Category: Featured

Learn how to trade your way to the top and be the next Champion of Investagrams Trading Cup 2019

We are back with the BIGGEST PRIZE POOL in Investa Trading Cup history with 1 MILLION PESOS base cash prize at stake on top of the bonus pot!

This competition is OPEN TO ALL and will run from
September 23, 2019 until December 20, 2019.

Registration

1. Anyone can join the competition! Experience trading in the Philippine Stock Market through Investagrams Trading Cup 2019.

2. You must have an Investagrams account. If you don’t have one yet, you can sign-up here for FREE.

3. The last day for registration is on September 20, 2019 (Friday). Secure your entry to the competition through this link, with a Prime (PHP 1999), Regular (PHP 999), or Student (PHP 499) Pass. Only one (1) entry and account per person is allowed.

4. Complete your payment through Credit/Debit Card, BPI Deposit/Transfer, BDO Deposit/Transfer, 7–Eleven (Coins.ph), M-Lhuillier, or Cebuana Lhuillier. You will be notified once your payment has been confirmed.

5. From your Transaction Invoice, or when you click on Trading Cup 2019 under the Virtual Trade tab in Investagrams, you will be led to an instructions page in order to validate your identity. If you haven’t uploaded your Proof of Identity yet, please do so, as this is a required step for all participants. Here are the Valid IDs that are accepted:

• For Prime and Regular Pass holders: Passport, Driver’s License, SSS, UMID Card, PRC ID, Voter’s ID, National ID, OFW ID, Postal ID (New)
• For Student Pass holders: Validated School ID AND Certificate/Proof of Enrolment

6. Once approved, you will receive a notification and your Proof of Identity under Account Settings will already be marked as Completed. Access to the following will also be granted to your account:

• For all competition pass holders (Regular, Prime, and Student): Competition Room and InvestaGroups
• For Student Pass holders: bonus student-starter modules in InvestaLearn

7. Read the official Rules and Mechanics here. All participants are expected to have read and understood the rules and mechanics of Investagrams Trading Cup 2019. These are published for your information and protection. Ignorance of these rules and mechanics is not an acceptable excuse for violation.

8. We will send you reminders and further details as we near the competition.

9. Please read the next steps here once you joined the competition: What Happens Once You Joined The Trading Cup 2019?

Competition Passes

There are three (3) types of competition passes:

1. PRIME PASS – PHP 1999

a. Entry to the competition

b. Exclusive access to webinars through InvestaGroups

• Inside the Minds of Stock Trading Champions and Multi-Million Fund Managers
• Understanding the Dynamics of Price Movement and Human Behavior
• Having a Risk-First Mentality
• How to Use Trading Tools to Your Advantage

c. Access to InvestaPrime+, a collection of powerful trading tools that will give you a competitive edge over other participants (3-month access equivalent to the duration of the competition):

• Screen the best stocks that suit your trading strategy
• Get real-time price and news alerts
• Improve your trading performance with pro-level analytics

d. Save 44% with the Prime Pass–compared to when you avail of InvestaPrime+ separately

e. 1 MILLION PESOS up for grabs in cash prizes plus a bonus pot (the bonus pot gets bigger as more participants join)

2. REGULAR PASS – PHP 999

a. Entry to the competition

b. Exclusive access to webinars through InvestaGroups

• Inside the Minds of Stock Trading Champions and Multi-Million Fund Managers
• Understanding the Dynamics of Price Movement and Human Behavior
• Having a Risk-First Mentality
• How to Use Trading Tools to Your Advantage

c. 1 MILLION PESOS up for grabs in cash prizes plus a bonus pot (the bonus pot gets bigger as more participants join)

3. STUDENT* PASS – PHP 499

a. Entry to the competition
b. Exclusive access to webinars through InvestaGroups
c. Bonus student-starter modules through InvestaLearn
d. Special incentives for the Top 10 Students on top of overall prizes

• Top 1: PHP 40,000
• Top 2: PHP 20,000
• Top 3: PHP 10,000
• Top 4 – 6: PHP 6,700 each
• Top 7 – 10: PHP 2,500 each

