Friday 15 January 2016

What do Traders fear the most?

What do Traders fear the most?

You answer first then scroll down to see if yours is the same as mine.

A flat market.


  1. haha...same. Must be busy for you past week.

    1. LKH,


      Those who sell/write options may profit from pocketing the decay in a flat market.

      But that's not trading; that's selling insurance ;)

    2. I say one.

      You want to share what's on your mind?

  2. Hi SMOL,

    That was what I thought too...flat market, no volatility, trading halt (less applicable to me since there are other markets)...

    1. Joyce,

      That's why I so impressed with your choice of hunting grounds!

      A bit surprised some retail investors are quite big daddy patriotic - one equity class and one narrow country focus.

      Owning 50 SGX stocks is considered "diversified"? That's an all-in bet no?

      And I thought big daddy encouraging our businesses and young graduates to expand regionally and internationally - grow our 2nd wing.

  3. Replies
    1. flat market is ok like today market condition. it allows you to take a break, check your positions, cutting your losses/positions, better to do it when market is flat than volatile.

    2. below are my most fear

      1, not enough margin/margin call (this can be caused by many reasons)

      2, saturday/sunday and public holidays,

      3, uncontrolable gains/losses,

      4, losing eye sight,

      5, computer crash,

      on and on and on........

    3. oh flat market is not on the list, not even close.

    4. coconut,


      I guess you intraday traders can make money off a 5 to 7 tick move so a "flat" market means different to you.

      You definitely enjoy trading! What an ikigai!

      I cannot trade 7 days a week. I quite like my existing routine where 5 days I exercise my mind, 2 days weekend I switch off.

      Honest flat market you never complain no movement in the stocks you trade?

      Even spreaders also need some movement no?

    5. market movement is like the weather, cannot be always the same. flat market can be boring if its prolong and even becomes deadly if impatience.

      but its just part of trading, nothing to really worry about.

  4. bull earn money
    bear earn money
    pigs get slaughtered

    staying sideline is a position too :)

    1. Jimmy,

      Standing on the sidelines is definitely a position!

      I like trending markets, but I hate crazy volatile markets where today goes up, tomorrow goes down kind.

      Days like that I tuck myself under my blanket and suck my thumb. Wait till dust has settle then I come out to look see look see.

      This is one of the key advantage a retail investor has over the professional money manager - we can go 100% cash while he can't.

  5. SMOL

    My answer is a cha cha market.

    Move up a bit, low a bit but at the same spot n the end

    But cha cha answer comes form you

    1. Sillyinvestor,

      Yup, that I dislike but I don't fear. I can always stay on the sidelines. I have control as in to participate or not.

      Flat market I fear as there's little I can do. Like stuck in a yacht in the middle of the ocean with no wind :(

  6. Market too flat or market too volatile both also no good. Don't know where to put the stop order right?

    1. Rainbow girl,

      No. When using stops, I have my own rules where to put them. That's not the problem.

      Problem is getting stopped out during whiplash in a volatile and choppy market :(

      In a flat market, I don't think my stops will be triggered. The bigger problem my profit target won't be either!


    2. It's all relativity. In a volatile market fluctuations are big, so stop too near get whipped out.
      In a flat market, stop too far... erm wait... looks like staying out altogether is the best choice. :S

  7. temperament,

    Yes, a short squeeze can be terrifying. That's one of the many hazards of shorting.

    Last year, the EUR/CHF squeeze is one of those events that led to quite a few forex brokers to go bankrupt or be bought over.

    I'll put them under the same category of risks like Black Monday events or flash crashes.

    To me, a flat market is more fearful as I can't trade... And time lost cannot be recovered :(

  8. right on temperament!! you nail it!

    when short squeeze you itterally will run out of margin and thats the purpose of it. thats also the number 1 killer for traders, there are many number 1 killer for traders by the way haha....

  9. and the incident you talk about is the famous VW short squeeze during 2008/9 crises.

  10. smol, you think trading is like selling furnitures? time lost? profit lost? wasting your presure time so you can do other more interesting things in life like watching star wars haha....

  11. i think many traders are not really ready to be traders, mentally they are not ready and expect some kind of rewards or payday everytime.

    i say when you have to eat grass when you encounter a prolong losing steak and your margin getting smaller and you have no other incomes, i really mean eating grass! or you prefer, bread also can for your meal.

    will you?

  12. .. when the internet is down, cannot do anything. Oops, probably not what you're asking for!

