Stock Trading is Boring and It Should Be

Stock trading is boring and it should be—at least, for me. I realized that when I sold all my $MAC shares to buy $CDC, which broke out from its 52-week high, yesterday (June 29, 2017). Before I noticed $CDC, my newly-developed EBE system  had me patiently waiting for $MAC to hit my trailing stop loss price. I’ve been waiting ever since I bought it on June 16, 2017. 

My trailing stop-loss price is around 8-13% of the 52-week high. It felt like I was waiting for forever. I got bored. I felt like I needed something exciting to do, to cheer me up. 

I was observing the market and found $CDC breaking out from its 52-week high like a mad dog. As a momentum trader, I really love 52-week high breakouts. And for a person who finds excitement in breaking rules, I quickly sold all of my $MAC shares then bought $CDC (without analyzing its fundamentals) at 1.66/share, almost at the peak. 

A few minutes after that, $MAC went up to a high of 6.90/share. $CDC went down a couple of percentage from my average price, big enough to cause an agonizing pain. 

I then decided to take a look at $CDC's fundamentals, and found out that $MAC is way better in terms of earnings growth. It's like comparing apple with shit.

As I had mention on my previous article, intense emotions can lead to irrational decisions. The moment I saw $MAC fly, I quickly sold all my losing $CDC shares and bought back $MAC at 6.88/share. The same situation with $CDC happened, I positioned almost at the peak and then it dropped a couple of percentage from my average price. I planned on selling all of it again. A classic example of the deadly emotional cycle in the stock market.

 

At that moment, I realized that I was caught in that deadly loop. I purged myself from those emotions by meditating. I realized that my latest $MAC trade was still in line with my trading plan, so I hold on to it. As long as it doesn’t hit my stop loss price, I won’t sell—unless I find another stock that is superior in both technical and fundamental aspect. My current trailing stop-loss price for $MAC as of June 30, 2017, is 6.31/share.

Conclusion

When you get bored trading, tell yourself that you are on the right track, and don't let the boredom die. Do not let emotions run in the stock market.