*For college students, high school students, and below only

Competition Timeline

1. Last day to register – September 20, 2019 (Friday)

2. Competition period – September 23 (Monday) to December 20 (Friday), 2019

3. Deliberation period – December 23, 2019 (Monday) to January 3, 2020 (Friday)

4. Official announcement and notification of winners – January 4 (Saturday) to 7 (Tuesday), 2020

5. Defense date – (to be announced)

• If you are part of the Top 10 winners, there will be a required defense where you will be asked to do a brief presentation about your stock picks, strategies, and insights from the competition. Winners shall also be awarded on this date.
• This is required but has no weight in determining the winners of the competition. The rankings are based purely on your trading performance while following the rules and mechanics. This is more of an avenue where we can get to know you personally before we give out the prizes.
• We prefer to meet you in person, but for Overseas Filipino Workers (OFWs) who cannot go to Metro Manila (we will confirm your address and situation) during the defense day, you may present through online video call/recording.

6. Last day to claim prizes – sixty (60) days from the Defense date

Prizes

After the deliberation period, the official Top 1 to 40 rankings will be announced as the winners of Investagrams Trading Cup 2019 through Investagrams’ Facebook page and platform. Winners will be notified through their e-mail address, contact number, and/or Facebook profile. Deadline for claiming of prizes is sixty (60) days after the Top 10 Defense date otherwise, the prize will be forfeited.

CHAMPION
PHP 360,000 Base Cash Prize
plus 40% of Bonus Pot
Investagrams Trading Cup Trophy
Champion Badge

2nd Place
PHP 180,000 Base Cash Prize
plus 20% of Bonus Pot

3rd Place
PHP 90,000 Base Cash Prize
plus 10% of Bonus Pot

4th-10th Place
PHP 18,000 Base Cash Prize each
plus 14% of Bonus Pot distributed evenly

11th-20th Place
PHP 7,200 Base Cash Prize each
plus 8% of Bonus Pot distributed evenly

21st-40th Place
PHP 3,600 Base Cash Prize each
plus 8% of Bonus Pot distributed evenly

Note: All prizes exceeding ten thousand pesos (PHP 10,000) shall be subject to twenty percent (20%) prize tax and shall be shouldered by the winner.

Refer a Friend

Get your referral link here and share it with your friends!

a. For ALL Investa Users

• Get PHP 50 in your InvestaWallet for every successful referral.

b. For ALL Trading Cup 2019 Participants

• Successfully refer at least 3 friends and you will get 1 month free InvestaPrime+ (worth PHP 599). This is capped at 1 month free only and will be granted after the registration period.
• Get a chance to win 1 year access to InvestaPrime+ (worth PHP 5,988). The more friends you refer, the more chances of winning. Be one of the 3 lucky winners who will be announced after the registration period.
• Get an equivalent 10% of your friend’s base cash prize winnings when they become part of the Top 10! This may be claimed up to sixty (60) days after the Top 10 Defense date.
  

  Will you be the next Champion?

Click here to join
Investagrams Trading Cup 2019!

The BIGGEST STOCK MARKET COMPETITION in the Philippines is here!

Welcome to Investagrams Trading Cup 2019!

We are back with the BIGGEST PRIZE POOL in Investa Trading Cup history with 1 MILLION PESOS base cash prize at stake on top of the bonus pot!

This competition is OPEN TO ALL and will run from
September 23, 2019 until December 20, 2019.

1. Registration. Participants may register until September 20, 2019 (Friday), before the competition officially begins on September 23 (Monday). Don’t worry, you will receive a notification once you have been automatically added to the Competition Room and the Trading Cup is about to begin.

Important note: Only one (1) entry and account per person is allowed.  If you have more than 1 account to join the competition, you will be disqualified.

Click here for more information on how to join.

2. Platform. The participants of Trading Cup 2019 will use the Virtual Trading Platform of Investagrams which tracks the real-time stock price movements in the Philippine Stock Exchange (PSE). The system automatically calculates transaction fees to make it more realistic.

