Sunday, July 5, 2020


Our academic curriculum, our upbringing and our SOP are all within the LEFT brain parameters. Even walking through fire, it is highly unlikely the LEFT BRAIN fanatic will never open up and questions all the situations and conditions that went against them.

The  left brainer who "convert" and open up to questions will start to explore the RIGHT brain. A convert like me takes a long time to open up and seriously question the left brain paradigm. It is super hard to surrender my left brain operations when it comes to trading. As I start to surrender my left brain abilities and focus with my right brain, I start to question the market behavior less and lesser over time and not to judge whether the market is right or wrong or irrational.

It is within us to form opinion if market is not with us Market is wrong and we are still right!!! Market is not at all bother what we think of market. Market is IMMUNE to anyone opinion. Market will do what it wants to do until the TIME has come for a change! while we continue to operate in the logical rational reasoning SOP struggling all the way to try keep up or miss the boat!!!

There is no way we can judge the market and be right when market is not inline with us but we will be judged!!! Market can remain in its current state against us for a long time no matter what the media writes and whatever name we call the market behavior.

Market is not at all bothers or will take into consideration what we think market "SHOULD BE". Market is at it is!!!!

I suppose the old tested proven technique is to listen to the market and follow the market trend no matter how reluctant we feel and how irrational mad it seems. Remember it is our opinion and we are dealing with an INDEPENDENT market trend that is not at all bothered about others.

When we use our quantitative knowledge to apply to the market and we are on a winning streak, we are vindicated. Yet the same technique is not foolproof and unable to escape the downtrend. The key question is one should ask.... WHAT DID WE MISS? WHAT WENT WRONG? HOW DID THAT HAPPEN? How often does one take a back seat, think over and ask if there is another side that he or she did not explore?

Every rise will be succeeded by a fall and every fall will be succeeded by a rise. The question is whether there are signs change is due or developing. The next question is whether the trend is up or down or temporary retreat irrespective which way the trend is heading or a trend change confirmation.

As I slowly mechanize my strategy and execution, my opinion about market behavior diminish over time. It is no longer if the market valuation is cheap or expensive and rational versus irrational. It is about what the market trend is doing now, is it likely to continue further or is it in the process of losing momentum or gaining momentum or is it changing and confirmation.

Now it is all about are there any signs of market trend is changing and confirmation it has changed.

The day we can abandon our left brain SOP controlling our minds and start to appreciate our right brains, that will be the day we see LIGHT!  

LEFT brain ... the liability and the danger

As an EMPLOYEE one look forwards to month end for the pay check. Some will be looking forward to promotions. There will come to a point one will be asking if the progression has ended and there will come to a point promotion and salary no longer matter. There will come to a situation where one will decide to embark a total career change. Some will end up like me. Training my eyes on the financial markets.

The journey will be very challenging and satisfying if one gets it right. Yes, we need to unwind many things that are conditioned in our mind that will be hindrance to journey as a consistently successful "trader". These are not about our quantitative or financial modelling skills. They are about qualitative skills. It is not about financial skills. It is about "beliefs and values".

Each and everyone of us will and have the ability to make a "conclusion" and succeeded by actions. Our "conclusion" will be derived as a result of our sights (reading/seeing), and hearing.


 
It is the ability of our mind to make transition to utilize our right brains more when our left brain keep telling and reminding us it is wrong when market goes against us will decide either we are going to make the cut to be a PRO or AMATEUR.

Over the years, I admit that my trading failures and error are not due to the lack of knowledge in the quantitative area (left brain) but rather lack of my ability to fully develop and exploit my qualitative discipline (right brain). The conflict between the left and the right brain can even break ones confidence. It is the way we have all mentally conditioned to think and make conclusions resulting in BELIEFS/OPINIONS.

I will keep reminding myself that market is neither LOGICAL nor ILLOGICAL. It is us that impose our opinions on the market and we believe that market should listen and do as our wish.The only way to win is to downsize your left brain and let your right brain to take over.

Once we accept market will do whatever it wants to do at its convenience and continue to do so irrespective of whatever we think or opine than the next thing that we need to do is control our left brain. To prevent it from creating conflict with the market direction so that we can make the proper correct right decision no matter how "wrong" our left brain is telling us.

