Wednesday, April 6, 2016

Emotions of A High Risk Trader



It was Closing time in the Markets of April 5th 2016. This was my first time in my Trading career to experience a 7 Digit Loss in a Day. Lucky me right? 

"How do you feel? Are you okay?" 
People ask.

I'm fine. It's weird I know. I should be feeling something. Pain. Depression. Sadness. But none of these emotions are present. 


"Eh ganyan ka naman talaga noong simula pa! Manhid!"
*Plays Pusong Bato In Background*

It wasn't always like this. And like everyone else who learned this craft, I also had my fair share of emotions - Happily jumping off my chair when I see huge gains in my port from super stocks. Then cry and sleep in heartache after a few trading days, as those gains get eaten up by a series of losses. Believe me, It's normal. 

Learning is a process. It takes time. And the stock market isn't something easily mastered. Don't believe people in social media who tell you trading is easy money, people who tell you all the good things about the markets without disclosing the risks. And especially people who don't talk about managing losses and emotions. 

These people who seem to be always right about everything and give you this illusion that everyone is profiting from the market but you, is a lie. Because no one is immune from the Markets.

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I look at the Stock Market as a game - the gains and losses in my account are just numbers. There are good days and there are bad days. Today was a bad day. 


And that's all there is to it. Moping around and giving in to negativity wouldn't help bring back what I've lost now would it? This experience just means I need to refine my system so this kind of damage would less likely to occur in the future.

It's simple discipline of the trade.

So how do I manage to kill my emotions in Trading aside from re aligning my perspective? 

Simple. 

"Study and Practice." 

Here's a link that could emphasize on that.

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In ZFT, we have a ritual called "The Purge" where we rid ourselves of all noise that could affect our trading decisions. This noise could be in the form of trading buddies, stock groups, gurus, subscriptions, disclosures, news, rumors, etc.. The process helps us re align our focus and better ourselves. If you are having trouble with noise, Try purging.




Many people fail fast in trading because of ignorance or lack of a better system. Selling plays a bigger part in trading than buying. And cutting losses is the first system every aspiring trader should master.

For everyone can buy with confidence.
But only few can sell with dignity.



26 comments:

  1. This comment has been removed by the author.

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  2. Hi Zee, just the post I needed today...

    A couple of weeks ago, I had this one stock which was climbing up slowly & steadily. I told myself that I will lock in the profit once my trail stop has been hit.
    For some reasons, this stock has made a complete U turn (also slowly) and I kept convincing myself that it would head back north soon. Now I found myself selling it at 17% loss.

    I know my rules but those rules became vague when my emotions set in.

    I guess the saying "it's not what you know but what you do with what you know" applies here as well.

    The Purge it is...

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    1. Have fun purging! I'll talk about it more in detail in future posts.

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  3. Hi ZF

    Wow! You nearly lost your mind there as you totally violated your own -4% cut loss rule (if it's still in effect) - good thing you managed to regain your senses at 9.24% - so close to being killed by one of your nemesis called "InvestTrader" :)

    Your tribe is so blessed to have as their Master as I believed fruitful learning can also be gained from losing. I envied them all for having you as Mentor and a dear friend to some but we, the non-ZFT but followers of you still lucky to have found you as ZeeFreaks - you simply is the real deal, the Master indeed!

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    1. Hello Puhunan! Nice to see you around. That -4% Cut rule was intact naman. I just had to sell my TF stocks that hit their stops.

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    2. Sir zee your is your trailing stop still the 20 SMA for TF or na upgrade mo na ung system? Thanks

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  4. After holyweek sabi ko ayaw ko na ng news. Nagleave na rin ako sa ibamg fb groups. Purging pala yun:) yown enjoy purging:)

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  5. You're one brave man sir Zee, this is why I salute you. Losing is a part of success, just as how winning is. The losing part will make us even better. This is how not accepting defeat looks like, instead this is how success looks like.

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    1. Nicely put. Reminds me of that book.. Failing Forward.

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  6. Sir, baka narinig ka ni Ms. Market....may post ka kasi dati na "Pagpahingahin ka naman ni Ms. Market"!! kaso mukhang deleted na..

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    Replies
    1. It's still there. Backread din pag may time.

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  7. Thanks for sharing Sir Zee, i think i need some purging too..

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  8. Indeed today is a bad day. Just to share my stupidity and maybe a part of my learning already, I bought NOW yesterday @ 1.65 for 60k shares during the opening.Due to time difference, I went back to my bed and slept again then I woke up seeing NOW is @ 1.50 but it went high as 1.95. So stupid and I let my emotions take over I cut loss. It only proves I have so much to learn.

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    1. The only time a loss becomes a true loss is when we don't learn from it.

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  9. I liked you and now, I like you even more. You're real. I wish I were as "manhid" as you.Em thinking of purging here. :(

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  10. sir Zf what was your mistake in this trade? i know you hve a strict cut loss plan

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    1. The cutloss and stops were respected naman. It's just that the TF stocks I'm heavy with went down big time.

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  11. sir ZF, thanks for creating this blog, a big help for us newbees. Been reading your blog the past 2 months and I just say its one of the best guide in trading stocks. I've already finished reading your blog from 2012-2016, although, i still have to read it again since its quite confusing reading it the first time. And I hope I can fully dissect the ZFT system. I just have few questions. First, how do you set stop loss during breakdown? Is it 2 or 3 ticks above the breakout candle? How do you avoid getting shakeout since sometimes a stock will go up and down during breakout? - Ace

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    1. We use the -4 to -5% standard on cutting losses. If umabot jan, sell na. We also use simple support and resistances to manage our cuts. If you're using a trend following method, then you can sell on your selected MA.

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    2. thanks sir ZF. Actually, I joined your subasta, not sure if I will be selected though, since I dont have much funds to bid but I would really love to learn the ZFT system. Btw, how are we going to study your blog, should we focus more on your recent posts (year 2013-2016)?

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  12. Purge Rune idol zee :)dispells enemys positive buff :)

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  13. It wont hurt if the loss is just a small portion of your port. It might look big on your current port pero panay harvest ka naman ng profit so I'm sure your loss vs overall net worth is small pct lang. And that is the true reason why you don't feel anything now.

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  14. i now traded 1.5M ~ 2M (80-90% capital; Zero Leveraged),
    Risk(-8%), Reward(++38%)
    Does it make sense??

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  16. tried purging myself, and made rules on my trading planner, it helps, i almost quit, but hell yeah purging yourself really helps a lot!

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