"Life belongs to the living, and he who lives must be prepared for changes" - Johann Wolfgang Von Goethe
It's great to see my cousin making money for the past 3 consecutive days, controlling his losses well and great improvement in riding the profits. It's been really stressful for him since he started trading at the beginning of the month, losing almost daily. This scenario is quite common to a new trader.
Being totally new to futures trading, it's quite an uphill task for him to learn so many things in such a short period of time. I can sense his frustration, anger and the feeling of hopelessness in himself.
I need to do quite a lot of damage control to his emotional well being, encourage and instill a positive mental attitude in the face of adversity.
Mentoring someone new is much easier, they are keen to learn, willing to listen with no emotional baggage. Most important, they are willing to change.
Many old birds that came to see how I traded, I would say are rather stubborn if they are not making money. They still like the way they look at their charts, layout and strategies.
My questions to them "Are you making money looking at so many tiny charts with so many indicators?", "Why don't you change and test other trading platforms?", "If you are not making money, why are you still looking at the same charts?"
Their answer "I'm comfortable with my charts, I like to look at these indicators and TT trading platform is expensive.", "I'm not stubborn!"
"TT is giving 1 month free trial, why don't you try it out" was my reply. "Free! you don't have to pay."
It's so difficult to convince them to change.
Profit in the special account went back to S$10,230.00 while still holding the 4 Topix/Nikkei spread. Not able to focus on this account for the past few months. Trading has been tough.
Saturday, October 31, 2009
Sunday, October 25, 2009
Market Sense
We have 5 senses and some claimed to have 6 senses but to be successful traders, we need Market Sense.
I have been trading on the floor for 20 years without charts, didn't know how to operate the Bloomberg or Reuters machines for news or charts. In fact, many of those successful floor traders were like me, blur like sotong when it comes to technicalities of trading.
What we have is Market Sense or a good gut feel of the market rhythm, the players and a deep understanding of the nature of the contract. There are only 2 directions for the market, it's either up or down, what's so difficult?
Being very self motivated, I read a number of books on charting and the various strategies, but I couldn't apply them successfully in my trading. I have problem remembering all those chart patterns, waves or numbers and felt price action is so random that I lost faith in them.
Converting to electronic trading has been really tough for some of the floor traders, many failed and leave the industry. I was forced again to revisit charting as a tool to my trading. I failed miserably and struggled for more than 2 years looking for the holy grail in chart patterns.
Price action is really random, as what Mark Douglas wrote in his book "Trading in the ZONE", the no. 1 principles of trading "ANYTHING CAN HAPPEN". Whenever a chart pattern fails, the technicians called it "false signal" or "false break" and it happens probably 50% of the time!
Charting is just a small part in the overall factor of a successful trader. Over emphasis in this area is what separates the amateurs from the professionals.
I tried trading the SIMSCI during the T+1 at home for the past few nights. I started tracking the market at about 8.15 pm before the data, news release and US market opening at 9.30 pm Singapore time.
I used a laptop with a wireless Internet connection to trade giving up the most important edge in my trading, speed in execution. Luckily for SGX contracts, I lose out only in milliseconds because the TT platform is still extremely fast.
I opened up the trading ladder for SIMSCI, Taiwan and the S&P as a guide with no room for any charts. I watched the movement of the S&P and put in my orders in SIMSCI hoping for some Yum trades, trading 1 contract at a time due to the thin volume.
I made a few hundred dollars each night for 2 to 3 hours work. No Charts! Was it luck or skill? I made money every night, will it last?
I don't normally trade at night so that I can have a good rest plus all my screens are in the trading arcade.
I think I have good market sense for the contract I am very familiar with.
I have been trading on the floor for 20 years without charts, didn't know how to operate the Bloomberg or Reuters machines for news or charts. In fact, many of those successful floor traders were like me, blur like sotong when it comes to technicalities of trading.
What we have is Market Sense or a good gut feel of the market rhythm, the players and a deep understanding of the nature of the contract. There are only 2 directions for the market, it's either up or down, what's so difficult?
Being very self motivated, I read a number of books on charting and the various strategies, but I couldn't apply them successfully in my trading. I have problem remembering all those chart patterns, waves or numbers and felt price action is so random that I lost faith in them.
