Stock Trader's Tool and Set-up

ZF shares
On trading tools commonly used:

• Moving Averages (MAs), 
• Darvas Box Method, 
• Fibonacci 
• RSI (Relative Strength Index)

On buying and timing

• buy in tranches - 3 tranches to be exact : Before, During, and After breakout point.The tranches can be done in weeks, several days or all in one day. 
• The safest to buy is during the matching or run-off at 3:15-3:20 PM since at that point, the possibility of a whipsaw is close to none.
• If you're an active trader, probably 2-5 times a week. 
• If you like to diversify and do low volume trades, then you can do 5 trades a week. 
• A Trend follower can trade once every month or even 2 months

Trend Following and Darvas

On a personal note, after learning about technical analysis, I have purge my stock to let go of the old mindset and apply the new effective system.

Time for execution. Practice and practice until mastery is attained. It will be "Plan. Execute. Reflect"

I decided to shift to reading the blog of another successful trader who has the setup I prefer: part-time and trend following. I got into that conclusion after I read about how much portfolio you should have to earn comfortable. Small trades for now when I haven't reached that desired portfolio.

It starts with a post on the career of Nicholas Darvas. He was a dance foremost then trader second. He was dancing all over the world when he earned $2 million. But his quotable quote includes: " I am the captain of my ship." And goes on to share who he relentlessly study until he got is own style.

Different trading styles and styles, Trading 212 shares on chart time frames

• for trend following: daily >> weekly >>3 to 6 months; low maintenance
• for breakout trader: 
• for swing trader: 3 every 3-4 hours
• for day trader: 10-15 mins char; requires more attention; high frequency trade

ZF shares that trend following

• easy to learn and master
• does not require a lot of indicators
• uses mainly 20/50/100 MA

Elements of Trend Following as derived from Ed Seykota

• initiation
• holding 
• liquidation

Pitfalls of Trend Following as shared by Kay Sebastian; she begins that it is not for everyone

• initiation
• good periods of the market has little movement and may bore trader
• never getting the earliest entry
• goal of trend following is to enter the trend not finding the lowest of lows
• holding
• getting stuck in consolidation; other traders like momentum are gaining more
• hanging on to large profits; when your profits, greed creeps in
• liquidation
• cannot sell at the highest level

Key to trend following

• asymmetric nature of trading; upside is way higher than downside
• trend followers manage their downside through position sizing and tight stop loss but trend follows do not set target prices

Swing or Trend then Screen the Stocks

To get started in stock trading, you need to pick stock. How to effectively pick stocks?

MoneyGrowers shares how to screen stock

• need tool to scan stocks: RSI, CCI, Moving averages, Stochastic, etc
• Mark Minervini has a stock template
• screen 200 MA, price above average OR
• MACD, about to cross signal from below (but this option is not found on Tsupetot)

Money Growers has another suggestion

• check stocks with AOTS (see previous post about this) then do Darvas box and watch for those near breakout

Investagram has a screener. Need to be beta user. You be a beta user when you post to your Facebook account

You can also use Tsupetot to screen stock;

TrickTrades shares to do nightly scan or create watch list pre- market using Finviz

• he said to become prepared: study tonight's market for tomorrow's play
• he screens stocks based on price: $20 and under and he plays with small cap

Drake Traderbits uses Investagrams Screener and shares

• chose trend: uptrend + MA 20 above to cross EMA 13 below; but Investagram screener unfornately does not 
• once he gets the stock fitting the above criteria, he used trendlines  to verify the uptrend
• he also manually checks MA 20 and EMA 13 is they are really about to cross
• he adds MACD 

Stock Screen websites/ apps

• Finviz free to use
• Investing.com Stock Screener free to use; one click on the selected indicator
• StockLabs.ph has a stock screener for premium members
• PSE Watch android app
• Tsupetot for PSE

If you want to pick uptrend stocks, you can use COL's technical guide: Research >> Technical >> Technical guide

It will list per sector and in columns the following information: the price, % from 52 week high, trendmode (uptrend/downtrend) then recommendation (sell, buy or hold)

ZF says

 I usually pick those issues that are on the Top Gainers/Losers. Then observe it in the coming days/weeks. If movement is 'good' to my tastes, I go for it.

Sandbagging, Money Management for Trader

This post is for trend followers and how to manage their money for trades. There is another article on portfolio allocation in an earlier post.

This suggestion on how much money to place per trade is made in comparison to the easy investment plan or regular subscription plan offered by certain broker. In the easy investment plan, you put in a specified amount of money to buy stocks of a certain company on a designated date. In this new sandbagging technique, ZF suggest you have four tranches/slices or periods to invest more in stocks. Two or three tranches are also acceptable but one tranche is risky.

Once you decided on the number of tranche, you decide to place your money

• Equal tranche: first half on the first breakout, and the 2nd half on the next
• Pyramid tranche: lower the price, the bigger the volume or budget

ZF continues: 

The inverse pyramid is usually done when selling. The higher the prices go, the bigger the volume

Mixing Trading and Traveling

The sun has dawned today. As I continue with self-studying the system of a successful trader, I finally came across an outline of the trading lessons.

Anyway, a question hit me if you need to be on the watch every time the market opens to watch your stock?