To know more about Investa vTrade, click here.

You can access the platform through web, or download the app on Google Play or App Store.

3. Goal. The goal of the game is simple — trade your account for the whole competition period and aim for the highest profits. The players with the highest rankings while playing within the rules will be recognized as winners.

4. Starting Capital. Each player will start with PHP 100,000 virtual money to trade.

5. Trading Hours. Weekdays from 9:30AM to 12:00NN and from 1:30PM to 3:30PM— just like the regular trading hours in the PSE. You cannot trade during off-hours and on weekends. Also, no trading shall be done at the pre-close period of 3:15 to 3:20PM— the system will resume trading at 3:20:01PM.

6. Tradable Stocks. Participants can only trade the listed tradable stocks for this competition. The tradable stocks are filtered by our system and qualifies as liquid and actively traded stocks.

You will be able to access the whole stock list once you are added to the Competition Room.

7. Diversification. To promote diversification and risk management, maximum exposure in a single stock can only be 1/3 or 33.33% of the portfolio. This requires the participant to buy at least 3 different stocks should they want to fully invest their portfolio. The system won’t allow you to allocate more than 33.33% in a single stock.

8. Buying and Selling Conditions. Participants now have two options when transacting. The first option is to transact using the current price of the stock and use market orders to buy and sell specific stocks at their real-time prices. The second option, is to transact using our new LIMIT ORDERS. By using Limit Orders, you won’t need to watch the market the whole day in order to transact in the market. Take note, however, that Limit Orders do not apply for cutting your losses. There is NO automatic stop loss order, so you will need to cut your losses manually. Check out our guide here on our new Limit Orders and upgraded VTrade: Our New and Upgraded Investa vTrade: Limit Orders

• Buy – You can buy the same stock multiple times within a day.
• Sell – You can only sell the same stock two (2) times in a day. This will be strictly observed in order to avoid abuse. This includes selling in TRANCHES. Example: If you bought 1000 shares of $SMPH at 39 then sold 300 shares at 39.10, then you have only one (1) sell transaction left for $SMPH within the day.

9. Holding period for all stocks

• Initially the twenty (20) minute time lock was only for stocks PHP 3.00 and below. However, due to the illiquidity of the market and behavior of some participants we will now be applying the twenty (20) minute time lock for taking profits to ALL STOCKS. Again, this is to avoid widespread and rinse-repeat trades. There are instances where specific names are simply bought due to the 2-2.5% widespread sold after 5 minutes once the stock has been ticked up.
• There will be no timelock or restrictions when selling at a loss.

10. Fluctuation rule for taking profits. This is to further protect the competition against ‘rinse-and-repeat abuses’. For stocks that are PHP 2.99 and below + other illiquid names that may be added, you will not be able to sell your position at a profit for 24 hours unless the price is FIVE (5) fluctuations above your average price. For stocks that are PHP 3.00 and above, you will not be able to sell your position at a profit for 24 hours unless the price is THREE (3) fluctuations above your average price.

• 24-hour time lock. If in the scenario that your position still has not gone above the fluctuation rule for taking profits, you will only be able to sell it at any price 24 hours after your made your purchase.

11. For stocks that will be detected by our WIDE-SPREAD DETECTION SYSTEM (WSDS).

• The Wide-Spread Detection System’s main condition is that the first (1st) best bid and ask should never be more than 2% at any moment during open market session (9:30AM to 12:00NN | 1:30PM to 3:15PM | 3:20:01PM to 3:30PM).

Fig 1. Real-time Market Depth / Orderbook
showing the first (1st) best bid-ask data.

Example: $ATN (Refer to Fig. 1)

Given:

1st best bid = 1.11
1st best ask = 1.14

Formula:

X = (1st best ask – 1st best bid) / 1st best bid

Condition:

If X is greater than 2% then WSDS detects that the stock is wide-spread and can be abused.

Solution:

X = (1.14 – 1.11) / 1.11 = 0.02700 x 100% = 2.70%

Verdict:

Since X is greater than 2% then the stock is wide-spread as computed by the system.

