"You gain strength, courage, and confidence by every experience in which you really stop to look fear in the face. You must do the things which you think you cannot do. - Eleanor Roosevelt
A guest visited me few days ago and we chatted about topics regarding trading and his aspiration to become a trader. He revealed a lot about himself and finally, after offering those information, asked me "Can I make it as a trader?"
I told him that he is very pro-active, read a number of books on trading, acquired good knowledge and very keen to become a trader. I can't tell until I see how he trade at least for a few weeks, pinpointing his mistakes and whether he is able to learn from it.
He is risk adverse, very cautious, wish to make big money but don't want to take too much risk and seems reluctant to invest in the hardware. If you don't have the proper tools, it will be tough to compete with the rest out there. I have still yet to find an investment that is low risk, high returns.
I have in the past encouraged a number of booth clerks and order fillers to become a "Local" to trade on the floor. Most were cautious, afraid to take the plunge with many excuses why they can't, mostly financial. They were afraid to lose their job and comfortable income. To those quite close to me, I will show them my trading cards and how much I can make for the day. Their eyes popped out everytime they see the profits I make for the day, sometimes more than their entire month salary.
I told them "If you don't give yourself a chance, an opportunity to prove yourself, when you grow old, probably you will regret and "F" yourself, why? why? why? don't give it a try!", "If you can't make it, go back and look for a job, at least you have given it a good shot, tried your best and if you fail, there is no regret."
"So, what are you waiting for, Christmas?"
The money is good, the money is fantastic, if you can make it. Just learn the skill. It's so easy during those floor days, I told many of my visitors that the floor is full of diamonds and precious stones, it's whether they can see it and pick it up.
Those were the days, it's over.
It's a different ball game now in electronic trading, we are competing now with the best traders as well as banks and hedge funds with the muscle power. They can afford to pay for the best traders, programmers, high tech computers and speed of execution. Everybody is so knowledgeable in the Internet age.
But, there are still plenty of electronic traders who are making good money. The opportunity is still there.
Give yourself a chance. How many lives can you have?
"Only when we are no longer afraid do we begin to live." - Dorothy Thompson
Profit for the special account is S$13,703 after 5 months, well below expectation, I'm a bit disappointed with my own performance for the past 2 months.
Saturday, August 29, 2009
Saturday, August 22, 2009
Super Scalper
"Face your past without regrets. Handle your present with confidence. And prepare for the future without fear"
I have the opportunity of visiting a friend who is trading from another arcade. He specialise in market opening and closing of the Taiwan contract, an SGX product. He is among one of the best scalper I know who can trade more than a 1,000 contract round turn in half an hour, rarely holding a position for more than 3 seconds. The speed that he executes his trades is amazing.
I observe that he don't have any chart except the ladders for the different contracts occupying 2 full screens. With the Taiex contract (Taiwan Exchange product) side by side, he monitor it closely, through observation and anticipation of the market players' behaviour, he will then execute his trades. Somtimes, he does hedge his position against the Taiex when he feel been squeeze by the big boys.
I saw many of the traders from the floor previously and are now big traders on the electronic platform. Most of them don't have any charts on their screen, and these traders are making money big time! Many of the traders in the Phillip arcade don't look at charts too and these traders are also making money!!!
I used to trade without chart on the floor, what we need is quick action and reaction to the market movement, mostly making money from the "YUM" trades or hijacking trades from the order fillers with our speed advantage. After going electronic, I have to learn how to read charts with so many markets to monitor, combining them with price action to execute my trades.
My friend showed me he made US$2,500/- for the morning less comm of US$1,500/-, his nett profit was about US$1,000/- for half and hour's work and he will be going home to sleep before coming back at 1 pm to trade the closing. He showed me last month's profit of about US$15,000/- nett and scratch trade rebates of about US$7,000/- from SGX (Extra Bonus).
This is one scapler who faces those "Algos" head on without fear and excuses. He told me "it's all in the mind", be "Fearless". How I wish I can manage this "Fear" factor a little better. Probably due to age, as we grow older, we tend to mellow down and becomes a bit more risk adverse.
