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How to & Advice

Basic Stock Trading Strategies for Beginners

We all know that there is money to be made in the stock market. Big corporations and retail traders make millions from the market every day! But how do they do it? And how can a regular Filipino do the same? Where do we even start?

The stock market can seem very complex, and sometimes it is! But don’t let that intimidate you. Just like with any other skill, you have to start with the basics first. Walk before you try to run. Keep making improvements, no matter how small, and you’ll reach your goals before you know it!

There are literally thousands of trading strategies being used around the world, but you don’t have to (and you shouldn’t) be using them all. Start with one simple strategy before trying more advanced tactics. Learn what works for you and what doesn’t, and slowly but surely you’ll see results.

In this article, we’ll help you take that first step by explaining some basic principles along with two simple strategies that you can use to start trading in the stock market. Ready? Let’s get started!

BUYING LOW AND SELLING HIGH: WHAT IT MEANS AND HOW IT’S DONE

When asked, “How can I make money in the stock market?” a lot of people say that “It’s simple. Just buy low and sell high.” Well, of course! No one is going to make money by buying high and selling low. That’s just common sense. But how can we buy low and sell high? There is no crystal ball to tell us what the future holds or how the market will move, so how will are we supposed to know whether the current price is low or high?

Well, the good news is that you don’t need a crystal ball or a time machine to see into the future—you just need to understand the concepts that trigger movements in the market. The better you understand the forces that shape the market, the more often your predictions will be right.

THE BASICS: SUPPLY AND DEMAND

In one way or another, everything that happens in the stock market is a result of supply and demand reacting to one another. There are a limited number of stocks, so if a stock is in demand and more people want to buy it compared to those who want to sell, then the price goes up. The opposite happens when more people want to sell and fewer people want to buy.

Think of it this way: A 1-pc Chickenjoy costs P89 right now. But what if that 1-pc Chickenjoy was the last one on earth and everyone wanted to eat it? How much would people be willing to pay for that? On the other hand, if there were mountains of Chickenjoy everywhere you look, would you still pay P89 for it? Probably not. It sounds funny, but the entire stock market functions on basically the same principle.

People want to buy and sell stocks for many reasons. Whatever those reasons are, they will cause either a stronger demand or supply. This will be reflected as an increase or decrease in price. So how does this help you see into the future? Simple. You just need to be able to identify the signals and triggers that indicate when a rise in supply or demand will come. All stock trading strategies, from the most simple to the most complex, are based on this idea.

BASIC STOCK TRADING STRATEGIES FOR BEGINNERS

Disclaimer: Before you read about the two basic strategies below, you should first understand the two schools of thought behind these strategies: Fundamental Analysis and Technical Analysis. You might want to first read about some basic stock trading terms here.

STRATEGY 1: VALUE INVESTING

Commonly described as “buying a business,” this strategy relies heavily on fundamental analysis. In this strategy, we assume that the market price will eventually become equal to the intrinsic value of the company. The basic principle here is to identify stocks whose market value is less than its intrinsic value. When you buy an undervalued stock and the market price corrects itself, that is where you make your profit.

There are many indicators and formulas people use to identify the intrinsic value of a company, but one of the simplest and most popular indicators is looking at the price-to-earnings or P/E ratio. To get the P/E ratio, just divide the price of the share by the earnings per share. Value investors will compare the P/E ratios of companies within or across industries to identify undervalued stocks. For example, if you see that the average P/E ratio for a company in the logistics business is 10 but one company has a P/E ratio of 5, then you may want to invest in that company.

There are many other indicators that you could use, but this is one of the most basic. Keep in mind however that a low P/E ratio is not always a good thing. Low prices could also mean there’s trouble inside the company, and that the value will continue to go down. That is why it is important to do thorough research after identifying potentially undervalued companies. As the name suggests, traders that use this strategy have to look for a good business with real value. Act as if you are becoming part-owner of that business, because that’s essentially what you are doing!

Other similar strategies that also use fundamental analysis are Growth Investing, Income Investing, CANSLIM, and more.

STRATEGY 2: MOVING AVERAGE CROSSOVER

On the other side of the spectrum, we have the Moving Average Crossover Strategy which an approach based on the principles of technical analysis. Here, we rely on patterns and data available in the market to predict future movements and make trading decisions. Your aim is still to buy low and sell high, but you are using different indicators and signals to do it.

