Always Bring Your Map When You Drive

 

Let's we go back to the time when I was still new about trading especially in futures. Back then when I wanted to trade, I always made trading plan first. Funny thing was after I entered a position and join the crowds, I became more impulsive, react to emotion instead of using my intellect, and deviated from my original plan.

People are likely to be rational when they are alone, and grow more impulsive when they join with crowds. The movement of price can hypnotizes traders , the bigger the fluctuation, the stronger the emotions. The more emotional market, the less efficient it is, and creates profit opportunities for calm and disciplined traders.

Before you trade always make a written plan, when you enter/exit the position, the reason and evaluate that.

I made a decision making tree for my trading guidance. It didn't make sure gain to me, but it made me to stay on the course when I was still at the opening position.

A Simple Decision Making Tree for Trading

We all start out as beginners. A trader with good plan shows a development. A beginner never writes down a plan because he is too lazy to write or has nothing to write. He is having too much fun chasing hot tips and then try to make a good entry.

GOLD: Selling When Everyone Else is Buying and....Buying When Everyone Else is Selling (Not Yet)

Spot Gold fell by more than 14 %  to $1559 for this month, as investors look safe havens which is cash and the dollar. A debt crisis in the euro could affect global economy and hit commodity markets. Some analysts have said the risks of gold being in overbought area, and having gone up for the past three years.

I was having a difficult time tried to measure how high for the gold because there were no history highs. But the bottom line was there would be a big correction for the gold. Now let's try to calculate how low the gold could fall.

If we calculate based on the uptrend line, the support level will be at 1477-1480. If we measure based on Fibonacci Retracement, it will touch at least 1450 and the 50% correction will be around 1300. As Usually, back to crisis, people prefer cash first to any investments.     

There Are Always Two Sides to Every Story

Today I am not writing about the market. My opinion is  still the same like the last one. This time I would like to share you a story. Perhaps we could take a lesson from that.:)

I have a friend, co worker friend actually.  He has been in this field for 3 years. One day, when we were having a little chit chat, accidentally he talked about his trading. He was upset because he still could not get sure profit from the market, and some of his investors got loss. From the way I see him, He is a discipline person, put all his time and energy for this work, Not just an ordinary traders, who just come to the office, make some calls, hope their investors buy their advise based on one page of paper only and do nothing for the rest of the day . He spends most of his time to study the market, and keep learning. I must admit he is very diligent. Yet he still cant make sure gain.

As a matter of fact, trading a plan is not only according our plan, but we  also must meet the investors agreement. The hardest thing is to educate them, not about making profit, but to make them knew that the market has no mercy. Unlike any common system, such as in traffic, even when we drive carelessly, another drivers avoid getting crash with us, even they pissed off. But market likes your careless trade, donate our cash to them. No one tell you that your trading pattern is dangerous, as long as you have the equity. you have the right to trade the way you like, even the result is worst.
A couple years ago, I had an investor who played quite big. His trading actually was quite good. The problem was he was very stubborn, and never admit that sometimes our open positions were bad. His pride will not allow him to be wrong.  He liked to trade big, and let the positions floated. Once, when I detected a trouble, when the euro was 1,2500, we were having sell positions at that time, I told him to cut our positions 200 points loss, but he refused. I kept try to tell him the next few days that the euro had broken its resistance and we should considered cut the positions. The answer is still "No". In our unwritten rule, Investors are the king, their decisions are subtle. That is one of the biggest obstacle  for the trader besides good trading, good money management, and good psychology trading. Making profit from the market is already difficult, but sometimes the investors make it worse by their urgency trade. Anyway, few months later, when the euro traded at level 1,4300, which we never expected to go up that far, he began to ask me his positions. Hold or cut? It was the most difficult question for me to answer. When we were behind 200-300 points, I have no doubt to cut the positions, but when they were already 1800 points, cut the positions were not so easy. 

Imagine you are a chef, and some day I cooked food with my own style, then I give it to you when the food is half burnt. If the food is burnt or not well cooked, then you have fully responsible for that. Sounds not fair huh? well, the world is already not fair for too long time, and we often experience that situation.

I am just saying to my friend, that is our cost for being trader. How many times we  becomes a scapegoat for their poor trades?. It was everyone fault actually. But who knows the real truth?. Just keep the coin one side seen, my friend. The important thing we do have a goodwill, keep doing the best and don't care what others said and thought. Trust me, even when you are doing right or doing nothing wrong, there are some people still blame you, but for sure not the wiser ones I guess.  

It's Only the Beginning, It is So Not Over...Yet!

Yesterday, SNP Index pass through 48. Buckle up guys, otherwise u may get kicked out. If you are new visitor, See my article before

History Repeats Itself?

Just like I wrote on Wednesday  last week, it wasn't good to enter the market. It is still not until now! Forget about the good Non Farm Payroll data (117k, Forecast 89k, previous:46k rev). It was just a number! people did not believe it this time. US always can revise that later.  Also the bearish sentiment was too strong before this Friday.

