Managing my open options spreads with one hand while petting goats with the other. Doesn’t get more minimalist then that, eh?

So Mrs. Chicagosean and I are headed to Los Angeles for a little R&R later in the month. The place we’ll be staying at is smack dab in the middle of West Hollywood, but the accommodations aren’t what you’d expect. Yes, there will be wifi, but we’ll also likely be awoken each morning by a Rooster. And a large turtle may wander into our room to ask if we’d like some coffee.

What?

Yep, thanks to a gem of a find on airbnb, we’re staying at an “Urban Farm.” Check out this link which has a ton of photos of the place. Totally pumped!

The place will give me plenty of space to expand my mind and contemplate how to put on a Long Airbnb/Short Expedia pairs trade.

Yet, this doesn’t necessarily mean I should fold up my tent and head back home. It just means I’ve got to recognize this about myself, never forget it, and then position myself accordingly.

This is why in 2012 I’m making a concerted effort to trade credit spreads on both sides of the market while maintaining minimal delta risk to my portfolio. While position adjustments will be mandatory as the markets move, it doesn’t require constant monitoring and my success doesn’t hinge on me picking proper directions. This is very important for me as I don’t typically have the time available during the trading day to be closely watching every tick of my positions. Nor would I want to even if I could.

I’m cautiously optimistic that 2012 will be a nicely profitable year for me, thanks in large part to the trading plan I’ve put in place. Of course, I’ve been wrong before…  ;)

This particular paragraph hit home with me:

In the stock market, there’s no one way to make your fortune.  Warren Buffett can make a fortune holding stocks for decades.  Nicolas Darvas can make a fortune holding stocks for months.  Buzzy Schwartz can make a fortune holding stocks for minutes.  The stock market offers fantastic opportunity for speculators of all types to make their fortune.

Yes Yes Yes! Show me 100 successful Traders, and I’ll show you 100 unique ways to make money in the markets. There’s no one BEST way, there’s only the way that works best for you.

Please keep reading this excellent blog post, its well worth the 2 minutes you’ll spend on it:

What it Takes to Trade for a Living

Related:

The Minimalist Trader Framework

If you are in Chicago and attending the Security Traders Association of Chicago Annual Mid-Winter Meeting this week, I have the pleasure of sitting on a panel to discuss Social Media and it’s impact on trading and investing.

The panel will be moderated by Tom Sosnoff (formerly of thinkorswim, now Tasty Trade). And on the dais with me you’ll find one of the hardest working men in the financial blogosphere – Greg Harmon, author of Dragonfly Capital; and industry experts Don Montanaro (Trade King), Tony Battista (Tasty Trade), and Kevin Callahan (AX Trading).

Should be a lively discussion. If you’re attending the event, I hope you’ll put us on your schedule. If you haven’t already made plans to attend the two-day event, you can find registration info here.

I promise to wear pants.

Links:

Dragonfly Capital

TradeKing

Tasty Trade

I had a little back-and-forth discussion with @Grotaiche on StockTwits this morning. He’s a newer trader based in Paris who is committed to learning a little bit about the markets every day. While chatting, I mentioned the reason I blog is so I can document my thoughts and lessons I’ve learned. And it got me thinking that perhaps the biggest problem I face is I keep forgetting some of my more important and hard learned lessons.

Often a huge frustration for me is that by the time I finally learn a lesson, the conditions that existed change and now a new lesson is being taught to me by the markets. You’d think after nearly 14 years in the markets, I’d have learned (and remembered!) everything I need to know by now.

What good is learning if I keep forgetting the lesson? How can I change this?

I’m interested to know what tricks my readers employ to ensure that lessons learned are lessons retained. Please share your ideas in the comments section?

This morning I came across this blog post in my Reader from Joel Runyon, author of The Blog of Impossible Things. It wasn’t at all written with Traders in mind, but the parallels to our world were striking – particularly when you frame it within the ongoing Wall Street debate of “humans versus machines.” Everyone loves to complain about HFT algos and assign at least a little bit of their losses to the evil machines, but in the end, it all comes down to you and how you work within the parameters of the system.

Here is an excerpt from his post, with a link to the full read after…

From “The Victim vs. The Conquerer”

The victim wonders why nothing ever goes their way.

The conquerer wonders how lucky they are.

The victim wishes things were different.

The conquerer makes things different.

The victim passes blame and points fingers.

The conquerer accepts blame and moves on.

The victim argues minutiae.

The conquerer understands what matters.

The victim accepts reality and waits for for someone to create their own utopia.

The conquerer rejects reality and chooses to create their own.

The victim whimpers.

The conquerer roars.

The victim complains of unchanging impossibility.

The conquerer relishes the challenge of the impossible.

