Nikki Yu is a stock broker and an innovator. She created a system that will help the masses understand how to trade effectively. She is also a writer-blogger who has opened up about her personal experiences in life. When it comes to trading, if you want to develop your trading knowledge know-how, then she is the mentor for you.
1. Which one do you trust more when making trading decisions, your instincts or your logic?
It can't be helped to use your instincts no matter if you try to put logic on all trades. Sometimes, you're attached to the price movement that it would not matter whether it was illogical or not. I guess the most logical explanation is that a perfect trade has to defy expectations thereby it must be illogical to some people to some extent since it would be an outlier.
2. How do you cope after experiencing a bad loss from the stock market?
It's very difficult. The best way is to talk, open up to someone (more often another trader so that they understand where you're coming from) about your losses and form a plan on how to recover. Usually, it may help to take a trading break and just simulate trading or trade small following a slump. Probably, to gain confidence as well, just write your trading ideas and make a journal explaining why you're bullish or bearish. You can do this through paper trading or opening demo accounts. It would also be good to read about trading losses from other traders (usually there are so many forums all over the world that discuss this) since it's not just you who loses big but everyone else in the world encounters the same.
Keep intent on your goals. Bit by bit, gradually when you suffer a loss, with the help of others, be determined to sort out what went wrong. Understand the true nature of your difficulty. Was it a large size? Was it a poor risk/reward trade? Analyze the loss and focus on a step by step process and be mindful of what created the problem in the first place. Usually, it would mean a lessening of one’s trading size and gradually working your way to grind the trades until one recover.
3. What do you think is the most important thing a trader must know in order to become successful in trading?
The entire world can collectively be insane temporarily. Keynes famously said that the markets can remain irrational longer than one can remain solvent. It’s an important thing to remember. Bubbles will always occur. Fundamentals and logical reasons – throw this out if you’re trading in the short term time frame. Flows would rule.
I think the most important thing a trader needs to know is that he/she is never certain about a single trade. Disasters usually happen when all indicators point north and we allow ourselves no leeway to be wrong. By then, our confidence in the trade has grown and so it's difficult for us to think that we could be wrong. This then sets up the trader to the next critical thing - which is taking the hard pill of cutting fast the moment one realizes one's wrong. The difficult part here is the exaggerated position of being overconfident, and then the inability to cut when proven it won't be working or even if it would end up correct, the timing would still be a mistake.
4.Can you share some secrets or tell us what your best practices in trading are?
One of the best practices is done by spacing out your trades as it confirms you’re in agreement with the market. That means not one entry price and not one exit price but many entries and many exits. You need to view a trade as a series of additional buys when the setup is confirming you’re correct. It’s a gradual adjustment either you’re adding more positions intraday or intraweek.
You have to be aware that you’re trading with many market participants. The more volume there is in that stock, the more reasons you should be paying attention to it. People trading volume breakouts before a price move uncover a great deal of information about the stock. Net foreign flows which are considered a heavy indication of strength in directional movement in the short term will be helpful to assist a trade’s price path.
One of the best ways to filter your charts is to first look at the strongest performers that are trading for the day, week, month and that are changing hands at least 500 times. The higher the transactions between many parties, the higher the reliability. Identify stock market leadership. Which sectors are they coming from and then try to uncover if it has a fundamental trend supporting it and then learn more in depth on how sustainable this can be.
5. What is your favorite quote about Finance? Can you recommend sources that will give us idea on how to start in trading such as books, videos or a spokesperson?
“All through time, people have basically acted and reacted the same way in the market as a result of greed, fear, ignorance, and hope. That is why the numerical (technical) formations and patterns recur on a constant basis.” – Jesse Livermore.
So it’s a study on the psychology of how the market’s participants’ state today is. Are they agitated? Are they euphoric? You must also look at yourself as no one is immune to the emotions inherent in every trading participant.
Probably check out the technical textbooks inside Market Technicians Association. (www.mta.org)
6. What is your trading strategy? How did you come up with it? Can you describe your most successful trade so far? What is your track record in terms of profit margin in the last 5 years?
My Trading Strategy is generally just drawing support and resistance lines, finding the Fibonacci levels of a current stock. I come up with it by either a price or volume strength that’s unusual relative to the market.
Re successful trades or track records for the last 5 years - nothing outstanding. There's still a lot of losses to make up.
7. What indicators do you use in your analysis? Do you have rules on how you use indicators?
I used to use a lot of moving averages and was heavily using indicators but other traders told me that I should just simply stick to the price action and classical charting so I honestly don't use a lot of indicators. If any, I just use it to confirm a bias if ever.
8. What indicator system do you use to spot a stock that you would likely place a trade in? Given those indicators, what parameters or set-ups have to be hit before you execute the trade?
I'm sorry but I'm really not a person who uses indicators in my trades. Perhaps my indicator is the most basic of them all, just look for the highest price performances amongst the most actively traded hands. Usually, if you trade often, you have a general idea that P1B in the first 30 minutes is a strong market - so you'd then piecemeal where the strength is coming from. Finding leaders tend to be just simply looking for where largest volume of the day happened - (VWAP) and then just use classic chart patterns. No indicators needed.