• The participant will be given a prompt that the detected stock is not tradable upon executing a buy or sell transaction.
• The stock will again be tradable once the system detects that the spread of the 1st best bids/asks are below 2%.

12. Revision of Tradable Stocks. Investagrams has the right to remove any stock from the list should it suddenly become too illiquid, abusable and/or delisted. Furthermore, Investagrams may also add new stocks on the tradable list as new stocks become more active and tradable in the market. All changes will be announced before implementation.

In such cases that a stock is to be removed, we will follow this process:

1. Investagrams shall notify all the participants via the Investagrams Platform before the market opens.
2. If you still have the stock in your portfolio, you can sell it at any point in time at your discretion.

13. Trading Halt. Stocks that are on a trading halt will not be tradable. A halted stock will only become tradable again after two (2) minutes from its trading resumption. If you already have a ‘halted stock’ in your portfolio then you have the option to dispose of it early or hold onto it until it resumes.

14. Initial Public Offering (IPO). All upcoming IPOs that will happen while the Trading Cup is on-going will be added on its SECOND (2nd) trading day.

15. Shorting. Shorting is not allowed in this competition.

16. On Trading Abuses.

• Day trading opportunities on natural market moves are normal, but please take note that Investagrams will be on full-guard against participants that abuse illiquid opportunities. We want our winners to show real trading skills that are applicable in the PSE. Abuse of intraday spread trades will NOT BE TOLERATED. These rules are set to protect against the usual ‘rinse-and-repeat’ abuses that are mostly used in virtual trading competitions like this.
• Read more about ‘rinse-and-repeat trading abuse’ here and why this is not characteristic of a realistic trading strategy.
• Any player that has more than 10% of their profits from rinse-and-repeat wide spread, illiquid and other abusive trades will be penalized or DISQUALIFIED depending on the severity of their offenses. We will be able to validate this through our data and algorithms that verify the historical transactions of each participant.
• Any form of hacks, cheats, and abuses shall not be tolerated and will have corresponding repercussions. Suspicious behavior that may not be specified in the rules may also be flagged as ‘abusive’ trading behavior. Warning shall be sent after Investagrams has reviewed and confirmed that the actions are against the integrity of the competition. All trade records shall be verified and those who fail to follow the rules will be disqualified.
• Participants will only be given ONE (1) warning, any participant who has constantly repeated any abusive trading behaviors (whether illiquid stocks, system abuses, loophole abuses) will instantly be DISQUALIFIED. Investagrams has the right to review any suspicious activity, and if the behavior is deemed inconsistent with real life trading then the said player shall be disqualified.

• Questionable Transactions. Questionable transactions will be cross-checked through the buy and sell transaction time and the traded stock. Stocks that have more than 2% consistent gaps in the one (1) minute timeframe within the transaction period shall be deemed invalid and Investagrams has the right to deduct the profits from the said transactions. It is normal to trade natural intraday moves and gaps can really happen, but if a participant is constantly trading stocks that have gaps within one (1) minute timeframe and their profits from these kinds of scenarios make up more than 10% of their total profits, then he/she will be automatically disqualified.

Fig 2. Example 1 for one (1) minute time frame gaps with buy (green arrow) and sell (red arrow) transactions

Fig 3. Example 2 for one (1) min. time frame abusable 2% gaps

Fig 4. Example 3 for one (1) min. time frame abusable 2% gaps

Investagrams will warn the player that is proven to be constantly transacting with illiquid stocks with 2% one (1) minute gaps. Basically, any stock that has 2% spreads and do not really have a trend is included in this definition. After the first warning, any player that is proven to repeat this kind of behavior shall be disqualified.

17. Unexpected events. In the case of an unexpected event which interrupts the operations of PSE or the system of Investagrams, the competition shall be frozen and paused. Further notice shall be given and trading will resume once everything is back to normal.

