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.

(1/365) Self Destruction by JoLi Studios AKA Leasepics, on Flickr.  This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

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.

Moving Forward

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.

Chanzj / Pixabay

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.