Sunday, February 1, 2015

Do you really know what you want, what you have and what you lack ???

Confidence develops when you are certain when outcomes are according to your expectation. Fear develops when things don't turn out as you expected after applying the same methods that produced the expected results earlier. Fears create DOUBTS and leads to confidence LOST. This is a natural progression when one swings between CONFIDENCE - DOUBTS - FEAR especially when you are trading, speculating or investing (whatever name you want to call it) in financial markets.

Luckily market are easier to manage.One needs to understand confidence is not gained over night and it is a LONG LONG LONG road to success. Success leads to confidence. Failure lead to doubt.

The internal battle is and basic foundation to overcoming fear and sustaining profitable venture is to have a CONSISTENTLY RELIABLE and PROFITABLE technique or system that survives all market conditions (up, sideway and down) that helps you make decision consistently profitable.

It is the human weakness and desire to sell at the highest point and buy at the lowest level. This shift one focus to "perfecting" the technique to pick points. In the long run it is less stressful to be able to work with a system that can identify the LOW RISK HIGH REWARD opportunities.

It is impossible to commit all the funds at one go when the market peaks out or bottom outs. It is more likely we will be taking positions in stages assuming one has sufficient funds and buffer range.

One needs to understand if your objective is to pick market extreme points or make profits consistently. This will ultimately decide your "future".

CUT LOSS and STOP LOSS are only for people who do not know the RRR (Risk Reward Ratio) and limited funds (poor planning). If you have a system and a consistently profitable reliable system that can guide you through, why would you want to indiscriminately take positions and continuosly put Stop Loss and Cut Loss.

Yes, all the seminars and books will tell you to limit your losses to X% of capital .. blah blah blah. If you have a system that can tell you or locate the market bearing, you should be able to next deploy a plan or strategy to act accordingly. This systematic techqnique should and must work across all different markets and instruments not forgetting time frames.

I have been trading for more than 22 years starting from financial analysis, rumors, charting, system and developing system in forex, stocks, futures, commodities and agricultural options. Evolving into a more systematic strategic trader from the indiscriminate irresponsible haphazard trading.

Do you really know what you want, what you have and what you lack ???
 





FEAR and you ....



Monday, January 12, 2015

Agro and Metal Commodities - Gold and CPO the defiant pair


A quick comparison of the above for CPO versus Soybean and Soya Oil show CPO is still way too expensive and a decent level to be align with the competitors benchmark is about Rm1600 - 1800 zone.

How long can CPO remains at cloud nine before it loses the steroid effect back to sanity... TIME will tell.

Gold is again way too out of alignment with SILVER the closes proxy.

With Crude Oil leading the way will GOLD and CPO remain defiant???

Sunday, December 21, 2014

2014 - Ending

2014 started with a BANG and ending with a KABOOM. Crude Oil, GOLD, CPO, Currencies (non USD) and KLCI index enjoy the ride to the top and down.

 
Every good show need to come to and end. Is Malaysia financial markets and commodities following the same route?

What 2015 holds will be interesting. Will it be the everlasting feel good? Or will it be just a follow through from 2014?

In the meantime, I will enjoy the show and look forward to the opportunities it present.

Bye Bye 2014 and Welcome 2015


Friday, November 28, 2014

Buffer and turbulence

How often can we sit and wait? How often are we mentally and emotionally wreck when we see the red numbers appearing? How often when a decision to exit with losses only result in market turning back to our earlier expectation?

The problems is mentally we are conditioned not to accept red numbers. A lot of this deals with our game plan. The ability to weather storms like this is not for everyone. The ability to sit tight and wait must be base on proper plan and strategy.

1. The confidence that when positions are initiated, it must be close to the TOP if SHORTS  and BOTTOM for LONGS. There must be sufficient buffer during this period.

2. When SHORT positions are accumulated mid-way rebound in a major downtrend, one must be able to verify that it is a temporary rebound and sufficient buffer to withstand until the downtrend resume or LONG positions are taken mid-way correction in a major uptrend, you must be sure that this is a temporary trend change with buffer to hold on to a temporary down draft until the uptrend resume.

3. Never over-gear your positions until you got no buffer to withstand all these temporary turbulence.


Sunday, November 16, 2014

WHO IS THE GREATEST ENEMY

In general, human wants to have a crystal ball or magic mirror that can tells the answer accurately in advance WHERE and WHEN. It is this desire that sets the stage for the fall of every market participants if not carefully and properly managed.

The first and most common question when you meet someone in a seminar is ... WHERE IS THE MARKET GOING TO TURN? Expecting a precise and accurate reply. A private conversation is never short of the same topic! When will this people start doing their homework and put a little effort to understand what market is all about and how it operates!

Whatever technique or system one utilize in the quest, there will be a period where the system will not work perfectly. IT is this period of draw down that makes the users disillusioned and start looking else where.

There are times when all the instruments will move in unison and at times decoupled from each other due to reasons published later.

To successful exploit markets, we need to approach the venture holistically and understand our objectives and analyze if our strategy is consistently reliable for us to deploy not to mention it must be comprehensible and simple.

Again human has the tendency to complicate matters until it is illogically incomprehensible leading one only see the tree but fails to see the forest! Microscopic analysis!

Until we are able to understand ourselves and map out a logical sensible road map, we will remain lock in yo-yo situation full of frustrations and agony. Fear when we take positions!

The greatest enemy is not the market or the intervention but OURSELVES! Our inability to understand our needs lead us to develop or follow methods that mismatch our INNER and the MARKET.

Do we use intra day data? Do we use End of Day? Do we use Elliot Wave? ETC .... Do we LONG? DO WE SHORT? Forget about trying to predict the market when we don't even know ourselves!