Back to Canada

Aircraft

I came back to Canada last weekend. Lucky that I do not have jet lag since I had to jump on top of several issues that night I landed. Been ultra busy since to catch up with so many things. At 2 am Saturday, this is the first moment I have some quietness to sit down and reflect on my experience from the trip.

What I Did in Asia

For majority of people travelling to Asia from North America during the year end holiday season, they are taking a vacation break. For me, it was essentially 12 hours work day pretty much everyday since the first day my flight landed in Hong Kong. Those exceptions are taking a detour to Singapore and other destinations, attended a wedding and had a special medical check-up.

Outside of trading, I invest in start-ups and do deals that interest me. Many people want to meet with me to see if there is any business opportunities. Others are looking for macro level financial advice from someone who is well connected and really know what is going on around the world. And occasionally, there are others with special reasons that have very interesting stories worth telling when I get the chance.

Going to Singapore to meet with several DaytradingBias.com members was the highlight of the trip. Very happy to see some new faces and those I met with the year before. It is nice to get to know you all better in person!

The Dilemma of Hong Kong

Hong Kong is in a very difficult position now than ever.

The unaffordability of living spaces for the middle to lower income families continue to get worse. Imagine how difficult it is to live in the city when the lower bound of around $18,000 HKD per month for a tiny 200 to 300 sq. ft. apartment in an average location. The same amount of money in Canadian Dollar is about $3,000 which can get you a decent space in a good location for a 1,800 sq. ft. condominium or an even bigger town house. Such compression of available living space has squeezed the life out of the people in Hong Kong. The so called middle class is now long gone.

Yet Hong Kong is still ranking as one of the top cities in the world for business opportunities. However these opportunities may not be accessible easily to those who are struggling at the bottom. Hong Kong is still a good playground for people who has the right connections and the necessary capital.

Everyone there seems to be more sensitive to opportunities in making money than anywhere else I have visited on Earth.

YouTube

I did a pro bono presentation titled “Investment Outlook 2019 according to STOPD” in Hong Kong at the Rotary Club of Kowloon Tong meeting on Jan 7th. It lasts about 2 hours and I did a powerpoint presentation for the event. The participants tried to capture the session in video. However, the voice recording was not as good as we hope for. Lessons learned from the experience and next time I will use a mic for direct recording separately.

The presentation was done in Cantonese so not everyone can understand it. If you want to watch the video (it is just me talking without the powerpoint slides), follow this link.

I am having the powerpoint presentation redesigned for YouTube. Once it is ready it will be uploaded. I will write a short article to explain some of the slides that may not be self explanatory.

If this approach works out well, I will try to do more videos in the future.

Planning Ahead

I have a line up of projects to be completed this first quarter. Talking about being busy in Asia, that was mainly meetings and brainstorming sessions. Here, back home, it is actual work to be done.

The 2nd edition of Trading Success Blueprint was ready …. until it is not. The trouble with the file format issue (Thanks Microsoft!) set me back couple of weeks until the pictures in the manual are restored back to the correct places within the manual. It will be done eventually.

Trading account applications that I thought was taken care of before I leave for Asia turned out to be half done. There is no mistake on my part, just that the brokerage side somehow were in party mode by the end of the year and failed to handle the matters properly. More waiting on this front.

The last pair of VIX based real-time trading signals / day trading strategies will be released for Emini S&P. This is under testing in real-time. So far so good, everything looks on track.

The manual that I expected to publish on these VIX based trading strategies is now going to be split into two manuals as suggested by one of the early readers. I am convinced because he actually did the split up for me and showed me that I was mixing up two different things into one. Namely, there is about 100 to 150 pages of manuscript written on day trading strategy design and principles that has nothing to do with the VIX trading methodology. He suggested that I turn that part into an independent volume with day trading strategies illustrating how it is done with just price data alone.

I think it is a great idea. So back to the drawing board and more work to be done. The good thing is, this additional manual will definitely resolve many issues for traders and giving them a head start in the day trading game. I will make sure it becomes an important trading manual for all Emini traders.

