"Nothing in life is to be feared. It is only to be understood" - Marie Curie.
The week has been good for most Equity futures traders with the increase in volume and volatility.
Had a chat with a fellow trader after the market closed yesterday and was sad to learn that he was not doing well since the close of the trading floor. That's almost 4 years ago and yet he is still very persistent. He confessed that fear have overtaken him now with his dismal performance despite being hardworking and trying his best.
Another trader who overheard our conversation, suggested that to overcome this demon "fear", he should try bungee jumping. Will it help in overcoming the fear in trading? I doubt so.
The definition of fear is a feeling of anxiety and agitation caused by presence or nearness of danger, evil, pain, etc. So, what's the danger and pain in trading? It's not life threatening and this feeling of pain is all about losing money.
I explained to him that fear existed in him because he is not sure about his strategies, he don't know his edge and he is simply gambling without the trading skill. This skill can be acquired through learning, that's best cure for fear of trading.
At the arcade, there is another trader who is fearless and he specialises in trading the Nikkei. This trader sometimes scalps up to 5,000 contracts a day holding position size from 20 to 50 lots, his P/L a day is my monthly target. I respect this guy for his guts though I'm not too sure whether he is such a good trader. His commission alone is close to S$10,000. Being an old bird, I certainly hope that he can survive in the long run.
I have my fear too, I trade small relative to my margin, I am now a Kiasi and Kiasu trader taking minimum risk now compared to my younger days. I just want to be consistent in my trading making small amount of money almost everyday with no stress, enjoy trading and the challenge of beating the market.
My cousin had the best performing week since joining me, it's really a great boost to his confidence though he still has a long way to go, he is still fragile. Being new to the industry, his performance is up to expectation, he is keen, willing to learn and most important, hard working.
I once told him that in order to succeed, he need to cast other things aside, just talk, think, read, focus and dream about trading everyday. He is getting better by the day with the constant drilling of having a strong and positive mental attitude.
I have a new trader who joined me this month, he approached me a few months back and after a short interview, I decided to take him in as my trader. He was a stock broker for a short period of time. Young and energetic, he is full of vigour and enthusiasm with a happy deposition. I figure it would be much easier to coach him with his financial background.
His performance for the first month is way beyond my expectation. He is a smart chap and learns very fast. With proper guidance and grooming, I believe he has the potential to be a great trader.
Saturday, January 30, 2010
Sunday, January 24, 2010
Correction?
"The entire essence of America is the hope to first make money - then make money with money - then make lots of money with lots of money" - Paul Erdman. Hello! how about the risk?
Finally, a long overdue correction for the world's equity market. President Barack Obama is making the right decision in announcing a new plan to limit the bank's size in nipping the problem of "too big to fail" financial firms that might engage in reckless behaviour.
President Obama wants to limit the scope of risk-taking by barring banks with federally insured deposits from trading securities for their own accounts and from owning hedge funds and private equity funds.
I certainly hope that he can succeed in pushing through those reforms and curb the excessive bonuses paid to those greedy bankers that nearly cause the collapse of the global financial system.
How far will the market correct? 10 to 20 percent would be ideal which should offer traders like us more opportunities from the increase market volatility.
Finally, a long overdue correction for the world's equity market. President Barack Obama is making the right decision in announcing a new plan to limit the bank's size in nipping the problem of "too big to fail" financial firms that might engage in reckless behaviour.
President Obama wants to limit the scope of risk-taking by barring banks with federally insured deposits from trading securities for their own accounts and from owning hedge funds and private equity funds.
I certainly hope that he can succeed in pushing through those reforms and curb the excessive bonuses paid to those greedy bankers that nearly cause the collapse of the global financial system.
How far will the market correct? 10 to 20 percent would be ideal which should offer traders like us more opportunities from the increase market volatility.
Tuesday, January 19, 2010
Unconcious Competency
"...by stretching yourself beyond your perceived level of confidence you accelerate your development of competence" - Michael J.Gelb
I have been busy the last 2 days doing live trading showing my students how I scalped the SGX contracts, doing spread trading and hedging. My brother was shocked when I told him that I will be doing trading on just a laptop with wireless connection in the training room. Obviously it's very challenging for me to do live demonstration without my edge.
The wireless Internet connection was interrupted on many occasions on the first day and I was frustrated. Luckily I kept my cool and patiently traded with caution and managed to make a few hundred dollars on each day.
