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Monday, 19 March 2018

I've thrown out my Trading Journal

Star Wars Chapter 1

As usual, foreplay first.

Before I started blogging, I was a reader of financial blogs just like you.

I had just been posted to Athens from Shanghai and with lots of spare time living on my own again (no longer living-in-sin), I decided to track my expenses for the fun of it!

You know, the monkey see, monkey do thing...

I got this idea from the butterfly's tavern and his famous cbox where lots of veteran bloggers of today used to mingle back then.

So for 3 years, I diligently recorded down all my living expenses. I stopped doing this "useless" exercise when I came back to Singapore.


Its evident my record shows I'm not a spendthrift. There's always a surplus every month, every year. Expenses are quite stable and predictable. No real surprises!

Only one item stood out as spikes in my spending - travelling expenses for vacations.

Am I going to stop travelling to save more money?


So what's the point of recording my lifestyle costs when I knew I'm doing OK expenses wise, and I not going to make lifestyle changes whatsoever?

Yup. I've outgrown this tool. Wink.

The importance of a trading journal or investing diary

Back to square one

Investing diary, that I still keep. Must remind myself the reasons why I bought in the first place mah! The holding period is in years... Why commit to memory when I can write it down?

Also must keep track of dividends received. Like all businessmen, I want to know how long it took to recover my capital back safely in my pocket.

Yes, if you need to ask, unrealised profits don't count. If you want to count, its your business!

I like durians, you like blue cheese. Don't you tell me my durians smell!

As for my Trading Journal, I've not spent any time reflecting on my past trades for more than one year now...

Its just zombie recording as a matter of habit!?

I so silly!

1. Outcome or action more important!

Why do I still need to write down the reasons for each and every trade?

When the reasons I'm in a position were no longer valid, I'm either stopped out at a small loss or profit stopped out at a small profit.

The goal is to never let a winning position turn into a loss; and never let a paper cut turn gangrenous until I have to loose an arm or a leg!

I no longer need a trading journal to tell me I have self discipline issues. Or?

2. I measure in actual dollars; not percentages

I have no intention to add new money into my trading account (unless I blew up), nor do I have any plans to withdraw money out from my trading account in the forseeable future.

Knowing I started with $1 and I now have $11 is enough.

Simple and crystal or what?

Money is just to keep score since I'm not trading for a living anyways.

3. I not selling subscription services, workshops, or courses

So no point in keeping detailed records for my cherry picking of profitable trades as advertisement or testimomial purposes.

4. No mind - tired rest; hungry eat

For traders who like to use lots of trading indicators to help you squeeze the trigger, switching to Price Action can be so nerve wrecking!

I've been using Price Action for my entries and exits for some years now.

Its time to let go of my Trading Journal to minimise the "mental anchoring" effect. Once a trade is closed, its over.

Better to focus on the next Good Trade then to dwell on what might have been...

Don't try this at home

This post is an inside joke between me and the butterfly.

The butterfly probably shocked and surprised some in our community when he recently shared he is not going to focus on savings anymore!?

And to think a lot of the current track and measure lifestyle expenses bloggers were inspired at the butterfly's tavern, me included.


To those who are a little confused, don't focus on "right or wrong". Its just that some of us are climbing up the mountain, some are climbing down the mountain, and some are back to square one.

At different stage of our journeys, we may require different tools.

Sometimes when we are back to square one, we may discover we don't have to climb the mountain in the first place...

But like the Buddhist parable, if we didn't climb the mountain, how would we know we needn't have climbed the mountain in the first place!?


Friday, 16 March 2018

Fees, Commissions, Charges, and Interests

There are 2 common tricks that snake oils try to fleece as much wool or milk "bei kambings" as long as possible:


This one is easier to spot.

That's where unscrupulous financial advisers will encourage you to switch unit trusts, do unnecessary asset relocations, and/or invest in anything that's new or flavour of the montht!

