I Quit Trading And The Sun Still Rises

I transferred all the money out of my trading account, and went to sleep.

A scraping sound against my bedroom window woke me in the middle of the night.  I lifted the blind.  There was a man with a headlamp clinging to the top of a large evergreen tree. He could have reached out his hand and pulled my beard.

I opened the window.

“What the hell are you doing?” I said.

“Putting a floodlight in this tree.” The floodlight was pointed at my window.

“It’s three in the fucking morning! Get out of my backyard before I call the police!” I yelled.

“This isn’t your backyard. It belongs to that guy.” He pointed a finger at a man who was walking around with a bullhorn, barking orders. It was my neighbor.

a man with a bullhorn barked orders

“Bring the tree closer to the house,” my neighbor was saying to a man driving a tractor. “I don’t want to see a single shingle on that house.” He was talking about my house. They were surrounding my house with trees. The trees were planted right up against my foundation.

“Hey,” I yelled from the open window. “You’re in my backyard! This is my house!”

He laughed at me and walked away.  “Nothing you can do about it now.”

I stepped back from the window. I was angry but felt impotent. All those people out there on my property transforming it; I couldn’t stop them. They’d dug holes. Planted roots. Thousands of pounds. Trees and dirt. Who was going to dig them up and take them away? I couldn’t do it. The trees could be up against my house like that forever.

I walked across the hall to where my wife and daughters were sleeping.  I shook Judy’s shoulder and whispered into her ear, “They’re in our backyard and there’s nothing I can do.”

“We’ll sell the house and rent” she said, half asleep.

“We can’t give up like that! We can’t let this guy surround our house with trees!” I wanted to fight but I needed troops. I looked out their window. A flood light shone in. A tree branch pushed up against the glass. “It’s too late!” I said. “The branches are going to come through the windows. The roots will ruin the foundation. We have no choice but to leave!”

tree roots as a destructive force

My 7 year old woke up, or maybe she was awake the whole time and just spoke up. “We can’t leave until after 5th grade,” she said.  “I don’t want to go to another elementary school.” Then she started to cry.

“See what you’ve done now?” Judy said. She hugged my daughter. I felt like an asshole. I felt very alone. I had to take care of the trees. “I’m sorry I woke you up,” I said to my daughter and I left the room. The whole house was swaying in the breeze.

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I woke up and peeked out the window. My backyard was the same it had been when I went to sleep. “Fucking nightmares,” I thought to myself. I felt a mixture of relief and foreboding and then went downstairs to cook my daughter’s breakfast.

When I was in college I’d dream of tornadoes. These dreams would fill me with panic but they never felt real. As an adult I’m finding the distinction between my life and nightmares has blurred considerably. I wake up now and check in on my daughters sleeping and wonder how I’m going to keep my house. I wonder how I’m going to provide them with the consistency children need.

I’ve stopped trading. Trading is all about control; having it and keeping it. No one can fire you except yourself. No one makes a bad trade except yourself. Of course, the big lesson I’ve learned in life is that any feeling of control is a complete illusion. It’s best to surrender. But to what? I don’t have a whole lot of faith in anything right now. Perhaps that is what I need. More faith.

trading is all about control.

I drove my daughter to school and after I dropped her off, I called a friend to meet me for coffee. I wasn’t sure what I’d do at 9:30 if I wasn’t sitting in front of my desk staring at the quotes.

We grabbed our coffees and sat. “So what’s going on?” he said.

“Not much,” I said. It seems we’ve started all of our conversations like this in the last few years.

He told me he had bagged a turkey. “I cleaned it in my studio,” he said. “To keep warm I burned an entire pile of junk mail in the stove. It was like the American Dream.” He smiled.

“You have any feathers?” I asked. My daughter collects feathers.

“Sure, loads.”

And with that we were in his car and driving to his studio. It’s a cramped and dusty place, a garage that’s slowly being taken over by the vegetation around it. It reminded me of my dream. Half of the studio is home to machines that he uses to build his dark inventions, the other half is where he paints.

