From Test Buy To Greediness

It's amazing how the market punishes people who become conceited.

I refuse to entertain the idea that "maybe" I was like that yesterday.

But the results speak for themselves.

That's what makes the market unique.

It is an endless stream of opportunity that slaps you in the face if you don't know the rules.

One day you're doing great.

The next day you suck.

Here is how a single trade wiped out a week of gains.

Here are what I believe to be my errors:

#1 : I sold the laggard SSI in order to buy more IS where I was currently up 18% but I got greedy and bought too much that my AEP went SO close to the current price. My AEP was 0.405 after averaging up and the stock closed 0.4250.

#2 : Right after I bought it, I KNEW I WAS WRONG on buying that much. But I didn't reduce my position. I was hoping that this stock WILL go up tomorrow. Right then and there, I knew I was wrong. But I REFUSED TO ADMIT IT.

#3 : Today came and when I checked the market, the stock was down 10%. I sold 2/3 instead of selling everything.

"Mag-iwan ako 1/3 para kung tumaas man or bumalik sa 0.400 levels, breakeven yung remaining 1/3."

It didn't recover.

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I have a problem scaling up.

A Series of Bad Executions and Rationalization

Here's how I traded SSI.

SSI, Round 1:

I don't see anything wrong on how I traded this.

SSI, Round 2:

On this one however, I was wrong when I bought after the 50ma held as support because that would be averaging down and ignoring the fact that the initial support I looked at was the 20ma which has now given up and also means that the AOTS is no longer as strong as I thought.

My thesis was invalidated but because I'm too dumb to realize that, I held on to my shares.

I sold some when the 50ma failed to hold but still betting on the 100ma holding up. That's why I only sold 2/3.

During these times, I was telling myself that the 100ma is my last line of defense and that I would cut mercilessly if it goes below that.

I was rationalizing.

"Maybe it's still a good buy after it dropped a few cents."

I was rationalizing by looking at the 100ma and how the price stayed above it which wasn't the reason why I bought.

The thoughts I had which maybe just slightly different from the reasons I got in, were wrong.

I sold at 3.39 today just before lunch because the 100ma didn't hold.

Then, there was a knock on the door..

A Series of Good Executions and Proper Mindset

Here is how I traded NOW this April when I went back to trading 15k positions.

NOW, Round 1:

NOW, Round 2:

NOW, Round 3:

NOW, Round 4 & 5:

If only I could operate like this every single time.

Wisdom is Found Only in Truth

So Zeefreaks just earned a million pesos in one day.

One. Million. Pesos. One Day. (photo taken from ZF blog)

The first thing that came into my mind was this:

"Who puts 10 million pesos in a single basura stock?"

Right? Second thing:

"How did he do that?"

For me to save a million pesos, that would take me approximately 10 years. I'd grow a beard even if my DNA doesn't agree. Two presidents would have ended their terms. I'd have increased my waistline by at least 4 inches. Most of my classmates would've been married and take their children to school. I would also have my own children and because of that, I just realized it would take me 10 more years.

But enough of my sh*t.

In my other post, I said that traders are like alchemists.
I'll tell you why.
But first, let's define what alchemy is and how it is done.

Alchemy is the ancient metaphysical science of manipulating and altering matter by using natural energy. This act is known as "Transmutation". The practice of alchemy to create objects out of raw matter is widely believed to be capable of anything and is subject to certain laws and limitations, all of which fall under the concept of Equivalent Exchange. In order to begin a transmutation, a "Transmutation Circle" is necessary. Without it, transmutation is generally impossible.

Now let's define what trading is.

Trading, in the Philippine context, is buying a stock and selling it at a higher price thereby profiting through price appreciation. That is "stock trading".  When you have mastered it, you will make money. But in order to master it, you will have to make sacrifices. For you to be profitable, you must have a "Trading System" that reflects your personality. Without it, you're just gambling blindly.

So why are traders like alchemists?

It's simple.

Trading is transmuting money into more money using your trading system.

Now let's go back to Zeefreaks and the Tribe.

There are other traders who are also profitable. Let's give them the benefit of the doubt even if they don't show their ports. But the ZFT, to me, is just insane.

If you are looking for inspiration, if you are looking for answers or advice, if you want to keep reminding yourself that it is indeed possible to trade for a living, follow the tribe. Following is free.

Imagine walking home from work everyday and passing by a car showroom. You look at your dream car and see yourself driving it. You imagine yourself going to places you've never been to and find yourself enjoying every revolution the wheels make. You give yourself a pat on the back and say "It was worth it. The overtime, the holiday work, the stress, the hustle. It was worth it."

