Sunday, 9 September 2018

Alibaba in the limelight again




I am currently back to my 'unorthodox' pair-trading with Alibaba (BABA) and Weibo (WB).

Had a short wild ride on Tilray couple of days back. It's almost like smoking the last puff of a cigar before it crumbles - not talking about a value stock here, but an over-valued stock.

My homework for the coming week is to consolidate some of my learning into a workable system and try to do some math. I realised that my total trading commission is a bit out of proportion versus my gain. As mentioned, CFD trade commission is a whooping $9.90 per trade and that is without factoring in the daily financing cost yet. Long positions have a higher daily financing interest than short. Despite that, I understand that we cannot correlate commissions and fees to the trade gains as they are sunken fixed cost and trade gains are variable. As such, I need to find ways to up my gain per trade in order to justify all my sunken costs (commissions, fees, time).

As I build up my number of trades, I will start calculating the expectancy. With every trade closed, I carefully noted down the lessons learned and hopefully not repeat the painful ones. In due course, I hope I can become a good Jedi warrior like SMOL and Jimmy.

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My recent treasure from the library...
Couple of snapshots relating to Initial Risk.


There is still a whole lot of trading knowledge awaiting for me to learn.

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