Clipper Ship Trades

This blog has been exported over to clippershiptrades.blogspot.com

2012-09-16T07:54:00.001-07:00

This will be the last blog entry here. Henceforth, please go to clippershiptrades.blogspot.com.

Thank you all for your readership.

I need a robust development methodology for my JForex business

2012-09-12T09:24:00.000-07:00

Trading Development Methodology v.0.0.1
1. Formulate new trading idea
2. Draft prototype
3. Test prototype
4. Select degrees of freedom variables
5. Formulate test plan for each DoF
6. Backtest
7. Forward-test
8. Optimize
9. Launch

ST Engineering near 3.5

2012-09-12T09:14:00.000-07:00

Looking at the strong support throughout the week, ST Engg seems poised for a breakout above 3.5. I will be watching for signs of volatility and weakness to determine if it is still worth riding further

Bought ST Engineering at 3.31

2012-08-01T08:05:00.000-07:00

Stop loss at 3.23
Tentative target 3.5, but I will watch the price action nearer that level to determine whether to take off half my position or to let it ride on.

Ride on!

Yanlord is no go

2012-04-13T08:41:00.000-07:00

Alright, Yanlord broke support at 1.24, displayed further weakness by knocking on the support repeatedly before plunging to 1.17 with an intra-day rebound to the support level again. It ends this week at the support level of 1.24. Well, well... I will skip this trade.

For those with itchy fingers who bought at cheaper prices. Well why did you buy on weakness? Did you have any statistical evidence or other compelling reasons to buy? If not, you are gambling, pure and simple. I am not saying it is wrong. But most gamblers end up in the poor house.

I buy on strength, because I have done my homework in reviewing my system and found positive expectancy for trades like these. And it is a lot of hard work. 19 out of twenty times, the promising system I envisioned falls flat with negative expectancy over the long term. And that is painful. Trading is 'painful' and a lot of hard work. My best forex strategy trading at the moment is painful. Its win rate is 35%, meaning I expect to lose most times I trade. It helps that it is automated of course. It helps that I know in the long term, it has a good positive expectancy.

Fact No.1 : systems or mechanical trading is very much like testing to find a light-bulb that works.
Fact No.2: successful trading is not about winning but about making your money grow.

Targeting Yanlord for a buy

2012-04-09T08:57:00.000-07:00

I will buy if Yanlord goes up to 1.3 in 3 days time. Otherwise I skip. Yanlord has an obvious support at 1.24, broken to the downside. I am trading on the premise of a false break.

Plus points:

General uptrend now at support going back to October last year.
Potential triangle breakout to the upside following a false break of resistance

To summarise:
Trigger to buy : 1.3
Stop Loss: 1.21
Target: 1.48
Risk 9cts per share

Suppose I have $20,000 in trading capital, my 1% risk is $200. I buy 1000 shares or 1 lot and if I lose the trade at 9cts ie. it goes down to 1.21, I lose $0.09 X 1000 = $90. Add in commissions of roughly $60 to buy and sell and you have a loss of $150.

If you do not understand, please do not trade. A little knowledge 'half cooked' is dangerous to your financial health. Becoming successful in trading is like taking an MBA course. Please do not think otherwise.You can always do your due diligence to educate yourselves with trading books of real value like those I listed.

If nothing else, just learn from me that limiting yourself to a 1% loss per trade will save you from inevitable sleepless nights and big losses further down the road.

Sold M1 at 2.43

2012-01-19T08:21:00.000-08:00

Sold M1 at 2.43 for a loss.

I am training to be a good loser. Good losers lose small. Now how about that bigger win, my dear Mr. Market.

Bought M1 at 2.5

2012-01-09T07:14:00.000-08:00

Bought M1 at 2.5 on signs of resistance yielding.

2.43 cut loss
2.71 target

Sold Singtel @ 3.14

2011-12-19T01:50:00.000-08:00

Singtel sold for a small gain. This is a scratch trade.

Bought SingTel @ 3.09

2011-12-03T21:00:00.000-08:00

Cut loss at 2.99
Quick trade, exit on any reversal candlestick pattern.
Extreme target 3.4

Sold CapitaComm at .99

2011-10-03T08:16:00.000-07:00

I adhered to my stop and exit the trade. Another of my plentiful small losses. Keep your losses small to preserve capital. Mind your downside and rewards will come eventually as a result of exposure to market trends. Losses are just the cost of that exposure.

Bought CapitaComm (CCT) at 1.06

2011-09-26T23:28:00.000-07:00

This is a MACD divergence setup. 1 dollar shows support. Stop loss at 0.99. Quick target at 1.13. Meaning if it reaches it in 2 days time, I will take the quick profit. Otherwise I will exit via price action on the daily chart.

Excuses to stay out of the stock market

2011-08-15T09:11:00.000-07:00

I am looking at the STI and there is a MACD divergence. Secondly, there is a massive flagpole pointing south. The flag is unfurling and it probably will be volatile enough to whipsaw my trades. I am not ruling out shorting some weak stocks with CFDs at this juncture.

I am aware that I may have miss some good setups for shorting earlier this month. However, I am pretty cool about it even though chances like this do not happen much. Why? Because I have about 40 times more trades in Forex than in the stock market per month, plus minus ten.

Anyway I guess I was not ready to jump into the short trade simply because I was not well prepared AND it was one day before the National Day holiday.

DBS sold at 15.51

2011-08-03T07:12:00.000-07:00

I have sold DBS the day after a bearish hammer hammered the day high of 15.73 down to opening price. So I set an alert for 15.5 below the low for next day's trading. Next day I got hit by the alert and off I close the position.

Well, I did paused for a while to consider looking at the charts before closing it. But then I willed myself from that thought and just DO IT. Anyway I was busy with work, so at the end of the day I see DBS down to 15.29.

