Chronicles of a Million Dollar Trader

Trading strategies always look great on paper. But when it comes to trading in the real world, market chaos and human unpredictability often make even the best strategies seem inadequate to the task. The hard truth all traders eventually learn is that trading is far more difficult when your chips are down and the pressure is on. In the tradition of Edwin Lefèvre’s legendary book Reminiscences of a Stock Operator, Don Miller’s Chronicles of a Million Dollar Trader offers an inside look at the ups and downs, failures and victories of one of the few traders to have ever earned $1 million in a calendar year by trading futures intraday. In this detailed journal, Miller lets you peek over his shoulder as he tiptoes through a minefield of potential mistakes, miscalculations, and self-defeating behaviors in search of consistent profits. Along the way, he shares trading diary excerpts from 2008 to 2012, as well as his actual performance for every futures trading day from 2004 to 2011—almost 2,000 days worth of real trading results and analysis. You’ll follow along as the challenge of everyday trading teaches Miller the importance of focus, motivation, controlled aggression, and just showing up—especially on those mornings he’d rather sleep in. As you track his progress hour by hour and day by day through the journal, you’ll see how he recognizes his strengths and weaknesses, reaches or falls short of his daily goals, analyzes his results, and applies everything he learns to future trades, including valuable insights gleaned from sports, poker, and life. If you’re thinking of quitting your day job to be a full-time trader, Miller offers a clear-eyed look at what you’re getting into. His path to success was rocky, with ecstatic highs interspersed with intermittent setbacks. Despite his well-crafted plan, his intelligence, and his dedication, Miller began his trading career the way so many others do—with losses due to a lack of training and a poor business plan. Though he learned his lesson, ate his humble pie, and got back into the game successfully, there’s no reason for you to repeat his mistakes. Chronicles of a Million Dollar Trader reveals how successful trading is about much more than reading charts, because you’re not just playing the numbers—you’re competing against the markets, other traders, and yourself. Much like a sport, winning is the result of good planning, practice, and execution, and if you’re not on your game, then you’re already on your way to losing. If you’re a full-time trader, part-time trader, or just considering becoming one, this insightful, revealing look inside Miller’s mind offers vital lessons on how to trade like a champion.

Preface xi Acknowledgments xv Introduction 1 The “Race” 1 A Motivational Carrot 2 How This Book Is Organized 3 Out of Hiding 4 Intention and Use of the Trading Journal Entries 5 Journaling and Performance 7 Balancing Credibility and Humility 8 Bamboo Trees and Windows 9 A Book about Trading? 10 Part I Beginnings 13 Early Tunnels of Life 14 A Late Bloomer 15 Early Vocations 16 Don’t Quit Your Day Job 17 Out of the Abyss 17 Evolving Perspectives 19 A Sporting Chance 22 Part II Journaling the Million Dollar Race 25 July 2008 Journal Excerpts 25 The Cornerstone 25 Why Has It Worked? 27 Poker Impacts 28 Wouldn’t You Know It 30 The Intraday Journal Begins 32 Planning and Trading a Premarket Bias 34 Go with Your Strengths 36 Textbook Morning-After Prior-Day Trend 37 Market Bias 39 Morning Sequences 42 Fouling Off Pitches 44 Work Remains 45 August 2008 Journal Excerpts 50 The Story of Grace 50 FOMC Day 52 Post-FOMC 54 Blinds, Antes, and Patience 56 Fool Me Once . . . 58 Changing Rhythms 60 Tale of Two Markets 62 Trend Day 65 Any Green Is Good 67 Volatility Returns 70 Range, Range, Break 73 Hold the Phone 75 Silver or Gold? 77 Breathing Room 78 Digging to the Surface 82 September 2008 Journal Excerpts 84 In the Zone 84 Less-Than-Peak Performance 86 Dreadful Start 89 Solid Performance 92 AM Offense; PM Defense 95 All Good Things . . . 98 A Market Blessing 100 A Forgettable Week 102 Raising the Bar for the Final Lap 103 Closing the “Trade” 105 Now It Gets Harder 107 October 2008 Journal Excerpts 108 Monday Mess 109 Autopsy of a Mess 110 Back to Work 111 86 Percent Recovered 113 Dodging the Carnage 115 Day Off 117 I Left in the 7th Inning! 118 Suck It Up, Don 120 Hitting a Wall 121 Role Reversal 122 Eye of the Tiger 123 A Defensive Win 124 Dodging Landmines 126 A Step Slow 128 Welcome to My Final Table 129 Morning Strength 131 October Wrap 133 November 2008 Journal Excerpts 136 A New Game? 136 Fighting It 138 Starting a Cold Engine 139 Jack Be Nimble 140 The Power of Momentum 142 Managing with My “B” Game 144 No Style Points 146 Brutal Pace 148 A TICK Tutorial 149 Warning Signs 153 Finish-Line Adjustments 155 December 2008 Journal Excerpts 157 Steady as She Goes 157 That “One Thing” 158 Pointing the Finger 159 Order Restored 161 The Week That Was 164 Empty Tank 165 Two Strokes Remaining 167 It Is Time 168 Year of the $1.00 Goal 170 2008 Year-End Grades 171 A Night to Dance 173 Part III Beyond the Race: Best of the 2009 Journal Excerpts 179 Roller-Coaster Day 181 The Jazz Trader 182 Wastebasket Day 184 The Sun Came Up 185 Five Stinkin’ Minutes 186 Upon Further Review 187 Life After 40 188 Where It All Began 190 The Missing Inches 191 Why We Floss 192 How I’ll Spend My Summer Vacation 193 Part IV Birth of the Jellyfish 197 The Genesis 197 Selecting the Team 199 The Jellies Speak 200 No Country for Old Men 200 Teamwork and Simplicity 202 Keys to the Castle 203 Part V Beyond the Tank: Best of the 2010–2012 Journal Excerpts 207 Poker, Trading, and Focus 207 Workplace Safety 209 Focusing on Life’s Comma 211 You’re Fired 212 The Flash Crash Autopsy 213 Money Never Sleeps 217 Part VI The MF Global Bankruptcy 221 Frozen on the MF Global Iceberg 222 A Different Kind of Trade 227 We Win 228 Part VII What Goes Up . . . 233 An Object in Motion Stays in Motion 234 Trailing Stops at the Macro Level 236 A Thousand Words 239 Part VIII Final Thoughts 245 Appendix Journal and Jellie Shorthand and Acronyms 247 About the Author 251 Bibliography 253 Index 255