Retire Rich

I considered buying ALI because it has the data I needed and it matches the criteria I'm looking for a stock.

This is as per stock criteria of the book Trade Like a Stock Market Wizard by Mark Minervini.

1. The stock price is above both the 150-day (30-week) and the 200-day (40-week) moving average price lines.
2. The 150-day MA is above the 200-day MA.
3. The 200-day MA must be trending for at least 1 month.
4. The 50-day MA must be above the 150 and 200 MA.
5. The current stock is at least 25% above its 52-week low.
6. The current stock price is within at least 25% of its 52-week high.
7. The relative strength is no less than 70 and preferably in the 90.
8. Current price is trading above the 50-day moving average as the stock is coming out of a base.

17 April 2019

4 May 2019

As a process of my complete paradigm shift, from long term investor to stock trading, I cut one of my losing positions. These losing positions were a product of uninformed buying decision.

I began cutting my losses starting with TKC Metals. I bought this stock, I think in early 2016 in anticipation of the "Build, Build, Build" program of the Philippine government. My conviction is that the construction sector, especially the Construction, Infra. & Allied Services subsector will boom. It was entirely my opinion.

Well, your personal opinion with the market will really cost you money in the long run as per Mark Minervini, author of the book "Think & Trade Like a Champion". My opinion really did cost me. Not able to examine thoroughly the fundamentals, I invested blindly thinking that the construction sector will move. From 2016 till us of this writing, my position never changes its color from red to green. The worst thing is I did cost averaging as the stock plummeted. 

Okay then, enough is enough. It's time to put ego aside. I made a mistake. I admit it. Cut my losses and then move on.

One mistake cleared. Let's move on to the next one soon. 

Momentum trade - Intraday
Stock: NOW
Entry: 2.7
Exit: 2.6
Result: Loss

As I mentioned in my previous post, I tried intraday again. The same trigger---greed. This time, I was stopped out.

They said that experience is the best teacher--indeed it is. I promised not to do it again because as I learned previously that intraday doesn't suit me as it drives all the emotions from me.

Well, the lesson learned last time doesn't bite me because I won that particular trade. This time, I lost. So, promise, I will not do it again. No intraday. Hindi ko kaya ang nag uumapaw na emotion dito.

So EOD daw nararapat para sa akin. Let me try to do that. Anyway, here' what happened with NOW.

The same story, NOW ticker was popping in yellow color. Greed sits in. Enter the trade, not knowing it was the peak. After I entered, the price went down. Boom! Hit my stop loss. I sold it at 5% loss. 1.25% loss total Port in less than 60 mins.

Takeaways:

The bad.

1. Should follow the takeaways mentioned previously.
2. Avoid entering a trade without the risk/reward ratio assessment. Reward should be higher than risk.  
3. Wag na kasi sa intraday.

Momentum trade: Intraday
Stock: IRC
Entry: 1.88
Exit: 1.92
Result: Win

While searching and shortlisting for stocks that qualify to the eight criteria mentioned in the book "Think & Trade Like a Champion" while the market was open I noticed IRC popping up on my watcher board at Investagrams. So it caught my attention. That was on 16 April 2019.

I'm somewhat bored actually, from reviewing charts and companies that would fit the criteria. I'm very eager to enter the market at that time to really get my hands dirty, learn from actual trading.

The price of IRC was moving up at a fast pace. So I got curious and greed sits in. I wanted to ride the momentum of IRC. A quick plan developed in my head. I said to myself, I'll enter and exit right away. But I know this trade is fundamentally triggered by greed. I had no set-up whatsoever to at least spot a stock prior to its fast move.

Well, as greed sits in, I entered IRC with only a stop loss in my mind at 5%. At 1.88 I entered the trade hoping the price will continue to move up. I observed the price action and volume after I entered. Based on volume, I felt that this price will never go up any further as I entered somewhere at the peak already. So I watched carefully at a 3-minute chart time frame. Fear started to sit in. I didn't wait till my cut loss hit. I sold it at 1.92 at a very small profit (less than 1%). I managed to get out unscathed but that was too risky.

My takeaways on this trade:

• I will never do it again -- impulsive trading.
• If I will do intraday or riding some stocks momentum, I should condition my mind that this is what I'm going to do this particular trading day.
• I was able to establish my cut loss price, which is good before I decided to trade. This is the discipline I wanted to develop in me even by doing this impulsive move. 
• The risk is really high compared to reward in this type of move that I did. 
• It seemed Intraday not suits me. I'm very emotional, the entry was triggered by greed. The exit was triggered by fear although I considered the volume of sellers as my deciding factor during my exit.
• I still need to find the right setup type of trading that suits me. A trading time frame that will not hamper my day job and the time difference between the Philippines and Kuwait should not be a problem. EOD comes to mind. But I still need to learn and read about EOD trading style.
• Next trade: Hint -- it was careless intraday trading again. This time I learned my lesson the hard way. 

