ZLBT Chats

Wednesday, September 30, 2009

Bursa Derivatives Market >>> CPO Futures Eases Down; FBM KLCI Futures Closes Lower

FBM KLCI Futures End Easier
The FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) futures ended easier Wednesday on the back of a similar trend in the cash market dealers said. The September 2009 contract fell 5.5 points to 1,202.0, October 2009 and December 2009 went down 3.0 points each to 1,206.0 and 1,205.5 respectively and March 2010 was 2.0 points lower at 1,204.0.

Turnover, however, rose to 7,136 lots from 6,277 lots Tuesday while open interests dropped to 18,629 contracts from 24,950 contracts previously. The FBM KLCI declined by 6.13 points to 1,202.08 at closing Wednesday.

Palm Oil Down On Lower Export Figures
CRUDE palm oil (CPO) futures on Bursa Malaysia Derivatives ended mostly lower yesterday, weighed down by the unfavourable export figures for September and the decline in soyaoil prices, dealers said.
Cargo surveyor Intertek Testing Services forecast a 7.8 percent drop in exports in Malaysian palm oil products for September to 1.23 million tonnes from 1.33 million tonnes shipped in August.
Another cargo surveyor Societe Generale-de-Surveillance estimated exports to decline by 2.2 per cent to 1.27 million tonnes from 1.3 million in August.
“Overall sentiment remains weak with most players sidelined and lower exports numbers also contributed to the losses,” a dealer said.
Prices were also in tandem with the losses registered on the US crude oil and soyabean futures markets on the back of a stronger greenback.
October 2009 contract lost RM18 to settle at RM2,136 per tonne, November 2009 eased RM16 to RM2,107 per tonne and January 2010 declined RM7 to RM2,103 per tonne.
December 2009 contract, however, was flat at RM2,105 per tonne. Turnover was slightly lower at 16,056 lots compared with 16,248 lots recorded while open interest rose to 92,125 contracts from 88,667 contracts previously.

TECHNICAL ANALYSIS >>> Composite Index 30/09/2009 / 综合指数 2009年 9月 30日

Composite Index 30/09/2009
As indicated by A, the Bollinger Bands Width expanded 11%, with the FBMKLCI below the Bollinger Middle Band, the KLCI ended 6.13 points lower, closing at 1202.08 points. Despite the intra-day losses, the KLCI is still supported by the 1200 level, and therefore, the 1200 psychological support level remains intact while the resistance is at 1248 Fibonacci Retracement.
As shown on the chart, the Bollinger Bands Width expanding with the KLCI below the Bollinger Middle Band is a bearish signal, and therefore, the KLCI has to return to above the Bollinger Middle Band as soon as possible, or else, if the Bollinger Bands Width should expand further while the KLCI below the Bollinger Middle Band, more downside risk is expected for the KLCI.
As indicated by B, total market volume increased 16.7%, despite the KLCI falling. However, volume is still below the 40-day VMA level. Generally, it is best if volume should stay relatively lower during a downtrend, for it suggests that the selling pressure is not too strong. However, if the KLCI should resume its uptrend, a relatively higher volume is required to sustain the rally.
As circled at C, the Stochastic ended lower, even breaking below 10% level. This shows that the short term movement of the KLCI is indeed weak, but it now now over-sold, suggesting that the KLCI might have a technical rebound in the near future. Nevertheless, the Stochastic has to break above 30% in order for the KLCI to break away from the short term bearish region.
Technically speaking, the immediate outlook for the KLCI is still on the weaker side, unless a valid break out above the Bollinger Middle Band. Still, the KLCI is testing its 1200 support level, and with the Stochastic showing a sign of a possible technical rebound, the KLCI is due for a rebound. But a rebound is insufficient for the KLCI to break away from its current bearish biased movement. Therefore, a valid break out above the Bollinger Middle Band is imperative if the KLCI should break away from its weaker movement.
综合指数 2009年 9月 30日
如图中箭头A所示,由于布林频带(Bollinger Bands)开始打开11%,而富时综合指数则已经处于布林中频带以下,所以综指下滑6.13点,以1202.08点闭市。虽然综指开始下滑,惟综指精确的在1200点的心理支持水平获得扶持,所以1200点成为综指当前的支持水平,阻力水平则仍然是1248点的费氏线。

