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Investagrams Trading Cup 2020: Bounce Back Challenge Rules and Mechanics

WELCOME TO THE ULTIMATE BOUNCE BACK CHALLENGE!

Presenting the Investagrams Trading Cup 2020:
Time to remember 2020 as the year that we rise against ALL odds

This competition is OPEN TO ALL and will run for three months from September 28 to December 30, 2020.

1. Registration. The competition officially begins on September 28, 2020 (Monday), however, due to the high demand of requests asking for another chance to register, we have decided to extend the registration until October 4, 2020 (Sunday) at 11:59 PM. 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. Click here to join the competition.

Important notes:
– Verification of ID is required to join the competition room and the exclusive InvestaGroup for participants.
– Only one (1) entry and account per person is allowed.
– If you have more than 1 account to join the competition, you will be immediately DISQUALIFIED.
– You can change your Display Name, Username, and Profile Picture until THE DAY BEFORE the competition starts. Once the Trading Cup begins, the system will not allow you to change the above mentioned anymore.

2. Platform. The participants of Trading Cup 2020: Bounce Back Challenge 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 the 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 participants with the highest rankings while playing within the rules will be recognized as winners.

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

5. Trading Hours. Weekdays from 9:30AM – 1:00PM. This is the current PH trading hours and will be changed once the enhanced community quarantine is lifted. Meaning, you can’t trade during off-hours and on weekends.

6. Tradable Stocks. Participants can only trade the listed tradable stocks for this competition. The tradable stocks are filtered by our system and qualify as liquid and actively traded stocks. The initial tradable stocks list will be posted over the weekend before the competition begins.

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 participants 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 (For LONG positions). 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 CONDITIONAL ORDERS. By using Conditional Orders, you won’t need to watch the market the whole day in order to transact in the market, you can now set AUTO CUT LOSS, AUTO TAKE PROFIT, and AUTO BUY ON BREAKOUT. You can also set these orders to GOOD TILL CANCELLED so that you order will remain active until your buy/sell price is hit. Watch this tutorial.

Buy – You can buy the same stock multiple times within a day.
Sell – YOU CAN SELL THE SAME STOCK SIX (6) TIMES PER DAY.
In one stock per day you can sell TWO TIMES (2) at a PROFIT.
In one stock per day you can sell FOUR TIMES (4) at a LOSS. (cutloss)

9. Buying and Selling Conditions (For SHORT positions). SHORTING is now available for this competition. The same thing applies if you want to short a stock, you can transact using the current price or set conditional orders if you can’t keep an eye on the market. We understand that many may not know the concept of shorting which is why we created a video tutorial you can watch here: LINK TO VIDEO

  • Sell – You can open a short position on the same stock multiple times within a day.
  • Buy – YOU CAN COVER YOUR SHORT POSITION ON THE SAME STOCK SIX (6) TIMES PER DAY.In one stock per day you can cover your short position TWO TIMES (2) at a PROFIT.
    In one stock per day you can cover your short position FOUR TIMES (4) at a LOSS. (cutloss)
  • FEES / COMMISSIONS: Same as long positions.
    COMPUTATION OF PROFITS: (Sell price – cover price)*shares – fees

For those who are not familiar on how to trade SHORT POSITIONS, here’s a STEP-BY-STEP guide to short selling stocks for this competition:

1. Choose your position from the market order type (long or short).
2. Upon choosing the short position, input the initial number of shares you want to sell.
Note: To short a stock, you have to SELL it first. Then to cover your position, you will need to BUY the shares back. To learn more please watch the tutorial: LINK
3. For closing the short position, select the short option in the market order type and input the number of shares you want to buy to close your short position.

10. Holding period for all stocks (For both LONG and SHORT positions).

      • We will be applying the twenty (20) minute time lock for taking profits to ALL STOCKS to avoid widespread and rinse-repeat trades.
      • There will be no time lock or restrictions when selling at a loss.

