Mike,
You probably have this already but just in case, here it its.
Coz
TABLE OF CONTENTS
*Moderator's Comments
The meaning of BI-MONTHLY.
*This Week's Questions
1. When will we see totally electronic futures trading?
2. What's the hardest part of trading?
3. Another book worth reading?
*Closing Thought
Experience is the best teacher but....
______
MODERATOR'S COMMENTS
I incorrectly closed the last issue of the digest with,
"that's it until February 6, 1999."
I plan to publish this digest the 2nd and 4th Saturdays of each monthly
rather than every other week. It all depends upon when the 4th Saturday of
the month falls. To make it short, the longest interval will be three
weeks. Most of the time it works out to be every other week. Sorry for the
confusion.
Anybody notice the NASDAQ's record leap on Thursday followed by the almost
record drop on Friday. I hate to sound like a broken record but the point
is that it is a moment to moment business and yesterday's action is just
yesterday's action. Each day brings a new market. It's what's happening
NOW that counts, not yesterday nor tomorrow. FOCUS ON THE MOMENT!!
THIS WEEK'S QUESTIONS
Q.#1
Eddie,
Seems that the futures exchanges in the US are dragging their feet in
making order execution totally electronic. Why?
Pat A. , Harwood Height, IL
A.#1
Pat,
You are right. EUREX, a european exchange that was formed by the
combination of SOFEX AND DTB is now the largest futures exchange in the
world, passing up the Chicago Board of Trade and the CME. Why? Because
given the opportunity, customers would rather trade electronically
bypassing the floor traders and brokers who handle their orders. Plus it's
a heck of a lot cheaper for everybody.
The problem is that exchanges are controlled by their membership and an
order that is entered and executed totally electronically (no human being
involved) is not in the best interest of the floor populations. It is
going to happen but not as fast (at least in the US) as it was previously
expected.
A NEW all-electronic options exchange is in the works and will be available
next year. This may force the hand of the CBOE and others to get with it.
The developers have real deep pockets and this should work. Time will tell.
I remember when all options were traded over-the-counter (no listed
exchanges).
When the CBOE was proposed, all of these option dealers (mostly in NYC)
said, "What do a bunch of grain traders know about options?" Within a year
of the opening of the CBOE, all of them were out of business.
Perhaps this will happen to exchanges doing business the old-fashioned way.
What's your bet?
*****
Q.#2
Ed,
You've been trading a long time. What's the hardest part of trading?
Jose V. Miami, FL
A.#2
Jose,
In a nutshell, it's all about being able to take losses quickly. Things
either go up or down. It's that simple.
The pain involved in being wrong is the hardest thing for most traders to
deal with. No one likes being wrong. However, that's a big part of this
business and how you respond to this is what makes the difference in being
in the game for the long haul or just hanging out until you eat you gun.
Most people can't handle the psychological punishment. It's great when
they are right but hell when they are wrong. It comes with the territory
and unless you can deal with this in a reasonable manner, I do not
recommend trading. It's just the price of admission.
Q.#3
Mr. Toppel,
Can you recommend any other trading books?
Bernie B. Los Angeles, CA
A.#3
Bernie,
My very favorite book is Zen in the Art of Archery by Eugen Herrigel. This
book was the basis for my own thinking about the markets as it captures the
aspects of ego and effortless effort. I have read and reread it a twenty
times and still get something out of it each time it read it. I can't
recommend it highly enough!!
Combined with my book, I think you'll get a good understanding of the
process of letting go so that you can go with the flow effortlessly.
*****
FINAL THOUGHT
"Experience is a tough teacher. It gives the experience first and the
lesson afterwards."
William Otley, Exec. Director USPA
And so it is with trading and investing. Unfortunately, you have to take
your lumps first in order to learn from your mistakes. Read all the books
you want but you will not get as much understanding as you will from
actually experiencing your own emotions while in the markets.
That's it until February 27th.
Edward Allen Toppel
*****
P.S. You can order your personally autographed copy of Zen in the Markets
thru my direct order page at <http://www.samuraitrader.com/order.html>
*****
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The Samurai Trader's email Digest is a production of Samurai Press,
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