FKLI Futures Trading - Bursamalaysia
This will chronicle trading in the FKLI & FCPO futures. If you don't like what you see/read in this blog, just surf away. These opinions are our personal opinions and just a record of our thoughts..."In evolution, it’s not the biggest, the fiercest nor the smartest that survive, it’s the one that changes the fastest.” I.e. the key word is to adapt the trading style to the markets, until it stops working
Friday, March 30, 2007
Thursday, March 29, 2007
Wednesday, March 28, 2007
Tuesday, March 27, 2007
Monday, March 26, 2007
Saturday, March 24, 2007
Friday, March 23, 2007
Thursday, March 22, 2007
Wednesday, March 21, 2007
Tuesday, March 20, 2007
Monday, March 19, 2007
The Numbers Game in Trading
20070319 17;15. FKLI trend day up, mirroring the strength of the regional indices. "Bad" news supposedly broke in the morning on the China interest rate hike. However the market made a "news reversal" to end as a classic trend day up.
Many who dwelve into the financial markets, searching for "instant gratification", do so without understanding the numbers behind the game. Read and enjoy this written by K Lien & B Schlossberg, a couple of Forex traders:
In his seminal book on trading Market
Wizards, Jack Schwager interviews one
mysterious currency trader with penchant for
meditation and Sanskirt who is uncannily
successful in making profits for his
employer. The start of the chapter contains
the following exchange:
How do you recognize when (your trading
power) goes away?
When I am wrong three times in a row. I call
time out. Then I paper trade for while.
For how long do you paper trade?
Until I think I?m in sync with the market
again. Every market has a rhythm, and our job
as traders is to get in sync with that rhythm.
The trader?s identity has never been revealed
for certain, but I believe that it was Andy
Krieger who said those words. He was so
phenomenally successful in the heyday of
interbank currency dealing that he managed
to earn 300 Million dollars for Manufactures
Hanover ( which has since merged with
Chemical, which in turn became Chase, which
is now JP Morgan Chase) in just one year.
This small snippet from 300+ page book is
almost a throw away paragraph. Few people
ever recall it. But ever since I've read it
many years ago I've always thought those
words held special meaning. Now, I am even
more convinced that this little exchange is
perhaps the wisest advice ever given to traders.
Losing streaks are universal in trading.
Anyone who has day traded for longer than six
months will recognize that fact. George Soros
lost $1 Billion dollars in the Russian ruble
fiasco, but everyone remembers him as the man
who broke the bank of England. Michael
Steinhardt was decimated in the emerging debt
market meltdown of 1994, but he is revered as
the one the greatest hedge fund managers of
all time. The reason most novice investors
and traders never appreciate the true risk of
the game is because they rarely see it.
Typically, most traders simply look at their
end of the year statements and only see the
end result. Rarely do they realize that their
money may have suffered a 20% loss sometime
during that year.
20070319 15:14. The FKLI is undergoing a strong uptrend day..... In the morning the psychology was to "Sell! Sell! China raises interest rates, Malaysia Bank Negara sure to follow. Bad for the stock market" A local equities research house wrote ""We will probably see share prices on our Malaysian stock exchange face renewed selling pressures today, which in turn
will likely lead to a marginal downward bias in the key Kuala Lumpur Composite Index (KLCI) performance. This comes as China’s central bank has raised interest rates (by 0.27%) over the weekend in an effort to cool investment amidst a robust economy. Whilst the rate hike was not entirely surprising, nervous investors might be concerned about possible future tightening measures. Recall that a plunge in the Chinese stocks in end-Feb has then triggered a global
equity sell-off." This is logical, but logic or fundamentals have less importance in today's markets. An example of how trader psychology is screwed up by hype on "fundamental" news.
