A Failure So Complete…

Matthew_McConaughey__how_I_got_my_head_around__awe_inspiring__Interstellar…that I need to write about it in the hopes of exorcising the bad taste in my mouth.

I didn’t trade the New York Stock Exchange today because I didn’t feel like I could get a wrap on the way the markets opened. This effectively left me with only the Nasdaq to try and decipher and I didn’t really feel comfortable with it either. I’m still a long ways from home but I will be going back this evening after a farewell get together late lunch of sorts. So, here I am trying to trade the cash open and I think to myself “hmmm…doesn’t look like I can fish for anything here, I guess I’ll go on and look at the other assets”. Of course, this is what I do everyday – I scour other contracts for trade opportunities. So here I am looking at other contracts to trade. I didn’t trade in the morning because of the obvious logistical challenges of being away from home but I saw that there weren’t any trades to be had there anyway. I’ve narrowed it down and it looks like I’ll be trading the British Pound futures. So, I’m having a bottle of water and I’m pretty much ready to go while watching CNBC feeling important about myself – this is arguably where things started to go wrong.

But I’ll commence with the official account of the slobfest anyway.

(10:00am) I sit there all Christian Grey-like “yeah, i’m a high powered executive hurr durrr huurr”. then I mentally posit: you know, I didn’t get to take risk yesterday and this morning: why don’t I FLEX my current risk profile and push the envelope a little bit (I can see your eyes rolling to the back of your heads).

(10:03am) after more gulps of water – maybe it was the hotel water – I think to myself “hey brody, since you don’t really have a set plan in the market…why not just do a heads, go long and tails, go short kinda thing” and I’m thinking. “yeah, that sounds statistically safe given that this is a different kind of day with a different kind of setup”

(10:03:45am) “hey, since we’re really letting things go into the twilight zone, why don’t we let Siri on your iPhone flip a digital coin!” At this point, my “intellect” is driving this mental conversation. My fiancée is asking me why I’m not prepping to trade.

“don’t worry babes, daddy got this shizzzz “

So you can see here that I have literally put myself in the perfect statistical storm no different than when George Clooney decided that they should just keep fishing even though there were forces of nature coming that would eventually wipe them out – I’m too tired to link so +1 for you if you get this movie reference.

My resulting trade of the British Pound ended up being such a colossal failure that this is one of the few times where the result and the effort were both equally goatcrap. To put it in perspective, I literally shorted the lowest tick of the period – literally, the lowest tick. You have to TRY and do something like that. The market did nothing but go up from that point; not even a retracement. Not even a “you know what, this guy Rhiese is a total shitwhistle, why don’t we bring the market back so he can exit out at a respectable loss”. There would be none of that. The market literally took me out to a pool full of crocodiles, put the Lady Gaga meat dress on me and pushed me in.

It has been ages since I’ve been stopped out on a trade and I take pride in taking the smallest losses that I can possibly take. There are times when I reach my daily limits but those are on a multitude of trades and different contracts. This one, I just got stopped all with a FLEXED risk profile.

As I’m sitting here at this budget Hilton hotel workdesk, I have the trade sprawled out in front of me for a post-mortem dissection. Yes, it was a collection of critical failures; letting my iPhone decide which way to go and increasing my risk. In increasing my risk and subsequently having it come true, I have intrinsically ruined the value of my taking the day off yesterday because it may have very well been a losing day both in opportunity cost and in PnL terms. On the other hand, I could have theoretically just let my iPhone decided my trades, but had I just stuck to my normal risk profile, I would have lost but I wouldn’t have lost as badly as I did and that is what made the difference in the day. Sure, I’m looking at the market now and in retrospect, I would have seen that the British Pound was being pushed slower than there were trades going off at the bid – maybe…just maybe I would have gone long. However, that all goes into the theoretical, the what-ifs. I may have still decided to go short because I know sometimes those trades going off at the bid are people simply covering shorts and the momentum will come back. So in the end, the main killer of my day was my attitude about risk.

