TLC Weekly Update April 24, 2020

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Another week of life under lock-down here in Toronto. Yet everything are getting done as more people adapted to using the technologies they avoided in the past ten years. I now have meetings with lawyers who insisted to meet face to face in the past with zoom. e-Signing documents with people who have the misunderstanding that e-signature are not legally binding. Things changed a lot as people are forced to adapt to the tech world that has been there all along.

For those of you traders and investors, here is an article on CalPERS failure to protect its assets as explained by Nassim Taleb. Idiots who have no understanding of tail risk nor proper trading experience in derivatives are often put in positions to manage risk. And this is a prime example of people who think he knows what he is doing. Unluckily, this is the norm for 99% of the financial industry. Here is another one coming from Canada.

I am still waiting for the hosting company to upgrade daytradingbias web server. It has been a struggle with them for weeks now. I understand that the lock-down is affecting their ability to handle non-emergency work. I guess I just have to wait for this to get done while working on the video lessons …

I hurt my shoulder one morning and now can’t do much until it recovers. It will be interesting to see how fast I will recover from the injury given that I have all these toys that are supposed to improve the recovery speed. I will explain what they are when I get the chance. Next week I should know if they helps.

TLC Weekly Update April 17, 2020

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An article on how these ancient computer systems are still in use today by the governments that leads to the mess we are seeing during this crisis. I know about this all along as I have friends who are expert in these old programming languages that are very well paid to maintain these systems. The sad thing is that transition to more modern computer technology is not likely because it implies automatically obsolete the existing management teams …

On YouTube Bloomberg channel there is a good video talking with Ray Dalio on his take on the current situation. I find his objective reasoning still as sharp, that the Fed has no choice but to choose who to save, and as an investor you have the choice to choose to invest based on that information. In other words, don’t mess with the Fed until they blow up.

DaytradingBias is undergoing major server upgrade these few weeks. After that we will also update the site itself again, this time to comply with the Google transition to so-called secure internet connection. All these will be done with the hope that users access will not be affected significantly.

After the hardware upgrade I will release my video lessons on the site. It should be good enough to handle the load by then.

Many people email me asking how the stock market keeps going higher as they see more and more people are out of work. Well, remember that the stock market by design is not a tool to reflect the true value of anything. During time of high uncertainty, the expectations of the future by the investors will not be as united as in stable time. And that creates extreme swings as people of opposite opinions duel it out.

It is really not the time to think about investing. All the major players I know of have stopped all their near term investment projects. Deals that are in the middle of negotiation are all dropped. All savvy investors are sitting this out until we have clarity. That’s common sense.

While I am waiting for the server upgrade this weekend, I will work on more video lessons.

Have a great weekend everyone!

TLC Weekly Update March 13, 2020

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People everywhere I bump into asked if I am doing alright when the stock markets worldwide falling apart. Obviously they are not traders. And depending on their tone,I can tell some of them have this schadenfreude high. Schadenfreude means pleasure derived from another person’s misfortune. I think you get the point. There are always people like that.

In order to avoid a lengthy discussion of the topic, I would just say, “Oh, really? I am busy with other things lately.”

It is already difficult to tell a beginner trader about the current trading environment. It is even more difficult to get the point across with someone who has all kinds of incorrect beliefs about trading and investing in general. And if any part of the explanation includes me making a handsome profit during this time, it will open a big can of worms …

So I kept my mouth shut to have some peace.

Interesting read on fasting that may help you to get better sleep. Some of my friends always have to eat something round the clock. I just sent them this article. I will follow up to see if any of them would give it a try. I am eager to see what the results are.

Will take a break this weekend after a week long hectic trading. In high volatility environment, when the stock market is swing hundreds of points in the Dow Jones Industrial Average every few minutes, lots of concentration is needed to do things right. And that takes a toll on the brain. It is important to keep a clear head if you choose to trade in this environment. You can make a lot of money quickly, but you can also lose as much money, if not more, in even shorter period of time.

Good news is that I am finally wrapping up one project this week. Although there are many more to go, I can see a few more will be done in coming two months. Very happy with the progress I made.

Talking about progress, I managed to double my pull-ups but it really hurts. At my age, it is much harder to recover from injuries. I guess I have to take it slow. Train smarter, not harder.

Have a great weekend all!

Mercury Retrograde: Blessing in Disguise

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Everyone talks about Mercury retrograde as if it is a time of trouble. This year (2020) Mercury retrograde from February 16 to March 9, then in June 18 to July 12 and once more in October 13 to November 3. We are about to see the end of the first retrograde period. Let’s sum up my experience so far with this retrograde.

