Friday, July 29, 2011

How Algorithms Shape Our World

You may not agree with him.

Wednesday, July 27, 2011

How to Make Money in Microseconds

Interesting article on Algorithm Trading

Sunday, July 17, 2011

Thank You!

Thank you for those "friends" who stand by me.

I'm fine, I'm Ok and not that foolish to be upset by a cowardly moron.

I have met up with my option trader friend and was told that he had employed two new traders who have good IT knowledge for this round of recruitment.

For those who have sent me resume and not selected, I'm sorry I couldn't help much except hopefully he look into the resume again in the next round.

There was another Proprietary trading firm that advertised for prop traders recently in the newspaper, it was shocking to many of us when we were told that there were more than 900 applicants.

Most prop firms look for young traders preferably below 25 years of age without trading experience so that there is no emotional baggage. Of course, those with IT and engineering background, with good analytical skill and able to crunch numbers will have the edge in the selection.

But, don't be despair, successful traders come from all walks of life as long as you have the passion.

"True success is not only about achieving success through sheer hard work. It is also about achieving stellar results in what one has a genuine passion and interest for." - Wong Chun Han, from the Sunday Times today.

Ask yourself whether this interest in trading is strong enough for you to dedicate your life to the pursuit of success in this particular field.

Every trader tried to look for the "Holy Grail" strategy, it's just about 2 simple rules that somehow is so difficult to follow.



For every trade that you take, these 2 rules should always be in your mind, every time, without fail.

Yes, talking is easy, cheap, doing it is damn difficult. Where to cut? When to cut? How far to cut? These are some the most asked questions from traders. Only the individual trader through trial and error can determine his own risk profile and how he want to trade, short, medium or long term trading.

There is no choice but to quit the industry if a trader can't train himself repeatedly to "Just Do It"

Wish all a Successful Trading journey.

Wednesday, July 13, 2011

This Son of a Gun

Some how or rather I have offended this Son of a Gun who is following my blog very closely and hammering me viciously in his blog. He has a personal grudge to run me down which I have tried to ignore.

It started when this "twkia" posted comments on the AFACT FORUM and attack all the trainers from SGX Academy. He is one of our fellow floor trader but we do not know who he is, what a shame. We tried to reconcile with him by inviting him to our AFACT gathering so as to settle any misunderstanding, he agreed but obviously chicken out at the last minute.

He is filled with so much hatred for SGX and especially me who called him to show face, step forward and don't be a coward. Why hide behind a skirt and keep attacking us? He dared not take up any of the challenges thrown at him despite giving him all the advantage. That obviously infuriated him and from then on he set up another blog to attack me.

From his earlier blog post, this Son of a Gun is not only vicious, but cruel, spearing penguins as his hobby. With such a wicked mind, I don't know why he still visit the temple to ask for blessings. Who is he praying to? If there is KARMA, then this coward would most probably be a penguin in his next life.

Despite being blessed with an intelligent mind and a healthy body, he chose to be a Big Bully on the Internet calling me all sort of names. Don't know who his father is, obviously never teach him how to be humble and respect others including animals. The Earth turns around, one of this day Heaven will punish him and make him learn how to be humble.

Dear readers, Have I mislead you here in my blog with regard to trading? Have I commented or attack this Son of a Gun in any of my post?

Though I despise this coward, I would like to thank him for polishing my head and to let him know I have another smoother head for him since he enjoyed it so much.

It's time for me to take a break from writing so as not to create more jealousy and hatred. I'm not here to gain fame or to sell anything to my readers but just to share some of my trading experiences.

I would like to thank those who have shown appreciation and Coconut for being so kind to add in his thoughts.

Saturday, July 9, 2011

There is still HOPE!

Met up with many traders during our AFACT second anniversary dinner few days ago and as usual we ended up discussing about trading and the market condition. Most traders are finding it tough to make good money due to the various reasons I have written recently.

