Trading Maturity

Fundamentals, Technicals, Speculation, Chismis.

Everyone is different and everyone has a different style of trading. Even if two people had the same style, the mindset and execution would be totally different.

There is no such thing as a one size fits all in the markets. And there is no such thing as the ultimate trading style, because the market moves in cycles.

If you don't agree with another trader's trading style, hayaan mo na. Wag mo gayahin yung haters na magrerecruit ng ibang haters to hate on trading systems na hindi nila ginagamit just so they can validate their feelings. Ano yan networking?

Never force and argue about trading systems as that would be a sign of immaturity and a total waste of time. Focus on Your system and Your execution because it is Your money.

You know what it means to be a mature trader?

Knowing that you and the system that you use is an integral part of this huge Stock Market Ecosystem. Ang tanong nalang jan eh... by the end of the year, marami ka bang nakain o ikaw yung nakain? 🔥🔥🔥

Market Noise

You want momentum in your learning curve? 

Then shut off all the negativity in your life as these would only be heavy baggage to your trading journey. Negative energy will most likely produce negative results. 

You also need to limit the information you expose yourself to. Dami dami mo binabasa, alam mo narin lahat ng style, pero di ka makaexecute ng tama! Wag ganun. Avoid analysis paralysis.

Lastly, find a specialist that you want to emulate - both in life and in trading style. Discover the process that they went through and FOCUS on that! Wag mainip. Iwasang sumystem hop!

Baptism of Fire

There was this certain gentleman who messaged me one sunny afternoon. Let's call him John. 

The man started investing in the second half of 2009 when the stock market was starting to recover. It was the best time to invest. John was a fundamentalist and a farmer by profession and understood the concept of the seasons. He was taught that farming and investing are very much alike - That just like farming, it takes time before you can reap your harvest. It was the best time to buy long-term investments.

 Several years later, he was able to grow his investments from 6 to 8 figures. Now that's a lot of zeroes! But as he continued with his story, John said he was lost on his investments and needed help. He explained that in the past 5 years, his investments stopped growing and even eroded chunks of his profits. 

All these years he was loyal to his stocks, which has now become a big fund, and was rewarded handsomely. But this time, his loyalty was being tested.

John confessed to lightening his positions in the first quarter of 2018 to buy his new set of "investment winners." A few months later, he found himself in a slump - His fund almost halved.

"-40% na ako sir. Ano gagawin ko sir Zee?"

It was his first time to experience such a terrible thing in such a short amount of time. And to make matters worse, he took a substantial loan to add to the losing position. What happened? What was the cause?

As I started to probe, It seemed that John discovered Facebook Trading Groups like how Magellan "discovered" the Philippines.

And the rest was history.

This was the exact moment John knew, he f****d up.

He thought he was a fundamentalist. But he wasn't. He thought he was because he got lucky. He was a speculator but didn't realize it. Because a true fundamentalist wouldn't be fazed by bear markets.

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Many traders who start out are like John. I was also like John. A few jackpot trades and we think we can trade for a living - until the season for bears come.

For those of you who seek the truth, here it is:

The market rewards us for the discipline in our trading system, not the loyalty to our stocks.

If you consider trading for a living, then you should ask yourself during a bear market when things are in chaos and the atmosphere is filled with fear. Not during times when the fields are green. If you can confidently tell yourself that you'll be alright with utmost certainty, then 

You 

Are 

Ready.

This is the ultimate "litmust" test. This is every full-time trader's Baptism of Fire.

 Because if you have the ability and the belief that you can build even in the harshest environments, then you will definitely thrive when the good times come.

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It's a bear market. Are you ready to go full time?

The Greatest Equalizer Man Has Created

Of all the games I've played, the stock market has been the greatest equalizer man has created. It does not care about your race or gender, if you are rich or poor, or whatever life principles you stand for.

Come unprepared and you will be slaughtered. Come with the right mind and skill, and you will be rewarded.

Now I want you to take a good look at your port and understand this: Whatever you see in there right now is what you deserve.

Don't expect to earn 100k or 1M in the markets if your mind's capacity is only at 10k.

You want a 1M day change? Then work hard and become worthy of that value.

The Good The Bad And The Ugly

Looking for stocks in the Market is like looking for Pets. Sometimes they're pretty ugly.