Converting to electronic trading has been really tough for some of the floor traders, many failed and leave the industry. I was forced again to revisit charting as a tool to my trading. I failed miserably and struggled for more than 2 years looking for the holy grail in chart patterns.
Price action is really random, as what Mark Douglas wrote in his book "Trading in the ZONE", the no. 1 principles of trading "ANYTHING CAN HAPPEN". Whenever a chart pattern fails, the technicians called it "false signal" or "false break" and it happens probably 50% of the time!
Charting is just a small part in the overall factor of a successful trader. Over emphasis in this area is what separates the amateurs from the professionals.
I tried trading the SIMSCI during the T+1 at home for the past few nights. I started tracking the market at about 8.15 pm before the data, news release and US market opening at 9.30 pm Singapore time.
I used a laptop with a wireless Internet connection to trade giving up the most important edge in my trading, speed in execution. Luckily for SGX contracts, I lose out only in milliseconds because the TT platform is still extremely fast.
I opened up the trading ladder for SIMSCI, Taiwan and the S&P as a guide with no room for any charts. I watched the movement of the S&P and put in my orders in SIMSCI hoping for some Yum trades, trading 1 contract at a time due to the thin volume.
I made a few hundred dollars each night for 2 to 3 hours work. No Charts! Was it luck or skill? I made money every night, will it last?
I don't normally trade at night so that I can have a good rest plus all my screens are in the trading arcade.
I think I have good market sense for the contract I am very familiar with.
Saturday, October 24, 2009
How stubborn can you be?
"Life is a gift of nature; but beautiful living is the gift of wisdom" - Greek Adage
I was away last weekend to KL, Malaysia to attend my wife's cousin's wedding dinner, and didn't have the time to update this weekly blog. I drove up with my wife's family in a 5 vehicle convoy and stayed in a hotel in Mid Valley before returning on Monday.
Can't imagine myself shopping and walking the whole Sunday inside such a huge shopping complex in Malaysia! I felt safe inside, that's my utmost concern for my family after hearing so much about daylight robberies and snatch theft on motorbikes.
The drive was smooth both ways without any police block for speeding, what a relief! Many times in the past, I needed to put 2 M$50/- bill in my passport for the traffic police to settle the case after some bargaining. Extra income for these law enforcers! I could see the greed in their eyes and the radiant smile on their faces when they returned the passport back to me and urged me to drive carefully.
My cousin joined me this month as a full time trader after more than 10 years in the electronic sector. He spoke to me in January about having not much prospect in his job, frustration and contemplating switching career to be a trader. As usual,I encouraged him to go for it, giving himself a chance, an opportunity in his life and to prove his critics wrong.
I lent him all my trading books so that he could prepare himself with some knowledge of the challenges ahead. I'm not sure whether he had completed them. He cleared some leave to watch and learn how I traded, so simple, so easy!
He planned and prepared himself mentally for 9 months. Full of confidence that he could make money from the word go. Of course, the result turned out the other way round, as what I would have expected.
My brother, a former floor trader joined me last July after my success in switching to electronic trading. The most intelligent in my family, I thought it would be easy meat for him as he traded the Forex after the floor closed.
Robert and I taught him our strategies in trading Index futures which I would say is rather different from the interest rate futures he traded on the floor. Nevertheless, with his background and knowledge, I didn't think it should be a big problem for him since we were there to guide him.
I was damn wrong as the months went, his account depreciated slowly, at least he knew some form of money management. In my opinion, he was not disciplined and a bit lazy. My parents were concerned and I was worried for him.
He did not lose money in trading, it's the expenses that were killing him, the booth fee and the trading platform fee. He couldn't make enough profit to cover those expenses. And, how about living expenses?
So, what went wrong?
Whenever I glanced and looked at his position, I knew whether he was making money or holding on to some bad position. He was surprised. I told him that with my experience and understanding of his trading style, looking at the number of position he was holding indicate he was in deep shit and fighting the market.
"I told you to cut your losses when wrong and don't average on bad trades, why are you doing it again and again, I told you a hundred times, a thousand times, yet you are still doing it.", seems a little bit harsh and exaggerated, painful for me but meant good for him.
"What can you to do if you can't make it as a trader? Taxi driver? Hawker?"
I thought he would not make it, but he really is a fighter, sold his house, cleared his debts, got more screens and continued to struggle on. I could see the will power and determination in him to succeed. He had not many choices.
