Tuesday, November 13, 2012

Geo Energy & Oceanus - Losses For The Month Of Oct

Retrieving and scanning through my POEMS account statements, I thought it would be wise to post the amount of losses I made in the month of Oct. I made a lost of $18517 on Oceanus and $6512 on Geo Energy.

I remembered my Oceanus trade vividly where it wasn't about the emotion that I could not cut loss but more on making a promise to all my students that I would ride the trade with the BBs because I believe it would trend higher during that period of time. Then came the abyss of sleepless nights where I became fearful and worried about the company going bust which caused the liquidation of all my holdings on 15/10/2012. The biggest mistake I made in this trade was to hold on to a losing trade for a period of time and using my cash account as an alibi to switch myself into the investment mode. Instead of cutting losses fast which is my usual style, I planned to buy up the shares since I had the money to hold it. That's a no no and I paid a hefty lesson to buy an experience. So no matter how accurate or good am I as a speculator, as long as I still commit those intangible human mistakes, it shall burn a hole in my pocket. I was not upset or moody on the losses but moved on there after to my Capitaland and some other counters. Cash account is good, but I think CFD is better because it forces you to cut loss if you are on the wrong side which eliminates the ego and emotional part of human psychology.

Shortly thereafter, I traded Geo Energy on tips which was also a grief error which burned a bigger hole in my pocket. However this time round I was better where I cut loss much faster using my Cash account. The problem with Cash account is that when you are wrong and if you have the money to hold, there is a tendency to buy up the shares and hold through a losing trade. Because I learnt and remembered my Oceanus trade, it taught me a lesson to cut loss fast using Cash account and in the process I learnt a valuable skill on how to punt IPO stocks which I would share with all my students in Dec. Shortly after I cut my loss, I told my friend that Geo Energy was on the verge of breaking down and it really did.

Every loss is like a new discovery, new experience like what happened in the past where I need to so much money just to discover myself and a simple strategy. Without those losses, how would I ever gained enlightenment and wisdom? I treasure the memory of the past misfortunes because it has added more to my bank of fortitude.

Ronald K - Market Psychologist - The Big Speculator