My observations from trading (19 Nov 12)

I have not learned well from my past lessons. I am still trading recklessly, opening positions (not following money management rules) and similar to before, I am overwhelmed by my own desires... own ego to win every trades and if the trade turns out to be a loss, I will open a new position, double it and hope to recoup.. Base on my own history, its just a matter of time before I blow my whole account again.. I am trying to look deeper into the problem..... on why I am committing the same mistake again and again.

It always start from a trade, with conviction and mentality that I should profit... If it turns to loss, my mentality is still "pixated" on the "potential profit" so with this mindset, I always take another position,  with a desire to recoup fast... This cycle repeats till I blow my account... All this actions is done on the BELIEF that I am always right.. I am just wrong on the timing.... Its the EGO and the GREED thats lead me to take such actions.. As for now, there isnt any day where I just take a loss, monitor the market and replan again.. Many times, I just trade and only stop till I reach the point of recouping/breakeven.

I think the key to trading isn't as much as my own personal profit/loss but rather more on putting mysel to the market and following the flow.... Many times, I just made things more difficult by inserting "I" into to the trading equation and this leads to irrational decisions stemmed from my own greed, fear, ego and etc.   I always tried to average down when my trades went wrong but as soon as I recoup on my losses, I sold it but if it goes other way, I will just hold and hope it turns around... I know clearly the market dosent work this way but still I hold to this mentality cos of fear... Fear the market turning around.. Fear of being wrong but sometimes being "wrong" is not as bad as it seems."

Regret, disappointment, pain , fear and greed are the common emotions which arise from my trading.... Losses/Profits definitely occur in trading but the key to succeed in trading is to minimize the aftermath.... Like regretting... thinking on hindsight.... Best is to leave the trade as it is regardless the outcome. Move on and trade accordingly to the plan again...

Goalless pursuit in life

These few days, I feel goalless in my life.... just feel like I am pursuing it without any clear direction... This might be attributed to various reasons...... 1) feeling regretful over the large losses I accumulated over the past few years.... depleting 70% of my account .. 2) many things on my mind... be it personal or work.. 3) working as a broker.... too much time in hand.....

I just feel that I am wasting my time everyday..... letting day by a day to get by... Time should be something precious by yet, I am treating it as dirt... a cheap commodity.  Life is uncertain.. and I can only live once but with my current attitude, I am sure it is not something what I want when I look back 20 years forward... Life is about experiences... experiencing moments, expanding horizon but I know I am not fully utilizing it yet... 

Living a life without pursuit is miserable.... very miserable. I need to utilize my time more.. have a more defined direction in life...  I should not live with an attitude "live to exist" ... I should strive for a more meaningful life....   Since my passion has already been trading, this is something I should work hard on.  I always have a desire to connect with likeminded people, sharing ideas but somehow i find it very difficult to start.. After going through many account blowups, my personal perspective to the trading holy grail is "Mindfulness"...  I believe the chances of succeeding will be higher with a trained mind... going in with an empty state but yet again analyzing throughly..

A deeper question to myself...... I always associate "doing many things" to achieve a sense of direction in life but in fact it is just an illusion... It will just be a cycle where I will be attached to things.... The key to happiness is to discover more about myself and seek inner peace... I just need to focus and DO things I really like instead of trying to DO things which looks good..... 

My personal trading challenge

Its still very difficult for me to overcome my past mistakes.... I have been dwelling over it whenever I look at my portfolio.. I cant stop feeling regretful over my past actions... This might be also because of the immense pressure I am facing... I have been trading on borrowed money thus after encountering large losses, its more difficult for me to make the interest payments.

The rationale move is to stay calm and distract myself from the DESIRE to recoup but the "evil" thoughts have been fleeting on my mind.... trying to recoup losses as fast as possible but in meantime, not considering the potential losses... This is a mistake which I am always committing... A wrong mindset that leads to a whole vicious cycle triggered.... My perception of risk taking is skewed... My brain was always tuned to look at the profits... the gains but never one time, I consider the risk too... This might be because my brained is trained too long towards this direction so in order to fix it, it will definitely take much much longer.

My first challenge is to look positive in face of adversity.. Only by doing this, I might have a chance to tweak my mindset again... As i emphasize on my previous posts, for myself, its very difficult to "force" rules without understanding... I tend to break it whenever i try very hard to resist...... The harder I try to resist, the more I will break the rule..  I can give myself some comfort by thinking that my account is not totally blown out... Though 70% is lost but on the other hand, I still have 30% left so if I try hard enough and disciplined, I might still recoup the loss.... Also at same time, if I continue my old ways, gambling recklessly, i will lose everything and chances of recouping will be much much lower..

