Went for a rather refreshing preview seminar on Internet Marketing today conducted by Fabian Lim from Asia Internet Academy, and indeed I gained new insights into the world of top affiliate/internet marketeers. Had always been rather fascinated by how some people could seemingly generate obscene amount of money in a extremely short period of time. A few good examples of such people are:
Name Networth Age
Jeff Bezos of Amazon $5.74 Billion 35 yr
Pierry Omidyar of eBay $3.69 Billion 32 yr
David Filo of Yahoo! $3.12 Billion 33 yr
They created their virtual empire entirely out of nothing, and created such immense wealth that most people would find unfanthomable. The speaker also explained why the Internet had such immense potential for growth, and why people should stake their claim of this huge pie:
Total Population: 6.4 Billion
Total Internet usage: 1.1 Billion
Asia Internet usage: 380 Million
Europe Internet usage: 311 Million
North America: 231 Million - courtesy of World Internet Stats
In particular, Asia's growth has been phenomenal, and such growth has also translated into increased online spending. We are now living in the Infomation age, where knowledge is money. Gone are the days where one can hold a job till retiring at 65 and receiving a large remuneration package. Many Singaporeans I know are barely ekeing out a living - many of them well advanced in age. My heart extends to those who slog for hours and hours on end, but never seeing an escape route from their so-called 'Rat Race'. I can only hope that one day these people will understand that their life will not change UNLESS they make the first move to change it.
Back to the workshop I attended, I decided to share some nuggets of advice that I believe are very valuable. To be successful (not only online), there is 2 main things one has to do:
1) Create VALUE
2) Be DIFFERENT
Creating Value - In every business, the main question the owner will ask himself is "How can I create value for my customers?" For some, the answer would be to have loyalty reward programs; redemption points; lucky draws even. For the online world, it could mean free eBooks, lessons, tips, advice, newsletters etc. There is a saying that goes - Price is what one pays; Value is what one gets. Once you create a product at a price where many people are willing to pay for, believing that it is worth the money, you have a winning formula.
Being Different - Think about this point for a moment. In today's fast moving world, out attention is being demanded for by so many mediums of advertisements. In buses, in trains, at shopping centres, flyers, brochures, etc. With so many people advertising their products, how can one really stand out? The answer, is simply to dare to be different. A good example of such a person is Seth Godin. Visit his website, and you will know why he is different from many other entrepreneurs out there. Another well-known website (but maybe not well-liked) is RichJerk. Unlike many other online programs out there, the creator (some anonymous guy called RJ) distintly differentiated himself by being unique. (in this sense, rather vulgar) But in the online world, any publicity is GOOD publicity. It creates attention, which in turn creates TRAFFIC. And traffic, as one might agree, is a key element to an internet marketer. Another very interesting success story I read recently was MillionDollarHomepage, created by some guy called Alex Tew. His idea was unique, and most importantly, it was different. He managed to sell all 1,000,000 pixels for over US$1mil. And the best thing is he took less than a year to accomplish this.
With such examples and case studies, the speaker has indeed illustrated the gargantuan potential of the Internet. Will likely be exploring this area in depth in the coming weeks and months. Stay tuned for more juicy updates.
Friday, December 22, 2006
Wednesday, December 13, 2006
Essential Trading Elements
Below are 10 essential trading elements that every trader should consider.
Skill assessment
Before a trader starts trading, he needs to assess whether he is ready for the market. A simple way to test his system against the market is by virtual trading/paper trading it till he feels comfortable with it. He should only start trading real money once he is totally at ease with the system and can make money consistantly.
Mental assessment
Another important aspect of trading is mental. Many traders make fortunes virtual trading, but when it comes to real money, 2 factors come into play - fear and greed. Fear of losing money and greed of earning more money will ultimately and inevitably be a traders downfall. He should learn to keep his emotions in check, and also be prepared for the ups and downs of the market.
Set risk levels
Everybody has different risk levels. A retiree in his 60s will not risk much of his account size per trade; whereas young aggressive traders in their 20s will not hesitate to plough a large portion of their account size in each trade. One must come to term with his psychology - whether he is a conservative or aggressive towards the market. Higher risks comes with higher rewards - and the vice versa may also apply. To know oneself is a step towards becoming a better trader.
Set goals
There is a saying - "Reach for the moon. Even if u fail, you'll still land amongst the stars" While it sounds corny and cheesy, I believe one should constantly aim for greater heights. He should aim for the next level, instead of giving in to mediocrity. While aiming high is encouraged, the goals shouldnt be the I-intend-to-earn-US$1m-using-my-$1k -account-in-a-year type. Set high goals, but also set realistic goals.
