The Universal Principles of Successful Trading: Essential Knowledge for All Traders in All Markets

 

Frankly, I forgot how I ended up buying this book, haha... These days, I hardly touch any trading books as most of the trading books offer more or less the same stuff... In terms of trading books, there is really nothing new under the sun...

This book was published around year 2010. Surprisingly, the said year marked a beginning of algorithm in financial market. Assume this book was prepare by the author around 2008, it was the end of subprime crisis and the book preparation ended with the beginning of algorithm all over the world. So, this book precisely implies the whole situation. The huge bear run during subprime made traders aware the need of quicker execution via algorithm... and yet, the principles stated in this book simply ignore the changes (damages?) via algorithm. So, this comes to the conclusion on this book: It has everything except ignoring the impact of quicker and faster trading styles. 

Having said that, this book covered almost everything a trader needs. It started with the mechanism via statistical, follow by phycology of trading mentality and ended with superb summary on the universal principles of successful trading. As an old and bold trader, I 100% agreed with the content on this book. For trader like me, this book served as a good revision (it did not took up a lot of time for me to read it) and some nice refreshment that sums up my 20 years journey as a trader. As such, I highly recommend this book despite the facts that algorithm element were totally ignored throughout this book. For a full rating of 10, I am going to rate this book at 9/10. I am looking forward to see the future edition of this book and I hope I can see some algorithm stuff being discussed along the way. 

From Tulips to Bitcoins: A History of Fortunes Made and Lost in Commodity Markets

 

Tulips story is no stranger to all financial guys like me. However, with bitcoins, the story tends to be different...

This book is interesting. It recorded all financial bubbles on commodities from earlier tulips till the latest bitcoins. So, reading this book is like reading a history book (except main focus is on financial cases). Readers tend to learn a lot from the cases presented and the author did so well to present it with clear and precise details. 

However, I found some of the cases presented seems not significant. For trader like me, some cases are just norms of the volatility and does not qualify to be "bubbles". Secondly, it will be good if this book includes all indexes bubbles apart from commodities. After all, commodities, indices, currencies, etc. are correlated in nature. Finally, I expected to see some comments or insight thoughts from the author at the end of every presented cases. However, it is more like a dull history book at the end. Unfortunately, the only wisdom I can found throughout this book is the quote as below:

The discovery of gold triggered a true story global gold rush. However, it was the merchants who generally became rich selling equipment and services.

For a full rating of 10, I am going to rate this book at 6/10. Well, I appreciate the hard-work from author in providing us such a detailed history on the so called "bubbles". However, the whole experience is like a drop in the ocean. I would not said it is a bad book... but simply not enough! As financial bubbles would not stop from now and then, this book will have a revise version sooner or later. Let us hope for a better version in the future... 

Marketing Warfare: How to Use Military Principles to Develop Marketing Strategies

 

I read the Chinese version of this book around 20 years ago... Those days, I was too young, too naïve and too innocent to embrace the cruel reality of the business world. Now, I am in the age of mid 40's... So, I thought it will be nice to revisit this book with older, less naivety and zero innocent brain. Here we go... 

Relatively, I found the Chinese version is much better. First of all, the wording in this original version tends to be confusing at times. I remember I do not have this problem when I read the Chinese version 20 years back. Secondly, although it was a direct translation, surprisingly, the translator did so well in the Chinese version. Usually, the original version tends to be better. This time around, it is the opposite! Finally, the design and structure of this book did not impress me. 20 years back, I do not seem to complain on this if I am not mistaken. So, the conclusion is... an old man is twice the child: tends to demand higher, haha!

Ok, enough of complains! Now, let us look at the bright side. This book overall is so awesome! This is a book with plenty of insightful facts which accompany by tons of real life examples. I do not really study the background of the said authors. But, both really put efforts in writing this book! In this book, there are plenty of theories presented, supported by real facts and real examples to help readers apply in real world. Unfortunately, this book does not have the latest revision. Otherwise, we can have more amazing ideas from authors regarding to the competition in internet and cyber world. 

