Saturday, October 18, 2014

The Market Got to Me This Week.

The Market Got to Me This Week.

Now I’m kind of embarrassed to admit this.  But the market got to me this week.  Yes at first the portfolios were down a bit, but then I made two mistakes.

1. From my early trading days, I had held onto two CFD positions that I should have dumped long ago. As the market fell this week that account that holds only options otherwise, was put under increasing pressure from the stupid CFD’s, that I admit, I was/am too attached to.

2. As that happened, guess what?  I started watching CNBC more than I ever would.  That led to the inevitable blood pressure rise, and micro monitoring.  And here I was thinking I was more immune to all that now.  That information is just too toxic, and Taleb argues that, “its also statistically insignificant for the derivation of any meaningful conclusion.”

They were both long term positions that I had bought, based on some fundamental and technical analysis, but were pressured by the randomness of the market in the shorter term due to the leverage effect.  Dammit!

Long story short - I finally cut one of the CFD positions for a loss (and I know it will bounce now – but that leveraged volatility is also the problem).  The other, well I'm still too attached to it to cut it yet, but as soon as I can on my terms - its gone. 

In my long-term option only portfolio, it was down a lot, but so what – I didn’t feel the emotional buzz like I did in the first account.   I don’t know for certain that it will perform well in the future, but I do know that the outcome will be a result of the correct signal over time, and not pressured by short-term volatility, journalists or market noise.  I like the comfort in that, and the lack of needing to make rash decisions when pressured.

How can you make the right decision when forced into the only action that you can possibly choose?

How can you not burnout when you allow yourself to be put under that pressure?

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