How stubborn you want to be? Until it is very painful before we learn not to be stubborn, admit our mistakes, take the losses and move on, the market is there everyday for us!
After more than a year of trading, I can see my brother making a u-turn and start to have positive cash flow recently and very consistent profit everyday. He now speaks with confidence. He has finally overcome his own obstacle and finding his edge in trading. I am really happy for him.
Being stubborn does not pay. I am ashamed to admit my own stubbornness too, holding on to my Topix/Nikkei spread. I have been influenced by my Guru not to cut the losses, holding on to it together and fight on with bruises all over the body. This is not my normal trading style. Though I can afford the losses, it's just not worth it.
It's a wake up call.
I have a friend who once worked for a fund management firm, he told me there were 7 staff, 2 admins, 2 traders and 3 compliance officers to make sure the 2 traders toe the line for every trade. Stop losses will be executed without fail to ensure traders stick to the rules with eyes like a hawk, watching over their every move. I suppose they didn't want another Nick Leeson to appear here again in Singapore.
That's how discipline is being enforced, no room for complacency.
Did not trade much for the past 2 weeks for this special account. Still holding 4 Topix/Nikkei spread and losses to date is S$2,031.00. What a disaster! Need a lot of soul searching.
I was away last weekend to KL, Malaysia to attend my wife's cousin's wedding dinner, and didn't have the time to update this weekly blog. I drove up with my wife's family in a 5 vehicle convoy and stayed in a hotel in Mid Valley before returning on Monday.
Can't imagine myself shopping and walking the whole Sunday inside such a huge shopping complex in Malaysia! I felt safe inside, that's my utmost concern for my family after hearing so much about daylight robberies and snatch theft on motorbikes.
The drive was smooth both ways without any police block for speeding, what a relief! Many times in the past, I needed to put 2 M$50/- bill in my passport for the traffic police to settle the case after some bargaining. Extra income for these law enforcers! I could see the greed in their eyes and the radiant smile on their faces when they returned the passport back to me and urged me to drive carefully.
My cousin joined me this month as a full time trader after more than 10 years in the electronic sector. He spoke to me in January about having not much prospect in his job, frustration and contemplating switching career to be a trader. As usual,I encouraged him to go for it, giving himself a chance, an opportunity in his life and to prove his critics wrong.
I lent him all my trading books so that he could prepare himself with some knowledge of the challenges ahead. I'm not sure whether he had completed them. He cleared some leave to watch and learn how I traded, so simple, so easy!
He planned and prepared himself mentally for 9 months. Full of confidence that he could make money from the word go. Of course, the result turned out the other way round, as what I would have expected.
My brother, a former floor trader joined me last July after my success in switching to electronic trading. The most intelligent in my family, I thought it would be easy meat for him as he traded the Forex after the floor closed.
Robert and I taught him our strategies in trading Index futures which I would say is rather different from the interest rate futures he traded on the floor. Nevertheless, with his background and knowledge, I didn't think it should be a big problem for him since we were there to guide him.
I was damn wrong as the months went, his account depreciated slowly, at least he knew some form of money management. In my opinion, he was not disciplined and a bit lazy. My parents were concerned and I was worried for him.
He did not lose money in trading, it's the expenses that were killing him, the booth fee and the trading platform fee. He couldn't make enough profit to cover those expenses. And, how about living expenses?
So, what went wrong?
Whenever I glanced and looked at his position, I knew whether he was making money or holding on to some bad position. He was surprised. I told him that with my experience and understanding of his trading style, looking at the number of position he was holding indicate he was in deep shit and fighting the market.
"I told you to cut your losses when wrong and don't average on bad trades, why are you doing it again and again, I told you a hundred times, a thousand times, yet you are still doing it.", seems a little bit harsh and exaggerated, painful for me but meant good for him.
"What can you to do if you can't make it as a trader? Taxi driver? Hawker?"
I thought he would not make it, but he really is a fighter, sold his house, cleared his debts, got more screens and continued to struggle on. I could see the will power and determination in him to succeed. He had not many choices.
How stubborn you want to be? Until it is very painful before we learn not to be stubborn, admit our mistakes, take the losses and move on, the market is there everyday for us!
After more than a year of trading, I can see my brother making a u-turn and start to have positive cash flow recently and very consistent profit everyday. He now speaks with confidence. He has finally overcome his own obstacle and finding his edge in trading. I am really happy for him.
