FerroChina

FRC has been sold down after releasing strong Q1 result. Why like that?


--------------------------------------------------
SINGAPORE, May 2 (Reuters) - Steel-maker FerroChina
rose as much as 4.9 percent after Hong Kong's South China Morning
Post reported that Australia and Russian firms are eyeing at
least a 20 percent stake in the China-based company.
Shares of FerroChina, which makes galvanised steel, hit an
intraday high of S$1.49 with over 4.8 million traded.
The newspaper report, which did not name its source, said
FerroChina has attracted interest from Australia's BlueScope
Steel and Russian firms including Evraz Group ,
part-owned by Russian billionaire Roman Abramovich, to buy a 20
percent stake in the Chinese company.
But the unnamed source said FerroChina may receive a large
offer and sell more than one-fifth of the firm.
"Some of the real acquisitive guys may come in with a huge
bid and the whole company could get sold," the newspaper quoted
the unnamed source as saying.
The report follows an announcement from FerroChina last month
that it had hired Merrill Lynch as its strategic advisor.
In March, FerroChina executive director Nelson Fong told
Reuters that the company would consider long-term alliances or
strategic investments by outside parties, but he said the owners
would want to retain some control.

Stocks rise and Dow crosses 13,000 as dollar advances

Does it mean that out of bear and into early bull or just bear market rally? I bet on early bull. Cheers!

------------------------------------------------------------
Stocks rise and Dow crosses 13,000 as dollar advances
Thursday May 1, 6:21 pm ET
By Madlen Read, AP Business Writer
The Dow Jones industrials cross 13,000 as dollar soars and optimism rises about economy


NEW YORK (AP) -- Wall Street shot higher Thursday as investors, while anticipating another dismal jobs report Friday, viewed the rising dollar and falling oil prices as promising signs for the economy. The Dow Jones industrial average soared nearly 190 points to close above 13,000 for the first time since Jan. 3.
ADVERTISEMENT


The dollar jumped on better-than-expected economic data and the Federal Reserve's apparent resolve to monitor inflation. The Commerce Department said consumer spending rose 0.4 percent in March, more than predicted, and the Institute for Supply Management said U.S. manufacturing contracted in April by a bit less than anticipated.

The readings were not all positive -- consumer spending ticked higher mainly due to rising energy and food prices. The ISM's report also indicated that companies are hurting from climbing costs.

But the dollar, which has recently strengthened after a protracted decline, rallied anyway, pushing the euro down more than 1 percent to $1.5461 in late trading. Trading was thin, with major currency markets in London and elsewhere closed for the May Day holiday, but the dollar's advance helped crude oil fall briefly near $110 a barrel and then settle at $112.52. That alleviated some of the inflation-related anxieties in the market, given that crude recently traded at a record near $120 a barrel.

"I don't know if it's all turned around, but I think oil got out of control," said Todd Leone, managing director of equity trading at Cowen & Co.

The Dow rose 189.87, or 1.48 percent, to 13,010.00, after briefly rising more than 200 points. It hadn't closed above 13,000 since Jan. 3, when it ended at 13,056.72; the Dow is still down 8.15 percent from its record close of 14,164.53, reached Oct. 9, 2007, before the brunt of the credit crisis hit Wall Street.

Broader stock indicators also enjoyed a significant advance Thursday. The Standard & Poor's 500 index rose 23.75, or 1.71 percent, to 1,409.34 -- its first settlement above 1,400 since Jan. 14. The Nasdaq composite index climbed 67.91, or 2.81 percent, to 2,480.71, its highest close since Jan. 10.

The dollar's rise came a day after the Fed lowered key interest rates by a quarter-point, but indicated the economy should keep growing moderately, while inflation is the growing concern.

"What we're seeing is that maybe the economy is not falling off a cliff, but perhaps leveling off," said Peter Cardillo, chief market economist at New York-based brokerage house Avalon Partners Inc. "I think the Fed (rate-cutting campaign) is over with, even though the Fed's statement didn't say that."

The economic assessment statement accompanying the Fed's rate decision was unclear about its policy going forward, but it has been widely believed that the central bank will pause following a string of cuts that lowered rates by 3 percentage points since last summer.

On Thursday, banks, homebuilders, chip makers and retailers surged, after getting battered earlier this year due to worries about the mortgage crisis and its effect on the global economy.

Bond prices fell. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.77 percent by late trading from 3.73 percent late Wednesday.

As the dollar moved higher against other currencies, gold prices dropped.

Investors are predicting another gloomy reading on U.S. employment on Friday. The Labor Department's report is expected to show a 75,000 net loss in jobs for April -- which would be the fourth straight month of losses -- and a rise in unemployment to 5.2 percent from 5.1 percent in March. In a negative sign ahead of that data, the government said Thursday the number of newly laid off workers filing claims for unemployment benefits increased by a greater-than-expected 35,000 last week.

However, with the government sending stimulus checks to taxpayers and Fed rate cuts still working their way through the financial system, many investors are focused on the second half of the year, when they are betting the economy will rebound.

Shares of Exxon Mobil Corp., one of the 30 Dow components, declined $3.37, or 3.6 percent, to $89.70, after it said its first-quarter profit rose 17 percent to $11 billion -- not as high as analysts expected, despite record-high oil prices. Lower production volumes caused the company's profit margins to shrink.

But on the whole, corporate profits have been coming in a bit stronger over the past few weeks than the market had expected. Meanwhile, spreads between rates on riskier securities and rates on safer issues have been narrowing, indicating that the credit markets are getting back to normal.

After the Fed's rate cut Wednesday, that pattern continued Thursday. Bank stocks benefited -- Citigroup Inc. rose $1.04, or 4.2 percent, to $25.99; Bank of America Corp. rose $1.85, or 4.9 percent, to $39.39; and JPMorgan Chase & Co. rose $1.60, or 3.4 percent, to $49.25.

In another sign that the financial sector is on the mend, the Fed said late Thursday that investment firms averaged a relatively low $18.6 billion in daily borrowing over the past week from the Fed's emergency lending program. Earlier Thursday, the Fed auctioned off $24.12 billion in super-safe Treasury securities to big investment firms.

The Russell 2000 index of smaller companies rose 13.57, or 1.89 percent, to 729.75.

Advancing issues more than doubled decliners on the New York Stock Exchange. Consolidated volume amounted to 4.32 billion, up from 3.66 billion shares traded Wednesday.

Overseas, Japan's Nikkei stock average fell 0.60 percent. Markets in much of the world, including Europe and Hong Kong, were closed for May Day.

Hyflux - cover story in The Edge, Apr 28, 2008

Most water stocks in singapore are small and unnoticed by investors. But that could change as their order books swell. Hyflux has already doubled its order book to %1.5B and significantly improved its earning visibility for the next two years. Does it means Hyflux will begin to attract smart money?

STI High - Low

Portfolio update: Bought Synear $0.595 and Cosco $3.22

Hyflux: Won more projects in China

Hyflux has been winning more projects; but, it does not seem move any higher and also daily volume is low. Why? Smart money not interested in the next big thing - water after oil meh? I used CPF fund to hold Hyflux for long term till 2011 - another 3 years to go. I believe in Olivia's dream


The Moisture Merchant
Dealing in Liquid Assets
By JAKE LLOYD-SMITH

Posted Monday, April 5, 2004
Olivia Lum, head of the fast-growing water-treatment company Hyflux, never knew her biological parents. She was adopted at birth by an elderly woman she called Grandma, and home was Kampar, a poor Malaysian mining town where an exodus of jobs had left most residents with no income. After Grandma sold her house to pay some gambling debts, Lum was brought up in a wooden shack without running water—unless you counted the rainwater that would regularly seep in and flood the floors. To keep Grandma's spirits up, Lum used to say that when she made it big, she would buy her a new house. "Of course it never happened," Lum says. "She died before I became successful."

