Welcome and thank you for subscribing to QuantDS PSE - the Philippine Stock Exchange trading guide of Quantitative Data Solutions.
Every successful trader has a unique set of rules in selecting stocks they want to trade, but they are all the same on one thing: they stick to their strategy. This guide does not promote changing the traders' approach entirely but to apply Quantitative Analysis, which QuantDS provides, as an additional filter in picking the right stocks to buy. We believe the combination of both Technical and Quantitative Analysis is an excellent and profitable trading strategy.
QuantDS PSE is useful for trend traders (position & swing trading), countertrend traders, and momentum traders. Listed below are the methods you can apply in selecting or filtering stocks using the QuantDS PSE depending on what type of a trader you are. Please take note that the explanations are only focused on the Philippine stock market.
FOR TREND FOLLOWING STRATEGISTS
Trend Following is a trading method of looking for upward trending stocks, riding the trend by buying a share, and selling when the direction is over, or the target price is hit.
Below are the steps to follow by trend traders using the QuantDS PSE trading guide.
Step 1. Check the Watchlist
The table of trending stocks is posted on the Blog page every week before the market opens.
The table consists of upward trending stocks (which are selected and filtered using technical analysis) including the price setup/condition and stop-loss price.
Click Blog and look for FULL Weekly PSE Watchlist (members only).
Once you open the post, you will see this Watchlist table.
Check Spreadsheet means to look at the support and resistance price levels in the spreadsheet
Step 2. Look for Buy signals.
The next step is to look for buy signals in the stocks included in the watchlist.
Look at the columns A (for stock codes), Q (for trade recommendation), T (for % probability), and U (for QDS alert).
The stocks with Buy signal has the following criteria. (See table below)
|Switch Trade (Recommendation)||Confidence Level (or % probability)||QDS Alert|
|Breakout Buy||50% or above||Buy Stop or Buy Limit|
|Buy @ Uptrend Support||50% or above||Buy Stop or Buy Limit|
|Buy and Hold||50% or above||Buy Stop or Buy Limit|
|Low Risk Buy||50% or above||Buy Stop or Buy Limit|
|Trigger Buy||50% or above||Buy Stop or Buy Limit|
|High Risk Buy||49% or below||Buy Stop or Buy Limit|
|Trigger Sell||49% or below||Buy Stop or Buy Limit|
Step 3. Check the Switch Trade Matrix
The Switch Trade Matrix table is where to look for the final trade signal for the stock. It should be read as an if-then statement.
If the stock has no exact condition in the Matrix, use the initial signals as your reference.
We suggest focussing only on the stocks in the watchlist. It will save you time.
Step 4. Check the Funnel Screener
This Stock Screener of QuantDS PSE shows the list of stocks selected/filtered after applying steps 1 to 3 above.
If you want to save more time looking for stocks to buy, it can be done by skipping the first three steps above and only look at QuantDS PSE Funnel Screener.
But we strongly advise to always double-check by still doing the steps 1 to 3 in selecting stocks to trade.
FOR MOMENTUM TRADERS
Momentum Trading is a strategy that focuses on stocks that are showing a strong upward movement, usually on high volume, within a specified period.
Below are the easy steps how to use the QuantDS PSE for momentum trading.
Step 1. Look for the Top Gainers
The top gainers are stocks with the highest bullish momentum during the day. You can see the list of top gaining stocks on your broker's online trading platform. Below is the example of COL Financial.
Note: Always check the volume of the top gainers for the confirmation of bullish momentum.
Step 2. Check Major Resistance and Breakout Price Levels.
There are three primary resistance price levels in the QuantDS PSE spreadsheet - the Projected Advance price, Top Trigger price, and Breakout price.
A definite BUY SIGNAL for the stock is when the stock price breaks out and holds above these three (3) price levels.
FOR COUNTERTREND TRADERS
Countertrend Trading is a type of trading strategy that assumes a current downward trending stock will reverse and attempts to profit from that reversal.
Please be reminded that this is a dangerous strategy. Predicting the bottom of the market is impossible, and we don't recommend doing this.
But for those who still want to try or already doing this type of strategy, QuantDS PSE might help you.
Look at the Bottom Support column of the Price Spread
The Bottom Support column in the Support/Resistance prices table shows the Major Support level of all stocks.
For traders trying to guess the bottom of the down trending stocks, the Bottom Support column might give you a hint where to put your buy orders and expect for the reversal.
The next column on the right is the Breakdown prices which may be used as stop-loss points.