I was monitoring the SNP Volatility Index, and last Friday it reached 39 before closed at 32. In my opinion if the volatility index breaks through 40 then we have a possibility to face the wild movement from the market just like 2008.

VIX Chart

Now compare it with DJI chart;

DJI Weekly Chart

Take a look at the Gold and Oil Commodity Chart in 2008

Gold Daily Chart

Oil Daily Chart

I guess when the crisis happened at 2008, most people prefer cash to goods, back to basic USD became favorable.Strange thing were: Gold and Oil plunged!  And when it was over, these commodities started to crawl up back. The question is,  If the market becomes very volatile like 2008, Will this pattern happens again?

Seperti yang saya tulis pada hari Rabu minggu lalu bahwa tidak baik untuk masuk pasar saat itu. Sampai saat ini pun masih tidak baik! Lupakan data bagus dari Non Farm Payroll, pasar sudah tidak percaya itu.Lagipula pada hari Rabu dan terutama Kamis sentimen turun sudah terlalu kuat. Ditambah lagi dengan keputusan Standar N Poor yang mendowngrade rating US menambah sentimen negatif.

Akhir-akhir ini saya mengamati Indeks Volatilitas dari SNP. Apabila Indeks tersebut menembus angka 40 bukan tidak mungkin pergerakan seperti tahun 2008 terulang kembali. Jumat kemarin, pergerakan indeks ditutup di 32 setelah sebelumnya sempat menyentuh 39.

Kalau melihat grafik emas dan minyak di tahun 2008, pada saat terjadi krisis, emas memang sempat membentuk new high baru, tetapi setelah itu terjadi koreksi yang signifikan dari $929/troy ounce ke $680/troy ounce. Setelah itu perlahan-lahan emas mulai merangkak naik. Yang terjadi dengan minyak lebih parah lagi, dari $115/barrel di bulan September 2008 turun sampai ke $35/barrel di bulan Desember 2008. Intinya adalah pada tahun 2008 saat terjadi krisis, 2 komoditi ini turun pada awalnya. Baru setelah itu lambat laun menguat kembali. Yang perlu dipertimbangkan adalah apakah pola ini akan berulang, apabila terjadi krisis?

HIGH ALERT!

As far as I'm concerned, right now the market is unfriendly. Technical Analysis wont help at this circumstances. I suppose we better stay away from the market, at least until this Friday report (Non Farm Payrolls US) or could be more. Always keep your cash first!

Saat ini sebaiknya kita tidak masuk pasar dahulu, Kekhawatiran ekonomi yang berkembang dari krisis Yunani yang sudah lama dibicarakan, disusul Portugal, Spanyol, lalu overheating perekonomian di China, yang terakhir dampak dinaikkannya plafon hutang US yang menunjukkan belum pulihnya perekonomian. Technical juga kurang berlaku di situasi sekarang ini. Ada baiknya kita melihat perkembangan dulu atau setidaknya menunggu hasil laporan Non Farm Payroll Jumat ini. Mudah-mudahan dirilis bagus. Sementara ini saya masih mengamati volatilitas SNP. Mudah-mudahan tidak setinggi seperti 3 tahun yang lalu. Satu hal yang pasti :Jaga Modal anda!

Don't Sink Your Ship with Only a Few Mistakes

When I was a kid, I used to play a rock paper scissors game with my friend. Rock beat scissors, scissors beat paper, and paper beat rock. Suppose now we play with $1 bet. If I have $100 in my pocket and you have $1000, in a couple hours the condition may still be the same, no one lose or win big. Now let's raise the bet to $20. Is it possible I lost my $100? Yes it is, because five strings of losses likely could happened than fifty strings of losses.

The same thing happens in trading. When you start to trade, you must plan how much loss you can bear and always put a risk small compare to your equity. We call it a stop loss. Some books recommend 2-3% loss  in each trade. I usually use 4-5%. I guess that depends on the market you trade and equity you have. 

The problem with using a stop loss is oftenly after the stop hit, the market goes back to our favor, Isn't it? :).  In this case, then we have to improve our methods. A stop loss is not a perfect tool, but it is the best defense we can have. 

Imagine a big ship with only one or two leakage chambers. No matter how big the ship, one little accident can drawn it. Limiting risk prevents a great damage to our account. Five or more strings of bad luck cannot make us kicked out from the market if we have a tight stop.