The market will tread on its own no matter how right or how right we think or believe market is. That means our opinions is IRRELEVANT.

Left brain dominant is everywhere. Why? It is the number. The corporate only read numbers. Bring them into the market which is cyclical,... they will be eaten alive.

The important things we need to do to be in a successful trading business, we need to stop our overpowering left brain. If there is anything that is holding us back it is the dominant LEFT brain. Let the right brain thrive and dance.

The right brain is not going to see the world as logical and illogical. It is just going to respond to the music.

Left brain is RIGID and the Right brain is flexibly adaptive 

Know when to use your left brain and know when hide your left brain. 

Wednesday, July 1, 2020

Transformation - Renovation ???

It is easy to teach and train any pet like dogs when they are puppies. Try teaching and training a mature dog? It takes lot of pressure and pain to discipline the old dog to behave. Trading is no different and it takes lot of sweat pain and money to train old traders to change.

Due to prolong formation years each adult that are active or participating in the financial market will have anomalies. More often it is the attitude and perception that need to RESET and REFORMAT. If one can't do a complete reset or reformat the mental wiring, we end up like renovating and old house to incorporate something new and different. When this happen if not properly done, we might end up with mismatch electrical, civil structure or even insulation between the old and the new.

From my own experience and encounter, the corporate world only knows how to see and talk in the "number lingo". This is the only language that is accepted and considered to be worthy to consider. Outside this "fundamental" parameter, don't even try or bother to discuss with the circle.

The corporate world is caged in this fundamental parameters that anything beyond this is a taboo. It is the system, the years of grooming that entrench one's mind in this corner. More often than not, fundamental approach is not perfect. I would always say that ... fundamental HELPS to screen out which one are SUPPOSE to be good. Sometime it is proven to be immediate and sometime it take a long time and tolerate/bear the pain and patience.

In the manufacturing process, we are only interested in efficiency and productivity. Meaning reliability, accuracy and fast.

If the world is linear and operate in a straight line without cycle than accountants and financial folks need not wait after the purchase. The price will only go in the direction of the entry. More often this purchase or entry will take time to be proven correct. Take time means .. U R WRONG on YOUR TIMING cycle.

Until the world start to seriously open up and consider the other options, the corporate world will never escape the clutch of market cycles. Such failure to anticipate will and can cause castatrophic disaster even risking the demise of the company.

We are not lacking in academically qualified people to manage the companies. We are seriously lacking the talent of people who are both academically qualified and who can incorporate cyclical nature into the business.   

I would even go to the next level to say that the inabilities of companies to prepare for any downturn with the PhD or Prized scholar and highly qualified academic graduates sitting in the management and board levels only prove that these are anomalies and will be repeated for over 30+ years I seen this repeating.

Unfortunately we live in a world where this people rules the companies and we will see this blunders. Either we decide to understand how to track the cycle and embrace it or we will wait for the time bomb to go off sometime in the future again

Tuesday, June 30, 2020

Analysis - Opinion - Reality - DENIAL

We are all GROOMED to have opinion(s). Almost all the time it comes from our ways of seeing things. How we are trained, taught and conditioned mentally will be our anchor to analyze and make any opinion. Obviously WE ARE ALL WIRED TO SEE THE WORLD IN A RATIONAL LINEAR LOGICAL PARADIGM.

This is the key stumbling block and hindrance to progress as a REAL trader who can move, swing, kick, punch, crawl and even duck if one meet any unexpected.

I took me quite a long long long time to realize and accepted the existence of the NON-LINEAR illogical and unexplained paradigm. The reason why it can't be explained is simply due to the fact we are not exposed and taught this discipline. When that happen it becomes very difficult to accept this state while we know they exist but we refused to recognize and accept. Simply because we don't know how to handle such situations.

How many of us sit and take time to think why WATER and SMOKE travel in its own way without any external interference? Yes, we all know "they" don't move in straight line unless we guide them in pipes!!! Yes we all know and we call this random brownian motion.

To cut the long story short, we all know that there are millions of reasons and opinions why market behave a certain manner. On the same token we all also know even whether the opinions agree or disagree with the market, market will move in its own path and own direction.

