Handling Guilt and Self Punishment

For the past few weeks of trading, the market took a trashing. I was one of the small boat in that treacherous climate. Luckily I have beefed myself with a rather effective plan, at least it proof effective for last month. And here I am, getting my plan really tested on this volatile 2 weeks. Gain some, lose some but the biggest loss I got, was self confidence and guilt. My cuts are overall good but my profit taking?... that really suck. Toyed around by my own emotions which atlas cause me to deviate from my plans. Day after day, I asked myself why am I not discipline enough in my exits. Even if I lost money but if I had followed consistently on my plan, I should looked forward to a great big tick on my trading diary. Who a, I kidding? Looking forward to a great big tick wasn't enough to keep me discipline. So I came to realize that I may need other forms of motivation. Reward or Punishment? Buy myself a new laptop? nah...I will buy it anyway... Prick my finger with my wife's glucose tester? Am I crazy!!! Then while googling for Self Punishment (pretty psycho to google such thing), I stumbled upon this website by urban monk.

http://www.urbanmonk.net/247/

This is great written article. There's one part that brought me to my senses. Whenever I am in a trading position, my emotions immediately changes. FEAR and the What if? question circles around my head like griffon vultures. And like any average human being, to end that awful feeling, I just get myself out of position by exiting anyhow. Phew.... What a relief!!! Wasn't that good? And guess what the next awful feeling subconsciously filled my body - GUILT!

This vicious cycle repeat everyday. I need a way to end this.

And that is when I realized this beautiful question:-

"Why am I feeling this way?"

Asking myself this simple question immediately let me consciously felt the fear that took over my body subconsciously, bring it out from within to 3 feet away from my body and look at it. With that irritating feeling 3 feet away, my mind becomes much clearer which allow me to objectively plan my exits.

This simple question also help me to check on my other feelings like anger, frustration, sadness that fill me now and then coping with the pressure of life. I am glad I am psycho enough to google for Self Punishment. So aways remember the question from the Buddha within whenever you felt negative.

My CFA Level 2 Exam Experience

After 4 months of intensive study, which I ought to do after experiencing Level 1 exam, I am glad that I scrap through my Level 2 exam. Though I not did as well as Level 1, I am just happy to have move forward. Here are my thoughts about what I have done and what I should have done.

1. This time, I did not sign up for FCIS as after calculating the sponsorship and the task to clock attendance, I realized that I am better off just getting the Stalla Guides. I purchase the Stalla guides because of the DVD lectures by Peter Olinto. However, this time, I fully depend on the Stalla Study Guides as these guides are excellent in their summarization of the essentials. Besides they are written in a way which I found i could easily comprehend. I have no other guides and hence I can't comment on others

2. Stalla Passmaster again. The questions in the DVD help pretty much for me to reinforce my learnings and yes, one definitely have to go through them.

3. Noting that in Level 1, as there are 10 studies, similar in Level 2, I realized that I tend to forget what I learned what I read in the earlier studies mid way through the studies. So this time, I scheduled my study sessions well. First part, a run through of the 10 topics which took me around 2 months plus. Then a 2nd round, however, with categorization of topics that overlaps to make sure I did not forget the earlier studies by applying them in the later studies. Also I did questions on the earlier study almost every day just to keep myself refresh. That take me around a month plus. The last few days are mostly on Ethics and just doing questions, not forgetting the mock questions as well.

4. Last but not least, never never lose your Confidence.

I couldn't think what else I could have done further except if I have started earlier. After getting my Level 1 results on 26 Jan, to the exam date on 5 Jun, I have only 4 months to complete the 10 studies. This time I have at least 10 months and hence no more complains about time. But again, this is Level 3 which may require more time and I have yet to get started. What I am doing different this time is apply what I learn in Level 1 and 2 and new findings in Level 3 curriculum on building a portfolio.

Arbitrage

After watching Numb3rs Season 3 - Longshot, I review the lessons in this episode in this site
http://www.math.cornell.edu/~numb3rs/samuelson/last2/num306.html. The Arbitrage section was rather interesting.

I looked into our Singapore pool betting system particularly on the soccer bets where there are odds defined and true indeed, the reciprocal of the odds are always greater than 1.


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A Don't Know Mind

The whole world recognizes the beautiful as the beautiful but this is the only ugly;

The whole world recognizes the good as the good, yet this is only the bad. - Tao Te Ching

To know more, one need to have a don't know mind.


