So, it has been almost 6 months since I started stock trading. I have witnessed several disasters in the stock market like the bear market, the ghost month, the inflation rate, the US-China trade wars, the US market’s Dow Jones massive decline and then again the inflation rate. All of these events seem to pull most of the Philippine stocks down and of course, in the process, forcing me to cut losses.
Good News
With all these events that baptized me in the stock market, I’m still alive and my portfolio is growing as well thanks to my sponsor, my small salary. It is not big, but it is definitely bigger than when I started last May. 2018. The loses that I have incurred over time with my bad trades are about 30% for my overall funds added to my portfolio over time. That’s painful, really. However, since I followed the strict money management and cut loss system, I’m still able to trade.
Most of my big loses are due to extended cut loss levels. If I have just followed the rules, it won’t be that big.
New Strategy
Until 3 weeks ago, I’ve been using my broken system that doesn’t really give me any consistent winning trades, and that system is no system at all. Before, I just look for support and resistance, and if the price is near the support, I buy it. Sometimes, I just wait for the price to go low and buy, not watching the real support level. With just support and resistance system, it is just like gambling really, you either win or less like 50/50 chance.
Also, I’m following a recommendation too but I found it not working for me. Don’t get me wrong, Tsupitero.com newsletter is good and it is still worth my subscription this year and for sure, I’ll renew next year too. The only problem is that I don’t have a system. I don’t have the proper entry and exit strategy.
So, I have been reading ZeeFreaks’s blog for straight 2 weeks and binge watching Money Grower’s videos on youtube. I have learned so much from them. By the way, Money Grower’s mentor is ZeeFreaks himself.
Prior to that, I have learned some basic to intermediate trading techniques from Investagram’s learning kits from their Trading Cup which I joined by the way, and I have no change of winning as of this moment as we only have more than 1 month to go and I’m down by 9%.
So, back to ZeeFreaks and Money Growers, I’ve learned the art of trading breakouts. They called it BOBO (buy on breakout). Bobo also means dumb when literally translated in Filipino. It is bogo when translated in Cebuano. Trading breakouts have higher tendency of trading a winning trade. Breakout is when price goes up and passes through a resistance. It is also applicable for moving averages during a downtrend when 50MA or better the 100MA crosses from above then hit the price and go below the price. It is usually good to trade this kind of breakout as it has higher chance of going up. Of course, you need to watch the volume as it could be just a fake breakout which also happens a lot of times.
My previous strategy by the way was called BOSO (buy on support) which is also good but it needs to be combined with other technical analysis as it has the tendency to go down further instead of going up.
Technician/Chartist
With that, I officially becomes a technician or chartist – a trader who only relies on technical analysis or charts to execute trades. As ZeeFreaks puts it, “No tips, no news, no rumors. Just the charts and you!”
Bonus: If during a breakout, the 20MA hits the daily price, it may be used as an exit point or a buy back point depending on the situation. If it breaks 20MA, usually, you’re out, unless you take more risk for more profit.
Bonus 2: I have found some possible breakout from Tsupitero.com’s recommendation. I just have to wait for the confirmation before going in. I think Tsupitero.com’s recommendation is a good way to scout stocks. It is still worth it.
My recent winning trade was CLC which I bought at 6.59 during the mini-breakout and sold at 7.50 the day after which was a massive breakout. I was not able to sell it higher as I was scared by the massive downswing, although I never regret that decision. 13%-ish gain is gain. And guess what, right after my winning trade comes 2 losing trade.
See? I guess my system is not enough but I’m getting there, slowly, one losing trade at a time.
Hey,
glad you are making progress with investing in stock market.
My first impression of stock market is that people who invest their money there are rich people. and so I am wrong.
hope you keep it up. keep on fighting to become rich! lol!
it also seems you don’t post technical blog posts anymore. what happened?
Yo, zup! I still post programming and web related stuff but not on regular basis. I’m spending most of my time studying this trading stuff and it requires a lot of time and work. Hopefully I can go full time in 3-5 years but of course, programming will still be my number 1 passion.
Try take a look at trading too. It is not all about making money. If you take it seriously, it can improve yourself too as a person.