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”20% niririsk ko per trade, kaya ko pa ba? Thrice na nawipeout yung account ko, should I prioritize my stoploss kaysa sa target profit?”

Understanding your risk and financial management is more than handling your emotions, but also being grounded with the right education and knowledge on the stock market principles. A 5000 pesos gain can turn into 20 pesos in no time if you do not know how to properly handle your account.

Here are some of the quotes or saying that may possible bring a change and a paradigm shift on your financial management

Quote #1:

You get recessions, you have stock market declines. If you don’t understand that’s going to happen, then you’re not ready, you won’t do well in the markets – Peter Lynch

Peter Lynch is one of the known investors and mutual fund manager in the world of stock market. He is also one of the many successful investors of all time! Being great in the market does not only mean successes and understanding the market structure. It also takes one to recognize that the stock market declines and fall, and that it the reality of the stock market.

If you are not able to accept this fact, your 100k capital investment can be wiped out anytime! Why? Because you are too confident with the market and your own assumptions and decisions. To be able to beat the market is to be able to accept that even the stock market fails. Learn and re-learn your mistakes on why you are losing. Get back on the track and use your losses as opportunities

Quote #2:

The stock market is a device for transferring money from the impatient to the patient – Warren Buffet

Even the greatest Warren Buffet explains that emotions are dangerous creatures! Being impatient is a mark of losing in the stock market. Once impatience takes over your mind and soul, your decisions gets grounded on fallacious, biased, and unclear foundations.

After that, you create poor results and executed actions. One day, you just sold out all your 2000 shares! But the next day, the market went up. Do you see the part where you lose? It was the part where you have lost your patience. Be patient with the market and be guided with accurate, reliable, and unbiased factors on your decision making.

Quote #3:

Rule #1: Don’t lose money. Rule #2: Don’t forget Rule #1 – Warren Buffet

One thing to always keep in mind is to not lose money. How can you do that? Rather than prioritizing your target profit or reward, set your stop loss! It’s just like a child, who can’t swim with a height of 3 feet, who would be diving into an unknown 5 feet pool. Does he know that the pool is 5 feet tall? Will he be able to swim? Why would he dive into that pool?

The risk of diving is similar to your indicators in trading. You must first analyze what you are about to get into, and the reason why you are going to be diving. Just because a same kid of 3 feet have dived doesn’t mean you are safe; it is also similar to your historical prices. Everyone has their own tolerance and set of skills. You must accept that too!

Conclusion

The quotes above are just some of the ways you can change your mindset and attitude towards the market. This will also help you avoid or prevent yourself from creating errors or experiencing another the same mistake. May you continue to have the burning desire to learn more about the stock market!

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With the increasing popularity of day-trading, stock mentorship programs can be seen popping up by the minute. The question is, do you really need one? The reality is: it depends.

Whether or not you should enter a mentorship program depends on your level, your learning style, and most importantly, your profitability. If you have been in the stock market for some time but you still are not as profitable as you want to be, chances are, you need a mentor.

However, entering a mentorship program is not as simple as it sounds. There are many things that you should take into consideration before committing to a mentorship program.

Having a Mentor does not equate to being profitable

Having a mentor in stocks is the same as having a mentor anywhere else. They are there to guide you but at the end of the day, your success ultimately depends on you. This magnifies the importance of Trade At Your Own Risk (TAYOR). If your purpose for having a mentor is solely for stock picks(and not on learning), then you are not looking for a mentor, you are looking for a fund manager. 

Different Mentors have Different Styles

Exercise caution and perform due diligence.  The need for a mentor does not mean that you can choose any mentor and achieve the same results. It is necessary to look for reviews, look for the differences in their offerings and of course, look at their prices.

However, it is important to note that price is not a determinant of quality (as with everything else). Choosing the right mentor can be the difference between profitability and mediocrity in the stock market. Another thing to take note of is the target market of the mentorship programs.

Some programs are tailored to beginners while others are tailored to more advanced traders. Typically, the price increases as the target market becomes more advanced. This is driven by the fact that basic concepts (e.g. introduction to the stock market) are easier to teach than more complex concepts (e.g.  Elliott wave and systematic trading)

You should still develop your open system

Once you have chosen a mentor, it is important to still develop your open system. This is driven by the fact that different people have different needs. Your risk appetite, level of dedication, and experience might differ from that of your mentors. Simply copying what your mentor does will result in a mismatch of that system to your lifestyle. At the end of the day, a mentor is responsible for helping us develop OUR OWN trading philosophies.

Conclusion

We have to remember that we are in the stock market to gain financial freedom. Choosing which mentorship program to enter is just as important as everything else in the stock market.  As they say,  A mentor is someone who allows you to see the hope inside of yourself. So at the end of the day, your success in trading comes from you. Mentors are just there to help you foster that talent.  We hope this article has given you some insight on mentorship programs. Happy Trading!

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For any given product or service there are tons of competing offers to consider.

One offer could be cheaper, one a little prettier, and another a little more efficient. Nobody knows which one is actually better.

Hell, even market positioning has its limits nowadays. You can’t just say “my ice cream is for diabetics” because chances are, thousands of others are already cornering that market position.

The good news here is, there’s no right choice. Apple, Samsung, Huawei— whether you choose one or the other, it all boils down to your taste. But just to make things more confusing:

Apple products are not the cheapest, not the fastest, and their customer support is definitely not the friendliest. So why do they stand out? Does that mean their customers have shitty tastes?

Nobody needs your product.

There are only a handful basic human needs, around 5-7 depending on who you’re asking. The point is, nobody really needs a delicious sandwich. All it takes is a banana to satiate one’s hunger. And sure enough, nobody actually needs your product. The universe will continue its chaotic dance—people can eat, breathe and love without you.

