10 Truths Every Newbie Stock Trader Should Know

In my 8 years of trading in the Philippine stock market, I've learned a lot from online resources (articles, books, market reports from brokers, etc.)  and stock trading forums. I also had a lot of realizations when it comes to stock trading. In this article, I will be listing some of those lessons and realizations for newbie traders, as well as for those planning to enter the stock market.

1. Stock trading is simple, but it's not easy
It may appear that stock trading is simple: buy low, sell high, right? 

The truth is, earning from the stock market is not easy. You can study all you want before plunging into the market and still find yourself in a string of losing trades. Even buying a fundamentally good stock doesn't guarantee a gain.

There are just so many factors that affect the market. Aside from political and economic issues in and out of the country, you also have to look at  personal issues that can make you lose money: fear, greed, hope, ignorance, dependence on others, and dependence on luck.

You need time and experience to be a consistently profitable trader. Sometimes, you can be lucky. But if you want to stay long in the market, you must not rely on luck alone.

Study, plan your trading strategy, check the results, then re-assess your strategy. These are the things that you need to do in order to improve your trading skills and know which strategy works for you.

5 Things I Did to Recover from the 2008 Global Financial Crisis

I began trading stocks in April 2007 after attending a basic stock market seminar from Philstocks (an online stock broker). I then joined stock trading forums such as Finance Manila and Trader's Pizza. In just a few months, with the help of tips, rumors, and a little bit of luck, my portfolio immediately grew by 30%. I felt good. I felt that earning from the stock market was easy. I felt I was good. It even came to a point when I was already contemplating on setting up a fund where my sister and her officemates can invest their money (in return, I'll have a cut on the profit).

Then came the subprime mortgage crisis in the second half of 2007, which lead to the US recession, and eventually, the global financial crisis of 2008. Add to that the Manila Peninsula siege in November 2007 that caused a massive selldown in the PSE. I suddenly found myself staring at a 50% drop in my portfolio. I was humbled by Mr. Market, slapping my face with a six-digit loss. I didn't know how to react,ang bilis ng mga pangyayari. Parang isang bangungot. Nakakapanghinayang. Should I sell and swallow the losses or should I just hold? I didn't know what to do.

In 2010, I was finally able to recoup my losses and started earning again. It took me quite some time to recover, but I'm glad that I'm still in the market up to now. I had better luck compared to others who simply quitted and vanished from the stock trading forums. 

I would like to share the 5 things that helped my stock trading portfolio recover from the global financial crisis. May it be a lesson to newbie traders, help them prepare mentally and emotionally, for the next bear market cycle.

Favorite Stock Market Movies

eiii... the PSE stock market has been bloody red for three days already. During this period, watching the PSE market is boring but of course good chance to enter for a reversal play. But maybe it would still go down so sometimes, it's best to relax at let them take profit. We just review charts when the dust settle down.

Watching movies are best past time for me. Below are some good movies about stocks that I watched.

1. The Pursuit of Happyness (2006)

Starring Will Smith and his real-life son, Jaden Smith. This movie is based on the story of Chris Gardner and the trials and tribulations that he endured on his way towards becoming a multi-millionaire. "The Pursuit of Happyness" focuses on the period of Gardner's life when he was attempting to become a top trainee in Dean Witter Reynolds' stock brokerage training program. Gardner and his son were homeless at the time, as the money that Gardner received through the stock brokerage training program wasn't enough for them to live on. Gardner and his son moved from homeless shelter to homeless shelter, all while Gardner was attempting to gain employment at Dean Witter Reynolds. A truly inspiring story.

SWAG simplified by Investagrams.com's - "Investa Screener"

Below is a sample video on how to use Investa Screener to filter possible SWAG Plays.

Good Luck!

Investa Screener by Investagrams

Previously, I am using Investagrams.com as charting support only.

But lately, Investagrams.com launch this Investa Screener which makes it easier to find stocks per your requirements for FREE!

I use again my troll account to log in and wallah, I can use their system for free and unnoticed lol.

Check there you tube videos below:

This is Investagrams.com procedure on how to access the service for free.

Basic Lesson 11: Brief Summary of Technical Analysis

Technical Analysis would be the part in the stock market that could be challenging to anyone. I started learning from reading materials and watching videos available online hence my studies was messed up as I am not sure where to start. Unknowingly, my determination to learn this aspect is paying off as I am able to interconnect the dots I have learned about stock market.

Here we go, my understanding about Technical Analysis in Stock Market.

Do you know the future of stock market? Of course no! There is no one that could 100% surely tell what will happen tomorrow. Only God knows the future.

So technical analysis is created to try predict the future price movement of stocks. So if someone will tell you that they can surely make you money in stock market then better get away from that person. He is trying to get your money and trying to scam you. No one knows the future! Do you?

Technical Analysis Summary of Basic Techniques:

Developing a Trader's State of Mind - Rande Howell

Just Re-sharing:

Webinar originally presented on October 6, 2011

Learn to build a Peak Performance mind for trading by developing a mindset that is rooted in discipline, patience, courage, and impartiality. Break through your fears in trading and use Trader Psychology to develop your Traders State of Mind.

