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Showing posts with the label Investing

Stock Trading: Gap Between Knowledge and Execution

Zeus Lee talks on stock trading entitled Mind the Gap: Gap between knowledge and Execution Shares 4 types of trader/ Stages of trader progression Quadrant 1: low win rate, low reward risk ratio Quadrant 2: High win rate low reward risk ratio Quadrant 3: Low win rate, high reward risk ratio Quadrant 4: High win rate, high reward risk ratio The highly regarded trader is the Photoshopped trader - deep understanding of his/her technicals - proper management of risk - application of winning intangibles Confidence is when you know you are going to win the war and get out alive whatever the outcome of a thousand battles. The Knowledge understanding Trend Structure and the Momentum Line Dow Theory (limited on what the theory says about price) When you are on an uptrend, the price structure is you have high, low, higher low, higher high When you are on a downtrend, the price structure is high, low, higher low, higher high When the trend is sideways, there is ranged high...

Planning your Trades in Stock Trading

Money Growers PH shares how to plan your trades in stock trading set entry point set sell point set stop loss or stop profit risk computation (risk reward ratio of 2:1) portfolio allocation potential reward He first draws a line on the chart for the lines of support and lines of resistance. Buy on support, sell on resistance Chris Cruz shares his reasons for buying Uptrend Old resistance becomes support Fibonacci 23.5% MA 20 support Abraham Avila Jr of Abs Trading shares What's a trading plan? Trading plan helps you to organize your thoughts and takes the emotion of the stock trading Structure of set of guidelines, define your trading activity, and what and when and how to trade Why create a trading plan? manages your risk better streamline decision making helps you enter and exit based on strategy and not emotion maintain disciple How to develop a trading plan? Answer the 7 questions 1. what markets are you trading? - US ma...

Using Charting Tool for Stock Trading

Joseph Busto documents how to use the charting tool in Investagram in the following YouTube videos Pinoy Stocks Central shares how to customize charts on Investagram here  and even shares about indicators and oscillators here  like MACD, EMA. RSI. DMI, Ichimoku clouds and Bollinger bands. The problem with his site is numerous pop ups. For more stock trading articles, visit Digital Nomad Here .

Cost Averaging, Again MACD and RSI

Alex Onze has interesting take on stock trading. He calls himself the Ghetto Financial Adviser. His songs and rap are actually entertaining. He shares place orders on GTC advocates cost averaging build assets first before buying Tyrone Solee of Millionaire Acts in his blog shares about MACD and RSI Buy when MACD crosses above the MACD signal line Sell when MACD crosses below MACD signal line Watch out when the MACD lines cross, check if the histogram has flattened Buy when RSI crosses bottom line ( Sell when RSI crosses above line (>70) or overbought line Spyfrat aka  Sir Hernan Segovia shares on stock market indicators he used Bollinger bands RSI Additional setup from Spyfat Daily Time Frame Weekly Time Frame Bollinger Bands set values at 50, 0.20 RSI set to 30-period from the default 14 and set level 70 & 50 from the default 70-30 Conditions according to Spyfat If bollinger bands below your prices= uptrend If bollinger bands...

How to Back Test Stocks and Bounce

Why we need to back test stock? Jack Angel shares: To know the support and resistance and to know when to buy or sell. Why we need to back test? Belle Layos shares learned about bounce trading first (from Money Growers PH) reference: ZF's Bounce  Plays 101 , Kapitan Kidlat's 3 days to Kill ,  back test to test mastery and trade setup backtest tools Excel to input data and Word to see charts Belle Layos setup for bounce play previously trending with parabolic move 3 day declining rule previous Darvas must act as support Use Fibonacci retracement with bounce in 38.2%, 50% and 61.8% (From Jason Cam) Candle should not close below retracement Should have reversal signs like doji or weak candles Drying volume, should dry up Sell on the 3rd day of bounce Then on an Excel table, she has the following columns Count on how many of the above criteria has been met Name of stock/ symbol of stock Date bounce point Fibonacci Previous candle Volume ...

