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Saturday, 26 April 2014

Million Dollar Trader - Reality TV

Below are 3 x 60 minutes long videos on reality TV show in Britain where they take 8 complete newbies off the street and train them to be hedge fund traders.

I  find it quite interesting as in recognising some of the traits of these newbie traders in me.

Some thing to do this weekend if you have 3 hours to spare.

To make it more fun, let's have a game:

1) After watching the first video, see if you can pick the top 3 traders that will survive till the end. 

2) Can you tell apart which traders are trading to escape and which are trading to achieve?

3) What's 32 x 32? (shit, that means no institution will hire me...)








Were the top 3 traders that survived a surprise to you?

Recognise some of the traits that work against us in trading? 

Institutions will mercilessly weed out those who have no aptitude for trading; contrast that to the world of retail trading where brokers and snake oil trainers will sell the dream of everyone and anyone can do it - with proven XX strategies and YY trading setups! 

What do you do when you suck at trading?

You become an "investor"!

  


45 comments:

  1. I have noted many retail traders finally realized that it is a tough job to trade for a living and convert themselves into retail investors - at least got dividends!

    ReplyDelete
    Replies
    1. CW,

      I guess we found out the shorter the running distance, the more it requires nature's talent.

      The longer the distance, the more nurture kicks in as in training, discipline, will power, etc. We can overcome what we lack in talent... Provided we don't kill ourselves in aiming to run a marathon within 3 hours - that require some natural attributes too ;)

      Delete
    2. Gave up on trading?

      Yes! Heard so many!

      Gave up on investing? Anyone heard of it?

      No?

      Delete
  2. If I remember correctly, you have some thought of moving into long-term investing for yield play.

    Giving up that thought already?

    ReplyDelete
    Replies
    1. CW,

      The feedback from trading is more immediate. About 2 years we can come to our own conclusion whether it works for us or not.

      The problem with "investing" is we need at least 2 market cycles or about 10 years to really know whether it works for us.

      It's perfectly OK to say this is what I "believe" when we are work in progress.

      But I am pleasantly amused when I see people write e-books or posts with the undertones of this is what I "know"... When the writer has only started the journey for a few years.

      Even more interesting is when the writer has tried and failed at trading after 2 years, switched to "investing", and in less than 1 year has already full conviction to share with others "if you believe me, follow me!" Who is to say the same author would not change his mind again in another 2-3 years down the road?

      If we read Warren Buffet or Peter Lynch books when they only had 2-3 years of track record, the impact is not the same as when they had decades of track record right?

      This is not my intention to put other writers down; I live in a glass house myself.

      It's more a nudge to both writers and readers alike to be more aware on the difference between "this is what I believe" and "this is what I've learnt from my experience.

      Especially if you profess to be a bleeding heart who has the interest of your flock of sheep.

      The road to perdition is paved with good intentions.

      Delete
    2. i think the thought i had was still with me yesterday haha...

      i started trading futures, not stocks so from the very beginning i knew i was trading or more correctly speaking, gambling. i try in other areas like property and stocks but my habit cannot change, i trade my investment!

      ofcos i know the distinction between trading and investing, but right now, as long as i'm still in trading, i cannot invest due to money management matter. i will invest once the opportunity comes or i quit trading altogether which ever comes first.

      Delete
    3. coconut,

      Sometimes we help others and forget about ourselves...

      On hindsight, you could have followed the same advice you gave your brother ;)

      Now you would have doubled or tripled your capital, receive 5 or 6 figures in dividends annually :)

      Who says must quit trading altogether?

      Just trade 50% of your annual dividend for kopi money (trading to achieve); knowing that even if you bust out this account, in another 12 months, you are back as a "hao han"! How's that for immortality in the markets?

      Of course that's provided you don't kill the goose that lays the golden egg as in raiding your investments for trading.

      Delete
    4. Investing for a living and trading as hobby.

      Delete
    5. funny things is that all people i know personally who know a bit of my activities also advise me the same thing exactly! cos i also told them about my frustration on my investment.

      i appreciated it ofcos. usual advise is trade half and invest half la, stupid (why they must add that i don't know).

      but mind you there is a lot of different between my (kind of) trading vs the others who don't really trade for a living. money is always not enough in trading if you take risk control into consideration, there is no such thing as zero risk but i like to bring it down to as low as possible.

      at this moment i can close my eyes and execute my orders, no problem haha...

      Delete
    6. CW! i think i'm doing the opposite, trade for a living and invest for fun!

      ya, thats what i am doing right now haha.

      Delete
    7. smol, yes i'm proud of my brother but frankly i'm much more satisfy with myself. i won't change a thing.

      Delete
    8. coconut,

      You did not get my poke ;)

      The advice you gave your brother was the opposite of what you did in reality.