"Look ma! Ain't Fifi Cute?"

The downtrend and atmosphere for the past months have conditioned our minds that it is painfully hard to find those pets that could make us a fortune without giving us nightmares. And now that ZS and Breakout season is here, you freeze. So many of these good pets appear but it seems you just can't decide which pets to go for.

"Should I sell DD and buy X? Was it the right decision to sell DAVIN and buy MCP? BHI or STI? 2GO or IDC?"

So many pets to play with yet so little cash. You get confused and sometimes hurt yourself in the process of playing with these pets. But the thing is, it doesn't have to be that way. When you find yourself pressured and wanting to buy EVERY pet that you find adorable, It could be that you haven't refined your parameters for choosing.

We have more than a hundred pets in our market. How do you filter the ones that would suit you best? And is your way of life compatible with the pet you are getting? If you have a confident answer to these questions, the next thing you need to ask is... Will you be following your rules in picking and handling religiously?

Pets can sure be cute and cuddly and all that, but there are certain consequences you have to face. Like you know...

And that's smelly business right there.

But the reality to all of this is simple. Different pets, Different directives.  It isn't really the pet that needs adapting but YOU. Yes pets can be trained. But animals will be animals. They have a unique directive that they follow even when they grow all alone without a parent. But it is different with us humans. We are gifted with the freedom to think and choose our own directive.

I feel like I've gone too deep again.

Here's a good anime reco you might want to follow

https://en.wikipedia.org/wiki/Parasyte

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A profitable system will always be a profitable system.

But a profitable system, in the hands of a user with the wrong mindset, becomes the wrong system.

Looking for stocks in the Market is like looking for Pets. Sometimes they're ugly... But if you know how to handle them properly, you might just be rewarded with a handful of goodies.

"Look Ma! Fifi just made more cute Little Fifis"

This concludes the story of little Angela who wished for a puppy for Xmas but misspelled "Santa" for "Satan" when she sent that letter.

See what a little mistake can do? 

I seriously hope this post made sense to you. Did it?

Stock Filters

A lot in ZFT have asked me why I don't use filters. Many who know my system and made filters out of it are able to find stocks with specific plays within seconds with just one click. For someone as lazy as me, it's pretty convenient. It's like having a cheat sheet in a game.

So why don't I use filters? I could. I've got access to our Tribe's Beta filter that's pretty awesome. But I guess I just find art and beauty in manually looking at the many charts out there even if they don't mean me money. Like looking at the clouds or star gazing.

Balance in the Markets

For a few to be immortal, many must die.

The stock market is like an ecosystem. 
Everyone seeks life - Only a few find it. 
And many who tread its road easily find death.

A few years of basking in the sun and moon of the markets and I
 have come to see these glimpses of  truths. And while it might 
look overwhelming, I've learned to keep things simple.

Let me try to walk you through to what I'm talking about.

Imagine a jungle with a wide spectrum of animals and plants. 
If you take away one sector in the animal or plant kingdom, 
a great imbalance would happen over time. 

For example, if you take away the reptiles you can find in that
 jungle, most especially to the snakes since most of the human race
 just hates or fears them - a rodent problem would likely arise. 
For there would be one less family to balance things out.

An explosion of the rodent populace would mean devastating
 consequences to any life form that these cute and furry beings have
 taken a liking to. And this would lead to the weakening or
 destruction of the kingdoms that interact with the rodent's meal
 - be it a plant, an insect,  or whatever these things can 
sink their little sharp teeth on. 

The eco-system where you put all the damned 
snakes wouldn't be happy as well. 

May dedicated hugot dun ah. 

(Not that I have any.)

The rodents would obviously be happy. But only for a time. 
Once there's no more food for them, they too will suffer.

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Side comments : Looking back at that food web, baboons are pretty
 bad ass for eating snakes. And I had no idea skunks eat birds. 
Now i'm not even sure if this is accurate after googling. 
I am currently mind effed.

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Technicians, Fundamentalists and Speculators. 

These are the three Kingdoms in the stock market ecosystem that
 bring forth balance. Take one out, and everyone suffers in one 
way or another.

If everybody were fundamentalists, we'd probably have no 3rd liner
 plays and we'll have a really slow market since no one would be
 buying until the next quarterly report. Just imagine the 
tension build up.

