Thursday, May 31, 2012

Last minute selldown

Learning Corner : Last minute selldown

This is what I do in daiy basis ... checking on the last minute buyings or sellings. This is just to illustrate to newbies or novices who NEED to learn such the last-miute surging or diving. Yes, this is boleh-land's bourse. So, do remember that the candle-sticks formed could be FALSE. This is what I shown to my tratles during our discussion. What indicators are you talking about in trading? It is MORE than just knowing the fundamentals, the news related ... the market pulses and sentiments ... certainly greater than those who use indicators.

So, do use those indicators sparingly ... it fails MANY of times. It is certainly higher of chances to fail if you are trading those speculative stocks using technical analysis.

note : Audio not working. Haha

BJToto : Closed at RM4.17 .... with 1, 478,900 units sold, valued at RM6.17m.

Bursa : Closed at RM4.91 ... with 19,244,600 units sold, valued at RM94.5m.

Another reason why we need to check the buy-sell intraday trades BEFORE we check those charts.

Hope this simple post could help some newbies about WHY I will not trust fully those technical indicators!! We need knowledge, experience ... and lots of common sense. If drawing those multiple lines with 10 indicators could help a person to trade well, go ahead. But for novices ... don't bother to learn more indicators. KEEP you trades SIMPLE. Don't let those indicator-promoters distract you from learning.


Proton : The Saga continues

Proton is the price we pay for brainless patriotism

by Koon Yew Yin
The founding of Proton National Bhd in 1983 was a big expensive mistake to begin with. Billions of ringgit from taxpayers have been lost in the process.

The haemorrhage could not be stanched until only recently when Khazanah Nasional Berhad sold off its 43 percent stake in Proton to DRB-Hicom a few months ago. Malaysians have been wondering – is this finally an end to the unhappy saga of the government’s foray into the production of a so-called ‘national car’ or will the burden on taxpayers and car owners be continued in other new ways?
A revisit of this white elephant project is necessary to generate a larger public discourse especially amongst taxpayers who should be more concerned as to where all the tax money they’ve been paying has gone to.
One simplistic assumption which appears to have been made by the initiator of the national car project Dr Mahathir Mohamad is that an industry that is growing yearly should be profitable. It is not. In fact, industry data shows that the total profits of all the car companies over the last decades amount to only a modest return, and that only for the fittest in the industry

The British experience

Consider the case of British Leyland, a vehicle-manufacturing company formed in the United Kingdom in 1968. It was partly nationalised in 1975 with the government creating a new holding company. The company incorporated much of the British- owned motor vehicle industry, and held 40% of the UK car market.
Despite containing profitable marques such as Jaguar, Rover and Land Rover, as well as the best-selling Mini, British Leyland had a troubled history. In 1986 it was renamed as the Rover Group, later to become MG Rover Group, which went into administration in 2005. This ended mass car production by British-owned manufacturers.
Today, many British car marques have transferred their ownership to foreign companies. For example MG and the Austin, Morris and Wolseley marques have all become part of China’s SAIC Motor Corporation Ltd.

Mistake avoidable

Why Dr Mahathir failed to learn anything from the disastrous British car industry experience is something that completely escapes many Malaysians. Surely any good leader would have gotten his officers to do due diligence.
If they had done so, they would have found that the industry even with year-on-year rises in sales is not guaranteed to generate good returns to shareholders. Notwithstanding its long tradition of successful car manufacture and the country’s highly developed economy, the industry in the UK still failed to make profits.
The reason for this situation is because one of the forces that limit profitability is the intensity of rivalry between car companies from around the world. This leads to oversupply and pressure on prices, further exacerbated by a high degree of freedom for new competitors to enter the industry.

Unless there is an enormous internal market such as China’s or the United States, and we can take advantage of the economy of scale, small producers such as Malaysia are forever doomed to a minor placing, or bankruptcy, in the marketplace.

Played out by Mitsubishi

As far as Proton is concerned, Mahathir’s mistake in ignoring the economic fundamentals of the industry was compounded by our lack of expertise or comparative advantage to produce cars. The anticipated technology transfer from Mitsubishi did not take place.
This should have been anticipated. Why should Mitsubishi transfer their know-how to Malaysia when it can control the pace of transfer to maximize its profits? In fact, the top management of Proton should ask Mitsubishi to open their books to see how much profit they have made from Proton since it began operation.
Mitsubishi knew that Proton could not do without them and they were quite happy to continue making money from Proton while the company here continued to bleed to death.
Equally important was the poor quality of management. Just before the privatization exercise, Proton had accumulated RM4 billion during Tengku Mahaleel Ariff’s tenure as chief executive officer but its cash reserves had dropped to RM600 million during his successor Mohammed Azlan Hashim’s stewardship, according to Mahathir.
To encourage people to buy Proton, the government increased the import duty for other cars and car parts. As a result, the consumers have suffered. For over 30 years we have had to pay higher prices for all cars including Proton. Even this has not been sufficient to save Proton which has been sold five times already.
Another question to ask is why few car manufacturers, until recently, seem to get into bankruptcy? If so, then prices can rise relative to cost and shareholders can get a fair return.
There are two main reasons. In some countries there is always the perennial optimism of managers and shareholders. In Malaysia, the reason is different. Here, our government has been changing rules and regulations to obstruct other cars from entering our market whilst providing special favours including an ever ready supply of financial assistance to keep Proton afloat.
The end result is that some Malaysians have ended up with more expensive cars of other brands whilst most Malaysians have had little choice but to buy Proton – a poor substitute.
This is the price we have to pay for brainless patriotism.

Proton’s and our never-ending problems

Ours is a sorry saga which is a classic case study on how not to set up a car industry. As with the national airline, I propose that a special course on our experience with Proton be offered in the Institute of Tun Dr Mahathir Mohamad’s Thoughts.
What better way to honour the ex-premier than a post-graduate course on his pet project – the National Car – and inviting him to be a guest lecturer. I am sure he will have lots to share and many people to blame as to why the project has failed.

Earlier this year tycoon Syed Mokhtar Al-Bukhary was allowed to take full control of Proton. Since the sale, Proton’s problems have continued through its loss-making subsidiary, Lotus. In March, the conglomerate was forced to put in place a team of consultants to conduct an audit on the Lotus group of companies.
The need for this review was pertinent in light of the financial obligation of Lotus in the form of a £270 million (RM1.3 billion) syndicated loan taken at the end of 2010, for which Proton had given its corporate guarantee.
In March, Proton, in its third quarter results, noted that its subsidiary was in a technical breach of certain post-drawdown covenants on its long-term loan. For now, the loan amounting to RM1.01billion has been re-classified as a short-term loan as at Dec 31 until the receipt of approval for the extension of time.
Although the new owner of Proton undoubtedly has deep pockets (he is the 7th richest man in Malaysia) and owns a business empire that covers ports, the postal service, power, defence and financial services, besides automobiles, we can expect him to recoup his losses by raising the prices further on Proton thus burdening our car buyers, and by charging higher prices for the other goods and services that he is involved with.
In any way, the Malaysian consumer will continue to be suckered by the national car debacle.

Taken from : Sal.Dali's blog


End of May : Go away

"Sell in May ... and go away" is true this year. So, it is end of May now ... it is time to go away. It is a summer holiday, school holiday ... time to go away and come back around August? Perhaps, we should hibernate till Sept ... and only to ''Wake me up when September ends"? I am not sure if I buyings in May is a good idea. I have to wait to see what is next in June ...

DOW closed 160 points lower this morning. We could expect another sell-down in HKSE ... so, I will check to see if I want to buy another counter there.

Facebook : Plunged to USD28 levels now .... and I will check her at USD 20. We could never understand why would anyone interested with the IPO or buying into the stories. Those crooks... the bankers, they are known to be crooks ... treating investors as suckers ... using media to create the hype. I do think good investors will avoid this hype and won't buy into these stocks!!

Brace yourself for anonther sell-down ... or else, cut loss ... and go away.

Got to go ...


