Dr Tee special project

Agenda for first update

1. Scope
2. Talk abt multi scale optimism teams assignment
3. Ask all to share their charts with us also
4.plan to collate and start studying on Jan
5. TA team scope
6. Q&A and more importantly get suggestions and feedback

City index lesson 1

Sideway market

- market waiting to happen. . To a trend

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3 key tenets of Wycoff market cycle

1. Time
2. Price action
3. Volume

2007 drop

1. Accumulation - 2008-2009

** usually insider buying happen

2. Markup - 2009 till now

** here I can buy on retracement and support

3. Distribution - 2015?

Topping process. . Usually 1 to 3 months

4. Markdown -

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Breakout strategies

1. Must have prolonged compression first.. cauz likely more explosive

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**** business of trading = managing risk!!!! Manage risk must always always come first!!!!!!!

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Average True range.. highest price and lowest price..average out. .

This ATR help me to see the trading range.. can help me see volatility..

And then later I can use this volatility to set my stop loss

Post to my supply and demand learning

Pic 1 - failed supply zone. . Due to big timeframe demand area..hence demand in control and this left supply zone is low odds

My Trading business

3 C s framework

A viable biz is abt creating, communicating and capturing value

1. Creating
- create net value for customers (user benefits exceed user cost)

2. Communication

- it is not what I think.. it is what my potential customers think!!!!

- how can I reach and convince what my solution is value for my potential customers or partners to become my actual customer and partner?

3. Capturing value
- capturing net surplus from the value created against other customers..

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1. Identify my potential customer pain..

2. Is my product a painkiller? I can immediately solve her problem...

Vs vitamin. . V slow effect..hard to sell

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Do Porter 5 forces to analyze my situation and competitors

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Dear All,

  Split to 3 teams now

1. Multiple optimism study

2. Optimism scanning

3. TA scanning

4. FA scanning

Recognising my mistakes

George Soro : I am only rich because I am aware and I realize my mistakes!

Supply and Demand Benny

In SD.. we are looking for key imbalances..

Not just normal imbalances

If we sell at supply..we buy at demand

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If there is a very big cheong up. . Who can cause this? Only the big players..

Vs a Normal rise and retrace. .. small imbalances. .

Professionals. . Trade hundred of lots which are millions of dollars vs retail traders. .

.. now just 2 ERC candles can push the price down already.. vs previously usually need 10 candles etc..

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Support and resistance may be same as supply and demand.. but they are different rules. .

In SD.. we look at buyer and seller key imbalances. .

However looking for key imbalances is just the first step! ..  there are many other rules and considerations. .

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Tip : For beginners.. just take 1:3.. do not be greedy..

Swing trades. . SD trades can last days and weeks..

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Risk - 1 percent rule..  if I follow strictly this 1 percent rule.. I will never be bankrupt and lose my account

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Use driving car as analogy

1. Learn theory

2. Practice basics

3. In circuit

4. In road

5. Pass exam..

But does that mean I am a very good driver liao??? Will I be able to avoid accidents? ??

I need to keep driving day by day and clock hours to gain my experience! 

Attending a workshop is not enough..

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Use buying and selling a property as E. G. .. say I want to sell a property at 1 million.. suddenly price drop to 500k. . I miss it even I keep reducing my price. . 900 k, 800 k...

So when price come back.. will you be likely to sell?

Another analogy... like chopping a tree at the same spot.. first time you try to hack the tree..the tree won't fall.. but if you keep chopping at the tree.. the more bark I remove.. then weaker.. easier for tree to and higher chance for tree to fall. .

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Hence. .. SD is different from traditional support and resistance.. see below. .

We want to trade the first time..the first chance..

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Gap.. gap as key imbalances. . Remember Steve nison say gap is the strongest support and resistance..

Why are there gaps?  When the market is close. .retail traders can't trade. . But institution and market makers can make the trades. .

Hence..say when there is a news.. the gap occur..and cause the greatest imbalances. ..

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Put a pic. .

Me versus the super big guys

Me versus a pack of wolves eating meat..

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In SD.. we need to know the market turning point in advance! 

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Why do we want to set and forget and not wait for confirmation? 

Reason is to.sell or buy the highest.. hence I can have the risk reward 1:3 the highest..

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Key for synergy : each team member or student need to specialize on one currency pair because the behaviour is different

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Team viewer and any meeting (free webinar tools)

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News

Trading with bigger timeframe.. can avoid most news except non farm payroll,  FOMC or other interest related news

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Backtesting is critical!!!..