Its the same reason why insurance agents encourage their clients to surrender their old and upgrade to new insurance policies with the latest bells and whistles...

And of course why brokers would encourage you to trade - the more frequent the better!

Buy and hold (forever and ever)

This one is very common but most bei kambings not so aware...

Low cost mutual funds and ETFs, no matter how low cost, still charge an annual management fee. They're profit seeking businesses, are they not?

How to make money from you if you withdrew the funds from them as in redemptions or sale of ETFs?

Same goes for credit cards, bank savings accounts, insurance policies, etc.

The trick is to make you think loooooooooong term. Even better if you buy and forget!

For those who love to parrot passive income, how you feel knowing you're the "passive income" for these vested interests? 

You think why their competitors dangle so many attractive "free" goodies to entice you to switch your business to them?

Of course "free" here involves jumping through hoops and rings as stated in the small print.

Opposite sides of the same coin

Yes! Now you're on to it!

What would a smart landowner do?

Have two businesses - one encourage quick buy and sell; the other evangelise the benefits of long term buy and hold.

Heads I win; tails I win too!

Is that why SIA also has vested interest in a low cost airline too?

I'm sure if you think hard enough, you can spot other examples too!

Tuesday, 13 March 2018


Sunday, 11 March 2018

Risk is subjective

When it comes to Trading risks, many bei kambing traders just think of risk/reward setups that are parroted a lot in books and workshops.

That's the black and white, 2 dimensional way of - either you are with me or against me - type of thinking.

Very mancho. Very left-brained. Very quantifiable.

Let me share my perspective from a retail trader who has transitioned from part-time to full-time trading.

You know what?

The biggest risk factor you haven't considered is YOU!

Let's start from outside in.

Your personal situation 

2 part-time traders with identical trading account size of $50K. And both have stable day jobs (stable is euphemism for career has hit the glass ceiling; hentak kaki).

One can earn and save $50K per year; the other $25K per year.

So if both blew out their trading accounts, one just need to lick his wounds for one year and he'll be back! The other has to wait 2 years; or return with a smaller and not so optimised trading account...

In case you didn't know, just like any new startup businesses, the no.1 reason for most business and trading failures is due to under-capitalisation...

Now what if I tell you that part-time trader who can earn and save $50K per year is married with full-time homemaker wife, has 2 school going kids, with housing mortgage, and is "blessed" with 2 sets of parents and parent-in-laws?

And that guy who earn and save $25K per year is single and staying with parents with no debts whatsoever?

How? Did your perspective just changed?

Now imgaine they both did well in trading part-time. Let's say their trading accounts are now $250K. So they decided to quit their day jobs and switch to trading full-time.

The family guy needs to make 20% a year from trading EVERY year just to maintain the same lifestyle as before.

That meant his trading will only compound and grow provided he makes more than 20% a year!!! 

One does not trade full-time just to hentak-kai...

The single guy just need 10% a year and anything more, his trading account will have chance to grow to a million.

Isn't that's why we traded in the first place? 

Who do you think is taking on too much risks by trading full-time?

What if I now say one of them got 1 year sabbatical from his day job?

If trading full-time does not work out got a ready job to return to, will that bring calmer peace of mind to our trading?

Or will burn all our bridges (破釜沉舟) incentivised us more?

Do you know what's reality? 

Full-time retail traders often depend on their wives for income support. That's why marry "right" is so important.

No, wife cannot be homemaker. (Unless the couple are parasites on their parents)

Not every woman so understanding like Taiwan film director Lee Ang's wife; she supported him in his 20s and 30s as a stay-at-home "bum" while Lee perfected his craft...  

That's why we need to make a clear distinction between institutional and retail traders - even if both are trading full-time. One got monthly salary; the other no kill no meat... 

Hence you find many full-time retail traders have "training" businesses on the side to help sustain themselves when they have drawdowns or to make their trading accounts whole again when they blew up. (Some of these retail traders are also known as remisiers)

Use common sense. If you never lose money trading, why on earth do you want to burn your evenings and weekends to teach others how to trade?

