My First Investing/Trading Books

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When I was learning about investing in the stock market, I needed books for more information. There are a lot of free pdf on the web but the books that I like, I want to have a hard copy of it so that my children maybe can read it someday. Maybe that will be the legacy that I'll be leaving them. I want them to know money management as it is very important. If only I have known that when we were kids, maybe I have chosen a different path. So, I went to check the bookstore and EXPENSIVE!! I searched for online bookstores that offers affordable books like amazon and I found at about BOOK DEPOSITORY. These are my first books. Jesse Livermore's Methods of Trading in Stocks - Richard Wyckoff This was my first ever book about trading. It has only 32 pages and can be read in one sitting but full of information. It tells about how Livermore's preparation before and after trading, money management, news, stocks to trade and pyramiding.   How To Trade in Stocks - Jesse Li

Understanding Technical Analysis

Ang pag-aaral ng technical analysis ay ibang-iba sa fundamental analysis. Ito ay naka-focus sa price action or price movements ng isang stock. Parang sa economics, inaaral nito ang supply and demand para malaman kung ano direction ng stock, kung ito ba ay trending or hindi.

Three assumptions when doing technical analysis:
 
  1. Price discounts everything. Ibig sabihin nyan na kung ano ang current market price ng stock ay naka-reflect na doon ang fundamentals nung company (qualitative and quantitave). Kaya ang mga technical analysts ay naka-focus sa kung ano ang ipriprice ng market sa stock.
  2. Price moves in trends. Ibig sabihin nyan kung uso ang isang stock, may tendency na tumaas ang price nito. Ibig sabihin mataas ang demand ng isang stock. Paano ba nagiging uso ang isang stock? Sa mga balita or updates tungkol sa company. Pero kelangan maingat dito kasi mamya nilalaro lang pala yung stock. Kunyari trending pero hindi pala.
  3. History repeats itself over time. Alam natin na up and down ang market. Kung mababa ngayon, sooner or later tataas din yan.

Ang pag-aaral ng technical analysis ay pwedeng complex or simple lang. Hindi kelangan na ikaw ay isang CPA or CFA para matutunan ito. Ang una natin kelangan intindihin ay ang mga concepts tulad ng trend, support and resistance, volume at charts.

Trend

Trend is simply knowing the direction of the market. Kung uso ba yung stock or hindi. Pwedeng up (trend), down(trend) or sideways. Kelangan din alamin kung gaano katagal yung trend- short, medium or long trend ba sya.

Trendline ay ang pag-guhit ng linya sa chart para malaman ang trend ng isang stock. Dito din malalaman kung ano ang support price at resistance price.

Tandaan: "The trend is your friend"



Support & Resistance

Ang pag-aaral ng support at resistance ay pwedeng makatulong sa pag-decide kung may price reversal o wala at kung selling o buying signal na ba.

Support ay kung saan inaakala na malakas ang demand, hence, eto ang buying signal while ang resistance ay kung saan inaakala na madami ang supply, hence, a selling signal. However, kelangan maingat sa paggamit nito especially if sideways or downtrend ang market. It depends sa risk appetite, goals (short, medium or long-term) at stock base ng trader/investor.



Volume

Importante ang volume dahil dito malalaman kung gaano ka-interesado ang mga investors sa isang stock. Pwedeng dito ma-confirm kung trending ba yung stock or hindi, kung may price reversal ba or wala at kung may price break-out or wala.

Chart & Indicators

The chart provides historical data based on a combination of price, volume and/or time intervals. There are four types of charts used: line charts, candlestick, bar and point and figure charts. Candlestick chart is commonly used.

To understand more about technical analysis, I would suggest the book "The Trading Code" by Jason Cam. His explanation is simple and easy to understand. You can also browse the web for more references.

Sources: Investopedia, web
















 
 
 
 

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