Forex, Futures, Skills, and Personality


1) Is the Forex market a more difficult market to learn to trade than the futures market(s)?
2) Also, which market tends to move at a faster pace?
3) Are the skills and/or personality traits that would make a successful trader any different between the two markets? ..... from TraderXXX

Hi TraderXXX,

1) The answer to your first question is that it depends on you and your mental capabilities. Some folks find geometry quite easy to grasp, while others can’t mentally understand that a circle is 360 degrees. Both the forex and futures markets are challenging for any beginner, unless of course you understand that a circle is 360 degrees.

2) Perhaps asking which market moves at a faster pace is not the question.

The question should be, which is more liquid?

As a trader, liquidity is of prime importance. Even though forex liquidity has been challenged in the last year because of the credit crunch, the answer is still forex, since it operates 24 hours per day and trillions flow through the trading.

3) Skills and personality are two key elements of trading, for sure, but which specific traits fits which market better is a question I just cannot answer for obvious reasons. What I can say, though, is that no matter which market you trade, you better have the required skills, and your personality should be one that deals well with pressure, emotional ups and downs, and can absorb failure, as in the form of financial losses.

4) Four answers for 3 questions? With a nickname like that, you'd do wonderfully great hawking XXX Porn DVDs in Holiday Plaza Jln Datuk Sulaiman. Well, everybody from JB would know that joint is a DVD paradise >>> Why you need FX & Derivatives trading beats me.

How's that for PERSONALITY? LOL!!!

Have a nice day.

Trade in the day; invest in your life

ZL's Bursa Themes
Updated commentaries & charts of FKLI, FCPO, FOREX & Bursa Stocks

Crude Oil >>> Technical Views

Nymex Crude Oil (CL)
Break of 67.02 minor resistance indicates that an intraday low is in place at 65.05 and some consolidation could now be see.
Nevertheless, recovery is expected to be limited well below 71.11 resistance an bring fall resumption. Below 65.05 will target 161.8% projection of 75.0 to 67.05 from 73.16 at 60.30 next, which is close to next psychological level of 60.

In the bigger picture, sustained trading below medium term trend line support solidifies that case that medium term rebound from 33.2, which is treated as correction whole down trend form 147.27, has completed at 75.0 on bearish divergence conditions in daily MACD and RSI.

Further break of 58.32 cluster support (38.2% retracement of 33.2 to 75.0 at 59.03) will confirm this case and pave the way for a retest of 33.2 low. On the upside, break of 71.77 resistance is needed to invalidate this view. Otherwise, outlook will remain bearish.

Tuesday, September 29, 2009

Novice Retail Traders, Good or Bad ?

I am a fresh face novice venturing into this unknown world. I have very little resources with a big ego to strike it big. I need advice and guidance.

....... from Noviceberg
Noviceberg question is one I have addressed before, not in BT open blog but person-to-person and I will address it again directly in a moment >>> here in open blog with sender's real name & emaill address adjusted to protect his/her privacy.

Before I do, however, I want you all to know it raises an issue I have thought about for some time now …
Noviceberg, it pleases me that you want to trade and it concerns me that you outright say your goal is to “strike it big” with minimal resources. The implication is that you see trading as a quick way to the riches you apparently desire.

If you don’t lose this notion, you will lose your money, however little that may be. One more time for all those who might have misunderstood this >>> trading is work. It takes time and effort to learn how to do it properly, as well as to achieve consistent success.

My advice is to reconsider your desire to trade until you have the correct attitude, solid skills, and most importantly, you have more capital resources. Do not trade with "urgent money" or as some Chinese crudely puts it >>> Coffin Capital.

