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Monthly Archives: April 2013

Three technical reasons supporting a BOTTOM for $AAPL

Reason number 1: We are at 50% retracement from the low of Jan 2009 and the high of Sep 2012. See the blue horizontal line below in the $AAPL weekly chart.


Reason number 2: The length of the drop from the high of 03/25 to the low of 04/5 is equal to the length of the drop from the high of 4/11 to the low of 4/19 (today).  See the blue zig-zag line.


Reason number 3: We have a bullish piercing candlestick pattern in development today.  See the two candlesticks inside the circle.

Below is the primer for bullish piercing candlestick pattern:

Piercing Pattern

The piercing pattern is made up of two candlesticks, the first black and the second white. Both candlesticks should have fairly large bodies and the shadows are usually, but not necessarily, small or nonexistent. The white candlestick must open below the previous close and close above the midpoint of the black candlestick’s body. A close below the midpoint might qualify as a reversal, but would not be considered as bullish.

Just as with the bullish engulfing pattern, selling pressure forces the security to open below the previous close, indicating that sellers still have the upper hand on the open. However, buyers step in after the open to push the security higher and it closes above the midpoint of the previous black candlestick’s body. Further strength is required to provide bullish confirmation of this reversal pattern.

CIENA Corp. (CIEN) Candlestick Piercing Pattern example chart from StockCharts.com

In late March and early April 2000, Ciena (CIEN) declined from above 80 to around 40. The stock first touched 40 in early April with a long lower shadow. After a bounce, the stock tested support around 40 again in mid April and formed a piercing pattern. The piercing pattern was confirmed the very next day with a strong advance above 50. Even though there was a setback after confirmation, the stock remained above support and advanced above 70. Also notice the morning doji star in late May.

And for these three reasons, I’m comfortable to buy some $AAPL this morning.

My 2 cents.

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Today Portfolio Adjustment (04-18-2013)

Today was a sell to close only and no buying.

Market opened almost neutral.  A little tug or war here and there and then BOOM! price began to tank.

I saw $BCRX playing defensive right at the opening gate and I was going, “Wait a minute! Ain’t you supposed to gap up because of the dire news on possible human-to-human transmission?”  No, the prices was having trouble keeping up on the high $1.9x area so I figured the situation in China might actually be better.  Without further thinking, I started selling $BCRX by chunks and eventually sold down to 80% of the original position for a small losses.  As time wore on and price didn’t seem to come back up, I sold the other 20% and called this gamble a breakeven.

Maybe, just maybe, $BCRX will gap up tomorrow without me.  What?  You think like this too?  Hmm, this is  a very common follow-up thought for a lot of people who have made up their mind to cut losses.  The way I see it, if thinking like this help you to cut losses, why not?  Half of the time when prices take a dumper after we’ve sold, we secretly pat ourselves on the back to congratulate ourselves on a job well-done.  And the other half-of-the-time, we simply say, “I knew it!”  There is nothing like proving yourself “right”, eh?

$APRI began to drop off and I immediately took action to sell as well.  Following $APRI, I sold $CERS as well.  Took small losses on both.

With general market continued to head south, I decided to reduce further my $SZYM investment as well.

After raising cash to 60% level.  I called it a day and stopped watching the market.  I don’t want to short because we may have a bounce next week due to 4/5/2013 support.  And I don’t want to buy because I don’t know if the 04/05 support will hold.  This leave me with a very comfortable cash position to wait it out.  Let’s see what happen tomorrow.

I did not take a very active approach to the market or my contribution to ibankcoin this week due to my catching a flu earlier in the week; if some of you are thinking I’m running out of gas, not quite yet!

My 2 cents.

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A Call from Next Week

Yes, we will get a call from next week to find out if 4/5/2013 low will be a support from today down day.

Take a look at the daily $SPY chart below:


It looks like 4/5 low is holding the ground for now with one hour to go.  Regardless, we will know next week how it will play out.  Meanwhile, I’m not going to sit heavily in stock waiting for judgement call.  I’ve been downsizing some of my position this morning and my cash is now 60%.