1. Because we need the confidence to set and forget and not wait for confirmation. .

2. Learn the currency behaviour

3. Build intuition to know if the supply or demand level is high or low probability

4. Slowly build up my winning rate and percentage

Trading like a Robot, Investing like Zhugeliang

Trading (Put Robot pic)

-Supply & Demand

-Harmonic Patterns

-Candlestick and Chart patterns (Reversal)

-Cut Loss at 2% max of money

-Journalling and FOLLOW RULES disclipine

- TP levels (Exit)

Investing (Put Zhugeliang)

Entry

-+ve long term CAGR

-Long term Optimism less than 25%

-Tail (short term rebound confirmation)

-Fibonacci

-Volume OBV

-Candlestick reversal/Continuation

Exit

-LT Optimism 50%

-RSI oversold

-Candlestick reversal

A Good Trader (Print out)

•Trading is about 60% psychology, 30% money management and 10% technical or strategy

•Do not let your emotions, fear and greed take control of you

•Be patient to wait for the right signals

•Be discipline to follow the rules or system that you set up

•Learn to do your own analysis on the chart and do a lot of practice to build up your confidence

•Take care of your downside and let the upside take care on its own

•To be a successful trader always follow the rules

Goal : Making the most money using the least possible effort exposing ourselves to the smallest amount of risk and making the money in the shortest possible time

Success in Trading in Forex = Money earned / (Amt of effort * Risk * Time)

(Think deeply abt above formula what it means and therefore i Know the importance of

1. System,  2. Trading like a robot (mechancially) 3. Ignore market - set and forget , 4. Swing/Position trading, 5. Disclipine

Article from BigFatPurse - http://www.bigfatpurse.com/2014/10/what-catherine-pichotta-and-game-theory-taught-me-about-investing-2/

Avinash Dixit and Barry Nalebuff are professors of economics at Princeton and Yale respectively. They specialize in Game Theory. In 1991 they co-authored a best seller called Thinking Strategically and their second book The Art of Strategy: A Game Theorist Guide to Success in Business and Life is an extension of the previous.

Dixit and Nalebuff defines game theory as

Rigorous strategic thinking, the art of anticipating your opponents next moves, knowing full well that your rival is trying to do the same to you

The Prisoner’s Dilemma

The most famous instance of game theory is the prisoner’s dilemma where two prisoners are kept captive in isolation. The police does not have enough evidence to convict, and would require the cooperation of at least one prisoner. If both confess, they would end up with a standard sentence, say 2 years in prison. If both refuse to admit to the crime, they both get off with at most a fine.

At this stage it would seem sensible for both to deny vehemently their involvement. But if the police could get one to co-operate with them and confess, they would have sufficient evidence to find the non coorporative prisoner guilty and send him to jail for a long time. Hence, being the first to confess might be the safer option. The dilemma lies in both prisoners wanting to protect their own interest and in the process, actually compromising it.

The Prisoners’ Dilemma is but one example of game theory scenarios. There are many others. In fact, we are all game theorist in our everyday life. We play mahjong and try to double guess what our opponents’ tiles are. We go to meetings anticipating our bosses questions and objections. We sit for exams, and try to spot the questions that might show up and choose to concentrate our efforts on them. We buy an air ticket online because we think it is cheap and the price will not go lower. We are gaming against our mahjong kakis, our bosses, the examination board, the airlines and businesses.

Sometimes we are successful and come out ahead. Other times we are not so successful and end up being gamed instead.

The Art of Strategy

The Art of Strategy is laden with real life incidents. The authors uses examples from pop culture, art, sports, politics and business to illustrate how almost every human and business interaction has a game theory component to it.

The authors also shared many little nuggets of personal experience throughout their teaching and consulting careers, one of which is as follows.

Before the book was published, co author Barry Nalebuff distributed copies to his undergraduate game theory class in Yale and announced that for every mistake or typo the students identified, they would get a two dollar reward. The only catch being you would have to be the first to spot the error.

The intention was twofold. On one hand, his students would read the text cover to cover. On the other he could eliminate most mistakes before the book goes to press.

The person who ended up as the big winner was a lady called Catherine Pichotta. She did not find the most number of mistakes, there were others who were more prolific. Yet she walked away with the most money. How did that happen? Simply because unlike every other student, she thought ahead and decided to employ one killer strategy.

She started from the back of the book.

I was blown away when I read about it. It was elegant. It was easy. And it was such a simple solution right under the noses of everyone yet no one saw it. Catherine Pichotta not only won the game. She aced it totally.

Aceing the investment game.

As investors, we play the money game. We want to make the most money.

To ace the game, we would do very well to take a leaf out of Catherine’s book. Here is what I learnt from her.

Acting Against the crowd

Acting with the crowd is comfortable. It is fun to compete with everyone and see who can read faster and spot mistakes and typos others have missed. It is fun and safe to buy the same stocks that all your family and friends are buying. Or to purchase the investment property when all your neighbours are upgrading.

On the other hand, acting against the crowd is uncomfortable. Especially when it comes to investing, it requires tremendous courage and perseverance.

