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things every retail investor/trader should know
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Livermore
Master |
09-Sep-2008 23:29
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Just like in a war, if you don't know where is your enermy, don't waste your bombs. Just fire small bullets. | ||||
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Livermore
Master |
09-Sep-2008 23:27
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80c to 40c. Ok, 5 lots at 80c, 5 lots at 70c, 5 lots at 60c, 5 lots at 50c, 5 lots at 40c.....:). That is still a very very small percent depending on your capital......
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elfinchilde
Elite |
09-Sep-2008 22:55
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haha, me eez letting you two talk on. believe it's illuminating for others to see the different styles and strats that can be adopted, both with success, in the market. 
eh, livermore: "For some of the stocks that have fallen until about 80c, how much more can they go down?" That is a very dangerous question. If it falls to 40c, it's a 50% loss, remember that. hehe. ok, cheers, lemme enjoy the last hours of my bd. hehe. |
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Livermore
Master |
09-Sep-2008 22:46
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Hi SF, Just my opinion here. I can understand different people have different risk profile. But for $100k I would do things differently. For some of the stocks that have fallen until about 80c, how much more can they go down? They cannot be 0 cents. You can slowly accumulate with small lots of a stock at different prices and finally the stock price is "cornered". Don't be surprised that with $100k and leverage and you catch the bull cycle, the returns can be more attractive than a property investment in some cases. I say some cases because I guess high end property appreciate much faster.
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stupidfool
Senior |
09-Sep-2008 22:12
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Thanks livermore for ur reply to my posting. For me,If i have 100k,i will buy into say STE.For 100k,i shd be able to buy about 35,000 lots.This will gif me like $5600 ayear on dividends. The $5,600 represents a return of 5.6%. Historically,over a period of 7 to 10 years,a good counter like STE will have a growth of 7% a year.Thus my annual total returns is 12.6%. This beats FD anytime. Cheers |
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ed88ks
Senior |
09-Sep-2008 20:46
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The Path to Becoming a Successful Trader Trader's still seeking their success, tend to lack a fundamental quality that successful traders have uncovered and evolved to. They fall prey to the dilution that things are OK. They ignore the warning signs when they're off and, more critically, tend to "push" their trading with the sub-conscience desire of satisfying their egos rather than controlling the trade. The harsh reality is they usually just perpetuate a speedy draining of their capital. Knowing who YOU are as a trader takes courage to face all the faults and strengths of ones character. It's not a mystery that we all come to the trading desk with some kind of "stuff" or baggage from our past, filled with good and bad beliefs that at some point will creep into our trading. I know with my own trading, past baggage and "A Type" personality lifestyle, I had to master the discipline of patience for each trade entry and exit. My first 3 years of trading were spent honing my "feels" for the market by watching the price action of "time and sales", totally void of charts or technicals. This is how a large percentage of day–traders made their fortunes, in the fast markets of the 90's. Today this method is a lost art replaced by a fine-tuned set of endless varieties of technical analysis and strategies. To this day, and I will be very honest, I still find myself working on my patience especially when a volatile market presents itself. That's the reality of my stuff, and the one thing I am determined to master and gain control of. With time, determination and focus, each attempt of control lessens the addictive tendencies, over my mind. This brings me to the determination needed to strive for solutions to our weaknesses. Successful traders do anything and everything to master these self-proclaimed weaknesses, knowing very well that ignoring them will cost more in the long run. They will come up with a way to attack the problem and if it doesn't work they will go to all lengths and create strict rules in order to overcome them. Your determination is required to do the same. First, is to acknowledge the weaknesses. This takes a special self-honesty and soul searching. Second, is to look at the flaws, followed by developing a strategy that reduces the impact on a trade. This is not the fun part of trading, but it is something that will safeguard your trading in the long run and one of those "musts" to master. In the beginning when I was chasing trades (getting in after lots of trend confirmation to be absolutely sure I would be right) and of course was confirmed to be too late by its immediate reversal, I decided it was time for a plan. I would read my hand written post-it note that said, "Are you chasing the trade?" if the answer was yes, my new rule was – do not enter. So on my next trades, when the trading room called yelled "Microsoft's running", I flash read the note – answered Yes – and proceeded to take the trade. Plan one didn't work. So I had to ask myself, what I was feeling. It was as close to addiction as I could get...my fingers had magnets and the keyboard was the mega-magnet pulling my fingers with not one ounce of mental awareness or control. I was truly "hooked" and now I was determined to fix this. So the