Stress-Free Trader (The Lawrence Chan Blog)
Full time index & forex trader, occasional consultant to hedge funds / institutions, my work leads to my not so normal view of the financial markets. My blog mostly talks about trading, market behaviours and other musings.
Originally this blog is supposed to be organized in a separate website like what most authors do but I don’t think I will maintain it properly that way. So here it is as part of this website.
Schedule – Regular blog post every Friday with occasional additional posts when I feel like ranting.
In case you are curious of what I do outside of blogging here:
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There is No Better Time than Thanksgiving Week to Think About Gratitude
2015 Nov 20 Fri 13:31:06 | by
Thanksgiving has been a confusing holiday for me for many years because there is the Canadian Thanksgiving in October and then there is Thanksgiving in November for the United States. For an Asian who first moved to Canada some 30 years ago as a kid, it was a puzzle. It took me a long time to understand the meaning of Thanksgiving holidays. Surprisingly, it is not something new to me culturally – I know Thanksgiving is the day for the expression of gratitude. What I did not understand is the reason why such a day is needed.
Gratitude in the Big Cities
I learned over the years living in big cities like Toronto and New York that rarely do we see people showing gratitude in anything. I say rarely because there are people who do and it is always a pleasant surprise to meet these people. From my observations, these people are more cheerful than the others. Maybe it is just my biased opinion.
So could it be the fact that there is a Thanksgiving holiday, people have to save up all their gratitude to be used on that day only?
Extending gratitude to others in the big cities lands me into many awkward moments. Sometimes a sincere thank you can make the day for the waitress who has a bad day. Yet, there are other situations that the gratitude is not accepted. We cannot control how the others response to our actions. Hence extending gratitude may make us feel vulnerable at times.
Being Grateful Has Practical Benefits
Being grateful is an attitude towards life. Once you choose to be grateful it becomes much easier to extend your gratitude towards the others because it comes from within. Fake gratitude only adds to one’s miseries, not helping it.
Nowadays, science has finally learned what gratitude can do and it is amazing.
By just practising thankful thoughts towards the people you know several minutes a day, anxiety and other stress related issues are significantly reduced.
In addition to thankful thoughts, if you show your gratitude to the people you love regularly, the relationships become stronger and can last much longer.
I would like to add that being grateful is a very powerful coping mechanism against great difficulties and depressive emotions. When you can see the world in a more positive way, you will be more willing to accept the challenges you are facing.
From Being Grateful to Being Humble
Many young people who never face adversities can be quite arrogant and that in turn making them not suitable as traders. One solution to this issue is simply making them practice gratitude everyday. Once gratitude grows on them, their arrogance is reduced. This gives them a chance to progress into a more humble attitude towards trading.
This transition is made possible because being grateful makes us accepting the fact that other people’s actions have effects on us no matter good or bad. Over time, this will make us understand our well being actually depends heavily on what happens around us for which we have no control. Knowing how little we have control over our own lives helps us stay humble.
And we all know there is no certainty with trading. Thus, being humble is important for long term success in trading as we are expected to deal with setbacks and things that we may not understand at all. Only by accepting the fact that we do not know everything that we can keep an open mind to deal with uncertainties.
Long Weekend and Holiday Break
I would like to take this opportunity to say thank you to all my readers at daytradingbias.com. I am very grateful for the emails I received over the years telling me my writings have positive impacts on so many traders around the world. Your gratitude keeps me going.
I would like to tell all my premium members that I am very thankful for their support. Without you, I would not be able to develop the next generation trading technologies that are tailor-made for traders like you. Your valuable inputs have helped me understand what traders really need during the trading day when decision making has to be done quickly and decisively.
I am getting back my rhythm in writing, finally. I just need a better way to organize my time so that I can complete all the things I have on hand one-by-one. There are so many projects I have started – Definitive Guide to Emini S&P Day Trading Success, Art of Chart Reading the ebook edition, next version of real-time price level tools and many more. Lots of things to get done, I am sure it will keep me busy for a long time.
This coming Thanksgiving week, I will take a week long break starting Thursday and will resume regular posting the Thursday after. There will be a delay for the regular December issue of Market Bias Observer. If special market situation arises, I will post a special update for the premium members over the Thanksgiving weekend. Depending on how hectic the travel during the Thanksgiving weekend, I probably will not be able to comment on the weekend charts.
It is first time ever I join the Thanksgiving travel madness. Wish me luck.
Next Generation Price Levels Tool
2015 Nov 13 Fri 16:38:07 | by
Received quite a number of emails asking what kind of secret projects I am working on for the site. Well, it is the same ones I have been working on all along. The most important project is the next generation Emini and Forex price levels tool. It is interesting to discuss what I am up to and why I see that being the disruptive technology in trading.
Being Able to See Multiple Timeframes Price Levels is Just the Start
The Price Level Tools I developed for the site allow traders to see at a glance all the key price levels that are important to traders in all the major timeframes. This highly summarized approach helps traders to see clearly where price actions will likely take place so that they can better plan their trading around these key level.