Being stubborn does not pay. I am ashamed to admit my own stubbornness too, holding on to my Topix/Nikkei spread. I have been influenced by my Guru not to cut the losses, holding on to it together and fight on with bruises all over the body. This is not my normal trading style. Though I can afford the losses, it's just not worth it.
It's a wake up call.
I have a friend who once worked for a fund management firm, he told me there were 7 staff, 2 admins, 2 traders and 3 compliance officers to make sure the 2 traders toe the line for every trade. Stop losses will be executed without fail to ensure traders stick to the rules with eyes like a hawk, watching over their every move. I suppose they didn't want another Nick Leeson to appear here again in Singapore.
That's how discipline is being enforced, no room for complacency.
Did not trade much for the past 2 weeks for this special account. Still holding 4 Topix/Nikkei spread and losses to date is S$2,031.00. What a disaster! Need a lot of soul searching.
Saturday, October 10, 2009
Algorithmic Trading
"The difference between a successful person and others is not a lack of strength, not a lack of knowledge, but rather a lack in will" - Vince Lombardi.
Went to attend a talk on Algorithmic Trading organised by AFACT last night. I am glad that Mr. Alan Donoghue from Nyenburgh, an algorithmic trading firm is willing to share his expertise with us. Together with vendors RTS and TT, we were given a brief education on Algo trading and how we too can be Algo traders.
Since we can't beat them, join them!
Algos have been accused of wrecking havoc to the profitability of many scalpers recently as more firms are jumping on the bandwagon to have a piece of the cake. Many traders felt the Algos are a threat to their livelihood and responsible for their dismal performance.
These algos are in fact narrowing down the spreads whenever there is any inefficiency in the pricing taking away the yum trades from the scalpers. They are providing more liquidity into the market and a boom to retail customers.
Non trending market condition in a narrow range with dropping volume is always difficult for traders to make money. It has got nothing to do with algos. Traders need to keep changing their strategies to deal with the different market conditions.
Scalpers are losing their edge in term of execution speed to the algos but with more algos, they will be fighting each other too and I believe not all algos make money.
Education has made investors more savy and traders smarter thus making competition really tough.
There is no level playing field in this world, we just need to live with it, come to term with it, be more imaginative and more innovative in finding our edge.
"You cannot depend on your eyes when your imagination is out of focus" - Mark Twain.
I have many friends who are trading from home, definitely losing out in term of speed, yet some of them are making a comfortable living. I salute them.
"The secret of success is to know something noboby else knows" - Aristotle Onassis.
Profit for the special account to date is S$9,840.00.
Went to attend a talk on Algorithmic Trading organised by AFACT last night. I am glad that Mr. Alan Donoghue from Nyenburgh, an algorithmic trading firm is willing to share his expertise with us. Together with vendors RTS and TT, we were given a brief education on Algo trading and how we too can be Algo traders.
Since we can't beat them, join them!
Algos have been accused of wrecking havoc to the profitability of many scalpers recently as more firms are jumping on the bandwagon to have a piece of the cake. Many traders felt the Algos are a threat to their livelihood and responsible for their dismal performance.
These algos are in fact narrowing down the spreads whenever there is any inefficiency in the pricing taking away the yum trades from the scalpers. They are providing more liquidity into the market and a boom to retail customers.
Non trending market condition in a narrow range with dropping volume is always difficult for traders to make money. It has got nothing to do with algos. Traders need to keep changing their strategies to deal with the different market conditions.
Scalpers are losing their edge in term of execution speed to the algos but with more algos, they will be fighting each other too and I believe not all algos make money.
Education has made investors more savy and traders smarter thus making competition really tough.
There is no level playing field in this world, we just need to live with it, come to term with it, be more imaginative and more innovative in finding our edge.
"You cannot depend on your eyes when your imagination is out of focus" - Mark Twain.
I have many friends who are trading from home, definitely losing out in term of speed, yet some of them are making a comfortable living. I salute them.
"The secret of success is to know something noboby else knows" - Aristotle Onassis.
Profit for the special account to date is S$9,840.00.
Sunday, October 4, 2009
Dare to live your dream
"While there has been considerable investment in hardware, the key is still the individual - his training, courage and commitment" PM Lee Hsien Loong.
