The 10,000 Hours and Beyond Club

Weekly Update
Last week we mistakenly got caught by the major news headlines couple times resulted overall lost of -5.3%.
As we heading into a lighter news week this week, we would also expect lighter London sections on Monday and Wednesday duo to holiday. Other than the 3 speeches from Draghi from Monday to Wednesday, there is pretty much nothing too serious on the news risk side from expending the growth.

Quote of the Week 6/3/2014

"Trading Quote for the Week 6/1/2014 "Not predefining your risk, not cutting your losses, or not systematically taking profits are the three of the most common and usually the most costly - trading errors you can make. On the best traders have eliminated these errors from their trading. at some point in their careers, they learned to believe without a shred of doubt that anything can happen, and to always account for what they don't know, for the unexpected."

So finally the account suspension restriction is finally lifted.

Now I just gotta to deal with the DD I had over GBP manufacturing PMI last night.
This week is very news heavy which is never a good news to my plans. I would be really careful about the next trade so i don't suffer another DD.

Let's see what happens.

Quote of the Week 6/9/2014

When you are fearful, no other possibilities exist. You can't perceive other possibilities or act on them properly, even if you did manage to perceive them, because fear is immobilizing. Physically, it causes us to freeze or run. Mentally, it cause us to narrow our focus of attention to the object of our fear. This means that thoughts about other possibilities, as well as other available information from the market, get blocked. You won't thin about all the rational things you have learned about the market until you are no longer afraid and the event is over. Then you will think to yourself, "I knew that. Why didn't I think of it then?" or, "Why couldn't I act on it then?"

Very interesting points Anand brought out thought his interview on how to be a more effective trader,

 

1. I always try to get a good sleep (8 hours), this helps me to keep high cognitive functioning and manage stress levels better. I also find that after a good sleep ideas which were floating around in my head in a jumble the previous day come together the next morning (I presume the subconscious mind has arranged information and ideas during that rest period).
2. I stop trading when I’m not feeling well, if I am suffering from any health issues I suspend my activities. The main protagonist believed to be Jesse Livermore in ‘Reminiscences of a Stock Operator’ (great book by the way) discusses this same issue in the book.
3. If I’m feeling emotionally unsettled I don’t trade, this could be an emotional disturbance generally, or specifically negative feelings from a previous trade.
4. I avoid any chemicals which affect my psychological state, this includes coffee, alcohol, cigarettes and drugs of any kind. I drink tea and water through the course of the day (Earl Grey if you are interested).
5. I exercise for 30 – 45 minutes every day … I run / swim usually, sometimes walk if I want to tone things down to avoid picking up ‘overuse’ injuries.
6. I try and maintain balance in my life, in other words do not let trading take over my life. I compartmentalise trading to one facet of my life. Not only is there more to life than trading, but this actually helps me to gain perspective when things are not going well.

Lifestyle choice is important in trading.

Read his full interview here,
http://www.forexlive.com/blog/2014/0...r-9-june-2014/

Some interesting reading found today.

The Stock Market Is Like a Fish Tank
Now that the majority is tightly packed into a market devoid of yield/alpha, this concentration sets up the inevitable collapse of valuations perfectly.

I recently had the pleasure of visiting a state fish hatchery. Those of you who fish know that the hatcheries are responsible for raising sports fishing species such as trout and salmon and then releasing them in lakes and rivers to bolster native stocks.

The fish are kept in large concrete tanks where the water temperature and feeding are carefully monitored and controlled. In this particular hatchery, the public is invited to buy a small handful of food pellets (25 cents) to feed the fish when they reach a certain stage of maturity. (Proceeds go to maintaining native fisheries.)

The fish are milling about semi-randomly, seeking whatever food might appear. In the stock market, investors and punters are also milling about semi-randomly, seeking yield and above-average returns (alpha).

When a few food pellets are randomly tossed into the tank, the first fish in the vicinity to respond to the splash get the pellets. In the stock market, the pellets are yield and alpha.

The fish milling around in the tank are highly attuned to the actions of their mates, and those nearest the first fish quickly follow them to the source of the food. This makes good sense, as the food (yield/alpha) might be plentiful and the second wave of fish would be well-rewarded for being second.

Attached Image (click to enlarge)

These fish attract the attention of virtually every other fish in the area, and within a few seconds the water where the few pellets landed is boiling with fish seeking pellets (yield/alpha).