11. 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:

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

12. Initial Public Offering (IPO). All upcoming IPOs that will happen while the Investagrams Trading Cup 2020 is on-going will be added on its SECOND (2nd) trading day.

13. On Dividends that will be given during the Trading Cup 2020.

      • Stock Dividends that will be released by a company will be credited at the END OF THE DAY of the ex-date. Please note that stock dividends will cause price adjustments, so be aware if a stock you’re holding will release stock dividends.
      • Cash Dividends that will be released by a company will NOT be credited to your total equity as the current system is still not able to credit cash divs.

14. On SRO that may happen during the Trading Cup 2020.

Stock Rights Offerings (or SRO) is offered to existing shareholders of a specific stock to purchase additional shares at a price lower than the current market price in addition to their current shares at hand.

SRO’s can be deemed good for longer-term investors. However, in the short term, may POTENTIALLY lead to a possible decline or gap down in the stock. So it’s important to always be aware of this.

Participants in the Trading Cup 2020 will not have an option to purchase additional shares from the SRO.

15. 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.

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%.

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 participants 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 participant 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 participant 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 participant that is proven to repeat this kind of behavior shall be disqualified.

17. Trading halt. Stocks that are on a trading halt will not be tradable during the halt and will be tradable again during the announced lifting time.

18. Participant rankings. This is constantly updated every 10-minutes and automatically ranked by Investagrams system according to net profit gain/loss.

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 100 participants after deliberation will be announced as the official winners.

20. Top 10 Winners. Those who make it to the Top 10 will be REQUIRED to do a defense of their trading strategies used during the competition. This is basically a presentation where you will share your biggest winners, losses, and learnings during the Trading Cup. This has been the tradition of the Trading Cup for the past three years where the winners will share with the community how they made it to the top.

NO DEFENSE = NO CASH PRIZE.

21. Prize Pool. In the event that there is a winner from the Top 100 that is not registered using a Double Up Pass, the pot prize associated with his/her ranking will not be distributed to the other winners. To see further details and full list of prizes, please see the landing page.

PRIZE POOL BREAKDOWN (Applicable for Double Up Pass Holders):

Total Prize Pool: 1,015,857

Raffle: 110,000
RCBC Securities Account: 200,000 (20k acc each for Top 10)
Top 21-50: 30,000 (1k each)
Top 51-100: 30,000 (600 each)
Base cash prize: 300,000
Additional prize pool: 345,857

22. TOTAL PRIZES FOR THE DOUBLE UP PASS HOLDERS (Top 20)

CHAMPION: PHP 258,342.8
TOP 2: PHP 129,171.4
TOP 3: PHP 64,585.7
TOP 4-5: PHP 32,292.85
TOP 6-10: PHP 12,917.14
TOP 11-20: PHP 6,458.57

23. Unexpected events. In the case of an unexpected event that 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.

24. 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 2020: Bounce Back Challenge. Announcements shall be made if there are any changes. Rest assured, we prioritize keeping the competition as FAIR as possible to all participants.

25. Ignorance of the rules is no excuse. All participants are expected to have read and understood the rules and mechanics of Investagrams Trading Cup 2020: Bounce Back Challenge. These are published for the participants’ information and protection. Ignorance of these rules and mechanics is not an acceptable excuse for violation.

26. If you are part of the Top 100 winners, the FINAL DEADLINE to claim your cash prize is on JANUARY 31, 2021. The cash prize will not be given anymore past this date.

27. 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.

28. Prizes from Partners. Some of our partners will be giving out prizes (in cash or in kind) which may be distributed on a different timeline or date depending on the partner. But rest assured that we will make sure that they will be provided.

29. PRIZE FROM RCBC. The Top 10 DOUBLE UP PASS HOLDERS will win an account with RCBC Securities, Inc. with PHP20,000 (withdrawable). Again, please note that this prize is only applicable for DOUBLE UP PASS HOLDERS.

30. Joining the Investagrams Trading Cup 2020: Bounce Back Challenge means that you agree with all the clauses mentioned above.

