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Friday, 10 June 2011

Kenny Rogers - The Gambler (My trading modus operandi)



This song reflects my mindset when it comes to trading. It's inspired from a recent discussion at 5 cents 10 cents blog.

When I am at the "table", I focus on 2 things:

1) The cards on the table (fundamental analysis)

2) The faces and body language of the other players (technical analysis)


But one trading edge I have now after paying my school fees is this money mangement technique from the song:

a.  Know when to hold (Everyhand's a winner, and everyhand's a loser.)

b.  Know when to fold (Cut loss)

c.  Know when to walk away (Last Thursday, I sold a unit trust at a small profit to raise my cash position from 25 to 35%)

d.  Know when to run! (Get back to cash like no tomorrow? Hope that day never comes!)


If this makes me a gambler, so be it!


P.S.  Profit is not profit until it's safely in my pocket.

5 comments:

  1. Yup. Paper profit is nice but the only problem is that I can't buy food with it.

    ReplyDelete
  2. haha you finally agreed you are a gambler. as long as the future is uncertain, be it financially or otherwise, its gambling.

    p.s. paper profit and paper loss are real profit and losses whether they are in your pocket or books or anywhere else as long as within your easy reach.

    and if you are thinking of food or other things instead, the paper profit instantly turn into expenses or losses.

    ReplyDelete
  3. Paper profit may disappear into thin air if not taken promptly

    ReplyDelete
  4. Hi SMOL,

    We should play poker one day ;)

    ReplyDelete
  5. 1) Hi Isaac, on!

    2) Hello Coconut,

    I rather not treat paper profit as real until they are safely in my pocket. Same same but different! American house owners discovered all the paper profits/wealth can disappear in a flash during the credit crisis.

    But paper loss I treat as real immediately - this is to put in the right frame of mind to cut losses quickly and prevent myself from averaging down to "get even". One Jurong Tech fiasco is enough!

    3) CW8888, I like the way you write off your losses and book them back as profits like companies handle provisions for bad debts.

    ReplyDelete

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