next time it happened, which it did --- three more times that day, I found myself having to literally sit on my hands. The emotion of desire and fear of missing out was in a battle with my intellect and my intellect was not winning. I withstood the three temptations...and still had the feeling. It was locked in my body even though my mind knew I should do something different. This is when I first realized the power of a mental sub-conscience "block" that so many of us get while trading and never get over. A physical connection of mind and body. That stays until removed. One way successful traders have found, unknowingly, is through positive repetition (doing the right thing over and over and over). This will eventually reduce the impact of the block and lessen its potency over time. There are some other techniques that can be done one on one that just do not work with a written description. They tend to be much faster and longer lasting. So, in essence if you are choosing or have chosen trading as your career, knowing who you are with an honesty and truthfulness is what this occupation demands. Facing our trading integrity can sometimes be very awkward, yet it's the only way you can develop new strategies to overcome or control them. The common thread to successful trading is, knowing truthfully who YOU are. Filter out your strengths, leverage them and at the same time attack your weakness and minimize them. It will add to your profitability as well as the quality of your life. You see, it's never just about trading but about your past and what you bring to the trading desk. Repairing your trading weaknesses will also have an effect on the rest of your life. Till next time, great trading! Robin Dayne |
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Livermore
Master |
09-Sep-2008 19:32
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Hi SF,
I am not quite sure how to answer your question. Firstly I am a lousy trader. I hardly trade now. Market keeps going down but there should be a period where there is rebound of a few days. But I am most likely to sell when the small uptrend resumes a downtrend.
Some might find it strange but during bull market, I buy high and sell higher i.e I average up as I catch the initial uptrend.
Get a margin account ready when market recovers. The returns are tremendous. But don't be so "gung ho" at the start. Maybe start off with 1 share and once you manage to catch the initial uptrend and leverage up, just let it "fly". Try not to buy too many stocks with leverage. During bull phase, I leverage up at higher price not at lower price as I need to ensure I have some paper profit to give me a buffer.
With $100k, your leverage is $300k!
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elfinchilde
Elite |
09-Sep-2008 14:56
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on market bottoming: generally, a major significant event has to occur before we can say that a market has bottomed (the earliest sign). That has to do with macros and psychology more than TA charts. We had it with the fannie mae and freddie mac (ticker abbr: FNM and FRE) takeover. There's one more thing though: Lehman Brothers. So arbitrarily, I'd say this: If Lehman Brothers can find a buyer--KDB or otherwise--then i daresay that market will more or less stabilise. ie, trend would then change to sideways with bias for up. Up would occur if and when you find green vol days are > red vol days. (credit to CWQuah for this. :) ) If Lehman can't find a buyer though, then it's status quo, since it's one good news, one bad news. But direction will continue in its same way: rangebound downward. Auxillary event to watch for is Hurricane Ike. Because its direction is towards the Gulf of Mexico. If it ravages there and destroys the oil production/refineries there, you can expect a sudden spike in oil/commods/gold, and a sudden down in markets. All this is til, as Newtonian physics go, "Net external force acts to change the direction of motion." To predict would be folly. We simply let the market show us its direction. --------- HLJHLJ, comments later; i need to read their ARs. going out now, cheers! |
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Farmer
Master |
09-Sep-2008 14:31
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That's right Elfin! Value investment is the way to go to stay long, totally agree.But I still dun see much value among the blues here other than some s-reits perhaps. What about ComfortDelgo and STE? I know u normally dun recommend, how about some comments? | ||||
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elfinchilde
Elite |
09-Sep-2008 12:52
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MA crosses can be used as well. Note that they are lag indicators though. ie, they move after the share price moves. The advantage is that it gives a more 'guaranteed' signal (assuming it's not a false breakout). The disadvantage is that there may be some distance between the lowest point, and the point at which the MA gives a buy signal. No indicator is either good or bad per se though. All have their strengths and flaws. It is how you apply them based on your needs and time frame. MAcrosses are excellent for longterm players, with a 3-5year time frame, for instance. The lag in this case is a positive factor, since yes, you may buy higher, but you literally buy the assurance that it is a real uptrend. And if your timeframe is 3-5 years, really, why quibble over 10c? Your dividend yield across the years will more than cover that already. MA however, would not be good for rapid trades. Since it's too slow. And that's just it: no indicator is good or bad. It's all in application. n00bs would do well to master a range of indicators, then apply them as fit, rather than "chuck all indicators, they're useless". That they've been around for so long must show something, isn't it. Who's Robin Ho? 