There is really nothing for me to do but to relax and rest.  Sometimes, you need to let the market goes and give it time to “digest”.  And it will be much easier to relax if you adjust your portfolio to increase cash.  If you are still heavily invested, some of you are likely to be tense and worrisome which is understandable giving today continuing bear stance.  For those who have a hard time moving from stock to cash: try this exercise, think of $CASH as a stock.  So, you will sell stock $ABC to buy stock $CASH.  That may do the trick.

Be safe.

My 2 cents.

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Today Portfolio Adjustment (04-17-2013)

Today was a two slaps on the face and a kick on my groin.

Market opened down and that pretty much set the tone for the rest of the day.  The bullish harami became the bearish harami and transformed into three inside down candlestick pattern.  A very bearish forecast and one not to be brushed away easily.

Seeing that I still had too much $PACB, I sold half to reduce risk.  Later on, when prices continued south, I sold the rest just to get my peace of mind.

Early in the morning, I got carry-away with the $FB runner and bought a starter position for taking out previous day high.  Like a sucker falling for the cheap trick, I realized this run was fake and immediately dumped it for small losses.  Note to self- when you are in a general market down day, don’t buy anything no matter how tempting it is.  Good thing I dumped it quick for the waterfall price action took place right after the day top was made.

Later on, I reduced my position size on $SZYM to reduce risk and locked in profit from prior entry.

$BCRX spiked up by last hour before market close due to news that this bird flu may involve human-to-human transmission.  This is grave news and I wish that $BCRX’s peramivir can work effectively against this H7N9 strain.  Naturally, I added more $BCRX.

Meanwhile, I’m getting kicked on the groin for my position trades on $AMRN and $LRAD.  These two alone provided quite a bit of damage to my portfolio.  Nevertheless, these two may also be the ones that will make my portfolio shines in the future.  The Stock God is seeing to it that I suffer dutifully before being rewarded.  This is how it always work.  No one getting anything for free or without suffering.  Because I haven’t averaged down, my suffering is manageable.

That is for the day.

Current holdings:


My 2 cents.


The trades I made in the journal were time-stamped in twitter

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Three Inside Down = Play Defense

Today confirms that yesterday Bullish Harami is not so bullish after all; instead today is a day to play defense.  The Three Inside Down is a candlestick pattern that points to a possible bearish stance.

Take a look at the daily $SPY chart below:


Now take a look at the primer on Three Inside Down below:

Bearish Three Inside Down Pattern


Type: Reversal
Relevance: Bearish
Prior Trend: Bullish
Reliability: High
Confirmation: Suggested
No. of Sticks: 3


Definition:             Get the highest rated stock from Americanbulls for this pattern >>>The Bearish Three Inside Down Pattern is another name for the Confirmed Bearish Harami Pattern. The third day confirms the bearish trend reversal.Recognition Criteria:1. Market is characterized by uptrend.
2. We see a Bearish Harami Pattern in the first two days.
3. We then see a black candlestick on the third day with a lower close than the second day.
Explanation:The first two days of this three-day pattern is a Bearish Harami Pattern, and the third day confirms the reversal suggested by Bearish Harami Pattern since it is a black candlestick closing with a new low for the three days.Important Factors:The reliability of this pattern is very high, but still a confirmation in the form of a black candlestick with a lower close or a gap-down is suggested.


At this point, a more cautious and defensive stance is warranted for those who are heavily long.

I’m currently sitting on 47% cash.

Be safe!

My 2 cents.

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Today Portfolio Adjustment (04-16-2013)

Today was a volatile and yet sleepy day for me.

Market opened positive so I bought $FB, $DDD, and $CERS at the open.

Unfortunately, $FB could not hold on to its price gap up and started a waterfall price drop instead.  It triggered my stop and I was out with a small losses.

$DDD took a little longer but I was stopped out eventually.

These two stops being activated in the morning on my buys gave me the idea that price action would be volatile today.

I started to build back my position on $CERS and $APRI and was buying them back bits by bits since the volumes were low.

