Weekly Motivation

Trader's Belief and Actions

Winning traders and losing traders experience the trading environment differently. It makes them feel different and as a result their actions consistently vary. In psychological terms, they interpret the market differently because they have a separate belief system in the way that they see themselves relative to the stock market.

Below is a copy of the beliefs and actions that successful and unsuccessful trader's adopt. I've found it useful to have a copy printed, next to my computer at all times. Why would a successful trader do this you ask? I believe, no matter how good you may be, you must always keep practicing the basics.

Belief statements that different traders can make:

**Winning Traders**

- The markets provide an opportunity

- The markets exist to give me profits

- If I get stopped out then I have to reevaluate the trade

- If the market doesn't do what I expect then I must reconsider

- I'll take one trade at a time.

- I don't have to be perfect; I just have to do my best.

- Money is not that important

- Losing is part of the process of making money

- Trading is a game, I know I can win

- Every setback provides me with new market information

- I can wait for an opportunity to come

**Losing Traders**

- I must be in the market now

- If I lose on this trade I am a loser

- If I wait for my trading rules I'll miss out

- If I get stopped out I have bad luck

- I can't lose money

- The market makers got me again

- I'm an idiot, how could I lose money

- What will they think when I tell them I lost money on this one?

- The stock market is rigged

- It's impossible to get a good fill

- I cannot take a loss

- If I take my profit then I am right

These different beliefs create different characteristics of winning and losing traders:

**Winners**

- Get pleasure from trading the market as an end in itself

- Not motivated primarily by money

- Confident that they can make money in the market

- Not afraid to take a loss

- Patient

- waits for opportunities

- Uses a highly planned strategy

- Is well prepared, done his homework

- Measures the risk/reward ratio of every trade

**Losing Traders**

- Never define a loss

- Locked into a narrow belief system

- Hesitate to make a trade

- Do not stick to a system

- Trade by whim

- Trade by emotion

- Have no consistent strategy

- Do not practice risk management

- More interested in proving themselves right then being a success

FKLI Feb 06 Oops! Trade – No sell stop is placed

My actual Entry strategy
a. I checked the open at 8:45am. The price opened gapped up at 913 and 907.5 for Spot and Next Month contract respectively. I did not put any sell stop as the trend is up. I would rather trade Oops! trade
b. The FKLI Feb 06 price hit 912.5 high in the morning and came down to 907. The price just did not touch 906.5 It is reflection of the gapped-down day on Jan 23 06.
c. After lunch, the price hit up to 913.5 even CI is just moving up 2 something points.
d. The volume for Feb 06 exceeded that of Jan 06. This implies more buyers coming in the market for Feb 06 than Jan 06.

Trade executed according to plan? Yes

What I have done best:
a. I do not follow Oops! entry as the trend is up, I will trade on Oops! Buy until the trend changes (it is quite subjective).

What I need to improve:
a. I need to continue to be consistent with my trade management.
b. I need to back-test Oops! with trend following.

What I have learned:
a. The results of Oops! signal were very discouraging:
i. 2 Oops! signals with initial run but profit is little or there is small loss.
ii. 2 Oops! signals with price opened gapped-down and closed down.
iii. 1 gapped-down and closed down and 1 gapped-up and closed up.
iv. However, this has not disappointed me as I feel the big trade is coming after 4 or 5 lousy Oops! signals.

FKLI February 2006 – No Oops Trade – Buy Stop Order not triggered

Trade Planning and Management

Spot Month (Jan 06) Chart as at Jan 20 2006

Prices as at January 20, 2006
Date | Contract |Open | High | Low | Close
Jan 20 06 | Jan 06 | 908 | 911 | 903 | 904
Jan 20 06 | Feb 06 | 910 | 912 |905 | 906

Entry Strategy for Oops! Buy stop order
a. Option 1: If the price opens gaps down from prior day’s low, put a buy stop order 1 tick above prior-day low after FKLI opens.
b. Option 2: If the price opens flat or higher than prior day’s low, do nothing.

