stock market
We save money traditionally through a piggy bank or commonly banks (gives interest return)
Inflation and low bank interest rates hurt our finances since your money is not growing at the rate that we want it to
saving - setting aside a portion of the money
investing - making your money grow
it is not enough to save money: save and invest
STOCKS - Shares of ownership in a company
stockholders - have access to earnings or profit - voting rights
269 companies were listed in Philippines
index - overall performance of stock market
when should i start investing? make sure you have savings/emergency fund.
where can i buy and sell stocks?
1927 - Manila stock exchange
1963 - Makati stock exhange
1992 - PSE
pse - non-government decision (self-regulatory organization)
publicly listed
quotation report
symbol, bid (buyer's price/highest), ask (seller price/lowest)
LTP (last traded price/negotiate)
SYMBOLS:
AC-Ayala Corporation
AEV-Aboitiz Equity Ventures, Inc.
AGI-Alliance Global Group, Inc.
ALI-Ayala Land, Inc.
AP-Aboitiz Power Corporation
BDO-BDO Unibank, Inc.
BLOOM-Bloomberry Resorts Corporation
BPI-Bank of the Philippine Islands
DMC-DMCI Holdings, Inc.
FGEN-First Gen Corporation
GLO-Globe Telecom, Inc.
GTCAP-GT Capital Holdings, Inc.
ICT-Int'l Container Terminal Services, Inc.
JFC-Jollibee Foods Corporation
JGS-JG Summit Holdings, Inc.
LTG-LT Group, Inc.
MBT-Metropolitan Bank and Trust Company
MEG-Megaworld Corporation
MER-Manila Electric Company
PGOLD-Puregold Price Club, Inc.
RLC-Robinsons Land Corporation
RRHI-Robinsons Retail Holdings, Inc.
SECB-Security Bank Corporation
SM-SM Investments Corporation
SMC-San Miguel Corporation
SMPH-SM Prime Holdings, Inc.
TEL-PLDT, Inc.
URC-Universal Robina Corporation
RISK MANAGEMENT: HOW TO SURVIVE IN THE STOCK MARKET
Part 1: Stop Losses
Part 2: Diversification, sizing and application
Risk
situation exposing yourself to danger
- possibility of losing some or all of an original investment
risk management
- manage pain
risk - lahat paghandaan
volatility - ups and downs of the market. not all the time are we correct. in times na magkakamali tayo, yon ang need na apghandaan.
usual scenario of death
- why need mag ingat
- mining industry (hype na hype ng gold, and then nagbreak down.)
- "even blue chips can fade"
para hindi ka ma blind investing and pressure of investing
why most traders perish
boy all in - pag may safety. if tradign career mo is your life. mali
no discipline - most human beings, walang discipline. they will think of it as gambling.
no discipline
all offence, no defense - if walang defense, hope na lang
no defense, pure hope
human nature not being able to handle loss
execute on negative outcomes
"we need to be proactive"
preparing you for the worst
- we must know how to play defensive if things do not go in our way
kung gaano ka kalupit mag offense, dapat ganon ka rin kalupit mag defense
ways to manage risk
1. stop losses - proteksyon bago aksyon (mag eexit pag magkamali or bababa
2. diversification - wag ilagay lahat ng itlog sa isang basket, invest/ distribute in other stocks
3. position sizing - gaano kalaking itlog ang ilalagay/invest mo sa kada trade?
stop loss
- may certain limitation or pain point; exit plan. matagal kang magsusurive.
types:
1. fixed percentage
- choose an arbitrary number as your stop point (maximum loss na matatanggap nila kada trade)
- some are tight 4-5% or 8-12% (net fees is at 1.19%)
- nacocontrol yung max loss per stock (advantage)
- depends on your style (strategy + time frame + risk tolerance)
- bili, kung naabot sa stop, exit
- will help you survive as a newbie (advantage)
- no context and adjustments with regards to the environment, stock, and set-up (mabubuhay ka pero hindi ka makakaadapt sa scenarios kasi fixed ka. )
2. price structure-based stops
- place stops on important price levels depending on the pattern/structure of the chart
- mas relevant
- stop below initial support
- kung nakabili ka sa 6.97
- kung malakas ang break away gap, sign of momentum, means hindi siya babagsak
- gap up buy, stops if stock closes within gap
- a few points below gap fill
- pattern, bullish pattern, need ng breakout confirmation kasi you're expecting a move, a bullish move, if nag breakout then fake,
- kung bumaba yun gbullish, may weird
pattern based stops
- head shoulders
- kung nasira yung support sa pattern, exit
trend line - break stops
tight consolidation stops
pros
- can adapt to different supply and demand scenarios
- will depend on the skill and understanding of the trader
- can be subjective
- adds more flexibility vs no brainer fixed stops (you need to put effort)
-
3. indicator-based
- use indicators as the basis for your sell signals
- can be used as initial stops or trailing stops depending on situation
- moving average stops used on initial position
- moving average stops used as trailing stops (if nagclose - warning sign, nagindication na nagdowntrend) - to run profits
- moving average stops used as protection on support breakdown
- rsi 50 as trend filter (if stock cannot sustain above 50 = warning)
- when using indicators kailangang may sustainability yung trend or movement.
pros and cons
-can help you adapt to the trend of the market by waiting for the exit signal from an indicator
- indicator alone can be misleading, you need price confirmation as well
- become more objective, the indicator decides for you
4. time based stops
- you set a time expectation on a stock (for instance, within 50 days)
- if the stock takes too long to move, you exit or trim
- to rebalance portfolio
allows to shift capital if the stock is too stagnant
need further studies on which time expectations are viable
time relative to proce action won't always be perfect--you may miss moves due to impatience
- magadna siya sa guide
protect themselves well on the downside. risk first approach.
find the own style to manage risk. dont let any stock kill you. introduct concepts that may help you find your risk management strategy in certain scenarios. gaano ka nag aallocate ng time and focus and dedication sa pagprotect mo sa sarili mo
"we need to be proactive"
preparing you for the worst
- we must know how to play defensive if things do not go in our way
kung gaano ka kalupit mag offense, dapat ganon ka rin kalupit mag defense