Click here to join the Investagrams Trading Cup 2020: Bounce Back Challenge

 

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How to & Advice Latest Posts

How to Deal with Missed Trading Opportunities

You could say that you have been in the financial markets for as long as you could remember when you think about the missed opportunities that could have made a difference in your trading account. Indeed, it is common to miss such opportunities given that the financial markets are awake 24/7. 

As traders, we are in an environment where an endless stream of opportunities displays itself. There may be various reasons for not taking the said leading name. 

1.)   The price structure seems unattractive. 

2.)   Failure to screen such names. 

3.)   The trader is busy with other activities. 

4.)   Mentally unprepared to take the trade. 

Missed opportunities happen all the time. The best way to move on from such is to prepare a buyback criteria if the opportunity represents itself. 

It is conventional wisdom that doing things right leads to the correct outcomes. No doubt, it’s natural for us to think that way. However, that is not always the case for us market participants. There would be times that you have analyzed the stock through fundamentals or technicals and it could still move against your bias. The best way to conquer this is to accept the fact that anything can happen (we cannot control the movement of these assets). 

While the financial markets are an arena of endless opportunities, potential prospects expose the trader with inimical psychological conditions. It takes a lot of hard work and perseverance for a trader to indicate when such opportunities exist. However, learning how to pinpoint a potential leader does not mean that you have learned to think like a professional trader. Without possessing the right state of mind, a trader would not be able to produce consistent results. Indeed, consistency is a mindset that has at its core certain fundamental thinking strategies that are unique to trading (Douglas, 2000).

It is ideal to see the market from an objective perspective, wherein you must learn and accept the risks with no internal conflict. You must infuse a mentality that is unique to traders. A mentality that enables you to repudiate hesitation and to eradicate overconfidence. That is relatively the epitome of professional trading. 

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Featured How to & Advice

Bubble Wrapped Trading and a Few Clichés

Growing up as kids we may have found ourselves playing with crosswords, and some other visual puzzles that challenge our cognitive skills. More often than not, we look for clues and cues from context and previous dots that we have already connected.

This maze game for instance will surely keep most of us occupied for maybe more than a couple of minutes trying to solve and find our way out. 

While we may have some fun at the beginning following the path laid out as shown, patience eventually finds its limits and we do one of two things.  Either we quit;  or move forward to find an easier way to solve it.  Linear thinking as most of us tend to have tells us to do one simple thing – that is to start at the end and find the right path by process of elimination.  

And as many who have lived before us have done, which is also probably life’s greatest hack, is to  BEGIN WITH THE END IN MIND.  The thought on its own may sound philosophical and perhaps even spiritual or esoteric, but the translation to practice is what we do all the time.  Visualization is a powerful tool.  And as Steve Jobs once famously said, 

“You cannot connect the dots looking forward. You can only connect them looking backwards. So you have to trust that the dots will somehow connect in your future.”

What we conceive is always what we achieve.  Or at least try to.  And unless you are of the belief that all in this world is totally RANDOM, our hopes, dreams and aspirations will usually begin with the VISION of “what ought to be”. 

Thereafter we go back to reality, create a plan and find ways to make it happen.

In the arena of trading and investment, a prudent participant will always make due diligence studies prior to engaging himself to a specific activity.  Best effort projections, and  calculations based on available information, for the most part is the end game in any feasibility study.  And the basic thesis that needs to be formed and satisfied is the probability that it will be a “potentially gainful” venture, before one will even take initial steps to proceed .

To further relate and break this down for equities, forex, and commodities traders, it essentially applies to  the most rudimentary idea of finding proper ENTRIES and EXITS.    And we all come to know that almost everything will not be always as what it seems. 

Trading as many of us find out the hard way, may be as simple as it sounds but is easily the most difficult endeavor to be engaged in.  The investment is not only monetary.  Many  would eventually come to realize, they have to be emotionally and psychologically invested as well.

