Love and Trade
I just squared off my first loss in the glorious stock market; I would be lying if I said that “it was a great learning experience for me” it was not, nor it is for people who say such things. These statements are only for people who see the glass full when it is visibly empty, I am that person who doesn’t see the glass when visibly there is one so yes I did not learn anything instead I was devastated and dejected. On the palm of my hands was the diploma in finance which failed to teach me Black-Scholes and a money line which clearly went awry.
There are bunch of metaphors that I can pitch in that would help me explain exactly how I feel about the markets, but the best fit is that of first love. Like first love, stock markets give you happiness, sadness, disappointment, leaves you penniless but begging for more so this comparison is not so unfit.
When you fall in love the first time you feel that it is the best thing that has happened to you, it is it is so right that you feel there is nothing wrong, by the same token, when you place a trade a sense of biasness takes over you which any class on behavioral finance doesn’t make you ready for, you endorse your trade so well that anyone around you can be convinced but when it goes bust it truly seems like a lack of due diligence and not keeping an eye on the current affairs.
Punching an order in your DEMAT account with eyes full of dollars feels so euphorious, within seconds you are transported to this land where you are the greatest trader ever with millions of dollars, you daydream about all the shoes you can buy and vacations you can take from the money you will make. Same with love, from day one the daydreaming starts; naming the children together, planning the big day, finalizing the honeymoon spot as the time goes by the relationship just like the trade you placed shows some promise, it shows returns of affection but soon you realize it is temporary you are on the wrong side instead of selling you should be buying and instead of loving you should be leaving. All those candy-land daydreams are ruined by reality, you find out the trade was never actually the right idea, you should’ve waited for the right moment, should’ve shopped around more but it is too late, you are already committed and in your portfolio are now some stocks that everyone recommended to be a ‘strong buy’ but they are not the strong buy for you, maybe for someone else?
Each day since I had placed the trade I opened my eyes to see the movements of the market, I tracked it religiously, I was cautious that if I miss the key move I might lose out on the opportunity ,the opportunity never came instead came the expiry of the put that I bought and I had to square it off. My first love was the same, each day I use to wake up with full conviction that I will make this work, each day I was cautious about what to say and what to skip just so I was not on the wrong side of the momentum, I use to keep a watchful eye on the indicators of relative strength but in vain, as you see, I was on the wrong side of trade to begin and the trade idea that I had was flawed, the theme was stupid so expiry was inevitable. Warren Buffet is right when he says do not invest in something you don’t understand. I do not understand options so I should steer clear of them similarly I do not understand insecure men so I should steer clear of them.
Anyways just like the markets give the opportunity to make loads of money this world also gives opportunity to find love. You just have to put the right screeners, follow the right indicators and as soon as you see the first support break you get out. My first trade and my first love were a complete failure, both left me insecure, distrusting and lost. Here is to the second attempt, cause I trust the markets as much as I trust the power of love.
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