Do your homework
By this, it means doing your pre-market scans, watching for impending economic/earning data (which might cause unwanted volatility) etc. Do not go into the market unprepared, for it robs complacent players mercilessly.
Set exit rules
I believe exit rules are equally, if not as important, as entry rules. Knowing when to exit a trade is paramount to building equity. Set a profit target, and stick to it.
Set entry rules
Entry rules should be precise and leave no room for guesswork. It should be a well thought out and written down in black and white, and followed to a T. (of course, it should be tested profitable too) Discipline and consistancy will be rewarded to those whom abides by it.
Keep excellent records
By writing down each trade, you have an indicator of how well you're doing. Keep a P/L sheet, plot a monthly equity graph, whatever works for you - but KEEP RECORDS!
Perform a post-mortem
It has and always will be a good practise to perform an after-action-review of each trade. Hindsight is 20/20, and usually the trade will become clearer to you once you have been detached emotionally from it. Write down the reasons you entered the trade, reasons you exited the trade, stuff like what you did well, what you should have done, and what you can do better next time. This 'diary of trades' is vital over the long run, as you can read about past trades and improve upon them.
Please post your thoughts and comments if any regarding this. I appreciate your feedback.
Skill assessment
Before a trader starts trading, he needs to assess whether he is ready for the market. A simple way to test his system against the market is by virtual trading/paper trading it till he feels comfortable with it. He should only start trading real money once he is totally at ease with the system and can make money consistantly.
Mental assessment
Another important aspect of trading is mental. Many traders make fortunes virtual trading, but when it comes to real money, 2 factors come into play - fear and greed. Fear of losing money and greed of earning more money will ultimately and inevitably be a traders downfall. He should learn to keep his emotions in check, and also be prepared for the ups and downs of the market.
Set risk levels
Everybody has different risk levels. A retiree in his 60s will not risk much of his account size per trade; whereas young aggressive traders in their 20s will not hesitate to plough a large portion of their account size in each trade. One must come to term with his psychology - whether he is a conservative or aggressive towards the market. Higher risks comes with higher rewards - and the vice versa may also apply. To know oneself is a step towards becoming a better trader.
Set goals
There is a saying - "Reach for the moon. Even if u fail, you'll still land amongst the stars" While it sounds corny and cheesy, I believe one should constantly aim for greater heights. He should aim for the next level, instead of giving in to mediocrity. While aiming high is encouraged, the goals shouldnt be the I-intend-to-earn-US$1m-using-my-$1k -account-in-a-year type. Set high goals, but also set realistic goals.
Do your homework
By this, it means doing your pre-market scans, watching for impending economic/earning data (which might cause unwanted volatility) etc. Do not go into the market unprepared, for it robs complacent players mercilessly.
Set exit rules
I believe exit rules are equally, if not as important, as entry rules. Knowing when to exit a trade is paramount to building equity. Set a profit target, and stick to it.
Set entry rules
Entry rules should be precise and leave no room for guesswork. It should be a well thought out and written down in black and white, and followed to a T. (of course, it should be tested profitable too) Discipline and consistancy will be rewarded to those whom abides by it.
Keep excellent records
By writing down each trade, you have an indicator of how well you're doing. Keep a P/L sheet, plot a monthly equity graph, whatever works for you - but KEEP RECORDS!
Perform a post-mortem
It has and always will be a good practise to perform an after-action-review of each trade. Hindsight is 20/20, and usually the trade will become clearer to you once you have been detached emotionally from it. Write down the reasons you entered the trade, reasons you exited the trade, stuff like what you did well, what you should have done, and what you can do better next time. This 'diary of trades' is vital over the long run, as you can read about past trades and improve upon them.
Please post your thoughts and comments if any regarding this. I appreciate your feedback.
Tuesday, December 12, 2006
The 90/10 Principle
Read this article somewhere before, and I find it rather useful. Decide to share it here for all to view. Hope you find this useful.
Discover the 90/10 Principle. What is this principle about?
10% of life is made up of what happens to you. 90% of life is decided by how you react. What does this mean?
We really have no control over 10% of what happens to us. In trading, we may have done all our homework - studying charts, looking at historical data, establishing support/resistant level before determining that the stock is headed up. However, for reasons unknown, it keeps headed south. We have no control over this 10%. The other 90% is different. You determine the other 90%. How?
By your reaction. You cannot influence the stock price, but you can control your reaction towards it. Let's illustrate with an example.