I have a set risk profile that I implement into my company for different types of trades and this profile is meant to keep me afloat during good times and bad. I suppose that if I could have made a sudden change in the risk profile, I could have done it today. There’s no strong correlation of results – both positive and negative – to taking one day out of 365 and making that day the time you decide to max your risk. The only time that you screw yourself doing this is if you do it more than just once a week; let that sink it – more once a week. There are people that adjust their risk exposure on EVERY TRADE with the variable coming from what mood they’re in. You can only imagine what their PnLs look like. Me, this is the first time in almost 8 years I’ve done something that neanderthalic for this business and as you can see, it cost me – both in my wallet and my attitude going into the weekend because you know I hate losses especially on a Friday.

Am I thankful to the man upstairs for this lesson? Yes. Am I crying tears of blood whilst wallowing naked in a pool comprised of self-pity, stale animal crackers and pigeon feces? Also, YES.

But I deserved it: all because I toyed with the idea of risk. I will never do this again.

I’ve sent my “intellect” packing after its short stay – it’ll be many years again before he sets foot in my mind. In times like this, I’m often reminded of the phrase: the things you think you know are the things that can massively harm you.

Unexpected Day Off

M8DBOID EC001I don’t know how the markets did today because I couldn’t even glance at them this morning. My fiancée’s friend had a family emergency and we needed to head over to where they lived which is about 2 and a half hours away. Then once there, it was the tending to the people and listening and chatting – it was tough. Nobody died or anything but it was a serious enough emergency where someone had to go to the hospital. It’s tough, man. Health is all we’ve got in this world and without that, nothing is possible.

As always, after the whole thing died down (gonna be keeping the person in the hospital for observation) I found time to get away and a good Wi-Fi signal in this local coffee shop across the street where I am now typing this entry. I remember like 9 years ago I had to trade mobile and I was in Portsmouth, Virginia.  Anyway, it was a gorgeous sunny afternoon and I was driving around looking for a place to open up my laptop (an old silver Dell inspiron). I was still lugging my old black messenger bag with my long-since-thrown-away San Diego Padres cap worn backwards. Still single but I think I was seeing some Vietnamese girl at that point. Oh, and I was driving my old car which would be traded in a few months later, I’ll never forget her. Anyhow, Portsmouth has this downtown center or something like that. It’s pretty much where all the mom and pop businesses are. There was this coffee shop there and it was pretty much as independent coffee shop as an independent coffee shop can be, friendly owner, nice selection and just people minding their own business. I sat in the front of the shop towards the main window and just looked out beyond my parked car and the trees lining the streets. There was a light breeze moving the branches so that the lights and shadows were dancing on the sidewalk. Back then, even now, I’m reflective of life. I don’t know whether or not I’ve come full circle but I just think it’s funny that after all this time I’m still going to a coffee shop to do some trading or to do some writing. I guess the atmosphere is conducive to it. This coffee shop is a little bit more modern though and has the build of a recently constructed and optimized structure for this kind of business. I’m not gonna say that it has no soul rather, it just has a different kind of vibe. Still nice though and the coffee is fairly decent.

I’ve been meaning to take at least one day off for a while now simply because I’m getting to a point where my mental connections aren’t really hitting on all cylinders. I feel kind of disjointed and a little ambiguous about what I’m supposed to be doing with the markets. It may be because I’m tired or it may be because I’m just at the end point of a mental cycle and need to recharge. I think it may be a little bit of both.

Nevertheless, I’m almost done with both this post and this coffee. I don’t like staying in coffee shops too long because it starts to give off the stench of an avant-garde-but-loser-fedora-wearing-fakephilosophy-talking appearance. Besides, the fiancée will probably want a late lunch and she’s understanding of me going off to write but only for a certain amount of time.

Man, it’s a gorgeous day. It’s like I’ve travelled back in time all those years ago and have a chance to relive those moments in that coffee shop. Life was somewhat more simpler back then. I hope you all are having a good day.