To implement the Moving Average Crossover strategy, you simply have to monitor two moving averages: the 20-day moving average and the 50-day moving average of a particular stock’s price. If the 20-day average becomes higher than the 50-day average, it means that the price is going up and you should buy shares. If the 20-day average falls below the 50-day average, you should sell because it means the price is going down. Sounds simple, right?

Many find this type of strategy easier to implement because it is very objective and there is very little chance of becoming emotional. It also requires relatively less research compared to Value Investing, so it’s less intimidating for a beginner. However, you should remember that at the end of the day it is always good to understand the logic behind the numbers. The “rules” in any trading strategy are never fool-proof. There are times when they will be wrong, and understanding the sentiment behind the market’s behavior can only help you make smarter trading decisions.

If you want to learn more about technical trading, you can also review some basic concepts such as Support and Resistance, Candlestick Charts, and Trends.

Every trader is unique and must refine his or her strategy over time. Some traders have very complex strategies, while others prefer to keep it simple. As you execute your trades and test more strategies for yourself, you will find a unique style that suits you. These are some basic ones to help you get started, but remember that the most important thing is for you to simply START. You can read all the articles you want, but unless you try it yourself, nothing will happen.

Good luck on your trades and remember, we’re always here to help!

What are the best stock trading tips you’ve received? Share them in the comments below and let’s move forward together!

Subscribe to InvestaDaily for more articles like these, or sign up for Investagrams to access special features to help you reach your first million.

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How to & Advice

How to Try Stock Trading Without Risking Money

We’ve all heard the saying, “Practice makes perfect,” but practicing in the stock market can get very expensive very quickly! Don’t worry though, because we’ve got good news for you—now you can practice trading stocks without risking any money!

How? Using the Investagrams virtual trading platform, a completely risk-free tool that is available to all Investagrams users. Just sign up (for FREE!) here.

With our virtual trading platform, you can buy stocks, test strategies, and manage a portfolio under real market conditions. Learn about actual companies listed in the Philippine Stock Exchange, and jump straight into real trading whenever you’re ready.

Already have an account on Investagrams? Just follow these simple steps to get started with your virtual trading account:

STEP 1: How to use the virtual trading platform (vTrade)


Once you are logged in to Investagrams, simply click ‘Virtual Trade‘ on the top left navigation bar. You will see a dropdown menu that corresponds to ‘Virtual Trade’ menu option. Click ‘My Portfolio‘ to go to your virtual trading page. You will see the overview of your Portfolio, Records, Order History (left side) and the Buy and Sell box on the right for you to start trading. Choose your preferred Stock and enter the number of quantity that you want to trade in. Click ‘Buy’ if you want to buy stocks or Sell Order’ if you want to sell stocks.

STEP 2: How to buy a stock


On the Buy Order page, use the drop down menu to find the stock you want. You can also type the stock name or stock code to find your stock faster. Enter the quantity or number of shares you want to buy, and simply click the “BUY” button at the bottom of the page.

Other important information you will see on the page include: your available cash, the current price of the stock, the boardlot or minimum number of shares you can buy, and more.

STEP 3: How to sell a stock


To sell shares of a stock you own, simply follow the same steps on the Sell Order page—use the drop down menu or simply type in the stock name to find the stock you want to sell. Then, enter the number of shares you want to sell and click the “SELL” button below.

Important information such as the current price, boardlot, and more can also be seen here.

STEP 4: How to manage your virtual portfolio


To view your portfolio, simply go to the Portfolio page. Here you will see a summary of the stocks you currently have—the number of shares for each stock, the total cost, current market value, profit or loss so far, and more. You can also see the amount of cash you have available (at the top left corner) and the total value of your assets (stocks + cash).

Easy, right?

Don’t wait another second and start practicing today! You have nothing to lose!

Have you tried the virtual trading platform? Tell us about your experience in the comments below!

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How to & Advice

How to Trade Stocks While Working Full-Time

How many of us have heard or used these phrases before?

“Gusto ko sana mag-invest sa stock market pero busy ako sa work e.”

“I can’t keep checking the stock market while I’m at work.”