If everyone were trend follower technicians, nobody would be
 buying anything that's down trending and there'd be no one to
 absorb the selling pressure when things go bad. 

If there were no speculators, we'd have a hard time 
looking for super stocks.

And that's why you should always thank those who are on the other
 side of the trade or those who have a different trading system than
 yours. I myself have great respect for Gurung ulols, tipsters, 
rumor mongers, crowd herders and even 
those "feeling-jockey" groups. 

They are my Heroes. For without them, I'd have no one to
 sell my shares to. They die for my sake. 

And occasionally If things don't do well with me 
on a trade, I return the favor.

This is the reality of the markets.

There could be times when one race would reign superior, 
but nature always finds a way to balance things out. Remember the
 CAL millionaires? Where are most of them now?
How about the JAP Lovers? The FNI boys? 

Are most of them still alive and kicking? 

Some monkey out there is probably well off and doing a better job.

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And while all living things created are different in some way 
or another, they have these things in common :

Birth. 

The need to interact with their own 
kind or to other species.

The need to consume. 

The need to rest. 

Death.

These are important patterns.
If you're a hunter, you don't go in for the kill when your target is 
on full alert. You execute when they are at their weakest. 
And you wait for that perfect moment.

It's the same with stocks and their cycles. So think of stocks as 
different kinds of animals with unique behavior patterns. They get
 introduced to the ecosystem, interact with the players, they make
 weak and strong trends, up, down, sideways then back again. 
And maybe at one point, just cease to be significant and die.

And you are a hunter. 
It is your job to either kill for meat
or capture and domesticate.

The problem with most traders and investors is the lack 
of conviction. Maybe conviction to their capacity as a person, 
 to the tool or weapon they use, which is their trading system.

This is the average trader/investor

Most come into the markets not realizing what's ahead. 
They come unprepared and defenseless.

It's a jungle out there. And everything in it 
wants to eat or destroy you.

This is what's out there...

This lack of confidence is what destroys them.
For what is an excellent trading system or a weapon
in the hands of a coward?

Sometimes I contemplate If I should just keep my trading
 systems to myself and to the people I've taught. I fear not being 
outclassed in my own system and my kind of game. 

I don't want to be selfish or anything  But I fear
 the consequences of having something powerful wielded
 by idiots. I can just imagine the horror of having a perfect chart 
destroyed because of the lack of patience and poor execution.


If there's one thing nature has taught us,


 It's Balance.

If you can't adjust, the market always finds 

a way to balance you out.

What is the price of your Trust?

As a trader or maybe as an investor, you just have 

to ask this question on every stock.

In any relationship, you cannot fully have faith in someone if they

 have not proven themselves to you over time. Friends and family
 can vouch for people, but that doesn't automatically merit trust.

It's the same with stocks. 

Now let me introduce you to Bob and his journey with SSI. 

(Since a lot of people are dying for an opinion on this stuck)

Bob is the average trader who was able to get some SSI at IPO

 price and is currently holding for long term because according 
to his broker, his guru, family and friends,

"Maganda fundamentals netoh! Bagger!" 

Literally.

Sometimes I wonder what Bob's definition is and what his
 parameters are when he says "Long Term." 
He should think about it. 

Here's the rest of the story...

(Click Image to Enlarge)

Actions speak louder than words. We all agree on this one right?

If they say SSI has excellent fundamentals and that there's 

nothing wrong with it, then why is the price action 

telling another story?

But what Bob doesn't realize is that he unfortunately put his 
trust in people, which is very hard to quantify and not on the stock's
 (SSI) price. This is also the very reason why he refuses to cut. 

If SSI was a person, you'd probably execute or bitch 
slap the hell out of him or her. Nobody likes a lying bastard.

So if ever you find yourself being betrayed by the price 
action of your beloved stock, better ask yourself,

"What is the price of my Trust?"

Do yourself a favor and don't be a martyr like Bob.

Deadly Mindsets that Traders Commit

Is it normal to lose in stocks? Yes.

This is the hard truth of the markets. From market 

veterans to newbies, everybody loses.

If winning 5-6 digits of profits was normal, majority of the people
 wouldn't dismiss snapshots with huge gains as heresy. 

Talk to those who worked as brokers and they'll tell you 

how unfair the world is.

