I Am Changing
I remember the day clearly. December 6, 2013, 10AM. I was running late, as usual. Thank God, they were easy to find. Turn left, turn right, and there they were. I couldn’t believe it took me 1 year and 2 months to reach this point. I had a funny feeling that after this, I would never be the same again.
“I want to open an online trading account, please. I filled up the forms online”
After the usual fake politeness and plastic smiles, there I was. I had opened an online trading account. The process did not went smoothly, though. I thought that I could fund my account online afterwards through my bank’s online banking. I was told I could, but until they receive the funds my application would be pending. I didn’t want my application to be pending and so I had to hunt for the nearest ATM to withdraw cash for the minimum opening fund. I was told to wait within 48 hours for their confirmation email wherein I can get my log-in details for my account. Less than 24 hours the email came.
Getting to Know You
In no time, I was able to quickly familiarize myself with the online trading platform. I was ready to trade but soon became unhappy with how little my funds were. I deposited only the minimum amount which was PHP 5,000 (1 USD = 42 PHP). I deposited PHP 15,000 more to my account the same day through BPI’s online bills payment facility. I later found out that there was a fee of PHP 25 and I hated it. I had not even started trading and I already lost money because of the fee. Great! I then discovered that I could deposit money to my account online through BPI’s “transfer to anyone” facility without the fee. My life was happy again.
A Wiser Man
My original plan was to research thoroughly before I buy any stocks. My day job got in the way and I decided to buy JFC worth 60% of my account balance, anyway. Shortly thereafter, I bought SCC with my remaining account balance. I was happy. I was floating in happiness when JFC closed at 171 when I bought it that same day at 167.
The following days, I came to understand MACD, moving averages and RSI. In fact, I discovered a very interesting article about how to determine the general market trend using moving averages and RSI. I enjoyed the article very much and I learned from it. That very nice article, you may download here.
I discovered that I bought the JFC and SCC stocks at the wrong time. The market was bearish. The bear market was confirmed when my JFC and SCC stocks declined the following day. I had a choice – keep them because the maximum loss that I set for myself was 8% for each stocks and it was not exceeded yet, or sell them because the market was bearish and they might probably decline even more. I chose to sell them at a loss. My total loss was about PHP 600. That did not make me happy. In the past, I suffered sleepless nights when I lost money, even as small as PHP 1, so you could just imagine how sleepless I was with a PHP 600 loss.
I knew how to pick the good stocks and how to time the market. Because of my growing confidence, I put more money in my account. I deposited PHP 100,000 more to my account. Yes, that’s PHP 100,000 and that’s not a typo error. These past few days, I was closely monitoring the market. The bear was still out there. My technical analysis said that it was not a good time to buy stocks now. I continued to wait for the bull. I needed to see a clear sign of market reversal and I’d be so buying JFC again with all of my money.
Things I learned
- Trading requires patience and discipline. I want to enter the market now but I just have to wait for market reversal – that’s what the RSI and moving averages tell me.
- You are more likely to lose money when you trade a lot because of the fees than when you sit tight on your positions. Avoid overtrading.
- When the market is undersold, it will exhibit bullish behavior in the coming days. You may want to take advantage of it.
- Don’t do day trading. The profit is small and will be offset by the fees. And when you lose which is bound to happen because the intraday variations of prices is very difficult to predict, the profit that you have earned might be wiped out by your loss.
- Don’t make trading decisions during the trading period because your decision might be based on emotion and you might regret it. Stick with your original trading plan before the market opened.
I am changing. I am becoming a trader and I like it. I will continue to change and become a millionaire.