A Battle with my Inner Demons

 "Knowing yourself is the beginning of Wisdom"

- Aristotle

With that in my mind. I needed to dive further into the abyss called MYSELF.

Know thy weakness.

Hope – I still remember the day where I was eagerly waiting for a disclosure in pse edge, rumors from finance manila and any kind of news in trading related page in facebook. Knowing the disclosure did help me once but it added more damage in my portfolio. Hope is also the culprit when I held on too long on my gaining trades because my pick is the same with the “Guru” I was following in finance manila. When I realized that those disclosures, news, and rumors are one of the culprits why my portfolio is getting smaller, I decided to lessen the noise by not opening those sites most of the time. 

Fear – I experienced this kind of emotion every time I see a stocks that is doing very well like closing at ceiling. I always wanted to enter that trade cause in my mind it will continuously go up. And guess what, it did go up but most of the time it didn’t and I ended up selling it at the bottom before bouncing up or sleep in consolidation. How did I challenged fear? Entering set up that I am confident with and not listening to the fear that I might missed out the plays that Ms. Market is using as a bait to consume my gains and even my hard earned initial capital.

 Anger – Did I ever got angry during past trades? Why should I? I mean, who to blame right? But little did I know that I am angry without even knowing that I am. Just realized that if I am not angry why would I want to avenge the thing that I loss. ‘Makakabawi din ako’ – the phrase that my mind always say when I lose big and gain small. To my mind I just need to repeat the things that I did in my previous winning trade and enter with a bigger position. But after having a bigger position, a winning trade ended up breakeven or even worse – ended up with a big loss. How did I ease my mind not to get angry? Well, I sell my losing trades and focus on the one that is gaining according to my bias. 

Sorrow – Felt this after I ended up giving Ms. Market a tuition fee equivalent to 25% of my portfolio. I was able to get out of that sorrow by talking to my wife about it. And her words is what kept me going to continue this love/hate relationship with Ms. Market.

Greed – I have an exit plan. I have a target price that was attained but ended up wanting more. Luckily, I ended up with a big gain but not too big if I just respect the target price that I set. What to do next time that greed knocks at my door again? Respect the target price and exit the trade according to plan. 

Pride – Feeling invulnerable after being right to play I tested and ended up going at it with too much confidence. When ‘Superman Syndrome’ have plagued my thinking, my gains were given back to the market with additional fees. How did I handle it when I feel that pride have taken over? Get out of the market and focus with my day job.

Know thy Strength.

Passion and Perseverance. Applying what works for me during school days as I realized after being humbled by Ms. Market that intelligence cannot be used in her territory. My only traits that I can use against her is passion and perseverance. The passion to learn more, earn more and give more; and the attitude to keep going and never give up no matter how many times I fall.

Plan of Action.

So going back reminiscing the past, Anger and Pride are the biggest threat to my mindset. If I haven’t knew boss ZF and other tribe members’ blog, I would have loss more of my capital. To counter this emotions, I will gladly use the following to combat my demons:

• Hope – Barricade oneself from the noise of the market.
•  Fear – Execute more paper trade, journalize and reflect on what had transpired.
• Anger – Cut mercilessly and move on. Enter into stasis or do something for one’s entertainment.
• Sorrow – Confess thy sorrow and focus on your inspiration.
• Greed – Respect the exit plan and never focus too much on an optimistic outcome.
• Pride – Be humble. Know thy limitation. Enter into stasis if needed.