Friday, January 6, 2012

Wish All A Happy New Year!

It took me 6 days later to wish my friends here a Happy New Year, 2012. Sorry about it, rather disturb. I am facing some personal problems recently, unable to concentrate on anything I'm doing. Trying very hard to calm down, look for solutions and tread carefully to salvage the situation. Can't believe I'm facing a mid life crisis.

Coconut has been lonely here expressing his thoughts and honestly revealed his huge losses last year. That's the risk involved in trading, the ecstasy and happiness in winning versus the pain and sorrow in losing. I've been through the various stages of such emotions, experience that made us wise, sometimes full of regrets, wish I can turn back the clock.

Trading has been extremely tough last year with lower volatility and liquidity. In the past, I used to encourage anyone who is keen in trading not to hesitate, now, I would ask them to seriously consider it carefully before taking the plunge. It's simply not easy. Remember, it's a negative, negative sum game.

It take lots of courage to admit our mistakes, I really salute Coconut for doing that, cut all the losses and move on, not many can do it. How's the feeling? It must be real painful. Scalping for me is just too tiring now, trying to compete with the Algos for that small piece of cake in the local contracts without any edge. No longer young and alert, have to change strategies and go for longer term trading to reduce comm.

A trader I came to know recently revealed that he made a 3000% return on capital since November 2010. He has been trading as a retail client for the past 5 years and was about to give up trading with the remaining $20k. Miracles just happen, his big break came during the Japanese earthquake followed by the tsunami, the rest is history. So it's still possible to make the big money, futures is all about leverage. He spent 5 years learning. he has guts that's extra-ordinary, a very humble guy.


KAW said...

Hi FAT, sorry to hear about your current predicament. I may still have a slight advantage of time before I come to this crossroad but I do believe everything happen for a reason. What don't kill us makes us stronger.
May the force be with you!

GNY said...

Life is full of ups and downs. Don't lose heart... behind every dark cloud, there is a silver lining.
Keep well, Fat.

Singapore Man of Leisure said...

Welcome back Fat88!

I wish you and Coconut peace of mind for 2012.

All we need is Time.

Gan bei to the past!

Fat88Trader said...

Thank you dear friends for the support.

coconut said...

ye? didn't realise a new post. i have every confident fat that you will pull through.

i must say i pull through last year crises pretty easy. the agony now is to wait for something to happen. what i really don't know but i have think through all possibilities as i can.

loneliness has been a long time close friend of mine. even i have families and some friends but seem that our frequency are not the same. i'm used to it.

happy new year everyone.

coconut said...

a change in (market) perception and strategies.

unless one is very discipline and careful, it can be a very dangerous when time of change.

the transition from short term to position trading almost cost me my trading "career" even i am very sure it will work in the long run. perception of leverage have to change.

start as small as one can and be very very patient before results can be achieved. so patient until you almost didn't give a damn about the market.

also i do not need any money from my trading account. my dear wife went back to work full time as a backup and our living expenses cut until there is no more room to cut.

the first few years was really slow in my case, so slow that i wonder whether i'm doing the right thing or not, especially when most of your profit were almost wape out in drawdowns.

coconut said...

and the only comfort i have back then was "this is a bull market you know", talking to my account.

coconut said...

after dinner rush out to a near by bookstall to get a book title "secrets of s'pore trading gurus".

i think i'm the only one don't know fat was on the book until today. i knew there was some interview but i didn't know it was on hard copy.

so i got it as quickly as i can together with another book call "trend following" by michael covel (don't know who is he)

don't know why i bought the second book which i think i will not have the time to read.

and i can't believe fat did used the term uncles and aunties playing the stock markets in the interview hahaha.

anyway a late congret to fat who had done so well as a trader.

sm@ll.fry said...

Hi. FAT,

really wonder what has happened and wish there's something we can do to help.

Hope the new year will bring good fortune to you and family! Look on the bright side of things, like gny said, theres always a silver lining soemwhere, depends if you are willing to open your heart and look for it.


sm@ll.fry said...

Hi coconut,

Haha I bought the book too, cos I saw FAT's photo on the cover. But haven't had chance to read it yet.

Happy new year to you and hope the new year will bring you good fortune and happiness as well!