Quiet Rainy Afternoon

profile2The New York Stock Exchange hadn’t moved as much as it did yesterday when I logged on and that had me a little worried. I think it was like 15 ticks up or something by the time the opening bell rang but all of that worrying was for nothing because right out of the gate I could tell that there was a strong current of order flow; the building blocks…the amino acids, if you will, of making the nice green stuff that you can exchange for new toys at Best Buy or the Apple Store.

Trading was brisk. I came, I saw, and I traded. I got the ticks that I needed because the market was fast and when I saw that prices started to sputter and circle around, I said “ok, that’s it for the market open.” I closed down the Nasdaq and Dow windows and immediately checked on other morning trades I had. Wheat didn’t really give me anything, it just hung around the market and I just happened to be lucky to sell out when people were in a buying mood. The same for Cocoa, although for that I was a little bit more fortunate as the prices were coming in when I covered. Overall, it was a trading session. I still made bad reads in the market open and I made bad reads on the Nasdaq & Orange juice but I cut my losses instead of trying to hold them for some unknown cosmic hope that I’d make more money. But for the trading that did matter, I was sized up. My sizing is half automated and half arbitrary because I know that there are times when the automation isn’t working correctly so I need to step in when I have that feeling in my non-exercising gut.

I am mucho exhausted. March & April are generally the most busy times for me as I’m setting things up for the summer and trying to squirrel away as much extra money as I can in order to take a trip somewhere. Don’t get me wrong, I’m thankful that I have these challenges even though I wish I would win $400 million in the lottery. Until then, I just have to trudge along and try to smile through life’s challenges. I don’t even need to be a billionaire, I just want like half a billion and that’s it – I’ll totally just leave and get a house somewhere in Santa Barbara or La Jolla where I’ll spend the rest of my life lounging at the beach and chopping the shit with the locals until I become the old, fat but enthusiastic mustached guy wearing Birkenstocks that you can ask for local directions but will also regale you with stories about the town even though I see that you have to go. I can’t wait.

In the meantime, I’m thankful that my trades worked out and that I didn’t chase after those sized up losers. I just said “eff you…” and moved on to better things. Life is too short to babysit something that’s not turning out the way you want and if there’s one thing that really infuriates me, it’s a market that stands there and doesn’t move when I need it to move. Of course, I don’t like the market that moves opposite of my position but that’s a given. All in all, I know what I did and I know what I need to do going into tomorrow. Time to live this day thankfully.

It’s Only Tuesday??

profile1The New York Stock Exchange was already up some 150 points when I logged in this morning so I was expecting good action going into the open. And there was good action, it was great but I couldn’t get a lot of ticks out of it because after the initial shakes and the pullback that drew everybody short, the market would continue its upward trajectory and basically leave everyone in the dust. I scalped a couple of trades during this upturn but there just wasn’t space for me to operate as I was faked out a multitude of times. It’s also worth noting that today I felt like I should limit my risk due to the nature geopolitical influences.

The day pretty much wore on with me taking small losses on all of my trades save for one which was a break-even. I pretty much bombed today. I’m not happy with it at all given how I feel about red numbered PnLs. I’m just glad that I made quick decisions and that I was aware and conscious of what I was doing even at the speed of the market. The other thing was that being small in relative risk really helped me out today. Even though my daily limit wasn’t hit, my habits regarding size really helped to conserve capital for tomorrow’s trading session and that’s where I’ll try and get back the money I lost today. Still, I don’t want to sound like I’m having these “breakthrough” moments or anything like that because at this stage in the game, I need to know what the heck I’m doing as it’s not only my future that’s at stake but the family that the fiancée and I will have (she’s not preggers but I’m just sayin’). Anyway, I’m not gonna be a good loser about things. I’m ready to come out and kick ass in tomorrow’s session because that’s what I’m all about.

