Author: Investa

Stock trading is never easy, but it is simple. By far the biggest hurdle faced by traders is we tend to make everything complicated and that’s one of the reasons why most traders fail. If you want to succeed in trading, you need to be brave enough and have the courage to stand any test that comes with your trading journey. We don’t have any perfect roadmaps, but the ability to have the following attitude could make a difference:

Be at peace with MONEY

A trader asked me: what did you do to get used to trading big amounts?

My Answer: Train yourself to have no emotional attachment to money.

The more you are chasing money, the more you’ll have a hard time trading objectively and at your best state. Often, traders are affected by each tick, each up, each down, and that leads them to trading errors. Our emotions get the best of us if we are focused on the absolute amounts.

You need to put yourself into a position where you just execute and focus on “trading best”. I think you will only reach your true potential if you are in a ZEN like flow.

Let the market come to you and your system, don’t chase it. Have no emotional attachment to money.

You have to remember that “money” is just a by-product, the result of your actions. Focus on your strategy and your trade, you will see that money will just naturally follow.

Be brave enough to have the right MINDSET.

While its true that one of the reasons why we wanted to do stock trading is to take profit from investing, there’s still an entire world from it beyond the prison of money or revenue streams. The ability to follow your trading system will help you digest the trading process and it helps you to intertwine and accept a variety of rules for different market conditions.

Having the right mindset is when you don’t let your emotions eat you. Winnings and losses are normal and part of trading. Having a plan for success trades and readjusting goals when negative portfolio hits you is highly important. Here are the essential rules to cultivating your trading growth mindset to help you achieve success:

• Journal everything
• Pick your trades like you would your life partner
• Keep refining your strategy and make it work for you
• Be your harshest critic
• Take what works for you and ignore what doesn’t

Be brave enough to LEARN from your mistakes.

When was the last time that you put everything in your journal? Not just the winning trades, but also the losing ones. Sometimes we’re too focused on winning, that we forgot the essence of losing. Profits are just confirmation of the right thing you do. Losses, on the other hand, unleashed the best trader in you. It’s when you lose that you start to learn something. It’s in that losses that make you feel, “I don’t want to happen this again.” “How can I make myself a better trader? What’s wrong? What do I need to change/improve in my system?” “How can I prevent from making the mistake I made?”

Instead of seeing it as a failure, why not treat this trade as a stepping stone for you to become a better trader? Failures aren’t failures at all. You have to see the good in them because it’s what will lead you to success.

Experience will always be the best teacher! It’s those hardships that will make you stronger.

Our greatest weakness lies in giving up. The most certain way to succeed is always to try just one more time. ~ Thomas A. Edison

We are afraid to get out of our comfort zone. We’re too contented living inside our shells that we just wondered what it is like to be in the real battle?

When you got that exciting feeling you can’t seem to explain, or understand why such thing happens? Don’t think otherwise. You are now prepared for the battle. When you start to have that boiling blood running in your veins and at the same time you feel afraid. This is your signal! Go for whatever it is!

Enough of that reading materials and seminars, enough of that strategy you tested a couple of times ago. Enough of that backtesting and paper trades. Enough of procrastination, this is where you should go. You’ve prepared, and you’re not born to be that way. Take that action and trade the real way. The game must start now and this is where you’ll be bolder. You’ll never know what you’re capable of until it happened. You’ll never know if you’re good enough if you won’t going to apply it to yourself.

When things go wrong and everything just seems to go against your world, take a moment and try to separate yourself. Respect that sometimes, good things don’t always happen. There will be bad trades; there will be bad day. There will be bad companies and there will be a ‘bad’ you. So respect yourself and accept that you’re a just a human. Respect that you also get tired. Physically, emotionally and mentally. You’re not a clock tickling day and night. Respect what’s your inner you is telling you. Spend time with your loved ones, there will always be a next time. You can always make it right. Just not now, maybe soon you will.

I want you all to be brave enough in everything.

Only the strong ones last in trading.

If you’re going to succeed in life, then don’t give up.

Keep grinding, everyone!

The stock market is one of the many possible ways to invest your hard-earned money and could offer the most potential growth. It is often risky, but if you manage it right, you can take advantage of the market to secure financial position and your future.

