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How Important is Reflecting on Your Trades?

“Successful traders know that a consistent and systematic review of their daily trading activities is the direct path to growing and improving” 

– Van K. Tharp

While looking at the movements of your charts, play the Reflection song by Lea Salonga and sing along with these lines: What is that trade I see? Staring straight, back at me. Why is the reflection something I don’t want?

Reflecting is not only done for the state of your mental health, to have a clear mind, or even to create better decisions. Reflecting must also be done when investing and trading to create sound and correct decisions. In order to do this, you must have a good, healthy, and peaceful environment. At the same time. It is very essential to have your thoughts and actions documents. Just like how you journalize the things you do every day; you must also journalize your investments and trades! 

For investors and traders, journalizing helps develop a more efficient and effective strategy in dealing with the market. With journalizing, you can see your mistakes clearly and what were the principles and rules that you have went against. At the same time, you can look at where you have excelled in! That’s the great thing about journalizing, it gives a peace of mind and determines the areas where you need to improve on. It instills the value of sticking with the rules and principles in beating the market.

One thing to know about journalizing your trades and investments is that it develops the discipline and habit of documenting every transaction that you have made —  from buying to selling, and even checking the chart movements.

Here are the things you should know when creating a journal for your trades.

Step 1: Determine what stock to purchase and what type of stock

It’s a must to know the stock you will be purchasing. But not only that, you must know what stock you will be purchasing. Is it a speculative stock? Defensive? Cyclical, blue chips, or tech stocks? This initial step already determines if you are a good trader. A good trader knows where he or she invests in. You can use either technical or fundamental analysis, or combination of the two. Remember, the organization of your trades starts on your discipline in analysis.

Step 2: Listing the quantity of shares bought

Do not rely on the information and journal given by your stock brokers. Record and list down the quantity of shares bought so you can be fully informed about your total investment. This will help you note if have already gained or made losses in your portfolio.

Step 3: The buy and sell point

This refers to the entry/exit point at which you decide on the price you would buy or sell your stock. To limit losses, you must note your target profit and stop loss. The benefit and essence of this step is to know the progress or status of your holdings.

Step 4: Type of time holding period

Determine on how long would you be holding the stock. Would it be for 3 weeks? For 2 months or 3 years? Decide whether you would be holding it on a short, medium, or for long term. 

Step 5: Trading Strategy

Trading strategies and holding period goes hand on hand. Journal whether you will be strategizing it with position trading, swing trading, day trading or scalping. Being informed with your strategies will help you on your decision making

Step 6: The buy signal and the reason

Journal the signals and indicators at which made you buy a stock. Were you just hyped with the news or alongside with the comments of traders? Always make a logical and clear decision with a good foundation of analysis, not with feelings. This will also help you understand more the importance of understanding the market structure and indicators. Was there a breakout? A hammer candle stick? A double bottom or an ascending triangle?

Step 7: Date when sold

Consider all dates important, as if they were your anniversary or even your birthday! Treat this as an important component of your trade for it will determine if you broke your rules and time frame.

Step 8: The sell signal and the reason 

Selling your stock also goes hand on hand with your time frame. Determine what was the reason for selling. Have you reached your stop loss or target profit? Was there a market breakdown or have you foreseen that the market is on downtrend?

Step 9: Principles and Results

As much as every step is important, you would and must also see the results of your trades! Have your stocks been performing well? Have YOU been performing well? Were your imposed rules and principles followed? If not, what were the results of your non-compliance with your principles?

Conclusion

Consider every step important. With the discipline of journaling, you will always continue to grow and develop the areas you need to improve more! 

Take note: You do not just record your success but failures as well! TAYOR!

Track your trading performance with InvestaJournal. Now available on InvestaPrime’s FREE 14-DAY TRIAL! 

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Featured Trader of the Week: Green DOT

Since the Philippine market has been lagging compared to various financial markets across the globe, it is a limiting belief that the local market is enough to amass the limitless opportunities in the markets. The global markets offer several asset classes along with the ability to short, leverage, and margin as part of your trading arsenal.

For our featured trader for the week, we will be showing you how he was able to spot Advanced Micro Devices, Inc. or $NASDAQ:AMD. Green DOT a.k.a. @greendot is an active member of the Investa Community who continuously spreads his knowledge, insights, and expertise in both the local and the global markets. 

