Sharing what I read from "Winning the Trading Game, Noble Draklon", since I come from stock trading only, better remember these truisms by heart
When it comes to investing, the first market that anyone is introduced to is the stock market. Throughout your entire stock market learning experience, there are multiple truisms that you learn. These truisms are designed to make you trade smarter and show you how to manage your risk and exposure to market downturns.
The problem occurs when a stock investor attempts to apply these same truisms to futures, forex, and options trading. The following six truisms can easily have a way of backfiring on you and destroying your account. Putting these truisms in perspective and knowing when and how to apply them will make your trading experience less confusing.
Stock Truism 1: Buy low, sell high In futures and forex you can go short as easily as you go long. Don’t have a buy-side bias
Stock Truism 2: Let your profits run and cut your losses When using any of the risk management tools we’ve discussed, one side will be losing while other side profits. This is necessary so that you can weather fluctuations, particular on position and swing trades, and catch the largest momentum move possible.
Stock Truism 3: Quantity of accuracy is not important as quality of accuracy When it comes to leveraged investing, you want to be able to be in as many optimum trades as possible. Constantly scalping 1 point here and 1 point there only to get caught on the wrong side and give away 20 points in one go is not our goal. Focus on getting into trades with the best opportunity for larger profits, and you won’t have to worry about being constantly in and out of market.
Stock Truism 4: You need to know where the market is going to profit from it In the end, none of us know the future. We make our best guesses and estimates, and still we are wrong. The right money management tools act as our safety net and help make up our mistakes. As long as you set aside your ego and let your tools operate to protect you, you will find them all valuable.
Stock Truism 5: Picking tops and bottoms is the only way to succeed. This is a variation of buy low-sell high, but it needs to be addressed. Too many traders believe there is a perfect entry and exit price, and in focusing this way they lose sight of the big picture. Often, it’s enough just to get started in the trade. Leave the timing to the timing experts and the money making to the money-making experts. Don’t get bogged down.
Stock Truism 6: It’s not a loss until you take. This is the worst concept to bring to the futures market. Every dime you make in these markets belong to you; every loss you take belongs to you. Don’t get lulled into a false sense of security in believing that you are immune to or somehow separated from your profits and losses. Be proactive and constantly be vigilant of what you are making and losing, so you can correct it if need be.
Attempting to apply these stocks market investment truisms to futures and forex can quickly backfire on you if you are not careful. They can cloud your risk management judgment when it comes to futures and forex investing. Eliminating the dogmatic stock market approach to trading and you will find a world of doors opening to you.
The CPF Board said the new CPF Minimum Sum will be S$106,000 – up from S$99,600 currently. CPF Members who set aside this amount will get a monthly payout of S$910 from age 64 for about 20 years
I think probably the CPF Minimum Sum is just sufficient for one to live simply from age 64 for about 20 years without other income. To live a better quality of life, one could use 1.x factor times S$106K to determine the estimated nett worth one should accumulate in 2008 to start drawdown at 64. I believe CPF is assuming one will retire at 62.
As I educated myself further by reading more trading books on future, forex, and commodities, these are books that previously, I leave them alone in NLB book shelves or just flip through.
In trading/investing stocks, I go for good fundamental stocks that at least providing me dividend yield of at least 2-3%, and this provides me with the safety net. If these stocks turned again me, the dividends collected from them is still far better than putting cash in Fixed Deposits.
In trading/investing stocks, I don't touch the profits, and all go back to trading/investing stocks for compounding effect; and the past profit also has the effect of offseting or cushioning against the current unrealized losses.
But, in trading future or forex, I must TOTALLY SWITCH THIS MINDSET.
This what I learnt from "Winning the Trading Game, Noble Draklon"
While it’s believed that compound interest is the most powerful force in the universe, the concept rarely translates well to the world of leveraged investing. It is easy to see people make profits over a lengthy period of time, increasing their trading volume because of their account size, and give it all back in one bad trade.
Take your profits off the table. If you are going to focus on your goal of making returns, I would suggest in the beginning that you forget about reinvesting your profits or ideas of compound interest – these are greed-induced fantasies.
