Aloysius Chan's Blog

Anger causes blood flow to the hand for fighting, fear causes blood flow to the leg for fleeing. 5 main domains for elaborated emotional intelligence Knowing one's emotion (self-awareness). Manaing emotions. Motivating oneself. Recognising emotions in others. Handling relationships. Anger builds on anger and will then revolve around revenge and reprisal. To defuse anger is to mitigate the information at the right window. Interpersonal intelligence Organising groups Negotiating solutions Personal connections Social analysis Artful critique Be specific Offer a solution Be present Be sensitive Ingredient of crucial capacity Confidence Curiosity Intentionality Self-control Relatedness Capacity to communicate Cooperativeness Children perform poorly due to Withdrawal or social issues Anxious and depressed Attention or thinking issues Deliquent or aggressive

2006 Merrill merged into BlackRock to form a trillion-asset club. The management were tempted by the huge bonuses and heavily traded the CDOs to hit their target. Public-private partnership fund were formed to buy the toxic assets.

To influence human behaviour: manipulate it or inspire it. Novelty can't stay forever, someone will eventually overtake it. Toyota overtook GM by 100% since 1990. Celebrity endorsement are blindly followed. The golden circle What: everyone knows what you are doing. The result. How: how they do what they do. The senior executive who got inspired. Why: why they do what they do. The vision from the leader. Brain Neocortex: rational and analytical, WHAT. Limbic: trust and loyalty: HOW & WHY. If people don't buy what you do, they buy why you do it. Proposing your company with why: "why I love about our company is becase ... all our staff look forward to working because it is an inspiration to ... it is amazing how serve customer because ..." Celery test: buying M&M and celery at supermarket, but why? (For health) School bus test: if the founder or CEO get hit by a bus. will the organisation still be able to run? Follow your why, and others will follow you.

Successful CEOs spend time on: management of operations, capital allocation, and investor relations. 2 basic types of resources that any CEO needs to allocate: financial and human.] To achieve robust operating cash flow using debt, equity, and asset sales. Financial leverage had two important attributes: it magnified financial returns, and it helped shelter the cash flow from taxes through the deductibility of interest payments. 1st to generate cashflow, next to generate margin in each segment. To be successful you have to think like an investor, dispassionately and probabilistically, with a certain coolness.

The link between EQ and earnings is so direct that every point increase in EQ adds $1,300 to an annual salary. Self-awareness strategies Quit treating your feelings as good or bad as feelings are to help you understand some things. Observe the ripple effect from your emotion. Lean into your discomfort to face your emotion. Feel your emotion physically by closing your eyes. Know who and what pushes your button. Watch yourself like a hawk. Keep a journal about your emotions. Don't be fooled by a bad mood and wait for it to pass. Don't be fooled by good mood either (e.g. foolish spending). Stop and ask yourself why you do the things you do. Visit your values, core values and beliefs. Check yourself, set your mood right for the day. Learn and spot your emotions in books, movies and music. Seek feedback from your peers. Get to know yourself under stress, the tellltale signs. Self-management strategies Breath right. Create an emotion (clouding) vs. reason (ignoring important emotion ...

Hard disk industry patterns (and reasons why some failed) Initially was just to build something technologically and economically feasible. Next is the performance requirements. Finally is the need to design and adopt disruptive technology. Fail fast and inexpensively. Do not wait till the market is large enough to be interesting. Processes are hard to change Boundaries are drawn around these processes. Managers don't want to throw the old proecesses out. Principles of Disruptive Technology Companies Depend on Customers and Investors for Resources Small Markets Don’t Solve the Growth Needs of Large Companies Markets That Don’t Exist Can’t Be Analyzed Technology Supply May Not Equal Market Demand