I was actually thankful when I woke up this morning. Yesterday, I was really feeling like crap and there was a tightening in my chest. Today, I ate real healthy with the exception of some coffee. I had haddock which is this fish that falls apart like a wet toilet paper as soon as you even touch it. I’ll give it to the fiancée, she can whip up a good meal. Along with the haddock, I also had some rice pilaf which made the overall meal pretty damned satisfying. But back to being thankful that I woke up, I have no idea why there was a tightening in my chest and honestly, like I said in my last post, I’m paranoid as hell that this could be a sign of a heart attack or a stroke. I keep going back to those times when I saw the clickbait headlines of “3 Things That Happen Before You Have A Stroke” and “You’re Going To Have A Heart Attack If….”. I feel like I’m living on borrowed time and this is why I’m so nutso about squeezing every minute out of everyday doing something that I enjoy. I am also the type of person that doesn’t like to waste time and I’ve become really sensitive about being prompt. I’m like a control freak with that now.

Anyway, speaking of time. Since I wrote this post so late in the day, I’m actually digging into time I have allotted for other things; like grocery shopping and…well, I don’t know. But I know that there are other things somewhere I haven’t thought of to do yet. I’m just thankful that I’m still up and breathing and that I had a chance to make money today. I know that it didn’t go well and I’m upset about that, but I gotta move on and be mentally prepared for tomorrow.

Such Busy, Much Activity

general-william-tecumseh-shermanThe New York Stock Exchange started off on a good and energetic note this morning. However, a lot of that action decidedly went towards the middle of the morning. I wish that it could have happened in the beginning but it seems as if conviction is a little too much to ask for these days. Whatever. I took whatever money I needed to take out so it’s not a big deal. There were other trades that I made but I was pleased that my Dow trades worked out because if you haven’t noticed by now, cash open is my bread and butter.

I also traded Wheat earlier in the morning and there was a little bit of action to it. After letting the trade run a little bit in my favor, I just decided to guarantee myself profit and started to look for other opportunities. Those other opportunities came in the Nasdaq and Feeder Cattle. The Nasdaq would give me a couple of ticks but Feeder Cattle was mostly a dud as most of the action quickly dried up and I didn’t get as much as I wanted to. All of these trades were on size so I was quite pleased with the result. For both my morning trades and my mid-morning trades, I picked my positions and vantage points well and they protected me as the markets ebbed back and forth. It’s very rare that I have trading days where theory follows application – if only things were this simple. I made my decisions quickly and I made sure that my risk was as controlled as I could make it.

All in all, the only thing that I didn’t like was the there wasn’t as much market continuation as I thought there would be. I would have arguably been better off buying the Dow and just holding it for the whole day.

I had to go into the city right after trading and if you know New York City, you’ll know that navigating that place during lunch hour is a nightmare. It must have been my lucky day because not only was traffic brisk but it didn’t seem like there were that many people breaking for lunch. It was like that scene in Vanilla Sky where Tom Cruise is weirded out about being all alone on his drive to work and then he just flips out in Times Square and starts running. I could have done that but if I did, I would be in very serious trouble and probably would not have been able to get this blog post out today. Anyway, it was nice spending time in the city where I spent so much of my formative years. Besides visiting the old stomping grounds of Wall Street, I wanted to pass by the beautiful Grand Central Station and into Park Avenue where much of the hedge-fund activity happens. There was nothing there for me, it was all just nostalgia and don’t get the wrong idea – I wasn’t working for some hedge fund or something like that. Wall Street and Park Avenue were places where I worked as a college intern and in my early post-college-early-career years. I didn’t get to pass by Park Avenue so I just settled on eating lunch at Times Square and then making my way back home. If there’s one thing that’s worse than lunch hour traffic, it’s rush hour traffic. It’s damn near impossible to get out through the bridges and tunnels without the suffering of gridlock-condition traffic.

Still, it was a beautiful day in the city. I love Manhattan. It’s the traffic and the people that I’m not so fond of.

