Sunday, July 24, 2016

How to Trade and Travel

A common misconception about trading the markets is that you always have to be on the watch.

Prices trade and react within a certain range during consolidations. And depending on the setup and kind of stock, this consolidation phase could take a few days to several months or even years.

Here's the 1 year chart of ION for example. It has been on a long sideways movement after its explosive 4 week rally.

If you bought the hype of the "Experts" and are still holding and watching the stock day by day, you'd probably look like these fellas...

Timing is everything.


I travel and take vacations a lot. And I usually trade with huge positions which when I think about it... is scary. This usually would render me unable to check the charts and be on my full battle gear. Unless of course I bring with me my loyal workstation like on this photo below.

But having to monitor minute by minute when trading is a lie. If you have day job, working on a project or travelling, you only need to monitor and trade when the stocks in your watch list or port are on the verge of breaking out or breaking down. 

Sounds impossible huh? 

But let me enlighten you to the 3 steps that have helped me trade while on the go.

1. Creating a trading plan.

Everything should be accounted for. 

A. The kind of setup and play you're going for - where you determine if you're in it for the short swings or the bigger waves and if the stock you plan to enter is volatile or not. 

B. Entry price, cut loss levels and trailing stops - the very fundamentals of trading. 

C. Time stops - where you sell your position if it doesn't move within a given time frame of your trading bias. Nakapag move on na lahat, ikaw nalang hindi. #whogoat.

Many traders fail in this area. Having no regard to any of these elements render trades incomplete and dangerous - a trip to hell if you may. One should also be prepared for every scenario so you won't panic like sell short or buy late when momentum and volatility comes in. 

2. Planning ahead and working with what you have.

You need to be aware of your environment and available resources. If you're working or visiting in an area that has no internet or if you do not have the resources to trade like a laptop or a mobile smart phone that can access the internet, then do not trade!

I usually just use my prepaid smart phone when on the go and register to internet promos to avoid getting billed a fortune. Internet speed is pretty fast and just right for trading depending on your location. For Globe users, here's the code. Thank me later.

If you have a live broker, make sure to give them careful instructions on how to execute your trade. If you have siblings, teach them the basics of buying and selling. If you have a dog, train the mutt to trade.

3. Alerts and Trigger Points.

Now all you have to do is to set your trading alerts. I use a mobile app for it (PSE Watch). I heard Investagrams also has this feature. Thank you app developers for making our trading lives easier!

From here, you have to determine your trigger points for the stocks in your watch list. What is a trigger point you ask?

A Trigger Point is a Darvas concept (Click here for a detailed post) that goes like this : when certain support or resistance levels are reached and breached, rallies happen. Simple right?

Trigger points can be both objective and subjective.

Okay for this blog post to have sense, here's an example of my recent trade while on the go...

Type of Play : Sleeper
Time Stop : 1 Month
Entry Points : 13.8-15
Trigger points : 
14.4 - 16.0 (Momentum)
12.9 - 12.8 (Cut loss)

I bought IMP on July 15, 2016 in anticipation of a mini ZS - 50MA.

I was prepared to wait for a month and buy more shares using the GTC feature (buy order valid for 60 days) while setting my trigger points at 14.4 - 16.0 range, which would alert me if momentum has come in and 12.9 - 12.8 levels for me to Cut loss. 

If the price doesn't touch any of these trigger points, I would not be notified. Ever. And to emphasize on the beauty of this simple statement, just imagine those mornings when you were woken up because breakfast was ready vs those mornings when you were woken up and had to wait for your mother to finish cooking while sitting on the table.

So while still on vacation that Monday, I received a message notifying me that my triggers were hit. 

And since momentum has come, all I had to wait for was the day's close before checking my port and planning my next move.

Port looked like this by the end of the day.

Two Sleepers, 3 for TF. No Tsupitas.

With IMP's ceiling move, it was time for me to plan my sells.

Under normal circumstances, you could just use the Off-Hours Order feature to execute your buying or selling for the next trading day. 

But since this stock went ceiling and you can't place sell orders above the ceiling price, I had to execute my sells at the pre-open of the next trading day. For IMP, I had to make sure to sell the next trading day after the ceiling candle as per my trading rules on these kinds of volatility plays.

If it didn't go for a ceiling, I could have opted to use the GTC feature for selling and set them on and near IMP's resistance levels.

 And Viola! A half bagger trade. 

 EZ. GG.

Additional Notes :

I seriously did not expect this to happen while on vacation. ZFTs should ask me when I'll take my next vacation. Alam na.

And I'm sure you trolls are gonna ask... 
...Among other technical questions. 

Please spare me your messages. Don't be lazy and read this blog from cover to cover.

Study. Execute. Reflect.