One more thing we should remember if we cannot afford to lose then we never can trade. There is always a risk in every occurrence. From the beginning we enter a position we already lost with the slippage and commissions. To cover that, the comparison between  the reward and the risk must be greater.For an example : If I plan $20 profit and $5 loss in each trade, with 4 times wrong and only 2 times right, I will still make money. This Idea is good but is very hard to implement. Well I won't object that, but if you see my walking text above, I would rather be the one than the nine. :)

Di masa kecil, saya dan teman-teman seringkali bermain permainan gunting kertas batu. Gunting mengalahkan kertas, kertas mengalahkan batu dan batu mengalahkan gunting. Misalkan sekarang anda dan saya bermain hanya saja kali ini memakai taruhan $1 setiap putaran. Dengan $100 di kantong saya dan $ 1000 di kantong anda, beberapa jam kemudian saya yakin hasilnya uang kita akan kurang lebih sama, tidak ada yang menang atau kalah banyak. Lain halnya kalau seandainya taruhannya dinaikkan menjadi $20 setiap putaran. Mungkinkan $100 saya dapat habis? Mungkin saja, karena kejadian 5x kalah berturut-turut lebih memungkinkan daripada 50x kalah berturut-turut.

Hal yang sama juga berlaku pada saat kita trading. Ketika anda mulai bertransaksi, anda sudah harus memiliki rencana seberapa besar resiko yang anda dapat tahan. Anda harus selalu membuat resiko yang kecil dibanding dengan jumlah modal anda. Kita biasanya sebut dengan Stop Loss. Beberapa buku merekomendasikan 2-3% resiko dari modal pada tiap kali transaksi. Saya biasanya menggunakan 4-5 % karena saya pikir hal ini tergantung dari pasar apa yang kita masuki dan seberapa besar modal yang kita miliki.

Masalah yang sering timbul dengan menggunakan stop loss adalah seringkali setelah menyentuh stop loss, harga kembali menuju level yang sebelumnya sudah kita prediksikan. Dalam hal ini kita perlu meneliti kembali metode/ analisa kita dan jika diperlukan membuat adjustment pada pola trading kita. Stop loss bukanlah alat yang sempurna, tetapi merupakan alat yang terbaik yang kita miliki. Bayangkan sebuah kapal besar yang hanya memiliki 1 atau 2 bilik kebocoran. Satu kebocoran kecil dapat membuat bilik itu dipenuhi air dan menyebabkan kapal tenggelam. Sama juga dengan account kita, satu kesalahan posisi dan kemudian membiarkan tanpa adanya stop loss, dapat menghancurkan account kita. Membatasi kerugian dapat menghindarkan kita dari kerusakan parah terhadap account kita. Lima atau lebih kesalahan berturut-turut tidak akan membuat kita terlempar dari pasar bila kita menggunakan stop loss.

Satu hal lagi dalam bertransaksi jangan sampai anda takut untuk rugi atau anda tidak akan pernah dapat bertransaksi. Pada setiap peristiwa selalu ada resiko. Menjual buah pun juga beresiko, akan selalu ada buah busuk yang harus anda buang tiap harinya yang berarti itu kerugian buat anda, tetapi selama jumlah buah yang anda jual jauh lebih besar daripada jumlah buah yang anda buang secara kumulatif, anda masih mendapatkan untung. Misalkan dalam trading kita menerapkan $20 profit dan $5 stop loss, dengan 4x prediksi keliru dan hanya 2x  prediksi benar, kita masih menghasilkan uang.

Ide ini sepertinya sangat bagus, tetapi dalam prakteknya tidak sesederhana yang dibayangkan. Hmmm... saya tidak akan menyangkalnya, tetapi jika anda lihat teks berjalan saya yang ada di atas, lebih baik saya berusaha menjadi yang satu daripada masuk di antara yang sembilan. :)

Euro : Elliot 4th wave

After a false breakout, euro seems to break up the  triangle pattern. Could be considered as 4th  wave (Elliot Wave), and beginning to 5th wave. Target around 1.4900

 See the pattern theory below :

Clock Ticking

Recently, I am a little disturbed by my second son question. He is a 4 years old kid, who is so naughty and stubborn like any other kids at his age. The same question he frequently asked. is  " Dad, what present will you give me at my birthday? must be a good one, dad.". Unlike his older brother, he is so demanding and very persistent with what he want. For the information, the day is August 2 and it is 8 days left starting from today. He keep me thinking what will be a good present for him :)

Speaking of August 2, we will have a bigger day beside my kid's birthday. There is the last day of  increasing US debt to avoid the country being "default". As we can see last Saturday, Democrats and Republicans in Congress are divided over plans to cut the U.S. deficit, a necessary move before the debt ceiling can be raised. The Treasury Department has estimated it will run short of money to pay all of its bills. While most investors believe a deal  will be done, nervousness ahead of the decision is still pressuring the dollar. At the present, Fed still keep Quantitative Easing and buy US debt which hold $600 billion US in QE2. The Debt ratio is $ 14.3 trillion or 98.62% GDP

(Source: Reuters) 