ZF shares how you can several vacations or hold a day job and still do well on the stock market

1. Create a trading plan
• are you for the small swings or big waves?
• what are your entry price, cut loss and trailing stops?
• do you have time stops when the stock you are watching isn't moving?
2. Plan ahead
• requirements of line trading is a phone/laptop and Internet connection (as most have an online broker) and so if you go to places with no Internet access then do not trade
3. Set triggers and alerts
• install a mobile app that sends you an SMS once your trigger and cut loss points are hit. Then at the time you have access to the Internet/ laptop can you post an Off-Hours (OH) order for the next trading day
• ZF used PSE Watch for this. There is also the Investagram InvestaWatcher. It's a subscription which alerts you via SMS for triggers and FB messenger for Dividend reports. It comes with a monthly subscription rate of P167 to P267 per month but paid yearly on subscribing.

Warrior Trading shares how he sets up his traveling trading station (plus vlogging gadgets?)

• 2 Lenovo gaming laptop: fast hardware; 1 laptop for all trading; 1 laptop for streaming/ chatrooms/ Youtube
• 2 Asus USB monitor
• HDMI mini monitor
• Capture card for his online streaming (HDMI port)
• Logitech Headset
• Logitech webcam 1080

Madaz Trader also shares his travel trading station

• Asus gaming laptop
• 2 Asus USB monitor; monitor stands to hold
• Logitech USB mouse
• USB Expansion hub
• Travel adapter
• prefers ethernet cable
• Logitech mechanical keyboard
• Blue Yeti microphone (if traveling locally)

You can have a minimalist traveling trading setup:

• laptop
• 1 extra USB monitor
• Internet connection

Exercise and Starting at the Beginning

 

Photo by Noelle Otto on Pexels.com 

ZeeFreaks has provided valuable free information on stock trading that even after a month of getting serious with stock trading, I am re-reading his blogs; on study mode.

 I would like to comment that the although the first blog post was dated September 20, 2011, the post inserted links pointed to posts dated at a later date in September and in the year 2013. Reoga Holinagi even asked which was the very first entry. I have the same question.

 Anyway, the earliest post on September 2011 was a student exercise. This post on student exercises linked back to lessons on moving averages and to osmosis; he called moving averages as linemen while he used osmosis to illustrate liquidity.

 In an attempt to copy his success thru self study, I would also look into the blogs of this followers. I first got the idea of self-studying his system thru Northstar's blog, where he aims to "reverse engine" ZeeFreaks successful trades. But Northstar did not update his blog beyond April 2018.

 Reading ZeeFreaks' blog was how it begun with MoneyGrowers PH, recalling back his earlier post in October 2015 and beginning it with gratitude.

 So let the games begin.

Full Time Stock Trading Needs Dedication

 

Photo by Scott Webb on Pexels.com 

 Profiting from stock trading is just like any profession, it takes time and lots of effort. Sirius Lee here shared that technical analysis can be learned by anyone with zero knowledge and dedication. He has shared his success too on how he purged stocks to make way for new learning. He cut losses and had almost all gains. His post inspired me to take on trading, that I can learn it despite not having a degree in finance or business. Initially his blog was in Tagalog then succeeding posts were in English. I feel it would be better in English for SEO purposes. Sirius Lee mentioned he started reading about ZeeFreaks January 2015 and when full time trading October 2015 after finishing ZF + Kidlat formal course. His initial reason to shift to full time trading was

ticket to free myself from corporate slavery

Stock Gamit here shares that life felt like

works on weekdays like zombies and laugh like clowns on weekends

And he ventured into several other ways to make money like freelancing, pay-per-click, multilevel marketing (MLM) before coming across stock trading. Self education on stock trading felt like

portfolio grew not with my gains rather by adding funds into my account... and kept throwing my cards blindly hoping for a lucky strike...

Stock gambit had a realization, stock trading

is NOT to buy cheap and let my money sleep BUT rather wait sufficiently, trade efficiently...Failure is an outcome of a poor execution

ZeeFreaks advised full time stock trading when,

1. Disciple
   • can you cut your losses?
   • can you take a loss without being too emotional?
   • do you have a trading journal?
   • do you have a routine in checking charts and doing analysis?
2. Capital
   • do you have 300-500K in your portfolio?
   • can you achieve 10% gain per month in your portfolio?
3. Specialty and Identify
   • do you have a bread and butter set up?
   • do you know what kind of trader are you, swing trader or trend following?

Identifying Trader Personality and Portfolio

Photo by Snapwire on Pexels.com 

 There are 2 types of investor,
1. Swing trader: big gain, heavy risks
2. Trend following: most followed strategy

 A robot from Alpha Cantauri shares information regarding his ideas on each trader techniques

For melee: unplanned attacks and are the result of one stock rising above the rest, forcing you to drop laggard stocks to focus on it in full force

For sleeper cells: dormant stock that may earn big time at the right time. Waiting game.

On portfolios, ZF shares

he has 3 portfolio and every 3 or 6 months profits are withdrawn and the port gets reset to 2.0 million. If within the 6 months no profits have been made, no additional funds will be added into the trading port

ZF talks about portfolio allocation like an RPG game based on the level of risk and rewards attained. Based on this story of portfolio, it seems ZF has 4 portfolios

Main portfolio which he calls Knight
Capital Preservation
75% divided into 3 stocks equally
25% cash
Yields the highest rewards with the least stress
But extreme discipline

Second Portfolio which he call Elven Archer

100% of portfolio is in cash or tsupita

strong mental capacity is required

Third portfolio which  he calls Swordman: balanced
Trend following 50%
Sleeper 25%
Cash 25%
This is the class of most traders

Fourth portfolio which he calls Mage
Time is money
All stocks are sleeper
Specialty is dividends

With this game-like ecology, Yggdrasil makes a creative DOTA-like character to personalities in stock trader along with creative RPG skills. It ends with a funny note

How much capital does it take to live off from earning from stock trading?
It depends on your lifestyle. ZF shares the cost of living from stock trading