Category Archives: Imbang Klase’s Adventures
What to do when you LOSE Php 1,000,000 in TRADING.
What’s it like to LOSE 1,000,000 PESOS?
Ka-rumaldumal (tama ba spelling? haha)
When you reach a certain point of size in your trading, the swings becomes naturally bigger. One of the main lessons I’ve had back in 2015 was that how you handled liquidity was definitely important. My specialty has always been about trading small cap/third liner stocks, that’s where I’m able to make a killing. That worked for my personal account, back then, but when I started managing funds the mechanics of the game began to change.
How the heck did I lose Php 1,000,000?
So how did I experience my first 7-digit down swing?
This was during 2015, I was positioned heavily on a single stock for my client’s fund, it was also my first time to handle such significant amount. It was kind of my conviction call back then. My position was nearly around X0,000,000 in one stock (around 8 digits)
The market was suddenly crashing, when the index went down, most of the small cap stocks dried up, they were falling fast. At first, there were enough bids to cover my position, there were 500k to 1m shares at the bids…
However, because of my size, I was hesitant to trim/cut my position because I was thinking “shit ako mag-papabagsak nitong stock na to, whole size ko na yung buong support. Kapag binagsakan ko mamamatay tong stock na to”.
I decided to hold even if initial support levels were broken and even if my stops were hit.
Earlier I tried to trim around 1/4 of my position, but the bulk of it was still there. I was too late. Because of my reluctance to cut and trim, what should’ve been an easy 3 to 5% loss floated to around 10%-20%. My position reflected around Php 1,000,000+ loss during that time.
What did I do?
During that time, I felt that the index was really toppish. It couldn’t recover back above 7800+. To protect myself from further downside, I just decided to cut my whole position and live to fight another day.
I sold every single share, I forgot the exact amount, but when I saw the stock recovering a bit, and there were big bids forming I sold it all off and I took the Php 1,000,000+ hit. Sarap noh?
What I did next.
Now you may be thinking: “ay natalo pala ng Php 1,000,000 to, haha bano!”
But in my mind, because I was already handling a bigger portfolio, it was expected that the swings would also be bigger.
This experience reminded me during my first year of trading. When I reached my first million, I became overconfident, I went all in, then the market started crashing, I took a 100k+ loss (approx 10% of what I was trading back then)
This Php 1,000,000 loss is the same experience. Except everything is much BIGGER, and the feeling was exponentially more challenging as well. But on a percentage standpoint it wasn’t too bad, that was just roughly around 10-15%+ of my position.
After taking the biggest hit of my life. Of course I was stunned, but I always had the attitude of finding the solution to improve myself, regardless of the challenge.
I went into retrospective mode. I’ll share to you the thought process.
Here you basically highlight what you did right, what you did wrong, and how you can do better for the next time. You must be as objective as possible. Eat your ego and pride and all your feelings.You must identify the root causes of your error so that you can minimize them and improve in for the future. If you want to be really good at your craft you must be your first critic. Acknowledging our weakness is the first path to STRENGTH.
So here we go:
1) Where did I go wrong:
– Don’t be rooted too much in your opinions. My specialty is being a technical trader, this time I tried to convince myself with the fundamentals of the stock. I became attached to my conviction and opinion.
– Too aggressive. Since this was my first time to manage more than 8 digits, I should’ve been more careful. Perhaps it would’ve been better if I took my positioning more carefully, since this was a totally different ball game.
– Not following my risk controls. My system has its warning signs in place, but because of my judgment to hold off instead of to just follow my rules, this costed me a lot.
2) What I did right:
– Resilience. Even if Php 1,000,000 was a very big amount, specially in my case during 2015. I didn’t lose myself, I didn’t cry, I didn’t quit. I decided to take responsibility for my trade. Regardless if I was a bit late, I ate my pride and corrected my mistake.
– A mistake will only stay a mistake if you do not correct it. After cutting my loss, the stock went falling by another 25%, and it just became stagnant for around 3 years. IF I had just waited and decided to be “an investor” on it, then I would’ve still been at a loss even after 3 years+. Objectively, I was able to make the right decision, even if it was late.
– Balance (No ALL IN). Another thing that helped me correct my mistake was because I wasn’t all in. Even if the position was significant, that wasn’t the whole amount. That made everything easier, because relatively the damage wasn’t that bad considering the WHOLE size of portfolios that I was managing.
3) What I could improve:
– FOLLOW YOUR RULES. I knew what I had to do, but because of my emotions and lack of experience during that time, I wasn’t able to execute.
– REFINE YOUR STRATEGY. I was doing well and beating the markets consistently using what I was good at, but because of my bigger port due to my managed accounts, I tried to experiment by adding fundamental metrics to add to my conviction. This isn’t necessarily bad, but because I was in a mixed-up stage in a very challenging market environment, I lost touch of my execution and discipline as a trader.