Profit for the special account went back to S$13,217/- reducing the Topix/Nikkei spread to 1 contract.
I have the opportunity of visiting a friend who is trading from another arcade. He specialise in market opening and closing of the Taiwan contract, an SGX product. He is among one of the best scalper I know who can trade more than a 1,000 contract round turn in half an hour, rarely holding a position for more than 3 seconds. The speed that he executes his trades is amazing.
I observe that he don't have any chart except the ladders for the different contracts occupying 2 full screens. With the Taiex contract (Taiwan Exchange product) side by side, he monitor it closely, through observation and anticipation of the market players' behaviour, he will then execute his trades. Somtimes, he does hedge his position against the Taiex when he feel been squeeze by the big boys.
I saw many of the traders from the floor previously and are now big traders on the electronic platform. Most of them don't have any charts on their screen, and these traders are making money big time! Many of the traders in the Phillip arcade don't look at charts too and these traders are also making money!!!
I used to trade without chart on the floor, what we need is quick action and reaction to the market movement, mostly making money from the "YUM" trades or hijacking trades from the order fillers with our speed advantage. After going electronic, I have to learn how to read charts with so many markets to monitor, combining them with price action to execute my trades.
My friend showed me he made US$2,500/- for the morning less comm of US$1,500/-, his nett profit was about US$1,000/- for half and hour's work and he will be going home to sleep before coming back at 1 pm to trade the closing. He showed me last month's profit of about US$15,000/- nett and scratch trade rebates of about US$7,000/- from SGX (Extra Bonus).
This is one scapler who faces those "Algos" head on without fear and excuses. He told me "it's all in the mind", be "Fearless". How I wish I can manage this "Fear" factor a little better. Probably due to age, as we grow older, we tend to mellow down and becomes a bit more risk adverse.
Profit for the special account went back to S$13,217/- reducing the Topix/Nikkei spread to 1 contract.
Saturday, August 15, 2009
SGX wades into "dark pools"
"If you wait to do everything until you're sure it's right, you'll probably never do much of anything" - Win Borden
It's finally here with SGX being the first Asian exchange to back dark pool, though the platform is neutral and independent of any brokerage. It give more anonymity to investors who do not want details of their deals exposed to the marketplace until the deal is done.
I'm not sure how much impact it will have for traders like us though we are trading futures. Our main concern now is "algo" trading, those powerful super computer with servers sitting in SingTel to execute trades many times faster than you blink your eye. It cost around S$15,000 a month to have the server there with more than 20 already taken up.
High volume scalpers are the most affected by the "algos" with many finding it tough to compete in term of execution speed. Their profitability have been greatly affected, there is no more edge for them. Further more, with their financial muscle power together with the computer brain to calculate net long/short position in the market and digesting other important information, traders felt squeezed by the "algos".
Though being a scalper myself, I have reduced my trading volume tremendously in the past few months, partly due to poor health, AFACT and market conditions. No doubt my profitability have been affected as well.
The market keep changing with new players who are well informed and knowledgeable. Days of many "Yum" trades are getting lesser with these "algos" having the edge.
I don't feel pessimistic like some of my fellow traders, what we need is a change in our trading techniques, mindset and be flexible to adapt to the changing environment. I still find many trading opportunities the whole trading day, just need to be patient and wait for the durian to drop.
Profit to date for the special account is S$8,733.00, still holding long 4 Topix/Nikkei spread. It has been a tough 2 weeks for me as I recuperate from the operation, my worst performance so far since coming back to trade at the arcade. I feel sleepy everyday, unable to focus and concentrate, probably didn't sleep well at night.
It's finally here with SGX being the first Asian exchange to back dark pool, though the platform is neutral and independent of any brokerage. It give more anonymity to investors who do not want details of their deals exposed to the marketplace until the deal is done.
