Sunday Thoughts: “I want to turn $1000 to $2000 by next week.”

Perspective

Who is right?

It is possible to turn $1000 to $2000 in a single bet in forex, in one day, in one minute, in one week, or one month, or any financial instrument that allows margin. Say for under Singapore regulations, the maximum margin allowed is 1:50. Meaning if you’re trading forex, every dollar you trade is worth $50. Overseas brokers can allow margin up to 500. Imagine your $1 being worth $500. And you have $1000 to trade. You effectively have $500,000 of margin.

With $500,000 of margin, you can do lots with it, just as what you can do with a bank loan. But it’s very, very different from a bank loan.

Simply because if you use all your margin, every little movement of a forex price (pips in common language) is going to be worth alot of money.

So as an example, with using all your margin of $500,000, betting long on the USDCAD on last Friday’s NFP results (which turned out higher than expected, but the USD CAD dropped by 60 pips in 5 mins), each pip is worth about SGD$38. So a 60 pip move against you will lose you $2280.

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HOW CAN I LOSE MORE THAN I HAVE? (learn to read bro)

Ok. So that’s what can happen. So let’s say it moves 60 pips in your favour. Thats $2280. Congratulations, you managed to turn $1000 into $2280 in 5 min.

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Dr Van Tharp in his book Super Trader did a very good experiment on this. And found that when it came to the biggest winners, there were basically 2 types: The one who bet large bets and got lucky, or the one who places small bets and profits little by little.

So who is right? Both are reasonable, and very possible ways of turning $1000 to $2000 although the more patient trader will take a longer time.

It’s all in your risk appetite. If you can’t afford to lose $1000 or even more (don’t be fooled that you’ll be closed out at $1000. Price can move so fast, the broker will just close it at the next possible price, which can make you lose even more than $2280 if there’s no one to take your stop loss. Happened to me once. And once is enough.), but willing to risk it because you have really nothing left to lose and wanna have a chance and doubling your money in 5 minutes, nobody can stop you.

The patient trader has an edge over you though. And it’s survival. Time. And luck only knocks a few times.

Which of the 2 types of big winners do you prefer to be? Rationally thinking, which is the right way to trade?

Both are possible. The only difference is time. And of course, this very important question if you want to be the big bet big winner trader:

What’s your next plan for the next trade?

Happy Sunday.

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June 2017 Monthly Reflection: Lessons Learnt

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Previously I blogged about the importance of reflection in trading. And I  do that alot. I do it weekly, and monthly, and during drawdowns, perhaps every 3 months, but I try to reflect as much as possible. Simply because it is the best way to learn.

June has been a good month so far. And I’m not just talking about the numbers. I’m talking about the lessons.

As a reflective trader, I’m always looking for ways to improve the process. And to try new things. Because there is no such thing as “the only way to trade”. Why do you think prices move? It’s because people are trading thousands of ways giving them thousands of signals on different timeframes. The only one way to trade, is your way.

So coming back to June. I experimented with several things with my trading. One is adding trailing stops once the move has gone about half in my favour, and another is to place breakeven orders when the price is about halfway towards my target price.

I’ve always been experimenting with these two, and through reflection, and looking back at my records, I don’t see clear advantages, for my strategy.

So I started to highlight when these stops actually “save” me, or make me “lose money”.

The other thing I experimenting with is taking profit early, based on current price action, and oscillators, and day of the week. For example, if it is close to the end of the week and my profit hasn’t been hit, I take profit. Another example, is when the profit amount is very attractive, and I say, “why not, just take lah”, and I close the trade.

The other thing I added to June, late June, is actually increasing my risk, to test and push my stomach for drawdown.

So here are my reflections, and findings, specific for my trading style. Just to share with you the outcome of reflective learning. These are specific to my trading style, so please, don’t take these lessons as yours. I’m just sharing you my own reflections, as examples.

  • Break even and trailing stops very seldom “save” me. They make me lose money instead, because of whipsaws hitting those stops, before eventually hitting my target.
  • Taking profit, ironically, makes me lose money. As I shared before, it’s important to have a right perspective. And to get the right perspective, you need to reflect, to discover it. While taking profit early puts money in the pocket, I actually lost money because the trade eventually hit my targets. That’s the right perspective to take. I lost money by taking profit. And this is harsh, because I know, losing money slows down the compounding rate, for every week that passes.
  • Increasing my positions size from 1% to 2% is starting to eat into me and push me to the edge. So now I know I am still not ready for a 2% position sizing, and perhaps, next month, I will try something like 1.5%, or less. Because I know that to speed up compounding, I also need to try to push up the position sizing, to gain a greater percentage growth per month.

