Sunday, 14 December 2014
A Good Year, A Great Trading Year
Last year, I mentioned to coconut in the comments that I doubled my futures trading account for 2013.
This year 2014, I tripled it.
Yup, for those good in math, you will immediately realise I've got a 6 bagger in 2 years.
A small speculative trading account has turned into a respectable size. (I only wished my investment account had the same performance!)
Did I planned for it? Was it the result of my goal setting?
If you are asking these questions, you may want to pause and reflect got logic or not?
I can think of 2 possible explanations:
1. Luck.
There are losing streaks, and there are winning streaks. I could just happen to be in a winning streak now. Better enjoy it while it last!
2. Sharpening the saw
My secondary 2 Geography teacher Mdm Foo motivated us "slower" students by saying:
"Others study 10 minutes they understand, you need 7 hours to understand - so be it! Once you understand, there's no difference."
I never doubled or tripled my trading account when I had a day job. I guess I am not as brilliant as those who just spend 10 minutes a day can make money trading part-time already...
Maybe spending more time in improving my trading craftsmanshiip - the hands on kind as in improving my entries and exits - finally paid off?
You "hao lian" show-off lah!
Maybe. Mouth in your face, you can say whatever you want.
For the past 3 years, when strangers ask what I do, I would say I am taking a sabbatical from full time work.
From today onwards, I'll say I am a Trader.
I trade to achieve; I invest in order not to lose.
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Hi SMOL,
ReplyDeleteCongrats on your achievement. I believe many people, including one of my close friends, aspire to be a full time trader.
You must be having many green eyes staring at you. Hehe.
S-Reit System Investor,
DeleteThank you.
There's nothing to envy as I "bought" this full-time trading job for myself at 45.
I "cheated".
It would have been more enviable if I got this track record in my 20s and I am able to parlay it to get recruited as a full-time prop trader by institutions ;)
Anyone can buy a trading "job" by trading his/her own account; but to get someone to PAY us to trade for them, that's another league all together!
Having said that, I am treating trading not as a "hobby" like most retail traders.
It's a craft.
Hi SMOL,
ReplyDeleteWah seh, good luck or good skill, may it continue for as long as possible :) May 2015 be as fruitful as this year ;)
Thanks LP!
DeleteIt's more luck than skill at the moment ;)
And I'm not looking the gift horse in the mouth!
I'll take whatever the markets are willing to give me.
Here's to a fun filled year for the both of us!
Glad you are having fun and being energised for 2015 :)
Hi SMOL
ReplyDeleteNext time salesmen advertised $10,000 in 10 minutes, you advertize $10,000 in 7 hours. Probably get less attention but more unique in the eyes of the public. Gotta be different, maybe this will work somehow ;) hahaha Just kidding.
Maybe it's not luck anymore after 7 hours, it's skill.
B,
DeleteIt's 13 years of part-time "hobbyist" trading and 2 years of full-time craftsmanship to be exact ;)
On stage 10 minutes; backstage 10 years toil and training.
That's why I need to give myself a pat on the back in this post (shameless!). There's no one else in my nano hedge fund office to give me a compliment :(
Hedge fund manager is me.
Buy side analyst is me.
Trader is me.
Receptionist also me!
LOL!
You can start selling your Method for course fee. How to triple your wealth in three years?
ReplyDeleteLOL!
CW,
DeleteThere's a reason why I didn't use "6 bagger in 2 years" or Tripling my trading account for 2015" for my post title.
I think that will attract more pageviews ;)
But that's not what I want. By using the post title I've chosen, I hope it's the regular readers who knew me and what I stand for that come to minimise the damage to wide-eyed newbies.
Besides a pat on the back for myself, regular readers may spot there's a little self-mockery here too - you guys know how I feel about percentages ;)
Buy 1 dollar Toto quick-pick and win $10 is also a 10 bagger what! LOL!
The day when my trading account can match my investment account in dollars, then we can start talking!
In case there are new readers reading here, I'll strongly recommend you read this old post of mine:
http://singaporemanofleisure.blogspot.sg/2011/09/investing-versus-trading-nah-ask-why.html
Those giving seminars and courses are not "trading for a living". They are running a BUSINESS.
Those of you who are fans of Rich Dad Poor Dad, and you didn't spot the difference, see that tree over there?
Yup. You can go bang your head there!
See the difference between reading and application?
Trading for a living is under the S quadrant. Those who want passive income please move to the quadrants to the right. Take your pick between B or I.
Own time own target :)
SMol,
ReplyDeleteIf I can get to choose consistent luck or skills.
I choose luck.
Skills improve luck.
We need luck nonetheless.
Glad that u have a good year. Next time others ask u what u are doing. Just tell them a millionaire in the making. LOL
Sillyinvestor,
DeleteThanks!
Eh... I think I'm the guy next door...