Default repercussion

A default would knock triple-A U.S. ratings down to at least selective default category overnight.
Conventionally, those who must hold triple-A securities for regulatory reasons are likely to be forced to sell in that event, although it's not clear cut.
If all U.S. government debt were to be rated in the default category, that would trigger downgrades on debt issued by related state entities and others who are benchmarked against government debt. This leaves no investable triple-A securities in the United States.
"The perceived wisdom is that they would have to sell, although there may be room for maneuver for this sort of default. It's not outright default," said Phyllis Reed, head of fixed income research at private asset manager Kleinwort Benson.
"The probability is less than one percent. If all of investors decided to position for this low probability event, and if nothing happens, they are going to lose a lot of money."
The International Swaps & Derivatives Association said it is not clear whether credit default swaps referencing the United States would trigger if a debt deal was not reached by Aug 2.
The cost of insuring the United States against default stands at just 56 basis points, nearly half the March 2009 peak. The CDS curve is nearly flat -- this in itself shows investor jitters, but not the sort of pricing in the market that expects an imminent default.
"Our view is the U.S. will go into some kind of technical default but they are unlikely to go into technical default on government traded debt obligations. They are more likely to default on other government payments such as defense contractors or social security obligations," said Percival Stanion, head of multi-asset strategy at Baring Asset Management.

Well, I guess somebody has a bigger problem to worried about than mine.

Baru-baru ini, saya sedikit terganggu oleh pertanyaan yang sering diajukan oleh anak saya yang kedua. Umurnya baru 4 tahun, dan tingkahnya nakal seperti layak anak seusianya. Yang membuat saya sedikit risih adalah pertanyaan sama yang sering dikatakannya."Pa, nanti kalau ulang tahun saya mau dikasih apa? pokoknya harus yang bagus ya Pa." tanyanya. Tidak seperti kakaknya, dia sangat gigih bila ada sesuatu yang diinginkannya. HUTnya jatuh pada tanggal 2 Agustus, 8 hari dari sekarang. Saya masih memikirkan hadiah apa yang baik untuknya.

Bicara mengenai tanggal 2 Agustus, akan ada peristiwa yang lebih penting dibanding ulang tahun anak saya. Hari itu adalah Deadline terakhir US untuk menaikkan Plafon hutangnya supaya terhindar dari resiko gagal bayar atau "default". Seperti yang kita tahu bahwa Sabtu kemarin terjadi perdebatan antara Partai Demokrat dan Partai Republik di Kongres, dalam hal pemotongan defisit US, sebuah langkah yang perlu sebelum dinaikkannya plafon hutang. Departemen Treasury memperkirakan akan adanya kekurangan dana dalam membayar hutang mereka. Sementara sebagian besar investor yakin bahwa perjanjian ini akan berlangsung lancar, sentimen pasar masih memberatkan dollar. Sampai saat ini Fed masih menjaga kebijakan keuangan longgar dan membeli hutang US sebesar 600 milyar US di QE 2. Rasio hutang senilai 14,3 trilyun atau setara dengan 98,62% GDP.

Artikel dari Reuters menyatakan:

• Bila terjadi default akan menjatuhkan rating US yang sekarang di level AAA
• Hal ini berimbas pada sekuritas tidak akan adanya peringkat AAA di US
• Akan ada default tapi tidak terjadi di obligasi hutang pemerintah melainkan di sektor pertahanan atau di keamanan sosial.

Jadi tampaknya ada yang punya masalah lebih besar dibandingkan saya pada tanggal 2 Agustus nanti.

Euro: False breakout, DJI: Entering 5th Wave

Euro Weekly Chart

Euro failed close below 1.4102, patterning tail, indicates false breakout?? As we could see Euro climbed more than 1 percent against the U.S. dollar on Thursday  after a survey showed a rebound in factory activity in the U.S. Mid Atlantic. We still have a resistance to 1.4530-1.4555

Euro gagal ditutup di bawah 1,4102, hanya membentuk tail, mengindikasikan pola break yang gagal?. Pada hari Kamis ini Euro menguat lebih dari 1 % terhadap USD, setelah data survei yang bagus pada aktivitas pabrik di Atlantik tengah. Kita masih punya resistance (tahanan atas) di 1,4530- 1,4555. 

Dow Jones Daily Chart

It seems DJI is patterning 5th wave, Double Top or break Hi 12875 (May 2011)?

Sepertinya setelah membentuk wave 4 (Elliot Wave Theory) Dow Jones memulai wave ke-5 nya. Pertanyaannya akankah Dow membentuk wave ke 5 menembus Hi 12875 atau hanya membentuk pola Double Top?.

Gold: How More High?

My mother used to be a good housewife. She retired now since we already grown up and have our own children. She was such a good mother at our time and really put all her time to raise us. She never read any newspaper, seldom watched TV or movies. Her hobby is listening music beside cooking. She ignores all the technology  which have developed so fast. When I brought a LCD TV, she was very surprised, and said "This thing is so thin, where 's the "machine?" :)

One day, when we were having family event, when I was reading newspaper alone, she came to me and asked me something. She had some savings and tried to change with gold. I was shockingly surprised, I mean how come my mother knew that investing gold was still good. " Do you think, it s still going up Mum?" I asked. And she said, "I m pretty sure, cause everyone else is buying." 