I'm not sure how much impact it will have for traders like us though we are trading futures. Our main concern now is "algo" trading, those powerful super computer with servers sitting in SingTel to execute trades many times faster than you blink your eye. It cost around S$15,000 a month to have the server there with more than 20 already taken up.
High volume scalpers are the most affected by the "algos" with many finding it tough to compete in term of execution speed. Their profitability have been greatly affected, there is no more edge for them. Further more, with their financial muscle power together with the computer brain to calculate net long/short position in the market and digesting other important information, traders felt squeezed by the "algos".
Though being a scalper myself, I have reduced my trading volume tremendously in the past few months, partly due to poor health, AFACT and market conditions. No doubt my profitability have been affected as well.
The market keep changing with new players who are well informed and knowledgeable. Days of many "Yum" trades are getting lesser with these "algos" having the edge.
I don't feel pessimistic like some of my fellow traders, what we need is a change in our trading techniques, mindset and be flexible to adapt to the changing environment. I still find many trading opportunities the whole trading day, just need to be patient and wait for the durian to drop.
Profit to date for the special account is S$8,733.00, still holding long 4 Topix/Nikkei spread. It has been a tough 2 weeks for me as I recuperate from the operation, my worst performance so far since coming back to trade at the arcade. I feel sleepy everyday, unable to focus and concentrate, probably didn't sleep well at night.
Sunday, August 9, 2009
National Day
"And in the end, it's not the years in your life that count. It's the life in your years." - Abraham Lincoln
Today is Singapore's National Day and I am proud to be a Singaporean. I am indeed grateful to one great man, Mr Lee kuan Yew, our first Prime Minister and his team of capable, uncorrupted collegues with a genuine vision to improve the lives of the ordinary citizens. Mr. Lee has laid the foundation for good governance and meritocracy with no mercy for corruption.
I can't imagine what would life be if we were under Mahathir, Suharto or Marcos in a country like Singapore that have no natural resouces for them to plunder. Yes, we are paying hefty salary to our Prime Ministers and his cabinets which I feel justifable for the peace and prosperity that we are enjoying today. That's my personal opinion.
It's our good fortune to have good leaders compared to all our neighbouring countries who are rich in resources, but with leaders first taking care of themselves, families and their cronies.
Last Tuesday, I went for another nose surgery to correct the everflowing mucous blocking my nose, making it so difficult for me to breath and sleep. I have sufferred for almost six months since the first operation in February and subsequently taken a few round of antibiotics to get rid of the infection or some 'bug' without success.
The first operation cost more than S$20,000.00 and this 2nd surgery cost more than S$4,000.00, S$1,000 goes to the Anaesthetist and S$1,500 goes to the surgeon for less than an hours work and that's at a discount. Total cost to date is S$25,000.00 and hopefully stop at that. Our money devalues very quickly, so how is the property prices going to come down? My mother complained that taxi fare is so high now especially during peak period with all the surcharges.
It's the ordinary citizen that's feeling the pinch now, the elite is still having a good time with CEO's and higher management staff rewarded generously with huge bonuses for their past performance. But do they pay back those bonuses when the company goes into the red?
Didn't trade much for the week, resting at home to recuperate. Good health is important to a trader.
Not much changes to our profit/loss account.
Today is Singapore's National Day and I am proud to be a Singaporean. I am indeed grateful to one great man, Mr Lee kuan Yew, our first Prime Minister and his team of capable, uncorrupted collegues with a genuine vision to improve the lives of the ordinary citizens. Mr. Lee has laid the foundation for good governance and meritocracy with no mercy for corruption.
I can't imagine what would life be if we were under Mahathir, Suharto or Marcos in a country like Singapore that have no natural resouces for them to plunder. Yes, we are paying hefty salary to our Prime Ministers and his cabinets which I feel justifable for the peace and prosperity that we are enjoying today. That's my personal opinion.
It's our good fortune to have good leaders compared to all our neighbouring countries who are rich in resources, but with leaders first taking care of themselves, families and their cronies.