What about a helper app for the visually impaired, just like in the Korean series “Start-up”? Well, it’s not a need as much as it is a desire. The visually impaired desperately want to read, walk, and experience the world the way most people do, so they feel they need the tech but they don’t. There are plenty other options that can achieve the same result.

Nobody knows what they want.

Once, I met this person in a violin class I used to attend. She was wearing a faintly yellow dress; her hair dyed with the deepest purple. I liked her, but to my surprise once we got closer I realized that her brilliance only burdened me with more insecurities than I could handle. Truth is, nobody knows what they want.

What course should I take? Which company should I apply for? Which stock should I buy? Big or small, decisions are always difficult to make. And buying your product is one of these decisions.

3 problems, one solution.

All I’ve discussed are problems. Bummer right? Thankfully, they’re all barks of the same tree, meaning all three share the same roots and the same solution. That is – branding.

What is a brand

A brand is a person’s first impression of a product:
“That car looks very futuristic but eco friendly.”
“That phone looks so simple I bet it can simplify my life too.”
“This cologne smells like chocolates.”

Branding gives your product its recall.

Why is good branding important

Good branding differentiates your product/service.

You can identify Chuck Taylors sneakers from meters away. They give you a nostalgic retro vibe. Just a pair of red and yellow will remind you of that savory big mac. Sometimes, even the sound of air brakes when a bus stops can remind us of the ‘fizz’ when opening a coke. 

Good branding makes a product or service relevant.

Nobody needs your product. But branding can make it relevant. “I’m an OFW breadwinner, and I need to send my family some hard-earned gifts for Christmas. Hopefully, my package will arrive safely so it can at least fill a part of the hole I left behind. Buti na lang may FedEx.”

Having set that first impression, people will naturally be reminded, when the desire arises, that your product is exactly what they’re looking for.

Lastly, good branding makes people feel something.

Nobody knows what they want. But emotions are always honest, no matter how hard we deny them. 

When we buy a new pair of Nikes, we just want to put them on, go out there and just do it. Just do it.

That first bite out of a yum burger will always put a smile on my face. Between its flavors are memories of my youth—decades of noise and sunshine with my family and friends. 

When we hear Investa’s iconic voices, we are both humbled and inspired— we know there is much to learn & accomplish, but we are always reminded that we’re not alone in our struggles. We never knew that family, friends, and strangers could share the same vision for the Philippines. And yet here we are.

The best brands make the world feel like a brighter place. They seek to empower and change people for the better. If you want your product or service to outlast your own lifetime, then do the heavy lifting and create a culture of warmth, honesty and innovation. Remember—our battle is not with our competitors, it’s with the impact we seek to make and the challenges of doing so.

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We all grew up in an environment where we need to follow certain rules, do this, do that, do whatever. Follow them and they say you’ll be guaranteed a success. Do the opposite and you’ll end up facing unwanted sanctions or worse, end up incarcerated. The structure we have around us can be restraining to the soul.

For some, trading is the escape. It is one of the ways to get away from the “structuredness” of the society. It is a way to express your creativity by mixing and matching indicators or even drawing lines whenever, wherever, and however you like!

There’s no right or wrong way to do things in trading. But here’s the catch, the escape can also be the problem. It’s like your everyday coffee — giving you that high burst of energy momentarily, only to leave you crashing down to your feet, never getting back up unless you get a dose again.

At the start of your trading journey, the tendency is you study indicators, how high should the P/E of a company be, or how certain news can trigger the stock to go through the roof, straight to the moon. You just want as much information as possible to get that trade right! 

Let me tell you something, trading has got to be one of the hardest if not the hardest skill to master. The reason is pretty simple, trading is about probabilities and it goes against our natural tendency to be right.

Gathering all evidence that prove or disprove your underlying bias about a particular stock is almost automatic. Neglecting those that don’t agree with you, only because you bought the stock and don’t want to accept that the trade can go against you, you were blind sighted.

I can’t blame you, we all grew up wanting to be right all the time. That’s human instinct. I mean, our ancestors won’t risk going through the river full of crocodiles, right? They want to be as sure as possible to cross the river with their limbs still sticking together.

Here’s something most traders know but never really incorporate in their trading:

“You don’t need to know what will happen next to make money.”

I hold this principle dearly. Why? It tells us that we don’t have to gather all the information about the stock like how the company has been doing, how many towers have been built, how many grocery stores have been opened, or how many indicators tell that it’s going to go up.

If, for example, another stock goes up without any logical reason, you can still make money! Consider this, if some random kid with a pile of cash, sitting at his mom’s basement, decided to buy a billion’s worth of the stock, he’ll push the price up! No matter how negative the indicators and your bias about the stock are, it’ll smash roofs and climb its way to the top!

What’s the solution? Find an edge and be strict with it. Edge is only a bunch of patterns/scenarios that stack the odds in your favor. Then, enter that trade without thinking too much about what it should do next. If you have the probabilities stacked in your favor, you wouldn’t mind taking the hits as you know your edge will play overtime.

So, enter that trade and don’t be afraid to push that button. Don’t think too much about what it’ll do in the next ticks or so. Just have an edge and follow your cut loss levels correctly. And always remember:

Be strict but a little reckless.

Contributor:

Full Name: Geyzson Kristoffer S. Homena
Investagrams username: @GeyzsonKristoffer

Channels:
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About the Contributor:

An Applied Mathematics graduate and a full-time teacher, Geyzson Kristoffer is a part-time trader who has been an active user of Investagrams since 2017. He spends his mornings, afternoons, and evenings learning about trading and reading books: Alexander Elder’s Trading for a Living being his favorite. Cohering to his passion and profession, he set his heart on teaching and helping newbies, but only the dedicated ones.