Weekly Gold chart

If you look at the chart, Gold has been rallying from $681/troy ounce (October2008) to $1609 (yesterday high) and it could test a higher level in days. I was trying to draw a line or a pattern, but I could not find the proper one, because the price is breaking up higher and higher. I could only draw Fibonacci Projection which the result is around 1632-1635.

Warren Buffett said, when you buy a stock, you become a partner of manic depressive fellow, Mr Market. Each day Mr. Market runs up and offers either to buy  you out of business or to sell you his share. Most of the time you should ignore him because Mr. Market is very psychotic. There is time when he become so deppresed  that he offers you his share for a song, and that 's when you should buy. At other times he becomes so manic that offers an insane price for your share, that's when you should sell. The idea is very brilliant but it is hard to implement.Why? because Mr Market's mood is so contagious. Most people want to sell when Mr. Market is depressed and buy when he is manic.

It is still in my mind what my mum said."........cause everyone else is buying". It sounded like an alarm to me. Note that it 's not only happening to my family or to my office, but it is happening everywhere! Everybody  at anyplace knows that investing Gold is good now. Do you still remember this financial proverb? Buying when everyone else is selling, and selling when everyone else is buying. Are we entering this zone already? we will see in coming months. :)

Ibu saya dulunya adalah seorang ibu rumah tangga yang baik. Sekarang beliau sudah pensiun karena kami semua sudah dewasa dan masing-masing sudah berkeluarga. Di Masa kecil kami, ibu saya mencurahkan hampir seluruh waktunya untuk membesarkan kami. Dari mulai memasak, mengurus rumah, menemani kami belajar, dll. Beliau jarang sekali membaca surat kabar atau menonton televisi, juga tidak memperdulikan perkembangan teknologi yang pesat. Suatu saat ketika saya membawa LCD TV, dengan polosnya beliau bertanya," TV ini tipis sekali, dimana letak mesinnya?" tanyanya.

Suatu waktu, ketika kami sedang berkumpul pada acara keluarga. Saat saya bersantai di teras membaca surat kabar sambil menunggu acara makan. Tiba-tiba ibu saya datang dan meminta saya untuk merubah tabungannya dalam bentuk emas batangan. Saya terkejut dengan permintaan tersebut, karena bagi saya, ibu bukan seorang yang "melek" investasi. Saya bertanya," Ma, bagaimana mama yakin bahwa investasi di emas masih bagus?". Jawabnya." Saya yakin, karena semua orang membeli emas sekarang."

Jika dilihat dari grafiknya, Emas telah menguat dari $681/ troy ounce ke $1609 (tertinggi kemarin) dan besar kemungkinan meneruskan penguatannya di beberapa hari mendatang. Saya mencoba untuk menarik suatu garis atau pola, tetapi saya tidak dapat menemukannya yang tepat, karena emas selalu naik dan naik, memecah hi nya setiap saat. Pendekatan yang dapat dilakukan adalah Fibonacci Projection di kisaran 1632-1635.

Warren Buffet pernah mengatakan ketika anda membeli saham, anda menjadi partner dari seorang yang maniak dan depresif, yakni Mr Market. Tiap hari Mr Market akan menawarkan untuk membeli sahammu atau menjual sahamnya. Sebagian besar anda harus mengacuhkannya karena Mr Market adalah seorang psikopat. Pada suatu waktu ia menjadi sangat tertekan sampai-sampai ia mau menjual sahamnya hanya dengan sebuah lagu, itulah saat anda harus beli. Di lain waktu dia menjadi seorang maniak yang menawar saham mu dengan harga yang luar biasa tinggi, Itulah saat dimana anda harus jual. Ide ini sepertinya sangat bagus, tetapi sangat sulit direalisasikan, mengapa? karena mood Mr Market sangat menular !. Sebagian orang juga ingin menjual pada saat Mr Market menjual sahamnya untuk sebuah lagu, dan sebagian besar orang juga ingin membeli, pada saat Mr Market membeli saham dengan harga yang luar biasa tinggi.

Masih terngiang di pikiran saya kata-kata ibu saya, "...karena semua orang membeli emas." Bagi saya kalimat itu nampak seperti sebuah peringatan. Ingat bahwa pemikiran ini tidak terjadi hanya di ibu saya, atau kantor saya, tetapi ini terjadi di mana-mana. Semua orang di setiap tempat juga tahu bahwa membeli emas saat ini adalah investasi yang bagus.

Ada peribahasa finansial yang umum, "Belilah pada saat semua orang menjual dan Juallah pada saat semua orang membeli." Apakah kita sudah mulai memasuki zona tersebut sekarang? Kita lihat saja di bulan-bulan berikutnya. :)

Dangerous Place or Dangerous Trade?