18. Participant rankings. Overall participant rankings are constantly updated every ten (10) minutes and automatically ranked by Investagrams’ system according to net profit gain/loss. Traders ranking from Top 1 to 40 will be constantly checked.

19. Deliberation period and the announcement of winners. At the end of the competition, at least one (1) week deliberation period shall be given to Investagrams’ team of moderators to verify trades and the confirmation of winners. The participants with the highest net profits will win. The resulting Top 1 to 40 participants after deliberation will be announced as the official winners.

20. Modification and adding of rules. Investagrams has the right to modify the rules of the competition and add protective measures against any future abuses that may arise to ensure the integrity of the Investagrams Trading Cup 2019. Announcements shall be made if there are any changes. Rest assured, we prioritize keeping the competition as FAIR as possible to all participants.

21. Ignorance of the rules is no excuse. All participants are expected to have read and understood the rules and mechanics of Investagrams Trading Cup 2019. These are published for the participants’ information and protection. Ignorance of these rules and mechanics is not an acceptable excuse for violation.

22. Sponsors. Apple is not involved in any way in this competition. The sponsor(s) is/are solely responsible for providing the prize(s) listed herein. The prize(s) won are not apple products, nor are they related to apple in any way. The responsibility of organizing this competition and distributing the prize(s) are the sponsors’ responsibilities. Apple does not sponsor this competition in any way.

Learn how to trade your way to the top and be the next Trading Cup Champion!

Click here to join
Investagrams Trading Cup 2019!

One of the most popular indicators to identify shifts or changes in trends or momentum is the Moving Average Convergence Divergence or most popularly known as the MACD (pronounced as “Mac-Dee” or spelled out by saying M – A – C – D).

MACD was developed by Gerald Appel during the late ‘70s. This indicator is also popular for its simplicity and versatility as it can be used to indicate changes, whether bullish or bearish, in trend or momentum.

How Does the MACD Calculate its Own Movement?

The standard settings for the MACD are the values 12, 26, and 9. These numbers are all Exponential Moving Average (EMA) which reacts faster than Simple Moving Averages (MA). A quick refresher, moving averages, be it simple or exponential, are both derived from the price action of a stock by computing the average price over a number of days or periods.

There are two lines in the MACD. The first line is calculated by subtracting the 12-day EMA by the 26-day EMA, the difference is then called the MACD Line. This moves faster than the other line. The 9-day EMA is left as is and is called the Signal Line. This is the slower moving line.

Another part of the MACD is called the Histogram. The MACD Histogram is responsible for demonstrating the difference of the MACD Line and the Signal Line. Whenever the MACD Line is above the Signal line, the Histogram will be positive (above the 0 line or the center line). When the Histogram is negative (below the 0 line or the center line), the MACD Line can be seen below the Signal Line.

Convergence and Divergence

A convergence means the faster moving average, the MACD Line, is nearing to meet with the slower moving average (Signal Line). A divergence, however, occurs when the MACD Line is distancing itself away from the Signal Line.

Parts of the Moving Average Convergence Divergence

What are the strategies we can use in the MACD?

The following are the strategies a trader utilizes the MACD for:

• Signal line crossovers
• Zero-line crossovers
• Divergences
• Histogram (Peak-through and slant divergences)

Signal Line Crossovers

There are two types of signal line crossovers, the bullish crossover and the bearish crossover. These crossovers are used to know whenever there’s a shift from a trend or momentum. A bullish crossover happens when the MACD Line crosses above the Signal Line. A bearish crossover appears when the MACD Line crosses below the Signal Line.

Here’s an example of a bullish crossover:

Below is an example of a bearish crossover:

How to Use Signal Line Crossovers to Enter and Exit Your Positions?

This is where the MACD is most popularly used for. As the following examples would show, the MACD is highly effective in generating potential buy and sell signals.

In the image below for $SMC (San Miguel Corporation), we can see how the 1st and 3rd bullish crossovers effectively signaled the start of the bullish momentum for $SMC.

We can see bearish crossover sell signals in action for $MAC (MacroAsia Corporation). Although the signals don’t necessarily indicate the end of the uptrend, they could be used to take profit or trim down in your positions.

