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Monday, 1 January 2018

My First Down Year Since Turning "Pro"...



I've always taken a bit of pride in being "different" from the mainstream herd.

Me being left-handed, right-brained, and likes to play the role of the 2 dots in the Tao symbol and all that jazz...

Others lip-sync the tools shepherds impose on their flock like goals and KPIs; I sing the visions and dreams of land owners.  

That worked fine until today.


Everyone seems to be doing very well for 2017. All made money!

Idiot! 

And I have to be the only blogger to make trading losses for 2017?


I'm not really sure about the "pro" part, but what do you call a person who starts to trade full-time since the beginning of 2013?

Amateur full-time? Weird right?

I did self-appoint myself as a nano hedge fund manager didn't I?

So "pro" it shall be then.

LOL!

From $12 in 4 years, its now back down to $11 in 5 years.

I lost $1 for 2017.

Or -8% for those who prefer to count in percentages.



3 main reasons for my sub-par trading performance:


1)  Tailwind; headwind  

Last year, the USD unexpectedly strengthen after Triump's win. End 2016, USD/SGD was $1.40; now it has weakened back down to $1.34.

80% of my trading account is denominated in USD since I trade mainly futures nowadays; while 20% is in SGD for my Simsci hedges.

Last year got tailwind boost super! This year's headwind not so fun...



2)  Hedging costs money

This is the moment of truth to test my trading conviction for 2018.

If I've bought travel insurance for all my overseas travels in 2017, and I've came back safely, does that mean I'm flushing money down the toilet?

So should I continue to flush money down the toilet in 2018 with hedges?

Hmm...



3)  I traded poorly

You know what? Cut the bullshit! 

The 2 abolve reasons are merely contributing factors...

The main reason I lost money this year is I've traded badly. Period.

Cannot always blame the RNG (Random Number Generator) gods right? (Its a gamer lingo)

That's the advantage where client is me, receptionist is me, trader is me, buy side anaylst  is me, and nano hedge fund manager also me! 

I can spot my own bullshit as a client! 

Since my trading account didn't earn money, its a given there's no 20% performance bonus this year!

As for the 2% annual fee, I think I'll go bang table and ask the idiot fund manager to waive off this 2% fee for poor performance! Never make money still got cheek to charge me!?



Reflection

I've spotted something interesting. 

If this had been end 2013, by losing $1 during my first trading year, it would mean I've busted my trading account like 90% of the traders out there!!!

You can't remove the element of "luck" in trading.

See if you can relate my reflection to this old post of mine:









50 comments:

  1. SMOL,

    There is bound to be up and downs in life. The most important thing is to maintain such staus of "留得青山在,不怕没柴烧" at all time.

    All the best in all your endeavor in 2018!

    Ben

    ReplyDelete
    Replies
    1. Ben,

      I'm more bemused about my trading performance than anything ;)


      Its when I don't know WHY and HOW I lost money that I'm more flustered.


      I had a great start to 2018!

      I did nothing :)





      Delete
  2. If you have lost and burst in 2012; you may quit trading and became investor. :-)

    ReplyDelete
    Replies
    1. CW,

      Nah!

      I would just rebuild my trading capital and start over.

      Where got fail one time and just give up?

      Busting our trading accounts is just the market way of testing our convictions...

      Many have a plan until they get hit in the face!



      I'm with you on the sugar-coated poke! Most retail "investors" are indeed failed traders ;)



      Delete
  3. Heehee no worries ... Ur overall conglomerate still showing healthy profits ... only got slight hiccup in one of ur subsidiaries last year.

    Oh btw if it were ur 1st yr trading u wldn't have blown ur trading ac ... just 8 cents ... ya I'm the % man hahaha!!

    ReplyDelete
    Replies
    1. Unknown,

      First, welcome and happy first day of 2018!


      Wow! You hyperbole more powederful than mine!

      Conglomerate? You think I chaebol or what? LOL!


      Your snake oil skill also very slick ;)

      In percentages, those weak in math would have been duped by you... Yeah right... 8 cents indeed! LOL!

      I start with $1; lost $1 = no money in bank account. Crystal!


