This is a video that was submitted by someone who believes that the dollar will collapse.
Based on the argument, if other countries starts to use other currencies a way from US Dollar in international trade, US Dollar will start to lose its significants and collapse.
Indicators:
1. China, India etc buying Gold.
2. Arab nations starting to work with their customers other than US to use a "basket of currencies".
3. Central banks starting to purchase non-US Dollar currencies like Yen, Euro etc.
What is the situation on the "Main Street" in US now?
What will these young people do and how will they grow up to be?
What is their future like?
What is next for the US government? Continue to spend? Will they continue to get money from foreign countries? Or to put it more accurately, getting more goods from foreign countries using IOU notes? Will the IOU notes continued to be recognized?
Thursday, December 24, 2009
Saturday, November 21, 2009
STI Stock Counters showing donwtrend in mid term
Here is what I observed so far:
Only banks and Semcorp are showing new break outs recently. The other stocks are all showing signs of lethargy. Let's look at these charts:
There has been a lot of hope that STI will hit 3000 before this year end and many people are waiting to sell off their holding during that stage. Looking at this scenario, that might not be possible if the trend continues. Even though STI has finally broken off to the upper side from the range over the last few months, it is still to early to conclude that it is going to go up all the way.
My view is that even though in terms of GDP, the recession is technically over, but, the recovery is rather weak with job loss still looming over our head. I have no taken a good look at the make ups of the GDP number. It seems that we are having a lot of internal consumptions particularly from the real estate market. These are not productive activities. I am going to wait and see. Even though this means that I am going to miss the bull run. I think at my age, safe play prevails.
Only banks and Semcorp are showing new break outs recently. The other stocks are all showing signs of lethargy. Let's look at these charts:
There has been a lot of hope that STI will hit 3000 before this year end and many people are waiting to sell off their holding during that stage. Looking at this scenario, that might not be possible if the trend continues. Even though STI has finally broken off to the upper side from the range over the last few months, it is still to early to conclude that it is going to go up all the way.
My view is that even though in terms of GDP, the recession is technically over, but, the recovery is rather weak with job loss still looming over our head. I have no taken a good look at the make ups of the GDP number. It seems that we are having a lot of internal consumptions particularly from the real estate market. These are not productive activities. I am going to wait and see. Even though this means that I am going to miss the bull run. I think at my age, safe play prevails.
Wednesday, August 26, 2009
Trade Summary - Early August 2009
For the first 2-3 weeks of August, I was trading badly without much patience. Too eager to make the killing resulted in early entry where trend was not confirmed.
For this week's trade, I stared again with 5 new entries:
1. AscendasREIT - bought at 1.64. Buy signal.
2. CapitaMall - bought at 1.55 on buy signal.
3. Keppel Land - bought at 2.62 on buy signal.
4. Meiban - bought at 0.35 on buy signal break out. Could be false break out.
5. Wing Tai - bought at 1.75 on buy signal.
Here is the chart of Ascendas Real Estate Investment Trust. The buy signal based on RSMA expert coupled with over sold situation and low MACD. The counter seemed to be moving along an uptrend channel. However, it has gone through many waves and potentially, it may be exhausted. If it breaks the bottom trend line, then, can exit quickly. If it breaks the upper trend line, then, there is potential for break out.
For this week's trade, I stared again with 5 new entries:
1. AscendasREIT - bought at 1.64. Buy signal.
2. CapitaMall - bought at 1.55 on buy signal.
3. Keppel Land - bought at 2.62 on buy signal.
4. Meiban - bought at 0.35 on buy signal break out. Could be false break out.
5. Wing Tai - bought at 1.75 on buy signal.
Here is the chart of Ascendas Real Estate Investment Trust. The buy signal based on RSMA expert coupled with over sold situation and low MACD. The counter seemed to be moving along an uptrend channel. However, it has gone through many waves and potentially, it may be exhausted. If it breaks the bottom trend line, then, can exit quickly. If it breaks the upper trend line, then, there is potential for break out.
Trading Update - NOL, CapitaCom, SwingMedia, Mercator, Yanlord
NOL went up to 1.71 and then went down. The market looks bad last week. Sold off at 1.62 took some losses.
Swing Media was looking weak. Sold at 0.06 after getting devidend. Took some losses.