“I need more space” he said. “You want to take a painting for a season? These really shouldn’t stay in the studio through the winter.”

“Yeah, I’d love one,” I said, thrilled.

He reached into what looks like an over-sized file cabinet and slid one out. “You like this one?” he asked. I did. The painting he pulled looked like the marriage between a scrambled television and a Hiroshige wood cut. There’s a sense of vertical movement and of repetition. It fit my current mood: scrambled, repeating, but with a hint of beauty.

untitled by jameson ellis

I took it home and brought it up to the office where, until the day before, I traded. I leaned it against a wall. I was excited to have it. When my daughter returned home from school it was the first thing I told her.

“Look, my friend gave me a painting. Do you want to see it?”

“No. Can you play with me?”

“Yes, I will. But first I want you to come look at the painting. I want to know what you think it is.”

She sighed and rolled her eyes at me. Then she ran up the stairs to my office.

“It’s a sunrise,” she yelled down.

I walked up the stairs to join her in the office. I looked at my trading setup, still intact.

“I’ll be down in one minute to play.” I said. “I just have one thing to do.”

She sighed and ran into her playroom. I could hear her reading to her stuffed animals.

I removed two of my three monitors and slid the other over a few feet, exposing the wall. I hung the scrambled sunrise. If nothing else right now, I still have faith in the sun. It’s gonna go down in a few hours and come back up tomorrow.

And I’ll be here between the two horizons, waiting for my picture to steady.
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See what happens next. Follow me on Twitter.

Exit music.

How A Pile Of Puke Helped Me Hold A Trade

Some days seem longer than others. Today was one of the long ones.

It started with my 6 year old daughter slapping the side of my sleeping face and telling me to “wake up.” Normally this is a cute, but after a cold weekend on a frozen river in central Maine “smelting” with college friends, I was hurting. “Wake up Mommy first,” I said. (Note: My wife, Judy, is 8 months pregnant and miserable.)

After Judy expressed her displeasure with me by banging the shit out of the pots and pans in the kitchen while she prepared my daughter’s breakfast, thereby disallowing me the luxury of extra sleep, I woke up. I walked into the next room and turned on my screens. The futures were gapping down a bunch. “Finally!” I found myself thinking. I immediately felt a pang of guilt as I realized the market was only gapping down because Gaddafi is a dick. The guilt eased as I decided that wanting a little stock market volatility wasn’t the same as wanting protesters in the mideast to be slaughtered.

Gaddafi is (was) a dick.

Look, as it sometimes happens in this business, what’s good for me is often bad for some, okay, maybe millions, of people.

That doesn’t make me a bad person. Hating handicapped parking spaces might though… they’re always empty. Seriously.

Anyway, I decided that it would be a tough day for support buys. We’ve been going up for what seems like forever, when we turn down for real, could take at least a few days for buyers to show up again. But then I always have difficulty shorting into a gap down. I decided to just chill out, take it easy, and let my long weekend wear off. My wife yelled up the stairs that they were leaving. They were going to have a “mother and daughter” type day. My kid is off from school all week. I said goodbye and the market opened.

Along with my friends at HCPG, I was watching SQM for a support trade at $53. When it opened there, I knew it was going to have to trade lower if I was going to get involved. It made a quick move down to $52.25 and started to bounce. Two minutes into the bounce, at 9:38 a ton of volume went off and I decided to give it a whirl. I picked some up at $52.57, put my stop just below the low of the day, and waited for the sweet money to hit me in the face.

The stock complied moving upwards very smoothly. I didn’t even curse once while I watched its ascent. From downstairs, I heard the backdoor swing open and then splashing sounds and some grunting. My wife was letting it all loose on the kitchen floor. “Hey, I’m trying to trade up here, for chrissakes!” No response… not even the customary “Fuck you” that such insensitivities should elicit. I moved my stop up to breakeven and went downstairs to “help.”