I am not trading to seek financial freedom. That' why I say I invest not to lose.
The investment part pays for my lifestyle. Weekend job pays for kopi and keeps me in touch with people - trading at home is damn lonely!
Trading is a vehicle to help me in my Zen (or spiritual since I am agnostic) cultivation.
Japanese Zen monks have their archery, Shaolin Chan monks have their Kung Fu, I have my trading as the outward manifestation of this training of the Mind.
Trading or investing is all about our mental states.
The monks and u??
DeleteThe monks have 出世cultivation
You cultivate in red dusk LOL.
Both lead to enlightenment, depending on wisdom on individuals
Sillyinvestor,
DeleteBefore I finally settled on Singapore Man of Leisure, I did toyed with the idea of calling myself the Flower Monk - 花和尚.
Decided against it since I'm not a Buddhist.
SMOL,
ReplyDeleteCongratulations on your 6 baggers over 2 years from your futures trading account.
I would say you are presently an exceptionally profitable futures trader with an amazing 300% returns in 2014.
Hedge funds return an average 2% this year, I read somewhere.
Algorithmic HFTs, like Virtu Financial, with its 99.99% win percentage would rank below your performance.
Many self employed retail futures traders have quit in the last two years. This means your performance is way above most experienced full time futures traders.
Did you reveal the size of your futures trading account in some other posts in your blog?
Jac Lau,
DeleteThank you!
My futures account is smaller than yours to keep things in perspective ;)
Percentages are frequently used as part of smoke and mirror:
http://singaporemanofleisure.blogspot.sg/2011/05/i-dont-want-percentages-i-want-money.html
That's why this post is part self-mockery, part cheerleading to myself.
If I'm in my 20s, I would be cold-calling all the prop houses and hedge funds for a junior trading position or exploring the managed accounts route with brokerages.
Last year, when Fat gave one of his accounts to his old trading friend from the SIMEX days to trade, I almost wanted to jump in to make Fat an offer... Imagine the hubris on my part!!!???
2014 is the year when volatility and bigger trends finally came back to the currencies market. I just happened to rode the short EUR/USD train ride early May at 1.39 after Draghi's "opened to unconventional measures" Q&A session. Rollover and add to winning position. Repeat.
I don't like to write about position or portfolio specifics in my posts. I am more into discussing and bantering with readers on matters of the mind and the heart.
Only in the comments do I reveal a bit more with traders like coconut. And now with you ;)
For eg, my answer to you that my account is smaller than yours will only be understood by you, me, and some regular readers who have read what you wrote previously.
Casual readers don't read the comments sections. I'll do less damage this way as there's nothing more dangerous than to read blog posts out of context without a shared background and similar level of understanding.
SMOL,
ReplyDeleteCongrats on your new job. As with any friends with new jobs, I always envy.
(Was it you who post about 3 stages of wealth: Envy, Neutral, Happy?)
Anyway, good for you. In the end, size does matter eh?
ckw-I99,
DeleteThanks! I need all the well wishes I can get!
No, It wasn't I who wrote that post.
You bet! Size does matter.
It worked both ways.
Having a small speculative futures account relative to my total investment portfolio allows me the steady hands and peace of mind to leverage up to 10:1 trading the futures.
Hi SMOL!
ReplyDeleteWah, nice! So now can officially called you a trader liao! lol Anyway, congrats to your achievement.
Thanks Richard!
DeleteI see you having fun in Penang!
Life is good.
wow congrates!
ReplyDeletejust came down from genting, no la i didn't went into the casino ofcos.
like jack lau says, its not easy to make money trading these days, you done us proud le!
you know what did you gain the most? no not the money, its the confident!!! but keep them in check.
congrate again.
by the way, very disappointed with genting highland, the whole place is under construction and i have no place to go and nothing to do.
Deletei can tell you right now that the main reason you done well is becos you don't need the money in your trading account for a living, not a bit.
Deleteand you will have a good chance of living out from your trading account!
coconut,
DeleteExactly!
I've tried hinting it a bit in my comments and I am glad you have picked up my same reflection when I discover I had tripled my account for the year!?
You never trade with "scared money".
In the past, I would have taken my profits too early or scared to add to winning positions.
Not this time.
How often can I catch a nice long trending market? Now that I found one, I did a full court press.
Congrats SMOL! Are you going to "reward" yourself by increasing the resources you allocate to the trading account next year?
ReplyDeleteYou mentioned something about how trading aids in your spirituality. This is extremely interesting. Would you care to elaborate on this, perhaps in a future post?
RetailTrader,
DeleteThanks!
Ah! I see you trade the US indexes ;)
1. Hmm... My trading account has just tripled. Why do I need to add new money to it? I know what you are after, but isn't that how most retail traders bust out their accounts?
On the contrary, I'm not changing my trading position size. If I get carried away and triple my position sizes next year, that's the quickest way to give back my profits and then some...