CapitaCom was down to 0.84. Hold. This counter was bought too early because Stochastic has not shown oversold.
Mercator was down to 0.32 broke cut loss point. Sold at 0.33. This counter is not showing strength. Also because Rickmers Marine is showing bad results and cutting dividends.
Bought Cosco on the counter trend trade at 1.20. Went up to 1.27 but retreated to 1.18. Sold at 1.23 since the counter does not show strength each time there is an up market. This counter could be weak again for some time.
Sold SembMar upon weakness. The counter showed sudden drop in price and continue to show down trend for another 2 days. Sold on bounce at 3.09.
Sold Yanlord at 2.39. Lost 0.01 plus transaction fee. Counter went down to 2.30 before bouncing back.
Overall last 2 weeks's trade was messed up by some greed in early entry resulting in unnecessary drawdowns. In order to go back to the rules and strategies, decided to sell off almost all and start afresh.
Swing Media was looking weak. Sold at 0.06 after getting devidend. Took some losses.
CapitaCom was down to 0.84. Hold. This counter was bought too early because Stochastic has not shown oversold.
Mercator was down to 0.32 broke cut loss point. Sold at 0.33. This counter is not showing strength. Also because Rickmers Marine is showing bad results and cutting dividends.
Bought Cosco on the counter trend trade at 1.20. Went up to 1.27 but retreated to 1.18. Sold at 1.23 since the counter does not show strength each time there is an up market. This counter could be weak again for some time.
Sold SembMar upon weakness. The counter showed sudden drop in price and continue to show down trend for another 2 days. Sold on bounce at 3.09.
Sold Yanlord at 2.39. Lost 0.01 plus transaction fee. Counter went down to 2.30 before bouncing back.
Overall last 2 weeks's trade was messed up by some greed in early entry resulting in unnecessary drawdowns. In order to go back to the rules and strategies, decided to sell off almost all and start afresh.
Friday, August 14, 2009
Trading update - UOL, COSCO, SwingMedia, Yanlord, Unifiber, NOL, etc
COSCO: Sold at 1.29 due to sell signal + Stochastic and RSMA Oscilator are trending down. Loss of 0.03.
UOL: Sold at 3.46 due to sell signal + Stochastic was neutral RSMA still positive. One of the reason is low volume. This makes the counter difficult to play as it requires larger margin in order to be able to sell at the price you want. It went on to move up to 3.64 etc. However, this is totally unexpected based on the chart. Loss of 0.07.
Unifiber: Bought at 0.06 and sold and 0.065 on contra. This counter was only for playing.
Swingmedia: Bought at 0.065. Tried to sell at 0.07 on contra but still holding. Dividend.
Capitacomm: Bought at 0.875 on RSMA buy signal. Stochastic still trending down. I think entry was too early and have to wait for longer.
Bought Yanlord at 2.40. Reason was that it was sold down from 2.82 to 2.40 within 3 days. But result announced was quite good. The sell down was probably due to Shanghai Stock Exchange.
Bought Mercator at 0.335 and 0.35. Selling has been done and seems to be subsided. So, there should be buyers coming in for the bargain soon.
Bought NOL at 1.63. Reason for buying was that it has gone through quite fast correction from 1.81 to 1.63 and at that level, the support seems strong previously.
GoldenAgri went on to move up to over 0.51 and higher. Which means that I had put too much money on the table because I failed to buy back on the immediate buy signal.
UOL: Sold at 3.46 due to sell signal + Stochastic was neutral RSMA still positive. One of the reason is low volume. This makes the counter difficult to play as it requires larger margin in order to be able to sell at the price you want. It went on to move up to 3.64 etc. However, this is totally unexpected based on the chart. Loss of 0.07.
Unifiber: Bought at 0.06 and sold and 0.065 on contra. This counter was only for playing.
Swingmedia: Bought at 0.065. Tried to sell at 0.07 on contra but still holding. Dividend.
Capitacomm: Bought at 0.875 on RSMA buy signal. Stochastic still trending down. I think entry was too early and have to wait for longer.
Bought Yanlord at 2.40. Reason was that it was sold down from 2.82 to 2.40 within 3 days. But result announced was quite good. The sell down was probably due to Shanghai Stock Exchange.
