Top 3 trading mistakes to work on for 2017

I have just attended a trading club meeting in early January and the Organizer/founder/leader has just given a glimpse into how he plans his trades and also a reminder to work on eradicating bad trading habits. In this post, I will touch on both. Hopefully this is not going to be a long post.

Trade planning

Basically there are some components to executing a trade. They are as follows:

  • Fundamental Analysis
  • Technical Analysis
  • Risk to Reward
  • Stick to the Plan
  • Respect the Markets
  • Review the Trade
  • Recalibrate if needed

What he recommended to start on a trade was to take a fresh sheet of paper, and write down what he thinks is the general trend for at least 3 months, like which currencies are bullish, bearish, neutral, pair up the currencies accordingly, and use technical analysis to enter positions, set profits and loss. So basically starting with fundamental analysis, than use the rest to complement it.

Also, he mentioned to reflect on the past trading year, and name 3 trading bad habits or recurring mistakes  made and aim to work on improving them this coming year. So, I decided to take his advise, and record them down and hopefully at the end of the year, when I look back at this, I hoped to have eradicated my bad habits. Here goes my top 3 mistakes in no particular order.

Stick to the plan

I suppose this is a common issue among novice traders like myself. Things such as closing positions before profit or loss targets are hit, not doing proper position sizing, not having a good risk to reward ratio etc. There are many many more. To counter this, I plan to come out with a trading checklist before I enter any positions. This will help me have greater discipline and not to have a massive drawdown as well. My accounts are nearly close to 0 but I do not wish to top up for now and will attempt to fight back to my original amount. Hope that trading will be better for me this year.

Trade review

This is something that I have done at the beginning when I first started to trade, but I did not know what I was doing. Now, I still do not know what I am doing entirely and I am not doing reviews on my trade. I need to get back into the habit of reviewing my trades but it is quite troublesome to do it due to the number of trades I execute. At the very least, I need to make a record of the reasons why I enter the trade, and what is the end result of the trade. Also need to take note that a trade that is profitable or a loss is not necessarily a good or bad trade. It depends on variables which cannot be quantified as well. There is another problem to this aspect with regards to how to review the trade. There have been times when I tried to review, but to end up in frustration only as I did not know where went wrong. I need to learn to utilize my resources more. Perhaps I can look to people in the trading club for advise.

Emotion/Pyschology

This is an issue which plagues many traders and especially for myself, this is a difficult area to manage. People are into trading to make money and I myself am no exception. However, the thing which I really need to take note of is that I just started trading and I should not be aiming to make profits but actually to learn and figure out a way to trade profitably in the long term. This links back to the point above on trade review, which I should be doing and I have not. The desire to make money has gone to my head, and with each losing trade, the frustration sets in and I will tend to make more losing trades and the cycle repeats. For now, I suppose the way is to reduce my trading position size drastically so that each loss is not that painful and is more manageable. Furthermore, I need to take rests and not trade so frequently so that each trade is thought through better so that I can make better trading decisions.

 

So there it is, my 3 issues which I need to work on. It is a tall order, but in order to progress and improve on my trading, these are things which need to be done. That’s all for now and happy Chinese New Year everybody!

Walking Dead – Thoughts/Reflections on work (part 1)

It has been a while since I last blogged about anything. The world is making history every single day with notable events such as Brexit, Donald Trump becoming president, and yet for myself, life is still much the same. As we near the end of 2016, I feel that I need to write down my thoughts on work. This was sparked by the online application form which I needed to fill up for a job position I applied for and it was a question on how many months have I worked for.

As I thought about it, I started work in Oct 2012, and now that it is coming to the end of 2016, I have worked for approximately 4 years, and yet have nothing to show for at the end of it. I did not manage to save the amount I expected to save, I did not make much progress in terms of career progression, and no purpose to work in life.

