Tuesday, May 31, 2016

The Anointed Ones and The Bearish Divergence

I'm sure most of you have seen these anointed ones all over social media and stock market groups. The funny thing about these guys is how much they love to be right...

... even when the market tells them otherwise.

So let me first enlighten you to a very powerful prophetic indicator that only a few mortal men use. 

The Bearish Divergence

A bearish divergence appears when the price makes a higher high but the RSI forms a lower high. Simple right? If you want it in more simpler terms, it could be that most people are bullish on a stock but the price isn't going anywhere and suddenly one day, decides to drop - which confirms the divergence. 

Now let me take you to another session of appreciating renaissance art while understanding sentiment cycles. Let's begin!

When a monster rally starts on a stock, people obviously take notice. Anointed ones would then claim how beautiful this company is based on their market experience. So they urge the new bloods to read on the company.

Obviously this would lead into a lot of discussion. Some would try to refute and warn but ultimately drown as things turn when gurus would then claim victory over favorable price actions amplified by the voices of their cult following.

At some point, many would profit from the run. And some would usually share how lovely their experiences were and how glad they listened. Their "work" would then be used as gospel to the unbelievers.

"See? Bagger na kami! (Actually not yet for me, but) Be quiet and just sit tight!" 

But of course not everyone would profit. And when things turn a little sour and a few start to doubt, the anointed ones and their cult would then start speeches that contradict and confuse - ultimately to have the follower confident of his or her position... to be confidently confused.

We all know where this is headed right? But not a lot would accept the market's truth. 

When you see this statement, it really means "I don't know what this statement means but I'll say it anyway so I'll look smart."

This vicious cycle is very prevalent when you see anointed ones here and there hype the certain stock non stop even during consolidations and obvious price dumps.

When a bearish divergence confirms and materializes the bear, that's when things get nasty. So if I were you, I'd be taking what I have even if it is at a loss and don't look back.

Sunday, May 22, 2016

Trading Ban & The Fear of Missing Out

A wise man once said...

"Surround yourself with the wise, and you will become wise.
Surround yourself with idiots, and you become an idiot."

Let's not argue with the wise man.

You have all heard about how we do our initiations. "The Purge." The cleansing of one's portfolio of every existing stock position a trader or an investor might have. We do this because our trades and investments reflect who we are. And if one wishes to know our ways, one must first become no one. 

"If a girl is truly no one, she has nothing to fear."

After the purge, a trading ban is imposed. No trades shall be executed until one is ready to face the challenge. And this would usually force to the surface the following wrong mindsets :

2. FOMO (Fear of missing out)

Out of the many other deadly mindsets, these two are the most destructive to one's port especially when both are presently eating at the trader's mind.

The want to recover all losses. And the want to ride all opportunities.


The previous months have been extremely bloody and hard to trade for a lot of us. If you made money during the mini bear cycle since May of Last year then you're one helluva trader. Kudos. But for those who didn't make money and even lost.. the pressure to earn and regain everything is real.

"If I don't trade, I won't make money."

While this statement is true, it is also true that if you don't trade, you won't lose money.

Not a lot of traders understand that cash is a position. That the plays in the market are not one time events that once missed, will be gone forever. That the market will always be filled with opportunities to make money - be it a bear or a bull cycle.

To beat the deadly Makabawi Syndrome or FOMO is to first assess and acknowledge if you have it. 

Are you currently at a loss in your overall port performance? 
Have you executed loss trades within the week or month? 
Are you itching to trade the next potential super stock?
Are you pressured to earn? 

If you have answered YES to any of these questions, then you might just have it.

The second thing you need to do, contrary to how it sounds, is to do absolutely NOTHING.

When playing a game, any game or craft that you have mastered, you realize that there should be a sense of control. Of being aware not just of your surroundings and your opponent, but of yourself and your limitations. The moment this control is absent is the moment you gamble and lose.