Without internal discipline, traders lose long before they are actively trading despite a proven methodology. They bring a fear based mindset into their trading day and that contaminates their ability to trade from a disciplined and impartial state of mind.

Trader’s health by Sam Jacobs of Alertel trading signals systems

The market is an emotion less brute and it goes on forever nonstop, but not you, not your body and mind. Your health is your greatest asset, trust me when you are young you may think this may not be applicable to you but eventually it does. I speak from my own life experience. All those sleepless nights and junk food plus energy drinks plus alcohol took a toll on my health as trader and as a family man. I had to pay with all that I had.

I don’t want this to happen to you young folks.

By maintaining better physical and mental well-being, traders can consistently create a positive and productive work environment.

I am a victim of bad trades, judgments and brokers. I am Sam Jacobs soon my time on this blue planet will be over. Why am I saying this?

Just like many I wanted to be a millionaire in few days by trading in stock and Currency markets. Little did I know what was in store for me! I can see myself back then, an over ambitious geeky retarded looking man who beamed with pride when he got his first account opened with a so called reputed and trustworthy broker. I am going to be a millionaire.

I used to flip through the financial times while drinking my first coffee of the day and as soon as I put the newspaper down I used to feel like the wizard of the Wall Street.

It did not take too long for the wizard to burn his fingers. I burnt it pretty well but my pride did push my egoistic nature to its limits. I was not ready to change. I was under the impression that I was right the whole time and it was the market which went wrong due to various reasons. I was just passing the buck. So on with my blame games. Little did I ponder into my own mind to find whether I was all right or was I doing the right thing nor I was ready to accept my mistakes, especially my health.

FOUR TYPES OF STOCK TRADING PLAY

This was shared in Facebook - Traders Empire Group. Worth noting.

1. Breakout Trades

When experiencing extended range consolidation, it is best to begin
considering playing for a Breakout in hopes of a new, sustained breakout
move. Recall that other traders will be attempting to “fade” the breakout
and if price continues, they will be forced out by their stop-losses.
Stops are placed conservatively just below the breakout zone or
aggressively below the area of most recent consolidation.

2. Retracement Trades

Retracements often have the highest probability of success when properly
identified (in a trending environment). Core trading strategies can be
utilized as well as swing trading strategies which seek to capture the
“sweet spots” or a simple 'leg' of price movement (these can be the
distance from a support zone to the most recent swing-high price). Stops
are placed conservatively below the support zone or aggressively below the
most recent swing low.

Automatic Analysis of EMA (13) x MA (20) Crossover using Investa Screener by Investagrams.com

With SWAG becoming popular, investagrams.com was able to provide Investa Screener as a support. Below is the video about how to use the Investa Screener.

In this video we discuss how the EMA 13 x MA 20 crossover system works, and how it can help us with trading. We also have included a new feature where you can ANTICIPATE the "cross" signal to be able to see these trades earlier.

You can now see which stocks pass through the EMA 13 x MA 20 strategy with just a few clicks using Investa Screener™

To gain access to Investa Screener just follow this 3 simple steps:

1) register an account in www.investagrams.com (if you already have one proceed to the next step)

2) Go to this FB link: https://www.facebook.com/Investagrams...

3) Share the video in your wall, and write how the Investa Screener Can help you. Include your investagrams.com username in the post together with the hashtag; #InvestaScreener (Make sure the post is in PUBLIC privacy)

Here is the video 

Good Luck!

MOVING AVERAGE By Guillen Rocher

When I was a new trader I never imagined na matututo ako ng Technical Analysis. Kapag nababasa ko pa lang yung mga technical terms at traders lengua nila gulong-gulo ako. Sabi ko sa sarili ko "Parang imposible"....😢

There is no impossible..

Minsan nagpost ako sa investing group (my first post) asking for help, I said....

" Sana po may magturo ng Technical Analysis dito, yung madali lang po sana maintindihan"..

Zeus' Strike And The Alignment Of The Stars

I had my fair share of profitable adventures with my linemen when
 dealing with 3rd or 2nd Liners. And I think it's about time I wrote
 and shared it to you guys.


Let's start it off with 

"The Zeus' Strike!"
The only lightning strike you'll be wanting to catch.

Now whenever my linemen, the moving averages, like the 20MA or the 50MA go below prices, 
I noticed that most of the time, a short term rally happens.

How to combine the right indicators and avoid wrong signals

When it comes to indicators, there are three classes: momentum indicators, trend-following indicators and volatility indicators. Knowing which one belongs to which category, and how to combine them in a meaningful way can help you make much better trading decisions. On the other hand, combining indicators in a wrong way can lead to a lot of confusion, wrong price interpretation and, subsequently, to wrong trading decisions. 

Indicator redundancy – seeing the same things on different indicators

Indicator redundancy means that a trader uses multiple indicators which show the same information; indicator redundancy exists if a trader chooses two or more indicators from the same category.

The screenshot below shows a chart with 3 momentum indicators (MACD, RSI and the Stochastic). Essentially, all 3 indicators provide the same information because they examine momentum in price behavior; you can see that all indicators rise and fall simultaneously, flip together and also are flat during no-momentum periods (red boxes).