– RISK MANAGEMENT. Don’t argue with the market, respect your rules and systems… If you are seeing warning signs, then lighten up your position. It’s easier to buy back than to become IPIT.
Picking yourself up.
Coming from that big loss of Php 1,000,000 was it the end for me? Nah….
It is all part of the game, and I considered it as part of my process to transcend to higher levels as a trader. After cleaning my port, I cleansed my mind and started to work on how to get back and become better.
It’s about refining your system and process as a trader. After doing my retrospection and refinement. I was able to develop better strategies and rules so that next time I wouldn’t be taking unnecessary hits, and so that I could play the higher stakes games more effectively.
An example of a rule I follow is
“never let any single trade dictate the fate of your whole portfolio.”
Meaning, I never go all-in, or if ever I’d do that in the future I’d make sure that I’ll be x5 tighter in my risk management.
Also, since I was aiming to manage bigger amounts in the future, I was also preparing myself mentally on how to handle bigger swings. Example, if you were managing Php 50m, a 10% swing would be instant -5m, a 5% swing would be -2.5m — if my brain and system couldn’t handle those amounts then I would never survive playing at the bigger leagues.
I knew that this was all part of the process.
How did that account perform after?
Since I went all cash, I saved my self from further downside, from 7400-7800, up to 6100, I avoided another 15-20%+ drop. I didn’t trade for a few months. I was really taking my time and being patient.
During this whole period, I was just observing the market, and preparing myself to get back in the game. I was studying and improving my system during the whole step back period.
When the market bottomed 6100 then gave confirmation around 6400-6500+, I instantly fully allocated my portfolio. These were strong signals on my part, and I knew that I’d be more responsible now with managing my risks. Soon after, the portfolio was able to recover and I ended up positive by around 20-30%
While the index was bottoming out and had a strong rally to 8000, the stock which I cut, did nothing.
Good thing I chose to correct my wrong. It paid off.
For me these moments where you lose big, are the moments where you are given the opportunity to truly become a more SOLID trader. All the market wizards that I’ve read about come from losing moments, which they conquer and turn into stepping stones.
When I first got 1m in 2012, I lost 100k, refined myself, and never looked back.
When I first handled 8 digits in 2015, I lost Php 1,000,000, I de-constructed myself and worked 10x better and now I’ve made multiples past that loss and I can now handle myself better at these higher levels.
It’s part of the ball game. As your portfolio size becomes bigger so does the difficulty of the game. In global markets, handling 1 Billion pesos is no problem, that’s just 20m USD and you can go in and out in an instant without needing to think about the liquidity.
In the Philippines, it’s a very different case. Instead of just thinking about where to buy and sell, you also have to think HOW to buy and sell..
Example. HOW do I get a 8-digit position in a basura stock? that’s a different challenge on its own.
At the end of the day, it all boils down to how your Psychology – System – Risk Management comes into synergy, that’s how your execution is defined.
If you want to reach a high level at trading, you need to be able to constantly admit mistakes, and correct them. You must be willing to improve all aspects of your game 24/8
I have no problem sharing to you these losses of mine, because I’m really proud of them. They have been my greatest turning point and if I didn’t experience them, I wouldn’t have grown exponentially as a trader.
You see me now comfortably trading huge amounts, that’s because I emphasized on my foundation early on as a trader.
I hope that this blog will help all of those who are trying to recover from their losses. You can do it! Past is past, your fate is dictated by what you do in the present 🙂
MY FIRST JACKPOT TRADE: $CALATA
Been a long time since I last posted here. I’ll share to you one of my biggest trades as a beginner — one that I was lucky to execute despite shitty internet connection.
Back then, I didn’t really have the capital. I successfully traded 25k++ but I knew i needed to boost my capital if I wanted to make trading seriously impact my life. I raised money from Investors, so that I could trade a more significant account. It was my 4th month of trading in April 2012, where I was able to raise around Php 600k.
I was still learning the ropes, I was reading lots of books but I didn’t have a well-defined system yet. My 600k became as high as 666k but then I was on vacation and I got complacent trading illiquid stocks, my portfolio went crashing to around 570k.
Then this IPO came. Calata.
(I know many of you are pissed, I understand, but please spare me from your hatred of him, I am sharing this story for learning purposes)
So-called youngest billionaire. Flashy dude, looking like a hybrid between Dragon Ball and Twilight, plus the fact that he had some pretty interesting Advisors. He also came from the same alma matter as me. I thought that there might be a play in $CAL.
