Traders are not born

"You cannot teach a man anything; you can only help him find it within himself" - Galileo

I have yet to come across a trader who makes money straight away, so for those who are still struggling, don't be discouraged, keep on learning and applying what you have learnt with the discipline that is needed.

Cutting loss is difficult, riding profit is even worse because of our natural human emotions of hope and fear. Once a trader is able to overcome these two very simple emotional theory but extremely difficult in term of execution, he is half way there.

I remembered an incident many years ago, while I was still trading in the pit, a fellow trader came up and handed me a trading card to execute some trades on his behalf, "Cut for me", and walked away immediately without turning back.

I could see the sadness in his eyes and felt the pain he was going through. Just too painful for him to execute the trades himself. He had taken too long to admit his mistake and the pain threshold overshot his mental state of mind to handle the situation emotionally.

He needed time to cool down. I caught up with him later to console him and learnt that just one bad trade wiped off a few months of his profit.

That sounded familiar to me, it happened to me a few times when I first started out as a trader, I was very experienced in that kind of excruciating pain, a sense of hopelessness, dejection, self doubt and wondered whether I was suitable to be a trader.

What can I do? Being a frog in a well, I didn't have many options with my limited education. With perseverance and determination, it took me one painful year to break even, to learn how to trade and avoid costly mistakes. I finally graduated from the school of hard knock.

Unlike traders now, we had little choice in the contracts available for us to trade in those days. There wasn't any courses available that teach us how to trade, either swim or sink.

The cost of trading has gone up tremendously making it difficult for new traders to take up the challenge. Traders are now educated, competition is tough and worst of all, Algos muscling in for a piece of the cake. We now have to compete with emotionless machines! But, these machines are still operated by humans and so they still do make mistakes! That's where I will be waiting for them, some Ah Q positive mentality.

New traders are very lucky now with SGX taking pro-active steps in providing subsidised education in trading and showing more concern for their welfare. It's just a matter of time that they mature in their trading, how long will depend on the individual trader. I'm not so smart, that's why it took me one year and even longer when I convert to electronic trading.

Profit for our special account went back up to S$13,630.00, like a yo-yo up and down, I'm just not happy with it. Still holding 2 Topix/Nikkei spread.