High Heeled Traders

Trade Up Your Lifestyle

April 13, 2011

I was looking down at the peeptoe shoe I tried on, pretty, but one of my toes was sticking out like a hotdog that’s too big for the bread. Can’t have that! My shoe size is 8 ½. I eventually landed on a size 10. Monstrous! I knowwwwwwwwww. But what the heck, it’s just a number, I will rather have what fits me perfectly.

That shoe shopping wisdom is definitely a springboard to success in any business.  (Who knew?!)    Just take a look at Sean “Diddy” Combs, the wealthiest hip-hop artist according to Forbes, now worth $475 million. Diddy built his wealth chiefly from music, clothing-line and vodka. The article points out that “Diddy makes his lifestyle coexist with everything else he’s doing” — making his wealth-building both enjoyable and lucrative.

So what do you do in your lifestyle that could coexist with Trading?  You might have thought of these before:

  • Have a thing for bling? Have a look at investing on Gold, silver, platinum called “Precious Metals” – they are a store of value and used widely in modern technology (phones etc) thus enjoying high demand, aside from physical things, you can invest on stocks or funds that mine / process them
  • Are you the Homey type? Then check investing on banks as well as retailers of food, gardening, consumer goods, homewares or buying a house – understand when people (including you) feel confident to spend / borrow  for these
  • Walk everywhere? Usually we drive or fly – which burns Oil, if the visit to the pump is getting painful, invest in stocks, or funds that produce it to share in the profits from the high demand.
  • Love travelling? Learn about countries. There are funds that hold country-specific investments, or see how their currencies perform against USDollar. Like China, Brazil or Indonesia Exchange Traded Funds (ETFs) or take the example of Japanese housewives trading the Yen and USDollar because household budgets are affected by the currency moves.
  • Big Fan of  Fashion and Shoes ? You can definitely check out investing on retailers.   If you are of the Fiercer Sex, (and been reading this for a while)  you know what I’m talking about when I explain what we know about Shopping, Fashion and Shoes to understand  Trading concepts.

Mesmerizing Indonesian Fashion - Tikma Photography


Trade Up Your Lifestyle

Then there’s the question of how we achieve consistent success in Trading? With Self-Mastery!  Hope you read the start of the blog as I covered it earlier, or  review here for the juicy details. Self-Mastery is “The doing when something needs to be done and NOT doing when it is not supposed to be done (self-control)”. Undoubtedly, Trading will be a new addition that you should know how to fit in your lifestyle. This will help you to summon “Self-Mastery”, like maintain your self-control or keep motivated in Trading  even when you are busy with your job or your children.

I will skip telling you my misadventures in trying to “find time” or “balancing” life for trading, they didn’t work!      Instead I recommend that you understand and do your best to ensure the many aspects of your life support Trading and the ‘ultimate goal” which, for most of us, is Happiness in life.    What makes up your life and how could it support Trading?

>Totally critical.   Helps with maintaining attitudes that are essential for success in Trading or other endeavours.   Be Open to Receiving the abundance of the Universe!


> Helps to keep you motivated and people around you may be able to assist in monitoring your trades, or you can can delegate some tasks to them.   I know in my case, having children makes me more aware of risks,  and losses,  so that help me with self-control to follow trading rules in Position Sizing ™ and Stop Loss.

Work / Career

> Use skills/powers  you already do at work (especially in non-Finance roles) that could be helpful to Trading, for example :

  • Nurses / Medical / Health professional — use emotional control like being detached “dissociated” so you make the right decisions, (can’t be emotional with your patients), following rules, discipline.  You can also use skills in developing procedure, how to minimize risks or increase efficiency when time or safety is of the essence.
  • Admin or Office staff — use patience, following rules, discipline, developing procedure and some technical skills at documentation and information management (filing, organizing) can definitely help your business
  • Sales / Marketing / Entrepreneurs – you know what’s hot in the market so you can use that in selecting  the investment/stocks you want to trade.
  • Artists / Sports people- you can certainly use your drive to study plus  commitment to practice for the best possible outcome.  Having imagination on how you can win  will greatly help too.
  • IT / Engineering / Tradespeople-  strong in analysis, breaking things down and solving problem, is handy for analyzing opportunities and developing solution /procedure.  Remember sticking to rules and discipline counts massively as well.
  • Teachers / Human Relationships / Mothers – certainly using patience,  ability to act when required (flexibility and self-control), being conscious of contingencies (you bring extra nappies and clothes in case something happens!),  don’t want to risk  a lot and developing procedures for efficiency.  More on this later, have a  “Trader Mom Special” tips to give you.

If you notice, I didn’t mention any Content or Knowledge you’d have to have…. that is easily acquired.  Your healthy mental state and  emotional control is much much much more important in Trading. I used to think  of how my IT job takes away focus from my Trading , it was hard.  But then I know I have to have my job to build my capital and it pays for my lifestyle.  When I changed my outlook into “how my work can help  me Trade”, it got easier —  I recommend that “attitude of gratitude”  for what you have and just use it to move in the direction you want.  (This is deep philosophical stuff right here!)    You will feel better, and when you feel better, you trade better.

Health and Well-being

>  Helps with stress management and peak performance, and of course allows you the Time to trade (can’t be trading on a sickbed!).


> Helps with stress management or gives you a diversion so you are refreshed when you trade.  Also associate with positive and inspiring people or those who have success in investing / trading, you might learn something useful.  On that note, flattery will get you everywhere so do butter up a person you think can help you, be honest that you want to learn from them.  He / She might even be an “Angel Investor” who may trust you with their money if you can prove yourself to be very very good at  Trading.


> Tasks that include  Budgeting, Pay Bills, Retirement Planning, Costs Control, Tax Planning that help you build capital  and knowing how much to risk.    These tasks are not exciting, even to me.     I have a tip I’d give you though, when you do these tasks, you are ensuring your  finances give you ability to enjoy life more.  It’s like wearing stillettos, at first you’d have to gather the courage and then  wearing them gives you the “high”  (emotionally and literally)    🙂      

Hip Heels by Via Uno

Housekeeping / Organization
> This includes tasks to organize / clean up your life so you can do everything else!      And if you’ve been reading this blog for awhile, you know  your “Shopping skills” is a treasure trove of knowledge for Trading.    You, genius, you!

I hope presenting this view starts you off with looking at how Trading fits your lifestyle and    see everything where you can seek out  “synergies” or  what would work together with Trading.    Remember multi-millionaires like Sean “Diddy” Combs  use this strategy,,,  how hard can it be?!

See you at the Top!

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Buzz Buzz!

April 8, 2011


                                                                                                                                                                                                                                                                                        Hello everyone! so happy to tell you about  Forbes.com blog not just on Trading, but features Women Traders as well!


The Forbes blog is Trading Places, and the writer, Emily Lambert  even “Called-Out” my comment to the whole site!   I recommend you look her up in Forbes.com

With  4 months into the world,  our blog  has also been well-received

  • By the Emergen community of Australia’s Young Leaders.  They published my centerpiece article “Women are Natural Traders” for  International Women’s Day eBook 



  • Readers both women and men,  even from non-Finance backgrounds — nurses, HR , IT, Engineering, mothers, fashionistas, administrators, NGO workers, entrepreneurs, teachers,  media and advertising  (you know who you are!).   Thank you all very much for your support!


  • Read in  Australia (as far as Perth!), Philippines, Indonesia, Singapore, Brunei, Thailand, Malaysia,  Japan, Hawaii and US, Cayman Islands, Germany, Switzerland — if I failed to mention where you are, please tell me!

I hope you can help me spread the word!  If you want to join me in writing here too, please let me know!

May the Fierce be with you!


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I can’t seem to recall when I took my first elegant baby steps to buy shoes on my own. 🙂     I do remember many shopping expeditions with my mother.   So as I say, Trading is like Shopping, wisdom in Shopping is honed for years!  So first lesson is that :  Learning to Trade takes time.   Don’t expect to learn Trading in 3 months!  Not unless of course you’ve been reading this blog  🙂   and if you are a savvy shopper, you’d definitely be able to trade profitably sooner than most.  But don’t rush, OK?

I hope you started reading this blog from the beginning (see For Newbabes for content outline and introduction to concepts ). We’ve been  saying “Trading –is basically Buying and Selling” – (will keep repeating this until you say it in your sleep) 🙂 .  Sounds simple,  but hopefully you now know it’s not a business to sneeze at.   To make it easier for some people (including me!), think that it’s like Shopping for Shoes.  When do you think something is a “good buy”, a “bargain”, or a “steal”, or simply a “must have”?  You have your own criteria, right?  What influences your buying decision (is this the Hot trend or is it on Sale?), how much to spend, when do you need it, what you can wear it with (does it complement what you know you have), where are you buying it (market)?  These are just some of the Trading concepts applicable that any self-respecting shopper  understands.  OK so, in the perfect world, you would window-shop, try on a few things, and buy following your criteria but sometimes,,,, you don’t.  HEHEHE.  Like, when you are already in a hurry, tired, stressed, too excited, broken up with someone (uh-oh)   – your mind is clouded and forget your criteria and just buy whatever, vaguely aware of being able to exchange or refund (don’t forget to keep the receipt!).  I’m sure you are familiar with that. Then you get home, get out the new purchase and walk it.  If it’s perfect, you’re happy.  If it pinches your feet, or hurt or does not quite work as well as you thought, you’re best to cut your loss and go back to the store to get another pair.  Though there’s also a chance, you’d hang on to it too (yeah, different reasons, too lazy or love the brand, what the heck!).  Everytime you’d walk past the shoe rack, you know there are probably too many in there, (but always have room for one more!)  and a number of buys that didn’t really work out. (Ouch!) Lesson learned:   you got to be a better shopper!  Long story, but Trading, like Shopping, is a simple idea, needs some work, but well worth the effort for BEST results.

Previous articles have given you an overview of Trading.  Here I’ve grouped them into task groups  that I do in real life !

  1. Research and Education
  2. Developing Self-Mastery
  3. Business Planning
  4. Actual Trading
  5. Performance Monitoring
  6. Get Back to Trading / Improvement


 Say Again? How does Trading relate to Shopping ?

