Trading Money for Peace

When the odds in life is overwhelmingly against you, one need to find some kind of refuge.

My refuge is to listen to The Chant of Metta.

Young fan

Okay, I got a young fan that keeps asking me question :p

From my experience, playing stock can sometimes be very disruptive to our daily job. Why? We tend to follow the ups and downs on our screen. We are happy when it goes up, worried when it goes down. Most beginners will tend to follow this daily up and down. Every opportunity we have, we will check our favorite counter price. If you are in the office, you keep a screen on all the time. If you are on the move, you subscribe to sms services or check through your smart phone etc. I have been through that stage before until I trade using a longer time frame. If not, cannot get any job done lor. Boss will be angry ler.

Making money is not that easy as advertised. This is a money sucking industry. The stock exchange take some of it. Your broker take some of it. You win, you pay them, you lose, you still need to pay them. This is a minus-sum-game. No wonder they need new blood, if not how can sustain their profit? If making money is easy, why do the majority of us still hold a job? So that to sustain our trading blunders!

Furthermore, the stock market is not a same level playing field. In football, you have the premier league for the best of the best, then 2nd division for the average and the 3rd division for amateurs. In stock market, the amateur is fighting straight on with the fund managers, the hedge fund traders, the day traders, the contra traders and all sort of people. It's like Malaysia playing Brazil! Without any foundation, one will sure to lose money.

The amount of capital must be large enough. Using the 2% money management rule, to have any meaningful stop, one need at least 10k. With 2K, you can only afford to lose 40 per trade, where 26 is already the commission that you must pay.

As with any other profession, the foundation is important. One needs to learn the theory. With theory, one develops a system. The system is to prevent us from acting inconsistently/irrationally. Then we add a little bit of money management just in case we are caught by the black swan. To execute our trade, we need to have the confident to pull the trigger, that is to train the mind.

So, to my young fan. Learn this 3 important pillars. Google it, buy a book. But read, think, analyze. There are many resources you can get. I'm just too lazy to re-write it down.

I will not encourage you like Bursapursuit. I'm not Dennis Richie that can train you out of the farm. You need to learn it by yourself. I can only give you some guidelines based on what I know. I'm not a guru. So my advice should be analyzed properly.

For the rest of the questions, I decline to answer as I would prefer to remain anonymous.

Bulls vs Bears (26 Oct 2007)

Bulls vs Bears

Looks like the bulls are regaining back their strength.

I sold off almost all last Monday. Hey, I was spooked by this US market. But, someone always manage to push up the market before it closes.

Anyway, this time, I was discipline in cutting my losses. But the market turn right up after I cut. The previous time when I was not discipline in cutting my losses, the market when straight down. This shows that not only one need skills but also luck to win.

KLCI seems like it is going to break new high. I lost a few valuable position. Now, have to rebuilt it back. I will still go for the CWs for more bang per buck.

I have or trying to open position for the following CWs: IOICorp, Genting, KLK, PBBank, MISC, HWL and Cheungk.

SweeJoo, Kretam, AirAsia

SweeJoo Weekly Chart

Cloase at new high. How much can this go? Will it create a channel? Why are the insiders selling? I have an open position in this counter.

Kretam Weekly Chart

Within an uptrend channel. Can it break to the upside this time? Or will it fall back. I have an open position in Kretam-WA

AirAsia Weekly Chart

Is the correction really over? I have no open position in this counter. Still thinking.

Bulls vs Bears (24 Oct 2007)

The bears continue the assault.

Bulls vs Bears (23 Oct 2007)

No change.

Chicken run

'I still sold [PetroChina] way too soon.'

— Warren Buffett


'I sold PetroChina CWs too soon.'
— swifz

:p

I scrambled out like a chicken when the market drops. This time, when things are not clear in my mind, I run. The last time I didn't run, I was rolled over like roti canai. I'm obsessed with protecting my capital and profit. My mind is filled with questions.

Is it a correction? Is it the continuation of downtrend? Double-top? Bubble-top? Election-push up? Oil shock? Gold shock? Dollar shock? Year-end window dressing? Bonus time? Subprime? Rate-cut? Halloween horror?

Arrgghhh. Bounce up and down. Hard to read the charts.

Ok. Back to daytime work.

Bull vs Bear (22Oct 2007)

Bull vs Bear

Daily bears > daily bulls, weekly bears > weekly bulls.

Are we at the edge of a cliff?