      The same trick can be used to generate excitement and eyeballs ;)

      For eg, I start sharing I made 10 times my money in crypto currencies!

      Wah! You so good! You so smart! You so lucky!?

      That's until you get an idiot like me who points out that we just need to buy Toto quickpick $1 - strike 3 numbers - win $10; we also have our 10 bagger!

      Want me to get excited on crypto currencies? Show me you bet $100K and snowballed it to $1 million, then we talk.

      Meanwhile, I'll stick with Toto ;)

      LOL!


      Delete
  4. Happy New Year Jared :)

    In trading, we gain some, we lose some. But no fear la you.
    A $1 drop from $12 (or 8%) is nothing compared to climbing to $12.

    I'm sure your retained earnings and assets will be able to generate sufficient revenue to tide through :)

    Please don't scratch my face! First day only!

    ReplyDelete
    Replies
    1. sleepydevil,

      Happy New Year to you too!

      Its just a finger cut; I'm OK ;)


      I do like to be "not the same" with everyone else. But this wasn't I had in mind :(

      LOL!

      Everyone "boom pi pi", and I have to be the only one with eggs on my face?

      Oh well, at least I've proven I can bleed. Which means I can be killed by the market.

      The market has given me a warning shot over my bow. I'm taking heed.


      Never disrespect the market ;)



      Delete
    2. You going changed from Trend trading?

      Delete
    3. CW,

      Can you smell or spot any sense of desperation or capitulation in my writings?


      I'm still pretty much a Trend Trader. Only thing is I'm a tiny sail boat; don't have backup motor.

      No wind what can I do?

      Just anchor patiently in the harbour; spend time and money on wine, women, and song while I wait for wind ;)

      I've paid the price for sailing out of the harbour too early...


      Actually there's one big trend, but I see it as a typhoon. I'll pass.

      Old oredi, cannot compete with youths who fearless play in the typhoon with their surfboards!

      How I wish I could join them :(


      Delete
  5. Hi SMOL

    Maybe luck this friday with $9.8m will be yours :) What's $1 loss to the winner of Toto? :D

    ReplyDelete
    Replies
    1. B,

      I hope so too!


      In percentage terms, it would be like me buying bitcoins at below $20 and selling at $20,000? Or something like that?


      Buy $1 Toto quickpick - lose max $1; win $9.8 million?

      Now that's the kind of risk/reward I like!

      No wonder so many traders like to buy options despite knowing 90% of options expire worthless...


      Wishing you and family lots of joy and happiness for 2018!


      Delete
  6. yap, i almost join you but i escape, you are left with the only one losing.

    going forward, if the market continue with everything going flat (except bitcoin) i probably will join with fat who is now happily retired i guess.

    ReplyDelete
    Replies
    1. coconut,

      See lah! So long never comment until Blogger treats your comment as "spam"...

      Found your comment and restored it ;)

      Delete
  7. where the hell was my comment, just disappear like that! i wrote something like that:

    yap, i almost join you but i escape, left you with the only one that is losing!

    however, if the market continue to be flat flat flat, then in no time i will join fat who is currently happily retired i guess.

    ReplyDelete
    Replies
    1. oh by the way smol, don't call yourself pro, very unprofessional, technically we are ameture, just say we are trader or full time trader.

      Delete
    2. coconut,

      Thanks! Left me behind... Thank you!!!


      Its fair lah. Last year I was wrong but made money!?

      So this year the market takes it back to remind me not every day Sunday OK?

      LOL!


      Eh, that's why there's a pair of "" in my "Pro" ;)

      In front of REAL traders like you, I where got dare use "pro"?

      Just saying Trader is sexy enough! This drives retail "investors" crazy... Ha ha!


      This post is meant to be self deprecating, self mockery, self parody - so must use "pro" for that bayonet twisting effect mah!

      At least I'm gracious in defeat. I lost out to those passive investors who exclaim, "Look ma! No brains needed!"

      Fair is fair! I've poked them in the past; now that the eggs are on my face, I poke myself back lor!



      Hello, if you want to call yourself "amateur", that's your business. I won't call myself an "amateur" in trading.

      Too much modesty comes out as being "fake".