    1. Kevin,

      No, that's a very good point!

      If service provider down we cannot control; but our own equipment we can influence and control. Where's my plan B backup!?

      And choice of brokers - low cost brokers have no human backup as in dealers or remisiers to take our orders via phone.

      I guess if I extrapolate I can also include stock suspensions and exchange shutdowns - I think SGX was closed for 3 days during the long forgotten Pan Electric crisis in 1985... That's our own very own "Lehman" event :(

  13. coconut,

    I like to separate events and what I fear into:

    what I can control; what I can influence; what I can't control.

    Position sizing, risk management I can control to meet those events I can't control. Like poker, I can check, ante up, go conviction all-in, or chicken fold ;)

    Of course not everyone can be a successful trader. That's why only 5-10% make it.

    During these 3 years, despite my lucky streak, there were quite a few times I feel like giving trading up.

    It's bloody not easy!

  14. coconut,

    Time loss not important?

    Traders and investors alike would like to grow their trading accounts or portfolios.

    Let's say 10% a year. And we'll extrapolate this "theoretical" returns 10 -30 years into the future to whatever financial freedom goals we may have.

    If we have flat markets for a few years, even if we don't lose money, those with excel files of compounding returns can see time lost cannot be recovered...

    You of course no concept of time as you are already doing what you like ;)

    That's not the same for those who are investing/trading to escape...

    Grasshoppers have concept of time - the here and now. So trading is not my whole life.

    Feel like watching movie watch; come back see I missed a trade, shrug. I'm not going to be glued to a PC screen in a dungeon and call it financial freedom!


  15. smol, all i will say is the percepton of time is totally different between trading and in real life.

    in life our time (pass) seems to be a smooth flow second by second, we all feel it.

    but in trading (perhaps also investing) time does not pass in a smooth flow, it actually strecth and compress in a unpredictable way. if that is the case you go and think what will happen to you and your portfolio or trading positions/accounts!!

  16. never use your everyday lives experience and believes apply to trading, it will not work!

  17. so when you encounter a prolong flat market, it is, in trading, time had strecth and you feel like you are in slow motion. there is a big gap between your perception of time vs actual market moment.

    so in desperate, you either feel flastrated or end up doing something stupid.

  18. temperament,

    I didn't know his sons committed suicide too?


    Which brings to mind maybe even if I like to consider myself as slightly "different" from mainstream, I am still within bandwidth of "normal".

    To be "exceptional", maybe we need to be off the scale from "normal"?

    I think one day we will discover what makes Warren Buffet "different". There must be some wirings that makes him see things differently from the rest of us.

    If not how to explain those ardent followers who track and follow Warren's investments and divestments, read and memorise all his annual letters to shareholders; yet can't seem to match Warren's performance?

    It's so easy to call one a Warren Buffet Value Investor follower.

    Come, please let us see your track record?

  19. coconut,


    I just got a lesson on Space Time Continuum from you!

    Those who catch no ball, its easier if you have watched Interstellar.

    Those of us who are here and now on Earth will age 20-30 years while your twin brother who travelled to the edge of a Black Hole will return in what he felt like a year or two to him.

    With girlfriend and hour feels like a minute.

    With mother-in-law, a minute of awkward silence will feel like an hour!

    I rest my case.

    Coconut is confirmed to be out of this world!!!

  20. here i come to poke you liao smol. haha

    if traders fear a flat market, do fixed income investors like it?

    1. SMK,

      Professional fixed income investors (bond fund managers) are in it for capital gains.

      You tell me how to outperform the market to justify their bonuses and management fees if all they get is just the coupon on the bonds?

      As for retail fixed income investors, most are holding the bonds till maturity and since they are just as adept as retail equity investors in denial of unrealized capital losses when interest rates rise, flat or volatile markets don't matter right?

      Same for sitting on unrealized capital gains in bonds when interest rates drop, if we buy and hold till maturity, what's the point again in caring about the world outside just as long the bonds don't default?

      That is why Bond Traders are the Masters of the Universe!

    2. hahaha poke already, eh quite hard leh!

      not necessary masters of universe lol
      those who are flexible are more easily adaptable, not necessary bound to one type of investment or the other.

    3. SMK,

      Not everyday I get a 高人 (premier league class) here. So gloves off as a mark of respect ;)

      You must be having your pre-CNY break. I've never seen you so "chatty" before :)


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