Actionable Money Management

For the last 2 weeks, I got stopped-out from my Simsci shorts.

This morning, I took profit from my short AUD/USD trade prior to the RBA rate decision; and made enough to cancel out the losses from my recent Simsci missteps.

The 2 mantras of Trend Following's money management are:

1. Keep losses small

2. Only losers average losers
 

Small losses can be even out by small winnings.

If we limit ourselves to not suffering no big losses, that means we are left with big winning trades. No?

If not, how do you think I doubled my trading account the the year before, and tripled it last year? You mean you believe I never made losing trades? Don't tell me you believe in dragons and phoenixes hor!


Tip: Many newbies (whether investor breed or trading pedigree) often like to ask gurus: "How do you find winners?"

When they should be asking: "How do you limit your losses?"

If you pause and think about it, isn't that's how you "verify" whether that guru you are asking got "substance" or not?

I mean any idiot can also make winning trades - just look at the testimonies that these gurus share about their students' winnings. (I stress again it's students OK?)


Only then perhaps you can understand this quote from George Soros:

"Its not whether you're right or wrong that's important, but how much money you make when you're right and how much you lose when you're wrong."

 

How do you wish to finish a Marathon?

There are black and white people - some call them one-track minds - who will immediately think of running a marathon, and/or focus more on the competitive sport of benchmarking who have the better times.

But I didn't ask about running or how fast to run a marathon; I only asked how do you wish to finish a marathon.


Think about it for a moment.


Finishing a marathon is not so daunting now, is it?


Walk

It may take much longer, unless you are too young, old or ill, most abled people can finish a marathon by walking without too much training and preparations. 

We just need a pair of comfortable walking shoes, a water-bottle, and frequent rest stops during the walk.


Cycle

Steve Jobs alerted me to the fact that when a man is on a bicycle, he becomes the most energy efficient animal from getting from point A to point B.

Don't believe? Next time you are at East Coast, try renting the bicycle for 2 hours. You don't feel tired even after riding for 2 hours right? OK, the bum may sore; but that's from tiny triangle bicycle seat....

I guess women enjoy bicycle seats more than men.


Chauffeured

OK, some like to drive. I've met colleagues in Sweden and China who simply love driving. They always volunteer to drive. 

I prefer to be chauffeured.

I can't afford the Diving Miss Daisy kind, but I can afford the Comfort Delgro bus and taxi kind.


Imagination

OK, I think I'll stop here. You can have your own fun thinking up other ways to finish a marathon. 

And if you want to try this exercise with your investtor/trading friends, just change the post heading to:

How do you wish to finish your financial freedom journey?




 

The Song of Malaysia's GST

The last time I posted this Hokkien rendition of "Let It Go".

Thanks to my cutest friend coconut sharing with me, I must share with you all this Cantonese version of Beyond's 海阔天空.

Super funny and very creative! 

And don't forget to appreciate the vocals and lead guitar parts. Excellent! 

Damn! I wish I can sing like that...


A special shout-out to our Malaysia cousins. We Singaporeans have a 21 years head start over you. I know that KNS feeling.

But it will soon pass. Trust me.

Death and taxes.