 

So you see, hopefully, why reflecting, and keeping records, and making it a habit and having the mentality that trading is a job, is very critical to trading successfully. I have met several interested persons in what I do, and I am very happy to hear them tell me “I’ve never thought of trading in this way before.”

Give reflection a try. Keep good records. And reflect on why you took those trades, how they went, and what were some lessons learnt. And keep them. And go back to them once in a while, and reflect if you have made progress. Focus on process more than the results. The results come from process, not the other way round.

Happy trading!

 

How long did it take for Harry Potter to become published?

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I think most people would be familiar with how the idea of Harry Potter popped into her head. The story is that:

After working at Amnesty International in London, Rowling and her then boyfriend decided to move to Manchester,[23] where she worked at the Chamber of Commerce.[24] In 1990, while she was on a four-hour-delayed train trip from Manchester to London, the idea for a story of a young boy attending a school of wizardry “came fully formed” into her mind.[23][41]

That’s from Wikipedia. Not many people, unless you read the backstory of how the first Harry Potter book got finally published,  it was only until 7 years later, and through a sheer stroke of luck when the publisher’s daughter had shown interest in the story to her father that caught his attention.

In that 7 years, she went through struggles, poverty, divorce, single parenthood. All while still focused, and determined to complete the first manuscript. And if it weren’t for the publisher’s daughter, we may never have the magic of Harry Potter today.

So the same goes for trading. You may have “seen the light”, or have found some secret formula to trading. But that is not enough to be successful. How to execute the formula, and have the mental edge to handle to inherent drawdowns, and not to give up trying and trying…and even needing a little luck in the end, to get the capital to grow your account, all while handling life itself.

Trading is a tough game. Yet it is so attractive to many because of how “easy” it is make money (and lose it). To succeed consistently, it can take years. As it did for me, and as it did for J.K Rowling, who always had the idea, the secret of Harry Potter, yet needed to go through so many trials and tribulations, and even needed a stroke of luck, to eventually reach where she is right now.

Are you willing to do the same? Or just looking for the secret formula and expect to lay back and let the money roll right in? Forget that idea. It’s what those $3000 per course salesmen are selling. And that’s all they are doing. Selling a dream.

Dreams are for you to make them happen. Or they will just be dreams in your head until the end your days.

It’s all in your own hands, not in others.

Put in the hard work, and time, for even a chance to reach success.

All the best!

@smartcasualtrader

There’s a Smart Casual Trader™ in all of us: Lessons from Monsters University

I love Pixar movies. Partly because not many people know that Steve Jobs had a large role to play in changing the animated movies industry not just by helping fund the small company, but through his legendary “reality distortion field”, managed to put Pixar on the map through tough negotiations with Walt Disney. Many of Walt Disney’s animated movie successes would not be possible without Pixar.

I digress.

Pixar movies move both kids and adults. And the script, storyline and characters, are mostly the brainchild of one man: John Lasseter.

I digress again.

Monsters University has a deep meaningful story. A story of Mike, the least scariest monster, gunning his way to pursue his dream to work in Monsters Inc. as a scarer. Despite the odds against him, he uses his strengths, his determination, and resilience, to build a team to top the university’s scaring program.

On the other side, we have Sully, the “sure-win”, overconfident, privileged monster who believed he didn’t need to try hard at all to be the best.

To cut the story short, things didn’t go well for both of them, but they had to team up in order to stay in the program, and group up with other non-scaring monsters in order to win a scaring competition to stay in the program.

To inspire the motley group that they have what it takes to be scarers, Mike brought them secretly into Monsters Inc to see real scarers at work. And the lesson then, was to realize that each monster had their own unique characteristics, using their strengths to their advantage to scare: Each monster had their own edge, there was no one “type” of monster like Sully, who was big, strong, and had a unbeatable roar. In other words, to succeed in scaring, it had little to do with who you are, what you look like, but rather, how you used your special talents, your edge, to be successful. Some of the scarers looked silly, even, but they still worked as top scarers, by leveraging on their edge.

The tagline for Monsters University is : “There’s a monster in all of us.”

And that is so true, for trading, or whatever you want to pursue. Don’t be intimidated by the men and women with the credentials in black suits, equipped with the top equipment, working in the top banks or funds. There is no one archetype of a successful trader. And I believe I’m a living example of such.

Find your edge. And the edge comes from being Smart, Casual.

Forget putting on your black suit and tie and put on your most comfortable T-shirt and shorts.

This is the Smart Casual Trading™ philosophy to be a successful trader, no matter what strategy you use.

Happy trading!

 

Call to Action: NOW OR NEVER

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Humans are creatures of habit. And it gives us predictability. Safety. Security. Work is routine. We all have our own routines.

