Anatomy of a port snapshot

We've always said that the stock market is a game or contest between yourself and hundreds of thousands and even millions of traders out there. In this dog eat dog world, you will need every advantage to get ahead. And you will need all these little things since they will add up. 

One of the best ways to improve your trades is to document them. This is one of the secrets that differentiate an average trader from a good or even great one. 

Taking port snapshots is one way for us to be able to grade ourselves in this game. Think of it as our report card to check our progress in our trading journey. Like an iceberg, the port snapshot is just the culmination or the result of our hard work. 

What you don't see is the work and difficult times that we had to endure to get to the level of achieving those port snapshots. 

The port snapshot can tell if we did enough preparation and legwork in doing our trade plans and if we were able to execute properly on these said plans. It can tell a lot of things if you only know how to look hard enough. 


Let's take a look at the most common components of a port snapshot:

STOCK NAME/CODE - This shows that out of the 200+ stocks out there in the PSE, a trader is able to identify which one would make a possible move. A port doesn't need to have too many stocks in it to earn. Contrary to popular belief, too much diversification is not good for your investing/trading. 

PORTFOLIO % - Sometimes a 100% allocation does not mean that the trader went 'all in' with no money left to spare. Maybe the trader just saw that this was the only stock or setup worth trading and only used a portion of their port allocation there. 

Nevertheless, the higher the allocation, the higher the conviction of the trader in that stock. 

AVERAGE PRICE - The entry price of the trader to the trade. If all buying was done in one tranch then this should be on an ideal breakout point and easy to trace. If buying was done in tranches, the aep should only be slightly higher than the ideal breakout point.

Having a great AEP shows the precision of the trader's entry. It can also usually show the trade profile of the trader. A bounce player or tsupitero or a position trader. 

CURRENT/MARKET PRICE - The exit price of the trader to the trade. The trader could have set GTCs and sold at this particular price. 

PERCENT GAIN/LOSS - Similar to the current/market price this can be treated as the final grade of the trader for a particular trade. Again, they could have sold here using GTC or sagasa sell. 

BLACKED OUT PORTIONS - This is usually for security reasons to protect the trader. But some traders out there would rather not have any blacked out portions and are secure enough with themselves that they feel it's not necessary. Kudos to them. 

See the many possible stories in one port snapshot? Learn to read between the lines and maybe it can help you to improve in your own trades. 

This is the beauty of people posting port snapshots, it can serve multiple purposes. One is to prove that it is possible to make it in the market. Another is to show that we walk the talk and don't just post analysis on a variety of stocks. First and foremost, we at the tribe are traders. We do this for a living and to earn. We want to prove to others that it is possible to trade full-time. That it is possible to survive without relying on tips and analysis of others. 

Keep this in mind next time you see someone post a port snapshot out there in the world wide web. Don't just admire or be jealous of the gains. Stop and try to dissect it. That might help tremendously in your own trading. 

It is possible to live the dream. You just need to work for it. 

So to all my fellow traders out there, cheers!

Running your own race

This quote has been something that our mentors has instilled within all of us during the course. I have always taken it to mean that our biggest obstacle to success is ourselves. 

In my previous posts, I have repeatedly said that you have to fit your trades to your profile. Make it fit to your lifestyle. To who you are. 

Well, recent events have made this very applicable and real to me. The little robot has started going to school and unfortunately the school schedule has absolutely wrecked havoc on my trading style. Since the class starts just before the time when humans need sustenance and ends sometime in the early afternoon and with the daily traffic, I have had to adjust, adapt, and innovate as a fellow tribe member has stated. 

At first, I thought it would be an easy transition. This past two months it really hit me that I can no longer buy at the close. Or even see what happens during closing. Checking the charts after trading is now a regular session of disbelief at seeing breakouts missed. Intraday buying opportunities that happen right before leaving for school have to be skipped. My system didn't want to have any lingering thoughts of buying super volatile stocks while driving on the road. 