Entry Strategy for Oops! Sell stop order
a. Option 1: If the price opens gaps up from prior day’s low, put a buy stop order 1 tick below prior-day low after FKLI opens.
b. Option 2: If the price opens flat or lower than prior day’s low, do nothing.

Entry Strategy for Oops! Buy stop order during Rollover period (starting 22nd of the month):
a. Option 1: If the price of both Spot and Next month contract opens gapped down from prior day’s low, put a buy stop order 1 tick above prior-day low after FKLI opens.
b. Option 2: If either the price of Spot and Next month contract opens gapped down, do nothing.
c. Option 3: If the price opens flat or higher than prior day’s low, do nothing.

Entry Strategy for Oops! Sell stop order during Rollover period (starting 22nd of the month):
a. Option 1: If the price opens gaps up from prior day’s low, put a buy stop order 1 tick below prior-day low after FKLI opens.
b. Option 2: If either the price of Spot and Next month contract opens gapped up, do nothing.
c. Option 3: If the price opens flat or lower than prior day’s low, do nothing.

Adding More Contracts and Re-entry Strategy
a. No adding more contracts and Re-entry Strategy

Trade Management
a. If the stop order is triggered, put a stop order:
i. 1 tick below the intra-day’s low for Buy stop order.
ii. 1 tick above the intra-day’s high for Sell stop order.
b. Exit Strategy
i. MOC – if the price hits extreme in your favor. The extreme is when a long outside-day is formed with Close near Low or High. Close at 5:14pm.
ii. Next day‘s Open – if the trade is profitable but the price is not extreme, leave it over-night. Exit next day’s Open if the price gaps in your favor.
iii. Next day’s Close – if the price hits extreme in your favor. The extreme is when a long candle is formed with Close near Low or High. Close at 5:14pm
iv. 10 to 16-point profit. – Exit immediately
v. If there is no ascending or descending triangle target, use Fibonacci 161.8% as a possible target for trend-following Oops!.

c. Trailing Stop for Exit on Next day Close or subsequent days
i. The protective stop cannot increase your risk (loss) and reduce your profit unless No 6 and 7 below.
ii. The protective stop cannot give back more than 6 points of unrealized profit.
iii. When the trade is profitable, move your protective stop to the breakeven point. Trail your stop.
iv. When the trade is profitable, move your protective stop. Short Position: Move your stop to 1 tick above the open or high, whichever is lower, for sell stop but must be lower than your previous stop. Long Position: Move your stop to 1 tick below the open or low, whichever is higher, for buy stop but must be higher than your previous stop.
v. If the price moves in your favor, the trade is profitable and the prior day bar is a long bar (more than 8 points), move your stop 1 tick above or below the middle of the bar.
vi. Short Position: If prior-day’s bar is a long bar (8 points or more) and the today’s open is higher than prior day’s close but below the middle range of prior-day’s range, put your stop at 1 tick above the middle of prior-day’s range. Long Position: If prior-day’s bar is a long bar (8 points or more) and the today’s open is lower than prior day’s close but above the middle of prior-day’s range, put your stop 1 tick below the middle of prior day’s range.
vii. Short Position: If prior day bar is a long bar (8 points or more) and the today’s open is lower than prior day’s low, put your stop at 1 tick above the prior day’s low. Long Position: If prior day bar is a long bar (8 points or more) and the today’s open is higher than prior day’s high, put your stop 1 tick below the prior day’s high.
viii. Short Position: If prior-day’s bar is a long bar (8 points or more) and the today’s open is higher than both prior day’s close and middle range of prior-day’s range, put your stop at 1 tick above the prior-day’s high. Long Position: If prior-day’s bar is a long bar (8 points or more) and the today’s open is lower than both prior day’s close and middle of prior-day’s range, put your stop 1 tick below the prior day’s low.
ix. The maximum loss is 10 points or high/low of the next bar if the price gaps

Today’s Entry strategy:
a. Call Apex at 8:45am to check the opening price. Ask Apex for the following before entering a trade:
i. Open
ii. High and Low
iii. Last Done
iv. Prior day high / low (if not remembered or need confirmation)
b. If the price opens gaps up or down, put a stop order
c. Ask them to inform you when any trade is done. If the stop order is triggered, put a protective stop order based on intra-day High or Low.
d. Exit on MOC, next day‘s Open, next day’s Close or 10-point profit.
e. Let the trailing buy stop follow the price until it is taken out.

