Sunday 19 February 2012

How Winning Traders Think

I won't spoil this interesting video that I found with my commentary. It's better you watch it yourself and reflect on your own. 

We are all different ;)

Warning: The below video takes about 21 minutes. And may be more suitable for traders with some real money trading experience.

It's better to wait when you are not pressed for time and in a receptive mood before watching it:

How Winning Traders Think

For investors, if you can put down your pride and prejudice for a moment, you may discover some takeaways that are transferable to the realm of longer time frame investing.

Especially if you don't think in "compartments" ;)

It would be great if you are willing to share your reflections. I need someone to bounce my own reflections with!


  1. money is not important for me to live, without trading i still can survive with minimum money.

    trading is just a game and not a job or career.

    1. oh ya one more, trading and living are the same thing.

  2. as for the video, i have no clue what he is talking about.

    1. OK Coconut,

      That's honest!

      I do not have a buddy like you to keep me grounded. So this video is like your buddy drilling some sense back into me :)

      The content is not new; but it's a great reminder to me on some of the things I know but never implement...

      Especially now I am moving into the realm of "full-time" speculation.

      (I prefer the word speculation over investing/trading)

    2. "I do not have a buddy like you to keep me grounded"

      yes you have, lots of them. "when the student is ready, the teacher will appear". everything and everyone becomes your teacher.

  3. you are going full time? what is your goal or objectives for doing that may i know?

    that video sucks. too much to remember. trading has to be stress free as possible. the more tress and worry you have, both in trading and most important in your life, the least you are going to make any money.

    1. LOL, the video too basic for you then.

      I now very free; need a bit of intellectual challenge.

      Have thought of buying a franchise - but that's helping others to realise their dreams; not mine...

      Have thought of collecting rent from property. But what's the difference from me surviving on equities dividend now?

      I am thinking of "appointing" myself to be a hedge fund manager (don't laugh).

      I've no clue what I am doing; but I guess that's part of the fun! I learn by stumbling along - just like IKEA (or at least when the founder was in charge. Professional managers will never admit they've no clue too)!

      I need to learn and expand.

  4. many traders think trading is like going to school to learn, or treat it like doing business, or a professional sport.

    trading or speculation is unlike any of them.

    the only thing i can think of that is really close to it is like a animal trying to survive in the wild.

    but unfortunately we human are not quite like animal in the wild. we developed a wrong sense of security and morality in our society that will be an obsticle to our trading.

    what are these wrong perception? we have to figure it out ourself, cannot be discuss in open.

    1. I respect.

      Somethings we have to figure ourselves; not to be discussed in the open.

  5. SMOL, you plan to trade for a living?

    1. Hello CW8888,

      I'm "retired" and don't have to trade for a living.

      But I discover I am still "speculating" like when I have a day job. Not used to the transition yet. Still holiday mood.

      I need to change my mindset so that I can take advantage of this edge I have over other traders: I don't have to "force" a trade ;)

  6. Hey SMOL,

    Why dont you consider to be a remiser? you get paid and you need to trade daily!

    1. Can join Philips as pro trader on own margin account. low commission and free live data access.

    2. Guru,

      No, I cannot multitask. I would put myself first before my clients - back to my salesman days...

      I just need to find a routine - a balance between fun and structure.

      Like today. I just went from Queenstown to Joo Chiat Place to have Fei Fei wanton noodles for breakfast. Then went to Changi Village to have Nasir Lemak lunch.

      Followed by a stroll at the Changi Beach walk. It's nice and carefree. But I can't be doing it everyday!

      I guess I am having what retirees experience:
      work withdrawal syndrome!? What the ...!

      No worries! I will figure it out ;)

    3. CW8888,

      Yes, I've attended the Philips protrader recruitment talk 7 years ago before my leaving to Shanghai.

      10 times leverage and 0.1% commission.

      But we have to generate at least $3,000 worth of commission per month to maintain the seat (if I remembered it correctly). You do the math. How many transactions!?

      Not suitable for my style. I am more a 2 to 3 swing "trades" a year kind of swing trader. One trade can be a series of pyramid up transactions like the C&O example.

      I am already "full-time" by default. When I say full-time, I don't mean go to a trading room or trade from home from 9 t o 5.

      I am more talking about my psychological frame of mind.

