Recent events have shown that there I have no such capacity and ability to determine the a winning trade.
We have seen again and again that when we violate the fundamental rules of our trade, we will consistently fail.
Take for example, technically, we have broken short term support, and all long futures position should have been closed.
We as a human are biased in our judgement of our trade.
It has been proven over and over again that the only 2 methods that will work over time is a mechanical system and value investing.
Mechanical system - a good system would ensure that you are not on the wrong side of the trade.
Value investing - wealth has been created over and over again by successful people who look as stock purchase as businesses. Price is what you pay and value is what you get.
Leverage - The application of full leverage in the Futures market can be devastating. I my self has experienced this first hand, having been wiped out, twice. The wisdom of Mr Buffett had been accurate and will constantly be accurate: No one ever get broke without leverage. Therefore it reminds us that each trade shall be conservative and position sizes should be small.
Chicken Little has only need be right once.
The margin calls and leverage is forcing speculators to show their hands. We will never know how it will end up 10 20 years from now. But as soon as margin calls, you are forced to liquidate and accept a lost.
Whereas if you have not applied leverage, you would have remain competitive and matched and index fund at worst.
I have lost so much more money from leverage than anything else in my life. When it comes to debt and use of other people's money, it think it is wise to think twice.
As Warren Buffett says: "If you are smart enough, you don't need leverage."
It is important to first understand the value of money. Having understood this, you would understand how miserable it is to lose your money in split seconds. And you would think twice before gamble again.
The only limited thing in life is time. Money or capital is a storage of time. It is a measure of the value of your time.
Let's look at it in detail: You wake up in the morning, start commuting to work, cursing the other drivers to drive faster, worked from 9 am to 5 pm in the job that you hate. Seeing that lousy boss/manager of yours. Getting shit from your colleague, and then travel home again in the jam. Reached home tired and go to bed. Assuming you make $100 a day,that brings us $13 per hour, $2.50 every 10 minutes.
Essentially, you are spending your life time to earn $2.50 every 10 minute, working in the job that you hate. And you wish you can retire/quit as soon as possible. You made that money for your lunch, for shopping, for entertainment, and for holidays.
That is money or capital. Storing the value of your time for future consumption.
Every time you purchase something, you are exchanging your time for something.
If you are to buy a T-shirt a cheap shirt at $30. It is very cheap and you can afford it. But essentially, you are exchanging 2 hour of your life working in that horrible job for that shirt. It no longer looks cheap. The question is, is it worth it?
If you buy a $200,000 house, you are spending 5 years of your life in exchange. Again, the question is to ask " Is it worth it?" Think of the torture you felt while at work.
If you lost $200,000 in the stock market. You lost 5 years of you life. As simple as that.
Would you now think twice before spending or gambling away your money?
By the way BC, I am interested with your system. Can you send me your back testing result please?
I have sent you my system back test result. I am again mistaken. It was a very successful system, after I have tweaked the position size. I was simply overleveraged when I made my early count.
If you don't have a written back test result, I suggest that you stop trying the system immediately. My experience tells me that it is difficult to stick to a method. Especially if it has not been tested. Even after I have tested it, I still doubt the system when I have constant losses.
Dear friends,
ReplyDeleteRecent events have shown that there I have no such capacity and ability to determine the a winning trade.
We have seen again and again that when we violate the fundamental rules of our trade, we will consistently fail.
Take for example, technically, we have broken short term support, and all long futures position should have been closed.
We as a human are biased in our judgement of our trade.
It has been proven over and over again that the only 2 methods that will work over time is a mechanical system and value investing.
Mechanical system - a good system would ensure that you are not on the wrong side of the trade.
Value investing - wealth has been created over and over again by successful people who look as stock purchase as businesses.
Price is what you pay and value is what you get.
Leverage - The application of full leverage in the Futures market can be devastating. I my self has experienced this first hand, having been wiped out, twice.
The wisdom of Mr Buffett had been accurate and will constantly be accurate: No one ever get broke without leverage.
Therefore it reminds us that each trade shall be conservative and position sizes should be small.
Chicken Little has only need be right once.
The margin calls and leverage is forcing speculators to show their hands. We will never know how it will end up 10 20 years from now.
But as soon as margin calls, you are forced to liquidate and accept a lost.
Whereas if you have not applied leverage, you would have remain competitive and matched and index fund at worst.
I have lost so much more money from leverage than anything else in my life. When it comes to debt and use of other people's money, it think it is wise to think twice.
As Warren Buffett says: "If you are smart enough, you don't need leverage."
Sincerely,
Lok
dear Lok,
ReplyDeletei'd read thru' your note again & again & i like your very independent thought.
i've been biased in the judgement of the trade but with full of hope not to be a looser!
i've make this mistake and hope will learn from it ...
all the very best to all.
杠杆作用（ leverage ）知易行难，许多时候我们都小觐了市场的险诈，并高估了自己的定力与纪律...。
ReplyDelete还记得我曾说过，复利（ compound ）是长期的活儿，不能缩短来做，每年20%回酬，20,000 的资金10年后就会滚成了100,000 ，这10年代表的不是数字，而是经验的累积，100,000 只是小小的奖励，真正的回酬是从第11年起！
但是许多人都喜欢跳过前10年，觉得10年太长，所以一下场就是100,000 。这便注定了失败的开始...
财不入急门，这句话可是字字珠玑呀！
Dearest friends,
ReplyDeleteIt is important to first understand the value of money. Having understood this, you would understand how miserable it is to lose your money in split seconds. And you would think twice before gamble again.
The only limited thing in life is time.
Money or capital is a storage of time.
It is a measure of the value of your time.
Let's look at it in detail:
You wake up in the morning, start commuting to work, cursing the other drivers to drive faster, worked from 9 am to 5 pm in the job that you hate. Seeing that lousy boss/manager of yours. Getting shit from your colleague, and then travel home again in the jam. Reached home tired and go to bed. Assuming you make $100 a day,that brings us $13 per hour, $2.50 every 10 minutes.
Essentially, you are spending your life time to earn $2.50 every 10 minute, working in the job that you hate. And you wish you can retire/quit as soon as possible.
You made that money for your lunch, for shopping, for entertainment, and for holidays.
That is money or capital. Storing the value of your time for future consumption.
Every time you purchase something, you are exchanging your time for something.
If you are to buy a T-shirt a cheap shirt at $30. It is very cheap and you can afford it.
But essentially, you are exchanging 2 hour of your life working in that horrible job for that shirt. It no longer looks cheap.
The question is, is it worth it?
If you buy a $200,000 house, you are spending 5 years of your life in exchange. Again, the question is to ask " Is it worth it?"
Think of the torture you felt while at work.
If you lost $200,000 in the stock market. You lost 5 years of you life.
As simple as that.
Would you now think twice before spending or gambling away your money?
Regards,
Lok
By the way BC,
ReplyDeleteI am interested with your system. Can you send me your back testing result please?
I have sent you my system back test result. I am again mistaken. It was a very successful system, after I have tweaked the position size. I was simply overleveraged when I made my early count.
If you don't have a written back test result, I suggest that you stop trying the system immediately. My experience tells me that it is difficult to stick to a method. Especially if it has not been tested. Even after I have tested it, I still doubt the system when I have constant losses.
Kindly check you email.
Regards,
Lok
我只能说，
ReplyDelete那真是一个不错
的期货交易系统！
^.^