Technical-wise, $NASDAQ:AMD price structure represents a picture-perfect trade setup. It first formed a cup and handle formation. The handle of the said pattern is indeed long, yet it is ideal for a stock or any asset class to form a proper base to further amplify its probability for a strong and massive breakout. 

It was a low-risk, high-reward trade, as accumulation levels could be at around the $50 area and a quick cut below $48 (-4%). It had an opportunity to tranche at the breakout of the $60 area with a quick cut below the breakout candle (-5%). Furthermore, it also presented another opportunity for a breakout in case you missed the previous move at the $88 area with a quick cut below the breakout candle as well (-4%). Selling into strength (selling on the way up/while it is easy) and into weakness (the breakdown of a, for example, a pre-determined Moving Average) is fitting since this is an All-Time High stock. 

The base at the handle area was supported with dried-up volume. When it managed to breakout of the said base, the up move was supported with massive volume. During its formation of the Ascending Triangle pattern, the formation was also accompanied by dried-up volume, and once it broke out of the said pattern, the up move was also backed with immense volume. $NASDAQ:AMD must at least sustain the $80 levels to further assert its ascendancy. 

The ability to spot resilient stocks despite the noise concerning various opinions regarding the future of the US Stock Market is the key to truly function as an independent operator. The bottom-up approach is the way to lead you to potential market leaders despite the performance of the overall indices. That is an approach that is hard to stomach in but is essential to your growth as a trader. 

Congratulations to those who were able to maximize the monstrous move of $NASDAQ:AMD. Lastly, kudos again to Green DOT a.k.a. @greendot for sharing his execution. Your FREE 1-Month InvestaPRO access is on its way!

READY TO LEVEL UP YOUR TRADING? 
Join the #InvestaCup2020 and have the chance to become the Champion of the Biggest Trading Competition in the Philippines. 

Click on the photo to learn more.

 

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How to Fast-Track Your Trading Journey Towards Consistent Profitability

Most people go into trading because of the profits it may bring.

But as your beginner’s luck runs out and starts heading into a losing streak…

You start spiraling into a state of frustration and confusion, craving for a strategy that can produce all the profits you ever wanted.

In the end, you ask yourself…

“Can I succeed in this trading business?”

“Is everything that I’ve done worth it?”

Well…

Now, you might think that succeeding in trading is a hill you can never climb.

But what the statistics don’t tell you is that not all of those who failed are quitters.

That’s why in the next 5 minutes…

I am going to share with you 5 essential characteristics you must operate into to fast-track your progress towards the 24% of profitable traders.

Let’s get started!

1. You Must Take Responsibility

Refusing to take responsibility for your trading decisions and beliefs means that you are giving up the power to change.

When you give up the power to change, you lose the ability to change your results.

So, if you wish to make that first step of taking responsibility, the first thing you should do is to…

Control your initial response to a situation

Instead of embracing the problem at first thought, find, and embrace solutions.

Let’s say you have a stock that moved +50% without you.

Your initial response would probably something like…

“I shouldn’t have followed that group admin’s stock tip!”

“It’s my broker’s fault, s*#@!”

Instead, exercise proper breathing first and ask yourself…

“How can I re-enter this market without breaking my rules?”

“Is this stock still worth being on my watch list?” 

See the difference?

Now, I know how painful it is to miss trading opportunities…

But controlling your initial response to a situation not only saves your trading capital but your mental capital as well.

Read on…

2. You Must Think Independently 

Dependent traders crave the opinions of others on whether they should enter or exit a trade.

If trading without a plan is already disastrous, what more if you let others define how your plan should be!

Always remember that the only best stock trading strategy out there is the best one for you.

So to give you perspective…

There are a lot of profitable trading strategies that work differently

Looking at the chart, losing 80% of the time will still net you profit in the end if you get rewarded 5 times your initial risk on winning trades:

Of course, I’m not telling you to lose 80% of the time, but looking at the chart…

You must determine whether or not you are the kind of trader who is:

  1. comfortable winning more trades but offer fewer rewards (high win rate, low risk to reward)
  2. more patient in achieving bigger rewards but can handle losing streaks (low win rate, high risk to reward)

Choosing A or B is something only you must choose, so never let anybody define how you should trade.

Own your process!

Got it?