  7. Hi SMOL,

    I watched the video. I think what he said about taking bigger risk once you have proven that you can make good profits consistently. This is the same as what Dr Elder had mentioned in his book, which is something that I really subscribed to. This is quite a business type of approach towards viewing trading for a living - only when you prove that you are capable of earning profits would you 'expand' your business by 'hiring another employer', i.e. taking more positions. It's quite a refresher :)

    Thanks for the video link!

    1. Hey la papillion!

      I was focusing on the same point too!!!

      That's how I got whacked during the dot-com crash the last time, despite having made good profits during the run-up...

      How silly. I made $2 from $10; if I increased my position size to $50, I would make... If only trading is all about straight line extrapolation! LOL!

      It's this "business type" approach I am seeking. I'm still stuck in the "hobby" or "interest" mindset.

      I got financially free mainly through my day job; speculation was more of a "booster". Now a bit lost without my day job...

    2. it take many years to prove that you are consistent profitable. it can be very long. i made 3 continue years of winning and still end up losing all. man trading!

      "buying a franchise"? again you prove to me you are doing for the sack of doing things! you are at dangerous territory i'll be very honest.

      "hedge fund manager"? i didn't laugh! thats what you should be thinking and not just trevel around like a ...

    3. haha, thats what i'll be doing if i'm you. i'm not saying what you should be doing.

      trading is very very tough!!!! don't do it until you die die must do whatever the consequeses. no kidding. most people will be very regret when all is too late. until then they think they have endless supply of money.

  8. "stroll at the Changi Beach walk"? i suggest you do nothing until you finally know exactly what you want before you start doing it especially in regards to trading or investing.

    oh i mean thats what i'll be doing and keep all my powder dry until i know exactly what i want to do.

    1. by the way, trading the unknown markets conditions is totally different from you are not sure (unknown) to what you want to do. the market is totally unpredictable, but that does not apply to you.

  9. Hi SMOL,

    Hmm, I don't think you're going to be a full time trader right? It just doesn't make sense to risk what you have for what you don't need, so I think there's easier ways to make money. Still, if you want to try being a full time trader, you don't have a better headstart than others. Why? Because I think you have already reached FF. Trading to reach FF is very different, psychologically, from trading after reaching FF. I think you don't have to take trades just to hit something. It's all just extra 'play' money - again, money that you don't need.

    Better to just play around in the stock market, haha :)

    1. my wife think that the stock market is there for her to make money, so as many others.

    2. LP,

      I've been a little "loose" with my words, but it's also very interesting that most automatically associate full-time "speculation" with trading!? LOL!

      With 2 to 3 swing trades (or positions to be precise) a year, I believe I "trade" less than most who call themselves "investors". Ha ha!

      Again you have hit the nail on the head! I don't have to trade for a living, and that's very liberating. Must not let this advantage go idle ;)

      I think I've misled or confuse with my poor choice of "full-time". I am missing the "structure" and "bearings" that I've took from granted from my day job.

      Hence the need to get back into the "full-time" frame of mind, even though I am not doing anything physically.

      Huh? I think I am beginning to talk like Coconut!

      Words failed me.


    3. haha, luckily i did not work full time except first few years after NS. you will becomes coconut very soon.

      what full time part time? got money eat KFC, no money eat bread, simple.

    4. Idol! (Ou xiang!)

      It took me 26 years (minus 2 years NS) from 16 to reach here at 44.

      I remembered you took the entrepreneur route and owned a few businesses before taking up trading. Impressed!

      Ha ha! Your KFC and bread analogy power!

      I got entangled by my own words... Thank you Coconut!

      If everything else is crystal clear, then I must be the stain!?

      My window still dirty. Good good.

    5. chicken feet biz. all partnership. total investment not exceed 100k. instead of managing the biz, i go m'sia to play golf haha.

  10. Mother!!!

    There's a scary coconut outside! Boo hoo hoo, sob, sob.


    But seriously, I appreciate your banter. It keeps me off the rocks. I still have to sail my little sail-boat for the next 40 plus years!

    I send in my scouts before committing my main body. If my scouts don't return, you'll never see a faster general when it comes to "strategic retreat"! (Run first; ask questions later)

    Good advice! I am not doing anything except thinking out loud here. And I do more than walking during my walks... Most of "koo koo" ideas at work came from such walks ;)

  11. man i still don't understand FF, maybe being a speculator most my life. how to be FF i don't know. maybe stop trading altogether and never tough it again #$@%^ haha.

    don't worry smol, i just show off my knowledge and sharing some experience. don't take it hard. do what you need to do. its not that bad. man i missing a lot from this bull run #@$%$%$! by the way have you cut your SIMSCI? whats your target?