“Marami na kasi akong inaasikaso e. Wala nang oras magbantay ng stocks.”

“I want to try investing in the stock market but I have a full-time job.”

There are so many Filipinos who want to start investing in the stock market but don’t because they think it requires too much time and attention—something most of us can’t give. But did you know that there are people who successfully trade stocks while balancing work, family, friends, and personal time? Yes, it’s possible! So, how do they do it?

Before we tell you our tips for trading stocks while working a full-time job, let us explain the difference between what most people THINK stock trading is vs. what it ACTUALLY is. One of the most important things you should know is that there are many kinds of traders who create different systems and styles to suit their own lifestyle. One common way of classifying them is into day traders and swing traders.

Day traders are those who buy and sell stocks multiple times in one day. They rely heavily on Technical Analysis and make money from price changes that happen within a few hours. This is why they have to monitor the market very closely and execute trades as soon as the stock hits a specific price. Day trading takes a lot of time, which is why most day traders are full-time stock traders—they are what people usually think of when imagining what a stock trader should look like.

Swing traders on the other hand are those who wait days between transactions, holding onto stocks for days or weeks before selling them. These traders rely more on Fundamental Analysis and hold on to the stocks for a longer period of time. Because this style requires less time than day trading, many swing traders work full-time jobs as well.

Swing trading is a great option for most beginners, simply because it is too risky for most people to become a full-time trader right away. Swing trading allows you to maintain your current income so that you won’t rely completely on the profits from your trades—which realistically won’t be a big amount when you’re just starting out. This will minimize stress and pressure that could negatively affect your performance as a trader.

Still, like anything in the stock market, swing trading carries its share of risks and rewards. So here are a few tips to help you get started on the right foot:

TIP 1: Find time to research and analyze

Swing trading may require less time than day trading, but you still need to do the work. No strategy will succeed if you just blindly buy stocks. The good news is that you can do your research and analysis whenever you have free time—before work, after work, or even on the weekends. Take the time to research and analyze thoroughly because the more information you have, the better you will be able to plan your strategy for the coming days.

TIP 2: Set buy and sell prices ahead of time

Once you have done your research and analysis, pick the stocks you want to monitor and identify the prices where you will buy and sell even before the market opens. Your goal is simply to buy low and sell high, so use your research and analysis to identify the acceptable prices beforehand. Not only will this allow you to execute quickly during trading hours (i.e. in between meetings and other tasks at work), but it will also help you avoid making trades based on emotion.

TIP 3: Use ranges instead of exact prices

As a swing trader, you won’t be able to monitor price movements every minute of the day. That is why you should use price ranges rather than exact prices. This will give you some flexibility, but be careful not to take it too far. You still need to be strict with yourself when executing your plan. You might get impatient when the price gets close to your defined range, but don’t be carried away by your emotions. That’s a recipe for disaster. Stick to your plan.

TIP 4: Stay consistent when executing your plan

Because you already planned your trades ahead of time, you won’t need a lot of time to execute them. Set aside even just 15 minutes of your lunch or merienda break to check on your stocks. If you see that the prices have reached the buy or sell range that you set during planning, then simply execute the trade. If the prices have not reached the defined when you were planning your strategy, hold your position and check the market again tomorrow. Do this once a day, five days a week.

TIP 5: Let technology help you monitor your stocks

Nowadays, you can access everything with just your mobile phone and an internet connection. There are many free services and apps like Investagrams that can help you monitor your stocks on the go. If you have a very demanding or unpredictable schedule, you can also avail of affordable services like InvestaWatcher so you can get SMS and FB messenger alerts whenever a stock hits your defined buy and sell prices. Either way, take advantage of the many free and affordable services to help you succeed.

With so much information and new technology available on the internet, investing in the stock market has become easier and more feasible than ever before—even if you have a 9 to 5 job. You still won’t make money without putting in the effort, but at least you have resources. You don’t even need a big amount of capital. For just P5,000 and a few hours a week, you can already start trading in the Philippine Stock Market. Just start small and stay disciplined. Stay consistent and keep learning, and your hard work will eventually pay off.

Do you have tips for balancing work, life, and trading? Let us know in the comments below!

Subscribe to InvestaDaily for more articles like these, or sign up for Investagrams to access special features to help you reach your first million.

