Aha today I got mood to blog. Actually no. I'm starting to feel an onset of sore eye. I hope it did not come from Melissa, whom had an eye infection and I grabbed her hand during service just now. No please no.
Okay I just want to talk about my forex trading first. You already knew from before that I lost more than half of my capital due to my greed and "God knows what came onto me". And it happened again this week. I traded upon an important news announcement (called the US unemployment rate). I lost USD49 on that. You may think it's small money. Right. But when I have only USD220 left in my account. That is a suicidal trade. I told myself I would not risk more than 2-3% of my capital on any single trade. But as you can see, I was gunning for a desperate attempt to pull my balance up back to where I would feel comfortable enough to sleep well for the night. But ummm long story short, I told a very short term trade on friday with a super-sized lot(that could be suicidal again if it lost). Luckily, it was a winning trade and it hit my target profit and I netted USD 33.60. Another trade gave up USD 13.75.
I guessed, after all these stupid trades, I will gain some precious and not to mention expensive lessons as a live beginner trader.
Okay, now is time for some deep thoughts I have about trading the markets. I read from somewhere in the past (yeah I really did borrow more than 50 financial books from the library) that the markets are called a zero-sum game. Because whenever a investor or trader loses, someone else in the other side of the world or whom takes an opposite sided trade wins. For forex markets, the biggest players are banks. I supposed they are tasked by the government to monitor the local currency and keep it within a range that is good for the economy. I can't say banks always lose, but it is obvious to say that they hold the largest trades and could potentially lose big. Sure, banks definitely got the state-of-the-art technology to sniff out the word out there, but there's no guarantee in trading. Especially when you are forced to handle huge trading sizes. It is difficult to get in and out of the market.
So I kept asking myself, so all in all trading the market is like a tug of war game between the sellers and buyers. One need to have a proven strategy and periodically change the trading idea to win most of the time. Then it raises another question. If more and more people gradually win more than they lose(assume that increasingly number of people attend trading courses), then who are the ones who genuinely lose? My answer is those newbie traders who think they know what they are doing, but ego eats them and their profits...
I have an advice to those who intend to buy those unit trusts, or mutual funds as they call it in the US. Nobody cares more about your money than yourself. Do you think that person who sold you the unit trust package cares about how much you can earn for yourself? He/she is actually thinking how much commission that can come from you. And those fund managers? Come on, why do you pay the monthly or yearly fees to them to invest your funds when they can't guarantee profits?
I heard a real life story from one guy in Wealth Mentors. He said he invested S$10k in some kind of investment scheme by ****(the company has the biggest chain of supermarkets in singapore. Go figure out). 8 years after he investing in the late 1990s, he got back a profit of less than 100 dollars. He himself was a very successful trader when he retrieve the money out. And he told anyone from then on who came across him trying to sell him investment policies, "Take a look at my profits. Can you guarantee these profits?
Guys, I'm not trying to stop you from investing your hard-earned money. Yes some investment plans work really well. But unless it is deposit guaranteed, anything can go wrong isn't it? Please do a thorough research on the risks and rewards of whatever you put your funds into.
Bless you all. The phrase that reached out to me this week was, "Don't follow the currents of the world, but the kingdom of God. Not my will, but Yours be done. "