Generally tho, i'd advise newbies to be wary of any "turn $1,000 into $100,000 in three weeks!" adverts. As we laugh about in the trading circles: "Sure, I can double your account in a week....but only after I bust five others." 
Risk and reward are always proportionate. To achieve such high returns, it entails high risk. Ie, one is either hero or zero. Do i do high risk trades myself? Yes. The returns are fast, the returns are big. But I do one other thing, which they won't tell you about: money management. The other thing they do not tell you: you can lose equally fast, equally big. Just ask any local BB who's dying after the foreigners bled them dry. Cosco, yzj, NOL, Straits Asia, STX PO. All the blues, not to mention the pennies. You think they still have profits from the last bull run? And this is exactly it. People always brag about the returns, they tell you "sure-win". but they will never tell you about the loss, or chance of loss. Those of you who are holding onto "sure win" duds now should know exactly what i mean. In the market, trend is everything. What does it say then, that after the boom and bust of so many cycles in the past century, after all these "turn 1,000 into 100,000 in 3 weeks" traders have come and gone, the only one remaining is Warren Buffett and his principle of value investment? A 40 year consistent track record. The market is no place for fairy tales. Anything that sounds too good to be true, is probably just that. Note: I know what i'm saying probably sounds like a damn wet blanket, and very unsexy and uncool. But I can also bet you that i'm one of the few who'd actually call it as it is, rather than airbrush the truth to high gloss and no substance. |
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stupidfool
Senior |
09-Sep-2008 12:41
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More sales talk after the free presentation,i presumed?
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stupidfool
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09-Sep-2008 12:36
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Hi livermore Based on ur theory,that is,trading in shares and trying to sell high and buy low,what will be the annual total returns be if i will be plough S$100k into your method of trading in the share market.??
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iPunter
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09-Sep-2008 09:15
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Super Trader Mr. Robin Ho has long dumped indiiators and rely only on price action/volume itself, for the simple reason that indicators are lagging.
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HLJHLJ
Veteran |
09-Sep-2008 00:22
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Sorry, I kapo a bit. LOL. Still bearish using this method.