You are sitting in front of your monitor. You have just done all your pre-market scans, and is very confident that XYZ stock is going to gap up. You place a market order to buy before the opening bell, and BAM! The stock gaps down 10% shortly after opening, triggering your mental stop loss level. What happens next will be determined by how you react. You curse and swear. You blame market makers and big players of influencing the stock price. You nervously watch the stock the entire day and it dips lower and lower. Before the end of the day, frustration takes over and you sell the stock at a big loss. You spend the rest of the day in a semi-stupor.
Why did you have a bad day?
A) Did the money makers cause it?
B) Did the institutional players cause it?
C) Did you cause it?
The answer is " C".
You had no control over what happened with the stock price. How you reacted in those 5 seconds is what caused your bad day.
Here is what could have and should have happened.
The stock gaps down to your stop loss level. You calmly exit the trade as set forth in your exit strategy. You spend the rest of the day reviewing the trade as to what caused the gap downwards. You learn valuable lessons and gain further insights towards your trading system. You go to sleep, knowing losses are a part of trading and that tomorrow might be a better day.
Notice the difference?
Two different scenarios. Both started the same. Both ended different.
Why? Because of how you REACTED.
You really do not have any control over 10% of what happens. The other 90% was determined by your reaction.
Why get stressed out? It will just make things worse. Now you know the 90-10 principle. Apply it and you will be amazed at the results. You will lose nothing if you try it.
The 90-10 principle is incredible. Very few know and apply this principle. The result? Millions of people are suffering from undeserved stress, trials, problems and heartache. There never seem to be a success in life.
Bad days follow bad days.
Terrible things seem to be constantly happening. There is constant stress, lack of joy, and broken relationships. Worry consumes time. Anger breaks friendships and life seems dreary and is not enjoyed to the fullest. Friends are lost. Life is a bore and often seems cruel. Does this describe you? If so, do not be discouraged..
You can be different!
Understand and apply the 90/10 principle.
It can change your life.
Discover the 90/10 Principle. What is this principle about?
10% of life is made up of what happens to you. 90% of life is decided by how you react. What does this mean?
We really have no control over 10% of what happens to us. In trading, we may have done all our homework - studying charts, looking at historical data, establishing support/resistant level before determining that the stock is headed up. However, for reasons unknown, it keeps headed south. We have no control over this 10%. The other 90% is different. You determine the other 90%. How?
By your reaction. You cannot influence the stock price, but you can control your reaction towards it. Let's illustrate with an example.
You are sitting in front of your monitor. You have just done all your pre-market scans, and is very confident that XYZ stock is going to gap up. You place a market order to buy before the opening bell, and BAM! The stock gaps down 10% shortly after opening, triggering your mental stop loss level. What happens next will be determined by how you react. You curse and swear. You blame market makers and big players of influencing the stock price. You nervously watch the stock the entire day and it dips lower and lower. Before the end of the day, frustration takes over and you sell the stock at a big loss. You spend the rest of the day in a semi-stupor.
Why did you have a bad day?
A) Did the money makers cause it?
B) Did the institutional players cause it?
C) Did you cause it?
The answer is " C".
You had no control over what happened with the stock price. How you reacted in those 5 seconds is what caused your bad day.
Here is what could have and should have happened.
The stock gaps down to your stop loss level. You calmly exit the trade as set forth in your exit strategy. You spend the rest of the day reviewing the trade as to what caused the gap downwards. You learn valuable lessons and gain further insights towards your trading system. You go to sleep, knowing losses are a part of trading and that tomorrow might be a better day.
Notice the difference?
Two different scenarios. Both started the same. Both ended different.
Why? Because of how you REACTED.
You really do not have any control over 10% of what happens. The other 90% was determined by your reaction.
Why get stressed out? It will just make things worse. Now you know the 90-10 principle. Apply it and you will be amazed at the results. You will lose nothing if you try it.
The 90-10 principle is incredible. Very few know and apply this principle. The result? Millions of people are suffering from undeserved stress, trials, problems and heartache. There never seem to be a success in life.
Bad days follow bad days.
Terrible things seem to be constantly happening. There is constant stress, lack of joy, and broken relationships. Worry consumes time. Anger breaks friendships and life seems dreary and is not enjoyed to the fullest. Friends are lost. Life is a bore and often seems cruel. Does this describe you? If so, do not be discouraged..
You can be different!
Understand and apply the 90/10 principle.
It can change your life.
Get Rich Slow
Yes, its not a typo. It reads get rich slow. Unless you operate a website that sells an e-book that tells people how to get rich quick (which, incidentally, is usually nothing more than selling the e-book to other people) , you're one of the many other 'normal' people out there. And chances are, the only way to get rich is slowly, but steadily.