The next screenshot shows a chart with 2 trend indicators (the ADX and the Bollinger Bands). Again, the purpose of both indicators is the same – identifying trend strength. You can see that during a trend, the Bollinger Bands move down and price moves close to the outer Bands. At the same time, the ADX is high and rising. During a range, the Bollinger Bands narrow and move sideways and price just hovers around the center. The ADX is flat or going down during ranges.

Day Trading Breakouts – 4 Simple Trading Strategies

Are you a day trader? If yes, then you will definitely find this article helpful as you begin to navigate the world of day breakouts. Today we are going to discuss 4 strategies for how to trade intraday breakouts.  Before we jump into the meat of the article, let’s first align on the definition of breakouts and some of their key characteristics.

What are Breakouts?

A breakout occurs when price clears a critical level on your chart.

These levels could be a trend line, support, resistance, or a key Fibonacci level. Remember, levels on your chart are psychological and represent the sentiments of day traders at a respective price level.

When you think of day trading breakouts, what comes to mind?  Stocks making daily highs, two-day highs, weekly highs, all-time highs?  As you see, breakout means a lot of things to a lot of people. So, why do so many people lose money day trading breakouts? Why are traders constantly buying stocks when they hit intraday highs, only to have them rollover within minutes. How many times have you shorted a stock on a breakdown through a critical support level, go get coffee, come back and see the stock has bounced and you just bought a five-thousand dollar no foam, soy latte? Well, in this article I will give you the "secret" that so many breakout day trading professionals use everyday to take themselves from ordinary to extraordinary.

Biggest Misconception about Day Trading Breakouts

If I buy a breakout or sell a breakdown, I will make money, right?  If you believe this statement, immediately contact your broker, withdraw your funds and put them in a savings account.  If you follow this system, you will lose money.  Often times professional floor traders and the like will wait for stocks to break new lows, look for large buy orders in the tape and then start scooping up every share in sight. This will leave you the novice trader, looking at your screen scratching your head. Asking yourself the question, how did this happen? My technical indicators were in alignment. The stock has been below its simple moving average the last 10 bars. The last 15 bars have been down, now when I put on my short position, the stock has the bounce of its life. If you are ready to end your streak of tough trading days, continue reading.

Technical Analysis Course Videos

Just Re-Sharing:

The benefit of technology is that you can find free training such as this. For those interested in learning by listening and watching then this would be best for you. A full set Technical Analysis course videos for free.

1. Technical Analysis Course - Module 1: Technical Analysis and the Dow Theory

Basic Lesson 10: COL Financial "Charting"

This is just an overview on how the COL Financial "Charting" looks like. This is actually a continuation of Basic Lesson 4 as this is a part of quotes tab.

Okay here we go.

- Click quotes then "charting"

- It will open a whole tab exclusive for charting only (Just like the mutual fund tab).

We will break up the overview from A, B, C & D.

- (A-Orange dotted box) Once you click the tab, it will provide you all the stock code and company name of all traded companies in PSE. You can either type the stock code or select from the list.

- (A-Green dotted box) This option will enable you to analyze the stock movement in daily, weekly, monthly and or intraday movement of 1 min to 60 minutes.

- (A-Blue dotted box) This option enables you to view the charting outlook in monthly, six months  and etc.

- (B-Orange dotted box) As the box implies (Compare), you can input another stock code so you can compare on whatever stocks you selected in Overview (A-Orange dotted box).

- (B-Green dotted box) Chart provides you the option on which charting platform you want. I suggest candle stick because I don't know the others LOL.

- (B-Blue dotted box) Studies compiles maybe all or majority of available charting techniques available. I am only know some of these studies such as moving averages, volume analyis, MACD, RSI, Stochastics, MFI, Bollinger Bank, Ichimoku and Parabolic SAR. I learned everything from surfing the internet only. You can just go to my Technical Analysis Page if you want to learn some of the basic technical studies about stock market. Or I suggest you go at these following websites as I learn from them the most:

http://stockcharts.com/

http://www.babypips.com/

http://www.investopedia.com/

- (B-Violet dotted line) Once you click this icon, you can see that you can download the basic user manual. It is just an overview also. This is the link to the COL User Guide PDF Copy - Click Here.

- Once you click "select tool", you will be provided with some of the charting tools that can maybe support you in making your charting analysis beautiful hehe. You can draw your charting what ever you wanted such us putting line, cirle, rectangle, annotation, callout, doodle (free form) and etc. I think Fibonacci is one of the most important tool on this option. See all my copied notes about Fibonacci in the Technical Analysis Page. 

- Lastly is watch list which by title itself tells you what it is. Just click watch list and the "My List with Add (Plus) Icon would appear. Once you click it, "Watch List Name" a somewhat separate tab would appear. Here you can name what ever watch list name you would like to name it. And now below it, you can list all the stocks you want to save. You just have to type the Stock Code then space before writing another stock code. In my sample, I put BPI then space PLDT. Your "Watch List Name" would appear below the My List. You can edit it and you can delete it afterwards.

Okay, I think that is the overview of COL Financial.

Good Luck!