Afterward, I just left the market alone because despite its roaring up day, the volatility of the stocks I was watching was all over the places; therefore, I pretty much decided today was a rest day for me.

I guess there wasn’t much to report today.

Current holdings:


My 2 cents.

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Bullish Harami = odd of going back up is good

We have a really nice Bullish Harami under development in the daily $SPY chart.  And the nice thing about this is that the price action is now on top of the 2007 support.

Take a look at the chart below:


Did you notice that despite yesterday big down day, it hasn’t penetrated the up trendline on the chart.

Although market is up $126 point right now, I’m sensing quietness and calmness.  Thus, I haven’t been active at all today.

Below is some primer on Bullish Harami:

Source: click here

Bullish Harami

The bullish harami is made up of two candlesticks. The first has a large body and the second a small body that is totally encompassed by the first. There are four possible combinations: white/white, white/black, black/white and black/black. Whether they are bullish reversal or bearish reversal patterns, all harami look the same. Their bullish or bearish nature depends on the preceding trend. Harami are considered potential bullish reversals after a decline and potential bearish reversals after an advance. No matter what the color of the first candlestick, the smaller the body of the second candlestick is, the more likely the reversal. If the small candlestick is a doji, the chances of a reversal increase.

Harami Candlestick example from StockCharts.com

In his book Beyond Candlesticks, Steve Nison asserts that any combination of colors can form a harami, but that the most bullish are those that form with a white/black or white/white combination. Because the first candlestick has a large body, it implies that the bullish reversal pattern would be stronger if this body were white. The long white candlestick shows a sudden and sustained resurgence of buying pressure. The small candlestick afterwards indicates consolidation. White/white and white/black bullish harami are likely to occur less often than black/black or black/white.

After a decline, a black/black or black/white combination can still be regarded as a bullish harami. The first long black candlestick signals that significant selling pressure remains and could indicate capitulation. The small candlestick immediately following forms with a gap up on the open, indicating a sudden increase in buying pressure and potential reversal.

Micromuse, Inc. (MUSE) Candlestick Harami example chart from StockCharts.com

Micromuse (MUSE)[Muse] declined to the mid sixties in Apr-00 and began to trade in a range bound by 33 and 50 over the next few weeks. After a 6-day decline back to support in late May, a bullish harami (red oval) formed. The first day formed a long white candlestick, and the second a small black candlestick that could be classified as a doji. The next day’s advance provided bullish confirmation and the stock subsequently rose to around 75.


My 2 cents


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Today Portfolio Adjustment (04-15-2013)

Today was a reaction day as well as a sad day.

Market opened down and I immediately sold $DDD before it fell apart as 3D printers’ stocks are prompted to do in a down day.  My losses were small compared to if I had hold.  This is another positive feedback and reinforcement to me that taking losses quickly is the way to go when I’m swing trading.

$PPC was disappointing as well but then you wouldn’t expect any breakout of significance without news and without the support of the general market.  This one was a no brainer, out it went.

Speaking of breakout, $S had a strong breakout due to takeover news.  Well, since I was no longer in it, there was no point in discussing this.  No, I did not kick myself for this miss since I had no plan for $S as of Friday.  So, this gap up would be like any gap up of stocks I never heard of.  If the tree fell on the forest and I wasn’t there to hear the noise, did the tree really fall?  Meditate on this and you will not be bothered by “missed” gain when you are not “in”.

I also began to sell off some $APRI and $CERS to minimize exposure because these high-beta stocks can drop quickly when the sentimental changes.  All it takes is one of the big holders to start dumping and you have a domino effect of everyone fighting for the last musical chair.  Later on, for fear of this domino effect, I sold the rest of my shares in $APRI and $CERS while prices were still holding well.  Since I bought these stocks as much lower average entry prices, I made some money instead of taking losses.