Click through for the rest of a very inspiring read: The Blog of Impossible Things

Related:

The Minimalist Trader Framework

• Trading is hard, duh.
• Building and maintaining a social community is far harder than it looks from the outside.
• Reading headlines is the surest way to insanity. This Euro mess is simply that – a mess.
• I’m rarely as smart as I think I am.
• The best trading strategy in the world won’t work for me if it doesn’t
  fit my lifestyle/workflow.
• The first loss is usually the best loss.
• Just because something doesn’t make sense to me doesn’t necessarily
  make it wrong.
• Keep bad habits in check. They can often have spillover effects into
  other areas of work, family, friends, life.
• I don’t like being around downers. So when things aren’t well for me,
  I should be cognizant of my body language and attitude around others
  so as not to become what I dislike in others.
• Being around people who are passionate about whatever it is that fires
  them up is inspiring and their company should be sought out at all
  times.
• Focus on risk and the minimization of it whenever feasible. My job is
  to survive, not hit home runs every trade.
• The economic lessons of the post bubble Japan and the current
  situation of Europe should be closely studied. If things don’t change,
  the US might find itself in similar situations. And where there is
  chaos there is opportunity. Be ready.
• Social media brings out the best in real people. But also brings out the
  worst in people with bad intentions.
• There is nothing cooler than watching an athlete, artist, performer, actor, musician, or trader performing at the Top of their ability.
• If I keep holding out for the next great thing, I’ll be waiting
  forever. Live in the now. It’s waiting for me.
• It’s ok to say no.
• It’s ok to ask questions.
• Spend money on the things that matter: experiences, meals, and products
  that make my life simpler/easier. Save the rest. Be vigilant.
• I’m getting tired of long winters. I can only tolerate it through the
  holidays. Need to have dual residences.
• Despite trading for nearly 14 years, there is so much I still need to
  learn. Particularly in the world of options. I’m embarrassingly
  ignorant of so many important nuances of volatility and certain
  greeks.
• My wife is right under my nose, yet sometimes I forget how amazing she
  is. I should focus on this more often.
• The Buffalo Bills are guilty until proven innocent. Despite knowing in
  my heart that they would totally blow it, it still hurt and I was
  still surprised when I was right. Wide right.
• If I could apply the same conviction I’ve had in both Tim Tebow being
  successful and the Bills blowing it again to my trading, I think my
  results would be markedly different. Better.
• A lifetime of goodwill and good deeds can be undone by one stupid and
  careless mistake. The lessons of Joe Paterno, Jon Corzine, and nearly
  every Chicago politician should serve as inspiration to always choose
  to do the right thing. The cover-up is nearly always worse than the crime.
• I should seek out a trading mentor.
• I should eat healthier. Be more consistent with my exercise.
• I should see more theater, symphony, and live music.
• I should read more.
• There are few things that warm my heart more than hearing my wife let
  out a belly-aching laugh. I hope I can cause her to do it more often.
• The @MayorEmanuel spoof twitter account leading up to his election as Mayor of Chicago was one of the most brilliant displays of creativity I’d witnessed in a
  long time. I hung on every tweet.
• I don’t focus as hard as I should.
• Need to be more spontaneous. But also more responsible when doing so.
• Remember to turn every loss into a win by internalizing the lesson
  that was offered. If I keep repeating the same mistakes, then stop
  fooling myself into believing I’ve learned the lesson and take a
  deeper dive into understanding my error.
• It hurts to see people excelling at whatever, but being cut down by
  haters for no other reason than obvious jealously and their own
  inadequacy. Celebrate success.
• I wish more companies could execute like Apple.
• I should be more appreciative of everything I have, and less longing
  for things I want.
• It’s so great to reconnect with old friends. I need to do more of it.
• I love being an Uncle. Just wish I could do it in person more often.
• I should give more – in all areas of life.
• I should stop saying all the shit I’ve said above and actually start DOING and
  LIVING IT!!

2012 is going to be amazing. Onward and upward.

- Sean McLaughlin, December 9, 2011.

-

Yes, I know a team needs to gain 10 yards to acquire a new set of downs. Not 9 yards & 11 inches. This I do not dispute. But I have a BIG problem with the way it’s measured when it’s close.

Pro & NCAA referees go through a well choreographed charade of trotting out “the chains” to decide indisputably whether or not the offensive team has moved the ball past the necessary yardage. It all looks good for the fans in the stands and the people watching at home.

But who’s watching the guy at the other end of the chain? As far as I can tell, nobody.

There are two ends of that chain, and we all focus on the end closest to the ball. But what makes the position of the guy at the other end perfect? That linesman has no chance of being off on his spot by an inch? A centimeter? I call bullshit. His spot determines the outcome of the call! But nobody talks about that guy.

There is so much wrong with this. Even the spot of the ball is inexact. At the end of the play, the referee EYEBALLS where he should place the ball on the field. No chance of him being off by and inch? A centimeter?

If the ball placement is eyeballed and the placement of the measuring chains is eyeballed, why the hell do the leagues emphasize this “exact” method of determining a first down?

As in the first two legs of this process, there should be a degree of error introduced. If the ball is within a couple inches of the “first down line,” as viewed from the sideline first down marker, the offensive team should be awarded the first down. Yes, occasionally a referee might get the call wrong and teams/fans will be pissed. But how is that any different than a holding or pass interference penalty that changes a game? Stop insulting the fans who have half a brain.

…And don’t get me started on how pass interference is called and penalized (especially in the NFL). Perhaps a post for another day.

And every day the story is the same. It comes down to one word: Europe. Only the fine print is slightly altered.

Each night some Tool with an Italian, Greek, German, or Spanish accent says something with no truth or reality behind it and the rest of us sneeze in whatever direction fucks the most positions. If I sound jaded, you bet your ass I am. This unending volatility has cost me money.

Many of you may have already seen Seth Meyers on Saturday Night Live do his shtick about the European Crisis. This originally aired a few weeks ago. But has the story really changed since last week? Last month? Last year?  If you haven’t already, view this 3 minute segment from SNL Weekend Update in which Seth absolutely slays the situation. I haven’t yet seen a better explanation of what’s really going on over there. Enjoy…