Loss Aversion
As defined in Wikipedia, "loss aversion refers to people's tendency to prefer avoiding losses to acquiring equivalent gains. Some studies have suggested that losses are twice as powerful, psychologically, as gains."
Emotions strongly affect our decision making. May it be in trading, or any decisions in our everyday life. As a result, we end up making wrong decisions and regret it.
Yesterday, 20 Nov 2017, I bought PXP near EOD at 9.70. I already had my trading plan (copied Sirius Lee's Momentum trade). Cut loss point at 9.50, Target Price at 10.33-10.83 (5-10% trade objective). Everything was set.
Today, 21 Nov 2017, it gapped up on opening and reached 10.26. My position is already green.
But there's one problem. A problem every trader hates the most. SLOW INTERNET! Most of the readers probably didn't know yet, I'm a Seafarer onboard a ship transporting chemical cargoes around Europe. And yes, we do have internet. But sometimes it's so slow depending on the heading of our ship. My charts doesn't load. I could not monitor the movement of this stock. Buying & Selling orders will take a lifetime before it will be posted. Cutting losses would be hard on this strong momentum stock.
So that fueled my fear of losing. That fear of turning my green port to red. Loss Aversion. I was filled up with emotions, at the same time cursing the internet in russian language. "Cyka blyat!"
As the stock goes down below 10.00, I sold my position at 9.95, closed my trading platform, and then went back to sleep. It's only past 3am here, 7 hours difference from PH.
The supposed to be 11% gain becomes only 1% gain. 😂 That's how Loss Aversion hit me. But anyway, every loss will only be considered a loss if you don't learn from it.
Lesson for today: Follow your system. Execute according to your trading plan to avoid emotions interfere your decision making. We have missed today's trade, but there will always be another opportunity. And when that opportunity comes, apply everything you have learned today.
PS: I posted this late, because of no internet.
Thursday 23 November 2017
Saturday 18 November 2017
The Tale of a Sailor
The Tale of the Sailor, the Son, and the Trader
Once upon a time, there was a kid named "Red" (not my real name lol). His parents work in the office, two elder sisters with small age gap in between. He's quite lucky to grow up with a complete family. Nothing much to complain about except for his Mom being so strict and nagging all the time.
On his first birthday, Red happily enjoyed his birthday party. He was wearing a sailor's uniform as a costume. His father also studied to become a seafarer. His parents dreamt of him becoming a Captain when he gets old.
His childhood was okay. He's doing great at school. His favorite subject is Math. He hated English and Reading. While he was doing 90%+ on Math, he got 73% in Reading. Quite a shame, but luckily he was able to get back up to 75% passing that awful subject. He was even a Sudoku Master when he was on 4th year highschool. The first ever Sudoku Master at school since it is the first time they conducted that competition. His class adviser got surprised that he won and bringing home the bacon to his section.
When he was 16, He entered the Maritime Academy bringing a luggage full of hope. Hoping that someday he'll become a seafarer, fulfilling his parents dreams for him. That was a quite hard challenge for him. That was the first time he got separated with his family for some months. But his dreams made the obstacles easier. Under the heat of the sun, with his hands being burned by the hot cement floor while doing push-ups, there's one thing that he keeps on telling himself, you can do it. He became a Dean's Lister for some semesters. After some time he was able to join a ship and do his ojt. In 2013, he graduated from college. He left the Academy surpassing all those obstacles.
Mid 2014, he completed the requirements and took the board exam. He passed it with 80% average. "Chamba", he says. He's now a licensed Officer-in-Charge of Navigational Watch. Two bars now on his shoulder board for 3rd Officer and 2nd Officer Rank. 2 bars to go and he'll be able to fulfill his dream of becoming a Captain.
2015 came and he was promoted to 3rd Officer. He's now officially a working professional. He was quite surprised that from his allowance of 25k as a Deck Cadet, it jumped to 150k, his very first salary. Earning 6-digits a month overwhelmed him. He bought a lot of things, gadgets, watches, mobile phones and tablets.
His money easily got depleted. In 2016, he learned about the stock market. He invested his salary hoping for earning a lot of money. But until now, his investment is still negative.
He is impatient, being an investor is not his genre. He traded and traded and traded but without a plan. With very little knowledge. That made him lose quite a lot of money.