I just watched the stock trade from 7 to 9 to 11 then.. when it was trading at 13. I just realized that there was indeed something happening with the stock. Consistently fat bids being posted, very stable price action. The intraday charts looked like a stairway. Sabi ko sa sarili ko… “Sige.. banatan natin to”, I bought around 380k Php worth at around 13.00+
I watched for the next 2 days, and I was so happy when my portfolio was showing around 70%+ in profits when the price hit 22+, my portfolio had a profit of 260k++, I was just 6 months into trading back then. I was so happy. But I already felt that the top was near, the manipulators seemed to have a hard time to push the stock up. I didn’t have any solid technical rules back then, it was just purely my gut.
Then the next freakin day. SHIT Happened. When I woke up our wifi at home got busted, data was also weak at our house. $CAL was trading at 22+ but I already knew that it was weakening.. suddenly it broke below 20, I couldn’t sell. My platform wasn’t loading, internet was bad. After a few minutes it broke down 18… then 17.
I was cursing my internet provider: “F@#$@#%!!! In@!!” That was my first big trade as a beginner 260k php disappeared. From 70% my profits dwindled to around Php 20k+ when the stock was trading at 16+, I was just desperate to take any profit I had.
When the platform loaded, it asked me to confirm my password, but when I was about to press the OK button already… something happened. One of the active brokers that pushed the stock was buying at 15, the stock made a support there. I gained hope. I held and just watched, like magic, the stock recovered.
The next day I was already on the watch. It was trying the same ‘chunky bid moves’ but it was becoming really heavy, it failed to break above 24+. When 23.95 got sold down, I instantly sold everything at 23.80s+. The stock collapsed and closed at 12.88 at the end of that day.
I was lucky to be able to sell and secure my profits almost at the top. I made 280k+ php. This was the first trade that really boosted my port.
Did I just get lucky?
Perhaps. But in those moments, I was also able to prove to myself that I had a certain level of gut feel for the market. I knew the top was nearing, and I was really planning to sell on that day. It was just that there was a blackswan moment.
What did I learn?
In case the stock didn’t recover back to its highs, so what? I just lost profits, and of course, I couldn’t have done anything about it. The internet connection being crappy was beyond my control.
When these kinds of things happen to you, I understand that you’ll also be cursing… but then when you calm down, you’ll realize… “Ok. What next?”
All your anger and rants won’t do anything to improve the situation. Pick yourself up and strategize your next move.
Life will always throw you shit. But remember, one trade shouldn’t define you. Focus on what you can control.
You may have lost one opportunity, but the market will always provide you with a lot more in the future. Calm your self down, make yourself stronger, so that when the right moments come, you can pull the trigger perfectly.
Lastly, if you are playing the speculation game. Whatever happens, do not fall in love with a speculative stock. 80-90% of them would kill you at some point, if you choose to hold them forever.
Yes, there will be times that speculative stocks may recover and go back up, but I’ve seen too many situations like this where undisciplined investors/traders get trapped forever and lose hope in the market just because they didn’t protect themselves (via risk management, cutting losses, balancing allocations)
Always have a plan B, then have a plan Z. If all the shit happens in the world, what would you do to survive as a trader? When you can handle that, then that means you’re ready to trade at higher levels.
That’s it for this post. Hope you enjoyed. I’ll be focusing more this year.
Thank you for supporting Investagrams. We promise to bring more great things in our platform soon. 🙂
Imbang Klase Fund Management and Performance
Hi. I’m opening 3 slots for my fund management services.
Just a quick intro on myself. My real name is JC Bisnar. Full-time Trader. I’m a Licensed Stock Broker (Certified Securities Reprensentative) in DA Market Securities.
Imbang Klase is my blog / pseudo name in the trading community.
For those who are seriously interested please read my requirements at the end of this post.
Now why would you entrust your money to me?
I don’t do the usual sales talk that people in this industry practice just so they could get your money. Most in this fund management business over-promise and under-deliver.
Some will even tell you: “hey I made 600%+++ gains, I can triple your money sureball, make you a zillionaire. Let me handle your funds.”
Then after awhile poof. Ipit. Wasak. Deads.
I don’t do that shit. I take great pride in doing the right process and constantly improving as a trader year-after-year-after-year. I don’t trade for one-time jackpots, it’s all about consistency for me. I trade with relentless emphasis in risk management and I utilize strategies that give me a strong edge no matter what the market condition is.
I know talk is cheap, so I’ll just let my experiences and performance do the talking.
Here’s a record of one of my first portfolio snaps during my first year in trading.
This was in 2012. I always visualized trading as a means to achieve financial freedom, but how can a kid start with a significant port immediately? Early on I was already tapping into investors money as leverage–that’s how I started. Fund management is not a new thing to me. Basically since day 1, I was already handling other people’s money–this is how I built myself.
How did I progress as a trader after 5 years?
Here are some sample results
Jan 26, 2017
Jan 27, 2017
Every year I just do my best to trade and beat the markets. That’s how I grew my portfolio and that’s how I make a living.