Breakout trade
Stock: URC
Entry: 159.6
Exit: 154
Result: Loss

Further to my study about stock trading, I read about Darvas Box and tried to use this set-up but I think I used it wrong.

So my bias is that It will break out at the second box that I plotted (see above). But It went against me.

With what I learned from reading the book "Think & Trade Like a Champion" by Mark Minervini, the good thing is applied what I've learned from the book. At least the rule of setting up stop loss before entering the trade.

So, with the above Darvas plotting and the 20, 50 and 200 MA I entered the trade @ 159.6 and set a 4.66 % stop loss at 154.

Well, as I said, I think the setup was wrong. As I look at it now, It seemed that URC has finished the one month upward run and in on its way to reverse the trend the day I entered. Glad about the stop loss and the discipline I learned from the book. I pull the plug without hesitation and learned from my first losing trade.

My takeaways on this trade.

• The book also told about stock selection process and criteria but was not able to use it religiously. The book mentioned about 8 criteria to consider before buying a stock. Next trade, I'll focus on those 8 criteria. 
• I'll study more about the right execution of Darvas. 
• I studied also about the Fibonacci retracement and it seemed I can still consider URC on a bounce as it hit now the 50%. I just don't know. Anyway, madami pang kakaining bigas. Aral pa ulit. 
• Next trade hint: I tried intraday and caught a stock that was surging up and ride the momentum.    

Position trading: EOD
Stock: JFC
Entry: 250
Exit: 322.6
Holding Period: 8 Months
Result: Win

As part of my shift to become a stock market trader from being an investor, I started looking at my current stock positions. The first I look into consideration was JFC (Jollibee). I bought the stock in July 2018 with the mindset of an investor. I decided to invest my hard earn money at JFC considering the criteria that it is a blue chip stock and that's it. I'm optimistic that it will grow over time.

Well, it just happened that I bought JFC at the time that it was near its bottom price. Honestly, that was pure luck because, at that time, I really don't have any idea about any indicators of a reversal. Reversal is the shift from one trend to the other. I didn't study anything yet about technical analysis let alone how to read a chart.

So, my entry at JFC was really pure luck and based on one criterion that the stock is a blue chip.

I bought JFC and forget about it.

Luckily, JFC was on the brink of reversal and the price started to go up the following day I bought it and skyrocketed from 250 to as high as 292 on 3 August 2018.

Pure luck. I just got lucky.

However, on 8 October 2018, the price plummeted to as low as 242.89. But I don't care. Naaaaa! I'm an investor yah! It was 4% down from the price I purchased it at 250 per share. Well, it really bounced back and went up to 324 on 4 January 2019. I'm a very happy investor.

All percentages I mentioned are the net percentage as I used a COL Financial buy and sell Android application that includes the brokerage commission on buy and sell.

In February 2019, I started my focus on learning about chart reading. At that time, I am not decided yet to become a stock trader. I'm curious about chart patterns and then, later on, learned that there are certain chart patterns that could signal a shift in trend. Eventually, on 1 March 2019 I decided that I will try stock trading.

So I tried to examine JFC price action using what I learned from my reading. Jan and Feb JFC price went sideways. It is consolidating and I'm observing the chart pattern taking into consideration what I just learned. I'm looking for a pattern that will tell me that the stock will breakdown or breakout.

Well, as far as my learning is concern, a chart pattern showed that the price will possibly go down trending. So I sold it at 322.6 on 11 April 2019. A 22% upside.

But by reading further, told me that I should wait for confirmation at least one more trading day if indeed the price will go down. I told to myself what if the price will go up even higher tomorrow?

However, the price indeed went down the following day. Till this writing, the price was going down and the price closed today at 302.20.

My takeaways in this trade:

• I know, I was lucky at the entry. I should read more about the correct entry.
• My strategy is not yet developed. 
• The exit was not correct also. I need to have confirmation if indeed it is a sell signal or not. 
• Need to check my time frame as a trader. 22% percent upside in 8 months? Is it okay?

I've got my online COL Financial account opened in 2015. It was the year that God gave me the opportunity to participate in the Philippine Stock Market. The opportunity was given to me thru OFSI. For those who followed this humble blog, OFSI is familiar to you already. For starters, you may click this link to know more about OFSI --- http://www.ofsi.ph/