Malaysian Capital Markets need DMA to get out of stone age
20070319 I put in a stock order today, using the so called 'online trading' systems that one of the stockbrokers provide (who are also stagnating), and the order has to go to a human, who then pushes a button to pass the order to Bursamalaysia Securities, whose's 20 year old system gives the confirmation. The whole process takes 20 to 30 seconds for the order to be confirmed. Alamak! The rest of the world are doing online trading and talking milliseconds to put in orders. We definitely need the upgrade to the Bursatrade for the securities, and for DMA (Direct Market Access) system to get up and running ASAP for the derivatives, and later for the securities side. Comeon Bursa, access the CMDF (Capital Market Development Fund) to make DMA a reality, and move the Malaysian Capital markets from the stone age into the digital age.(remember? we are in the MSC here)
Friday, March 16, 2007
20070316 The Chairman Mr Teh, at the Public Bank Berhad AGM yesterday alluded to something that is food for thought for those who deride the stock market. This is something that is worth noting in the blog.
- "After 40 years of uninterrupted profit growth, a shareholder of 1,000 Public Bank shares in 1967 would now be owner of 129,720 Public Bank shares worth a whopping RM1.16mil. Together with RM391,000 paid out in gross dividends, Teh said the net worth of the 1,000 shares would be RM1.55mil, which represented a compounded annual return of 20% for each of the 39 yers."
- "One owning Public Bank shares since the start of 2002 when the shares were worth RM5 each would have reaped a return of 122% over the five-year period to date, compared with a 58% rise in the KL Composite Index. "
Thursday, March 15, 2007
Wednesday, March 14, 2007
Tuesday, March 13, 2007
Monday, March 12, 2007
20070312 Intels tells Malaysia "to reinvent itself as a Digital Nation..." The molith organisations like the SC (Securities Commission) should make sure Malaysia goes into the digital age of direct access online trading, by facilitating the expediation of the Bursamalaysia DMA.(Direct Market Access) Impediments to speedy implementation should be removed. The state of the current stock online system, given the large volumes transacted this year is in a word, LOUSY. It still needs humans to push buttons when the light turns on, to transmit the orders to the Exchange. Come on, SC move Malaysia into the Digital Age of direct access online trading.
Sunday, March 11, 2007
Friday, March 09, 2007
20070309 The world stock indices have a correlation to the Japanese Yen cross rates, the USDJPY and EURJPY. This is because of the theory of the Yen carry trade unwinding. They sell assets such as foreign stocks and commodities and buy Yen to repay the 'almost zero' Yen loans back in Japan. If the EURJPY or USDJPY resume the downside move from the retracement (similar to the stock indices), there could be more carnage ahead for financial markets. But this is only a 'what if' scenario, and by no means will turn out to expectations.
Thursday, March 08, 2007
20070308 This organisation is one of the Investment Banks classified by Bank Negara Malaysia. It is one among others which offer so called investment banking services.(as seen from their 'services;' offerings) But futures/options broking is not one of these services. With the recent crash of world's stock markets, I wonder how the employees of this question answer customer enquiries such as: "We think the markets might correct, can you short some futures contracts to hedge our portfolio?". Without a futures broking arm the answer might come back as, "Er, sorry we don't offer futures broking services." These are the flagship financial institutions of Malaysia, who can hold themselves out as investment bankers, yet do not provide risk management services such as futures. Bursamalaysia should revamp the trading memberships structure, pay back the RM1.5million to be a trading member, start afresh and rope in the remaining Universal brokers, small brokers and the investment banks to be members of Bursamalaysia Derivatives Exchange. Undo the mistake of leaving out the derivatives industry from the demutualisation of the then KLSE, start afresh and make hedging/risk management an integral part of the Malaysian capital market landscape.
"There is the plain fool who does the wrong thing at all times anywhere, but there is the Wall Street fool who thinks he must trade all the time."J Livermore
THE END OF AN ERA
From Dragons and Bulls by Stanley Kroll
Intro and Foreword
The Importance of an Investment Strategy
5 The Art of War, by Sun Tau (circa 506 BC) and The Art of Trading Success (circa AD 1994)
That's the way you want to bet/a>
Long-term v Short term trading
Technicals v Fundamentals
Perception v Reality
Part 1: Winners and Losers
Part 2: Winners and Losers
Sun Tzu: The Art of War
Those who tell don't know, those who know don't tell
Why there is no such thing as a "bad market"
The Secret to Trading Success
The Experts, do they know better?
Risk control and money management
The 'good bets' business by Larry Hite
Don't lose your shirt
Ed Sykota's secret trend trading system