Then let’s move on…

3. You Must Know Your Stock Trading Strategy Intimately

One of the things that hold people back to become a profitable trader is when they have unrealistic expectations of the strategy they are using.

So, here’s an example of a systematic stock trading strategy backtested from 1990 to 2018:

Number of trades: 710

Winning rate: 48.5%

Average Annual Return: 12.77%

Maximum drawdown: 41.73%

Source: TradingwithRayner

There are better systems out there, but this system beats the 32-year average annual return of the PSEi which is 7.50% 

Now, the first thing to analyze is…

The strength and weakness of your strategy

Not only you should know when your strategy works, but also when it doesn’t work.

As you can see, this market thrives on long-term trends and lost only 5 out of the 28 years the strategy has been tested.

However, you must take note that this strategy does not work well on Financial Crises:

The next thing you must identify is…

The worst-case scenario of your strategy

Now, what would you’ve done if you have experienced a 4-6 month losing streak?

Or lose 22.6% of capital in just a month?

Would you start tweaking your indicator settings, add new indicators, or pull out your capital and hop into a new system just because you are not “satisfied” with the results?

A worse-cast scenario is never easy to accept, but identifying it plays a crucial part in choosing a strategy

If you do not have the conviction to stick with your system through hard times, then you won’t thrive long enough to experience consistent returns: 

So, the next time you encounter a strategy that promises huge returns…

Always determine what its maximum risk and average reward are, and think independently whether or not you can accept the risk, reward, and the concept of the strategy.

Next…

4. You Must Execute Consistently

As a human being, you will miss some trading opportunities and miss checking your charts.

This is why you must develop not only habits but a system to put your habits into action consistently.

So, what you must do is to…

Have a trading routine

One thing you must know first is that your trading business by any means should not damage your relationships or hinder other responsibilities

Overall, your trading routine should at least have the following:

  • analyzing charts/building your watch list
    • reviewing your trading journal
    • executing trades
    • a fixed time where you must execute your routine

With that said, you must…

Track your trading habits

You can add more habits if you wish, but tally what you’ve accomplished by the end of the week/month and see how you perform.

If you have barely accomplished half, then make adjustments or improvements to your trading habits.

Remember, consistent results can only be achieved by consistent actions.

And finally…

5. You Must Grow Continuously

If you think that there’s nothing else to learn as a profitable trader or you feel that you are not growing, it’s either your trading business is dying or you are not growing fast enough.

In able to grow continuously, a couple of things you can do is to…

Feed your mind with contents that ONLY help you improve what you have

Instead of trying to add more knowledge into your “toolbox,” choose to improve the tools you already have and how to use them effectively.

If you are looking for direction in trading, then the TradingwithRayner Show will help you out.

If you are a price action trader, then Your Trading Coach has one of the best content for it.

But if you are new to trading, then Investa Learn will help.

Again, choose contents that’ll only help on what you have and where you are now.

Have a trading circle that helps your growth

You don’t need to look for traders who trade the same as you.

But what you do need is to be with independent thinkers who can give you wisdom and direction in trading (instead of hype and tips on which stocks to buy).

Because being around with disciplined traders and high-performance traders open your mind to new possibilities on how you can improve your own. 

Overall…

The best trading groups I know not only support you in your trading but also produce a huge impact on your life outside of trading.

Putting Things Into Perspective

Trading is a journey worth going through for a lifetime.

What’s important is not just the money you can potentially make (or lose), but the meaningful relationships you build and the person you become in the process.

Overall, these 5 characteristics must be practiced in harmony as it is crucial not only to your trading success but the longevity of that success you have or will achieve.

As the saying goes, “success requires maintenance.”

With that said…

What else can you add to these 5 things?

Let me hear your thoughts in the comments below!

Contributor: Jet Toyco
Investagrams Username: @Jet_Toyco
About the Contributor:

Jet Toyco is a private executive trading coach and a systematic trading portfolio fund manager at TradingwithRayner.

He is also a public helper of the trading community that is always open to questions anytime to give the knowledge people deserve at no cost, and no hype.

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Where Should I Start Trading in the Financial Markets?

It is common for an aspiring market participant to wonder about which market they should commit themselves to. Many may argue and accord several propositions concerning the subject matter. The majority of which would tell you to start with the local market. On the other hand, there are a minority of individuals who would advise you to start with the Global Markets, whether it is the US Stock Market, Forex, Commodities, or Cryptocurrency. 