At the time I reduced position size on $APRI & $CERS, I also started to reduce position size on $SZYM as well.  Thanks goodness I did giving the waterfall price action later on.  As price continued to fall, I continued to unload more $SZYM.  By the time I sold all my $SZYM, I gave back about 70% of the profit from my last entry.  But all was not lost, price continued to head further down my from last sales and I was able to pick back up about 60% of my original position at the bottom 10% of today price range.

I was watching $DUST from the get go trying to gauge the right time to take profit.  I started to trail my stop using the low of 3 min bar chart when the price started to consolidate; by the time I stopped out, I was able to squeeze a few more points out of it as opposed to selling it at open.  Yes, before you jump in and say that I could have make more points by holding my position thru the end-of-the-day; let me remind you that you have the hindsight to work with while I only had a sure profit facing me.

Instead of taking the risk of giving back some of my profit, which happened to me often when I overstayed my welcome, I chose to take profit first.  Remember, I had about 26% gain starring at my face after only a weekend hold; so I really should not be too greedy.  After I sold, I daytraded $DUST with 1/3 of my original position and made a few more bucks.  However, I did not participate in the late hour run-up to the close because I did not want to push my luck.  Often times, when I tried to push my luck, I often ended up giving back too much profit.

Seeing that the market was down big and momentum did not slow down during the morning hours, I looked at $SDS and $FAZ and decided to make a daytrade out of it.   I was not committed to holding it more than today because these inverse ETF had poor track record of continuing a run.  Besides, I didn’t want to risk losing money on a late day rally.  Knowing the trades were for the day only allowed me to see this trade as a quick profit and nothing more.  When price went up to the point where the momentum indicators started to turn back down, I took profit and left it alone.  One of my rule is that if I make a decent sum in daytrading, don’t go back in after I’ve closed the position.  7/10 I would give the profit back if i do.  Therefore, yes, I missed the late day rally of these two ETF as well.  No big deal.

Then later on, I discovered my big mistakes.  While I was busy managing my $DUST, $SDS, and $FAZ trades during the morning hours, I completely forgot about my $PACB and $DNDN positions.  By the time I remembered these two positions, I was disappointed that $PACB was already down a whopping 8%.  Darn!  I would have dumped this in the morning if I had not skipped this one.  Seeing that it was already down 8%; I decided to give it  more room to bounce.  If price doesn’t bounce tomorrow, I will probably dump it for a much bigger losses than I will like; but then, I’ve to own up to my mistake.  $DNDN, on the other hands, did not have a hold on me the way $PACB did; therefore, I dumped it pronto.

$BCRX gapped up and I was thrilled.  However, in the morning, I elected to sell half for profit when prices trekked back down to $2.00 price support.  Later on, when prices headed back to $2.04, I decided to buy back shares I sold.  Well, prices didn’t always followed my direction; and I decided to sit this one out since any sudden news from the Asia could spark this one up.  Besides, I’m only at breakeven point now even after price had trekked down to the close.

I was oblivious to the Boston bombing until I saw the posts from ChessNWine and The Fly.  I usually don’t pay attention to outside noise when I’m trading.  The bombing was so nonsensical but it also reminded us that life could be so fleeting.  One moment you were having a cup of coffee and the next you were either gone or sans a body part.  The best way to beat this is to live our life fuller and stop sweating the small stuff.

Current holdings:

LRAD, AMRN, TINY, SZYM, PACB, BCRX and 54% cash.

My 2 cents.


The trades I made in the journal were time-stamped in twitter

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It’s not about right or wrong picks, it’s about trade management

If the market turned south when you were 70% or higher loaded in equities, paper losses were forgone conclusion.  However, you could manage your portfolio so that the losses would be controlled if the carnage continued.

I was fortunate to have the gut to chase $DUST by Friday close; thus, I was able to gain the profit to offset the losses I took this morning.  I made several calls last week and only $DUST saved the day.  The others were either going nowhere ($CERS, $APRI) or took the other direction of my calls ($PPC, $DNDN, $PACB).  Was I upset?

Not really.