Apple: We hire people to tell us what to do and not the other way round. Boss guide the team to great result. Candour: the quality of being open and honest; frankness. What motivates your team? To master the art of getting stuff done without telling people what to do. Listen Clarify Debate Decide Persuade Execute Learn Listen Conduct casual career conversation to avoid burnout or boredom. Life story. Dreams. 18-month plan. Reward rock stars but do not give them all the glory. Absentee management Hands-off, ears off, mouth off. Lacks curiosity. Doesn’t want to know. Doesn’t listen. Says nothing.  Is afraid of any details. Has no idea what’s going on. Sets no goals. Remains unaware of problems. Causes collateral damage by tripping on grenades unawares. Is ignorant of both the questions and the answers. Is unaware of context. Micromanagement Hands-on, ears off, mouth on. Lacks curiosity. Pretends to know all. Doesn’t listen. Tells how. Gets lost in the details. Asks for make-work...

Benjamin Graham's core principle Stock is an ownership of the actual business. The market is either too expensive or it overbalanced to too cheap. The higher the price you pay, the lower your return it will be. The risk of being wrong can never be eliminated. You can even take advantage on bear market. Successful investment come from identifying the likeliness for the industry to grow. Obvious physical growth does not always translate to investor's profit. Experts have no dependable ways to select the most promising companies in the most promising industry. Mindset: patient, disciplined, eager to learn and hardness emotions. The defensive investor must confine himself to the shares of important companies with a long record of profitable operations and in strong financial condition. The longer the bull market the more investors may thought a bear will never come. Price fluctuations of convertible bonds and preferred stocks Variations in the price of the related common stock. Var...

Bad things decreasing Legal slavery Oil spills Expensive solar panels HIV infections Children dying Battle deaths Death penalty Leaded gasoline Plane crash deaths Child labour Deaths from disaster Nuclear arms Small pox Smoke particles Ozone depletion Hunger Good things increasing New movies Protected nature Women's right to vote New music Science Harvest Literacy Democracy Child cancer survival Girls in school Monitored species Electricity coverage Mobile phones Water Internet Immunisation Cuba is the poorest of the healthy while the United States is the sickest of the rich. In Cuba, you must reject everything the government does and support what they rejects. Many refugees drown in the Mediterranean sea as European Council Directive from 2001 that tells member states how to combat illegal immigration. Risk to worry about now! Global pandemic: the coronavirus Financial collapse: too many financial bubbles World war 3: trade war and territorial led conflicts  Climate change: v...

1955: year of automobile. 1959: Ford suffered losses in automobile sales as their car isn't suited for general market salary range. Appropriate market understanding is a must. Increment of tax rate may result in drop of tax revenue. Tax is only effective when there are many wage and salary worker. The rich will try to avoid tax by setting up pension plans and tax-free foundations. Information is crucial to the securities market (e.g. politician health). State material therefore cannot be disclose frivolously. The weakness of unchecked currency is devaluation. Why cryptocurrency will not work? As the above statement on decentralisation, the currency will weaken along the way with rampant behaviour. It is too complicated and in order for it to work effectively, many layers have to be in place (e.g. additional blockchain to ease the main cryptocurrency and other blockchains to facility faster confirmation). It is like a country with many fractions versus an incumbent party. As long as...

2 systemes in psychology: the conscious and the automatic. Müller-Lyer illusion: 2 arrow directions but the same length.  Aphorisms were judged more insightful when they rhymed than when they did not. Example of cognitive ease. Sins of representativeness On most occasions, people who act friendly are in fact friendly. A professional athlete who is very tall and thin is much more likely to play basketball than football. People with a PhD are more likely to subscribe to The New York Times than people who ended their education after high school. Young men are more likely than elderly women to drive aggressively. Hindsight “The mistake appears obvious, but it is just hindsight. You could not have known in advance.” “He’s learning too much from this success story, which is too tidy. He has fallen for a narrative fallacy.” “She has no evidence for saying that the firm is badly managed. All she knows is that its stock has gone down. This is an outcome bias, part hindsight and part halo ef...