Trading the financial markets, as described by Mark Douglas, is an activity where an individual is exposed to an endless stream of opportunities. In hindsight, the financial markets do not sleep, given that there are a multitude of stock markets across the globe, operating in different time zones, and the forex and commodities market that operate almost 24/5, and the cryptocurrency market that functions 24/7. 

There are trading opportunities every day, even if you would only trade the $PSEi. As of this writing, the local market operates for three and a half hours. Although, it is a limiting belief that trading merely one market is enough to fully amass the limitless series of opportunities that the whole financial markets are offering. The capability to be able to trade on the short side, along with the option to execute a trade using leverage and margin are aspects that the local market does not have yet (although there are limited brokers in the Philippines who offer margin). 

Some started trading the Global markets without participating in our local market, and vice versa. The most important factor here is to choose an environment that presents more opportunities than the latter. There are cases when a trader performs better in global markets in comparison to the local market, and vice versa. To each their own, as they say. 

It doesn’t matter what market you want to commit to if you have studied and assessed what you are getting into. An aspiring market participant should be aware of the differences across the trading landscape. This is to ensure that the novice trader fully understands the risks involved for every available asset class.  

If you want to learn more about the differences between the Global and Local market, you may check out the Going Global InvestaDaily Article series.

Now is your chance to DOUBLE UP your TRADING! Join the Biggest Trading Competition in the Philippines.

Do not miss the Investa Trading Cup 2020 and have the opportunity to WIN OVER PHP 300,000 IN PRIZES!

 

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Featured Trader of the Week : J Hackz

Despite the cloudy performance of the local index, there are still names that exhibit resilience. Spotting a potential market leader involves precision and accuracy, and a market participant’s stock selection should be clear and concise.

For our featured trader for the week, we will be showing how he was able to pinpoint Philippine Infradev Holdings Inc. or $IRC to fly. J Hackz a.k.a. @j_hackz is a member of the Investa Community who shares his analysis on several names using classical Technical Analysis.

Based on the price structure of the said stock, $IRC was hovering above its major dynamic support levels in the form of moving averages. While the stock was forming a base, it was accompanied by dried-up volume and was also hovering above RSI (14) 50, which further solidified the creation of the said base.

Despite its issues with liquidity, it was a low-risk, high-reward trade, as accumulation levels could be at around the 0.78-0.8 area and a quick cut below 0.76 (-4% to -5%). It had an opportunity to tranche at the breakout of the recent pivot high at 0.94 area with a quick cut below 0.9 (-4%). Potential take profit areas were around the 1.15-peso area (20%-45%).

The recent breakout of its previous pivot area was also supported with massive volume, which was a good indication of the said move to further continue its advance. $IRC must either break the 1.15-peso levels or at least sustain the 1-peso psychological support level to further supplement its dominance.

It is essential for a market participant to prepare for what’s ahead. A stock like this may shake you out as observed with the wicks present in the price structure. The key is to establish a buyback plan in case you get stopped out of a trade like this. There is a chance that you were just too early in the trade. As Zig Ziglar exclaims, success occurs when opportunity meets preparation.

Congratulations to those who were able to maximize the technical swing of $IRC. Lastly, kudos again to J Hackz a.k.a. @j_hackz for sharing his execution. Your FREE 1-month InvestaPRO access is on its way!

Now is your chance to win over PHP 300,000 in PRIZES and
be hailed as the Champion of the Biggest Trading Competition in the Philippines!
Join the Investagrams’ Trading Cup 2020: Bounce Back Challenge. Competition starts on September 28.
Click on the photo to learn more about the Investa Cup 2020.


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Competing While Managing a Portfolio: The Untold Truth

With Investagrams’ Trading Cup 2020 around the corner, most traders might be wondering if they can handle the pressure of managing both a competition and a real portfolio. Joining the competition will give you a chance to win prizes and see how you stack up against other traders. On the other hand, there is an associated risk that comes with handling multiple accounts at the same time. The truth is, managing both a competition and a real portfolio will divide your attention in a way that forces you to take smarter trades. 

Having two portfolios can divide your focus, but it is more likely that you will be forced to follow your trading plan. You want to grow your personal portfolio, while also doing your best to win the Trading Cup. Thus, you will do your best to reduce the number of impulsive trades that you take. 

