Happen to coincide with what was predicted in the my last article.
Apr 8, 2012
Apple Leading the Collapse?
Happen to coincide with what was predicted in the my last article.
Market Peaking in Late April?
Picture tells a thousand words. Getting your money ready anyone?
Feb 23, 2012
Too Young for Trading?
A 17-year-old blog reader asked me recently if he is too young to start learn trading and how can he start. That got me thinking. Mmm, how would I teach my girls if they expressed interest in trading?
You need to have spare money
Well, how young one may start to learn trading depends on when he can save up the capital to start trading. Nowadays, this barrier is lowered greatly with forex brokers that allow trading of nano lot sizes. A broker I know of allow trading of any lot size and this allows starting capital of US$500 and still allow proper money management to be applied.
It is easy to lose everything
This is up to individual. I was thinking some parents may like to let their children understand the risk of trading. Let them start trading without any rules. Let them fiddle and familiarize with the trading platform. Let them experience margin call, let them experience account blow-out. US$500 is cheap to learn all that.
You've got to execute the trades without fail, even if you've lost the last 10 trades!
After that, I would give my girls a decent trading system (including money management rules) that they can trade without interfering their studies (and their studies also don’t interfere with their trading too!). I would monitor that that trade the system consistently even if they experience losing streaks. Children are unpolished gems. I would think children are more likely to follow trading systems.
Side dish
Also, importantly, treat it as a means of bonding with our children, a game that we can play together!
Is this how you will teach your children how to trade? Or would you even teach them at all?
You need to have spare money
Well, how young one may start to learn trading depends on when he can save up the capital to start trading. Nowadays, this barrier is lowered greatly with forex brokers that allow trading of nano lot sizes. A broker I know of allow trading of any lot size and this allows starting capital of US$500 and still allow proper money management to be applied.
It is easy to lose everything
This is up to individual. I was thinking some parents may like to let their children understand the risk of trading. Let them start trading without any rules. Let them fiddle and familiarize with the trading platform. Let them experience margin call, let them experience account blow-out. US$500 is cheap to learn all that.
You've got to execute the trades without fail, even if you've lost the last 10 trades!
After that, I would give my girls a decent trading system (including money management rules) that they can trade without interfering their studies (and their studies also don’t interfere with their trading too!). I would monitor that that trade the system consistently even if they experience losing streaks. Children are unpolished gems. I would think children are more likely to follow trading systems.
Side dish
Also, importantly, treat it as a means of bonding with our children, a game that we can play together!
Is this how you will teach your children how to trade? Or would you even teach them at all?
Feb 21, 2012
Successful Traders and Professional Gamblers
Books such as "The Way of the Turtles", "The New Market Wizards" and "The Market Wizards" tell very nice trading battle stories. These books are really about the war stories of the many successful traders of our times.
The 3 books seem to resonate that professional gamblers (poker, black-jack etc) have a high chance of becoming successful traders. All 3 books describe trading as very similar to professional gambling.
In professional gambling, gamblers:
It is with this edge that turns the game into a positive expectancy game. In the long run, the professional gamblers will win, provided they stick to their rules strictly and patiently.
As you can observe, trading borrowed many terms from professional gambling: risk management, edge, expectancy etc.
Hence, it is so important to trade with a edge. By trading with an edge, we know that we will be profitable in the long run, and we will not suffer from trade execution paralysis - especially we have lost many trades consecutively. As we know that we will ultimately come back because we trade with an edge.
The next question is: How to trade with an edge?
The 3 books seem to resonate that professional gamblers (poker, black-jack etc) have a high chance of becoming successful traders. All 3 books describe trading as very similar to professional gambling.
In professional gambling, gamblers:
- Bet small when the odds are unknown. This is their risk management strategy.
- Will have many losses
- Bet bigger when the odds favour them. For instance, professional black jack gamblers have strategies to count the cards and know when the odds favour them. This is their edge.
It is with this edge that turns the game into a positive expectancy game. In the long run, the professional gamblers will win, provided they stick to their rules strictly and patiently.
As you can observe, trading borrowed many terms from professional gambling: risk management, edge, expectancy etc.
Hence, it is so important to trade with a edge. By trading with an edge, we know that we will be profitable in the long run, and we will not suffer from trade execution paralysis - especially we have lost many trades consecutively. As we know that we will ultimately come back because we trade with an edge.
The next question is: How to trade with an edge?
Feb 20, 2012
The Most Expensive Trading Book?!
Well, we know trading books are notoriously expensive. I believe this is inarguably THE MOST expensive book on trading. Well, at least the most expensive one I have come across so far. Let me know if you have come across one that is more expensive than this: Day Trading With Short Term Price Patterns and Opening Range Breakout by Tony Crabel.
A new copy is retailing on Amazon for a whopping $1,293.18! See below:
Tony Crabel's book is a classic that talks about breakout strategies - ORB, NR4, NR7 etc.
BUT!!! I manage to find the ebook version through Google! Save me $1,293.18!
A new copy is retailing on Amazon for a whopping $1,293.18! See below:
Tony Crabel's book is a classic that talks about breakout strategies - ORB, NR4, NR7 etc.
BUT!!! I manage to find the ebook version through Google! Save me $1,293.18!
Feb 19, 2012
Our Students Has Traded Successfully Since
Many trading educators like to claim this.
First up, how many students? Remember there is only 5% successful traders in the world? Does it mean all the successful traders come from your classes? :-D
I remember a popular forex trainer once admitted truthfully that after having conducted so many classes (and mind you, it is really MANY), there is only a handful of students whom he knew begin to trade well. He cited perseverance as the key to trading success for his students. He offered to check his students results but they just dwindle along the way.
First up, how many students? Remember there is only 5% successful traders in the world? Does it mean all the successful traders come from your classes? :-D
I remember a popular forex trainer once admitted truthfully that after having conducted so many classes (and mind you, it is really MANY), there is only a handful of students whom he knew begin to trade well. He cited perseverance as the key to trading success for his students. He offered to check his students results but they just dwindle along the way.
Feb 18, 2012
US Unemployment - Let's Visualize It
Double dip recession...market recovery...sometimes I just get so sick of what the analysts are saying everyday. I still remember back in end 2008 when many were saying that the subprime crisis was just a storm in a cup. The total value involved in the subprime crisis was only a fraction of the entire US economy? Sigh, I have learnt to just take "advice" with a pinch of salt.
Numbers don't ring a bell? Let's try graphics. See here for an animated visual representation of the US unemployment numbers throughout US (up to May 2010). Quite scary when things get glimmer, doesn't it?
So I guess the US government still has a lot of work to do.
Then again.
From Sam Stovall's theoretical model, the market cycle precedes the economic cycle. SO, the stock market has to pick up before we see improvements in the economic numbers, don't we?
Then why those analysts are basing on economic numbers to predict the stock market?
Numbers don't ring a bell? Let's try graphics. See here for an animated visual representation of the US unemployment numbers throughout US (up to May 2010). Quite scary when things get glimmer, doesn't it?
Then again.
From Sam Stovall's theoretical model, the market cycle precedes the economic cycle. SO, the stock market has to pick up before we see improvements in the economic numbers, don't we?
Then why those analysts are basing on economic numbers to predict the stock market?
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