Besides trading for my own, I also manage the funds of my clients. Mainly, I handle the money of people who are busy with their main businesses/work.
Here’s a sample of my performance for a client that was with me for less than 2-years.
The client started somewhere around March 2015 with Php 1,000,000
This is the account now.
In less than 2 years, the portfolio is up by 60% now doing Php 1,600,000+. (If you qualify as a potential client I will gladly show you my un-shaded trading records)
Just to give insight–how did some of the best mutual funds perform during the same period?
Let’s use PhilEquity (perhaps the most consistent) fund in the Philippines as a benchmark.
Adding their performance for 2015 to 2017 you’d still be in the negative. Their 5 year growth rate pegged at 8%, 10 year growth rate pegged at 10%, not bad, but just steady.
Understandably, mutual funds have a bigger challenge because they mainly follow the PSEi as a benchmark. These mutual funds also go by the billions which makes it harder for them to go in and out.
These are some disadvantages that I do not have, because at any time I can choose whichever stocks are the strongest (even if they’re not part of the index) or I can go all cash in one snap should I sense danger coming.
My Trading Style
For my personal portfolio, I am really aggressive. I can play super speculative stocks, in big exposures and quick time frames. I mainly make a living trading for my own funds. I don’t chase after commissions. I make money when my clients make money, that is my focus.
That’s why hindi ako “hayok or atat” mag-trade pag para sa client. This allows me to emphasize on risk management and go patiently and conservatively every year. For example, when the market sucks I do not force my trades. There were some months in 2015 and 2016 where I was just mainly in cash (no stock positions).
My approach for clients is different–I focus on balancing performance and risk management. My main aim trading for my clients is to beat the PSEi and all mutual fund performances every year.
I make it a point to use a strategy that can be applied regardless of the size of the portfolio–kahit 1m o 100m pa yan I can use the same strategy and I’m still confident I can make money.
Probability wise, I expect myself to outperform 80% to 90% of the time, because this is what I’ve done since I’ve started as a trader. Though I continue to keep this streak I do not let myself become cocky and complacent. If you know me personally, you will know how seriously I take improving my discipline and my trading process every single day.
If ever I have a losing year, I make sure that downsides are controlled and in these scenarios that would most likely mean 95% of all other traders and funds probably lost money as well (unforeseen market crashes, surprise negative events, etc)
Why Do I Manage Other People’s Money?
You’re probably asking: “Why is he still managing other people’s funds if he says he is making a living out of his own trades?”
Besides the monetary gains, what I like about fund management is I’m able to meet great people. Besides being a trader, I am also an aspiring entrepreneur. I highly value and appreciate learning from people who are ten or even hundred steps ahead of me when it comes to business or in life in general.
This is a way for me to expand my knowledge and grow as an individual. Tulungan lang. I help my clients trek the markets and grow their portfolio, and they help me develop myself as an entrepreneur and as a human being.
My requirements are simple:
1. Minimum Investment 1m, Minimum holding period 1 year.
Why 1 year? Because I need enough time to maneuver in the market and find opportunities and I am looking for clients who will grow with me in the long run.
Also, the amount is not a hindrance for me. I can handle 1m or even 100m, I’d trade it almost the same way. I’ve been training myself to use strategies that can be employed regardless of the portfolio size.
For security–all accounts are under the client’s name and will be opened under DA Market Securities Inc. Meaning while I have the discretion to buy/sell, I cannot withdraw from your account.
2. IMPORTANT: Wag atat. Your allocated capital should be something that you can fully entrust to me.
I’ve had some clients who were impatient. 2015 the market was crashing, I was mostly in cash and not trading, they took their money out (with a loss around 2-3%, from commission cost and minor market swings) and when the market recovered wala na, their account was not in my hands anymore. While the clients who sticked with me for the whole year was able to ride the 20-30%++ rally.
The sample portfolio I showed you is a client who is approaching her 2nd year with me. I still haven’t took my profit share from her account (dahil di naman ako nag-mamadali sa pera and I prioritize rolling over the profits so the account will grow faster.)
Please understand that in trading it’s all about losing the least money when the market is in a down trend, and focusing aggressively when the market is strong. Hindi araw-araw may trades. I could make money in a year just by having 5 to 10 trades and that would be better than making 100 trades where your money is impulsively put into risk.
3. You must be involved in a business or a relevant field today. I like to deal with people who I can learn from, particularly Entrepreneurs, Industry leaders and Innovators. This is my main criteria.
4. Let me know about your background, what you do for a living, your past experiences in the stockmarket/investing and why you want to invest with me.
For those who are qualified and interested:
Please feel free to send me an email at firstname.lastname@example.org or PM me at my Facebook: https://www.facebook.com/jc.bisnar.1
If you pass as a client, we’ll set a meeting and I’ll discuss with you the terms.