There she was, crumpled against the downstairs toilet, saying goodbye to breakfast. She told me to go check on our daughter out in the car. Now, I had seriously crawled out of bed and started to trade. Since I don’t turn the heat up in the house past 60 nowadays, I sit in a chair wrapped in a blanket my grandmother knit me when I was 13. So yeah, it’s over 20 years old and, well, colorful. I was also sporting the pajamas my daughter had given me for Valentine’s day (think hearts) and slippers.

I approached the car. She was drawing. She didn’t see me coming, but just in case she happened to look up, I decided to do the mock tip toe with a crazy look on my face. Heart pajamas, slippers, funny blanket, mock tip toe, crazy face… Of course, that’s when I saw my neighbor walking his dog in my direction. “Hi Jeff,” I waved. He gave me a strange look. He couldn’t have seen my daughter in the car.

People must wonder what I do all day.

I opened my daughter’s door. She didn’t even look up. “Daddy, I need a brown pencil.”

Back inside, my wife was brushing her teeth. I grabbed a brown pencil and gave it to her. I gave her a hug and apologized for getting her pregnant again. I also reminded her that women used to have many more kids back in the 50s and that if we didn’t have a boy this time, she’d be having another in about a year. She left unamused.

My SQM trade was working out despite all the hubbub in the house. I nearly sold some into S2 at $53.14 but given the severe bounce overtaking the ag stocks like CF, MOS and AGU, I decided to hold it a bit longer. I took off half at $53.36 and then the last half when the stock got rejected by the 20 ema on the 5 minute chart. My average exit was $53.42, for an 85 cent profit.

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Is Stock Trading Destroying Your Memory?

When I was 25 my best friend died suddenly. I desperately wanted to write a eulogy but was not able. It is a great regret of mine that I did not, but my brain erased him. I just couldn’t recall events perfectly enough to make them clear to a church full of shocked mourners. I wanted to bring him back exactly and I could not.

Yesterday I clicked one of those texty ads on the sidebar of some blog. The ad said something about improving your memory. It had a tiny picture of a woman looking off into the distance with her hands touching her temples. She was trying to remember something. It led me to a site called Lumosity. I took a couple of their memory tests. They had a little graph at the bottom showing a simple uptrend. The uptrend indicated improvement in my memory if I kept working at their tests.

do our actions mold our brains?

I worry about my memory. Did you see this article from a couple of weeks ago? “Internet Use Affects Memory, Study Finds.” Here’s a snippet:

The subjects were significantly more likely to remember information if they thought they would not be able to find it later. “Participants did not make the effort to remember when they thought they could later look up the trivia statement they had read,” the authors write.

A second experiment was aimed at determining whether computer accessibility affects precisely what we remember. “If asked the question whether there are any countries with only one color in their flag, for example,” the researchers wrote, “do we think about flags — or immediately think to go online to find out?”

In this case, participants were asked to remember both the trivia statement itself and which of five computer folders it was saved in. The researchers were surprised to find that people seemed better able to recall the folder.

It makes sense. But the implications are frightful.

If we start to rely on Google, if we outsource our ability to remember we are also at the mercy of Google, or any government which wants certain events recorded in a specific way. What happens to history if it’s alterable and only recorded digitally? You may like your Kindle or Nook, but there is no permanence to e-books. They can be rewritten.

Never Forget?

In the past, cultures were built around a shared oral history. If they forgot, they lost a special component that binded people together. They were forced to remember. What happens if your culture starts forcing you to forget? What if it tells you to “Never Forget” some things to the detriment of other far more important things that you should remember instead?

Never Remember?

Where’s Ray Bradbury when you need him?

Last May I stopped trading for six months. When I went out of my office and spent entire days with people I felt like I was somewhat impaired. I’m so used to being with my computer I hadn’t realized how much it was affecting my mental habits and routine. What happens to your brain when you just sit and stare at numbers flashing hundreds of times a minute? It burns.