Bull vs Bear (19 Oct 2007)

Bull vs Bear

Bulls continue to go down. KLCI looks like going down too. SSE looks toppish. HK looks troubling. US banking sector in trouble. Possible double top for FTSE & DAX. STI run seems to have ended. Trouble every where.

I have continued to reduce my HK CWs. Only left with Petroch and Chlife CWs. Next Monday, new batch of CWs will be out: Chcbc-C1, Chmerch-C1, HKEX-C4 and Zijin-C1. All issued during the high tide. So beware!

BTW, thanks to the HK CWs, my account finally goes into the black! So I took 40 months to get back all my tuition fees. Lets see whether I can maintain my performance.

Bull vs Bear (18 Oct 2007)

Bulls vs Bear

The bulls are generally down, while the bears are creeping up. Beware!

The current crazy theme is "covered warrant". Yes, anything got to do with CW, buy, buy, buy. This is really crazy. The premium has expanded tremendously. How long will this last?

Bull vs Bear (17 Oct 2007)

Bull vs Bear

I see that the bears are slowly creeping up. Daily bulls are down while weekly & monthly bulls are flat.

Not much action for Malaysian stock. Plantation stocks are doing well. Bursa continue to make new high. Oh...I missed out PBBank CW. People are so crazy about CWs again. This makes the CWs to go up very fast. No chance for me to buy.

HK CWs has gained tremendously. One has even score a 30% premium. Everyone is expecting it to continue to go up and up and up. But wait! Lee Shau Kee says sell above 30,000. That is one prominent investor. This call may just become a self fulfilling prophecy.

Anyway, I detected a bearish divergence signal on the HSI daily chart. So I decided to sell part of my CWs. Then again, I was really not comfortable everyone is just crazy.

Bull vs Bear (12 Oct 2007)

Bull vs Bear

Still flat. Fund managers, you all have your rendang and ketupak. Spice up a little bit the share market now.

HK H-shares continue the crazy ride. A nice little poem for everyone.

Direct train coming through
Prices goes up the roof
Who cares about valuation
As this is only a perception

H-shares go higher
Bubble gets bigger
Uptrendline get steeper
Players get greedier

Petroch, Cnooc and Sinopec
Buy buy buy, auntie and ah-pek
ICBC, BOC and Chlife
Going up very nice
CCCC, Shenhua and Chalco
Yes! Go go go

Party till Olympic?
Currently not yet panic
But beware!
The creeping shadow of the bear

If you are the last one to get on
You will surely hit by the train head-on


P.S. Currently I'm sick with a cold, sore throat and red eye. So no feeling at all.

Thou shall not compute the profit

I told myself many times, don't compute the open position profit. No no no. Especially in the middle of the week. Don't fantasize with the profit. No no no. But I did it yesterday. Oh boy, what a discomfort it gave me. It really entice me to take profit. Yes, it is a bubble. It was a bubble two weeks ago, it was a bubble a month ago, it was a bubble 6 months ago. But the bubble keeps growing bigger.

By thinking in terms of profit, I am not able to read the market correctly anymore, every small correction gives me the jitter. It gives me the urge to take profit. My inner self was battling out:take profit vs. follow the exit system. Wise traders says: "Let you profit run. Sell your laggard!" Oh man, how hard it is to follow this simple advice. Psychologically, I'm still trying to train my mental thinking. The book that I'm still reading is The Disciplined Trader: Developing Winning Attitudes by Mark Douglas. Reading is one thing, making the points as your habit is another thing.

Bull vs Bear (11 Oct 2007)

Bull vs Bear

Flat. No action on the Malaysian front while HK and SSE are hitting new high. But beware, HK is approaching 30,000 while SSE is approaching 6,000! Correction may be around the corner.

BOC A & H shares have broken out. Someone bought every share in BOC-C1 in the last few minutes until no sellers left. Crazy, the premium is too high now. Well 10% is consider high when most are trading at -1 to 1%. Unless BOCs move up, I think that BOC-C1 will drop back.

Sinopec also broken out today. Following the path of A-share. Hopefully, this laggard will be able to chase after the leaders Petroch & Cnooc.

I rearranged my HK CW by cutting out Cnooc and buying Sinopec. I am thinking that a breakout play should have stronger momentum to go higher and faster. Anyhow, I'm keeping my Petroch CW as it will be listed in SSE soon.

Looking out at IOICorp. On the verge of breaking out.

Bull vs Bear (10 Oct 2007)

Bull vs Bear

Numbers of bears stay flat while mix for the bulls.