My trading situation is currently at EMERGENCY state where it requires immediate action.....I need to keep my foolish "GREED" in check...  Such emotions arise also due to occasional envy of other people doing better so most importantly, I need to train my mind..... A mind of contentment, virtuous is something I am striving for....

This is a very tough personal challenge due to my proneness to emotions but I believe theres hope as long as I practice mindfulness.. observing all my thoughts.. actions and etc.... analyze them and assess if theres better way to improve my "thinking".

Books

Brain

1) Buddha's Brain (Happiness, love & wisdom)
http://www.amazon.com/Buddhas-Brain-Practical-Neuroscience-Happiness/dp/1572246952

2) The Lucifer Effect
http://www.amazon.com/Lucifer-Effect-Understanding-Good-People/dp/0812974441



To read

http://www.amazon.com/Genealogy-Morals-Polemic-clarification-supplement/dp/0199537089

A tinge of regret but so what?

For the past few days, I have feel very regretful again on the large losses I have incurred on my trading account over the years. My portfolio has shed 70% on value and to bring back to break even, I will need to double my account more than two times.... A recap on how all this "mess" happens.... I have always took trading as a venue to dispel boredom... Whenever I felt bored, I will take big trades and if it turns out to be a loss, I will trade more, hoping to recoup my previous loss and if a loss happens again, I will tend to think in a skewed probability (thinking profit is coming soon after a loss where all events are actually independent of each)... This triggers the whole cycle of blind trading, with just greed in my mind... ignoring everything...

Whenever I felt sad, I used trading as a venue to vent my sadness too... to distract myself... trading very large amount to seek excitement. Its very similar to gambling or maybe its exactly like gambling... I have never got away in any of my attempts.... Though I have gained a lot from my risky trading ways but its never enough.. I will take larger positions... Larger and larger and for every loss I incur again, I will take more risk to recoup so needless to say, its just a matter of time I lose everything..... I have never genuinely took any efforts to curb myself from gambling... Despite reminding myself not to fall to the same vicious cycle again, I can't seem to do it.... I have tried very hard to resist but the harder I try, the more Im falling to the same trap..

There is always pain from trading but suffering might be optional.... Its the reaction towards the event that caused most problems.... Using my example as illustration, its my ego and greed that caused me to behave irrationally.  Its my desire to "take revenge on my loss" that leads to more pain, triggering a vicious cycle... I realized taking a trade with the wrong intention is very harmful to my own mind regardless the outcome is.... Even if I manage to take a profit and recoup all my previous losses, I am already at a disadvantage. My mindset is totally wrong.. corrupted with the wrong values and its just a matter of time before it bites me again...

I am really regretful of my actions but I am fully aware the past cant be changed... On a positive note, I really learn a lot from this painful and expensive experience.. I discover how emotional I can get and how also how foolish I am.... Regrets with all the past negative emotions will only hinder me from recovering so I really need to get over it and take small steps to achieve a virtue trading mindset...

a) Gambling Free >> Shouldnt take trading as a mode of entertainment to seek excitement..
b) Suffer Free > Pain is inevitable but my reaction towards it is the most important (i.e never revenge trade or either with purpose of just recouping)
c) Trading with an empty mind, expecting nothing out of it.....Its the detachment that kills me.... The desire >> greed and everything...

One Year Older

I am one year older but I have not progressed much in terms of trading and neither got any wiser.... On looking back over the year, I was not trading.. I was mainly gambling and this results in incurring significant losses.. I was transformed to a compulsive gambler.... I was stressed, nervous and my mood was very dependent on my trading.... My mind was held prison....being controlled by some kind of evil...

Somehow, one day, I chanced on a book about mind/brain... I read it and being curious, I slowly dwell more into this topic from various sources and finally I made some progression and attained some "peace".... In my past few years, I always wish for money for my birthday... (i.e being a millionaire... billionaire... sort of it) but this year, I do not have any "firm" wishes.. I have been living in an "unconscious state" for most of my life....  Taking trading as illustration.... I have making many trades over the past year, with most made with the intention of becoming rich in a short time.... On observing now, I have already stepped into the game on a wrong foot... I am trying to recall the past states of my mind on the trades I made.. I think I am suffering "a sort of illusion" thinking my chances of winning is higher after a string of losses when in fact, they arent dependent at all.. My desire leads me to huge disappointments, causing me large void on my mind... Anger, greed, fear, hope all slightly starting to creep up but its kind of a vicious cycle.... I can't get my eyes off the market (though its clearly dosent matter if I look or not once trade is opened) When the outcome is deviating away from my expected outcome, all of the above emotions are magnified, resulting me in a mode of frustration... The result is kind of expected every time.. It will usually lead to account blow up... No matter how hard I try to resist, I still cant get over it last time.. I will still deposit more money.. with the beginning trading conservatively but gradually, I will take more risk.. cycle repeats again and eventually like I mentioned earlier... account blow up..