    1. Coconut,

      I hedged (shorted) the SIMSCI at 339 (March contract) when STI was around 2950.

      No target. My plan was to unwind this hedge when my 3 core holdings have gone ex-dividend in March. It's a non-directional trade.

      I've excluded myself from further upside of STI; but got downside protection against unexpected shocks (Greece messy default, Israel attack Iran, etc)

      What I didn't expect was to get a buy-out offer for Nera Telecoms at 45 cents (25% gain). It's like having a put-option. Now I'm over-hedged. #%$&%#^&(! LOL!

      I practicing buying "protection" like hedge funds. Learn by doing.

    2. ???

      i don't think thats what the hedge fun are doing.

    3. Coconut,

      Financially free is a stepping stone for my ultimate goal to be spiritually free. But that's early days! Art and philosophy work better on a full stomach. Or maybe not!?

      To me, FF is not about the dollar amount. It's about options or choices. The ability to choose and walk away - if needed.

      If the equities market is confusing, I can walk away and play precious metals or currencies. If still confused, I go for a holiday! There will always be a bull market somewhere (stolen with pride from you!)


    4. apple pear and orange, so many choices. what to eat?

      i don't need choices, i know what i want! pear, no pear, apple, no pear and apple, orange also can.

      the more choices you have, the least option (freedom) you got.

    5. you know why now you are lost, don't know what to do? you have too many choices (with your money? haha)

      but i guess you had found what you wanted to do (with your money).

      i don't believe in FF or freedom. no such thing. the best we can do is to know exactly what and how we want to live.

    6. one single word, flexibility (in your mind). as what bruce lee said, "be water my friend"

      we stop here.

  12. "i don't believe in FF or freedom. no such thing. the best we can do is to know exactly what and how we want to live."

    Hi coconut, i think(only think)i understand you a bit more by what you said above. i am always willing to learn some things "new & original, from anyone." To know what you want exactly in life is very powerful. You will find ways and means to achieve it. i have had a real life experience.
    Ya? i believe i have no choice but to move my money around and hopefully can leave a legacy behind for my only son. What's FF or Freedom?

    And to me, we are all stock's kind or another. Even WB traded when companies didn't turn out to his liking. NO???

  13. ya everyone is a speculator whether like it or not.

    to know what you really want and not what other thinks you should have, first is to find out who you really are. to know, admit and most important to love whoever you are.

    in this case we will know the "right place" where we should exist so that we can live to our fullest without having unrealistic dream or fantasic.

    1. my daughter admit to me that she is damn lazy, like me. i say to her, what's wrong with it?

      she is a day dreamer (thinker) like me. she (her brain) is not lazy as far as i'm concern.

    2. If I introduce Temperament's son to Coconut's daughter, I wonder will I get an ang pao?

      Boy with legacy should match with dream girl!

    3. not dream girl! girl like to day dream haha.

  14. Hi SMOL,
    What do you Exactly want now with your life? You know you can be Powderful too!

    1. Temperament,

      I am happy with my life so far.

      I do not know EXACTLY what I want (this is where I differ from Coconut). But I'll know when I know.

      I have some vague and broad plans for the future, but I avoid the specifics. This way, I can also enjoy the "surprises" and "chance encounters" along the way.

    2. haha smol, i know you are sincere guy. not knowing what to do with planty of money on hand (i assume) is very dangerous!!

      same advice, if you don't know what you want, the best is to do nothing until you find your goal or opportunity in life.

      and if you are happy with your life right now, why change? why you have to find something to do for the sack of doing like so many others.

      if you want to be a "successful" speculator, you have to learn not to do anything when you are not too sure. only when you are dead sure will you pound! got it?

    3. dead sure means you will want it without regrets. and if you continue to seek things to do without knowing what you really want, you will confused youself and will not be able to see clearly when opportuity really arises. becos every changes you will percieve as opportunities.

      do it when you have to do it, not when you want to do it.

    4. Hand placed on my heart.

      Closing my eyes; a slight bow.

  15. Hi SMOL,

    Remind me next time not to subscribe to your comments....Orchard road not flooded now, but my email inbox is!!


    1. LOL!

      Sorli lah!

      That's why I never subscribe to comments.

      Don't say me, compared to your's and AK's blog, mine is only "ponding" ;)


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