      I'm all real one OK? No plastic surgery!

      Don't believe you poke see!



      P.S. Thanks for making me feel better. My idol Stanley Druckenmiller had his first currencies down year ever! Lucky his equities book bailed him out with single digit % win on overall performance.

      2017 has been a great year for equities worldwide. Not just bitcoins ;)


      Delete
    3. when times of big gains, there is also big lost. now although there isn't any big lost, my profitability also getting smaller and smaller, to the extend that it isn't worth taking the risk as describe by fat in his trading, i begain to understand how he feel not able to make money consistently.

      i begain to wonder whats wrong with the market place, or is it me that is having the problem.

      Delete
    4. we are speculaators, not investor, we live upon volatility but there is none at this moment, how to trade? gone are the days of easy money, got to think of a way out!

      Delete
    5. and plaese don't suggest retired, i will rather lose money than retire haha!

      Delete
    6. coconut,

      That's why it a pleasure to have you here! We understand each other.

      The AFACT forum is dead :(


      Those who started after 2009 had an edge over us - this is all "normal" to them. They have no legacy baggages...

      And passive is killing active big time!

      No choice. Have to wait for reversion-to-mean - if it ever comes!

      The cure for high prices is high prices. Maybe. Waiting for a long time liao...


      Now I must "tarik" back... I've not earned the right to call myself a "speculator" yet. I'm only a fulltime trader, for now.

      I do hope one day I can proudly call myself a speculator :)


      You see old fogeys like Soros, Jim Rogers, and Stanley, they where got retire from trading?

      If we are not trading to escape, why stop when we are still having fun?


      Let's see whether I can adapt to this centtral bankers supported "new normal" in 2018 :)


      Delete
    7. Hi SMOL,

      No legacy baggage is a real problem.

      Dunno whether my consumer staples skeleton army can withstand Diablo's Fire Nova or not. Bad things happen together right? Later my Iron Golem Blue Chip Tanker dies from his lightning inferno and I'll be totally naked le :(

      I maxed up summon resist liao. Tor long RNG gods churn out a minion that can survive.

      Whole inventory full of cash....oops, I mean mana pots.

      So how, you tell me? Can survive?

      Delete
    8. Unintelligent Nerd,

      Keep the day job. Better still, get tenure will be best!

      At you stage of the journey, portfolio -90% you won't die. Spring comes you'll recover.

      But if got retrenched and out of work for 2 years and more, I've seen it "destroyed" more souls than portfolio losses - especially for men.

      Once the confidence of a man has been shaken, its hard to recover... At my HDB estate, there are a few able bodied men in their late 30s and 50s not working - just sit at home relying on their wives or parents.

      I don't judge. I hi hi to them when we meet.


      How to survive? Whether you're made of rubber or glass, you'll know when the time comes ;)


      Delete
    9. Hi SMOL,

      Bo tenure lah. With the supply of PhDs, only the top 10% will evolve into a Bond.

      I also cannot evolve into equity. :(

      What am I? A peer-to-peer lending financial product? No upside, but participate in downside? Eeeeeee

      Delete
    10. Unintelligent Nerd,

      Psst.

      Marry rich ;)

      But must invest in SKII for men and lots of Redbull.

      And suck up to your father-in-law ;)



      Delete
  8. Hi SMOL,

    Can elaborate what you meant by trading poorly?

    I was doing my usual thing, but I realised market changed and my methods failure rate gets higher. I tested every now and then, but still like that. So I did nothing for the past 2 months or so to close the year with no activities. Still doing nothing.

    ReplyDelete
    Replies
    1. LP,

      You noticed it too?


      I rate my trading by my entries and exits:

      Entries could always improve but that's part of kaizen so I'm quite OK here. The saving grace was I kept my trading positions small. Hence no big blowups when I had to take a loss ;)

      Exits were the culprit. I didn't take my profits quick enough while transitioning from Trend Trading to Range Trading.

      I was still "stuck" in the Trend Trading mental mode of not being shaken out of a trade and hanging on for the ride when I'm doing Range Trading!? I stupid or what?

      It goes to show my Trading mental dexterity is not up to par...