SEATBELTS AND AIRBAGS

First mindset to instill before anything else is that TRADING is a business.  We probably have seen a few who may regard it as more of a hobby, all because some friend or acquaintance egged him on.  Nothing wrong with that.  That’s how most of us started anyway.  

Bear in mind though that while businesses are undertaken to EARN,  a hobby will always COST.   So if you’re just in it for the thrill and/or the novelty, you would be better off picking up some racquet sport or joining in some competitive event.

And following the idea of beginning at the end, a trader’s primary rule is not only look at what he or she stands to gain but more importantly, FOCUS on what is at risk or what the potential losses can be.  

As any sensible trader or investor will tell you, the result of any trade SHOULD and MUST always only END as any one of the following:

  • A small win;
  • A small loss / break even, or;
  • A BIG win.

Recent events in our history amplified the importance of prudent actions. Without the need to further rationalize  being knee-deep into this era of the pandemic, the words “SAFETY FIRST”  became ingrained in our consciousness and thrust  itself to be of paramount importance.  

In the investment realm we can equate this idea of instinctive survival to the all important concept of CAPITAL PRESERVATION.  

Simply translated, the principles of risk management must ALWAYS be applied as all capital are limited.  Although unlike the current protocols that we observe to avoid contracting and transmitting the virus, total avoidance is not an option in trading.  The dynamics is such that we have to be constantly aware and engaged – either in an active trade or in search of set ups for one.  

With the enough technical motivation, involving ourselves in a particular trade we see as potentially profitable is what it is all about.    Not taking any chance when opportunity presents itself is actually the greater failing.  After all, RISKS are inherent in everything and will always be present in all aspects of our existence.  The impetus should just then be on properly managing them.  

That said, you of course need a  proven and tested METHOD;  and a process that gives you an edge over time.  Having a certain degree of mental fortitude in executing an actionable idea should always be a step in the right direction.  But for now, let those be topics for another time.

TAKING THE FALL is inevitable. But not all falls are equal.  

A ten foot vertical drop onto a concrete pavement will definitely hurt more than if you just stepped and slipped on a banana peel while walking on grass. While not entirely unexpected, failures can and will happen from time to time.  The trick is we have to train and prepare to endure them.

Defense should always take the forefront in all beginner’s lessons.  In the Japanese art of Judo, your sensei would have likely started you off with the basics of falling.  Simple roll offs from side to side, to dampening a fall after being thrown are almost always taught first to novices.  The rationale is of course simple.  As you cannot avoid hitting the ground for the most times you engage, the best you can do is not to get hurt.  You have to be able to get back up for the next grapple.

To clarify the analogy, here are a few basic RISK MANAGEMENT concepts that should protect your portfolio and act as a bubble wrap for your trades:

1. Setting and executing STOPS. 

Hands down it is the most important and basic component of any RISK management strategy.  No trading plan should be without it.  These identified and pre-planned price points for EXITS can be classified as any of the following:

  1. Cut loss 
  2. Trailing stop
  3. Time stop

There are hundreds of references that a newbie trader can study up on to understand these generalized concepts and apply to their trades. While most active traders should already know this concept, the emphasis can never be undermined.   Google is always our friend if you are still alien to the above terms.  For now just believe me when I say that a properly placed stop will make certain that you live to trade another day.

2. Knowing the CONTEXT of your trade.

Almost anyone can become a trader of the equities market.  It does not really matter if you have a small or large amount of capital in order to understand basic concepts of PRICE ACTION.  And knowing the context of the trade you will be embarking on, is an input that is ever critical in order to be aligned with an acceptable MARGIN of SAFETY.

One of the first of the many cliches a newbie will hear is “the TREND is your FRIEND.” Overused in many forum and opinion posts, it is perpetual wisdom.  Being a long-only market, the PSE investors know only too well that to make gains you need to BUY LOW and SELL HIGH, or at least buy high then sell higher.  

From a perspective of a prudent, and safety-conscious trader it simply IMPLIES to take positions only in names that are trending UP.  

