A Beginner’s Guide to the Stock Market

By Serrano and Francisca

I met Paqui in Granada, attending the ofi cial presentation of her book. After her speech, she approached me to say: "I work as a trader, a couple of hours a day and I make money. My broker is in the USA and I only operate intraday". Astonished and eyes wide open, it took me a while to answer back. Ignorant and layman, I then decided to come clean: "Sorry, Paqui... can you please tell me what is that trading stuff about?" To my surprise, in simple words, lots of pedagogics and warm enthusiasm she explained me the basics of a thrilling activity to everyone´s reach as long as you are motivated and focused on being trained... and that is how this manual was born. In this book, the authoress unveils her secrets: The basics of trading , general ideas on stock markets knowledge and practical advice that will allow anyone interested to start diving safely in such vibrant activity. On a simple but intelligent way, she shares with her readers the knowledge acquired along her successful career. However, she does not limit herself to passively repeating basics of stock markets theory but leads by example. At fi rst she made – and still makes – money with her trading activity, but afterwards she was willing to open the doors of her” knowledge base” to everyone, a beautiful gesture most of her readers will be grateful for life. Manuel Pimentel

Would you like to reduce your working hours? Would you like to achieve economic Independence? Is there really people out there that make a living working just a couple of hours a day? How do they do it? Could I be one of them? Which is the initial investment required to be a day trader? This Manual answers these and many other questions about the thrilling stock markets world, so that anyone can start operating in the worlds biggest Marketplace.

• Language: English
• Publisher: Lid Editorial
• Release date: Oct 30, 2020
• ISBN: 9788416392520

Book preview

Francisca Serrano Ruiz

A Beginner’s Guide

to the Stock Market

How to Make a Good Living

Trading Stocks

Original title:

Escuela de bolsa

©

Francisca Serrano Ruiz

, 2015

©

Editorial Almuzara, s.l., 2015

All rights reserved. The total or partial reproduction of this book is not allowed, or transmitted, or transmitted in any form or by any means, mechanical, electronic, photocopying, recording or otherwise, without prior permission writing of the copyright holders.

Collection Economy

Editorial Almuzara

Editorial director: Antonio E. Cuesta López

Editor: Óscar Córdoba

www.editorialalmuzara.com

[e-mail] - [e-mail]

I.S.B.N: 9788416392520

Forewords

By Jorge del Canto

My aim is to speak about the author and the content of this book. If you are not sure whether to read the book or have already decided to read it, I will try to explain who and what you will find in its pages.

The job that Paqui does is very difficult. She does day trading, which is a technique for speculating in the stock market, and defined as the opening and closing of a trade within a few hours or even minutes. Anyone can do it but to be successful consistently, and in the long term, is something that only an exclusive club with a small number of members, of which Paqui is one, can actually achieve. Brad Barber, a Professor from the University of California Davis, together with other colleagues from the University of California Berkley and the Peking University, published a study in 2011, an improved version of another done in 2000. They examined all the trades made by day traders in the Taiwan stock market between the years 1992 and 2006. One of the conclusions, amongst many other remarks of less relevance, is that only 27 from every 10,000 attain the success that Paqui has accomplished. Surprising!

Another conclusion, and something that I can corroborate from my own observation, is that those who accomplish it do not have a deep or extensive knowledge on economics, financial rates and suchlike. Their success does not lie in their skills, but rather in the attitude they have towards loss and gain, fear and greed, and the discipline they follow to control the risk they assume.

There are so few of them that it is difficult to find one of these successful traders. Now we have the good fortune, not only of having met one of them, but also one who is ready to explain what she does and how she does it. More than a simple book, what you have in your hands is a guide that throws a beam of light to illuminate the path you have to follow if you wish to have real success in trading. There is also a package of related activities available for those who wish to engage in such a venture.

In simple words, and without being pretentious, Paqui shows us the basic concepts we need to know as well as various techniques and resources for day trading, the different financial instruments she uses and the importance of financial management. But the most important thing, what I think is the key to her success which is not only exposed in the chapter on psychology trading but can be found spilled all over its pages, is that she shows herself as she really is and teaches us, with sound advice and logical solutions to different problems we may encounter, how to walk and advance on this path so that we transform it into a freeway.

I appreciate very much her sincerity in showing us how to apply psychology to trading because it is an aspect that is often forgotten or ignored in other books. This is a very important element in trading that Paqui always emphasizes, not only in this book, but also in her seminars, knowing that this is what will really help us to overcome the enemy within.

I remember well the moment I met the author of this book. I thought I was going to spend an afternoon with a very good old friend of mine. But that reunion changed the course of my life. She told me: ´You have to meet this friend, she is wonderful! She is very interested in meeting you and likes trading very much´. By then I started to worry a bit, but my friend carried on saying, ´She has written a book´. Then I felt more worried. Finally, she said, ´And we would like you to write the foreword´!

Who would have even thought about it? Here I am, writing a foreword for a book that needs no introduction, a book that should be read. Paqui is a person to be discovered, I can assure you that you won´t be disappointed! I like to call her Paqui because, now I know her well, the name on the cover of the book, Francisca Serrano, feels more like pseudonym. It is Paqui who reveals her bare personality to the reader. It is rare to find people like her: she is successful in life, and what is more, she is honest, clear and humble; she is sincere and straightforward, someone to be admired.

