"No tips. No news. No rumors.
Just the charts and you!"
I'm sure you've heard me say this before.
I still do.
Let me just say this for the Records.
Fundamentals work. It just isn't for me. Not yet at least.
Allow me to explain.
A few months ago, I was able to read Alexander Elder's Trading For a Living and Momentum Masters by Super Traders in the US. I got to hear and read about my peer's trading strategies - JC Bisnar (Imbang Klase) and Javi Medina (Taylor). I also had a series of conversations with COLFinancial's chairman Sir Edward Lee. And all of them had a common belief in one Fundamental Concept:
Company Earnings
Let me give you something to visualize on.
On May 16, 2018, FOOD released their earnings report for the 1st Quarter of 2018. The results were astounding! But not much movement happened, until 3-4 months later!
There's a lot more of these examples as I did my research. But I'll let you discover them on your own.
These events led me to re-evaluate my trading system.
"With my current port size, do I now have to introduce fundamentals into my system? Should I start to look for youtube vids explaining funda for dummies? Where should I start?"
"Where do my beliefs come from?"
When I started out my trading journey, It wasn't a smooth road. The very first trading group I joined was a good support group. But it was not the best influence in terms of learning. We were all trying to learn from each other. But to be completely honest, it was just another case of The blind leading The blind.
We got linked and joined with "BIG" names in the stock market community. And eventually, we learned about the art of speculation, the power of rumors and of course, the dark world of Insider Trading.
"Rumors are good! Disclosures are bad! That's why it's called Sell on News!"
It was exciting.
Every time we got a fresh tip or bits of insider info, we felt that we were a part of the Big Boys Club! Before everyone else, we get to witness the details of these so-called game changers. We felt powerful. We felt like gods!
But I was wrong.
Even first-hand information from Company Owners themselves turned out to be curses for us. We held on to false hopes that turned our ports and dreams into nightmares. But that wasn't so bad - because we had each other. What turned me 180 degrees was the moment a few of our own in our group spun a story. It was all out of their heads. And we believed them.
That fantasy cost me my 2nd [psychological] wipeout and my first trek to more than half a million pesos worth of losses. And after recovering from that Psychological trauma, I decided to purge some beliefs and stick to what I can control and understand.
"No tips. No news. No rumors.
Just the charts and you!"
Here are my other personal beliefs:
In the Philippine markets, there's a delay in price action towards "Good" Fundamentals and Earnings. I think Fundamentals work better in other liquid Markets like the New York Stock Exchange (NYSE) where there's a big chunk of market participants, who have significant buying-power, that believe in the power of Fundamentals and Investing.
I plan to trade US markets next year. By then, I think I would have integrated some fundamentals into my trading system. Techs would still have the final say in my trading decisions.
-----
"Hindi ba magiging ineffective yung isang strategy if marami nang nakakaalam?"
This is a half-truth.
Imagine a room with 100 traders. 99 of which believe that buying PXP on the next breakout would make them money - they all have P10,000 each. The last remaining trader, however, believes he should sell all his remaining PXP shares at the breakout levels for it is already overbought. He only has 100 million worth of PXP shares.
With this setup where there's an overwhelming belief in favor of the breakout, and only one person believing it is a sell, which side do you think is right?
Except for universal laws and truths, beliefs with people who have more power and influence get to decide over-all direction.
You may not agree with me. And that is OKAY.
For we are all prisoners of our own truths.
Now tell me, What are your truths?
Just the charts and you!"
I'm sure you've heard me say this before.
I still do.
Let me just say this for the Records.
Fundamentals work. It just isn't for me. Not yet at least.
Allow me to explain.
A few months ago, I was able to read Alexander Elder's Trading For a Living and Momentum Masters by Super Traders in the US. I got to hear and read about my peer's trading strategies - JC Bisnar (Imbang Klase) and Javi Medina (Taylor). I also had a series of conversations with COLFinancial's chairman Sir Edward Lee. And all of them had a common belief in one Fundamental Concept:
Company Earnings
Let me give you something to visualize on.
On May 16, 2018, FOOD released their earnings report for the 1st Quarter of 2018. The results were astounding! But not much movement happened, until 3-4 months later!
There's a lot more of these examples as I did my research. But I'll let you discover them on your own.
These events led me to re-evaluate my trading system.
"With my current port size, do I now have to introduce fundamentals into my system? Should I start to look for youtube vids explaining funda for dummies? Where should I start?"
"Where do my beliefs come from?"
When I started out my trading journey, It wasn't a smooth road. The very first trading group I joined was a good support group. But it was not the best influence in terms of learning. We were all trying to learn from each other. But to be completely honest, it was just another case of The blind leading The blind.
We got linked and joined with "BIG" names in the stock market community. And eventually, we learned about the art of speculation, the power of rumors and of course, the dark world of Insider Trading.
"Rumors are good! Disclosures are bad! That's why it's called Sell on News!"
It was exciting.
Every time we got a fresh tip or bits of insider info, we felt that we were a part of the Big Boys Club! Before everyone else, we get to witness the details of these so-called game changers. We felt powerful. We felt like gods!
But I was wrong.
Even first-hand information from Company Owners themselves turned out to be curses for us. We held on to false hopes that turned our ports and dreams into nightmares. But that wasn't so bad - because we had each other. What turned me 180 degrees was the moment a few of our own in our group spun a story. It was all out of their heads. And we believed them.
