7/9/10 Song For My Father

It was the summer of '72 when I first started listening to jazz. This was one of the first albums I borrowed. Pretty accessible stuff.

Running through my head last night/today, in no particular order:

(a) In the absence of a discernible (long-term) edge, what's wrong with banking a few hundred each day on an isolated series of trades? Averaging $300/day over two hundred trading days adds up to $60,000 annually, which is the equivalent of earning 6% on $1m in Treasury bonds yielding the historical average (or 12% on $500k in junk bonds). With ten-year notes yielding less than 3%, not a bad return.

(b) Closing flat each day shelters the port from overnight risk. Both the number and magnitude of overnight gaps have jumped over the past year. Might as well play in riptides without a life vest/'capital preserver.'

(c) Giving lost opportunities more than a fleeting thought is a total waste of time. More often than not, the next opportunity is just a few beats away. I never need to look far for an example. The TZA I opened this morning at 38.20 and closed minutes later at 39.09? I noticed an afternoon print above 40 later in the day, spent a moment regretting not having held longer, then turned my attention back to work. At the end of the day, all regret dissipated with the closing print of 38.35.

(d) Trading is a game. The game runs continuously, and offers an infinite number of win/loss opportunities. Whether you enter the casino at 430a, 630a, 11a, or 2p, you haven't missed anything that won't recur time and time again.

(e) Beating yourself up for misjudging a move? Why? It happens to all of us, every day. Make a U-turn. Correct a wide swing and get back on the pavement. Take the next exit and grab a coffee.

Let's enjoy dinner, watch a film, read a book. I'm going to worry about the next trade later.