Wednesday, May 30, 2012

If I were you

"If I Were You"

You seem to find the dark when everything is bright
You look for all thats wrong instead of all thats right
Does it feel good to you to rain on my parade
You never say a word unless its to complain
Its driving me insane

If i were you
Holding the world right in my hands
The first thing I'd do
Is thank the stars for all that i have
If i were you

Look what surrounds you now
More than you ever dreamed
Have you forgotten just how hard it used to be
So whats it going to take
For you to realize
It all could go away in one blink of an eye
It happens all the time

If i were you
Holding the world right in my hands
The first thing I'd do
Is thank the stars above
Tell the ones I love that i do
If i were you

So whats it going to take
For you to realize
It all could go away in one blink of an eye
It happens all the time

If i were you
Holding the world right in my hands
The first thing I'd do
Is thank the stars above
For the ones I love
Take a breath and enjoy the view
Live the life that I've wanted to
If i were you

It is still a very nice song ... I like it very much. As long as I appreciate lives and those around me, I am thankful. I have no intention to change anyone around and I do think we all live our lives the way we wanted too. So, I will not say ... "If I were you" as I will never be you or anybody. I am born to be me ... myself. I have never wanted to change whatever happened in the past ... or wishing for things to be happened differently. Being a positive thinker ... pushing myself(not others) to improve while appreciate the happenings(good or bad) ... thanking God for giving me "ME" ... that is the way I  want to live.

Anyway ... there are always negative people around us, those who see darkness in a bright day. Those always complain about how unfair lives are ... those who will find faults in anyone ... let them as they are. You can't change them ... you dont wish to be 'them' ... they are un-happy lots, un-grateful with abundance ... taking things for granted. Just let them be ...

For one, we should mix with more positive people, maintaining healthy environments. And for that, we should be thankful that we have the wisdom in us to see the differences ... and lead our lives in a better way.

Thanking those have helped me directly, indirectly ... for being supportive. Thanks many more positive readers and appreciative ones.



p/s : Today is a state holiday in Sabah, a harvest festival(psstt ... time to buy Harvest? hehe).

Comment : Trading as a main income

I was reading what Conrad's writing "Trading as a main income".

Note that the title is “Trading As A Main Income“, not trading to get rich quick or trading for a million bucks.

Now that we understanding what the title is implying let’s discuss it as realistic, mature and serious traders who are looking to turn trading into source of income. In a sense, trading for a living.


Through the years, trading has always been a pipe dream for most who wanted to get filthy rich. With the advancements in technology over the last decade, this pipe dream has been brought closer to home than ever before. Today, it is a very accessible dream to anyone and everyone. All you need is a computer and an Internet connection.

And of course, you need the right kind of market.

This is where the hype starts. We have been over-exposed to all sorts of advertising and promotional rah-rah that make us believe that it is actually possible to make that fortune a reality. We see ads with winners making really fantastic profits from a single trade and we hear of friends who make a living from trading and living the good life. We see the rich and famous on TV that had made fortunes in the market. We read about people making fortunes from the comfort of their homes.

We believe we can be one of them. Worse, we believe it is really that easy.

TEH : I have mentioned MANY of times ... those in KLSE or markets are NOT realistic people. How do you justify that 80-90% of them lost money and STILL losing money? NO COMMON SENSE. People talk about trading and investing like ... those talk-show ... just go to forums, u will know what I mean ... and believe me, chances are SO HIGH that majority of them are just talk-talk ... just as I said, for fun and waste away their time. It is to fill their TIME and boost their egos. Nothing concrete about learning ... about checking their mental states and no one talk about planning. Heck, throw in a few more indicators, everyone can trade! Haha ... explain WHY hundreds or thousands of them paying THOUSANDS of $$$ to attend some trading courses or buying those softwares. NO COMMON SENSE again.

Look, if I want to be blunt ... we need to be REAL ... a REAL person, take the REAL trade and check the market pulse and gain experiences. Heck ... since when trading is reading of books? Reading is encourage and good ... but NOTHING beat common-sense ... as majority in markets do not have much.

Sorry for being blunt and truthful. I do not need to be so-called tactful in my own blog, should I? Imagine this again ... you go to UNI ... 3-5 years, paying SO SO much of money and used so much of time studying, passing exams ... to get a cert. WHAT makes you think that you do not need education in trading markets? THINK deeply about that ... pause a while ... splash some cold water in bathroom ... and promise yourself to QUIT or LEARN.


There are many stories in the market, especially by those selling the dream, that you can make millions of dollars through trading and investing. There are testimonials from those who have made a year’s salary in only two weeks and some who have turned a small account into a million bucks.

I am sure there are truths behind those stories but the one truth that is never told is whether that success story continued and how it ended. Most end in tragedy. Poor financial management, complacency, reckless overtrading and inconsistency usually plague such successes. The reason those successes don’t last is because it is not really success – it is pure luck.

And luck always runs out.

The truth is that it takes money to make money when you don’t have luck to make you a million.

TEH : Yes ... I like what he wrote ... REALITY. I am not exposing those hype or those advertisements telling us stories about how he 'has done it'. Haha ... allow me to laugh. The next time you want to pay those thousands of dollars for a trading class, think again. How about pay me a fraction of that and I teach you the school-of-hard-knock way of trading. Yes, I do not invest any of those indicators ... it is there. But, how are we going to know what to use and when to use them ... if you are NOT a REAL trader? I am talking about real trading ... real pain of losing or missing boats!! Only real pains could teach you some lessons(if you want to learn).

Let’s get real, shall we?

Real trading is about creating a proper and sustainable income based on being realistic, pragmatic and consistent. I always tell my students to aim to make $50 to $300 a day. That is realistic, pragmatic and it can be a consistent income that pays handsomely by the end of the year.

Almost all my students don’t even have a $200,000 capital to begin with. Beginners almost always start out with $5,000 or $10,000. For a 5% gain, you should aim to profit at least $250 from a $5,000 trade or $500 from a $10,000 trade. That’s realistic and doable on a regular basis. Sometimes you will get lucky and the market may handout a little more than 5%.

If you are able to take an average of $300 off the table a day, you’re looking at a $1,500 weekly wage or $6,000 monthly income. Even at a $100 a day, you’re looking at a monthly income of $2,000 which works out to $24,000 annually. Now that is what trading is really about.

If you can’t achieve that humble level of success, don’t even dream about the big money.

If you can’t handle small successes, you won’t be able to manage a windfall.

TEH : We do not grow our investment over night. Tell me ... how long do you plan to be in market? How much could you sustain ... losing more than profitting? How long will it takes for the market to punch you and then you will say ... I quit?! I want to emphasize the word CONSISTENT. I do not care if you told me you have made a 'killing' in trading a speculative XYZ as I do know ... in long run, the so-called LUCK factor will not be on our side. It is not 50-50 ... I told my new tratles that day ... 80-90% of them losing money, you all sure want to be in the market? I have a few total newbies in this new cohort-6. Very discouraging ... but that is the truth I am sharing. I do not want the group to talk about those speculative empty-shells stocks. I will get upset ... and place that as one of the main rule it the group. Trade at your own risk ... and be serious in trading.


It is a well documented fact that in the world of Trading, there is a small percentage of winners and a disparagingly disproportionate percentage of losers. It is also common to hear about many small time traders losing thousands of dollars to a few winners who make hundreds of thousands and even millions of dollars. The obvious truth is that there are a small number of traders making lots of money from a huge pool of traders losing their capital.

Why the imbalance and why is it so unfair?

In actuality, it is not unfair because those who are successful at it have done all it takes and more to get to that level. They are a dedicated and disciplined bunch of people who have the values that most people dislike; they are Patient, they Work Hard and they Practice their craft. It takes a very special person to have those qualities and to live out those values every day. It demands Discipline, Dedication and Determination which most people don’t possess.

Most people would prefer to have easy money without having to work for it, wait for it or practice to get it. They lack the determination to learn how to do it, they are never dedicated to earn it and won’t have the discipline to keep it.

TEH : He has written is very well ... taking words out of my mouth. Lee Chong Wei does not becoming champion in a year or two ... he practised hours per day for years ... since young!! The determination ... the dedication ... and the discipline. Yes, the 3-D ... which I will certainly write more about it. Nothing comes easy ... and since I am only 4 years in markets ... I am still very much a novice, whether you want to believe or not. I should know better where I want to be ... and yes, give me another 5 years of DAILY practising ... I might be a good trader, one day. I will still be here writing this blog ... but I m not sure if you(readers) will still be in market or reading my posts? I m getting my cohort-6 moving, by then ... I hope to reach cohort-50 ... will you be still interested or still dreaming of becoming a trader?

Seriously, I do not really 'dream' to be a trader ... I just continue to work hard ... to improve myself, increase my knowledge. I was handicapped as I have zero-knowledge about finance, accounting, economics, businesses ... plus markets ... I learnt them by myself, in daily basis ... for average 4-6 hours ... for 4 years now. How am I doing? Good? Not really ... I m always dissatified with what I m achieving as my benchmark is to better MYSELF ... no one else. It is ME and I. I respected so many who have 'done it'(I m talking about REAL investor-traders again)  ... and yes, I respected Conrad. I read his books ... I asked my tratles to buy his books and more. I could only guide ... but I could NEVER be able to ask them to do what I have done ... it is crazy, to think of it. Haha.