There is not best time to start. If you don't start now, next year you would have asked yourself why you didn't do it. Say no to average. You work is not done when your inbox is finally empty, it is when your boss stop telling you what to do. Before you do something, ask yourself would you do it tomorrow or in 30 days' time? Connect to the right person. Showing up on time is a basic promise. Tiny business Go where your customers are. Be micro-focused. Outlast the competition. Leverage. Respond. 8 important questions Whom are you trying to please? What are you promising? How much money are you trying to make? How much freedom are you willing to trade for opportunity? What are you trying to change? What do you want people to say about you? Which people? Do we care about you? 10 secrets of marketing process Don’t run out of money.  You won’t get it right the first time. Convenient choices are not often the best choices. Irrational, strongly held beliefs of close advisors shoul...

Enabling thoughts Time must be explicitly managed, like money. You can always change your plan, but only if you have one. Ask yourself: Are you spending your time on the right things? Develop a good filing system. Rethink the telephone. Delegate. Take a time out. Relationship tips Meet people properly. Find things you have in common. Let everyone talk. Check egos at the door. Praise each other. Phrase alternatives as questions. Clichés Dance with the one who brung you. Luck is what happens when preparation meets opportunity. Whether you think you can or can’t, you’re right. How to live your live Dream big. Earnest is better than hip. Don't complain, just work harder. Treat the disease, not the symptom. Don't obsess over what people think. Look for the best in everybody. What what they do, not what they say. Be the first penguin. Get people's attention. Loyalty is a two-way street. A bad apology is worse than no apology. Tell the truth. Get in touch with your crayon box. No ...

Minimalist The more stuff you own, the more your stuffs own you. 7 Principles Be convinced Our actions follow our heart. Benefits Spend less Less stress Easier to clean Freedom Good for the environment Be more productive Example for my kids Financially support other clauses Own higher quality things Less work for someone else Make it work for you Rational minimalist We will intentionally promote the things we most value We will remove all clutter from our lives We will decorate in a minimalist style We will use our money for things more valuable than physical possessions We will live a counter-cultural lift that is attractive to others Jump right in Victory leads to victory: do smaller and easier tasks first to build momentum Minimalism encourages minimalism Sell your stuff so to reduce your emotional attachment Stop the trend Do not buy things that you will only use once or twice Possessions do not equal joy Consumerism encourages you to work harder Consumerism will create more make-t...

Motivation People want to play because they believe they are in control. Need for control is a biological imperative. Motivation become automatic when you can self-direct choices into a habit. Marine is one of the lower paid but high motivation trade. Explain to yourself why this task will help you get closer to a meaningful goal. Team Group norms play a critical role in shaping our emotional experience. Norms determine whether we feel safe or threathened,  or excited, and motivated or discouraged. Saturaday Night Live is successful because everyone know one another. It's all about leadership: how to make everyone come together. To make everyone feel included, the entire team is rooting for each other and everyone feels like a star. Focus Cognitive tunneling is overly focused on whatver is directly in front of our eyes, e.g. gluing to smartphone. You will lose focus in cognitive tunnel and latch on to the easiest and most obvious stimulus. Firefighters, nurse, commandos, etc. stay ...

If you eat a live frog in the morning, you will go through the rest of the day without problem knowning you have already done the most difficult task. If you have to eat 2 frogs, eat the ugliest one first. Set the table Clarity, purpose. Decide on what you want. Don't do things that need not be done. Plan everyday in advance. Eat an elephant with one bite at a time. 6 P formula: Proper Prior Planning Prevents Poor Performance. Have a master, monthly, weekly and daily list. 10/90 rule: if you plan with 10% of your time, you will save 90% of the wrongs. Apply the 80/20 rule to everything. There will be tasks that rewards more than the rest. Consider the consequences. Future orientation of 5, 10, 20 years. What is the consequence of doing and not doing a task. Law of forced efficiency: you don't have time to do every tasks but the most important ones. Practice creative procrastination. Procrastinate on your smaller tasks. Use ABCDE method continually. A = must, B = should, C = nic...