      Now the million dollar question is whether your brother was "lucky" or was your advice sound in the first place?

      Imagine if your brother had lost money and found you did not walk the talk yourself....

      That's what I meant by the road to perdition is paved with good intentions ;)

      So don't you dare claim credit for your brother's investing success!

      Delete
    9. give me a break!!

      hehe, i bought earlier than he did you know, made my first million ever!

      i sold mine since then and he did not sold a single one, thats where we parted out way.

      well done for him but what can i say about myself? my head is still swollen even now.

      Delete
    10. coconut,

      Eh! I thirsty...

      Help you let some air out of your swollen head you know?

      After a winning streak, we are our worst enemy :)

      Kick me back when I'm full of it OK?


      Delete
    11. you know my story right? my big loss in 2011? so i did pay back my share of being cocky!

      knn! i was thinking to hit a million every year, i though i was a million dollar trader already! still far away man.

      Delete
    12. coconut,

      Of course. That's why I believe you when you say you don't trade for "money".

      You and I have found out the hard way NOT TO put stupid money goals in our minds.

      We focus on the PROCESS or the JOY of trading. If ain't fun for us, why bother?

      Silly goals like $XXXX trading profits per month, or X% investment returns a year just messes us up. We can only take what the market is willing to give us.

      You were there when that guy with thick purse (with friends) preach passive index investing for OTHERS, but what does he do? Sell naked options for the joy of "passive" income every month.

      And lost $100 K. The main cause is not greed like he says, He FORCED the trades because his subconscious mind was willing himself to hit his self-imposed monthly money goals...

      Been there, done it :(

      We all have battle scars on our bodies. Traders with pristine bodies have either done plastic surgery or just great story tellers - tell others do this and that, but do another thing themselves.

      Delete
    13. Hmm.. both of you were at passive index investing event?

      Delete
    14. CW,

      No. I saw coconut commenting at the thick purse blog. So I knew coconut would know which post I am talking about.

      I long time no attend investing events liao. That phase is over for me.

      Delete
    15. so far for so many blog i visit, only fat blog talks real sense on trading.

      and he just mentioned he is hanging up his jacket. he know what risk management is and thats the title of his blog, risk management.

      when i mention i risk for every trade is something like 0.02% no one believe me i guess but i do many trades in a dayfor positioning, so the risk is muiltple higher.

      risk is something you cannot aga aga one, if we don't respect it, it will get us one day.

      Delete
    16. ofcos there are some good investment blog but they are usually quite boring one and it should be haha.

      Delete
    17. smol you are absolutely right about goal setting. unlike investment it can screw us big time!

      we can only get what the market will gives us base upon our system of trade, anything beyond that we are asking for trouble.

      Delete
    18. coconut,

      Shhhhhh.... You innocent like 6 year olds - say the first thing that comes to mind!

      I feel the lost too. Fat is one of the few ex-floor traders and professional prop traders who blogs.

      If he says trading not easy; I respect and tighten my stops even more.


      The rest of the trading blogs are mainly "educators" promoting their courses or subscription services. Everyone has to make a living; this I respect. I ex-snake oil salesman too mah!

      It's always Caveat Emptor - let consumers beware.

      Delete
    19. i have no real problem people selling their trades secret or opinion or ideas, its a free world, do what you want.

      i just dislike people sitting down and crying about being cheated. thats loser mentality. i don't like.

      i can just feel the frustartion that fat gone through, being a successful trader and out of job! i will die before i quit trading.

      i'm just the opposite of fat trading experience, i was not doing that great when we still have the floor trading before computerised trading, when everything goes on line, i'm like a fish found the water and very much suited for my kind of trading, system trading.

      Delete
    20. coconut,

      Floor traders had an edge over the investing public when they can see, feel, and smell the order flows in the trading pits. They front run the order flows; now HFT takes over that role more efficiently than humans can.

      It's not easy transitioning out from physical contact (pushing and shoving) trading to emotionless trading via multi-screens with keystrokes and competing on who has the fastest mouse clicks...

      One man's poison is another man's meat. You thrive in this environment in your dungeon, oh faceless dungeon master!

      Delete
  3. What is a trader and what is an investor?
    Can you define by the time factor, alone?
    i think there are "long-term" traders too just as they are short-term investors.
    Both can make money.

    ReplyDelete
    Replies
    1. temperament,

      Of course we can play with semantics.

      What you say is quite prevalent in reality. Some "investing" greats like Peter Lynch are great mid-term traders; looking at the amount he turn over his portfolio annually and do sector rotations. Some readers I've read in our favourite forum have mistakenly thought Peter Lynch was buy and hold... (reading books superficially)

      Again most retail "investors" in our Singapore financial blogosphere are what you say short-term investors - especially those that show their portfoliio movements. How else do we classify round trip trades within a year?