One of the most important concepts hidden in the price levels tool is the structural behaviour in price movements which I described in STOPD. For traders who are not familiar with STOPD or other auction based price theories, it can be confusing what these price levels are useful for.
Currently the price levels tool only highlights the price clusters across multiple timeframes so that the traders can see quickly where the important price levels are. But it has not solved another pressing issue the traders want to know. In short, all traders want to know if certain price levels will be tagged in the near future and the probability for which it may happen.
The Likely and Unlikely Scenarios to be Unfolded Immediately are not Infinite
Contrary to popular beliefs, once a trading day has started, and that certain things have unfolded, the way a trading day can progress has very limited options. Of course we know that there can be news shock, central bankers interventions or even just a huge institution acting suddenly. Those scenarios are rare and can be handled with proper money management strategies. What we are interested in, is how to deal with the current trading day in normal circumstances.
The reason for which a normal trading day can only unfold in limited number of possible scenarios is quite simple. Notice that many participants have committed to their positions around similar strategic price levels that are pre-determined before the session started. When everyone is looking at the same information and using the same analytical techniques, similar outcomes are unavoidable.
Main Obstacle is the Proper Framework to Represent Prices in a Logical and Deducible Matter
So how do we figure out what price levels are likely to be tagged in the near future when all we have on hand are just whole bunch of numbers? The answer lies in how we represent price levels in a way reflecting the thinking of the players. If we can represent the price levels in a way reflecting the actions made by majority of traders (in terms of total traded volume), we can tell which price levels are being focused on easily.
This is how the whole concept of automating the analysis becoming very difficult. Traders change their strategies all the time. The retail traders often chase the next best strategies. We need something that continue to affect the way traders think so that we can produce consistent results over time.
Disruptive Trading Technology
For day trading purpose, up to the moment of decision making, all we want to know is whether a particular price levels is more likely to be tagged before another one in the opposite direction. The rest of the issues like money management and chart development up to that point in time, seasoned traders can handle proficiently already. This extra bit of statistical bias is all a good trader need to make better trading decisions that is not possible before.
Even if you have very good memory with decades of trading experience dealing with all kinds of trading environment, you may still make the mistake of identifying the odds incorrectly. With the technology I am developing, the statistical bias will be crunched up in real-time so that there is no more guess work.
I have spent decades in research on trading technologies, I am all excited with the possibilities of this project. It is something that can change day trading forever.
Back to Rigorous Exercise Regime and Planning for Next Year
2015 Nov 6 Fri 12:51:38 | by
Ever since I started my moving 2 months ago, almost everyday was a busy day, leaving me with no time and no energy for my exercise routine. Schedule messed up all the time thanks to all kinds of problems with deliveries and miscommunications. It is frustrating knowing that I cannot keep up with my plan to train myself back to peak physical shape as soon as possible.
When I first trying to gain back my physique, just a short but rigorous routine was enough. It is simple and effective. Best of all, it takes almost no time. Now that I have achieved basic fitness, I need something more. After cleaning up enough clutter, I finally I have time and little bit of space to restart my exercise regime.
When Carrying a Sabre is Not an Option
I am used to use very heavy weapons for my physical training. It works very well as I have been doing that all my life. With the recent move to this new area, however, I encountered a problem. People in the area seems to be scared by the toys I carry with me when I go to the nearby park for practices. I understand what they worry about – no explanation is good enough why someone is carrying a huge sabre walking around their neighbour. I have decided to give it up after several odd encounters.
I think it is time to think outside the box again to deal with this. Maybe, I can train with a metal rod instead of a sabre. As long as it is as heavy as my sabre there should be no problem. But carrying around something like that is still asking for trouble especially when a police cruiser is passing by.
Using weights is out of the question because it will negatively affect my overall build for high-speed explosive strength. Remaining alternatives include dynamic strength training with resistance bands or springs. It will take me some time to figure out if they are good replacement for what I need. If that works out, I don’t even need to go outdoor for my training which is great when heavy snow can make it difficult to practice in the park.
Planning for Next Year
For daytradingbias.com, more real-time tools will be introduced. Several trading models will also go live. The goal is to allow traders to lean on the signals either discretionarily or mechanically. I have outlined what the plan is quite sometime ago. In short, the various statistical biases will be presented as part of the premium content while more rigorous discussions of the exact trading models and their sensitivities to various parameters and market conditions will be made available in special reports.
Due to some unforeseen circumstances, I have to spare more of my time to expand my trading to cover the investment need of some friends and relatives. Helping them out means reduced aggressive trading for myself while putting more focus on managing their funds with conservative growth targets. It is in line with my transition to reduce my trading activities to a slower pace so it is something I am looking forward to do.
Starting next year I need to cut back on my time allocated to my coaching / mentoring services. It is necessary when I am obligated to do my best for the funds I manage. What it means is that it will not affect anyone working with me right now but I will be very selective in taking on new traders.
A Year Since
Cannot believe it has been a year since my late girlfriend passed away. It still feels like it was something happened recently. Yet time flies without me knowing. It is a very uneasy feeling – it still feels like she is here with me but not quite.
