The Disease of The Mind

When we enter the markets, we aren't just spectators of events that unfold right before our very eyes. We are first and foremost, participants in a non-ending battle arena. And there are no allies nor are there friends, there is only you and the beast that is the market. But not everyone knows this. Most of us are taught from the very beginning, the fundamentals of loving beautiful beasts. That if you love these big, unfailing and mystical beasts long enough, you will be rewarded.

Dahil may forever... 

... sa friendzone.

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(Click here to read the thread)

For those of you who want to know how much that trader has lost, it's around 1.1M. I know tons of traders and investors who have lost more. I've read countless of letters like these. And if there's one truth that the market tells us about these stories, it's Learn before you Earn. 

These losses don't become the dreadful numbers that they are overnight. They always start as a small, tolerable disease. And rather than finding a cure and dealing with it immediately, beginners let it run the course.

"Liit lang na paper loss to. Kaya pa."

Then one day, you find yourself paralyzed and in the verge of death. "I'd like to trade and learn. But it's too late for me to cut." So you accept your sorry position and leave everything to fate.

But it hasn't have to be this way.

Imagine for a second that traders are warriors. Do you think a warrior can fight effectively with a dreaded disease? Definitely not. The most they can do is spread the disease to the enemy - which is funny because this is what's happening to a lot of stock market communities. Damn. I've such a dark sense of humor.

Before one can learn how to fight properly, the disease must be stopped.

This is where the purge comes in. Purging isn't just selling everything in your bloody portfolio. It's also cleansing of the mind. Because trading isn't a physical game but a mental game. How can you move on if you are bringing a ton of emotional and mental baggage with you? 

Selling everything in your portfolio ensures you have nothing left in the physical and absolutely nothing to worry about in the markets. It's a painful process but it is necessary. 

And after clearing your portfolio, the next thing you'll have to deal with is bitterness. You know you were wrong. You were humbled by the markets and you paid the costly price of ignorance and falling prey to false gurus. But in order to move forward you will have to forgive yourself and accept where and what you currently have in the present. Forget about the losses you made. Face the markets once again as if it was your first day to see it.

From here, you are ready to learn how to fight. The only things you'll have to deal with are the bad habits you caught before you started purging - Listening to market gurus, rumors, tips, the reading of disclosures and news, and all your misconceptions of the markets and the fears from the scars you presently have.

Don't listen to those who can only talk. Don't fall for it again. For it is too easy to quote wisdom of old. Seek out people who can talk about winning and back them up by consistently showing you how they are made. 

And how would you know if you are right this time around and what you're learning isn't another disease? Here's a simple acid test: If what you learned makes you money, that is truth. If it doesn't, consider it cancer. 

Merry X-Mas and the Buy Back Program

Several weeks ago some friends, who have a hard time believing in technicals alone, were telling me to buy X (Xurpass) because the company has apparently been buying back their shares at current prices - it was trading between 9.x - 10.x that time.

"Galing sa kinse yan! Umabot pa nga ng Bente. Parang steam games lang, super X-mas sale! Mismong company buma-buy back! Di sila tanga. Bili na tayo!"

"Cheap Valuations" according to my favorite broker.

(Taken from the PSE Edge website)

I'm no fundamentalist and I don't follow brokers. I'm like John Snow, 

All I know is had I bought X at that time based on the company's buy back program, I'd be incurring a loss of at least -10% by now.

If you were in my shoes, what would you tell your friends the next time you meet and talk about X?

"Okay lang. Di sila tanga."

I wonder how long I'll wait before they'll start saying, 
"I told you so."

How to Trade and Travel

A common misconception about trading the markets is that you always have to be on the watch.

Prices trade and react within a certain range during consolidations. And depending on the setup and kind of stock, this consolidation phase could take a few days to several months or even years.

Here's the 1 year chart of ION for example. It has been on a long sideways movement after its explosive 4 week rally.

If you bought the hype of the "Experts" and are still holding and watching the stock day by day, you'd probably look like these fellas...

Timing is everything.

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I travel and take vacations a lot. And I usually trade with huge positions which when I think about it... is scary. This usually would render me unable to check the charts and be on my full battle gear. Unless of course I bring with me my loyal workstation like on this photo below.

But having to monitor minute by minute when trading is a lie. If you have day job, working on a project or travelling, you only need to monitor and trade when the stocks in your watch list or port are on the verge of breaking out or breaking down. 

Sounds impossible huh? 

But let me enlighten you to the 3 steps that have helped me trade while on the go.

1. Creating a trading plan.

Everything should be accounted for. 

A. The kind of setup and play you're going for - where you determine if you're in it for the short swings or the bigger waves and if the stock you plan to enter is volatile or not. 

B. Entry price, cut loss levels and trailing stops - the very fundamentals of trading. 

C. Time stops - where you sell your position if it doesn't move within a given time frame of your trading bias. Nakapag move on na lahat, ikaw nalang hindi. #whogoat.

Many traders fail in this area. Having no regard to any of these elements render trades incomplete and dangerous - a trip to hell if you may. One should also be prepared for every scenario so you won't panic like sell short or buy late when momentum and volatility comes in. 

2. Planning ahead and working with what you have.

You need to be aware of your environment and available resources. If you're working or visiting in an area that has no internet or if you do not have the resources to trade like a laptop or a mobile smart phone that can access the internet, then do not trade!