My actual Entry strategy
a. I called Apex to check the Open. The price opened gapped down at 900.5 and 900 for Spot and Next Month contract respectively. I automatically put in my buy stop order at 905.5, 1 tick above the previous day’s low. My risk is 5.5 points, which is lower than the maximum 6-point risk for Oops! trade.
b. My buy stop order was not triggered after 10:30am. A good Oops! trade is usually triggered between 9:10am and 10:30am. I checked the prices. The low was 895 and the high was 903. If my stop is triggered at 905.5, my stop loss is 894.5, 11.5-point loss.
c. I decided to cancel my stop at 10:35am.
d. The price then moved down to break 895 to hit low of 893.5. Those who bought at gapped-down covered their positions.
e. It is important to follow my trade management with greatest discipline and without second-guessing the market. In this way, I can achieve consistent results.

Trade executed according to plan? Yes


What I have done best:
a. I follow Oops! entry.
b. I cancel my buy stop order as the risk is more than 6 points.

What I need to improve:
a. I need to continue to be consistent with my trade management.
b. I need to back-test Oops! with trend following.

What I have learned:
a. No position is a position.
b. Discipline is very important in my trading.
c. The results of Oops! signal were very discouraging:
i. 2 Oops! signals with initial run but profit is little or there is small loss.
ii. 2 Oops! signals with price opened gapped-down and closed down.
iii. 1 gapped-down and closed down.
iv. However, this has not disappointed me as I feel the big trade is coming after 4 or 5 lousy Oops! signals.

Weekly Motivation

My Story by Lim Goh Tong

Lim Goh Tong (Chinese: 林梧桐; pinyin:Lín Wútóng) is the Malaysian casino king. Lim was born in Fujian Province, China in 1918. He left China and made a fortune in large-scale construction projects throughout Malaysia. In 1969, the Malaysian government granted its only casino license to Lim. His Genting Group operates the Genting Highlands casino resort in the mountains 25 miles northeast of Kuala Lumpur.


Parental teaching in a traditional Chinese upbringing have taught me to be humble, polite and respectful to others

I live a simple life with discipline. Habitually, I get up early but have no fixed time for going to bed. Sometimes, I stay up late going through documents or pondering on some issues. Even in my sleep, I would wake up with ideas and start taking notes and draw diagrams.

I HAVE A HABIT OF CARRYING A PIECE OF PAPER TO RECORD ANYTHING THAT COMES TO MY MIND. It also serves as my dairy for appointments and things to do for the day. In this way, I do not have to be reminded by others.

I am well known to my colleagues and staff as a tough taskmaster, but those who work with me can vouch that I drive myself just as relentlessly as I do others.

I believe in the power of conviction. When I make a decision and believe strongly that it is right one, I will go head on with it, no matter what odds I am up against.

In business, I believe in going step by step, slowly but surely. I prefer to seek out opportunities with good potential and build on them.

Weekly Motivation

How do you get rid of your negative belief?

What negative beliefs are you attaching yourself to that are holding you back?

Do you believe you don't deserve success?

Do you believe you're not worthy of being great?

Get a piece of paper and write down all the beliefs that are holding you back. What happens is when you put them DOWN ON PAPER you realize how stupid they are. Most people keep everything in their head and put nothing down on paper. Putting things down on paper helps bring CLARITY to your thinking.

99% of the negative beliefs people hold are a complete lie. They're just not true, but people start holding onto them and over time they start believing that they're real.

Ask yourself, what negative beliefs do I have that are holding me hostage?

This is very important stuff.

