This correction/downturn will undoubtedly go down as my largest loss in my years of trading. At the moment, I am still holding a couple of paper losses on top of the realized losses. At the point of writing, I’m a bit disheartened at how I approached things at the moment because it seems that my cost-control mechanism has spiraled out of control and the worst thing is that some of it is unforced. I shall now try to rewind back in time to think of what could have possibly gone wrong. Event 1: Weeks before the fed cut. During this period, it has gone into a consolidation. At that point of time, many, including me, felt that it is just a normal consolidation. It has triggered some of the cut loss for the counters, but I sold most of them. In practice: It turned out to be spot on as those counters eventually hit the trigger. However, I feel I should have stuck to my principles. This would reduce my profits, but it’s ok. Event 2: Days before the fed cut. During this period, I have thought of a longer term approach for my trading system. Ideally, the position will be divided into portions of different time frames, with approximately 1/3 based on the longer trend while the short term is based on shorter trading positions. In practice: It turned out to be an outlet for me to run for cover. You see, 1/3 long term, 2/3 trading. But during this period, things turned a bit sour, and I subconsciously decided to allocate it to the longer term perspective. I usually see lots of potential reversals, but have been faked most of the time. In the end, I held it all the way down. My handling of the trading position was downright lousy and this directly cost me dear. Furthermore, I just conveniently pushed my longer trading position to be equivalent to a pillow stock, which is bullshit. Longer trading positions are still trading positions. There should be cut losses and treated like the shorter term, with the difference being that it is on a longer time frame. What I did was naïve and it makes me feel downright disgusted about myself. Lessons learnt: I have to admit that the introduction of the new system got me confused as I thought that long term trading = pillow stock treatment, which is crap. The system flaw that I thought I should mention is that I should not just take a primary position first. This isn’t right considering that my positions are determined by technicals (unlike TatHong, which is analyzed by my bro). Secondly, I have making judgments on my trades. I believed that QDII would be beneficial for S-stocks, I believed that US recession would be a good opportunity for Asia as a whole. I had so many beliefs and I know that it is all wrong because it has affected the way I trade. I lost my mechanical approach and hung on those beliefs. I lost the plot. In the past, I would buy the shares based on technical data, then looked at forums for “guidance”. But now, I’m not as decisive as before. The fear to realize losses is present now and I must rectify it. I have decided to put this whole post in RED and BOLD as I am extremely pissed and humiliated by my own actions. It is appalling that my losses are worse than that of the subprime crisis and February correction when I have more time to deal with the correction at the moment. It is appalling that I held on to hopes that market will reverse. It is also appalling that I tried to use technicals to predict a reversal, which is something that I never believed in. You see, I worked against my fundamental blocks of my system. And is apparent that this sort of ill discipline is much worse than all the mistakes I’ve made in the past few corrections. I will reflect upon it and I MUST ENSURE that this is the last time that I make such an error. Tomorrow will be another day full of opportunities and hope I can close this chapter of poor trading. |