This is typical of life. The few who are rich are those who have worked for it, experienced failures and earned it the hard way. The many who are poor work for the rich to make them richer. The same can be said of the market. Those who learned it and earned it the hard way will always make losers of those who are ignorant and foolish enough to believe that the market is easy money.

The losers are the ones who believe that the market can get them rich quickly. They treat the market as if it is a system to be beaten. They also use the market to gamble their hard earned money away. In short, they don’t take the market seriously and don’t respect the market as a serious, highly qualified and professional financial business.

If it were that easy, then why would Wall Street Traders need to go through years of university education and more years in mentorship before they become the best in the world? If it were so easy, why do we keep hearing so much about so many people wiping out their accounts in the market instead of hearing more about those who have become enormously successful? The success stories are far and few between but the woeful stories are plenty and common.

TEH : Yes ... taking gambling habits to market .... again, you could read some posts in forums, you could only shake your head. Are they real? One good trade could get you rich? Some bet so huge in XYZ because of some so-called sifu given them tips about buying ... with target 200% by end of the year? Who are you kidding, man?

Being realistic ... if one do not lose money(breakeven) in first few years ... congrats, you must be doing something right. If one has cultivated good trading habits, getting good trading systems ... putting with right mental for trading, it is the ONLY way to be successful in trading ... consistently.


In the movie, “In Pursuit Of Happyness“, Will Smith’s character, Chris Garder struggled in life as a medical machine salesman looking for and dreaming of that “next big thing“. Cutting the story short, Gardner becomes a trader on Wall Street after a lot of reality checks, struggles, sacrifices, trials and failures. The sacrifices were not his own alone but that of his family and more famously, his son who kept his faith in his father’s pursuit for happiness.

We know today that he is a successful and well known figure on Wall Street.

It didn’t happen overnight. He didn’t get rich quick. And he certainly didn’t attend a three day workshop to learn how to trade.

If there was one element missing from this rags-to-riches story, it would be how Gardner still had to continue to work his ass off as a trader before he made his first million. He had learnt what the pros did and how they did it . And it took a lot of hard work, patience and practice.

I’d like to share with you a simple fact that seems to have been missed by everyone who chases their dream of becoming successful – have you noticed that there are many movies and books about successful people and how they struggled, failed and struggled some more before eventually finding success … but there are none about people who became successful overnight or got rich quick?

This is because it is a reality of life – true, lasting success doesn’t come easily and those who have it had to work for it. Nothing comes easy.

TEH : I bought this DVD(original, ok?) ... I do not watch movie much(no time) but I searched for this one. Yes, it is related to hardship and success. I do not really see myself successful but I am currently building the foundations needed to reach my goals. Again, I do not bother much if anyone is going to tell me I am successful or nor successful. It doesnt matter much to me. What matters to me ... is how I feel about what I am doing!! I admit I have struggled pretty much in the initial stage of learning ... but believe me, it is good and invaluable.

Yes, nothing comes easy .... if attending those 3-days or 4-days courses could make you a trader, you are such a naive dreamer!! So, I m making my trading course in alternate Saturdays and more meetings with daily sharing in my group through facebook and blogs. NOTHING comes easy ... so, many of my tratles ... keeping very quiet now. I dont even know if some of them still in markets. That is how difficult I want to make it to be ... travelling all the way to attend my long-winded 3 hours talk!! Haha ... believe me, if there is a good talk in Penang or Spore, if I am available, I will travel there ... pay money for it and attend the talk. I have travelled to market-talks and such whenever I am available. Have you seen me stop writing a post or not checking on markets for a day? I dont waste time ... as I do not have the time!! Time = money to me!!

Real trading is all about making a steady income. I don’t boast about being a big time trader. Those who know me will tell you that I don’t trade big time. I don’t make tens of thousands a day or even in a week. The trades I make have a humble profit objective of $100 to $300 for every $5,000 to $10,000 capital outlay. I frequently do make a higher average than that, often between 3% to 5% and on the occasion, more than 10%. But it all starts with a humble 2% to 3% target.

At that level, you still can make a million starting with a $10,000 account but it will take around eight years if you have the luck of the right market;

A $3,300 capital should return you around $100 on a single trade which works out to around 3%. Thus three trades for a total capital of $9,900 should get you a minimum of $300. If they were inter-day or intra-day trades, you’re looking at $300 a day averagely. That works out to around $72,000 a year.

But that’s a minimum, meaning to say that anything less literally tells you that you’re not trading well. You need more practice or you need to find out what real traders do and how real traders do it.

A $10,000 trading account yielding 3% daily means that on a monthly basis, its actually turning around $6,000! But let’s keep it real and say that you’re only half as good and there were some losses too … let’s say half … you’d still be making $3,000 monthly. This is still $36,000 a year – a really good side-line income for any trader who is starting out.

Now consider that with more practice and experience, you’re able to increase your trade sizes and thus increase your profit margin over the next few years – $36,000 turns into $54,000 the next year. Now you have a capital of $90,000. In the subsequent six years at the same growth rate you raise your account worth to $135,000, then $202,500 and in fifth year, your account grows to $303,750. By the sixth year its grown to $455,625, year seven its up to $683,438 and on the eighth year, you finally break a million at $1,025,156.

Somewhere in those years, you might take a hit and you might get extremely lucky. With proper financial management and discipline, you will keep the losses small and let the luck ride big.

But that is only if you know what real traders do and how they do it.

So why, after reading this, are you still thinking that you can get rich quick through trading?

TEH : I m not dreaming of getting rich, I dont have the amount in my head ... as I remind myself to improve my trading system, be humble to listen to others .. in order to learn from many. I never see myself any better than other traders, but I do know that I need to continue to focus in my trading. At times, I got carried away, at times ... I do blunders and also many mistakes along the way. In my ups-downs, I maintain my focus ... and I am no longer alone, I have a whole group with me. So, I have greater responsibilities of educating and sharing with them ... what I have learnt and my mistakes too. By admitting wrongs, correcting them ... by sharing and reflecting .. that is called maturity. Yes, we do need maturity to be in markets.

I have chatted and known many 'immature' traders/investors ... those young and egoistic ones(in fact, I kicked one person from my stock-watch last month) ... and making sure the group maintain focus in their tradings. Otherwise, it will be just one of those noisy forums where you could easily lose focus.

I will continue to teach .... holding to my full-time job, giving tuitions and teaching some basic tradings. I never claim myself as sifu or good. My tratles knew me in person ... they know better.

One day ... perhaps 5 years later, I might quit my full-time job .... getting out as full-time trader. Perhaps, one day ... I will feel my own success ... as even if I fail, at least I have tried.

It is 12.30 am ... time to rest after 7 hours of class yesterday.

Today, I am 45th. :)


Tuesday, May 29, 2012

Moving to HKSE

If I am in Sabah now, tmr is a state holiday. Yes, just another reasons, on top of the many, why I would love to go back to Sabah ... once I retired from many of the things I am doing now and my responsibilities done with. I do have small beach-apartment(vacant ... anyone travelling to KK can rent my place, ya!) ... with nice furnishing and my vacation home at the moment. It will be a nice place to retire ... I like beaches ... not bitches, ok? Haha

HKSE : Let me check my HKSE's babes ... ZJ bought at HKD9, now at HKD9.40, Qinfa bought at 1.25, now at 1.30 and my most recent babe is CNOOC, bought at 14.18 and now at 14.60. Doing good. What I missed was Geely ... eyeing at HKD2.50, missed the queue ... now at HKD2.90. Ouch.

Anyway ... I still have one more HKSE's babe to buy ... thinking ... what's next?

Due to the political risk in Malaysia, with sodomy-news as the mother of all jokes here ... KLCI could not go any much more(tho I do expect it to break new high at 1620 before the whole collapse again) ... moving myself away to HKSE is my choice. I have told my whole group last year that they should consider HKSE too but majority are too new to trading and markets ... HKSE is a totally new playground. For me, I hv been familarising myself with HKSE for the past two years.

In fact, I m thinking of sharing many of my HKSE's stocks I am looking into, but it did not attract any much interests from my tratles or my stock-watch groups. We are more familiar with KLSE ... so, it is obvious that the fear(risk) of unknown ... giving us the fright!!