You need to work on yourself if you want to succeed. Let's go! :}

FKLI Jan 06 Oops! Trade 1 – Closed with a net loss RM225 (Jan 9 06 to Jan 12 06)

Trade Planning and Management

FKLI Jan 06 Chart as Jan 06 06

January 9, 2006

1. Entry Strategy for Oops! Buy stop order
a. Option 1: If the price opens gaps down from prior day’s low, put a buy stop order 1 tick above prior-day low after FKLI opens.
b. Option 2: If the price opens flat or higher than prior day’s low, do nothing.

2. Entry Strategy for Oops! Sell stop order
a. Option 1: If the price opens gaps up from prior day’s low, put a buy stop order 1 tick below prior-day low after FKLI opens.
b. Option 2: If the price opens flat or lower than prior day’s low, do nothing.

3. Entry Strategy for Oops! Buy stop order during Rollover period (starting 22nd of the month):
a. Option 1: If the price of both Spot and Next month contract opens gapped down from prior day’s low, put a buy stop order 1 tick above prior-day low after FKLI opens.
b. Option 2: If either the price of Spot and Next month contract opens gapped down, do nothing.
c. Option 3: If the price opens flat or higher than prior day’s low, do nothing.

4. Entry Strategy for Oops! Sell stop order during Rollover period (starting 22nd of the month):
a. Option 1: If the price opens gaps up from prior day’s low, put a buy stop order 1 tick below prior-day low after FKLI opens.
b. Option 2: If either the price of Spot and Next month contract opens gapped up, do nothing.
c. Option 3: If the price opens flat or lower than prior day’s low, do nothing.

5. Adding More Contracts and Re-entry Strategy
a. No adding more contracts and Re-entry Strategy

6. Trade Management
a. If the stop order is triggered, put a stop order:
i. 1 tick below the intra-day’s low for Buy stop order.
ii. 1 tick above the intra-day’s high for Sell stop order.
b. Exit Strategy
i. MOC – if the price hits extreme in your favor. The extreme is when a long outside-day is formed with Close near Low or High. Close at 5:14pm.
ii. Next day‘s Open – if the trade is profitable but the price is not extreme, leave it over-night. Exit next day’s Open if the price gaps in your favor.
iii. Next day’s Close – if the price hits extreme in your favor. The extreme is when a long candle is formed with Close near Low or High. Close at 5:14pm
iv. 10 to 16-point profit. – Exit immediately
v. If there is no ascending or descending triangle target, use Fibonacci 161.8% as a possible target for trend-following Oops!.

c. Trailing Stop for Exit on Next day Close or subsequent days
i. The protective stop cannot increase your risk (loss) and reduce your profit unless No 6 and 7 below.
ii. The protective stop cannot give back more than 6 points of unrealized profit.
iii. When the trade is profitable, move your protective stop to the breakeven point. Trail your stop.
iv. When the trade is profitable, move your protective stop. Short Position: Move your stop to 1 tick above the open or high, whichever is lower, for sell stop but must be lower than your previous stop. Long Position: Move your stop to 1 tick below the open or low, whichever is higher, for buy stop but must be higher than your previous stop.
v. If the price moves in your favor, the trade is profitable and the prior day bar is a long bar (more than 8 points), move your stop 1 tick above or below the middle of the bar.
vi. Short Position: If prior-day’s bar is a long bar (8 points or more) and the today’s open is higher than prior day’s close but below the middle range of prior-day’s range, put your stop at 1 tick above the middle of prior-day’s range. Long Position: If prior-day’s bar is a long bar (8 points or more) and the today’s open is lower than prior day’s close but above the middle of prior-day’s range, put your stop 1 tick below the middle of prior day’s range.
vii. Short Position: If prior day bar is a long bar (8 points or more) and the today’s open is lower than prior day’s low, put your stop at 1 tick above the prior day’s low. Long Position: If prior day bar is a long bar (8 points or more) and the today’s open is higher than prior day’s high, put your stop 1 tick below the prior day’s high.
viii. Short Position: If prior-day’s bar is a long bar (8 points or more) and the today’s open is higher than both prior day’s close and middle range of prior-day’s range, put your stop at 1 tick above the prior-day’s high. Long Position: If prior-day’s bar is a long bar (8 points or more) and the today’s open is lower than both prior day’s close and middle of prior-day’s range, put your stop 1 tick below the prior day’s low.
ix. The maximum loss is 10 points or high/low of the next bar if the price gaps