That was because I knew I was not a prophet who could foresaw price movements 100% of the time.   My intuition, at best, would give me 51% win ratio.  But the point here is not about how much winning picks versus losing picks.  If you can accept this simple truth that none of us has the divine crystal ball to work with; then you can stop chastising yourself for not seeing the current carnage.  Instead, spend the energy to manage your trades so you can prevent your portfolio from bleeding further.

As I had discussed this before, I used the “thought” of buying  back my positions I sold today at a cheaper price later to give me the confidence to execute my trades to cut losses.  Yes, I may be selling at the bottom but you cannot allow this “ego” thought to freeze you like a deer facing the headlight.  You have to be “OK” to miss the “possible” late rally so that you will allow yourself to cut losses.  Take a look at my $SZYM today.  If I hadn’t taken my losses in the morning time, I would be sitting in a much bigger losses.  Instead, I’m now salivating while waiting for the right time to buy back in for a much cheaper price.

Take heed to The Fly warning about averaging down today.  If today down day is just a  prologue; averaging down will be like opening your spigot to allow more of your blood to come out faster.

I’m not suggestion going all cash here.  Portfolio management is simply a process to minimize the risk by reducing the hi-beta or non-performance stocks so that cash will be available to buy back stocks at cheaper price if ones are fully loaded.

Go with the flow, my friends, go with the flow.

Now that I’ve done my mumble jumble on trade management. let’s take a look at the $SPY daily chart:

As you can see, today down day penetrates the support from year 2007 high.  The next level of major support is the year 2000 high.  If this 2000 high can hold the downdraft, we may still be stuck in a consolidation stage with the previous rally as an aberration.  However, if the 2000 high fails to support price; further downdraft will be quite ugly.  Yes, there is a lot of “ifs” here.  This beg the question, why will you want to be fully loaded when there is a lot of “if’s” in the face of the current downside storm?

Do some of us forget that the beauty of the stock market is that you can open and close your positions at any times in the day when the stock market is opened?  Why do you worry about holding stocks the way people are holding gold bar right now?  For crying out loud, stocks are liquid and you can always buy back.

This post is meant for people who are having a hard time deciding what to do with the fully loaded position and is gnawing their teeth right now.  If you are already managing your portfolio accordingly, my hat off for you.

Currently 57% cash.

My 2 cents.


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Where Ego Dares #1 – The Mind

Before we begin the discussion of ego and how we can make it work with us instead of against us, let me present a philosophical discussion by one of our deep thinker below regarding our mind:

What is mind?

Mind is not a thing, but an event. A thing has substance in it, an event is just a process. A thing is like a rock, and event is like a wave- it exists, but is not substantial. It is just the event between the wind and the ocean, a process, a phenomenon.

This is the first thing to be understood, that mind is a process like a wave or like a river, but it has no substance in it. If it has substance, then it cannot be dissolved. If it has no substance, it can disappear without leaving a single trace behind.

When a wave disappears into the ocean, what is left behind? Nothing, not even a trace. So those who have known, they say mind is like a bird flying into the sky- no footprints are left behind, not even a trace. The bird flies but leaves no path, no footprints.

The mind is just a process. In fact, mind doesn’t exist- only thoughts, thoughts moving so fast that you think and feel that something exists there in continuity. One thought comes, another thought comes, another, and they gone… the gap is so small you cannot see the interval between one thought and another. So two thoughts become joined, they become a continuity, and because of that continuity you think there is a mind.

There are thoughts- no “mind.” Just as there are electrons- no “matter.” Thought is the electron of the mind. Just like a crowd… a crowd exists in a sense, doesn’t exist in another. Only individuals exist, but many individuals together give the feeling as if they are one. A nation exists and exists not- only individuals are there. Individuals are the electrons of a nation, of a community, of a crowd.

