Reflections for 2015
In my whole trading experience, I’d say 2015 was the most difficult. Though there were many high fliers throughout the year, (mostly speculative names) most of the big caps, index names, and fundamental names just sucked. In this year, we saw how previously deemed “alpha names” just died down in liquidity and sold off fast at extremely low levels, this is a big pre-cursor for what’s about to come to us. If you’ve been following this blog, my stance since Oct-Nov has been firm– 2016 onwards the market will continue to be punishing. And now we’re here… breaking down of that 6600 level.
Performance
Performance wise, 2015 is my 2nd best year. 2014 was my best year %, but I consider 2015, more valuable and memorable, because the lessons it taught me are really priceless. Back then, I thought I was just lucky finding high fliers, and outliers. Initially, my first notion was if you’d be making consistent 30-50% year on year that would be great already (and yes it is). But then upon further reflection, I saw that I could challenge myself further. I set myself to at least double my money every year.
Difficult task, but I dedicated myself to it, either way even if I missed 100%, I knew I’d be near that all the time, if I really put my heart to it. Even with this difficult year, I’m glad I managed to prove to myself that hey it’s fucking possible to be consistent on a high goal as long as you prep yourself to perform in a high level as well.
The Most Important Aspects
This is where I realized how valuable
Patience and Discipline is. No matter the knowledge in indicators and systems, a person’s
experience and psychology plays a big part in
executing in dire times like this. Bulk of the year, I was just sitting in cash. I only played in high probability moments and plays. I was
trading ruthlessly, I knew how shitty the market was soon gonna become so I tried to be as
accurate, and as
nimble as I could.
Most of the time, when my system was giving me warning signs, I had zero-exposure in the market. This lead me to outperform, avoid down-swings, and ride outliers. I also set in my mind that I’m in no rush of making money. I only take what the market gives me. Though I have a high goal, I am not pressured with the amounts and the targets, my only real focus is on the process, with perpetual questions like these embedded on my head:
- Am I following my system?
- Are the probabilities on my side?
- Is the trade worth taking?
- How is the overall market health?
- How can I exit this play?
- Am I forcing myself or am I just going with the flow of the market?
Challenges and Lessons
2015 has also been the first year where I started to encounter liquidity problems. Since I had an increase in my managed funds (clients), the size thing was a big challenge in an environment like this. And it is a very great lesson for me, there were many instances where I did not follow my cut loss plans because I was hesitating due to the liquidity, little did I know how fast some plays fell down ‘due to lack of liquidity’.
This is an imminent trait in most bear markets, weak small caps are the first one to perish. I realized that in the future there should be no exceptions, I took some unnecessary hits this year just because I wasn’t disciplined enough to take the pain early on. But it’s all good, I still managed to survive, and those lessons will be remembered forever.
Hello 2016
2016 will be a killer year. A killer of those who were invested at the high levels with no cut losses. I expect chaos, but it’s all cool when you’re all in cash. As usual there will be profitable bounces in these critical moments, but we should always remember that the game and environment has changed.. 2015 was probably just an appetizer.