I’ve been doing research for my series of posts about daytrading in the early days. I found an old trading journal from 2005, before I started my old blog (in 2007). I was amazed that it looked exactly like my trading journal from this week. Amazed because I thought I was doing something different these past couple of years. I’ve been doing the same thing. I simply forgot what it was I did. It was eerie.

I’m taking steps to improve my memory. I meditate daily. Even though a lot of the time I’m sitting there and my brain jumps all over the place at least I see that happening. I understand what I’m up against. It needs to rest. I need to remember that.

I’m driving my car. I look in the rearview mirror. My six year old daughter is looking over at my 4 month old daughter. They are silently smiling at each other. We’re all healthy. We’re driving to the beach for the sunset and everyone is happy. I want that memory. I want to remember typing and being interrupted each morning by my six year old’s voice calling from her darkened bedroom, “Is it nighttime or morningtime?”

If I can’t have these memories forever, I’m not sure what use my brain has anymore.

I’ll write them down here; hope the cloud never crashes.

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Meanwhile, I just reviewed my Twitter stream. It’s awesome. Follow me.

Exit music.

Insomnia, Gold, and Delusions of Grandeur

Two days ago, at 12:30 am a gigantic beech tree crashed through my house trapping my wife and two daughters against their beds. Amazingly, though only a couple of feet away, I was unharmed. The tree had knocked out the power and so I couldn’t see anything but I heard their screams and I knew they were hurt.

A few weeks back, I had a guy come to look at the tree and he told me to cut it down. “It’s full of ants,” he said. But we got busy getting the house rented for August and so we put it off. I figured I’d just do it in the fall before the winter when the heavy snow could pull it down. The immediate guilt caused by this decision was complete.

Sure it looks pretty, but a Beech Tree nearly killed my family.

I stumbled through the room, or what was left of it, even trying without success to lift the tree off the bed. The hole in the roof was letting the rain in. Rainwater on my bed, on my bedroom floor. I had to get help. The kids were crying but my wife was quiet and unresponsive. The phone was knocked out and I had no idea where the cell was. I had a hard time even getting out the front door. There were no neighbors within a quarter mile. The summer people all left. I decided to head out to the main road and try to flag down a car.

At least, this is what was running through my head last night as I lay awake in bed not able to fall back asleep.

What do YOU do when your thoughts spin out of control in the middle of the night?

I walked downstairs, switched on the kitchen light and rifled through a stack of business cards. I found the tree guy’s card, and put it on the counter with a note for my wife, “Call tomorrow.”

I was hungry. I made some toast. There was no way I was going to fall back to sleep so I went upstairs to my office and turned on the computer. Reflexively, I switched on my broker and Esignal and then started to surf around.

I “pointed my browser” at Twitter (quick parenthetical rant: seriously, whoever came up with such an expression. no one in the history of internet “surfing” has ever “pointed their browser” at anything) and noticed that Barry Ritholz had tweeted 4 minutes earlier. “Huh,” I thought, “maybe Barry is up too. Maybe he can’t sleep.”

I clicked on the link in his tweet. It was some bajillion word post on rebalancing the housing market. No pictures, nothing. I scrolled to the end. It was signed, “Governor Elizabeth A. Duke.” This confused the fuck out of me.

“Jesus, Barry Ritholz has fucking Governors writing posts to his blog and tweeting them at 1:00am? Dude has power,” I thought.

I thought about Joshy sitting across from Barry in Barry’s huge office. Gigantic gold-plated desk…animal heads on the wall, etc. Barry is angry that Joshy is closing in on his Twitter follower lead. Barry stands up and calmly tells Joshy that he’s pulling the plug on him. He’s going to support this upstart Dinosaur Trader now.

