Select Page

Up or Down? | 02 | the Patron

“Up or Down?”

02

Starting Out

Willing to Share

The close of the ASX yesterday marked the completion of my first week being active in the world of investing and trading.

If you are familiar with my previous post and introduction, then you will know I have little to no experience with trading stocks and have decided to take matters into my own hands by investing $9,999 into the ASX.
My hope is to learn how to make better returns on my capital.

Last week I felt a sense of achievement when I looked at my profit and loss and saw a 2% gain after 2 days.  I remember thinking how easy this was and how wonderful it would be to tell my wife the good news and finally prove (I mean show) the point that investing is nothing like gambling.

Unfortunately last week Friday saw one of the stocks in my portfolio (EXG) drop by over 36%

I had put roughly $2000 into EXG a couple days before they announced news which was perceived negatively by the market and so the share price tanked from 0.041 down to 0.031 which is where I sold out and took my first loss.

“We are not our thoughts…”

This was the day I wrote my first post and I mentioned the emotions I experienced and lessons I learnt:

1) The stock market is not a place to place money in while sitting back and relaxing!
2) One’s mind can become its own enemy, by imagining the worst possible outcome…repeatedly.
3) For me the stock market is partly about learning to invest, and partly learning to overcome the emotions I experience when under stress
4) The emotions never stop, the thoughts are always there.
5) We are not our thoughts…our response to the thoughts & emotions is what defines us and separates good investors from bad investors.

__

 

Having said all this, I opened my profit and loss on Monday and noticed all but one share had dropped in value.  This meant I had now gone from $10,200 after two days, all the way down to almost $9,000 after four days.

Now I dare not mention a word to my lovely wife!
Previously I was confident and almost eager to boast about the easy gains, yet now I dare not breath a word of our investment and how it moved 10% negatively within a week.

Previously I would have thought about cutting losses and exiting the market to seek safer alternative forms of investing, but I made a commitment to this for 3 months as a trial period, and I have guidance from other investors who experienced the same scenarios.
The age old battle will rage on within my own mind, while those investors around me bring peace to the storm through the words they speak.  If we know the reasons for stock price movements, then it is easier to think logically and not emotionally.
(Education really is power)

Today the numbers are different.

My mindset is now positive and if you’ve been watching Gold, then you would have noticed the price increase.

We do not bow to our emotions as traders, otherwise we would cave within a week. My loss of 10% in the first week was someone else’s gain!
It is possible to make excellent return on your investment through the stock market…It just happened to be someone else last week, and hopefully this is my week!

Stewart | the Patron

Commentary from the Merchant: 

I really appreciate the level of self-reflection here. Stocks and the market are volatile: a loss today is a break-even tomorrow depending on circumstances. One thing I wan’t to point out is that a Merchant’s mindset is not determined by price. There’s a comment above which I would caution against:

My mindset is now positive and if you’ve been watching Gold,then you would have noticed the price increase.”

Is the mindset positive now because of the price of Gold having a slight bounce?

If it is, then I can guarantee that your mindset will oscillate between positive and negative on a daily basis. That is not a sustainable approach. Your mindset should be positive before you enter the transaction and throughout. You also purchased your precious metal mining shares at an oversold level.

It may be difficult, but try not to get terrified  by dips or over-excited by gains in price. If you celebrate every positive move, then you’re bound to have a funeral every time the price dips again.

Finally, I’m impressed by the honesty that there were times that your thoughts urged you to get out in the past 7 days. Essentially we want to feel better, and the only way our fight or flight brains know how to do that is to exit the situation by selling.

Well done on sticking through it.

| the Merchant

Please leave comments for the Patron or myself below. As always, if you care, share this article. We’re working hard on this  end to help you think better.

Also don’t miss this morning’s post on the Gold price and Miners.

Don’t miss a thing!
Subscribe now.

