Invest Fair 2009

Went to InvestFair 09 at Suntec City yesterday. Not much take away from there. But managed to keep my thoughts in more proper order after a few months of practicing active trading since end May 2009.
Noticed that Forex and CFD is becoming more popular now.

10 Laws of Risk Management

1. Control Share Size
Start with small share size for a few months till you get constant winnings.
Then adjust to higher share size and continue till get constant winnings.
If get confused or start losing, adjust to lower share size.
2. When in Doubt, Get Out immediately
Flats are Winners. Never mind the commissions.
3. Know when NOT to enter trade
Don’t get in if the stock goes IRRATIONALLY high or low.
- If it goes too high, it will turn back.
- If it goes too low, there might be some problems with company.
No positions before market open
- Enter only 1 hour after market opens.
Use extended time for exits (5.00-5.05pm)
No positions before major market announcements.
Avoid volatile stocks.
4. No Cost Dollar Averaging
Only for value investor
5. Don’t Overtrade
Plan your trade, trade your plan.
Define in your plan how much you want to trade in a same time period.
6. No Doubling Down
Only for gambling
Need unlimited capital size
7. Have a Loss Limit
2% of Risk Capital
Stop trading once Loss Limit have been reach and reevaluate trading system
8. Be Logical, not Emotional
Be unattached to the outcome of your trades
9. Don’t trade if something wrong with systems
Slow quotes
Jamming
- Go through checklist for tools operation condition (equipment maintenance checklist)
Sick
Thoughts distractions
- Still keep in touch with market but don’t trade
10. Be Disciplined
Have trading rules.
Have trading plan.
Review trading plan and positions.
Stick to fixed schedule for important activities.

Daily Trading Routine

1. Daily Self Analysis
Rate your psychology before trading (1-10)
.
2. Develop Low Risk Trade
Do market analysis
Ensure all ’stars’ are align before entering trade
Minimize risk
Preserve capital
Remove higher risk trade
.
3. Mental Rehearsal
Pre-plan your trading plan
Anticipate problem & resolution (stop loss)
.
4. Be a Stalker
Stalk the maket till all ’stars’ align then enter
Be patient
.
5. Be a SNIPER
AIM
FIRE!
with speed, bold, courage
commitment to trading plan
discipline
.
6. Monitoring
CLOSE MONITORING when first enter trade. Exit if trade fails. Intraday Chart
OVERVIEW MONITORING when market moves in favor. Trail your stop loss. Daily Chart
CLOSE MONITORING when some action Might be necessary eg. sudden move in price range, gap, parabolic trend etc. Intraday Chart
.
7. Abort / Take Profit
Cut your losses short, Let your profit run
Exit when stop loss is activated in failure
Partial profit (short term) when psychology is stressing
.
8. Daily Debriefing
Review whether there is any mistakes.
Do 3 WHYs
Following trading plan & rules?
Review & consider the options available when the mistake is made

Goals

LONG TERM (15 years)

1. Become a Trading WIZARD (expert in stock trading field)
2. EXPONENTIAL Passive Wealth Creation
3. CONSISTENT Passive Income that exceed monthly expenses ($8k)

MEDIUM TERM (5 years)

1. 100% trading capital PRESERVED and start to invest in other vehicles (eg. property)
2. Start generating passive income

SHORT TERM (1 year)

1. Define a GOOD STRATEGY PLAN
2. Understand ALL COMPONENTS in Trading
3. Consistently RISK LOW, WIN BIG/SMALL with POSITIVE net profit monthly
4. Higher PROFIT % month-over-month.
5. DISCIPLINE

VERY SHORT TERM (1 quarter)
1. Study and practices all books from Wizard traders.
2. Start creating Trading Business and Business Plan.
3. Achieve for daily review.
4. Improve trading psychology (3 weakness per quarter).

Trading Plan

1. Define Goals
2. Trading Routine
3. System for selecting securities
4. Risk Management plan
5. Define trading strategies, entries, exits
6. Means of measuring success

Risk Management

1. Control Share Size
Start with small share size for a few months till you get constant winnings.
Then adjust to higher share size and continue till get constant winnings.
If get confused or start losing, adjust to lower share size.
.
2. When in Doubt, Get Out immediately
Flats are Winners. Never mind the commissions.
.
3. Know when NOT to enter trade
Don’t get in if the stock goes IRRATIONALLY high or low.
- If it goes too high, it will turn back.
- If it goes too low, there might be some problems with company.
No positions before market open
- Enter only 1 hour after market opens.
Use extended time for exits (5.00-5.05pm)
No positions before major market announcements.
Avoid volatile stocks.
.
4. No Cost Dollar Averaging
Only for value investor
.
5. Don’t Overtrade
Plan your trade, trade your plan.
Define in your plan how much you want to trade in a same time period.
.
6. No Doubling Down
Only for gambling
Need unlimited capital size
.
7. Have a Loss Limit
2% of Risk Capital
Stop trading once Loss Limit have been reach and reevaluate trading system
.
8. Be Logical, not Emotional
Be unattached to the outcome of your trades
.
9. Don’t trade if something wrong with systems
Slow quotes
Jamming
- Go through checklist for tools operation condition (equipment maintenance checklist)
Sick
Thoughts distractions
- Still keep in touch with market but don’t trade
.
10. Be Disciplined
Have trading rules.
Have trading plan.
Review trading plan and positions.
Stick to fixed schedule for important activities.

Technical Analysis

1. Support & Resistance
- MA
- Trendline
- Retracement (Fibonacci)
2. Impulsions vs Corrections
3. Overbought & Oversold Indicators

Trading Pillars

1. Fundamental Analysis
2. Technical Analysis
3. Speed of Execution
4. Live Date Feeds
5. Risk Management
6. Psychology of Trading
7. Trading Plan

My beginning as a Trader

This will be my journal in tracking my journey towards becoming a successful trader.
My target area of competency is trading in stock markets and then expand to derivatives.
My ultimate goal is to achieve trading success which I define as ability to achieve financial freedom for my family via trading within 20 years period from now.