Imagine the liquidity in HKSE  ... imagine those huge-cap stocks(unfortunately, 80% are owned by China's gov) ... imagine the cheap valuations(many trading in single PER, ok?). Imagine the growth stories in China. Imagine the huge population with increasing purchasing power, imagine ... Malaysia 10-20 years ago, where cars was a luxury, handphones are new gadgets ... computers only for those 'elite' ones ... imagine the technologies transfered from the western ... of coz, imagine the 'cloning' could be done ... imagine the amount of energy-power needed to run the whole country and the demands ... imagine the huge reserves which the diversification of their USD into commodity will only help to boost the prices of commodities. Imagine too .. the un-imaginable ... and imagine these glutton Chinese, punting away in ... the largest casino ... HKSE.

I am buying Jim Roger's stories about emerging markets, particularly ... China. So, I hope I am smart enough to buy more HKSE's stock this year and next(till the next collapse).

We just need to be patient to wait for correction ... we do need to know what we are buying. I am checking more on HKSE recently due to better valuations there and less political risk(no political-sex news to excite us).

So ... I will form a group ... for HKSE. Anyone interested?

7.30 pm  : It is not even in my planning yet to form a HKSE-group as I do not really think so many will be interested. It is just a thought ... then only plan ... and to see if it works. Thanks for few responses to join!!

Qinfa : Bought at 1.25, closed at 1.36 ... 8.8%, way to go.

Cnooc : Bought at 14.18, closed at 14.72 ... 3.8%, way to go.

ZhaoJin : Bought at HKD9, closed at 9.63 ... 7%, way to go.

All the above bought less than 2 weeks ago.


Monday, May 28, 2012

Punting in stock markets

One of my class cancelled(that is RM240, ok? ouch). Anyway, I still have classes till night today. That could give me more bullets collected to shoot ... hehe.

Today's topic ... how not to lose money is another COMMON SENSE which not many have in trading markets.

EMPTY ... by Click Five(I like)

Rule : Do not buy speculative, empty-shell stocks due to rumours.

Now, many or should I say ... most of the stocks traded in KLCI is manipulative and speculative. It is very quite easy to see ... they are the always in most actively traded stocks in KLCI for few days(at times, could be only for few hours!!) ... many punters talking about them in forums(most of them gamblers, uncles-aunties and those ignorant newbies). Most of these stocks are penny stocks ... and many below 20-30cents.

Let us take today .. we have SMI, Silver(PN17 also many punting, up 30+% in one day today), Abric, Emico ... and those ACE-babes such as Dscsol, AGlobal, Focus ..,

I dont know how to trade these counters. They failed most of my FA criteria and technically, it COULD not be used. So, it is pure speculating ... punting , get stuck ... dont know what to do, after dropping 30-50%, cut loss ... and repeat to gamble again.

Ingens : A weekly chart of a stock called INGENS. Hmm ... I m not sure if it is a name of a japanese cartoon character, but I do heard of it before. Where?? Yes, forum ... i3-investors, such a good platform INFESTED by punters ... talking and discussing about INGENS. Haha ... sorry, I m cynical. I do get upset if I need to probe further about its fundamentals.

It is thinly traded today at 0.075, dropped from 15cents levels ... that is 50% losses if one has punted into her during that ONE day surged(21st Mac). Game over for a time being ... till one fine day, some donkeys will make noises in the forum, and it rumours to be gorenged to 20cents again!! Perhaps, one may wait for 0.035(another 50% drop from current level) for a 'safe' entry point. WTF am I talking about? Entry-point? Haha ... I m talking to gamblers ... if one really NEED to enter ... nothing above 0.04, please. If we got stucked ... what should we do? How on earth anyone could tell WHY you entered at much higher level then? Of coz ... GREED ... today, fear? Sell for huge losses? One thing for sure ... I will NOT touch such counters, certainly will NOT average down. I will CUT-LOSS all those stupid-donkey's stocks, shake myself up ... splash cold water(soak in salt water, please) ... and making sure I will NOT be in market anymore UNTIL I get the simple definition of trading-investing right.

Ooppss ... side-tracked ... where am I?

Yes, how not to lose money? Simple tips here ... NEVER get yourself to buy through rumours, espeically those PENNY EMPTY stocks. If you dont know, ask!! Damn it ... stupid Malaysia education system, oppression of freedom of speech ... till majority of us DO NOT cultivate the good habit of LEARNING. Damn the education system, we simply DO NOT learn anything much except getting some certs to WORK. Phew ... voicing out the frustrations ... haha ... why many WILL NOT ask, queitly they will buy into Ingens, AGlobal, DVM ... AsiaEP ...

Another example : AsiaEP

Someone told me that her remisier asking her to buy AsiaEp at 0.08 ... I was like ... WTF ... shoot your stupid remisier(how he got the license, ask him) due to some rumour of 'china' ... I advised her NOT to get into such rumours. Oh boy ... the stock when up to 0.10 in few weeks time. Damn it ... I was wrong to give the advice. I m not sure if I was cursed. If you punt at 0.08, and becoming greedier ... did not sell at 0.10 ... and each time it moves lower, u will say ... it will rebound to 0.10 again ... you are proven wrong. Today at 0.04 ... shoot me, it is 50% below my cost price now, should we average down? Please ask the same remisier. He should have told you the exit point too.

It is endless ... do NOT blame your remisier, do not blame the persons posted in forums or blogs, do not blame anyone, including your dog ... blame yourself. Take it. Cry over it ... slap yourself, splash some cold water ... move on. Start afresh ... if you have the will. If not, QUIT market ... promise never to come back to stock-market anymore, it is SCAM. It is full of bull-shits ... from your remisiers, your broker reports ... those media ... just quit and avoid and accept that market is not for you.

What if ... Iris goreng again. What if KARAM-bunai or Sanichi goreng to 25cents again? What if ...

Advice : Never buy into these speculative empty stocks. It is NOT cheap. We do NOT value stock as cheap through it prices. Never to touch a stock below 50cents or perhaps below RM1. It is the tips I could share on "How not to lose money" ... in markets.


Sunday, May 27, 2012

Had a nice day

Sunday ... I was busy the whole day with classes due to the nearing exams(Tuesday). Tmr I will be fully booked till night ...

Anyway, today is a very nice day for me ... I mean, I m very glad to ask my sis & hubby for dinner ... plus managed to ask my two aunties to join us!! It is indeed a nice feeling, dinner on me ... and that is the best feeling, I guess.

You see, previously ... in so many years, I never really could afford to treat my family members dinners or whatever. I was simply too financially tight myself, with my naive characters(about money) and ... I could only shallow my pride, checking that I could not afford.

Today ... I am glad ... as I could be able to ask them for dinner, and making sure they are no longer worry that I could not afford a nice dinner. I am not spendthrift ... but I am very willing to spend a little for a nice dinner with my whole family. And I want to make it more often!!

Again ... it is a luxury to me ... I worked hard these few years, I m making sure that I m focusing in the right direction and not allowing myself to rest much. I still have so much of things to do ... full-time teaching job, my tuition classes ... trading courses ... and my facebook-pages, besides this small cyber-page I am occupying. I m certainly not looking for luxurious living, I will be glad to have a simple-content lives ... but with some money in pockets, I could afford to spend on people around me, my family.

Then, my aunty(a mom to me) just bought an i-pad-3. WOW ... she said she could go online now. I gave her my site-address(haha) ... and told her my blog is very boring. I talk about nothing much, except some stocks ... strategies in trading or investing ... or some times, just a place for me to share my feelings(like now).

I dont know if she is reading these lines ... I just want to let her know that she has done so so much for me, making sure I grew-up to be a man, a useful one ... and someone she could be proud of. I have no achievement to show her ... but seeing that everyone is happy with tonight dinner(even my little girl enjoyed her spaghetti) ... making me very pleased tonight.

Kor-kor, it doesnt matter if you are reading my blog, I will still write 'independently' as I have(LOL) ... and you do not need to understand what I am blah-ing about. What is more important I would share here ... is the gratefulness I felt ... and I want to say "thank you". Thanks for being a mom to me.

Welcome to my blog ... and you are my most valuable reader!! :)


Stock Watch(HKSE) : CNOOC, ZhaoJin and Qinfa

Qinfa : Back to HKD1.25 and grabbed at 1.25 done ... will check to sell around HKD1.50-1.60.

CNOOC : Bought 2k units done at HKD14.18. It is rebounding from support.

ZhaoJin : This is posted for my stock-watch page, slowly introducing to them some HK's stocks for trading purposes. Queued at HKD9 and it was done. Recently touched HKD8 before the rebound. Will gold prices recover from here? We shall check.

Yes, to me .. it is time to move more to HKSE as there is no election-fear in markets and more attractive valuations. In fact, volatility is what we needed ... to trade.