Should you wish to find more information about me, you may browse through my website https://imbangklase.com/about/ and check out my FB page: https://www.facebook.com/ImbangKlase
The Market Will Always Be There–the question is: will you?
Sustainability first before anything.
It’s pointless to make millions due to luck, then lose it all out of kamikaze.
A lot of traders fall for this because they are so hungry to make that quick buck without really covering their base — going through the process and finding their system.
Some do find a system, but mid way they overrule the system when it encounters down sides. Meaning pag ‘na-ipit‘ or nag ‘kamali‘ they won’t cut loss. Once you give exceptions to the pain, you will make it a habit, and this habit often leads to the ‘death’ of many traders having the mindset “babawi rin yan, patulugin ko nalang muna“.
Luck doesn’t always save your ass in these kind of situations. I’ve seen veteran traders, those of around 10 years in experience, never make it back once they had a big hit with majority of their capital stuck just because of one undisciplined call.
Some of the most common reasons would be ‘OK lang may fundamentals naman eh’
Here’s a few names with so-called fundamentals that are still on a slump even after a few precious years.
The market will always be there, you just have to survive, and progress consistently. You cannot do that if 80-100% of your capital is stuck in a solid down-trending stock. In many situations it would take you 3 years (good case) to sometimes 7 to 10 years (reality case) before breaking even.
While there will always be a chance that some dead names will bounce overtime, take a look around how often (or I mean rare) that happens. Kalma lang tayo sa market, one step at a time.
Wag kang papasok ng walang protection. Baka pag-sisihan mo hijo.
This is where risk management, balanced port allocations, stop losses, and all the boring and ‘un-pleasurable’ aspects of trading comes in. They protect you from a lifetime of regrets.
Been a while since my last post here, I’ve been really busy, I’ll post more updates here soon.
God speed everyone 🙂
The ‘Secret’ to Trading?
So we start our trading journey.
First thing we look for are profitable strategies, systems, indicators and etc.
You embark on your journey finding the ‘Holy Grail’ of trading. You start studying Technical Analysis.
Some will find it too broad and confusing, so they ask for the guidance of mentors.
Then you see your idol, you replicate their strategy or style, but then some of us will still be on the unfortunate side, wondering–why am I still losing money?
I’ll spare you the time and the wonder.
Strategies, indicators, systems are all tools. These gives us an ‘idea’ when to buy/sell.
but of course, not all ideas have real value.
“Pare ganito yan kapag tumama sa 68.99%, bounce dyan chong”
“Kapag nag cross yang dalawang linya, 88 day at 69 day pwede yan buy signal yan”
“Ahhh most likely hindi na aakyat tong stock na to kasi nasa 5th wave ng kamatayan na to, wala tapos na olats na yan”
“Uy may malaking Tilapia pattern buy na yan malaki upside”
We see these ‘ideas’ everywhere, but how many of them are valid?
How do you know whether the idea really has value?
If I give you a strategy that looks really good and complex with all the colorful indicators and magic formulas, then I market it to different people and showcase the profitable trades. A lot of people would instantly believe. Seeing only the ‘upside’.
People will optimistically try the strategy or the reco thinking they have found the magic. Only to see it fail on tough times.
1) Because they didn’t really back test the strategy themselves, and they didn’t take the time to deeply understand the roots and logic of the method. Blindly following something often leads to lack of confidence and failure.
2) When you get spoon fed with a strategy, even if it really is effective, the execution and risk management still lies on the trader.
3) We all have different personalities and dispositions, not all have the right discipline and patience to wait for the signals.
4) Much worse maybe the strategy was just built upon luck and didn’t really have a statistical advantage. A lot of systems are based on superstition.
You see, it’s not much about the complexities and the specifics of the system that makes you successful.
“Rather, it is your understanding and connection with your system that enables you to translate ideas into profitable trades.”
People are always on the look for the ‘magic’ formula. Basic human nature, every one wants it easy. Everyone wants shortcuts.
They don’t realize that there is none, and the only magic there is… within yourself.
Even if we all trade the same strong system, we will still have different results. A lot of that can be attributed to the unique emotions, experience, and skills of each individual.
When you start to take things seriously, like try spending 2 years or more trading and studying all kinds of indicators and strategies– you will realize that a lot of things that are taught or believed by authors, traders, gurus can actually be omitted (disregarded).
So how do you know which ones do you need?
A strategy is only as good as the ‘statistical advantage‘ that it gives you.
Meaning, you need to verify how strong it is on a big sample size.
“Gaano ka ka-lupit sa span ng 1,000 trades?”
“What is the hit rate (%) of your system?”
Some systems and traders only look good on easy times.
Then they collapse when the hard times comes in.
Almost everyone makes money in bull markets.