Thought exist- mind doesn’t exist; mind is just the appearance. And when you look into the mind deeper, it disappears. Then there are thoughts, but when the “mind” has disappeared and only individual thoughts exist, many things are immediately solved. The first thing is that immediately you come to know that thoughts are like clouds- they come and go, and you are the sky. When there is no mind, immediately the perception comes that you are no longer involved in the thoughts- thoughts are there, passing through you like clouds passing through the sky, or the wind passing through the trees. Thoughts are passing through you , and they can pass because you are a vast emptiness. There is no hindrance, no obstacle. No wall exists to prevent them; you are not a walled phenomenon. Your sky is the infinitely open; thoughts come and go. And once you start feeling that thoughts come and go, and you are the watcher, the witness, the mastery of the mind is achieved.

Mind cannot be controlled in the ordinary sense. In the first place, because it is not, how can you control it? In the second place, who will control the mind? Because nobody exists beyond the mind- and when I say nobody exists, I mean that nobody exists beyond the mind, a nothingness. Who will control the mind? If somebody is controlling the mind, then it will only be only a part, a fragment of the mind controlling another fragment of the mind. That is what the ego is.

Mind cannot be controlled in that way. It is not, and there is nobody to control it. The inner emptiness can see but cannot control. It can look but cannot control- but the very look is the control, the very phenomenon of observation, of witnessing, becomes the mastery because the mind disappears.

Mind is nothing but the absence of your presence. When you sit silently, when you look deep into the mind, the mind simply disappears. Thoughts will remain, they are existential, but mind will not be found.

But when the mind is gone, then a second perception becomes possible: you can see that thoughts are not yours. Of course they come, and sometimes they rest a little while in you , and then they go. You may be a resting place, but they don’t originate in you. Have you ever noticed that not even a single thought has arisen out of you? Not a single thought has come through your being; they always come from the outside. They don’t belong to you- rootless, homeless, they hover. Sometimes they rest in you, that’s all, like a cloud resting on top of a hill. Then they will move on their own; you need not do anything. If you simply watch, control is attained.

The word control is not very good, because words cannot be very good. Words belong to the mind, to the world of thoughts. words cannot be very, very penetrating; they are shallow. The word “control” is not good because there is nobody to control and there is nobody to be controlled. But tentatively, it helps to understand a certain thing that happens: when you look deeply, mind is controlled- suddenly you have become the master. Thoughts are there, but they are no longer masters of you. They cannot do anything to you, they simply come and go; you remain untouched just like a lotus flower amidst rainfall. Drops of water fall on the petals but they go on slipping, they don’t even touch. The lotus remains untouched.

That’s why in the East the lotus became so significant, became so symbolic. The greatest symbol that has come out of the East is the lotus. It carries the whole meaning of the Eastern consciousness. It says, “Be like a lotus, that’s all. Remain untouched and you are in control. Remain untouched and you are the master.”

So from one standpoint, the mind is like waves- a disturbance. when the ocean is calm and quiet, undisturbed, the waves are not there. When the ocean is disturbed in a tide or strong wind, when tremendous waves arise and the whole surface is just a chaos, the mind from one standpoint exists. These are all metaphors just to help you to understand a certain quality inside, which cannot be said through words. These metaphors are poetic. If you try to understand them with sympathy, you will attain an understanding, but if you try to understand them logically, you will miss the point. They are metaphors.

Mind is a disturbance of consciousness, just as waves are a disturbance of the ocean. Something foreign has entered- the wind. Something from the outside has happened to the ocean, or to the consciousness- the wind, or the thoughts, and there is chaos. But the chaos is always on the surface. The waves are always on the surface. There are no waves in the depths- cannot be, because in the depths the wind cannot enter. So everything is just on the surface. If you move inward, control is attained. If you move inward from the surface you go to the center- suddenly, the surface may still be disturbed but you are not disturbed.

The whole of the science of meditation is nothing but centering, moving toward the center, getting rooted there, abiding there. And from there the whole perspective changes. Now the waves may still be there, but they don’t reach you. And now you can see they don’t belong to you, it is just a conflict on the surface with something foreign.

And from the center, when you look, by and by the conflict ceases. By and by you relax. By and by you accept that of course there is a strong wind and waves will arise, but you are not worried, and when you are not worried, even waves can be enjoyed. Nothing is wrong in them.

