Jesse Livermore by ChartSpeak

I got hold of this article from a lady friend who is always willing to share.

I read and can't agree more with the author.

So I thought I should pass it on to you - if you happen to drop by my website.

I hope you will find it useful and insightful, and in return, pass it on to someone whom you think may need it or refer your friends to this web-site.

Meanwhile, wish you a good day! and you know what? It's always nice to share.

Here's the link to the article: ChartSpeak_031206.pdf

The Closure of GETC

I went back to meet up my local friends last evening at GETC. It was sad to see them pack and go like that at 7 pm when Nikkei closed. Some of them had been trading there for years day-in day-out and of course they would have developed sentimental feelings towards the people and place there. Of course, most of them denied it.

Trading as Local has fewer and fewer advantages over retail customers as most of the freebies had been removed from SGX and rebates on commission by brokeage firms were either reduced or ceased totally.

Some of the Locals plan to or have changed their trading style from scalping to even position trading as they have no speed advantage when they trade from home or from their broker's trading arcade which are believed to be slower than SGX's lease line.

Sigh... it's sad but just like in any business, we have to accept changes when changes embrace us. I still believe to be a full-time trader, one must have real passion for trading and must treat it as a business, and not deem it as another job. It's never a Job!!

No employee will wake up early in the morning with a smiling face and say: "I can't wait to go to work!" I know of a Local who was so angry with himself when he was 5 min late for the Nikkie opening. Because he was late, he missed opportunities for 'yum' trades. That's the different mentality and attitude between a salaried employee and a business owner.

Passion - quoted from Steve Job: " If today were my last day of my life, would I be doing what I am about to do today?"

Ask yourself this question from the bottom of your heart.

Settlement Price Calculation for SIMSCI

According to SGX, the calculation of the Final Settlement Price (FSP) of SGX MSCI Singapore Stock Index Futures Contracts will be changed from the current Averaging methodology to the Special Quotation (SQ) methodology effective 1st Sept 05.

Current FSP Methodology – Averaging
The current FSP methodology is based on the average value of the MSCI Singapore Free
Index, taken at 1-minute intervals in the last one hour of trading, together with the closing
MSCI Singapore Free Index value on the last trading day, excluding the highest and lowest
values.

New FSP Methodology- Special Quotation
The Special Quotation is calculated by MSCI using the first traded price of each component
stock in the MSCI Singapore Free Index on the day following the Last Trading Day,
irrespective of when those stocks first trade in the SGX trading day. This means that the first
traded price of each component stock may occur at any time between SGX market open and
market close on the day following the Last Trading Day. Should any component stock not
have traded by SGX market close on the day following the Last Trading Day, the last official
closing price of that stock will be used to calculate the Special Quotation.

This will be effective from 1 September 2005 (i.e. for contracts expiring in September 2005 and beyond). For contracts expiring before September 2005, the current FSP will apply.

So what is the impact on traders who specialised in making money on Simsic's settlement price? Well, in my opinion, it is a bad news! First of all, this golden opportunity only happens once a month and now with this new calcuation method, it will involve more risk. Why? Because it will definitely be tougher to 'guess' what would be the settlement price the next day. I believe no careful traders would be willing to take so much risk(holding overnight positions) for a meagre profit potential.

That is precisely the reason why traders do not speculate Nikkei's settlement price. Because Nikkei uses this method.

Looks like livlihood of traders will be affected. But traders are very creative creatures, i am sure they will find ways to fight the system, at least it is what want to I believe.

Where to place your stop in Nikkei?

When I scalped Nikkei using 15-min chart, I realised that when I was on the right side, my stop will never be triggered. But when I was wrong, then 3 ticks' stop ( i.e. 15 points) is good enough to prove me wrong.

Of course, there were times that the market hit your stop and went back to your level,, or even worst, back to your profit target level. Well, when that happened, you can only blame it on your luck or timing of entry. See, trading is an art, not a science. That's why only 5% of traders are making real obsense money.

But most of the time, a three ticks' stop is a good guideline to prevent you from losing big. After all, successful trading is all about knowing how to protect your captial . And at time, the stop can also act as a good indicator for you to turn around. That your first decision is wrong and you should now act the opposite.

I always like this quote: : "Your first cut is always the cheapest!"

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