Look at interest in futures, forex, and options investing as “simple” interest. If you can risk one to make two, you are ahead of the most. You risk your operating capital in leveraged investments in order to gain unusually big potential returns compared to other alternatives. I am sure thee is some special mathematical formula, but suffice to say that leveraged investing, more so than any other investment, does not take kindly to compounding. Take your profits home.
SDRL - Seadrill orders four jack-up newbuilds for delivery in 2010
Seadrill has entered into agreements with KFELS and PPL Shipyard in Singapore for the construction of in total four jack-up newbuilds with delivery in 2010.
The two units to be built at KFELS will be based on the KFELS Mod V 'B' design. The rated water depth is 400ft and drilling depth is 30,000ft. Deliveries are scheduled in June and November 2010 and the total contract price for the two units is approximately US$420 million. These jack-ups will be the fifth and sixth jack-up orders that Seadrill has placed with KFELS. The previous units have all been delivered on time and budget and are all in operation for various oil companies.
The two units to be built at PPL Shipyard will be based on the Baker Marine Pacific Class 375 Deep Drilling design. The rated water depth is 375ft and drilling depth is 30,000ft. Deliveries are scheduled in March and November 2010 and the total contract price for the units is approximately US$430 million. These jack-ups will be the second and third jack-up orders that Seadrill has placed with PPL Shipyard. The first unit, the West Triton was delivered on time and budget in early January this year and is currently operating for Apache in Victoria, Australia.
Seadrill has in addition received option agreements for further jack-up newbuildings in 2011.
Alf C Thorkildsen, CEO Seadrill Management AS, says in a comment,
"These newbuild orders are the best way to increase Seadrill's near term earnings potential in the offshore drilling market. We are convinced that the market for offshore drilling units in general will remain tight in the years to come. The decision to initiate the US$850 million building program was taken based on expected high return on invested equity due to the following factors; the current jack-up order book is less than 20 percent of the existing ageing fleet (which has an average age of 23 years), the jack-up newbuild capacity before 2011 at first class yards is limited and the number of term contract for jack-ups is increasing.
"Furthermore, the combination of deliveries, pricing and expected return is attractive compared to other investment alternatives within the offshore asset market as well as corporate opportunities. The Seadrill Board has specifically concluded that this opportunity is superior to increasing the bid for Scorpion in order to achieve a potential higher acceptance. The four jack-up newbuilds will grow the Seadrill high quality jack-up fleet from eight to 12 units. It is not expected that the newbuildings will significantly reduce Seadrill's short-term dividend capacity. Longer term, dividend is expected to increase as a function of the orders. Seadrill's shareholders should be assured that Seadrill's focus will continue to be on the deepwater segment. However, the Board will continue to work opportunistic in order to seek to maximize return to shareholders based on investments limited to modern drilling assets."
VP Investor Relations
Seadrill Management AS
+47 51 30 99 19
Alf C Thorkildsen
Chief Executive Officer
Seadrill Management AS
+47 51 30 99 19
Like to share one article Googled. POSTED BY DANIELXX (Thanks to him)
The buoyant stock market may have got some investors/traders who have made good money to consider quitting their jobs and doing investment/trading full-time. This is evident from the enthusiastic response to a thread with the same title in one of the share forums (wallstraits.com I believe). Judging from the comments of one or two of my contacts who have gone down this path, I would think there are pitfalls that one has to be aware of to avoid being sorely disappointed and suffering heavy opportunity costs.
Firstly, one's risk appetite changes tremendously when going from part-time to full-time. Any entrepreneur would tell you this: that when they start their own business, every cost component becomes magnified to them because it all flows toward their bottom line. So it is for one trading/investing for a living. In general, return is directly correlated to risk, which means the eventual returns may not be what was projected at the onset of turning full-time. For traders and investors alike, the level of volatility which previously worked fine for them might now seem too risky; the change in risk outlook is subtle but palpable. It is a psychological barrier that is difficult to overcome.
Secondly, mental discipline is compromised. An investor previously too busy to track stock prices suddenly finds all the time in the world for his own allocation; the temptation is too great for him to follow the path of least resistance and monitor stock prices since his fortunes are tied to them. Routine office work, whether one likes it or not, gives a definite structure to one's mental framework and hones useful skills. Social interaction and the exchange of ideas with other people (colleagues, clients) also augment this. All such activities are lost when one turns inward to one's own investment portfolio.