Last Tuesday, I went for another nose surgery to correct the everflowing mucous blocking my nose, making it so difficult for me to breath and sleep. I have sufferred for almost six months since the first operation in February and subsequently taken a few round of antibiotics to get rid of the infection or some 'bug' without success.
The first operation cost more than S$20,000.00 and this 2nd surgery cost more than S$4,000.00, S$1,000 goes to the Anaesthetist and S$1,500 goes to the surgeon for less than an hours work and that's at a discount. Total cost to date is S$25,000.00 and hopefully stop at that. Our money devalues very quickly, so how is the property prices going to come down? My mother complained that taxi fare is so high now especially during peak period with all the surcharges.
It's the ordinary citizen that's feeling the pinch now, the elite is still having a good time with CEO's and higher management staff rewarded generously with huge bonuses for their past performance. But do they pay back those bonuses when the company goes into the red?
Didn't trade much for the week, resting at home to recuperate. Good health is important to a trader.
Not much changes to our profit/loss account.
Saturday, August 1, 2009
Updates
"When the banks did well, their employees were paid well. When the banks did poorly, their employees were paid well. And when the banks did very poorly, they were bailed out by taxpayers and their employees were paid well." - Andrew Cuomo form the Attorney-General's office.
United States banking giants paid nearly US$33 billion staff bonuses last year while at the same time getting US$175 billion from taxpayers. JP Morgan Chase had the biggest number of millionaires, paying more than 1,600 staff bonuses of over US$1 million each despite receiving US25 billion from the US Government.
Wow! with so many homeless and hungry in the US, these bankers really need some soul searching, it's daylight robbery!
"Never trust your bank" - Mr Peter Chan, a Hongkonger and his wife have been campaigning for investors who lost money on Lehman Brothers' Minibonds.
The interest on the mortgage of my house have not come down for more than 2 years since the financial crisis despite near zero interest paid out by banks on saving accounts. Banks are quick to revise interest rate upwards but unless you take action, they will "YUM" you, the rate will remain there, the spread is so wide that they are able to maintain good profits and pay good bonuses.
Our special account got hit last week with profit falling to S$8,127.00, stubbornly holding long 5 Topix/Nikkei spread position. The feeling is lousy, making money is so tough while losing it away is so easy.
United States banking giants paid nearly US$33 billion staff bonuses last year while at the same time getting US$175 billion from taxpayers. JP Morgan Chase had the biggest number of millionaires, paying more than 1,600 staff bonuses of over US$1 million each despite receiving US25 billion from the US Government.
Wow! with so many homeless and hungry in the US, these bankers really need some soul searching, it's daylight robbery!
"Never trust your bank" - Mr Peter Chan, a Hongkonger and his wife have been campaigning for investors who lost money on Lehman Brothers' Minibonds.
The interest on the mortgage of my house have not come down for more than 2 years since the financial crisis despite near zero interest paid out by banks on saving accounts. Banks are quick to revise interest rate upwards but unless you take action, they will "YUM" you, the rate will remain there, the spread is so wide that they are able to maintain good profits and pay good bonuses.
Our special account got hit last week with profit falling to S$8,127.00, stubbornly holding long 5 Topix/Nikkei spread position. The feeling is lousy, making money is so tough while losing it away is so easy.
Saturday, July 25, 2009
Updates
"Start small, dream big, build deep" Ng Tee How, President of AFACT
Yes, to all aspiring traders, that's sound advice.
"Small opportunities are often the beginning of great enterprises." - Demosthenes, Greek orator.
Met many traders during the launch of AFACT, Association of Financial and Commodity Traders (S) on the 23rd July 2009 and again the topic of "algo" trading seems to be the talk of the town. Here is the link to what "algo" is all about, http://nytimes.com/2009/07/24/business/24trading.html?ref=business.
These high frequency traders generated about US$21 billion in profit last year according to estimates by a research firm. These high-frequency specialists clearly have an edge over typical traders with their powerful computers housed right next to the Exchanges.