Lum found her success in the water business. She worked her way through college and earned a chemistry degree, but she always saw the business world as the way to climb out of poverty. Fifteen years ago, drawing on her meager savings, she founded Hyflux (NCC: $20K from her saving), a company that pursued a wide range of water-related ventures in Asia, from cleaning wastewater in China to investing in desalination plants in Singapore.

Today, Hyflux is one of the hottest firms in the Asian water market, and under Lum's leadership it has scored a number of R.-and-D. breakthroughs. In the 1990s, the company developed an ultrafine membrane filter (pictured above) that is used in all the company's major products. More recently, Hyflux, in association with a U.S. group, began manufacturing a condensing device called the Dragonfly, which produces potable water by extracting moisture from air—and could change the way water-scarce countries meet their daily water needs. There are some drawbacks: the surrounding air must have at least 40% humidity, and each device costs about $1,000. Lum, however, insists that the unit price will fall as her team refines the design, and says Dragonflys may soon be found in refrigerators and even cars.

Hyflux is now a $270 million company, and Lum's biggest challenge will be to sustain its rapid growth. "There are further good years ahead," says Kerryn Tay, an analyst at GK Goh Research in Singapore, pointing to growing demand for Hyflux's products in China and government support at home. For her part, the hardworking Lum wants Hyflux to be worth $3 billion within five years. Grandma would approve




-------------------------------------------------------------------------------------
AWARD OF WATER TREATMENT PROJECTS ESTIMATED AT RMB 371
MILLION IN CHINA

Hyflux is pleased to announce that its wholly owned subsidiaries (collectively referred
to as "Hyflux") have been awarded two water treatment projects worth about RMB
361 million in the Jiangsu Province in China.


HYFLUX WON BID FOR WORLD’S LARGEST REVERSE OSMOSIS MEMBRANE
DESALINATION PLANT IN ALGERIA· Project value is S$632 million
· Project almost doubled order book to S$1.5 billion
· The largest contract undertaken by the Group to-date
· The single largest ultrafiltration plant leveraging award-winning
proprietary membrane
Singapore, April 22, 2008 – Hyflux Ltd (“Hyflux”), a leading provider of integrated
environmental solutions, has won the bid for the world’s largest seawater desalination
plant in Algeria, with a project value of US$468 million (about S$632 million).

Portfolio update: contra WMI @4.85 ROC 3.4% in 3 days

Kep and SCI - XD on 29 Apr 08

Let see any buying interest on Kep and SCI after last Friday selldown on Kep and SCI. Monday will be the last day to collect dividend, Kep $0.55 and SCI $0.15.

Good dividend yield play.

FerroChina 1QFY08

FerroChina continues strong performance, posting
triple-digits revenue and earnings growth for 1QFY08

Will it run up on Monday?

Portfolio update: Sold STX 3.74 ROC 17.1%. Bought YZJ 1.10, WMI 4.66

Bought STX @ $3.17 on 7 Mar 08 after its pullback; but, it came crashing down all the way to $2.32 (-27% paper loss).

Portfolio update: Took partial profit on STX, ROC 18.9% in 48 days

Trading For A Living

By Geoff Turnbull

There can’t be many traders who haven’t at least considered the idea of telling the boss what they think of him, throwing it all in and going off to trade the stock market for a living. It’s a big risk financially, and that uncertainty is what stops most from jumping ship. Is it really possible to trade for a living?

The Dream

You know how it is, you’re sitting in a traffic jam at some unearthly hour of a particularly wet and miserable morning, on the way to the same office you have sat in for too long to remember, and you’re thinking - there must be a better way – life shouldn’t have to be like this.

Your mind starts to wander and you find yourself thinking back to that stock you bought only a week ago, and how it skyrocketed giving you enough profit to takes the kids to Disneyland in the summer, and you begin to consider if you couldn’t make a fulltime living at this trading game.

The advantages are certainly tempting; no more pointless meetings with the manager, hours to suit, holidays whenever you feel like it, and with your home-office - no more traffic jams.
Heck, come to that you could even make home anywhere you want it to be! By the time the traffic starts moving again. you’re busily calculating how much cash you could make if all your trades went like that last one - you’re almost ready to write your notice letter there and then!

The Bad News

Time for a reality check. Certainly all of the above benefits are there to be enjoyed, but it’s a huge step from full time employee to full time trader. Are you really ready to give up that monthly pay-check just yet? Can you really cope not knowing how much money you’re going to make month to month? Are you prepared for the months when you actually lose money instead of make it? There are many things to consider before taking the leap of faith.

Considerations

Before you even think about trading for a living you have to know how much money you need to live on, that is, how much cash do you need to generate every month in order to survive. As a financially minded person you already have good home accounts, or are at the very least vaguely aware of where the money goes. So take the annual figure (monthly is no good, you need to account for annual recurring items like insurance premiums, car servicing, and vacations), add 50% and divide by 12. Why add 50%? Because there will always be unexpected expenses, and as traders we are always prepared to expect the unexpected.

Now you know how much money you need each month, you can look at your savings and work out how much buffer money you have, that is, how long you could survive without earning anything at all. You can’t expect to be an instantly profitable trader, and even the best and most experienced have periods of drawdown, so you need to be ready for the worst. If you can’t live for at least six months from your savings then you are probably under capitalised and are not ready to give up that pay-check just yet.

An important but often overlooked aspect of under capitalisation is the effect it will have on your trading; if you are trading because you need the money, then you are trading scared and you’re almost certainly going to lose. You cannot distance yourself from the money-aspect of the trade if you are relying on the money.

Living expenses are only one part of the financial equation. Next you must consider how much trading capital you need. This is the money actually facilitate trading, in other words your account balance for trading margin, and the money you will be spending on data feeds, software, and internet access. You must account for this separately, you cannot start eating into your daily living expenses money just because you took a bad trade and need some more margin.

The amount of trading capital you require will depend very much on your trading style. To day trade the US Stock Markets for example, you must have at least $25,000 in your account, so budget for $30,000 to allow for positions moving against you (if you fall below the $25k minimum even briefly, your account can be frozen for up to three months). If you are holding positions overnight you may manage with a lower balance but bear in mind your buying power and consequently returns will be reduced.

If all this is starting to sound expensive, well it is. There’s no two ways about it, you simply cannot survive long term as a trader if you are under funded.

This article will be concluded in part two.

About The Author
Geoff Turnbull is a full time day trader, and a contributor to http://www.stock-trading-world.com

In part 1 of this article I started to look at the financial implications of giving up the day job to instead start trading full time for a living. There are more than just monetary considerations as we will see later, but for now, there are some more costs to ponder.

More Costs!

Let’s move on to equipment. Presumably you already have a PC and internet connection by virtue of the fact you are reading this on the internet. But are these both up to the job of trading full time? Again the specifications for both hardware and ISP will depend largely on your trading style, but if you’re relying on a 100Mhz Pentium II and a dial up service, you’re setting yourself up for failure. So budget for quality equipment, budget to keep it up to spec, and budget for some repairs too – expect the unexpected.