That fantasy cost me my 2nd [psychological] wipeout and my first trek to more than half a million pesos worth of losses. And after recovering from that Psychological trauma, I decided to purge some beliefs and stick to what I can control and understand.
"No tips. No news. No rumors.
Just the charts and you!"
Here are my other personal beliefs:
In the Philippine markets, there's a delay in price action towards "Good" Fundamentals and Earnings. I think Fundamentals work better in other liquid Markets like the New York Stock Exchange (NYSE) where there's a big chunk of market participants, who have significant buying-power, that believe in the power of Fundamentals and Investing.
I plan to trade US markets next year. By then, I think I would have integrated some fundamentals into my trading system. Techs would still have the final say in my trading decisions.
-----
"Hindi ba magiging ineffective yung isang strategy if marami nang nakakaalam?"
This is a half-truth.
Imagine a room with 100 traders. 99 of which believe that buying PXP on the next breakout would make them money - they all have P10,000 each. The last remaining trader, however, believes he should sell all his remaining PXP shares at the breakout levels for it is already overbought. He only has 100 million worth of PXP shares.
With this setup where there's an overwhelming belief in favor of the breakout, and only one person believing it is a sell, which side do you think is right?
Except for universal laws and truths, beliefs with people who have more power and influence get to decide over-all direction.
You may not agree with me. And that is OKAY.
For we are all prisoners of our own truths.
Now tell me, What are your truths?
very true sir. one man's decision can dictate the fate of many. this universal law can also be applied on our own. a single WHY? will conquer my beliefs and change my perception to the environment. A lot of times I was on the brink of giving up trading and saying i am just punishing myself, I never thought that trading would be this difficult (sleepless nights, stress, emotional strain, red ports) BUT I also learned during this difficult times I change on a scale I couldn't see myself before i started.
ReplyDeletevery true sir. one mans decision can dictate the fate of the many. this can also be applied to myself. A single WHY can stretch my limits, i can understand and discover myself. i never imagine that trading is so difficult (emotional strain sleepless nights mind flipping events). its hard to have a mental battle with people you do not even see but it is more difficult because there were times i am battling myself. a lot of factors to go through but a single WHY can push me forward and always take a leap of faith
ReplyDeleteGood Articles. Please visit us in MINDANAO. People here were really so poor in trading stocks. That's why I really pursue trading full time even in starting in a hardest time this year. All I want to achieved is to build my ability since wealth will just follow later, then share the blessings to my brothers and sisters here. I hope you'll be one of our mentor in building our abilities and skills in trading. KUDOS.
ReplyDeleteSame thing happen to $ABA, also Nicolas Darvas is a techno-fundamentalist.
ReplyDeleteI like! Charts don't lie.
ReplyDeletethat is why michael Douglas is the MAN!
ReplyDeleteThat is why Mark Douglas is the MAN!
ReplyDeleteVery good inputs. I luv u Zee
ReplyDeleteVery informative.
ReplyDeletezee,
ReplyDeletea piece of advice, when trading US markets, don't bet on the earnings.
e.g., dont hold on a position if you know the following day ay lalabas ang earnings report.
Usually, prone to gap downs(even if ganda ng chart, AOTS) / gap up (if you are lucky) upon earnings release.
Boss zee thank you after 11 months natapos ko din blog mo, sobrang dame ko natutunan, gusto ko man sumali sa project seed kaso walang wala ako pero nag papasalamat padin ako at dito ako dinala ng destiny ko, hopefully makita man ko man lang kayo kahit sa malayo, salamt sa mga kontent nyo esp kay akio, celeste, kap, mesino and the zf tribe. someday our path will cross
ReplyDeleteagain thank you boss zee
I find this article so deep bai.. The ultimate truth is composed of all truth :)
ReplyDeleteboss zee thanx for sharing this gold! noob question lng po pag 9 out of 10 po breakout traders mawawalan na ba ng edge yung strategy? kasi super obvious na? thanks po godbless!
ReplyDeleteTyr Lach a strategy's better when more people know it but the outcome is still decided by who has more power
ReplyDeleteTotoo nga po n merong nagmamanipula ng takbo ng stocks silang mga nsa taas n may malalaking shares kawawa ung mga ordinaryong trader especially dun s mga baguhan plang. Makikita m biglang breakout ang stocks at anlaki ng volume. Ung mga ordinaryong trader nalinlang nung nakita nila sa chart.Pinahype lng pla ang ang stocks tas silang nsa taas ngkkabuhusan na at kumita na. Ikaw n kabibili plng ay umaasang tataas pa ng-antay pa msama p nito dhil s greed tinudo m ang pgbili nag-ALL IN ka yun pla pababa na ang ang stocks. Aray sunog ang port mo.
ReplyDeleteWell i guess we really cant discount the fact that there are those who really wants to control especially yong may hawak ng majority of stocks...syempre..may agreements din mga yan...pero..for me..as long as we have done the right thing..no problem..the truth will always come out in the end..and indeed the truth will set us free pa rin.:))
ReplyDeleteThank you sir Zee for sharing your insights in trading using chart to gauge sentiments of retail trader, insti and other traders which is factored in one picture showing emotion of people in each candle.
ReplyDelete