Happy Trading.


Saturday, May 26, 2012

Valuations of stocks

It is Sat ...  I do have classes from 9 am to 11am, 11am to 12.30pm ... then lunch with some of my tratles ... before have a meeting(my cohort 5) and analysing some charts with them. When we practise in do things regularly, we could improve ... and to me, that is the only way to improve. Theories remain as theories ... without practices, it is empty.

Quote : Theory without practice is empty, practise without theory is blind.

Markets are VERY huge ... there is no way a person could claim he knew it all. Not possible. May it be FA or TA or combination of both, there are simple so much things to learn. To check on one indicator itself, back-testing our theory ... may take us months or even years(as market environment changes). So, if anyone telling me that trading or investing in market is easy ... I do wonder what he meant.

Valuation parameters

Imagine this ... many use PER as a valuation ... but it is not as simple as that. Low PE doesnt mean cheap to buy, high PE stocks are popular and hot. We have historical PER, average PER ... forwarded PER ... and if a newbie is to read those broker reports, we could easily get confused. Yes, I speaking about myself ... imagine digesting those reports, without any knowledge in accounting.

One good example of low PE-valuations stocks are those chinese-shoe-stocks. Many are trading way below their IPO and trading below PE-5. Yet ... investors shun these stocks due to fear of a/c malpratice and the 'Made in China' stigma. It is interesting to read that ... many such companies are actually empty-shells, cooking up some good accounts and beautify their annual reports.

On the other hand, we have those ACTUAL empty-shell-stocks, loss-making companies ... or with very high PER(heck ... I was wondering about Facebook, trading at PER 70+ when it was listed, tanking to USD31 today and it is still extremely expensive and ridiculous to invest in). Counters like MTronic, Harvest ... AGlobal ... these are new darlings of so-called investors in KLSE. Someone asked me(a newbie) how do we identify a speculative empty-shell stocks to avoid? Well ... how would you answer him?

Every good investor will tell you that we should NOT use PER alone as to value a company. Yes ... the leader of the sectors will have higher PER(seen as leader ma, so ... deserve higher valuations). When we compare a company to another company, we need to speak about their business ... it is apple-to-apple comparison.

Another yardstick many investors will look into is P/B ... generally the low the 'better'. So, low PE and low PB is preferred. Yet ... hhmm .. it is not really a buy?!

I used to check NTA ... and order book. Well, you know ... when an analyst want to be bullish about a counter, and placing a BUY in their reports ... they will come out with many other ways to convince you why it is a buy. So, they will even mention that the stock is trading way below its NTA(Lionind in mind) or the company has strong order-book, to occupy them for another few years!

Low PE, low PB ... high NTA ... swelling OrderBook ... is a buy? Heck ... it is still not a buy?!

How about cashflow ... strong cash counters are always preferred. Yes, I do like cash positive counters a lot ... until a friend of mine(an accountant) told me that we need to check where those cash from?!! Arrghhh ... as newbies, we will be confused by now. Ok .... we check their debt/gearing ratio ... it simply means that if I have RM1k in hand, but I owe someone RM2k ... that is not good. But, if I have RM2k cash in hands, with no debts ... yes, that is positive pointer. GasMalaysia in their prospectus stating they are debt free. So ...apply and see can get a lot of two, if you are lucky.

Dividends do not lie ... fully agreed with this book. I like. As investors, we do look into dividends as we are going to buy-n-hold. If I m putting my money in FD, getting 3% ... it is certainly more logical to put our money in a stock which gives us more than 3% p.a. There are SO MANY of these good companies giving us such a return. If my aunties/mom know about compound-interest, and discover these good companies ... putting in FD for past 30+ years, they should be very rich now. Yes, as they save every penny, buying only during market crashing ... how to lose money, right?

I have to go ... otherwise, I would have blah-blah longer ...

Just remember, DO NOT read broker reports to buy/sell. Learn to value the companies, business-wise. Buy those blue-chips if u dont know. Buy only during market crashing.

Happy Investing


Thursday, May 24, 2012

Warren Buffett : Investing

Warren Buffett :" I do not look at the price first, I look at the business first".

Warren Buffett : How much it is selling for, how much do we think it worth.

PetroChina : Was trading at 35billion, worth 100billion in our valuations.

PetroChina is the second most valuable company, after Exxon.

Lady : "How do you find a report like PetroChina 4 years ago?"

W.Buffett : Everyone else reading Playboy, I read annual reports. Haha

Everyone is speaking about him when it comes to investing. We all are different, and yes he started young. When everyone else in his early teens playing games, he started to learn about investing. Can you believe that? Do you know that he is one of the richest man in the world and living an extreme 'cheap' lifestyle?

My highest respect : Warren Buffett.


Wednesday, May 23, 2012

Depressing Sector : Alternative Energy

CWP : Testing the important level of HKD 0.28 recently. PER at 5+ levels, declared dividends.

XinJiang : Trading nearing to historical around HKD3. IPO-ed at HKD19. Talking about waterfalls ... this is a deep one for those still holding the stock. I remembered I have written about her during her IPO ... as she is one of the largest wind-power energy producer in China. What's wrong here? PER at 11+ ... without gov's aids and those hpye about green-planet, it will only go lower ... and dormant for looong time until ... one day, crude oil shoots to USD200, governments globally TRYING to show they cared for the planet-earth ... and pump in some money for the sector again. Many smaller companies 'closed' shop ... it is a tough business to sustain.

SolarGiga : From the peak HKD, I drew lines ... HKD5, HKD3 ... then HKD1. Today is is going below 50cents soon ... ouch.

You get the picture ... one of the most depressed sector ... and it is no longer green!! Google-it ... one could discover that many solar/wind companies are getting gov's aids and as the still need more capitals to build the infra-structures ... the whole industry would bleed.

About 3-4 years ago, I read a lot about alternative energies ... and it was a very hot sector then. Today, it is abandoned. Wanna be a contrarian? A lot of work to be done ... ever since I have 'left' for greener pasture.

Worth checking ... and another collapse of the markets, we shall see these as a long term altenatives.


Call warrants : The risks

Last night I went to RHB for a talk ... about RHB's latest products(screeners) and 'Call Warrants'. The CW-talk was by OCBC, actually. They are new-kids of issuing CW with 8 listings so far.

I met : A reader, who recognised me when we took a lift together to 11th floor. Kelvin, who is attached to RHB now. JT, a real estate agent who has his own facebook page and I did not even really realised I was added in his group!! AT, my tratle(of cohort-6) and a CNX-member ... who told me that they have replaced the previous your trainer with a 'better' one recently. Well, such a place is a place to get some interactions and sharing of knowledge and ideas.

Screeners : I have to admit that RHB's latest screener is good as they placed FA and TA together. Yes, these days ... we do many traders who do look into both of the world. No longer we argued about FA vs TA. Of coz we always have people who will only preach about FA or TA, and condeming the other side(to justify that they are they best ... those egoistic and obstinate/stubborn ones). Anyway, the screener is 'free' till end of June ... and yup, nothing is free, ok?

Points: AirAsia partnering with RHB, they are giving 'hottie' points ... each time you trade with RHB, they give you points ... and after collecting the points, you can get a free AirAsia ticket. Now ... everyone can trade and fly. haha.

Undervalued : Through the screener for some fundamental's criteria, RHB is deemed to be undervalued for a long term investors. Well, RHB is being used as example ... by RHB. Ironic.

Then ... the next session is talking about 'call warrants'. There are so many of them there ... I do wonder who are actually trading/punting into these risky instruments. Let me share a little about the RISK, as most of those issuers will only tell you more of rewards. We all know why people willing to punt into call-warrants, right? Yes, the very HIGH profits ... came with HIGH risk that majority do not and could not fully understand.

There is one young guy sitting next to me and said he is 'new' to market. So, I advised him ... do not touch call-warrants, no matter how much that guy in-front promoting them. In general, do not buy what you don't know.

Risk #1 : Expiring in short period of time. Most of the call-warrants are short term ... 6 months to a year tenure. Once it expired, you will get NOTHING as almost ALL the structured warrants in KLSE is 'European style'(cash settlement). So, the risk is too high to buy-n-hold. Believe me, very likely it WONT be in money. You lose it all when it expires. That is the main risk.

Risk #2 : Many of these instruments could not be traded ... no liquidity, no volume. Yes, only you and the market-marker(the issuer). Guess what ... when market or the underlying mother share going against you, you will lose hugely as you could not be able to sell, especially when the expiry date nearing ...