In a recent talk to some of the students during the review session of Tom's (YCK) class, I asked them "Who wants to be a professional trader?" Only two of the students timidly raised their hands shyly indicating their interest.
These students had taken the proactive step to go for training on the various charting strategies from one of the most knowledgeable trader on the subject. Are the students willing to put in the commitment? Do they have the courage to take up the challenge? Do they dare to live their dream and make it happen?
I like to read Dr Lee Wei Ling's articles on the Sunday Times and today she wrote about "Turning dreams into reality". "Singapore was built by a group of determined men who worked hard to realise their vision". I am extremely proud to be a Singaporean and very thankful to these "gentlemen".
"Fortune favours only those who grab the opportunities life offers. If the future has rough patches, we should simply accept that as a fact of life, and continue to make the best out of things."
Majority of the successful traders (old birds) I know don't come from well to do families, they struggled with determination and worked hard to realise their dream. There are also many new birds who are doing very well after a few years in trading, I was told some of them are now big size traders in the electronic platform.
What makes them so successful? How are they able to withstand the stress of having a few hundred outright position? Imagine the risk and think about their rewards. It's none other than having the COURAGE to trade what they believe in.
Still holding 3 long Topix/Nikkei spread in the special account, profit to date is S$8,814.00.
In a recent talk to some of the students during the review session of Tom's (YCK) class, I asked them "Who wants to be a professional trader?" Only two of the students timidly raised their hands shyly indicating their interest.
These students had taken the proactive step to go for training on the various charting strategies from one of the most knowledgeable trader on the subject. Are the students willing to put in the commitment? Do they have the courage to take up the challenge? Do they dare to live their dream and make it happen?
I like to read Dr Lee Wei Ling's articles on the Sunday Times and today she wrote about "Turning dreams into reality". "Singapore was built by a group of determined men who worked hard to realise their vision". I am extremely proud to be a Singaporean and very thankful to these "gentlemen".
"Fortune favours only those who grab the opportunities life offers. If the future has rough patches, we should simply accept that as a fact of life, and continue to make the best out of things."
Majority of the successful traders (old birds) I know don't come from well to do families, they struggled with determination and worked hard to realise their dream. There are also many new birds who are doing very well after a few years in trading, I was told some of them are now big size traders in the electronic platform.
What makes them so successful? How are they able to withstand the stress of having a few hundred outright position? Imagine the risk and think about their rewards. It's none other than having the COURAGE to trade what they believe in.
Still holding 3 long Topix/Nikkei spread in the special account, profit to date is S$8,814.00.
Sunday, September 27, 2009
Forex Trading, easy money?
"Look before you Leap" - English proverb.
I have received a SMS recently, "Want to make monthly passive income from Auto forex trading? We do not charge management fee and don't have to buy any software. Interested, please come to our talk". So, how they survive?
I don't know who this chap is, obviously trying to earn some comm. from soliciting funds to invest in some Auto Forex trading system that promise reasonable returns without highlighting the tremendous risk involved. BEWARE!
I have invested some money with fx:1 academy 3 years back to test out their so called Automated trading that promised good passive income with impressive back testing track record. I was conned into being their scapegoat and my account lost more than 50% before I decided to close it. Very ashamed to reveal it here, but just for my friends to be aware of the risk.
I have never seen a day of profit, it's downhill all the way right from the beginning. Since it was a small investment, I didn't pay particular attention to it until one of their trainers called to apologise about a huge sudden draw down due to some adverse news during the night. Of course all the bull shit explanations about missing stops in the Forex market, etc, etc.
The company made money from churning the account through an automated trading system deploying various strategies. The Forex Broker gave the company a cut from the spread between the bid and ask price every time a trade is done. It's a money tree for them, I don't mind if they are able to make money for me, but that's not the case, it's win win for them and losses only for me.
This company markets their courses and automated programme through some sort of MLM plan where most of the top money earners are in fact salesmen and not traders.
A friend visited me recently and revealed paying S$3,800/- to the same company for a course on Forex trading learning only one strategy, he emphasised. He did not trade after the course, as he was unsure of the charting and trading platform. Another victim of some sleek marketing on how easy to make money trading forex by just spending 2 hours a day. It suited him perfectly since he is working full time.