Whether our opinions as a result of our "analysis" agrees or disagrees with the market direction, market will continue to tread on its own INDEPENDENTLY. Can we use our learned knowledge and mind to improve our performance with the INDEPENDENT market?

The biggest challenge is when our analysis and opinion contradicts market trend direction, WHAT DO WE DO NEXT? Who is RIGHT in this case? We opined that market is WRONG and we are right. What does that mean? It mean our pocket will bleed and our accounts will shrink.

As strong as our opinion can be and our conviction, unfortunately market is NOT Convinced and agreeable to us!!!!! Market move against us and the next thing we know is our cash value shrinks!!! So who is right? Who is wrong? The higher we sit in the ivory tower, the bigger our ego is. Ego is ok when we are in-line with the market. But when our EGO has blinded us and mentally paralyzed us from seeing and feeling the obvious, that will only lead us to the path of pain and misery.

The common SOP (standard operating procedure) in this case is ... I am right, market is wrong. Do we accept our shrinking account as we are still right???

Many mistakes are made in the past and they serve as my lessons, guides and experience.  To learn, to improve and to be open to question if improvement is my goal and my ONLY GOAL.

Life is easy if and when our template is in agreement with market trend direction. Everything is sunshine ...

Over the years I learn to listen to the market and slowly "divorce" my learned analysis and observed what the market is telling me especially the old habit of analytical opinion come up.

REMEMBER, you can be the NOBEL prize winner or the smartest person with Top Grades, but when the market disagree with you, YOU BETTER LISTEN or PAY UP.

Market is reality and market punish those who disagree. Punishment is not the act invitation to a feast. It is an invitation to pay for the feast.

I have fought the market as my enemy and make friend with market. My conclusion is... It pain to fight and my pocket hurts. A survivor will understand and learn to be friend with the market. When our ego is big, we will definitely end up fighting the market. Let us see and face the reality if anyone fighting the market can smile BIG in the mirror.         
 
On the contrary, anyone that make friend with market and follow whatever the market wants to do, letting go our ego and opinions will be rewarded handsomely and with BIG smile!!! That is reality  

EGO = EMOTION = DENIAL

To win with market is to make friend with market even if you disagree with your big learned mind. In one word ... you need to be a HYPOCRITE.

Friend the market like a hypocrite even if you disagree and you walk out with a super big smile or ... fight the market and walk away with ugly face and shrinking bank account.

The choice is yours and good luck 
  

Sunday, June 28, 2020

Bad drivers or Lemon vehicles?

Lemon is a slang that I pick up when I was living in USA. Lemon is a slang for defective stuff like cars. When we embark on the "trading" journey all that comes to mind is about MONEY. How much money one wants to make blah blah blah.  ... The OPEN field means there is practically easy entrance without much barrier to this trading field. There are no interviews, pre-qualifications ....and the list goes on before you can open account and trade.

While too many rosy advertisement are misrepresentations, the blinded participants also fail to ponder over how the whole system works. To those who decided to embrace and embark on using charts or use charts as reference one should sit back and think why there are many time frames, why are there many different indicators and finally which one(s) do we use and when do we use them or not to use them.

Visually a naked chart we will see the chart goes from left to right with time on the X-axis (horizontal) and  price level on the Y-axis (vertical). Price tracks move up and down over time from left to right swinging up and down. Some swings are longer than the others vertically range and some swings are shorter. Some swings last longer move in time and some are shorter. In summary we are looking at some basic combinations of

1. Longer price swing move with longer time. 2. Longer price swing move with shorter time. 3. Shorter price swing move with longer time and 4. Shorter price swing move with shorter time.

The third component to this is the GRADIENT or slope of the swing move.

Irrespective of the 3 components - PRICE, TIME and SLOPE(GRADIENT), it is universal that all has a timing cycle  from the start to the end of the swing move and start of a new different swing.

The universe evolve around cycles and cycle are part of nature. Nature is not static. Nature is evolving and changing all the time.

Change means DIFFERENT from the past or something that just happened.

Trend cycle is no different. A direction trend will have intermittent opposing direction reacting but not sufficiently forcefully able to change the prevailing direction trend. Whether the major directional trend is up with intermittent small down moves or vice versa, the time will come for the trend to end and change either to down or sideway.

