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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Habitual Coffee Drinking
2016 Apr 22 Fri 13:00:55 | by
I used to drink a lot of coffee. Back in the days when I was trading pretty much 7/24 on all the major markets, drinking coffee was a necessity. There was no energy drink back then in case you are thinking about alternatives. Although I was a heavy coffee drinker during the college days, it was nowhere near what I drank back then. I am not talking about 6 to 8 cups a day. I am talking about pouring down 6 to 8 mugs a day. That’s the equivalent of drinking 12 to16 cups of coffee every day for years.
Can too much coffee be a bad thing?
Coffee lovers argue that it is perfectly fine to drink a lot of coffee. Personally, I think the opinion is quite bias. Seriously, anything we eat or drink too much are bad for us. How can coffee be an exception.
After years of heavy coffee drinking , the first sign of trouble was that I had hand tremors even when I was not drinking coffee. This was very annoying as it reduced my dexterity in a number of sport / martial art activities. It took me at least a year in cutting down my coffee in-take before the hand tremor was under control.
Another reason why I prefer reducing coffee intake is that coffee actually makes me a bit more excited than normal. This actually affects my ability to hang onto trading positions that require patience. Many good trading setups can take a long time to unfold and being jittery is the last thing I want when I am managing this type of trade.
Nowadays, I still like drinking coffee in the morning but I would stop once I feel I am alert enough for my daily task. From my experience, as I get to exercise more, the need for coffee is reduced significantly. In fact, I find midday exercise wakes me up more than having another mug of coffee in early afternoon. Having a good night of rest often allows me not taking any coffee at all until late morning.
Rigorous exercise helps. So do enough rest. Isn’t this the perfect formula for better trading performance as well?
I guess my dependency on coffee is more psychological than a real addiction now. I can skip coffee during weekend with no withdrawal symptoms like mild headache. Maybe one day I can enjoy coffee as an occasional treat instead of using it as my caffeine medication.
Best Portable Exercise Equipment
2016 Apr 15 Fri 14:59:42 | by
After the prolonged trip away from home, I have determined to find ways to do exercise pretty much everywhere. Here is a list of the equipment I will take with me on the road from now on. They are easy to carry and give one a pretty good all round workout.
For me, these items have to be light weight, easy to pack and do not waste a lot of space. After all, the airlines are getting more and more restrictive with the luggage size making it more difficult to hand carry everything on board. I would do absolutely everything I can to avoid having my luggage checked as the waiting time for the luggage can take a very long time.
Surprisingly, all I need are the following three things to get a good all round exercise routine completed:
1. Pull Up Handles
These portable handles are made to hang on top of a door or anchor on any strong frames. Once the handles are anchored properly, you can do pull-ups and various other body exercises. The one I got is the Lifeline one but any other brand should get the job done.
Here is how it looks like,
2. Resistance Bands
There are various types of resistance bands for doing exercise. First, the flat type is the most portable one as one can simply pack them as the last item you stuff into your luggage. Second, there are two types of flat resistance bands. One is just a very long rectangle where you can grab both ends to pull and stretch it. The other one is a loop for which you can pull it between your arms or legs for resistance training. Third, there is also the tube type that usually comes with handles and anchors to attach to a door or other fixtures.
I find the third type although stronger in general but they are not as portable or as useful when one is travelling. Hence I will stick with the flat types which both the single layer ones and the loop ones are very handy exercise equipment that takes virtually no luggage space.
I tried several brands from local sports equipment store but the resistance was too weak for my need. This one is the one I bought that I find good enough for my need,
3. Jumping Rope
I choose to include this in the list only after I figure out that it is still a good thing to include it because it is not necessary that all travelling ended up at a hotel or business related.
One can get jumping rope everywhere but one cannot do it everywhere. For example, it is not likely you can do rope jumping effectively within your hotel room. Nonetheless, if you are travelling to country side or a vacation house, you can easily find an open area for rope jumping.
