"How to make $2 Million by making Millions of Mistakes"

I don't think much of 99,9% of vendors, most of whom couldn't trade their way out of a paper bag if their lives depended on that, but Don Miller - exchange member at the CME - who made $2 million trading his own account from a notebook - yup, one notebook - at home, had his results independently audited, so his ability to walk the talk and be able to prove it deserves my absolutely fullest respect.

He also doesn't pretend there are any great secrets behind trading profitably, has disclosed his trading method freely, - basically buying pullbacks into trends as his main bread and butter setup - and writes some pretty insightful stuff on his blog like this post here:


"Wednesday notes - Necessary Mistakes


Many of you know I have several pet peeves about this industry, including lack of transparency, poorly designed trader training by non-traders, and lack of accountability by the likes of Cramer et al. (Lest we forget that memorable "Miller vs. Barrons & Cramer" Post from February.)


Well one pet peeve that stacks right up there on my list is never being able to understand why many traders or educators never speak about that "other" side of this business -- or putting it bluntly, their MISTAKES.


Well I make 'em. And sometimes they're doozies. In fact I make 'em every day. And as I was telling the the team the other day, there has never been a day in my trading career where I haven't made one. Think about it. Never. And some days or portions of days, I flat out suck.


And while I've thus far passed on the many recommendations to pursue a book (btw, isn't the blog enough?? Plus, it's live and ever-evolving!), if I did, it would probably be titled something like, "How to make $2 Million by making Millions of Mistakes". And by "mistakes", I mean everything from tangible loss to the opportunity loss that comes from missed opportunities, lack of focus, burn-out, etc.


Rifle through the virtual pages of this diary and you'll see plenty of them. Who could forget that infamous day in October 2008 where I -- along with the rest of the world -- got the wake-up call of all wake-up calls as the VIX shot through 60. -$94K was the "tuition" I paid to learn how to trade the VIX in the stratosphere if I recall. And yes, the tuition was worth it as that week ended +$40K and month +$315K.


So that incredible month was the result of a beginning mistake. And not just your "trip on a banana peel" variety ... rather it was figuratively a full blown drop from the 4th floor of a building onto a concrete walk.


Today, I made smaller mistakes in that I traded the Europe session poorly and began the U.S. session with a drawdown. Yet I was able to use the information gained and "tuition" investment (failure for the market to break down even in the stratosphere and a less than 100% focused mind) to anticipate the U.S. session rhythm, tighten up the focus, and fully negate the early draw.


So why then do most traders, columnists, educators, vendors, chatrooms (I could go on, but might run out of virtual ink) never want to discuss their mistakes??? Well here's a news flash: We're human and we make 'em. And top traders make plenty of them ... perhaps even more than novices at times as we take the necessary risks required to profit over the long run.


And since mistakes are often the very seeds needed for success ... whether it be invention of the light bulb or million dollar trading, shouldn't we not only talk more about them, but shout them from the rooftops???


My recent years of success are the direct result of mistakes -- whether earlier in my career or of the current day variety. Come to think about it, even the current Jellie effort which is currently transforming traders is the direct result of a mistake in the form of my own personal early-summer burnout which led me to the concept of "Well, if I'm going to focus on restarting my own engine, why not do it with a team of traders so we can all benefit over the long run?"


Mistakes. I hate 'em. You can ask the Jellies about my self-inflicted lash marks.


But I love overcoming them.


Every hour of every day.


I have to.


I'm human."

LINK:
Don Miller Trading Journal: Wednesday Notes - Necessary Mistakes

Spot on.

Don is always a good read and as you say is one of the few who is actually putting a lot of money at risk every day....bet there's not many out there who can say they've lost $94k in one day but still ended the week up $$$$.

I like the sound of this bloke. Thanks for pointing him out.

Having made a fairly serious mistake this morning (thread elsewhere), and having now read a bit of Don Miller, I now feel slightly better about it.

That blog was created to suck people into paying him 10K a month to access his trading room.
He spins it as quality trading eduction and only a handfull of people will be selected, but its all BS.

Lot of effort, runng the blog for over a year before mentioning training.

If any of the people on the course were worried he did offer to show his account statements.

foredog said:

Lot of effort, runng the blog for over a year before mentioning training.

If any of the people on the course were worried he did offer to show his account statements.

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He has been selling snakeoil seminars/trading videos for the last 10 years.

donaldduke said:

That blog was created to suck people into paying him 10K a month to access his trading room.
He spins it as quality trading eduction and only a handfull of people will be selected, but its all BS.

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I agree that I never will get why someone would become a vendor instead of just maximising ones own pile or starting a hedge fund.

I never have and never will respect that as it's basically nonsense.

But what I do respect is the fact that he can at least trade, and pretty profitably at that, and is pretty much the only guy selling sthg willing and able to prove that.

Any surgeon needs a degree before he can operate, any pilot a license, etc etc, you pretty much need proof of competence in most areas of life before you can start doing what you want to do to make a living.

Yet in this industry you have 99,9 % charlatans meeting the dumb and the gullible willing to fork over money to people who have nothing but hot air.

The people that get ripped of giving money to suppliers without track records absolutely deserve what they get.

So, agreed, this education stunt of his is a joke, he said so himself somewhere basically that all the info is freely available, including his style of trading, but whatever his reasons may be for this venture, he did at least make 2 mill last year from trading and can prove that.

But the point of this was his take on mistakes being a normal part of trading.

I wish he wouldn't have entered the vending arena then we wouldn't get sidetracked from the actual message of someone who is truly proficient at what he does, and which really mirrors my experiences too...

Mistakes in trading are just part of the whole deal.