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What are you carrying?

Two monks were traveling by foot in winter when they came upon a ford swollen by the rain. A pretty girl stood by the water, crying because she couldn't get across. One of the monks said, "Come on!" and scooping her up in his arms marched through the flood, put her down on the other side, and walked on. All day his companion fumed inside. Finally, when they stopped for the evening meal he burst out, "Why did you pick up that girl? You know monks aren't allowed to touch women. And she was pretty, as well!" To which his companion replied, "Why are you are still carrying her then?"

Do you believe in ghosts?

Time flies and it's almost 2 months away that I have posted my last post in March. I did 2 months of CFA hibernation and finally, the exam is over. While at the library, I spotted a book staring at me - Zen Questions by Robert Allen. The book has lots of illustration and here is one that I like.

A man's wife lay dying. She loved her husband very much and made him promise never to remarry. She told him that, should he break his promise, she would return to haunt him. For some time the husband remained faithful but, being quite a young man, he felt the need of a wife. He met a girl he liked and decided to remarry. Immediately the ghost of his former wife started to appear to him. She not only berated him for his unfaithfulness but embarrassed him by recounting in great detail exactly what he and his new wife had been up to. In desperation the man sought help from a Zen priest. The priest told the man to put some dried beans in his pocket. The next time the ghost appeared he was to take a handful of beans, without looking, and challenge the ghost to tell him how many beans he held. If she could do it, he would leave his new wife, but if not, the ghost would have to stop bothering him. The man followed this advice and, as soon as he issued the challenge, the ghost let out a scream of anger and fled.

An Old Woman, Your Best Friend and Your Dream Girl

You are driving your 2 seater battery-powered buggy on a stormy evening round a remote area. In front of a buggy stop you saw three people. A sickly skinny old lady lying on a cardboard bed, your best friend who once saved your life and the lady(man) of your dreams. Your buggy is only strong enough to carry one more passenger. Who will you pick?

I post my views in April.

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The Fisherman's Story

A boat docked in a tiny Mexican village.

An American tourist complimented the Mexican fisherman on the quality of his fish and asked how long it took him to catch them.

“Not very long,” answered the Mexican.

“But then, why didn’t you stay out longer and catch more?” asked the American.

The Mexican explained that his small catch was sufficient to meet his needs and those of his family.

The American asked, “But what do you do with all your time?”

“I sleep late, fish a little, play with my children, and take a siesta with my wife. In the evenings, I go into the village to see my friends, have a few drinks, play the guitar, and sing a few songs…I have a full life.”

The American interrupted, “I have an MBA from Harvard and I can help you!

You should start by fishing longer every day. You can then sell the extra fish you catch. With the extra revenue, you can buy a bigger boat. With the extra money the larger boat will bring, you can buy a second one and a third one and so on until you have an entire fleet of trawlers.

Instead of selling your fish to a middle man, you can negotiate directly with the processing plants and maybe even open your own plant.”

“You can then leave this little village and move to Mexico City, Los Angeles, or even New York City! From there you can direct your huge enterprise.”

“How long would that take?” asked the Mexican.

“Twenty, perhaps twenty-five years,” replied the American. “And after that?”

“Afterwards? That’s when it gets really interesting,” answered the American, laughing. “When your business gets really big, you can start selling stock and make millions!”

“Millions? Really? And after that?”

“After that — and this is the best part — you’ll be able to retire, live in a tiny village near the coast, sleep late, catch a few fish, take a siesta, and spend your evenings drinking and enjoying your friends!”


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The Best Month

I had trouble getting over this month. Firstly I cannot focus, which affected my meditation, my driving, my dealings with my love ones, my studies, my trading and mostly my confidence. Scenarios after scenarios are placed infront of me to test my reactions to them and largely I failed. What I did does not complement what I have been writing in my blog.

Everything I wrote in the blog is what I want to be. I thought I am there. I thought I was ready and unknowingly, this month came and tested me out. I failed and I realized I have alot more to learn. I got to pick myself up again so that I can prepare for another month like this and overcome every other month.

Just like the best friend is the friend who tells you your flaws, the best month is the month that let you realized your shortcomings.