Risk #3 : Lacking of knowledge and experience in trading these could created a huge emotion swing!! One day up 30%, next day up another 30%, the next few days ... no volume to trade and if you thought you are a genius to gain 60% in two days, it gaps down 50% the next week ... and slow death ... moving lower. Once you cut-huge-loss, it shot up another 40% only for you to chase ... and the emotion swing continues.

I could point out a few more reasons WHY majority in markets, especially newbies and novices should NOT trade call warrants but I think it will fall to deaf-ears. In fact, I will be seen as being jealous of their huge gains. OUCH.

I stood up to correct him during his talk when he kept mentioning of exercising your call-warrants to mother share. You COULD NOT do such ... it is cash settlement and you have to wait for the expiry date, to settle with the bank-issuer ... using CASH. These are not company warrants. By the way, if you buy a good fundamental and dividend stocks, they do not expire and continue to give you dividends. Buying these call-warrants is GAMBLING and PUNTING. Just dont touch if you dont know ... but I know many of them get too excited about the high leveraged instruments. I was a newbie and novice(still am) too before, ok?

He also used the term 'invest' in call-warrants ... it is NOT invest. We may allow the term 'trade' but I prefer the right word ... punt or 'tikam'. Haha.

He shown the basic calculations such as premium, gearing, delta ... and majority could not understand such calculations. I could recommend Alan Voon's book. Buy that ... read few times, and after 2-3 years in market ... perhaps, one may want to check on warrants? Good luck.

Yes, I am very discouraging most of people to go into call-warrants. There are simply too many things to learn about if we do not want to get badly burnt. Choice is yours, anyway.

There are only two way about it ... either you win(profit) or you lose. I have reminded many times my group, that 80-90% of those in markets losing or lost money. WHAT makes you think that we could be the top 10-20% of those in market profitting? No sense ... no common sense ... going into markets without knowledge, no expreinces ... straight away want to gain hugely, punt into call-warrants ... after winning hugely, thinking he is a god-of-stocks ... and continue to gamble, and will eventually lose all back to markets and more. heard of such stories? I do.

Well, I would like to thank him for giving up some revisions on the calculation part, especially the effective gearing part. Just don't promote it to those majority. It is too risky for them ... they even lose money trading AirAsia ... how to handle AirAsia-cw?

I do hope Bursa or SC will educate more traders and investors. That is my hope ... that one day, more of those in markets could understand RISKS. Dont talk about profit first, ok?

Another example I gave my tratles last weekend ... you are new in your company. You were excited that you 'passed' the interview ... you get into your job, totally new ... and you are thinking of increments and bonuses in the first week of your job?! THINK ... dont you think so it should be ... doing all the donkey-works, extra efforts ... going extra miles, doing what others NOT doing(in a smart way), gaining experiences ... THEN only ONE DAY, we might think about rewards from the company? If you have done well and the company does not done well or did not appreciate your efforts, the experiences you gained could be taken as a stepping stones to move to a better company, right?

THINK ... as thinking needs brain. Mind you, majority of those losing money in markets DO NOT use common sense. Somehow, we are good in our jobs, we spent years in college and universitys acquiring the paper-qualifications(license to work) ... but ... well ... we do not need any qualifications to buy a call-warrant the next morning, right? Unless you are below 18?

Enough said .. need to check on markets and my open positions.

Good luck in your punting ... I mean, investing.


Tuesday, May 22, 2012

Moving to HKSE

It is 2pm plus ... I was busy this morning ... really busy, reading and scanning for some stocks. To reduce my exposure in KLSE(due to GE risk), I m going to move back to HKSE as there are cheap-sales everywhere.

I won't be actively trading HKSE ... just buy ... hold till overbought(or 20-30% profits in coming months). Many in oversold positions and trading at single digit PER. Do your homework.

HSI up 240 points at the moment.

RHB-talk : I will be attending this one tonight. Prepare to scribble and hope to record the whole talk using my 'smart-phone', one of the reasons I need a smart-phone, ok?

Ok ... back to my trading and reading.

Will report about tonight's talk if I could stay up late till 2 am again. I have been sleeping around 2am for the past one week. Well, market is down ... I am busier. Once all the buyings over, I will rest and let the nature taking the course.

till then.


Monday, May 21, 2012

Stock Watch : 3M at new lows

MAS : A strong rebound will give good profits ... could MAS be flying again?

MEGB : Dropped below RM1, harami formed today, watching for reversal. Yes, the PTPTN issues dragging the stock price lower ... master without skills. Will the boss take it private? Thought he was yelling that it was under-valued at RM1.20?

MISC : The rebound may be short-lived as the volume decreases. MISC was at new low recently too.


Don't give up, don't quit


D'Masiv - Jangan Menyerah

Tak ada manusia
Yang terlahir sempurna
Jangan kau sesali
Segala yang telah terjadi

Kita pasti pernah
Dapatkan cobaan yang berat
Seakan hidup ini
Tak ada artinya lagi

Reff 1:
Syukuri apa yang ada
Hidup adalah anugerah
Tetap jalani hidup ini
Melakukan yang terbaik

Tak ada manusia
Yang terlahir sempurna
Jangan kau sesali
Segala yang telah terjadi

Back to: Reff 1

Reff 2:
Tuhan pasti kan menunjukkan
Kebesaran dan kuasanya
Bagi hambanya yang sabar
Dan tak kenal putus asa

Jangan menyerah (6x)

Back to: Reff 1 & Reff 2

Dan tak kenal putus asa (2x)

Bear Grip : What to buy?

Monday morning ... it is a Monday-blue as Chelsea won the Champion League. After that, EPL will have a break ... Liverpool needs to get a new manager, someone talking about Micheal Owen. How about Steven Gerrard in future? Playing and managing is certainly a different ball game. You don't need to be good player to be a manager, right?

cohort-6 : On Sat, I have my first class with my latest batch of tratles. I am surprised that I do have few total newbies to market. They might struggle a while in learning the terms and many more. To even get use to the 'bull-bear', 'long-short', 'leading-lagging' ... phew, really a lot of things to crunch. Hope I could encourage and guide them well ... these are the newbies!! They are recommended to join my trading group by my tratles!! That is nice ... the best advertisement is through 'mouth-to-mouth'. Hope I could grow my trading class from here, getting my notes and many more in more professional way. Perhaps, I need to get my own place ... hmm .... a more comfortable place for them to be there for loooong 3 hours plus. I do need to give some notes as suggested by one of them(AT). And ... I might need to wear in a more proper manner!! haha. Anyway, the response is better than I expected(well, market collapsing ... I thought some might quit even before coming ... I was proven wrong) ... I was thinking of 10-12 of them ... but I will have 14 of them now.

cohort-7 : I do still have 4 enquiries where I could not cater for them ... some I forgot to reply their mails. Sorry. I m extremely busy and might over-look on some e-mails. Using facebook(listed on Friday), it is the best way to communicate with me. I could not promise that I will have cohort-7 as I will be very busy till Sept now as once the current exams over, the next one will be in Nov.

tuition : I have taken in 3 new classes ... I need another 5 new ones to tally my current no of classes. So, till I have new classes, I will be kinda free for another 1-2 months. The 'free' time will be spent to be back with my e-tratles.

KLSE : I am interested with waterfalls ... so many of them. You go for what you like. I do think going for bigger cap or blue-chips would be better. GenM and YTLPower sound good.

SGX : I am looking at Olam and Noble. These two popular counters at extreme oversold region, the gap down recently.

HKSE : I am going for ZhaoJin ( and/or Geely( this week after stalking for two months now as gold prices retraced. It is showing early signs of rebound now.

ok, time to get back to my work ... lots of paper-work. Yes, I do still have full-time teaching job, u see.

Happy bottom-fishing.

Note : I like this song ... and have posted it before.

Yes, do not love your stocks ... it will kill you, ya.


Sunday, May 20, 2012

Five Fatal Flaws of Trading

Close to ninety percent of all traders lose money. The remaining ten percent somehow manage to either break even or even turn a profit -- and more importantly, do it consistently. How do they do that?

That's an age-old question. While there is no magic formula, EWI Senior Instructor Jeffrey Kennedy has identified five fundamental flaws that, in his opinion, stop most traders from being consistently successful.

Why Do Traders Lose?

If you've been trading for a long time, you no doubt have felt that a monstrous, invisible hand sometimes reaches into your trading account and takes out money. It doesn't seem to matter how many books you buy, how many seminars you attend or how many hours you spend analyzing price charts, you just can't seem to prevent that invisible hand from depleting your trading account funds.