But how do you actually start?

One of the issues that many newbies in the stock market find themselves confused with is their investment strategy. Knowing one’s logical and emotional capacity also helps in determining their investing style preference – whether they are good at investing or trading. It is essential for you to know which one is the right fit for you based on your financial goals.

THE STOCK INVESTOR

“I will tell you how to become rich. Close the doors. Be fearful when others are greedy. Be greedy when others are fearful.” – Warren Buffett

In its simplest term, an investor is someone who believes in fundamentals of valuation over a long-term period. They often enhance their profits through compounding or reinvesting any profits and dividends into additional shares of stock.

Investing is suitable for individuals who aim to build wealth steadily over a period of time through buying and holding of investment instruments. It comes from studying the company’s fundamental background and a belief that the company will perform well in the future.

THE STOCK TRADER

The goal of a successful trader is to make the best trades. Money is secondary.” – Alexander Elder

Trading, on the other hand, is done by buying and selling of shares in a more often manner. Stock traders choose to buy and sell stocks in multiple transactions and in quick succession. They are much more concerned with the stock itself rather than the company’s growth and future plans. In trading, one must know that there are several types that comes with it, including position trader, swing, scalp, and a day trader:

Scalpers: This is a type of a trader who holds a stock for a few seconds to minutes at the most. They buy and sell many times in a day with the objective of grabbing small consistent profits out of the market. They are the busiest ones and those who have the focused time to monitor the market.

Day Traders: These traders do not hold a stock overnight. They usually buy stocks at the beginning of the market and sell it off at the end of the day. They are also not included in the ‘busy ones’ as they have the time to monitor the market throughout the day.

Swing Traders: The Tradable asset is held between one and several days by these traders in an effort to take profit from price actions or ‘swings’. Those who swing can’t monitor the charts during market time so they tend to buy first and then dedicate their free time to analyze the market and target sell conditions.

Position Traders: They are the ones who trade for the long-term that last for weeks, months, and even years. They do not trade actively and they based their trading decisions on a combination of fundamental and technical analysis.

SO HOW DO YOU KNOW WHICH ONE SUITS YOU?

We need first to assess yourself. It’s like getting prepared before you enter the battles. Here’s how it goes:

TIME

Are you here to invest in the long haul or just finding quick punts in the short term?

Time is important in determining whether you’ll go trading or investing. A trader usually allots time more frequently in the market. They have time to monitor the market movements and try to make a profit from it in a short period of time. Sometimes weeks, days, hours or even minutes.

An investor, on the other hand, prefers a longer period of time. After picking well-established companies to invest in, they’ll put their money there and hold it til the profits run. They don’t usually check the market because they are not affected by the market volatility. Ups and down are just normal.

RISK

As we all know, both have an accompanying risk. Just like when you go into the gym, you know and you expect that you’ll have to sweat many times before you achieve that fit body you are aiming for. The same goes with investing and trading.

Since an investor’s thinking is more is into fundamentals of the company, they then to think that holding a stock for a longer time is quite safe as it works on buy and hold principle. Investor tends to feel comfortable with low risk and low returns in a short period of time but might deliver higher returns through compounding interests and/or dividends if the chosen stock is held for a longer period of time.

Now let’s look at the case of a trader. A trader is expected to be exposed in market’s day to day fluctuations. They have higher risk and higher potential returns as the price might go high or low in a short while. There’s underlying risk for every trade that they execute as the more they participate in the market, the higher the chance of gaining or losing the capital that they are betting in.

PERSONALITY

This one’s you. You’re personality says a lot about how you are likely to invest and could even determine the investment type you are likely to make. Whether you are the aggressive, anxious, conservative, passive or the speculative one, you have to take a step aside and make sure that you acknowledge your investor profile adapt your investment strategy accordingly.

Conclusion

Wrapping up, investing and trading are entirely different methods but both depends on one common goal – that is to generate profit from the market and it is entirely up to you on what choice of strategy to use based on your time, risk management and personality.

No matter what the difference can make between these two, the most important thing is to have is your focus.

Know what you are doing and trust the process.