And when you’re working, a 9-5 job, for the sake of income, you will be in a routine for a long, long, long time. Because you are an asset to your boss/company. And they want the rats to continue running for as long as they can.

The carrots that you are chasing surely put food on the table. But where do you put the excess carrots? Spend or save? Neither. You need to learn how to grow those carrots, instead of waiting for the bonus and promotion that is already calculated into what you are worth, and what you are given will ALWAYS be below your true worth, in order for the boss/company to be profitable. As long as you are running on the wheel, chasing the carrots.

And I’m not referring carrots as money. Staff benefits don’t add to your bank account. But they make you stay running. For the same amount of salary.

Again: You will never, be paid your true worth. It is simply unsustainable for any company to pay their assets their their true worth. Especially if you are at the bottom of the becking call.

This is a call to action to start NOW. And this shows it very clearly why:

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And much more clearly put here:

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Another picture I love to illustrate compounding is this:

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Time and tide waits for no man. And the magic of compounding reveals itself only at the final few years of a long term commitment to reinvesting, no matter how small the interest rate is. But it must exceed inflation.

Leaving $500,000 in the bank does not make you rich. It makes you poorer and poorer, especially in the current low interest rate environment, as inflation is, while still low, is picking up. How does that 0.05% interest rate in savings sound to you compared to a 2% inflation rate?

You’re losing value in your $500,000.

WAKE UP NOW.

I’ve been there, in the routine, stuck in the routine, tricked to believe I can retire comfortably with my salary and savings, but in the future, your dreams of retirement simply get delayed and delayed. the CPF drawdown age will increase. And you will find your savings have lost so much of its value, it’s utterly too late.

Unfortunately we still live in a society stuck in the routine 20 years of study + 40 years of working until 60 and finding ourselves poor without knowing it.

So the call to action is NOW.

  1. Start early. Start NOW
  2. Learn how to invest or grow your own money. Not buy into sales pitches that puts money into others’ pockets. Grow your own carrots, for yourself.
  3. Be in it for the long term, because the 8th wonder of the world as some call it, compounding, reveals itself only towards the end.

So instead of realizing you’re 60 and still not enjoying as much as you thought you would, you would be at 60 wondering how on earth did you get so many carrots you don’t know what to do with them.

You can start by learning. Find the time to learn about simple investing in stocks. That’s how I started. Even simple investing a small amount every month into a ETF for 40 years will reveal the magic when you’re 60. If you’re lucky, and able to generate 10% yearly of compounding, you are going to DOUBLE your $500,000 into a cool $1mil in 7 years.

It doesn’t matter if you have $100, $200, $1000, or $10,000. Let the power of compounding do its own magic. But you must follow the 3 rules:

  • Start early. Start NOW
  • Learn how to invest or grow your own money. Not buy into sales pitches that puts money into others’ pockets. Grow your carrots, for yourself.
  • Be in it for the long term, because the 8th wonder of the world as some call it, compounding, reveals itself only towards the end.

It’s your choice. It’s your excuses to make. Remember. You only have 1 life. And time does not turn backwards.

Smart Casual Trading is only one way.  Running your own business is another. Investing early, regularly in a long term portfolio with a decent interest rate is another. Trading equities is another. Investing in property is another.

The most important thing is to take the action, slow down your running, start saying “no” to your boss, invest time to learn, and take the action NOW.

You can take action by checking out my facebook page, where I have put up a course with a fantastic discount to get you started on starting a forex business.

Get up and get going!

 

The Smart Casual Trader considers the Dark Side

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There is this bias about doctors going private. And it’s a concern even for the government. The unspoken truth is, beyond the standard “for better quality of life”, “to provide better care”, is about money. Please, correct me if I’m wrong here. It is the “ladder” to climb for doctors. To gain experience and reputation in government hospitals, and then make it on their own. I’m stereotyping. I know. I know of truly sincere, noble doctors who leave the public sector to provide better care for their patients because they now practice on their own terms. And, they have a better quality of life. Sure, the charges are higher because of overheads and costs which come out from their own pockets, but there is no denying the dark side as well: The lure of money.

I’ve seen facebook posts of doctors opening their own clinic, and their friends commenting “huat ah!”

I guess, that’s the reality.

And so it is with what I’m doing with Smart Casual Trading. I’m starting small, trading on my own, and providing services on the side at nominal rates, and more. I’m focusing on my brand, and in time, hopefully, my brand resonates with the average Singaporean who have paid and got burnt by conmen who make more money coaching than doing what they actually coach, and in time, I hope I am able to build a community of followers and believers in what I do.

Then what?