Many traders make the mistake of saying “This will do me whilst I start out, and I’ll get something better when I make some real money”. This is quite simply false economy, you are unlikely to ever make real money with a substandard setup (and this applies equally to substandard software and data feeds). This is a cut-throat business and 95% fail, you must give yourself every advantage you can. You wouldn’t enter the Indy 500 in a go-kart with the intention of buying a better car when you’ve won a few races, and the same thing applies here.

Earnings

When you’ve added this all together, you have a pretty good picture of how much money you need to generate from your trading in order to live. Does your past performance suggest you will be able to meet this target? It’s tempting to say “When I go full time I’ll make much more”, but how do you know this is the case? Perhaps you can take a couple of weeks holiday and try it out – if you don’t make enough in that two weeks then you’re not ready. A few weeks really isn’t enough time to know if you’re going to succeed though. An ideal next step then is to cut your day job hours to part time and trade maybe two or three days a week. This way you know you have some money coming in, you get to trade for real, and if it all goes horribly wrong you are probably better placed to get back into full time employment than someone who quit the working world completely.

The option of part time work is a luxury many of us don’t have however. So does it have to be all or nothing – trade or work? Why not keep the day job and trade outside your working hours as well. If you are trading and end of day strategy, then this is easily achieved by doing your research in the evening and placing the appropriate combinations of Stop and Limit orders with your broker.

For day traders, certainly practising is easier if your intended market is not your home market, for example if you want to trade the US and you live in the UK where you can come home and paper trade in the evening.

There are other try before you buy options open to the day traders who want to practise trading their home market outside of normal hours though. eSignal allows you to download tick data for any symbol and play it back in real time or speeded up so you could trade the whole day in an hour. Other vendors have similar offerings, and if you have an IB account you can use AutoTrader to record tick data during the day for playback into a demo version of SierraCharts or QuoteTracker for free.

The bottom line here is that before you take the plunge, you need to have done everything in your power to prepare yourself for what lies ahead. It will still be harder than you ever thought, but it will be nigh on impossible with no preparation whatsoever.

Other Considerations

There are a few non-financial aspects to consider before going full time with your trading. If you have a family, how will the change impact them? Do you have the space to work uninterrupted during the day? It’s important that the family don’t assume that because you are at home you are automatically available to take the kids to school, or walk the dog. Make sure from the start that everybody knows the ground rules and that you can separate your working time from your free time effectively.

Consider also the social impact of leaving your full time employer. Again, if you have a partner or family are you going to drive each other nuts being in the same house all day? Relationships can be tested to the limit! Or if you live alone, are you going to drive yourself nuts being on your own all day? Trading full time can give you enormous amounts of free time, but if you have nothing to fill that time with you can quickly lose the plot – I’ve seen it happen and it’s not pretty.

Is It Worth It?

Nobody can tell you if trading for a living is for you, it’s something you have to find out for yourself. I’ve seen traders go through highs and lows to challenge those of any stock chart, but for most it has proved to be a good move. The long list of benefits are all there for the taking, as with any change of career or indeed any major life change, as long as you go into it with your eyes open, and above all prepare, then there is no reason why it cannot work for you.

About The Author
Geoff Turnbull is a full time day trader,

Semb Corp

With dividend of $0.15 and XD on 29 Apr, will there be panic buying by funds the next week in view of DOW closing +1.81%

Stocks Take Flight on Earnings Blast

U.S. stocks soared at the opening bell Friday amid renewed hope that the worst is over for financials. Solid earnings from a few Dow components also gave the market strength.

The Dow Jones Industrial Average surged nearly 200 points, or 1.5 percent, in the first five minutes of trading.


Does this means the worst is over?

Bear market end tonite?

I think DOW will rally tonite and put the bear to sleep. STI on Monday will rally. Don't miss the boat.

I did not take profit lately as I am expecting big rally in STI should be coming soon.

Book: The Disciplined Trader by Mark Douuglas

Available in NLB. This book has been recommended by some top traders themselves. It is about preparing ourselves psychologically for trading.

Is the worst over?

Reuters
World stocks power to one-month high
Monday April 7, 4:07 am ET
By Natsuko Waki


LONDON (Reuters) - World stocks hit a fresh one-month high and the dollar rose on Monday, bolstered by firmer commodity prices and growing expectations that banks are close to cleaning up their credit-related troubles.
ADVERTISEMENT


Optimism also stemmed from speculation that finance chiefs from the Group of Seven rich nations, meeting in Washington this weekend, are considering drastic steps to fix banks and markets battered by the U.S. mortgage meltdown.

Portfolio update - add more SCI @ 4.18 on its pullback

Is Market Rout Nearing End? Cheers!!!!

UBS, Lehman Capital Raisings May Signal Market Rout Nearing End

By Elena Logutenkova and Aaron Kirchfeld

April 2 (Bloomberg) -- Securities sales by UBS AG, the world's largest money manager, and Lehman Brothers Holdings Inc. underpinned a rally in financial stocks yesterday that may signal an end to eight months of market turmoil.

UBS, battered by the biggest writedowns from the collapse of the U.S. subprime mortgage market, announced plans to seek 15 billion Swiss francs ($14.8 billion) in a rights offer to replenish capital, while New York-based Lehman, the fourth- largest U.S. securities firm, raised $4 billion in a stock sale.

The fund-raising plans quelled speculation the companies might follow New York-based Bear Stearns Cos., which agreed to sell itself last month to JPMorgan Chase & Co. for a fraction of its market value after a run on the company. Investors looked past Zurich-based UBS's 12 billion-Swiss franc first-quarter loss disclosed yesterday after record writedowns on debt securities, as well as Deutsche Bank AG's $3.9 billion of markdowns.

``When UBS does a massively dilutive deal and the stock still goes up, that's helpful,'' said Henry Herrmann, chief executive officer of Overland Park, Kansas-based Waddell & Reed Financial Inc., which manages $65 billion. ``It's a rally associated with the presumed elimination of survival risk. The market's getting a little more comfortable that the crisis is over.''

UBS rose 12.3 percent in Swiss trading, the biggest gain in two weeks, leading a 5.1 percent rally in the 60-member Bloomberg Banks and Financial Services Index. The company has lost 55 percent of market value during the past 12 months.

`Enough Demand'

Chairman Marcel Ospel, 58, who helped form UBS through a merger a decade ago, will be replaced by general counsel Peter Kurer. UBS said it plans more job cuts at the investment bank and will set up a separate unit to segregate assets at risk from the credit-market meltdown.

Lehman advanced 17.8 percent in New York Stock Exchange composite trading, the most in two weeks, after increasing the size of its sale to 4 million convertible preferred shares from 3 million and saying demand ``significantly'' outpaced supply. Investors paid $1,000 for each Lehman preferred stock, which can convert to 20.0509 common shares once the stock reaches $49.87, or 32 percent higher than the closing price on March 31.

``Investors were worried that these big writedowns were going to impede their ability to raise capital,'' said William Fitzpatrick, an analyst at Optique Capital in Racine, Wisconsin, which owned 565,000 Citigroup Inc. shares as of Dec. 31. ``The way Lehman was able to bring in capital, that mitigates a lot of that risk. Clearly there's enough demand for these companies that raising capital is no longer the major overhang.''

Debt Writedowns

The debt market turmoil spurred by rising U.S. mortgage defaults hasn't abated, and presents the most severe crisis for banks in 30 years, Morgan Stanley and management-consulting firm Oliver Wyman said in a joint report yesterday.

