Wednesday, December 17, 2014

Trading and Zen

Don't worry. I am not a bleeding heart so no proselytising from me!

For newer readers, I am agnostic.

However, I do use Zen as my spiritual and philosophical anchor. It's the closest metaphysics I can find that's has the least conflict with Science.

I'm into verification that sort of thing...

This post is not about sharing how to apply Zen into your trading. For that, you can easily search under Google and many others (bloggers/traders) who have already done so.

I shall instead share how trading has helped me in my understanding of Zen, and in turn, myself.

Do we want too see the truth?

For some of us trading for some years, we can see this phenomenon quite often: 

Entering a good trade yet lost money; and winning money with a bad trade.

Yet there are traders who will never admit to it or are puzzled how can it be?

Seeing and admitting the truth takes courage.   

With trading, the feedback is a lot quicker since we practice mark-to-market every closing. 

In real life, we do have an "inkling" how the world works, where we fit into this pecking order, and how we are all different from one another. Yet we tell little lies and make up fantasies not only to ourselves, we tell them to our children and share it with other people!?

We do this as it feels comfortable when more people believe the same shit we do. 

That's why we have people eager to share with others how easy it is to make money without realising they were already a "victim" of a financial scam.... Or to recruit you into MLM, or cell group, or political party. 

By applying the trading process of constant reviews, re-evaluations, and reflections - it helps me see the world as it is; not what I wished it to be.  

How do we know we know?

In school, we do it through tests and exams. 

That was easy!

How do we know we can do it?

Professionals do it via articleships or housemanships and acceptance by professional bodies. You don't call yourself a practicing lawyer or registered accountant just by having a relevant degree do we?

There are quite a few engineers in our financial blogosphere. Many have engineering degrees, but how many are certified professional engineers? 

Outward manifestation of Zen

Mindfulness, living in the here and now, no mind - all wonderful concepts to show off and pretend I know.

But when I started trading... Shit! 

Knowing and doing are not the same!!!

That's where I go, "Jared, you are such a fraud!"

I don't make money with knowledge (unless I teach); I make money with execution.

In trading, it's all about execution - entries and exits. 

If I can't tell whether I've made a good trade or bad trade (what has profit or loss got to do with it?) what's the point with Zen again?

Sunday, December 14, 2014

A Good Year, A Great Trading Year

Last year, I mentioned to coconut in the comments that I doubled my futures trading account for 2013.

This year 2014, I tripled it.

Yup, for those good in math, you will immediately realise I've got a 6 bagger in 2 years.

A small speculative trading account has turned into a respectable size. (I only wished my investment account had the same performance!)

Did I planned for it? Was it the result of my goal setting?

If you are asking these questions, you may want to pause and reflect got logic or not?

I can think of 2 possible explanations:

1.  Luck.

There are losing streaks, and there are winning streaks. I could just happen to be in a winning streak now. Better enjoy it while it last!

2.  Sharpening the saw

My secondary 2 Geography teacher Mdm Foo motivated us "slower" students by saying:

"Others study 10 minutes they understand, you need 7 hours to understand - so be it! Once you understand, there's no difference."

I never doubled or tripled my trading account when I had a day job. I guess I am not as brilliant as those who just spend 10 minutes a day can make money trading part-time already...

Maybe spending more time in improving my trading craftsmanshiip - the hands on kind as in improving my entries and exits - finally paid off? 

You "hao lian" show-off lah!

Maybe. Mouth in your face, you can say whatever you want.

For the past 3 years, when strangers ask what I do, I would say I am taking a sabbatical from full time work. 

From today onwards, I'll say I am a Trader.

I trade to achieve; I invest in order not to lose.


Monday, December 8, 2014

To see a friend get Rich

“There is nothing so disturbing to one’s well-being and judgment as to see a friend get rich”

Economic historian Charles P. Kindleberger (1910-2003) wrote in Manias, Panics and Crashes: A History of Financial Crises (1978 and subsequent editions):

Don't pretend!

Very true right?

That's why you see people who many years have swore property investing is not their cup of tea "capitulates" just in time to get themselves an investment property right at the top of the property cycle...

It's hard to stick with your convictions when all you see are colleagues and relatives who have made hundreds of thousands in just a few years.

Same for those who wished they had left their money in CPF or fixed deposit accounts and not invested in REITs or other income stocks. 

The 8% yield on income stocks may look a lot sexier than 2.5%, but if you are nursing a 20% plus capital loss... All of sudden, purchasing power erosion by inflation is a lot less scarier than "your own worst enemy".

External financial missteps are painful, but they don't destroy the soul.  

The more insidious ones are those of envy and jealousy.

We don't need to look far.

We just have to look at the person in the mirror.


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