生意 The Business of A Meaningful Life

Quora Question: “How long does it take for a newbie to learn Forex trading from scratch if he can dedicate 15-16 hours a day?”

I recently answered the above question on Quora.

” I won’t know how long it will take you. It took me 2 years for forex. Maybe I am slower. There are many elements to learn in trading in order to be consistently profitable – understanding market structure and determining the edges are just two of many. Money management, trading psychology, trading plans are also part of a plethora of learning required. Your personality, your emotional, financial support, and how you devise your learning also affect your ability to become a profitable trader.

Allow me to share my personal experience – hopefully it will provide an alternative angle.

Trading 15 to 16 hours a day, even in training mode, really screws up one’s life, so I don’t recommend it. (I did 7 days a week, averaging 15 hours to 20 hours days – over the weekends, I was catching up on reading, preparing charts, reviewing notes and strategies, reflecting – I was learning to trade 24 hour timezones, and 2 other markets beside forex. All these took me slightly more than 3 years from the day I started. )

It was a really wild ride, and draining – mentally, emotionally and physically. But every time I climbed back up, I grew stronger in every way. (But physical recovery took longer – that’s why I don’t recommend it.) I had the support of my family which helped me weather the ups and downs. I was also a different beast, and I had planned to learn trading years before. So I prepared financially, discussed with my wife, achieved much of my job goals, and when the time came, left my job and started to learn trading. (I had tried to learn trading whilst working – but work responsibilities were my priority so my trading did not progress significantly). Even so, my original plan – stupidly – was to achieve trading success in 1 year – ha ha ….

All that started in 2012. I now trade a few times a week, or once every 2 weeks – whenever the markets present opportunities. Trading in any timeframe can be profitable if you know what you are doing – short and longer timeframes offer different challenges and risk reward scenarios. Yes I benefited from trading, and will always be able to do so. But it has never been my long term plan to trade forever, so I spent the last 2 years learning to code, design and am automating my trading processes so I can move on to other challenges.

Learning to trade is a heavy commitment – be sure you know what you want.”

Why I Could Not Stick To A Trading Plan?

Whilst drawing up the trading plans I analyzed edges, key price levels, expected profits/losses, trade management, probabilities etc.  After the trade has been executed, I became obsessed with the P/L (profits and losses).


Traders  who focus on the P/L will likely swing with changing short term accounts of the market environment. They will lose focus of the overall picture and edge they had gone in with.   Their minds dance to the rhythm of the marketplace, and the beats drown out the rationale of their original trade. They build a case to sabotage themselves and toy with  tactical decisions that run contrary to the original plan.  This is particularly true of resourceful traders who possess agile mindsets and analyse how markets constantly operate.  They become entangled with trade management issues during the trade.


Trade management should be part of the earlier trading plan, not created during the trade, and only touched on when key points of the plan are materially affected.    Addendum frustrations, and emotions like greed and unwillingness to end the day with a loss etc change their views of the original trade.   They become stressed, and lose the consistency of looking through the same lens they had used for making the earlier trading plan.   A wise trader once shared “we act to reduce our distress rather than maximize our opportunity”


The perspective I had whilst developing my trading plans was different from what I became engrossed with after trade execution.  Changing that was monumental in helping me turn the corner.

Different Roads To Rome

Late last year, I asked a reasonably established trader friend if he would take 60% return per annum on equity with low risk strategies (aka close to no equity loss for the year).  He was reluctant as he spiraled towards 5 to 10% return on any single trade, perhaps even 20% on a good day.  His risk factor would be 3 times higher than mine, and might crisscross the market average.  His efforts would probably be 10 times less strenuous than my strategies.

I however, will never be like him, and not because I have not tried.  But we were born and forged in different temperaments, and have different agendas.  I did not intend trading to be an eternal career.  He would trade to his last day.  I wanted to pass on a system of learning and flexibility that my children can use at their discretion.  He wanted to hone every instinct in his body to naturally respond to trading opportunities.  I on the other hand, minimized internalization and opted for intellectual drivers that may be automated in a system.  He can trade different strategies, anytime of the day.  I trade any instrument any time of the day but stick to a system of largely independent wheels and nooks.  Both of us wisely use leverage to our advantage and are never exposed beyond our comfort zones.

My varied systems share three overriding criteria –

1)      Complete independence with no reliance on any source of information and influence, and can be deployed according to changes in the markets.

2)      Employ hard work to reduce risks.  Hard work can be automated, risks cannot.

3)      Never lose sleep using low risk strategies and money management.  This also means it targets equity enhancement and is not regular income driven.

Can anyone combine our different personalities?  Yes, but from a value : risk efficiency angle – such marriage will dilute the merits of each system.