As one of  the not-so-few who had it good during the bull market that kicked off in circa 2009, it meant buying anything that moved. And because a “high tide lift all boats” (yes, another cliche’), most of the time, entries in uptrending stocks did not play too much critical importance.  

While a seemingly wrong entry might stall enthusiasm for a bit  it should not matter for too long.  In the end, the drawdowns (or negative portfolio values) as a result of PULLBACKS or corrections will cease to exist as the UPTREND resumes.  Eventually it should conquer higher price levels  the way we want them. 

But wait.  There’s more.

Even in an established trend (up or down), the trade context will alternate to the more time-consuming phase of price action, that we call a RANGE or consolidation.

 Simply put, it is an area where price settles for a while.  This is also the zone where the previously identified SUPPORTS and RESISTANCES are either re-defined or re-established.

Of course price action that constantly moves higher is what most of us desire to be locked onto. However as “divergences” will occur as a result of relative rapid price expansion,  we cannot disregard the fact that a transition to a “boxed” or ranging price action is inevitable. 

All depending on where you entered, a range more often seen as a correction may also viewed in a couple of other perspectives, namely:

a. An opportunity to enter or add to positions at a relatively lower / safer level –  range price action offer pullbacks and redefines support and resistance.  This eventually evolves as either a FLAG or a PENNANT which are what we call CONTINUATION patterns.  It allows other participants to come in while others liquidate for reasons of their own making (profit taking, cutloss, or time stopped).

b. Range trading idea – on the transition to the RANGE context where a new “support” is defined by way of the crowd buying or buying back into at specific price points, a RANGE TRADE may be initiated.  Meaning, buying near said new range support then selling into or near the established resistance of the recent high.  As mentioned, range context is more time-consuming as all correctives are.  Typically they take at least near twice the time of the trending move.  In Elliott Wave Principles, the idea is estimated by way of Fibonacci Time measurements.  What is implied here, is that a RANGE trade may also be considered where you buy near supports of the range and sell near the resistance of the range.

As this can go on for more than a few times, it’s a WASH, RINSE, REPEAT idea.  And surely, it can also be most profitable.  The important mindset to take here is that price action is only in a range – UNTIL IT IS NOT.

3. Knowing your REWARD TO RISK ratio.

Not really a cliche but sounds like one is another primary rule for traders, “BUY NEAR SUPPORTS, SELL NEAR RESISTANCE”, is hands down  the most important one to achieve profitable trading.  Either in the context of the general trend or inside a range trade, this is a must know for everyone.  

Necessarily of course, one should need to  have properly identified the major price points that attract most buyers (supports), and the levels that entice holders to turn sellers (resistance) aiming to lock in profits.

And the widely accepted rule of thumb is to take only trade positions with at least a 3:1 ratio.

This again simply means that for every one unit loss you are willing to take, you must at least have the prospect of gaining three (3) times that said amount.  Another translation would be for every one peso you are willing to risk (as a loss),  you should at least find that there is the potential of gaining three pesos (as profit).  Naturally, a higher R/R or reward to risk ratio is more desirable.

And the simple formula:

Target price minus BUY price / BUY price minus STOP.

For example:  

If you bought XYZ stock at 0.95 and have a set stop at 0.85 with a target price of 1.25, your R/R will be:

1.25 – 0.95 = 0.30

0.95 – 0.85 = 0.10 

= 0.30/0.10 

Reward to Risk ratio = 3.0 x 

Again, this cannot be overemphasized.  A good R/R is ALWAYS the key to profitable trading.

4. PROPER POSITION SIZING

Does the term “ALL IN”  sound familiar to you?  If there is such a thing as a mortal sin in trading, it would have to be taking too big a position size upon entry. 

If you are doing some kind of project of entrepreneurial orientation, it would be highly unlikely that you will spend your entire budget for said venture in a single release or in a one time pre-payment term.  

It does not matter how much of a sure thing you may think it is.  Sound principles dictate that you may want to test the waters first, and perhaps give only a small down payment.  And as the project goes forward, gradually increase your exposure as you gain more confidence in its ability to progress smoothly.