9. How do you plot support and resistance/ do you follow your ma's, Fibo, Harmonics, Trendlines?
Nothing fancy. I don't have a different support resistance level. What everyone sees as support - I just see the same thing. MA,Fibo, Harmonics, Trendlines - all these are drawn by the same people so it's just a matter of time frame. You draw your support and resistance based on the time frame you're trading. If you're planning on trading entirely for the month - a more useful time frame for you is to check the low and high of the month to estimate the support and resistance of the chart for that month. Similarly, just use a 10 or 20-day moving average if you're just trading for the short term. It would be useful to plot where the rest of the supply is coming from by looking at the 50/100/200 day but they shouldn't have to be constrained and definite levels that you follow religiously. It's just an important indication of a possible support or resistance.
10.Why do you think a Cutloss is necessary and where do you place the stop? How do you determine your Cutloss level? How do you determine your take profit level?
Cutloss levels depend on conditions. If you're trading in the short term and you know that there's an extended run up in the stock; you have to quicken the pace of selling when there's an intraday reversal or a drop from the highs of at least twice the normal volatility of the stock. Usually, that means 10% away from the highs if it's truly a volatile third liner. However, if it's a midcap name, a normal volatility drop of 5% from its current highs might signal exhaustion - where you need to place a trail stop.
Cutloss levels aren't automatic. I guess you determine your cutloss level based on the pattern you're assuming the stock would form.
For instance, if you're seeing a potential reversal, your Cutloss is simply a 5% distance away from the recent lows (after retests either intraday consolidation) or daily consolidation. It could be a Fibo target that's why you're taking profits or entering on retracements.
The general assessment is that the deeper the retracement, the weaker the momentum of the stock (meaning it will take a longer time for it to go higher.) Hence, if you're just trading fast - make sure retracements of charts don't fall 50% of the entire move. (Once they hit the 38.2% retracement, you should assume buyers gather already.) - else - it's not a momentum stock and will transition more to a value-oriented type of play which usually retraces all the way to the recent lows (either the 0.618, 0.764, 0.886 Fibo and which takes a long time of consolidation.)
Nikki Yu provides a more approachable mentorship system for newbie traders and for those who want to upgrade their ideas when it comes to a wider trading market field. Hers is a sharing or collaborative way of providing information to others. It is evident that Nikki Yu has taken the time to observe various perspectives not only in the trading market systems but the traders around her as well as the economic climate. The thing that I like best about her is the fact that she is still learning, she is still progressing not only that her style is open to ideas, open for improvement.
Nikki Yu’s personal journey is an open book that she decided to share to a wider audience with the purpose of increasing information- She is one of those who have improved the ways on how Filipinos can learn to invest. As a reader, you cannot help but feel that she is providing you with genuine thoughts and emotions. Nikki values the inputs of other traders and does not let her ego get in the way of adding more knowledge and experience to her portfolio.
She does not focus on the negative aspects of trading and strives hard not to degrade any trader in the business. Apart from that, she is also providing free workshops and seminars, she takes the time to visit even far-flung areas just to educate other people. If you want to learn, she will take the time for you, she gives real value to people.
Because of this clients are drawn to her, she is a natural, able to transform clients into real friends because of the direction and purpose of her financial system and goals. Apart from the goal of becoming elite traders, she has also designed systems and ways to help people manage their finances. This goal is what makes her collaborative; she makes use of information in order to help transform people’s lives— Money is a sensitive topic, and one of the most important things that people value in life, and if you are able to talk about it freely and with confidence then this can show that you have a strong mental attitude.
Yu is able to harmonize the elements in her system, both in the financial world and with her personal experiences. She created the bookaka.com, a tool to help people understand the trading system. Yu tweaked her learning styles and opened herself to crowd sourcing from the best traders in the world and as a result, she is able to produce valuable information that people need should they need to upgrade their investment skills.
Nikki Yu’s personal journey is an open book that she decided to share to a wider audience with the purpose of increasing information- She is one of those who have improved the ways on how Filipinos can learn to invest. As a reader, you cannot help but feel that she is providing you with genuine thoughts and emotions. Nikki values the inputs of other traders and does not let her ego get in the way of adding more knowledge and experience to her portfolio.
She does not focus on the negative aspects of trading and strives hard not to degrade any trader in the business. Apart from that, she is also providing free workshops and seminars, she takes the time to visit even far-flung areas just to educate other people. If you want to learn, she will take the time for you, she gives real value to people.
Because of this clients are drawn to her, she is a natural, able to transform clients into real friends because of the direction and purpose of her financial system and goals. Apart from the goal of becoming elite traders, she has also designed systems and ways to help people manage their finances. This goal is what makes her collaborative; she makes use of information in order to help transform people’s lives— Money is a sensitive topic, and one of the most important things that people value in life, and if you are able to talk about it freely and with confidence then this can show that you have a strong mental attitude.
Yu is able to harmonize the elements in her system, both in the financial world and with her personal experiences. She created the bookaka.com, a tool to help people understand the trading system. Yu tweaked her learning styles and opened herself to crowd sourcing from the best traders in the world and as a result, she is able to produce valuable information that people need should they need to upgrade their investment skills.
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