The world's biggest financial companies reported about $232 billion in credit losses and writedowns since the start of 2007, data compiled by Bloomberg show. In all, investment banks may post $75 billion in markdowns in 2008, the report from analysts led by London-based Huw van Steenis said. Revenue from investment banking may drop 20 percent in 2008, with credit businesses declining 60 percent, the analysts said.

Deutsche Bank, which operates Europe's biggest investment bank by revenue, said yesterday that it expects to book first- quarter writedowns on leveraged loans, commercial real estate and residential mortgage-backed securities. The Frankfurt-based company said market conditions ``have become significantly more challenging.''

``I don't see how many banks are going to sustain revenue because parts of the business have disappeared due to the financial crisis,'' said Stefan Mueller, a managing partner at Proprietary Partners AG, a Frankfurt fund management company.

Federal Reserve

While investors agree that more writedowns and share-price swings are inevitable, Kevin Rendino, who runs the $6.5 billion BlackRock Basic Value Fund in Plainsboro, New Jersey, found cause for encouragement.

``You want to get all the bad assets off the balance sheets, and the banks are in the process of doing that,'' Rendino said in an interview. ``You're seeing the writeoffs, the charges and the replenishment of the balance sheets, so all that's good.''

The U.S. Federal Reserve cut its main lending rate on March 18 by three-quarters of a percentage point to 2.25 percent. The central bank also started a lending program for brokers, which is similar to the so-called discount window used by commercial banks, after the run on Bear Stearns.

``You can't ignore what the Fed has done,'' Rendino said. ``It's been a game-changing set of events over the last couple months. It doesn't make the bad assets worth more but it's going to be good for banks and it creates a better environment for financials going forward.''

STI direction?

STI has staged a good recovery. Will the momentum continue?

Synear has also made good recovery and I will hold Synear for long term as history has shown that companies that have exposure to Olympic Sponsorship will have strong branding and their sales will do well.

Portfolio update - Contra NOL

Portfolio update - contra sci and cosco, bought synear and nol

DOW bullish closing before long weekend

Looking at bullish closing of DOW before a long weekend and the intra day, it was real bullish buying with heavy volume. Will STI play catch up next week?

I do not Use Stops Here is Why...

http://www.themoneyblogs.com/steve/my.blog/i-dont-use-stops-heres-why.html

Reproduced here:

Don't Use Stops, Here's Why...
Posted on 03/01/2007 08:08:15 | Link | Post Comment

One rule that we often hear as traders is to, “always use protective stops” on every trade. When I first started trading about 7 years ago, I did not use stops. At the time, I had several trades that had collapsed because of “unexpected bad news.” One bad trade would sometimes cost me 5-10% of my total account value. As I looked back at my account statements, I would think--“if it wasn’t for this 1 bad trade, I would have done pretty well this month.”

Unfortunately, I quickly realized that those “bad trades” are just part of trading; you can’t avoid them. It’s just impossible. Soon, I read some of the wonderful books by Bill O’Neil who professes that you must have a 7-8% stop on every trade so that you can never lose too much money on any one single trade. I felt enlightened. I felt that all of those “bad trades” that I had had would soon go away and that my “true” performance could finally shine through.

What I learned was that the “bad trades” did for the most part, go away, but many of my successful trades went away too. In the end, my trading performance became even worse than during the time before I was using the stops. I began “stopping out” on lots of trades. To anyone that has been through this, you quickly realize that compounding 7% (or even 2% for that matter) losses causes your account to go down fairly quickly. So even though, you can’t get “too hurt” on any one trade, you can get very hurt by lots of small losses on many “bad trades.”

This led to my next revelation. Brace yourself. What if I did the exact opposite of what I was doing? If I was dying a slow death from having “protective stops” on all of my trades--I thought... what if I got rid of the “protective stops,” and made all of of my trades have limit sell orders (for a gain).

In other words, I let my losers run, and I stopped out of my winners. Heresy! Guess what--it worked. All I did was create a trading plan that was the opposite of everyone else’s. The biggest problem with doing this, is that I couldn’t stomach it. It only made sense, that eventually I would be a loser. Well, all in all, I was a winner. But, this experience began my pursuit of a trading style without using stops.

What I learned was that I needed to learn how to manage my own risk without using stops. Using stops is asking an external tool (the stop itself) to manage your risk. You always have to pay to have someone else or something else manage your risk, and the flip side of that is that you get paid for managing your own risk.

This is the concept behind mortgage pricing. Fixed 30 year mortgages cost more because the institution is managing the risks involved with interest rate fluctuations. In contrast, for a 1 year variable loan, you as the borrower carry that risk, and you pay less for your money over the long term for doing that.

Anyway, I am digressing. In terms of the market, you need to learn how to carry your own risk. I do this in my own account by making sure that my position sizing is relatively small amount based on the variability of the stock relative to my account size.

In other words, for the time frame that I trade, 1-14 days--I look back and make sure that if the worst move that has ever happened in the last year to that particular stock happened again--it would effect less than 1% of my account equity.

On top of that I use options so that I have an absolute floor to my losses. That works for me. The end result is that when whatever position I’m in is shaking people out, I can wait patiently for my exit point (which is based on an indicator, not an absolute price).

This means that even after adverse moves, I am still, almost always getting out of my positions after some up move. I don’t sell when other are selling, and I don’t buy when others are buying. I do the opposite. It is really one of the keys to trading, to be contrarian, to be alone.

It is hard. If you don’t believe me, try going to the movies by yourself tonight--it’s just not that fun being alone. But in the market, it pays.

And, for all of the numbers junkies like myself. Here is are some results from just 1of the systems that I trade with and without systems. The data looks similar to this for just about all of the systems that I trade.


---------------------------------No Stops-------With Stops (20%)
Compounded Annual Growth--36%--------31%
Max Monthly Draw Down ------6.6%---------7.8%
Sharpe Ratio ------------------2.00---------1.79
% Average Gain ---------------3.2%---------2.8%
% Average Loss ----------------5.1%---------6.9%

This is just one example of many.

Lastly, thanks to everyone who’s been writing me while I haven’t been writing. I got really tied up with taxes, work, blah blah blah.

Good Luck,

Steve


1 Comments:
I too have learned that using stops is a great way to lose money. I have found that if I make what I think are great entries and it goes against me, I will inevitably get stopped out before it turns around and goes back up. I am very careful about not being the "greatest fool" and yet I find that almost every time the trade will initially go against me, sometimes hideously, but it always comes back. For this reason, I have found that "scaling in" works best together with patience.

Portfolio update - Bought SCI 4.08

Portfolio update - Buy back STX @ 3.17

I am not too worry about buying STX as there will be Korean bargain hunters waiting. You only have to look at this to judge it.

STX Pan Ocean Co., Ltd. (“the Company”) wishes to announce the number of the
Company's shares migrated between Singapore Exchange (“SGX”) and Korea Exchange
(“KRX”), which is a mandatory disclosure under the KRX Listing rule 31-2. The details
of the migration of shares are set out as below: -
1. Details of share migration (As of 6th March 2008)
Daily number of shares migrated from SGX to KRX: 8,010,000
Daily number of shares migrated from KRX to SGX : Nil
Net number of shares migrated this month : 25,203,000
2. Date of Confirmation : 7 March 2008

Portfolio update - Contra STX ROC 11.8%

Tharp Trader Test

I am a Planning Trader

You tend to be decisive and to the point. You'll quickly assume leadership when it is called for by the circumstances around you. You have the ability to quickly develop and implement trading systems to meet your needs. You can easily spot logical inefficiencies in the market and take advantage of them, especially if you are pointed in the right direction.

