One last review of the Trading for Dummies principles using the color-coded chart. Judging the broad market this morning, I could see there was a headwind and settled on the short side very early on. Trade with the trend is rule number one.

AAII and ONNN both turned up on the radar as unusual suspects. Waiting for a low-risk spot to enter is the next step. Tightening the stop down a bit once your initial risk is covered comes next on the checklist. Letting your profits run is the third cardinal principle. And last, but probably most important of all, you have to bet only as much as you're able to handle emotionally and no more.

ONNN, 30 min. Chart

That's the last bit I'll write about day trading for a good several months, but you should still visit the site from time to time since I'll continue to blog and yack about longer-term investments. Good night!

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Looks like they might try to jam it up into the close, so it'd be a good idea to cover here, 7.50.

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Well AAII would have been a tiny loss (assuming you tightened the initial stop), but old ONNN (which I now call OFFF) has dropped like a rock and would be a tremendous winner. Think of it as my going-away gift, because there won't be any more freebies like this one for months. Looks like the market got ramped up a bit starting around 2 PM, but it hasn't really turned the tide in any meaningful way.

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Tone is poor, I'd favor the short side. AAII and ONNN both look interesting to me, but I've got to go row. As you can tell I've stopped trading a couple of days earlier than planned, and tomorrow will be the official start of my trading holiday. I'll check in later....

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Just got knocked out of a tournament 3 hands in, so let me share my bad beat story. ;-) I've got QQ on the button, I raise pre-flop, big blind re-raises, I call along with several others. Flop comes down 3 9 T rainbow. Big blind bets, under gun calls, I raise, everyone gets out except for the big blind and the guy under the gun, who both call. No re-raises from either so I don't have them on AA KK.

Turn is a 4, big blind bets, under gun calls, I raise large thinking big blind is also not on TT but is probably holding JJ, big blind calls and under the gun calls. River card is a 7. Same drill. Big blind bets I raise him large, he calls, under the gun calls (smooth calling TT perhaps?).

The winner? 6000 chips to T7off held by the guy under the gun. Big blind had JJ. Calling two large raises while holding T7off under the gun is slightly unusual. The Chairman feels the pain.

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Eyes on AAII, ATYT, QLGC, TASR....

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ESPN has poker on every Tuesday night at 8 PM ET.

The Travel Channel has poker on every Wednesday night at 9 PM ET.

Bravo has something called Celebrity Poker Showdown which I would probably skip.

And it looks like Fox Sports has something called Late Night Poker once a week?

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Rob Kinsey writes that the "magnitude of today's leveraged bets in the bond market is cause for concern."

Jim Griffin writes that "oil and bonds are strange bedfellows."

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The Clipper Fund's year-end letter for 2003.

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World of Poker radio show archive. If you can bear the pain of listening to amateur radio, you may find some little tidbits of advice that are useful.

Actually I just suffered through all four of those shows (skipping the ads of course) and there's not a whole lot there.

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A note on trend-following systems. The recent swoon in the Yen was pretty unnerving to be long through, but my system didn't get shaken out, which was fortunate. Long-term trend following requires enormous discipline because you have to ride out dull and rough patches and also be content with an exit that is usually far off the high.

Patience, discipline, and an absolute refusal to build scenarios or indulge in guesswork are the qualities required to be a trend follower. Most people have fun filling their charts with various "trendlines," interpreting assorted indicators, guessing tops and bottoms, etc. They're almost always wasting their time, but it makes them feel good and maybe even "proactive." ;-)

Japanese Yen (JY), Weekly Chart

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So front-running "fundamentally undermines the fair and orderly operation of the exchange auction system." You don't say?

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