 Research / Education – is like learning Shopping 101

 Girl, before you hit the Shops, there are a few points you should know before getting  out into the world, or in our case the markets.  People are out to make money in the markets.  Know what you should know how to accomplish your Shopping mission.  These are like the  Trading concepts that I have explained in earlier articles (for those who are new to the site, pls go to For Newbabes for content outline).   Trading concepts like:

  • Market (where to get the best deal and one I am comfortable) 
  • Market Type and Strategies
  • What Concepts to use – is there a Trend? Are there bargains?
  • System (Rules) including Position Sizing (TM)
  • What moves the markets? 
  • Market selection
  • Other Market knowledge (this is not a complete list, I’m just giving examples)

 Self-Mastery: Work-Shop

 This means, lay the groundwork for trading success!   We’ve talked about Self-Mastery as the primary success factor for consistent trading!  Self-Mastery means “doing when something needs to be done and NOT doing when it is not supposed to be done (self-control)”.   This area in Trading is also called Psychology.   Before you enter a trading position, remind yourself of the following:

  • Risk Control : what’s your risk tolerance, when to take the risk, Low-Risk ideas
  • Stress Management : stress will lower your performance, thus you need relax
  • Attitudes and Beliefs > Are you aware of what’s driving or stopping you?
  • Practice Trading – Window shopping – trade/shop with no money involved to learn and get comfortable
  • Mental States – Is it a good idea to Trade or Shop when you are fuming mad?  No need to answer that! Don’t even think of doing it! Best to Trade or Shop when you are in Zero State (not excited/frustrated from last trade), which will allow you to  see the opportunities as they are and to just make your decisions according to your System / plan.


 Business Plan  – Mind Your Own Shopping

Yes, these are different for every person, and would be dependent on each one’s situation.

  •  Objectives : What is it you want? For trading this could be monthly  income expected, how much you are willing to lose (e.g. 20%) and preserve (80%) etc.
  • Spending Money : funds to commit and funds to risk
  • Timeframe :  long-term, short-term / swing, day trading
  • Plan B – When things don’t go according to plan, what do you do?

It’s raining, it’s not raining, what am I gonna wear?

 Actual Trading  – Ready, Get set, Shop!

  •  Look for Opportunity
  • Am I following the Rules (System)
  • Open (Buy to Open or Sell to Open)
  • Monitor the trade
  • Close (Profit-taking Exits or Stop Loss)
  • Documentation and Filing

 Performance Monitoring  – Hey does this Shopping make me lose weight?

How are you feeling about your trading?

  • Are you able to work? sleep at night?
  • Are you too excited?
  • Are your Objectives being met?
  • Are you following your System / Rules?

 Get Back Up and Improve   – Buyer’s Remorse and Recourse

  •  Mistakes? What mistakes ?
  • How do you summon up the courage to get back in the market and trade?

We’ve talked about most of these points, questions,  and concepts in previous articles.  Review them. Plus, more detailed discussion in the next materials, promise!

You may notice that once you’ve acquired the knowledge on all  6 task groups and laid out your business plan, you only need to be doing the task groups of  Self-Mastery, Actual Trading, Performance Monitoring and Improvement. On a per-trade basis, you will need to be doing Self-Mastery and the Actual Trading.   Lay a solid foundation for the business, and it will be more fulfilling and profitable.


Meantime, keep thinking about your Shopping experiences, because  “Trading is like  Shopping” and  as I said, will help you to learn to Trade.    There is a saying, “What you hear, you forget. What you see, you remember. What you do, you understand.”  Makes sense?

 In the next articles, I will discuss how to weave Trading in to your life. 

But before that, I leave you a Homework :   Go hit the shops!  (Enjoy, but shop responsibly!)

Thanks Via Uno for Walking with us in this journey!

Position Sizing (TM) is a trademark of Van Tharp Institute

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A “Major Major” comparison of Real Estate and Trading, girl you’d be hitting 2 birds with one stone reading this article. Smart and Fabulous. Love it!

Let’s dive in!

10)      Liquidity

Try this : put some cereal in a bowl and pour over some milk.  You would find the milk would go right into the bottom of the bowl, you wouldn’t see it unless you stir the mixture.  Now get some cut-up fruit and put into the cereal.  You would find that the fruit would stay on top of the heap.

The milk easily passes through the cereal because it is “Liquid”.  It is the same as in investing, “Liquidity” is the ability to easily  “get in or out”  of an investment  ideally without disruption to regular prices, and therefore the ability to convert the asset to cash. (Sound FX –  Ding Ding Ding!)

Liquidity is one of the most talked about qualities of an investment,  it is important because it gives flexibility to the investor,  as well as “safety” in that when times are difficult you can get out of your investment and  keep losses small.

a)      Real Estate

Any homeowner would know this.  You can not sell a house in a day or two.  Even if you are able to find a buyer willing to cough up the money you are asking for at the  first day you sell, there is a lot of laws that control the completion of the deal.  Things like :

  • cooling off period — when the  buyer gives a written offer to buy  there is still a minimum period  let’s say 24 hours that they can back out – this would vary according to government regulation
  • inspection period – laws try to give people a fair chance to make sure goods / properties  are in a condition that is acceptable to the buyer.  At this time a building inspector may be brought in to check the soundness of the structure, security , any pest issues etc.   At the same time, a Valuer may also come it to check the property’s worth, assessing  the construction, fixtures and amenities  as well as against the market value of similar properties.  The Valuer’s report is  a requirement of banks to support the loan and is also useful to the Buyer to aid in negotiation.   This can take  1 to 5 days depending on the availability of the professionals needed to be on site, writing up and delivery of the Report
  • settlement period – normally a property  is bought with a bank loan and you would have to deal with the government’s  administrative procedures  about the change of ownership etc.  Some sellers  use this time as well to look for alternative accommodation. This period can take around  6 weeks and negotiated between the two parties.

b)      Trading

There is varying degree of  Liquidity in the financial markets.  Remember this is the ease of getting in or out of the investment.  Companies with a big amount of shares available to the public and long history of profitability  are called “Blue-Chips” and are the most liquid shares.  Smaller companies that trade less than 10,000 shares a day are highly illiquid and hard to get out of,  you need to be aware of this when considering buying these investments.  In the FOREX market,  an estimated US $ 3.98 Trillion a day change hands, it is highly liquid thus attracts many traders

As for time period, trading transactions to Close could take 2 to 4 days.

  • Transaction on Shares get completed the next business day. (T +1 where T is the Transaction day)
  • Transaction on Options get completed after  3 days.   (T+3  where T is the Transaction day)

11)      Access to Funds

This is similar to Liquidity however let’s just talk about just getting SOME money out  or getting back in the investment.

a)      Real Estate

You don’t have to sell your property to get some money out,  which is one attraction of Real Estate.  You can instead gain access to funds / equity with your home loan.

  • Structure your Loan to have a Redraw facility – banks may have  a loan product  where you can “redraw” your equity.  Normally, it would be set up such that you can put in extra payments to the loan (lowering your debt) and get funds when you need it.  For this  “convenience” however, the banks charge a higher interest rate.   You need to weigh this “convenience” against other alternatives like having a specific pool of funds for any such cash needs rather than paying an extra  interest on  your loan.  Think, for a 300,000 loan, an extra 1% is 3,000 per year. Even if it’s only half of that, it’s too much to pay for convenience!
  • Refinance – if you have not structured your Loan for a Redraw facility or if your property has appreciated in value and you want to get back some equity, you can Refinance, which means you are basically getting a new loan, paying back the old loan. (You normally do this when you transfer to another lender, but you don’t have to–n just ask your current lender).  For example, the original loan is 100,000 which is 80% of the value of the property  worth 125,000,  then the property increased in value to 170,000.  You could  refinance with 80%  Loan to Value Ratio  and your new loan is $136,000.  You then pay your old loan which was 100,000 – which makes  36,000 available to you.    Note though that you will be subject to loan application process again where your current financial standing ( income and liabilities or other credit criteria)  will need to be considered “acceptable risk” for the higher loan to be approved.   So if you plan to Refinance, maintain stability in your life, stay in the house you are occupying for 1 year   or keep  the same  job – check with local banks about how many years they require to be in the same housing/ job  to be considered a good risk ),  as well as planning number of dependents / children  and avoid borrowing for cars, furniture etc.   Even if there are many  “interest-free” offers – RESIST  THE TEMPTATION…. RESIST  THE TEMPTATION… RESIST  THE TEMPTATION.  Or …  wait for The Sale.

b)      Trading

  • You will have to sell  your investments to be able to gain access to funds.  Although unlike Real Estate, you can sell  just a part of it  and  hold on to another portion  for further appreciation as you see it.
  • Financial markets are volatile, so in case you have sold your shares at a profit for example at a high price, once  a decline in the stock price happens, you can always jump back in (Remember your Entry Rules though).
  • You can also take advantage of Derivatives like Call Options to roll-up your investment without fully committing your cash.  Review “Oceans and Opportunities” and “Learn to Last Part 1 : Financially” and will also tackle Options at a later section.

12)      Calculating Payoff

“You Are Here”  — these are magic words on a map,  when you are travelling or entering an unfamiliar building,  at an instant  you’d know whether you are in the right direction or not and  just help to  get your bearings.     In calculating “Payoff”,  you are mapping at  what point you get Breakeven,  Profit or Loss.   Having this roadmap will definitely allow you to  rethink  whether  to take that direction or not , employ any tricks if you can to get the desired result, or even save resources.

a)      Real Estate

  • Payoff of Loan / Debt Repayments

Do you know that when you pay your loan more frequently (every fortnight instead of monthly)  you pay LESS interest on your home loan?  I used a Home Loan Repayment Calculator and it shows that  with a Loan of  300,000  with a 7.25% interest rate and Loan Term of 30 years —

If you are paying Monthly – you pay 2046.53

With Total Interest Payable of 436,750.00 for the life of the loan

If you are paying Fortnightly – you pay 1,022.83

With Total Interest Payable of 325,546.00 for the life of the loan

That’s 111,204 – YOU SAVE / DON’T HAVE TO PAY, all because  you invested 5 minutes in checking your Loan Repayments Payoff, and found that reducing your Principal faster will save you a ton of money.

Try doing this yourself – I used :


  • Flipping a Property

I had once a friend propose to me about a  buying a worn out property, renovating it and selling it quickly for a profit.   I am not too excited about the physical labors involved (I am just not a “handychick” )    but I still did a quick study mapping out the figures, which looks a little something like this:

If buying a worn-out property for renovation, you need to

  • Calculate all expenses in opening and closing the transaction, incl real estate agent’s fees to sell, stamp duty, taxes, lawyer’s fees, bank fees etc.
  • Calculate the renovation expenses (cost of new carpet, paint, kitchen , bathroom , other fixtures etc),  if you want to attract high bids,  you have to present the property beautifully,  you need a professional  to do design / color and take care of aesthetics.
  • Calculate / allocate the loan repayments from  Buying and Selling the property, this could take up  3-6 months
  • Calculate the  Total Expenses – add 10-15% for slippage (because  risk of being overbudget is always there!)
  • Assess market value of similar properties, you need to be in an attractive / competitive price point if you plan to sell / flip quickly.