For a full rating of 10, I am going to rate this book at 9/10. As mentioned above, I do have troubles with wording and structure of this book. The whole book just not smooth in terms of reading despite the contents were prefect even in today's world. The amazing part, after more than 20 years, I still manage to find some nice quotes extracted from the book as below. So, it tells the whole story. This book is simply awesome and first class! Thumbs up!!!

How many times have your heard company people say it's easier to get to the top rather than to stay there? Forget it, that's a myth created by people who are more interested in the study of sociology than they are in recognizing the realities of business competition. It's far easier to stay on top than to get there. The leader, the king of hill can take advantage of the principle of force. 

A general tries to fire up his troops by telling them what good soldiers they are and what great equipment they have. Many marketing generals do the same thing and fall victim to their own rhetoric. They talk themselves into the "better people" or "better product" fallacies. At the end, it is the superior strategy that counts. 

Why fight an offensive war if defense is so attractive? If you can win a marketing battle and become the leading brand, you can enjoy that victory for a long time. Simply because you can now play defense, the stronger form of warfare.

Defensive principles:
1. Only the market leader should consider playing defense.

2. The best defensive strategy is the courage to attack yourself.

3. Strong competitive moves should always be blocked.

4. Be prepared to strike back

5. Keeping something in reserve

6. Reduce your legal exposure

7. Marketing peace

Offensive principles:

1. The main consideration is the strength of the leader's position: How do we decrease their share of the market?

2. Find a weakness in the leader's strength and attack at that point.

3. Launch the attack on as narrow as possible.

Flanking principles:

1. A good flanking move must be made into an uncontested area but close to the leader's position.

2. Tactical surprise ought to be  an important element of the plan.

3. The pursuit is just as critical as the attack itself: Cut your losses and let your winners ride.

4. Flanking with low price, high price, small size, large size, distribution, product form

Guerrilla principles:

1. Find a segment of the market small enough to defend. It could be small geographically, or in volume or in some other aspect difficult for a larger company to attack: Niche and pick a small enough segment so that you can become a leader: example, local store. 

- you seldom read about companies that went under because the market they were concentrating on was too small. On the other hand, you often read about companies torn apart by overexpansion, companies that launch too many markets in too large a geographic area.

2. No matter how successful you become, never act like the leader: The essence of guerrilla strategy and tactics is the opposite of what's right for the Fortune 500 crowd.

- resist temptation to make up formal organization charts, job descriptions, career path and so on. 

3. Be prepared to bug out at a moment's notice: Don't hesitate to abandon a position or product if the battle turn against you. A guerrilla does not have resources to waste. 

- Geographic, demographic, industry, product, high-end (commodities only).

Line extension long term effect is clearly the opposite of the short term effect. In the short term, line extension is almost always a success (diet coke as example). But in long term, line extension is usually a loser's strategy.

Don't spend your money to change uniforms (Burger King vs McDonald). Spend your money to give your troops better weapons.

Marketing myths create false illusions. If we could only develop a better product... and the dreaming goes on and on. You shouldn’t think in terms of betterness, only in terms of differentness.

Every marketers has 3 kinds of products: to advertise, to sell and to make money on. It's wasteful to advertise a product just because you can sell it and make money on it. Would a motion picture theatre advertise the popcorns it sells? No, you advertise the movie and you make money on the popcorns and drinks. Advertise the same items might be a mistake if it undermines your position. 

Defenders can sometimes profit by fielding a full line of products. It's always a mistake for an attacker to do so. 

If the strategy is good, the battle can be won with indifferent tactics. If superb strategies are needed to win the battle, then the strategy is not sound. The marketing general that depends on superior tactics to win the war is usually quick to blame the arm that didn’t work. In today's battleground, that arm is usually the advertising.

My Life in Red and White

 

Arsene Wenger... a man who changed my life 25 years ago...