To sum up my work experience so far, I have worked for 3 different companies, worked in 5 different roles, and only had a single pay raise of $16 when I worked longer than a single year at a position (and the pay raise is not even at my current job). In case you are wondering, all my job have been contract jobs so far. Things are getting rough in Singapore, with its economy stalling and not doing well in the current economic climate, it is difficult to get a long term stable job. Even so, the initial bunch of colleagues who started work around me have gone on to find permanent jobs during the same 4 years while I drifted along, from job to job. Sometimes, I wonder if there is just something wrong with me, that I am the only one unable to find a stable job. Well, people say that be fortunate to have a job. It is true, and I guess that’s a relative thing. To know that you are fortunate, you are inevitable comparing yourself to someone in a less fortunate position in order to know that you are in a better position. Anyways, when my boss told me that during my contract annual review, it doesn’t exactly inspire me to want to do my best for my current job. As such, I am perpetually late for work, and really don’t feel the need to push for things in the work arena.

In any case, I digressed. “Walking dead” basically summarizes how I feel about my work currently. I wake up every morning not wanting to start the day and go to work. I take my own time to shuffle to office, and look forward to the end of the day to return to my own room. This process repeats itself everyday. There is no end in sight. Apologies, but this is going to be a rant post but I suppose I need an outlet to organize my thoughts and let off some steam. It mainly boils down to 2 reasons why I feel this way.

Lack of Interest in Job Scope

My current job scope is a Business Analyst at a local bank. It sounds fanciful but it has nothing to do with the bank business side or Front Office. It mainly consists of gathering user requirements when they want to implement some changes in the source system, and writing out the functional specification documents and then performing UAT on the systems. This is not what I wanted to do when I studied Finance and Economics years ago. I suppose that no one really does what they study and having an interest/passion in one’s job is not a necessity but a luxury, but I feel that I am not able to accept this. As work takes up such a huge amount of your time, doing something I do not enjoy does not make me look forward to living and to begin the day. This does not make me feel alive and I feel like a part of me dying everyday. A lot of people at church tells me that the idea of work is just a means to put food on the table and that is God’s plan but I do not agree with this view at all. I have tried to accept this thinking and my job but it does not work for me. The longer I do this, the more I am convinced that I am unable to do this for the rest of my working life. I am not entirely sure, but it might also be due to the fact of the lack of career progression/direction which caused me to feel this way towards my current job.

Lack of Career Progression/Direction

It is difficult to feel there is progression or direction in terms of career when all my jobs so far have been contract jobs, and there is also no reward for loyalty to the company. As a contractor, there is only so much you can try to learn by yourself and there is no annual review of your work or any sort. A contractor is just like a mercenary, you go to whoever pays you. My multiple job-hopping has been more of desperation rather than progression, as the departments that I have been in are redeployed overseas or undergoing massive restructuring. As I speak, even in my current role, they are decommissioning the database that my department is in charge of and slowly restructuring/dismantling the team. This results in me being lost and disillusioned, feeding into the loop that I can’t accept this. It doesn’t help that there is no increment for staying on longer in the company, no bonus for contract completion and only 12 days of annual leave per year, which is sad. There is just no motivation to work hard as there is no satisfaction or end goal to reward your effort or a job well done.

There are many times I do wonder, like why do the people around me seem able to find at the minimum permanent jobs and at least are able to enjoy the benefits while I am unable to do so? They may not be totally passionate about their jobs but at the very least, they have the benefits of being a permanent staff to enjoy. Is there something wrong with me or am I just always at the wrong place at the wrong time? I don’t seem to have luck at clearing the interview hurdles as well as most of the interviews I have gone to, I have not been offered positions while I see my friends going for seemingly less interviews than me getting offers. Is there really something wrong with me?

Well, that’s the end of my ranting. I guess the more important question is what to do from now on. I can continue to rant and feel sorry for myself but that is not going to help me move forward. As a new year beckons, I should really start to think even harder about what I can do. There is even greater pressure with each passing week and month as there is wedding, and family to start thinking about. It is really frustrating. After typing this, I realise I sound like a spoilt brat, whining and complaining just because things don’t go my way. Okay, nobody is going to care about how I feel. What’s more important is how do I react to the situation. Also, I suppose that it does not matter that much what others say as they are not in my position and probably do not understand me. This is something I need to know, to really place less weight on what older people from church say. It feels like church people have it wrong in a couple of things, not just pertaining to this.

Anyways, I really do need to put a lot more effort and thought into planning what I need to do for 2017 if not I will not get anywhere. Really need to find a way to sustain my energy reserve and also the drive to push me to forward. I suppose that will be for another post but it really does make me feel better to have written this post out. That’s all for now, will try to rush out a couple more posts soon in the near future.