Another Boring Chinese New Year has passed

28 02 2010

This marks my 27th CYN as I must say it’s becoming more and more boring. The only thing that still excites me is my ang bao and long holiday. Even so I still have to prepare my annul statement to questions from my relatives like ” oh, why you still dun have a girlfriend? What are you working as now? Are you planning to further study? The saddest part is I failed to achieve my goal which is to lose 3kg before CNY. Damn! =[

If Tiger Woods still needs a coach for his game. Why not you in the game of trading?

16 12 2009

Almost all the greatest investors or traders have either a mentor or coach to help them in their early days of investment. Warren Buffet has Benjamin Grahman to guide him. George Soros has his father to  teach him the meaning of survival when he was still a teenager. And even TigerWoods still has a coach to provide him with feedbacks on his techniques even though he is already considered one of the greatest golfer in the world.

I believed that is especially important when you are just starting to learn how to trade and a good coach/mentor will be able to provide you with valuable feedbacks on your trading techniques and your psychology. Perhaps some of you might think by reading some books on trading or discussing in forums will be good enough. But an experienced trader will be able to pinpoint your mistakes and shorten your learning curve.

The next question which may come into your mind is :” how do I find the right coach to help me?”. There are tens and hundreds of courses available out there in the market where people are willing to teach you for a fee. Here are some suggestions which you can consider in choosing the right person.

  • Is his/her style of trading the type I am looking for? (Intraday or Swing Trading)
  • Is he/she only boasting about how much their strategy or system is generating profits but skipping through the drawbacks and psychology of trading itself?
  • Does he/she sound sincere in helping you achieve your goals?
  • Will there be any support session after the course and possible repeat course with no extra charge or lesser fees? ( Your journey only starts after the course and not during it)
  • Only forums providing positive comments on this particular trainer?

These are just some of the advice that you need to consider when going for courses. Think of them as your investment criteria. If you can spend a substantial amount of time in looking for your dream car, house or even spouse. It’s the same as looking for the right type of trading course that fits you.

My First Day of Work…

14 12 2009

I’m back into the slow pace of work like the Japanese MNC I used to work in. Only that this time I have more flexibility and minimum politics to avoid. Perhaps that is one of the advantages working in a SME. Despite getting a paycut, I felt much relaxed and motatived to do my job in the daytime and concentrate on my ‘dream’ in the night time. There is only 8 people in my company and only around half of them are locals including myself. The rest are from Mynmar and Indonesia. But I can sense that they are friendly people and I could imagine myself cooperating with them without much problems.

Of course today is only the first day and much is left to explore within my new colleagues. I appreciate the beauty of small setup company because its just because you are small, that’s makes you more flexible in management and faster response time because of the lack of process control. Anyway, I am not aiming to climb the ‘management ladder’ so I just follow my plan to stick to this job as long as possible and focusing on sharpening my ‘trading skills’. That is my plan and I will do my best to stick to it.

Process Goals

10 12 2009

When you have set a goal to achieve say… in  3 years time. Process goals are like baby steps leading to it. For example, you have set to lose 10kg in 6 months time. Your process goals should be something like to exercise 2hrs daily, to have a healthy diet every weekdays etc. Its the process that you want to be committed to in your journey to reached that milestone. I believe alot of many people failed to achieved and maintained their goal partly because they didn’t set their process goals or plan it properly.

For example, losing 10pounds to 20 pounds of weight is easy comparing to keeping it off… that’s where process goals comes in as its helps you to build a routine and as time goes by, a habit and in time to come, that process becomes a part of your life. So the next time when you are brainstorming to set a goal. Think of the process goals that you are willing to committed to perform along the way.

Leverage. The 2nd most powerful force in the universe.

1 12 2009

Albert Einstein once dubbed compound interest as the most powerful force in the universe. In my opinion, leverage will then have to be second to it. Leverage can be understood in 2 areas.

1. The use of various financial instruments or borrowed capital, such as margin, to increase the potential return of an investment.

2. The amount of debt used to finance a firm’s assets. A firm with significantly more debt than equity is considered to be highly leveraged.

What I am trying to say here is that you can reached your financial goals much faster if you combine the 2 most powerful forces, which is compound interest and leverage. Warren Buffet gain his massive wealth not only using compound interest  but also using leverage by setting up a funds and using ‘free float’ from his Berkshire Hathaway. So does George Soros when he used leverage to short the  British pound to became ‘The man who broke the bank of England”. Many of the wealthy people that we knew all use some sort of leverage to hasten their wealth creation.

Now the drawback on leverage is that it can magnify your loss as just as much as your gains. Its like a double edged sword and it could hurt you if you don’t know how to use it. One of the way to use leverage correctly is a deep understanding of the market your investing. For example. If you are using leverage for property purchase, you gotta understand the various locations, market price, trends, demand and supply, interest rates, etc. Another way is the proper money management on your investment trades.

Leverage can hasten our road to financial freedom and also to destruction if it is not properly understood and executed. Seek to understood and respect its power and it shall reward you tremendously.

Are you working for the wrong reason?

22 11 2009

Recently a friend of mine just brought a car after saving and scrimping for countless months. After placing an initial deposit, he still needs to service a 10 year loan for it. His case is just a fraction of the numerous people out there working hard for their own desires.

Its makes me wonder whether sometimes people  are working hard for the wrong reason. They work for 12 to 16 hours, 7 days a week. And spent their hard-earned money to fulfill their own desires. Women are willing to spent their month worth of salary on a LV bag. Guys scrimp on their meals and think of alternate routes to avoid ERP charges in order to pay their monthly car installments.  Do they really own their cars/bags or its the other way around?

One way I can guess is that you find yourself unable to stop working no matter how much hated your job but had to tolerate all the bullshit because you need  the income to pay for your monthly installments. Perhaps its time to do something about it before your desires owns you.

Defining Your Own Trading Plan and Philosophy

20 11 2009

In my opinion. The first step to become a successful trader is to create your own trading plan and philosophy. That includes being the type of trader you are, the market you are targeting and the philosophy of your trading plan.   and then, a so-called ‘guru’ will write a book or start a seminar saying that his trading plan will help you profit from the market. But bear in mind that it is His trading plan and not yours. His mindset and values will most likely differ from yours and even if it works for you. It may not last for long particularly if you do not have the necessary knowledge to adjust your game plan when the market changes which it always do.

My trading philosophy is similar to a person who wants to learn to play basketball. Imagine what will you do if you want to learn a new sports like skiing or diving? You will first read up some books or attend some courses to learn more about the sports before getting hands-on. In the aspects of basketball, you will have to learn the basics like passing and dribbling.

But mastering the basics doesn’t guaranteed success unless you play a pick up game with someone else. This is the part whereby most people failed and couldn’t pick themselves up in the game of trading because they lost too much and recovering will took forever. The best players in the game will learn to survive every game.

Survival is the key word, and that is my trading philosophy. Take a scenario of two athletics with same experience and attributes going through the NBA season of 82 games. Athletic A gets injured a couple of times and sat out for 20 games whereas Athletic B only sat out for only 2 games due to minor sprain. At the end of the season, Athletic B gets higher payout and becomes more experience because of  the 80 games he played.

Being a basketball fanatic, I intend to define my trading philosophy with the same values I had towards the game basketball. Which is to survive every game and gained the lesson learnt from it and move on the next.