“No one knows who he is,” Barry would explain to Josh. “He’s mysterious. Plus, I love Dinosaurs. He’s gonna be a star…”

I quickly fantasized about being on CNBC. Balding, nervous and sexually cowed by Courtney Reagan… no… by Sylvia Wadhwa. I’m terrified of her. Can you imagine what she could do to a man? I’d love to be sexually brutalized by her… I imagine the email I’d shoot off to Joshy now that I’d be in charge. “Hey, get a few posts up on The Mixtape or I’m considering removing the page. Just not getting enough traffic there to support the bandwidth costs.” This made me smile.

Silvia Wadwha would sexually destroy me.

Someone else in my stream posted a horrifying story about an 11 year old girl who was bullied by an entire network of underground hacker types. She had posted suggestive and taunting videos and now the hackers were getting their revenge on her family. I watched one video where she’s crying and her father comes to her side and starts yelling at the entire internet. He’s yelling at the anonymous rage that’s attacking his daughter and he’s got no fucking shot. This depressed me.

Jessi Slaughter and her Dad

Why are we letting our kids go? Don’t buy your kid a phone people. Beware popular culture.

I took a peek at gold which was back over $1900. In fact, it was up near the old highs trading between $1915 and $1916. I didn’t want to trade, it was 1am for chrissakes, but I couldn’t help myself. I figured if this thing traded over $1916 it was definitely going to pop to a new high. So I bought, $1915.70. Seconds later it was trading over $1920. I sold and immediately shut my computer down.

In the next room, my family was sleeping soundly. No tree. No crazy anonymous internet gangs. No gold. I lay down, me and my thoughts.

I worried that I’d wake up to find $GC_F trading over $2000. I mused about how 20 minutes earlier I was poorer somehow but I was actually happier. Now I was laying here worried that I fucked up a trade. I worried about 11 year old kids posting suggestive internet videos. I wondered if any of them were awake, posting videos, getting into trouble while maybe their parents were passed out drunk in the next room.

I worried… I worried…

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Do you lie awake at night? If so, follow me on Twitter. Sleep soundly? Great! Follow me on Twitter.

Why trade?

This past week was very hard for me. I was wrong consistently. Worse yet, I recognized that I was wrong but continued to “fight the market” nonetheless. This compounded the pain of being wrong and turned it into something far worse; stupidity.

At times like these, sometimes it helps to be reflective. To ask questions. One question that has come up over and over for me recently is, why trade? Why put myself through this? It’s been months since I’ve made real money. I’m stressed out and I’m dying the death of a thousand small cuts. Not to mention the two very large cuts that I suffered this past week…

Well, to answer that, I need to delve a little into my past. I have to remember the beginning of trading. What was life like before I began to trade?

I remember all too clearly my ex-bosses fat knuckles laying on her desk before me. She had asked me to write a memo, a menial little task. I wrote the memo and a half hour later there I was sitting across from her staring at those fat, pasty white knuckles as she ripped my little memo to shreds.

I remember getting paid $26,000 a year in my next job and having to fight (unsuccessfully) for a $500 a year raise that was promised to me. And I still remember the phone call I received from a friend of mine who had recently started trading when he told me that he had just nailed down $75,000 in one month. That’s when I quit that job and decided that I would learn how to trade.

Now, just as a reference point, it is not easy to make that much money in one month… or at least, it was never easy for me. I’ve traded now for 8 years and have probably made upwards of $75k in a month 5 times. And I haven’t made that much in a month since early 2001…

The early days, those days where I was learning were great. I was told to “paper trade” and to watch the market. I was told that it would probably take 6 months to really learn the sectors and the stocks and that I should just focus on learning and not worry too much about the money. There were hundreds of different traders in the office, but it was easy to discern a few main “types of traders”. Think high school where you had the jocks, the nerds, etc. With traders, there were the retracers, the trend traders, the news guys, the freaking psychopaths… I learned quickly that I hated to lose and that I was very conservative with my trading style.

I’ll write more tomorrow. This could go on for a very long time and it’s late. I really need to read a bit.