No offence, but I think you got a very supportive and good wife. Willing to go through thick and thin, nan de!


coconut said...

before i walk out of the book stall i already finished reading the only two chapter (fat and tom yuen) i'm interested.

i was laughing when i read "uncles and aunties.." and a guy next to me just stare at me haha.

i bought the book anyway.

coconut said...

write something.

after reading the book i bought "trend following", i realise there is a great different from my approach.

true trend follower as say by the author, start their position by break out from the same direction. my guess, only guess is the author himself does not trade using the exact term he use when he trade!

i believe in trend following, but i believe in counter trend as well. in fact i'm a natural counter trend trader. most of my entry points in a position are counter trend on pull backs (to minimize losses) after which my exit or re-entry consist both counter trend (maximize profit) or break outs (cutting losses) to cut or stay in position.

ofcos when the drawdowns reach a certain %, my position will be deem collapes.

i truly believe a pure trend following only or a pure counter trend only strategy cannot work in the long run.

to me is like playing golf with only one hand. no need to get upset, its only my believe, not a universal one.

coconut said...

so when you see my trading style is nothing but a swing trading (trying to catch the top and bottom) with one exception, a stop order on break out (mostly mental) to prevent me from losing my position.

a very small price to pay for keeping my position intact.

coconut said...

playing golf, swing trade is my left hand (side) and staying in the trend is my right hand.

in swinging the golf clubs, the pro would probably have no feeling (tension) in their body. for ameture like me, i can only feel one side of my body, the other side just have to follow.

in trading terms, i'm still an ameture in trading even though i'm profitable.

coconut said...

my defination of a perfact trader is one who can trade either way of the market with no tension and emotional stress regardless of where the market goes and where his money goes.

i have a long road ahead of me with no end in sight.

coconut said...

the most i learn and appreciate from fat is this

"you have to justify your trade".

trading is a minds game, a minds fools game. it does not matter how you fool your self in believing what you believe in, whether in your perception or any strategy, as long as you can achieve:

cut your losses and ride your winners,

make more profit than losses,

if that is the case, i will rather be a fool than unprofitable.

coconut said...

if you don't understand, here is my example.

i'm what i am a counter trend trader, not a trend follower. i can cut my losses fast but i also take my profit pretty fast.

i will do only counter trend trade but actually some are trend following trade. by thinking i'm cutting my losses and close a trade but actually it is a break out trade with a new position.

i'm fooling myself but i didn't care. the end results will probably be the one i desire.

it applies to other areas of trading and life as long as i know who am i.

coconut said...

need a clearer example, ok a very simple one.

let say i enter a position of just 1 lot when price came down @ 1.00. i'm long position A. assuming my position did not collapes, and price went to 2.00. as a trend follower you just stay put. but me no, i see toppes so i went short 1 lot @2.00.

technically i'm out but not in my mind. i now has 2 positions.

if price came down for me i take profit and end up with position A. if price went up instead i will cut loss on position B say 2.20 and end up with position A also.

you may ask, whats the different, why's the trouble?

oh different! i got to do what i do best and still riding the trend if any.

coconut said...

ofcos, you still have to trade the right size at the right time. catching the up and down movement.

but at the end, it is not the counter trend trades that really make the money, even though i think i'm pretty good at it. it is the trend following trades that got me through!!

coconut said...

hence for me there is only one single phase that i carry all the time, "this is a bull market you know!" haha.

Fat88Trader said...

Coconut, What are you doing now after squaring all your positions? Really admire your patience, so relax, no pressure at all.

coconut said...

"this is a bear market you know" haha.

ya very hard to believe, those who know my trades also ask the same question especially i told them to hang on to their investment. my wife also question about her share of investment, i'm still under pressure. we now have zero income.

don't forget i came into blogging only after i started to trade like market maker. almost daily and damn so much work. really not my style but i feel closer to you guys who trade like no tomorrow haha.

so is everything back to normal prior to 08/09 period. i'm still looking for any entry point in any market but especially stocks. i'm not out of the woods yet, i have to recover my position.

thanks for asking fat, how your mid life crises doing? i'm also at the stage but i still don't feel it, can't gives advise accept "if the army came, sent your general" haha.

coconut said...

i'll fill in some details of last year losses so some may learn.

