Downtown Seattle, Washington State, U.S.A.  *  Photography by Dennis Phan





请阅读潘家墉作品 * Xin mời đọc một số tác phẩm cuả Dennis Phan.




When I attended live seminar taught by Mr. Mike Coval, he told us if we treat trading as a business, it will give us return like a business. If we treat trading as a hobby, it will give us return like a hobby. I determined to make trading my business, not my hobby. I work hard to make myself knowledgeable about trading. It was hard at first, but I figure it is hard at every thing from the beginning anyway.


I believe in any business, we should include, but not limit to, the following factors:


1.     Knowledge about the business.

2.     Capital.

3.     Management Skill.

4.     Products/Services to sell.

5.     Customers to serve.

6.     Worker Comp. Insurance.

7.     Fire and Liability Insurance.

8.     Salary Expenses.

9.     Rental Expenses.

10.            Utility Expenses.

11.            Commute and/or Travel Expenses.

12.            Legal Issue.


Mr. Robert T. Kiyosaki, the author of “Rich Dad Poor Dad” book, categories four different quadrants for the work forces: E, S, B and I. E stands for Employee; S stands for Self-employed or Small Business; B stands for Big Business and I stands for Investor. I believe most of us started with the E quadrant. We can stay at the E quadrant or move up depending on our goals and motives. I was, at one time, offered the opportunity to move up to the E quadrant by being a financial planner with a big financial firm. To be a successful financial planner under their system, I have to manage my team, sell insurance products, serve customers, travel a lot and pay rental/utility/insurance expenses for my office. I figure I won’t have time for my family doing that business. On the other hand, Investools program gives me flexible schedule, shorter working hours and best of all, I don’t have to sell products and serve customers. I know for sure I will not be in the B quadrant simply because I am lazy. I don’t want to prepare for all 12 items listed above. Pure and simple.


One of the reasons I love this business so much is I only need items 1, 2 and 3 to run it. Items 1 and 2 are self explanatory. When I talk about Management Skill in this business, I mean money management, emotion control and trading discipline. I believe it is easier to manage myself than to manage my employees or my team. Another reason I love this business is the working hours, especially on the west coast. The market closes at 1:00 P.M. and I am off. At night, I spend about one hour reviewing my portfolio and planning my next moves for the following day just in case the market does not move in my direction. I monitor my positions on weekdays from 9:00 A.M. to 1:00 P.M. It is said the amateurs open the market and the professionals close it. By no mean I imply I am a professional. I still have a long way to go before I become a professional trader. It is just with my trading style, the closing hour is much more important than the opening one. Besides, I am busy with my kids in the early morning. By the time I drop them off to their school and come home, it is time to go to work. The timing is just right for me.


This business does not have products to sell and customers to serve which I personally think is a big plus, to me at least. By eliminating items 4 and 5, I save a lot of time and money in inventory and customer service. I have no rental, utility and insurance expenses for my store/office/warehouse. I don’t even have employees to worry about worker comp. insurance and their salary. The best part is I can do my business in the comfort of my own home. Hence eliminating commute and/or travel expenses. The only possible legal issue here is if my broker goes bankrupt. To minimize that risk, I pick a large online broker firm whose stock is publicly traded in the NYSE. The 3rd week of the month is usually the most exciting week for me because option expires on the 3rd Friday; I call it my “payday.”


I am often asked if I still trade while I am vacationing. When I am off, I sell covered call against the stock I currently own. If the stock closes above the strike price and I am called out, I make profit selling the stock and the covered call. If I am not called out, the net cost of my stock is reduced. Some traders prefer to set stop loss while they are vacationing to protect their profit just in case the stock drops in value. They are in the “defense” mode. That is not my style. I prefer selling covered call. I guess I am in the “offense” mode. If I see a good naked put opportunity, I conservatively sell the naked put way out-of-the-money (OTM) and make sure I have enough capital to buy the stock just in case it is put to me. Buying long call/put, selling short call and spread trade of any kind are definitely out while I am vacationing. Covered call and conservative naked put are the only strategies I use during my vacation. I do not bring my computer with me during my vacation because vacation is the time off for me and my family. In fact, I do not even have a lap top computer, for now.


I intend to make trading my business, not my busyness. I believe money making process should be fun and relaxed. In my opinion, trading is neither hard nor easy. It is just different. I consider the pluses and minuses between trading and other “traditional” businesses and I pick trading to be my business. So far, I haven’t regretted my decision. I will wrap up this series in my next article “The Thought.”





Dennis Phan   家墉

Khai Minh, UCLA & Investools Alumni

Los Angeles, California, U.S.A., 05 June 2007





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