This pattern can be repeated until one runs out of pellets: toss a few food pellets in a sparsely populated area of the tank, and watch how quickly the majority of the fish rush to the spot where the food has already been consumed.

The few fish wandering around the edges who did not join the majority speeding to the place where the food (yield/alpha) has been exhausted are the likeliest to be closest to the next semi-randomly tossed pellets.


In effect, those who join the majority thrashing around the spot where the food has been consumed are guaranteed to go hungry. I submit that the stock market is like a fish tank, and the majority are thrashing around precisely where the yield/alpha has been consumed and the risk of starving (losing money) is greatest.

The same can be said of the residential rental market, and every other asset class where the majority of participants and betting capital that the food pellets are limitless, when the reality is the yield/alpha in the market has already been consumed by those who got there first and second--those who responded first when no other participants noticed the splash of opportunity.

Now that the majority is tightly packed into a market devoid of yield/alpha, this concentration sets up the inevitable collapse of valuations perfectly.

By Charles Hugh Smith
http://bit.ly/1lsH3RY

New week starts with a non-disappointment!!

GO FRANCE

There will be plenty trading on the road while the 20th LA film festival is taking place this week.

Feel free to join me if you are heading down for some awesome award winning movies.

uote of the Week 6/16/14
"The human side of every person is the greatest enemy of the average speculator" - Jesse Livermore

3 Ways to Make the Most Out of Your Forex Trading Journal

Much has been said about the importance of mastering your trading psychology. And though there are many different ways to accomplish this goal, perhaps the most practical and effective way of doing so is by keeping a psychological trade journal.
Used properly, a psychological trade journal can help you track your behavioral tendencies and their usual outcomes. This is important because being aware of these patterns can help you pinpoint your sources of distress.
As they say, “Knowing is half the battle.” Once you have knowledge of what causes distress, you can make the proper adjustments to keep negative situations from affecting your account.
Of course, to get an edge in the markets, it’s not enough that you keep a psychological trading journal. You must also use it properly. Brett Steenbarger, a well-respected trading psychologist, gives us three tips on how to make the most out of trading journals.

1. Be goal-oriented
Jotting down observations is helpful but, unless you act on them, they will be nothing but observations. You must turn your observations into simple, concrete goals. If you noted a trading mistake, you should determine what you should’ve done differently and turn that into your goal for the next day.
It will do you no good to dwell on your mistakes and negative thoughts. Instead, focus your efforts on how to overcome the same negative situations in the future. For example, if you find that you get trigger-happy and tend to overtrade after experiencing a couple of wins, make it your goal to keep your hands in your pockets and be more prudent the next time you find yourself on a winning streak.

2. Balance the negatives and positives
It’s common for traders to write about what they did wrong or what they missed especially when writing about a losing trade. But if that’s all that your journal entry contains, the odds are you will wind up feeling frustrated when you review your trading journal and read about all the mistakes you’ve made.
Instead of focusing solely on the things that you did wrong, dedicate a part of your journal entry to what you did right and what’s working for you. It can be as simple as acknowledging that your analysis was correct or that you managed to cut your losses in time.
Too much negativity in your journal entries can be damaging to your trading confidence in the long run so it’d help to balance it out with some positive thoughts on your trading. Write about both your strengths and weaknesses so that you can use your journal to enhance your trading performance.

3. Focus on learning
Aside from writing about your thought process during the trade, you should also identify the lessons you learned so you know how to react to the same situation when it repeats itself. By putting these thoughts down in words, there’s a better chance of remembering these lessons and applying them next time.
For instance, you can take note of how you could’ve played the trade better or how you could’ve pressed your advantage by adding to your position. You can also write about which technical or fundamental signals could’ve allowed you to exit early and cut your losses.
Of course you can’t guarantee that these lessons or rules will result in profits the next time you apply them to a trade, but they will help you get an edge in the markets. By doing so, you can make sure that each trading day provides an opportunity for learning and growth whether or not you were profitable for the day.

France WON AGAIN. 5-2 Switzerland!

GO FRANCE!!!

Quote of the Week 6/23/14
"You can get in way more trouble with a good idea than a bad idea if you forget the good idea has limits.” -Ben Graham

The assassination of Archduke Franz Ferdinand 100 years ago 28 June 1914 marks the start of World War I and set the stage for every major event of the next 100 years.

Attached Image (click to enlarge)

Attached Image (click to enlarge)

Funny how history works.

