A few behavioural traits of a confused/bad speculator

In my many years of trading securities and futures, I've come across many or almost all, bad traders. They could be the ordinary jo in the gallery or the chief dealer in a big firm and the thing that catches my attention is that all of them share a lot of similar traits; not necessarily all the traits but a lot of similarities.
So here are some of the most common traits of bad traders which I noticed:

1) they spend paper profits.
Illogical as it may seem, this is the most prevalent trait among people with poor emotional control. I think most of you will realize the same thing if you think about it. How many traders(or even yourself) do you know suddenly increase their spending pattern during a bull run? They could be more lavish in their meals, change a new car, change to more expensive perfumes, more expensive in their dressing or even keep a mistress. When I ask them whether they have liquidated their positions; the answer is always unanimously 'not yet'! ..There's more, they'd be so full of themselves that they even declare that they'll make it no matter what the market condition and most of these fellas are stock traders in Bursa(Bursa being a 1 way market only)! This only shows that people do not need to be rich before they 'upgrade' themselves,they only need to feel rich!
A contrasting example would be my very succesful trading buddy Tom: he naturally liquidates the portion of his positions to pay for his Camry , an Altis for his wifey and a 3 week European holiday for himself, wife and his in-laws ;all paid for in cash.. my only gripe with him is why take his in-laws along? Sorry tommy..i can't help myself.

2)they are sexually active only when there are winning real or on paper.
Lo and behold, I broke the taboo subject that most of you don't want to admit! Think about it, bad traders are only sexually active when they get lucky in the markets! They think they are great and they go all out to conquer another person to fuel their ego of being so smart in making a rare win. They good traders (very few) whom I know personally are only sexually active when they are in a losing streak! Maybe this behavior can be explained that winning traders get their high from winning and don't need any external stimulation to cut down their high..after all,sex is more mental than physical and so too is trading. Lesson to be learnt here? Good lovers are actually lousy traders..LOL!

3) they have no life outside of the markets.
They would be restless when the market is on holiday,they'd look at charts the whole time or be drinking themselves drunk just so the holiday would past by. They would talk about the market to every person they meet showing off their limited knowledge that they possess. Or they'd go around asking for tips and tits! If they could,they'd want to trade 7 days a week.
Contrast this with the good,excellent or fantastic traders I've come across; They have a balanced life and are very passionate with their hobbies and family. They have other goals in life and look forward to a break to catch up with their other passion. Gt is passionate with his family and with his hobby of flying remote control planes and helicopter. Lesson to be learnt here; GET A LIFE!

4) they subscribe to analyst reports.
All the good traders whom I personally know NEVER bother reading analyst reports let alone subscribe to it...not even the Wall Street Journal or even Fortune magazine. But they do read good trading books like 'Reminiscences...', Market Wizards etc. Why then bad traders rely on so many news and reports while the best don't even bother? Confidence; the best knows that no one knows what the future holds. Some more,why bother paying for someone else's opinion when you can get it free in some bad traders blogs? But ask yourself this, if analysts are so sure of their reports,don't you think they'll sell everything they possess and trade? Think about it, how many analyst do you know gets fired for writing a wrong report or a series of wrong reports? Lesson here: if you want opinions ,get it FREE!

5)they never learn from their mistakes.
History repeats itself all the time and that's why we study it. How many traders do you know actually study their mistakes and try their level best not to repeat it? Or how many traders do you know keep on repeating their mistakes over and over again? Like getting wiped out more than once? It's hard to accept your mistakes more so if you have an over inflated ego. I guess that's why so few make it in this game called speculation ,but a lucrative game for those living off people's mistakes.

This is also not a conclusive traits of bad confused traders, just a few traits that are most common among them. Think about it, does it apply to you? If it does,then do something about it like STOP trying to impersonate a trader.

FKLI & CPO Update

*FKLI maintain my LONG 1461 for October month..

*CPO also same story, still holding December contract LONG 2736..

The many 'don't 'of intelligent speculation

Many a time I've been approach by friends who want to speculate in the futures markets and I always give them my copy of 'Reminiscences of a stock operator' to read 1st. If the book is not read within 1 week, I would then ask them to return back my book and tell them plainly in their face not to waste their time even to think that they can trade.
This is a hard and cruel game and you need a passion for it. But let's see how many people can be passionate about this game after reading and pondering about the 'DON"T' of speculation. Why do I start of with the 'don't' of speculation ? Because it's the most common and basic mistakes made by every beginner when they place their 1st trade.