We were surprised by a crying coworker in that afternoon. She was a newcomer, very fresh graduate who joined not more than 2 months at that time. Yet she brought a 50,000 USD client in a short time, absolutely not bad for a rookie. She traded Loco London Gold (LLG) Futures Contract or simply we could say gold. At the beginning, she made a string of  good profit trading, Then thing didn't end well, and made her capital account almost 60% behind. Well, her reaction might be new but the end of story is quite common for us. 

Trading in Christmas

To understand how futures work, let's make an example.

Kevin is a young successful businessman, and interested in buying gold. He is very sure that the trend is still bullish. Let's say the gold is  trading at $1,500 an ounce. His analysis indicates that it could go up to $1,580 within a month. With $150,000, he can buy a 100 ounce gold, and if his analysis is correct , the price goes to 1,580 then his cash becomes $158,000 or 5.3 percent. Nice, isn't it?

Now Kevin could do almost the same thing in futures contract, without deliver $150,000. The margin on the contract is only $1,500. In other words, he can control $150,000 contract of gold with only a $1,500 deposit. so when the gold price reach $1580, he will make the same profit as same as if he buy 100 ounce. Only the profit is not 5,3% but is 530% (Note: the margin was only $1,500/100 ounce gold contract, rite?) , Very amazing, huh?

Most people, after they understand how futures work, are flooded with greed. A beginner with $ 15,000 buy 5 contracts!, if he is correct and gold rallies to $1,580/ounce, he will make  $8,000/contract or $40,000. If he repeats a few time, he 'll be a millionaire by months.

The problem with the markets is they don't move in straight lines. Charts are full of fluctuation, false breakout, false reversal, etc. Gold may raise from $1,500/oz to $1,580/oz, but it is normal to dip to $1480 first along the way, that $20 dip made $ 2000 paper loss for someone who bought a 100 oz, Another $10 dip would make the beginner kicked out from the market.

Mr. Market

Futures can be very attractive for those who have strong money management skills. They promise high return but demand high discipline too. A Big fat guy who can't kick his smoking habit is unlikely to make a good trader.

When you are first approach trading, you are better starting with slower moving stocks. Once you have learned well as a trader, then take a look to the futures.

TERJEMAHAN :

Suatu siang, kita dikejutkan oleh tangisan sesenggukan dr seorang trader wanita. Ia adalah seorang trader baru yang tidak sampai 2 bulan bekerja di bidang ini, tetapi sudah berhasil memasukkan nasabah sebesar USD 50.000 untuk ditransaksikan di perdagangan berjangka emas. Untuk ukuran Futures nilai segitu cukup besar, mengingat resiko investasi ini sangat agresif. Pada awal-awal transaksi, hasil yang dicapai cukup bagus, setelah beberapa saat kenyataan tidak berjalan sesuai dengan rencana dan menjadikan modalnya berkurang  hampir 60%. Reaksinya dalam menghadapi kenyataan ini mungkin baru, tetapi akhir cerita seperti ini cukup umum di telinga kita.

Untuk lebih mengetahui cara kerja futures (transaksi berjangka), lihatlah contoh di bawah ini:

Kevin adalah seorang pengusaha yang cukup sukses dan berminat untuk membeli emas.  Ia berkeyakinan bahwa tren masih akan terus naik. Katakanlah harga sekarang ada di $1500 per troy ounce. Analisanya menunjukkan bahwa harga emas dapat menguat menuju $1580 dalam 1 bulan. Dengan $150.000 Kevin membeli 100 oz emas, dan jika analisanya benar, ketika harga emas mencapai $1580. Nilai emasnya akan menjadi 158.000 atau profit +5,3%. Kedengarannya menarik kan?

Nah, Kevin dapat melakukan transaksi serupa yakni membeli emas hanya saja bukan di pasar fisik tetapi di futures, dengan keuntungan tidak perlu menyerahkan $150.000, tetapi cukup dengan deposit $1.500. Dalam arti bahwa $ 1.500 mengontrol kontrak emas sebesar $150.000. Jadi apabila harga emas menuju ke $1580, maka nilai keuntungan yang diterima Kevin akan sama dengan dia membeli fisik 100 oz emas, hanya saja yang berbeda adalah persentasenya. Bukan 5,3% tetapi menjadi 530% (Ingat: Dana yang disetorkan cukup $1.500 saja sebagai deposit). Luar biasa bukan?

Sebagian besar orang setelah mengetahui cara kerja futures, Pandangan mereka dipenuhi oleh keserakahan. Seorang pemula dengan $15.000 membeli 5 kontrak emas futures! Apabila Ia benar, harga emas naik ke $1580/oz, maka ia akan mendapatkan keuntungan $8.000/kontrak atau $40.000 per 5 kontrak. Beberapa kali ia dapat melakukan ini, dalam hitungan bulan ia akan menjadi miliuner.