Surprisingly, this one you do not need to carry it around. All you need to do, if there is no armchair in your hotel room, ask for one. An armchair with strong arm rest are pretty much all you need for various dip and push up exercise. The catch is that you cannot do full range motion so you cannot really get full body workout with just the armchair but it is good enough if you have really nothing else with you.
Next time, I will have my portable gym everywhere I go.
The Growing Concerns About Predictability of the Financial Markets
2016 Apr 8 Fri 13:13:24 | by
It is nice to be back to the modern world where internet is actually functional. One actually has to experience the inconvenience to appreciate how great the internet is nowadays. Learned quite a few tricks to deal with bad internet connections and I will post them in coming weeks. For now, it is catch up time for me in handling the huge pile of emails to response to.
Long Term Predictability of Financial Markets
A recurring theme I learned from my clients over the past few weeks, for the first time, that both old money and institutions are very concern about the predictability of the financial markets around the world. I am not talking about just the major ones like stocks, bonds and real estates. I am talking about global allocation and investments of all kinds. Unlike the previous few financial crisis, where these movers and shakers actually know that troubles were coming at least six months before anyone notice there is a problem, this time they are also in the dark.
In the past, when majority of investment vehicles are so overvalued like now, the major players already scaling out of various markets and park the excess cash on the side to wait for the golden opportunities to enter the markets again for long term multiple fold gain. Their actions actually produce the tops in various markets in the past as I explained in STOPD. They have the confidence and expertise to focus on protecting their capital while everyone else are still chasing returns.
This time around, however, the expected weaknesses in global assets that normally follow the overall economic down turn has not materialized. Well, I should say that it has not materialized in the way these major players expected. The key reason is the participation in the game by the central banks around the world. The direct involvement in various financial markets by these central banks changed the way how the global markets behave. This is not a good thing though. The central banks are making the global economy more fragile and more easily to break as people who are in the position of decision making on majority of global assets cannot find a reasonable course of actions to handle the current environment.
Long term investors no longer want to play the game because they cannot see clarity 5 to 10 years down the road. Such problem used to happen all the time but limited to certain part of the world or certain sector of the global economy. This time, as all major central banks are involved in rigging the game, there is no practical way to shift away from bad investments. The choices are limited to bad and very bad only. No wonder the swings in all asset classes are getting so volatile – only the active speculators and market makers are playing the games right now while everyone else are staying away.
Revamp of Site Design
Taking input from several savvy SaaS investors,I will revamp the website in coming weeks. The goal is mainly to streamline the front page design so that it is much cleaner and easily to navigate. I do not know how the site will look like at this point but I am sure it will be more friendly for more people.
I am also reviewing the advertisement placement on the site. As the site design changes, it is a good time to check if it is really worthwhile to put ads on the site as they also slow down the overall access speed. I have not decided what to do with this yet. Will keep you all posted about it.
Direction of My Writings
Over the years I have written lots of useful materials on trading and share that on the site. During the past few weeks when I have extra time on hand to reflect what can be done to make things better, I discovered that it is about time to switch my focus to write on the more advanced materials about trading. I am not talking about stuff like exotic calculations here. I am talking about providing materials with more depth on single topics that cannot be done with online articles.
Those of you who have read my articles probably know I have series of articles with each part spanning thousands of words. But that still cannot solve the issue of the need to have illustrations, tables, etc. for full discussion of certain concepts in trading. I plan to spend more time producing this type of research materials which I think should help many beginner traders to really expand the depth of their knowledge.
As my time is limited like everyone else, if I focus on producing the advanced materials, I will have less time to write articles for the site. I do not see this as a big problem going forward as new readers will have enough materials to digest from what I have written already while long term members of the site are more likely looking forward for the advanced materials.
I am open to discussion about this. Just drop me a line telling me what you think.
Keeping Fit on the Road
2016 Mar 18 Fri 13:31:25 | by
First, internet is not that good in some part of this world. Being consistently cut off from the net while trading is a very frustrating thing. Internet access sucks big time with quite a few major hotel chains. This is making me seriously reconsidering how to trade while on the road.
