March 24, 2017

How To Use QuantDS PSE Trading Guide

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' strategy totally 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 a very good 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 in 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 stock, and selling when the trend 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).

stocks watchlist

Once you open the post, you will see this Watchlist table...

watchlist

Weekly PSE watchlist table.

Check Spreadsheet means to look at the support and resistance price levels in the spreadsheet 

support and resistance

Price Spread or the support/resistance price levels table.

 

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).

stock trading

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.

trading guide

Switch Trade table

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.

stock screener

Stock Screener of QuantDS PSE

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.


VIEW STEPS

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 time 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 for COL Financial.

COL Financial

Top Gainers table.

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 major resistance price levels in the QuantDS PSE spreadsheet - the Projected Advance price, Top Trigger price, and Breakout price.

If the stock price breaks out and holds above these three (3) price levels, this a clear buy signal for the stock.

resistance price

Major resistance price levels.


VIEW STEPS

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 very risky 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.

bottom fishing

Price Spread or the support/resistance price levels table showing the Bottom Support prices (highlighted).

For traders trying to guess the bottom of the downward 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.


VIEW STEPS

If you have more questions about QuantDS PSE Trading Guide, please send us a message on our Facebook page.