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[The following post is found in a blog of a Hong Kong part-time trader at here.]
The Hong Kong Federation of Trade Unions is an organization in Hong Kong that offers classes of many kinds at a very cheap price to Hong Kong citizens. You can find loads of things that you can learn: cooking, sports, business skills, arts, etc, etc. I joined a Sunday course on investment that lasted for a month or two, and it was finally finished two weeks ago.
The teacher himself is a semi-pro trader who has been trading the Hang Seng Index of Hong Kong for many years. Although what he taught on the screen was the traditional investment theories and approaches that are used by mutual fund managers, he often digressed and went into his speculative stories and experience, which I was really interested in.
Finally, it was the last class on the Sunday before the last. There were only 3 students in the class instead of the original 20-ish. Most of the students dropped out in the middle. At the last part of the lesson, we ended up talking about trading in general.
Of all three students, only I myself was a true trader (so to say) who had experience in intraday trading with a real account. The rest of the class were two 30-ish complete newbies. The teacher knew that, and I felt that he was trying to give me some important advice before the end of the last class after which we are unlikely to meet again.
"Only look at the chart pattern." There's the theme he was trying to convey to me the whole night.
At some point of the discussion, I tried to share my view on the fundamentals of the markets that I consider important and tried to predict the future direction of them.
But he simply dismissed it. Completely.
"I don't know about it." He said, "They should be left to the economists."
"How can I predict the future?" He added.
I also talked about news trading. I often benefits from the large movement after a news release, I said. Then I just questioned how weird the market would react to the news. Sometimes the news and the market is just completely unrelated (or at least it seemed so to me). Before I could elaborate further on this weirdness, I was interrupted by the teacher again.
"You don't have to know why!" Said him. "The same single piece of news, some people think it's bullish, some people think it's bearish, you'll never know."
"You trade [intraday] at night* to make a bit of profit, right?" He said. "Then you just have to watch the chart and trade. The reasons people react to the news are irrelevant to you."
"Just look at the chart, find the pattern, and trade. For other things don't really matter."
[*Note: I live in Hong Kong and at night it's the New York session.]
We also talked about the zero-sum nature of the market. I asked, where does all the money I earned come from? Isn't it a zero-sum game?
He said, "Not really, the money you earned [from your broker] is just a very small portion. Unless you have a really large account then they may trade against you."
"Like China," he gave an example, "they tried to trade oil in secrecy but it was leaked to the outside, so the market makers moved to market and they ended up with big losses."
But still, there has to be people to lose in order for me to gain, right?
"Well, you can always find losers in the market. People may get hit hard in this crisis, but sooner or later they will forget about it altogether, and a new group of people will enter the market again, sooner or later, one after another. There are a endless column of successers."
"Look at the history and you will know. There is always the cycle of bull and bear markets. When the bull market comes again, people will forget the lesson and throw money to the market again. It repeats like clockwork and it never ends."
I went further. But why? I just wonder how come people never learn from history? Why are they so stupid?
"Because it's human nature!" He said. "Don't talk about others, sometimes you are like that as well!"
"Why are you always making the same mistakes over and over again [in your trading]? Every once in a while I make mistakes that are stupid. You can't even control yourself! Isn't it the same scenario as those people who lose their money in the market?"
"It's just human nature."
And soon this meaningful conversation ended as the last lesson came to a close. I hope that in my future quest as a trader I will be able to conquer this shameful side of human nature and make profits.
The Hong Kong Federation of Trade Unions is an organization in Hong Kong that offers classes of many kinds at a very cheap price to Hong Kong citizens. You can find loads of things that you can learn: cooking, sports, business skills, arts, etc, etc. I joined a Sunday course on investment that lasted for a month or two, and it was finally finished two weeks ago.
The teacher himself is a semi-pro trader who has been trading the Hang Seng Index of Hong Kong for many years. Although what he taught on the screen was the traditional investment theories and approaches that are used by mutual fund managers, he often digressed and went into his speculative stories and experience, which I was really interested in.
Finally, it was the last class on the Sunday before the last. There were only 3 students in the class instead of the original 20-ish. Most of the students dropped out in the middle. At the last part of the lesson, we ended up talking about trading in general.
Of all three students, only I myself was a true trader (so to say) who had experience in intraday trading with a real account. The rest of the class were two 30-ish complete newbies. The teacher knew that, and I felt that he was trying to give me some important advice before the end of the last class after which we are unlikely to meet again.
"Only look at the chart pattern." There's the theme he was trying to convey to me the whole night.
At some point of the discussion, I tried to share my view on the fundamentals of the markets that I consider important and tried to predict the future direction of them.
But he simply dismissed it. Completely.
"I don't know about it." He said, "They should be left to the economists."
"How can I predict the future?" He added.
I also talked about news trading. I often benefits from the large movement after a news release, I said. Then I just questioned how weird the market would react to the news. Sometimes the news and the market is just completely unrelated (or at least it seemed so to me). Before I could elaborate further on this weirdness, I was interrupted by the teacher again.
"You don't have to know why!" Said him. "The same single piece of news, some people think it's bullish, some people think it's bearish, you'll never know."
"You trade [intraday] at night* to make a bit of profit, right?" He said. "Then you just have to watch the chart and trade. The reasons people react to the news are irrelevant to you."
"Just look at the chart, find the pattern, and trade. For other things don't really matter."
[*Note: I live in Hong Kong and at night it's the New York session.]
We also talked about the zero-sum nature of the market. I asked, where does all the money I earned come from? Isn't it a zero-sum game?
He said, "Not really, the money you earned [from your broker] is just a very small portion. Unless you have a really large account then they may trade against you."
"Like China," he gave an example, "they tried to trade oil in secrecy but it was leaked to the outside, so the market makers moved to market and they ended up with big losses."
But still, there has to be people to lose in order for me to gain, right?
"Well, you can always find losers in the market. People may get hit hard in this crisis, but sooner or later they will forget about it altogether, and a new group of people will enter the market again, sooner or later, one after another. There are a endless column of successers."
"Look at the history and you will know. There is always the cycle of bull and bear markets. When the bull market comes again, people will forget the lesson and throw money to the market again. It repeats like clockwork and it never ends."
I went further. But why? I just wonder how come people never learn from history? Why are they so stupid?
"Because it's human nature!" He said. "Don't talk about others, sometimes you are like that as well!"
"Why are you always making the same mistakes over and over again [in your trading]? Every once in a while I make mistakes that are stupid. You can't even control yourself! Isn't it the same scenario as those people who lose their money in the market?"
"It's just human nature."
And soon this meaningful conversation ended as the last lesson came to a close. I hope that in my future quest as a trader I will be able to conquer this shameful side of human nature and make profits.