So to compensate, I have had no choice but to change strategies. I went back to my notes and reviewed about trend following and sleeper plays. Being a mentor to bastards and the seed has also been a big help since it allowed me to get a fresh perspective on the power of MAs. Having had a coffee session with Zodiac's resident Dog was also very timely for it showed social proof that a different technique can still give massive gains. The only difference was time.

Time because...

- instead of being able to buy on the actual breakout, you buy in anticipation of the breakout. Your patience will be tested.

- your entries and exits are different from being an intraday trader. It means looking at the bigger picture. 

- instead of just focusing on the daily charts, the weekly chart now gets equal significance as well. 

- I would be at the mercy of forces that are not in my control.

This has been my first attempt at a TF trade. Not perfectly executed, but I think that it will do. 

MCP

But do take note, that I still try to keep up with a checklist of the intraday breakouts that did happen successfully. Which ones that were still caught by my scanners and which ones were missed completely. For at my core, I am still an intraday trader at heart. That is something that cannot be taken away. This is just a temporary setback. 

Going back to the previous analogy, this is a race that I intend to win. I imagine that we are all in a marathon, it doesn't matter how we reached the finish line, the important thing is we reach it. My circumstances might take me a bit slower than the others for now, but I will persevere.

For what does not kill us, only makes us stronger right? And being able to add and master a whole new weapon to my arsenal will only make my final form that much more deadlier. 

Finding yourself

There is a thing called the rorschach or inkblot test. Humans are asked what they see in an abstract image. There are no right or wrong answers because it is actually a trick. Their answers reveal more about them then what is in the actual inkblot. 

Viewing charts could be the same way. Different people looking at the same chart would give different views. For example:

"looks expensive"

"BREAKOUT! ALL IN!"

"take profits"

"too bad. sold early"

"I'm not convinced, will wait another day"

"Can I still enter? Is it still safe to buy?"

Another example is this:

"avoid!"

"time to bodega"

"nowhere to go but up"

"I'm an investor and am waiting for future profits"

Two very simple charts. But it can give a wide variety of responses. And this is just a chart with MAs. What if you add in the different indicators? RSI, MACD, STOCHS, STS, FastK, etc. 

Mayhem. 

Analysis Paralysis.

This is why having a simple trading system can be beneficial. Less is more. Having set rules on buying/selling, strategies for the multiple trade scenarios. Having a trading plan is the key to success. 

Going back to the inkblot test and the charts, being able to identify your trading personality will help you to pinpoint make the necessary changes or upgrades to fix any deficiencies or weaknesses in your trading profile. Maybe you don't need an overhaul, just a few tweaking. 

But hey, this is all just the ramblings of a robot. 

Trader Profile: Trading Systems

Let's get this out of the way. There is no perfect system. No one size fits all. It's similar to the analogy of the education system as seen in the image. For further info on that do some searching on the web about the fish climbing up the tree analogy.

In layman's terms, it just means that a breakout trader's strategies should be different from an investor or a bottom fisher's strategies. When I say strategy, I mean the buy/sell points, holding period etc. The reason for choosing a system depends on multiple factors and you have to be aware of these factors before entering a trade. Here are a couple of things to consider:

Space & Time:

This refers to how much time you can spend looking at the market. Are you a full-time trader? Can you monitor during the whole day? If you have to work a day job then it would be more dangerous for you to buy very volatile stocks. Stocks that could swing from +/- 10-15% in a day. Can you take that risk?  

Another aspect of time is how long is your holding period? If you see 3-7% gain in your stock do you sell immediately to lock in your profits? Or can you still hold it in case it goes even higher in the coming weeks/months?

Risk Profile: 

This refers to how the way your brain is hardwired. When you see a stock going down do you see it as a buying opportunity or do you avoid it? There are players who are bottom feeders and are happy with a stock going down because they think that it is just retracing and they can get it for cheap or low risk.

The other side of the coin are the momentum players who would only ride stocks that are on the way up. Buy high, sell higher is their motto. 