Profit for the special account again drop to S$5,821.00. Still holding long 3 Topix/Nikkei spread.
I have received a SMS recently, "Want to make monthly passive income from Auto forex trading? We do not charge management fee and don't have to buy any software. Interested, please come to our talk". So, how they survive?
I don't know who this chap is, obviously trying to earn some comm. from soliciting funds to invest in some Auto Forex trading system that promise reasonable returns without highlighting the tremendous risk involved. BEWARE!
I have invested some money with fx:1 academy 3 years back to test out their so called Automated trading that promised good passive income with impressive back testing track record. I was conned into being their scapegoat and my account lost more than 50% before I decided to close it. Very ashamed to reveal it here, but just for my friends to be aware of the risk.
I have never seen a day of profit, it's downhill all the way right from the beginning. Since it was a small investment, I didn't pay particular attention to it until one of their trainers called to apologise about a huge sudden draw down due to some adverse news during the night. Of course all the bull shit explanations about missing stops in the Forex market, etc, etc.
The company made money from churning the account through an automated trading system deploying various strategies. The Forex Broker gave the company a cut from the spread between the bid and ask price every time a trade is done. It's a money tree for them, I don't mind if they are able to make money for me, but that's not the case, it's win win for them and losses only for me.
This company markets their courses and automated programme through some sort of MLM plan where most of the top money earners are in fact salesmen and not traders.
A friend visited me recently and revealed paying S$3,800/- to the same company for a course on Forex trading learning only one strategy, he emphasised. He did not trade after the course, as he was unsure of the charting and trading platform. Another victim of some sleek marketing on how easy to make money trading forex by just spending 2 hours a day. It suited him perfectly since he is working full time.
Profit for the special account again drop to S$5,821.00. Still holding long 3 Topix/Nikkei spread.
Saturday, September 19, 2009
Yum Yum Trade
"The coward calls the brave man rash, the rash man calls him a coward" - Aristotle
Many ask me what's a 'YUM' trade and to quote examples. Yum trades occur mostly in chaotic market when we don't know exactly what's happening, the price movement defies logic, big surge up and down for unknown reasons. I love this type of market movements, it create lots of opportunities for the brave.
Two very big Yum trades occurred this month on the SGX contracts, one on the 9/9/09 (Taiwan contract) and the other on 18/9/09 (Simsci contract).
On 9/9/09, the Taiwan contract opened at around 2692 and started moving upwards, another trader sitting besides me who specialise in the Tw contract told me the resistant was around 2715. I checked my charts and yes, it should be a strong resistant at that level.
I shorted 1 lot at 2720 and immediately cut loss 10 ticks away, market paused for a while at 2740 and I thought it's easing off, so shorted again at 2738 and again have to cut loss immediately 15 ticks away, really fast and furious.
What happened? The cash market has not open yet, what's the news in Taiwan that we don't know about? Why are they buying up the futures? Is Algo at work, pushing up the market to catch the shorties? Lots of questions float in my mind.
Market hit 2795 and started retracing down and fearing the market will come off, shorted 2 lots at 2786. Imagine my shock when it U-turn immediately upwards, what type of ass luck is that! Three losses in a row! I was angry, trying to justify holding the 2 lots and refusing to cut loss. Shit! big mistake, it broke big figure 2800 and another wave of senseless short covering came in.
I was speechless looking at the market and staring at my overall losses of 150 ticks in less than 10 minutes with only a very small position. The limit up is very close by, what should I do? I dared not average further fearing for the worst, with a small position, the damage would not hurt me, I consoled myself.
I had no guts! Fear overcame me.
Taiwan is far away from Singapore, I don't know what's happening on the ground there, what type of news will affect the market. But, I always have this feeling that the market is heavily manipulated by the KMT and their cronies. It's a great contract for speculators with good volume and daily range.
The market continues pushing up to a high of almost 2850 and started to descend furiously, not adding on any position just in case it pull back up again. Came back down to 2790 in less than a minute, undecided whether to cut the position with a small loss, no, hold it.
A bad move not to cut with a small loss, the market moved swiftly back up to 2820 again, holy shit! Then started coming off to 2780s and swung back up again to 2800. What the "f#@K"! I was frustrated not getting out of my position a second time.
The third time it came back down, I got out my position at 2783 with overall losses of around 20 ticks. I was happy, but it turn to frustration again when the market dive down to 2760. What a stupid idiot I am! In less than an hour the market crashed all the way back down to a low of 2680, below the opening price.
