Archive for: November 12, 2006

Abiding to general public rules needs discipline and social responsibility as an individual. As a citizen we have the duty to follow rules created by the authority. Many countries impose fines or other form of punishment if anyone breaks any of the rules. ( provided if you are caught … ) Naturally , the feeling of getting away from breaking a rule might be a good feeling of some form , but in trading this is not going to work. I obviously have broken many trading rules during my course of trading. Though at times I managed to get away free for some of the mistakes made , some other mistakes are really costly. From there on I am self motivated to abide by all my trading rules. In trading there is no room for mistakes , especially silly ones. Some written rules might appear simple and silly that makes one think that it is not necessary to be written down , but I learnt that these are some of the most …

When I first attended a trading seminar during the beginner stage I got to know a trader and we became friend. We met up once in a while to discuss trading. Over time the frequency of meetings and phone calls lessened and we lost touch after that. I received a call from him about two years later and he asked if I was keen to have some trading books and told me that he had given up trading and wanted to disposed all the trading materials and books. When I met him up to collect the books he told me that trading is just not for him.

Among those big pile of books that Tony gave me , “Trading in the Zone by Mark Douglas” is one of my favourites. It is a book about trading psychology. I read through it once and every now and then I still use it as a reference. I believe many traders have also read this book before.

When I first picked up this book , I flipped …

China ’s foreign currency reserves surged to US $ 1 trillion , the most ever held by a single country. It is growing at US $ 30m an hour. Wow ! am I reading this news correctly or the media printed this figure by mistake ? My eyesight is still alright hopefully. Yes , it is US $ 30 millions per hour … can you imagine that ?

The growth has been driven by a record trade surplus that critics in the United States blame on an artificially undervalued yuan. The government’s policy of not allowing the yuan to strengthen to reflect demand for the currency keeps the nation’s export prices low , further fuelling the trade surplus. Holding a large foreign currency reserve is of strategic importance for China to cope with international challenges. China maintains the forex reserve mainly for the purpose of guarding against international financial risks , ensuring the balance of international payments and safeguard security of the national economy.

Some consider that a fast rise could also over-stimulate the economy. Will this trade surplus and excessive reserves …

Came across this book ( Sun Tzu on Investing , Author - Curtis J. Montgomery ) when I was browsing some trading books in a local bookshop. The book title caught my attention as I like reading similar books and topics about “The Art of War” . Most of these books were wriiten in Chinese , tough nowadays there are many translated copies. The author’s name ( Westerner ) gave me second thoughts. And I was thinking very hard how could Sun Tze’s strategies for War in ancient time be applied to Trading and Investment … and written by a Westerner ?

I stood there browsing and reading few chapters. Eventually I bought the book , main reason is that certain explanation inside this book really described and matched my bad trading behaviour and psychology that I needed to correct. Second reason is that there are many wise words or nice quotes in this book that I could use to improve my trading psychology. I found that topics about trading psychology is hard to read and remember in text form …

Financial markets have been around ever since mankind settled down to growing crops and trading them with others. Financial markets takes many different forms and operate in diverse ways. Estimating the overall size of the financial market is difficult. How huge is it really ? I do not know.

What I understand is that it now deals in trillions of dollars and as a result even slight movements in them could have a significant effect on global economies , as well as individual businesses around the world. Hence being able to comprehend how the financial markets work has become increasingly vital to those in business and those who are involved in those markets as traders or investors. Even tough I only trade specific market I still need to have a view of the broad market. As a beginner trader I took many trade decisions which went opposite direction against the broad market. I paid to learn those lessons.

I use information and knowledge of financial markets in a variety of ways. If I have spare cash ( which never happen so far …