Many of us will be distracted by all the news and actions that we loose focus on the whole gist of trend. The core to the whole price and time actions (trend) is about the START and END with in-between!!!!

While all this sounds very simple and basic, the truth is this is what the whole game is all about.

The key is to develop system or methodology or techniques to identity the START and the END.

Commonsense logic only tells us that if you see potential a setup or work in progress the end of the present it also mean the start of something new. Another commonsense is if you don't see anything that is likely for you to consider the warning or setup up for the end of the present prevailing trend, it means we are "in-between" and means we sit and wait!!!! It is this in-between that are full of distractions. This template sequence has stood the test of time and never changes.

If it is bad performance, it is highly likely it is not the car is a lemon but the incompetent driver is the culprit.

Instead of focusing what if .. what if .. what if ...and coming up with all sort of trades, we should be looking at are there any signs and confirmation of change. IF NOT let it be and do nothing!!! 

 


Saturday, June 27, 2020

Trading -- Experience and Philosophy - NEVER ARGUE WITH THE MARKET

With 30+ years trading, I have the many opportunities to sit back and reflect this journey. What it is and what it is not. The wrong perception what this "trading" is all about and it is not. The misrepresentations by many people about this "subject" and over representations.

Over the years I had and have read all different books and tested many different charting indicators tool. Obviously, if it is 101% accurate and reliable, it won't be readily available. I can only conclude that these tools do works but NOT all the time and definitely does work more than 50% of the time.

The main reason why it fails to work 101`% accurately is because I believe the wrong interpretations by the users and partly I believe it is due to the nature that market exist in both non-chaotic/linear state (rational) evolving into chaotic non-linear state (irrational). It is not easy to develop a tool that can capture both non-linear and linear state given that we are wired mentally in a LINEAR mindset.

Non-linear chaotic state means it is challenging our mental conditioning, logic over how things are suppose to work and things do not work exactly how it is suppose to work all the time when financial market is concern. It took me many years to shed this mindset HOW THINGS ARE SUPPOSE TO WORK with mental conditioning from academic education.

When things happen per our mindset template in a logical rational manner we can readily accept without a second to disagree. However, when things do not happen per our mindset template in a logical manner, we find it unacceptable and mentally challenging to accept the existence of such situation although we see and experience it. This is the handicap of the mental conditioning over the years.

As we trade the market, we will experience both situations where the trend agree with our opinions/views and there are times when the trend disagree or contradicts with our mental perceptions. We are entitled to have our own opinions. Whether market trend agrees or disagree with us is another matter completely.

Market trend direction does not need our opinions and does not need our permission. Yes, we can opt to disagree with market direction with our opinion and open positions, but it also means it will take time for market to change and agree with us.
 
Remember, the biggest obstacle before us and to overcome is how market trend direction should behave after we read the news or experience things first hand. Over 30 years, the statement of how market "should" behave after hearing and reading news did not yield produce 101% accurate trades. It is a 50-50 bet.  

Everyone loves to win in an argument but arguing with the market is something we will never win in the short term. Although market will and can agree with us in the long term, the short term disagreement between our mental views and market direction is sufficient to shake our mental temperament.

Without a doubt market exist in both linear and non-linear state, the greatest challenge will be to develop a robot trading that can cope both state. Most robot will fail when market transit into the non-linear irrational non-logical state. It is highly unlikely programmer will appreciate and understand this condition making it difficult to robot trade.

It is for this reason and challenge before me, that I took time to develop and test systems, improvise, upgrade and update the methodology that  I use. Refine and  simplify the system to capture both linear and non-linear state. It also means, I don't need to glue my eyes to the screen and I am aware the trend direction.

In conclusion, market is NATURE and nature evolve around cycles. Cycle means different phases. Cycles means changes. Changes mean agreeing and disagreeing.

What good is projection and forecasting if one does not understand the current position in the overall cycle. The key to accurate forecasting entails one ability to accurately pinpoint the current versus the overall trend cycle in motion. 

Like Nature, there is Birth, Growing, Maturing and Decaying for each trend cycle. The peak of a cycle is also the birth of a different opposing cycle.

Appreciating and understanding the cycle's nature will enhance one in deploying assets or executing positions in a good timing and efficiently minimizing risks and waiting time