7. Today’s Entry strategy:
a. Call Apex at 8:45am to check the opening price. Ask Apex for the following before entering a trade:
i. Open
ii. High and Low
iii. Last Done
iv. Prior day high / low (if not remembered or need confirmation)
b. If the price opens gaps up or down, put a stop order
c. Ask them to inform you when any trade is done. If the stop order is triggered, put a protective stop order based on intra-day High or Low.
d. Exit on MOC, next day‘s Open, next day’s Close or 10-point profit.
e. Let the trailing buy stop follow the price until it is taken out.

8. My actual Entry strategy
a. I called Apex to check the Open at 8:46am. The price opened gapped up at 918 with high of 921.5. I automatically put in my sell stop order at 916.5.
b. I was waiting for my sell stop to be triggered for the whole morning. But I did not receive any call. Look like to CI and FKLI are still strong.
c. My buy stop order was triggered at 913 at 12:15pm. I immediately inform Apex to put my buy stop order at 922, 1 tick above intra-day’s high of 921.5.
d. The price hit low of 915 after lunch and moved around the range of 916 and 917.5.
e. I told myself to close my position if there is a loss.
f. CI closed up 2.13 points. But it is forming an evening shooting star. I may stay on with my position if the price near MOC is lower than the open of 918.
g. The price closed at 916.5 with higher volume of 3742

9. Trade executed according to plan? Yes

January 11, 2006

1. Today’s Trade Management:
a. Call Apex at 8:45am to check the opening price.
b. Initial Trailing Stop:
i. If the price opens gaps down, close your position immediately. Remember, Oops! is most powerful this time. It is also price-extreme.
ii. If the price opens gapped down, do nothing initially. Close your position after 10:30am if the price stays gapped down.
iii. If the price opens higher, flat or lower, put your buy stop order at 922, 1tick above previous day’s high.
c. Possible Exits:
i. MOC
ii. There is a price extreme – a long white candle with close near the high or a long black candle with the close near the low with blow-off volume.
iii. If there is 10-point profit.
iv. Let the trailing buy or sell stop follow the price until it is taken out (if there is a down-trend)
v. Use Fibonacci 161.8% as a target if it is trend-following Oops!
d. Subsequent Trailing Stop:
i. The breakeven point, 915.5, after the price breaks 9810.5, 2nd previous day’s low.
ii. 913.5, 1 tick above the intra-day’s high, if the price breaks 905.

2. My actual trade management:
a. I called Apex at 8:45am to check the Open. The price opened lower and hit 914.5. I immediately put in my buy stop at 922.
b. I did not monitor much. The price hit 911 low after CI opened before moving up to hit high of 916 at 12pm.
c. The price then moved down again as CI is dropping. It hit 912 again.
d. The price then moved up to 915 before closing at 914.5.
e. The trend is up. Shorting is not favorable. I will stay on the trade

3. Trade executed according to plan? Yes

January 12, 2006

1. Today’s Trade Management:
a. Call Apex at 8:45am to check the opening price.
b. Initial Trailing Stop:
i. If the price opens gaps down, close your position immediately. Remember, Oops! is most powerful this time. It is also price-extreme.
ii. If the price opens gapped up, do nothing initially. Close your position after 10:30am if the price stays gapped up.
iii. If the price opens higher, flat or lower, put your buy stop order at 922, 1 tick above the recent high as it is a trend following Oops! Sell.
c. Possible Exits:
i. MOC
ii. There is a price extreme – a long white candle with close near the high or a long black candle with the close near the low with blow-off volume.
iii. If there is 10-point profit.
iv. Let the trailing buy or sell stop follow the price until it is taken out (if there is a down-trend)
v. Use Fibonacci 161.8% as a target if it is trend-following Oops!
d. Subsequent Trailing Stop:
i. The breakeven point, 915.5, after the price breaks 910.5, 3rd previous day’s low.
ii. 913.5, 1 tick above the intra-day’s high, if the price breaks 905.

