I know I've already turned my back on my trading but my recent discovery of a technique or strategy - a trading strategy which is I believe will be useful also in my investment stocks. You'll probably be asking me "What is this trading strategy? and how is it going to help in acquiring my favorite investment stocks which are of course dividend-earning stocks?"
The No. 1 Rule in Trading: Buy Low!
First of all, we all know what the No.1 rule in trading is and that is to buy low, which means you try to buy a stock at its lowest or low value. While the stock price is of less concern when buying investment stock (to some), for me I still want to make sure that what I buy is still at its lowest value (at least during the period I decide to buy again) to make-up with the volume I buy - of course lower stock price means more volumes. Actually, investors love it when their favorite investment stock is at its low price because they can buy more volumes with their money.
The Obvious Answer but....
I think you get the point now. The question of most traders is "When to buy?". And even if the obvious answer is when the stock price is low, we still have another question "how do we know that it is the best price? and when is the best time to buy the low price? or when will it happen?"
Drums Roll...
Okay, it is called Mama Strategy. Well, I won't be explaining the in-depth meaning or how to do mama strategy in this article. Because, obviously this is an all text-article and explaining it here would be ridiculous. It's like making a chapter of a book or at least one essay in length.
The Mama Strategy
Okay, using Mama Strategy will help you recognize or see signals of when to buy and when to sell. But of course, since we are buying an investment stock our only goal is to buy that stock when it is at its lowest value (at least during that time). Mama strategy is a combination of different indicators in graphs used by traders. Indicators such as the ALMA (Arnaud Legoux Moving Average), MACD and Volume. Sometimes, they use CALMA by adding CCI (Commodity Channel Index) to show earlier signs of buy and sell - it's a bit more sensitive to the safety of the trader (used often by lazy people like me who seldom is online or OFWs who is having a hard time being awake or waking up on Philippine time). So meaning, we'll only use the warning signal for buy so we can get the best price.
The image above shows an example of a the mama strategy in DMC or DMCI stock. There are 2 circles in the graph which shows; yellow should be the entry the start of the mama strategy which is the signal for buying. The mama strategy has started already in the image above so I can't say when you should go for exit or the sell signal but it will look like the red circle. What is happening in the circle? There are two lines, the MACD (blue line) and the moving average is the red line. When the the lines crossed and the blue line went above, that is the start of the mama strategy. It signifies the buy signal and when the red and blue crossed again and the red went above the blue -- that signifies the sell signal. I am not an expert in explaining this but it is best to check it out in YouTube for better explanation. So okay, this would be a bonus for you all. DMC is a good investment stock, it is also one of the blue chips in the Philippines that pays your dividend. So, yes it is a good buy.
Anyways, trading is not really my forte but I am progressing. I try to play once in a while to apply the new strategies I learned from friends. Again, this may not be applicable to you but I really prefer to use this strategy to my own investing strategy so I could maximize all my hard-earned money to well-picked investment stock.
Updates
- while I wasn't busy blogging, I was busy getting paid at SeedIn. Yes, they still are paying and they still have projects. It's really a good investment or at least a place to put your sleeping money to work for you.
- I also got dividend payments from COL. It was great to see this dividends piling up on my mail. I can still remember receiving my first dividend - it made me so excited to save more money for my family's future. Believe me, it is waaaaaay better than saving in time deposits.
- at last I got rid of my NOW stocks after months of peso averaging. I converted it into a new investment stock which of course is a dividend-earning stocks again.
So that is it for now. Hope this has been informative or at least helpful to you guys. If you have any suggestions or corrections, please drop a comment below. Thank again and God bless.
Labels
Comments
Post a Comment