Is that your idea of financial freedom? Working more hours than your previous day job?

You - Or the Mind part

We can have 2 traders, with same trading account size, similar personal situation, trading the same vehicle - yet one is consistently profitable; the other struggling.

This is the - I not you; you not me - part.

Only we ourselves know oursevles best. 

It also depends on how "honest" we are to ourselves.

This is the grey, fuzzy, philosophical, and psychological part. You have to know why you get up in the mornings.

Trading is hard. The odds of success is no different from starting your own business. So why do it?

Because you heard from others it's simple? 

You were sold on the - If I can do it, so can you - spin?

Do you verify things for yourself? 

Can you think for yourself?

Risk is subjective

Now you know why I am not quick to pass judgement when I see others drink atas coffee.


Wednesday, 7 March 2018

Earn More or Save More?

I've yet to know anyone who saved their way to prosperity!?

I only know stories and examples of where individuals, companies, and even countries that earned their way out of the poverty trap.

The problem with save more

You can't save more than what you can earn!

For those who love percentages - how to save more than 100%?

There's always a limiting cap.

Earn more is damn hard

Precisely! Its definitely not anyone and everyone.

There's only one CEO spot. And only so many other positions for top management...

Not everyone can be a top salesperson who earn big bucks with juicy commissions.

Its the same with trading and investing. (Don't bluff yourself)

Not to say about being an entrepreneur and building up your own business!

Even at country level, there were many other countries that got their independence like Singapore in the 60s. How many of these countries are still "developing" after so many decades? (Make a wild guess why big daddy so fixated on GDP growth?)

Earn more; save more

There's a reason why our 5,000 years of Chinese wisdom says:


Yup. Its earn more; save more.

I rather earn $10K and save 10% (no stress) than to earn $2K and save 50% (how sustainable is it in the long run?)

Save more does not need brains. Just discipline. 

Earn more needs creativity, imagination, hard work, endurance, and most important of all - loads of lady luck!!!

So when you hear people in our community lamenting why schools never teach us about financial literacy, what they really meant is why school never teach them how to EARN MORE...

If anyone needs school to teach them how to SAVE MORE, there would be an embarassing silence...

Talk about an awkward moment!

Monday, 5 March 2018

Study for marks or for learning?

This post is self-contained, but if you interested in the backstory, you may want read Sillyinvestor's recent post and especially the comment exchanges between LP and him:

Teach the subjects or teach children?

LP is a full-time tutor while sillyinvestor is endangered species in Singapore - Singaporean teacher in Chinese language, and male somemore! 

I would like to add to their conversation by sharing from my perspective - the student who can't make it... 


I do like to read history.

I've always loved to listen and read stories as a child. And there were lots of interesting stories in history for me to discover!

I remember during Sec 1, during our first history test, I was first in my class. I guess my classmates were not familiar with the new essay format of answering? I never had problems with england compositions. Wink.

Well, once they found out the secret of doing well for history tests and exams was rote learning, I quickly fell to the bottom of the barrel. 

I don't study history for exams; I read history for enjoyment.

I got F9 in history for O' levels.

I've not stopped reading history even after leaving school.

Buddhism study

A few years back, I signed up for this 3 year Buddhism course in Mandarin at the Bright Hill Temple. 

The first year was super fun as our dharma teacher is quite a maverick!

She never stuck to the prepared notes, often veering off into storytelling about her life, her study at Sri Lanka for her degree in Buddhsim, and most interesting of all, her frequent "poking" of our class:

1.  Converting to Buddhism (皈依) is not a passport. If anything else, its more "onerous" as karma will bite even harder when you break your vows! 

2.  Learning Buddhism to cultivate yourself (学佛) is not the same as "parroting" Buddhsim (拜佛).

3.  And lots of other interesting "pokes" that flew over the heads for the majority of the class...

Unfortunately, she left abruptly during the 1st semester of year 2. Her replacement just read off the prepared powerpoints and notes.

