Departure of 2 Key Economic Figureheads Shows Lack of Confidence in Government

The second tenure of President Jacob Zuma has just begun and already South Africans are left wondering about the departure of two influential policymakers from their offices.  Pravin Gordhan was moved from his post of Finance Minister after elections had taken place with much speculation leading up to the elections on whether he was willing to stand for a second term and most recently Gill Marcus, South African Central Bank Governor has expressed her intentions not to renew her contract when it comes up for renewal in November this year.

 Pravin Gordhan exit comes as a grieve warning to current cabinet. Gordhan drove a hard line and came to office in economic times of vulnerability. He was able to steer government budget in the right direction and ensure stable government revenue with his previous work as SARS commissioner. However Gordhan’s integrity has come into question when he openly appealed to government officials to tighten their belts, an appeal which seems to have fallen on deaf ears within the ruling party where government departments is rife with overspending and tender irregularities. One needs only to look at the recent Nkandla scandal which has implicated President Zuma in upgrades to his private residence to the worth of over R200 million to see the extent of these uncontrolled actions of extravagant spending.

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This had to be the last straw for Gordhan who has somehow tried to save his own reputational damage by agreeing to work within another department in government.  He now heads up the Ministry of Cooperative Governance, a department which objectives are to ensure that officials abide properly by the rules set out and maintain a steady hand on their spending; something the previous minister was unable to do.

Gill Marcus has been an outspoken advocate of the dire economic situation which is currently playing itself out in South Africa.  The monetary world of economics has seen an abrupt stop to norms with prolonged periods of quantitative easing in the US. The mass amount of money created to halt the rot of the world financial system is dismal but Marcus has been able to adapt well to the new environment.

Given the problematic circumstances faced from externalities from the outside world, Marcus has on several occasions warned government of the dangerous precedent it is setting by not acting swiftly to economic disruptions such as the Marikana Massacre in 2011 and most recently the Platinum sector strike which lasted 5 months. In both cases labour has been unwilling to reasonably negotiate and sacrificed the wages of workers to secure higher wage demands at the cost of thousands of jobs and at the same time business has suffered a barrage of attack on its confidence levels in doing business in South Africa which has led to a ripple effect of mass closure of many businesses and job losses.

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While sitting idly by, the government has watched from the side lines as this economic tragedy has made a mockery of a sound and stable economic environment. As these events continued to rear their ugly heads Marcus has been forced to drop growth forecasts quarter after quarter leading to further downgrades from rating agencies and outcries from the same government officials who claim to have all citizens’ interest at heart while at the same time continue to lavishly spend on luxury houses and cars.  

One does seem to question the health of the economy knowing that both fiscal and monetary policies are essential to the functioning of any economy and the exodus of two of the most important persons within those policy frameworks is a major blow to confidence in the current government.  

The continual denial by top leadership within the ruling party of disruptions within the economy is tantamount to unclaimed responsibilities entrusted to them by the electorate. If these responsibilities are further ignored it may only lead to a worse situation than what we see and damage which can be irreversible.  Maybe it’s time for the ruling party to gaze into the mirror of possibilities and see the true reflection of what really is happening.

If you would like to contact me you can through my email at cadetrader@gmail.com or if you wish to follow me on twitter and get the latest updates of news, interesting commentary and general trends in the market, my twitter handle is @CadeTradeR if you follow this link it’ll take you directly to my twitter timeline: https://twitter.com/CadeTradeR

Listening to the Wise Man

The other day I was thinking back on my life and the philosophy by which I live by which has helped me achieve my goals thus far in my life.  Then my thoughts directed to my trading journey and what it has taken me to reach the level I have in the last few years.  We all have a story to tell, our own personal journey’s leading up to our greatest achievements. Our stories may be unique yet our beliefs to endure and succeed are shared.

There will be moments in your fledgling trading career where you will be left vulnerable to the emotions of doubt, hope, fear, greed and many more. It’s in times like these we search for that piece of inspiration or that thought of genius and even the grace of humility.

I’ve found refuge from listening to the stories of many professional traders only to realize that they too faced the same obstacles I am.  What makes them rank to the level of professional is the fact that they persevered through and made it to the top.  One trader in particular who captivates many traders in South Africa is Igor Marinkovic.   

Igor moved to South Africa in 2000 as an electronic engineer and began trading in 2003. He started in warrants and gradually made his way to futures for which he currently day trades ALSI futures.  Igor’s 11 year trading career has seen him become an authority on the ALSI and has earned him the name ALSI Trader.  The fact that he has been able to navigate his way through the market with very limited amount of experience is true testament of his ability as a trader.

Igor has built quite a large present within trading circles in South Africa and abroad which gives further evidence that people place a lot of value on what he has to say. One of Igor’s most recent projects is Trading Wisdom’s, a website which is dedicated to capturing thoughtful quotes from some of the world’s best trader’s.

