Big Mouth Iron Condor (BMIC) System^TM

A lot of traders around the world were comparing my BMIC System^TM with Dan Sheridan's High Probability Condors. First, let me clarify that BMIC System is a system created by me and it is not based on Dan's system alone. In fact, BMIC System is generated by mixing and playing with at least three iron condor systems that are available currently in the internet and of course, the system works because I have done sufficient backtesting before I put this system on live trading.

Now, some of you may find that my Beta 1 Guidelines are too much to handle. Remember that this system is a rule-based system and therefore I have a lot of rules to capture different scenarios. For example, the hard close rule is to deal with the overnight RLS settlement. Buy back cheap rule is to make sure that a trader can remove his obligation as early as possible. So, they are all there for reasons. You cannot get these rules in a complete sense by reading other iron condor systems because most of them tell you vaguely how to get in but none of them is really able to address the "How to get out", or at best, you may consider this or that ... blah blah blah.

Why do I not talk about volatility? In the first place, iron condor consists of two vertical spreads. Therefore, the volatility is hedged in that you buy high IV option and sell high IV option at the same time. Or you buy low IV option and sell low IV option. Indeed, RVX can help to determine how big the mouth is. It helps in certain sense but that's all you can use. So, not mentioning volatility is not fatal because it does not matter at all, unlike time spread or diagonals.

If RVX is at all time low, chances of getting burnt WOULD NOT GO UP because you are going to use some rules to get out of the position. For example in Beta 1, I talked about what if you lose 1.5 times of your original credit received, you should consider getting out. So, those who said they may be burnt did not consider faithfully all the potential exit rules, and I am daring to say that - they did not.

All in all, no matter which iron condor system you are trading, make sure that you have done sufficient backtesting and forward testing before putting money at risk. Taking someone's system without testing it can be fatal and when you get burnt, don't blame the system developer but yourself - why? It's because you haven't done enough practice to drive F1. How can you drive like Lewis Hamilton when you just get your license?

Go figure.

Com'on - Listen to the so-called guru's advice

Read the following in a local forum with interest of how silly and naive aspiring traders can be:

"I am a newbie and just started trading few weeks ago. I thought I got some good information from this forum and won some money initially. One particular forummer caught my eyes as he was very articulate and claimed he was right of the market movement for the past few months..2 weeks ago on a friday, when the market turned, I listen to his advice and go long, becos he sound to firm and sure abt the position..never did I expect he flip his position so fast on the coming monday..Now i suffered for a lost of $10450..very sad now I never lost such a huge amount in my life..and the above was my entire saving..I am keeping this away from my wife over the weekend and now feel very depress and lost"

Hey, in the first place, a few lessons we can learn from this poor chap's mistake:

1. Treat someone's opinion as a fact is fatal because a trader can turn his opinion in a split second. Since he is not giving you any advice, he owes no fiduciary duty to you. If you are wrong, it is your own mistake and you have no legal recourse against this guy. So, don't even think of suing that trader? No way, you are wasting your money and your lawyer will happily pocket the legal fee.

2. Never trade with the amount you cannot afford to lose. So, if you hear like this guy say "I suffered a loss {sic} of $10,450 ... I never lost such huge amount in my life", probably he is trading too big and thinking that this trade would be a home run. Once you are in the mindset of gambling, chances are you are asking how much this trade can make, and not how much you will lose if you are wrong in the first place. That's why gamblers can sometimes make money but in the long run, gamblers can't last. Probability is not on their sides anyway.

3. This is really a joke but is so common. So many people are not willing to pay a few K to get proper education because they say the instructors suck, the course sucks, the materials suck, the strategy does not work. Ironically, they are happy to pay so much money to let Mr. Market teach them a good lesson. You can call this moral hazard, or the law of adversity. Isn't it better to pay $10k for proper education and learn how to trade well and last longer, instead of paying $10k to Mr. Market and now the money is gone. This poor guy literally has less than $10k to start his trading business. He felt sad and probably he wouldn't trade anymore because humans are scared due to "once bitten, twice shy" syndromes.

Another victim ....

Thanks, Conrad

My best trading pal, Conrad Alvin Lim mentioned me in his blog, and guess what? I received two friends request in my Facebook. Not a bad way to attract traffic and increase my profile (do I really need a high profile? I don't actually).

Without sharing too much the stories of my two new friends, I would just like to highlight the difference between Wealth Academy Trader ("WAT") and Optionetics two-day intermediate seminar. I consistently receive questions, specifically asking me to compare and contrast these two courses. It's like "Greeksman, I am considering either WAT or Optionetics. What's your take?"

I see the comparison as that of an apple with an orange. I am not in the best position to comment on WAT since I am never Conrad's student myself. However, from the conversation I have with Conrad and his students, and since I have the honour of being a special guest in his WAT forum, I understand that WAT provides basic training on trading matters.

In my opinion, whether a person decides to trade stocks, indices, options, futures or forex, because he chooses to be a trader, he has to acquire the basic skill. I believe therefore WAT is a good course to help aspiring traders to build their foundation. I don't any get commission from Conrad though to say this. I do find that had Conrad taught WAT earlier, I would have had become one of his students so that I can brush up my technical analysis and candlesticks.