I dropped out of the Buddhism class.

I did not end my cultivation. 

Study for who and what?

When we take up a baking class or a workshop for investing in our personal capacity and not "coerced" by anyone, are we really after that piece of paper? Do marks or grades matter? 

However, if you are now an ITE student taking up a baking class, or a business finance student in poly or uni, all of sudden, marks, grades, paper qualifications matter a lot!?

Gee. And you wonder why?

Perhaps that's why some of us find life after leaving school a lot harder and daunting... Hence we will find every "excuse" to return back to school to "escape".

Just like the many in our community who seek financial freedom to "escape".

Life is easier if we know why we want to get up in the mornings.

The alternative could be the Thomas Edison way of discovering what you really want, or what Singaporean Hokkiens would say, "Crash got sound!"


Friday, 2 March 2018

Understand something with your body

There are two kinds of understanding:

One is where someone said something, you understood it with your brain.

The other one is with your body.

P.S.  You understand you understand; you don't you don't. I"ll stop here. Have fun meditating over it during the weekend!

Wednesday, 28 February 2018

You know how to beat inflation?

I bet you do!

I mean nowadays, just do a bit a reading on the internet, one can all of sudden become an "expert".

All you need to do is to quote who and who said this, or cut and paste what others have said and you can write about anything!

Yes, its that easy to be a blogger!

Serious. No entry barriers at all!

Inflation is serious. Not fun and games. Just look back 10-20 years and see how much HDB and private property prices have gone up. How much education and health care costs have ballooned. And of course for those who drives, the price of cars and motocycles today are crazy right?

Funny thing though. You can afford them right?

Unless you jobless or retired with little to no savings.

Now ask yourself, what is the single biggest reason you can afford the lifestyle you are having today?

Was it your investments? The insurance policies you have bought? Your savings?

No right?

Did it surprise you?

Now lets make things a lot more interesting.

Let's use 1965 as our index 100. That's the year Singapore gained independence mah!

Talk to your parents and/or grandparents.

If they were financially literate, what were the asset classes they used to protect themsevles against inflation?

How did these asset classes panned out 52 years later?

More regrets or more smiles over their good foresight?

If your parents/grandparents were not financially savvy, even better!

That meant they never "invested" or did anything to protect themselves against inflation.


What's the asset class they "accidentally" stumbled into that kept pace with inflation?

Not only that. It turned out to be a little windfall for you the descendant!

That's almost like, "Look ma! No brains needed!"


Do you still think we need to "invest" or else? 

Friday, 23 February 2018

I wish I can swing it both ways!


I'm not coming out of the closet to declare I wish to be bisexual, silly!

Its about trading!

I've read the Market Wizard series and I'm so impressed with those traders and hedge fund managers that can swing it both ways.

They have a position on.

Market moved against them.

They cut loss.

But the difference with other mortals is that same time they got out of their money losing positions, they are able to "switch" and put on the same position in the other direction!?

Talk about making lemonade from lemons!

Now that's cool!

To be able to turn a money losing position into a profitable one!!!

Least some of you think its "easy", I must share I tried to do it a few years ago with the USD/JYP trade.

I got stopped-out on both directions!

That experience so damaged me mentally that I couldn't trade for the next several weeks.

Recently, I am happy I got profit-stopped in my Simsci short positions. I didn't let a profitable trade turned into a loss.

Although I am quite confident STI will retrace back above 3400, I just can't bring myself to go "long" the Simsci.


STI went above 3500 now. 

If I had been able to swing it both ways, I could have made the same profit up similar to on the way down too...

Its my mental block. That's something I am working on.

Today, I can only do the wash, rinse, and repeat trades.

Go in the direction of my bias, when the move looks exhausted, get out and wait for the retracement to re-enter into the same trade again.

I can only go with the flow as in Trend Following; I can't do counter-trend trades.

That's the difference between hobby and craft.