Quote of the Week
"There is a time to be long, a time to be short, and a time to go fishing." Jesse Livermore

The Trade that I have Missed for a Good Reason 7/10/14
GMT 0800
USDJPY
1. Not in the right time zone
2. Against FOMC minutes.

It seemed to me that a solid bear trend has formed on the daily chart

On the other hand price has been struggling going beyond the 101.50 mark.

If take a short, it is possible to have some quick pips. However, USDJPY tends to act choppy in London section while it is also going against FOMC hawkish minutes http://bit.ly/1lWgD7p, i rather NOT take this trade.

If this is happening in Tokyo section, I will for sure take a quick short.

For years, going through average 200-400 news feeds around the world has become one of my daily routines involving in the global economy and the currency market. And there, from time to time, there is always this one message would make me put down everything and clear my mind to think what we have missed in life and what we should be looking forward to.

Today Robin William, one of the most respectful and funny actor in my time complete his life journey.




"I like to listen to good music, and I can't stop playing my album." - Robin William.

Two days after Obama's 9/11 speech on Airstrike on ISIS, another British was beheaded by the ISIS this Saturday. I am just watching how this ISIS outbreak will be unfolded since the very beginning while scared at the same time for every steps we are taking to bring the peace back to these who needed.

Inspiration from Alibaba Jack Ma

You are poor because you have no ambition.
Jack Ma: Before I founded Alibaba, I invited 24 friends to my house to discuss the business opportunity. After discussing for a full two hours, they were still confused — I have to say that I may not have put myself across in a clear manner manner then. The verdict: 23 out of the 24 people in the room told me to drop the idea, for a multitude of reasons, such as: ‘you do not know anything about the internet, and more prominently, you do not have the start-up capital for this’ etc etc.

There was only one friend (who was working in a bank then) who told me, “If you want to do it, just try it. If things don’t work out the way you expected it to, you can always revert back to what you were doing before.” I pondered upon this for one night, and by the next morning, I decided I would do it anyway, even if all of the 24 people opposed the idea.
http://az598155.vo.msecnd.net/wp-upl...g-members.jpeg

When I first started Alibaba, I was immediately met with strong opposition from family and friends. Looking back, I realised that the biggest driving force for me then was not my confidence inthe Internet and the potential it held, but more of this: “No matter what one does, regardless of failure or success, the experience is a form of success in itself.” You have got to keep trying, and if it doesn’t work, you always can revert back to what you were doing before.

As with this quote by T.E. Lawrence – “All men dream: but not equally. Those who dream in the dark recesses of the night awake in the day to find all was vanity. But the dreamers of day are dangerous men, for they may act their dreams with open eyes, and make it possible.”
http://az598155.vo.msecnd.net/wp-upl...ma-serious.jpg

Jack Ma: People lose out in life because of these 4 reasons:

1. Being myopic to opportunity
2. Looking down on opportunities
3. Lacking understanding
4. Failing to act quickly enough

You are poor, because you have no ambition.
Ambition is living a life of great ideals; a magnificent goal in life that must be realised.
In this world, there are things that are deemed unfathomable, but there is nothing in this world that cannot be done. The depth of one’s ambition determines the potential of one’ future.
By way of example:

The Story of Juliet Wu Shihong – one of China’s first-generation professional managers, who gained success by working her way up the ranks from a cleaner, a nurse, a marketing executive, through self-education and learning on the job.

http://az598155.vo.msecnd.net/wp-upl...u-Shihong.jpeg

She had been the general manager for the world’s most famous multinational IT groups’ Chinese branches (Microsoft 1985-1998; IBM 1998-1999). She is also China’s first successful international corporate executive to join the executive team of a domestic private firm. Wu was seen as a symbol of the new generation of business executives that China has produced in its economic reform and opening-up.

When Wu started off in a big company working from the lowest ranks, her daily job was to pour tea and sweep floors. Once, because she forgot her staff pass, the company’s guard stopped her at the door and denied her entry. She explained to the guard that she was indeed one of the company’s employees, and that she had merely left the building for a short while to purchase office supplies.

Despite her pleas, the guard still did not allow to enter. As she stood at the gate, she watched as those of similar age to her, but smartly dressed in business attire walking through without having to show their passes.

She asked the guard, “Why are these people allowed through without producing a pass?” The guard dismissed her coldly nonetheless.

That was the turning point for Wu – she felt great shame, her self-esteem trampled on.

She looked at herself, dressed in shabby clothes and pushing a dirty push cart. Looking back at those dressed in smart attire, her heart felt a deep ache from the sudden realization of the sorrow and grief from being discriminated. From that moment, she vowed never to allow herself to be shamed like this again, and to become world-famous.