I had missed the 'YUM' trades because Anger and Fear had overtaken me. I was a coward not to take on bigger position and more risk. The market went up 160 ticks within 10 minutes and crashed all the way down 170 ticks later, so much opportunities yet I had not capitalise on it.
"Bravery is the capacity to perform properly even when scared half to death" - Omar Bradley
Met other traders during the break and learnt that most scalpers were badly caught on the way up. It's bloodbath even for the disciplined. Payback time!
Yesterday, the YUM trades occurred in the SIMSCI contract after the cash market closed. The market started selling off for no apparent reason, I bought some at 3189 and 3185 since most major markets were stable and holding well.
The market came off swiftly after hitting some stops. Bought further at 3163 and managed to cut only 1 lot at 3158 before the market dropped like a bomb, prices disappeared from my ladder. Some massive stops must have been triggered. Holding 5 lots and saw my losses at more than 600 ticks in just seconds.
Scrolled down and saw the prices trading down furiously, managed to buy 3 lots at 3024 and tried chasing the market at 3026 and 3052, all missed. Next level tried buying 3 lots at 3136 and managed to get hold of 2 lots, didn't even realise the big figure had changed again, holding total 10 lots.
It was so fast that I didn't even realise that I bought so low at 3024, my eyes and hand couldn't even cope with the wild swing because within seconds I was buying more than a 100 ticks up. There was no time to think, just clicking away at lightning speed trying to get some Yum trades. Managed to get all out at average price of 3163 seconds later, luckily still managed to make some good money.
I scalped the SIMSCI now and know the contract well enough to average on such a situation, though I missed buying more contracts at the bottom. I had traded conservatively in comparison to my margin thus able to stare at FEAR right in the face.
There will be a lot of speculation on why the market was sold down with few minutes left to closing. Any news will be too late even for us as the market crashed within seconds.
In the world of dirty finance, did any body leak out those massive stop orders? Was it a deliberate attempt to trigger those stops? Was it just normal market action with orders coming in to square off their positions ahead of the long weekend? Why didn't they do it before the cash market close? Was it Algo?
Phone calls started coming in after the market closed, mostly "Did you YUM the market?", "What happened?" I told them I was Yummed and got my hair all wet even though I'm almost bald.
Other traders started to talk about their fear such as assassination attempt on our leaders or some terrorist attack. Thus they froze and just starred at the screen without any action.
Recalling sometime in the early 1980s when PM Lee Kuan Yew was hospitalised, the news sent the STI crashing down. I was working in the bank and witnessed the massive sell down of the stock market, with clients in panic mode calling us to unload their stock holdings.
Another incident was during election time in Taiwan when the then president Chen Shui Bian was shot. It sent the TW contract spiralling down during the T+1 session to limit down. That was real scary if you were caught holding any long position.
The special account is in limbo, still holding 3 Topix/Nikkei spread when it crashed all the way down to a low of -1080. Unbelievable, that's why I underperformed. The profit to date is S$9,435.00
Many ask me what's a 'YUM' trade and to quote examples. Yum trades occur mostly in chaotic market when we don't know exactly what's happening, the price movement defies logic, big surge up and down for unknown reasons. I love this type of market movements, it create lots of opportunities for the brave.
Two very big Yum trades occurred this month on the SGX contracts, one on the 9/9/09 (Taiwan contract) and the other on 18/9/09 (Simsci contract).
On 9/9/09, the Taiwan contract opened at around 2692 and started moving upwards, another trader sitting besides me who specialise in the Tw contract told me the resistant was around 2715. I checked my charts and yes, it should be a strong resistant at that level.
I shorted 1 lot at 2720 and immediately cut loss 10 ticks away, market paused for a while at 2740 and I thought it's easing off, so shorted again at 2738 and again have to cut loss immediately 15 ticks away, really fast and furious.
What happened? The cash market has not open yet, what's the news in Taiwan that we don't know about? Why are they buying up the futures? Is Algo at work, pushing up the market to catch the shorties? Lots of questions float in my mind.
Market hit 2795 and started retracing down and fearing the market will come off, shorted 2 lots at 2786. Imagine my shock when it U-turn immediately upwards, what type of ass luck is that! Three losses in a row! I was angry, trying to justify holding the 2 lots and refusing to cut loss. Shit! big mistake, it broke big figure 2800 and another wave of senseless short covering came in.