Hence it is important we develop and fit a trading system according to our natural inclinations and goals.  If they do not align, change something.   And do not lose sight of the results you are contented with.

Are You Trapped?

(Found this interesting article I wrote many years ago whilst cleaning up old hard disks.)

Worry  the market has been too good?  Not sure economic growth is really turning round … but do not want to miss the ride?  With so many indices towering towards the sky,  surely the sky will not fall……  Are there not many faithful riding the upstream together ….. to the  precipice of a waterfall?

Emboldened by fellow believers, market pilgrims bravely battle pessimism and disbeliefs, holding onto the winning faith, encouraged by every victorious rise, even a blip.  But the markets are treacherous waters, and sharks are circling round.  They know how we think.  They smell that drip of fear, that nuance of uncertainty.  They like us this way – the fatten sacrificial calf for juicy bits of pleasure.  Indeed when the feasting begins, there will be no reprieve.

The staunch investors and gamblers alike are cornered,  the stakes have been played, ….. and our emotions  are now stringed to the market puppeteers’ whims.

Long term investors are you?  Well longsuffering has its weakness too.  Long  term commitment and  long term  memory failure are often bosom friends.  We hate to be reminded of the many funds which failed and the esteemed institutions which needed to be bailed out in 2008 and 2011.  Many blue chips have not since recovered their initial glory and many crown jewels  have  turned into less worthy gems .   Many seniors have lost their savings and pensions, and even countries have gone bankrupt or are tethering on the brink.  Yet the indices continue to goad us on.     

Have we not learnt?  Hugging an asset over a long duration does not safeguard it from value decay.   A wise man asked this revealing question, “how many top 50 Asian companies in the last 30 years, are still at the top today”.  For me that settled the issue.

Warren Buffet?  My grandmother?  Sure they are success stories.   Value investing is well advised but difficult to practice.  Buy during a crisis, when emotions strain against every ounce of logic?  Do incremental purchases over a long period of time?  Buy into a fund managed by a reliable bank … ha ha, …. that is a good one.  How do you judge whether the company is indeed undervalued, or over valued?  Follow industry valuation …  at that point in time?  Follow a guru that has made great calls in the past?  Follow the advice of analysts – never mind many readily reverse their target calls, even though they should have known better  – just look in the month of February for incriminating examples pretending to be intelligent diligence.  What to do?  Who to believe?  Know your candidates well, and buy only what you know, and if you know enough of Warren Buffet’s style, you will also know he is first and foremost a businessman … that is why he is a good investor.  So pretend to be Buffet all you like, and some of you will succeed, and I hope it is you.  But what if you get it wrong?    

Be your strategy one of resigning  from cradle to grave, or zealously swinging from treetops to treetops,  honest, competent  financial advisors will always tell you to actively manage your portfolio and watch it like a hawk – they are not going to be responsible for it – remember it is always “at your own risks”.

You are disciplined?  You mean that infamous stop loss or the rather clever trailing stop?  Often used, always to great effect – for relief or depression.  They are not  always practical or often not intelligently implemented.  I shall not go at length dissecting the merits and grievances of a stop.  But consider these questions –   How does a long term investor reconcile a stop loss?  Should not he simply weather the ups and downs, with the forbearance of a God ?   Where is the right place for a stop loss/trailing stop?  At 2% from support/resistance?  Too little?  10%?  Or when price corrects in a “wave”  rebounce?  Wait, perhaps it should be at the point our investor can preserve his capital, rescue leftover profits, or  at his final or stepped tolerance point for losses?  Ah, what if the stop loss is hit, but the price pattern shows conflicting signals… what to do? Here is another good one … “place a stop loss where it is unlikely to be hit, and if it is unfortunately crossed, then you know you were lucky to put it there..”  Yes, we get the picture, so we do whatever works best for us, if we actually muster ourselves to do it, ….   but we are disciplined are we not?  

A stop loss can be as fickle as when “ I have enough!”, or as sophisticatedly tied to the markets via probability studies, moving averages, Elliot Wave theories, price action, and so forth.  Notice the market itself does not generate a stop loss or take profit exit.  A stop is designed by us, according to our tolerance ability.  It is imposed to create order in an otherwise haphazard market.   It was a tool totally of our own creation – to manage ourselves.  Surely we can do better if it is to manage ourselves.

Equities remain one of the more efficient assets  for the general populace to increase capital wealth and protect against inflation.  Many social economists and financial advisors have asked for governments to help citizens set aside investment accounts just for investing, not for subsidizing housing, education or health, to achieve the dual purposes of inflation hedge and committed wealth creation.

How can the ordinary investor make the game more palatable?   As always, there is a simple answer.


Follow up article.

Change A Rule (Part 2).