DAVIN & My Ego

Oh yeah.

Tonight I'll be dissecting my DAVIN journey which started January 8.

So I bought DAVIN when it broke out of the fractal high, then went all in on the close.
However, it tanked the next day and got me selling all of it at a huge f*cking loss. (more than 10%)
But although I exited, it was still in my watchlist.
It seems pretty obvious what the support level is. So I bought near it.
But this time, not all in. Just testing the waters I guess. Got scared of the recent loss.

Then it gapped up.
Now this gap up, I don't know how to interpret.
So I just waited.
Then it went up. But I didn't want to buy more.
Until finally, I bought more when it broke out of immediate resistance.

The reason I was confident to add more on this level even if it seems too high already, is because I have a decent base at 1.81. If I add more, that would only make my average price at 2.06.

But the reason why I didn't add when it gapped up or when it surged the day after it gapped up, is because of my EGO. I've been thinking about it during that week.

"Why didn't I buy then?"
"How come I didn't see that?"
"That was the confirmation. But I didn't do anything about it."
"Ba't di ko pinuruhan?"

Then I realized, I didn't want to buy more because I don't want to increase my average price. Because my entry price of 1.81 was awesome. And if it reaches 3.60+, I would have myself a bagger. And if I don't increase my average price, I have more % gains to brag about.

How stupid. That was really really really really f*cking stupid. F*ckering f*cking f*ck!

Took me an opportunity cost of 30%+ gain before I convinced myself that making more money is more important than having more % gains to brag about.

Sold on weakness.

This, too, shall pass.

Lessons learned.

Sunday Reflection

The past 2 weeks have been good to me.
Some things I did right.
Some I did wrong.
What better time to be dissecting my trading decisions.

Let's start with: SMC

So here's what happened:

- I bought SMC at 51.60 because it did a Zeus Strike but I didn't buy it immediately after doing the ZS, I observed it first for a couple of days and noticed it gets bought up at the close. So I bought.

- The day after I bought it, it shot up +15%.

- 2 days after, I put a sell order at 66.50 which is my target price.
- The next thing I thought of is doubling up since the worst case scenario would be losing my profits.
- I put a buy order at 56.20 which is just above the 200ma support.

Now here's where I f*cked up:
- I cancelled the buy order thinking the price wouldn't go that low and waited at a higher price.
- I was so eager to add to my winning position that I bought at current market price after only a day.
- 2 days after that, it dipped to my optimum price for doubling up! Exactly at 56.20!
- But instead of buying, I closed all my positions. At 56.25!

I sold it because of 3 reasons:
- When I sold it right after lunch, the candle was a long red marubozu.
- The index was down by more than 2%.
- I wanted to buy more DAVIN.

Then the stock closed at 60.00.

Thinking back on this sequence of bad trading decisions, here're what I believe to be my errors:

Error #1: I didn't have the patience to wait for the best entry. (the optimum risk-reward scenario)
Error #2: I forgot an important characteristic of this stock. (it always gets bought up at the close)
Error #3: I didn't wait for the close. (i get better results when I wait for the close)
Error #4: Fear of Missing Out. I wanted to buy more DAVIN.
Error #5: When I finally sold SMC, I couldn't push the buy button considering the current price of DAVIN that time.

Error #6? Up to now I haven't been able to summon the confidence to go back in.

Am I being too hard on myself for thinking about these much errors? Or am I just rationalizing?


Next stop: EEI

I bought this at 5.35, I was waiting at 5.31 but didn't get filled. So I bought at the close.

3 Reasons why I bought EEI:

Reason #1: I have a clear cutloss price. (5.19 to be specific, where I'll be risking P800 including commissions if my thesis is proven wrong)
Reason #2: The cutloss price of 5.19 was used in conjunction with the 20ma as support, if it breaks, I'm out and I lose P800 on a P25,000 position.
Reason #3: I've seen this pattern before. Over and over again.

After only a day, I sold almost half of my position because I felt I wasn't comfortable with the P25,000 position so I reduced it to P15,000.

The day after that, I closed my position on this stock at 5.31

I only had 1 reason for selling: I couldn't wait for it.

Bottom line, after these two trades, you would've gotten an idea of my trading mistakes and where I need to focus on and improve.

The Seven Costly Sins

Much like in real life, there are sins in trading. And it will cost you a lot whenever you commit them.

Envy: You see Zeefreaks' unshaded portfolio and BOOM!

You tell yourself, "I gotta have those kinds of gains."

Gluttony: So you copy him. Not necessarily his strategy. But his stock picks.
And maybe some guru's bagger of the year.
You join stock market groups and chatrooms.
And whenever a person legit to your eyes tell you about a hot stock, you buy it.
Until you end up with 20 "hot picks" in your port.

Greed: The guru told you to buy SSI at 7.50 because there are many social climbers.
A week later, it's at 5.90 and he tells you it's ON SALE!
After 2 and a half months, it's at 3.37, WHAT A DEAL!
So you sold your house to buy more.
Imagine the overflowing profits you will get once it goes back up.
2 months after that, it's 2.44.

Lust: In a sense, this is the same as Greed where you can't have enough of something.

But consider this, you were able to ride FNI from 1.90 all the way to 3.50.

And you want to do it again. You think you can do it again. It's so easy.

You bought it at 1.90 because it's a double bottom.

Bought again at 1.20 because the president is buying.

It'll go back. It's just paper loss.

Half a year later, it's 0.48.

Pride: This one.. is the worst. Because you won't know he's there.. playing you.
Notice the trades above.
Pride was there.
And you were his unsuspecting victim.

Sloth: Remember those trades where you were left out because you were waiting for more signals.

You see a stock break out of a major resistance but you didn't buy it because the broker you were following didn't buy it too.

So you just watched it go from 0.05 to 0.80.

Then you lost confidence. 

You just slept through it and didn't bother trying to know what went wrong.

Wrath: This one is also easy to miss.
You bought TAPET at 9.00, a day after, it's 4.49. Then 2.90.
And you tell yourself, "F*ck this! I'm getting those losses back!"
So you come up with another brilliant idea.
I'm going ALL IN on BLOOM because Enrique Razon does not live in Guagua.
I'm absolutely right on this one. Besides, my "mentors" are also heavy on this.
A day after that, it gapped down and you lost 10% of your account.

There you have it folks.
The seven deadly sins of trading.
You may call it some other thing.
But the bottom line is, whenever you commit any of these..
You lose money.