You enjoy long-term planning and goal setting and seem to enjoy learning, expanding your knowledge and staying well-informed. Consequently, you should have no problem developing a sound business plan for trading successfully.

You are excellent at planning in advance especially when you have specific trading goals in mind. You are good at keeping both your short term and long term objectives in mind during the planning process. You like to be effective and efficient and will quickly abandon procedures that do not help you to accomplish your goals. Your dislike for repetition in error will probably help you with trading, because uncovering and fixing any mistakes that you make is an important task of trading.

You are probably quite career focused. Thus, if your current focus is on trading, it's probably because you've had a major disappointment or frustration with your initial career of choice. However, you need to be careful with trading/investing because it tends to be a solitary activity and you love to organize others and pass on your knowledge.

Nevertheless, you tend to have the three important qualities that we look for in top traders. Thus, if you apply yourself, develop a business plan for trading/investing, and really work to understand what trading success is all about, you have the potential to be hugely successful.

Trading Strengths

Originality and drive; willingness to follow your ideas through to completion.
Quickly see patterns and possibilities, with the ability to rapidly hypothesize and generate low risk trading ideas.
You could probably generate a trading business plan and trading systems quite easily and naturally.

Trading Challenges

Probably so logical that you don't recognize when emotions are causing you to self-destruct.
Your willingness to take action based on rapid insights may result in premature actions, which may create tension with your risk management system especially if you really believe in your rapid insights. You may be susceptible to the loss trap. Therefore you may not honor your stops because you want to be right about your trades.

May become bored with routine systems, even if they are performing to standard, and seek excitement to "stay in the game."

Retire young, retire rich

Published February 25, 2008

Retire young, retire rich

JASON LOW shares some tips on how you can turn this dream into reality

ACCORDING to the annual world wealth report compiled by Merrill Lynch and the Capgemini Group last year, Singapore registered the fastest increase in the number of US-dollar millionaires in 2006. More than 11,000 people joined this wealthy club that year, raising the number of high net worth individuals to a total of 66,660.

With more and more people making it into the group of the wealthy, it appears that joining their ranks is no longer as unattainable as once thought. No wonder many young professionals and undergraduates here are dreaming of joining that select group sooner rather than later. If you are one of those with that goal in mind, it may be timely to start planning how to get there. After all, the earlier one starts, the higher the chances of getting there in time. Here are some tips culled from various sources.

Start saving now and let compound interest work your way
'Tip number one is you have to start saving immediately,' said James O'Shaughnessy, founder of O'Shaughnessy Funds and author of How to Retire Rich in an earlier CNN Money report. 'The younger you are when you start, the better chance of retiring in style.'

Easy as it seems, most people have trouble saving for the long term. 'Saving is often a vicious cycle for most people. They are only disciplined enough to save in the short term before blowing all their savings away in a big ticket item like a car,' said Alvin Chia, a private investor who turned financially free at the age of 27. 'It is important to live below your means and avoid splurging on unnecessary items if you want to achieve the retirement dream early.'

Both early savings and living below your means allow you to take full advantage of the power of compound interest. If you save $2,000 a year starting at the age of 20 until you are 30, you will still have more money than a person who saved the same amount between the ages of 30 and 60. Enough said.

Pay yourself first
Taken from David Bach, who shared the powerful concept of automated savings in his book, The Automatic Millionaire, the trick to this is to have money automatically channelled from your payroll and deposited into your savings account before you even have access to it.

Invest for the long term
Equities offer the best form of long-term growth among most classes of investments. From 1926 through 2004, stocks - using the S&P 500 index as a measure - have posted an average annual return of 10.4 per cent versus a mere 5.4 per cent for bonds, according to Ibbotson Associates.

Both Mr Chia and Laura Oh, a 26-year-old home tutor, have their investments mostly in equities as well. They both have achieved their financial freedom.

Interestingly, they are both long-term value investors who invest in undervalued companies that pay high dividend yields and use these dividends to re-invest again when the right opportunities strike. Miss Oh, for one, started paper trading at the age of 19. 'Starting to invest early and putting your money into the right class of investments definitely helps you grow your money faster than putting it in fixed deposits,' she said.

Have a detailed game plan and monitor your progress

Set realistic goals by projecting your retirement expenses based on your needs. 'Know how you want to live in retirement and be honest about it,' said Mr Chia. 'Then calculate how much savings you need to put aside a year to achieve your ultimate goal.' One rule of thumb is that you will need at least 70 per cent of your annual pre-retirement income to live comfortably.

Review your status at least every couple of years to make sure you are still advancing towards your goal.

Don't be discouraged by failures and remain focused
It is not uncommon to meet with obstacles along the way. Don't lose faith or be daunted by the goals that you set for yourself. Break that impossible goal into a million achievable bite-sized goals and conquer each one at a time. As Mr Chia recalled, he was relentless in the pursuit of his retirement dream and took small steps to build up his investment pool. He said: 'When I was 19, I worked as a security guard at night to make sure I was making money sleeping. My main duty was to open the gates for the staff every morning and in that process, I earned myself $1,400 extra a month just from sleeping.'

Find a mentor to guide you
Having a mentor to constantly give you personal advice on your financial state and the allocation of your investment portfolio is a major plus. Very often, your mentor should also be someone who shares the same life and investing philosophy as you. Only then can the mentorship be very successful.

Portfolio update - Bought NOl 3.43

Contra GAR 4.8% and Wilmar 2.2% on sign of market weakness

Hard road to recovery

Slowly crawling the hard road to recovery and another 70% of losses to be recovered. This MUST be the FINAL and LAST hard lesson to be learnt.

Portfolio update - Bought back Golden Agri @ 1.09

Golden Agri closed at 1.14. Well done. Will watch closely on Monday for a quick profit again.

Portfolio update - sold SCI ROC 4.3%

Portfolio update: Sold FRC and REL

Took profit on Ferro China, ROC 21.5% and Rotary ROC 6.5%

I have managed to wipe off the losses in Feb 08. Now, working towards reducing losses in Jan 08. Cheers!

Ferro China": Good run +15.3% on 40.5M

This volume was last seen on 2 May 07 and ran up to the high of $2.43. Can it happen again? Maybe if we believe the below report from DBS Group Research

More Reasons to Buy FerroChina

Story: We highlight a few key points that we believe can help FerroChina re-rate significantly over the next three to six months.

Point:

Firstly, a potential bid for steel-maker Delong by the Evraz Group at over 11x FY08 earnings suggests that FerroChina, currently trading at 5.3x FY08 PER, is significantly undervalued and also highlights the latter as another potential takeover target for larger steel companies.

Secondly, we believe the Group’s fundamentals remain strong and that it should report a record earnings year in FY08, boosted by full consolidation of recently acquired SuperbTeam’s numbers. Our forecast net earnings for FRC in FY08 is RMB1,138m compared to RMB427m for FY07F, translating to a fully diluted EPS growth of 28% for this year. Furthermore, we expect FerroChina to announce a good set of 4Q results next Thursday, 28 Feb, which should help further reassure investors of its strong growth prospects, as well as the positive contribution that can be expected from having fully acquired SuperbTeam.

Portfolio update - Bought Synear

I went in to buy Synear @ $1.06 at market price after withdrawing overnight queue at $1.00. The last two days of doji, and today with higher volume, I am expecting a reversal soon.

FRC

Bought FRC on 12 Feb @ 1.25. It has then stopped moving up and consolidated.