Then everything resets again, and you’ll see some faces disappear when the bear makes a visit.
This is a natural cycle, people who don’t cover their bases often take a big hit when times get rough.
Trading is like a sport. You need to perform day-in, day-out. And just like sports, in order for you to get better, you need to keep practicing.
Look at all the best athletes and competitors in their respective fields, do you think they got there because they went the easy way?
Champions do not take shortcuts.
Let’s say two samurais fight.
Who would win — A master with a low-quality sword? or a beginner with the best sword in town?
By constant practice you will know whether the ‘weapon’ is indeed right for you.
You will only know how strong and effective a strategy is by going out there and trading it.
Once you’ve found the right system for you. Now the fun (or hard) part comes in.
Trading is a never ending journey of learning.
There is no perfection in this endeavor because we are all bound by one principle that you have to respect.
That is ‘uncertainty’.
The market has always been the same in the sense that it always ‘changes’
No matter how good you are, you will never know everything, you will always encounter mistakes.
The best traders are not perfect.
Rather, the best traders know what to make out of imperfection.
They focus on the things that they can control.
Your trading rules, patience, risk management are some of the key aspects.
They are able to follow their rules with discipline.
Everyone focuses on the upside.
The best traders ruthlessly focus on covering the downside.
Confident when right. Humble when proven wrong. Always eager to learn and improve.
Successful trading requires this certain balance.
There is no end game. The journey is the reward.
The real challenge in trading is not about finding profitable ‘methods’ or ‘strategies’ — these are everywhere, can be googled and can be replicated from other people specially if you have a keen eye.
The real challenge lies in mastering thyself. Even if you have all the seminars, trading books, mentors, learning modules in the world, you won’t be able to execute progressively if your trading mentality aka. ‘psyche’ is frail.
Your system is your weapon. A mere tool.
‘The sword is only as powerful as its master’
Personal Milestones and Trading Lessons From Ragnarok Online
Just recently, I’ve reached a personal milestone. But then, what happens when you reach so called goals in your port? Do you spend it out and party like hell? Not for me.
Somehow, I just blurt out a subtle “oh yeahhh”, treat my friends to some ramen, and then focus on the next trade.
but I guess that’s how it is when you set big goals and know you have a long way to go.
Trading for 5-years, I’ve never withdrew a significant amount in my port.
Why so? I’ll tell you.
Even if trading is all about being rich, I don’t really care much about the superficiality of ‘money‘.
Imagine you have Php 1,000,000 to burn, what would you spend it on?
a Car? Casino? Chicks? Parties? Gadgets? Clothes? Food? Video Games?
Most people in their 20s would probably have these in mind.
Your 1m would soon be gone, and the typical person would say “at least I enjoyed“.
Yeah sure, but then you have to go back striving again, and the cycle goes on.
Earn, burn, earn, and burn.
My motivation is quite different.
Even with all the perks of being a trader, I haven’t really splurged much. I believe you can enjoy the essence of life through simplicity.
I first had a feel of how powerful simplicity can be in a video game.
It was in the game ‘Ragnarok Online’, the first major online game published in the Philippines. There was a saying in that game that really struck me till now.
The saying goes…
Wala sa porma ang LAKAS.
It was true. In that game there were characters that looked cool and bought expensive ‘looking’ equipment in other words ‘ma-porma‘…
Yet they were weak in the inside. They were beaten by characters that looked simple, like this.
In-game value, the Angel Wings costed about 5m-10m zenny and the Sakkat (the vietnamese farmer hat) was only worth 200-300k zenny back when I was playing.
I saw tons of instances where supposedly ‘weak’ or ‘low-value’ looking characters were beating the crap out of cool looking, expensive avatars.
So how did that happen? What was the difference between them?
Pros focus on being good, not
looking good. They focus on developing their ‘core’
Builds (how you build your stats and skills)
Strategies (how you plan to use your build)
Execution (how you execute your strategies, how you play your character)
I took this principle seriously.
Realizing that the ‘surface’ was pretty much useless if the core is weak.
Even if your character looked simple on the outside, you could still dominate the game by having strong builds within.
Come to think of it, competitive video games have certain resemblances to trading.
People who never competed in games will think that this is a meager endeavor, but when you look at the top leagues, the prize money for many competitions today surpass the $1,000,000 mark.
Why? Besides that it’s entertaining gathering a big audience, it also requires great skill. Same goes with sports, poker, business and trading.
All of these endeavors require reflexive decision making, constant improvement, extreme focus, and intensity.
In trading you focus on these aspects to win the game.
System (Your strategy in buying / selling decisions)
Risk Management (How much you allocate per trade/stock, how you minimize damage and maximize returns)
Psyche (Your mental approach to trading–money, risk, volatility,etc)
Execution (How you apply your system, how you play the game)
Your success is defined by your performance–not by the noise you make, the number of followers you have, the extravagance you display, and the credentials you have.
