Note: This post is written for my personal trading record purpose only, so this should not be taken as any form of investment advice or guidance to follow. Discussion is welcome, while you must do your own research for our own risks.
Discussion
MP Materials Corp ($MP) position entered yesterday was kicked out immediately by the mechanical stop loss order, as it broke down into the 20MA with an increase in volume. This immediate kick-out might be triggered by many factors including increasing yield, while this is not observed in other precious metal or commodity stocks.
In this situation, the failure might be more explained by the weakness of MP without solid demand or enough consolidation after the two recent pocket pivots on 8th April and 14th May.
Insight & Applied Buddhism
Although the first setup comes into a immediate kick-out, a good discpline for stop-loss order and thus limit in risk exposure are maintained, which reduces the psychological influence and accumulation of bad emotion for future trading. I try to elaborate below the applied buddhist practice by six perfections, or six paramitas, in Mahayanma Buddhism based on Prajñapāramitā sūtras (प्रज्ञापारमिता सूत्र):
Six Paramitas in Trading Behavoral Control
- Perfection of Generosity (Dāna pāramitā; दान पारमिता)
– Control in small entry position to avoid over-sizing and limit risk exposure - Perfection of Discipline (Śīla pāramitā; शील पारमिता)
– Use in stop-loss order to avoid manual control and decision making - Perfection of Patience (Śīla pāramitā; क्षान्ति पारमिता)
– No close and over monitoring in movement after setup - Perfection of Diligence (Vīrya pāramitā; वीर्य पारमिता)
– To understand and accept impermenance of the market
– To investigate, review and enhance the next trade (Like this post) - Perfection of Concentration (Śīla pāramitā; ध्यान पारमिता)
– Be mindful of the mind and emotion like the Greed manifesting before setup and Hatred after the kick-out
– Meditate and contempltae on the psychological reflection
– Concentrate and review the execution - Perfection of Wisdom (Śīla pāramitā; प्रज्ञा पारमिता)
– The first time to start writing a trading log in order to generate insight on both the market, investment performance and self reflection etc.
Setup Summary (To be updated)
| Date | Ticker | Action | Reference | Reference Price | Justification | Position | Price | Size | Stop Loss | Risk Tolerance | Risk Exposure% | Risk Exposure$ |
| 28/5/2024 | MP | Entry | 20MA | $17.00 | Volume contract at 20MA T-1 | 800 | $17.05 | 13,640 | 16.65 | 20MA-2% | -2.35% | -$320.00 |
Chart
My Personal Trading Record :
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