DON"T #1 : Don't ever over trade.
This year we've come across bloggers and traders who have suspended themselves from trading for one reason or the other. My deduction is that they were over trading. What is over trading? Over trading is mainly trading with insufficient capital. What is sufficient capital? Let's take the example of CPO ,the margin requirement is RM4,ooo per lot. That means you need a minimum of RM4,000 to trade 1 lot of CPO. If you follow gt's 30% rule;you need a minimum of RM 14,000 in your trading account to trade 1 lot of CPO. But how many actually keep to such a rule? I've seen many gallery traders who trade CPO with RM5-7,000 per lot.Needless to say,they don't last long after 1 or 2 whips from the market.

DON"T # 2: Don't increase your trading position after a loss or a series of losses.
This is quite a normal thing for gamblers to do,they increase their positions every time they lose thinking that their losing streak will end soon and they get to cover all their losses in 1 hand. But how many actually know when their losing streak will end? What if the markets whips u 10 times in a row? DO you think you still be around to catch the big move in your favor? This is also a form of over trading.

DON"T # 3: Don't ever fight the trend because of your opinions.
There is a blogger (still blogging by the way) who is and I believe is still fighting FKLI by being short and even shorting higher. He quotes 'who says there is only 1 road to Rome?' . But the surest and fastest way to Holland is by being stubborn and egoistic by fighting the market! IF you think you are smart and intelligent and therefore you must be right all the time why then do you not find or even hear of Albert Einstein or Professor Stephen Hawking trading for a living even on a part time basis, since they are sooooo smart and their opinions are definitely better than yours or mine? Think about it? You think you are smarter than Einstein or Professor Hawking?

DON'T # 4: Don't ever talk about your trades with other traders.
Trading is an egoistic game,chances are if you ever talk to someone that someone will talk you out of your position;since egoistic people always want to justify that they are always right! If they can't talk you out of your position with charts ,they'll probably talk you out of it by showing you negative analyst reports or projected gloom in the economy or market. Remember, all analyst reports and projections are just opinions of the author!

DON'T # 5: Don't ever talk about trading to your non-trading friends or family.
This is the fastest way to lose friends as they'll think that you are either a braggart or a gambler.
You must see it from their point of view,it's damn boring and most inexperienced traders get carried away as they'll go on and on and on about their trades or system and will start dominating the conversation. People will avoid you the same way people avoid direct selling recruiters or pesky life insurance agents trying to load you up with policies you can't afford! But do talk trading to people you don't like ;it's a classy way of getting rid of them from your life!

DON"T # 6: Don't be a fulltime trader/speculator if 30% gain a year on your capital is less than what you are making now.
Serious, it blows my mind wondering why people even decide to trade on a full time basis when they are already holding on to decent jobs. But honestly,30% gain is a conservative figure to speculators,but how sure are you that you'll even come out ahead for the year? Most part time traders don't realize that the reason they are doing spectacularly year in year out is because of their full time job. Losses will affect you no matter what people say and losses without a full time job will affect you even more. You'll never realize just how many tricks your mind can play with you.

This list of 'don't' is not exhaustive but I think I've covered the basics . Now it's all up to you to really be honest with yourself. If I offended anyone,don't take it personally but just ponder about it.

By the way,I'm not taking in new students but the door is still open for oops n nb..since I left them too abruptly! So oops and nb do send me your email address if you want to continue your education.

Weekly Update FKLI & CPO

*FKLI now holding Long 1461 for October month (roll)..

*CPO still holding December contract LONG 2736..

ps>> for those not believers that our market damn strong and still holding FKLI Shot position, i wish good luck shorting to AVERAGE HIGH your position, watch/search this movie about Nick Leeson, dont go against the trend, the name of the movie -->> ROGUE TRADER :), maybe you guys (i mean shorties) will learn something.. Good weekend to all.. adios

Test your skill/system trading..

*You discover a super system to trade, try this website www.chartgame.com to test your "PROVEN" system to trade the market. The chart taken from real stocks traded in US/Canada, your system will compete with Buy & Hold system set by the website.

*This is my game record using my system.. hahahhaah, damn bored now playing chart games..