It is no different in investment or trading.  Proper risk management necessarily involves proper position sizing and limiting risk of losses.  Most experts opine that one should not risk more than 2% to 3% for every trade, and no more than 6% of your total portfolio.

A good practice is to buy in tranches of maybe 3 to 4 portions of your allocation. It may be in equal portions or in certain percentages of your allocation for a certain stock.  This way, exposure and risk will be limited to a small percentage especially at the beginning of a trade or in the initial entry.  There is a lot of literature and on the topic of position sizing, and a good one you may come across with are the writings of Van K. Tharp.  (as shown here).  It might be overwhelming at first but the ideas and concepts are well worth the nosebleed.

The size of allocation for each stock in your portfolio must also be properly managed.  Portfolio-based investors usually do periodic reviews based on their set metrics and will actively facilitate re-balancing on a regular basis.  This practice assures that only winners are maintained and the laggards and losers are promptly removed.

As a simple measure and gauge that you are properly position sized, market veterans will only have this to say, 

“You must be able to sleep soundly at night.”

And finally as a recap of how to best protect your investment as a trader, this image of a recent scene in the series of unfortunate events so far for 2020 should be fitting and will remind you of the best risk management practices that every one of us must adopt and embrace.

I am pretty sure you get the picture.  

Contributor:

Name: Jojo Gaston
Investagrams Username: @JojoGaston0

About the Contributor:

Jojo Gaston is a partner/mentor at BoH Society, an online trading support group that provides traders’ education, and data-driven trading format for local stocks, forex, and other foreign markets.

Categories
Featured News & Features

Going Global: The Earnings Season

In the US Stock Market, traders and investors all over the world are always looking forward to the earnings season. It is an important period for traders and investors since publicly listed companies release their earnings report. It is announced quarterly. 

The Earnings Season typically commences  in January, April, July, and October. Although keep in mind that not all companies release their earnings at those dates, there are instances that some firms release between those dates since it ultimately depends on the given company’s quarter ends. 

This period is crucial for a market participant as these earnings could either result in a gap up or gap down in price, depending on the quality of the report. It’s no stranger for traders and investors in the US Stock Market to experience these wild swings during the earnings season. 

According to Mark Minervini, one of the best traders in the world, the best way to approach the earnings season, assuming that you own shares of a stock before its earnings release, is to simply sell all of your position if you do not have a profit cushion in the first place. If you have at least a 15-30% profit cushion, then you may opt to hold into earnings. 

If for instance, you bought a stock at the long side, then you sold it before earnings, then the next day it gapped up, just move on and assess whether an opportunity represents itself. You can always buyback a stock whenever possible. You do not want any surprises. It is truly difficult to anticipate it, given the fact that a gap up or gap down could happen. 

Here are some examples of stocks after earnings season: 

 Figure 1. $AMD Chart

Figure 2. $CHGG Chart

Figure 3. $TWLO Chart

Figure 4. $BYND Chart

Figure 5. $INTC Chart

Figure 6. $SMAR Chart

Figure 7. $ZNGA Chart

As you can see, this does not happen in our local market. It is critical for a trader or investor who participates in the US Stock Market to be keen with the earnings season. It is a must to be prepared for occurrences like this. Per Mark Douglas, anything can happen, and we cannot influence what the stock price will do next. 

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Latest Posts News & Features

InvestaUniversity opens FREE Stock Market Classes for Everyone

Investagrams, the fastest growing social-financial platform, is opening the newest FREE Stock Market learning space named InvestaUniversity. The online university offers basic to advanced lessons about finances and investment to all. 

No matter the financial status, age, experience, and education — everyone can learn how to invest in the stock market. Everyone can improve their financial lives through wise investing.  Everyone is accepted into the InvestaUniversity. 

The mission is to create at least 10 Million investing Filipinos. And Investagrams saw that the only way to make this a reality is to help all Filipinos be educated about the unlimited opportunities in the stock market. Hence, the birth of InvestaUniversity. 