Bottomline >>> Investing say, 25% of your personal savings would be prudent. Never invest with monies that isn't yours.

The issue I mentioned in the opening directly relates to Noviceberg and the millions of other beginners like Noviceberg who are trading real money on a global scale everyday in every market around the world.

One study I read concludes that some 70% of retail day-traders lose money. If this is true, or even close to true, what is the implication for the rest of us who trade retail, either on a day basis or for the short term?

Does it mean there is more “money in the pot,” as it does in poker, or is it a negative that actually hurts us? Certainly the fact that millions of amateurs are trading daily increases liquidity, which is good, but it also has the potential to move markets based on hunches, gurus, manipulators, and bad skills.

Even though I encourage folks like Iceberg who is a self confessed Novice to learn how to trade, as it can be rewarding, I wonder if this is a good thing or a bad thing? What do you think?

Trade in the day; invest in your life …

ZL's Bursa Themes Updated commentaries & charts of FKLI, FCPO, FOREX & Bursa Stocks

Monday, September 28, 2009

Bursa Malaysia Biz >>> Share prices end lower on profit-taking

Share prices on Bursa Malaysia ended lower today on profit-taking as investors cashed in on heavyweights following the downtrend in the US market, said dealers.

At close, the FTSE Bursa Malaysia Kuala Lumpur Composite Index shed 11.44 points to 1,205.95 after opening 0.57 of a point easier at 1,216.82.

SJ Securities analyst Phua Kwee Hock said the market was undergoing a small correction and did not expect it to fall below 1,184 level.

“The market may see a support level at 1,193 and a resistance level at 1,212. This profit-taking is more of a global thing,” he said.

Phua said the local market tracks the US market which went on a selling mode recently when the US Federal Reserve made a cautious stance on the country’s economic recovery.
“Because of that cautious note by the Federal Reserve, investors took it as a hint and factored it in their expectations,” he said.

Phua said the market would remain soft until middle of October ahead of the 2010 Budget to be tabled by the government on Oct 23.

The FBMEmas fell 75.97 points to 8,118.06, the FBM Top 100 slid 76.92 points to 7,908.92, the FBM70 lost 85.27 points to 8,015.06 and the FBM ACE Index dwindled 50.17 points to 4,023.91.

The Technology Index shed 0.05 of a point to 16.28, the Finance Index slipped 67.67 points to 9,934.54, the Plantation Index slid 83.85 points to 5,909.14 and the Industrial Index was 21.8 points lower at 2,645.29.

Losers led gainers 469 to 145 with 183 counters unchanged and 461 untraded.

Turnover was lower at 454.117 million shares worth RM605.403 million from 688.772 million shares worth RM945.180 million on Friday.

Top losers included KLK, which shed 24 sen to RM13.74, LMCement lost 23 sen to RM6.05 and SP Setia fell 20 sen to RM4.

Among actives, KNM lost 2.5 sen to 76 sen, SAAG slipped half a sen to 23 sen while Jadi Imaging gained half a sen to 21 sen.

Losers among the heavyweights included plantation companies such as Sime Darby, which fell six sen to RM8.52, IOI Corp shed 14 sen to RM5.20 and PPB Group declined 10 sen to RM15.92.

As for the banking sector, Maybank lost two sen to RM6.66, CIMB Group and Public Bank slid six sen each to RM11.10 and RM10.20, respectively, and RHB Capital lost 15 sen to RM5.10.
Tenaga Nasional fell two sen to RM8.18, Axiata dropped three sen to RM3.14 and Genting declined 19 sen to RM9.

On the Main Market, turnover slipped to 416.577 million shares worth RM595.463 million against Friday’s 632.296 million shares worth RM929.450 million.
Turnover on the ACE market also dropped to 20.852 million shares valued at RM5.445 million from 31.587 million shares valued at RM8.74 million previously.