Things start to improve when I don't resist my thoughts.. I observe them and start to do some deep thinking... to find out the meaning and rather than, enforcing rules on myself... The holy grail for trading in my own opinion is our mind.... I am not saying the methods and techniques are useless but rather, I think without a strong mind, it is difficult to earn in this profession... Many times, I am just blinded by my own hopes/expectations, creating illusions...

Instead of pursuing riches, I seek in the journey to live in a more "awakened" life.... observing my own thoughts to live a life of virtue (Gratitude, empathy  contentment) ... Happiness can be in the simplest form.... It is the avoidance of unhappiness but once I have strong desires, attaching strongly to a certain thing, unhappiness will definitely happen as nothing is permanent... Living in the present is important as everyday is a blessing.. a gift..... Trading is my passion as I enjoy the challenges it present and also at the same time, training my mind to be stronger...  Patience, contentment and also at same time, opportunity to observe the devil in me, creeping out....

My obversations from trading (7 Nov 2012)

I have taken a trade yesterday, making a short trade at the support level. This decision is made based on 2 factors, primarily the overall trend going down and also the price action showing theres "heavy resistance", indicating limited upside movement. I have drawn "possible reversal areas" on chart and my stop was on the next resistance level and my profit target is set at the next support level..... I have set my entry level at the candle top (limit order) and soon it was opened.

On entering the trade, the currency (EUR/USD) rallied against my position and soon, I was stopped out... It was a huge reversal, where a pin bar candle was formed at support... I broke my own rules again, taking an opposite side of trade (long), larger position and averaging down 1 time... Though the trade turned out to be in my favor (profit) but looking from another angle, I lose to myself again...

There is a slight difference from this time as compared to last few times... Though I broke the rules  again, my intention was kind of different.... I feel like I am not so "desperate" in recouping but this might be attributed to 2 reasons.. 1) The amount was not significant enough for me to act against my mind or being desperate.. 2) I don't mind losing the amount I placed for my new trade in my attempt to "recoup".. Having said that, it might be also possible that I am "confident" in my trade thus I increase my position...

I think the former is more likely because it seems that this decision was made after seeing my account depleting and also at same time, taking consecutive losses.. The main thoughts which were fleeting in my mind after seeing my trade getting stopped out so soon are as follow :

- Upset about a loss again . Not monetary but rather more of ego problem (being wrong consecutively)
- Feeling a "NEED"  to be correct.... also at same time want to recoup the recent loss incurred
- Impatient.... thinking that the next trade will be more likely to turn up as a win/profit when the outcome isn't any dependent on each other..

As above, all shares a common denominator.... Desire... (Expecting a certain outcome) ..  They are dangerous because if the actual result isn't aligned with my expectations, it causes a void in my mind.
It is very powerful as it will trigger greed, fear and hope.. Everything.

This will be a vicious cycle, constantly inflicting pain/unhappiness... The only way to break it is to trade on my own analysis with an empty mind (not having any expectation).. going with the flow and take each and every trades as independent from each other.

Managing Expectations (Part 1)

These past few days, I have been training my mind and things seem to be improving.. I am no longer so impulsive or attached to the outcome of my trades.. I took trades base on my own analysis and after that , I try to observe my thoughts closely.. I am not trying to resist the thoughts as it will be more counter productive.... What I am trying to do here is to observe and let it go past.. without any desire to curb it or anything... The ultimate aim is to empty the mind and trade the flow without having any expectations.

By having an expectation, I desire/crave for an outcome and if the outcome does not turn out to be what I like, I will feel a sort of anger/emptiness in myself.. I used to revenge trade for my losses because it all lies with my expectation for a profit so whenever trade going against my favor, I will just cost average till it turns to a profit.. 60% of the time I will go unscathed but the remaining 40%, I crashed out and blow my own account..

This is the danger of having hope/expectation.. Trading is simliar to the real world.. Many variables are not within our control..... Its just an illusion thinking we are in control but in fact it is never the case but one thing that can be achieved is to fine-tune my mindset... To trade effectively (based on the present rather than bias formed from mind), emotional baggage needs to be dropped from the mind to make it "lighter"....

Most of the cases, the underlying obstacle is within my own fear, greed and ego... Ego comes from the fact of emphasizing on "ME"...  like I know a lot... this trade will never be wrong and I do not want to have any losses.. Theres are many more examples... Fear stems from a certain desire...... Like I fear of my account getting blown out or trades turning out to a loss and all this fear comes because I am EXPECTING something.. I am desiring to earn LOTS of money thus the fear so its kind of related to GREED.. They are inter-dependent....

Though its ironic but I think the amount of money made is not an accurate indication of good trading but rather, I think good trading is more on virtues.... Trading with good virtues is more important as this is the only thing which can bring stabilization to the mind, leading to a higher possibility of a more consistent result.