Good to be Home

I was asked how can I take on so many projects at the same time. Well, first, I am not doing all these things by myself. There are many others helping me out making all these things possible.

During the trip, my exercise regime is disrupted and my diet is not optimal to say the least. And I was loaded up with coffee throughout the day making me hyper (as evident in the presentation video). I just slowly re-introduce myself back into my rigorous routines since I have several goals related to health and physical fitness that I like to achieve. Will write about this front when I get the time.

I thought I would have time during the trip to post something. I ended up taking notes that filled one whole notebook with no time to spare. Interesting experience to pick up the pace and doing as much as I can with limited amount of time.

Feels great to be home.

For those of you who celebrate the season, Happy Chinese New Year!

Casualty of Going Cashless: Empty Donation Boxes at the Cashier Counters

image

I do not usually go to fast food joints or coffee shops. If possible I always prefer brewing my own coffee and cooking my own meals. Doing this for years not just because of the health factor but also for the sake of avoiding long line ups. During my trip going from Canada to Hong Kong, however, I spent some time strolling in the airports while waiting for all kinds of things. I found a very interesting but sad phenomenon has emerged.

Those donation boxes that sit at the front of these cashier counters at McDonald’s, Starbucks, Tim Horton, etc. are all pretty much empty.

I actually popped the question to a few cashiers to see if my observation is correct.

Well, it turns out, the little amount of coins in many of these donation boxes were the collection for over a week.

My casual observations tell me that eight to nine people out of ten lining up at Subway used credit card, bank card and even cell phone to pay for their food. I actually counted the numbers while waiting for my flight. That’s about 50 people over a 45 minute sampling. The remaining ones who paid with cash have not put their changes into the donation box.

Well, Canada chose to do away with its pennies (1 cent coins) probably contributed to the problem too.

I wonder what the charitable organizations can do to counter this situation.

Time to Slack Off 2017

image

As a follow up to my Time to Slack Off series, I like to report my results and what I think going forward I will do with my trading. Many doors opened this year for which I am very grateful for and that I get to try out different ideas in such a short period of time is both exciting and exhausting. It is time for me to reflect and plan for the coming year.

Transformation of My Trading

I have achieved my trading goal for myself and for my clients as a money manager back in early October already. Due to serious pile up of all kinds of tasks, I did not get the time to write about it until now. This year is fundamentally different from the years of trading I have done due to the drastic changes of my trading goals and the new responsibility of managing a completely different kind of funds.

Many readers who follow me for years know that I used to trade through the complete US market open hours. I did take breaks during lunch but I tended to squeeze as much profit from the market as possible back then. Last two years my personal trading goals have changed to a more moderate approach for which I am driving for consistent returns with much reduced stress and effort. That took a lot of work outside of trading to further improve my mechanical trading models. More importantly, I came up with an even better trading framework for handling the current trading environment.

Hence I spent a lot less time in front of the screen and more time outside of it. I now usually sit at the screen to watch the open but I can choose not to because my mechanical models would take care of the orders anyway. Even though I have open positions by 11 am (Eastern Time) I can walk away since the positions are managed automatically. In my opinion, the performance is actually better based on the relatively shorter amount of time spent in front of the screen.

My Experiment on Running a Different Type of Fund

Last year I started to manage in a small scale funds that demand stable return in low-teens percentage with a time window of 3 years (or more) of lock-in period. As oppose to classic fundamental based fund managers who bet on fairy-tale information, or those big swingers with so-called macro view that ignores the market dynamics, my approach is to day trade with mechanical strategies that I know are rock solid concepts working consistently over the past 20 years. By controlling the leverage, I make it possible to produce consistent returns without the so-called volatility swings with those funds that have overnight risk. It is a great idea that worked out very well.