But majority would easily accept a 6-7 digit loss because that's 

how the norm is. And there's a ridiculous culture of embracing 

this truth instead of fighting it.

Like when you fail in your tests and 

immediately look for your "buddies"

But while everybody has their fair share of losses, not 

everybody stay as losers.

Allow me take you to another wonderful experience in

 appreciating renaissance art and the truths of the stock market.

Today, I'd like to talk about the Common Deadly 

Mindsets that Traders Commit.

"Expensive vs Cheap" Mentality

You buy 100k Shares of Stock A for P0.10 

Instead of Buying 1,000 Shares of Stock B for P10

A lot of people fall for this one early in the game. Buying one stock
 over the other because it looks cheap price-wise.

Take this for example on FNI vs NIKL. Both are said to be 
Nickel stocks. And since FNI looks cheaper than NIKL you buy
10k worth of FNI shares on October 22.




Next day, NIKL rallies and FNI fizzles.
Your FNI's worth is now almost a hundred less.

If you only chose the more "expensive" NIKL you'd 
have gained five hundred more.

So what's the point of you having millions of shares on 

a stock but fails to show you a profit?

It's just showing off without having real substance.

#realtalk

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Now a lot of people would also dismiss the idea of buying

 at All Time Highs (ATH) because of statements like 

"I've never seen this stock this expensive before!" 

I'm guessing some of these people have 

been telling that to URC since the 20s.

And a lot of people would nonchalantly buy stocks that have 

fallen 20-50% from their highs because "It's on SALE!"

Who doesn't love a good Sale?

I hate to break it down to you buddy but 

the stock market ain't like the Malls.

FNI MEGASALE at 2.55 you say?

 The reality is, there is no such thing as a cheap or expensive stock.

Only Winning or Losing stocks. 

"Paper loss lang yan!" Mentality

The non acceptance of a loss. This is the most common phrase you

 will hear when people cannot accept a loss. It's a way of fooling

 yourself to the reality that you lost your hard earned money

 - and that if you go long term, you'll be fine.

A lot of people would use the W. Buffet quote 

to defend their paper losses:

"Rule no 1: Never Lose Money

Rule no 2: Follow Rule 1" 

Well guess what?

You aren't lolo Buffet who was already a 

#richkid when he said that.

And this is usually the root cause of the next Deadly Mindset..

Averaging down and the Bodega Mentality

While this strategy works fine with those with lots of money, 

it isn't necessarily so with those with just a few. 

If you have less than 50M in buying power, why would you buy the

 downtrend when you can buy trending stocks that would actually

 grow your money? You don't have to always suffer first before 

you make profits.

And so whenever you feel like buying a down trending stock, 

may you always remember this image:

Now what happens when you combo the last two deadlies?

You'd probably end up having this Wrong Mindset:

"It's too deep to cut!" Mentality

Have you ever had losses that reached more than -30% 

in your port? Painful right? 

"But maybe. Just maybe" you think to yourself, one day, you will
 be liberated from all this pain and some magical rally would

 happen. It's possible. And out of your desperation you do a lot

of meaningless stuff like research about the company you 

'invested' in. Hell, you even know the name of the CEO's dog!

You also believe whatever the Gurus say even though you 

know deep within yourself that what they say is crap.

You had a lot of opportunities to cut your losses.

 So why didn't you?

I'm pretty sure your losses didn't grow as it is overnight

It's hard to swallow a loss. But what's harder to swallow is your 

pride and ego. If you only admitted that you were wrong, 
non of these terrible things would happen. 

So cut when it's still early and remember:

 your pride, ego, and laziness won't feed you.

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To end this post, they say 99% of the people who traded and

 invested in the stock market lose. And only 1% thrive.

So If you want to be part of that 1%, 
then don't do what the 99% is doing.

Technicals or Fundamentals

It's a bull market. Everything works.

But what happens when the bears visit town?

Many traders and investors would find their methodologies tested

 during this phase. It's a time where you find out what works best

 and what doesn't. 

I've heard countless stories of people and their experiences. How 

they gained big or small but lost more. I would find their system

 and approach good. Be it a fundamental or technical approach, it

 would usually be a system that is well toiled and thought of.

So what went wrong?

