T3B Gathering 24 Jan 10

I know this is quite dated. Not sure why I did not post this earlier. Anyway it still contains some valuable insights towards trading that are timeless.

It has been around 9 months since the last gathering in Apr 09. Darren did a recap of the market since the last gathering and showed Keane’s “prediction” was realised – Keane urged us to start buying and stop shorting the market and it was true enough SG market recovered around 100% and some HK counters even increased up to 300%.

Being a mentor, he encouraged us to attend the mentor sessions regularly as he strongly believe that the success in trading is highly correlated to the number of mentor sessions he/she attends. He realised that most beginners get into the market when the market is retracing and experienced many losses which discouraged them from trading. This cost them to miss the opportunity when the trend moves. When the trend has proven itself, they gain the confidence to go in again but only to find out the retracement began. They tend to be trapped in this viscious cycle for some time and by attending mentor sessions will allow beginners to know which part of the trend they are in and will help to breakaway from the losing cycle.

After a short recap on some of the charts, Darren invited Keane to the stage.

We were shocked to see Keane on clutches! He explained to us he fractured his left foot while rollerblading with his kids. But he still made the effort to speak to us personally and stand throughout the session to make a more impactful presentation.

How was T3B system applied to Pre, During and Post Crisis
Pre-crisis – riding the entire uptrending stocks but always prepared for downturn and exit when trough broken. The market is a mousetrap = easy to get in but difficult to get out. But as T3B traders, we will always get out when the trough is broken and will never be under the mercy of the market. We will be able to focus on the next opportunity to go in the market rather than worrying when can we get out.

During Crisis – Short selling was the main business and T3B system continues to rake in profits in a down market.

All in all, Keane use the analogy that the market is like a dark forest, T3B system functions like an Infra-Red goggles to help us appreciate the situation but we can never change the circumstances.

Current Market Condition
[I believe this is what you are looking for...] We are in the midst of bull market (somewhere halfway of it), hence the potential upside is still present. The recent pullback is a good preparation for S3 opportunities. The uptrend is still intact and should not short the market now! Keane mentioned he will call for another gathering when the market condition changes.

The recent retracement can be attributed to 2 reasons. 1) China government cooling the overheating economy, especially the property market. 2) Obama declared the intention to downsize banks. These are attempts to create a soft landing for the markets.

Bullish about China and Renminbi
China exported alot during the crisis to grow her economy. To boost exports, the government has to keep Renminbi low and they artificially pegged it to USD, by selling Yuan and buy USD. As USD weakens, Renminbi weakens in tandem. In this way, Renminbi is suppressed. Keane believed RMB will one day value itself properly and he himself is holding RMB. He urged everyone to hold excess cash in RMB by opening an account with Bank of China locally. He only converts it to S$ when he needs the money.

China has already taken over Germany as the world’s largest exporter. By end of this year, China is expected to overtake Japan as the 2nd largest economy in the world and it is only a matter of the time, China will take the number 1 spot. Within 3 years, it is expected that China’s stock market will overtake US’s Hence, going with China and RMB won’t be wrong.

As we cannot trade China A shares, we can capitalize on H shares (Chinese companies listed in HK). Trading both SG and HK markets is advantageous as the latter usually lead the former. For example, recently, HK market pulled back while SG market continue to trend upwards, giving profitable opportunities.

Keane shared a real story with us: someone invested in US stocks and enjoyed a 40% gain. But because of the devaluation of USD, coupled with the spread cost, his gains were wiped out! It makes even more sense to invest in HK as HKD will strengthen with growth of China’s economy and you can have double gain (stock and currency).

ON TRADING THE T3B SYSTEM

You must have confidence in the system!
Keane mentioned that he uses T3B charts 100% of the time. There are no other indicators he rely on. He wants to assure us that what we know is enough to give us an edge in the market. “What would you do if you know you will never fail?” implies we need to trade with conviction!

Keane relate a story in “Think and Grow Rich” – a gold miner failed his exploration only to find out if he persisted 3 more feet, he could have found the gold. The message is that we need to persist in trading, even if we have to cut our losses. Take cut losses as expenses or cost of doing trading business.

Take Action!
Repeating his advice from his last Apr gathering, he reminded those who did not trade and looked back after STI almost hit 3,200, they should regret for not taking action. In fact you must make yourself feel the pain as much as possible so that you will take action. Remember, the rich gets richer because they take action and the poor only think of taking action. If you are lazy to screen so many stocks, just trade STI ETF! SGX is another easy to monitor stock. It’s earnings is highly dependable on trading volume. T3B system clearly works as many have benefited from it and if it is not working for you, you have to find out the reasons.

But I have not enough capital!
“Find more money!” Keane said, in respond to people who said they have no capital. Keane shared his personal story on how he find more money during his younger days. He took action to find more money and he was not afraid of hardships. How much do you want to sacrifice to succeed? There are many ways to work with small capital. You can trade smaller cap stocks in the same industry. For example, Allgreen vs City Dev. Most blue chip China banks cost less than S$1! You can also use CFD leverage, it is a form of good debt because it helps you to make more money. The financing charges are negligible.

Attachment to Money
The more you are detached from money, the richer you will become. Keane told the story about 2 Buddhist monks, who met a woman along a stream. The woman asked if she could be carried across the stream and the elder monk obliged. As the monks proceed their journey, the younger monk asked the elder that it is against their religion to touch woman. The elder replied that he has dropped the woman a while ago and it is the younger monk that has yet to let go. The moment we are attached to money, we will find it very hard to risk our money to trade and feel very painful to cut loss everytime. Hence, it is unlikely we can perform like what a successful trader can be.

Record your trades
You should record your trades so to understand how you behave in the market and when you use the system. When it comes to the same situation, your past mistakes will warn you not to take the same approach and your correct actions will give the confidence boost to act accordingly.

BEYOND TRADING

Questions to ask yourself (whether you are financially free?)
1) Are you paid by time?
2) Are you earning 8hrs or 24/?
3) If you stop working, will money continue to come in?
4) Do you have multiple streams of income?
5) If you are an employee, are you working for an employer who is being left behind?
6) Are your friends and family moving forward?

Property investing
Keane has several properties in SG and other countries. He shared how he invest in properties. He buys only in core region, ie, the central areas. He added that it is safer to buy where the expatriates are. It just relate to me what Robert Kiyosaki said, buy properties where jobs are. He also look at PSF and make sure the price is reasonable. Most importantly, choose good agents and know what is the lowest price offered.

My personal takeaway: If I know by trading and following T3B system will never fail to make me rich, what will I do? I will get as much capital I can to trade! The fact that I am not focusing all my money in trading is because I have some doubts in it. It does not pay to have doubts in trading. The more doubts I have, the less successful I will be in trading. I am taking action to channel more resources to trading and focus on growing wealth by applying T3B system. If I know by trading and following T3B system will never fail to make me rich, what will I do?

You may also like:

1. T3B Gathering 5th Apr 09 – Wealth Creation Portfolio Management Part 1
2. Capital is key to Profitable Trading
3. Seeking trading education
4. Trading Goals for 2010
5. The Evolution of a Trader by Mike McMahon
6. Trading Report Card – Jul 10
7. Lessons Learnt as a Trader (so far)

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