BT's Featured Company >>> Hock Seng Lee Bhd

Hock Seng Lee Berhad (6238 HSL) is a fully integrated marine engineering, civil engineering and building construction firm specialising in mass land reclamation and dredging. HSL has transformed vast acres of uninhabitable swampland into modern housing and industrial estates, tourist resorts, commercial centres, international seaports and highways.
The features of its business are its in-house capacity to handle the entire construction process and its ownership of one of Malaysia's most comprehensive and advanced dredging fleets. HSL is the only Sarawakian company listed on the construction counter of Bursa Malaysia's main board.
HSL presently owns one of the most extensive fleets of specialised marine equipment in Malaysia and is involved in mass reclamation projects which are among the largest ever undertaken world wide.
Today, HSL some over 700 full time staff, thirty per cent of whom hold tertiary or technical qualifications. Its headquarters in Kuching boasts an electronic office environment with an advanced computer network, fully computerised accounting and a wide range of customised computer software to support tendering, job costing and project management.
HSL posts strong first half
Declares 5 percent interim dividend
KUCHING  Second quarter 2009 earnings for Sarawak-based infrastructure specialist Hock Seng Lee Berhad (HSL) rose 26 percent against 2008's corresponding quarter. YB Senator Dato’ Haji Idris Buang, Chairman of HSL, said that the Group had enjoyed a strong first half year due to a bumper procurement year in 2008 and the ongoing flow of projects to East Malaysia under the latest government initiatives.

For the six months to 30 June 2009, HSL's net profit before tax increased some 16 percent compared with the same period of 2008; rising from RM26.77 million to RM31.10 million.
On a quarter to quarter basis, earnings before tax grew from RM13.56 million for Q2 2008 to RM17.11 million for the current Q2 2009.
Revenue for the first half of 2009 also saw strong growth, up 13 percent to RM159.98 million from RM142.10 million in 2008.
“With RM1.3 billion outstanding in our order book and with the flow of projects from SCORE (Sarawak Corridor for Renewable Energy) and the federal government stimulus packages, we foresee ongoing success,” said Dato’ Idris.
“Our policy is to share such success with our loyal shareholders and thus, once operational needs are taken care of, we will continue to declare attractive dividends”, Dato’ Idris added.
Dato’ Idris announced that the Board had decided on a first interim ordinary dividend of 5 percent per share less tax at 25 percent and payable to shareholders on 9 October 2009. The dividend entitlement date shall be 16 September 2009.
“Rewarding our loyal investors is part of our company ethos and the reason why we have so many long term institutional stakeholders who relish participating in our growth story,” said Dato’ Idris.
HSL Group maintained zero gearing and strong cash reserves at the half year mark.
HSL has been honoured to receive the KPMG/EDGE award for Shareholder Value in the construction category for the past several years.

Sunday, September 27, 2009

Will BLACK OCTOBER emerge again after tailend of 3Q2009?

Third Quarter 2009Q3 will be over & out by middle of next week and if you can still remember last year 2008, October (4Q) was the month when the KLCI index dropped the most to hit lowest point last year at about 800 point. Many investors will remember that month as a "Black October".

Black October actually not only happened last year but happen a few time in history of world share market. Now will it happen again this year? Base on the chart, FBM KLCI index likely to move sideways and I think the index will be well supported because it can easily be controlled by the Top 5 shares out of 30 components that makes up the FBM30. And when and if the going gets soft, plantation shares will most likely provide support to the index if and when when the banking or financial sector runs out of momentum.

Optimistically, I think 3Q09 result will more or less just about same with 2Q09 but due to this 3Q financial reports, many companies bottomline will somehow be burdened by the H1N1 epidemic and retail businesses will be the ones hardest hit due to the simple fact there were noticeably lesser crowds in shopping malls and even out in the streets throughout the months of August & September. It was a majority case of "crowded fear".

Obviously Bank Negara will still emit good (cosmetic?) news about the Malaysian economical standings but will wary investors buys it?