So say the property is  400,000 and  Total Expenses for the project  is 60,000 then the property should  sell for not less than 460,000 (your breakeven point).  Now, if the market value of similar properties in the area is 460 – 480,000  then you will either only breakeven or get a 20,000 profit.  Considering the whole risk of the project, doesn’t seem to be worth it.

I came back to him with the conclusion that we need to buy the property in a popular suburb  with a steep discount  — around  20-30% BELOW market value  –in order to make money because we don’t have time on our side  as loan payments will eat up profits.

Knowing the Payoff of the transaction  you’d be better informed of whether to do the project or how to go about  doing it.

b)      Trading

With Stocks or Options, it is fairly easy to plot  Payoff and  breakeven points.

  • Say with a Stock costing $5 each, you buy 500, Total Investment  =  $2,500
  • Then add the costs of Opening and Closing the transaction which is just the broker fees and gov’t charges which may be around $50
  • Then take the Total Investment  $2,500  and Total Cost of $50 to arrive at $2,550, then divide by the number of shares (1000), your breakeven point for each stock is   $5.10.  Any price move above $5.10  – you are profitable.  Any price move below 5.10 you have a Loss.

Starting out though I hear about people wanting to “diversify” thus  they think they are doing a  “good job” by only risking a small amount on any one company stock .  ( and I also admit to having done this ! )  However,  the stock price has to make a BIG  move in order to be profitable.  The share holding would be languishing  at a “Loss” for a long time before they are profitable.  Instead of “diversifying” stock holding, they’d have better opportunity to profit with being “focused”  on one stock and managing the trade carefully instead.    In the example below,  a  500 shares holding only need to gain 2% to breakeven, while 100 shares holding need to gain 10% to just breakeven.

  100 shares 500 shares
Cost per Share $5 $5
Transaction Costs $50 $50
Total Investment $550 $2550
Breakeven point per share $5.50 $5.10
Percentage gain required 10% 2%

Mapping out Payoff  as shown above  is helpful to determine  how many shares to buy  that will  allow you to enjoy profits from price rises  and give you an idea  of how many opportunities you can have. (ie.  How many times could your share rise 10% a year? If it does?)

13 ) Depreciation

The general definition of Depreciation is a “decline in value ”.

a)      Real Estate

Look around you,  anything that was new or young  wither and get old.   (Ouch! Look the other way!)  But that basically is the reason behind  Depreciation in the financial world.

As time passes, steel  materials rust, masonry can crumble, chemicals for adhesive and paint lose strength, it is reasonable to expect then that buildings made up of these materials slowly deteriorate. Therefore, the value of a building declines.     So in Real Estate,  brand-new properties are popular with investors.  With a new property, every year, you can claim Depreciation of the building and chattels (or fixtures like the plumbing, doors)  as a Tax-Deductible Expense.    As an example, for a building / structure  worth 290,000 you can claim Depreciation of building  and  chattels around $7200. This will have the effect of lessening the Personal income you have to pay tax on —  if property  is in your Individual name.    A seminar  I attended even  trumpeted this as a good thing, because you are lowering the taxes you pay or get a big tax refund.  BUT,  don’t get too excited because when you sell the property, the amount that has been depreciated will be considered in the Tax calculations.  I know some people who got a tax bill in one financial year because they had a property that they sold that year but claimed Depreciation on the previous years.  It’s beyond the scope of this article to illustrate, but get advise  from  your Accountant regarding this.

When I got started with real estate, the  property was placed under company name – we didn’t get the “benefit” of a tax deduction, but when we sold it, we didn’t have any “nasty surprise” of having to pay more Tax due to the Sale.    Again, clarify this idea and tax structures with your accountant – preferably  BEFORE doing anything. ( HEHEHE)

b)      Trading

In Trading financial markets,  you will hear “ currency depreciation”  — which means the loss of value  of a country’s currency  against one or more currencies.   It is used interchangeably with “devaluation”.

Depreciation  as explained in Real Estate discussion above does not apply in Trading.

14) Taxation

First let me say that it is important to get reading on Tax guidelines, tax agencies do put excellent information for the public and armed with this knowledge,  to  consult with your accountant for tax matters and the business structures that are available where you invest and your purpose for the investment.  There are different tax rates for different structures, people!

This is a good part to tell a story.  I remember  wanting a distinct pair of shoes, it  looks amazing! I  really wanted it.  BUT,  it had killer heels, and I carry the baby around all the time still, hehehe no can do.

I also fancy ballerina shoes,  they look so cool and comfortable,  when I tried  one on however, it didn’t  look good on me.   My feet were  “structurally wide”… hahaha…

Yes, the world is not fair. Anyway,   I did find something that worked for me magically,,,

a)      Real Estate

The following are common taxes that  apply to Real Estate investments

  • Land Tax – this is an annual payment to the local government, it is based on the value of your property.  I tried to look up the justification/ purpose of this tax –  I didn’t find any ! We are just told to pay it. * Surprise!  The following link would give you more information.


  • Stamp Duty – this is a payment to the government  when you buy property  (in Australia – what luck!)  Other countries like New Zealand, Singapore, US  do not have this tax.  There are exemptions like when you are a First Home Buyer and up to a certain threshold.  It is applicable to most investment property.   Check with your lawyer if you need to pay this tax.
  • Capital Gains Tax (CGT) – when you sell or give away an asset for more than the original value, you may are required to pay this tax.
  • Income Tax –  this is an annual tax on your income for the year, this includes Rent income received from your real estate investments, Dividend income,  Interest earnings
  • Estate Tax or Inheritance tax   — wasn’t there a “joke” about the only permanent thing in the world is Death and Taxes?  And there is a special tax  that combines both!  Estate Tax is tax payable on the transfer of assets of a deceased person.  This is paid in many countries, in the United States,  it has been controversial in recent years “Unified Gift and Tax System” –  you can tell there are many rich persons there intending to get the most advantage they can get!
  • Goods and Services Tax / Value-Added Tax –  the property itself may be exempt, but services relating to real estate like property management and any  other goods  you buy to maintain property (like curtains, dishwasher etc) is subject to GST.  If your business structure is registered for GST, you need to record and report it. Again, check with your accountant.

Here are some links on Taxes for your reading pleasure….

Australian Taxation Office

–Free Tax Seminar


–Investment Essentials


b)      Trading

There are lesser taxes to pay in Trading for sure —

  • Capital Gains Tax (CGT) – when you sell or give away an asset for more than the original value, you may be liable to pay this tax.  Say you bought Microsoft at $12 and it is now $20, you have to pay tax on the $8 (less fees) you made on the financial year you sold it.
  • Income Tax –  this is an annual tax on your income for the year, includes Dividend income,  Interest earnings (from your holding account for trading) , as well as rent mentioned above.
  • Now  just a word about Dividends – if they are “fully-franked” that means tax has already been paid by the company on the profits from which dividends are paid.  Individuals may not need to pay tax on it. Australia, New Zealand, United Kingdom  has similar system called “dividend imputation”.   Tax laws vary from country to country and business structure so check with your accountant.
  • Goods and Services Tax / Value-Added Tax –  Shares may be exempt, but services relating to it like brokerage and clearing  is subject to GST.  If your business structure is registered for GST, you need to record and report it. Again, check with your accountant.

15)   Legally -all yours

Best of course to consult with lawyers / solicitors regarding legal issues,  I thought  I’d just give you a few memorable (and some painful) lessons on legal matters from my past life.

a)      Real Estate

  • Ownership rules  –  pay attention to this.  You don’t want to be on the hunt for property you can not own.  We arrived here in Australia as Temporary Residents and there are constraints to what Non- Permanent Residents / Citizens can own – mostly new properties are available for investment.   Also, there are government “First Homeowner Grant” program, (usually  to Individuals)  and  since we want to avail of it, then we opted to use another entity for investing / real estate transactions.
  • Contract for Sale – it is wise to check the whole sheaf of papers enclosed in a Contract for Sale.  I like  to pay attention to:
    • whether the property has  Liens registered which could be a complexity.  A “Lien” is like a legal claim to the property, which can prevent it from being sold,  this could be from a second mortgage or if the owner owes money to anybody and used that property as security  or collateral.
    • If the property is yet to be built or  Off-The-Plan, it should have an attachment of  all Fixtures and Fittings to exact specifications.   For example,  check the dishwasher brand and capacity, the dimensions of the sink, the sample of carpet to be used etc.   This is an area where builder / developer could  go cheap if they are vague in the Contract and could be very disappointing when you see it completed.
    • If you have plans to rebuild or redevelop, note the  layout of the land, where the Easements are located.  Easements could be used for the transport of services like water, gas,  telephone etc.   Since maintenance or repair  is required on such services,  you can not build on the surface, thus you need to consider this if you have plans to further develop the property.
  • Exchange of Contracts –  this is when buyer and seller commit to the Sale of the property.  A Deposit is payable at this point, usually 10% of the Sale Price.  If the Buyer does not want to proceed with the Sale at any time after that, goodbye Deposit! It is forfeited in favour of the Seller. Check that there could be a Cooling-Off period  e.g.  5 days from Exchange (just in case you change your mind or any unfortunate event happens, you  can still get off the hook!)  This is good to know,   earthquake, tornado, floods can happen without warning.
  • Sunset Clause – this is applicable to properties that are being sold “off-the-plan” or those that are still being constructed.   In Australia,  development projects are required to have a “final completion date” – after which your obligation to the contract evaporates. ( You know, like the Sunset   — there is no more light after the sun goes down).   Buyer and seller are normally freed from the contract.  The Deposit  and any interest incurred is paid back to the Buyer.   This sounds really good except that,  I heard that some sellers are happy to be freed THEN  jack up the price of the property and find other buyers.  So it would be good that you check that the Seller can not rescind on the contract even with the Sunset clause.
  • Settlement time limits – after Exchange of Contracts, you proceed to “Settlement”  to complete the transaction.  This is when the transfer of title is done  and  the balance of the Purchase Price is paid (Deposit is paid at Exchange of Contracts) and you become the Legal Owner of the property.   Law varies per area but  prescribes a period  of time e.g.  six weeks after Exchange to Settlement,  which can be negotiated.  It is good to know this time limit,   you can negotiate  better price or terms for a property when  the Seller is in a hurry to complete the deal.
  • Rental Guarantees – some Sellers will entice buyers with Rental Guarantees.  Which means they are willing to pay Rent for the property after Settlement.  They could offer 2 weeks or so.  Took the bait on this one as  it seems straightforward, BUT, when we actually got a tenant  occupy in a week,  instead of paying Rent for the agreed  2 weeks they just want to pay the number of days it is actually vacant. Frustrating, because we offered  $200 discount on the Rent to move in quickly as it was nearing the Christmas holiday period.   So I can only advise now  to make sure a  Rental Guarantee  is a guaranteed amount of money  in case you think of similarly offering discount to minimize the vacancy.