S&P just launch the S&P Southeast Asia 40 Index. 3 Malaysian companies that are in the Top-10 of this index are IOICorp, Genting and Maybank. I was unable to get the rest of the 14 companies from Malaysia.

Anyhow, does that mean trading opportunity for IOICorp, Genting and Maybank?
IOICorp: Long term uptrend. Currently consolidating between 5.80 to 6.20.
Genting: Long term uptrend but losing momentum. Currently the bulls and the bears are battling it out. The possibility for the bulls to win is greater.
Maybank: Looks like a false break of uptrend. Good chance of holding above 11.50.

Out of this 3, I have position in IOICorp & Genting CWs.

Bull vs Bear (9 Oct 2007)

Bull vs Bear

Not much change. Generally, bulls are still in control.

Singtel

Singtel Daily Chart

Has everyone forgotten about Singtel-C1? It took me some effort to get into this counter. Singtel chart shows that it is moving up in a tight channel. Currently, Singtel-C1 is really lagging behind. With today's close, Singtel-C1 premium is -4%! The exercise price is in MYR but since SGD is appreciating against MYR, the exercise price in SGD has decreased. Why does it not trade at 0% premium (at least)? Maybe because Singtel tend to have a large swing of around 10 cents per day. This in affect means that if Singtel-C1 to trade with 0% premium, then it will also swing in the region of 20%. So quite dangerous if one gets the wrong entry.

Bull vs Bear (8 Oct 2007)

Bull vs Bear

Bulls up, bears flat.

Most of my portfolio is made up of HK CWs. It's kind of scary this few days where the price can suddenly go down the cliff and then up again. Luckily I still have a good margin. If not, definitely a stressful situation. A-shares of BOC, ICBC and China Life rallied so much today. It is as if these stocks is really determined to maintain a high premium over their comrades in HK. Will the HK H-shares keep up the momentum?

Bursa Pursuit Top 10

Bursa Pursuit Top-10 Ranking (5 Oct 2007)

Day 5 of competition, with an initial capital of MYR250,000.00, the No. 1 player now has MYR1,000,000.00!

I do not understand how can this happened. I wonder...

1. If these people are so damn good, are we the idiots that everyday lose money to them in the real game?
2. If you can earn 300% per week, why bother with the grand prize of MYR100,000.00?
3. What are they doing in a small market like Bursa Malaysia? Don't you want to be at Wall Street where the big money is?
4. Has the game simulate as close as the real game?
5. If you earn 300% per week, by week 6, will you have MYR1,024,000,000.00?
6. If No. 5 is true, will you own the whole wealth in Malaysia by the end of this year?

Bull vs Bear (5 Oct 2007)

Bull vs Bear

Strong jump in daily bulls. This is due to day and contra traders that pushed the price up fast. Let's see whether it will be sustained by the longer time frame traders/investors.

A-H Discount

Bubble bubble everywhere,
Play small play big but beware,
When the bubble pops,
Make sure your pants do not drop.

SSE has closed for one week. What will happen on next Monday? Does a week of holiday makes everyone trigger happy? Did you notice the discount between H and A-share of ICBC? It is now about 10%. It was 20% a month ago.

What if this happens to the others? Keep an eye on Chalco, Chlife and Sinopec. Original post at Dragon Zone.

Bull vs Bear (4 Oct 2007)

Bull vs Bear

No change. Market seems to be holding well.

My Pohkong seems to be acting out as in my dream. Can you believe that? My parents used to dream about 4D in their sleep but I dreamed about candlestick chart :p

Bull vs Bear (3 Oct 2007)

Bull vs Bear

No change in numbers. Waiting for the correction. Best if 1350 can hold.

Bull vs Bear (2 Oct 2007)

Bull vs Bear

Big jump in the number of bulls today. Index gap up and at daily overbought position. I guess that correction is imminent. The question is how much correction?

Bursa Pursuit 2 Oct 2007 Ranking

Today is day 2 of the trading competition. I cannot believe my eyes. I pinch myself. Only 2 days and the No. 1 player have already earn 60%!!! To think that I only started buying today and this guy is so far out already. Mama mia. The top-10 players are much better than George Soros or Warren Buffett.

Bull vs Bear (1 Oct 2007)

Bull vs Bear

Bulls continue to increase while bears continue to decrease. Today, I notice something crazy, the newly issued CWs are trading at a very high premium. HK market close, but the CWs rallied. Looks like people are scared of missing the boat. Anyway, for the Malaysian market, not many counters have rallied yet, so we are still at the beginning of a bull stage. It could pick up strength and it could still die off. The important point is risk control.