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OSO Special

This is a kid show that is broadcast in Disney Channel, I think. I don't really pay attention much about this show but without fail, the yellow panda will say this, "It's part of the plan". This phrase always follows after a hiccup occurs during
his mission. That statement has alot of meaning and these are my views: -
1. Everything happens for a reason
2. Hiccups occurs and one should not be dejected but instead take it as part and parcel of life. They are there to test your strength, your will and most of all, let you refined your plan and hence make it better than good.
3. The Universe plan everything and hiccups are part of it. Universe put them there because Universe still find ways that you can make what you are attempting to do better.


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Experiences or Courses

As of today, I lost $5000, my initial startup for my Future Trading Account. Did I lost $5k just like that? It actually took me from August 2010 to February 2011, a span of 7 months to lose my initial startup. If I looked it in another way, I could have spend $5000 on a future trading course that span 5 days of intensive training. Would that be different? $5k for a 5 days course or $5k for a 7 months strengthening up one's own psychology, money management and trading methods. I know one of my friend is going for a trading course in Australia that cost almost $10k for a period of 7 days. Is it worth it or would it be better if he would just top up his trading account and used that to further improve his trading experience.

All choices is worth the money provided one learned something that is equivalent to the amount that one paid. This would mean acquiring the knowledge and putting them into action, seeing the result work slowly to where one want it to reach. However, in my view, 7 months of live trading experiences, learning and going through the real thing, managing the 3Ms is better than 7 days of theories. Of course, if during the 7 months, I learned nothing, making mistakes over and over again and not realizing it, cannot control emotion etc could prove to be not so good. In that case, I might as well quit trading altogether. However, to be fair, what makes me think that after another $5k or $10k course, I can be a different man? Yet, to plunge $5k on a trading course is good if one need an initiate booster to get into the trading mindset when one has absolutely no idea where to start. Still I think, go for the cheapest one like Tom Yuen class which I still think value for money.

"A jug fills drop by drop"

Thank You

23rd Wednesday 2011, TY-RDV. Tom has for the third time credit me for the idea of his "Daily Market Analysis" in Facebook where the idea came from another trader's course that I took. Of course, I love the compliment but I felt I should thank him for acting on it as his work benefit me and the rest.

I remember there was a time when I quoted someone 'words of wisdom' to my wife. However, a few weeks later she quoted back to me saying that she heard it from someone else and not dear me. It makes me feel like playing a second fiddler. Probably, she thinks that words like this could not have come out from her hubby's mouth. My ego hurts really bad for a simple thing like this and my mind can play the scene all day long draining out my energy and making other people near me drained out as well.

First, I am sorry. I like to thank my wife for using those words of wisdom on a great occasion as it shows she understand the context and has even applied them as principles to improve her life even though she forgot who had told her. This is because whoever told her those words, seriously... does not make a difference. However, if she would remembered that it was me, she would have strokes my ego, causing me to be seriously attached to it and in time to come, unable to let go when the reverse happened i.e. when my ego got hurt. Similarly, I am glad that Tom find meaning in the Daily Market Analysis and with that, I thank him.

Overall, I thank one for one's openness to hear those words
I thank one for one's time to understand those words
And I thank one for accepting those words as part of one's life
Least but not least, there is no need to thank me as I know it when I know it.

Where's the $1?

Three men eat at a restaurant. The bill comes to $25. They each pay $10. When the waiter brings the $5 change they each take back $1 each and leave a $2 tip. So each man has paid $9, which totals $27. The waiter has the $2 tip, which makes $29, so where's the other $1 gone?

This is a mind boggling riddle that I was told when I was 13 years old and have got no idea where the $1 had gone for really long time. People like to lead others how they want other to perceive, think or react. Just like a magician, the trick is to make sure that s/he get the audience to look where s/he wants them to, just like a herd. Similarly, authors, writers, commentators almost everyone write, say in such a way that they want the audience to follow, believed their views and hence provide all the information that support their views and suppress the opposing ones.

"Believed nothing, no matter where you read it, or who said it, no matter if I have said it, unless it agrees with your own reason and your own common sense."

So where's the $1? The $27 the 3 men paid for the meal includes the $2 tips. So $3 (the $1 each men took back and not included) should be added to the $27 instead of double adding the $2 which is already in the $27.

"Whatever words we utter should be chosen with care for people will hear them and be influenced by them for good or ill."