On early 2017, he attended the InvestaSummit. He was amazed. That's the first time he learned about different strategies in trading.
Today, he is studying a lot. Following Zeefreaks, MoneyGrowers, Kidlat, and Sirius Lee. Dissecting their trades and learning their strategies. He hopes that one day will come, his trades will be consistent like them.
He has another dream now. And that is to become a successful and consistent trader. And someday, after he fulfill his #CareerGoals of becoming a Captain, he will be able to retire early as a seafarer and be a full-time trader.
So help me God. 1,2,3,cut.
Once upon a time, there was a kid named "Red" (not my real name lol). His parents work in the office, two elder sisters with small age gap in between. He's quite lucky to grow up with a complete family. Nothing much to complain about except for his Mom being so strict and nagging all the time.
On his first birthday, Red happily enjoyed his birthday party. He was wearing a sailor's uniform as a costume. His father also studied to become a seafarer. His parents dreamt of him becoming a Captain when he gets old.
His childhood was okay. He's doing great at school. His favorite subject is Math. He hated English and Reading. While he was doing 90%+ on Math, he got 73% in Reading. Quite a shame, but luckily he was able to get back up to 75% passing that awful subject. He was even a Sudoku Master when he was on 4th year highschool. The first ever Sudoku Master at school since it is the first time they conducted that competition. His class adviser got surprised that he won and bringing home the bacon to his section.
When he was 16, He entered the Maritime Academy bringing a luggage full of hope. Hoping that someday he'll become a seafarer, fulfilling his parents dreams for him. That was a quite hard challenge for him. That was the first time he got separated with his family for some months. But his dreams made the obstacles easier. Under the heat of the sun, with his hands being burned by the hot cement floor while doing push-ups, there's one thing that he keeps on telling himself, you can do it. He became a Dean's Lister for some semesters. After some time he was able to join a ship and do his ojt. In 2013, he graduated from college. He left the Academy surpassing all those obstacles.
Mid 2014, he completed the requirements and took the board exam. He passed it with 80% average. "Chamba", he says. He's now a licensed Officer-in-Charge of Navigational Watch. Two bars now on his shoulder board for 3rd Officer and 2nd Officer Rank. 2 bars to go and he'll be able to fulfill his dream of becoming a Captain.
2015 came and he was promoted to 3rd Officer. He's now officially a working professional. He was quite surprised that from his allowance of 25k as a Deck Cadet, it jumped to 150k, his very first salary. Earning 6-digits a month overwhelmed him. He bought a lot of things, gadgets, watches, mobile phones and tablets.
His money easily got depleted. In 2016, he learned about the stock market. He invested his salary hoping for earning a lot of money. But until now, his investment is still negative.
He is impatient, being an investor is not his genre. He traded and traded and traded but without a plan. With very little knowledge. That made him lose quite a lot of money.
On early 2017, he attended the InvestaSummit. He was amazed. That's the first time he learned about different strategies in trading.
Today, he is studying a lot. Following Zeefreaks, MoneyGrowers, Kidlat, and Sirius Lee. Dissecting their trades and learning their strategies. He hopes that one day will come, his trades will be consistent like them.
He has another dream now. And that is to become a successful and consistent trader. And someday, after he fulfill his #CareerGoals of becoming a Captain, he will be able to retire early as a seafarer and be a full-time trader.
So help me God. 1,2,3,cut.
Excalibur: Dream High
What is my Dream?
"A goal without a plan is just a mere wish."I've been trading for quite some time now. I was blinded by my dream of earning a lot of money. This dream led me to the opposite. I lost a lot. Roughly around 200k now. I feel so lost. I've been tracking my performance since April. It's completely a mess. I feel like giving up now thinking that trading is not for me.
I will take a rest from trading for now and focus on studying charts. I've started dissecting the trades of Sirius Lee from his blog. I was amazed with his trades actually. After this, I will also dissect Zeefreaks' and Akio's trades. Hopefully after that, I would learn their strategies and be able to apply it on my trading. I would study first until the year end and start all over on January.
I need motivation. Please cheer me up. Fighting!
PS. Here is Red Velvet's Irene giving me motivation 😁😍😂
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