Emotions are the raw driving force of prices in our markets. But it is the mind that sparks what comes forth from the heart. A mind that is in decay and exhausted needs time to heal. For how long you ask? A few days to a week. Probably a month. Only when the mind is in perfect condition can a person execute what is seemingly impossible over and over again. 


Last week the new batch of ZFT had their first practicals. They were given a pass to execute several trades.

Here's a detailed post from 54.


The ability to gracefully work under pressure, the control of the mind and heart, foresight, increased conviction to the system, and actually researching and having a plan then carrying it out to the end are the benefits of executing this month long trade.

After much though, I decided to join in. And to make it more interesting, I went all in. Quite a challenge I must say given my size and my average holding period of 3 days. 

Forced to a one month lock and no trading funds except that measly 18k, I might just take an early vacation. I'll prolly visit Camiguin or Cebu or some place with good beaches.

After all, -8% isn't much of a loss compared to losing the mind.

Wednesday, May 18, 2016

ZFT PCC : Arthur Pendragon

I am procrastinating at the moment, couldn’t write anything for the technical report I’m supposed to finish in three days. I decided to write this hoping that other people will somehow benefit and take something from my experience.

This was my port three weeks ago:

A red port and stressful work is never a good combination. Most will ask how I ended up so deep in shit. My mentors would disavow me for it seems like I never learned a thing.
Having the time to reflect I’ve divided this post into stages.

Stage 1 – Denial

One critical factor is the denial stage. The refusal to accept you made a mistake will inevitably result to not wanting to cut your losses quickly. I reverted back to what I was before the ZF program. When you are so deep in shit, you just --- you just can’t get out of it.

Classic “ipit” situation.

I relied on hope again instead of thinking straight and use what I learned. This is like you being Pandora, holding a box with nothing but hope in it. The period that one is still hoping that things will turnaround eventually is what denial is all about.

You cannot blame me – after all to hope is human for man is an animal with a sense of the future, a being in quest of reality. Threatened by fear and encouraged by hope, as he reaches beyond himself for that which is yet to come.

Let me stop you right there as you might get the wrong idea, hoping maybe in human’s nature but the same way you wouldn’t mix Mentos® mints with a bottle full of Coca-Cola® you DON’T mix hope and trading in one sentence. (which I just did but pay no attention to that). They just won’t go well together.

Stage 2 – Seeking Guidance Comfort

In this instance, I felt so hopeless and so frustrated that I wanted to quit trading there and then. I needed to talk to someone. I looked for some guidance. From someone who wouldn’t say “kaya mo yan” or “makakabawi ka din” or “maliit lang yang loss na yan”.

Celeste in this post (https://rootingforceleste.com/2016/04/26/scribe-chronicles-ism/) took the words out of my mouth:

 “The resonance of comfort only echoes when the voice knows what it says. It will only reach the pit if it understood the depth of the distress in the first place.”

ZF didn’t even attempt to stop me. BUT…

Kap on the other hand said this:

Did you notice what both of them said? Aside from both didn’t say “makakabawi ka din”.

Study and invest more time.
Review that trade.
Reflect and learn from it.

No, I wasn’t looking for those phrases either. In reality, I was just looking for comfort. 

So I ate ice cream. I walked the dogs. I took in the form of an Awoken and killed some Vex and Fallen in Venus in some form of release of my frustrations.

Having a routine to de-stress is imperative.

Stage 3 - Acceptance

Everyone knows the tribe has strict cut loss limits. There are rules. The mentors never failed to remind us, as they both kept on reiterating the same phrases: follow rules and exercise discipline.

I know for a fact that I did not follow the rules and that I lacked discipline on these trades. If I did, why the hell am I writing this piece?

So I have now accepted that I made a mistake. It was on me. Not on the mentors, not on the system.

It still took me approximately two weeks to finally cut all those losses. It was the Purge all over again.

By this time, these phrases in Stage 3 (Study and invest more time. Review that trade. Reflect and learn from it.) make more sense now.

So nope, I didn’t raise the white flag. The fight goes on as they say.