In the trading arcade, I traded with 6 screens on lease line for execution speed while I have to make do with just a 14 inch laptop to squeeze my charts and trading platform together during the training. Glad that I didn't disappoint my students, I certainly feel a sense of achievement for imparting the trading techniques to them.
One of my student called it unconscious competency in the way I executed my trades with ease despite the obstacles that I faced.
I have been busy the last 2 days doing live trading showing my students how I scalped the SGX contracts, doing spread trading and hedging. My brother was shocked when I told him that I will be doing trading on just a laptop with wireless connection in the training room. Obviously it's very challenging for me to do live demonstration without my edge.
The wireless Internet connection was interrupted on many occasions on the first day and I was frustrated. Luckily I kept my cool and patiently traded with caution and managed to make a few hundred dollars on each day.
In the trading arcade, I traded with 6 screens on lease line for execution speed while I have to make do with just a 14 inch laptop to squeeze my charts and trading platform together during the training. Glad that I didn't disappoint my students, I certainly feel a sense of achievement for imparting the trading techniques to them.
One of my student called it unconscious competency in the way I executed my trades with ease despite the obstacles that I faced.
Sunday, January 10, 2010
Discipline
"Some people regard discipline as a chore. For me, it is a kind of order that sets me free to fly" - Julie Andrews
We had a very successful AFACT "Time for Tea" event yesterday for members to catch up with each other and share their trading strategies. Didn't expect such a huge turnout of nearly 80 members, luckily the restaurant was big enough to accommodate all of us. We only have indicated interest of around 60 members who signed up 3 days before the event.
Of course, there were many who signed up for the event and didn't turn up and many more who turned up without signing up. It's really a huge challenge for us, the organiser to estimate the turnout for the next event and to look for a suitable venue.
So is there a lack of discipline? Many of us take things for granted in life despite the good fortune that we have. As a trader, we need discipline and more discipline.
Our next event will be the traditional Chinese New Year Lunch on the 27th February, "Lo Hei" a Cantonese saying for tossing up good fortune for a better Year. We have around 300 members, how many will turn up, especially the old birds?
One of the pioneer trader IAN, in his sharing reminded aspiring traders to be discipline, trade within their limit and not to fall in love with a position that has gone wrong.
Yes, any trader know discipline is important, successful traders are mostly discipline and follow strictly to their rules of engagement.
So, what is the meaning of discipline? Checking the wikipedia, one that applies to a trader is "The ability to do the right thing even when no one is watching or suffer the consequences of guilt which produces pain in our bodies, through pain comes discipline"
I remember telling a group of new traders some time ago that if I will to carry a cane and sit beside them, they will definitely make it as a trader in a very short period of time. A whack every time they don't know how to cut their losses, how cruel!
Can we train our self to be discipline?
Start with being punctual, I'm hardly late for any appointment in my life, unless there is a very good reason.
I'm always at the Phillip trading arcade 15 minutes before the market open to prepare myself.
I have never get myself drunk, hardly entertain except during weekends and no matter how late, I will still crawl back home.
Always think about others and be responsible for our own action.
I am sure most of us can accomplish these simple tasks to change our behaviour and attitude. Then we can become better traders.
We had a very successful AFACT "Time for Tea" event yesterday for members to catch up with each other and share their trading strategies. Didn't expect such a huge turnout of nearly 80 members, luckily the restaurant was big enough to accommodate all of us. We only have indicated interest of around 60 members who signed up 3 days before the event.
Of course, there were many who signed up for the event and didn't turn up and many more who turned up without signing up. It's really a huge challenge for us, the organiser to estimate the turnout for the next event and to look for a suitable venue.
So is there a lack of discipline? Many of us take things for granted in life despite the good fortune that we have. As a trader, we need discipline and more discipline.
Our next event will be the traditional Chinese New Year Lunch on the 27th February, "Lo Hei" a Cantonese saying for tossing up good fortune for a better Year. We have around 300 members, how many will turn up, especially the old birds?
One of the pioneer trader IAN, in his sharing reminded aspiring traders to be discipline, trade within their limit and not to fall in love with a position that has gone wrong.
Yes, any trader know discipline is important, successful traders are mostly discipline and follow strictly to their rules of engagement.
So, what is the meaning of discipline? Checking the wikipedia, one that applies to a trader is "The ability to do the right thing even when no one is watching or suffer the consequences of guilt which produces pain in our bodies, through pain comes discipline"
I remember telling a group of new traders some time ago that if I will to carry a cane and sit beside them, they will definitely make it as a trader in a very short period of time. A whack every time they don't know how to cut their losses, how cruel!