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Featured How to & Advice

Paano Mag-invest sa Philippine Stock Market

Paano ba gumagana yung stock market? Paano magsimula mag-invest sa stocks at paano kumita dito? Ito ang mga pinaka-karaniwang tanong na natatanggap nami araw-araw. Sa artikulong ito susubukan namin sagutin ang mga tanong na iyon at ipapaliwanag rin naming kung paano ka pwedeng magsimula mag-trade ng stocks.

Magsimula tayo sa mga pinaka-importanteng konsepto.

Unang-una, paano nga ba gumagana ang isang market? Intindihin natin ito gamit ng pinaka-simpleng halimbawa ng market: ang palengke.

Sa palengke, may mga nagbebenta at bumibili ng mga gulay, prutas, bigas, at iba pang mga kasangkapan natin sa pang-araw-araw. Parang ganito rin ang stock market, pero imbes na mga produkto, mga kumpanya ang binibili at binebenta—oo, mga kumpanya! Sa stock market, pwede ka maging isa sa mga may-ari ng mga kumpanya tulad ng PLDT, Jollibee, Ayala Land, Meralco at iba pa.

Nagtataka ka siguro kung paano makabibili ng ganyan kalaking kumpanya ang isang karaniwang Pilipino. Di ba mahal ang mga kumpanyang iyan? Ang sagot: oo naman! Pero iyan ang dahilan kung bakit hinahati-hati ang mga kumpanyang ito bago ibenta. Tulad ng isang pizza na hinihiwa para maging mas madali kainin, ang mga kumpanya rin ay hinahat-hati sa tinatawag na shares para mas madali bilhin. Kung gaano karaming shares ang mabili mo, ganoon rin karami ang porsiyento ng kumpanya na pagmamay-ari mo.

Halimbawa, kapag isang kumpanya ay hinati sa 10 milyon na shares tapos 1 milyon dito ang hawak mo, ikaw ang may-ari ng 10% ng kumpanyang iyon. Galing noh?

Pero bakit ba nagbebenta ng mga shares ang mga kumpanyang ‘to? Bakit nila kailangan ang pera natin? Ang sagot dito ay dahil minsan kinakailangan nila ng karagdagang pera para palakihin ang negosyo nila. Kung gusto nila gumawa ng bagong produkto o magtayo ng isa pang pagawaan, malaking halaga ng pera ang kakailanganin nila. Kahit malaking kumpanya, nahihirapan pa rin makakuha ng ganoon karaming pera ng mabilisan, kaya imbes na maghintay pa sila ng ilang taon nagbebenta nalang sila ng shares sa stock market. Ibig sabihin nito na kapag bumili ka ng shares ng isang kumpanya, binibigyan mo sila ng pera para palaguhin ang negosyo nila.

Edi paano nga ba kumita sa stock market?

Kapag nakabili ka na ng mga shares o stocks, maaari kang kumita sa dalawang paraan: sa pagtaas ng presyo o sa pagtanggap ng sinasabing dividends.

1. Kita sa pamamagitan ng pagtaas ng presyo

Kapag nakabili ka na ng mga shares ng isang kumpanya, maaaring tumaas o bumaba ang market value o presyo ng mga shares na ito. Depende nalang kung mas marami ang gustong bumili o magbenta ng mga shares na iyon. Ito ang konsepto ng supply and demand.

Halimbawa, kung nalaman ng mga tao na malaki ang kinikita nung kumpanya o kaya maglalabas sila ng bagong produkto, mas maraming tao ang magiging interestado bumili ng shares ng kumpanyang iyon. Kapag mas marami ang mga gustong bumili nung stock pero konti lang ang gustong magbenta, tataas ang presyo dahil mas malaki ang demand kaysa sa supply.

Kung mas marami naman ang gusto magbenta nung stock pero konti lang yung gustong bumili, pwede rin mangyari ang kabaligtaran—bababa yung presyo dahil mas maraming supply kaysa sa demand. Maraming posibleng dahilan para rito, tulad ng mahinang benta, sumabog na pabrika, o kung anumang problema sa negosyo.

Maraming iba’t ibang bagay ang pwedeng makaapekto sa supply at demand. Dahil konektado ang buong mundo, maaaring apektuhan din ng pangyayari sa ibang bansa ang ating ekonomiya, pati na rin ang presyo ng mga stocks sa Philippine Stock Exchange.