Stage 4 – Aftermath

I was supposed to lay low for a bit and take a breather from the market after those successive bad trades. But I am as stubborn as a mule so I still traded and dug myself deeper and deeper. I won some trades but I incurred bigger losses.

It is important to take a step back every now and then. It gives you a wider perspective on things around you. 

I guess for some divine intervention my day job forced me to go into a sabbatical leave from the market. Mind you, it was hard when the village runs on solar power and someone forgot to buy petrol for the generator. Nonetheless I managed, I had time to reflect and revisit my trades.

After such reflection one thing is clear I need to control my emotions. One very easy thing to say yet so difficult to do.

Tame your emotions or it may be the cause of your downfall.


Today 18th of May, after almost a month of incurring losses, Ms. Market seemed to be in a good mood and welcomed me back with arms wide open. I just wish it was really an all-in.

Emotion check: My smile is still from ear to ear BUT not overflowing with joy.

I still need to work on my emotions and so should you.

One step at a time. We’ll eventually get there.

- Arthur Pendragon
(Eques ZFT Batch VII)

Friday, May 13, 2016

Personal Notes Series 009 : Trading with Purpose

I'm in constant fascination by the heroes in most cartoons and anime. You'd normally see them face and fight a tougher, impossible enemy. When I think about it, it's just stupid sometimes - they could have just lived their lives for themselves and not be bothered. But they choose to become stronger. To have a higher purpose in life. Not just for themselves. But for others. And in doing so, they find that seemingly impossible strength or wisdom to meet the need of becoming that hero.

I always wanted to be a hero. To help those in need. I realized I started becoming one when I committed myself to trade not just for myself. But for others.

Monday, May 2, 2016

Stories of A High Risk Trader : Gurus and Bagger Plays

It's May and everything is red. You check your port and it ain't pretty. You hold your beloved bagger turned beggar stocks and start reading up on disclosures, follow gurus, trace broker transactions and start to wonder what you did wrong. "It was quite easy to make money last month. What in the world happened?"

What indeed.


Let me tell you a story in the eyes of ZF. It all started 1st quarter of the year. A Facebook post appeared, heck, probably a private message coming from a popular guru or stock market icon.

Tiwala lang. (Just trust) 

Of course, you're taken aback. You've never gained access to such vital information. It's too good to be true right? Stories and rumors of the many who have lost in the stock market flash between your eyes. "But what if it's true?" You mumble to yourself. 

What if. 

The man who claims to be an informed player seems decent. This is your golden chance to regain all your losses! And in a moment's notice, you succumb to the temptation of pushing that buy button. 

All in!

You consult with a few people if you did the right thing. It seems many have already bought as well. You join in the exchange of information and pleasing comments about the company. Big personalities add to your confidence as they release sweet words about this trade. You even spot a few who claim to be the Painters of the Tape, the chosen ones who are tasked to bring the prices to nirvana. 

"Marami kang binili anooo?" one asks. And you casually reply "Hindeeee. Tikim lang." 


A few weeks later you check your port and you are up BIG! You can't believe your eyes. The rumors were true! The tip was legit and everyone is greeting each other and singing praises. As a reward, you buy yourself that lovely meal and start counting how much profits you need to buy that lovely ride you've always dreamed about.

First Gen Porsche baby.

Just a few more weeks and it will be yours. But you can't wait that long so you decide to leverage on more positions bigger than your original investment because YOLO right? What could possibly go wrong?


And now those weeks have come. You excitingly open your trading account only to find out the dreaded mess it has become.

"Anyare?" You were supposed to get your Porsche this week, like everyone else. You consult your trading buddies first. They too are in the same position. The "Alliance" and the gurus are telling you that it's just a minor bump in the road, so stay put. "Only ginyuses will sell at this point" they add.

Desperate and in need of comfort, you seek out the root of it all. The annointed one. The keeper of truths. The Painter of the Tape.

But even he has no encouraging words to give.

What is it that you should do? Will you continue to believe these people? Will you continue to hold your positions? Will you sell? Will you grab life by the balls and change your destiny? 

I have no idea. I'm just a mere fiction story teller.