded.
5. Trader T, $1,029 on 6,355 shares traded.
Open Letter To A Digg Poweruser: or, WTF? My One-Legged Girlfriend Has a Nasty Unibrow! LOL!!!
Dear Sir, Madam or Robot,
Hello, I am a third-tier blogger. I've been trying hard to grow my readership and I hoped "the digg" could help.
However, every time I write a humorous, or (gasp!) thoughtful piece and try to have it dugg, I invariably end up with only a handful of diggs. Then some dude will comment, "Great piece... too bad it will never see the light of the homepage because of all the Powerusers. Har! Har! Har!"
So I ask you, Poweruser... Who are you? What do you want? And what kind of sick world do you come from?
You see, I'm not angry at you for being so powerful. I'm just trying to understand you... Every land has its kings; I get it. Do you get anywhere by fighting the king? Not with 24 "mutual friends" you don't!
So, lets just take my recent piece as an example.
So I ask you, Poweruser... Who are you? What do you want? And what kind of sick world do you come from?
You see, I'm not angry at you for being so powerful. I'm just trying to understand you... Every land has its kings; I get it. Do you get anywhere by fighting the king? Not with 24 "mutual friends" you don't!
So, lets just take my recent piece as an example.
I watched in dismay as my little "skit" languished under a picture of a man's unibrow and 40 submissions from Cracked.com. Apparently, Powerusers love unibrows and "cracked" has many interns with digg accounts. Lesson learned.
I then watched as a picture of a girl with one leg gained over 6000 Diggs!
I didn't understand what was going on, until I saw a horse's head sticking out from a well behind the girl. The head was circled in red with the letters WTF? scrawled over it.
No doubt, this made me chuckle. And indeed, it's quite possible that while looking at my screen I shook my head in dismay and reflexively mouthed the words, "What The Fuck?" I mean, truly, "what the fuck" is that horse doing there? And what happened to the girls leg? So many questions!
No doubt, this made me chuckle. And indeed, it's quite possible that while looking at my screen I shook my head in dismay and reflexively mouthed the words, "What The Fuck?" I mean, truly, "what the fuck" is that horse doing there? And what happened to the girls leg? So many questions!
Perhaps it's the mystery of the photo that led to the amazing amount of diggs? From this can we infer that Powerusers are intrigued by all of life's mysteries?
Or is it as simple as people wanting to take a quick look at a picture of a sunken horse/one-legged girl say, "I Digg that" and move on? Could it be there is no Poweruser conspiracy?
Or is it as simple as people wanting to take a quick look at a picture of a sunken horse/one-legged girl say, "I Digg that" and move on? Could it be there is no Poweruser conspiracy?
If so, does this in some way prove what my father-in-law is always telling me about popular "culture?" That "American Idol" and celebrity worship exist because "that's what people want" and not because there's some grand conspiracy to dumb Americans down and shift their attention from what's really important?
I hope not... because it's much easier for me to want to blame a small group of powerful people than for me to blame humanity in general.
Your humble third-tier blogger,
Your humble third-tier blogger,
Dinosaur Trader
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