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.


coconut said...

haha finally a more positive note.

ya why stick to just one market all the time if its not producing results. all markets are essentially the same.

3 years ago i never dream of trading stocks, hate them cos you can only long and not short, how to trade? now i can't get enough of it.

will i be trading stocks next year, who knows? my eye is always open to other new opportunities. as long as it is legal i willing to put my money down.

i prefer to be call a speculator or opportunist rather than a trader.

coconut said...

your mind is your friend, but many times it is also your greatest enemy.

trading is unlike other profession where you take home every day or every month an income. sometime you have periods of no or negative income. always prepare for such a period even before it comes.

it is therefore very important that one must maintain a positive mindset through out the time. having a negative mindset is definately not going to help.

don't put making money as your top pirority and your trading journey will be a much smoother one.

coconut said...

"always start your golf swing from the ground up" the golden bear.

why do so many spend so much time and money playing the game of golf? spending so much time in driving ranges trying to perfect their swing which will not happen in the golf course. are they idiots?

no, its a hobby, a serious hobby, to some an addiction. there a very similarity in golf, the golf swing and trading.

what is the objective of playing golf? excercise? improve one handicap?, show off? win some side betting?, competition? a pro? who knows.

what is the objective of trading, make money. thats all?

coconut said...

i think the most difficult hurdle to overcome for a trader is attachment of money.

trading is a number game, not a "money" game. try not to attach money onto your body like your own fresh and blood.

if you take care of the number, the money will grow.

Fxtrader said...

"Money is a reward to a trader, Money should never be a goal to a trader".

Only by having a defensive mindset, one will not fall prey to the two biggest emotional traps of trading: Greed and Fear.
"Always look for excuses not to trade".

Just my humble opinion.

coconut said...

"Always look for excuses not to trade".

there are 2 ways one can approach trading/investment,

1, stand at the side and watch til you see something. meantime keep all your bate.

2, take all your bate and jump into the ocean, thats my way.

depend on your perspective, i look at a "trading" world that i resume full risk exposure and try to control it. i'm force (by myself) to change, to switch, to run, to reverse or face death, much like an animal in the wild. even money in the bank is not safe for me for it will devalue over time.

coconut said...

yes, i'm so right to say my trading is like an animal in the wild. do they have any choice not to be in the wild?

and in the wilderness, sometime the best defends you have is to be offensive, you have no choice.

coconut said...

"Greed (confident) and Fear",

pardon me, these are not emotional trap, they are our defensive and offensive machcanism. traders have to learn to use them at the right timing.

Fat88Trader said...

Yes, as trader, you have no choice but to perform, it's about bottomline, no one else to blame and avoid excuses.

newtrader said...


this is OHL. need to seek help from you. hope u dont mind me posting here :p cos i dont know who else can help me.

i have difficulty claiming the 70% MAS funding for the SGX Academy courses i took. My house UOB says that they are not able to claim for me cos I am not their staff, they need some form of documentation stating that they can claim for me as their staff. Can AFACT help me on this since I am a member?

Thank you very much. Have been a silent reader of your blog which has been very inspirational to me! Trading has been very tough for me as a scalper. U r right, it's wiser to do position trading as scalping is no longer easy.

Fxtrader said...

Ah huat,

Looks like someone is flaming you over here in this blog?

Operation botak head polishing.
I know there is a sickening shorty baldy(his blog can be found at my blog list) hot on my trail and I know this keyboard warrior trades mainly the simsci. He had asked for it and I shall bring it on. From today onwards, I shall start my operation botak head polishing, mission is to polish this arrogant baldy's head until shiny.

sold 361.6

Some childish behaviour. He himself is a trader somemore and he claims to know you since the Simex pit trading days.



coconut said...

haha i find it very funny, are we in business trading markets or human?

can't even pinpoint where the targets are haha.

coconut said...

but hey, after reading his blog, he did sound a bit like me!

well i guess we are all just "a little me, a little bit you".

coconut said...

have to say this, the more i read, the more the similarity i found!!

- a self teach trader
- a position trader
- trades many markets

but i just coun't understand why he is so upset about.

is he sufferring from autistic syndrom?

Fxtrader said...

hi coconut

yup. most of his blog is targeted against "arcade traders". Don't know what his intentions are, but i seriously think he is focusing on the wrong things.

haha. After a stressful day i will read his blog and gain some of his 'human targeting' insights.



Fxtrader said...

he's an ex-simex pit trader, who is trading from home now.

coconut said...

you know fxtrader, i'm not making fun of him or anybody.

if he is what i think he is, which i'm almost certainly sure about, i know how he feels.

and i woun't be surprise if he can trade pretty well.

lets forget about it and forcus on trading itself.

Fxtrader said...

hi coconut,

yes, catch up with you soon.



sm@ll.fry said...

Hi Patrick,

Yes I agree with coconut, Yes finally a positive note!

Incidentally I'm currently trying to learn to swing trade. Sadly my first attempt was a losing trade. Am trying to review what's wrong and hopefully not repeat the same mistakes again.

Now I understand why everyone say trading is tough!

And I can also start to appreciate why some people get so personal about trading. I guess it happens when we are not careful and loss ourselves..

coconut said...

its even harder to tell people when analyse your trades, don't put winning and losing as guide.

i know losing is painful but it may not be a bad trade. and winning trade may not be a good trade.

yes positive, positive thinking. learn to love the game especially when you are down and losing.

coconut said...

when you are new you don't have a clue what system work, you listen here, there and everywhere. trying to learn as much as you can.

the best way is to know more about yourself and pick those that are close to you and your personality, those you feel good and logical.

when you becomes a very good trader, it is easy to condamn others way of trading and life, and they start believes that their way is the only way to go.

when i start to realise that my way is a good way and others is also a good way of trading, my trading start to fry.

coconut said...

knn, fly not fry haha.

coconut said...

"the boundary condition of the universe is that it has no boundary" stephen hawkings

markets is like the universe, no boundary, chaos and formless.

there is no center of the universe, or you can say everything in the universe is at the center, including you and me.

there is no one trading system that is a good system. or you can says that all system traded are good systems.

we have to learn time and place where we currently exist by determine which is the best current system to use.

like the body of a professional golfer, our mind as a professional trader has to be as flexible as we can be.

coconut said...

if the "theory of general relativity" is correct in discribing our big scale universe which it is, than our markets has to be a "relative" one as well.

i say trading is a number game, well i'm wrong, it's a relative number game to be more precise.

our thinking, our logic and ofcos our trading systems and ideas have to be relative in nature as well. if you are the sole owner of this planet, is winning a billion worth anything to you?

coconut said...

so is "cutting your losses short and riding your profit long" a sure way of making money?

it is for now cos most traders "cut their profit short and ride their losses long"!

when most traders start to "cutting your losses short and ride your profit long", then we better start thinking of "cut our profit short and ride our losses long"!

coconut said...

does it sound confusing? that is exactly how the lottery house work.

they "cut their profit short and ride their losses long" where we the plunter "cutting our losses short and riding our profit long".