It's Just Emotion Taking Me Over

To gauge what the students have learned so far, teachers create exams at the culmination of every major lesson. In the House of ZFT, our first exam is handed to us through a Buy button. (see The Three Musketeers)

The cut point was at -8%. The area of maximum tolerance. When that point is reached, you sell all your positions without ifs and buts. It was higher than the standard -4 to -5% of the ZFT system as we have exposed only a tenth of our portfolio value. It was a trial run, a knowledge check of sorts. We bought our musketeers (stock picks) on a Friday. And we do only one of two things: hold the positions for a month or sell when the cut point is hit. No in-between. 

On a Thursday, merely six days later, we sold. Two of our stock picks did not even last a week. They crashed and they burned. It was our first exam, and I couldn’t help but feel we’re failing it.

“First mission is a disaster”, I lamented.

“Mission failed tayo, dalawa agad”, echoes another.

The conversations within the group carried the same defeated tone. The excitement that bubbled a week ago seemed like a memory of distant past. In reality, it is not so much about money lost as it is about newly-found confidence slipping away.

“Ako ata pinaka-unang nag-cutloss kahapon, ‘di ko lang sinabi kasi nakakahiya.”

Our portfolios did not take much of a beating, but our egos did. I imagine that a class of thirteen very eager minds working in concert to pass a group exam would fare better. I didn’t think we’d get a perfect score, but I certainly wasn’t expecting we’d get stopped out as early as we did. I guess that’s the stock market for you, serving the humility pie when you least expect it.

I looked forward to our next class after we inevitably had to cut our losses. I was wondering how Zee would react, what he would say. Come Friday night, I didn't think the lesson would be... juicy.

It was juicy like Jessy. Appropriately, our latest topic was about money management and how to avoid being emotional when trading.

Zee posed a question to kick off our class.

This is how I saw it. Emotions come out to play when something of significance is at stake. If you don’t involve real money in it, how else would you take the test seriously? 

"If you don't put money in your trades, 'di kayo matututo," Zee added. 

And that is our goal ultimately, that is the reason why we are here in the first place—to learn. It may mean we’ll have to take a few hits, endure several sleepless nights, get our egos bruised again and again. But if in every wound, there is a lesson, I’ll take it any day.

Emotions. They said that there are only two fundamental emotions in this world: love and fear. All other feelings that we experience—happiness, sadness, contentment, greed—stem from just either of the two. Every positive emotion comes in a place where there is love and every negative emotion where there is fear. To learn how to control love and fear is not only difficult, it is herculean. 

Emotion is the very definition of human beings. This is why out of all the lessons we have to fully grasp in this course, taming our emotions would prove to be the most challenging. Neither advanced technical weaponry nor a well-thought out trading plan would allow you to execute a trade flawlessly once emotions come trickling in. This is something that every trader has to continuously learn. 

And that’s when pieces will fall into place, the moment we take responsibility for the choices we make. The moment we stop blaming others for the misery we are in. 

Jon Snow and The Three Musketeers

**GAME OF THRONES SPOILER ALERT**

The Battle Beyond the Wall

Because Jon Snow is officially alive and kicking and looking every bit of the Targaryen bastard that he is supposed to be, I decided to finally lay my sword at his feet and pledge my allegiance to the Lord Commander of the Night's Watch—or ex-Lord Commander? And by sword, I mean this little blog.

Let us do a Bran Stark and take a journey down memory lane—specifically to season 5 episode 8. Do you remember the most breathtaking and powerful fifteen minutes Game of Thrones has ever produced? Yup, the jaw-dropping epic face-off between the undead and Jon Snow’s insufficient army of wildlings. It’s unlike anything we’ve seen on TV. 

Come at me bruh!

Here's a run-through for the benefit of everyone who does not watch GoT (seriously though, is there someone else who doesn’t?):

These are the Wights. The dead raised by the White Walkers. In the game of chess, they are the pawns. In the Game of Thrones, they are the creepy pawns.

This weird-skinned creature with wispy white hair is what we call a White Walker. In videogame jargon, he is a Boss. Or an exceptional kind of villain encountered by a player at the end of a level. 

Now, white walkers can only be killed using dragonglass which is not readily available, unfortunately. And any other weapon used against them breaks into tiny little pieces. Parang ‘yung puso mo nung nagkaron ng bago ‘yung ex mo.

#basag

But in a thrilling turn of events, Jon Snow literally shattered a White Walker using his sword that is made of Valyrian steel.  

This is how we are made aware that Valyrian steel is as lethal as dragonglass against these scary-ass non-beings.

The Three Musketeers

Meanwhile, we pause for a moment and go back to the real world. This week, we were given our first live trade assignment: Find the Three Musketeers. We took a trading sabbatical a couple of weeks ago and this is the first time that we’ll be exposed to the market again. It’s no surprise that all of us are jittery and excited all at the same time. The task is simple: look for three stocks (Three Musketeers) which would satisfy the requirements based on the previous lessons about moving averages (MAs). (Here’s a very helpful link for you: Trading 101: ZS and AOTS). We allot only 10% of our portfolio for each stock. Once we find them, we buy them. Simple.

…And we hold them for a month. Or we cut them once it reaches our cut-point percentage, whichever comes first. This is the tricky part. We not only have to look for the most qualified stocks based on MAs, we also have to look for the most sustainable ones. Those which could last us a month at the very least. In the jungle that is the stock market, too many things could happen in a minute. Too many. I can only imagine what could transpire in a month.

The headmaster gave us a 50:50 lifeline ala Who Wants to be a Millionaire? and narrowed our choices to a little over 60 stocks out of the 200++ listed in the PSE. Still a lot, but it's a start. After hours and hours of charting, hunting, analyzing and debating, we came up with a list of suspects. 