Do you think it makes better cow-sense now to come out from share market and wait for some correction before reinvesting again.
Personally, I still believe the country's economical scenario is getting better but presently, is just over bought. And if we buy when share market drops, will it bring more profits? Or will it be Deja Vu again?
Man >>> this is gonna be TRICKY!!!

Market analysts flips flops >>> After then and now, what's next?

Case in point: Six months ago, the mainstream financial world was lock-step in the March of Dooms as the Dow Jones Industrial Average plumbed the depths of a 12-year low. In their words >>>>>>>>>


"Dow 5,000? A Bearish Possibility." (Wall Street Journal)

"The bear market is tightening its grip. No one is taking a back-seat approach. Everyone is just selling. We're collapsing in on ourselves."(New York Times)

"I don't want to sound like the grim reaper, but it's possible that one of the [major] averages could come down by... another 50% drop from here. This is a slow-drip, slow-death decline." (LA Times)
"It's going to continue its easiest path, and that path it sees is down. That's where we're stuck right now and who's going to get out in front of it?" (AP)


"By all indication, this pattern is back on track... the turn will come on or near March 10, 2009. Anywhere in this time period may mark a turn, which will obviously be a market low."

Once the bullish winds of change had turned, on March 16, one very "quick-to-change" analyst wrote:
"When the market speaks, it behooves us to listen. The implications of this are that the... major stock indexes are in the initial stages of a multi-month advance."

"Wave 2 should carry the Dow as high as 10,000. The rally should regenerate substantial feelings of optimism. Investors will be convinced that the bear market is behind us."

"Be Prepared For This Environment; it will be hard for most investors to resist."

Flash ahead to today >>> From its March 9 low, the Dow soared 30%-plus to a new yearly high. AND, as a recent Wall Street Journal reveals -- the financial in-crowd has undergone a Charles DOW-in like evolution "From Bear to Bull."

Here, the graphic illustration below shows the conversion:

What's next??? Obviously it is an ASS .....


Saturday, September 26, 2009

Fundamental or Technical Analysis >>> Which Way To Go?

Question: I'm a complete beginner in the investing world. I assume the best place to begin is with fundamental analysis; however, I've found traders stating that fundamental analysis does not work, while other say it's essential. As well, the amount of information to be digested is frightening for a novice. Considering the above, I have two questions:

1. Is there a roadmap of subjects to be learned in order to facilitate the grasping of all the information?

2. What do I do to correlate technical analysis with fundamental analysis?

A BT silent reader
Answer: Ms / Mr XXXX , as a beginner you are asking the right question at the right time in your learning curve. Good start!
The “road map” you seek begins with the terminology, which is financial in nature, primarily. Learn how to read the SC and companies financial reports and the quarterly/year-end statements. This is the beginning.

After this, learn to define other markets that influence your chosen market. For example, Sime Darby & IOI Corp have an affective relationship (oil palm & plantations). Naturally, Magnum, BJToto & Tanjong for gaming industries.

Once you understand the market relationships, you can better analyze the market you want to trade. Then define and follow quality news sources or analysts that track the sector, or the market itself. Finally, learn how to get in on conference calls, or read the transcripts. One can learn much from what the CEO or CFO has to say, and how he or she says it.

Fundamentally (pun intended), this is the road map. Bottom line? Learning everything you can about your market is good.

It is true that traders disagree about which is the better approach to analyzing markets, technical or fundamental analysis. Pure technical analysts look at chart patterns and care little about fundamentals. Pure fundamentalists care little for charts and patterns.