      On one hand, I'm not going to throw away the skillsets that got me from $1 to $12; on the other hand, I had to "let it go" before I can take on new skills...

      I not brave enough to do a 东方不败 on myself!

      LOL!


      Delete
    2. Same same. For me it's the battle between picking bottom and trend trading. Lots more to learn, but at least I learn not to 'iron-teeth' and insist on using the same thing on a different market. When the market wind changes, I stop. Like you, I also using small amounts to test.

      Delete
  9. the best to discribe the market place is it is like a pool of water and its getting dryer and dryer everyday, bad news is we are the fishes in the pool!

    ReplyDelete
    Replies
    1. coconut,

      Can all of us traders gather round and do a rain dance?

      But, but, but... Those who did nothing and no use brains got 18% returns in STI ETF...

      They would say to us rubbish! Its an ocean out there! Enough water for everyone :)


      This is the moment of truth for active traders. Do we capitulate and join the no-brainers?

      Or do we say even though we are Ronins, we are still Samurais...

      We would rather die in battle than face the shame of dying on our beds!

      See you at the battle field ;)

      This battle would be interesting! We are outnumbered by the algo robots and passive zombies!


      Eh! You got made profit. Can you move in front to be the TANK?

      Why you look at me like that? I injured warrior... Of course must stay behind you!

      I'm the Bard. I sing song to boost troops morale!

      Delete
    2. i got nothing against the investor, those that hold on and never sell. they are the plants and we are the mammal

      its the speculators, or the lack of them that is the problem. its a harse enviroment out there. no rain, no water, everything is drying out, even the plants, they are not faring good also, yield is droping fast like stone.

      Delete
    3. coconut,

      Hello! You are one who made money and you gloomier than me? LOL!

      I not so pessimistic.

      Human nature don't change. Cycles will return.


      This reminds me of those documentaries on the African savannah plains. During the long drought, plants and animals will die off one by one until the rain finally comes...

      Just hope I'll last until the rain comes!


      Delete
  10. SMOL,

    Maybe your trend signals too short term? I guess also depends on what markets, assets or instruments you use, but for most of 2017 there was a trend --- up!

    If you're talking about day trading or scalping ... then that's out of my territory ... me no ninja or commando ... I'm the bambi staring at the lorry's headlights!!!

    Well, most markets are getting old but that doesn't mean they'll die soon. We still need to see high inflation before the next big change in economic cycle. 2018 may be the year for inflation surprise. Those long suffering commodity or M&O companies may have pleasant 2018 Xmas present! Hahaha!!!

    ReplyDelete
    Replies
    1. Spur,

      I've no clue how your comment ended at the spam folder of Blogger???

      Found it with coconut's first comment ;)


      Tell me about it!

      I've been using every new "highs" in STI to establish my hedges in futures to protect the equity side of my investment portfolio.

      So I've been flushing money down the toilet each time STI breaks higher and I had to cover my hedges :(

      A bit like those travel insurances we buy but never got chance to claim... Choy!

      Now the big question for 2018 is should I continue to buy travel insurances?

      LOL!


      I'm not sure whether my trend signals were too short term...

      One thing we know for sure is I was on the WRONG side of the trend and got steam-rolled over!

      That's why I rated by trading for 2017 as poor :(

      Delete
    2. Hi SMOL,

      I thought I'm the counter trend here, not you :)

      But as an insurance, it's part of the plan to lose money 99% in case that 1% hits. You can adjust the % yourself. I 'hedge' by holding cash. Near 45% to 50% now.

      Delete
    3. LP,

      If someone would tell me that STI will go up 18% in 2017 guaranteed, I wouldn't have to hedge ;)

      Yup, holding cash is one of the simplest and easiest form of "hedge".

      At my investment book, I'm not 100% vested too ;)

      Even greater underperformance!

      LOL!


      Delete
  11. Never mind what we called ourselves in the Market.

    What ever we do, we are just trying to buy or sell to the next fools.

    But we may be actually the "next fool".

    Now who has make 18%?

    Really?

    Have they sold?

