How to become a trader?

Easy for this question. If you know how to use a computer and internet, then, to become a trader, you ONLY need to:

1. Press Long button on screen
2. Press Short button on screen

That is all! Simple, right? At this point, anyone who traded before will certainly say "No".

Yes, trading can seem simple at the surface. It is like a chess: anyone can learn it in 10 minutes, but to win, you have to put in 10 years of work and study.

Trading is harder than most salaried jobs because it requires you to use your brains and to suppress your adrenaline.

Answer, 2/3 of 2/3 of 2/3

Here is the answer for previous post,

1. For market newbie, they may very well choose 2/3 of 2/3 of 100, hence 44.45. Since we all kWillie we want to win, we at least will have to choose 66.67

2. To win over newbie, market professional will choose 2/3 of 66.67, hence 44.45

3. Now, to truly win over everyone, we have to choose 2/3 of 44.45, hence 29.63.

4. What if there are some extremist who believe everyone is rational and choose 0 as their answer? Then you will have to lower your estimate.

5. What if there are more professional in the group? Then you might think in higher level, namely, 2/3 of 29.63.

Which level did you belong to?

2/3 of 2/3 of 2/3 of 2/3 of 2/3 ...

Today I remembered an interesting story I read before. (I can't really recount where did I read this)

Here we have a competition. The rule is simple,
1. Everyone has to choose a number from 0 to 100
2. The person whose answer is closest to 2/3 of average participants' answers is the winner.

Easy? Which number will you choose? This competition is fairly similar to stock market.

I will post the answer tomorrow. Continued.

Research in Motion's Motions

While RIM, company best known for blackberry, was recently severely punished by market participant for announcing a profit decline estimate, it is now gearing up for new venture. It announced recently it will deploy new tablet, Playbook, at automobile. More, yesterday RIM announced it will push Playbook into India market.

While the company was dimmed by Apple's iPad, Blackberry is still welcomed among executives for it's highly encrypted message system. It seems like investors overreact to recent adverse earnings.

Everyone has a niche, RIM too.




Disclosure: this is not a recommendation for stock purchase. Nor does it recommend participation in equity market.

Raise of margin requirement

While the regulators have been advocating a raise on margin will tame the volatility on futures market, in short term, the raise has adverse effect.

First, regulators made their point that higher margin makes futures contract unaffordable, which causes less speculator in the field. But that is only true up until one point. If the ,margin is too high for small player, liquidity will dry up, market will become more volatile. Hedger will suddenly find themselves holding bunch of contract without being able to sell.

Second, in short term, the raise of margin will squeeze the smaller player. People who want to shun margin call will close their losing position, all at once. What happen next? The price move in greater momentum.

Speech

Last year, he said, I will never resign.

Last week, he said, I will resign after we solve the crisis.

Yesterday, he said, I am ready to resign.

That is baffling. Leaving tones of problems haunting the earthquake torn country, he ask himself "Kan" he do it?.

Euro Zone is planning for Greece bond default, finally.

While the politicians had been struggling to avoid the inevitable default of euro member, the day has finally came. According to today Wall Street Journal, politicians are seeking a new financial plan, which will seek 30 billion Euro contribution from private-sector creditors.

One year ago:
We will do anything to stabilize Euro.

1 month ago:
We may consider soft-restructuring.

1 day ago:
Lets ask 30 billion from private creditors.