Para kumita sa pamamagitan ng pagtaas ng presyo o price appreciation, kailangan marunong kang pumili ng mga stocks na tataas ang presyo. Kailangan marunong ka rin magbenta bago bumaba ang presyo nito. Mahirap man matuto kung paano gawin ito, kapakipakinabang pa rin kasi kapag marunong ka na, walang limitasyon sa mga oportunidad kumita.

2. Kita sa pamamagitan ng dividends

Ang isa pang paraan upang kumita sa stock market ay sa pamamagitan ng pagtanggap ng dividends. Dividends ang tawag sa bahagi ng kita ng kumpanya na binibigay sa mga shareholder o yung mga may-ari ng shares ng kumpanya. Depende nalang sa patakaran ng bawat kumpanya kung gaano karami at gaano kadalas ang pamamahagi nila ng dividends.

Mas simple ito kumpara sa price appreciation, pero wala ka masyadong kontrol sa kita mo. Nakadepende ka lang sa kumpanya. Kung ayaw mo nang masyadong aralin ang supply at demand sa market, pwede ka naman bumili ng shares sa mga kumpanya na madalas magbigay ng dividends. Ok rin ito kasi di mo na kailangan magsikap masyado pero may kikitain ka rin kahit papano.

Interesado ka ba? Eto ang mga kailangan mo gawin para magsimula.

Unang-una, alamin mo kung ano ang pinapasukan mo.

Totoo nga na pwede ka kumita sa stock market, pero pwede ka rin malugi kung di mo alam ang ginagawa mo. Tulad ng pagguhit o pagtugtog ng instrumento, kasanayan din ang stock trading. Huwang mong iisipin na kikita ka lang ng basta-basta kaagad, lalo na kung nagsisimula ka palang. Kakailanganin mong matuto at magsanay para gumaling sa stock trading, kaya huwag kang magtapon lang ng pera. Aralin mo kung paano ang tamang proseso. Hindi sugarol ang mga stock trader.

Kung gusto mo magpraktis pero ayaw mo pa gumamit ng totoong pera, pwede mo muna gamitin ang virtual trading platform namin. Gamit ng platform na ito, pwede mong masubukan ang pagbili at pagbenta ng stocks, pmamahala ng sariling portfolio, at pagsunod sa mga pagtaas at pagbaba ng presyo sa Philippine Stock Exchange—ng walang ipinagbabakasakali na pera. Dito mo mararanasan kung paano nga ba talaga kumita gamit ng stocks, at masasabi mo na rin kung gusto mo tumuloy sa paggamit ng tunay na pera o kung mas bagay sa iyo ang ibang klaseng investments.

Ok rin ang stock market kung gusto mong palakihin ang puhunan mo ng mabilisan, pero di lang naman ito ang nag-iisang opsyon mo. Alamin muna kung ano ng pinapasukan mo bago mo gamitin ang pinaghirapan mong pera.

Pangalawa, maghanap ng stock broker.

Kapag sigurado ka nang gusto mo mag-stocks, ang susunod na kailangan mong gawin ay maghanap ng stock broker. Stock broker o broker ang tawag sa mga tao at institusyon na mayroong lisensya bumili at magbenta ng stocks sa Philippine Stock Exchange. Kung gusto mo maging stock trader, kailangan mo maghanap ng broker na mamimili at magbebenta ng stocks para sa iyo.

Mayroong dalawang uri ng broker: ang mga traditional brokers at mga online brokers.

1. Traditional Brokers
Kadalasan, ang mga traditional brokers ay mga tao na tinatawagan o kaya tinetext kapag gusto mo bumili o magbenta ng stocks. Dahil sa teknolohiya ngayon, karamihan ng mga broker pwede na rin makausap sa Facebook, Viber, at iba pang mga apps. Ito ang karaniwang gamit ng mga taong abala sa trabaho at nangangailangan ng gabay ng isang propesyonal.