My advantage is I am not trading to escape. No goals; no datelines.
Time is on my side ;)
2. Sure! No problem. I'll put a note to share more about Trading and Zen. Just as long as it's topics about trading psychology or risk management, I am game :)
Once, when I was starting out, I had a few good sessions in a row. A senior came and asked how I did, and I told him I had a pretty good run, and I "got lucky". He looked at me and said in a serious tone: Don't ever discount your trading success as luck. If you are sitting in front of the market working orders and scalping diligently, when you win, it is not luck. You are sacrificing time and taking risk. When it pays off, it is hard work.
ReplyDeleteSMOL, you're in the big leagues now. 6x return is phenomenal. Fucking good work.
ladykiller,
DeleteAfter reading your latest hilarious tirade, I had to check whether I was being a Cute Uncle Nice Toupee, or an unwiped post-dump chrysanthemum... LOL!
Phew! Lucky I got add in the Sharpening the Saw bit ;)
Thanks!
The Lucky bit is humility and for those who have no idea what we have gone through to learn our craft. No point in saying too much as they won't understand without going through it themselves.
The Sharpening the Saw bit is an acknowledgement to the trading giants whose shoulders I stand on. Funny thing is that those giants I studied never did their trading on the beach, woke up at ungodly hours to prepare for their trading days, hardly took a vacation, and worked longer hours than others!?
10 minutes trading a day anyone?
Well mate when you acknowledge trading as a craft, you're one of us! Neither a chau-hai nor a koke-fah. You're legit, don't worry about it!
Deletewah lau!!!
ReplyDeletemy semcorp shot up! sell sell sell!! haha
3.20, 15 lots haha...
Deletewhat happen??!!
i bought them last week, suppose is for keeps but 10% in a day!!
Deletewhat can i do? sell them ofcos.
coconut,
DeleteWTI went back up to 55?
Lucky Semcorp "only" went up by 1.5%...
Keppel shot up by 3%.
And Semcorp Marine? Now that's what I call a short squeese! Up 9.3%!!!
Count your lucky stars!
Good for you!
DeleteI thought you shorted...
:)
yap, should have went short instead but i'm too busy with other trades and its a good thing, market is alive, its alive!
Deletei keep thinking, whats the best way to invest in cheap oil? buy the WTI futures, semcorp, the big oil producer, what?
Deletei'm still thinking.
someone on CNBC suggested buying the bond of oil related company, they had been crash! but not for me, i'm not that sophsicated.
DeleteCan also short high yield junk bonds or short banks as a proxy for lower oil price ;)
Deletehow about buying the russia.
Deletecoconut,
DeleteDate a Material Girl!
They "eat oil heavy heavy".
With cheap oil, you can afford 2 ;)
i was thinking of my dream car for a long long time (i'm a sucker for cars) and now its time haha, its a M6 convertable. ya may be i should invest in it since oil is cheap haha...
Deletecoconut,
DeleteNow you're talking!
That's a pick chicks up car ;)
don't say that! now my OC woun't approve already la!
Deletetemperament, you and i hit the button at the same time!
ReplyDeletetemperament,
ReplyDeleteI am the few lao pa pa men who still use handkerchiefs...
Must wash, rinse, and repeat use mah!
That's how ;)
coconut,
ReplyDeleteYou really have affinity to numbers...
Nobody reads the date stamp one except you!?
actually you are damn right, ever since young i look at patterns already or should i say sensitive to it. you know my IQ?!
ReplyDeletecoconut,
ReplyDelete118?
Hi SMOL,
ReplyDeleteCongrats. No horse run in this horse year!
So what have you done to pamper yourself with your six bagger success?
Rolf,
Delete平常心
I will be working this Christmas and New Year ;)
Physical work can be therapeutic and a great form of meditation practice. That's how I am pampering myself!
Hi SMOL,
DeleteReason why I asking is it seems like for me, I am becoming emotionless to my portfolio. Just seems like another bank that I throw a part of my income into. Even if portfolio achieve good wins, I do not sell and pamper myself with materials! Most of the time just gazing and fantasizing about its size growing but to no actual effect! Can be an illness, an obsession or if it has just become part of our life?
Rolf,
DeleteAwareness of how we are doing is one thing; obsessive tracking and measuring is another.
We don't drive by constantly looking at the odometer ;)
Wishing you a fun-filled day today and everyday!
Hi SMOL,
ReplyDeleteCongratulations on your great year.
It has been a long long time since I made my first comment in blogosphere. I cannot help but stop by to drop a congratulatory note on hearing a great achievement from a fellow blogger.
I recently expanded out of Singapore stock market. My part-time job now takes up so much of my spare time nowadays so I have decided to cut off blogging. Unfortunately, for all the hard work put in, my performance is dismal compared to yours. Anyway, I am not greedy and still happy with my inferior performance:) Wow, 6-bagger within 2 years! You blow the living daylights out of even the great hedge fund managers.