There is the dark side. The dark side is to go “private”. Because I’m been noticing my posts showing my profits and trading performance get the most hits, instead of those “smushy” stuff about empowering yourself to  learn a new skill and to step out of the comfort zone.  People still just want the “Secret Formula”. The “Holy Grail”.

The dark side beckons to me, to leverage on my performance, and on my brand, and go the path of mass marketing, mass coaching, mass lecturing, and of course, mass income that exceeds my trading income.

It is the common sense to do, isn’t it?

I respect the doctors who choose to remain in the public sector, choosing to teach, achieving AP positions, going into research, while their colleagues enter fields that are money cows. I have nothing against either. I just notice this. And I respect both doctors for their own reasons.

What about the Smart Casual Trader?

Only time will tell.

#smartcasualtrading

Contact me if you’re interested to learn more.

 

What is trading forex for a living? Should I trade for side or full income? The Smart Casual Method can be used for both.

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The dream most people think about trading for a living is that you literally make money from anywhere, using some secret formula, and getting your trades right all the time. A quick rich scheme, where you money makes money, and you are free.

In the first sentence of Elder’s Trading for a Living I remember quite clearly he said something about it being possible, to be trading for a living, defining it to mean you live off your trading profits. Meaning, you trade, you profit, you make money, and never have to work again.

To an extent, yes. That is what I am doing. My main income comes from trading. I make a range of 3-16k per month, with some months in a loss, but not too great a loss that I am overall in a loss. Overall, I have made enough profit, that if I withdraw my profits on a monthly basis, I can live comfortably. I’m not a millionaire, because I’m focused on small steps, small risks, and compounding for the long term. I don’t risk all my margin in a single trade. I trade like I am running a business. I pay myself a salary when I need to, but my focus is on growing the business, to compound the profits over a long term.

I guess some, if not most, people think trading for a living think its about making $500 a day using a secret formula with no risk, and the $500 a day goes into the pocket everyday. I’m sorry, please don’t fall for those cons. While it is possible, ask yourself: Why would someone want to spend advertising money on such a thing to attract your attention? I am trading for a living, but I’ve not put in much advertising money into selling the idea of trading for a living because I know the truth. I can easily con people. I have the results. And I can sell snakes oil to vulnerable, desperate people. Thankfully, I am not one of those type of people.

I was asked an interesting question by a potential client yesterday: “What’s in it for you?” I interpreted as “What’s the catch?” Because what I am offering is as good as free. Yes I do charge fees for certain services for my time, but those are truly nominal and I’m happy to negotiate if I can get something from you in return. Check out my Facebook page and tell me what you think of my services and prices.

Well the fact is, my main source of income still comes from trading. I do have side income from lecturing part time which I love for the lecturing and nurturing of students, I’m not doing it solely for the money, and this Smart Casual Trading coaching project, well, is perhaps, potentially another source of side income for me.

But I do have a main goal with all this. I am passionate about my brand. I am passionate about coaching. I am passionate about being the “go-to” guy for honest, authentic, coaching. I’m sure there are others out there. But I sincerely want to help, because I myself struggled in my own journey. And I came up with this as a side project, and so far, it’s been empowering, and enlightening for myself.


So coming back to trading for a living or for a side income. The answer, unfortunately, lies in a simple fact: How much capital do you have? Remember, I run my trading as a business. And as with all businesses, you need capital. Small businesses with small capital cannot expect to make big bucks overnight, but little by little, growing your brand, gaining market share, that’s when the money rolls in, as you reinvest your profits back into your business. I am able to trade and make sufficient money to live off them because I have substantial capital. It’s as simple as that.

As for side income, the answer is simple. How much capital do you have to trade? If , again, it’s not much, then keep your job, and treat forex trading as a source of side income to grow your capital. Take it as an investment. Take it as putting aside a sum of your salary into this side income, and grow it slowly. With the power of compounding, you eventually, as I have, may reach a point where your trading income exceeds your salary. Then you can ask yourself, what do you want to do.

The problem with side income is that most people with full time jobs will hardly have the time and energy to start from scratch. And that’s why I’m here. And that’s why I believe Smart Casual Trading is the best “dresscode” to trade. It doesn’t’ require much time, effort to execute, but it does take time to learn to build up knowledge, skill, and discipline, all of which are within your own hands.

I have clients who are willing to jump  into the unknown going full time. I have clients who just want something to spend time on and make lunch money. if they can. I have clients who are just looking for side income. I have clients who have little, but wish to be independant.

The Smart Casual Trading Method is for the everyday person. I designed it so. Because money is not the true value behind the method. The true value is in freedom and self-empowerment.

As the saying goes:  “Price is what you pay, Value is what you get”

Happy Trading!