This link from the Department of Fair Trading  New South Wales could be handy for your information gathering:


b)      Trading

I have nothing much to write here. (  What a relief!)  Trading has few legal complexities.  Only Ownership rules come to mind,  your financial institution/ broker would have Account Opening guidelines you can refer to.   Usually, they would be in compliance with local ownership rules (for  foreign investors),  tax, terrorism or  “anti-money-laundering”  laws. As a retail investor / trader, once you’re set,  there is practically no legal matter  to attend to – just buy and sell, buy and sell.

16) Systems

If  am often awed by living in these times.  There is so much one can do just sitting in one place, all because of the Systems that we are surrounded with.   You want to send a written communication, no need for pen and paper,  stamp or walking to post office, you get online and send an email, faster and cheaper too.  You can say a  System is basically a series of steps that achieve something .   In investing / Trading, you need Systems to do work for you.

a)      Real Estate

A very good thing about investing on Real Estate is that once you’ve got a new property, and a property manager,  there is nothing much to do, it really is a passive investment.  The property itself is composed of many systems – electric system, plumbing system, ventilation etc,  the property manager you should choose should have  business  systems that  easily and promptly pay you and inform you of the income and expenses and anything that require your action.   You can go weeks and months without needing to do anything and receive the rental income.

So when choosing to invest in Real Estate, look for new properties (the systems are all new) and a well-established property manager with  at least the systems mentioned above.

b)      Trading

One of the BIG lessons I ever got in trading which I hope you also remember is to “trade a System that fits you” (from the book “Market Wizards” by Jack Schwager and  echoed in Dr. Van Tharp’s book – “Trade your way to Financial Freedom”).

  • So first agenda is to Know  Yourself.
  • Next create a System.

OK we’re done!  Hehehe I wish…truth be told,  it takes time to know oneself, what you believe in, then create a Trading system that you yourself are convinced to follow.

3 Ways to get a Trading System

  • YOUR OWN SYSTEM. After you’ve come to terms and possibly fixed up your Belief System (make sure beliefs are all in agreement), from there forming your Trading System,  then you can “practice trade”  or test  and revise as needed until  it is profitable.   At the start you may have to follow your system manually (making sure you exercise self-control), then have it automated (hire an IT professional),  which will give you passive income.  Even if it’s not computerized,  if you trade efficiently with your system, you can achieve income of stellar returns,  say targeting only 3% per  month x 12 months, that’s 36% per year.  (Compare with 7%  bank interest !)     One of my systems produced extra income for me even with a seesawing market,  it afforded me to  visit my parents overseas after a few months giving birth, and the capital was  still working for me after coming back from vacation —   how good is that?!
  • PROFESSIONAL SYSTEM.  The people who trade professionally  (fund managers, hedge funds, mutual funds etc  ), who trade the money of other people,  have  computerized trading systems with which to put their millions to billions of dollars to work for their clients.  They can achieve upwards of 20% from their Trading.  You can choose to put your money to work in financial markets this way.  Be careful though, you still need to subscribe to  “trade a System that fits you” – if the fund manager’s  system  need you to tolerate a loss of 50%, can you take it?
  • BUY A SYSTEM.  Mind you, systems for sale costs thousands of dollars, and is not all guaranteed to produce stellar results.   I’ve met many traders who say they bought a system and  tweaked it because it does not address all  the trading components they want  (because  the  people who develop this commercial system have different beliefs of what they should put in there!)  now,   just asking, if you are going to change things, why not just develop one yourself?

17)  Location and Environmental factors

a)      Real Estate

They say the 3 most important things in Real Estate is  Location, Location, Location.

  • Investment  properties in a good location  command increasing prices and rents.  They should be close to public transport system, places of work, and amenities like shopping,  schools, recreational areas (parks, beach, sports centers).
  • However,  there are environmental factors that should be considered in buying or building investment property.    A variety of environmental forces affecting life and property–   Earthquakes, floods, tsunami, volcanic eruption, blizzards, hurricanes,  forest fires,  desertification, rising sea levels,  hazardous chemicals (if previously used as industrial waste / dumping facility)  etc.  can be painful  financially.
  • You might be able to check this with locals or  government development plans,  some of them carry historical information of damages from environmental factors.  In the recent widespread flooding in Queensland, they say the same thing happened 30 years ago, and so this is a clue for flatlands or low-lying areas close to river systems.  Many areas in the continental United States experience yearly visits of hurricanes,  while earthquakes are common to many countries in the Pacific Rim.

Just be careful and know the environmental risks to your investment,  ensure the structures comply with  Building Codes and  get the appropriate protection.

b)      Trading

  • ACCESS.   With the mighty internet and telecommunications services we can do so much more in less time and even while on the move or on places that have been considered far far away.    I got online while in our island hometown in the Philippines and checked my trading account in Australia !   Broadband rocks!  In Trading, you can access your online broker to  place trades or monitor them wherever you are, or whatever time you choose,  giving you flexibility, even freedom!
  • OPPORTUNITY.  Another  good thing about Trading is that you are not restricted to do business  by your location, you can take advantage of opportunities  outside of your home country.  Like being able to trade stocks in the New York Stock Exchange even through your local broker or  with a  financial institution of your target country.   You can participate in the growing economic prosperity of other countries by trading Exchange Traded Funds for that country, for example, Indonesia or  Brazil  or  by trading their currencies.

18)  Protection

Recent happenings in Japan had a disastrous effect on Real Estate and Trading in financial markets – when the earthquake struck, the tsunami came and destroyed life and property.  Then there was the related nuclear crisis that is still unfolding, limiting power supplies across the country.  Homes were shattered for sure, and factories  had to close.   When all this happened,  the Japanese Yen strengthened  which had the effect of  driving down the value of the Japanese exporters and  with risks rising due to the nuclear crisis, companies mining  Uranium and other nuclear fuels  (many in Australia) dived,  there was also widespread selling in other markets including normal safe haven Gold were converted to cash.

You wonder, “when these things happen if there is any way to get some protection? ”

a)      Real Estate

Insurance is a common tool in property investing:

  • Home Insurance – insures the building structure, often required by  banks.
  • Home Contents Insurance – insures the personal property of occupiers
  • Landlord Insurance – insures from loss of rental income

Ensure that  the value of your property / asset is reflected correctly in your insurance policy  to avoid being “underinsured” – this is when your property  whose current value is 300,000 is only insured for  200,000 – which was the original price you 10 years ago! That would make it difficult for you to rebuild or  being short in paying your loan on the property.

Where  Insurance companies do not  cover  damage from environmental factors or what they call  “acts of God” or “force majeure” – there might be available “coverage” from the government, like  the  Earthquake Commission (EQC)  established by the government  of New Zealand.  It covers residential property owners for “damage caused by  earthquake, natural landslip,  volcanic eruption, hydrothermal activity, tsunami,  including storm, flood or fire” caused by those environmental forces.  Check out their website —


b)      Trading

You might ask,  can I be insured against a fall in my stocks as I am going to retire soon?  As a matter of fact you can!  You just have to know about a financial instrument called “Options”.

An Option is a contract between 2 parties, giving the buyer (or taker) the right but not the obligation  either to buy or sell   an asset  at a specified price, on or before a specified date.  For this right, a buyer pays the seller a “premium” just like commonly associated with  “insurance” in everyday life.    Call Options give you the right to Buy and Put Options give you the right to Sell.   Now back to protecting the value of your assets –  you can Buy Put Options paying 30c, but you now have the right to Sell your stock, at say $20.  Even if the stock price falls to $18 you have the right to sell at $20.  You have protected the value of your stock. (Thank heavens!)

Options actually cover  a wide variety of  financial instruments :

  • Company stocks (like Apple, Shell Petroleum)
  • Stock Indices (Dow Jones Industrial Index, Nasdaq 100)
  • Exchange traded Funds (like SPDR Gold Shares, iShares MSCI Brazil Index Fund)
  • FOREX (actively traded currency pairs AUD/USD, JPY/USD, EUR/USD)
  • Commodities – Agriculture (corn, pork bellies), Energy (natural gas, oil), Metals , FX, Weather, US Treasury bonds
  • Interest Rates

Options are widely available and you can check with your local Exchange whether they are available for you to trade.  When you get more sophisticated, you may also want to trade / open an account in countries with more advanced Financial systems —   like Australia or United Kingdom, or  in the United States.  In the US  you’d find  one of the oldest, largest and most diverse marketplace for Options and other derivatives — the Chicago Mercantile Exchange — they even have Options traded to protect profits from “washing away” due to Rainfall.   I like the sound of that!




Now I didn’t promise an exhaustive list, but hope you learn much because this  is exhausting!

For your own benefit, you can make a table of all these points and score Real Estate and Trading – as it relates to your situation.  That would give you clarity on what to focus on first.  For  Real Estate, I am not saying it is easier but you can get professionals help you with the complicated stuff, and with the right property and strategy, it is a great passive investment! Trading as you have seen is very flexible, lucrative, and offer a lot of protection, but it does take skills and knowledge to get good returns.

Both deserve to be studied, clearly you’re already all up on this. Next time someone says to you, “Trading is gambling”, you can say, “Excuse me!  People’s retirement funds are invested in financial markets–You might want to broaden your knowledge”.   I’d be tickled if you also  recommend my blog  🙂


Thanks to Via Uno for the  Major Shoes  posted here…

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Ladies! Why not put your SHOPPING skills and love for SHOES to good use!

Yes,,, finally! Women can now have the chance to learn about Stock Investing and Trading profitably “like only a woman can!”.  If you want to take charge of your financial life  (Or even NOT having to explain the new shoes !)  Let’s talk!