I also do some trading. Maybe it is due to my limitation. My problem with trading is that it is not scalable. When the amount of money managed gets too large, it gets harder to move in and out. Slippage cost grows. Effort grows. Time put in grows. I find that as the investment fund size grows, one has to move more towards longer-term trading. May I ask whether you face the same problem, particularly when your trading account has grown 6 times? How do you solve it?
Hope to hear even better news from you at the end of 2015. Quadrupling of account?
hyom hyom,
DeleteWow! Welcome back! It's been a long time...
Thanks! I got lucky that's all ;)
Let's not fall into the trap of comparing with others; I prefer that we walk our own paths ;)
As for your question, I think size starts to impact performance only in the billion dollars range. A fund size of a few hundred millions would be ideal for most fund managers, But then, what do I know? I'm only a nano retail trader ;)
A bigger fund size triumphs a small account in terms of transaction costs - can negotiate with broker for better rates; better service/platform support, priority to get research reports, etc.
Whether we trade $100 K or $10K, the effort and time involved is the same. It's just adding of zeroes to the order size. All it takes is still some typing and one mouse click to place an order.
The limitation I can think of is that we can only trade in liquid markets or stock counters only.
Even though my trading account is now 6 times what I've started, I've only doubled my trading size per trade. I am still learning to get comfortable to trade with the bigger position size. So in percentage terms, my returns per trade is now lesser in relation to my trading account than when I started :(
I don't think in percentage ;)
It's fun when the profits doubled! But when the losses are doubled in terms of real money, it's not that easy to stomach even though it's the same in percentages...
Quadrupling? I don't even think about it. In fact I don't wish to fall into the goal setting trap. I rather focus on improving my buying and selling - processes that I can control.
That's how I achieved my 6 baggers. Improving my entries and exits. Not setting any artificial goals that I've no control over in reality.
My own investment funds is nothing near a billion and I already find liquidity problems. I think it is because value stocks in Singapore tend to be illiquid and liquidity has dropped in the Singapore market recently. I guess high liquidity is the advantage of trading in futures and forex which you are doing now. Cowards like me shun leveraged instruments like forex. The Swiss Franc fallout in January made me so relieved that I did not touch Forex. How to cut loss when the currency can be leveraged 50 to 1 and it gapped down by double-digit percentage? I think you are really good to make money from forex but I am not going to follow you:) At least not in the foreseeable future.
DeleteMay I ask what sort of futures do you trade? Stock indices, commodities or currencies? Why that choice?
hyom hyom,
DeleteAh! Your style requires lots of patience to slowly build up a core position. Especially you are into buying unloved and out-of-season stocks ;)
I'm now mostly into forex futures - the G10 currencies. I use the Simsci to hedge my stock portfolio, while I dabble once in a while with precious metals too.
I'm more a macro top down guy. Forex suit me as I can express my macro views quickly,
China slowdown and lower coal prices? Short AUD!
WTI oil retrace back to $80? Long CAD!
Fed will raise interest rates by this year? Long USD!
Lower milk prices? Short NZD!
World coming apart? Long Gold!
As you can see, I've a rather kindergarten approach to macro top down trading!
LOL!
If I just stick to unloved and out-of-season stocks, the liquidity problems will be even worse. I actually do not mind buying hot stocks as long as they have the liquidity to allow me to get the hell out the moment my "spider sense" tells me I am in danger. This is the advantage of being a small, not-so-rich retail investor.
DeleteWhat I avoid is leverage. However, this is also why I think you deserve to get rich faster while I have to be contented with getting rich slower. Fortunately, I am compensated with lower risk. Even the most experienced, most disciplined trader who follows his cut-loss rule without fail all the time cannot escape devastation if he happens to be on the wrong side of CHF during January 2015. How to react to split-second huge gap-up in CHF? Even the computer will have problems. Saxo clients should appreciate it.
I like your approach. You make it sound so simple. Go with your guts on macro development but stay disciplined with risk management rules. The odds are that you will make it given your existing track record. I would make a bet on you if I could. Mainly because you are a Man of Leisure and does not play with "nervous money". I think it is wise of you to keep the leveraged trading account smaller than your investment account even though the trading account yields much higher gain. How else do you keep the trading account less vulnerable to fear?
hyom hyom,
DeleteHow much value is there if the stock we are eying appears on the top 30 volume list? That's for momentum and growth "investors" - they buy relative strength.
Value is synonymous with unloved and out-of-season ;)
Trend followers like me generally don't consider ourselves as smarter than the market. We keep it simple. Ride the trend and if the trend reverses, get out!
We don't say things like market overbought or oversold - that would imply we know more than the market ;)
Risk management is everything. We can't play if we have no chips left :(