Investagrams pooled in a team of educators — JC Bisnar (CEO of Investagrams), Christian Silverio (Investagrams’ resident trader and private fund manager), and Paolo Tomacruz (Investagrams’ resident trader and private fund manager) who will break down the complex concepts of the financial markets to easy-to-learn and friendly weekly lessons. 

To further the students’ learning, InvestaUniversity has also prepared activities and homework which will be discussed in the live online discussions. 

“In InvestaUniversity, no one gets left behind. All the courses, the videos, the core curriculum, ia-upload natin ang mga lesson sa ating mga ng channels — on Youtube, Facebook, and on InvestaLearn platform — all for free. Kung gusto mag-participate, mas magkaroon ng commitment, magkaroon ng access sa mga benefits, then you can pay a tuition fee. At the end, bahala ka na literal. Dito sa InvestaUniv, we want it to make it as open and as inclusive as possible, and InvestaUniversity will make sure that no one gets left behind,” JC Bisnar, CEO of Investagrams said in their launch video. 

Your tuition, your call. 

Promoting education for all and inclusivity, Investagrams made InvestaUniversity’s core program to be free. But if you want to commit, participate in the weekly activities, and gain some perks, you can settle a tuition fee of your choice. Whatever the amount, it’s all up to you.

This program and tuition fee scheme may be the first of its kind in the Philippine Stock Market. 

To enroll in InvestaUniversity, simply follow these 3 easy steps:

1. Subscribe to Investagrams’ YouTube Channel (www.youtube.com/investagramsTV).

2. Follow the official Investagrams Facebook Page (www.facebook.com/investagrams).

3. Join the exclusive InvestaGroup community (www.investagrams.com/Group332).

Curious about InvestaUniversity? Know more here: http://invs.st/InvestaUniversity 

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Featured News & Features

Investagrams Featured Trader of the Week: Mivan

For this week, we would like to congratulate our featured trader: Mivan a.k.a. @mivanl!

For our featured trader for the week, we will be showing how he was able to spot $ACEPH before it broke out. His trade idea is influenced by Mark Minervini’s ways of trading the financial markets as seen in his analysis of the said stock. 

He first determined the importance of identifying a consolidation pattern before entering the trade. It is ideal for a stock to form a base first before it moves higher. The longer it took to form the base translates to more chances for a stronger up move. Indeed, the bigger the base, the higher in space. 

Moreover, he also highlighted that the volume was relatively lower than its historical average. It is expected for a consolidation pattern to exhibit such features to signify that it is unquestionably forming a proper base.  

Also, he highlighted that there were overshoots of the initial breakdown of the support area, yet it bounced back immediately. That signifies buying pressure on the said stock in those areas.

He also mentioned that the initial breakout was supported by massive volume. Furthermore, on the day of the breakout, it closed strongly as there were no wicks present in the candlestick. 

It is a low-risk trade, as the downside for a breakout could be a cut below 2.3-2.35 (-3% to -5%) and potential take profit areas at 2.7-2.8 (conservative) (12% to 16%).

Indeed, being patient enough to wait for a trade where all the variables from your system align is the epitome of professional trading. Setups like this could last from a few weeks to several years. The key to trading the financial markets is to be very particular with your stock selection. As they say, it is up to you to decide whether you are a bored wealthy trader or a thrill-seeking gambler (Minervini, 2020). 

Congratulations to those who were able to maximize the technical swing of $ACEPH. Lastly, kudos again to Mivan for sharing his execution. Your FREE 1-month InvestaPRO is on its way!

Categories
Featured How to & Advice

Philippine Stock Exchange Trading Periods

“Nag-enter ako ng buy order, bakit hindi lumalabas yung stock sa port ko?! HELP PLS!”
“Anong oras ba bumubukas stock market mga boss?”
“Ano po yung CLOSING?”
“HELP! GUSTO KO I-CANCEL YUNG ORDER KO PERO HINDI PWEDE. HUHUHU”
“MAMSER BA’T HINDI PWEDE MAG LAGAY NG TRADE? PANO BA TO? MAIIWAN NA AKO!!!!!”

