Because of social networking sites (facebook, twitter, instagram), the stock market is being introduced to more Filipinos here and abroad. And since one can join the market with a minimum investment of 5000 Pesos only, more and more people are jumping in, hoping that they can easily grow their money using this financial vehicle.
After opening a stock trading account, the tendency is to look for training resources, which include forums and facebook groups. However, once people see how easy it is to get stock trading tips from these groups, they become prone to just rely on the tips/recommendations of other members. In fact, it's easy to spot newbie traders based on the questions they post.
Below are some of the irritating/annoying questions you'll often see in stock trading groups. Given the nature of questions, expect to see replies that are just aimed to hype a particular stock or just bash/embarrass the poster. So read on newbies and hopefully, you won't ask the same questions next time. :)
1. I'm a newbie in the stock market. Ano ok bilhin?
Given the number of stocks in the PSE, expect each trader to have a favorite stock. The stock can either be for long term, short term holding or daytrading only. Recos (short for recommendations) can range from blue chips to penny stocks. Before buying a stock, know first how long you plan to hold on to the stock, as well as the fluctuation levels you can tolerate. Determine if your decision will be based on fundamentals or just based on daily charts. What works for others may not work for you due to different trading constraints (e.g., slow internet connection, busy with work).
2. Ok pa ba pumasok sa [insert 3 penny stocks that hit ceiling price here]?
Example: Ok pa ba pumasok sa ION, PA, NOW?
Penny stocks easily attract newbies because of ceiling plays. Who doesn't want quick profit, right? Oftentimes, once a stock goes ceiling for 2 or 3 straight days, newbies get convinced to join in the party. Unfortunately, once they start buying, big players start selling, and "ceiling play" suddenly turn to "selling play". Newbies then become stuck holders, now hoping for their "superstock" to bounce back and hopefully go green again. Once they get impatient, the blame game starts. But really, the person who should be blamed is the one who pressed the "Buy" button. They wouldn't be in that position if not for impatience, envy and greed.
3. Pwede na kaya pumasok sa [insert penny stock that hit ceiling but is now crashing here]?
Example: Pwede na kaya pumasok sa SUN?
When a penny stock goes ceiling or has closed significantly higher for several days, newbies treat pullbacks as opportunity to buy. But sometimes, these opportunities just mean that the play is over. Newbies end up catching falling knives, which again, make them stuck holders. The "hoping" phase then begins, wherein newbies are uncertain when the penny stock will bounce back. This "hoping stage" may last for several months to years. The anxiety and sleepness nights can be ended though by selling at a loss (or what other refers to as cut loss).
4. (After a penny stock's price goes crashing) Bumili ako kanina ng [insert penny stock here], benta ko na ba?
Example: Bumili ako kanina ng FNI, lugi agad, benta ko na ba?
The question simply shows that the trader has no plans when he/she placed the order. This is rather risky (especially if it's now a losing position) since you don't have a cut loss point. You won't be able to determine when you should cut your losses, which can be a reason why you might lose more money.
5. Red today, buy na ba?
Like what was mentioned in #1, there are a lot of stocks to choose from in the PSE. Beware of people who might just recommend a particular stock (which they recently bought) so you can help them in pushing the stock price higher. Preparation is the key. Prepare a watchlist of stocks that you'll be observing in the upcoming days, including the good entry points and target prices (as well as the potential upside for each stock). With this approach, you don't have to go through the "buy now, ask later" scheme.
Newbies, if you find yourself always asking these questions, I'm sorry to say, but you're still not ready for the stock market. Entering a trade is very easy, exiting is the difficult part. If you'll simply follow recos being thrown at you (unfortunately, some of them are just hyped ones), get ready to lose money or get stuck on that stock. If there's such a thing as recipe for disaster for your stock portfolio, the questions above will definitely be included.
As a general rule, study first before you invest, moreso if you plan to trade stocks. You can start learning the basics by attending free seminars to learn more about fundamental analysis (know which stocks are ok based on financial figures) and technical analysis (to give you an idea on the entry and exit levels). After that, research more on what you want to learn. Missing an opportunity is preferable than losing money because you entered a trade unprepared. Always remember that you entered the market to gain money, not lose it.
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