Bought Mercator at 0.335 and 0.35. Selling has been done and seems to be subsided. So, there should be buyers coming in for the bargain soon.
Bought NOL at 1.63. Reason for buying was that it has gone through quite fast correction from 1.81 to 1.63 and at that level, the support seems strong previously.
GoldenAgri went on to move up to over 0.51 and higher. Which means that I had put too much money on the table because I failed to buy back on the immediate buy signal.
Friday, August 7, 2009
Trading Update - Olam, UOL and Cosco
Sold Olam at 2.51 bought at 2.48
Reason for selling: The chart does not look good. RSMA sell signal and Stochastic also giving sell signal which confirms the sell.
Cosco sold at a lost at 1.29. Bought at 1.32.
Reason for selling: Same as Olam.
UOL Sold at 3.46. Bought at 3.53.
Reason for selling: Both MA and Stochastic show uncertainty. Overall market seems heading for correction. Since it is uncertain, might as well sell off and wait again.
Sembmar - hold
Reason: MA and Stochatics still bullish even through it is undergoing some correction. Will wait for sell signal to confirm. I believe sell signal will appear tonight and I will hold this over the long weekend. For counter trade, it is possible to add more position to this counter. However, I will not take additional risk for now.
Reason for selling: The chart does not look good. RSMA sell signal and Stochastic also giving sell signal which confirms the sell.
Cosco sold at a lost at 1.29. Bought at 1.32.
Reason for selling: Same as Olam.
UOL Sold at 3.46. Bought at 3.53.
Reason for selling: Both MA and Stochastic show uncertainty. Overall market seems heading for correction. Since it is uncertain, might as well sell off and wait again.
Sembmar - hold
Reason: MA and Stochatics still bullish even through it is undergoing some correction. Will wait for sell signal to confirm. I believe sell signal will appear tonight and I will hold this over the long weekend. For counter trade, it is possible to add more position to this counter. However, I will not take additional risk for now.
Wednesday, August 5, 2009
Trading update - Golden Agri
Sold half of the holdings on sell signal at 0.405 on market.
Queue (limit order) at 0.41. Yesterday close at 0.40 (stop loss point).
My RSMA expert showed sell signal. Also, last few trading session indicates moving away from upper line of Bollinger Band.
Decided to sell all later because the counter is extremely quite and all the transactions are extremely small. No big player in sight. Only small players playing with small lots of 1 lot to 10 lots.
In summary: Golden Agri Resource -> Good trade with 16.6% net gain (after all transaction fees) in 2 weeks.
Overall market seems to be soften for now. There could be some corrections coming soon. Whatever it is, I will still wait for the signals from the system.
Current holdings:
Cosco: bought at 1.32.
Sembmar: bought at 2.85
Olam: bought at 2.48
UOL: bought at 3.53
Sold Olam later at 2.51. This counter has not been showing a lot of strength. The overall market looks weak. There is a bid sell down today for no aparent reason. This might signal further weakness or correction. Overall market is over bought. Market is waiting for more data to be released. Decided to take a cautious approach.
On the hindsight, the selling of Golden Agri seemed unwarranted because it bounced up 0.02 to close at 0.425. That is almost 5% higher from the sold price. This indicates that the system is too aggressive in issuing signals. Another parameter is needed to control the signal or making decision. More research into this area is needed. Some solutions are:
The use of N maybe needed. For example, setting the stop at 2N to take higher risk?
The used support line?
Use of other indicators like RMO, Bollinger Bands?
Anyway, it is still too early to tell if the price of GoldenAgri will sustain. Let's see how it will move from here.
One of the big fear has been prices plunging through the cut loss point dramatically. This could result in taking too much risk and potentially losing everything in a short. The market is now very volatile and changes are fast and sometimes furious.
Queue (limit order) at 0.41. Yesterday close at 0.40 (stop loss point).
My RSMA expert showed sell signal. Also, last few trading session indicates moving away from upper line of Bollinger Band.
Decided to sell all later because the counter is extremely quite and all the transactions are extremely small. No big player in sight. Only small players playing with small lots of 1 lot to 10 lots.
In summary: Golden Agri Resource -> Good trade with 16.6% net gain (after all transaction fees) in 2 weeks.