I was originally a Magpie fan... Arsenal football came into my life in 1996 when the flying Dutchman, Dennis Bergkamp arrived in North London from Inter Milan. This was then followed by the arrival of Le Boss. I was diverted to North London football since then. The beauty of non-restricted "Wengerball" really caught my attention those days and Arsene Wenger was my hero for almost 20 years...

As such, this book meant so much to me despite the legacy of Arsene Wenger almost tarnish at the end of his Arsenal era. This autobiography is a full story of Le Boss from his childhood all the way to the present situation. After this book is published, the media seems to focus on why Jose Mourinho was not mentioned in the book. To me, it is not only The Special One. The others like Sir Alex Ferguson (at least a bit), the late Gerard Houllier, Big Sam and many others was not featured in this book too. This may sound like a little flaw to readers. However, come to think about that, I think this biography is quite special compared to the others. At least Mr. Wenger focused on himself, and it makes this biography so unique and not so "gossiping" like others.  

For a full rating of 10, I am going to rate it at 10/10. Yes, I admit that I am so much bias to this Arsenal legend as he is the one who made me fall in love in football for over 20 years. Secondly, although the gossip content is below par, at least I can concentrate on the man I admire so much. Finally, there are some quotes from the book as below which enlighten my mind after reading this book:

A coach tends to over-estimate the effectiveness of his communication. So, there are some rules that need to be taken into account: 

1. On average two thirds of people would do more if their qualities were better recognized. 

2. Less than 30% of people apply the recommendations they've been given owing to a lack of confidence, a lack of respect for the coach or a lack of clarity or of practical recommendations. It's important to be clear in one's recommendations in order to boost confidence and improve performance. 

3. When expressing a negative point, one should put forward three positive points when speaking to somebody who needs to develop.

4. One should not aim for multiple objectives: just one or two are enough.

5. Never forget that time and place are very important.

The coach should promote collective expression by creating the conditions to allow the team to take risks, and encourage them to do so. And when faced defeat, he should stay firm, believe in his convictions, above all not blame the players. When he is preparing for a match, the coach's challenge is to succeed in destroying the opponent's strong points without preventing his own team from expressing themselves. If you exaggerate the opposition's qualities, you increase your players' fear and the risk they will hide away. At Monaco, our strength, was that they did not hide: they weren't afraid of anybody.

Putting the bias and favoritism aside, actually I learn more from the other legend (which I hate him so much those days, LOL). Relatively, I think the book "Leading" is much better. However, due to my utmost love to Arsenal, this book brings a lot of sweet memories to me, and I am so nostalgic while reading this book. As a conclusion, thank you so much to Le Boss for bringing us every hard-fought matches, awesome players throughout his time at Arsenal and ultimately, the memories on Arsenal journey which Mikel Arteta is building on it. As mentioned by current gaffer ~~~ "Trust the Process" and all the best to the club I love so much! 

The 7 Habits of Highly Effective People

 

This book suddenly crossed my mind after reading a lousy book in "Atomic Habits". "Atomic Habits" really disappointed me. As such, I felt there is a need to revisit a book I read 20 years ago. Main thing is, I need to find out whether I really hate "Atomic Habits" that much or simply because this sort of books no more sounds appealing to me...

At the end, this is still the same "amazing" book I read 20 years ago. A reread after 20 years is an incredible journey. After all, when I can re-quote some of the nice quotes below, it clearly showed that this book is still applicable after years. Further to that, although the said 7 habits were practiced over the years, the revision on this book did trigger some new ideas on me particularly as well as my interdependent relationship. 

Relatively, "Atomic Habits" do not have this sort of attraction. Well, credit must be given to the author of 7 habits. "Atomic Habits" may not be that bad. Perhaps, the presenting styles and the practical part is not as good as 7 habits. 

Out of 10, I have no reason to revise my full rating 20 years ago. This book is still one of my bibles in life and amazingly, it is still perfectly good to maintain all the 7 habits for the rest of my life. Thumbs up and thumbs up to the late Stephen R. Covey!

My experience has been that there are times to teach and times not to teach. When relationship are strained and the air charged with emotions, an attempt to teach is often perceived as a form of judgment and rejection.