I know of traders who wear slippers and shorts and look like normal people. Yet are BEASTS when it comes to the financial markets.
They probably make more money than those who come in suits everyday.
I was just 12-13 years old back then, but Ragnarok definitely taught me a lot. Up to this day, this principle is still on the back of my head…..
Uulitin ko lang dahil masarap sabihin.
Wala sa porma ang lakas.
Same goes in real life. Our society has gotten so concerned about “outside imagery” and “formalities” that they forget to focus on their “essence“.
Let’s have one scenario.
Sports car. Wow pogi. Kaso pag-dating sa Maynila pare-pareho lang tayo ng takbo sa sobrang traffic.
You don’t need a car to attract a fine lady. If your partner is overly concerned with your car. then better think twice.
This is just one sample–most guys dream of immediately buying their ‘pogi‘ car, setting Php 1,000,000 to 2,000,000 as budget. There are ways to survive without it. I’ve done it thanks to Grab. Though in some cases it is indeed a necessity, you can get a simple one first.
Imagine, instead of burning 1 mil – 2 mil, roll it first and make it grow 10-fold whether thru trading or business.
Up to now I don’t own a car, because I’d rather build an empire with the money.
Trading is a very interesting and challenging endeavor, it also offers the highest rewards to those who master it.
If I’m all for this ‘simple‘ life, then what motivates me to trade and to find opportunities?
What am I gonna use the money for?
Well, the initial goal is to cover my ass for the future. In an average person’s lifetime, we spend half of our lives (20 – 60 years old) working for money.
Imagine that, selling your precious time, just to survive. (Assuming you don’t like your day job) You work work work work, then you die. Wow. that’s just really great.
I didn’t want to go through that path so I had to make an effort and sacrifice as early as possible to free up my time.
Now that the early-game farming is paying off–I can now focus on things that have real meaning to me.
Money is our bullets in the game of life. When you have more money you can mobilize and manifest your ideas into reality.
The more you focus your bullets, the greater your impact will be.
And that has been my main motivation.
Investagrams is one of our projects, and we’re just beginning. We still got a long way to go, more ideas to execute. We’re just at 1% of where we want to be.
Try to forego looking good in the short-term, and focus on building your core first.
Build your war chest.
If done well, your investments will return hundred times of what you would’ve gotten if you took the short term rewards.
I’m not saying we forego every little shit in life.
It’s perfectly fine to spend and enjoy.
Just be aware of how you allocate your resources, and know that there’s a more rewarding path that entails just a bit more patience and sacrifice.
By sacrificing in the short-term, you get to DOMINATE in the long-term.
Who knew that a simple online game could teach you a lot of things.
Thank you Ragnarok Online for teaching me these lessons.
Sir Penge Po Stock Tip
uhhh… no offense, pero I do not advocate spoon feeding. This blog/page serves as my journal, mainly for my leisure and entertainment. Kahit teammates ko, tulungan kami pero kanya kanya kaming diskarte, kahit nag-bebentahan kami wala kaming iyakan o sama ng loob. Bakit ganun? Because no one knows shit in the market, you have to be responsible for your trades.
I post charts from time-to-time, to track some names I’m looking at. May mga orange na kahon, may mga price point, pero walang TP, walang indicator, walang analysis na ga-haba dahil wala naman akong cinoconvince bumili, kung mali simple lang, eh di cut loss. The charts I post are mainly for my reference, or trip ko lang i-share kasi interesting.
Di rin ho ako guru o ano man, simpleng trader lang na ang focus eh maging consistent hanggang sa ako’y maging lolo.
Peds na, para sa trip-trip lang at libreng pag-share. Does that mean dapat nyoko sundan? Nah. Maaring kumita ka, pero maaring ikamatay mo rin. Point is, you have to know what you’re gonna do based on your strategy.
I am willing to help those who deserved to be helped, pero I never advocate spoon feeding. You can ask me for advice and general questions pero hanggang dun lang. At the end of the day you will have to put in the work.
Kung bigyan kita ng isda, isang araw mo lang kakainin yun, pero kung ma-tuto ka mangisda habang buhay ka mabubusog.
Farewell 2015: The Best Lessons are Learned in the Most Difficult Moments
Reflections for 2015
The Most Important Aspects
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.
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.
Drifting Away from 2015 (a re-cap of my trading year)
2015 reminds me of 2013.
Strong start, and possibly weak finish. These kind of moves tell you that there are deep implications that may kill the market further in the future. Market held 6600, and is trying to bounce 7200-7300 but then what next? Not unless we take out 7550 and eat 7800 with conviction, that’s the only time this market will be interesting again.
If you plot every potential catalyst, probabilities are heavily skewed to the negative. So don’t be to eager.