Overall market seems to be soften for now. There could be some corrections coming soon. Whatever it is, I will still wait for the signals from the system.
Current holdings:
Cosco: bought at 1.32.
Sembmar: bought at 2.85
Olam: bought at 2.48
UOL: bought at 3.53
Sold Olam later at 2.51. This counter has not been showing a lot of strength. The overall market looks weak. There is a bid sell down today for no aparent reason. This might signal further weakness or correction. Overall market is over bought. Market is waiting for more data to be released. Decided to take a cautious approach.
On the hindsight, the selling of Golden Agri seemed unwarranted because it bounced up 0.02 to close at 0.425. That is almost 5% higher from the sold price. This indicates that the system is too aggressive in issuing signals. Another parameter is needed to control the signal or making decision. More research into this area is needed. Some solutions are:
The use of N maybe needed. For example, setting the stop at 2N to take higher risk?
The used support line?
Use of other indicators like RMO, Bollinger Bands?
Anyway, it is still too early to tell if the price of GoldenAgri will sustain. Let's see how it will move from here.
One of the big fear has been prices plunging through the cut loss point dramatically. This could result in taking too much risk and potentially losing everything in a short. The market is now very volatile and changes are fast and sometimes furious.
Tuesday, August 4, 2009
Trading Update
Sold Mercator Maritime on Sell Signal. Bought at 0.355 sold at 0.37.
Now closed at 0.335.
Sold Capitaland on panic. Bought at 3.78 sold at 3.92.
Now closed at 3.77.
Bought UOL on buy signal at 3.53 closed at 3.5.
Thinking of selling GoldenAgri at 0.43, then 0.425 then 0.42. Now closed at 0.40. Reason for holding is that stop loss is at 0.40 and wanted to follow rules strictly. So, if the counter show more weakness, it will be time to sell tomorrow. Early part of day showed some
Olam show weakness. Closed at 2.55.
SembMar closed at 3.18. Showing some weakness also.
Cosco bought at 1.32. Show some buying interest but close at 1.32 after overall market going down.
The overall market is at the over bought level and most of the counters are also at that level. It is imperative to be cautious. Tomorrow will be critical day in deciding whether to exit the positions. Looks like the overall market is heading for correction. If so, then, there will be more down side since it failed to make higher high.
Now closed at 0.335.
Sold Capitaland on panic. Bought at 3.78 sold at 3.92.
Now closed at 3.77.
Bought UOL on buy signal at 3.53 closed at 3.5.
Thinking of selling GoldenAgri at 0.43, then 0.425 then 0.42. Now closed at 0.40. Reason for holding is that stop loss is at 0.40 and wanted to follow rules strictly. So, if the counter show more weakness, it will be time to sell tomorrow. Early part of day showed some
Olam show weakness. Closed at 2.55.
SembMar closed at 3.18. Showing some weakness also.
Cosco bought at 1.32. Show some buying interest but close at 1.32 after overall market going down.
The overall market is at the over bought level and most of the counters are also at that level. It is imperative to be cautious. Tomorrow will be critical day in deciding whether to exit the positions. Looks like the overall market is heading for correction. If so, then, there will be more down side since it failed to make higher high.
Thursday, July 30, 2009
Sticking to the rules
There was a sudden sell down at 2PM yesterday that resulted many people who took profit or cut loss. I was conned into selling Capitaland at a small profit and subsequently saw it bounce back. I almost sold of GoldenAgri but managed to convince myself to stick to my trading rules and not succumbing to emotions.
My decision to stick to rules proved to be correct and the market bounce back and close only slightly lower.
Today, he market rally back again.
I added Cosco back after twice I sold off too early resulting in small profits each time. However, based on the chart and indicator, this counter still have not realised its potential and there are still a lot of room to move. Again, I failed to follow the rules and resulted in missing the big portion of profits.
After selling down yesterday, my portfolio is now at about 7.2% positive. This is down by almost 3%.
My decision to stick to rules proved to be correct and the market bounce back and close only slightly lower.
Today, he market rally back again.
I added Cosco back after twice I sold off too early resulting in small profits each time. However, based on the chart and indicator, this counter still have not realised its potential and there are still a lot of room to move. Again, I failed to follow the rules and resulted in missing the big portion of profits.