2. My actual trade management:
a. I called Apex at 8:45am to check the Open. The price opened lower and hit 914.5. I immediately put in my buy stop at 922.
b. I did not monitor much. The price hit 918.5 and moved down after 9:30am.
c. I told myself to cover if the price moves up 919.
d. The price moved up after 10:15am to 919.5. I was not able to cover at 919.
e. I only able to cover at 920. The price then moved up to hit 923.5 before closing at 915.5 with low of 914.5.
f. It is a whipsaw day. I was able to get out if I am wrong.
g. I lost RM225 (RM175 + RM50 commission).

3. Trade executed according to plan? Yes

4. What I have done best:
a. I follow Oops! entry.
b. I let the order for the whole day before MOC.

5. What I need to improve:
a. I need improve my exit rule so that I can stay consistent.
b. I need to back-test Oops! with trend following.
c. I need to trade less and concentrate on high risk-reward ratio trade of more than 3 and small losses

6. What I have learned:
a. If you are wrong, get out immediately. Do not hope.

FCPO Mar 06 Ascending Triangle Trade 5 - Closed with net gain of RM15

Trade Management

FCPO Chart as at Dec 29 05

December 30, 2005

Entry Strategy for AD: stop order
a. Option 1: If the price opens gaps up from prior day’s low, put a buy stop at 1420 after FCPO opens.
b. Option 2: If the price opens flat or lower than prior day’s low, put a buy stop at 1420 after FCPO opens.
c. Option 3: If the price opens gapped down, put a buy stop at 1420 after FCPO opens.

Adding more contracts
a. No.

Trailing Stops
a. If the stop order is triggered, put a stop order as the initial trailing stop at 1410, 10 –tick stop loss.

Exits
a. When your initial stop order is triggered
b. Exit on MOC if the price closed below 1420.
c. When the projected AD target of 1458 is hit.
d. Let the trailing buy stop follow the price until it is taken out.

Today’s Entry strategy:
a. Call Apex at 10:30am to check the opening price. Put in your buy stop ay 1420. Ask them to inform you when any trade is done.
b. If the stop order is triggered, put a sell stop order at 1410, 10-tick stop loss.
c. If this is a first-time ascending triangle breakout, exit on MOC (5:55pm) if the price is less than 3 points from 1419 or my stop is being triggered
d. If it is a second ascending triangle breakout, there is no MOC exit unless the stop is triggered.

My actual Entry strategy:
a. I did not plan for this trade.
b. However, after seeing FCPO hit high of 1423. I decided to put in my buy stop at 1420, the original ascending triangle breakout point.
c. I called Apex at 11:30am to buy at 1420 with sell stop at 1410. The buy order is triggered immediately after I place the order.
d. The price moved down from high of 1423 to hit 1414 before closing at 1415.
e. I did not close my position as I think that second breakout is more real.

Trade executed according to plan? No. I let position open even the price fell below 1419 as I just formulate the second breakout rule for ascending triangle formation.

January 3, 2006

Today’s Trade Management:
a. Soy Oil March gained 74 points on Friday.
b. Call Apex at 10:30am to check the opening price.
i. If the price opens gapped-down, do nothing initially. Closed the position after 11:30am.
ii. If the price opens gapped-up, put my sell stop at 1410.
iii. If the price opened lower, flat or higher, put my sell stop order at 1410.
c. Possible Exits
i. When my stop order is triggered
ii. When the projected AD target of 1458 is hit.

d. Trailing Stops:
i. The initial stop is 1410.
ii. Let the trailing buy stop follow the price until it is taken out.