2. Online Brokers
Sa online broker naman, kadalasan ito yung mga institusyon na mayroon lang website kung saan pwede ka bumili at magbenta ng stocks para sa sarili mo. Wala ka nang kakausaping tao, sa halip ay pupuntahan mo lang yung website nila at pwede ka nang bumili at magbenta ng stocks. Ito ang karaniwang ginagamit ng mga aktibong trader dahil mas mababa ang bayad sa broker at mas mabilis ang mga transaksyon. Ok ito kung gusto mong matuto talaga o kaya naman kung alam mo na ang gagawin mo. Wala nga lang magpapayo sa iyo kaya kailangan may kaalaman ka na talaga sa stocks.

Pangatlo, magbukas ng account.

Kapag nakapili ka na ng stock broker, kakailanganin mong magbukas ng account sa kanila. Iba-iba rin ang mga pangangailangan depende sa broker, pero iilan lang naman ang mga hinihingi ng karamihan sa kanila:

1. Aplikasyon na naisagot ng maayos (maaari niyo hingiin ito sa opisina nila o kaya sa website nila)

2. Dalawang government ID tulad ng passport o driver’s license

3. Iyong Tax Identification Number (TIN)

Kapag naipasa mon a lahat ng mga ito, hintayin mo lang yung pag-apruba ng account at pagkatapos ay ideposito ang puhunan sa kanila.

Pang-apat, simulan na ang pagtrade!

Kapag nadeposito mo na yung puhunan sa iyong napiling broker, pwede ka na bumili at magbenta ng mga stocks! Alalahanin lamang na di nito ibig sabihin na kikita ka kaagad ng maraming pera. Kung nasubukan mo na yung virtual trading platform namin, alam mo nang kailangan ng oras at sikap kung gusto mo kumite sa stocks. Kailangan mo aralin yung market, tutunan ang tamag pag-diskarte, at tuluyang pagtibayin ang sarili kung gusto mo magtagumpay. Habang tumatagal ka sa stock market, lalo mong maiintindihan ang sarili mo at ang trading style na bagay sa iyo.

Per huwag ka hihinto doon!

Marami na tayong napag-usapan dito, pero palaging may higit pang pwedeng matututunan. Maraming iba’t ibang paraan para mag-invest, kumita, at magtagumpay sa stock market.

Mag-subscribe sa InvestaDaily para makakita ng iba pang mga artikulo, o mag-sign up para sa Investagrams para magamit ang mga features naming na pwedeng makatulong sa iyo. FREE naman ito lahat!

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How to & Advice

How to Start Investing in the Philippine Stock Market

What is the stock market and how does it work? How can you start investing in the stock market and making money? These are some of the most common questions we receive at Investagrams. In this article we’ll try to answer those questions and give you a step-by-step guide on how to start trading stocks yourself!

Let’s start with the basics of the stock market.

The stock market, as the name suggests, is just another type of market—like a food market where you buy meat and fish! The only difference is that in the stock market, people buy and sell companies like PLDT, Ayala Land, Meralco, and many more. Yup, that’s right! In the stock market, you can become a part-owner of some of the biggest companies in the Philippines.

You might be wondering, “How can a regular person afford to buy such big companies? Isn’t that expensive?” Well, it is! That’s why companies are divided into shares before being sold. Just like how you would cut a pizza into slices to make it easier to eat, companies are divided into shares to make it easier for people to buy. Once you buy a share in a company, you will become a part-owner of that company.

For example, if a Company X is divided into 10 million shares and you own 1 million shares, then you own 10% of Company X. Cool, right?

So why would these big companies sell shares of their business? Why do they need our money? The answer is that sometimes, big companies need to raise additional capital (A.K.A. tons of cash) to grow their business faster. If a company wants to develop new products, conduct research, or build more facilities, it would take a lot of money to fund those projects. Even big companies would find it hard to get so much cash so quickly, so they raise the money by selling shares on the stock market instead. This means that if you buy shares from a company, you are giving them money to grow their business in exchange for part-ownership that same business.

Okay, so how can you make money in the stock market?

Once you’ve bought shares in a company (or a few companies), you can make money in 2 ways: through price appreciation or through dividends.

1. Earning through price appreciation

When you own shares of a company, it is possible for the market value or price of those shares to change over time. Depending on how many people want to buy those shares and how many people are willing to sell them, the price will either go up or down. This is the concept of supply and demand—how many people want to sell vs. how many people want to buy.