In comparison, the responsibility as a money manager managing client accounts, my objective is often maximizing the return with risk precisely defined. I can assure you that it is not an easy task. Although I have been doing my part for years, it is still challenging as the financial markets evolve rapidly.

The Birth of a Private Fund

Inevitably, after the success of the experiment, I am being asked to reconsider my position to run a fund among close friends and families. It is not even going to be the size of a tiny hedge fund. It is just money that a few close friends can spare for speculation purpose (something I called burnable). Since I am so restrictive on the amount of money they should put into the pool relative to what they have and that I am imposing the same 3 to 5 years lock-in period, I am glad that they choose to keep their individual commitment small. Now that the word is out, I have requests from friends everywhere asking me to do the the same.

This is, kind of, completely deviating from my original plan. My original intention was to run this private fund with just my own money and possibly some from my partner. Once the first year return is booked, I will try to convert the individual accounts that I manage for my long term clients into the same pool so that I can streamline the whole operation. That is a longshot though, because my clients really dislike publicity of any kind. Still, I hope to convert them to believe in my new hands off approach.

Anyhow, I planned to launch this no later than February next year. Just the explanation of the risk involved in my kind of trading can take hours to each individual interested in this. It will keep me very busy until then.

Mix and Match of Trading Signals

So what does all these developments have to do with daytradingbias.com? After all I tagged this post with it.

Well, part of the trading models I developed for my private fund will also be made available at daytradingbias.com thru real-time trading assistant and other means. I have looked into many other ways to delivery the signals. The viable ones will be added one by one.

For those interested in managing their own accounts with a subset of signals picked from the set, documentation / a complete course will be made available so that they can adapt the strategies to create a trading plan that fits their risk tolerance. This is what I am planning so far but I do not know if the plan will change again down the road.

On the Road Again

I am heading to Asia as mentioned in my post back in October coming weekend. Once I have internet access there I will continue to post. I will get the chance to meet with many people from the financial industry there. If anything interesting comes up, I will definitely write about them.

 

Past Time to Slack Off Posts

Time to Slack Off 2014

Time to Slack Off 2013

Time to Slack Off 2012

Busy Schedule Ahead

It has been weeks of chaos so far in the development front on deploying my trading models. Unforeseen troubles in live trading of the models forced us to twist our code to handle all kinds of issues like sudden disconnect from brokerage server. Unlike co-location server based solutions, we have now proven retail level client side automation has many issues that cannot be taken care of easily.

Nonetheless, I am still going to push forward with these projects to see how much we can accomplish. In the meantime, I am busy writing up the documentation / instructions on trading these strategies effectively.

While all these things are happening, coming two weeks we are setting up a new remote data centre. This is not our first attempt though. Some of the premium members may remember that the first try was a complete disaster. Once the remote data centre is up and running, I will phase out the current one in Toronto.

Adding to all that, I am also going to hit the road again later this year due to an interesting development that I may work on a special project involving a number of trading firms and financial institutions in Asia. I am not sure what my exact travel plan will be at this point. For those of you in Asia, I will get in touch.

Have a nice weekend all!

It Costs More to Travel Among Cities within Canada Than Going Abroad

20170108_210344

I am very happy to be back home after the long flight from Hong Kong. No surprises during the flight, maybe with the exception that those who were sitting nearby are all sneezing and coughing. Hopefully I do not catch anything nasty from them.

While I was flying, I checked the costs for plane tickets going from Toronto to various destinations in the world. In particular, I was checking for prices to several cities for which I may have to go on a short notice this year. I found out, to my surprises, that the cost of plane tickets going anywhere within Canada are relatively more expensive than going abroad. What’s wrong with this picture?

Honestly, this was the case all along in the past. Years ago, I accepted the fact that Canada, having very limited number of airlines servicing the flight routes within the country, has to absorb the higher cost of operation on per customer basis. Hence higher ticket prices was unavoidable.

However, since 10 years ago, when more operators were allowed to compete for businesses, I thought the scene would have changed. Well, I cannot be more wrong on this.