My actual trade management:
a. I called Apex. Foong told me the price opened gapped up at 1525. But Joanne called on my hand phone. She informed me about the opening.
b. I hesitated for a while about what point to put my sell stop. I decided to put in 1410, my initial sell stop order.
c. I was not able to check the on-line prices as the web site is down.
d. At noon, I called to checked the price; the low is 1422 and Close is 1423 with volume of 766.
e. AT 4:10pm, I called again to check the price. The price was at 1424 with volume of 16xx.
f. I told myself that I would close the position if the price is below 1420 near MOC.
g. I called Apex again at 5:24pm, the price is at 1427 with volume 1908. I knew that today is a real breakout.
h. At 5:47pm, I called again; the price is at 1429 with volume 2773.
i. I checked the price again at 5:57pm, my position checking time, the price hit high of 1430 with volume of 3266. I will stay at the position.
j. I called at 6pm to check the closing and the prices for both March and April contract. The March contract closed at 1429 with volume of 3383.

Trade executed according to plan? Yes


January 4, 2006
Today’s Trade Management:
a. Soy Oil March gained 134 points overnight.
b. Call Apex at 10:30am to check the opening price.
i. If the price opens gapped-down, do nothing initially. Closed the position after 11:30am.
ii. If the price opens gapped-up, put my sell stop at 1417.
iii. If the price opened lower, flat or higher, put my sell stop order at 1417.
c. Possible Exits
i. When my stop order is triggered
ii. When the projected AD target of 1458 is hit.

d. Trailing Stops:
i. The initial stop is 1410.
ii. Let the trailing buy stop follow the price until it is taken out.

My actual trade management:
a. I was having a chat with my friend. Joanne of Apex called me to inform me that the price opened gapped up at 1440 and hit high of 1446. It was trading at 1439 now.
b. I immediately put a sell stop order at 1417 according to my plan. 1417 is the mid-point of previous 2nd day’s bar.
c. At noon, I called to check the price. The price hit low of 1437 but it was trading at 1438 with volume of 1853.
d. After checking the chart, I decided to raise my stop to my break-even point of 1423. 1423 is also one tick below the high of 1424, the recent high.
e. The price then moved around 1427 and 1440 for the whole morning.
f. At 4pm, I called to check the price. The price hit low of 1436 but it was trading at 1439 with volume of 2635.
g. At 4.58pm, I called to check the price. The price was trading at 1439 with volume of 2841.
h. At 5:48pm, I called to check the price. The price was trading at 1437 with volume of 3131.
i. At 6pm, I called to check the price. The price hit low of 1434 before closing at 1437. It formed a whiplash sell and black shooting star.
j. I did not close my position. I will wait the market to take me off or the price hit my target.

Trade executed according to plan? Yes

January 5, 2006
Today’s Trade Management:
a. Soy Oil March gained 36 points overnight.
b. Call Apex at 10:30am to check the opening price.
i. If the price opens gapped-down, put a sell stop at 1423
ii. If the price opens gapped-up, put my sell stop at 1423.
iii. If the price opened lower, flat or higher, put my sell stop order at 1423.
c. Possible Exits
i. When my stop order is triggered
ii. When the projected AD target of 1458 is hit.

d. Trailing Stops:
i. The initial stop is 1423.
ii. Let the trailing buy stop follow the price until it is taken out.

My actual trade management:
a. I called Apex at 10:32am to check the open. The price opened higher at 1440. Quek of Apex reminded me to put in my stop. I put it at 1423, my break-even point.
b. I did not monitor the price as the on-line price was down and I was monitoring FKLI as I miss again the big run
c. At 4pm, I called to check the price. The price hit low of 1431 but it was trading at 1432 with volume of 1008.
d. At 5:02pm, I called to check the price. The price was trading at 1432 with volume of 2167 and low of 1430.
e. At 5:46pm, I called to check the price. The price was trading at 1433 with volume of 2331.
f. At 6pm, I called to check the price. The price closed down at 1435 with volume of 2865
g. I did not close my position. I will wait the market to take me off or the price hit my target.

Trade executed according to plan? Yes

January 6, 2006
Today’s Trade Management:
a. Soy Oil March lost 39 points overnight.
b. Call Apex at 10:30am to check the opening price.
i. If the price opens gapped-down, put a sell stop at 1423
ii. If the price opens gapped-up, put my sell stop at 1423.
iii. If the price opened lower, flat or higher, put my sell stop order at 1423.
c. Possible Exits
i. When my stop order is triggered
ii. When the projected AD target of 1458 is hit.

d. Trailing Stops:
i. The initial stop is 1423.
ii. Let the trailing buy stop follow the price until it is taken out.