For starters
When asked for an effective way of obtaining wealth, a common answer is 'Invest'. The problem with this answer? Not everyone has money to invest. (see here) It says that 64% of Singaporeans feel they should be prepared to bear the financial burden of retirement, yet 42% of Singaporeans had not started saving! A saying that is very well known but is hardly applied: A dollar saved is a dollar earnt. In a modern day society such as today, it is easier to spend money faster than you can read this sentence. Everyday, we are mentally flogged with television commercials, newspaper ads, billboards, signs, posters, etc. that only serves one purpose - To take away your money and make it theirs.
Unveiling the Mystery
With all these statistics, how is it possible to build wealth? The answer is simply - slowly. Consider yourself ahead of the game already. By reading this post, you are already opening your mind to ideas and concepts which could help you begin the process of building wealth, which is saying more than the 42% of the population who are doing nothing! A house starts with a single brick and the same can be said of wealth building - You have to start with what you have and keep adding to it.
A simple way to keep track of your expenditure would be to keep a personal finance sheet. I have created one such template which I find is suitable for my use. Download it for free here. Feel free to customize it to suit your expenses category. I do not have any mortgage/automobile payments to make, therefore my commitments are less.
I have been keeping such records for over a year now, and each week, I update on the excel spreadsheet on what I have been spending on. From time to time, I review it to see where I am able to cut my spendings, and therefore increasing my savings. Just by keeping to this, I have managed to amass a rather sizable fortune (to me at least) over the past 2 years, which I intend to use as my capital for my options trading venture.
For starters
When asked for an effective way of obtaining wealth, a common answer is 'Invest'. The problem with this answer? Not everyone has money to invest. (see here) It says that 64% of Singaporeans feel they should be prepared to bear the financial burden of retirement, yet 42% of Singaporeans had not started saving! A saying that is very well known but is hardly applied: A dollar saved is a dollar earnt. In a modern day society such as today, it is easier to spend money faster than you can read this sentence. Everyday, we are mentally flogged with television commercials, newspaper ads, billboards, signs, posters, etc. that only serves one purpose - To take away your money and make it theirs.
Unveiling the Mystery
With all these statistics, how is it possible to build wealth? The answer is simply - slowly. Consider yourself ahead of the game already. By reading this post, you are already opening your mind to ideas and concepts which could help you begin the process of building wealth, which is saying more than the 42% of the population who are doing nothing! A house starts with a single brick and the same can be said of wealth building - You have to start with what you have and keep adding to it.
A simple way to keep track of your expenditure would be to keep a personal finance sheet. I have created one such template which I find is suitable for my use. Download it for free here. Feel free to customize it to suit your expenses category. I do not have any mortgage/automobile payments to make, therefore my commitments are less.
I have been keeping such records for over a year now, and each week, I update on the excel spreadsheet on what I have been spending on. From time to time, I review it to see where I am able to cut my spendings, and therefore increasing my savings. Just by keeping to this, I have managed to amass a rather sizable fortune (to me at least) over the past 2 years, which I intend to use as my capital for my options trading venture.
My Trading System
The trading system that I use, is almost purely visual. It relies on price and volume, and 2 other simple indicators, based on candlestick charting. Am in the process of trading this system using virtual money for about a month before I go full-steam ahead using real mon$y. Will be posting all my virtual trades online for reviews and comments to help me hone and refine this system. I believe the Holy Grail does exist, but it is the trader who is the Holy Grail, and not the system. Human psychology of fear and greed cripples a trader in the market place and renders him unable to make a logical decision. This system has a strict stock selection criteria, and the most stringest of filters to enable only the most potentially profitable option plays are left after scanning the basket of stocks.
Will be posting all my virtual trades online for reviews and comments to help me become a better trader. Stay tuned.
Will be posting all my virtual trades online for reviews and comments to help me become a better trader. Stay tuned.
Options as a Strategic Investment
Options as a Strategic InvestmentBought this book a few months back, and boy, is it a heck of a book. Weighing in a at almost a kilo, and 983 pagesOMG!, Lawrence McMillan manages to jam-pack so much information about various option strategies into this book, that it has become a must have for any aspiring option trader. Got this book from Kinokuniya @ $150, and realized that I could have got the book online from amazon at a lower price. Nevertheless, this book has been money well spent, as I believe the other 250,000 buyers of this book would rightfully agree. In this book, even strangers to option will be drawn into the world of options trading, as he expounds on the basic property of stock options, various Call and Put Strategy, and even delves deeper into the various applications of the strategy, when to apply it, how to manage it and also a summary of each strategy. It is indeed one of the greatest option trading book of all times. No wonder people label it the Bible of option trading.
