Friday Notes – That Which Doesn’t Kill You …
As I’ve mentioned recently, I chose to throttle down the trading engine a bit over the last few months to work on two things this summer:Consistency and modest capital growth.
For try as “we” may (OK, I admit I’m the one often chopping trees with the dull axe because I don’t have “time” to sharpen it), one simply can’t put the pedal to the metal all the time.
In my case , I usually have to be reminded in the form of something that tries to “take me down” … whether it be periodic illness, the rare low-probability market hit, or a bout of sloppy trading.
And such was the case this week as a major dose of the flu relegated me to extremely limited trading during U.S. market hours only – which until today made for less than quality pickings as all of the PJOs came before 9am ET.
Yet something has kicked in during this summer of reflection during what I now refer to as ”AFC” (After Flash Crash), and I’m frankly beginning to thank May 6.
I’ve often stated that it often takes one rather significant move in reverse to develop that coiled power that’s needed strong propulsion. You see this everywhere in life … from the old pre-video game pinball machines (we old guys called that knob that launched the ball a “plunger”) to the archer coiling his/her bow, to stories of people everywhere overcoming adversity to do great things.
And time and time again, I’ve seen the same thing in my various careers – including trading.
As I’ve stated before, every major & sustained period of capital growth – whether it be slow & consistent or in record chunks – has been preceded by some odd “kicked in the groin” event … whether self-inflicted or due to circumstance beyond my control. Here’s the “Nine Lives” post from 2009 discussing the concept in more detail.Three months ago to the day, the market threw a 120 mph pitch at my head (which for most baseball batters is about a 0.0001% probability based on career at-bats … perhaps the same as the “FC”).
Thankfully, experience had engrained an subconscious protective “ducking” mechanism that may have saved my trading career.
Yes, I got hit … which I shared with the world. And yes, you can replay that day’s video to your heart’s content as have 2,000 other traders.
Yet the “duck” allowed the pitch to glance off my head instead of crush my skull.
And here we are three months later … to continue this ongoing trading reality story.
The ticker to the right shows it’s been 92 days since a meaningful loss, 12 weeks without a losing week (and no, decent traders shouldn’t have losing weeks), and a gross gain/loss clip of 3.5-to-1.
Even this week, despite the flu and trading opportunities that were often few and far between, results clocked in without a loss while still trading every day.
The equity curve is once again above that account trailing stop that was breached for the first time in my career on 5/6 (with a cushion re-established), is accelerating exponentially, and looks like one huge bull cup with rising trend support similar to the S&P daily chart itself off the early July lows.
Most importantly, I’m still here.The wound has healed, the self-imposed rehab stint at Pawtucket is over, and I’m heading to Fenway for the fall.
And when I get there, I’m going to tip my cap to the same pitcher that tried to bean me just three months ago.
Batter up.