If you really want to know your mind, the body will always give you a truthful reflection, so look at the emotion, or rather feel it in your body. Emotional pain is caused by the sense of lack or imcompleteness. 'Now' is the key to spiritual dimension. Ordinary unconsciousness (drunk to number) vs. deep unconsciousness (acute unhappinesss). Resist! "What is going on with me now?" What do you resent? Do you have a choice? Be fully present and state of alertness. Parable of Jesus on waiting for your master. The enigmatic connection between your Chi and the universe. Total surrender > resistance from suffering. It means total acceptance. Do not find something that was not lost in the first place, find yourself and you will see. E.g. God. Forgiveness can only be true if 'now' instead of the past is invoked.

Scientified trading flowchart Observe data Form a testable hypothesis Make predictions based on the hypothesis Compare observed results with predicted results Correct (yes 6, no 2) Report Trading system development Idea What to trade / how to trade Data Model rules and logic Backtest Promising (yes - 7, no - 4) Validation Pass (yes - 9, no - 4) Best estimate Risk Position size Profit potential Worth trading (yes 14, no - 7) Trade (9) Trading development system Selecting issues to trade Selecting the auxiliary data Processing of price and volume data Calculating indicators Establishing for profitable patterns Generating trades Computing metrics for measuring success Creating many alternative models, searching for the best model Testing to validate the pattern recognition Establishing a baseline with which to compare future performance Trading management system Monitoring the health of the system being traded Estimating risk Determining maximum safe position size Estimating profit potent...

Start with why? What do you value and what are your values? What are your beliefs? Where is your business now? What is working? What is not working? What to start, stop and keep? What are the benchmark? Strategy and business development Vision Mission Business development (partnership, new market) SWOT Competitor landscape Operations Systems and processes Efficiency Equipment, tech and IT Production Human resource Recruitment Training Succession planning Culture Employee satisfaction Organisation development Marketing Branding Social media Website analytics Public relations and media Email marketing Collaborations/partnerships Content marketing Figurehead marketing Finance Revenue streams Profitability Investments Tax  How are your business being marketed? Awareness / research / evaluation / purchase / post-purchase/advocacy What are your personality type? https://www.16personalities.com/ https://mycreativetype.com/ https://enneagramtest.net/ What does your customer need? What is n...

Only less than 7% of the trader succeed.   Typical XABCD pattern Type 1 down. Type 1 rebound up. Type 3 correction. Type 1 breakout.  Common harmonics patterns ABC patterns AB=CD patterns Gartley 222 patterns Butterfly patterns Crab patterns Bat patterns Three drives patterns Dragon patterns Sea horse patterns Scallops patterns Classical chart patterns Head and shoulders Double tops and bottoms Triple tops and bottoms Rectangles Triangles Broadening formations Diamond top Wedges Pennants Flags Technical analysis Support and resistance Market structured high (MSH) Market structured low (MSL) Trendlines Trendfans Pivot lines Swing lines Trading naked strategies Candles price patterns Pin candle patterns Oracle candles patterns Advanced oracle candles patterns Belt hold patterns Cradle patterns Narrow range inside bar patterns Pivot price patterns Candles Bullish reversals Morning star Hammer Inverted hammer Doji Engulfing Harami Piercing Kicker Bearish reversals Hanging man...