I usually just use my prepaid smart phone when on the go and register to internet promos to avoid getting billed a fortune. Internet speed is pretty fast and just right for trading depending on your location. For Globe users, here's the code. Thank me later.

If you have a live broker, make sure to give them careful instructions on how to execute your trade. If you have siblings, teach them the basics of buying and selling. If you have a dog, train the mutt to trade.

3. Alerts and Trigger Points.

Now all you have to do is to set your trading alerts. I use a mobile app for it (PSE Watch). I heard Investagrams also has this feature. Thank you app developers for making our trading lives easier!

From here, you have to determine your trigger points for the stocks in your watch list. What is a trigger point you ask?

A Trigger Point is a Darvas concept (Click here for a detailed post) that goes like this : when certain support or resistance levels are reached and breached, rallies happen. Simple right?

Trigger points can be both objective and subjective.

Okay for this blog post to have sense, here's an example of my recent trade while on the go...

IMP 

Type of Play : Sleeper

Time Stop : 1 Month

Entry Points : 13.8-15

Trigger points : 

14.4 - 16.0 (Momentum)

12.9 - 12.8 (Cut loss)

I bought IMP on July 15, 2016 in anticipation of a mini ZS - 50MA.

I was prepared to wait for a month and buy more shares using the GTC feature (buy order valid for 60 days) while setting my trigger points at 14.4 - 16.0 range, which would alert me if momentum has come in and 12.9 - 12.8 levels for me to Cut loss. 

If the price doesn't touch any of these trigger points, I would not be notified. Ever. And to emphasize on the beauty of this simple statement, just imagine those mornings when you were woken up because breakfast was ready vs those mornings when you were woken up and had to wait for your mother to finish cooking while sitting on the table.

So while still on vacation that Monday, I received a message notifying me that my triggers were hit. 

And since momentum has come, all I had to wait for was the day's close before checking my port and planning my next move.

Port looked like this by the end of the day.

Two Sleepers, 3 for TF. No Tsupitas.

With IMP's ceiling move, it was time for me to plan my sells.

Under normal circumstances, you could just use the Off-Hours Order feature to execute your buying or selling for the next trading day. 

But since this stock went ceiling and you can't place sell orders above the ceiling price, I had to execute my sells at the pre-open of the next trading day. For IMP, I had to make sure to sell the next trading day after the ceiling candle as per my trading rules on these kinds of volatility plays.

If it didn't go for a ceiling, I could have opted to use the GTC feature for selling and set them on and near IMP's resistance levels.

 And Viola! A half bagger trade. 

 EZ. GG.

Additional Notes :

I seriously did not expect this to happen while on vacation. ZFTs should ask me when I'll take my next vacation. Alam na.

And I'm sure you trolls are gonna ask... 

...Among other technical questions. 

Please spare me your messages. Don't be lazy and read this blog from cover to cover.

Study. Execute. Reflect.

Personal Notes Series 008 : The Mandate of A High Risk Trader

Personal Judgement and Paying It Forward

I find it odd when some people say we should donate everything to charity since it is "morally" the right thing to do. Does this mean that if we use the money for personal gain we become Immoral or less of a good person?

But the thing is, in ZFT we exercise free will. We don't force each other to do things we do not want. Which means, be it for personal gain, or for paying it forward, we use the funds according to what we believe is right, according to our personal judgement.

And I personally believe having the choice to give away something of value is far more rewarding and honorable than to be forced to give just because.

" ...for God loves a cheerful giver. "

So do not compare us to seminaristas and other trading schools or other mentors. We do what we do because we want to do what we do - NOT because we are PAID to do it or because we could make good business out of it. You don't see us selling stuff to our readers diba? Our trading gains are more than enough to sustain us.

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Investing and The People of ZFT

I understand that I am no businessman. My strength is in gaming and in trading. And with the way things are going with our current RAKs, I believe the ZFT fund isn't maximized. Yes we are able to help a lot of people with the funds we are getting. But what happens when we stop the Subasta and Seed mentoring? How many in ZFT would be willing to pledge support to charities and other groups needing help? How long can we keep this up?

There are so many things that we could do together with all the talent in the Tribe. But I hesitate to ask ZFTs to join me in this culture and cause. Because there is no such thing as free lunch. When we have tribe projects like the development of Technical Screeners, Project Seed, and other Tribe Events, it comes with a price. And I'd rather have people come forward and give out of the abundance of their hearts.

And in this light, I am looking for something sustainable. If you give to charity, you help a few to several people for a while. But if you partner with people in their businesses with the same principles as you (and in paying it forward), you not just help the businessman, you also continuously help the community that receives the RAK.

Here's a sample of what's going through my mind.

(Thanks for Introducing the Mindly App Celeste)

I would like to re-iterate that I am no businessman. This is not my strength and alone, I cannot effectively achieve whatever it is that I would like to happen. So If you have a better Idea and would like to partner with us on this ordeal, you may contact our budget secretary Robert Sy.

If you think about it, I could just take the easy path and turn my back on this task and hoard all that money like an RPG gamer would. But I just can't. I love.. Because God loved me first and I would just like to share that love experience with others.

http://zeefreaks.blogspot.com/p/the-mandate.html

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?