These systems are so fast they can outsmart or outrun other investors, humans and computers alike. A loophole in regulations allows market places like Nasdaq to show traders some orders ahead of everyone else in exchange for a fee. That's definitely unfair advantage for those who have deep pockets.
I don't see such high-frequency trading in most Asian exchanges at the moment and such edge shouldn't be given to those few who can afford to pay a price for it. Many traders complained about these "algo" traders in the futures market with their intelligent software to "catch and squeeze them". There is no doubt that trading is difficult in the last 2 months, with lower volume, summer holidays and a trending up market.
Most traders don't do well in a trending up market, as it tend to whipsaw on it's way up unlike a falling market that can be drastic. There is definitely manipulation by the big boys in the market with their financial muscle, and if they are smart, that's a huge advantage, but don't forget Nick Leeson causes the collapse of Baring Bank trying to support the Nikkei!
These big boys such as hedge funds, mutual funds, unit trusts and banks operate on behalf of their rich clients to take high risk trades so as to get a cut of the profits and commission. It doesn't hurt their pocket when they lose, just bye bye and close shop. Not many of them make money while their investors are the real suckers.
Many traders are clearly unhappy and frustrated with the "algo" chipping away their profits but as traders we need to be flexible to adjust to the ever changing trading environment. We can still make money with sound money management and the trading skill acquired over the years, just tune it a little bit here and there. I don't feel such a huge impact of these "algo" traders, if I don't make money on any given day, it's because I am stubborn and don't follow the rules, it's my own problem!
"You can't stop the waves, but can can learn to surf" - Jon Kabat-Zinn
Robert is leaving the trading arcade to trade from home by the end of the month. I feel sad that he is leaving as he is the one who has given me a lot of inspiration to make a come back to trade in the arcade. I still remember his words of encouragement "is making about S$1,000/- a day OK with you?" I went back thinking, if Robert can make it, why can't I do it?
Robert's style of trading don't require so much speed, he is a tactical trader waiting for the right entry level and an extra-ordinary patience in riding profits on his good trades. He is so easy going and relax, watching you-tube and movies while trading and monitoring the market. I really admire him and how he can do it yet still being highly profitable.
Profit for the special account took a hit from the widening of the Topix/Nikkei spread, down to S$14,937.00. Now holding long 4 spread, didn't expect it to widen that much. That's one of the major problem of a trader, so, always "expect the unexpected"
Yes, to all aspiring traders, that's sound advice.
"Small opportunities are often the beginning of great enterprises." - Demosthenes, Greek orator.
Met many traders during the launch of AFACT, Association of Financial and Commodity Traders (S) on the 23rd July 2009 and again the topic of "algo" trading seems to be the talk of the town. Here is the link to what "algo" is all about, http://nytimes.com/2009/07/24/business/24trading.html?ref=business.
These high frequency traders generated about US$21 billion in profit last year according to estimates by a research firm. These high-frequency specialists clearly have an edge over typical traders with their powerful computers housed right next to the Exchanges.
These systems are so fast they can outsmart or outrun other investors, humans and computers alike. A loophole in regulations allows market places like Nasdaq to show traders some orders ahead of everyone else in exchange for a fee. That's definitely unfair advantage for those who have deep pockets.
I don't see such high-frequency trading in most Asian exchanges at the moment and such edge shouldn't be given to those few who can afford to pay a price for it. Many traders complained about these "algo" traders in the futures market with their intelligent software to "catch and squeeze them". There is no doubt that trading is difficult in the last 2 months, with lower volume, summer holidays and a trending up market.
Most traders don't do well in a trending up market, as it tend to whipsaw on it's way up unlike a falling market that can be drastic. There is definitely manipulation by the big boys in the market with their financial muscle, and if they are smart, that's a huge advantage, but don't forget Nick Leeson causes the collapse of Baring Bank trying to support the Nikkei!