I was speechless looking at the market and staring at my overall losses of 150 ticks in less than 10 minutes with only a very small position. The limit up is very close by, what should I do? I dared not average further fearing for the worst, with a small position, the damage would not hurt me, I consoled myself.
I had no guts! Fear overcame me.
Taiwan is far away from Singapore, I don't know what's happening on the ground there, what type of news will affect the market. But, I always have this feeling that the market is heavily manipulated by the KMT and their cronies. It's a great contract for speculators with good volume and daily range.
The market continues pushing up to a high of almost 2850 and started to descend furiously, not adding on any position just in case it pull back up again. Came back down to 2790 in less than a minute, undecided whether to cut the position with a small loss, no, hold it.
A bad move not to cut with a small loss, the market moved swiftly back up to 2820 again, holy shit! Then started coming off to 2780s and swung back up again to 2800. What the "f#@K"! I was frustrated not getting out of my position a second time.
The third time it came back down, I got out my position at 2783 with overall losses of around 20 ticks. I was happy, but it turn to frustration again when the market dive down to 2760. What a stupid idiot I am! In less than an hour the market crashed all the way back down to a low of 2680, below the opening price.
I had missed the 'YUM' trades because Anger and Fear had overtaken me. I was a coward not to take on bigger position and more risk. The market went up 160 ticks within 10 minutes and crashed all the way down 170 ticks later, so much opportunities yet I had not capitalise on it.
"Bravery is the capacity to perform properly even when scared half to death" - Omar Bradley
Met other traders during the break and learnt that most scalpers were badly caught on the way up. It's bloodbath even for the disciplined. Payback time!
Yesterday, the YUM trades occurred in the SIMSCI contract after the cash market closed. The market started selling off for no apparent reason, I bought some at 3189 and 3185 since most major markets were stable and holding well.
The market came off swiftly after hitting some stops. Bought further at 3163 and managed to cut only 1 lot at 3158 before the market dropped like a bomb, prices disappeared from my ladder. Some massive stops must have been triggered. Holding 5 lots and saw my losses at more than 600 ticks in just seconds.
Scrolled down and saw the prices trading down furiously, managed to buy 3 lots at 3024 and tried chasing the market at 3026 and 3052, all missed. Next level tried buying 3 lots at 3136 and managed to get hold of 2 lots, didn't even realise the big figure had changed again, holding total 10 lots.
It was so fast that I didn't even realise that I bought so low at 3024, my eyes and hand couldn't even cope with the wild swing because within seconds I was buying more than a 100 ticks up. There was no time to think, just clicking away at lightning speed trying to get some Yum trades. Managed to get all out at average price of 3163 seconds later, luckily still managed to make some good money.
I scalped the SIMSCI now and know the contract well enough to average on such a situation, though I missed buying more contracts at the bottom. I had traded conservatively in comparison to my margin thus able to stare at FEAR right in the face.
There will be a lot of speculation on why the market was sold down with few minutes left to closing. Any news will be too late even for us as the market crashed within seconds.
In the world of dirty finance, did any body leak out those massive stop orders? Was it a deliberate attempt to trigger those stops? Was it just normal market action with orders coming in to square off their positions ahead of the long weekend? Why didn't they do it before the cash market close? Was it Algo?
Phone calls started coming in after the market closed, mostly "Did you YUM the market?", "What happened?" I told them I was Yummed and got my hair all wet even though I'm almost bald.
Other traders started to talk about their fear such as assassination attempt on our leaders or some terrorist attack. Thus they froze and just starred at the screen without any action.
Recalling sometime in the early 1980s when PM Lee Kuan Yew was hospitalised, the news sent the STI crashing down. I was working in the bank and witnessed the massive sell down of the stock market, with clients in panic mode calling us to unload their stock holdings.
Another incident was during election time in Taiwan when the then president Chen Shui Bian was shot. It sent the TW contract spiralling down during the T+1 session to limit down. That was real scary if you were caught holding any long position.
The special account is in limbo, still holding 3 Topix/Nikkei spread when it crashed all the way down to a low of -1080. Unbelievable, that's why I underperformed. The profit to date is S$9,435.00
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