Zero-Line Crossovers

The zero-line crossover of the MACD can also be used to confirm changes in momentum and emergence of new trends. This crossover happens when the MACD Line crosses below or above the 0 line of the MACD.

The MACD Line is the green line below. We can see how effective it was in generating momentum signals for $TECH (Cirtek Holdings Philippines Corporation). A possible buy signal could have been generated whenever the green line (MACD Line) crosses above the 0 line and a possible sell signal could have been implied whenever the MACD Line crosses below it. Keep in mind that you don’t need to use the MACD’s Histogram in this strategy.

Bullish and Bearish Divergences

Like the RSI and other momentum indicators, the MACD could be used to spot bullish and bearish divergences.

A bullish divergence happens when the MACD creates higher highs whilst the price action or the candlesticks make a lower highs. This indicates that there could be a bullish reversal within the stock.

A bearish divergence is just the reverse of it. It happens when the MACD creates a lower highs but the price action makes a higher highs, indicating a weakening bullish momentum.

Here’s an example of a bearish divergence. $MEG (Megaworld Corporation) created a higher high but the MACD created a lower high. If you would notice in the right part of the chart, selling momentum overwhelmed buying. The MACD also went into the negative region.

The image below for $GLO (Globe Telecom, Inc.) is the bullish divergence, opposite of the bearish divergence. We can see how the stock reacted days after the bullish divergence was spotted. The MACD indicated that the selling pressure was waning down and that there was an impending bullish sentiment about to happen.

Histogram Strategies

The Histogram can also be used to foretell divergences or changes in the trend or momentum of a stock. There are two divergence strategies that can be used from the Histogram: Peak-Through and Slant Divergences.

Peak-Through Divergences

These are formed when the Histogram creates “peaks” (highs or lows) that diverge from what highs or lows the price action creates and later crosses over or goes “through” the 0 line. They can be either be bullish or bearish Peak-through divergences.

Here’s an example of a Peak-through bullish divergence in $MBT (Metropolitan Bank & Trust Company). The MACD Line and the Signal Line was removed here to highlight the peaks of the Histogram.

As you can see below, after $MBT made a lower low, the MACD Histogram signaled that the selling momentum was weakening by creating a higher low peak followed by going through the 0 line. The stock went on to create a higher low in price as seen on the right part of the chart.

Bearish Peak-through divergences are just the inverse of its bullish counterpart. We can see how there was an impending sell off days after $ABS (ABS-CBN Corporation) created a higher high in the chart below.

Slant Divergences

These are simply slants that do not need mountain-like peaks that peak-throughs have. The Histogram should slowly display lower lines as it moves towards the 0 line to signal a possible shift in trend or momentum. The Histogram expands when the MACD Line noticeably moves away from the signal line, indicating a strengthening trend or momentum. The inverse happens when the MACD Line moves closer towards the Signal Line.

Below is an example of a bearish slant divergence for $GLO. We can see how the Histogram signified that the short rising momentum was short-lived and that it was forecasting a looming downward momentum. The Histogram displayed lower lines as the MACD created a higher high. Also, it generated the divergence even before the MACD created a bearish crossover.

A bullish slant divergence can be seen in the chart of $MEG (Megaworld Corporation) below. It indicated a possible shift from selling pressure into buying pressure as the MACD established a lower low (even earlier than the bullish crossover that transpired).

Final Thoughts on MACD

The MACD is a reliable technical indicator that beginners can use in the Philippine Stock Exchange and other kinds of markets. The best way to use the MACD is when the stock is trending. A non-trending (moving sideways) stock is susceptible to false or even pre-mature signals that the MACD generates. Divergences that take place during a short-period are less effective compared to divergences that took a longer period to generate a possible buy or sell signal.

Continuously back-test the MACD if you want to integrate it in your approach in the market. The MACD does not guarantee you gains in the market. Like any other indicator, it only adds probability in your trading bias.

Happy back-testing!