The problem arises when you are also on the surface. You are in a small boat on the surface, and a strong wind comes and it is high tide and the whole ocean goes mad- of course, you are worried, you are scared to death! You are in danger; any moment the waves can overturn your small boat; any moment death can occur. What can you do with your small boat? How can you control anything? If you start fighting with the waves, you will be defeated. Fight wont’ help; you will have to accept the waves. In fact, if you can accept the waves and let your boat, however small, move with them and not against them, then there is no danger. Waves are there; you simply allow. You simply allow yourself to move with them, not against them. You become part of them. Then tremendous happiness arises.

That is the whole art of surfing- moving with the waves, not against them. With them- so much so, that you are not different from them. Surfing can become a great meditation. It can give you glimpses of the inner because it is not a fight, it is a let-go. Once you know that, even waves can be enjoyed… and that can be known when you look at the whole phenomenon from the center.

Just as if you are a traveler in the forest and clouds have gathered, and there is much lightning, and you have lost the path and you are trying to hurry toward home. This is what is happening on the surface- a traveler lost, many clouds, much lightning; soon there will be a tremendous rain. You are seeking home, the safety of home- then suddenly you reach there. Now you sit inside, now you wait for the rains- now you can enjoy. Now the lightning has a beauty of its own. It was not so when you were outside, lost in the forest, but now, sitting inside the house, the whole phenomenon is tremendously beautiful. Now the rain comes and you enjoy. Now the lightning is there and you enjoy, and great thunder in the clouds, and you enjoy because now you are safe inside.

Once you reach the center, you start enjoying whatsoever happens on the surface. So the whole thing is not to fight on the surface, but rather slip into the center. Then there is mastery, and not a control that has been forced, a mastery that happens spontaneously when you are centered.

Centering in consciousness is the mastery of the mind.

So don’t try to “control the mind”- the language can mislead you. Nobody can control, and those who try to control will go mad; they will simply go neurotic, because trying to control the mind is nothing but a part of the mind trying to control another part of the mind.

Who are you, who is trying to control? You are also a wave- a religious wave of course, trying to control the mind. And there are irreligious waves- there is sex and there is anger and there is jealousy and possessiveness and hatred, and millions of irreligious waves. And then there are religious waves- meditation, love, compassion.But these are all on the surface, of the surface, and on the surface. Religious or irreligious makes no difference.

Real religion is at the center, and in the perspective that happens through the center. Sitting inside your home, you look at your own surface- everything changes because your perspective is new. Suddenly you are the master. In fact, you are so much in control that you can leave the surface uncontrolled. This is subtle- you are so in control, so rooted, not worried about the surface, that in fact you can enjoy the waves and the tides and the storm. It is beautiful, it gives energy, it gives a strength- there is nothing to be worried about it. Only weaklings worry about thoughts. Only weaklings worry about the mind. Stronger people simply absorb the whole, and they are richer for it. Stronger people simply never reject anything.

If you have read all the way here, I congratulate you.  You have the motivation and interest to learn.

If you’ve skipped the reading, either half-way or from the beginning, then you are impatient and is only looking for quick fix that interest you.  From my experience, you may not have the commitment to improve yourself in a way that you can master the skill you need to trade successfully.

If you’ve skipped the material above because you already know the material (either from a book you own or borrow), a big congratulation is in order.

Ok, so how is the above discussion of the mind help me with trading well?

Good question!

Remember the part about centering?  That where we all want to go as a trader.  When you are centered, you look out the window and you see all the volatile price action; so, instead of being in the middle of a storm where you will be subjected to all sort of emotional responses which can prevent you to make the right decision, you are in the perfect calm stage to make the right decision by getting out when you see price action is going against your entry point.  In other words, you will be in a state of mind that allows you to cut your losses quickly.

I will discuss more of how we can approach our center in the future “Where Ego Dares” series.  Yes, I borrow the title from the movie called “Where Eagles Dare” starring Richard Burton, Clint Eastwood.

And for those who are interested, the philosophical discussion of the mind is an excerpt from a book by Osho.

My 2 cents

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