Type of alogrithmic strategies Data trading: economic data. Market making: earn spread. Coorelation: compare with other market. Arbitrage: profit from disparities. Trend following: pullbacks, moving average or breakouts. Mean reversion: go against trend. Gamma trending: generate income on the excess cost. Type or orders Risk price: bid price. Stop loss order: risk management. Market order: standard order. No worse than price: stop or limit. Two-way price: both bid and offer price. TWAP: time-weighted average price. Iceberg orders: limit order in wholsesale. Dark pool: wholsesale matching. The players Banks. Coporations and hedgers. Hedge funds. Discretionary/macro funds. CTAs (Commodity Trading Advisors), systematic and model funds. Real money. High-frequency trading (HFT). Central banks. Policies is a major driver. Moral suasion for currency preference. FX intervention on currency too high or low. Diversification: hold or protect own currencies. Retail traders. Groupings USA The dolla...

Emotions in trading Hope: I sure hope this goes up right after I buy it. Fear: I can’t take another loss; I’ll sit this one out. Greed: I’m making so much money, I’m going to double my position. Despair: This trading system doesn’t work; I keep losing money. Cognitive bias Loss aversion: The tendency for people to have a strong preference for avoiding losses over acquiring gains. Sunk costs effect: The tendency to treat money that already has been committed or spent as more valuable than money that may be spent in the future. Disposition effect: The tendency for people to lock in gains and ride losses. Outcome bias: The tendency to judge a decision by its outcome rather than by the quality of the decision at the time it was made. Recency bias: The tendency to weigh recent data or experience more than earlier data or experience. Anchoring: The tendency to rely too heavily, or anchor, on readily available information. Bandwagon effect: The tendency to believe things because many other pe...

Basics Learn goal setting and focus. Develop skills instead of money. Versatile to market changes. Identify your risk level. Execute trades immediately. Let market do the talking. Develop a system in trading. Being objective. Recognise true information and act on it. Unsuccessful trader Lack of skills. Limiting beliefs. Lack of self-discipline. General The market is always right. There is no beginning and ending price in the market. The market is an unstructured environment, it can go all direction. Reasons are unrelevant in the market. Strong Mentality Complete disciplined trading approach. Release yourself from the negative trading emotions. Memories are stored as charged energy. Building a framework Understand your behaviour. Learn to manage your conscious. Monitor relationship with your environment. Psychology of price movement What kind of price action will sustain the buyers' beliefs that thay can make more money?: When are sellers likely to come into the market in force? Whe...

Common mistakes Overly lured to the its benefits. Not creating rules. Ignored responsibilities. Addicition to random rewards. Avoid boom buster. Winner Loser Boomer Buster Stay consistent Know the risk. Understanding yourself What are the objectives? What sre the skills? What is a carefree state of mind? What is objectivity? What does it mean to make yourself available? What Is the "now moment'?   Truth about skills Anything can happen. You don't need to know what is going to happen next in order to make money. There is a random distribution between wins and losses for any given set of variables that define an edge. An edge is nothing more than an indication of a higher probability of one thing happening over another. Every moment in the market is unique. Beliefs They manage our perception and interpretation of environmental information in a way that is consistent with what we believe. They create our expectations. Keep in mind that an expectation is a belief projected int...

Important fundamentals Nonfarm payroll. Gross domestic product (GDP). Trade balance. Treasury international capital (TIC).  Producer price index (PPI). Consumer price index (CPI). News headlines to take note of "Dollar" & "surge". "Dollar" & "plummet". "Dollar" & "plunge". Sentimental indicators U.S. dollar index (DXY). Commitments of traders (COT). Chicago Mercantile Exchange (CME). International Monetary Market (IMM). Speculative Sentiment Index (SSI). Daily Sentiment Index (DSI). Technical analysis EMA (current) = EMA(previous) + SmoothingFactor × (Price − EMA[previous]) SmoothingFactor = 2 ÷ (1 + n) Pivot point for current = high(previous) + low(previous) + close(previous) ÷ 3 Momentum = price(current) − price(x periods ago) RSI = 100 − (100 ÷ [1 + RS]) Initial RS = (total gains ÷ n) ÷ (total losses ÷ n) Subsequent RS = ([previous average gain × (n − 1]) + current gain) ÷ n/([previous average loss × (n− 1]) + c...

