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This is probably why haha.... Trading Expectations Dangerous...

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    This is probably why haha....

    Trading Expectations
    Dangerous concept I feel @Freehold as I don’t think you can ever expect the market to give or owe you a thing. All you can do is set your goals and manage expectations through developed lessons/knowledge, and constantly re-adjust your plans and systems to make expectations and results more easily achievable. I think you should (pardon the pun) ‘expect’ that expectations can and will change depending on your performance. And they probably do play on your behaviour if your expectations are un-realistic and you are forcing yourself to make trades happen. All I can do is share my view on this about adjusting expectations throughout different time periods.

    After 7 or so years fumbling around trading half-arsed, I felt like last financial year all I expected or aimed to achieve was to not lose money – Now obviously we had a spectacular spec run around this time last year, give or take a month or so. Thus, after achieving this prior expectation comfortably, the goal posts shifted from now not losing money to making ‘XYZ’ this financial year. But perhaps this is an unrealistic expectation right now, unless we see similar market conditions to last year. My future expectation is that based on my ‘crystal ball’ (and will get a bit more macro/micro below) that these conditions should return at some point over the next 6 months. And if they absolutely do not, I am in stocks & shells with minimal downside (i.e. price at directors and sophs etc and super low EV) with maximum leverage. That way I should either A still find the odd bag here and there or B not lose too much money, and at most lose opportunity cost and time. So I agree with @webbj and thanks for providing me with a bit of a canvas to jot some thoughts down on the market at present.

    My expectation in January after last year’s fun was that I won’t make that same money and really, I should try not to lose it. So, I guess managing expectations here made me slightly fortunate to cash out of a lot of micros in Jan/Feb (but not all and took some pain). As a lot more bargains have been made present I have been dipping my toe in here and there gradually on high conviction trades. I am almost at the point now of being fully loaded as I feel as outlined above that similar conditions to last year should present themselves again and I want to be fully leveraged. Now if I haven’t made a good chunk of coin by Christmas then I will honestly need to change these expectations and fundamentally look at what I may have done wrong July-Dec this year.

    Now looking at the market now and where I can see expectations being un-manageable I can see is perhaps the feeling of the last few months or If not the last few weeks and it causing frustration or causing people to make error. Any micro spec runs are being well and truly sold into – except for genuine discoveries like an ADT and some bios that spring to mind. So, while I have been in some of the right movers, ultimately, I have not exited or pip traded on the basis that – I did not feel that these were liquidity crab traps and that at some point they will ‘kick on with it’. Ultimately that expectation right now has been flawed, but because of the price I’m only sitting on very few paper losses. SRN an example of this week’s frustration. Being in at .011/.012 I could have taken 30/40%, to see it come back to that price is always frustrating, but I have to look at what I expect it to be worth, and it’s a lot more and I still will stick my neck out there and say at least 2c. So….

    Future expectations
    We’ve seen some sectors and IPOs do quite well this week. @Anton Chigurh ‘s Calix CXL +20% , KTD 80% to name a few. There is clearly money out there sloshing around for a home. Some bios have been gaining steam (ACW, PAR, BLT), but for me what is quite telling is how some easy money has been made in the last month on the blue chips like your MQG, APT, and Milk stocks such as CLV, KTD. Point being is high beta stocks with strongly perceived macro tail winds are still climbing. Until this recent week’s US Gold rout a lot of the major gold stocks were also doing well. So my point is notwithstanding trade and other macro concerns (particularly about late bull cycle and property doomsaying and other looming crashes) is that growth stocks or outperforming sectors continue to do well as cash needs to find a home or fund managers have to keep up or to deploy. So why I think expect another spec run (with an inherent bias towards mining) is:

    What should or could we be looking out for to match or adjust our future expectations:
    • I think the STT is telling us that viewers are down, so we aren’t there yet. But that was always a barometer last year,
    • Crypto movements – I’m by no means an expert but this week’s move in blockchain and crypto stocks could be some fuel, and certainly brought out it’s fare share of rockets and twitter crazies.
    • IPO’s and Spread shells coming out in coming weeks: If they do well, more money will start to spread across to others: So watching with interest on TMR, CR1, ARN, RFR, SLZ, CM1
    • Diggers and Dealers in Kalgoorlie in a few weeks
    • Major indexes to flatten out and for high-beta seekers to move away from the easy cream and into more riskier assets
    • Earnings and outlook statements both domestically and US/Internationally.
    Summing up
    Essentially the shortest answer I feel is expectations are what your systems/plans and goals have led you to believe what you think will happen. If you’re not getting results, you need to either change expectations or your plans.

    Perhaps I should have just written this statement as what turned out to be just a simple thought bubble turned out to be a massive ramble. Anyway, hope some others get something out of it.
 
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