2007 :-
Officially became full time trader in September, 2 months after global market crashed due to US sub-prime crisis. Prior to that was on a part-time trading basis and prior to that was solely a passive investor. Like everyone else started off trading like punting, followed here, followed there, making money here a bit, losing there a bit and nett off not very impressive. Next, realized in need of a skill and hence turned to Technical Analysis and that was in the early month of 2007. Became a TA trader for quite some months, to test out before turning into full time in September. Market condition for 2007 wasn't that bad except for the crash in July and August, rest of the time relying on TA to trade was pretty much straight forwards and the result wasn't that bad.
2008 :-
The first game changer and also the lowest point so far in my life as a full time trader since 2007. Due to the US sub-prime crisis, global economies and stock markets were deteriorating as months went by in 2008. The game changer event was in September the collapse of Lehman Brothers. Prior to that I was still trading with the help of TA and as market condition slowly sinking towards September, was taking hits along the way. Initially, was thinking that the TA skills I normally used were not good enough and hence starting to enhance and at the same time trying to learn more TA indicators to assist in trading. As I'm a contra player (strictly follows the T+3 due date) and also don't believe in shorting the market when the trend is down (due to my mindset of being a fundamental and value investor), hence could see others making good profit while shorting but still maintain on playing the long side only. Then came the unexpected collapse of Lehman Brothers and there were fears everywhere with countries sinking into recession and stocks were beaten down to dirt cheap prices. Taking hit, not making enough to survive and the stress that followed was not something any full time trade would enjoy. Back to the drawing board and started to rethink all over again where went wrong and how to rectify it was on my mind then (engineer instinct I supposed, when all failed, back to drawing board). Couple of thinks struck my mind then :-
1. I remembered a meeting an ex-army friend some months ago in which he told me his brother was a remisier and has been making good money as he managed to capture the trend correctly. Must look at the bigger picture even though I am on contra trade and that was what appeared to my mind.
2. With everyday looking at every ticks of the stock prices I started to see stock prices moving like a music groove and with my good memory of able to remember the short-term support and resistance of the stock prices without the need to refer to charts. For contra trading I could leverage on the swing range and take advantage on it, moving along with the music groove.
3. From the background of being a fundamental and value investor, when prices of the fundamentally strong stocks are beaten down to dirt cheap and if don't buy then will be a big big mistake (look around how many billionaire investors became billionaire when they bought stocks at dirt cheap prices). This has somehow contradicted to what TA practices (ie looking at TA indicators for buy signal and normally when buy signals appear, prices already move up from their low). With that, I started to think that TA might not suitable for me as a trader.
4. I also found weaknesses in TA. TA can help to minimize losses but cannot prevent unnecessary one. TA does not require the knowledge in knowing the company fundamental and TA is based on past pattern to predict for the future. Who can predict the future with 100% accuracy ?
5. I like reading Romance of The Three Kingdoms and Sun Tzu's Art of War. Those are exciting to read because of the various war strategies that involved and what astonishing was even with a smaller army size, with the appropriate strategy one can still defeat an army of size bigger than yours.
With all the above thoughts I finally realized I need strategies in trading, different strategies for different market conditions (market conditions are forever changing). Slowly I crafted a strategy for myself to trade, one that aiming to have consistent contra gain and not venturing into something that cannot cater for unnecessary losses. Hence, that was the point I started to ditched TA as realizing TA is just a tool in a toolbox and nothing else. Next for the rest of 2008 I started to test the strategy I crafted and along the way refined it. The result was I slowly getting rid of those unnecessary losses and at the same time started to earn back those "school fees" I paid to the stock markets prior to that. The year 2008 wasn't a nice one for me as suffered nett loss in trading.
2009 :-
With 2008 being the game changer year for me, 2009 without any doubt was the bearing fruits year for me. I continued to crawl back those losses in 2008 with my customized strategy in trading and with global markets did a sharp rebound after hitting low in March, my trading performance starting to bear fruits and consistently hitting profit months after months. Before end of 2009, I already recovered all I have loss in 2008 and started to get nett profit for the year. The sharp recovery in stock market and economy in that year did bring relief and satisfaction to me as a full time trader but at that point didn't really realized that my customized strategy did not actually went through a serious stress test as the worst scenario for stock market was over and everybody started to buy the "green shoot" story by US Federal Reserve. I supposed at that time nobody care as long as everybody were making good money from stock markets.