REL - some reflection

Company will be releasing its full year financial results for the year ended 31 December 2007 on 26 February 2008, after the close of trading on the Singapore Exchange

Press Release - Rotary Engineering posts record S$40.5m net profit for the nine months ended 30 September 2007

I am expecting record full year net profit. REL has came down from the high of $1.54 and recent low of $0.82.

I will accumulate more on Monday @ 0.94 after its pull back on Friday.

I am also mindful of selldown in Keppel and Tat Hong after posting good result, perhaps, fund managers are raising cash as it is easier to dispose them after good result as there will be a ready pool of buyers.

P&L Performance review

Overconfidence has lead me to excessive contra trading and improper money management forcing me to take realized losses and wiping off 66.7% of 2007 realized profit.

Slowly, I have crawled back some 17.3% realized profit, and now the nett realized loss at -49.4% of 2007, and -114% off 2008 target profit.

Look like 2008 is going to be a very tough year ahead for me to meet the 2008 profit target. Cheers!

Portfolio update - Contra NOL and STX

Rotary Engineering

Rotary Engineering ups stake in Saudi Arabian JV
to 51%; seals US$62m deal to build storage tanks
for petrochemical complex in Saudi Arabia

REL breaks resistance level, but closed badly. Will this news enable REL to surge up tomorrow?

Tat Hong Q3 Result

Portfolio update - Bought STX and NOL

The Three Vices of Trading

The Three Vices of Trading

Brett N. Steenbarger, Ph.D.


The following is a short article for Woodie’s CCI traders. It summarizes several of the psychological pitfalls that interfere with accurate pattern recognition. My hope is that CCI traders can focus on these three “vices” as mental preparation prior to entering the markets. One of the best ways of becoming an observer to your negative behavioral patterns—rather than a trader lost in those patterns—is to periodically take your emotional temperature. That means standing back and asking yourself: Am I falling prey to one of the vices below? Remember, observing and interrupting your patterns are the first steps in altering them! Your patterns lose control over you as you become better at not identifying with them. When you become an observer to your patterns, you are separating yourself from them. What great progress that is!


Vice Number One: PERFECTIONISM

Perfectionism is often the chief culprit when the pain of losing exceeds the pleasure of winning. Desperately trying to feel good about themselves, perfectionists set unrealistically high ideals. They think they will finally be OK if they just accomplish X. (For X, you could substitute many things, including looks, wealth, popularity, or achievement). Because X is an unattainable goal, perfectionists ironically use their ideals as a basis for self-criticism when their performance doesn’t match up. After all, is achieving X will make me OK, then I must not be OK if I fail to achieve X. The emotional theme of the perfectionist is “not good enough”. Perfectionists are driven to do more and more because they never feel competent, worthy, and loved as they are. Thus, even when there’s a profit on a trade, perfectionists will look for the portion of the move that they did not participate in. If they caught most the move, they will reprove themselves for not trading a larger position. And when trades don’t go well, perfectionists review all the reasons that shouldn’t have made the trade, should have known better, etc. By focusing on the portion of their performance that doesn’t match their ideals, perfectionists transform successes into defeats, losses into failures. They rationalize their perfectionism as a drive for achievement, but all they are accomplishing is an undercutting of their confidence.

Perfectionism shows up as negative self-talk and self-blaming. Emotionally, we recognize perfectionism from frustrated, angry feelings when trades don’t work out as planned. “Beating myself up” is how many perfectionists describe their self-talk. The way to beat perfectionism is to make a concerted effort to talk to yourself the way you would talk to a good friend in a situation where things went wrong. Most people know how to treat others with respect, love, and dignity. They just haven’t learned to do the same for themselves. If you would be more nurturing, understanding, and supportive of a friend than you are of yourself in the identical situation, then you know that you’re not being your own best friend. If a trade doesn’t work out, the constructive trader focuses on, “What can I learn from this?”—not “What’s wrong with me?”. In Woodie’s language, the best antidote to perfectionism is the ability to reassure yourself, “There will be better trades down the road.” The key is to not miss those better trades while you’re beating yourself up!


Vice Number Two: EGO

Everyone likes to win in the markets. It’s only natural to feel good when you’ve done your homework and end the day with a profit to reward your efforts. Ego involvement in trading, however, goes further than this. When the ego is involved, we write the market a blank check for our self-esteem. If trading is green, we feel good about ourselves; if we go into the red, we feel diminished. That places tremendous pressure on our trading over time. Not only do we have the burden and challenge of reading complex market patterns; now we also have a psychological gun pointed to our head ready to go off any time our pattern recognition fails us.

Most traders are aware of the dangers of trading with too much leverage. A trader accustomed to trading 2 lots, where each tick in the ES is worth $25, would feel overwhelmed jumping to 100 lots, where each tick now moves the account $1250. With the stakes raised to such a degree, the same trade would now no longer feel the same. It would be hard to let a position go against you by a point ($5000, instead of $100), and it would be difficult to let a profit run. When traders invest their feelings about themselves in their trading, they are operating with maximum emotional leverage. In the currency of self-esteem, they trade 100 lots. So much of their emotional account rides on each trade, that it inevitably affects decisions about cutting losses, letting profits run, and entering and exiting in a timely fashion. The successful trader wants their trades to work out; the ego-involved trader needs them to be profitable.

We know that ego threatens our trading when we find ourselves needing to trade just to win back some recently lost dollars; when we feel a desire to advertise our positions; and when we find ourselves riding an emotional roller coaster as profits wax and wane. Just as we can recognize traders’ perfectionism from anger/frustration, we recognize ego-involved traders from euphoria/depression. If trading has us truly depressed, we know that it’s not just our trading account that’s hurting. The antidote to ego-involved trading is to place our self-esteem eggs in many baskets: recreational interests; other work involvements; relationships; and our spiritual lives. Many times we pour our self-esteem into trading because those other facets of our lives are not properly developed. A balanced life makes for balanced trading. In the spirit of Woodie’s CCI Club, we can take some of the ego out of trading by learning from others, by becoming a candle that lights other candles, and by using a portion of market profits to help others make a wish that will come true. If your good feelings in life come from good relationships and worthy achievements, you won’t need the markets for your happiness. Market success can be the frosting on the cake of your successful life, rarely can it substitute to the cake itself.


Vice Number Three: OVERCONFIDENCE

It is common for traders to complain of a lack of confidence in their trading, but very often it is overconfidence that does them in. Overconfidence results from a lack of appreciation of the complexity of markets and an underestimation of the challenges of trading them successfully. In a sense, overconfident traders lack respect for the markets. They think that reading about a few setups or buying the newest software will prepare them to make money. Overconfident traders don’t want to work their way up the trading ladder: they resist the idea that screen time is the best teacher. They also chafe at the idea of growing their account. Rather than start with one contract and wait until they’re profitable before trading larger size, they want big positions—and profits—right away. Because they’re so eager to make money—and so sure they can make it—overconfident traders generally trade impulsively. They won’t wait for the setup to form; they’ll jump the gun—and get whipsawed in the process. Instead of being patient and waiting for short-term patterns to align with longer-term patterns, they will take every trade, enriching their brokers in the process.