Hobby happy or make money can oredi!

Craft? Its not about beating others or winning recognition. Nor its always about the money. But money is important as a feedback mechanism.

It's about beating yourself up, putting yourself through pain, and being uncomfortable.

All for that ephemeral sense of accomplishment when we discover what we cannot do some years back, now we can do it skillfully.

It's like learning a new language, do public speaking, or running a marathon.

Tuesday, 20 February 2018

Believe In Yourself

Of course its not about taking it to the extreme and suffer from hubris!

On the other hand, if we don't believe in ourselves, who will?

Don't let others shake you out of your convictions.

Making mistake is part of our learning process.

That's provided you make your own mistakes.

If you follow others and it turned out to be wrong, eh.... How to profit from it?


Saturday, 17 February 2018

Trading R' Us

Qian bei CW has got to have one of the simplest and clearest filing system for his blog posts.


I just file everything financial related into "financial literacy".

Today, with a bit of time on my hands, I've grouped my past trading related posts under this new "My interests" heading under - Trading R' Us.

Those of you who got a bit of trading blood under you may want to check it out. Just click under "Trading R' Us" and all 16 trading related posts will pop out.

Actually, there's not a lot of difference between traders and investors - just the time frame differs.

Many amateur traders are also "investors" by default. Hands up who never let a short term trade turned into a long term "investment"?

Look at those veteran retail investors who are doing well. See how many of them are also competent in the art of "trading around a core position"? 

There! Its never about the noun or "labelling".

Its always about the adjective.


Thursday, 15 February 2018

When Correlations Break

Yesterday evening 9:30 pm was a highly anticipated event - US CPI report!

OK, those of you bottom-up stock picking and Singapore stocks only pandas and koala bears would yawn...

Ya, spending 5 minutes on economics is 5 mintues wasted you would parrot.

But to us macro top-down, interest rate, precious metals, forex and stock index traders, its like watching the World Cup for soccer.

Last night did not disappoint.

Come to think of it, the price action was like Trump's surprise election win!

Quick! Data out!

Inflation was higher than expected.

It reinforces the higher average hourly earnings from 02 Feb's US Non-Fram payroll catalyst that started this recent equity correction - fear of faster inflation and higher Fed interest rates.

But Retail Sales disappoint.

What trades should I put on?

Short Simsci!

That was what I can think of spontaneously.

Quick look at the market price action.


Interest rates spike up. Dollar strenghten against G7 currencies. Gold drops. S&P, Dow, and Nasdaq futures all nose-dived. (I use inter-market analysis)

Quickly enter limit order to sell the Simsci.


Not filled!?

Missed by 4 ticks!!!  (That's how fast market moved between when I pressed "send orders" to when the order appeared in the queue. Retail platform mah...)

Should have used Market Order instead! I was cursing myself now.

(Side note: I just letting out frustrations only. I would "never" use Market Orders in a fast moving market- too dangerous. Don't try this at home!)

As I was fumbling to  re-enter another Limit Sell order at a much lower selling price, I looked with dismay to see the market run away from me.

Give up. The train has left without me. 

Better to wait for a retracement to enter at better selling prices.

Funny thing though. When the retracement came, I've changed my mind. I've decided to short USD instead.

I am now betting the retracement will turn into a reversal.

Decided to use Forex instead of Simsci to express my thesis.

That's what makes Trading so intellectually stimulating!

Provided you get it right. You should see me when I get it wrong...

US 10 year Treasuries now around 2.93%.

Wasn't the fear of it breaking 2.68% that caused the recent US equities correction?

How? US markets last night, and Asian markets today all rallied!? 

No longer afraid of Fed rate increases? 

Shouldn't higher interest rates be good for a currency?

US dollar got creamed after the initial knee jerk reaction strength....

USD/JYP tanked and broke below 107 indicating riskoff. But Nikkei 225 today rallied with rest of Asian markets?