Which brings us to the question: Why do traders lose? Or maybe we should ask, "How do you stop the Hand?" Whether you are a seasoned professional or just thinking about opening your first trading account, the ability to stop the Hand is proportional to how well you understand and overcome the Five Fatal Flaws of trading. For each fatal flaw represents a finger on the invisible hand that wreaks havoc with your trading account.

Fatal Flaw No. 1 -- Lack of Methodology

If you aim to be a consistently successful trader, then you must have a defined trading methodology, which is simply a clear and concise way of looking at markets. Guessing or going by gut instinct won't work over the long run. If you don't have a defined trading methodology, then you don't have a way to know what constitutes a buy or sell signal. Moreover, you can't even consistently correctly identify the trend.

How to overcome this fatal flaw? Answer: Write down your methodology. Define in writing what your analytical tools are and, more importantly, how you use them. It doesn't matter whether you use the Wave Principle, Point and Figure charts, Stochastics, RSI or a combination of all of the above. What does matter is that you actually take the effort to define it (i.e., what constitutes a buy, a sell, your trailing stop and instructions on exiting a position). And the best hint I can give you regarding developing a defined trading methodology is this: If you can't fit it on the back of a business card, it's probably too complicated.

Fatal Flaw No. 2 -- Lack of Discipline

When you have clearly outlined and identified your trading methodology, then you must have the discipline to follow your system. A Lack of Discipline in this regard is the second fatal flaw. If the way you view a price chart or evaluate a potential trade setup is different from how you did it a month ago, then you have either not identified your methodology or you lack the discipline to follow the methodology you have identified. The formula for success is to consistently apply a proven methodology. So the best advice I can give you to overcome a lack of discipline is to define a trading methodology that works best for you and follow it religiously.

Fatal Flaw No. 3 -- Unrealistic Expectations

Between you and me, nothing makes me angrier than those commercials that say something like, "...$5,000 properly positioned in Natural Gas can give you returns of over $40,000..." Advertisements like this are a disservice to the financial industry as a whole and end up costing uneducated investors a lot more than $5,000. In addition, they help to create the third fatal flaw: Unrealistic Expectations.

Yes, it is possible to experience above-average returns trading your own account. However, it's difficult to do it without taking on above-average risk. So what is a realistic return to shoot for in your first year as a trader -- 50%, 100%, 200%? Whoa, let's rein in those unrealistic expectations. In my opinion, the goal for every trader their first year out should be not to lose money. In other words, shoot for a 0% return your first year. If you can manage that, then in year two, try to beat the Dow or the S&P. These goals may not be flashy but they are realistic, and if you can learn to live with them -- and achieve them -- you will fend off the Hand.

Fatal Flaw No. 4 -- Lack of Patience

The fourth finger of the invisible hand that robs your trading account is Lack of Patience. I forget where, but I once read that markets trend only 20% of the time, and, from my experience, I would say that this is an accurate statement. So think about it, the other 80% of the time the markets are not trending in one clear direction.

That may explain why I believe that for any given time frame, there are only two or three really good trading opportunities. For example, if you're a long-term trader, there are typically only two or three compelling tradable moves in a market during any given year. Similarly, if you are a short-term trader, there are only two or three high-quality trade setups in a given week.

All too often, because trading is inherently exciting (and anything involving money usually is exciting), it's easy to feel like you're missing the party if you don't trade a lot. As a result, you start taking trade setups of lesser and lesser quality and begin to over-trade.

How do you overcome this lack of patience? The advice I have found to be most valuable is to remind yourself that every week, there is another trade-of-the-year. In other words, don't worry about missing an opportunity today, because there will be another one tomorrow, next week and next month...I promise.

I remember a line from a movie (either Sergeant York with Gary Cooper or The Patriot with Mel Gibson) in which one character gives advice to another on how to shoot a rifle: "Aim small, miss small." I offer the same advice in this new context. To aim small requires patience. So be patient, and you'll miss small.

Fatal Flaw No. 5 -- Lack of Money Management

The final fatal flaw to overcome as a trader is a Lack of Money Management, and this topic deserves more than just a few paragraphs, because money management encompasses risk/reward analysis, probability of success and failure, protective stops and so much more. Even so, I would like to address the subject of money management with a focus on risk as a function of portfolio size.

Now the big boys (i.e., the professional traders) tend to limit their risk on any given position to 1% - 3% of their portfolio. If we apply this rule to ourselves, then for every $5,000 we have in our trading account, we can risk only $50 - $150 on any given trade. Stocks might be a little different, but a $50 stop in Corn, which is one point, is simply too tight a stop, especially when the 10-day average trading range in Corn recently has been more than 10 points. A more plausible stop might be five points or 10, in which case, depending on what percentage of your total portfolio you want to risk, you would need an account size between $15,000 and $50,000.

Simply put, I believe that many traders begin to trade either under-funded or without sufficient capital in their trading account to trade the markets they choose to trade. And that doesn't even address the size that they trade (i.e., multiple contracts).

To overcome this fatal flaw, let me expand on the logic from the "aim small, miss small" movie line. If you have a small trading account, then trade small. You can accomplish this by trading fewer contracts, or trading e-mini contracts or even stocks. Bottom line, on your way to becoming a consistently successful trader, you must realize that one key is longevity. If your risk on any given position is relatively small, then you can weather the rough spots. Conversely, if you risk 25% of your portfolio on each trade, after four consecutive losers, you're out all together.

Break the Hand's Grip

Trading successfully is not easy. It's hard work...damn hard. And if anyone leads you to believe otherwise, run the other way, and fast. But this hard work can be rewarding, above-average gains are possible and the sense of satisfaction one feels after a few nice trades is absolutely priceless. To get to that point, though, you must first break the fingers of the Hand that is holding you back and stealing money from your trading account. I can guarantee that if you attend to the five fatal flaws I've outlined, you won't be caught red-handed stealing from your own account.

TEH : I will comment later, to share with my tratles my views(especially my new cohort-6). NOTHING is easy ... and I have told my whole tratles that it will takes me another 5 YEARS to get into the above average traders 'status'.

It is not a full truth when some trading courses claiming to have a trading system to catch 'breakout' or gain 20-40% in those advertisements. Some claiming with softwares or programs that could easily scan thousands of stocks in minutes to give us the best stocks. If you strong believe in such courses and systems, you must be NEW to markets again ...

Welcome to the our largest legalised casino ... KLSE.


KNM : A slow death

KNM : The monthly chart of KNM to show the fallen 'O&G' darling. The sharp exponential surge from 2003 till 2007 was incredible. I was still not around then.

KNM : It was at RM1.80(I have to multiple with 4 when I called someone to sell his stakes ... he bought at 1.80 x 4 = RM7.2). I m not sure if he sold his stocks. Unless you are close to me personally, I will not make a buy-sell call ... it is too risky and I do not know your risk appetite(tolerence). Anyway, from RM7.20 ... going to 72 cents now is a BIG huge loss ... and the lesson could be too painful for many to remain in market. That is how cruel market could be.

KNM : This is a daily chart showing KNM reaching the new low ... when I wrote in the i3-forum, KNM was trading at 0.83 levels. Then, as someone mentioned that it will shoot to RM2.50, I was questioning the rationale. Yeah ... I was more concern that MORE newbies might just jumped into her, HOPING that the speculation is true ... and they could get rich-quick?

It is not to splash cold water or adding salt to the wounds who are holding to this ex-darling. It is to 'safe' many newbies from the agony of hoping to get-rich-quick ... once these INCORRECT mentality developed, bad habits cultivated ... it will be very difficult to 'change'.

This is NOT a call to sell your KNM for big losses. I am sorry again to those get sucked into KNM ... we all should learn and take it as a lesson. Just promise yourself NOT to do such mistakes. ONLY YOU know why you bought her. Previously, I bought her as I was a newbie ... and I heard many saying it is a good stock!! Of coz ... I do have kind people telling me to be careful, check on some facts.

Today ... I am wiser ... more experienced and understand many things in FA and TA. Today, I could tell you at least 5 reasons why KNM is NOT a buy. Perhaps, technically I could find some reversal signals ... but then again, why gamble on risky counters?

Be safe ... if you not sure what counter to buy ... I will suggest blue-chips. If you dont know what blue-chips mean, dont worry ... learn. It will take another few years for us to know about markets. You really need YEARS ...

You decide. It is your money.