Having said that, all authors, writers, broadcasters whose works are in contact with the mass public ought to know that they held great powers to influence many people with for their works. Hence if they choose the right words, they can motivate people to do good and if they uses the wrong words, they can incite violent and destruction to people's live. Even though the author claims the right to freedom of speech or quoted as one's perspective that need not be taken as factual, not everyone has the ability to differentiate an opinion from a fact which include the author him or herself before the Truth reviews.

"Every thing we see is a perspective. Every word we hear is an opinion"

High Probability Trading

I was introduced to the Monty Hall Problem in the series Numb3rs Season 1 "Manhunt". You can google "Monty Hall Problem" and you should get a lot of hits about this problem. Basically the problem is like this. There are 3 cards and 1 shows a ferrari while the other two show a goat picture. The objective of the game is find the car. The instructions of the game are as follows :-

1. Out of the 3 cards, place your single choice
2. Once placed, out of the two cards, the host will open one of the card that contains the goat
3. The host will ask if you will like to switch
4. This is the last chance to switch and once you decided whether to stay or switch, your choice card will be opened.

A simulation of the Monty Card Problem can be found here.

From the understanding of this problem, one can see that by understanding probability, one can increased the odds of winning.

Let's say that we have 3 traders, 2 who follows a system and 1 who do not have any system.
One of the traders who follow system switches his choice while the other stick to his choice. The one who does not follow the system sometimes stick and sometime stay. If I will to simulate the result of all 3, the one who switches will has the best gain. This is what I call High Probability trading. If one is able to have a system of indicators where each indicators give the probability of winning, average them up and if the sum met a certain threshold for entry, I believed such system will give a really good edge for that trader. Of course, at the same time, one may need to create indicators to determine exit as well.

2012

Based on the Mayan calendar prediction, a major disaster is going to fall on planet Earth at the end of 2012. Googling further, the cause is due to the Sun's "discharge" called solar flare that can cause tsunamis, earthquakes, fires, radiation. So is Hell going burn Earth over? Are natural disaster a sign of God's wrath? Satan's work?

Nature phenomenons are Mother Nature work, the Universe work in an attempt to balance nature and the system respectively. Nature disasters are part of nature phenomenons. They are not brought by Hellish creatures from the underworld. They are just Earth scratching an itch so as to feel at ease again. How Hellish it will get at dooms day does not depends on or created by these tsunamis, earthquakes etc. It will depends on how one react to them. If one felt trap inside inside, desperate to live, not knowing what to do, screaming, hitting, killing each other just to survive, one is sure to feel Hell on earth. The disaster is already bad enough and if one react that way, one has make the disaster even worst for oneself. Imagine how many people will feel that way fighting, looting, killing each other to save themselves. Hell will definitely freezes over.

However if one understand that universe is at work, understand the universe will give one an avatar after she finished, one may be in Heaven just before disaster struck. Would everyone be able to remain calm when disaster strikes?

Control your mind before your mind kills you even before the disaster actually happens.


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Credit yourself

"Believe nothing, no matter where you read it, or who said it, no matter if I have said it, unless it agrees with your own reason and your own common sense."

The name of the quote was not given as it is just a name. The one who gave the words was not highlighted because the words are more important than Him. However the words are worth nothing if you don't understand them. So ultimately, the credits should goes to you if you understand these words which make the words worthy, the author enlighten and the name burning bright.

"To live a pure unselfish life, one must count nothing as one's own in the midst of abundance."

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Within

Peace comes from within. Do not seek it without.

Similarly, anger comes from within. Do not destroy it without.

Everything come from within. Hence do not seek or destroy them without.




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The Foot

"The foot feels the foot when it feels the ground". One feels enlightened when one enlighten others.


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One

A candle cannot burn without a flame. Just like a candle, a body cannot burn without one. Just like a candle that can lit up millions of candle without losing its flame, one can also lit up millions of people lives without losing one. Though flame may be gone once the wick vanishes, it continues to burn bright in many other candles as long as the understanding spread.

"Just as a candle cannot burn without fire, men cannot live without a spiritual life."

"Thousands of candles can be lighted from a single candle, and the life of the candle will not be shortened. Happiness never decreases by being shared."

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Laura Sloate

This is another example of Helen Keller. She's blind but she is a multi-millionaire stock investor.

Read this on here