Its easy when correlations are positive. Then its like memorising 10 year series or rote learning of definitions and formulas - 3 times 3 = 9.

Anyone and everyone can do it! That's what we can learn from books and courses.

But when the correlations break, its times like these you'll discover you can't depend on others telling you what to do...

Hee hee.  

Got a risk-free trade on. 

Volatility is back!

Monday, 12 February 2018

Mountains don't jump through hoops


Often we hear youths with small means get all excited about 1 to 2% stuffs; and "free" trinkets like miles/cashbacks and such.

Understandable. I were young once. And definitely with puny pockets too!

Next time you visit the Bird Park, or any talent shows with an animal act, look out for the hands of the animal trainers. Each time their "pet" does what they were told to do, they will slip a "reward" to the animals' mouths.

Now look up to see the strings others are pulling on you if you have been swinging from one credit card to another, hopping from bank A to bank B, and jumping from one discount app to another...

Those of you in sales or marketing you know what I'm talking about. Its our job as "animal trainers"!

As for those of you clueless what talking me, I'll suggest you talk to someone you trust that is also successful in sales or marketing. (Make a wild guess why I added the "successful" qualifier)

Someone who will tell you like it is. Not the politically correct bullshit spin about customer experience or satisfaction that sort of thing. Its all about market share, revenue growth, and promotions up the corporate ranks!

Long story short. 

What's the common trait you find people who are decisive, determined, and strong-willed?

The ability to ignore the small stuffs and zero in on the salient (抓重点)?

I have a test. 

What's the essence of an education?

Get it right, everything will fall into place. Wink.

Saturday, 10 February 2018

Perspective Matters

Someone who is sitting on a 2 or 3 baggers feels different with a 10% correction than someone who has bought the recent high and is taking a 10% unrealised loss.

Someone who has taken back his capital and is only risking his "unrealised profits" in the market is not feeling the same stress as someone who is using 50% margin and risking 2 times his capital when a correction hits...

Someone who only has max 25% of his networth in equities is a lot more sanguine than someone who is 100% vested in equities.

Someone who bought shorter duration bonds like 1 year or 5 years government bonds is not suffering capital losses when interest rates rise, just as long he can hold the bonds till maturity. Those bei kambings who bought into bonds funds or ETFs will suffer capital losses...

Someone who got sugar daddy/mommy to bail them out when things go horribly wrong can sleep better at night.

Wednesday, 7 February 2018

Now that's volatility!

I was glued to my notebook yesterday morning 8 am till 1 am into the wee hours early this morning.

Not since Brexit and Trump's election night have I seen such volatility!

Talk about wild swings to stop-out both longs and shorts...

The volatility has continued to this morning. First green, then giving back all those gains...


For long only retail "investors" without utilising margin, its probably a non-event. You just ignore the "paper gains" for Jan 2018 like it never happened.

However, for one group of "investors" who shorted volatility using inverse ETNs, they have been wiped out...

For those into selling options to earn "passive" income, its a reminder this is what happens when you win 99% of the time, but you'll be wiped out when that 1% tail risk hits you when you least expect it!

No free lunch. 

There was a time in 1999 when I thought to myself, "This is easy!"

And you know how markets humbled me subsequently.

That's why old fogeys who have survived more than 1 bull/bear cycle behave differently from youths who have only known a bull market.

Sunday, 4 February 2018

Why You Fail To Have A Great Career

Its so hilarious!

And the poke is power at the end. 

I had to pause and reflect for a bit whether I too was using it as a "shield"...

Thursday, 1 February 2018

Goal Posts Can Move Forward One!

Those of you who understood why CPF Life was introduced won't be surprised.

I mean you can see the trend in recent years. Not only in Singapore, but globally.

Personally, I believed the 60/40 event some years back did shock them to the core. Ever since, lots of "sacred cows" we thought will never be touched have been slaughtered...

Its interesting. Nothing is written in stone. 

The slow march towards collectivism continues...

We definitely need population growth!

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