Jesse Livermore: ... "Of course, if a man is both wise and lucky, he will not make the same mistake twice. But he will make any one of ten thousand brothers or cousins of the original."

donaldduke said:

That blog was created to suck people into paying him 10K a month to access his trading room.
He spins it as quality trading eduction and only a handfull of people will be selected, but its all BS.

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$10K a month, are you serious?

Black Swan said:

$10K a month, are you serious?

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Sumpin like dat yup, think its for the whole course tho, dunno, was that 3 months or what.

Again, I totally agree that that is total nonsense, everything anyone could need to learn how to trade profitably is freely available all over the place, trading isn't so much about the how or method, it's far more about you and yourself and the way you handle losses, mistakes, winners, etc.

BSD said:

Sumpin like dat yup, think its for the whole course tho, dunno, was that 3 months or what.

Again, I totally agree that that is total nonsense, everything anyone could need to learn how to trade profitably is freely available all over the place, trading isn't so much about the how or method, it's far more about you and yourself and the way you handle losses, mistakes, winners, etc.

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Also what a lot of gurus preach is common sense TBH. One issue I always find slighly off putting is the lack of quality of these blogs/websites, for less than £10K you could have a site as good as most premiership football clubs, needs someone to manage the content etc, but you get the point...
Still thanks for the link, enjoyed having a route around, will put his vids on my watch list

BSD said:

Sumpin like dat yup, think its for the whole course tho, dunno, was that 3 months or what.

Again, I totally agree that that is total nonsense, everything anyone could need to learn how to trade profitably is freely available all over the place, trading isn't so much about the how or method, it's far more about you and yourself and the way you handle losses, mistakes, winners, etc.

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Isn't the point that you get his constant mentoring over this period? If he is as good as you say, then it might well be worth it for some people, i.e. to help them manage trades, handle losses, and generally absorb some of his experience along the way by osmosis, as it were.

Don't forget that he's also partly doing it for "Cheriddy", apparently.

(Don't worry, I won't be signing up for it any time soon)

Black Swan said:

$10K a month, are you serious?

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Its actually $7500 for four weeks access to his virtual voice based trading room.
I would post a link to his site but dont want to give his snakeoil any free advertising.

He offers limited places and there seems to be no end of suckers ready to sign up.

Yes I totally agree Swan, in fact I actually think most everything is pretty much common sense and not rocket science at all at the end of the day to be honest, I really believe in Occams clever observation that all things being equal - which they really are in trading - the simpler explanation is always better.

Most good traders I've known have kept it shockingly simple, have been great adherents of KISS.

Harvard did a rather well known complexity experiment where two groups of students had to come up with explanations to simple problems. The first group got the correct evaluation from the professors, ie if they had come up with a logical and rational explanation they received a "correct", if not they got a "wrong", while the second group got random evaluations, so that even if they were right they might have received a "wrong" and vice versa.

The first groups solutions were all admirably simple, while the second groups explanations became increasingly complex as they tried desperately to fit theory around inexplicable fact.

Not exactly an unknown phenomenon is it in real life either.



What also supports that is Paretos rule which basically states that often enough it's 20% of input that generates 80% of output.

Meaning if one is clever one concentrates on identifying the success relevant 20%, while steadfastly ignoring the rest that's largely irrelevant noise creating very little value added but offering great scope for lengthy and convoluted theoretizing in a hamster wheel.

montmorencyt2w said:

Isn't the point that you get his constant mentoring over this period? If he is as good as you say, then it might well be worth it for some people, i.e. to help them manage trades, handle losses, and generally absorb some of his experience along the way by osmosis, as it were.

Don't forget that he's also partly doing it for "Cheriddy", apparently.

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I think that's the general idea, they just trade together as far as I know, they have his setups, which hes shared freely around before, and then he just does his trading, with them "looking over his shoulder" in cyberspace or however the actual mechanics work.

That said I think the difficulty is learning how to do it yourself, and I think only you and yourself can really come to terms with that.

It's really unwarranted hubris and apples and oranges in lots of respects, Don half jokingly comparing himself with the Turtles (he calls his disciples Jellies in a wordplay on Turtles lol) that Richard Dennis funded, completely different situation, but at the end of the day, once Dennis had taught them his method, they also had to do it on their own, which also explains the huge differences in results amongst a group all trading the exact same system in the same markets at the same time.

;-)

I was trying not to ask where jellies came from

Speaking of gurus, are there any David Fuller fans here?

Not been there for a while, but his site always looked interesting. I only ever looked at the free bits, but there were tasters of articles that were available in the paid section of the site. Also (expensive) seminars or whatever, from time to time.

However, the monthly charge for the website didn't have as many noughts in it as Don Miller's apparently has.

BSD said:

had his results independently audited, so his ability to walk the talk and be able to prove it deserves my absolutely fullest respect.

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Do you have a link to where he says his results were independently audited? All i have seen are blog posts where he says 'phone up my broker if you dont believe me'.

montmorencyt2w said:

I was trying not to ask where jellies came from

Speaking of gurus, are there any David Fuller fans here?

Not been there for a while, but his site always looked interesting. I only ever looked at the free bits, but there were tasters of articles that were available in the paid section of the site. Also (expensive) seminars or whatever, from time to time.

However, the monthly charge for the website didn't have as many noughts in it as Don Miller's apparently has.

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Can totally understand why folk pay 100 quid a month to Dan Armitage's fx500club, even the company (the craic as the Irish call it) is worth it; bouncing ideas of folk, pulling each others legs...etc and those guys do the job well, but to be paying thousands a month is bonkers IMHO. TBH I'm surprised how many gullible and frightened folk are out there..