Monthly Archives: February 2010

Wise Words for Traders – and anyone else

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Today I stumbled upon a cool site: Five Rules for Life. Some of the entries are trite, some are banal, but some are truly insighful. In particular, I liked Dr. Brett Steenbarger’s rules. In addition to the link, I am going to quote them here because they are just so darn good:

  1. In life, do good and do well. Real success comes from pursuing your talents and enriching the world with their expression.
  2. They lead best who follow their calling. Those who follow a genuine calling set an inspiring example with their actions.
  3. Not all who rave are divinely inspired. Passion without wisdom is mere noise.
  4. True love never dies; it has to be killed. Love is making another’s happiness your own.
  5. Be your ideals; in some measure, you’re already the person you wish to become. Conscious living is striving to be who you are when you’re at your best.

I think it is interesting that the 2nd most concise moral code ever had 10 commandments – 6 dealing with interactions with people and 4 dealing with God. (The most concise moral code was Jesus’ 2 commands: “Love God and Love One Another”.) I briefly considered whether or not the 6 commandments for living with people would be a good “Five Rules”. Before I write my thoughts, I’ll remind you, gentle reader, what those commands were:

  • Honor your parents
  • Honor your marriage
  • Don’t murder
  • Don’t steal
  • Don’t tell lies about people
  • Don’t covet, (or “be happy for other people’s successes”)

That’s not a bad set of rules. Of course, people in all times and in all places are completely incapable of always following those rules, which is why coming up with a different set of guidelines is both desirable and despicable. (Lest you think you are the exception to my assertion that people can’t follow those rules, you should perhaps be aware that Jesus made it clear that wanting to murder, cheat, steal, lie etc is just as bad as actually doing the act. A word to the wise…)

So I am thinking through my own Five Rules. At this point, there are two things I know for certain about life:

Jesus Loves Me

Shit Happens

Not exactly a whole-orbed philosophy of life, but at least it’s a start. What are your Five Rules?

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Back in the Saddle

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Back in November 2009 I made the decision to stop trading. I had been working at it for over 2 years, and had managed to lose a boatload over that time period. It was time to stop, time to regroup, time to rethink. It was a painful decision because trading – in so many ways – is a perfect “job” for me. It fits me in a thousand vital ways. But it wasn’t fitting me in one very important way – making a living.

I stayed away as long as I could – over 3 months. But I have decided it is time to get back on that pony. This time, I am a lot wiser. I learned a lot in those first two years, but the main thing I learned is that I was not being a professional trader. So what am I going to do differently this time?

Continue reading →

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GST in life, business and trading

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One of the behaviors I am working on with my clients to is to train them to take a Goal/Strategy/Tactic approach to running their businesses. A Goal is the end state of whatever you are trying to achieve. A Strategy defines how you will accomplish that goal, and a Tactic is a specific step you will take to execute that strategy. For most of my clients, the goals are clearly defined, but the strategies are not, and for those who have good strategies, few have clearly defined tactics. Without clear goals, strategies and tactics, it is much harder to achieve what you want to achieve. Hard work is no substitute for clearly defined goals, strategies and tactics.

With that introduction, I turn to Brett Steenbarger who (once again) points us to a way to assess the mood of the market daily. One of my continuing failures as a trader has been not recognizing the mood of the market, and trading contrary to the mood. It is a continual struggle for me to find the “sweet spot” between “looking at too much data” and “not looking at enough data”, and in that struggle I often lose sight of what the market is trying to tell me. Dr. Brett helps to point the way towards recognizing the data that matters and the data that doesn’t.

Now that I have identified that particular weakness of mine, I need a plan to overcome it. My goal is to execute trades that are consistent with the market’s sentiment. If I am satisfied with that goal, (and I am), then my next job is to refine my strategies for identifying the market sentiment. With appropriate strategies, then and only then am I ready to define my tactics for executing those strategies.

I know the GST approach doesn’t work for everyone, but for those – like me – who need an ordered approach to accomplishing anything, it is a worthwhile model for to follow.

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4 Simple Important Rules

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Brett Steenbarger today reminds us e-mini traders of some simple rules that will keep you out of the way of oncoming trains:

  1. Understand the market’s current short-term sentiment: Trending Day or Range Day?
  2. Watch the Tick to confirm -is more business happening on UpTicks or on DownTicks?
  3. Play pullbacks to the VWAP on Range Days
  4. Fade bounces that don’t breakout on Trend Days

Of course there’s a lot more to it than this, but it was so lucid and so simple that I felt it worth noting.

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What Good is the Federal Government?

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Mark R. Crovelli points out in today’s LRC that – in the entire history of the state of Colorado – the US Government has done literally nothing to protect Colorado from invasion. In fact, the US Government has been the single biggest threat to the safety and security of Coloradans since the beginning of the relationship.

If the Feds claim they have the right to demand taxes because they provide protection, but in fact only provide more harm, what is it exactly that makes them different from the local mafioso who demands protection money? Does the badge and the fancy hat somehow give such activity legitimacy?

Freedom starts in your own head.

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Get Your Head Right

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Do you ever need to justify your desire to be free?

Absolutely not.

Freedom needs no justification. Freedom is not a means to an end. Freedom is the end. Never, ever, ever apologize for your desire to live your own life on your own terms y your own means. The only qualifier is that you must grant to others the same rights you desire for yourself.

So how do you live as a free man or woman in an age when government at every level is becoming bigger and more instrusive into everyday life?

It starts in your head.

One of my favorite freedom advocate, Ernie Hancock, says “no one ever voted themselves free.” He’s right. Freedom is not something anyone can give you; it is something you must choose for yourself. Yes, it’d be great if all the people in government, from the U.N. to the Feds to the State to the County, City and even Neighborhood would all just leave us alone. That would make it easier to live the way we want. But we all know that is not going to happen.

At some point, you must simply make the decision to live free and damn the consequences. Freedom starts between your own ears.

Stop expecting someone else to grant you freedom. Freedom is your birthright. Take it.

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The PIIGS threaten the Euro Zone

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Portugal, Ireland, Italy, Greece & Spain, that is.

These countries are on the periphery of the Eurozone, both geographically and economically. And they are all in debt up to their collective eyeballs. I am so bored with banks that lend zillions of dollars, (or euros in this case), to people who cannot possibly hope to pay it back, and then go whining to the government to “do something” or The World As We Know It Will Come To An End, but all the bankers in the PIGS did it, and now they are in deep yogurt just like the US banks. For some reason, letting these criminals pay for their own crimes never seems to be an option, but I guess that is because these are smart uber-criminals who have so arranged their crimes that if they have to pay, everyone else will too.

(Kinda like the US. But we’re different cuz we’re special.  Say it like Mr. Rogers: “SPESHULL!” Whatever.)

Anyway, the Europeans have been pretending that their financial fecal matter has the sweet aroma of fresh roses for a couple of years now, but – to mix a metaphor – the bloom is off the rose as Greece is on the precipice of default, and the other PIIGS are close behind. <sigh> Like I said, this is all so mind-numbingly stupid and boring and completely preventable that I would prefer to just ignore it, but I can’t, ‘cuz you see what happens is that the bankers get off scott-free, and the government dumps the whole load on the backs of the people. Meaning, you do more work for less pay for yourself, and more pay for the bankers, bureaucrats and other assorted blood-suckers.

Word is just out that the various Big Important Banks from Germany and France are going to provide some sort of guarantee to the Greek government, so we can all fall prostrate at the feet of the benevolent bankers and thank them for saving us from the calamity they created.

~~YAWN~~

So the trade is: short the euro. The dollar sucks, but the euro sucks worse.

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