The most important thing people forget when treading and trading

 the markets is the mindset. A system based on fundamentals or

 technicals in its purest form is just sets of "if, then, else" 

statements.

example:

IF A breaks-out of 10, Then Buy at 10.01-10.1 ;

IF B is [insert fundamentally sound principle], Then Hold/Buy ;

else, avoid ;

Simple right?

But why is it so hard to act on it?

Because numbers are constant. Your emotions are not.

And while some people would argue that you can mix both

 fundamentals and technicals, I believe you just can't.

Either of the two works, that is... if you use the right approach.

And No. you can't choose Ereudite.

The 8 Deadly Sins in Trading

Lust

There's just something special about trading. You just can't go 
through the day without it. You itch to trade even if it's a weekend.
 You sometimes loathe weekday holidays.

You don't really have to do it, but there's a certain 'high' you feel
 whenever you make a winning trade. And that feeling drives 
you to make more trades. 

You think to yourself 

"How will I be able to make money if I DON'T trade?"

Commission loss ain't that bad... Right?

- Commission

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Adultery

Fundamentals or Technicals.

You've gone a long way with these two. Both of them tell you the 
very things you want to hear. And for that, you love them dearly.

You reach the crossroads. You're at a loss. They can't mix. 
And you're allowed to choose, but only one.

"Love transcends all." You confidently tell them. 

Oh what a fool you are. But you're willing to be a fool just 
so you could be with them both.

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Gluttony

Don't you just wish you could trade EVERY stock that went up? 
The want to trade every stock leaves your port in such diversity
 that you can't make decent returns. But that doesn't bother you.

Instead of focusing on a few conviction picks, you just want it all.
 When a stock you're eyeing goes up, you feel empty and left out.

"I knew it!" you blurt out. You tell your friends you saw it coming. 
They say the same. Even their deceased grandfathers saw it coming.

But were you able to buy? No.

You then continue to buy the next potential 'bagger' you see.

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Greed 

"So far so good." 

You think to yourself as you were able to get a stock at a low price.
 You believe nothing can go wrong at this point and nothing else
 will shake you - especially not those bashers and doomsayers.

Greed has gotten the best of you. You've bought more than what
 you can chew, after all, You Only Live Once. Hashtag. #. 

Cutting loss will never be an issue at this point so you don't set one.
 And so you not only count your profits for the day, but you also 
include tomorrow's. 

You then check the internet for the things you've been eyeing 
to buy. Like that new Iphone6.

"Nothing can go wrong" you chant. "Nothing."

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Sloth

The citizens of certain stock market groups are you biggest assets. 

"Why do you need to work hard, invest, or study when you can ask 
the experts for free?" You proudly tell your stock buddies while 
recommending your best group find.

You buy and sell the stock recommendations. You don't really plan
 your trades. But why? If it doesn't go your way there must be 
some bloody explanation. After all, experts can never go wrong.

You sip your morning tea while you comfortably recline on your 
couch and sing "que sera sera..."

A few weeks later you open your port with this reaction:

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Wrath

You completely sold down a certain stock to its low for the day 
and vowed to sell your dog if you ever trade it again.

"Hah!" You exclaim in delight as you think that it's all over 
for that stock.

It rallies the following day covering all loses it made for the whole
 week. You look at your dog. Your dog looks back.

"I was just joking." You say softly.

A complete whipsaw. It hurts as hell.

You once more look into the eyes of your loving dog, and say 

"I'm the hero you need. But not the one you deserve."

You know you shouldn't, but something tells you that you need to.

The Batdog Trader Rises.

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Envy 

You wonder why several of your friends are all in high spirits. 
They show you gains you've never seen before. You want what 
they have. And you want it bad!

They tell you to join in. Cause it's gonna be the next big thing.

 You've heard this many times before. You know it's not. But you
 say to yourself

"This time, it's different."

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Pride

An expert. That's what you are. 

Success? You've tasted it. You know what it's like. You brag about 
the bagger trades you made years ago over and over again.
You tell everyone it's a piece of cake. 

Your past record will dictate the future.

Even when the market itself tells you otherwise, you simply 
announce to your followers,

"Setbacks."

You know shit just hit the fan. Oh you know it. But you just won't
 admit it. Pulling out words of wisdom from the experts of old 
seems to be the best way to cover it all up.

After all, you can never go wrong. Ever.

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How many have you committed?