It is a well known adage that 90% of investors lose money. The crowd loses money. If you want to win the money game, do not do what everyone is doing. Act against the crowd.

Seeing through distractions

Many an eager Yale undergraduate in Barry Nalebuff’s class would have jumped into the book straight away. They wanted to be the first to spot errors. The faster you start the more errors you can spot before others get to it.

They were not wrong actually. It is a sound strategy. But is it the best strategy? Catherine saw through it all. She realized that speed is but a distraction. It is merely to throw people off the track. The emphasis on speed prevents people from stepping back and thinking clearly. They were blinded by the need to act, to do something.

And no other group of people in the world is as distracted by investors. We are bombarded by news, influenced by gurus and analysts gunning for our attention. We are ring fenced by analysts hawking their shares, fund managers peddling their funds.

We get jittery when we hear about stocks correcting in the US and feel compelled to act. A possible interest rate rise sends us scurrying. Potential mergers, buy overs, hot stocks, sexy stories.

Distractions. All of them distractions. They compel us to act, often in a manner detrimental to our investing fortunes. The sooner we learn how to see past it, the sooner we will be able to ace the game of money.

Understanding the game.

Finally, Catherine Pichotta understood the game. She saw that winning the game is not about finding the most typos. She goes beyond that. She went up a notch. She saw that winning the game is about finding the most typos that others have yet to find.

The ability to understand the game is crucial. If we as investors do not understand the game, we are simply going around in circles. And here I will define the big picture for you. The big picture is this – The big picture is not about making the most money.

Let me repeat myself again. The big picture is not about making the most money.

The big picture is about making the most money using the least possible effort exposing ourselves to the smallest amount of risk and making the money in the shortest possible time.

If you are only thinking about making the most amount of money, you are like the blind man grasping at the elephant’s tail and thinking that the elephant is long and thin. It is hardly a true representation of the elephant.

Put the other components into the game and you can see how the big picture changes. Would you employ a risky strategy that can potentially double (most money) or wipe out your capital or would you go for one that will give you 50 percent returns with a 20 percent downside?

Would you want to trawl through financial reports every evening and every weekend, forgoing precious family and leisure time for a 20 percent return (most money again) or would you go for a passive strategy that returns 15 percent?

Understand the game. There is no way an investor can win the game without understanding it. And as Catherine has shown, once you bring your understanding of the game up a notch, there is little chance of you losing it.

Game theory and Investing

I will leave you with what authors Dixit and Nalebuff had to say.

Though it involves simple common sense, much is counter intuitive and can only be mastered by a new way of seeing the world.

Of course the authors are talking about Game Theory, but deep in my mind I know without a doubt it is the greatest takeaway an investor can ever have.

- See more at: http://www.bigfatpurse.com/2014/10/what-catherine-pichotta-and-game-theory-taught-me-about-investing-2/#sthash.cUcv6gBT.dpuf

Solution to my 2013 and 2014 extreme losses

Mind

1. Daily let go
2. Coach
3.  Ignore news and daily price movements and only use price alerts

Method

1. Supply and Demand and Patterns trading..trade what I see
2. FA+TA+PA template, positive cagr
3. Cut loss

Market

1. CFD
2. Forex
3. Stocks

Giving

1. James Hon and TDTP
2. Dr Tee and Ein55 coaching
3. Facebook Supply and Demand

Forex fundamentals

1 Standard lot = $100,000

1 Mini lot = 0.1 standard lot = $10,000

1 Nano lot = 0.01 standard lot = $1,000

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Always use Pending order.. and not market execution!

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Buy stop and sell stop v similar to market execution.. (Breakout strategy)

Key strategy for multiple timeframe in ANY instrument when I am doing trend trading

Black October - to AVOID!

This is, after all, October, infamous for some of the most notorious stock market crashes in history;

~ The Panic of 1907 (October 1907)
~ Black Tuesday, Thursday and Monday (October 1929)
~ Black Monday (October 1987)

Let’s also not forget that fateful October in 2008 that effectively ended the lives of Lehman Brothers and Bear Stearns.

Trivia:

• The first day of October Expiration week has been up on the DOW 27 of the last 33
• Expiration week is usually bullish
• October Expiration Friday has seen the DOW go down 8 of the last 10 (this is the anniversary of the Crash of 19 October 1987 – DOW went down 22.6% in one day, the single worst loss in a day.)

Question for Supply and Demand

1. Probability of a RBR breakout.. then later becoming demand zone for DBR?

2. Level on level?  I trade on which level pullback?  Also is generally level on level higher probability?

3. Gap.. is it correct for the left and right candles?  Can it be considered supply or demand zone?

Candlestick analysis

Candlestick patterns

Hammer and Shooting Star in a trend!!!

Strongest candlestick signal
Need confirmation. .follow rule strictly!!!!!

