Be Your Own Financial Planner

Week 3 : Sept 2011

Another book by the TrueWealth Publishers ( Azizi Ali), written by Jade Haven. I like this Malaysian publisher, with topics ranging from Stock markets, Financial planning, Properties, Swiftlet farming...anything to do with making money!

This book starts with the Basics : Risk Profiling, Time value of money,Cash Flow, Net worth, Debt management ( Car , House, Credit cards ), Planning.

It then goes on to explain the aspects of 4A's : Asset Protection ( Insurance ) , Asset Accumulation ( Cost Averaging, Higher returns, Inflation, Risk Minimisation ) , Asset Preservation ( Allocation, portfolio rebalancing, Trust Nomination, Tax Planning ) and finally Asset Distribution ( Wills, Living Trust ).

Jade's purpose of writing this book is to share her knowledge... and if you go through her book, you will get a "big picture" feel of what financial planning should be.

If done properly, you should be able to "work for fun, and not for fund!"

Note her idea of Value Cost Averaging, Higher Returns, Living Trust. Very useful for me.

Book can be bought online from http://www.bookplanet.com.my/index.php?target=products&product_id=177 . Cost rm39.90.

A Profitable Guide To Technical Analysis

Week 2 : September 2011

This is a beginner's guide to Technical Analysis...and do not be fooled by its simplicity.

Many traders get caught up with too many complexities and forget to read the obvious writings on the wall!

I particularly like these parts :

(1) Market seasons ( pg 29)

(2) The tools required for Different Market Scenarios ( Direction, Momentum, Volatility ) ( pg 74) .

(3) Patterns and Formation ( Trend Reversal, Consolidation, Candlesticks pattern ) ( pg 50)




And what can I add to enhance the knowledge found in this book?


(1) I prefer to label the market trends as : Up , Down, Sideways
Then Add the Volatility : Volatile, Non-Volatile
Then Add Standard Devaition : Normal 1, Volatile 2, Extreme Volatility 2-5

Hence, my market pulse will have the 3 factors above.

Once identified, i will then proceed to look for the tools to trade.


(2) The tools required. I generally participate in Trending markets ( Up and Down ) only, so I stay out in Sideways (hence , i do not use RSI or Stachastics). I also use the Support / Resistance lines with particular attention to the Slope. I also like Moving Averages, in particular Guppys.


(3) I am a great fan of Patterns. So, I also look our for Continuation, Indecision, Reversal patterns. Breakouts to me can mean Breakout to CONTINUE, and Breakout for REVERSAL. Make sure you can differentiate the two Breakouts.


Conclusion :

This book to me , addresses many problems faced by beginners, in that they are not sufficiently exposed to the BIG PICTURE trading, ie failing to identify firstly, the market pulse and seasons. Winston covered this area well. I suspect many newbies get caught up with too many technical indicators and they get confused easily as indicators are just that, indicators. Perhaps they think that indicators is all , be all to trading. Alas...naked trading with just PRICE action can roll in the money as well!


In the realm of 3M's in trading namely , Method, Money Management, Mind... this book has emphasis on the Method aspect only. Very little emphasis on the other 2 M. For starters, I recommend SUPER TRADER by Dr Van Tharp ( on Money Management) , and TRADING FOR A LIVING ( Dr Alexander Elder ) ( for all 3 M ) , and TRADING in THE ZONE ( Mark Douglas ) for Mind.


You can this book at http://www.profitableta.com/ or at all leading bookstores.

The Beginning...

Week 1 : September 2011

Do you remember what the book that you read over the weekend?

" What I hear, I forget...
What I see , I remember...
What I do , I understand...."

- LaoTze

So , to understand what one reads, one must put it into practice.

And one can start by review the book.

Start now.... read one book a week ... ( or a wise saying a week )

And ...review it once a week too!