The famous electronic device failing issue:

  • my cell phone used up all its battery once
  • one of my UPS (uninterruptable power supply) battery suddenly died
  • my laptop suddenly dropped its speed to 0.4G
  • my remote trading server works fine, but Tradestation crashed like an hour before market close

The famous communication issue:

  • I ask for one document, people give me something else all together, several times
  • Some deals just stuck on unimportant points

Is it a time that we are supposed to experience more hiccups? Sure.

But should we be afraid of it? Hell no.

Learn to make use of the positive side of Mercury retrograde is what matter most.

Instead of pushing hard on getting deals done, I know it is a time to take things slow and review documents carefully. So things may not progress as fast as I like, at the same time I get to hammer out all the details with time to spare.

This is also the best time to push hard on conducting research projects. As someone who spend a lot of time studying the financial markets. This is the best time for me to review what I have done in the past and see if I can improve on what I have accomplished before. Even past research that ended up not useful can become inspiration of a new research direction.

During this retrograde, I found one significant flaw in one of my trading models that leads to the large drawdown that I do not feel comfortable trading. This particular problem is there for 12 long years since I started trading the model. Some of you may recognize that 12 years is also an important cycle.

The breakthrough to this issue helps me drop the drawdown on this model by half. And in turn, the new research helps me applying similar ideas to a number of other models to improve their trading stability. I never thought I can improve these trading models any further until now.

I am very happy with the results.

The key to utilize Mercury retrograde is to first dive deep into research / study something important to you before the retrograde at least several weeks prior. Then revisit the subject again during the retrograde to see if you can gain new insights. Incorporate the new insights to further your understanding of the subject. It’s effectively a hack to gain expertise quickly.

I am looking forward to the next Mercury retrograde already.

Mercury retrograde is really a blessing in disguise for traders and anyone who conduct serious research.

TLC Weekly Update March 6, 2020

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I spent significantly more time with the market this week due to the wild moves all week. My automated trading models all have built-in filter to avoid trading in such high volatility environment so nothing much happened there. Engage in manual trading was fun riding all these 50 to 100 points moves.

I came across this video on How to Control Your Negative Thoughts. If you want to achieve anything in life but you are stuck right now, watch it. I can’t explain the subject and the concepts better than this guy.

If you have not watch Tim Ferriss on Mastery: Start with End Game and Make Space for Creativity before, do it. You may not get the message first time around though, perhaps it is not the right time for you yet. In that case bookmark the video and watch it again in the future when you need to shake things up in your life.

Workload still on the high side due to sudden need to assist my friends on several business deals. In turbulent time like this, looking out for friends and family is of high priority.

Have a great weekend all!

TLC Weekly Update February 28, 2020

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I saw so many articles and news media quoting brokers that “they have never seen anything like that”, referring to the 500 points drop in Dow over last 45 minutes trading on Thursday. That is just absurd. I remember that it was no big deal back in 2008-2009. It was also nothing comparing to year 2000 dotcom bubble burst. People really have a short memory of these things …

Here is an interesting read about Magnus Carlsen, the best chess player alive, who groove around internet chess websites for fun and excitement.

A good video summing up the COVID-19 situation, watch it so that you are properly informed.

The CORVID-19 is spreading all over the globe. If your community is a high risk area, make sure you keep up with your personal hygiene routines so that you can minimize your chance of contracting the diseases. I was asked by some friends wondering if there is any Chinese herbal medicine can help in terms of prevention. There is really no magic solution so don’t fall for any scam out there.

I am experimenting with making videos myself instead of having someone else handle that. Sometimes the idea is so simple, like I am just trying to show a clip of my trading strategies working in real-time, it is much easier to assemble the video quickly and have it uploaded.

Stay safe and have a great weekend everyone!

TLC Weekly Update February 21, 2020

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Took me long enough to gather the daily trading records on the reference account to produce the updated monthly performance on Big-Game Hunter ES. Some people messaged me that I must be afraid of disclosing the losses. Some even think that the model must have lost everything. Well, BGH has been doing fine.

I do not pay much attention to the daily activities of BGH and downloading the daily statements is something I don’t like to do. Hence I batch process it once in a while. Until I find a way to automate the process, I will limit the updates to the monthly performance only.

I came across this video made by Nassim Taleb on some major misunderstanding of risk by the economist Richard Thaler. It is a must watch for all traders and investors. I have been advocating defensive money management for decades now. Nothing changed. People everywhere still not able to grasp the risk they are taking can actually put them out of any speculative game.

