More often than not we want to be right. Many traders want to be right. To be recognized that you are right in trading is a good feeling.
Trying to prove you are right mas madalas makasunog ng port.
I want to talk about EGO sa trading. Di nyo man pansin but marami na instances na naging biktima ng EGO ang port ninyo. When i say EGO what do i mean?Look at the example chart. This was my trade a year ago.
EEI went up with volume. I think all time high volume niya for few years din kasi nasa 20M ang volume meaning ang dami bumili sa EEI.
A day after bumagsak.It initially had a support level pero nag collapse din so I cut my losses.
I was looking at its movement. It went up 20% a day earlier and nasa 5 or 6 percent lang binagsak nya the following day (not whole day kasi mga 10 am ako natingin and it plays somewhere sa 6 or 5 percent down) I was waiting na magkaroon ng base or support para maka entry ulit. At 9.3 nagkaroon nga ng base. It touched 9.3 then di na bumababa. Naulit ilang beses so my thinking was that could be a good base na. So I entered.
Pagpasok ko di naubos lahat ng bids ko ngpush na sya pataas. Validated ang analysis ko na good base nga yun. Few moments later bumalik sya sa entry price ko. Moments later nabasag ang 9.3. I cut my losses again. I have this rule sa self ko na twice lang ako pwede magkamali sa isang stock kapag day trading. After the second cut its a validation na I’m wrong at the market is moving opposite sa direction na gusto ko.
Why i shared this? Ganito yan. When i was just starting sa trading i used to buy then cut kapag bumagsak. Kunyare bili sa 1 peso. Cut sa 0.95 peso. Re-entry sa 0.85 peso kasi bawe na at may tubo pa kapag bumalik sa 1 peso (yan ang thinking ko). Bumagsak, cut ulit sa 0.8 peso. Bili ulit sa 0.75 peso kasi bawe na kapag bumalik ito sa 0.95 peso. It goes on and on until huli na ng mahalata na halos 20% na ng pera ang nawala sa kaka buy, cut, buy, cut. I did not know it at first na EGO yun. I thought malas lang. Later on, I knew na it was me trying na panindigan na tama ako (na instead bumagsak eh mgbobounce) which in the end I was wrong naman pala. If you find yourself in a situation na you think you are right (na kahit bumabagsak ay nag aaverage down ka kasi u have a feeling na u are right) go back and read this post.
Ego destroys account faster than FOMO at FEAR.
If a person equates being profitable with being right and losing money with being wrong. A loss is a direct attack on the self-image, constructed by the ego. Since the ego wants to be right, and will always protect itself at any cost, we will sacrifice profits; endure excruciating pain for long stretches. The objective is no longer to be profitable, but to validate the ego.
There is no right or wrong. There’s only having the markets on your side, or moving against you. What I see more of than anything else is people ‘betting their politics.’ “Duterte is right, so MWC and ABS-CBN should go down,” even, especially when, they are, in fact, going up. likewise, “Mali si Digong. Dutertards yan. Tataas MWC atABS-CBN” all the while they’re actually going down. Money is made by allowing and accepting that the markets are always right, and going with the flow of the markets, and that’s a totally no-ego approach.
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