Unbeknownst to most traders, fear does not only stem from declining stocks, it also occurs on soaring ones. FOMO, or Fear Of Missing Out, happens when you enter a trade just because you “fear” out of missing from that opportunity or move. FOMO is defined as a “pervasive apprehension that others might be having rewarding experiences from which one is absent.”

DISCIPLINED VS. FOMO TRADER

A rational, calm, and disciplined trader should trade like this: he creates a watchlist during the weekend, charts them, and prepares a trading plan before market opens. Those are all pre-market activity. He executes when his buy and sell triggers get hit.

A FOMO trader does not look for a specific setup. He’s largely attracted to volatility and buys almost passively without ample preparation. Remember the hype about the third telco during 2018? Many investors and traders experienced FOMO on those stocks that were related to that telco craze, some investors actually spent their hard-earned money and invested in without knowing the background or capability of the stock/company. Even people who are beginners in investing simply opened up accounts just because of the hype! This is not recommended at all.

It’s normal to experience anxiety when you see a stock on its way to a ceiling price, especially when you haven’t been profitable in the stock market yet and not used to missing on ceiling plays. Who doesn’t like missing on huge market moves? Naturally, no one does.

When entering a trade, it’s important that you don’t enter for the sake of not missing the move. What’s more important is to trade your planned trades since they are made at the time when you’re most objective, rational and not emotional.

If you…

• Do not wait for your trading setups and enter early before your trigger price gets hit for fear that you might miss the move.
• Do not believe that there will be plenty of other plays that the market will allow you to ride upon.
• Do not have a strategy in approaching the stock market correctly.
• Want to gain money as fast as possible because your peers are doing so well.
• Are over-confident with your trades after incurring a winning streak.
• Revenge trade after losing trades.
• Chase price as they leave your entry area/zone.
• Rely on the analysis of other people.

Then I hate to break it BUT most likely, you’re a FOMO trader.

HOW TO AVOID FOMO?

Here’s a possible remedy to cure your FOMO behavior.

Understand that…

• Trading is a marathon, not a sprint. Winning trades out of careful preparation benefits you in the long run.
• You cannot ride every high-flying trade. Some trades won’t be lined up accordingly with your preferred setups and strategy.
• Know then to trade and more importantly, know when not to.
• Even though we cannot be emotionless, we can actually control how we behave when they arise.

CONCLUSION

If you missed out on one high-flyer, study why you missed it. Adjust your screening strategy and forget about the “what could have.” If you’re an investor, stick with your buy low, sell high strategy. Rely on the fundamentals of the company.

The adrenaline rush from the pleasure and chance to generate money can really stick to your head and you’ll then be susceptible to give in to your emotions. Do not rely on your instincts but rather follow a structured approach in trading the market and write down your trades in your trading journal after every single trade you take.

So, set rules that will help govern your trading and follow them religiously. Structure a proper trading routine. Develop good habits to help yourself act better among different scenarios. Develop a strong will to deter your impulses. No matter how emotional you can get in the market, you should always be able to control your actions.

Good luck!

When trading on technicals, some traders consider chart patterns as of one the most effective trading tools in their set up as they are pure price-action. Traders look out for chart patterns or price formations to help them know if the odds are in their favor.

Chart patterns play a significant role in your ability to be more profitable in the market as it will give you an idea wha¬t to play and a chance to ride the breakouts, reversals, continuations, and many others. These chart patterns can occur in any given time frame such as intraday, monthly, weekly, or daily, as you will see in the following chart examples.

If you’re a new trader, there are loads of chart patterns you need to acquaint yourself into. Using real chart examples in the PSE, we’ll discuss how you can use some of these patterns to your advantage.

1. Head and Shoulders

Head and shoulders is one of the most popular chart patterns among the list and is most likely to occur during the end of most bullish trends. It has four parts: the left and the right shoulders, head, and neckline.

Here’s the analysis behind the pattern using the chart above.

From the low (P8.50/sh) of the leftmost candlestick of the chart up until the highest traded price during November (P17.46/sh), we can see how $X (Xurpas Inc.) held a bullish trend that gained more than % in gains.