 DATE and Time : 27 March 2011, 3 pm 

WHERE :  Hello Happy  café just outside Westfield Chatswood, Victoria Ave

 In celebration of the “gravity-defying” UN Women organization in Australia, we’re gathering women to talk about what they can do to earn an income AND not having to change their life too much!   See www.highheeledtraders.com  for fun and fabulous lessons on Trading!

Email “charmel@highheeledtraders.com” to register or SMS 0405148124 by Wednesday
Limited places.   


—– Forwarded Message —-
From: UNIFEM Australia <admin@unifem.org.au>
To: charmel@highheeledtraders.com
Sent: Tue, 15 March, 2011 9:59:04 AM
Subject: Thanks for Registering Your IWD Event
Dear Charmel,Thanks for registering your International Women’s Day Event.We will be dispatching International Women’s Day Materials and Merchandise from mid-January.Kind Regards,The UN Women Australia TeamPlease Note: On January 1st 2011, UNIFEM Australia transitioned to become UN Women Australia. UN Women was created in a historic resolution by the United Nations General Assembly in 2010. It brought together four UN Agencies, including UNIFEM, to become the United Nations Entity for Gender Equality and Women’s Empowerment – known as UN Women.

TRADING for Women event in North Shore Times online news!


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I was at the first morning of Peak Performance 101 Workshop  and it was interesting to find a lot of people who say they are a Property Investor, or Property Developer.  There were about 10 from 40, that’s HUGE!!!   I guess I shouldn’t be surprised since I already know (I told you didn’t I…)

… That money goes to where it’s treated best, and right now, property is NOT treating money as well as before!   So it is really a good call to write about Real Estate and Trading…. been on this theme for 2 weeks now!    Bear with me for a few more points …

7)      GROWTH FACTORS -what conditions will allow increase in value to your investment?

a)      Real Estate – generally, growth in real estate is attached to

  • “Good news”  —  good economy, job growth,  and with increased migration or changing demographics, an increase in demand that push prices up.
  • “Scarcity” –  for example, the  limited land  along waterways  which features relaxing views and create exclusivity,   attracts a premium and increase its value as people compete for these kind of properties.
  • Inflation –With people’s expenses going up,  people also invest in Real Estate so they can experience increased value of their assets, it’s  like a protection from inflation.

b)  Trading –

  • “Good News”

(1)    Good economy, job growth tend to favour Stocks in general, companies tend to do well in environment with high demand and good consumer confidence.    Don’t you feel  able to buy more when you are not worrying about being in the red a little bit or if you are going to lose your job?

(2)    Demand growth – growing incomes  allow more value appreciation for more expensive things like houses, cars, appliances or food as well as other “discretionary” or non-essential  items.  This is good for  almost every kind of financial product that experiences high demand like stocks of companies that produce  consumer goods (like the popular Apple phones or computers,  cars and the oil / gas companies that produce and distribute them)

(3)    When people have more buying power, it tends to cause inflation, and governments raise interest rates to try and slow down rising prices.  Higher interest rates benefits the currency of that country  at current conditions steady rise is seen on  Indonesian  Rupiah, Australian Dollar, South Korean Won

  • “Bad News”

(1)    War –  tend to increase the appeal of Gold as safe haven  and Oil as a precious energy source that wars tend to consume

(2)    Recession or slow economic growth – these are the times that interest rates are lowered by  Central Banks wishing to make more money available to people who have loans.  When interest rates are cut by .50% for example, a person with  $250,000 loan will pay about $100 LESS  on interest repayments a month and can buy other goods/services.  This can go the same way with companies who have bank loans.  With less loan repayments,  or low borrowing costs, they can either put it to fund projects or give back money to their shareholders, thus stock prices tend to grow even if  the economy is in recession or  in a low-interest rate environment.

(3)    Low US Dollar – because this is the world’s reserve currency and used to price many commodities in demand around the world, the movements of US Dollar affect the price of Gold, Oil and other commodities.  There’s what is called “Inverse” relationship to the other commodities, if the US Dollar is trending down (weakening), the price of commodities go up, because it becomes more “affordable”  to non-dollar holders.

Notice that in Trading– there are always opportunities on both Up or Down and even Sideways market.  There are financial instruments that could be traded that perform according to different market conditions.

Anything can happen in the world, really.  And a  girl has got to be prepared, don’t you think?!     That is why Shoes with a classic design is a must-have wardrobe staple! It doesn’t matter if it’s  summer or winter, you’d always be in the thick of the action!     Trading is the same as it is an all-weather business!   Now you know, that like Smart  Shopping, this is a must-have skill!

8)       Create Value

a)      Real Estate

Lifestyle shows are very popular these days, the  “Extreme Makeover”,  “MTV Cribs”,  “Biggest Loser”, “Oprah” episodes on becoming a better person or looking good etc,   the key to adding value in Real Estate is to  “make it beautiful” or create more usage.  For example,

If it’s an Apartment or Unit —  you are limited to improving the “inside” of your property,

  • Renovate or  “capitalize” on key areas like the kitchen or bathroom
  • Add more space  – enclose a balcony so it has indoor use or add storage
  • Make it attractive – all the apartment owners can vote to do a facelift for the whole building i.e. rendering or repainting, change windows

If it’s a House or structure on it’s own Title, in addition to the above

  • Enclose a carport to make it a garage (more secure and more storage possibilities)
  • Add an Attic or clever  use of existing spaces like storage or children’s nook
  • Add environmentally-friendly features like solar heater,  sunroof or plantlife
  • Add a “granny flat” or separate self-contained studio you can rent out
  • Rezone – some Residential property can be rezoned for Commercial or Mixed-Use  say if the area is getting too much traffic, a house may  be converted to  Display Center, or Doctor’s clinic, childcare center, maybe even a café or art gallery that benefits from foot traffic or exposure (for advertising purposes).

b)      Trading

With your own powers,  you generally can’t do anything to improve the value of an investment.   You can’t raise the value of your  Bank shares for example by taking out a larger loan, (you wouldn’t do this for the sake of a rise in share price anyway).  Although  collectively, with higher demand – as many people take out more loans, the banks could be more profitable.    But you can’t increase the value of  assets you trade on your own.   (Well, maybe if you’re part of a Cartel, like what those  Saudi and Oil guys are doing!  Your days are numbered,  Oil will eventually run out! Hmmppp!)

I know a Gold trader who works in a bank who once told me his clients   “create value” with scrap Gold, they’d buy  the scrap cheaply and then reprocess for new jewelry.  I realized how true this is when a  friend of mine who has a pawnshop was telling me about her last holiday, she said at her last holiday in the Philippines, before she leaves the country, she’d have bangles made out of them,  she could jack up the price of the jewelry  by increasing the purity (makeit 18K instead of 14K) and adding  artistic value with more ornate design.  She doesn’t  even have to declare it in Customs.  Smart old hen!

To create value in Trading, what you need to do is to improve yourself and your skills and knowledge. Remember I said earlier that the  key to consistently generate income in trading is Self-Mastery. The doing when something needs to be done and NOT doing when it is not supposed to be done (self-control). So keep learning about yourself, address your weaknesses and cultivate positivity.  Review the article “It’s not me, it’s YOU”.

9)      Expansion Strategy

a)      Real Estate

  • Redevelop – you can apply to redevelop a property, say build dual occupancy  or duplex – where  2 families can have separate living spaces), provided the land area is big enough to satisfy the local government guidelines.   In one area we were looking at, the minimum is 600sqm and frontage (how wide it is at the front) must be 20sqm.  Some areas designate 1000 sqm to be the minimum, with 500sqm needed to be given its own land title.  These rules could change  depending on the changing economic situation, for example when a rural area becomes more populated with working families and businesses moving in, thus transport and other services have to be stepped up.
  • Some investors thus take a long-term view and buy land that is close to the city (1 hour commute or so) to sell or develop later.  Note that this could be  10-20 years though and is largely uncertain, you still have to work with the local government for approval.  You could check with  Development Plans  of the local government or State you are interested in for  further clues of economic activity planned for the area or whether it will be designated for  Industrial use, or  developed for  tourism if  people are already attracted to its environmental features.   An airport or rail line could massively increase the value of your landholding.

b)       Trading

  • You can expand your  Trading business by branching out to other markets .  Many  companies, because they  are used by people worldwide or  operate in many major economies are listed in more than one Exchange (or country).  For example, since you already know the company and able to trade it profitably, you can choose to trade it in other Exchanges  — like BHP  the biggest mining company in the world which has headquarters in  Australia and traded in Australian Stock Exchange,  is also traded in London Stock Exchange,   New York Stock Exchange, Johannesburg Stock Exchange.  You can also easily do this on FOREX , Oil and Gold, trading it on different time zones.  For example, the  Japanese Yen,  which is a very popular currency for trading,  you may choose to start your trading day  in the Asian timezone,  then follow the sun to the European timezone and then to the US timezone.  (Sleep optional!)
  • You can also Trade other investments or instruments that  have a relationship with the one you are currently trading.  You could do this when you are trading something and know other investments move with opposite effect (an Inverse relationship).  For example,  Japanese Yen is stronger, stock prices of  some Japanese companies like Toyota, Canon go down – because they generate most of their sales outside of Japan and get paid in US Dollars in their terms of trade.  With a stronger yen,  there will be less Yen for every Dollar they receive.
  • Similarly,  you can trade one that moves the same way, for example, when  Oil as a Commodity is going up, stocks of Oil companies go up.
  • System – you can develop a new system and take advantage of more opportunities.    For example, a system that  achieves 5% per month writing Call Options in  a Sideways market but  does not perform as well during Bull market.    To take advantage of  opportunity of an uptrending market, develop a system that will not cap profits  or be able to ride the Trend.
  • Automation– with automating your system  you can certainly handle more funds to manage, for example, you can go from 500,000 to 5,000,000 easily.  It also makes the position sizing more accurate and allocate with discipline.  It takes away the human factor, with less error and will trade without emotion, just following the rules you have set with your system.   An automated system will not be “scared” to take an entry position or be “greedy” and not wait for more profit if the price is already falling on the 10% threshold you’ve set.    It will also make your operation more efficient —  facilitating faster turnaround time with the documentation  for  your own  performance or client reports and tax filing for example.  With increased efficiency, you can focus on growing your Trading business by trading other markets or accept new funds.