After selling down yesterday, my portfolio is now at about 7.2% positive. This is down by almost 3%.
Tuesday, July 28, 2009
Expect the unexpected
Almost everyone expected today to have some form of pull back from profit taking. To the surprise of many, today is extremely strong day for STI. After initial advances in the morning, the afternoon session proved to be even stronger.
My portfolio is now 10% above last week's position on average.
My portfolio is now 10% above last week's position on average.
Monday, July 27, 2009
Mercator Maritime, Capitaland, Sembmar, Olam, Golden Agri
Cosco: Sold at 1.23 today with a small profit.
Reason for selling: Not sure of the technicals about this counter. It was bought based on hunches after much run by Keppel Corp. This counter run up another 5 cents immediately after I sold out. However, there is no regret since this decision is totally based on logic and trading rules. It was the reason of entry that was wrong.
Golden Agri: Almost sold off out of "fear" of not making money. However, cancelled the order after considering the trading rules. Close unchanged at 0.38. Papaer gain of 0.035 / 10.14%.
Mercator Maritime: Held on. Closed at 0.39. Great run up today. Paper Gain of 0.035 / 9.86%. Decided not to sell now. Taking more risk since technical indicator is not giving sell signal.
Capitaland: Closed down at 3.94. Paper gain: 0.15 / 3.96%. Technically soften. Could be profit taking. Wait for sell signal.
Sembmar: Still going strong at 3.06. Paper gain: 0.21 / 7.37%.
Olam: Bought today at 2.48. Based on the RMO buy signal. Even though the counter has already run up quite long, the overall trend is still bullish. So, it is worth to take a risk.
Reason for selling: Not sure of the technicals about this counter. It was bought based on hunches after much run by Keppel Corp. This counter run up another 5 cents immediately after I sold out. However, there is no regret since this decision is totally based on logic and trading rules. It was the reason of entry that was wrong.
Golden Agri: Almost sold off out of "fear" of not making money. However, cancelled the order after considering the trading rules. Close unchanged at 0.38. Papaer gain of 0.035 / 10.14%.
Mercator Maritime: Held on. Closed at 0.39. Great run up today. Paper Gain of 0.035 / 9.86%. Decided not to sell now. Taking more risk since technical indicator is not giving sell signal.
Capitaland: Closed down at 3.94. Paper gain: 0.15 / 3.96%. Technically soften. Could be profit taking. Wait for sell signal.
Sembmar: Still going strong at 3.06. Paper gain: 0.21 / 7.37%.
Olam: Bought today at 2.48. Based on the RMO buy signal. Even though the counter has already run up quite long, the overall trend is still bullish. So, it is worth to take a risk.
Wednesday, July 22, 2009
Sembmar, Capitaland and COSCO
Added Capitaland 3.79
Added Sembmar 2.85
Added COSCO back at 1.21.
Maintain GoldenAgri at 0.345
Added Mercator Marine at 0.355
Reasons: At this time, the trend is still up even though there is some correction today. The major trend still going up with most of the counters having EMA5 above EMA20 above EMA50 and EMA200 as well. This is a super bull trend that has not been see for quite a while.
Mercator has a very good fundamental based on financial reports. This counter has potential for long term investment if it can continue to perform.
Another counter needs attention is NOL after some corrections.
Added Sembmar 2.85
Added COSCO back at 1.21.
Maintain GoldenAgri at 0.345
Added Mercator Marine at 0.355
Reasons: At this time, the trend is still up even though there is some correction today. The major trend still going up with most of the counters having EMA5 above EMA20 above EMA50 and EMA200 as well. This is a super bull trend that has not been see for quite a while.
Mercator has a very good fundamental based on financial reports. This counter has potential for long term investment if it can continue to perform.
Another counter needs attention is NOL after some corrections.
Tuesday, July 21, 2009
Important lessons - Timing, stop loss, support and resistance
There were a few mistakes made during the last few trades that cost me some money instead of making a few thousands. These are important lessons that I need to remember:
Keppel Corp
CityDev
Ascendas India Trust
Parkway Holdings
All the above counters suffered from having stop loss point to close to the entry and above or just below support where the counters penetrated support and rebound back to close much higher following the overall market bullishness. Even though I know that the short to mid term trend is to go up, I had stubbornly put the stop loss too close. In the case of Parkway and Ascendas India Trust, I lose patience with them and decided to get rid of them out of frustration.