The hallmark of overconfident traders is that they think they are going to make something happen in the market, instead of patiently waiting to take what the market gives them. Spelling out profit goals for each day or week of trading is one manifestation of overconfidence. Humble traders know that markets expand and contract their volatility—sometimes the trade just isn’t there. The overconfident trader, however, feels that he/she is bigger than the market. Indeed, overconfident traders will often take great pains to try to catch the tops of bull swings or the bottoms of corrections. As a result, they often fight the market trend—and can get run over in the process. If the emotional signs of perfectionism are anger/frustration and the emotional signs of ego involvement are elation/depression, then the emotional signs of overconfidence are impatience/impulsivity. Overconfident traders overtrade. They fear missing opportunities more than they fear losing money. The antidote to overconfidence is rule-based trading and the intensive rehearsal of trading rules. By making entries, exits, stops, and position sizing rule-governed and vigorously rehearsing trading rules during simulated trading (as well as in real time with small positions), traders can greatly reduce their impulsive trading. Very often this means training oneself to focus on (and rehearse) what-if scenarios of being wrong in the market, as well as forcing oneself to spell out the rationale, targets, and stops for all trades. By making trading a more self-conscious process, traders interpose thought between impulse and action, gaining greater control of their trading. When the trading room admonishes, “No boasting, just posting”, it is encouraging restraint on overconfidence.


Summary

Clearly, the three vices are not completely independent of one another. There can be significant overlap for traders. For example, a trader might take a position out of overconfidence, then hold onto it out of ego-related stubbornness and pride. Whether the vice is perfectionism, ego, or overconfidence, the basic problem is the same: Making the trade about oneself, rather than about the markets. If you are thinking about yourself—how much you’ll make or lose, how well or poorly you’ve done, how much you’re a success or a loser, how much better you could have done—you can’t be fully focused on the markets. It’s not about you. It’s about the setups and the ability to read them. And to read them, you must be one with them, immersed in them, so that you feel them, not just observe them. You can’t feel the markets and become lost in feelings of anger, frustration, elation, guilt, depression, impatience, or impulsive need. The greatest vice in trading is to take it personally, to become so focused on the outcome of trading that you lose sight of the process. If you are fulfilled outside of trading, your other needs will not infiltrate your decision-making and sabotage your entries, exits, and money management. If you build yourself physically, socially, spiritually, and professionally, you will find that the markets won’t need to bear the burden of carrying your identity. At that point, you’ll be able to say (in your best Woodie voice):

We Don’t Need No Stinkin’ Vices!




Brett N. Steenbarger, Ph.D. is Associate Professor of Psychiatry and Behavioral Sciences at SUNY Upstate Medical University in Syracuse, NY. He is also an active trader and writes occasional feature articles on market psychology for MSN’s Money site (www.moneycentral.com). The author of The Psychology of Trading (Wiley; January, 2003), Dr. Steenbarger has published over 50 peer-reviewed articles and book chapters on short-term approaches to behavioral change. His new, co-edited book The Art and Science of Brief Therapy (American Psychiatric Press) is due for publication during the first half of 2004. Many of Dr. Steenbarger’s articles and trading strategies are archived on his website, www.brettsteenbarger.com.

Portfolio update - sold wilmar, bough tat hong and Ferro China

Wilmar has a good run and I have decided to take profit. Bought Tat Hong @ 3.10. Tomorrow it will announce Q3 result. Tat Hong has been quite positive despites market going down.

Q2 result highlight as follows:

TAT HONG’S 1HFY2008 NET PROFIT AFTER MI MORE THAN DOUBLES
TO S$40.2 MILLION
- Record Half Year Profit (excluding investment gains) in three
decades
- Highest Gross Profit Margin of 39.4%
- Growth seen in all business segments, with Crane Rental
registering highest growth
- Maiden contributions from newly acquired Australian subsidiaries
- Share of Associates’ Profits almost tripled to S$5.5 million
1HFY2008 Financial Highlights:
· Net Profit jumps 2 times to S$40.2 million
· Revenue reaches a new high of S$298.3 million
· Earnings Per Share (EPS) up 86.8% to 7.94 cents
· Proposes interim dividend of 3.0 cents less 18% tax, and
interim dividend (One Tier) of 0.8 cent


Also bought Ferro China @ 1.25, like Tat Hong, this one seems going against market down trend.


FerroChina 3QFY07 net profit surges 87.7%
to RMB101.9 million; completes Superb Team acquisition
• Earnings accelerate with increased contributions from associates as one additional
300,000 mt reverse cold rolling mill started production in May 2007.
• One-off rebate from raw material supplier arising from purchases of raw material in
previous quarter.
• Superb Team acquisition catapults FerroChina market capitalization to S$2 billion,
making it among the top ten S-Chip companies on SGX.

Portfolio update - Bought wilmar

$4.00 is well supported and I was waiting at 3.98; but, after lunch it went up and I have to catch it at 4.04. Trading on MACD turning positive and stochastic, its low is supported by lower MA channel.

Book: A Complete Guide to Technical Tading Tactics by John L. Pearson

A great lesson that I have repeatedly failed to learn and re-learn as written by John as follows:

For those who do experience trading success, take money out of your trading account! Diversify your trading profits. One great analysis and trader, Fibonacci expert Joe Dinapolis, told me before going on the radio show that he likes to buy selected properties in real estatw, whether it is in Bangkok, Massachusetts, or Florida.

I have heard many a trader start out with $5,000 or $10,000, make a large sum trading a particular market move, and decide to just build their account. Quite frankly, I really do not remember any of those people acheiving that goal. I have seen traders give most, if not all and more, back to the markets. One reason is they become overconfident. They think, "If I can take $5,0000 to $30,000, maybe I can take $30,000 to $1 million!". Greed sets in, they trade larger positions, take on more risk, and forgot what got them their initial profits. If you are a one-lot or two-lot size trader, then take money out of the market on a consistent basis and reinvest elsewhere. Wealth creation is the goal, and diversification is the key to success in life.

Some Trading Thoughts

You only have three choices when you are in bad position, and it is not hard to figure out what to do: (1) Get out, (2) double up, or (3) spread it off. I have always found getting out to be the best of all three choices


No opinion on the market or you are doubtful about market direction? Then stay out. Remeber, when in doubt, stay out.


My reflection:

Last year, I have great success in doing choice (2) double up when in bad position as had done well when market recovered quickly. Last month, this choice has failed terribly, and wipe off most of the past year profit. The reason is overconfidence, and Greed sets in, I trade larger positions, take on more risk, and forgot what got my initial profits.

My great mistake is : Not knowing your market!. The market condition that causes the market fall is very different this time and Fed rate cut has lost its magical power and market could not recover.

I will re-learn these lessons:

1) Control risks
2) Put away some money

and move on. Cheers!

Top 10 Reasons Why You Should Trade Stocks

Top 10 Reasons Why You Should Trade StocksWednesday February 6, 1:08 pm ET
By TradingMarkets Research

Extract:

More Information Than Ever Before

The economic boom of the 1980s and the financial boom of the 1990s led to a proliferation of finance- and business-oriented newspapers and magazines. And the majority of this new financial media was all geared toward the same purpose: helping the average trader get a piece of the action.

Nowadays, researching information about both specific stocks and the stock market in general is one of the most popular past-times on the Internet.

For traders looking for information about companies, managements, earnings, balance sheets, and even rumors and insider buying, there is more information more readily available than at any time in the history of finance. Retail traders can now listen in on earnings announcements and conference calls that were restricted to professional stock analysts only a few short years ago.


Profit in Up Markets and Down

Trading stocks -- as opposed to simply investing in them -- means you can make money whether the market is moving higher or lower. When markets are moving higher, you can buy the breakout, ride the trend, or if you are already long stocks, sell into strength. When markets are moving lower, you can sell breakdowns short, ride the bearish trend downward, or buy the dips. As a trader, all you want is volatility -- direction is a secondary issue. As long as stocks are moving, you will always have a chance to win.