I am heading off to walk and think of more things to write!   Will be back soon…

Thanks to Via Uno for their divine shoe images…

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Remembering mothers and daughters for International Women’s Day

8 March 2011


To My Daughter, With Love
On the Important Things In Life

A mother tries to provide her daughter with insight
into the important things in LIFE
in order to make her life
as happy and as fulfilling as possible

A mother tries to teach her daughter
to be good, always helpful to other people
to be fair, always treating others equally
to have a positive attitude at all times
to always make things right when they are wrong
to know herself well
to know what her talents are
to set goals for herself
to not be afraid of working too hard to reach her goals

A mother tries to teach her daughter
to have many interests to pursue
to laugh and have fun every day
to appreciate the beauty of nature
to enter into friendships with good people
to honor their friendships and always be a true friend
to appreciate the importance of family
and to particularly respect and love our elder members
to use her intelligence at all times
to listen to her emotions
to adhere to her values

A mother tries to teach her daughter
to not be afraid to stick to her beliefs
to not follow the majority when the majority is wrong
to carefully plan a life for herself
to vigorously follow her chosen path
to enter into a relationship with someone worthy of herself
to love this person unconditionally with her body and mind
to share all that she has learned in life with this person

If I have provided you with an insight
into most of these things
then I have succeeded as a mother
in what I hoped to accomplish in raising you
If many of these things slipped by
while we were all so busy
I have a feeling that you know them anyway
One thing I am sure of, though
I have taught you to be proud of the fact
that you are a woman equal to all men and
I have loved you every second of your life
I have supported you at all times
and, as a mother, as a person, and as a friend
I will always continue to cherish and love
everything about you
my beautiful daughter

— Susan Polis Shultz

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I was trying to help a BFF to find “Mr. Right”. One of the things I asked her to do is to list what is important to her about the man and the relationship she desires. She came up with a long list in a spreadsheet. I was fascinated that the “must-have” or “negotiable” items are much different from mine. Needless to say, talking about it changed her world-view.   Anyway, 10 years on, I’ve still got the spreadsheet, and she’s still single. HAHAHA

Anyway, similarly I would like to say, this “long list” I am doing comparing Real Estate and Trading may be different to what you think is important to bear in mind.   As much I want to try and walk in your shoes (and you in mine),  we’ve all got different understanding and experiences, while we might see and do the same things, somehow, the journey will be different. 

Also, I am going to tell you all these things I learned but know that “whilst great care is taken to present accurate and authoritative information, it is in no way complete nor that I am engaged in rendering legal, accounting, trading, or other professional service. If legal or other expert assistance is required, please seek competent professional advice. “

So to continue on:
4) Income
The purpose of investing is to get income we don’t have to “work” for — which is called “passive income”. You set it up and does its thing while you are busy with your work or business and periodically, you get income from it, that income is passive income. Sweet!

a) Real Estate – the allure of Real Estate is “passive income” – as long as your property has a tenant and pays rent, you get an income. Note though you still need to consider “net income” – where, your rental income is lessened by the expenses incurred by the property (loan payments, property maintenance, taxes etc more details below) , this could leave you with “negative cashflow” meaning you have to add cash to maintain the investment. (Why do it? An investor would weigh this loss against the value of the property and /or capital growth) – say you are happy to shell out $50 a month because you bought the property with a small downpayment and the property is $100,000 below market value by some heirs wanting a quick finish to the deal.
Typically, Commercial property would produce more income than residential property –also partly because you need to put more equity on Commercial property (around 40% downpayment), thus the loan payments would be smaller.

b) Trading – there are 2 incomes from Trading : Passive Income and Trading Income

  i) Passive income

     (1) Dividend – usually from “blue-chip” well-established and profitable companies. Companies that have steady revenue and low costs would normally pay their shareholders investment in the form of “dividends”. They could be paid regularly – called “fixed dividend” or “special dividend” – a one-time payment for whatever reason the company deems fit. They could also be “fully-franked” meaning taxed are already paid for it so you don’t have to pay tax on it.

   (2) Interest earnings

          (a) STOCKS/ OPTIONS – from an account maintenance point of view, when you have cash that you haven’t committed to your trading that stays in your account, you can get paid relatively high interest rates. These are usually Cash Management products that banks/brokers have to also increase their deposit holdings from the public. My current bank for example pays 5.5% per year on cash that is parked on the Cash Investment account that I use for Trading allowing me to withdraw/deposit as often as I want. Contrast that with a Term Deposit where there is usually minimum amount (5000) and minimum amount of time you need to keep with the bank (e.g. 6 months) and earns 6.5%. For example, with Cash Investment Acct, $10,000 paid 5.5% interest will get $45 per month, not stellar but can still pay some of your trading costs.
          (b) FOREX – Foreign Exchange. I’m not going to fib about knowing how this work because I don’t trade FOREX, but let me share a point that when trading currencies you can earn Interest payment at rate payable for the currencies as you keep them in your Trading account. I remember when the Aussie Dollar was equivalent to 80c to 1 US Dollar and started going up because our interest rate is much higher than US interest rate and kept going up, and almost went to “parity” (meaning equal value) – imagine if you’ve been holding the Aussie Dollar and earning the interest rate say over 1 year went from 6% to 9%, your money would have grown from 2 incomes there – the interest rate and the increase in value of the currency. Please feel free to consult other references for FOREX. I used : http://www.oanda.sg/assistance/quickguides/trading-on-fxtrade/interest-calculations

   ii) Trading income – from buying LOW and selling HIGH and also, as you get more skilled and knowledgeable, you can also earn from Selling High and Buying Low. To earn Trading Income would require a bit more activity than “passive income” but still you need NOT spend 40 hours work week like if you are on your job and get paid for your time.

I think this is an important consideration on your Trading, is that you are able to trade markets and make money in both UP and Down directions. It not only presents more opportunities but also manage your risk.

5) Costs – Opening and Closing

a) Real Estate — Profits are often squeezed by the high transaction costs to Open and Close Real Estate deal. The following is a typical transaction of buying an apartment “off-the-plan” in Australia – where we are so fortunate to have to pay tax when we buy property (probably was the reason the government here was able to avoid a Recession during the Global Financial Crisis). Anyway, for example the property costs $277,000 and upon completion 12 months after, it was sold for 320,000 for 43,000 “profit” however if you consider the costs :

  • Legal fees – open/close = 2,500
  • Real Estate Agent’s fees incl Marketing (3.3%) = 10,560
  • Government Admin / Search Fees = 500
  • Stamp Duty =8900 (Australian gov’t “tax” on buying property)
  • Deposit Bond =2500 (paid instead of a 10% deposit, lessen the cash outlay)

Total Acquisition Costs = 24,960

 Tax on Gross Profit @ 30% = 5,412

 Total Transaction Cost = 30,372
** If selling after holding a property (after a few years), there would be costs associated with getting the loan, “admin fees”, or getting out of a Fixed loan called “Exit” fees or Break fees, plus loan payments if the Expenses is more than the Income.
(You might want to refer to http://www.canstar.com.au/exit-fees/ )

b) Trading
Trading by yourself through an online broker would generally save on your costs. Online Share Trading Brokerage fees in Australia is from around $20, for Options it’s around $45 per transaction. Plus “Goods and Services Tax” or “Value Added Tax’ which is around 10% in Australia up to 15% in other Asian markets. So to Open and Close – which involves 2 transactions, the cost is around $50 for Stocks and $ 100 for Options. Here’s a sample of Rates and Fees that I refer to :

With Trading, some online brokers offer the Active Trader discounts of $5 less if they trade more than 10x a month or increase the brokerage fee from a flat rate to a percentage of the value of the Shares / Options above a certain amount.
Note that Real Estate costs are considerably higher than costs of Trading financial markets.

3) Continuing expenses

a) Real Estate
• Loan payments
• Bank account fees
• Property Management
• Transaction fees (debit/credit fees)

• Property Taxes
• Government services fees (e.g. garbage collection)
• Water / Utility payments

• Accountant fees (for yearly tax filing)
• Travel expenses (to inspect property could include airfare/hotel/taxi)

Occasional (as the property gets older, more costs of this nature)
• Repairs
• Replacing fixtures and fittings e.g. hot water system, plumbing

b) Trading
i) These are common Monthly/Quarterly costs to private traders:
(1) Internet subscription (for online trading)
(2) Phone service (for backup if online facility is down or when mobile)
(3) Continuing education costs e.g. seminar / books / materials

ii) Long Term investor
No extra expense to buy and hold stocks or ETFs as there is no time-restriction to hold these investments

iii) Short Term / Day Trader
Since there is more trading activity, chances are, trading in this style would need more “real-time” data and thus would need more sophisticated tools. Here are some examples :
• Software
• Subscription to more sophisticated Trading platform
• Subscription to market data
• Continuing education costs e.g. seminar / books / materials

Professional Traders belonging to large funds or those that operate funds could also incur costs relating to being a member of Exchange.

Be aware of the high costs with how you invest or maintaining the investment. Oh I know some people would say that “it’s OK”, that’s “tax deductible” yeah right, but you had to cough up the money in the first place. From a cashflow perspective, NOT GOOD.

I’ve got several other points to cover (15 or so… we’ll see where this will take us).

I’ll be back princess…

(Thanks to Via Uno for shoe images livening up this blog post)

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After finishing the article “Dressed to Trade”, I thought “ that should give you a shot of reality”, and “uhhmmm I might be losing readers after that one”,,,hehehe,,,, but you’re still here!   Wow!   May the FIERCE be with you!  🙂

My First Love
Most of my friends interested to Trade always mention interest in Real Estate so I thought I’d also share what I know about it side by side with Trading. You can say Real Estate is my first love in investing. For a few years, even without cash to buy, I’d go inspecting properties for sale every week, we’d travel up along the North Shore and check out what are usually family homes in tree lined streets or go see new developments. When we spot a new development on the way to a party or picnic somewhere, we’d stop and check out their Display. I would knock on walls to determine materials satisfy soundproofing, look at color palettes, tiles or carpet or fixtures to be used, floor plans, facilities, check out the surrounding area including transport options and shops. It is quite enjoyable and educational. I’d also look at prices of comparable properties in the area, and development plans / regulations by the local government. The “tipping point” comes after I’ve crunched the numbers in a spreadsheet and income or equity value allows me to see if it’s an “attractive risk”. Was that a weird term? It’s like the stilettos I was looking at the other day, that had 5 inches heels – it would cause some pain but is sure to make you look glamorous,,,so you would still wear it…ohhh what we sacrifice for beauty! 🙂

A Reason for Every Season
There was a time that I was going to buy a 1 bedroom apartment and exchanged contracts (meaning two parties signed the contract / agreement – I am buying the property and the developer / vendor is selling the property to me) and I’ve put the clause “Subject to Finance” (means I only complete the purchase when I get approved for a loan) — about a year from completion. Towards the completion of the project, the marketing people who is also arranging the loan said the bank was lowering its Loan-to-Value Ratio (LVR) on the property – just means they are not willing to lend as much as before, say they were willing to lend me 90% of the price then they changed to only lending 80%, so I need to fork out a bigger downpayment (20%). This is when I sniffed that there is a tightening in credit situation and when I went back to my calculations, the investment is just not attractive anymore. I got out. (Email me if you want to find out more).
So I focused on investing / trading in the financial markets or “paper assets” like Stocks that does not require me to get a loan. Also around that time my life situation was changing. I was going to have my first child and plan to have the second short time after and will be taking time away from work for the next few years. I think it is very important to bear in mind that having children is a big adjustment and one you should consider in financial strategy that you do. You don’t want to be overcommitted, for example, needing to fork-out loan payment if there is a vacancy in a rental property or any sort of big expense (like those fees to maintain common property e.g. the elevator or swimming pool maintenance). Looking after babies is a big responsibility, try not to add financial worries to a situation where post-partum depression can happen (this type of depression affects mothers who have a new baby, usually overwhelmed by the responsibilities).