Apologizing

This post has no direct links to trading as perse but somehow, I find it relevant to my pursuit of a enlightened mind which somehow will have an impact on my trading.. It starts from a small incident where I raised my voice to my dad today for some small incident.... This is due to my own built up frustration over some matters and when the words struck the chord in my brain, I just lost control on myself... I know it is pretty unfair for my dad as he dosent know much... On my perspective, my dad is in the wrong but looking on a bigger picture, since he dosent know much, I should not just vent my frustration on him.

Thoughts of apologizing has been flowing in my mind but pride has stopped me from doing so..... Its kind of weird because I think its of embarrassing to admit my fault or even handing the power of control to the receiver of apology..  Why so? I dont want to be laughed at, or either let the receiver gaining an "upper hand"...  This is because of self ego.. self centered...

On deeper observation on my own thoughts, I realized its v wrong so I decided to apologize.. I question myself on all thoughts... like "why do I fear apologizing" >>>> "Why I am self centered and fear of being embarrassed >>> "Why am I afraid of being judged"....  I do not want to be slave of my mind... giving me illusions or misconceptions (i.eonly the weak apologize)... I am just too focused on "myself"..  I am just afraid of how the opposite party view me but is that important?

Thinking from another perspective, my dad who is so nice to me and loves me so much , definitely dosent deserve this from me so he needs this apology to allow his mindset to return to equilibrium else it will just "unbalance" everything.....  Eventually, I apologized... Though its hard to write the message but I am so glad I did so because it makes the whole situation better...

Humility and gratitude are the main forces, guiding me to make the apology.. Pride enslaves us to constantly strive for the favor of others as though they were our judge. The more pride I have, the more ironic it is because it just shows how dependent I am on the favor of others.

We expect others to try to make us happy, to go out of their way to give us what we want. This is not why other people exist. When we let go of these expectations, we accept people for who they are, and learn to appreciate their uniqueness.

My trading Journey

I have been plagued by my own emotions for my trading...... mainly greed , ego and etc....  Over the past few years, I have been making the same mistakes again and again.. Well, I consider the actions as mistakes because they are mainly dictated by my own greed or personal ego so regardless the outcome (profit or loss), they are just destabilizing my mind. I never ever focus on the process itself (trading) but rather, I put more emphasis on the outcome which is something thats not within my own control.. My mind is always misaligned ..... I have expectations.....  I expect something to happen when most of the times, it is just delusional... Sometimes, I might just get lucky.... the outcome turns out as expected but at the same time when it isnt coming out as expected, my mind got tilted.. I got emotional... Greed ego took over me... I was wired to think that all trades will turn out profitable so I make more emotional trade (i.e desire to recoup) everything.. Again sometimes, I might turn out lucky but when outcome isnt what I desire, I repeat the process until I lose everything.... I was more like trading like an addict... 

Whenever my account got blown out, I always promised myself not to repeat the same mistake, trying as hard as possible to suppress my emotions but without fail, same things happen again.... I come upon a realization...... Suppressing without understanding will just lead to more pain and as a result, it won't help in my trading at all. Similarly, coming up rules to enforce discipline without understanding of own mind will just lead to me breaking the rules again.... With this realization, I start to take on the journey to understand my mind more... to go with the flow.... to understand the root of greed or any emotions that pop up in my mind and try to rewire my brain...

To trade efficiently, I know I need to follow the flow as much as possible and not letting my mind (imaginations) clouding me..   I have been trying to learn more about my mind to stabilize it..... I am trying to think along the direction... reasoning many of my problems..... like greed, desire, fear, ego.....
My soul was "damaged".... I never found peace in mind thus no matter how much I suppress, it only bring more to my suffering. The reason why I say my soul was damaged is because I am plagued by greed, ego, desires....... Desires lead to craving and craving leads me to focus heavily on the outcome... results... Like life, everything goes in cycle... It is pretty much self inflicting.... Heavy focus on outcome just lead my mind to be programmed in a way to think that any loss is a failure but in trading, its not this case.... Its the aftermath that deals the most damage to me... Revenge and etc....

Trading is the best experiment to train my mind as it involves all the possible emotion... fear, anger, greed , hope, sadness, disappointment and everything..... Trading has brought me stress and pain but all this is because my mind was not stabilized.. I believed a trained mind wil reduce stress or pain to zero... Trading is pretty much like life..... to be in the moment without letting past/future affecting me....  living in the moment.....

I have never had such thought till now... My mind is in a more awaked mode now but I know seeking enligtenment is a long journey.... It cant be accomplished overnight...... It takes lots of effort and consciousness and I will make use of this space to jot down my thoughts so that it can be used as a reference in the future...