Friday, May 18, 2012

My Blog, My home

After a day of short technical rebound yesterday(I was too busy to write but I was with my group, yeah) ... yet another sell-down day. Are you in fear now? Remember Sept 2011? Yeah .. I remembered it clearly as I was so excited. I posted a list of 100 stocks in my watch-list where the RSI reached ridiculous level ... some in single digit!! Remember that post or many more new readers around? A check on my nuffnang's statistics, it shown only 316 unique clicks for half a day today. Hmmm ... used to attract about 800 clicks averagely in the morning last year(before creation of my own group) as I do write about stocks I m watching, stocks that I traded ... even given 'live' commentary reports on some going-ons in KLSE. Wow ... and I am NOT being paid to be the reporter!! I took hours sharing here and hours more doing my readings ... only to see some un-appreciative readers(luckily only a handful of them) making fun of my PERSONAL postings, ridicule my intelligence(if any).

Nuffnang : Another invitation to attend the RHB talk next Tuesday ... 6pm. Might reply and my excited mellowed after the recent disappointment. I have placed Nuffnang ads to join in the group for events related to financial. I want to push myself a notch higher, to know more investors and those with experiences. I want to get out of the circle of those attended normal public market talk. Anyway, I do not get any amount of money from Nuffnang after about a year posting the ads. But, hope they will invite me for these talks.

Freedom to write

It will take me some time to get used to blogging MY WAY again. I dislike the attentions especially being featured in the 'i3-investor' site where most being their only interested with profitting from markets. I could not be 'free' to write ... if you get what I mean. You don't if you are not a blogger, or you do not write about your personal stuff in your blog, being viewed, syncronized, judged ... arr ... I really dislike censorship. I want to write what I have in my mind as this blog is a place I clear some thoughts which stucked inside my head. Too congested upstairs ... making me very forgetful in many things going on.

Car : a depreciating 'asset'

I remembered I posted a post about cars ... 2.0 sedan. Then, I was comparing Toyota, Honda, Hyundai ... hai-ya ... it was just placing what was in my mind at that point of time. I went to Madza's showroom that day ... and told my wife I will prefer Camry or Accord, uncle's family car. Then ... some people needs to make remarks in i3-site. I was pissed off but I did not reply. Normally, I 'piss-off' for a moment only ... and the senses came back to me. Arrghh ... these people in forums have nothing much to do, they like to judge and blah blah ... let them be la. So, I did not reply, of coz. I do have so much better things to do and still struggling to fine the time to complete them to my best abilities.

You see, IF I really have the money(obviously I do not ... otherwise, why would I still be riding a kap-cai to work, right?) ... I won't buy a car. I won't. I wrote in my blog here before about 3 years ago ... I was driving a kancil ... and if I ever upgrade my car to Proton saga ... I would have doubled my income. Yup, by shifting to KL and working hard ... I have actually doubled my income. And IF one fine day ... I write about changing my Proton to say ... Avanza(the kids growing up, u see), I would be doubling what I am earning at the current moment. I am planning that in 5 years time, you know. Dream ... plan .. action.

To me, car is just a transportation mode. Buying a car for anything than its main function is ...err ... stupid? I dont need to drive 200km/hour. I dont need to show-off to many around and telling them "see, I can afford the car". I do not have passion for machines. Weird ... man supposed to love nice cars? ok ok ... I am a gay. haha

Anyway, I should place those personal views to my personal blog, not this so-called financial blog. haha ... I could laugh when some considered my blog as categorised in 'financial'. It is obviously NOT.

Financial Knowledge

Yes, I do read Rich-Dad, Poor-Dad ... it was a REALITY check for my bad personal financial situation. You need to read my blog about 3-4 years ago ... when I struggle(and still am) financially. With little saving, the weddings ... the new born baby ... I was so financially tight. And with 2008 being a bad year for markets, I lost almost everything .. financially. And my failure in my keropok business also 'forced' me to be educated ... all the stress and failures. All the criticism from surroundings. I am still being viewed as a 'gambler' ... being in markets by my family. So, I do not take about stock market with anyone in my family, except my young cousin-brother.

Today, after 4 years in market ... I told my wife ... see how I changed my whole mindset about finances and stock-markets? It is a place for me to learn, to explore ... and giving me opportunities to get in touch with so many investors/traders ... and giving me the extra PUSH that I needed to do 'better'.

I am not shy to tell many that I was broke merely 6 years ago ... I was without financial knowledge, I do not know anything about managing money, ANYTHING at all about money, I was a total idiot. But, having said that ... I m a person who won't sit down and let the fate taking it course? I was determine to prove the critics wrong .. more importantly, to tell my wife to see how I improve from there. I did not look back since then.

Today, I could understand what is trapping majority of teachers. They are kind people, some are very dedicated ... yet, they will never be financially 'free'. The whole education system is flawed ... we never being taught to think out of the text. I should know ... I am in education line for 20+ years now. Indeed ... 6 years of transformation in me is ... amazing. I simply dont care what nay-sayers splashing cold water into me. Those 'good' friends who tried to advise you to be very careful in stock markets(with good intention, of coz).

But those knew me well enough ... know that I will not take 'quit' as the answer. :)

Here, I would like to thank few people who have been supportive. I do not think so I could be able to pull myself out of the rut without those encouraging words. To those who have criticised me ... thanks.  Without that, I could not push myself much harder. Positive people gives us the extra pull ... negative people give us the extra push.

Songs : The path to my emotion

Another thing I do like to write about ... songs. Yeah .. I listen to songs, I dont really care if it is Chinese or Malay .. or Indon. I do like to put songs up as it reminds me of what songs I am listening too and I could search for them. Last year, I have reduced the song-postings and created a blog just to put those songs!! But I failed(due to laziness) as I m so into this blog, I find it troublesome to have so many blogs to maintain. Why can't I just campur-aduk ... my personal postings, my songs ... and my stock-markets here? I still want to write about Liverpool ... or my bowling? I am not always stock-stock or money-money, u see. I am human, a blogger  ... err ... who just want to find his own cyber-space? Sometimes I wish I do not have followers!! haha ... But then again, I want to be in touch with those good people and to share opinions, particularly on stock-markets or financial-related. See my dilemma?

I love it when someone told me they like Sam Hui's songs too. It is sharing ... rather than just telling me they like Perisai too.

Trading group : My 'social' life

Last Sept, when market came crashing down ... I had my first trading class!! Yes, there were about 10 of them. I was excited and wrote about it in details. Haha ... what an experience, teaching(more of sharing) adults about stock-markets. Many of them been in markets longer than me. Just that they are here to learn basic technical analysis. I do mean ... REAL BASIC. I m a non believer in many indicators blah blah ... I m not selling indicators, to sell my trading classes. In fact, I told everyone ... I dont see myself teaching next batch or perhaps I was lack of confidence. I am surprised that my cohort-1 given me the confidence and I have my cohort-2 coming. Then ... from there, BL of my cohort-1 created a facebook group for us all to communicate, discuss and share. BL is the person coined the word 'tratles' too. I never looked back since then ...

Tmr will be my cohort-6 and I have increased the 'fees'. They are still paying cheaper than my tuition students paying me(for exams). Hence, obviously ... I am still the cheapest in town with motto "Now, everyone can trade". Haha ... How to trust some crazy guy like me? Yes, it is risky. Haha. ok ok ... at times, I do show my serious side, ok?

One step at a time ... I will only think of cohort-7 after done with my cohort-1 to 6. There are about 70 in the groups now and it is kinda crowded even in the facebook. I will have trader's meeting for my own group once in a  month. It is meant for learning ... learning to trade, to share about investment ... a platform for many to remind each other not to lose money(much) and also continue to learn ... and I will continue to share more with those in my group. Trading has been a 'lonely' journey in my 3.5 years until this group created(never even expect it to grow so fast ... some of my tratles introduced their colleagues, friends to attend my class!!) ... and now I have a space to write about my trades. Yeah ... the writing of trades no longer being here much, unless I have the time to share few of the trades taken ... win or lose.

By the way, from FEB to MAY now ... the market has been very challenging. Some in my stock watch group has stopped(they lost some money following my calls?). I can't blame them ... anything we buy also go down ... unless you punt into those 'hot' stocks la, which unfortunately ... NOT to my interests.

Well, I have changed the course structure and some contents. I will reduce the talk-talk-talk(tho they are important aspect of trading, IMO) ... and adding in some into my contents for discussion.

Well ... didnt realise that I could really blah-blah ... feeling better to realise that this is MY blog, anyway. I can blah-blah anything I want(not politics, please) ... and wont need to answer anyone anything. Hehe

To be frank ... I am glad with the responses of my cohort-6 and my dedication and time will be spent with my tratles, e-tratles and stock-watch(my clients la). Haha

Have a nice weekend ahead.


p/s : Added a new label 'blah-blah'. Expect more blah-blah once I am 'free' next week. haha