1. valid for 4 days.. if by 4th day it break hammer high.. valid
2. Volume at hammer range shud be increasing

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When hammer fail?.. Price drop below it's tail

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Price patterns

1. Bullish flag

a. Flag pole
b. Small few candles drop
C. Sell Volume drop

2 parameters for confirmation

A. White candle breakout of flag channel
B. Volume drop during drop and rise more than half intraday during breakout

***Logic - hedge fund buying. . Won't put all funds in at one time for big fund... they will put percentage money..E. G. 30 percent first time. . Then even put 20 percent to sell their stocks to push price down and force retailers to sell them..

Then buy the rest. .. Key is to average their costs

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HK market do not trade Hammer!

Hammer v good for Singapore market

What a Professional Trader thinks

Scalping

Scalping - Sideway

1. Trade on Channel top and bottom

2. Spike signal

Scalping - Trend

1. Scalp using support and resistance using EMA 30 (of current time that I Enter.. E. G. 1 hour,  30min, 15 min)

2. Follow the big trend (daily) using EMA 30.. no need draw lines

3. E.g. if short.. need to wait for lower high to be confirmed

For E. G. See below

4. For trend strategy. . I shud only lose once. . I. E. During a big trend change. .

5. If there is a direction, I can set my stop loss at 50 pips. . Because I atm trading with trend,  my probability of winning is high

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My journal

- record my P&L with my emotions recording

- E. G. I don't follow rules, I anyhow trade

- best way Is to stop trading and go to bed or go for run

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Follow news and trend

www.dailyfx.com/calendar

HPB talk

1. Noise - Ignore the noise

Relationship bet happiness and mental wee being

- Add animation on ppt

- turn to your neighbor and say "take care of your mind"

- close your eyes and "don't think of a pink elephant"

2. 3 min breathing exercise

-visualize breathing in fresh air
- breathe out visualize release all the tension

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Kopi - 3.5 teaspoon
Kopi siu Dai - 1.5
Teh kosong - 0 teaspoon
Soda - 7 teaspoon

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Screening frequency

Obesity -once a year
High blood pressure - once every 2 yrs or advised by doctor
Diabetes - once every 3 years
Cholesterol -once every 3 years
Colorectal cancer - faecal 1 yr,  colonscopy - once every 10 years

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7 min HI IT workout

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Key hand movement by Marianne
1. 50 thousand thoughts. . -use hand cheong left

2. Kana stuck in one thought - flap hands

3. Worst. . Rationalizing -both hands slap each other

4. Kana emotion angry.. use hand pump heart

5 . People also *flap hands.. now put my pen.. my pen (I. E. Argument or defense).. I kana flapped!!!!!!

6. Drop.. use pen drop down..

7. Then drop all my thoughts and judgement and comment. .and just LISTEN to them..and touch them..touch their hands and shoulder. .

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Use egg in container vs tennis ball

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Victor Frankl story.. he is v resilient.. thats why he survive..

Everyday he visualize him cleaning up and giving a lecture.. at one time how he escape.. he jump into a wagon of dead people.. and then escape

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Next time in angry..m E. G. With James, Selina, KH etc..  Count 3 2 1 .... and deep breathing. .

Pivot points, CCI

CCI numbers

1. CCI (14d)
2. EMA (3)

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Coincident indicator

10 day EMA and 10 day EMA open

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Pivot points..

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Support and resistance

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Candlestick

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RSI -10

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Stochastic % k (14d)
% D (3)
Smoothed % D (3)

My forex strategy thinking

1. Trade only when there is obvious trend and buy/sell on pullbacks

- Daily chart - never go against the daily chart trend.. best only trade when there is a obvious trend on daily. .. ignore if consolidation and worst if it is choppy

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Keys

1. Must write down my thinking and plans. .every fucking detail

2. All build upon price action as they are leading indicators..  (Price patterns, Support and resistance, higher high and higher low,  swing points,  3 types of trend - Uptrend,  Downtrend, Consolidation)

The RSI etc. .are just for fine tuning

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Strategy

1. Trend line - Daily, H4, H1

2. Supply and Demand zones

3. Key swing points

4. Fibonacci retracement

5. Key support and resistance zones

6. Price patterns - Flag, triangle, rectangle boxes..(reversal and continuation)

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6. Add lagging indicators

Key important things

1. Never go against daily chart trend!!!!

When daily chart is down..

I.e. at least 2 lower high and 2 lower low..

Use the swing points. . As 

2. Alex story - within 1 month from Normal to depression and go to IMH

a. He was worried

b. He compare a lot with his peers

C. He was unhappy

D. He lost 100k,  lost his job, loss his girlfriend

***as traders.. it is much much more important to know when to enter and enter to exit..then why.... (e.g. why S&P go up, why dollar drop etc..)

Summary - Trade what you see not what you think! !!

Trading is a personal journey. . No 2 people are the same!...