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.


  1. I like this post, ZF. I started reading your blog a year ago and I can say that your teachings can also be applied to sports betting. Keep it up!

  2. very informative post for me as I am always looking for new content that can help me and my knowledge grow better.