My actual trade management:
a. I called Apex at 10:32am to check the open. The price opened higher at 1432. I still remembered to put in my stop. I put it at 1423, my break-even point.
b. I did not monitor the price as the on-line price was down and I was outside doing my personal stuff
c. At 11:30apm, I called to check the price. The price hit low of 1430 anfd high of 1435 but it was trading at 1433 with volume of 787.
d. At 12:30pm, I called to check the price. The price was trading at 1435 with volume of 1092 and low of 1430.
e. At 4:00pm, I called to check the price. The price was trading at 1435 with volume of 1221. It is a quiet day.
f. At 6pm, I called to check the price. The price closed down at 1433 with volume of 1346. The April contract closed at 1437 with volume of 901
g. I did not close my position. I will wait the market to take me off or the price hit my target.

Trade executed according to plan? Yes

January 9, 2006
Today’s Trade Management:
a. Soy Oil March lost 22 points overnight.
b. Call Apex at 10:30am to check the opening price.
i. If the price opens gapped-down, put a sell stop at 1423
ii. If the price opens gapped-up, put my sell stop at 1423.
iii. If the price opened lower, flat or higher, put my sell stop order at 1423.
c. Possible Exits
i. When my stop order is triggered
ii. When the projected AD target of 1458 is hit.

d. Trailing Stops:
i. The initial stop is 1423.
ii. Let the trailing buy stop follow the price until it is taken out.

My actual trade management:
a. I called Apex at 10:31am to check the open. The price opened gapped-down at 1429 for March contract.32. I still remembered to put in my stop. I put it at 1423, my break-even point.
b. I did not monitor the price as the on-line price was down and I was outside doing my personal stuff
c. At 11:30apm, I called to check the price. The price hit low of 1427 and high of 1431. if I use Oops!, my buy stop of 1431 will be triggered.
d. I did not add more contracts as the price kept falling.
e. At 12:30pm, I called to check the price. The price was trading at 1427, the low, with volume of 343.
f. At 4:00pm, I called to check the price. The price was trading at 1426 with volume of 538 and low of 1425. It is a quiet day. I told Apex that my stop will be hit.
g. My stop is hit at 4:40pm at 1423. I have a net gain of RM15 ([3 x RM25] - RM60 commission).
h. At 6pm, I called to check the price. The price closed down at 1423 with volume of 1080 and low of 1422.
i. I let 23 point gain varnished as I use trend following too much. I should have exited when the price opened gapped up 11 points.

Trade executed according to plan? Yes


What I have done best:
a. I follow re-entry of Ascending Triangle breakout entry.
b. I do not let a sure-profitable trade to become a losing trade.

What I need to improve:
a. How do I not give up number of points if my trade is right.

What I have learned:
I will wait the market to take me off or the price hit my target. Sometimes, it does not happen.

Weekly Motivation

Why most traders do not cut losses?

It is unofficially ranked as the most important trading rule, and one of the biggest mistakes that traders make is to not cut a loss. This problem is often compounded by committing a great deal of money (if not close to the entire trading capital) into the trade initially.

To the defence of all those who have at one stage or another not cut a loss, it is a perfectly natural thing to do. Deep down, the last thing a person wants to do is consciously make a decision to lose money when there is a chance that you won’t have to lose the money at all.

There is often a touch of excitement and optimism when traders begin trading and the thought of cutting a loss does not complement the prevailing emotions in a person and therefore it is the last thing that people want to do. Furthermore, the main reason why people trade (whether right or wrong) is for money.

People trade because they believe there is a chance that they could realise more money than they could have ever dreamt of. In the eyes of a beginner, obviously cutting a loss does not support the aim of making lots of money because it is realising a loss of money, and denying yourself the chance of breaking even in the trade.