One more aspect of your risk profile is how much are you able to put in one stock? Do you go all in (something I covered before) or place only 25% of your port in one trade? For those just starting and still finding their system or personality as a trader, I would suggest to place 10% or less in a trade. Just to have some skin in the game. 

Find your system

Going back to the earlier analogy, there is no one size fits all system. You have to stop and reflect on who you are as a person and a trader then make your system fit you. Don't compare yourself to how big someone else's gains are. You don't know their journey and how long it took them to get there. Focus on your own journey and one day you might be the one that others are looking up to. 

Bonus note: 

Just don't try to invert your charts. That is most definitely not a system. It's just pure and utter crazy talk. If it wasn't, then you should be able to see it in all respectable charting software out there.  

Trader Profile: Alpha Centauri

The entity known as Zeefreaks recently posed a question to us mentors, 

What does it take to be a success 
(in this world of trading)?

This was in response to a recent post on the ZF page. I find that it would be hard for my system to answer this question sufficiently in my current form so my system will reactivate the cyborg unit automaton for this purpose.  

Starting transmission...

Before I begin, I would just like to say that honestly, I do not consider myself to be a success yet. Success is relative. Much like perfection, the important thing is the journey. 

And to understand the journey, I feel like we have to start at the beginning. 

The dream

Ever since I could remember, I never wanted to conform to the norms of society. I never dreamed of having a 9-5 job or working in a company all my life. There were always loftier goals: living free from office politics, never answering to a boss or a client. However, life happens and reality sets in. So I went through the motions of working for a company yet the dream never died. In my off hours and weekends, I started several companies and worked on side projects to look for a way out of the rat race. Not all of these endeavors ended well. But the dream was always there.

I was then introduced to the world of stock market through a friend. The allure of earning more than other mortal men has appealed to my very being. Of course, it started with just tips and rumors. It was hit and miss. But then there was always something at the back of my mind that troubled me with this technique. My dependence on these tipsters or insiders weighed heavily on me. What happens when they are gone? There had to be a better way. 

Enter the Zeefreaks program.

The sacrifice

It was stated before of how hard it was to go through the ZF course. It was certainly not fun and games, people. It was 3 months of 3 hours daily of grueling study of charts, concepts and more charts. It was essentially and literally reprogramming our minds to how we viewed the market. 

After the hours of study, there were even more hours of seatworks, exams and lively discussions of more charts. This meant giving up family dinners and meetup with friends. Weekends spend charting and reviewing. Even sleep deprivation since my shift started at 4-5am. You could say that my life revolved around charts since then. It was a major change and needed total commitment but I immersed myself and totally loved every minute of it. 

The transformation

My performance throughout the course was up and down. Mostly down. But I stuck to it and didn't give up even when doubt started to creep in. I learned to trust the process. I went back to my notes and reviewed some more. Backtested again and again. 

There was a sort of manic drive to be better. If others were able to do it, why not me? What can other people see in the charts that are not visible to me? There was no proverbial light bulb switching on. I had to train my eyes and mind to see the little things, the small indicators, the patterns that were oblivious to all but a select few. I would remember the days when I felt helpless watching stocks fly with me just wishing I had those. That feeling would make me refocus and study some more. 

Once I got my first few winning trades, my confidence was restored. All that time spent was not wasted. It was just part of the process. Just keep pounding the rock as I said before. Those winning trades just helped to ignite a spark within. To experience that high of being able to spot winners on your own. 

The ongoing journey

So again, I do not consider myself a success. I like to think of the end of the course as my 'rebirth' in the stock market. So you could say that I have only been trading for about 6 months. A newbie to say the least. 

Maybe I'm a little bit better equipped to deal with the market than before. There is still a long way to go before I reach my 10,000 hours. I am still constantly improving my craft. Tweaking the defects, plugging the holes, documenting the results. I have yet to reach my final form. I am still feeding my newfound addiction. 

And so this is my story.

Alpha Centauri of the ZF tribe. 

Just another fictional character in the world of the Philippines stock market. 

What's yours?


Ending transmission...