Met a trader from another arcade yesterday and was told that he had resigned as a trading member, closed account with his clearing firm and pondering what to do next with whatever money left he withdrew. Probably in his 50s, he would take a break for the next 6 months. I felt sad for him, trading is so uncertain, it's only meant for those who are willing to change and adapt according to market condition and against the better players coming on board.

Spreaders and Scalpers blamed the Algos, they are most affected by the advance in computer technology, losing their most important edge, "speed". Short term traders are increasingly finding it difficult to survive, the Algos distort the market. I believe it's still the big boys who are able to control the market and very efficiently with their speed and size to pulverise the small time traders.

In order to survive, trade small, follow the trend and go with the waves, trading should not be stressful once you have a plan.

For those following my other blog on trading performance between 2 veteran traders would know that there are some traders who are still able to survive. 8038 has been trading SGX products from Australia for the past 2 weeks and still able to be profitable consistently despite the lack of speed a few thousand km away.

Why? Because he don't do high frequency scalping, his comm is just a fraction of his profit unlike 8022. To be successful like 8038, a trader need to be patient to wait for a trading set up and the nerves to ride the profit. 8038 losses are small on his losing days, I admire the type of discipline he has.

Looking at the account of 8022, he didn't lose money trading over the last eight months, his losses are in the comm. Despite repeatedly reminding him to be conscious of the trading cost he insisted on his way of trading. These are some of the traders that I have honestly told them not to waste their time. It's not about perseverance, it's about being stubborn.

For those who are not making money, their characteristics are similar to 8022. for those who are willing to change, there is HOPE, 8038 is a very good example for all to learn.

Saturday, July 2, 2011


My cousin broke the news to me yesterday that he's quitting trading and going back to work soon, after a friend recommended him a job. I was a little surprised but supported his decision since he is not getting anywhere after being a trader for 2 years.

He broke even on his seventh month of trading, that was quite remarkable for a newbie who didn't know a thing about trading, confused even over bid and offer in the beginning. Last year was good and he improved tremendously with consistent profit every month though on the average, still below his last drawn salary. He enjoyed the freedom of being a trader.

The last six month was lousy, he got hit a few times shaking his confidence. Volatility shrank and scalping became very tough with the coming of the Algos, his profit came down, so was mine. After some serious consideration, he felt that it's better to go back for a more stable income, CPF, year end bonuses and medical benefits.

I'm glad that he made money trading, didn't burn a big hole in his pocket like others we heard so often. He took a 2 year break from his career, gained plenty of experience as a financial futures trader and most important he has given himself a chance, an opportunity to become a trader after hearing so many glamorous stories of successful traders. There is no regret.

8022 just told me that he is quitting too and looking for a job. I admire his perseverance to stay on for another 5 years as a electronic trader after the trading floor closed in 2005. I can imagine his suffering without income for 5 years and using up his savings on daily expenditures for the family.

The hardest part for a trader is when they get too old to get re-employed, when they are in their late 40s and the only thing they know best is trading and not making money.

Reality sets in, only the best traders make it and that's less than 10%.

Scalping is getting very tough, very tiring especially when many of your opponents are powerful machines with plenty of muscle to push the market in their favour. The machines distort the scalpers with their speed in putting and pulling out orders, sometimes huge orders to bully the small traders. Trading hours are long now, thus making the lives of short term traders more miserable. Volatility reduces as the Exchanges extend the trading hours and traders trade more incurring more comm.

I spoke to my brother about the challenges we are facing now as an electronic trader in a non level playing field, where Exchanges are embracing Algo traders with open arms giving them better comm rebates and speed. Change! that's what we need to do. The machines are now the scalpers, they are like the FT (Foreign Talent) in our country, it's difficult to compete with them, we are now left with the crumbs.

I have to change the strategy of trading, that's what I'm slowly adapting, trying to avoid heavy scalping to reduce the comm. It's hard for an old dog to learn new tricks after 25 years as a scalper, it's a challenge.