You know nothin' Jon Snow

Today is game day. I woke up bright and early to finalize my trading plan. Understand that every student is left to his or her own devices when it comes to trade execution. Zee has been very crystal from the beginning; we do not trade as a group. The tribe has often been misconstrued as market movers, jockey players. They’re far from it. In fact, they detest those who are. 

The logic is simple: Highway A will bring you to Destination A and Highway B will bring you to Destination B. The tribe members travel daily and they always take Highway A (ZFT system), a road which has already been tested and proven. So they always find themselves in the same destination (stock) at the end of the daily commute. But what one person does once he reaches the destination, whether he decides to buy a coffee or stroll around a park, is entirely up to him. It’s just common sense really.They follow the same system, so they see the same results.

Now, allow me take you back to the battle beyond the Wall when Lord Commander Snow killed a White Walker.

Imagine the stock market as what’s beyond the Wall. It’s a slaughterhouse. The wights are the market noise. You can take out maybe one or two. But too much would surely kill you. 

The White Walkers or the Four Horsemen?

The White Walkers are the real deal. They are the stuff nightmares are made of. But once you know their kryptonite, there's nothing to be afraid of. I imagine it must be rewarding to identify a stock as a boss and make a killing. But every stock has a potential to be a boss, you just have to know where to look and when to look.

And we are all Jon Snow. Our dragonglass and Valyrian steel are our technical indicators, our weapons.

Jon Snow know nothin’.  Except that dragonglass can kill a White Walker. But now, Jon Snow also learned that Valyrian steel can be as deadly. If there are more tools against the Others, we are yet to find out.

Jon Snow know nothin’. Only the two weapons that could spell the difference between death and survival when winter finally comes.  

For Bushido, in a month (or less) we’ll find out if we used our weapons accordingly and bagged a White Walker... or just his pawn. 

Sneak Peak

I finally found out why I didn’t get my Hogwarts letter when I was 11. Little did I know it would come two decades later, not delivered by an owl, but by a Facebook messenger ping.

In my imagination, a heavy, majestic door opens to reveal a hall so vast the ceiling ebbs onto the heavens. It was lit by thousands of candles afloat in midair. But instead of golden plates and goblets, laptops, monitors and CPUs were laid on the table.

The Gateway

Imagine the waiting area of a doctor’s office, the lobby of a hotel, the foyer of a mansion. In the House of ZFT, the Gateway is where incoming students are welcomed, screened, assessed and sized. This is done two weeks before the formal classes. This is also where everybody gets to meet everybody without the pretense of troll accounts. “Trust is important to us,” one of the mentors said, “that’s why we use our real accounts even here in the Gateway.” In a world where dishonesty and fraud are so ubiquitous nobody bats an eye anymore, trust is as precious as it is priceless. Even more so when you’re a part of an exclusive group who understand the market with such depth that the unbelievers get so consumed in bringing you down. Trust is essential.

Which one are you?

The Gateway proved to be the perfect place to get a glimpse of everyone’s persona. There are the newbies, the veterans, the diligent students and those who would rather listen than talk. But everybody’s excitement was so palpable I could almost feel it radiating off my phone’s screen. House rules were laid. We were tasked to elect a scribe (a secretary) and to choose our batch name. Electing a scribe was easy, selecting a batch name on the other hand caused a bit of a struggle. In the end, we all decided that what would matter most is our honor and loyalty to the tribe and the system—just like what a samurai is to his daimyo. This is why I voted for Bushido.

First Day High

It was a Monday. For the readers who are not familiar with how the ZFT course is conducted, classes are held on M-W-F at 8-11 PM via your trusty messenger, Skype. Three hours of divine stock market lectures, three times a week for three months. They couldn’t have used the rule of three more efficiently if they tried. 

The master of the house knows how to start things off. He did so by introducing himself, not as Zee, but as the person behind the mask. “Subasta students you have this right,” he said. There it is again, the building of trust within the little band of faceless men. It was a day of introductions. Everyone got to say a little something about themselves, but the spotlight never strayed away from Zee and Kidlat. They know how to have fun yet they both were stickler for rules. Which was not surprising because they wouldn't have made it this far if they lacked discipline. All the students were on their toes trying to get a hold of these fictional characters that are now suddenly so real. If I had to guess, my batchmates and I are all on the same boat. These were people we just used to admire from afar, and now they’re taking us under their wings. That, my friends, is quite surreal. 

The Reveal

In other news, I heard it through the grapevine that my fellow samurais are currently on a witch hunt. They want to know who I am. It seems as if they suddenly found themselves with plenty of time in their hands due to the month-long trading ban presently being imposed. So instead of hunting for stocks, they hunt for the real Nina. It was quite a spectacle really and I was tempted to take part just to see how people would react once fingers are pointed at them. Well, I couldn’t resist. I did point fingers here and there... Or did I? Maybe I would have, if I wasn’t too busy working my ass off at my day job… Or was I? But here’s a little tip my dear friends, you can take all your Sherlock glasses off because you don’t need to look far to know exactly who I am. I lost, I gained. Still, I am in an endless pursuit for knowledge, for success, for happiness. I understand that these things could manifest in different ways. It could be playtime with the kids, a spouse waiting for me when I get home, laughter with friends over dinner, a roof over my head, a food on the table, a green port, a nice car, a master’s degree, a dream vacation, an eight-hour sleep, an ice-cold glass of water or maybe just simple pat on the back. Success is subjective. Happiness is what you make it. If you truly want to know who I am, don't look too far. Take a look in the mirror and you’ll find out.  

"We're all mad here."

P.S.

Vote wisely.