2017 is a special year for me as I've reached several milestones be it in investing or trading. Just last month, it marked my 10th year as a Full Time Trader. In 2012, I've blogged my 5th year as a Full Time Trader (5 Year Full Time Trader Recap -- Part I, Part II). Now, in my 10th year, a recap of what has happened no doubt will serve as an education for me going forward.
It was like 2 different worlds for the first and second 5 years. The first 5 years, stock market was like an ATM to me when consistently I can churn out profit on a daily basis. However, for the second 5 years, though I can still maintain a consistent profit every month but the profit level was much lower. For the first 5 years market conditions were very good for trading as global stock markets recovered from 2008 GFC with a bull run and the high profit level was due to leverage on contra trading. After 2011 when SGX decided to reduce the minimum tick size, that when the "nightmare" started. The contra trading method no longer able to churn out good profit level and it also increased the risk. For the next 3 to 4 years I have no choice but to test out different trading methods thus affecting my profit level. It was until 2015 that I finally found a method (probably not the best) that allowed me to churn out consistent monthly profit. The negative for this method was lower profit level but the positive is it comes with lower risk (no leverage involved). Though profit level was not as rosy as before, the present set up also allows me to face the market more calmly, confidently, more relax in trading and not affected by how other regional markets perform. I also found that I am able to read the market better in the second 5 years. However, there is still one thing that puzzle me and yet to understand why. Should I not be getting overly greedy, my analysis of the market will be very spot on but if I start to get greedy financially, my analysis will be way out. As such, for most part of the analysis, each twist and turn of the market I have to keep it to myself and that the reason I seldom post market analysis on my blog anymore. SGX will be increasing the minimum tick size from 0.5 cents to 1 cent for stock in the price range of $1 to $1.99 next month, that should be a very welcome move not just to me but traders in general and my profit level should be able to go up.
I even encountered some "weird" things during the 10 years period. Just 2 years ago, through an old friend I was introduced to be a trader for some high net worth individual. The deal was this individual will be providing huge trading capital for me to trade, the profit will be split 50-50 but the loss this individual will be absorbing. The only condition was should I recklessly or carelessly incurred too many losses, I will be out. Accordingly can easily get a 5-figure income every month, sound good deal ? Whether such a set up is legal or not I do not know. In the end, I did not take up as to me, I would prefer to trade with my own money, hey at least have some backbone right ?
People might question me did I make the right choice in becoming a full time trader. Well, if just purely from financial point of view, answer probably is a no. Should I still stay as a salary employee (engineer) financially I should be doing better than what I am now. I need not face with market risk and probably I can afford to be off focus on my work for half of the month and still get my pay cheque at the end of the month. In addition, I will have title to my name after climbing up the career ladder. However, taking away the financial factor, I strongly believe I have gained more in becoming a full time trader.
From 2013 to 2014, I have taken 11 Coursera courses to gain more knowledge on the fundamental of finance and economics (something that I do not have in my education). One of the course was on Financial Engineering which later spurs me to develop several software applications in 2013 for me to use in stock market and those probably now known as FinTech (refer here). Another course I took was about Business Startup and that later gave me an idea of setting up my Incubator Portfolio. It was also in 2013 that I started to research and study how Sun Tzu Art of War (孙子兵法) could be used in investing strategy. For the next 2 years I spent times correlating the 13 principles that formed the Sun Tzu Art of War into 13 principles in stock investing. To ensure the principle works I even tested it out in the stock market using CPFIS, SRS and cash account doing short to mid term trading. Then in 2015, after getting some confirmation result, I finally used it in my investment portfolio -- the Strategic section. Apart from that, I also managed to spend more times with my children, never miss a single event during their growing up phases, always be there when they needed help. These are those things that I believe no money can buy. Hence taking that into account, I prefer the challenge of being a full time trader, the satisfaction I can get from trading and I don't think I regretted in being a full time trader.
This is so much for Part I of the recap, will continue on Part II....
10 Year Full Time Trader Recap -- Part II