Everything happening at light speed around me since the beginning of this year. So many changes happened and developing around me that I would not believe in myself just one year ago. As if there is an invisible hand, I am pushed towards a different path in life for which interesting future awaits me. I am very grateful and ready for the challenges ahead.
Packing the Trading Office into One Laptop
2015 Oct 30 Fri 13:11:52 | by
I posted back in early August about the difficulties I have to deal with in finding the perfect laptop for my need. I have now found a laptop that can fulfill most of the requirements with some issues still not resolved. Hence my hunt for the perfect laptop continues. Here is what I found that works for me.
Lenovo Flex 3 with UHD
The laptop I bought is a Lenovo Flex 3. It is a 2-in-1 laptop meaning that it can turn into a tablet by flipping the screen all the way to the back of the keyboard. The version I got features a 14 inch touch screen with very impressive high density display offering 3200×1800 resolution. The computer manufacturers call this ultra high definition (UHD). This allows me to display all the charts, quotes, browser windows and order placement applications that I used to display on 2 monitors with my desktop computer.
Notice that this laptop is not a top of the line model. In fact, it is a relatively cheap model. I get this laptop mainly for the screen resolution it offers. The CPU is an i7 so it is more than enough for trading purposes.
The Mess of Dynamic Scaling by Windows 8
Setting up the laptop for trading took more than a week as I have to install many programs. After installation, I have encountered a weird problem for which the charts displayed by NinjaTrader, Multicharts, etc. are all messed up. I figured out a solution to disable the Windows 8 dynamic scaling and have it posted last week. Overall I am impressed with the performance of the laptop although the battery life should be longer.
What does not work out is the use of stylus (i.e. pen for writing on the screen) to take notes on the Flex 3. It seems to me the touch screen Flex 3 has is not built for notes taking at all. I tried a few touch screen stylus but none of them offers a satisfactory experience when working with Microsoft OneNote. It is quite disappointing since the Flex 3 can do a pretty good job in everything else so far. May be I will find a pen that works in the near future. If so I will update this post.
Microsoft Office and Windows 10
One important thing about buying a new laptop these days is the consideration of using Microsoft Office. If you plan to install the prior versions of Office onto your laptop like I do, do not opt for Windows 10 and do not upgrade to Windows 10. Windows 10 has built in detection to refuse to launch the older versions of Microsoft Office.
This move by Microsoft is to force people to “upgrade” to their latest subscription based Office. I am a very old fashion computer user who prefer the ability to open and edit my files any time, including 10 years later should I choose to, even though by then I may no longer use Office at all.
It is getting near the point that I would say with just one laptop, I can carry my trading operation everywhere. That is what I intended to do in the future. For now, more field testing is needed to fine tune the idea.
My time is still split between unpacking boxes and catching up with my projects for the website. Organizing things from the boxes is a boring and time consuming task but has to be done. I am limiting myself to a box or two every week now since the projects and writings for the website has to take priority. With this in mind, I am hopeful that sometime after New Year my place will be nice and comfy.
Surprise Savings From Rogers Cable Internet
2015 Oct 23 Fri 14:56:00 | by
I used to subscribe to Rogers with their most expensive cable internet plan. It used to cost near $200 Canadian a month. Even with that subscription plan, I still have upper bound to my bandwidth usage. It is so pathetic that from time to time I would exceed the limit and had to pay extra.
My internet access is mainly for my trading need for which I have to download tons of tick data every night for thousands of stocks and commodities. The amount of data I am getting depends on the market environment. It is something out of my control.
Since I have to setup various internet based access in my new home before actually moving in, I chose to start a new subscription of cable internet with Rogers in parallel to my original one that was still in use at my old place. It turns out, their new streamlined plans have changed significantly. Due to market pressure, the most expensive plan offered by Rogers now is just $100 Canadian a month. On top of that, this new plan has unlimited bandwidth.
Bye bye extra charges and hidden fees.
If I have chosen to move my service from my old place to the new one, my subscription plan would stay the same. And I would have make a big mistake. A $100 saving a month is very significant.
I encourage fellow Canadians to review their existing cable internet subscriptions with Rogers to see if they can take advantage of their new subscription plans.
Interesting conversation with some friends earlier this week who somehow have this perception that some money is evil. In particular, money made from investing, trading and even making a loan to others for interest is bad money. Very glad to hear the …
Trying to catch up with emails, projects and everyday task over the past few days. Learned a few things from the experience. They are quite funny. First, failing to clean up inbox for more than a week means many hours of work. Just identifying and d …
Many people who invest in real estates including majority of the people in the industry think that they can see the trend. In other words, they think they know where the price for certain region of properties will go in coming 6 to 9 months. In reali …
While dealing with my chaotic quest of relocation, I got the chance to talk to several ex-clients turning into personal friends from my hedge fund days. It is interesting that many of these seasoned investors are quite worrisome about the future outl …
Finally, the pre-arranged day to move has arrived this week and the movers were on-time. Everything went smoothly as long as I do not care about the hiccups in-between. 70 some boxes were unloaded into my new place with furnitures and other stuff. I …
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