This week I finally get back on track with my exercise regime. My goal is to up my game this year from normal pull ups to single arm pull ups. It is a big challenge – I recall I was able to do that when I was a teenage. Wonder if I can train myself to do that at this age.

Given the virus outbreak, people are getting more cautious everywhere. Restaurants used to have long line up now have empty tables at peak hours. Fewer people going out to the malls. Personally, I am thankful to the technology we have now that I can video conference with people pretty much everywhere.

I guess it will be a long fight against the outbreak so stay safe and keep up with the hygiene routine!

My Journey to Fully Automate My Trading: How Did It All Begin

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In this internet age, people always question the authority of anyone who tries to make a point. That’s especially true when the point of view one has is completely different from what the mainstream beliefs are. Since my beliefs are at odds with the mainstream trading education community, I guess it is time to set the record strict so that you can decide for yourself why you should listen to me on things related to trading.

Interviewing Myself

I have a habit of interviewing traders (if they allow me to) and collecting answers from them if they prefer the questionnaire format. That adds up to several boxes of records over the years. Many of these traders are good traders whose life long trading experience are extremely useful to newcomers. However, my trader friends also prefer not being put in the limelight, so to speak. I can only use the information myself as oppose to publishing volumes of trader interviews.

One of the questions I always ask these traders is, “How it all begin?”

I am going to answer that myself. Right here, right now.

How It All Began

Many people get into trading because they learn about it from a friend or saw on TV how traders are making big money. If you are interested in making money quickly, you will give trading a try. That’s not what happened to me at all.

When I was young, I have no interest in money making. I did not have what they call entrepreneur spirit. I was not interested in the financial markets. My hobbies were reading books, playing chess and making my own electronic devices.

My older brother was completely opposite. He liked creating his own businesses. He had a keen sense about the financial markets since he was young. He was the person who, at the first opportunity he found, became a floor trader in the Toronto Stock Exchange.

As a young trader, being Asian no less, in a place dominated by very aggressive western people, who would have imagine that he can last six months?

He went on to set a record there – as a first time newcomer, he not only survived the game for a full year but also made 4 times his trading capital by the end of the year. He was the hottest new guy.

From there the direction of my life took a sharp turn. My mother believed that my brother’s new found prosperity was the way to go. My brother thought that my intention to become a full time academic was stupid. Without any other option, I had to give trading a try.

So I followed my brother’s footstep to became a floor trader at the Toronto Stock Exchange.

I also set a record there – I was the youngest floor trader they have accepted thanks partly to my brother’s star power and partly for my perfect score in their exam which never happened before. I had an advantage over others in taking the exam – the hardest part of the exam was related to option pricing and strategies which was damn easy for someone who spent most of his life studying math and science.

That’s why I do not think like others who try to beat this game.

I did not even want to play this game, for God’s sake.

That’s how my trading career started some thirty years ago.

TLC Weekly Update February 14, 2020

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I am busy working with my team to port the trading strategies from my training courses to support NinjaTrader. To my horror, we’ve found significant discrepancies among the data which in turn making the performance results not consistent. I will write more about this on DaytradingBias after we have completed our investigation.

I did not know that there has been no complete explanation explaining how planes can stay in the air. Interesting read for those interested in science and engineering stuff.

The coronavirus outbreak has serious implication to the global economy. At this point we do not have enough information to understand its full impact yet. One thing I know for sure is that retail stores and restaurants are in terrible shape everywhere where the virus has landed. The damage is done and it will show in first quarter economic data worldwide.

Earlier this week I uploaded a new video to Youtube to mock those people who brag about their day trading. From time to time, my readers will send me links to these videos and ask what I think about them, whether they are legit, etc. It is really a mindset issue – I think I explained very well in my Smarter Way to Trade series but who wants to be told that “they are not the chosen one”?

Just like to take this opportunity to wish you all a very happy Valentine’s Day!

TLC Weekly Update January 24, 2020

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Time flies when you are having too many correspondence at the same time! My week was flooded with all kinds of messaging – emails, conference calls, instant messages … Many still ongoing so no end in sight with this challenge, yet.

Things should get better next week.

I came across this article on a better way to teach kids mathematics. Just as I thought, it is all about building a better foundation that matters most. I’ve been advocating this concept in trading education for years now … rarely anyone would listen. Maybe I should try harder.

Here is an interesting video of a stock market bubble you may never heard of. Check it out.

This Saturday is Chinese New Year. I guess I will have some unavoidable social gatherings then. Hopefully my schedule is not affected much by then.

My second webinar will be held on this coming Thursday 4:30 pm Eastern Time. For those of you interested in participating, check out my post here for more details.

Happy Chinese New Year!