These big boys such as hedge funds, mutual funds, unit trusts and banks operate on behalf of their rich clients to take high risk trades so as to get a cut of the profits and commission. It doesn't hurt their pocket when they lose, just bye bye and close shop. Not many of them make money while their investors are the real suckers.
Many traders are clearly unhappy and frustrated with the "algo" chipping away their profits but as traders we need to be flexible to adjust to the ever changing trading environment. We can still make money with sound money management and the trading skill acquired over the years, just tune it a little bit here and there. I don't feel such a huge impact of these "algo" traders, if I don't make money on any given day, it's because I am stubborn and don't follow the rules, it's my own problem!
"You can't stop the waves, but can can learn to surf" - Jon Kabat-Zinn
Robert is leaving the trading arcade to trade from home by the end of the month. I feel sad that he is leaving as he is the one who has given me a lot of inspiration to make a come back to trade in the arcade. I still remember his words of encouragement "is making about S$1,000/- a day OK with you?" I went back thinking, if Robert can make it, why can't I do it?
Robert's style of trading don't require so much speed, he is a tactical trader waiting for the right entry level and an extra-ordinary patience in riding profits on his good trades. He is so easy going and relax, watching you-tube and movies while trading and monitoring the market. I really admire him and how he can do it yet still being highly profitable.
Profit for the special account took a hit from the widening of the Topix/Nikkei spread, down to S$14,937.00. Now holding long 4 spread, didn't expect it to widen that much. That's one of the major problem of a trader, so, always "expect the unexpected"
Saturday, July 18, 2009
Updates
"True religion is real living; living with all one's soul, with all one's goodness and righteousness" - Albert Einstein
"The world's most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money" - Journalist Matt Taibbi on Goldman Sachs quarterly profits of US$3.44 billion.
Almost all the bank's earnings come from trading and they are not going to tell us how they do it. That money-making machine is running at US$38 million per day or US$1.58 million an hour. Wow! unbelievable, how Goldman can be so fast, opportunistic and canny in it's multi-billion dollar bets on the direction of the financial markets?
Goldman's Traders were known in New York as the Bandits of Broad Street and competitors comparing Goldman staff to bellicose "orcs" in the Lord of the Rings. With many of Goldman alumni in powerful government positions, that might have given Goldman a competitive edge in term of sensitive information.
The most objectionable aspect of Goldman's success is that it's earnings are shared by such a small number of already wealthy people since it distributes 49% of revenue to employees. These bankers are going back to enriching themselves through an elaborate, opaque form of casino trading which is semi-detached from the rest of the society.
It's no wonder traders are complaining about the difficult market trading condition. It's tough, we need to work harder, work smarter and taking more risk in order to survive in such a competitive environment with many more blood-sucking vampire squids.
Profit to date for the special account is S$16,056.00, at least this Jaw is still able to snatch some food from the vampire squids.
"The world's most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money" - Journalist Matt Taibbi on Goldman Sachs quarterly profits of US$3.44 billion.
Almost all the bank's earnings come from trading and they are not going to tell us how they do it. That money-making machine is running at US$38 million per day or US$1.58 million an hour. Wow! unbelievable, how Goldman can be so fast, opportunistic and canny in it's multi-billion dollar bets on the direction of the financial markets?
Goldman's Traders were known in New York as the Bandits of Broad Street and competitors comparing Goldman staff to bellicose "orcs" in the Lord of the Rings. With many of Goldman alumni in powerful government positions, that might have given Goldman a competitive edge in term of sensitive information.
The most objectionable aspect of Goldman's success is that it's earnings are shared by such a small number of already wealthy people since it distributes 49% of revenue to employees. These bankers are going back to enriching themselves through an elaborate, opaque form of casino trading which is semi-detached from the rest of the society.
It's no wonder traders are complaining about the difficult market trading condition. It's tough, we need to work harder, work smarter and taking more risk in order to survive in such a competitive environment with many more blood-sucking vampire squids.
Profit to date for the special account is S$16,056.00, at least this Jaw is still able to snatch some food from the vampire squids.
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