As a good investor or trader, one needs to be very patient and calm. One must not be agitated easily and must not succumb to unfounded fear. Fear of losing is always the cause of loses. Balancing greed and fear is very important in succeeding in trading or investing.
I must adjust my stop loss and must not sell out of frustration. Since I still have more than 75% of my capital standing by, I must not be worried about my capital being tied down not earning anything. The correct way is to use up my additional capital for new opportunities and keep my existing investment intact unless there is compelling reason to sell.
Keppel Corp
CityDev
Ascendas India Trust
Parkway Holdings
All the above counters suffered from having stop loss point to close to the entry and above or just below support where the counters penetrated support and rebound back to close much higher following the overall market bullishness. Even though I know that the short to mid term trend is to go up, I had stubbornly put the stop loss too close. In the case of Parkway and Ascendas India Trust, I lose patience with them and decided to get rid of them out of frustration.
As a good investor or trader, one needs to be very patient and calm. One must not be agitated easily and must not succumb to unfounded fear. Fear of losing is always the cause of loses. Balancing greed and fear is very important in succeeding in trading or investing.
I must adjust my stop loss and must not sell out of frustration. Since I still have more than 75% of my capital standing by, I must not be worried about my capital being tied down not earning anything. The correct way is to use up my additional capital for new opportunities and keep my existing investment intact unless there is compelling reason to sell.
Golden Agri - 20090719 & 20090721
Bought Golden Agri back at 0.335 because the previous selling unfounded. Added same quantity on 2009-07-20 since the counter seems bullish.
Saturday, July 18, 2009
Golden Agri - 2009-07-16 and 2009-07-27
Golden Agri was sold off at 0.335 on 16th July for a quick profit after a friend told of the potential sell down in the market.
Again, this is another poor decision. This is selling out of fear and there is no solid reason. The counter did not show any sign of weakness. It did not hit stop loss point. The counter still show bullish signs technically. Fear of losing overrides fear of not winning more.
After realizing the mistake, the counter was bought back again at the same price on 17th July.
Important Rule: Trading is a lone game (Jesse Livermore, Turtle Traders). Do not discuss your trade with other people.
Again, this is another poor decision. This is selling out of fear and there is no solid reason. The counter did not show any sign of weakness. It did not hit stop loss point. The counter still show bullish signs technically. Fear of losing overrides fear of not winning more.
After realizing the mistake, the counter was bought back again at the same price on 17th July.
Important Rule: Trading is a lone game (Jesse Livermore, Turtle Traders). Do not discuss your trade with other people.
2009-07-17: AscendasIndiaTrust, Healthway, Parkway - update
Sold off Ascendas India Trust at 0.68. I was getting impatient over this counter. Within the next 3 trading sessions, it went up to 0.71. The biggest problem with this trade was that I was looking too closely at the intra-day fluctuation and lose sight of my own trading rules. The second problem was to set the stop loss point too near to short term support where it is very often break. Allowing 3 bids below support would have prevented pre-mature sell off.
Healthway was sold at 0.10 and it closed at 0.105 on 17th July. There is not need to sell off if the counter has not breach the stop loss point. The fear of losing money has overcome me in this trade and prompted me to sell off prematurely.
Parkway was sold off at 1.69 on 17th July. The reason for selling was that on 16th July, it opened at 1.72 and was sold down to 1.68 during a super bull day. This caused me to get impatient over it since it kept showing sell down while other stocks are push ahead. Looks like it is going to go down. However, at the end of the day, it turn out that it was closed at 1.71. Now the counter looks a little bullish. Again, the same mistake as the above 2 counters.
The conclusion that I had drawn from these and many other trades that I'd made is that I must stick to using oscillator to monitor the stock and disregard the intra-day fluctuations. I should only focus on closing prices of each day and stop from playing intra-day fluctuations.
Playing intra-day fluctuations sounded like very cool and professional. In the end, the reward was not attractive and it is very much prone to manipulations of the bigger players. There is no point to get sucked into the fights between buyers and sellers. It would be wiser to sit aside and watch the outcomes of their fight before taking sides. In this way, we can know more clearly which is the winning side.