For example, if a company announces that it will launch a new product or that it earned a lot of money in the last quarter, more people may want to own a share of that company. If more people want to buy shares but few people want to sell, then the demand will be greater than the supply and the price will go up. On the other hand, if there is bad news about a company like low sales or problems with their factory, then people may not want to own a share of that company anymore. If more people want to sell their shares but fewer people want to buy, then supply will be greater than demand and the price will go down.

This is a simple example, but in reality there are a lot of factors that affect supply and demand. Because the whole world is connected, what happens in other countries may also affect the Philippine economy and the prices of our stocks.

To make money through price appreciation, you must know how to consistently invest your money in stocks that increase in price and then be able to sell them before the price goes down. It takes time to develop this skill, but it can be very rewarding. There is no limit to how much money you can make, and the opportunities are endless!

2. Earning through dividends

Another way that you can earn money in the stock market is through dividends. Dividends are simply portions of the company’s profit that are shared with their stockholders as a benefit of being part-owners of the company. How much and how often dividends are given is up to the company to decide.

This is simpler than price appreciation, but you will have little control over how much money you can make. However, if you do not want to be concerned with analyzing supply and demand, you can buy shares in companies that are known to give out dividends regularly. This would require less effort while still allowing you to earn.

Interested? Here’s how you can get started.

Step 1: Know what you’re getting into

Although you can make a lot of money through the stock market, you can also lose a lot of money if you don’t know what you’re doing. Stock trading is a skill, just like drawing or playing an instrument, so don’t expect to be a stock market wizard right away. It will take time for you to develop your skills and learn how to trade stocks properly, so don’t put your life’s savings on the line unless you have tried and tested your strategies already. Stock traders are not gamblers.

If you want to practice trading stocks but don’t want to risk money yet, then you can try out our virtual trading platform. Using this platform, you can buy and sell stocks, manage your portfolio, and follow price movements of real stocks in the Philippine Stock Exchange—all with zero risk of losing money. You will see what it really takes to make money in the stock market and then be able to decide for yourself if you want to start trading with real money or if you are better off with other investment options.

The stock market is a great option if you want to grow your money, but it is not your only option. Know what you’re getting into before you dive in with all of your hard-earned money.

Step 2: Find a stock broker

If you’re sure you want to invest in the stock market, then the next step is to find a stock broker. Stock brokers are individuals or institutions that are licensed to buy and sell stocks in the Philippine Stock Exchange. If you want to trade stocks, you will need a licensed stock broker to make the actual transactions for you.

There are two main types of brokers: traditional brokers and online brokers.

1. Traditional Brokers
Traditional brokers are usually individual people that you call or text whenever you want to make a transaction. Nowadays, you can even reach some of them through popular messaging apps like Viber, Facebook Messenger, and more. Traditional brokers are great for people who are busy with other things and want advice from a professional.

2. Online Brokers
Online brokers on the other hand are usually institutions that are licensed to buy and sell stocks. To make a transaction, you would simply log into their website and make the transaction yourself. This is sort of the DIY method where you are given the tools to trade stocks, but there is no one to give you advice. This type of broker is usually used by active traders because the fees are lower and the transactions are faster. However, you will need to learn about the stock market and proper trading on your own because there is no one to guide you.

Step 3: Open an account

Once you’ve chosen a stock broker, you will have to open an account with them. Different brokers have different requirements, but most of them will only require a few things:

1. A properly filled up application form, which you can get from their office or website

2. Two valid government ID’s, like a passport or driver’s license

3. Your Tax Identification Number (TIN)

After you submit all the requirements, simply wait for your application to be approved before depositing the capital investment for your account.

Step 4: Start trading!

Once you’ve deposited the money to fund your account, you can already start trading! But remember that this doesn’t mean you’ll make tons of money right away. As you may already know if you tried our virtual trading platform, stock trading takes time and effort. You need to spend time and effort analyzing the market, refining your strategy, and constantly improving yourself if you want to succeed. The more you trade, the better you will understand yourself and what works for you—how much risk you can take, how often you want to make trades, how much money you can afford to invest, etc.

It doesn’t stop there.

We’ve covered a lot in this article, but there’s always more to learn! There are many ways to invest, make money, and conquer the stock market.

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