I did not have a trading plan or style when I started investing in the stock market in January 2012. At the end of February, I was up 10%. Yey! Stocks that I was holding then were MEG, BPI, JFC, and SMPH.
Then in March, I learned Technical Analysis. I increased my capital and tried doing TA in so-so stocks (and yes, even basura). I thought I could do TA by just drawing lines here and there. Then boom, the market began correcting... the 10% I gained in two months started to be eaten up by the correction and yes, a few "technically analyzed" trades (of so-so and penny stocks).
I think the deepest loss was at 7%. This was my tuition to the world of stock market.
I slowly recovered in October and ended 2012 with about 4.5% gain. I am happy with that gain. I can't get that gain with an ordinary bank savings account.
After the gains and losses, several "hula-lysis" trades, and hoping-for-the-best-but-did-not-happen scenarios, I now have a trading plan. It may not be as clear-cut as the trading style of many veterans, but I think I can improve this.
I posted this in www.pinoyexchange.com as an answer to the question posted by "Mr. Stocksmarts" Marvin Germo.
"for medium-term to long-term stock picks, i choose fundamentally sound stocks (i.e. blue chips or companies i recognize) with a bit of technical analysis too.
by medium-term, i mean i will (and can with no regrets) hold them for more than three months to a year. by long-term, more than one year. i buy "undervalued" stocks (based on FA of my broker) that are technically in the bottom part of the current price range (based on my newbie reading of charts = TA).
For medium-term stocks, i sell all once target price or FV is reached. For long-term stocks, i sell portion of my positions and hold the remainder for long-term.
i still buy them on dips if uptrend is sustained. and yes, i might sell them when major support/s is/are broken. luckily, this hasn't happened yet for my mid- and long-term stocks.
for short-term plays, any stock (including basuras or penny stocks). TA, rumors and the mindset of "profit is profit no matter how small. sell!" and i make sure i only play small too, not a significant portion of my portfolio.
P.S. I am no stock market expert. I just started January of 2012.
(wow. this is the first time i explicitly wrote down my trading plan. before, this was just in my head. haha.)"
See you @ PEX. my ID is pisomatters.
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