Few days ago, the most awaited Ultralotto Jackpot which made aspiring billionaires Filipino hyped for quite several weeks was won by two lucky individuals. And just like that, PCSO announced that the game was over. “May nanalo na!” so we ended up to “Uwian na”. Do you know how much is the jackpot? Well, it’s a whooping Php 1.18 billion and it is the it is the biggest prize in lotto history! Imagine having that huge amount of money, puwede ka nang bumili ng maraming house and lot with cars, create new businesses or put your money in different kinds of investments. You name it! Or kung gusto mo din mag-YOLO, you can travel anytime, anywhere or buy the things that you wanted, kahit ano! No wonder many Filipinos spent much time waiting in the lottery outlet and betting their hard-earned money just to try their luck. Sino nga bang hindi madadala sa possible once in a lifetime opportunity, right?

But did you know that over the past years, marami rami na din ang Pilipino ang nanalo ng milyones sa Lotto and some might think that these people are now living their lives like a king and queen themselves. But little did we know that only 30 percent of them gets successful in life? According to studies, 7 out of 10 lottery winners ends up going broke and filing for bankruptcy. So what happened?

Kung tutuusin, hindi lang sa dami ng pera yan, but on how you control yourself and the temptations around you. Imagine the life of Jesse Lauriston Livermore, an American Investor who was popularly known in the world of stock market where he acquired his great fortune during the market crash of 1929 and actually lost everything and filed for bankruptcy in 1934 – his world turned upside down and even committed suicide in 1940 because he couldn’t make it any longer. Devastating story.

I know a lot people who are earning a lot – hundred thousands digits a month but still, it’s not enough for them, depende pa din sa lifestyle nila yan. As a regular Filipino na may saktong sahod buwan buwan, I would say “tiba tiba na ako don!”. Pero bakit kaya madami pa din ang naghihirap ngayon?

Ang sagot? LACK OF FINANCIAL LITERACY!

Yan ang pinakamalaking problemang kinakaharap ng mga Pilipino ngayon, lalo na yung medyo mga nakaka-angat o may kaya sa buhay, some of them don’t really plan for their future until dumating na mismo sa harap nila ang problema. They don’t have the discipline to work things out when it comes to financial budgeting and to do it regularly.

Alam ninyo ba na ang countries like United States of America, United Kingdom, Canada, and Japan alongside with their goverment organizations, prioritizes the teaching of financial literacy to their people of all age, most especially to young people so that they will grow up with a good grasp on financial matters. And that’s something that we still lack in the Philippines.

Let’s take this as an example.

You have an instant Php100,000 pesos – hindi mo yan pinaghirapan, hindi rin galing sa trabaho o kahit kanino pa man na kamag-anak o kaibigan, bigla na lang siyang dumating.

Imagine youself in this situation. Anong gagawin mo?

What are the chances that you will save that money?

Spend or invest it? How would an average person would suddenly think about their future kung may biyaya na dumating at makakaisip na siyang bilhin yung mga bagay na sa panaginip niya lang?

We’re living in world where everyone wants INSTANT and practically speaking, people will spend first before they save/invest. Usually whats left (if there is) after all the splurges are those that we just set aside, pampalubag loob na may mai-save. Its natural, at ito ang mga bagay kung bakit kailangan ng bawat Filipino ang maging Financial Literate. Ang dami kasi nating alam pano gumastos pero kokonti lang ang taong marunong mag-invest – 1% nga lang sa Pilipinas ang marunong mag stock market.

Filipinos may still be miles away from achieving this dream, but having financial freedom is something that we can achieve. Be financially educated! It’s never too late. It is still possible to reverse the adverse effects of bad money habits. Financial literacy may require Filipinos to learn, unlearn, and relearn a lot about personal finance, savings, and money management and there is no more opportunity time to learn about this, than today.

Learning and Application. These two matters.

Useless ang mga seminars and workshop if you don’t know how to apply it to yourself and the people around you. Yes, kasama sila na dapat matuto to save and invest at an early point in time dahil the earlier you and your family are able to forgo all unnecessary spending, the more you save and invest over time. Kasama mo sila sa pagbuo ng pangarap mo.

Sabi nga ni Robert Kiyosaki, “money without intelligence is money soon gone”.

Learn how to make money work for you, and the people around you.