Second, trading only in the morning actually fits my schedule quite well. Although I have all these meetings to attend to this week, having the afternoon free to work on writing my articles and books actually feels good and give me a better structure to improve productivity. I do work many hours and often forget about time to anything else. But I know it is unhealthy to do so. Maybe I should consider reducing my trading hours in 2nd quarter so that I can complete the several writing and site projects more quickly.
Third, it is difficult to exercise on the road. I would not dare to exercise on the floor in the hotel rooms. The gym at the hotels are packed unless I go there when no one else are going. That leaves me with only limited number of basic exercises that I can do. For my young readers, keeping fit probably is not of very high priority. For a middle age guy like me, however, regular exercise is very important for both health and trading performance.
I wonder what the professional road warriors do to stay fit during their travels.
This week so far the internet access is bad but I can still go online frequently. Starting next week, my internet access will be quite limited so I may not be able to post my emini day trading battleplans or getting to post real-time commentaries. Just like this morning, it took me an hour to resolve the connection issues. I will try my best to notify premium members through the real-time commentaries whether I can post anything before the next trading day.
By the beginning of April, I should be back on normal schedule after i catch up with emails and other chores.
In case I cannot post by next Friday, Happy Easter!
Hardware Mode Over and Impact of Extreme Intraday Volatility
2016 Mar 11 Fri 14:27:22 | by
Two long weeks into setting up new hardware for the website and up coming real-time services, we have finally getting the hardware part of the equation done. Fine-tuning how to best utilize new hardware is always a tedious task. We can only guess what is needed and at the end of the day the actual results dictate what has to be done.
More Writing on Custom Market Breadth
Next step is resuming what we were doing and stress test our website to see how much data we can upload to the website. In parallel I will be the one testing the real-time custom breadth charts to get it ready for alpha release. I have lots of writing to do to get all premium members on the same page on this subject. After all, there are many concepts related to market breadth analysis that are not common knowledge to majority of traders.
Focus on a single subject to write is always my Achilles Heel. Hopefully I have what it takes to overcome this weaknesses and get more done in a short period of time.
Hands Off Being the Best Decision
One interesting observation about the current market environment – if I stick with my usual swing strategies to trade the Emini over the past few weeks, it would not perform at all. I am not saying my strategies would lose a lot of money. That is not true. What would have happened instead, would be a mix bag of big winners and big losers with almost nothing in between. That’s what I worried about back in early February that having too much of a good thing going with my trading can lead to a period of time for which the swing plays may not work out well.
The problem is that intraday volatility has exceeded certain multiples of the daily volatility making the risk reward on daily timeframe and above no longer feasible for regular engagement to stay profitable. One has to be very selective on what type of swing positions to put on to ensure the risk is under control.
I am not sure how long it is going to take for the trading environment to get back to normal. In fact, such high risk high volatility environment does not die down easily. This means day trading right now is the better game going forward until we see a shrink in volatility across the board on all the major markets.
This trading year is getting more interesting everyday.
Busy Travel Schedule
I have a very busy travel schedule in coming weeks requiring me to meet with my clients before the end of the quarter. If all goes well, including functional internet access at various hotels, I will be able to keep up with my regular posting of the Emini battleplan. This will be a good test of my ability to trade on the road.
This week the funniest news around the world is that Canada has finally sold off almost all its gold reserve. I use the word funniest because phrase like “most important” is not applicable to a country that is not so important in the world. Cana …
Since my programmers are stepping up the effort to release my new real-time trading tools, lots of testing are done which results in very high bandwidth usage. Well, our bandwidth usage has always been very high as my servers are collecting tick data …
A friend introduced me to his long time buddy who is considering retirement now. We have an interesting talk over the evening and I have learned some very disturbing development in the financial industry. This is not a good sign for people who consid …
Taking a break this week gives me precious time to figure out something useful for my trading in the long run. I was stuck with the problem of remote access to my main trading computers and home servers for a long time. This week I figured out what t …
This coming week is Chinese New Year. Many Asian markets will be closed. This in general leads to light volume trading in other markets as well, making it a good time to take a break to reflect on what happened in the past lunar year and decide what …
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