When babies are growing up, it is a special time, enjoy it.

Investing is a Many Splendoured Thing
What I gather from my friends is that they think that Real Estate is easier than Trading, so they’d invest in Real Estate first. Hmmmm I am not convinced that’s the right approach to investing. If everything that we would do is only the easy one, we’d probably be extinct as dinosaurs now hehehe
Anyway, I thought the important consideration is to invest in something that would perform given the conditions and fits in your overall life plan. Real Estate is not as simple as it appears to be. Of course Trading is also not simple, but the key is being educated in both areas so you would know when they would work best.

Here’s a list of considerations when investing :
(I will present 20 or so but know that that is no means all of what you need to consider!)

1. Market Type – we’ve discussed that the prevailing Market Type would set the scene for performance of your investment.  Will it perform in Up, Down or Sideways market?
a. Real Estate – will perform when market is going Up and Sideways provided you can create value in Sideways market
b. Trading – can execute strategies when market is going Up, Down and Sideways

There is a very good book by Dr. Van Tharp “Safe Strategies for Financial Freedom”  that discusses what factors drive markets to go Up, Down, Sideways… things like Inflation, Interest Rates, Value of the US Dollar.  He has a free newsletter you can sign up to get where he discusses the Market Type. Even if you haven’t read the book / newsletter — get a feel for when things are going great in investments, usually this would be a good economy, like when people are not worried about their jobs, if so, they are more likely to spend on houses or take on more risk.

2. Fundamental Analysis – is there value or growth in the investment, also note the risks it pose such as environment (for Real Estate) and Management (for Stocks).  The most important consideration for an investment is growth and this is usually due to Demand factors.

a. Real Estate –  rate it against criteria which makes it good investment and attract quality tenants – things like accessibility to transport, work and amenities like shopping centers and recreational facilities e.g. beach, park, schools.  It should also be structurally sound (no use buying a decaying property if you don’t plan to rebuild on it).
b. Trading – is the company profitable and achieving its profit forecasts?  Does it have a growth strategy and product pipeline that would ensure its continued growth?  Is it a startup company with products / service that would achieve exponential growth e.g. Facebook with 500 million users is a startup with a lot of  promise given its advertising edge to its users.  Would its users continue to use its services?

Fundamental Analysis will give you an indication of the soundness of your investment. For Stocks – Warren Buffett has a business model for evaluating companies to invest on, you can also check out William O’Neill’s CANSLIM model.

3.  Will it require Financing / Leverage – I said earlier that I didn’t want to get a loan given that I was going to have a baby  and I thought it is an important consideration –  When you get a loan, the financial risks will always change, our economic situation can entail lowering the rates or increasing rates, you have to know that you can sufficiently service the loan, otherwise you could lose your investment.

a. Real Estate —  just think about the housing crisis in the US which started the Global Financial Crisis —  people have committed to mortgages that started low  and jumped to as much as 3x their original rate, that is just insane amount of debt burden to shoulder at once.  Not surprisingly, many people were unable to service their loans and chose to foreclose.   The loans that the bank will be willing to extend to you can also change during the course of your loan, say during an economic recession, a commercial property can only be lent as much as 50% down  from 60% , meaning you need to put in more money and if you are unable to put in the required amount, the bank can choose to foreclose.

If you still want to invest in property without taking out a loan yourself, look at Real Estate Investment Trusts (REITs) or Property Syndication in your area.

b. Trading  — in stocks, the simplest way to invest is with your own money, ie. not requiring a loan.  You can just buy as many shares as you want and then let it be.  If you want and gotten a bit more sophisticated, you can take out a loan (this is called Margin Lending), using your stockholding as collateral  cover (or security, in the same way that a house you bought is security for the loan you took for it).  They will normally lend from 40% to 70% – depends on the quality of the company which is assessed by your bank / broker.

IF THINGS GO WRONG like when the value of your investment go down or you are unable to pay your loan interest:  In Trading, you also just surrender your shares and pay additional cash if there is a shortfall in the sale of the shares.  In Real Estate, they will get hold of your property, and if the equity on a second/investment property is secured by another property, the 2 properties will be in trouble.  Understand your financing terms and conditions thoroughly.

More on my “2 Loves” on the next post…

(Thanks to Via Uno management in Australia for allowing use of images of their dreamy shoes).

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Dressed to Trade!

February 18, 2011

This is the moment of truth.  In this article I will tell you  what  you are getting  into in the business of Trading in its entirety.  It requires a lot of knowledge and activities  intricately woven together –but don’t be scared, if girls can dress up to be “well-put together”,  you can do this.  It just requires careful, advance planning, something worthy of a   “hot date”!

1.  Start with preparation on your Self. Hot date or not, you owe it to yourself to know who you are and present yourself accordingly.  In the same way, Trading requires Self-Mastery.  You trade based upon your preferences, your limitations, then respect that by making sure you exercise self-control and not overdoing things. (Discussed this earlier in  “It’s not Me, it’s YOU” ).  Self-discovery may take you to a few journeys, as you Trade, you will learn more about yourself, so be patient,  don’t expect too much anytime soon.  I said before in “Lessons from a Trader Mom”…  I started trading around 2001,  but only learned to truly trade in a relaxed and profitable way — “as a mom” after my second child, when I had the miscarriage, that was 2008.  (Everything in God’s perfect timing… yeah OK, I’m a late bloomer  🙂   )

2.  Set  Rules and Follow them –  In dressing up, you would have “style rules” —   do you dress conservatively?  sexy ? casual ?  In the same way this will make “decision-making” easy for you when you go Shopping,  (like easily eliminating low-cut blouses  if you are conservative), in Trading,  you need  these Rules, put together in a System as a shortcut to get into Trading opportunities. This would include :

  • knowing what type of market is prevailing currently (bull/bear/chicken) and adopting strategy that will fit
  • knowing the risk you can afford per trade (Position Sizing)
  • what will pass as a suitable risk and when to get in (Entry criteria)
  • set limit to when things don’t work out (Stop)
  • when to get out with your profits (Exits)

I gave you an idea of these Rules in the articles First Things First, Why Trade?,  discussed  measuring Risk in “ The Right Foundation”,   And Position Sizing in “Learn to Last : Part3 Financially” as well as the market conditions that you will encounter in “Buy 1 Take 1”

3.  Practice –  You wouldn’t debut a fake tan or  a never-tried-before haircolor to a BIG event.   First, it may not really flatter  or go with your overall look, or you may not be confident enough yet, leading to poor results.  Similarly, be careful not to plunge into Trading with untested System and  Self-Mastery  skills.   Give yourself  time  — to craft how you will operate your business, practice using your System, and then evaluate your “performance”,  plan for  FAIL scenarios  — just as having an “extra shoe” or accessory or powder and lipstick to touch-up —  so that you are well-prepared for when things move against you.      Girl, I can assure you,  this preparation is essential and it’s better to lose “play money” than the real thing.  Just think, you could have been shopping or going on vacation!

An island in the Philippines.... ahhhhhhhhhhhh happy place!


Dress Up

1. Get Clean

I hear this  part of a song from my mom who came from  an Ilocano region in the Philippines    — “Nag-lipstick ka nga ag-lipstick di ka naman nag-brush your teeth”.    It’s roughly translated as  “what’s the point of putting lipstick on if you haven’t brushed your teeth? “.  Eeeeeewwwww.

In Trading,  you have to start every trade with a clean slate.

Ken Long from Tortoise Capital calls this being on  “Zero State” – you are not excited, or  frustrated so that you have a clear mind and see things as they are and  only then are you  able to make sound decisions  in Trading.   Therefore, it is essential that you renew yourself for trading everyday.  Ken blogs at http://kansasreflections.wordpress.com

 2. Hair

As in our everyday life, deciding about the length of your hair requires careful consideration.   For example, I like to grow my hair long, but it is thick and got a bit of wave so I need to invest time to take care and groom it, but with 3 kids I don’t have much time!  What to do?

Hair Length is like the Timeframe — As in Trading, the suitability to temperament and lifestyle is a major consideration.

  • Short-term (Day Trading)– your transaction is quick, in and out on the same day,  this would require constant watch when the trade is in progress.
  • Medium term (Swing Trading) —  transaction could be a few days to few months. You get more flexibility in what you can do or “strategy” – it would require checking the trade few times each day
  • Long term (Long Term) – few months to years as long as your Stop is not breached.  This would only require monitoring at the end of the day.

In terms of performance, not one is better than the other, success depends on the trader’s abilities.  For baby traders, I recommend the Medium Term timeframe (Swing Trading) it just help that regular and constant monitoring of the market give you more knowledge and chance to develop your skills.

3. Foundation and Make-up

Present yourself well with good skin thanks to a good foundation –  your  “genie in a bottle” !   Getting this right is a combination of what you Want  (for example – liquid / matte finish) and Have (oily skin /  mature skin).

I devoted an entire article  “The Right Foundation” to discuss what you can possibly WANT and  HAVE that would form the foundation of your Trading.   Here’s a rundown….

…what you WANT

  • What are your Objectives? What kind of money do you want to make
  • How you will operate the business, timeframe, are you taking clients
  • What Market you want if you have specific interests

… what you HAVE

  • Psychology
  • Risk Tolerance
  • Resources – Time, Money, Skills
  • Market Beliefs

And what about Make-up?   No use putting make-up on if it doesn’t make you look good right?  Usually the best us of make-up is that which emphasize your best features.  So like in Trading, you use makeup to play to your strengths and that which gives you an advantage. That includes what suits your timeframe, interest, temperament — and what your powers are!