      What we "believe" and what we do may not always match.

      Throw away labelling and focus on having fun!


      What I hate is saying trading does not work, as if chanting investing is like selling durian sure bao jiak? As if on a long enough time frame, all will make money?

      Trading is like 100m sprinting - its for the best of the best and those born with the right attributes.

      The problem lie with us if we believe when others tell us we can be sub 10 secs 100m sprinters just by following some proven setups or software signals...

      Those that are trading or investing to escape are especially vulnerable.

      Delete
    2. or to make (tons of) money can be included also.

      interest or passion has to be above everything else including money. ask yourself, will you still do it if there is no money to be make?

      don't trade if the answer is no!

      Delete
    3. look at CW blog!

      everyday there are something written about the market, so boring, he must be a nut to do it day in and day out!

      well what can i say? thats passion.

      Delete
    4. coconut!!!

      Was that a poke to CW?

      You die!!!

      Delete
  4. Wow SMOL,

    This blogpost and the subsequent comments set me thinking. Why am I blogging when I know my analysis are not super, and perhaps even misleading?

    I started off as writing the crystallise my thoughts, why am I buying and selling? Initially, I thought some advertising fees would be nice as I do that. However, after I no longer care about the advertisement fees due to the wrong platform used (wordpress), I continue nontheless.

    Bluntly, why do I do that? Well, the part of crystallizing thoughts so hold true, but also for my vanity. I get a kick to see my stats booming from talking to myself, to a few hundred views whenever I posted (I know few hundreds is pathetic compared to renowned bloggers, but hey, I am easily contented, and the fact that someone is interested in what I write spurs me to go on)

    So it is for interest and ego, that I blog, I also realised that I do not really care about the words used, it could be the command of my language or more due to the fact that I am a straight talker. Seriously, have you not pointed it out, I do not think, "i believed" and "I experience" make so much of a difference.

    Actually, I think value investor = hold long long, is quite misleading. I know Warren hold long long, but because his analysis of company is correct. When we make a buy, we make numerous assumptions of what is expected of earnings, and the management and business including risks and cyclical movements that we should tahan, but many a times, we may make mistakes in our "thesis" so if the business is not what we are looking for, we exited. Hold long long even if we are convinced we make a wrong call is not value investing but silly investing.

    Hmmm.... What I am so defensive here? Maybe because I am guilty of several things you pointed out.. hahaha..

    ReplyDelete
    Replies
    1. sillyinvestor,

      I never believed those coy contestants when interviewed, say they never expected to come so far into the finals... Why you enter the contest in the first place?

      You stand out by being so refreshingly HONEST. Just look at your comment. And I am sure that's the reason why your readers and I read your blog ;)

      Once upon a time, I believed the Earth was flat when discussing about Hyflux preference shares. I gamely shared what I BELIEVED at a forum and other blogs.

      Then when reality showed me that the Earth was round, I SHARED MY HUMBLE PIE EATING EXPERIENCE. Who knew it turned out to be one of the top ten all time posts of my blog :(

      That's the difference.

      We authors can write whatever we want - embellish with dragons and phoenixes even better!

      The onus is on the readers themselves to think for themselves whether the differences matter ;)

      Delete
    2. Hmm.. Talking about hypocrisy, I think it's a more intense word for reframing.

      I remember working out guts for some external appraisal at work, some even at the expense of our core business. U know what, our leaders always sing thesame tune, we are not chasing for awards, we just want to know where we stand when we benchmark ourselves. Vomit* Merlion x2...

      Please la, I know u also bo bian, u also have higher up there bosses to Answer to, but not chasing awards, then why are we "creating" documents and coming our with system and processes 1 year before the appraisal. Puke puke

      Delete
    3. sillyinvestor,

      江湖 ah....

      Well, at least you got a free body detox ;)

      Delete
  5. "The onus is on the readers themselves to think for themselves whether the differences matter ;)"

    Unquote:-
    The difference does matters in what you say after people commented in your blog.
    i think it is important you can embrace and entertain all comments, appropriately.
    In this aspect, i should say you are excellent.
    You are doing very well even with boring old "temperamental man" and "cranky coconut". Who is really very smart. Imagine he says he is trading for the sake of his passions only and not for money.
    i must meet him to make him take an oath for saying it.
    Ha! Ha!

    ReplyDelete
    Replies
    1. temperament, we give coconut a break today.

      CW smiled at him, I poked him, and now you called him cranky...

      LOL!


      Time-out. It's group hug time!

      Let's form a circle and give coconut a big big hug :)

      Delete
  6. Hmm.. Let me ask a sensitive question, since we have 2 seasoned traders here.

    Before u make your first pot of gold, traders need leverage to work? No leverage, no trading?

    Traders all look at graphs? Really?