After a bit of investigation, I found the culprit of the higher prices. It is the additional charges and taxes placed on the tickets that distorted the prices of these plane tickets. In other words, The actual fees charged by the airlines are now lowered while the government and its extended operations like the airport authorities have erased the competitive effect offered by more airline operators.

In short, we are seeing exactly what we can expect from big government – taking all it can with ever expanding charges and levies. This is not a big issue, really. People simply adapt to not travel, for both business and leisure, whenever possible within Canada. The incentive to travel also nudged towards go abroad instead even if the flights cost more because they are relatively cheaper in comparison to the ridiculous pricing for flights within Canada.

When we think of someone acting stupid, the saying of “shooting one’s own foot” comes to my mind quickly. In this case, however, this is definitely a case of shooting both legs – first leg for sending people abroad and the second leg for destroying the eco system of the airline industry within the country. You cannot get a better negative example than this.

Feature Image: Coffee served at the Charlie Brown Cafe in Tsim Sha Tsui, Hong Kong. The coffee there is great!

Singapore: Searching for a New Identity for Survival

image

After talking to many people in Singapore from all walks of life, my impression is that it is no longer the uplifted, high energy place it once was. In fact, many factors that are contributing to its long term well being are no longer there. Similar to Hong Kong, Singapore can no longer depend on what it built in the past to thrive in the coming decade.

Real Estate and Financial Industry

The decline in Singapore’s real estate market has been on-going since 2014. Many analysts in Singapore think that the bottom is near. Well, I am not that optimistic. From my conversations with many people who work in the financial industry there in Singapore, many firms are ending their contracts with local staff and sending their own people back to their home countries. That means one segment of high income earners in Singapore is disappearing which is the real reason why Singapore’s real estate markets are under pressure.

In other words, Singapore is facing its biggest challenge ever as its role being an important financial centre in Asia is now at risk. We cannot tell if these major financial institutions will expand their businesses there in Singapore in the near future, but usually this type of business planning is at least 5 years or longer. Hence it is reasonable to say that if, ever, these firms will be thinking of growing their businesses in Singapore, it will be at least 2 years from now. The 2 years estimate is based on the fact that these firms moved out since 2014.

Tourism

As a tourist destination, Singapore is usually a one to two day tour city because of the overall size of the place. Majority of tourists who visited Singapore for leisure purpose would revisit the place for just once or twice more, unlike resort destinations where various resorts each offering a different experience where the visitors can enjoy their stay for longer time to rest and relax.

For seasoned business travellers, they have already enjoyed touring the city in the past hence they are no longer big spenders when they stay in the city. And the trend of rising prices at restaurants and shops targeting tourists and foreign business people is also a big turn off for the visitors as there are many alternative locations in Asia where they can better spend their money.

So I think it is reasonable to say that it can be difficult for Singapore to grow its tourist industry into something more significant for its economy.

Internet Era

For many years, Singapore has been very focus in ensuing their citizens being better educated to deal with the industrial world back in the last century. However, since the beginning of this century, the internet has completely upset the balance of the world economy. This wave of technology shock has affected economy worldwide. One thing that really messed up the world is that the education of people around the world were all pointing to the wrong direction since the internet revolution has started. Nothing in the education of young people are preparing them for the new economy.

This problem affects Singapore much more than the other countries in Asia. Even though in college level education, younger generations can be trained with more computer knowledge, but that implies that at least 2 generations of young workers in Singapore need training before they can be redirected into the knowledge based economy or Singapore will lose all the advantage they used to have against the rest of the countries in Asia.

More importantly, the education up to high school level has to put a lot more emphasis on computer skills which was never the focus. Without reform, the education system will continue to produce workers without the skill sets necessary to thrive in the new economy era. This is no difference from other high tech places like Hong Kong, Korea or Japan. Just that Singapore economy has always been driven by one or two main industries while other Asian countries have better diversifications. Thus, being able to stay at the forefront of knowledge based economy is more important for Singapore than other places.