Can we train our self to be discipline?
Start with being punctual, I'm hardly late for any appointment in my life, unless there is a very good reason.
I'm always at the Phillip trading arcade 15 minutes before the market open to prepare myself.
I have never get myself drunk, hardly entertain except during weekends and no matter how late, I will still crawl back home.
Always think about others and be responsible for our own action.
I am sure most of us can accomplish these simple tasks to change our behaviour and attitude. Then we can become better traders.
Friday, January 1, 2010
Wishing all a Prosperous 2010
'Make Peace with the past so it won't screw up the present"
Almost everyday my cousin told me he learnt a new lesson at the end of the trading day, well, after 25 years of trading, I'm still learning. The market is so dynamic, no single day is the same and most tried in vain to spot a repeat of a past pattern for their perfect entry which is an illusion. The most common excuse, false signal!
2008 was a fantastic year for most traders while 2009 was for most, a lousy year despite the V shape recovery for most equity market and the economy. I wasn't happy with my performance last year, it's mediocre despite the hard work. I don't want to look for excuses, it's simply plain stubbornness and refusing to admit mistakes.
I look forward to doing some longer term day trading for the coming year, it will be challenging for a scalper who is so short sighted.
Almost everyday my cousin told me he learnt a new lesson at the end of the trading day, well, after 25 years of trading, I'm still learning. The market is so dynamic, no single day is the same and most tried in vain to spot a repeat of a past pattern for their perfect entry which is an illusion. The most common excuse, false signal!
2008 was a fantastic year for most traders while 2009 was for most, a lousy year despite the V shape recovery for most equity market and the economy. I wasn't happy with my performance last year, it's mediocre despite the hard work. I don't want to look for excuses, it's simply plain stubbornness and refusing to admit mistakes.
I look forward to doing some longer term day trading for the coming year, it will be challenging for a scalper who is so short sighted.
Sunday, December 27, 2009
Star Hedge Fund Trader
Mr David Tepper, Head of Appaloosa Management is set to collect a cool US$2.5 billion pay package for the year after staking huge bets that global banks would recover in 2009. That's about over a third of the US$7 billion profits generated by the firm in 2009.
The hedge fund said it made returns of over 120 per cent for the year to the beginning of December. He bought Bank of America when the shares were trading below US$3 a piece and Citigroup at US$1.
At the end of last year Appaloosa had a track record of generating an average of 30 per cent returns a year since it's inception in 1993. It's assets under management have tripled in just three years to US$12 billion. Pretty impressive.
Mr Tepper has built a reputation on judging value in panic situation.
My respect to him, he's got guts!
"Without courage, wisdom bears no fruit" - Baltasar Gracian
The hedge fund said it made returns of over 120 per cent for the year to the beginning of December. He bought Bank of America when the shares were trading below US$3 a piece and Citigroup at US$1.
At the end of last year Appaloosa had a track record of generating an average of 30 per cent returns a year since it's inception in 1993. It's assets under management have tripled in just three years to US$12 billion. Pretty impressive.
Mr Tepper has built a reputation on judging value in panic situation.
My respect to him, he's got guts!
"Without courage, wisdom bears no fruit" - Baltasar Gracian
Saturday, December 26, 2009
Asset Bubbles
"The instinct of ownership is fundamental in man's nature" - William James
Many bankers and economists voiced concern about asset price distortions in an environment of plentiful liquidity which may be sowing the seeds of financial instability, especially in emerging markets.
China's property and stock markets are a "bubble" that will burst when inflation accelerates in 2011, former Morgan Stanley chief Asian economist Andy Xie said. China's residential prices rose last month at the fastest pace since July last year, spurred by the 4 trillion yuan stimulus package and record lending.
Inflation is a concern, so is the depreciating value of our money when governments keep printing money.
In Hong Kong, a shop just 1,212 sq ft in one of the city's busiest districts was reportedly sold for a record US$108 million which work out to about US900,000 per sq ft. The shop houses luxury retailer Emperor Watch and Jewellery. How many watches and jewelleries they need to sell to justify the return on investment? Money laundering?
Here in Singapore, prime good class freehold landed bungalows rose 18.6 per cent for the year, setting fresh record high of S$1,447 per sq ft. More wealthy buyers are willing to fork out more for such properties, 17 were sold for above 20 million each this year. The rich poor gap is widening everywhere, the rich getting richer and the poor suffers.
