The last quarter of the year is a special time for the stock market enthusiasts, not because of a specific market condition but because of the Annual Investagrams Trading Cup.
The Trading Cup is an annual competition hosted by Investa where stock market traders spend three months to battle it out and show their trading skills.
Not to mention the cash and percentage of the bonus pot (P1M this year!) for the winners.
Also, this year’s cup became more special than usual due to what it represents, hope.
We know that 2020 was not great for everyone, specially if you’re invested earlier than March.
Still, due to the market recovery during the second half of the year, this year’s theme became more appropriate: Trading Cup Bounce Back Challenge.
It is also a great time to learn more about the market since it is not limited to experts but also open to beginners.
It is also an excellent opportunity to measure up with your peers, examine the extent of your skills, or simply apply what you learned from InvestaUniveristy or your mentors.
Through this competition, I learned more about trading, the stock market, and myself.
Here are 10 learnings that I will definitely bring to my trading this 2021.
1. Emotions are very different between virtual trading and actual money trading.
During the trading cup (Sept 28 – Dec 29, 2020), I was trading three kinds of portfolios, a real-money portfolio, an Investa virtual portfolio, and my trading cup portfolio.
Though I am selecting stocks from the same watch list, my executions were not the same – some were better while others were not.
I realized that I was more relaxed when trading my Investa virtual portfolio, a little bit careful with my trading cup portfolio, but cautious with my real-money portfolio.
As a result, I was unable to maximize my trading plan, which limits the gains. Comparing the three portfolios in the last three months: my training portfolio is up ~70%. My trading cup portfolio is up ~21%, but my real port is only up ~15%.
It revealed that even though I know what to do, the fear of losing money still bothers me and is one of the critical aspects that I need to build on moving forward.
2. Plan your trade, and trade your plan.
I usually check the charts at night to prepare for the next trading day. I create a list of the stocks I can trade in the morning, including the risk-reward ratio, entry price, cut loss price, and the target price.
However, though I already have a plan, there were several occasions when I did not follow it.
I was only fortunate that we are currently in an upmarket that I still managed to get a decent gain in the trading cup.
3. Journal your trades.
I learned that journaling your trades is very important if you want to put your trading skills at a higher level.
My trading journal entries usually contain why I bought the stock, including the risk-reward ratio and value-at-risk (VAR), the trading strategy I used, and the target price.
When selling, I take note if I reached my target price or if I cut loss.
A trading journal is also a great way to review how well you followed your trading plan.
4. We need a helpful stock trading community.
The trading cup is long, and it is easy to get frustrated when a stock’s performance goes against your initial assumption.
Just like any other endeavor, a community is essential to help us through.
However, not all stock trading communities are helpful, so be careful when looking for one. I saw some trading communities in Facebook that were toxic and bait newbies into buying stocks based on hype.
My trading community is InvesTradersPH. I learned a lot from them, especially from our mentor, Sir Anakin Sky, who taught us reliable trading strategies that were very helpful during the trading cup and actual trading.
5. The InvestaPrime+ subscription is impressive.
Kudos to the Investagrams Team for giving a three-month trial of InvestaPrime+ packaged with the trading cup entry pass.
The most useful features for me were the following:
- InvestaJournal – shows my trade analytics;
- InvestaScreener+ – includes premium indicators like ADX, volatility, and of course, the VTrade Competition Tradable Stocks List; and
- InvestaWatcher – sends SMS alerts for your entry, cut loss, and target prices. It also sends SMS regarding company disclosures from your watchlist.
I was amazed by these features that I immediately subscribed to the annual plan after the competition.
6. Avoid FOMOs and hypes.
Since the trading cup also features the actual movement of stocks, FOMO (Fear of Missing Out) and hypes are bound to happen.
I just need to filter out all the noise and follow my trade plan that I prepared.
But personally, I seldom become a victim of FOMO and hype. What usually happens to me is FOBO.
7. Avoid FOBO and Analysis Paralysis.
I didn’t execute my trade plan several times during the trading cup. Not due to hypes and FOMO, but because I hoped for a better setup or waiting for one of my favorite stocks to enter my trade criteria.
I overanalyzed stocks that can perform better than those which already entered my trading plan.
Fear of Better Options (FOBO) hindered me from taking the calculated risks and limiting my potential gains.
8. Wait for the market to confirm or reject your bias.
The market is the only metric that can tell if we are right or wrong about a particular stock.
We see this time and time again, especially when the market is performing well. New traders catch the superman syndrome and tell themselves that they can do no wrong or that trading is easy.
Eventually, the market reached euphoria and starts to decline and humbles the proud.
Depending on the market movement, I learned to take it as it is, move on to the next stock, or even stop trading for a while.
9. Don’t compare yourself with other competitors.
Since the trading cup is a competition, it is easy and unavoidable to compare yourself with other traders.
During the whole duration of the trading cup, I only managed to reach rank 600+. Though I finished the competition outside the Top 1000, I am still happy with my performance this year.
I still managed to get a decent gain and validated the strategies I learned from my trading community.
The only comparison that I need to make is with my previous self, and looking back on my performance last TC2018, I gained higher but ranked lower.
10. Bring the learnings from TC2020 to my actual trading and beyond.
I wrote this post to share my learnings from the Trading Cup 2020 with my fellow traders and challenge myself to perform better in the next Trading Cup.
Though I am still far from what I want to achieve regarding trading, I know that the confidence I gained in this competition will carry over to my actual trading.
Another important thing I learned is that I can still trade while having a full-time job as a teacher.
I hope that 2021 will be a better year for the stock market and hope to beat my TC2020 performance. Happy trading!