In addition to this, you will need to pick only the best trades instead of trying to catch every trading opportunity that comes your way. In reality, some of you might already be implementing this in your system but by joining a competition, you will be encouraged to take this to the next level.

It is without saying that only executing smart trades is easier said than done. After all, no matter how right you think you are, the market can swing the other way leaving you speechless. This is where the use of trading tools really come in handy. By using tools such as screeners, watchers, and backtests, you can effectively automate your trading. These tools can also help you arrive at data driven decisions that can improve your trading executions.

Click on the photo to access the InvestaPrime FREE 14-Day Trial now.

Depending on your priority, you can set watch list alerts for one portfolio and then closely monitor the other one. But, if you really want to take your trading to the next level, you can set watch list alerts as well as conditional orders (stop loss and buy on breakout) to free yourself from monitoring the markets and instead focus on doing research.

Alternatively, you can do your research after the market closes, set your alerts and orders the next morning. This is to divert your attention to something else such as your full time job or other personal tasks. Again, some of you might already be practicing this, but joining a competition while managing a portfolio emphasizes the need to utilize the tools to their full potential.

All of this contributes to a paradigm shift in the way you trade. Instead of observing charts all day, you as a trader, will be more inclined to be data driven. Your profitability as a trader will then be more reliant on the decisions you make rather than the amount of time spent monitoring your positions. 

Eventually, when the competition ends, the changes that you made in your trading strategy will result in a more relaxed trading lifestyle. The pressure of managing two portfolios will leave but the changes you made to your trading system will stay. Instead of working hard to trade all day, you will effectively streamline your trading by only dealing with the important processes. 

All in all, the experience will lead to you taking smarter trades, spending less time in front of the computer screen, and hopefully one step closer to financial freedom. 

Win over PHP 300,000 in PRIZES and become the Investagrams’ Trading Cup 2020 Champion!

Click on the photo to join the Trading Cup 2020.

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Up to the Challenge? BOUNCE BACK in Investagrams’ Trading Cup 2020!

Vision 2020. 

We imagined this year to be our best — achieving our goals, having our breakthroughs, and becoming the best that we can be. 

But the opposite happened. Almost every month, something majorly daunting happened. Taal Volcano erupted in which its ash fall covered several regions in Luzon. Because of the pandemic, it seems that we are perpetually in home quarantine. Consequently, the financial markets fell after their almost a decade of bull run. 

Our clear vision for the year suddenly became bleak. 

But 2020 is not yet over. We can still get up and BOUNCE BACK!

We can still redeem this year and make the best out of it. That’s why Investagrams still pushed and continued its annual tradition of holding the largest Trading Competition in the Philippines. 

Despite everything that happened, Investagrams braved the current market condition and put in more effort to make this year’s Trading Cup the best yet. With the base pot money of PHP 300,000 (for Double Up Pass) plus the re-opening of Shorting or Short-position trading in this year’s competition, all the contestants have more chances to grow their portfolio amidst any market condition. And the most exciting part is that the Bonus Pot money grows as more contestants join in!

Aside from the cash prize, the Top 3 winners will get LIFETIME Access to InvestaPrime Elite worth PHP 100,000 each and the coveted Trading Cup Trophy and Champion’s Badge.

“In the midst of this pandemic, every person we know is going through something radically different than anything we have ever experienced and this crisis is actually asking us how fast and how well we can endure and adapt to changes. 

Through the Investagrams Trading Cup 2020 competition, we want every investor and trader to see 2020 as a year of new beginning and to prove themselves that they can make their own paths forward. It’s time to prove that all your hard work, perseverance, patience, and dedication to the craft is finally going to pay off,” Joanne Marquez, this year’s Trading Cup project lead, challenges and inspires everyone to keep going and keep conquering despite the hardships brought by this year’s events. 

“To everyone who’s joining the competition, I wish you all good luck and may the best trader win,” Marquez added. 

It’s time to ask yourself. Are you ready to BOUNCE BACK? Are you ready to conquer 2020? Join the Investagrams Trading Cup. The competition will start on September 28.

To know more about the Investagrams Trading Cup 2020, visit www.investagrams.com/tradingcup.

For the InvestaCup’s Rules and Mechanics, READ HERE.

Good news, InvestaUniversity students! Get PHP50 off when you register to Trading Cup 2020.  Just use the Exclusive Promo Code: TCUPUNIV50.  

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