In the world of Optionetics, however, apart from having a basic technical training, one will add on the foundation of options. So, one can start trading options assuming that he has already had trading skill. I sincerely believe that this should be the case. If one starts immediately to trade options, it's like "Hmm ... you are driving a F1 race car without having a driving license". I am not saying that it is not possible but you know the risk involved.

In the end, whatever one decides to do, he must understand why he is doing what he wants to do, and do whatever it takes to achieve the goal he set for himself. So, if you are interested in knowing more on Optionetics, do drop me a note or come to one of our previews by registering at http://www.optionetics.como.sg. The previews for the upcoming seminars will be 7-9 October in Singapore, and 11-13 October in Hong Kong.

If you are physically in Hong Kong, please come to Langham Place, Mongkok on 11 Oct at 1:00pm. Why? It is because for the first time in Optionetics' history, I will be doing the preview in 100% Cantonese. The slides will all be in Chinese too. So, if you are interested in hearing Optionetics talk options in Cantonese, I shall see you in Hong Kong. I am sincerely looking forward to it.

Those who attended the course should sue these people for misrepresentation - the course promises easy profits, which is clearly untrue

Very often in the local forum, you will see someone stand up to be a referee or an umpire to tell the world that it is unfair for someone to make money and for the rest to lose money. I can never understand the mindset of these people. Most likely, they could be victims of these seminars, and perhaps lost a lot of money by learning how to trade or invest.

Instead of blaming themselves for being ignorant and perhaps not giving 100% to learn how to trade/ invest well, they choose to blame the seminar organisers, the instructors, the founders of the courses, the people involved in the seminars, their academic qualification (which has no relevance in trading/ investing whatsover).

The sad thing is that if you subscribe to this logic, chances are you will never be able to be successful in investing and trading. It goes by this simple logic - trading and investment is a skill and it is not possible to be acquired overnight. Most of the participants I came across carried what I called a "quick-to-get-rich" mindset. Worst still, if they also have the mindset of equating setbacks as failure, they will never achieve anything from trading and investing. The seminar fee will simply go down to the sink. It is as simple as that.

Now, if you are serious in learning how to trade / invest well, then ask yourself this question. Are you able to commit to yourself (not to the others) that you will do whatever it takes to achieve it? Are you able to design a plan to enable you to learn the process and the requisite mechanics? Don't say that you have a day job and you don't have time to do this. Maybe you have to sacrifice your sleeping time. Maybe you have to sacrifice your Friday night's drinks. Maybe you have to let go a hobby like golf over the weekend. To respect trading and investing as a business, you must put in time and effort to realise the dream. How do you expect someone to teach you how to ride a bicycle without you practising how to do it?

To think what these folks do is naive and obviously, don't say that I haven't told you so - they will fail and I guarantee that! The saving grace of course is that we need these people to participate in the market, so that we can grab money from them.

WEALTH ACADEMY - CONGRATULATIONS ON BATCH 13

Congratulations to the folks on the right of the photo who completed Batch 13 of Wealth Academy on 18 - 21 Sep 2008.

As I told my fellow coaches, there is always a reason for everything. I am not going to AKLTG to coach for money. In fact, I came out with my own money to be a coach. But why did I spend my weekend there at the expense of many things which I could otherwise do? I sincerely believe that as I meet people from different walks of life, it will inspire me and sometimes I do learn something from the others by understanding their questions, and talking to them. So, there are values I found in engaging conversation with different people.

Thanks Adam for his thoughtful remark at the closing ceremony by framing me as the "Best Options Trader in Singapore". This is despite the fact that my readers jolly well know that AKLTG offers an options trading program and there is a perceived competition between AKLTG's options trading program and the options trading program along which I tag. He does not mind doing the introduction. To me, Adam has inspired my life since I joined Wealth Academy in May this year. I learned so much from him in terms of how to be empowered by doing just simple things every single day.

Conrad? Well, there is nothing more than I can say. This guy rocks and he is what I call one of the best day-traders in the world. Who can compare with him on his knowledge in candlestick patterns? I can't because I am a beginner in candlestick analysis. Actually, I don't need to use candlesticks so much in my options trading as I am primarily a premium collector. However, I found the knowledge in candlesticks a must in my forex trading because there is no premium collection strategy but purely directional play. So, it becomes a MUST for me to learn it.

Thanks Terry for doing a fantastic job as the Program Director. He is an amazing chap with a lot of energy, and he led the team to provide the participants, Adam and Conrad with tremendous support. Of course, to my fellow coaches, you guys are great because I learned something from you too - Kavin, Michelle, Serene, Joshua, Vincent, Bernard, Vivian, Allan, Ruben, Cheryl, Melvyn, Lawrence, Justin, Alicia, Mark (I hope I did not miss out anyone ...)

That's why I keep going back to AKLTG, a place to allow me to be energized and empowered.

Finally, I would like to thank Arthur, one of the participants for providing the picture so that my blog can now be updated with a graduation photo!

So, if you wanna come back to be a coach in WA 14, it's going to be fun.