Thursday, February 18, 2010

Coming Back

"If you don't like something, change it. If you can't change it, change your attitude" - Gail Sheehy

A friend called to wish me Happy New Year, a former floor trader, he quited trading after the floor closed in 2005. He is a good sportsman, coaches kids tennis and golf before joining a golf club as a manager.

I was relieved that he is doing OK and not asking me for a loan, I really have a phobia of casual friends calling me out of the blue.

The workload in his current job is killing him. He needs to ensure everything is alright before the first flight and run smoothly till end of the day. That's almost 12 to 15 hours everyday except for a weekday off. He is paid about S$5,000/- a month, a sum that a foreign worker will be more than willing to take up.

In his late 40s, he would like to spend more quality time with his family and with age catching up, he might not have the energy to put up with such hectic schedule.

Since he is spending so much time and energy in his current job, he felt instead, he should channel them back into trading for a living, something he had done before. The time is flexible.

He called 2 other friends who are currently trading and both advised him not to give up his current job as trading is very "tough" now. I wondered why these 2 traders didn't quit trading, of course, I believe they had good intention.

He asked how my second brother is doing now, they were once tennis buddies. I told him my brother struggled for 1 year before finding his niche trading in the afternoon session. That's how long it took him, a seasoned floor trader, it's definitely tough but he is currently very comfortable.

As usual, I asked him what was his expectation. He hoped to at least match his current income. I'm surprised that many of the former floor traders didn't have great expectation, they were realistic and aimed for something achievable, low risk.

I analysed his situation and finally asked him whether he can survived without income for a year with his wife being a homemaker. He pondered for a moment and told me he needed to do some calculation but expressed his intention to make a come back.

I guided him on the various procedures to become a member of SGX, trading platforms and charting providers. He requested to visit me at the arcade to see how I trade once he is ready. That's definitely not a problem, I'm willing to help.


Joe said...

Hi Ah Fatt, like your honest comment to your friend "I analysed his situation and finally asked him whether he can survived without income for a year with his wife being a homemaker." Did you ask him further how much he is willing to lose in his first year?

Fat88Trader said...

Knowing my friend for many years on the floor, he is not a high risk trader, careful and not reckless. No yum no trade type of trader.

In fact, many of the former floor traders are rather fearful of electronic trading. They have lost their edge.

Joe said...

You do need great patience to be a "no yum, no trade" type of trader. What I understand from "survived without income" meant to me is breakeven in that one year. But to start new on electronic platform, can one learn to be a good and consistent trader without first losing money to the market and to overcome the fear of losing money?

Fat88Trader said...

"to start new and without losing money to the market" is a monumental task. Most new traders "pay to learn", we can hardly run away from this fact. No doubt, trading is "tough".

The 1 year learning phase is most crucial, it break many aspiring traders. There are many things to learn in trading especially in finding your edge. Competition is stiff, it's a negative, negative sum game.

Take up any trading book and you learn the rules of the game. You need the followings:-

1. Guts
2. Discipline
3. Patience
4. Focus
5. Plan your trade
6. Cut your losses fast
7. Ride your profit
8. Money management
9. Strategies
etc, etc.

Most traders know all these rules but are still unable to execute them when it come to actual trading. Why? It's in the mind!

James Denham said...

I agree, even I turned $10,000 to $25,000 in less than 3 months using Futures Trading Recommendations from Elite Traders

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