Kendala utama adalah Pasar tidak bergerak dalam satu garis lurus. Pergerakan pasar sangat fluktuatif, penuh dengan break out palsu, reversal palsu dll. Emas mungkin akan menguat ke $1580/troy ounce, tetapi wajar apabila sebelum menuju level tersebut, emas turun dulu ke $1480. $ 20 penurunan merupakan kerugian mengambang $2.000/ kontrak atau $10.000/5 kontrak bagi si pemula. Adanya penurunan $10 lagi dr harga emas memastikan si pemula keluar dari pasar.

Futures merupakan perdagangan yang sangat menarik bagi mereka yang memiliki keahlian manajemen uang. Futures menjanjikan keuntungan yang tinggi tapi diiringi dengan kedisplinan yang tinggi pula. Seorang yang gemuk yang tidak dapat menghilangkan kebiasaan merokoknya, tampaknya tidak akan dapat juga menjadi seorang trader yang baik.

Jika anda baru belajar berinvestasi, cobalah masuk ke saham terlebih dahulu, terutama saham-saham yang pergerakannya tidak fluktuatif ex: infrastruktur, banking, pertambangan. Setelah beberapa saat anda sudah mulai matang menjadi seorang trader, barulah anda dapat mulai memcoba ke futures. :)

Automatic Trading

A few weeks ago,  when I was staring the graphic at the office looking for some opportunities, my friend came and offered me to join with him about buying a software. A 10,000 USD software that can not only predict the price movement but also can predict the entry time and exit time. Such a fantasy!. Didn't want to disappoint him, i asked him, "Why don't we make a test? and if it works then we will consider to buy. So we took a stock from the software recommendation, when to buy and when to sell with target profit ( the gain was expected around 6% within 10 days). Well, the result wasn't near the target, not even close!. The stock ended down -14% in 10 days.

Complex human activities do not lend themselves to automation. Computerized learning systems have not replaced teachers and Airlines pay a quite high salaries to pilots despite having auto pilots. They do it because humans can handle unforeseen events. 

Markets always change and defeat automatic trading systems. A competent trader can adjust his methods when he detects trouble. An automatic system is strict and self destruct.

Betting your money on Robot is like betting your life on autopilot. The first unexpected event will destroy your money.

I believe there are very good trading systems out there, but they have to be watched and frequently adjusted. Let me take some phrases about Autopilot Myth:

"Traders who have the autopilot fantasy try to repeat what they felt as infants. Their mothers used to fulfill their needs for food, warmth, and comfort. Now they try to recreate the experience of passively lying on their back and having profits flow to them like an endless stream of free, warm and milk.

The market is not your mother. It consists of tough men and women look for ways to take away money from you instead of pouring milk into your mouth."

Beberapa minggu lalu, ketika saya sedang sibuk melihat grafik mencoba mencari peluang, seorang teman datang ke saya dan menawari untuk patungan membeli sebuah program robot. Harga software itu sebesar 10ribu USD lebih, sama dengan investasi awal untuk investor. Wow! sebuah angka yang cukup fantastis!. Kelebihan dari program itu adalah, dia tidak hanya dapat memprediksi pergerakan harga, tetapi juga dapat mengetahui, tanggal, bulan, tahun berapa kita harus masuk dan keluar. Dalam benak saya, variabel/ constraint apa saja yang dimasukkan ya hingga dapat membuat software secanggih itu. Tidak ingin menurunkan antusias teman saya, saya menawari untuk mencobanya dengan membeli sebuah saham dari rekomendasi sotware tersebut. Singkat kata, saham, harga, kapan masuk dan kapan keluar sudah ditentukan. (target keuntungan kurang lebih 6% dalam tempo 10 hari). Hasil yang kita dapat ternyata tidak mendekati target, tidak sama sekali!. Saham tersebut ditutup -14%, setelah 10 hari kita beli.

Aktivitas manusia yang kompleks tidak akan pernah dapat diprogramkan. Sama halnya dengan sistem pembelajaran yang terkomputerisasi tidak akan menggantikan guru dan Airline membayar mahal pilot mereka daripada menggunakan autopilot. Mereka percaya bahwa manusia dapat menangani masalah yang tidak pernah kita duga lebih baik daripada program.

