I am a huge fan of South Park and I spent gazillion of hours re-watching each episodes of it without getting exhausted and to be honest I happen to learn a lot from it; even some of my trading rules and style(s).
You might be wondering what the heck is the photo above. Actually it was a game (being played by Stan Marsh and later his father) called Heroine Hero in which it is an xbox 360 game that lets you catch the pink dragon as you shoot up injections of heroine.. In reality no one catches the dragon. But turns out despite the stupidity of this game, a lot of people in South Park get hooks up and even playing it for a couple of days.
So to cut things short, the said rule of the game is to catch the pink dragon.. But the game won’t let you catch it.. Funny right? To be honest its like trading stocks.. The game itself keep on saying you that you need to jump the sinking boat and yet you keep on managing to say to yourself “hindi.. tataas pa tong stock na to.. tiwala lang”which after a day or two usually results you into heavy losses on your portfolio which will makes you say that you will make this stock as a LONG TERM. Anlabo diba? You mentioned that you will just hold this stock and just trade it, it will then became long term..
My rule is very simple: As soon as I enter a trade, I set my TARGET PRICE and of course my STOP LOSS. This is very very important to everyone. I find it very problematic for a people who just bought a particular hot stock pick because a lot of people are clamoring that this will rise in a couple of days only to find na nabuhusan na pala sila.. What did they do? Most of them they did nothing because they dont know how to set their STOP LOSS.
Again to cut things short, here are my trading rules:
- I usually set my stop loss 2-5 ticks below the nearest support and every time it hits below it, I sell it immediately and go on with my life.
- Besides setting 2-5 ticks, sometimes I just set my stop loss when it exceeds a loss of 7%. Why? Ask Benjamin Graham. If you happen not to know him, please google him and read his books.
- I am a SWING TRADER ergo, I play by the rule of BUYING near support then throw the stock when it reaches resistance level. Sounds easy right? But trust me.. Even I sometimes neglected this rule in special occasions. I swing in an UPTREND, DOWNTREND and SIDEWAYS environment. I guess with my 6-8 years of experience, I can attest that I make money by simply doing this.
- I RARELY use minute chart. To be honest it is so hard to day trade.. I made a lot of money day trading but eventually, nawawala din bigla. I dont know. It must be that I am not really used in guarding from time to time my stocks. Who knows day trading will work on you. I really like Swing Trading though.
- I like reversal candles.I usually monitored DOJI candles as well as if it has a substantial volume like other traders.
- My personal favourite: EMA 13 and MA 20 Combination a.k.a SWAG position.
- Moving Average of 50 and 200 which most of institutions are following as well
- Moving Average of 9 as a default for short swings.
- I usually check if charts are becoming a flag, pennant and/or other various patterns.
- I RARELY BUY stocks which is/are overbought or somewhere between 80 territory without fundamental news or material public info.
- 65:90:12 MACD set-up.
And of course the most important of all; if CASH IS KING ergo, CHART IS QUEEN and it must be respected.
So there you have known my simple rules in trading. There will be charts out there with different interpretations coming from other people. EXPLOIT IT and USE IT to your own ADVANTAGE. You may see charts from other GURUS out there let’s face it with a lot of attractive explanations and hoola baloola.. I am not saying that they are hyping or even wrong. The best position? Use their charts wisely. Set your own target price as well as stop loss. Do not just be a blind follower.USE IT as an advantage. To be honest I love to look some of the charts of famous gurus in Facebook and mind you that they are very influential most specially to the noob traders out there. I do not follow their suntok sa buwan target price as I plot my own exit price.. Nice right? Very Basic? lol
And of course lastly and probably one of the best strategy is to arm yourself with sufficient knowledge. Start reading Financial Books/Technical Analysis/Fundamental Analysis as well as how to read earnings report and balance sheet of the company (to be honest I myself sometimes get lost event though I am taking MBA).
There you go. Happy Trading. Relaks lang.
PS: Kindly Google “South Park s11 e13”, download it and watch it. Probably one of the funniest South Park episode.
Black Swan Trader
No Bullshits.. Only Charts..
Ohh btw I am not offering and kinds of services or subs.. You know why? Because I am just like you, a retailer and a trader trying to outsmart big firms out there.