Like I said, I have improved in my trade management. In short trade management is how the open trade is managed while open. Trade management involves trailing stops, decisions to take part of the profits off the table, or to let it ride further. Whether you should adjust your stops due to a 'hikake', last bar rule or retest failure rule. All these are rules consistent and proven to manage my trades to let it ride the trend as far as is plausible while not giving up too much profit.

DBS bought 15.05, stop 14.88, target 15.8

2011-07-27T09:31:00.000-07:00

The title says it all, STI downtrend line is broken to the upside. DBS happens to be a flag broken, what's more that is the $15 level.

Maturing as a trader

2011-07-24T07:00:00.000-07:00

I am maturing as a trader, part-time but still a trader. What I learnt from the countless trading and investment books I earnestly studied or read have made me realise that the wisdom, knowledge and skills acquired are also applicable to most fields of endeavour in life. Discipline, self-control, emotional awareness, risk management etc. I do not want to sound like a textbook. But learning to trade has been the greatest journey of my life so far.

Key takeaways from 'Adventures of a Currency Trader'

2011-03-03T07:53:00.000-08:00

Thou Shalt Never Lose More Than 25 Percent of Thine Account
Thou Shalt Test Before Trading
Thou Shalt Stand Accountable to Another Person for Thy Trades

Discipline, discipline, discipline

Don't Become Cocky

It is a myth to think that you need to pay 'tuition' fees to learn about anything about trading. Sure you have to accept losses as part and parcel of trading just like you accept your bigger wins.

Discipline is the main reason why traders are able to stay in the game. Note, I did not say successful. The moment you think you are successful, you complete a cycle that goes from Humble to Cocky then Humble again. There were successful traders and institutions who later became failures, remember LTCM (Long Term Capital Management, yea yea) and Nick Leeson. They are terribly smart but got carried away when they chose the slippery path of forgetting their discipline.

Discipline is key to why independent traders can perform better than some hedge funds with their overload of information and hi-tech stuff and multiple screens.

Long Term Coin Tossing

2010-12-22T09:32:00.000-08:00

You have a coin. You win every time it turns up heads. You lose when it is tails. You play 10 rounds. Maybe you get 7 heads, 3 tails. Win rate 70%. You play another 10 rounds. You get 4 heads, 6 tails. Win rate 40%. Even though the odds are 50/50, you will get such results.

Suppose you play 100 rounds, probability becomes high that your win rate will be close to 50%, not exactly but close. You play 1000 rounds, your win rate becomes very close to 50%.

Now suppose you welded the coin such that heads turns up about 55% over time. Then you have an edge in the system that over time will produce about 55% win rate.

I see the long term probabilities in my favour when I backtest my jforex program over a period of 3 years. That is why forex is so appealing, you do not need to wait years in the stock market to discover that your edge is real. 'Long term' in forex is much shorter than the stock market.

We are dealing with the uncertain future, so it is not 100%, follow the trend and mind your risk.

See where the queue is and go serve them

2010-08-02T08:44:00.000-07:00

Yea, serve and be rewarded.

Heads or tails?

2010-06-14T09:15:00.000-07:00

It came to me like a relevation while in the shower: Betting on the heads or tails of a coin is very much like betting on whether the market you are trading is ranging or trending.

You have strategies for ranging markets and you have strategies for trending markets. Problem is these strategies inevitably falls into either of these 2 categories: ranging or trending.

So is it possible to make a good guess whether it will be ranging or trending next? When I start seeing a sine curve in the forex market, probability is good the range will maintain and I will go in at the bottom or top of the range, especially if it looks really well-behaved. On the other hand, if I see increased activity, and a likely breakout from a cup and handle or a nice pennant, chances are good for at least a 3 pip scalp.

BTW, now seems a good time to buy some stocks. Do practice risk management.

Bought Wilmar at 6.42

2010-05-07T08:43:00.000-07:00

Bought on capitulation. Wilmar ended at a high of 6.6 at close.

Post-entry emotions

2010-04-27T08:31:00.000-07:00

I felt I was not adhering to my wait at 15.48 level for DBS. My fear on that day on entry is the fear of missing out. Well there is no clear cut right or wrong. But it shows a discipline issue. If I stuck to my discipline I could get in at 15.48 today easily. If it ran away today to greener pastures, I would probably be cursing inwardly over that 'few cents'. But really I think I will be quite zen about it and just BE.

So what? Miss, miss. A bit no discipline, so? Relac la...

BTW, my stop loss level for DBS is 15.21, probably 15.18 I will do some chopping.

Bought DBS at 15.54

2010-04-26T07:46:00.000-07:00

Stalking DBS

2010-04-25T09:16:00.000-07:00

I have filtered out Golden Agri and DBS as potential stocks to buy.I am going to give Golden Agri a miss because the reward:risk ratio is now less than 3:1.

DBS is forming a cup and handle formation, one of my favourite patterns in trading forex EURUSD.I will wait till the handle forms nicely before I go in at the bottom of the handle.

15.74 is the breakout of this pattern. 15.21 is a major support that goes back to 2009 Feb and May. 15.21 should also be the bottom of the handle. If DBS leaves the station from 15.48 tomorrow, I am not chasing, as the handle is too short. And such a move is liable to break down as it is to break further up.

Observation mode for now

2010-04-15T08:30:00.000-07:00

If the bullishness continues, I will wait for a correction in the STI before trading further. Till then I am just observing.

I am currently reading this fabulous book: "Techniques of Tape Reading" by Vadym Graifer and Christopher Schumacher. It tells it like it is. Reality trading. How risk should always be on your mind. Risk and emotional management. Rewards must always come later.

Why am I reading this book? I am training to trade the forex market.