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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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