These are just some of the questions that we, as beginners in the market, ask. I have to admit, I have asked these questions myself back when I was just starting out. So let me help you by explaining each trading period of the Philippine Stock Market in detail. Ready? Let’s go!

The Philippine Stock Market Trading Hours is divided into 9 periods. These are the following:
1. Pre-Open Auction Period
2. Pre-Open No-Cancel Period
3. Market Open
4. Continuous Trading
5. Market Recess
6. Pre-Close Auction Period
7. Pre-Close No-Cancel Period
8. Run-Off/Trading At Last
9. Market Close

Let us explain the periods one by one.

1. PRE-OPEN AUCTION PERIOD

9:00 am – 9:14 am

This is the first period of a trading session. In this period, you can enter, modify, or cancel your orders. However, no matching of orders will occur. That means if you place a “buy” order, you won’t see it in your portfolio just yet.

This is the time when you see bids and asks way off from the previous closing price just like this one:

2. PRE-OPEN NO-CANCEL PERIOD

9:15 am – 9:30 am

Unlike the pre-open from 9:00 am to 9:14 am, during this period, you are allowed to enter orders but CANNOT cancel or modify them. This is the period when you want to view the projected opening prices of stocks since most of the fake bids and asks are usually cancelled before entering this period. You can view the projected open of a price at https://www.investagrams.com/Stock/ProjectedPrice.

3. OPENING PERIOD

9:30 am

This is the period when the Opening Price for all Stocks is calculated. During this period, the Order book is frozen and you cannot enter, modify, or cancel an order. After all opening prices are calculated, the order book will be unfrozen.

4. CONTINUOUS TRADING

9:30am – 12:45 pm

This is when orders are automatically matched at the Best Price in accordance with the Revised Trading Rules.

5. MARKET RECESS

During this period, trading for all stocks is halted. You cannot enter, modify, or cancel orders during this period. Currently, there is no market recess in the Philippine Stock Exchange. Before the March 16, 2020 shortened trading hours, the market recess was from 12:00 nn to 1:30 pm.

6. PRE-CLOSE AUCTION PERIOD

12:45 pm – 12:47 pm

This period is the same as the Pre-Open Auction Period. During this period, you can enter, modify, or cancel Orders.

7. PRE-CLOSE NO-CANCEL PERIOD

12:48 pm – 12:49 pm

During this period, you are allowed to enter Orders but cannot cancel or modify them. If you want to cancel an order, make sure to do it before this period to avoid unnecessary losses.

8. RUN-OFF/ TRADING-AT-LAST

12:50 pm – 12:59 pm

Traders can enter Orders ONLY at the Closing Price. In this example, $MM closed at 2.65 with 1.03M shares of unserved offers. If you want to buy this stock, then you can place a buy order at 2.65 and you will see it in your portfolio after the transaction. If, however, you already owned some shares and you want to dispose them 1-tick lower at 2.64, you will have to place the sell order at 2.65 even if you are willing to sell it at a much cheaper price.

9. MARKET CLOSE

1:00 pm

This is the last period of a trading session. No trading activity occurs here. This is the time when you reflect and journal your trades and screen stocks for a potential play in the next trading day.

CONCLUSION

The key to an effective trading is to keep these market periods in mind before you enter or exit a trade. If you want to place orders at the opening price, you may place them during the pre-open no-cancel period since fake paddings from other market participants are usually cancelled before entering this period. The same is true if you want to place an order at the closing price — you may place it during the pre-close no-cancel period. These simple gestures will save you a lot of headache.
You don’t want to get confused during market hours. So set forth children of the market, use these information to your advantage and dominate the trading world!

Contributor:

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

Channels:
www.facebook.com/GeyzsonKristoffer
www.investagrams.com/Profile/GeyzsonKristoffer

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.

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