Thirdly, one's investment horizon is shortened as there is a definite pressure to "bring bread home every day" or at least every month. While buy-and-hold is hardly the way to go (except for people like Warren Buffett), one should also not be primed to sell every time a portfolio stock rises by 10-20%; as Peter Lynch advises, let the profits run. Worse, one might buy a stock for the wrong reasons as a result of the shortened investment horizon; where previously he used to buy an illiquid stock for its long-term prospects and wait for it to be recognised, he might now start buying highly valued, highly traded momentum stocks to reap quick gains in a highly risky musical chairs game (or the "greater fool" game). Patience is a virtue highly relevant to investing; that virtue is often attenuated when one depends on and consequently focuses excessively on one's stock portfolio.
Fourthly, one has to reconcile within oneself the role of a trader/investor in contributing to society. This social pressure cannot be underestimated, especially from the older generation. This view is understandable, and indeed, one will have to assess his motive for turning to full-time investing/trading. Is it mainly due to push factors (job dissatisfaction)? If so, it is time for a rethink. As for contribution to society, there is none: all that talk about bringing liquidity to the market and helping to ensure efficient resource allocation and prices is just plain bollocks; traders or investors bring nothing to society, unless they reach a certain scale of operations akin to that of venture capitalists. One has to be comfortable with that.
All things being said, there are people who trade or invest successfully on their own, in various areas such as equities, commodities, futures. I would think to overcome the psychological barriers described above, one has to have at least one million bucks to consider this avenue as a complete full-time option, or at least half a million with another additional source of passive income to be comfortable with this chosen path for the long-term. Assuming an annual dividend yield of 3% (typical for the Singapore market), one can collect $30K in dividends on a million-dollar portfolio which is adequate for covering the household expenditure ie. capital gains will be the main instrument for growing the portfolio and the full-timer will have to be confident of making this happen. Additionally, the drive to constantly enhance one's knowledge in this field should be there; there are so many ways to improve one's reading of stocks, from enhancing one's knowledge of the various industries through reading, to locating sources of information to enable monitoring of the environment in which one's stocks operate, to streamlining the stock selection process, to understanding the global or regional markets with a view to assessing global supply and demand dynamics. It would be fair to say that the level of discipline involved is similar to that in operating one's own business.
Keppel FELS to build 6th ENSCO semisubmersible rig worth US$537 million
Keppel FELS secures order for a US$512 million rig from ENSCO
Keppel FELS Limited (Keppel FELS), a wholly-owned subsidiary of Keppel Offshore & Marine Limited (Keppel O&M), has secured a contract to build a US$512 million ultra-deepwater semisubmersible (semi) drilling rig from a subsidiary of ENSCO International Incorporated (ENSCO).
To be delivered in the second half of 2011, the ENSCO 8504 will be the fifth consecutive semi that Keppel FELS is constructing for ENSCO.
Wow! Both Kep and SML are still getting more orders at higher price, probably, to offset higher cost. They are not squeezed by their customers.
I think Kep will breakout on Monday liao. Last Friday, closing with doji near resistance line. Keep up, Kep. Cheers!
Lesson learnt to be passed on to my children. Buy Term for protection and invest the difference for return. I believe that we are the only person that truly care about our investment; and definitely not the so-called money managers, who work for salary and they are not your "Dad". They are not going to ensure you that you get "rich" or say sorry you get "Poor".
We should put in the best effort to increase our FQ and invest the rest of money.
Few days ago, I reminded my two elders that their father is still their best FA, and listen to nobody else.
I am 61 yrs old uncle living in HDB heartland who has achieved financial independence @ 56 and retired @ 60 from full-time job as employee.
Single household income since 1995 with three children. Eldest son and daughter are now working and youngest son still in his 2nd year uni in SUTD.
I have been doing long-term investing and short-term trading in Singapore stock market only since Jan 2000 so I am that Panda or Koala in the investment world; but I am still surviving well in the wild.
I am now executing my Three Taps solution model to maintain sustainable retirement income for life till 2038.
Last updated: 3 Sep 2017
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