Friday, February 11, 2011

05. Learning to Swim

As a novice trader, I fully understand the importance of learning the tricks of the trade fast. Thankfully, I saw an electronic board advertisement along Ayala Avenue by chance inviting applicants for the 5th PSE - Ateneo Certification for Securities Specialist Course. If I am to become a full-time trader, I need to be certified as one. I did not waste my time. After convingcing my wife, I enrolled in the course. I was number 47 and the cut-off is 50 students for this class. I got lucky and I took it as a sign that this one is really for me. The new direction for my career has now taken an irreversible course. It is evident that securities trading is becoming popular among young professionals and I can sense that a lot of them will be shifting their careers too and soon if they get to be confident in their knowledge and experience in the securities market.



The certification course is still weeks ahead and I am very excited to get a headstart. I pulled out the book "Market Wizards" by Jack D. Schwager which I bought more than two years ago but never gotten the time to read. As I read the pages, I was both awed and inspired at how the different Wall Street market wizards had done it. While their experiences are different, the message is the same - develop your own methodology that works for you. I took notes of their methodologies and strategies while my jaw sometimes drops at some of the terminologies. The book is helpful but I need some more elaboration of the concepts.


While watching youtube (ABC songs for children) with my baby, I typed in the search box "How to Invest in the Stock Market". Lo and behold I discovered one of the best website links that provides free webinars on stock trading - http://www.yourtradingcoach.com/. I started right away and I am so glad to have found free video resources on technical analysis, fundamental analysis, risk management, and a lot more. I am very thankful to the person that put it all together, Lance Biggs. He was kind enough to acknowledge my email and even sent me an additional free article. I am now practicing how to do market analysis, trend analysis, and price analysis on PNB stocks. Using the technicques in the videos, I was able to predict that the price of PNB stocks will go down from P50.0 to P45.00 range within two weeks saving myself the trouble of buying it at a higher price. Thank you Lance again for teaching me how to do it thru your videos in your website that you unselfishly share to novices like me.


I used to also just view the price history of stocks at the PSE website in my buy-sell decisions as I still did not know then how to read and use the charts. Now I know that the Moving Average of Convergence and Divergence (MACD) chart can be used to understand whether the market is bullish or bearish. Now I am also learning to determine price supports and resistance, and the use of candlestick patterns to detect price reversals. Of course, I do not want to sound an expert on this thing but just a little more knowledgeable than the previous me. The point is I am no longer trading blindly as before.


The PSE price history and charts, however, are very limited. I need to have charts showing three years and five years data. Additionally, I need to have financial information of the companies I am monitoring. By stroke of luck, I found out that these data, charts, and information are available online at Bloomberg and Reuters and other sources. I am using Bloomberg more often as they present all these information into nice tabs. Then I realized that the listed companies have investor relations pages in their website showing their annual and quarterly financial performance. I can do research online. All I need to do is process all these information, data, and charts for me to select my investment portfolio and to plan my trade. I need to develop my methodology.


At first, I thought these are the only information I needed to know until I realized that that the current political turmoil in Egypt and the rising inflation in Asia, particulary China, seem to affect the downward trend of the PSE index despite the good economic performance of the Philippines last year. Voila, the last piece of the puzzle - the NEWS - is considered in the equation. So I am now monitoring the news - global or domestic, economic or political, corporate and financial - both online and on TV. Sometimes, I wake at 12:00 midnight just to have the first information whether Mubarak already resigned or not and make my own assessment as to how the market behaves the following day.


Perhaps, and most likely, these are not the only things there is to know. I am willing to learn and I cannot wait for the four-month certification to start soon. I am already fidgety from excitement. If I ride the big waves, I better learn fast.




2 comments:

  1. Hi Rex,
    Thanks so much for the great feedback on my site. Much appreciated. And I'm really glad to hear you've got value out of the youtube videos.

    All the best with your ongoing journey. There's exciting times ahead.

    And keep up the blogging. Awesome work so far!

    Cheers,
    Lance Beggs

    ReplyDelete
  2. Thanks Lance for the encouraging words. You are an awesome mentor. Rex.

    ReplyDelete