Easy to Buy, Easy to Sell

Stocks are highly liquid. Unlike speculating in real estate or starting a business, stock trading is a purely financial endeavor that requires very little in the way of equipment, inventory, or a virtual fleet of salesmen, appraisers, inspectors, agents and other middlemen that are required personnel when it comes to many other ways that people have traditionally tried to make money. Trading stocks not only allows you to be your own boss -- it allows you to be your own, sole employee, as well!


Outperform Mutual Funds

For investment, and for those with little time to devote to the markets, mutual funds are a perfectly legitimate option. But for those with a little more capital and a little more time, trading stocks is a far more effective way to make money than trading mutual funds.

Although many stock traders have attempted to trade mutual funds, many mutual fund companies have increasingly imposed steep fines and penalties to restrict accountholders from trading mutual funds in their accounts. Not only do stocks not have this problem, but a portfolio of well-chosen stocks -- such as the high PowerRating stocks published by TradingMarkets -- has been shown to beat the market by a significant margin since 1995.

More Tools than Ever Before

Along with the overwhelming amount of information available to retail stock traders today, there are more tools that traders can use to analyze stocks on their own. Analytics, charts, and trading message boards are just a few of the tools and resources that are available to do-it-yourself stock traders. Gone are the days, for example, where technical analysts and chartists were required to hand-draw charts after the market close, tediously updated their graph paper charts with all the attention (and efficiency) of a medieval monk.

Now, with a click of a mouse, traders not only have eye-poppingly informative price charts to study and analyze, but the sheer computer power available to retail traders of all types makes it possible for the average guy (or gal) to be able to test and backtest trading strategies, experiment with technical indicators, and review and process far more stocks in a short period of time than would have ever been possible in decades past.

Intellectual and Emotional Challenge

Most people who trade for any length of time become interested in the mechanics of trading, sooner or later. This is often true even if they start out with a service that just provides entry and exit signals. Whether that means looking at a price chart (such as our PowerRating charts) to confirm a recommended buy or sell, or using other technical or analytic tools to understand how a given system or service makes the recommendations it does, the desire to want to "look under the hood" and see how a certain trading system really works is both an understandable and a healthy temptation. Many traders have referred to trading and trading systems as being like putting together puzzles, calling it some of the most intellectually challenging work they've ever done.

Not only can trading stocks give your brain a workout, but also your heart is likely to feel more than a few heavy thumps as you embark upon your trading career, as well. Anyone who has traded stocks for any length of time will tell you trading stocks is one of the toughest vocations you can get involved with in terms of playing with your emotions. The idea that trading is 10% method or strategy and 90% psychology is no secret among stock traders, who know that even the best stock trading system or method will fail if the trader does not have the requisite confidence and discipline to follow it.

Opportunity to Make Money

Last, but not least, trading stocks provides a great opportunity for people to make money outside of their 9 to 5 (or 8 to 6, nowadays) jobs and careers. There are a variety of techniques -- from intraday and "day trading" to swing trading to position trading -- that stock traders can choose from, making it possible to find a trading style that matches both their person (i.e., full-time worker, student, retiree, work-at-home parent) as well as their personality.

One of the best things about trading stocks is that there really is no "one way" to trade stocks. Contrary to popular wisdom, there are plenty of people who make a fine second income trading stocks -- and almost none of those people trade in the exact same way. Moreover, many popular myths about trading -- from the idea that technical analysis doesn't work to the notion that you cannot trade unless you use stop-loss orders to the idea that buying low and selling high is not as effective a strategy as buying high and selling higher -- are really just that: myths and habits that have worked for some, and not worked for others.

The trick is to find a method that works for you, test it, and if the tests are good, trade it. Who cares what anybody else thinks about your personal style of trading -- as long as you are making money?

So, Do You Wanna Be a Stock Trader?

Like a lot of activities that take a great deal of skill and focus, there really isn't any way of determining whether or not you have the necessary confidence and discipline to trade stocks until you actually begin trading stocks. Paper trading and trading simulations are very helpful for traders to master the mechanics of trading, the placing of orders, the management of positions, and so on. But the only way you will know if you have what it takes to trade stocks is, to put it bluntly, to start trading stocks.

Invest for retirement, looking to buy and hold the best stocks for as long as possible. Start a business if you want to get rich -- as the saying goes, nobody ever got rich working for somebody else. But to simply enhance your lifestyle, to make everyday living that much more potentially rewarding and secure, or to afford those creature comforts that provide just the right amount of spice to life, there are fewer better methods than trading stocks. And no better time than the present to get started.

David Penn is Senior Editor at TradingMarkets.com

Portfolio update - add REL

Bought Rotary yesterday after observing it was moving up after opening with an increasing volume despite poor market condition. Today, its low is still higher than yesterday low. I will try to hold it longer for Rotary full year results announcement.

The 3Q result is good.

Rotary Engineering posts record S$40.5m net profit for the nine months ended 30 September 2007.

The oil and gas and petrochemical industry here is still vibrant
and there is ample room for growth, says Chairman and Managing Director Chia Kim Piow

Performance update

I was punished for not strictly following my risk control rules. Keep committing the same mistakes again.

Portfolio update

I have committed another sin - over-confidence on Keppel as I have expected good result; but the market disagreed.

I have to keep re-learning those trading lessons in a hard way. Cheers!

New Portfolio - starting new life after wipe off

I have paid dearly for not following my risk control rules and wipe off 60% of last year realized profit.

Bear trap - Queue to sell off all contra trades. Bite the bullet

Total estimated contra loss and cut losses = $61K !!!

Huge contra losses wipe off 46% of my last year profit of $134K in days!

I will need to re-strategise in view of very difficult market ahead before hitting the buy button again.

Portfolio update - Buying stocks on sales

Portfolio update - Sold Kep, Bought back Kep, and bought more STX

DOW vs STI

DOW has recovered +2% from its latest low at 12,589 on 8 Jan 08 while STI was at its latest new low 3,323 yesterday, 10 Jan 08.

I believe STI should recover aggressively today.

As of yesterday, DOW is -9.3% from its last high, and STI is -14.3%, so it means that STI has more room to catch up with DOW.

Portfolio update - Bought COSCO, STX and Hyflux

Portfolio update - Bought STX, SML, and Cosco

Realized Profit Target for 2008

My realized profit target for 2008 is $58K. Cheers!

Portfolio update - Contra SGX at loss and Bought Kep

STI DOW index trend

Last DOW lowest on 26 Nov 07 at 12,743, down - 10% from its last highest 14,165 on 9 Oct 07. Last Friday, 4 Jan 08, DOW closed at 12,800, down -9.6% from its last highest 14,165 on 9 Oct 07.

Last STI lowest on 22 Nov 07 at 3,313, down -14.5% from its last highest 3,876 on 11 Oct 07

Last Friday, 4 Jan 08, STI closed at 3,438, down -11.3% from its last highest 3,876 on 11 Oct 07

Win Lost Ratio - Hit score

Portfolio update - Bought SML and STX

Portfolio update - Sold STX and Kep. Bought Yongnam

2007 Review and Strategy for 2008

After reviewing those trades made in 2007, I have made the following observations:

- several contra losses due to lack of fund arising from over-trading.
- averaging down at narrow gap without significant lower average cost.

Change of strategy:
- Enforce discipline of 2% risk limit per counter and 6% risk limit per 6% drop in STI index. This will help to prevent overtrading.

- Harder to do contra trade for counters that are more than $3 due to change in bids. Will focus more on counters that are less than $3