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elfinchilde
Elite |
08-Sep-2008 23:27
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the ETF is a low vol counter. Generally, if you wish to trade, it must be a liquid counter. For the ETF: If you wish to apply TA, you need to use channels and S/R levels. Williams and BUSD for rapid trades; the rest of the indicators won't really apply. fyi, long term supports pegged at 2.53 and 2.31. Actually, if you're buying the ETF, you are likely looking at very longterm: 1-3 year horizon. If your intention was to get something for a fast punt, you may like to consider individual counters instead. Since by its nature, the ETF is made up of a basket of stocks, ie, for the ETF to really go up, ALL the stocks in the dif sectors have to go up. In a bear market, where the BBs are rotating/churning and moving fast, it's quite hard to expect an ETF to go up. Unless you bought in that many quantities of course. If your buy px is not far from here, a cut may be a better option, actually....conserve capital. if you can't bear to cut, consider getting some STI put warrants instead. trade a small amount regularly (puts + calls = strangles), in order to hedge your position/recoup capital. Trading is aggressive by nature. What you can do tho, is to control the risk exposure by playing small and running fast. choice of counter matters too. Please don't practice trading on something like STX PO or StA, sure become like this: 
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desire
Member |
08-Sep-2008 22:44
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hi elf, to be frank, i am holding STI ETF right now, do you think it is wise to apply TA or rapid trades on this counter? . For beginner like me, i was thinking to get some more stable counter to play with, i will move to more aggresive trade when i gain more experience, cheers  .Thank you for any advice again =)
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elfinchilde
Elite |
08-Sep-2008 22:36
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"Learning from books or courses is totally different from actual practice. Even trading with a demo account can be very different from trading with real money. Trading successfully just a few counters might just be too small a sample size to determine long term success. Moreover, psychologically trading with small capital is very different from trading with big capital. But with his knowledge, I must say he has the potential to excel in trading in the long run, if he sticks to his plan with no emotions attached." ---- Agree with trader88 on all the above. The main difference is in psychology. Most people if you ask them, they'll tell you they can *stomach losses*. but the moment their counter dips, they'd panic. And there's one more thing too: often, people who've made consecutive winning trades tend to start getting arrogant: they think their method works, their method's the best, they're infallible. And that, usually, is when the market takes them out. A few trades isn't an indicator of success, to me. It could very well just have been luck: the way in the bull run last year, practically every tom, dick or harry made money. longterm record is more important. I do concur with trader88 tho, that your friend is probably on the right track. :) eh, desire, i said rapid trades. (ie, intraday to <5day trade). If your view is longterm, you should be looking to buy on dip instead. It all depends on what you're holding tho. and if you have spare cash to back it up. if you have some duds, it may be wiser to cut, so that you can buy in cheaper. i really won't hold much hope for an election rally....i think more likely a range bound phenomenon. 2800 is critical to break, it becomes a very strong resistance now. |
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novicex
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08-Sep-2008 22:31
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thank you for the generosity in sharing what you know here with novice like us.. i really do wish i came here much earlier before my losses.. but capital preservation is very important.. and so i'll wait like what many of you mention earlier.. and i have been waiting for the past 2 months (though i did took one small wrong entry and failed to cut losses in time again) ultimately it has got to be mind over matter... and i didn't think i would be this irrational and that it would hurt so much. indeed the psychology has to play a large part in trading. i am definitely looking forward to elf's course.. hey please conduct it asap.. we would benefit so much from it! |
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desire
Member |
08-Sep-2008 22:26
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thanks again to all priceless advices; i really gain a lot from this forum. "for rapid trades, your entry should have been on friday. i gave a hint that it was controlled accumulation on the blues. so your exit is today or tomorrow, wed latest, since i expect the DJIA to be up at least 200 pts tonight, which should give a filip to our poor STI." sorry to trouble you again master elf, do this clause from you mean that i have let go all my share by wed so that i can cut loss at a better price? My time frame is half year cause i am looking forward to the presidential election in US, do you see anything beyond 3000 for STI by year end? I have capital to lose as initially i am firm that 20% lose of my capital is ok for me. But when it comes to real situation, i really feel the hype  ! i thinks it is normal for amatuer player like me. But again your word of wisdom help me a lot. I think it will be a fantastic experience for me if i can meet up with any master here one day, esp elf, and gain some gold advices from you (i guess i will have pay for that too, hehe). |
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Livermore
Master |
08-Sep-2008 21:51
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At least my friend started off on the right path compared to me.*ha*. At least he is better than one of my friend who after many years in the stock market, can tell me paper loss is not a loss as he is looking at long term. But too me, the market might not be suitable for all. You can tell a person it is important to preserve your capital and paper loss is a loss, but he just won't agree with you.
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