Bee Stung Lips

Last year I attended Clemen Chiang’s Freely Business School Options Trading seminar and got involved in the world of options trading. It was a very highly charged event, from which many participants (including yours truly) left with high anticipation of making our first millions.

It’s always exciting to learn something new especially when it comes with a promise of making big bucks at the end of the day. Novices like me went directly into live trading with real, hard-earned money. The lucky ones made fantastic profits, the not-so-lucky ones (yours truly again!) lost even more.

So what happened to my 1st million $$$ which was supposed to come within 5 years? 1 year has almost passed me by. Many people have asked me this question in my old blog. And I sincerely apologise for not answering you earlier, which is why I’m writing this post.

My initial capital of US$5,000.00 is currently down 72%. Matters were made worse since I forgot the username & password to my virtual account in IB. How to practise trading strategies without sacrificing real money? 

So my current sifu, Ronald Lee, repeatedly advised me to be more careful in my trades. I admit last time I don’t follow all the rules all the time. Don’t care whose rules, I sometimes follow my gut feeling. Sometimes I win, sometimes I lose… all because of gut feeling. But now, after almost 1 year trading in limbo, I decided it’s better for my trading account (and present state of mind) to trade the ’safer’ way.

In case you’re wondering, ’safer’ does not mean ‘guaranteed’. ’Safer’ means using your head to analyse the necessary info (stock price, charts, options price, instrinsic value, time value, implied volatility, etc) before executing a trade. Stay away if there’s nothing to trade on any particular trade.

And I’m proud to say I’ve beaten my demon three times consecutively. Ever since last August, I have lost money during Expiration Fridays. Using Ronald’s strategies, I have made profits in Jan 08, Feb 08 and Mar 08 Expiration Fridays…. better yet, I let my options expire worthless.

Huh? Did you get that right? You bet!

Wanna know how? Check him out. The next options trading workshop is this May. It’ll be worth your money spent on the latest mobile phone/Nintendo Wii/PSP3/handbag/slimming treatment, whatever.

My main trading resolution for year 2008 is to at least get my trading account back to square one by 31 Dec 2008. Remind me to check my status at the end of the year.

He worked for France’s 2nd largest bank – Societe Generale, and he knew how the bank’s internal trading control system worked. Nothing extraordinary about that… until a few days ago when the world found out how Jerome Kerviel lost SocGen USD 7.18 billion betting on futures with the hope that market will rise in 2008.

 The man who might have spooked the US Feds into a suprise rate cut between sessions.

This amount surpassed the previous phenomenal figure involved when Nick Leeson brought down Barings Bank through risky trades back in the 1990s.

Here’s the mystery: he didn’t pocket even a cent for all his trades. So why did he do it?

My dabble into the US stock market began after I attended my first full-length, expensive options trading seminar last May. At that time the US market was bullish and almost everyone made money when we traded for the first time.

When the subprime crisis hit the market in August, the bear took the bull by its horns and jumped out the window. Naive novices like me were caught unawares. I didn’t know what to do, and I went numb for weeks when I saw the haemorrhage in my trading account.

I sought answers, and found a humble and experienced sifu to help guide me. Trading friends helped when I’m unsure of how to execute and exit a position.

Slowly I’m learning. But time = money and I can’t take forever to learn everything. This is what I learned today.

Isaac Newton was napping under an apple tree

When the fruit fell and hit his crown

Oh! What serendipity

He discovered ”gravity” 

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An apple a day keeps the doctor away

Apple in the morning – Doctor’s warning

Roast apple at night – starves the doctor outright

Eat an apple going to bed – knock the doctor on the head

Three each day, seven days a week – ruddy apple, ruddy cheek

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But whatever Steve Jobs said last night at the annual Macworld convention caused Apple (AAPL) stock price’s nosedive. And with it all my small gains in the last 2 months. Sigh…

The credit fear that gripped the US market throughout August until Sept 17 (when Feds Chairman Ben Bernanke slashed the interest rates) became the turning point where I began questioning the 3 options trading strategies I learned earlier this year. Before the credit woes, the market was bullish & optimistic. I was making money most of the time so much so that my trading account gained almost USD2k. I had stuck to the rules and diligently followed the market.

Suddenly the trend reversed. Stock prices fell and I couldn’t get out on time. My starting capital of USD5,000.00 shrank to USD1,701.67 when I applied the ‘repair’ strategy for 2 open positions. This strategy was supposed to work when what we expected did not happen & the market went the opposite way. What I didn’t know was if the market reversed once and again, I’d end up losing both way. I paid the price for not knowing…

So I stopped trading options but still watched the market. I asked around for some answers but none was satisfactorily given. And then a friend told me about an unknown options trader who’s begun teaching. Without hesitation I signed up for his weekend course. You won’t believe how much it cost me!

This new ‘guru’ calls his options trading strategies “Street Smart”, strategies developed by combining various strategies he learned from other people’s options trading courses, books written by other trading gurus & from his own trading experiences. He told us how he bust his trading account many times over, making mistakes like averaging down a losing position. He pinpointed many other mistakes which I have made and have vowed never to repeat (such expensive lessons).

After the weekend course, we were offered follow-up tutorials for 3 months. During these weekly tutorials, he guides us on how to apply his strategies, gives explanation for stock screening & why trade a particular counter, and most of all, he’s reachable when you need urgent advice.

So far the market’s been very volatile. Trends don’t seem to follow through. Bad news don’t act like bad news. Good news don’t act like good news. My trades aren’t moving. I’m waiting for a Santa rally now.

Dr Clemen Chiang set 2 rules when trading options:

Rule #1. Don’t lose money.

Rule #2. Always remember rule #1.