    ReplyDelete
    Replies
    1. temperament,

      Your last sentence has a lot of wisdom that may be lost on those who buy-and-hold and pass the hot potatoes to their dependants to figure out...

      LOL!

      We (old fogeys) are getting naughty here...


      My link to my old post on sea turtles is a reminder that no matter what we choose to call ourselves and/or our choice of poisons, never forget our "role" is to grow big as soon as possible.

      When we're small, anything and everything can kill us!

      As we grow bigger, even though we are not invincible, less predators can hurt us now ;)

      Delete
  12. Ya.

    The problem is me ikan billis can only grow as ikan billis.

    Pray tell how to grow as a SHARK?🤔

    ReplyDelete
    Replies
    1. temperament,

      I only know about sea turtles...

      As for how to be a shark? Maybe you want to interview some "ah longs"?

      Or maybe check with coconut?

      He plays billiards. He's the pool shark ;)




      Delete
  13. Hi Jared,

    Objectively speaking, your first down year in 2017 as a professional using trend-following strategy in futures is not bad in terms of percentage when compared to other professionals. Not trying to console you. Here are the fair comparisons.

    https://uk.reuters.com/article/us-hedgefunds-performance/computer-error-top-trend-following-hedge-funds-lose-out-in-2017-idUKKCN1AV1KA

    https://www.bloomberg.com/news/articles/2017-07-10/quant-funds-that-chase-trends-are-this-year-s-biggest-losers

    http://www.automated-trading-system.com/state-of-trend-following-in-november-4/

    The TOP trend following hedge funds and CTAs had a bad year in 2017 too. Although your trading portfolio had losses, I believe your investment portfolio which is made up of equities should more than compensate for the losses since it is bigger than the trading portfolio. I hope you had a positive year overall.

    In 2017, I dabbled in futures. Every single trade lost money. Can you be dumber than that?

    ReplyDelete
    Replies
    1. hyom hyom,

      No worries. I'm not fishing for sympathies or compliments when I reveal my trading performance once a year.

      It started as a "poke" as I find it quite ironic trader me keep records once a year while long term "investors" update their portfolios monthly!?

      Hee hee.


      Wow! You got research and verify for yourself one! Yup, that's why I had a great start for 2013 ane 2014 too!

      A rising tide lifts all boats :)

      Then its live by the sword; die by the sword :(


      I tip my hat to you. You can read between the lines! And know what hedging meant ;)


      Hey! That's a great start for your futures foray! That'll put the "fear in the RNG gods" into your trading soul ;)

      Better this than to mistake beginner's luck as skill... That'll lull any trader into complacency and hubris.

      A big no, no in trading :(


      Delete
    2. Hi Jared,

      I had a similar "great start" in my first year in equities when STI rose more than 17% in 2004. It really felt dumb to lose big money in a year as a hardworking active investor when do-nothing passive investors made 17%. That loser experience helped me limit losses in my first year trading futures. I believe futures are much better for learning trading quickly compared to equities because in futures, the trader dies faster when he makes mistakes due to the leverage. You did well to be profitable in the first several years as a futures trader. Far better than me.

      I am looking for a broker to trade SIMSCI. Which broker are you using for trading SIMSCI? How much does your broker charge for a single SIMSCI contract transaction? My broker (Interactive Brokers) does not allow Singaporeans to buy SGD-denominated futures on SGX.

      Delete
    3. hyom hyom,

      Its Philip futures.

      Commission for 1 Simsci contract = $10.00.

      GST = $0.70

      Total = $10.70 per trade.

      Delete
    4. Hi Jared,

      Thank you for the information. I will take a look at Philip futures. Interactive Brokers charge SGD4 only for SIMSCI but it is off-limits to Singaporeans.

      Delete
  14. $1 can teach so many precious life lessons, totally worth it!

    ReplyDelete
  15. LOL SMOL,

    When I saw excuses 1 & 2, I tot you were really going to believe those excuses. So unlike you, I already preparing to poke you liao.

    Then number 3 came along and I tot, aiya no chance liao.

    ReplyDelete
    Replies
    1. ERSG,

      Its called "foreplay" ;)


      Hello! No foreplay just poke pain one you know?


      Give chance!


      Delete

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