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.
add me up also on twitter @pisomatters
and facebook: pisomatters@gmail.com
Wow, we started of similarly! I started in November 2011, with no style - and really no clue - but ended up with a 5% gain in January (sold too early).
ReplyDeleteTook a break and by end of November 2011, had 6% gain. But in between I took a beating with PCOR - bought at 11.36, sold at around 10.3 or so.
I'm learning TA right now too. If you pick up some nice tips, please share! :D
The market is so bullish, just enjoy the ride. I am now waiting for a major correction to accumulate more!! =)
ReplyDeleteWow.. You guys have been playing the market for quite some time. I just started in Oct 2012. Im still contemplating on my trading plan. So far im not losing any money except for the recently bought dnl.
ReplyDeleteI want to learn TA in-depth when i go back for a quick holiday but havent find sompne to teach me yet
Hi Claudine! If you are a COL client, they offer a free technical analysis seminar once a month. For non-COL clients, they charge P500 for this seminar. Since you said "quick holiday", I assume you are not in Manila. Better schedule your "quick holiday" in time with the monthly free TA seminar of COL.
ReplyDeleteRegarding DNL, it looks like COL has good outlook for the stock. Maybe just sit back tight and let the price catch up with the valuation. (Yes, in this instance, it is the price that is supposed to catch up with DNL's valuation. hehe)
Good luck on investing! May we all get what we want from this endeavor.