4.  Underwear

Let’s explore the basic purpose of this garment :
  • Protection and prevent unwanted exposure.
  • Achieve a certain mood (Oohhh La La….)

If you do choose to skip this, know the effects and consequences.  The accepted norms of society favors having them on in public (remember the scandals on Britney Spears?) On a personal note, as a woman don’t you think it’s better to be mysterious than over-exposed?


In Trading, I would say this is of the same essence as  Position Sizing  — Never go without!

  • When you are starting, ensure risking small at  1-2% of your capital, this position size will help you to last long enough to Trade while still  learning the concepts and self-mastery skills.
  • On the other hand, George Soros was said to have recommended that when you have earned the right (e.g. 50% above your capital), you can be  “bold” to risk a  large amount for a trade to win big.  This strategy is to be used sparingly, only at carefully considered BIG reward opportunities.
  • Not  having or not following a clear  Position Sizing system would result to being over-exposed to risk  and likely to end Trading venture or large losses.  See the article “Learn to Last : Part 3 – Financially” for more on Position Sizing

5. Dress

 This is the most noticeable part of your look – make sure you understand how to wear it and it shows your best or it suits you well.   I again take a fashion tip from MissJ (who else?! –He’s the black gay judge in America’s Next Top Model and author of “Follow the Model”) – “the most important thing is to never, ever, subscribe to one that isn’t right for you”.  Example :  Skinny jeans are made for thin people and if you are not similarly proportioned, STEP AWAY  from the craze.  It may be the hot trend but if  it does not make you look good then find other clothes you can rock!

This can be likened to Trading a Financial Instrument, Concept and Strategy to use.   You have to understand these fully to effectively trade it.  Warren Buffett was said to have missed out when the dotcoms  fuelled a Bull market  in the US from late 90’s to 2000  —  he famously said he does not want to get involved in anything he does not understand – and he is proven right because the dotcoms went from boom to bust in just a few years.

From my experience, since I worked in IT, I  tried to do some practice trades on Microsoft, however, I couldn’t make sense of what makes it move — knowing about the company’s financial health does not seem to be enough.   Then the price of Oil was going upward and getting painful at the pump so I tried  trading it.    I found that I am able to understand Oil stocks more, able to follow what affects the movement e.g. supply and demand, geopolitical risks as well as correlation with currency trends particularly at the time that US Dollar (at which Oil is priced in the global markets )  is in a downward trend.  In Trading concepts , I am more of a Band Trader– I just feel more comfortable in the belief that once a price had stretched very far, it would reverse to a more stable price level.   I found this trading concept works well in a market that is going through a Sideways or consolidation phase.

With dresses as well as in Trading – I also mentioned that it would be wise  to have a strategy in mind “doing much with little” —  I used the Little Black Dress analogy or shopping for clothes that you can coordinate or wear differently to many occasions –  to do so, (trade an) investment that  have Protection, Income, Growth.  I discussed this in “First Things First : Why Trade?”

6. Shoes

This is not nearly as noticeable as the dress but I think you can agree with me that it is just as important.  After all, this includes “high heels”, with instant inches gratifying our desire to achieve a “higher self”  🙂

I wouldn’t have as much fun writing this blog if not for  Shoes.  Yes indeed, many Trading lessons I share here have been compared to Shoes and here is a run down (from “Women are Natural Traders”) :

  1. Objective – We should know what we are after.
  2. Buy what is a good FIT – your timeframe, interests
  3. We buy a lot!  So take care we don’t blow our budget –following this for Trading always have a prudent Position Sizing strategy
  4. Buy / Wear that is suitable to the conditions
  5. Buy what looks and feels good.
  6. As there is always another shoe, in Trading there is always another  opportunity

I probably did not stress this as much before but actually with Trading you are in the path to achieving your  Higher Self.  We talked about  Trading success being a  fruit of Self-Mastery  — when you are purposeful in your thoughts and actions and channel your energies to something you want to achieve.

A  few inches, good posture and  confidence  from wearing high heels – priceless!

7. Mirror

You check  your reflection in the mirror every now and then to know if things are what you want it to be?  The dress drape well and hide the flaws, or whether your eyeshadow is blended well… in Trading, the same “check the mirror” exercise is required. This where you would check how how good or bad you are doing.

  • Did you follow your Rules for Trading?  If not, that’s a mistake and you should make corrections. If you did follow your rules and still made a loss, that’s OK, that’s just a part of doing business.
  • Are you monitoring your trades so that you know whether it is time to move your Stop or is the trade moving favourably and you want to make the most money by managing your profit-taking Exits

8. Jacket / Tights / Socks / Pantyhose

While these items of clothing are not always worn, it is a must-have for  protection in tough weather conditions.

In the same way, when the financial markets is going up /down  (sideways) too fast i.e.  much more volatile, you want to be protected.  It pays to be able to implement a strategy that will protect profits or value of your investment.  As an example, I may use Options strategy like a Covered Call or Buy Put Option.

9. Accessories — Hat, Scarf , Bling ( Earrings / necklace / bracelet), Belt, Bag

They could all be simple, or have one that makes a statement and  surely they can be many BUT  must work together.

In the same way, a trade gets its Reward and is completed with Exits . I have read in Dr. Van Tharp’s book “Trade Your Way to Financial Freedom” and confirmed in my trading that the simple ones are really effective. Yes, you can have many, but make sure they work together. For example :
  1. Time Exit – I give my trade up to 2 months, if not profitable I will close it.
  2. Psychological – I determine when I will not be able to trade due to personal circumstances e.g. being on holiday
  3. Profit Target – the critical one, I target 3x my initial Risk
  4. Tighten – when profit target is reached but price still moving in my favour I let the move go on but tighten my hold on profit by setting a limit to when it reverses and I take profit at that point. Say profit target is $5 and move to $8 but reverses, I get out at $7.

10. Perfume

Just before stepping out, you would reach for your favourite scent to give you an extra boost to conquer the day…

 In Trading, it is important for you to feel good over a trade. If you are not confident you can cut short a profitable run because of fear. The way I do it, is I make sure I follow my Trading procedure, check that all System components / Rules have been followed, put myself in a relaxed state and have all the things I need ready. It also helps that I write down by hand in my little notebook what I am supposed to do in any move I can expect that day. I am then confident I am prepared and ready for the Trade.  I of course spray on a fresh scent to get that confidence and energy!

11. Tools

Looking good has its tools  — manicure set, hair dryer, straightener, curler etc.

Tools of the Trade for Trading include : calculator, computer, internet access, notebook and pen, filing materials and storage.  Not essential but definitely helpful when on the move especially for easy monitoring at your online account — is a smartphone, otherwise, a normal phone will do for trading execution.  Also for studying — books, CDs, newspapers for market developments.  Online news sites are best because they get updated within the trading day.


All Dressed Up! photo by Tikma Photography


Business as Usual

Apart from the Trading-specific knowledge and activities I’ve discussed – there is the usual Business components.  Here’s a brief view :

1.  Understand the nature of the business  –  know what you should expect and essence of the business. (e.g. restaurant = food+service).  Trading is about “Riding the Waves”.  Know  your obstacles and opportunities.

2.  Training and  Education – Any business or job requires thorough education and skill, Trading is the same.  Look for Trading programs that are comprehensive, not just focused on one thing or strategy.  I recommend Van Tharp Institute for advancing  Trading skills.  They have a Basic Trader program as well as Super Trader program with all components of Trading we’ve been talking about here.

3.  Procedure / Operation –  What are the steps and tasks to do to make your business deliver results, i.e. produce product or service.  McDonalds is legendary for how they operate their business.  We want to endeavour to do the same thing which will give us predictable results and something that can be replicated, possibly by future business staff.

4.  Documentation and Information Management — in essence, Record keeping which will tell you 1) how you are actually doing things  ie. Trading Statements which tells what is the actual price you Bought and Sold , 2) provide you a way to trace what you did for self-improvement   3) compliance on Tax and Securities laws

5.  Organization – While you don’t need staff for your Trading business at the start, it pays to know the other people that may be affected or involved when you are Trading.  For me, I make sure my trading time frame is suitable for work or children’s schedule,  teaching the kids literacy by letting them help me type in stock symbols, and communicating to family members that need to know  about profits and losses etc.

6.  Contingency Planning —  Do you have backup for things go wrong?  Like when you usually trade online and your computer is not working – have Phone trading numbers handy or smartphone  or have somebody do it online for you.  When I was about to give birth to my third child, I cut my active trades but let the long term one move along, I gave someone an orientation of how to monitor the stock price for me.

7. Business Structure and Taxation — At the start, you’d probably trade with personal funds.  If you happen to have a company you can trade under company name too. As you get skilled you may want to trade / invest Retirement account Or funds in Trust or even a small group of other people who want you to manage their money.  Whatever circumstances you have, you need a  business structure for taxation and protection of assets.

8.  Growing the business —   Very important — this is where small business is differentiated from big business.  With Trading – there is no global barriers,  I have my online account here in Australia but I am able to monitor / execute some trades even when I am overseas – Singapore / Philippines or United States.  You can generally open a trading account in any territory subject to their laws.  To grow your trading business, you can put in additional capital,  get a loan for leverage (Margin) or venturing into other markets for more opportunities, you can also attract capital from other investors and manage money for them earning management fee and or performance fees.  Some of the biggest investment / trading funds are Soros Fund Management, Paulson & Co, PIMCO that are each worth billions of dollars.  These are the big money guys that you could look up to and emulate.

These are the prime business considerations in Trading. It’s usual for any business.


Trading is  full-on isnt it?

I mentioned before that despite all the studying that I needed to do, I think it’s still the easiest business I ever did.  Think what you don’t need to do:   Manufacturing,  Quality Control,  Billing and Collection,Inventory, Warehousing and Distribution, Sales and Marketing, Legal management, Security, Physical Plant, Property Management,  Staffing and Human Resources,  Disposal system,  Government Relations etc.   Arrrrgghhhhhh!   I can think of more headaches in other businesses compared to  Trading!

While it seems that Trading is such a complicated business,  I hope you will still be able to think that you can do it.

We dress up in our daily lives already.  Let’s get Dressed to Trade!

(Thanks to Via Uno Shoes and Tikma Photography livening up this blog post!)

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