I’ve been a little gloomy lately. I shouldn’t be given that I’ve had a great start to the week. I’ve just had a lot going on for this month and I’m ready to kick back and unwind for the summer. I was thinking that we don’t get a lot of time here on earth and that life can be sometimes so random that we don’t know what each day will bring. I used to do cocaine up the ying-yang and it really weakened my heart and lungs. Aside from the other ailments that start to catch up to you as you get old, my knees are shot from pickup bball games and I just feel like I’m more brittle than ever before. I get paranoid whenever I have chest pains and start to wonder if this is going to be it for me. I try to keep myself healthy but as you can see, I am not as active as I should be outside of driving. I would like to change that and I will. There’s a lot of life to live and I know that. It’s just that there are days when I lose perspective and I tend to lose a sense of proportion when it comes to little issues in my life. It weakens me to the point where I fear an actual big problem might actually give me a heart attack. So, every day when I wake up, I’m thankful, especially today. I’ve been having chest pains for most of the day and even though I know I have to go to the doctor I’ll just tough it out. I guess if I don’t post tomorrow and for the next couple of days, then you can surmise what happened. I’d rather not think about things like that and just let things go where they go. Like I’ve always said, I only rely on the man upstairs as I can only make plans but it’s The Creator’s far reaching wisdom that determines all.

I’m just thankful right now and I’m going to keep being thankful as long as I have air in my lungs. I’m thankful that trading went very well and that I’m living a semblance of a life. My only wish is that I could be more thankful and appreciative.

A Peaceful & Serene Morning

I woke up today at around 6:45am. I didn’t expect to be up so early given that I usually sleep in on Sundays but I figured since I was up, I’d get some stuff done. Stepping out into the driveway, I felt the cold chill of March air – which was surprising being that this was already late April. I just told myself to suck it up as it’ll get warmer towards the afternoon.

I like driving around on Sunday mornings because it gives you a sense of just how large and empty the world can be. If there is something I like about catching these hours alone, it’s the way the colors of the saturated morning sun stand in contrast to the dull illumination of daylight. You’ll see a building that hasn’t had the sun shine on it yet except for that small part of the upper level. I live for sights like that. It makes me feel like I’m witnessing time’s essence itself.

After running a couple of grocery errands, it was pretty much time to go home. I was wondering if I would actually entertain myself by picking up a print copy of The New York Post or The Wall Street Journal Weekend Edition. I know I could just read it on my iPad and honestly, it’s quite fun to do so. However, with time so fleeting during mornings like this, I just decided to forego doing things that would take up too much time altogether. Even blogging too much on this post.

I’m glad I got a chance to recalibrate myself. As this beautiful Sunday morning rounds out to a close, I am really thankful for everything that I have. I am lucky, not smart. And you know what? That’s ok by me. God has different plans for different people and if being lucky and not “intellectual” is the way that I’m going to go through this life then who am I to question God’s cosmic wisdom. There are things that I don’t know both about life and the capital markets. All I need to know are the results, and that’s that.

Ok, Now I’m Really Annoyed

10f568c7cbb17c082b58bf2f6c9b3d32The New York Stock Exchange opened with the energy that I’ve been yearning for since God-knows-when. These are the types of opens that crush wayward positions and causes eyeballs to bleed. These opens are like getting in the ring with a young Mike Tyson after calling him ugly or standing in the Chernobyl uranium tower while everyone is running away. The breadth and depth – and danger of these opens are where the money is made. This is what I live for; this is what epic movie soundtracks are made out of – the ones with loud horns and deep bass aka Conan The Barbarian stuff.

It was just too bad that with all that, I only covered commissions on the day.

I’ll explain what happened.

First, let me preface by saying this was all my fault.

The fiancée and I are having relatives over because it’s late April and we’re firing up the grill. I wanted them to come later like 11am because I want the mornings to myself. But in true relatives fashion they come over at 9am because they want to hang out at the house. Whatever. The thing is, I’m used to trading at my dining room table (not a good practice but like journeyofarookie says, I need to find out WHY I do this in order to improve as a trader) in the morning. I don’t get any disturbances and overall I prefer it compared to the home office.