Since then, she used every opportunity to enrich herself. Every day, she was the first to arrive at work, and the last one to leave. She made every second count, spending her time learning the ropes. Her efforts soon paid off; she was made a sales representative, and quickly progressed to being the regional general manager of this multinational company in China. Wu did not possess strong academic qualifications, and was revered as the ‘Queen of Part-timers’. Subsequently, she assumed the position of GM of IBM China. This is the Wu Shihong, the heroine in China’s business circle.

http://az598155.vo.msecnd.net/wp-upl...-Shihong1.jpeg

If not for the incident, Wu Shihong would not have had the ambition to become rich, and her life would have taken a very different path then.

Lessons...

1. You are poor because you do not have the desire to become successful.
2. You are poor because you lack foresight.
3. You are poor because you cannot overcome your cowardice.
4. You are poor because you lack the courage and determination.

1. With ambition you can overcome all inferiority and maximise your potential!
2. With ambition you can persevere, continuously learn new things and strive for perfection.
3. With ambition you can defy all odds, and create miracles when others daren’t.

No matter how poor your family is, do not doubt your own abilities and lose sight of your ambition.

1. When your family deems you worthless, no one will pity you.
2. When your parents do not have money to pay the medical bills, no one will pity you.
3. When you are beaten by your competitors, no one will pity you.
4. When your loved ones abandon you, no one will pity you.
5. When you have not accomplished anything by the time you are 35, no one will pity you.

Go big, or go home. Otherwise, you’re wasting your youth.
http://www.zerohedge.com/sites/defau...jpg?1411392109

http://vulcanpost.com/7702/jack-ma-y...or-35-deserve/

After yesterday stock posted its biggest single-day LOST in 2014, today we welcome the biggest single-day GAIN in 2014.

Yup, that's right.

QE didn't end today, and no rate hike in sight regardless the strong 5.9% unemployment rate posted last Friday. A whole cent dollar turnaround on sterling/dollar minutes after FOMC. All pervious days worth dollar gain whipped out within minutes.

All analysis from yesterday are out the window.

Now, does anyone else want to take a guess on what happens tomorrow?

BTW, lesson is learned again; Rule of thumb - stay the heck away from FOMC.

Found a quite interesting article here to share.


Why Trading is Like a Triathlon

“A triathlon is a multiple-stage competition involving the completion of three, continuous, and sequential endurance disciplines. While many variations of the sport exist, triathlon, in its most popular form, involves swimming, cycling, and running in immediate succession over various distances.” - Wikipedia

Trading is a three-dimensional competition that requires the management of three continuous, simultaneous, endurance disciplines. While a variety of trading methodologies and systems exist, profitable trading involves management of the trader’s psychology, attention to risk control, and dedication to trading a robust system over an extended time period.

Many traders make the mistake of thinking that simply knowing the right methodology will guarantee their success. In actuality, it is a three event marathon consisting of more than just entries; psychology and risk management have much more influence over long term success. Entries have no meaning without the right exits, and no system is a winning system without the discipline to follow it.

Attachment
Here are the three events in the trading race:

A trader’s psychology has to be one of confidence in order to trade it with discipline. Confidence comes from doing homework, back testing, chart studies, and experience. A trader has to trade position sizes that turn down the volume on their emotions. They must have the mental discipline to follow the plan that they carefully crafted when the market was closed, when the market is open. When a trader drifts into greed, fear, and ego, they will likely wreck on the rocks of reality. A successful trader needs the psychology of an entrepreneur, cultivating the fortitude to get through the small losses so they can make it to the big wins.

A trader’s risk management will determine their short term and long term success. Trade too big and the trader will give back all past profits with just a few losing trades. Trading huge position sizes insures that a trader will eventually give their whole trading account away to disciplined risk managers. If risk is not managed, no trading method will lead to profitability because some string of losses will eventually be too much to bear.

A trader’s methodology should be robust enough to have an edge over the markets and other traders. High probability entries and set ups based on historical price action is a good place to start. Planned exits to lock in profitable trades when right, and knowing where to get out if proven wrong, is critical to success. A good trading methodology is trading with a plan that defines entries, exits, and position sizing. Implementing a strong methodology increases the likelihood that a trader’s overall wins will exceed their overall losses within the time frame for expected profitability.

If you want to win the trading race, you must train for all three events.