Tuesday, August 27, 2013

Recession Heroes Ep 2 - Trader with 17 years of trading experience still lose money

I missed episode 2 of recession heroes so i watched it online on catch up TV xinmsn. This episode is even more interesting and we can learn a few points from this female trader who shared her experience. I have also wrote about episode 1 here.

Here is the summary of episode 2:

This lady was retrenched during the 2007/08 financial crisis. She was a futures broker in a financial institution for 17 years. She worked mostly from 6pm in the evening to 5am in the morning trading futures market.

Why still lose money in trading?
After being retrenched, she thought she would be able to trade at home and have time to look after her son. But, within 10 months into trading at home, she lost quite a lot of money and stopped. Why did she lose money? She said trading in a financial institution allowed her to have tips and instant news to make decisions fast. Trading at home is different as most of the time the news is delayed. The second reason is trading an institution money's is different from trading your own money. The emotional and psychological aspect is completely different. Even with the experience and knowledge of trading, it is still highly possible to lose money.

My views on trading
After watching this episode, it confirms my view on trading. Firstly, I've heard that most people lose money in trading and it is said that only 5% of the traders in the world can make money consistently. I didn't believe it at first but now i believe in it. Secondly, i've heard that trading is a psychological and emotional game. If you can't control your emotions, you can't be successful in trading. This point is also confirmed.

So is it still possible to make money through trading? I think it is still possible to make money from trading but it will not be a lot of money. In actual fact, very few people are full time traders. Most trade on the sideline occasionally. You may not agree with me but i've traded before and know what it is like to lose money. It is really an emotional game. Want to make a lot of money through trading? Think again.

My views on investing
On the other hand, investing is different. Most people can make money through investing. The more knowledge and experience you have in investing, the more successful you can be. The longer time you have in the market, the higher the chance of having better returns. That is why i advocate investing more in my blog. The benefits of investing at a young age is great. You can read more on how to invest here and here.
Knowing the difference between investing and trading is important. Know which one you're more suitable for and learn as much as you can.

The story ends with this lady becoming a housewife and does some baking at home. She sells some of the cakes and pastry she bakes at home to friends and relatives. She has more time for her family and her son especially. As family income reduced greatly, she had to sacrificed yearly expensive and long overseas trips, dining out in fine restaurants at hotels and reduce spending on buying branded stuff. She is more happy now and lives a more carefree life.

You can watch this episode 2 of recession heroes on xinmsn here.

Related Posts:
1. How 27-year-ol​d S'pore woman lands herself in $100k debt
2. How to pick stocks (Part 1) - Economic Moats
3. Channel 5 new TV series - Recession Heroes


  1. Hey SG Young Investment,

    You know I will disagree with this right! With regards to the trading part. Learn to do things the right way. Get a strong foundation, before jumping in with real money. Many people jump into the sea without even learning how to swim! So that statistic is a bit skewed.

    I'll take a look at the show! Looks really interesting! Thanks for sharing:)And after ep 2, I'll come back and comment again!


  2. Hi Pok Chow,

    It takes guts for me to write this post. Haha.. I know there will be people who disagree with me. ;)

    I think the most important thing is we need to discover which is more suitable for us. Some people are more suited for trading while some are more suited for investing. I wanted to bring across a point that trading and investing is completely different. The psychological aspect is ways apart.

    Go watch the show. Its interesting. Ep 3 is also out already. But more on business.

    1. Trading for a living is tough job.

      Even tougher taking on trading as second stream of income as part-time job.


  3. Hi CreateWealth8888,

    That I agree. It took me quite awhile to realise how tough it was. I thought I was better than other people :p

    I guess the sooner we realise it, the faster we get out of dreamland and face reality :)