Paper Money Without Limits | Weekend Report | 10th September 2017

I've grown increasingly frustrated with our governments. US, Australian to be mention some by name. My criticism of them  is scathing on many fronts yet I have come to realise that Democracy presents the  fatal flaw: What the majority votes for, the entire country...
Read More

Speculator’s Monthly Wrap Up – June 2017

It has been a fairly slow and boring month, not much in the way of news. The only thing noteworthy was the dispute between some middle east countries and Qatar which is still ongoing. Other than that markets and stocks are just treading water. So ill make this a quick...
Read More

Speculator’s Monthly Wrap Up – May 2017

Bubbles, bubbles, everywhere. Compared to last month, we had a bit of a slow news flow this time around. Bitcoin surged to extreme highs, Trump had his week in the spotlight with impeachment talk and his overseas trip. The wannacry malware virus infected hundreds of...
Read More

The Merchant Weekend Report | 21st May 2017

The Patron's Birthday this weekend 😉 Just saying...   What's happening everyone? Hope you're doing well and that the market has not enslaved you but rather that you are confident in your trading and vision for your future.   I have made some adjustments to...
Read More

ASX Short Sell List 10th April 2017

How to use the short sell lists: Compare the number next to your stock over a few days. If it's increasing from day to day then the short selling bets are increasing that the price is going down on that stock. And vice versa. ___ Daily Gross Short Sales reported for...
Read More

Gold $1260+ on missile launch 

Read More

ASX Short Sell List 5th April 2017

How to use the short sell lists: Compare the number next to your stock over a few days. If it's increasing from day to day then the short selling bets are increasing that the price is going down on that stock. And vice versa. ___ Daily Gross Short Sales reported for...
Read More

DOW’s ugly candle + $GOLD | 6th April 2017

The Dow Jones printed a truly grotesque reversal candle... What the above indicates is that a rally attempted to continue, however, the selling power overwhelmed the initial attempt.   The market rallied on the ADP Employment number...but tumbled on everything...
Read More

Blackham Q&A | $BLK | 4th April 2017

Ok. Blackham's attempt at stabilising investor confidence. Perhaps filmed during the trade suspension to proactively curb bearish sentiment. http://video.abnnewswire.net/video/BlackhamResources_20170404.mp4   Keep in mind this is pure PR and damage control. Make...
Read More

$Gold | Just Charts | 4th April 2017

Australian Price of Gold.   No discussion. Just observation.  ...
Read More

Speculator’s Monthly Wrap Up – June 2017

It has been a fairly slow and boring month, not much in the way of news. The only thing noteworthy was the dispute between some middle east countries and Qatar which is still ongoing. Other than that markets and stocks are just treading water. So ill make this a quick...

read more

Speculator’s Monthly Wrap Up – May 2017

Bubbles, bubbles, everywhere. Compared to last month, we had a bit of a slow news flow this time around. Bitcoin surged to extreme highs, Trump had his week in the spotlight with impeachment talk and his overseas trip. The wannacry malware virus infected hundreds of...

read more

3 Comments

  1. the Sniper

    Hi Patron!

    I can identify with your position. I entered this market, thinking  I was wise and would be very quick in “Making Big Bucks”, that I would simply sit and wait for the right moment to pull the trigger. Yes those were my thoughts.

    The moment came the very next day after entering my first trades ever.  My shares were going up, up and up, I made 5K and I did not pull the trigger to sell. I thought this trend would carry
    on the next day and the next. ( and everybody would think that I am an awesome trader) Lol

    When I opened account the next morning, my shares were not moving. They were in a trading halt.

    When they took the halt off a few days later, it fell, and I watched, my 5K draining away. and it fell far below where I bought in.

    A  terrible  feeling I could not describe. 

    I was  trapped and am still waiting for things to change upwards.

    Hoping I will start thinking like a Merchant.

    Thanks again! I really love your post.

    The Sniper

    Reply
  2. the Patron

    Hi The Learner

    I can only agree with you.
    We learn best when we put an action to the task while receiving guidance from those who are more experienced.
    Looking forward to the next few months and what it holds

    Yours Faithfully

    The Patron

    Reply
  3. Anonymous

    Hi Patron,

    Welcome to the stock investing/trading world.
    You have an excellent coach/friend( Jack), so no need to worry. I am sure he will guide you to lots of wealth and in case if things go pear shape then he will be able to get you out of trouble with minimum damage. So in short it pays to follow smart people.

    All the best.

    The Learner

    Reply

Leave a Reply

Pin It on Pinterest

Share This