What at first was an unexpected change of plans became a precious encounter and I am honored that she has requested me, and not another person more qualified or with more influence, to write this foreword.

Good luck! I’ve already had good fortune when I thought I was meeting with Francisca Serrano but I discovered Paqui.

Jorge del Canto

Fund Manager and ESIC Professor

by Carlos Bocanegra Baquero

Financial markets are like an immense ocean offering daily opportunities to go ´fishing´ for returns on our assets. ´All´ you have to do is select the right assets using fundamental analysis, choose the right trend, bull or bear, and find a competitive broker to execute your orders on the market. This is how thousands of people, who trade on financial markets, earn money every day.

Francisca Serrano Ruiz, who we all know as Paqui, and whom I personally consider to be a very astute and disciplined individual, is one of those customers that make you feel very proud of your profession. As she comments at the beginning of the book, Paqui has taken a journey from having no interest whatsoever in stock exchanges and financial markets to becoming an investor capable of managing her assets and achieving her financial objectives by making her own investment decisions.

She achieved this through effort, discipline, hours of study and operating in the markets; which is the best way of gaining experience. At Renta4 Banco Granada, we feel very proud of contributing through courses, seminars and answering our customer’s questions, so that concepts such as ´technical analysis´, ´trend´, ´target return´ and ´stop-loss´ become every-day terms, and, more importantly, help customers to earn money and manage risk.

Paqui has gathered together in this guide all of this information and her experience, using simple language. We are very grateful to her for having worked with us since the beginning of her journey into the stock markets and for using information from our website to illustrate this book. I am certain that any reader wishing to delve deeper into the exciting world of financial markets will find this book both useful and enjoyable.

Carlos Bocanegra Baquero

Technical Analyst - European Financial Advisor

Managing Director, Renta4 Banco, Granada, Spain

Acknowledgments

There are a lot of people I would like to thank. I am very thankful to Alexey de la Loma, as I was his pupil at the beginning; also to Roberto Moro for his wonderful course on technical analysis; to Aitor Zárate who caused me to think twice about my beliefs and for introducing me to the e-mini S&P500; to Javier Alfayate for making me curious about his control of stocks; to José Luis Cárpatos, who struck me with his kindness, humanity and knowledge of the stock markets, explaining it in simple words, and to his former pupil, Gaone, who humorously taught me original scalping methods; to the institutional Sergio Mur, who showed me how he had won the trading contest and how he handles millions of dollars every day; to the Colombians and Mexicans and to the American Carlos Vélez who gave me different views of trading and helped me to make my system better thanks to the seminars they taught, both online as face to face. From each of them, I assure you, I have learned something important.

A Note from the Author

Seven years ago, whenever I picked up the newspaper, I would immediately remove the sepia-colored pages. I would use them to line the dustbin or to rest my paintbrush on when any DIY needed to be done at home.

I had no interest in economy because I had no understanding of it. I always had the idea that people who worked on the stock market were economists. I assumed that they had acquired their knowledge in this area by doing some MBA or another degree which had given them the magic key of knowledge to open the door to that world which seemed so abstract to me.

All of this changed one Sunday, seven years ago. In a newspaper, in the Sunday magazine, I saw an article about traders and stock-market investors. Traders are professionals who make their living on the stock market.

The story that had the most impact on me was one about a housewife who used to go to the supermarket, make dinner and, between one activity and another, listen to economic programs on the radio and follow financial news. She would go to bed worrying about whether Inditex was going up or down and what began as a hobby became her life. In a short time, working part-time, she managed to earn more money than her husband, who worked from morning to night.

I was also interested to read the curious story of a neighborhood butcher who knew as much about meat as he did about the Ibex 35 index, which he followed passionately while dishing out steak to his customers. He had bought his car with the profits he made from selling his stocks.

Ignacio Sebastián de Erice in his book La bolsa y la vida (Life and the Stock Market), explains how he lost half of the money he inherited investing in a company that was making losses. Following this bad experience, he decided to take the bull by the horns and learn about how the stock market operates, in order to start making profits. He now writes for the Spanish newspaper El Mundo, where he amuses readers with stories of going on holiday with the profits he makes on his stock-market investments.

Roberto Moro, an independent analyst and my former Technical Analysis teacher, told me over a beer in Madrid that he used to work professionally dubbing films, before making his living from the stock market.

He is now a big name in technical analysis.

Why them and not me?

That's what I asked myself. Years ago my father taught me:

"If you don't know everything about something you're interested in, copy leaders in the field. Research what they did to achieve their goals, follow the paths they took and, when you get up there, improve what they did."

My name is Francisca and I am a trader.

I have reduced my working day in administration to the minimum, and, even though I like my work, I can say that I achieved financial independence two years ago. When I need money I switch on my computer, analyze the charts, wait patiently for the right moment and go in. I work only from 15:30 (which is when the American stock market opens) to 17:30 or 18:00.

I do day trading which, in its most aggressive form, is known as ´scalping´. In everyday English what this means is that I operate during the day: I get in, take the money, and get out. I leave my positions closed, which allows me to sleep soundly at night.

Seven years ago, all of this was gibberish to me. Over those years I took numerous courses on the subject and invested a large amount of money in training. Like any good