Splitting 1000 pips into 4 parts of 250 pips each. Splitting 100 pips into 4 parts of 25 pips each. Spitting 10 pips into 4 parts of 2.5 pips each. It should be used with fundamentals.

Reversal Almost same length candle Dark cloud cover (bearish candle with higher high and full body). Bullish candle followed by bearish. Pattern piercing (bullish candle with lower low and full body). Bearish candle followed by bullish. Stars Evening star (and hang man and hammer). Morning star (and inverted hammer). Shooting star. Doji star. Bullish tri-star. Bearish tri-star. Rickshaw man (long legged doji). Harami The shadow can exceed mother's length Bearish mother with bullish baby near the lower body. Bullish engulfing. Tweezer bottom. Bullish mother with bearish baby near the upper body. Bearish engulfing. Tweezer top. Crows Upside gap two crows. Two crows. Counterattack line. The close met at the same place. Bearish counterattack line: bullish candle then bearish candle. Bullish meeting line. Bullish counterattack line: bearish candle then bullish candle. Bearish meeting line. 3 middle range candles 3 white soldiers. 3 advancing white soldier. Advance block. Stalled pattern...

Engulfing (reversal) Big long candle overtake the previous candle completely. Doji (reversal) Open and close at almost same price indicates market does not know what it want. Dragonfly doji: bullish. Open and close at the top with long lower shadow. Gravestone doji: bearish. Open and close at the bottom with long upper shadow. Stars (reversal) Morning star: long candle, short lower candle, long candle. Evening star: long candle, short upper candle, long candle. Pin bar (reversal) Hammer in bearish: small open and close with long lower shadow. Shooting star in bullish: small open and close with long upper shadow. Harami (reversal) Small baby candle after long mother candle. Bullish harami: baby at bottom. Bearish harami: baby on top. Tweezer (reversal) One bullish and another bearish long candle or vice versa of almost same height.

Strategies The last kiss: wait for retest before placing your trade in a drift (type 4) price action. There will be a breakout after the retests. Do not enter the market too quickly as there will be fake-outs. Take profit and stop loss at half of the drift (type 4) length. The big shadow: engulfing candle (reversal). Bearish candle bigger than bullish candle or bullish candle bigger than bearish candle. The bigger is more powerful. Stop loss after the wick. Wammies and moolahs: double bottom and double top (reversal).  The next test should be at least 6 candlesticks apart. Stop loss at the end of the double bottom or double top. Take profit after the next zone. Kangaroo tails: long doji (reversal, type 2 & 4). Market has gone too far and reversing its course. Open and close should be within the previous candle, or it will just be another "runaway". Stop loss after its tail and take profit in the next zone. Trendy Kangaroo (type 1) If the kangaroo happens in a strong trend...

Slow down: as you may be heading the wrong direction. Start over: if you are starting from scratch on today's price, will you buy it? You don't have to like someone, you just have to do business with the person. Find your focus this year. Avoid rushing to judgement, any luck can be maybe good or bad. Practice good habit of not procrastinating Do it immediately Schedule it Let it go Someday/maybe When you say no, mean it, and you won't needlessly lose your time.

"You can't connect the dots looking forward; you can only connect them looking backward" Steve Jobs Career operating modes Inactive Reactive Proactive Innovative Riskometer Stagnation zone Comfort zone Stretch zone Panic zone Calibration questions What is your ideal day like without money concern? What excites you most? What are you most proud of? What compliments people give you the most? What would your closed ones say you value the most? What are some powerful memories you have? Who are your 3 most admired people and why? What do you want less in your life? What challenges are you currently facing? What are you unanswered questions at the momemt? What are you missing in life? What do you want more in your life? Value clusters Connection, community, friends, family, intimacy Creativity, innovation, ideas, writing, expression Courage, risk taking, challenge Freedom, independence Financial security Gratitude, being present, mindfulness, rest and rejuvenation Health and we...