Tuesday, May 1, 2007

Why do I Trade? Part 2: The Best Business


I was chatting with Mr CS Ong the other day and he mentioned that Trading is the Best Business. And I am inclined to agree. Trading should be viewed and conducted in a businesslike manner. But unlike conventional businesses, there is nothing one could just pack the bags and leave should one decides to. And once the skill is mastered, one could trade in any market. You need not be at a fixed location as like what a conventional business would require you to. And as Mr Lsb mentioned in the original post of Why Bother to Trade?, unlike conventional businesses, there is no need to manage assets and other people, etc.

And business, as we know, is somewhat synonymous to freedom. Mr Kiyosaki of Rich Dad and Poor Dad fame, has an interesting audio (Freedom or Security) which you could hear to demonstrate the point of freedom.
Somewhere in the 14th minute, the excerpt is as follows:

People who tries to find security are actually selling their freedom down the tube. Because the people that found this country, who fought the revolutionary war did not fight for job security. They fought for the right to be free. And freedom is a very, very high state...
How in the world can you say you have freedom when somebody tells you when you can eat lunch? How in the world can you say you have freedom when somebody tells you when you go to work and when you get off work? How in the world can you say you have freedom when somebody tells you when somebody have the right to fire you because they need to downsize?
when somebody has the right to tell you how much you can make? That is not what we fought for. Too many people has sold their freedom...

Of which, I am sure Mr Zewt would be inclined to agree with Mr Kiyosaki with his numerous postings on Modern Slavery.


And the key point as earlier mentioned was the mastery of trading.

When I first traded, I was mostly breaking even. There was not much gain nor loss at end of each month. Couple of hundreds gain this month only to lose a couple of hundreds in the next month. Then, I began to see the light. Somehow, they all began to fit and come together. I began to make money.

I felt like a money making machine for quite some time. I began to make the same amount that I was earning from my full time job. Then, it grew to twice the amount, thrice and on the peak of it, was five times more what my full time job was paying me. I was churning out an ROI of more than 20% per month. Yes, per month. No doubt, it was still a small capital base but the feeling was great. My trading funds just grew and grew.

You could feel the euphoria, when you finally found your own holy grail - a method that works for yourself. A method which promises you financial freedom. Finally, I see the promises of the treasures of the seven seas is realizing before me.

But then, our story has yet to end. I shall continue in the next article. Stay tuned. Hey, you! Yes you! Don't play with the remote. Haha. :)
(Marcus, yes, I m keeping the suspense alive :P)

~ to be continued...

As usual, you are advised to download the ebook(s) soonest possible before the link expires or removed. I m not responsible of providing fresh links if they are no longer working.

10 comments:

Ben Gan said...

First, my congratulations that you have found a good way to trade and win. Once you have mastered your discipline and emotion, and with your knowledge you will succeed.
With regards to trading and investment, my simple definition is this: Trading is more akin to buying and selling fruits for a quick profit.
Investing is equivalent to buying antiques with the intention to hold for longer term appreciation of price. That does not mean, short-term profits must not be taken when there is a sudden good offer for them.

Seng said...

Max,

Congrats! Glad to hear you have found your way. At these rates of returns, (assuming you don't spend your winnings) it only a matter of time before your "small" capital becomes millions.

Regarding investing, trading, speculating and gambling, I think a better way to think about this issue may be to understand that in any fields of endeavour, there will inevitably be Masters and Novices. Even in a gambling game like poker, there are Masters and Novices. The Master would simply wait for the "fat pitch" or the "sure thing" (as he defined it, whether by card counting, knowing the players, etc.) before betting the entire house. In other words, the Master knows how to achieve maximum result with minimum effort. Certainly, the Master has reached Master status only after "paying his dues", something that cannot be achieved without considerable study, training, mistakes, experience, skill, perseverance, talent, etc.

Regarding the definition of "investor" and "speculator" in the Intelligent Investor, I find it clearer when I think of "investor"="Master" and "speculator"="Novice". I believe Graham is too modest a person to equate himself with the title "Master" and hence chose those inaccurate phrases. It is clear that there can be Master Speculators (like Soros or Livermoore), and there can also be Master Investors, Traders and even Gamblers. In the context of the entire book of an "investor" who has studied the situation carefully, applied Margin of Safety, etc. you could replace the phrase "investor" with "Master" and it would probably enhance one's reading of the Intelligent Investor.

Cheers.

zewt said...

hmmmm....i tend to agree and disagree with robert kiyosaki on some things... cant say i agree with him 100%. i just dont quite like the way MLM ppl use his concept.

wow.... 5 times your salary!!! max, no need to work lor. hahahahaha..... i have never made more than my salary. sigh...

Marcus Fei said...

Max,

Congrats on what you have achieved from trading!

And I can't wait ;)

Anonymous said...

we, max, fast fast post up next post...

i want to gain 20% of my capital also... but still far away...

Anonymous said...

Congratz on ur succesful trading system... anyway, mind to share it? as the trend will b stronger when more ppl using ur trading system, n u will benefit from it too... throw 2 birds v 1 stone... anyway, wish u achive ur millions earlier....

Trader Max said...

Ben: Thank you, but until I have attained wisdom, any success would be meaningless. Your simple definition works - loved it :)

Seng: Thank you for your encouragement. That is indeed my goal. With regards to your Novice and Master, indeed, I am a little greedy, I aspire to be a Master - though I do not know the means yet.

Zewt: Well, his concept and charisma on freedom and security makes sense. MLMs are opportunists, so is Kiyosaki, they complement each other and when they both see such an opportunity, they capitalise it. Haha.

Marc: Hope it would not disappoint you.

ur msn friends: Do stay tuned. :)

Trader Max said...

anonymous: On the contrary, the more people use, probably it wouldnt work. There is a part in Ben Graham's book regarding "What USED to worked in Wall Street, until this book is published". Couldnt remember who Ben Graham/Jason Z was referring to though.

Also, consider this, if all are buyers, who are the sellers? Haha. Sorry :)

Ben Gan said...

What works will not work when more and more work at it.

zewt said...

yeah, then i have to agree kiyosaki has the charm to make things happen... as for those who try to copy his concept... may lack that greatest element..