A sense of possessing needs to come before a sense of genuine sharing.

Knowledge is the theoretical paradigm. Skill is the how to do and desire is the motivation. In order to make something a habit, we have to have all three.

Effectiveness lies in the balance. Excessive focus on P results in ruined health, worn-out machines, depleted bank accounts and broken relationship. Too much focus on PC is like a person who runs 3/4 hours a day, bragging about the extra 10 years of life it creates, unaware he's spending them running. 

There are 3 social maps: Genetic determinism, Psychic determination, Environmental determination to explain the nature of man. 

Look at the word responsibility - "response-ability" - the ability to choose your response. Highly proactive people recognize that responsibility.

Proactive people are still influenced by external stimuli. But, their response to the stimuli is a value-based choice or response. It is our willing permission, our consent to what happens to us, that hurts us far more than what happens to us in the first place. It's not what happen to us, but our response to what happens to us that hurts us. 

It is our willingness permission, our consent to what happens to us, that hurts us far more than what happens to us in the first place.

In the great literature of all progressive societies, love is a verb. Reactive people make it a feeling.

Proactive people focus their efforts in the Circle of Influence. They work on the things they can do something about. The nature of their energy is positive, enlarging and magnifying, causing their Circle of Influence to increase. Reactive people on the other hand, focus their efforts in the Circle of Concern.

Whether a problem is direct, indirect, or no control, we have in our hands to the first step to the solution. Changing our habits, changing our methods of influence and changing the way we see our no control problems are within our Circle of Influence.

Habit 1 says "You are the programmer." Habit 2, then, says "Write the program." Until your accept the idea that you are responsible, that you are the programmer, you won't really invest in writing the program.

Almost all of the world class athletes and other peak performers are visualizers. They see it; the fell it; they experience it before they actually do it. They begin with the end in mind.

Before a performance, a sales presentation, a difficult confrontation, or the daily challenge of meeting a goal, see it clearly, vividly, relentlessly, over and over again. Create an internal "comfort zone." Then, when you get into the situation, it isn't foreign. It doesn't scare you.

My maxim of personal effectiveness: Manage from the left; lead from the right.

The key is not to prioritize what's on your schedule, but to schedule your priorities. And this can be done in the context of the week.

The focus in steward delegation is on effectiveness, not efficiency. Certainly you can do it better by yourself, but the key is to empower someone else to do it. It takes time. You have to get involved in the training and development. It takes time, but how valuable that time is downstream! It saves you so much in long run. 

The steward relatively compares to gofer focused on results instead of methods. The steward becomes his own boss, governed by a conscience that contains the commitment to agreed upon desired results. But it also releases his creative energies to achieve those desired results.

Real self-respect comes from dominion over self, from true independence. And that's the focus of Habits 1,2,3. Independence is an achievement. Interdependence is a choice only independent people can make. Unless we are willing to achieve real independence, it's foolish to try to develop human relations skills. 

I suggest that in an interdependent situation, every P problem is a PC opportunity - a chance to build the Emotional Bank Accounts that significantly affect interdependent production.  

Seek first to understand involves a very deep shift in paradigm. Most people do not listen with the intent to understand, they listen with the intent to reply. They're filtering everything through their own paradigms. 

As long as the response it logical, can effectively ask questions and give counsel. But the moment the response becomes emotional, one needs to go back to emphatic listening.

The more proactive you are (Habit 1), the more effectively you can exercise personal leadership (Habit 2) and management (Habit 3) in your life. The more effectively you manage your life (Habit 3), the more Quadrant II renewing activities you can do (Habit 7). The more you seek first to understand (Habit 5), the more effectively you can go for synergetic Win/Win situation (Habits 4 & 6). The more you improve in any of the habits that lead to independence (Habits 1,2,3), the more effective you will be in interdependent situations (Habits 4,5,6). And renewal (Habit 7) is the process of renewing all the habits.

There is a gap or space between stimulus and response, and that they key to both our growth and happiness is how we use that space.