When it comes to learning about trading it pays to learn from the best. Just as we follow the trends in trading we naturally gravitate towards successful traders who have their own shared experience to relate with others.  Quotes ranging from Jesse Livermore to Mark Douglas, they all remain relevant when it comes to trading.  They are principles which are universal and should be followed by all traders.  

But why should traders pay attention to wisdom’s? 

It’s our gateway to sanity, knowing that trading can be difficult at times is simply not enough motivation for us to be able to carry on pursuing it. Having assurance that the obstacles which we face were the same faced by so many others and overcome inspires us to become greater than what we’ve ever imagined.

Trading Wisdom’s is a collection of those few who have successfully managed to accomplish trading. Each quote deals with different aspects within the trading process and because they short, concise and easy to remember they affirm our belief that what seems impossible is always possible. The value added to our trading journey stems from the path they lead us onto to which keeps us following the same path throughout our journey irrespective of the level we hold.

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Thinking back to Igor’s journey makes it all real the possibilities anyone one of us can achieve if we are determined to succeed, passionate about what we doing and remain disciplined. The collection of quotes he has compiled shows just how passionate he is about trading, the extent of experience he has been able to draw upon and make his own trading success happen and the fact that he would want to share these wisdoms with others shows his commitment to educating those who wish to be taught in the ways of the wise man.

If you would like to contact me you can through my email at cadetrader@gmail.com or if you wish to follow me on twitter and get the latest updates of news, interesting commentary and general trends in the market, my twitter handle is @CadeTradeR if you follow this link it’ll take you directly to my twitter timeline: https://twitter.com/CadeTradeR

Having the Right Mind Set Isn’t as Straightforward as You Think

Recently I read through an article written by Bennett McDowell published on TradersLog.com which touched on a thought provoking topic, the different ways traders see the market and the way in which they respond to their mind set they have in place. McDowell explains that markets should be seen as a nonlinear entity comparable to space, time, reality and oneness, a non-systematic mechanism in which output is disproportional to its input, where natural order is the determining factor and logic doesn't apply.

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McDowell goes further on to say that most traders use linear thinking when participating in the market which could possibly explain why they have a difficult time interacting with the market over different periods of time.

 

Think about it for a while, it took me some time to wrap it around my mind. We all experience it in our trading; we dedicate a fair number of hours staring in front of screens sifting out opportunities from a universe of securities with endless possibilities. The process is laborious in times when no opportunities seem present and pleasant when they are bountiful.  Although we perceive both times in a different light, we attempt to apply the same consistency to each situation so that our results do not deviate from our expectant outcome.

Our mental prowess is tested to the maximum when we are suddenly confronted with chaotic transitional market conditions which no longer conform to our rigid trading strategies which were set in place with the previous condition. If we are unable to initiate our ability to become more malleable and adaptable to new conditions we are then faced with emotional responses, most notably fear and greed which have tremendous impact on our trading process.

Herein lies the contradictions, we as human have advanced to a point where we use the process of logic as a tool to assist us in understanding all facets of life, including trading.  However if we were to accept what McDowell was saying we would see that there is a clear conflict between the nonlinearity of the markets and the linearity of our trading mindset. But why do we apply logical process to markets which are nonlinear in nature?

We introduce logic to the process so that we are able to assess the probability of a trade working out. We apply different techniques such as technical analysis so that we create an edge which aids us to enhance our chances of profitability. However we need to be mindful that although our expectations on the market are fixed it doesn’t stop the market from exceeding or even coming close to our expectation.  Markets are nonlinear and although we use logical processes to predict their direction they can work in the opposite way which leads me to the second reason why we use logic.

The markets can be both rewarding and punishing when we ignore the rules we set out. How many times have you observed in your own trading a situation where your profit target was exceeded and you chose to greedily stay in the trade regardless of your rule to exit or the time the price gapped below your stop loss and you fearfully hoped the price would retrace to a more tolerable loss? 

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Logical process prevents our emotions from entering our minds.  We need to be aware of the nonlinearity of the markets as they can cause confusion. The markets can lead us on and mistakenly believe that if we were stopped out we have done something wrong and if we’ve profited more than expected that we've done something right.  This is not the case; it’s simply our edge working for or against us. Our edge may have 50%+ probability which gives us the advantage but we should not forget the other side of the probability which can lead to us being wrong. Our success as traders cannot be measured by our highest winning trade but by the manner in which we execute and follow the plan.  

If you would like to contact me you can through my email at cadetrader@gmail.com or if you wish to follow me on twitter and get the latest updates of news, interesting commentary and general trends in the market, my twitter handle is @CadeTradeR if you follow this link it’ll take you directly to my twitter timeline: https://twitter.com/CadeTradeR