FKLI

*FKLI rolling day, continue LONG 1461 for October month.. good profit for September :) and officially i'm back in the black (up 50pts +/-) for this year 2010, looking forward to close FKLI this year on positive note after total heart ache for the first 6 month of the year.

CPO

*CPO turn LONG 2736 for December contract.. hmmm heavy losses for November contract, haihh

Weekly update FKLI & CPO

As expected i got nothing to post or update for past 1 week, so here goes my position again.. NO CHANGE..

*FKLI still holding firmly my September roll LONG 1426.5..

*CPO also same case, still maintain my NOV contract SHOT 2624 but looks like as i post in my cbox earlier today i going to get slaughtered by the market soon because as i typing this update, Soybean Oil jumping like shit about 2% up... knn fred hahahaha

Unit Trust vs Stock Market

Taken from : RHBInvest's forum

Written by : "I smell money"

Don't know if you guys notice this, but everyone with investment in unit trust need to take note of this. I've recently flipped through the newspaper to have a check on performance of unit trust (according to Lipper Ranking) and these are some of the findings:

1.For the 6 months period [26-02-10 - 27-08-10], the common benchmarks FBM KLCI index rose +12.8% and FBM100 rose +12.4%. However Malaysian equity funds (non-islamic) had only return +8% on an 80-member average. {WHOA!!! not too impressive return by an average fund manager}.

2. Ok, then lets look at how many of the funds beat the benchmark of 12%. Oppss .. only 10 out of 80 fund or 12.5% of fund managers beat their benchmark.

3. Ok, then we shall look at the creme de la creme of the group, and see how they have done. For the top performing fund for the 6 month category, the top fund only had a return of 15%, huhhhh!!! only 3% above the benchmark.

Ok. then its time to compare this with some of the markets 2010 favourite.

Comparison same period
1. Supermax 12% (even after it had fallen off the cliff towards the end of July)
2. TimeCom 29%
3. Axiata 19%
4. Jadi 65% (ok this one a bit too unrealistic, but if you went in around XXsen when the stock was heavily traded)
5. AirAsia 14%
6. JCY -29% (of course not everything is hunky dory, and how can anybody forget about this name)
7. Unisem 19%
8. Notion -45% (woooo, dont we hate this name)
9. UEMLand 40%
10. MRCB 21%
11. Adventa -27%
12. Talam -20%
13. BJ Corp -23%
On average +37.5% (if you spread your money across all the 13 stocks evenly).


So if anyone who wants to invest in the stock market through unit trust then they should reconsider this strategy.

*Thanks to Teh (http://cpteh.blogspot.com) for allowing me to borrow/publish his article here.

CPO & FKLI

*CPO turn SHOT 2624 today but still maintain November contract.. i not interested to trade December contract yet!!

*FKLI still same case still holding September month LONG 1426.5..

Selamat Hari Raya & Weekly update..

I wish to all reader/followers of my blog here Selamat Hari Raya & Happy Holidays to all :)) and to those SHORTIES for FKLI & CPO good luck going against my position.. hik hik hik

*FKLI still holding September month LONG 1426.5..

*CPO also same case still maintain November contract LONG 2557..

Weekly Update

Not much to do, so this is my current position..

*FKLI still holding September month LONG 1426.5..

*CPO maintain November contract LONG 2557..

FKLI & CPO

*FKLI roll to September month LONG 1426.5..

*CPO maintain November contract LONG 2557..

CPO & FKLI

*CPO turn SAR LONG 2557 for November contract..

*FKLI still holding LONG 1354 for August month..

Update FKLI & CPO

Nothing to update actually, so this is my current position..

*FKLI still holding August LONG 1354..

*CPO maintain SHOT 2652 November contract..

CPO & FKLI

*FKLI still holding August LONG 1354..

*CPO turn SHOT 2652 November contract..

Weekly update FKLI & CPO

*FKLI still holding August LONG 1354..

*CPO maintain October LONG 2445, no rollover for me... :))

Weekly update FKLI & CPO

*FKLI still holding August LONG 1354..

*CPO maintain October LONG 2445..

FKLI & CPO (Weekly update)

*FKLI roll today at close, so holding LONG 1354 for August..

*CPO still holding October contract LONG 2445..

Weekly update..

*FKLI still holding LONG 1308..

*CPO maintain October contract LONG 2445..