So it’s like 9:27 and one of my relatives asks me this dumb question; it’s so dumb I don’t even remember what the gist of it was. I answer him in a curt way but in my mind I’m like “hey douche! i’m doing something here – shut up!”. In retrospect, I should have told him outright I was busy but I didn’t (therein lies another mistake). Then while all the action of the opening bell is happening and I’m trying to get a hold of the market, someone opens the refrigerator door and shouts really loud: “hey where’s the beer?”. Of course, this happened as I was pressing keys and getting ready to hit enter to place an order. And of course, once I’m completely distracted – the order goes through. You can only imagine the anger that coursed through my veins at that point.

I needed to get out of the bad position and I did. I really wanted to get back in the market at that point and I was looking real hard for an excuse but I knew deep down I’d just be revenge trading for the loss I knew I incurred. I didn’t know just how much I lost yet but I knew because I was short and the market zipped upwards that I got kicked in the face. So I’m really looking hard for a trade but in the end, I just say “fuck it” and let it all just go. By this time, I’m really disappointed in my relatives and all I want to do is just go upstairs, play Halo in private for the next 5 hours while vegging out on potato chips.

I don’t like distractions because I don’t want to lose a day of trading. If I lose a day of trading, then I lose a day to make potential money. My fiancée knows this – and because she likes to shop (within reason), she knows not to disturb me between 9am and 10am. This fact seems to be lost on other people. But like I said, this is something I alone should be taking responsibility for.

Thankfully, what ended up happening was that in the confusion of all these complaining voices as the market was going on, I inadvertently and unexplainably pressed the wrong number key or maybe my pinky hit it first or something, for contracts that I wanted to trade. The result was that even though I got kicked around, I only got kicked around on no size at all (4 ticks on 1 YM contract). So when I finally focused on what my final PnL number was, it was red alright but it wasn’t the curl-into-a-fetal-position-because-you’re-stupid red. That is true and unadulterated Luck as well as the way that the man upstairs is telling me that I have to manage distracting factors around the house better.

But as I was saying before, I wanted to refer to journeyofarookie’s blog about asking WHY about everything and anything.

Why is it that I like trading in the dining room – and on the dining room table? Thinking about it now, I think it is because the dining room is a lot more airy with space to just jump and spread my arms and just – breathe. It’s not a semi-cockpit like my office desk. In addition, the presence of aesthetic textures such as the dark wood on my dining room table (which is truly adore) and the light blue of the kitchen cabinets (the fiancée picked it out) and of course, the sun coming in the window just makes the whole atmosphere so positive and inviting. Maybe it’s just the presence of natural light that makes me feel like I want to work here and that this is a pleasant place to let my ideas flow. The funny thing is, our townhouse isn’t even big, it’s in a very old development – like 1980’s old. It’s just that the fiancée was adamant about light, fresh flowers, aesthetics and modernization. So maybe that’s my answer…I need a ton of natural light, flowers and engaging textures in space to relax me as I trade – or maybe my true calling is as an interior designer.

That was a pretty interesting exercise. I will go forth and ask more whys about my day.

However, getting back to the nitty-gritty of this trading blog. I am upset. I am upset that I lost money today. No matter how small the loss is, it’s still a loss and I HATE losses. I hate them so much that it makes my blood boil. I’m not a good loser and I never will be. Never ever. But I do thank God that I didn’t lose badly today. I tried trading the British Pound during the London session last night and that ended up being a scratch so today was just kind of a nothing day.

However, it goes to say that the main lesson of this trading session is this: DO NOT TRADE IN A PLACE WHERE RELATIVES ARE WITHIN EARSHOT DISTANCE

I’ll just go and prep the grill for the afternoon – but not before I send those knuckleheads to pay for and get the cooking charcoal.