Making a Living, Not Making a Dying
Alarm rings at 6. Shower. Dress. On the job from 8 to 5. Commute home. Eat. Watch TV. Bed. Repeat.
I Have Sinned
On December 19, 2013 I made an impulsive trade. I bought 670 shares of JFC worth PHP 118,751.68 (1 USD = 42 PHP). That morning of Dec 19, I had no plan to trade. I opened my trading account and to my surprise the PSEi gained 1%. For the past days, PSEi was gaining. Looking at my indicators, the MAs were converging and I could picture in my mind that a cross-over was impending. And so I bought JFC. I must admit that the buy was impulsive and I broke my rule of not buying unless the shorter MA crossed the longer MA from below, signalling a bullish trend.
I Was Tricked
I bought JFC on December 11, 2013 at 167 per share. At the time of buying, I did not know about indicators. When I learned about indicators, I came to an upsetting realization. I bought JFC at the wrong time. Me buying at the wrong time, was somewhat confirmed by dropping of the share price to 161 per share. I knew I was wrong buying and I had to get out of the market while my loss was still small. One of my trading rules was to limit my loss to a maximum of 8%. My loss was 4% which was still acceptable but I chose to sell and exit the market anyway. I did not want to wait for my loss to reach 8% before I sold because I was convinced that I entered the market at the wrong time. Two days after buying, I sold JFC and took my loss of PHP 365.95. Three days after selling, JFC rose to 179.80 per share. Had I waited 3 days before I sold JFC, I could have exited the market with a profit.
Currently, I have a loss of about PHP 6,000. From now on, I promise myself to honor my rule of not buying unless the indicators signal a bullish trend. My loss is 5% and still within my maximum loss limit and so I can still hold on to JFC. If the market continue to be bearish, I will exit as soon as I have a profit or my loss exceeds 8%. I am putting DMC in my watchlist. If the market becomes bullish, I will continue to hold JFC and buy DMC.
Things I learned
- Do not make impulsive trades.
- Follow your trading plan. I should concentrate on following my trading plan and not on how much profit I can produce. I have confidence in my trading plan and if I follow it well, the profits will naturally come.
- Do not sell when my loss does not exceed 8%. Sometimes, it’s better to do nothing than to sell.
I want to change my life. I want to live. I want to be an expert trader someday and make a living. I want to be making a living, not making a dying.