Monday, October 22, 2012

Getting started with Stocks Trading (Philippine Market)

My trading account in First Metro has been approved! I can start trading as soon as I fund my account. It requires a minimum of P25,000 to start a First Metro account. If you want to know if investing in stocks is for you, then read on. But before anything else, be sure you're ready to start investing in any kind; you may want to read the "before getting started" entry if you haven't done so.

In my previous post, I talked about Mutual Funds where your money belongs to a bigger collection of fund managed by an expert. Now, if for some reason you feel like you can beat the best fund manager out there, AND you have the TIME to do it then this is for you. You really need to have time to do this, and preferably a reliable internet connection during trading hours (more on this later). It is strongly suggested that you attend seminars before you jump into trading stocks. As for me, I'll take my chances and jump into it right away. Experience is the best teacher anyway; I want to experience it first-hand. I'll also seek guidance from my finance mentor.

Only put money that you are willing to lose, especially when you're just starting (like me).  You need to be financially and emotionally prepared to lose big or in worst case lose it all, and I mean from P25,000 to P0. It is said that trading stocks is like gambling, but it is only gambling to people who don't do research or consume knowledge. As always, you can mitigate risks when you equip yourself with knowledge. On the bright side, the risk is high because the potential to gain is also high.

Let's first define what is a stock. From Investopedia, a stock is a type of security that signifies ownership in a corporation and represents a claim on part of  the corporation's assets and earnings. So in a basic sense, you're buying a part of the company and you become "part owner" of that company. "Part owner" is in quotes because it takes a lot of money to have a major role in a company that you bought stocks from.

The house where these stocks are traded is called the Stock Market, in the Philippines it's the Philippine Stock Exchange (PSE). And before you can start trading stocks, you need to have a licensed broker. The broker can be a person or a party (brokerage firm). Trading starts at 9:30 AM to 12:10PM 3:30 PM with 1.5 hours recess from 12 PM - 1:30 PM on weekdays excluding official holidays. In trading stocks, you can aim for short term gains or long term or both. Many are active on short term trades, where you buy stocks at a low price and sell it when it's high.

With technology, it's possible to trade online (Website or mobile app). The only question is what firm are you going to choose, and there's only a few to choose from: Citisec Online, First Metro, Phil Stocks, and BPI Trade. Citisec is a veteran in online trading, and it has been tested and verified to be reliable most of the time. First Metro is relatively new to this category, but it has been getting praises from their fresh interface and iOS apps.

As for me, I already have an account in Metrobank so it's relatively easy to start a First Metro stock trading account. I'll post more on how to start a First Metro account soon. Now is a good time for investing in stocks, let's take advantage of this opportunity.

Getting Started on the Philippine Stock Exchange « Selwyn Uy Blog
Stock Definition | Investopedia


  1. If you, readers, want to learn more on how to invest in the Philippine stock market, you can check PSE's Market education website