Tough Time Ahead

In this modern time, as people demand more and more from their government while in reality the government is really nothing more than a construct to manage a place, Singapore is really dealing with a serious identity crisis at this point. Singapore, being a special sovereign entity situated at the centre of South East Asia, has enjoyed great economic growth and endured tough times while bouncing back gracefully every time.

Yet, as the world is entering this crossroad all together this time around, Singapore is facing a very tough time ahead as its government leading approach to its society and economy is facing its biggest challenge ever. To thrive into the future, Singapore has to figure out not only what lies ahead but also resolutions that has to be put in place as soon as possible before the tides turning.

Feature Photo: Singapore Changi Airport

Going Back To Hong Kong

image

After a hectic week of visiting a number of countries in South East Asia, I am now getting ready to leave Singapore for Hong Kong tonight. I have spent time with bankers and traders who I know for more than a decade. I also got the chance to meet new friends and potential clients introduced to me by my friends. It is nice to see the familiar faces while enjoying the company of my new acquaintances.

First thing I noticed is that many of my friends are now bald and some are very out of shape. Some already passed away due to sickness. It is evidence that we are getting old. Time does not care who we are indeed. The experience is giving me stronger determination than ever to keep myself healthy. The choice is there for everyone, but we must consciously make the hard choices first in order to get the long term benefit.

The retail trading scene in Singapore and other South Asia countries have not changed much. The rules and regulations in many of these countries are still too lax and unenforceable. This give rise to unethical practices by many brokerages to lure naive people into speculations on high risk financial markets without realizing that they are engaging in such activities.

Worst yet, some of these operations are just outright scams taking money from people and then disappear overnight.

I am not sure how long will it take for these countries to mature to the point for which average investors are sophisticated enough not to fall for these scams and illegal activities. It will be a long road and it takes a lot of political willpower to make the necessary changes happen.

I have more to write about my trip to these countries but I have to do that another time. I have to pack up and head to the airport soon.

Have a nice weekend all!

p.s. feature pic is the airport train for connecting the terminals of the Singapore Changi Airport

Leaving Hong Kong Soon

imageI am heading towards other Asian countries tomorrow. My schedule is jam packed and some of the countries I am going to do not provide reasonable internet access. I am not sure if I can even check email in some cases. It will be a nice break from the Net though. Like many people suggested, maybe it is a good thing to unplug from the Net once in a while.

I have notes written down on quite a number of topics that I like to write about. When I get the chance to sit down quietly on my own, I will be able to organize my thoughts and have some interesting observations to share. It looks like my decision to spilt the blog from daytradingbias.com is a very good call. It is quite unprofessional to talk trash in a site that offers professional services to traders, isn’t it?

I am hoping that I can wrap up this round within a week. After all, it is very tiring to talk like 8 to 10 hours almost everyday. I definitely need a break and what is better than spending the Christmas week with friends and family to enjoy the holidays?

The feature image is my father’s Chinese calligraphy.

Have a nice weekend everyone!

Hong Kong is Fading Away

traffic on junction in city Second week into my busy schedule meeting people here in Hong Kong, one thing that I have to deal with consistently is the time spent in between. Due to the packed environment and crazy traffic condition in Hong Kong, traffic jam is the norm. Hence much time is wasted on travel. In fact, I think I spend more time traveling in Hong Kong than in many other major cities I have been to. Killing time in leisure seems like a luxury in Hong Kong when you see all these people walking in very fast pace with serious look in many of them.

Historical Importance vs. Reality

Many Hong Kong people are very proud of their past accomplishments. As the richest city for Chinese people back in 1970s to 1990s, it is approximated that Hong Kong’s GDP was as much as one third of the whole China back then. It was really amazing how such a tiny city, due to historical reasons, being placed into the global trade route, could shine so bright. But this is exactly the problem with the people in Hong Kong – many of them do not realize the special conditions allowing the city to grow so much has been chipped away over time.