Trendlines, Hang on, Let Go

The YouTuber Jack Angel mentioned in one of her post that she has been greatly influenced by another YouTuber Alex Onze on stock trading. Alex Onze was among the first to used his mother tongue to talk/ teach about stock trading and there is Money Growers who brings a more aesthetically pleasing videos on trading. In Alex Onze's early videos, he talked about plotting trend lines and identifying support and resistance. In an uptrend, he advises buy on support, then at sell on resistance. If you miss selling on the first time the price hit resistance, sell when it is at 50% between support and resistance..In a downtrend, after identifying support and resistance, same technique: buy on support and sell on resistance. he demonstrated that in an uptrend, once the supply is almost too much, avoid buying that stock; but in an downtrend, once the price drops so low it becomes a hot stock with tendency to bounce back; buy once initial bounce back is equal or more than 50% as the...

Simple Indicators to Buy More Stocks

I wanted to get into stock trading, and what are the indicators I need to know at the minimum to know to enter and exit or how to set buy and sell triggers moving average 20: when the price pierces the MA 20, time to probably sell candlestick: watch out for the doji MACD: when the histograms almost flattens RSI: line goes below the 30 For more articles on stock trading, check out Digital Nomad Here

Value Investing Strategy in Stock-Picking

Value investing is one of the best known stock-picking methods. The concept is actually very simple: find companies trading below their inherent worth. Value investing doesn't mean just buying any stock that declines and therefore seems "cheap" in price. Value investors have to do their homework and be confident that they are picking a company that is cheap given its high quality. Value investing is popularly used by Warren Buffet of Berkshire Hathaway, the richest man in the world. It was first expounded by Benjamin Graham It was more of a buy and hold strategy. For more about stock trading,  Digital Nomad Here .

Introduction to Fundamental Analysis

Fundmental analysis is the cornerstone of investing. In fact, some would say that you aren't really investing if you aren't performing fundamental analysis. The biggest part of fundamental analysis involves delving into the financial statements. Also known as quantitative analysis, this involves looking at revenue, expenses, assets, liabilities and all the other financial aspects of a company. Fundamental analysts look at this information to gain insight on a company's future performance. Fundamental analysis is a technique that attempts to determine a security’s value by focusing on underlying factors that affect a company's actual business and its future prospects. On a broader scope, you can perform fundamental analysis on industries or the economy as a whole. The term simply refers to the analysis of the economic well-being of a financial entity as opposed to only its price movements. For more about stock trading,  Digital Nomad Here .

How Warren Buffet Does It

Brief sumary of what Buffett looks for: 1. Has the company consistently performed well? Sometimes return on equity (ROE) is referred to as "stockholder's return on investment". It reveals the rate at which shareholders are earning income on their shares. Buffett always looks at ROE to see whether or not a company has consistently performed well in comparison to other companies in the same industry. ROE is calculated as follows: Net Income / Shareholder's Equity . The investor should view the ROE from the past five to 10 years to get a good idea of historical performance. 2. Has the company avoided excess debt? The debt/equity ratio is another key characteristic Buffett considers carefully. Buffett prefers to see a small amount of debt so that earnings growth is being generated from shareholders' equity as opposed to borrowed money. The debt/equity ratio is calculated as follows: Total Liabilities / Shareholders' Equity. A high level of debt compared to equity...

Qualitative Strategy in Stock-Picking

Valuing a company involves not only crunching numbers and predicting cash flows but also looking at the general, more subjective qualities of a company. he backbone of any successful company is strong management. The people at the top ultimately make the strategic decisions and therefore serve as a crucial factor determining the fate of the company. Investors can simply ask the standard five Ws: who, where, what, when and why? You should know who its CEO, CFO, COO and CIO are. Then You need to find out where these people come from, specifically, their educational and employment backgrounds. Ask yourself if these backgrounds make the people suitable for directing the company in its industry. After that, ask about what is the management philosophy? You can discern the style of management by looking at its past actions or by reading the annual report's management, discussion & analysis (MD&A) section. Ask yourself if you agree with this philosophy, and if it...

Fundamental Analysis in Stock-Picking

You may be asking yourself why stock-picking is so important. The answer is simple: wealth. If you become a good stock-picker, you can increase your personal wealth exponentially. Let's start by delving into one of the most basic and crucial aspects of stock-picking: fundamental analysis. It is often a great starting point to picking good companies. The goal of analyzing a company's fundamentals is to find a stock's intrinsic value. If the intrinsic value is more than the current share price, your analysis is showing that the stock is worth more than its price and that it makes sense to buy the stock. The premise behind finding intrinsic value is that a company is worth the sum of its discounted cash flows. In plain English, this means that a company is worth all of its future profits added together. And these future profits must be discounted to account for the time value of money, that is, the force by which the $1 you receive in a year's time is wor...

