Poco a poco se va lejos

I'm sitting on my biggest drawdown ever (47%), and it has left me wondering... how the hell am I going to hurdle this?

August 2009 - the month I will always remember as a trader.

The losses started as a trickle - little by little the market churned me. It was just 1%-2% losses per day. Until the big drop came. I decided to hold a stock overnight that was strong fundamentally, even though it wasn't doing very well technically. The next day, it gapped down 12%. The company placed shares at a deep discount. I was devastated. From that point on, the losses have been piling up exponentially. I can't control my risk. My emotions have been running high. I've been cutting too late and taking profits too early. I simply am not in tune with the markets.

My psychological well-being has also been compromised. And it shows with the way I've been dealing with my co-workers. It seems like, lately, I am more concerned about HOPING that their stocks would decline, and their account balances would deteriorate to a level below mine. This stupid competitive or crab-mentality episode of mine has been distracting me from what should be my ultimate goal - improving and refining my trading in order to make up my losses and eventually, WIN.

GOD. The market is running high and I'm losing money. For days and weeks, I've been jumping around from trading right to trading reckless. Why? Because I've been hoping for that big break in order to bring back my confidence, which has been causing me to pick a stock, bet big and then, consequently, HOPE that it would go up without looking at the picture objectively.

I need to change. I know I can turn this around. I just need to be more patient and be content with singles and doubles. My losses started out with a trickle and then a big drop came... maybe if I traded better, my gains would start small, and then with a little luck, a big win would come around as well.

This will be my toughest test ever.

Little by little, one goes far.

Mini Crash

I just had the worst 2 weeks of my career as a trader.

From euphoria down to near depression just in a matter of a month.

How could have that happened? How could have I let that happen?

I was up and then I am down. Roller coaster it is.

I can only imagine how other traders felt when the market was at its worst. From the peak of the bull market down to the March 6 bottom - unbelievable.

I lost 16% in 2 weeks. What if I had started at the peak of the market? I might have wiped out my whole account.

I need to be more disciplined. I've been saying that since I first started but I still haven't changed significantly. Maybe that's the reason why people say the learning curve of a trader approaches its ceiling in about 5 years. It takes that long to master ones emotions, and to gain discipline. Or, it takes that long to become a machine.

Lessons:
1. You can't control the market. You can only control your risk.
2. When you feel like you "know" what you are doing. Stop and evaluate. Bring down your size and do so until you feel like it's "hard" again.
3. LEARN WHEN TO STOP TRADING. It's not just about churning; it's also about preserving one's capital.

The Path to Excellence

Must to my dismay, my team for the playoffs, the Cleveland Cavaliers lost to the Orlando Magic just a few minutes ago. I was really rooting for Lebron, who I think will really become the best player that ever played the game some day. But before that title, he still has to prove himself, not through individual awards, but through championships. He has to go through the same growing pains that Michael Jordan had to go through to gain the honor of being the best.

The whole situation that Lebron is going through somehow made me think about my own - in trading. I know I have the potential to be one of the best or at least end up as one of the better ones. But before I really realize that potential, I have to go through several difficulties and trials that would test my character. I need to experience losses and depression and everything else that could kill my spirit before I could really elevate my game.

So now, Lebron, like me, is going through a tough time. But I'm sure he'll get over it, the same way I will in a few days. And the sooner the moping ends, the sooner the healing and learning will happen.

But I'm fortunate, unlike Lebron, I don't have to wait a whole year before I could really redeem myself. For me, I'm over my last month's subpar performance (I did well relative to my first few months, but still below my expectations), and I'm now looking on to June. I will work harder, I will be more disciplined and I will not give in easily to my emotions.

Here's to a profitable month.