    Traders radar of companies? How big is it?? Otherwise how to know the flavor of the month?

    Just curious, if its trade secret, forget it.

    ReplyDelete
    Replies
    1. sillyinvestor,

      1) My Story - I made my first pot of silver working for others - just to be clear. No investing ego boosting stories or dragon-slaying trading tales to tell :(


      2) I never say I am a trader. I only proclaimed to be an equities man whore:

      http://singaporemanofleisure.blogspot.sg/2011/07/i-am-equities-man-whore.html

      My investments pay for my lifestyle choice, and swing trading pays for coffee and keeps me occupied while waiting for home-runs swings of the investing bat.


      3) I sometimes take a peek at charts, but strictly speaking, I am more a price action swing trader. Price, volume, time are the 3 basic building blocks of all technical schools. I stick with the basics. I watch the "goldfish" :)


      4) Now you know why people "pay" to get trading signals from "gurus" on flavour of the week punting ;)

      Most use Top Volume screenings to join in on these momentum plays of the week.

      But do note the danger as that's how syndicates "fake" the trading volumes by sucking in the momo (follow the herd momentum) crowd. Remember B.A.L?

      That's what you get for "free" from me. Got say like no say hor? If I knew, I would be out there selling my subscription service ;)


      5) I am more a macro guy. So my swing trading vehicles are SIMSCI, currencies, precious metals, etc. More futures based with 2 weeks to 3 months time frame.

      Equities swing trading I use more a 6-18 months time frame - buy the dip and sell the peak that sort of thing. Now, was that a trade or an investment?

      LOL!

      Delete
    2. Opps!

      Forgot about leverage.

      Let me reply indirectly.

      Most people forget property is fun and meaningful because of the 5 to 1 leverage.

      Try paying 100% in cash and all of sudden, the investment "returns" becomes a bit down to earth and BORING!

      Leverage - it all depends you after excitement or prefer boring is good.
      Whether you are in a hurry to achieve by Y datelines, or time is on your side :)

      Don't buy off-the-rack; always insist on tailor-made.

      Delete
  7. Hi SMOL,

    I managed to squeeze some time over the weekend to watch the 3 videos. Quite entertaining and enlightening. Thanks for sharing!

    I see very much of myself in Mike. Not so sure about trading style but more of his attitude. Cut the crap, just get work done. Make a mistake? Cut loss, reflect on it and move on! Keep trying harder, focus on the task. No need to socialise so much. Best to sit in a corner with no room for anyone else. If there is a neighbour, then try to ignore the neighbour. And what the **** was the commotion about? People, just get a hold of reality or get out of my sight! I'll pretend to be courteous by adding a 'please'. LOL~

    And with semantics, I also say why bother. If we can't get out of the game winning some money, there is only one name for us - 'losers'. If we win, by all means call ourselves whatever we like. Trader, investor, fund manager, hedge fund manager, financial expert, big time gambler, tikam genius, and what not? 欢喜就好!

    Cheers,
    Endrene


    ReplyDelete
    Replies
    1. Oh, I must clarify that the 'Mike' I'm referring to is that rookie trader in the video, not sillyinvestor. :)

      Delete
    2. Endrene,

      I can't thank you enough!!!

      It's typical of men to jump straight into the action without first watching the 3 videos....

      Foreplay, foreplay, foreplay!!!

      I shared these 3 videos because I like the 3 winners of this test:

      1) Aheed - Youth and top student (Raw talent triumphs experience!)

      2) Mike - Soldier, warrior, fighter. (Whiners, tree huggers begone!)

      3) Caroline - Single mum and entrepreneur. (Need I say more?)

      It's definitely not anyone and everyone!

      Imagine if our brokers fire us as clients if we do not meet the cut? Of course not!!! You can do it! Just top up your account. This time you unlucky.... Next time you sure win one! We believe in you! Yes you can!


      I like the way you spotted the mindset or attitude part that's paramount to surviving this vicious market no matter we call it trading or investing.

      When our Mind is still and clear, the Method and Money Management parts will come naturally - haute couture style.

      Unfortunately, most people presume the short-cut way of "buying" Method from off-the-rack is the way to go...

      Delete
    3. 3M's : Method, Money, and Mind.

      Method is the least important and yet many retail investors are paying to "Gurus" to source for "new" and "proven" methods.

      Less Analyzing. More Investing - CW8888

      It means that we should be focusing more on Money and Mind to achieve success over market cycles.


      Delete
    4. CW,

      Pigeon-holed retail "investors" don't know what they are missing when they proudly declare they don't read trading books... Dr Alexander Elder who?

      Yet if you ask most successful retail traders, they have read all the investing greats.

      It's like back in school. Majority stick with the recommended textbooks, Those few who read widely outside the syllabus stand out during class discussions and during job interviews ;)

      Delete

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