Why Options?
Before we answer the why, we must answer the what. An option, is simply a right, but not an obligation, to purchase the underlying stock. One contract controls 100 shares. There are 2 kinds of options - Call and Put. Basically, to buy a call is to be positive about the stock; vice versa buying a put, is to be negative about the stock. As it is a derivative security, the price of the option is linked to the price of the stock. Options are becoming more and more widespread, as more and more people are realizing the advantages of trading options.
- High leverage
- Limited risk
- Unlimited potential gains
The beginning of my journey
I have to admit - I have been heavily influenced by Robert Kiyosaki and his range of RichDad books. A friend first introduced the book RichDad PoorDad to me when I was in the army in January 05, and I devoured the book instantly. Never had I felt so empowered by the knowledge that the book puts forth, and I went out and read almost all his books. Schools in Singapore never taught me about financial literacy before, and this was like a whole new subject for me - albeit a more interesting one. I immediately understood why 95% of the wealth lies with 5% of the world's population - it is because of what they know, and how to apply it.
I began eagerly reading numerous finance books - ranging from Real Estate Investment, Mutual Funds, Flipping Properties, Forex Trading, Network Marketing, Futures Trading, Stock Trading, Volatility Trading, Options Trading etc etc. This was somewhere around Jun 05. My mind was chock-full of new ideas I never knew existed, but I didnt know how to apply it! Then I came across a group of people that gather together to play the board game Cashflow 101 together, and we met a couple of times to play it. It was there, that I got a know a guy in his mid 20s, and he got me interested in a particular network marketing company. Once again, I was filled with a burning desire to succeed - and decided to go ahead with it. However, it didnt work out that well, and I lost around S$1k. Not letting myself be discouraged, I decided to join another mlm that had a low start-up ($10/mth). That other venture worked out better, but after 4 months, I realized the time and money I was putting into the venture did not justify the results I had achieved, and I gave it up.
It was around Oct 05 that I went for a Freely seminar with a friend, having seem his newspaper article repeatedly appearing on the Straits Times newspaper. The seminar left a deep impression on me, and changed my view on Options Trading. I started believing that Options Trading is indeed the vehicle of the rich, and when utilized properly, can produce enormous gains.
I began eagerly reading numerous finance books - ranging from Real Estate Investment, Mutual Funds, Flipping Properties, Forex Trading, Network Marketing, Futures Trading, Stock Trading, Volatility Trading, Options Trading etc etc. This was somewhere around Jun 05. My mind was chock-full of new ideas I never knew existed, but I didnt know how to apply it! Then I came across a group of people that gather together to play the board game Cashflow 101 together, and we met a couple of times to play it. It was there, that I got a know a guy in his mid 20s, and he got me interested in a particular network marketing company. Once again, I was filled with a burning desire to succeed - and decided to go ahead with it. However, it didnt work out that well, and I lost around S$1k. Not letting myself be discouraged, I decided to join another mlm that had a low start-up ($10/mth). That other venture worked out better, but after 4 months, I realized the time and money I was putting into the venture did not justify the results I had achieved, and I gave it up.
It was around Oct 05 that I went for a Freely seminar with a friend, having seem his newspaper article repeatedly appearing on the Straits Times newspaper. The seminar left a deep impression on me, and changed my view on Options Trading. I started believing that Options Trading is indeed the vehicle of the rich, and when utilized properly, can produce enormous gains.
Pre-amble
With regards to the blog title, I can honestly say I have fulfilled 1/3 of that statement, particularly the 'rags' word. Have been through many financial hardships in my life (all 20 short years of it), and I am determined never to be in such a similiar situation. This blog will be about the 'to' - the journey of attaining financial freedom. Am currently trading options, and will be posting all my trades for fame or more probably, shame.
The purpose of this blog is two-fold: To enforce self-discipline in oneself to constantly update this blog, and also to be accountable to oneself for all trades made. Only then, can one become a better trader.
All options trader/aspiring entrepreneurs out there, please feel free to contact me to exchange ideas and network. I believe in the power of leveraging. :)
The purpose of this blog is two-fold: To enforce self-discipline in oneself to constantly update this blog, and also to be accountable to oneself for all trades made. Only then, can one become a better trader.
All options trader/aspiring entrepreneurs out there, please feel free to contact me to exchange ideas and network. I believe in the power of leveraging. :)
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