He said if we stick with his proven methods and never break his rules we will experience great profits and not suffer great losses.

In the past 2 months of trading with real money I have made and loss here and there. Great profits and great losses. So much so that my trading account doesn’t seem to move coz whatever great profits I made were used to cover whatever great losses I suffered.

Last week the US stock market looked as if the housing market burst its bubble. No matter how many good news came out of earnings, positive inflationary & economic data, the Dow, Nasdaq and S&P dropped every day. Being an inexperience trader I tried averaging down (a method usually applied for mutual funds), only to suffer even greater paper losses. 

Then I remembered what a friend had said to me. Why buy call options when you know it’s easier to profit with put options? I thought about it over the weekend, and I resolve to continue applying Dr Chiang’s methods if the market condition continues… this time using put options instead.

Another friend who’s made big money & suffered small losses woke me up when he urged me to stay focus and cut down on my experiments. What he said really made sense coz I really did make money when I stayed true to Dr Chiang’s kungfu, whereas majority of my losses stemmed from those experiemental trades.

I hope the 50 people who attended the Bali Retreat with Dr Chiang made the profits he said they would. I would like to learn from them what it’s like trading side-by-side with the Options guru.

I’ve been kicking myself since last Friday. I regret not listening to my instincts.

Late last week the US market was heading south, and yet Research in Motion (producer of BlackBerry) posted amazing earnings & guidance, with plenty of feel good news going around for this company.

I wanted to buy the night before the earnings annoucement but I didn’t do it coz RIMM options premium exceeded the 5% rule (where each trade amount should not exceed 5% of your current total portfolio). Having been beated by DRI (gapped down instead of up even after good earnings & guidance), Oracle (no gapping action after good earnings & guidance) & Apple (selling-the-news), I wanted to conserve my capital & recoup.

And then on Friday RIMM gapped up over $30 per share… and some of my batchmates made US$4,500 in just one night. Clemen Chiang made 10 times the profit. Arrggghhh..!!!

Really expensive lessons to be learned here.

I attended the recent National Achievers’ Congress 2007 at Putra World Trade Centre. I didn’t buy the entrance tickets, I got them free when I signed up for the Options Trading Seminar last month.

Apparently the event organiser, Success Resources, has been holding this annual event for the past 15 years. And every year they bring in successful entrepreneurs – people who had nothing and are now very rich by their own right.

So, for those of you who didn’t attend this live event, I’ve jotted down some inspirational quotes which might help you as you go through your every day life. It’s certainly helping mine.

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Age is no excuse, choose to be happy.

Happiness is a decision we make every day.

- Andrew Mathew, author of “Being Happy”, “Making Friends” & ”Follow Your Heart”

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Wealth is not how much money you have, wealth is what you’re left with if you lose all of it.

- Roger Hamilton, Asia’s leading wealth consultant & Chairman of XL Results Foundation

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The only difference between you and the next person is your ability to see your future.

- Dr Clemen Chiang, CEO of Freely Business School

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To break a record, you must have a clear goal, a strong reason, learn from the best & do the best. 

- Tung Desem Waringin, author of “Break The Record”, owner of a bank in Indonesia

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Your problem is not your problem. 

Go be it! Go do it! Go have it!

- Jerry Clark, giant of motivation, owner of Club Rhino Inc

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 You are 1 mega idea & 1 key contact away from your fortune.

- Mark Victor Hansen, author of “Chicken Soup for the Soul” series

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 The mirror is not the problem, change your inner self.

- James Skinner, founder of 2 global financial groups, ideasthatcanchangeyourlife.com

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 How you do anything is how you do everything.

- T Harv Eker, author of “Secrets of the Millionaire Mind”

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What to do is fundamental, how to do it is the science and art.

- Stephen Pierce, business optimisation strategist, CEO of Impulsive Profits Inc

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It’s not who you are but who knows you.

- John Childers, the “Million-Dollar Speaker”

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Show businesses how to maximise what they’re already doing, multiply the ways they can do business & repurpose what they’ve already done.

- Jay Abraham, founder & CEO of Abraham Group Inc

… akan datang dalam 5 tahun…

In case some of you wonder why I’ve not been blogging regularly lately, that’s because I’ve been busy practising options trading every week night.

Over the long Labour Day/Wesak Day weekend I attended a 3.5-day seminar on Options Trading by Dr Clemen Chiang (PhD) from Singapore. Some of you might have heard of his name. A young chap, only 33 years old, but a multi-millionaire many times over.

I first noticed Clemen Chiang back in 2004 when I looked around for courses in investing. Back then I attended Robert Kiyosaki’s 2.5-day business school for investor seminar in Singapore & started trading/investing in KLSE & commodities. I didn’t (and still don’t) have $$ to invest in properties yet.

Clemen Chiang specialises in Options Trading in the US stock market, ie Dow Jones, Nasdaq and S&P. He shared with us (my batch is the 49th class he’s taught so far) his kungfu, which he calls “Freely Powerful Strategy”, “Freely Most Powerful Strategy on Planet Earth” and “Freely Dynamic Strategy”.

He also said “do or die, don’t ask why”, we are to follow his rules, and not change any of his rules (rules = steps/strategies). When we follow his rules, he guaranteed us we will make money when market goes up, down or sideways.

And he showed us how he made >US$2,100.00 (pure profits alone) in less than 10 minutes in the live US market. Imagine earning more than your monthly salary every night, Monday to Friday.

Well, the majority of us (272 in batch 49) have started paper trading every week night, using his kungfu & timing, and those who practice every exact step have achieved profits. I’m won some & lost some… losing because I didn’t follow his rules. When I follow exactly what he taught me, I see my profits… in US greenback. Woo-hoo!

I can smell my first million already….