A Systematic Trader's Journal

The last week has been another challenging moment for me, where I had encountered multiple setbacks in my trading. And yes, it was a challenging moment for me throughout the week, and in addition, it felt even worse when I knew I was making such lousy calls on the market. This experience has indeed humbled me a great deal, and I do hope I could share some experience of this short evaluation that I had done up over the weekend: Allow the market to show its hand,  especially when it trade sideways. Look out for the more liquid markets, as their volumes remains fairly thick even though volatility remains high. (e.g Eur/Usd) See not trading as making money, instead of seeing it as 'not making money being the same as losing money', where to wait is not a waste of time. Leverage should be greatly reduced, and stops should be widened to allow you a chance to allow your trade to work out. And that will greatly help the trader psychologically. Stops must be used. In such volatile market...

Today has also been one very interesting day for the financial markets.  With time running out for AIG's vault, it seems like all eyes are looking at the Fed to provide a bridging loan to lend the company a helping hand. Additionally, if rumours are right, WAMU may soon get off the radar screen if JPM has interest in them. Looking at the market on the macro level, we have witnessed the more than $600B in share value that got worthless or disappeared in the financial and banking sector, and historically, equity markets on average drops 26% during a recession, where now S&P 500 has already reached 23%. In addition, current dividend yield of some stocks have begun to surpass yields from Treasury Bills products. One more evidence is taken from Thomas J. Lee, JPM Chief US Equity Strategist in New York, net cash balances in margin accounts at NYSE member firms are highest in at least 50 years, citing $932B has poured into money fund since Aug 2007. So do you think this could be a pos...

Due to some technical error, I am posting this events in GMT time manually.   Date Time $€£¥ Event Per. Prev. Fore. Act. Imp. 09/16 12:30 CAD Manufacturing Shipments m/m 2.1% 1.0% - 12:30 USD Core CPI m/m 0.3% 0.2% - 12:30 USD CPI 0.8% 0.0% - 13:00 USD TIC Net Long-Term Transactions 53.4B 55.0B - 14:00 USD Treasury Sec Paulson Speaks * * * 15:00 CHF Gov Board Member Hildebrand Speaks * * * 17:00 USD NAHB Housing Market Index 16 17 - 17:30 USD Treasury Sec Paulson Speaks * * * 18:15 USD FOMC Statement * * * 18:15 USD Federal Funds Rate 2.00% 2.00% -

Today's events have indeed been a thrilling experience experience for the international markets. As I am writing this, the China Central Banks has just cut its key interest rate again by 27 basis points to spur growth, Lehman (est. 1844) has filed for Chapter 11 (Bankruptcy) , there are rounds of ECB having an emergency rate cut, UBS sneaking in to declare another $5B of writedowns, AIG seeking help from the Fed with a request of a $40B bridge loan after rejecting an offer by Flower to prevent themselves from joining the slaughterhouse where their CDs are currently gapping outwards, and it seems that the only few pieces of good news are probably that Merril had a merger with BOA, as well as a consortium of global banks have put together a $70B fund to facilitate liduidity and an orderly resolution between Lehman and their counterparties. ECB also joined in with $30B to curb liquidity woes as well.  In my opinion, it seems like an obvious trend that all Fed Governors are challenged ...

Continuing from my previous blog, how did I fair in the market as a trader today, after the market has adopted to the tight spreads and no commission trading environment? I made money, that is my humble answer. Is it a lot? Is it that simple? Some may ask, but the answer is no. It was never easy. Simply, what is the difference between trading on the current environment versus an environment that requires you to make back wide spreads and huge commissions from the market? Well, in my opinion, the difference is just that other than being able to allow you to exit at a price that could end you up with lesser losses, if not it will end you up with a small profit. But if you relook at it again, do you think the market has also became less trendy over the years? If time allow, it would be excellent if you could take a close look at the Average Daily Range data on some of your favourite currency pair that you trade on frequently. You will discover that right after when trading became more e...