Take a look at the performances of some of these equity funds. Most of them are bleeding already.. wait till you see more panic abroad till the contagion hits all of em and redemption goes rampant.
I’m not saying this will happen immediately. But I really believe more pain will come in the following months.. I also think 2016 will be a very difficult year for the average investor. Best thing is to focus on other profitable avenues such as starting your business.
How I attacked this kind of market
at the start of the year my port looked somewhat like this
I positioned in MAXS + SSI since they still looked good back then + they had interesting stories.
At one point I even tried to fool myself and become a fundamental investor
Why I don’t give a f*ck about noise
I base all of my trading decisions mainly on my technical screen. I look at fundamentals, hear out rumors, listen to tips but I don’t really care about any of those if they don’t pass my technical criteria.
Here’s an example…
I’ve been hearing, seeing tons of information about this stock.. and what’s funny is if you were the typical investor you’d already be hyped by all the fuzz.. but look at the last 10 candles before it gapped down.. it was never able to go above the 50 day Moving average or even the 20 day (these are just basic indications of weakness).
My philosophy is simple:
Whatever information–whether fundamentals, rumors, tips, insider–you have will only be valuable if the market acts on that proposition.
In other words, even if you have all the connections, and even if you have the tips of the number 1 analyst in the world. It will all be useless if the only one acting on that information is YOU. If there really is magic in a stock, there should be an impact in the demand & supply showing you signs (no matter how subtle) that there is “something” going on in that stock.
when the broad market started to weaken, I decide to go back to becoming ruthless. What’s interesting in the weak phases of the market is that’s where you really see whether you have what it takes to make money in the most challenging periods.
1st circle: failure to re-take 8000
2nd circle: Confirmation, support turned resistance– failure to re-take 7800, by this point most blue chips already sucked.
I’ve designed my strategy to identify potential plays as early as possible. That’s when I buy, not when you see noise all around as if you’re being given a free gold mine. (the more obvious something is, the less opportunity.)
Here are some of the plays I fortunately found this year:
Pardon the screenies, but this is what I found in my files
Tapet , PXP
these were the early days..
I wonder why there was no noise back when this was doing 4.00 lol..
This was the first bottom around 1.17.. Some of the best technical set ups appear when everyone in FB / forums are crying. That’s exactly what happened in this trade.
There seems to be an inverse relationship between “Noise or Fish Enthusiasm” vs “Stock Market Returns“
this FNI bounce play will be memorable for me because I was on the beach with a special someone while taking this trade. Imagine that, making money while enjoying life.
Most of my other plays I usually post in my blogs, or in my FB.
too bad wasn’t able to hold this all the way tho. hehe
I mean it when I say I like to find things early.
If the play is strong, my only focus is on that play till I milk it to the end.
I keep focus fire on that stock and stick with it, until I see no more upside. This is where I become a punter. I swing the stock for as many times as I can as long as I feel that it still has fire in it.
This is my favorite stock. Been here since the early days. I remember a good old friend of mine called this stock “puGO” back when it was doing 2.00 bucks. hehe. 🙂
Sold then bought back
These are just some of my trades. I have lots of quick trades, minor bounces, day trades etc.. but I don’t usually put much focus on set ups that only give me 5-10% upside. I realize that I’m more of a win big type of player than a rinse and repeat quantity trader. I prefer to sit patiently and wait for potential big moves. I like trading plays that give me 20% or more.
Like any other trader I commit lots of small errors, I proudly incur many 3-5% or even 8-10% losses. Doesn’t matter.
Here are some of my losses this year. 🙂
I appreciate losses because they enable me to step back and learn further–refine myself. I never hesitate admiting mistakes. I never bitch about it, once you get scared of losing money that’s the end of your career in trading.
It’s all part of the probability game. When I get it right though, I make sure that my bullets are really concentrated on that play.
The way I outperform:
Be humble when mistaken, and be overly aggressive when proven correct.
How I’ll attack the next months / 2016
At this point, even if I don’t trade anymore I’m already good for the year. I am merely waiting for really good opportunities to get some bonus. I’m happy that I was able to hit my goals back in my post “Why You Should Never Compare Yourself to a Mutual Fund”
I think the Sept-Oct will be deadly. I’d be on the sides waiting for extreme reactions that I can take advantage off. My strategy is to play tighter in the next few months, ONLY going in when the probabilities are really really high. Like what I’ve been doing for the whole year.. the game is all about finding outliers. If the market fails to take out 7600-7800 then it’s good as shit for me.
This is also a good opportunity for me to start shifting my efforts and capital towards other endeavors, am working on several start-ups as of the moment. The market has been a good stepping stone.. now it’s time to pay back and create real value in this world. 🙂
It won’t be easy… but it will be WORTH IT.