i had only stocks position and by end march i actually end up net shorting some stocks.

it was great but i did something terrible, well haha 2 years of winnings i just can't tell you my feeling so i change my trade boundary (not strategy)to enable me to trade bigger. be a bigger player.

so i set the seed for my own "destruction" and comes august/september when the market start to tank, then i realise how big i was.

this time is worst than march japan incident, and out of fear and lost of cool, there is only one solution, cut cut cut! i don't really care where the market is going and how much i'm going to end up losing.

there is nothing wrong with my trading or losses except over trading.

but again, i only increase my size when i'm up, not when i'm down. but still over trading haha. i'm still in very good shape dispite my losses.

coconut said...

i really encourage people to go for positions trading.

i don't know, short term trading i can only go that far and the set back is always horrible.

when i was still doing day trading, i decided to give a try to long term trend following somewhere in 96. my very first position trade was actually a winner, buying on the dip with every opportunity.

it was USD/YEN. i carry a total of 6 or 7 contracts and my winning on paper was about 60,000, thats a lot for just a few months and at the same time i was day trading! then i did the same with cable but this time was accumulating in the wrong direction until i'm out of control. cutting all my losses including the short yen position. then worst i went back to short term day trading, lost all my capital.

so it is not i blindly go for position trading. i have a good start but i don't know how to carry on.

coconut said...

there is a treat at afact "do you have what it take to make 20k/month"

give me a million and i will double that amount (40k) every month!

that is what my margin in my 2 account and that is what i did for the past 2 years.

many traders can do it, no problem. but the problem is can we handle the losses that will surely comes? if i don't cut my losses, i might end up with 2 millions in the red!

coconut said...

haha i don't mean to be meant. there is soft side and there is hard side of me.

when i'm taking a position or when i'm exiting a position especially when it is a cutting losses for survival. i have to have all my anger and confident and the will to do it. thats me.

coconut said...

so do i have what it take to make 20k/month?

the answer is clear, yes? actually no!

i don't want to make 20k/month. i'll let the market decide how much i will make or lose, back to position trading.

coconut said...

life without music is hell.

my favourate song er haha, can't find in youtube, really! can't believe it.

何处是归程 - 洪鐘

but i have a substitute

coconut said...

haha correction. my first position trade was long USD/YEN and also USD/MARK. they form one position. it was a long dollar trade.

coconut said...

"hence for me there is only one single phase that i carry all the time, "this is a bull market you know!" haha."

and this is what i learn which is most valuable to me, know yourself.

chinese saying, a spear and a sheld are contracditary.

if i'm a spear, i'll carry a sheld with me all the time.

if you are a sheld, you should know what to carry.

coconut said...

and in the battle field (market place), i'll know who to look for, one who are carry double spear or double sheld.

Unknown said...

Hi Cocunut,

Here u go, on the house for u. :D


coconut said...

first thank you very much, but no thank you haha.

sorry it has be be sang by 洪鐘. it just so different to me.

anyway i really appreciated. i got this song sent by someone from hong kong. i just coundn't find it here.

coconut said...

can you trade without knowing what other markets are doing? especially the underlining market and the close related ones, may be someone can.

the guy who sent me that song was my old classmate. he had immgrat to HK and had a family buz in china.

very smart and gutsy but at one time he told me he lost 2 or 3 millions in the stock market. the family had to bail him out.

he comes to s'pore often and one time happen i have 2 cars, one i just bought and another waiting to sell for scrap. i offer to lent him while in s'pore.

the day when he return me the keys, expecting him to say thank you, he tilted his head and say

" knn bo xxx (my nick) driving this car is like driving a tank on the road" this is exactly what he said. his wife gives him a hard push to his head.

haha such are my friends, no hard feelings.

Singapore Man of Leisure said...

LOL! True friends speak like that Coconut :)

Next time you go to HK and he never take care of you, you can use the same flowery language back at him!

coconut said...

i'll tell you what car he was driving,

an alfa romeo 2.0 twin spark!

haha he's not far from what he said.

coconut said...

anyone a MF global "victim"?

there is some very good news, the letter are too long for me to read but roughly say will return 80% of funds in interim (partial refund).

my question is will MF global ever function again? they have such wide product range.