Then there are those, such as myself, who think that good trading is about knowing all you can know about where you invest your money. For me it depends on the length of my investment. Short term (1-3 months), I find technical analysis tools quite useful, and I use them. Mid-term (6 months or below 2 years), for longer=term I go to fundamental analysis for both entry and exit. This is how I correlate the approaches to analysis.
Finally, never be afraid of what you need to do to achieve success. Fear will only inhibit your progress. Instead, embrace the wonder of learning and get excited about where you might end up if you do your work and learn the craft of trading. That place is the art of trading. This, my friend, is the place where success resides and fun is had.
Trade in the day; invest in your life …

FBM KLCI >>> Further Consolidations Ahead

Market sentiments in Bursa Malaysia are expected to be rangebound next week but with gains likely to be limited on concerns over external factors, in particular the US economy. There are worries about the pace of the US recovery and also the posibility that the government might curb stimulus measures too soon, a dealer said. He expects the market to open weak on Monday following the slide on Wall Street on Friday when the Dow Jones industrial average fell 42.25 points to 9,665.19.

Share prices on Bursa Malaysia consolidated within tight trading ranges in tandem with the weak performances on the Wall Street and regional stock markets. The FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) continued to stay above its major psychological support of 1,200 when it closed at 1,217.39 points on Friday.

Continuing weaknesses on the regional stock markets sent the FBM KLCI marginally lower on Thursday. It closed at 1,218.06 points, giving a day-on-day loss of 1.01, or 0.08 per cent.
The counter eased back in tandem with the weaknesses on the Wall Street and regional stock markets, closing at 1,217.39, giving a day-on-day loss of 0.67 point, or 0.06 per cent.

On a weekly basis, giving a week-on-week loss of 3.81 points, or 0.31 per cent.

The FTSE Bursa Malaysia Small Cap Index eased 24.22 points, or 0.24 per cent to the 9,965.99 level while the FTSE Bursa Malaysia ACE Index lost 15.02 points, or 0.37 per cent, to the 4,074.08 level.

Following are the readings of some of its technical indicators:

* Moving Averages: The FBM KLCI continued to stay above its 10-, 20-, 30-, 50-, 100- and 200-day moving averages.
* Momentum Index: Its short-term momentum index continued to stay above the support of its neutral reference line.
* On Balance Volume (OBV): Its short-term OBV trend stayed below the support of its 10-day exponential moving averages.
* Relative Strength Index (RSI): Its 14-day RSI stood at the 69.42 per cent level yesterday.

The FBM KLCI's brief technical rebound hit its intra-week high of 1,231.49 on Wednesday, encountering resistance zone at 1,224 to 1,258 levels. Subsequent technical pullback hit its intra-week low of 1,213.88 yesterday, staging a re-test of envisaged support zone 1,183 to 1,217 levels.

The FBM KLCI's weekly chart continued to stay above the support of the neckline (See FBM KLCI's weekly chart - A1:A2) of its head-and-shoulders pattern formation. It continued to stay above its intermediate-term uptrend (A3:A4).
Chartwise, the FBM KLCI's daily trend continued to stay within the confines of its intermediate-term uptrend channel (See FBM KLCI's daily chart - B3:B4 and B5:B6). It continued to stay precariously above its immediate overhead resistance (B1:B2).
The FBM KLCI's daily, weekly and monthly fast MACDs (moving average convergence divergence) stayed above their respective slow MACDs.
The FBM KLCI's 14-day RSI stayed at the 69.42 per cent level yesterday. Its 14-week and 14-month RSI stayed at 74.76 and 60.50 per cent levels respectively.
Last week, it was commented that the FBM KLCI might pause to catch a short breather in a holiday-shortened week. Consolidations are in technical order for the three-trading-day week. The FBM KLCI traced out a week-on-week loss of 3.81 points.
Due to lack of fresh market leads and dwindling market volume, the FBM KLCI is likely to consolidate further to stage a retest of its immediate downside support of 1,210.

Next week, the FBM KLCI's envisaged resistance zone hovers at the 1,221 to 1,255 levels while its immediate downside support is at the 1,180 to 1,214 levels.

Tuesday, September 22, 2009

Wall Street >>> Mixed Verdict for Stocks as Dow Falls, Nasdaq Climbs

The markets ended with a mixed picture on Monday as M&A action helped send the Nasdaq Composite to another new 2009 high but crumbling commodities kept the broader markets from joining the party. Dell's $3.9B offer for Perot Systems leads to modest tech advance amid stumble in other sectors.