As of year 2015, Hong Kong’s GDP is less than 3% of China’s GDP. Its relative importance to the growth of China and its future is long gone. Within a decade or two, as China continue its push to modernize the rest of its coastal cities, Hong Kong will likely be less than 1% of China’s GDP. In other words, Hong Kong is going through what many Western countries were going through over the past 20 years – normalization of its economy, living standard and social structure while the developing countries like China were playing catch up.

A Highly Inefficient Place

One thing that stands out in Hong Kong is that majority of the workforce are being rushed to get things done. Everything are being pushed for completion as quickly as possible. By results, however, they are just making more mistakes and time wasted on these mistakes. At the end of the day, nothing is really accomplished efficiently this way.

Another clear problem with the city is the less than desirable education cost which reduces the competitiveness of the city over the years. Education cost is so high that starting from very young age, parents are forced to pay so much of their income just to get inferior education for their children. The high stress environment is also making the younger generation less capable to think creatively or critically. Highest priority in life for the young adults is how to get by with a better paid job.

Fading Away

Hong Kong can keep on fighting the trend of being normalized into just another major city of China but it is not likely to succeed. Hong Kong got its chance and became a very important city of the world. It has a good run just like other famous cities in the world. As the original conditions disappear, the inevitable cannot be avoided hence Hong Kong will never have the same level of importance for being the sole connection between China and the rest of the world.

For the people in Hong Kong, especially the younger generations, there are many great opportunities out there for them but they have to better equip themselves with more knowledge and analytical skills. The internet actually liberated all the knowledge human kind has accumulated so far. Unluckily, English has been a very weak spot in Hong Kong’s education system, making it very difficult for the young people there to learn from the net by themselves.

For instance, the overall investment knowledge in Hong Kong is so bad that even young professionals do not know much about financial markets. Those who are interested in the financial markets are often misled by the financial media in Hong Kong.

Settling Down After a Chaotic Week

image

Flying from Toronto Canada to Hong Kong is easy. In fact, way easier than traveling to United States. First and foremost, going through US customs takes at least double the amount of time. Anyhow, my hectic schedule started the very next day after I arrived.

Jet Lag and Polyphasic Sleep

I have been asked enough times about jet lag that it is something worth mentioning here.

Ever since I trained myself to sleep in biphasic sleep, jet lag is never an issue. I always get sleepy once I have nothing to do and can fall asleep easily. When I focus my mind, I can continuously work 10 to 15 hours straight. That’s the interesting benefit of training oneself to actually sleep multiple times a day.

One thing to remember though it takes time to modify one’s sleeping pattern. If you are used to sleep at least 8 hours a day and that you cannot easily squeeze out at least 45 minutes during the day for a nap, cutting short your main sleeping time will seriously affect your brain functions.

Meditation as a Sleep Replacement

Sometimes, if actual nap is not possible, there are interesting ways to refresh our mind to peak performance through other means.

If you have practiced meditation long enough and can get yourself to the state of a cleared mind quickly, you can try to induce the sleep like function in your body where it starts to flush out the chemicals generated during the day when your brain has been working hard. Key to this technique is switching to a breathing rhythm closely resemble the one that our body normally does during our sleep.

In other words, one can consciously induce the brain cleaning function without actually going into deep sleep. Your brain will be completely refreshed after a 20 minute practice of sleep breathing under meditation. Interesting isn’t it?

Hong Kong

It is considered being cold in Hong Kong right now but for someone coming from Canada, just T-shirt and jeans are perfect for me. Obviously that attracted many curious stares wondering if this guy is insane. The picture in this post is taken from the famous place in Hong Kong where they make the roasted gooses. I chose to take a picture of the mega bridge connecting the airport to the rest of the region because it is in fact a very cool piece of architecture.

My schedule will continue to be very hectic. Instead of the expected quiet down of my meetings, many more meetings are now scheduled around my original ones. An interesting development indeed since I thought not that many people would be interested in my line of work.

Have a nice weekend all!