Stock Picking Misconceptions

On the subject of wealth accumulation few subjects are talked about than stocks. Let us examine some of the most popular strategies for finding good stocks or the art of stock picking. The aim of which is to achieve rate of return that is greater than the market's overall average. Many investors new to the stock-picking scene believe that there is some infallible strategy that, once followed, will guarantee success in pull out that stock. Unfortunately, there is no foolproof system for picking stocks. Why? Many factors affect a company's health that it is nearly impossible to construct a formula that will predict success months after months or year after year. A lot of information is intangible and cannot be measured like company's staff and competitive advantage among other things. Human (often irrational) element inherent in the forces that move the stock market, stocks do not always do what you anticipate they'll do. The bottom li...

Warren Buffet Style Investing

voltes5 shares: Warren Buffett was a student of Benjamin Graham when he went to graduate school in Columbia University and came to be know as the Oracle of Omaha.The world has come to know him as a plain-spoken, avuncular figure more at home at a Dairy Queen in his hometown of Omaha than in a boardroom in midtown Manhattan. the mystique of Buffett is that this small-town stock picker managed to become America’s second-wealthiest man largely by keeping things simple and sticking to his knitting. That's not all, Buffett has never been afraid to deviate from the classic definition of value investing. This man who downs five Cherry Cokes a day seems at ease investing in Coca-Cola (Buffett’s Berkshire Hathaway owns $9.7 billion in Coke stock). Buffett’s approach to picking stocks—and businesses to buy outright—is “buy ‘em at a big discount” While Graham Graham never cared much about the quality of the stocks he invested in as long as they were trading at a deep discount to their “i...

How Social Media Makes Money

SilkCharm made a wonderful presentation on how social media makes money--on how they go with their monetization and revenue. She includes case studies and examples. And so the ways that social media makes money are numerous donations: Wikipedia survives on donations advertising: this is the most common; you offer advertising space for a fee membership fee: World of Warcraft charges a this type of fee for players to continue playing expansion fee: World of Warcraft's Burning Crusades has a fee to refreshing gaming experience merchandising: Cafepress and Zazzle provides with on-demand customisable items related or linked to your site or blog paid online events: You could have a conference that have an admission fee virtual goods: in Habbo or Cyworld, you can purchase pixel/ virtual goods to enhance your account Rather than stick solely to Google Adsense, you can try out these other ways to make money out of your site.

Farm or Stock Market

Stock Market is a risky option that could earn you big buck in a short time. Farmland, on the other hand, is not as riskly but the big bucks come over time. Should you go into farmland investing or stock market investing? Let us examine the advantages of investing into each kind. Starting with stock market investing, you can get piles of money overnight. Think about the Google success story. Once concern with stock market investing is that as quick as you could get money it may slip away from you (if you are not careful enough) quickly too. The money you earned overnight might just disappear the next day. Going on with farmland investing, this has been described as a stable slow way to earn money. Everyday everybody eats. But you can only harvest the fruits of your labor (farm products and money) during harvest. That means months after months of toil. Farmland investing can get your hands dirty (with soil, I mean) or have someone else do the tilling for you. Whether to ge...

Picking Lands Perfectly

When one’s criteria as to the place one’s dream house is to be built is characterized by trees all around, secluded place away from the city, one maybe considering buying land. But buying land is different from purchasing a house, way too different. There are some guidelines in order to pick that kind of land. The key to profiting from undeveloped land whether you are developer or a simple buyer for a dream house is to envision its use. What will you use the land for? It answers the question on what you want this land to be. Years ago, the trembling prairies in New Orleans lay unused for many generations. Louisianians had labeled the land as good only for the cultivation of crawfish. No one seemed to have any idea the land could be used for. All that was changed when a successful businessman arrived and transformed the vast track of land into subdivisions: the swamps were filled, roads laid and houses built. All because he had a vision Then the pragmatist of today will ask fo...