A multibillion-dollar takeover in the technology sector couldn't rouse the broader market in a ho-hum session Monday but did help keep the Nasdaq in positive territory at the closing bell.

Today’s Markets
The Dow Jones Industrial Average fell 41.34 points, or 0.42%, to 9778.86, the Standard & Poor's 500 lost 3.64 points, or 0.34%, to 1064.66 and the Nasdaq Composite picked up 5.18 points, or 0.24%, to 2138.04.
Aside from Dell’s $3.9 billion takeover of Perot Systems and a $2 drop in oil, the markets were impacted by Lennar’s big quarterly loss and bearish commentary from fertilizer giant Potash.

The choppy day for stocks comes after the Dow soared 215 points last week, its biggest weekly gain since July 24. Stocks have extended their summer surge with little difficulty this month amid increased optimism about an economic recovery. The Dow had closed higher in nine of the previous 11 sessions, ending on Friday at its best level since early October.

In fact, Monday's modest 41-point slide for the blue-chip index represents its worst day since plunging 186 points on Sept. 1, an impressive stretch for the Dow considering September's bearish track record.

“It’s nice to see the market isn’t getting the selloff everyone has talked about,” commented NYSE trader Jonathan Corpina of Meridian Equity Partners. “We’re not going to go up 50 or 80 points every day but the fact we’re hanging in there is important.”
Stocks will “probably pull back for three or four days here and then the market probably rights itself a little bit” before “rallying into the month’s end,” said Michael James, senior equity trader at Wedbush Morgan Securities.

Despite the early week struggles, some bullish traders have their sights kept on the pivotal 10000 level on the Dow and beyond.

“10000 is a foregone conclusion. People are chasing returns at this point," said NYSE trader Jason Weisberg of Seaport Securities. “I hate to do this publicly, but the chart points to Dow 11000.”

Enjoy Bumping Into Walls

In any endeavor in life, you have up and down periods. Dealing with the market has many such up and down periods. In order to profit from the up periods, you have to tolerate or even “enjoy” the down periods.

ZL is an optimist. That means if someone does something well, I can figure out the essence of what they are doing by understanding their thinking. Thus, when such a person goes from A to B easily and effortlessly, I can determine how they do it and teach that skill to other people.

It turns out that one of the major problems people have in going from their current location to their desired goal is all of the walls or obstacles they continually run into each day. There is a common solution to these obstacles — make them okay. Don’t worry about getting from point A to B, just enjoy bumping into the walls.

If you’re in the market, one of biggest obstacles you’ll face is the wall of losses. It’s fairly difficult to deal with the markets if you are not willing to lose. It’s almost impossible. It’s like wanting to be alive, but only wanting to breathe in and not breathe out.

When you want to be right, you’re not dealing with the obstacles. Instead, you’re forcing things. When you want to make a profit out of today’s trade, even though it’s a big loser, then you’re not dealing with today’s obstacle. Enjoy the obstacle, embrace it, and be willing to accept it. If the market tells you it’s time to get out at a loss, then do so.

Quite often traders take the relationship they are having with the market, and transmute it by developing a different system or trading with a professional money manager. Now, the old struggle they used to have with the market—of not accepting what the market gives them—becomes a similar struggle they are having with their system or with their new advisor. Instead of giving up on the market after a string of losses, just in time to miss the really big move, they avoid their system until it is doing really well. When it is showing tremendous profits, they jump on board — only to be blown away by the market. And the same thing happens when they invest with money managers. This desire to be “right” motivates them to jump to the top money manager when he’s hot, only to go through a big string of losses. It’s all the same thing.

Psychologically, if you don’t come to grips with your obstacles and embrace them, you will simply find another way to repeat them. Realize that the walls occur because they are there for you to bump into.

When you accept this fact and embrace it, you’ll accept bumping into walls. And strangely enough, you hardly even notice that the walls are there. The result will be a new level of success in the markets.