By placing our attention to the bullish trend pattern (identified by successive higher highs and higher lows), we can gauge a stock’s likeliness to continue its trend or be prepared if a reversal is looming.

$X did not create a higher low after retracing from its high of 17.46/sh, it would have been better if $X found support at the resistance (high) of the left shoulder for a classic price flip (support/resistance flip). The market required $X to find support at the same low of the left shoulder, forming the so-called neckline. This could be taken as an indication that the uptrend was weakening given that the retracement was deep (a steep -19% pullback). Sellers were prevailing during that time. For the right shoulder, we can see that $X didn’t create a higher high and didn’t test the high of the head. It then preceded to strongly breakdown the previous support (neckline) confirming the succumbing of the buyers to the sellers.

The key in this pattern is to look at how a stock creates its highs and lows during an uptrend and check if it breakdowns key areas of support.

2. Inverse Head and Shoulder

Inverse head and shoulders pattern, the opposite of the head and shoulders pattern (as shown above), also have the main three parts: left and fight shoulders, head, and neckline. This time, it’s an indication of a bullish reversal. See how each succeeding pullback after the head turns into a higher low, catapulting $MBT (Metropolitan Bank & Trust Company) to form new higher highs. After breaking the neckline, the banking company gained for as much as 94% up to the rightmost candlestick in the chart.

3. Cup and Handle

As the name implies, the pattern should resemble a cup and a handle. It is characterized by the “U” shape formed after a stock declines aggressively followed by a short consolidation and an equal rally of the same size as the decline, as well as a handle after the pullback of the high formed on the right part of the cup as shown in the above $SMC (San Miguel Corporation) chart.

When this pattern is found during an uptrend, it could sometimes serve as a continuation pattern. When seen on downtrends, this pattern could signal a possible bullish reversal.

4. Double Bottom

The double bottom pattern serves as a predictor for a bullish reversal pattern and an existing downtrend to reverse from. Bottom one should serve as the lowest swing low of the current downtrend and bottom two should test the first bottom as support. If bottom two does not break the low of bottom one, it should test the highest swing high between the two bottoms and breakout of it.

We can see $2GO (2GO Group, Inc.) doing a successful bullish reversal using the double bottom pattern. Traders who were able to ride the breakout could’ve gained more than 60% given that they were able to exit in profit.

5. Double Top

The double top pattern is the bearish equivalent of the double bottom. When seen during uptrends, it signals a possible shift to the downside. It is characterized by two tops and a neckline/support line that confirms the pattern when broken.

In the chart above $SSI (SSI Group, Inc.) failed to breakout the resistance of top one after testing it, causing the stock to retest the previous support as identified by the swing low. After the second retest of the said support, $SSI broke its support with a strong bearish candle, confirming the double top pattern.

6. Pennant

The chart of $FDC (Filinvest Development Corporation) above is an example of a bullish pennant. This pattern serves as a consolidation pattern after a stock trend upward. It has two parts: the flagpole and the pennant itself. The flagpole is the initial rally before the consolidation, an important part of the pennant as its length can serve as a stock’s target price. The pennant, meanwhile, is the period of consolidation. It is defined by two trendlines that converge at one point with one another.

Pennants are good indication of an uptrend as it allows traders to take profit while at the same time allowing other traders to get in, opening an opportunity of a higher move.

There’s also a bearish counterpart called the bearish pennant where the breakout point is the low or the support of the pennant.

Conclusion

Always remember that the psychology of the market on how and why they form these patterns are more important than knowing the names or designs of these patterns. Understanding chart patterns will allow you to confirm your buy and sell signals and not just rely on your gut feels or hunches. Don’t forget to have solid risk management incorporated in your system. Just because a stock breaks out of your entry point doesn’t mean that it won’t retrace back to your entry price and end up becoming a loss.

While one list/article cannot capture every possible chart pattern in the market, these six patterns will allow you to develop your base knowledge in technical analysis that will increase your potential to identify market-changing events that could possibly leads to increased trading success.