My parents bought a 3 room HDB flat at S$11,000/- 35 years ago which is now worth more than S$200,000/- . A friend bought a 15 year old 3 room HDB flat in Queenstown, near the MRT station 2 years ago at S$300,000/-, I thought he was crazy to pay such a high price for a 65 sqm old flat. He recently sold it for a 20k profit nett, free lodging for 2 years.
Will there be a asset bubble? With Gold price hitting above US$1,000/-, Oil price above US$70/-, a plate of mee siam costing S$3/- with only half an egg and costly taxi fare, I don't see property prices crashing down. A crash will be a good buy!
A friend complained recently after having lunch at a restaurant in ION Orchard, he asked for 3 glasses of plain water, 2 of the glasses were refilled later. He was shocked when he was billed S$5/- for plain tap water, S$1/- each for the paper tower and S$3/- for a small plate of peanuts,++ (7% GST and 10% service charge.
The properties in Orchard are expensive and with big developers bidding high prices for them, the rental for the shops and restaurants is not going to be cheap.
Who benefits most from such high property prices? Who else but the biggest land owner! The government of course, adding much to their coffers and higher property prices would also mean higher property taxes as well, the government is getting so rich. We the citizen, need to work very hard.
Many of my friends are concern whether their children can afford to buy a property when they grow up with prices increasing at such an alarming rate. One solution by the government is in building ever smaller HDB flats, a 5 room flat have shrunk from 125 sqm to as small as 105 sqm now. More 3 room flats are built to be affordable and not comfortable, live with it if you are poor.
We are one of the most densely populated country in the world yet our planners are still trying to squeeze more people into this tiny island. To be more competitive? Higher growth? Better living standard? I think it's more stressful for the ordinary citizen.
Many bankers and economists voiced concern about asset price distortions in an environment of plentiful liquidity which may be sowing the seeds of financial instability, especially in emerging markets.
China's property and stock markets are a "bubble" that will burst when inflation accelerates in 2011, former Morgan Stanley chief Asian economist Andy Xie said. China's residential prices rose last month at the fastest pace since July last year, spurred by the 4 trillion yuan stimulus package and record lending.
Inflation is a concern, so is the depreciating value of our money when governments keep printing money.
In Hong Kong, a shop just 1,212 sq ft in one of the city's busiest districts was reportedly sold for a record US$108 million which work out to about US900,000 per sq ft. The shop houses luxury retailer Emperor Watch and Jewellery. How many watches and jewelleries they need to sell to justify the return on investment? Money laundering?
Here in Singapore, prime good class freehold landed bungalows rose 18.6 per cent for the year, setting fresh record high of S$1,447 per sq ft. More wealthy buyers are willing to fork out more for such properties, 17 were sold for above 20 million each this year. The rich poor gap is widening everywhere, the rich getting richer and the poor suffers.
My parents bought a 3 room HDB flat at S$11,000/- 35 years ago which is now worth more than S$200,000/- . A friend bought a 15 year old 3 room HDB flat in Queenstown, near the MRT station 2 years ago at S$300,000/-, I thought he was crazy to pay such a high price for a 65 sqm old flat. He recently sold it for a 20k profit nett, free lodging for 2 years.
Will there be a asset bubble? With Gold price hitting above US$1,000/-, Oil price above US$70/-, a plate of mee siam costing S$3/- with only half an egg and costly taxi fare, I don't see property prices crashing down. A crash will be a good buy!
A friend complained recently after having lunch at a restaurant in ION Orchard, he asked for 3 glasses of plain water, 2 of the glasses were refilled later. He was shocked when he was billed S$5/- for plain tap water, S$1/- each for the paper tower and S$3/- for a small plate of peanuts,++ (7% GST and 10% service charge.
The properties in Orchard are expensive and with big developers bidding high prices for them, the rental for the shops and restaurants is not going to be cheap.
Who benefits most from such high property prices? Who else but the biggest land owner! The government of course, adding much to their coffers and higher property prices would also mean higher property taxes as well, the government is getting so rich. We the citizen, need to work very hard.
Many of my friends are concern whether their children can afford to buy a property when they grow up with prices increasing at such an alarming rate. One solution by the government is in building ever smaller HDB flats, a 5 room flat have shrunk from 125 sqm to as small as 105 sqm now. More 3 room flats are built to be affordable and not comfortable, live with it if you are poor.
We are one of the most densely populated country in the world yet our planners are still trying to squeeze more people into this tiny island. To be more competitive? Higher growth? Better living standard? I think it's more stressful for the ordinary citizen.
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