Pasar selalu berubah dan tidak pernah ada program yang dapat membacanya sepanjang masa. Seorang trader yang ahli dapat menyesuaikan metodenya setiap saat dan dapat mendeteksi adanya ketidakberesan. Sebuah program tidak akan dapat sefleksibel itu..
Mempertaruhkan uang anda kepada Robot sama dengan mempertaruhkan nyawa anda di auto pilot. Satu kali kejadian yang tidak diharapkan sebelumnya  muncul, akan langsung menghancurkan uang anda. Saya yakin ada banyak program bagus sekarang ini. Tetapi mereka harus selalu diamati dan setiap saat disesuaikan.
Berikut ini sepenggal frasa dari mitos auto pilot:
"Trader yang mempunyai fantasi autopilot, mencoba untuk mengulangi perlakuan mereka pada saat bayi. Ibu mereka biasa memenuhi kebutuhan mereka akan makan, susu dan kehangatan. Sekarang mereka berusaha mengulangi pengalaman itu dengan membeli sebuah program dan berharap keuntungan mengalir ke kantong mereka tiada henti. Pasar bukanlah ibu anda. Pasar terdiri dari laki-laki dan wanita-wanita tegar yang siap mengambil uang anda daripada memberikan susu untuk anda minum"
Tetapi mungkin saja setelah account anda hancur, anda diberikan segelas susu untuk compliment :).

Weekly Euro: Triangle Pattern?

Euro is making a triangle pattern if we see the chart. A break through 1.4102 support will trigger to 1,3969 at least then could go down further to 1.3758. From the Fundamental itself, last 2 weeks euro data have showed us that unemployment rate in Europe is also very high (9.9%) not too far from the highest 10.1 on October 2010. Also I think europe is not over from the Greece sentiment yet. Okay, the Parliament vote result was quite good, but dont you think the debt is a "little" too big to IMF and the Greece itself to cover?.  I think it is still a big question whether Greece survive from this or not. So if we dont have any certain answer for this, euro may still be bearish in coming weeks.

Pada grafik mingguan, Euro membentuk pola segitiga simetris. Adanya break di tahanan bawah di 1,4102 akan memicu euro ke 1,3969 setidaknya dan kemungkinan diteruskan ke 1,3758. Dari Fundamental sendiri, kita lihat bahwa 2 minggu lalu data euro menunjukkan hasil yang kurang baik. 9,9% unempoyment rate bukan merupakan indikator yang tepat untuk menguatkan euro. Didukung permasalahan Yunani  sendiri yang belum selesai. Coba kita pikir dalam-dalam, apakah permasalahan Yunani yang mencapai 340 Milliar euro sudah usai? Sepertinya belum. Sedangkan kebijakan cut spending dan tax yang besarnya "hanya" 34 Milliar, mendapat reaksi keras dari rakyat Yunani. Masih merupakan pertanyaan besar apakah Yunani dapat lolos dari default apa tidak.

Untuk minggu-minggu ke depan, tampaknya kita akan melihat pelemahan di mata uang euro.

Dow Jones : Difference between Data and Price

This Friday, We had US data Non farm payroll and unemployment rate released. The results were very disappointing. Non farm payroll came only 18k which below from the 97k forecast.It was also very far from the ADP sensus 157k!. Unemployment was at 9.2% made it six months high.Yet the DJI could end slightly down (-62 points). 

As we could see, there were no good significant data in 2 weeks, except Greece Vote, Housing Start and ISM Manufacturing. But Dow still made +835 points. Isn' it very strange, what happened with the last 2 weeks?? I mean the technical was bearish, market sentiment was also, but within a short period of time, Boom! it goes back higher again almost reaching this year high without a surprising news.

For this week. If we looked over the data last Friday, it may seems that Dow could make a quite correction to 12315 - 12422.Technical refer to the 4th wave. But it might be different if the strange thing happens again :)

Pada hari Jumat kemarin, telah dirilis data Non farm payrolls dan unemployment rate, yang hasilnya luar biasa buruk. NF payroll cuma berada 18k jauh di bawah forecastnya 97k dan lebih jauh lagi dibandingkan hasil ADP(sensus awal utk NF payroll)  pada hari Kamis yang dicatat di 157k. Unemployment rate juga mencapai 6 bulan tertinggi di 9,2% dan tidak jauh beda dengan bulan Januari 2011 di 9,4%. Kenyataannya Dow cuma ditutup -62 poin.

Kalau kita perhatikan baik-baik, selama 2 minggu ini, sebenarnya tidak ada data yang bagus yang dapat mengangkat DJI. Kenyataannya?? Dow naik 835 poin dalam 2 minggu ini, seakan-akan menghapus sentimen dan teknikal yang turun 2 minggu lalu. Dalam hal ini kita tidak perlu mengulas "aksi " Fed selama 3 tahun terakhir ini. hanya saja yang kita perlu cermati adalah minggu ini, apakah sentimen pasar tetap bullish setelah mengetahui kenyataannya? atau investor pasar sudah mulai sadar bahwa sebenarnya pelemahan ekonomi masih tetap menjadi persoalan besar? kita tunggu saja.

Untuk minggu ini kalau kita melihat dari sisi teknikal dan dirilisnya CPI, PPI data US. kemungkinan DJI akan mengalami koreksi ke Fibonya di 12422 atau di 12315, didukung dengan Elliot Wave theory yang mungkin sudah mulai di wave ke-4nya. Mudah-mudahan Fed tidak menjalankan "aksi"nya minggu ini.