That's how I feel when I look at their port screenshots. It's like looking at my future self. Because I know that someday, I will be consistently profitable too. I'm willing to make the sacrifices and I know it will be worth it. It just takes time.

So how does the tribe do it? The "bagger" plays. The two-digit consistent gains. The 7-digit profits. How did they become insanely profitable?

They got to that level because they've done what others aren't willing to do.

They paid the price according to the Law of Equivalent Exchange. What's the price? The price is the cost of ambition. Late nights, early mornings. Lots of associates, very few friends. Being constantly misunderstood. Criticism. And doing a lot of things alone, at first.

You cannot gain anything without first giving something in return. To obtain, something of equal value must be lost. That is the Law of Equivalent Exchange.

But because of these sacrifices, they've seen what others haven't. They are able to do what others deem impossible.

They found:

"the Truth"

What is the truth? Truth is, Truth can be deceiving.

What you believe to be true, is it true? Or do you just believe that it's true because you were taught that it is true and never looked any further?

So what is the truth?

Truth is what gives one the most fitting form of despair to insure them not to become conceited.

Truth is the source of knowledge, a dimension of information. However, a trader will only be granted as much knowledge as proportionate to what he has given up as a toll.

Truth appears different to each person as a reflection of their true self and understanding. Those who rely on someone else will never make it farther than those who are willing to look deep within and beyond themselves.

Truth is in yourself.

Truth is "YOU"

καιρός

It was 8:00 AM when a text message woke me up.

I was still groggy for having slept less than five hours since I work in the afternoon and leave the office past midnight.

"Sorry ha? Wala na kasi ako. Yung hospital bill ni Tita ako na nagbayad. Nagbigay na rin sila Kuya at Ate. Baka meron kang pwede ibigay dyan pambili ng maintenance ni Tita. For one week na lang kasi yung natitirang supply."

It was then that I decided to finally start writing this very important topic: Why Do I Trade?

I remembered a movie that I really liked.

It takes place in a society where people stop aging at 25 and each has a clock on their arm that counts down how long they have to live. When the clock reaches zero, that person "times out" and dies. Time has become the universal currency; it is used to pay for daily expenses and can be transferred between people.

There are two kinds of people. Those who have 24 hours or less on their clock and need to keep working their ass off to earn more time. And those who have enough time on their hands to live forever and do whatever the f*ck they want.

This is the reason why I trade and keep on pushing myself to the limits to master this game.

I want TIME.

The movie is an extreme example of a "rat race." They keep working in order to live. If they don't, they die. In real life, if you're in a rat race, you don't die.. but you're not living either. You'd be missing out on a lot of things.

There are three OFWs in my extended family. And they all have one thing in common as it is with almost all OFWs. Their children grew up seeing them only once or twice every two years. They go home to the Philippines and spend a month or two with their family. Go on vacation. Baguio, Boracay, Palawan, Bohol, anywhere you can think of. Then time runs out. It's over. Back to work.

I remember a scene when I was still in college. I went with my cousin to the airport to fetch her husband. There was a woman carrying a child. Probably 2-3 years old. A man approached them and kissed the woman. The child looked as if she had no idea who the man was. The man gave the child a teddy bear. The woman said "Oh ayan ang Papa mo may regalo sayo. Papa mo yan."

This isn't the life I want.
This isn't the life I want for my family.
I don't want to miss a second seeing my child grow up.

Eight hours of working for someone else could be eight hours spent with your loved ones.
Waking up early in the morning to prepare for work could be waking up to exercise.
Waking up early in the morning could be waking up to prepare breakfast for your family.
Working on weekends could be movie time for the whole family.
Working on holidays could be a family road trip somewhere.

Eating lunch with workmates could be picnic with your parents who are getting old.
Overtime hours could be keeping up with friends asking how their day was.
Working late at night in order to submit that report could be hours for making love with your special someone.

Think of one of Zeefreaks' students.
He's now a full-time trader working on his own bakeshop on which he's passionate about.

He gets to spend quality time with his family obviously.
And he still has enough time to do swimming.

You can't do these if you're working for someone else.

You see.
Money can buy time.
And if you have more money, you have more time.
More time to pursue your passion and things you like.

More time to give to people who need it.
More time to share with the important people in your life.

More time to spend with people you love.
I care less about the money.
I want time.

I've been studying the market and myself for two years now.
I am not yet profitable.
So am I wasting my time?
I don't think so.
What's spending two, three, even five years learning and mastering this game if you see yourself playing it even when you're 50, 60,70 years old?
I know I'll get there.
In Time.