This is a very important lesson and it must be adhere strictly. As for now, using the combination of Stochastic and MACD and Moving Averages to trade seems to be able to make more winning trade than any other tools.
Healthway was sold at 0.10 and it closed at 0.105 on 17th July. There is not need to sell off if the counter has not breach the stop loss point. The fear of losing money has overcome me in this trade and prompted me to sell off prematurely.
Parkway was sold off at 1.69 on 17th July. The reason for selling was that on 16th July, it opened at 1.72 and was sold down to 1.68 during a super bull day. This caused me to get impatient over it since it kept showing sell down while other stocks are push ahead. Looks like it is going to go down. However, at the end of the day, it turn out that it was closed at 1.71. Now the counter looks a little bullish. Again, the same mistake as the above 2 counters.
The conclusion that I had drawn from these and many other trades that I'd made is that I must stick to using oscillator to monitor the stock and disregard the intra-day fluctuations. I should only focus on closing prices of each day and stop from playing intra-day fluctuations.
Playing intra-day fluctuations sounded like very cool and professional. In the end, the reward was not attractive and it is very much prone to manipulations of the bigger players. There is no point to get sucked into the fights between buyers and sellers. It would be wiser to sit aside and watch the outcomes of their fight before taking sides. In this way, we can know more clearly which is the winning side.
This is a very important lesson and it must be adhere strictly. As for now, using the combination of Stochastic and MACD and Moving Averages to trade seems to be able to make more winning trade than any other tools.
Wednesday, July 15, 2009
Golden Agri - New trade 15-7-2009
Enter into this counter because it has gone through a lot of corrections recently.
Stochastic shown greatly over sold.
This is quite a popular counter and very high volume transaction. Easy to buy and sell.
Enter price: 0.315.
Stop: 0.29
Close: 0.32.
May add more tomorrow. Depending on how the US market closes. Since there are good Macro levels news coming out, the market may move up in quite rapid speed. Need to be able to capture this uptrend.
Stochastic shown greatly over sold.
This is quite a popular counter and very high volume transaction. Easy to buy and sell.
Enter price: 0.315.
Stop: 0.29
Close: 0.32.
May add more tomorrow. Depending on how the US market closes. Since there are good Macro levels news coming out, the market may move up in quite rapid speed. Need to be able to capture this uptrend.
Parkway, Ascendas India Trust and Healthway
Parkway
Entered 1.66, 1.72. Average price: 1.69.
Based on RMO Trading Method
Hold: closed 1.70.
With overall market uptrend, there is potential that this counter will move upwards. So far, it has held up quite well.
Ascendas India Trust
Entered 0.695
Exit at 0.68
Reason: Basis of trade was not well established. Chart pattern is not convincingly showing potential for uptrend. Even though it held its price quite well, there is too much negativity over India's new budget and outlook.
Healthway
Entered 0.105.
Exit: 0.100
Reason: Counter did not perform as expected. With low volume and interest, it will be difficult to move the price. Too small in volume and lack of interest by players making this counter illiquid.
Entered 1.66, 1.72. Average price: 1.69.
Based on RMO Trading Method
Hold: closed 1.70.
With overall market uptrend, there is potential that this counter will move upwards. So far, it has held up quite well.
Ascendas India Trust
Entered 0.695
Exit at 0.68
Reason: Basis of trade was not well established. Chart pattern is not convincingly showing potential for uptrend. Even though it held its price quite well, there is too much negativity over India's new budget and outlook.
Healthway
Entered 0.105.
Exit: 0.100
Reason: Counter did not perform as expected. With low volume and interest, it will be difficult to move the price. Too small in volume and lack of interest by players making this counter illiquid.
Thursday, July 9, 2009
Parkway, Ascendas India Trust, Healthway
Parkway
Entered 1.66, 1.72. Average price: 1.69.
Based on RMO Trading Method
Ascendas India Trust
Entered 0.695
Healthway
Entered 0.105.
Entered 1.66, 1.72. Average price: 1.69.
Based on RMO Trading Method
Ascendas India Trust
Entered 0.695
Healthway
Entered 0.105.
Thursday, July 2, 2009
SGX - Parkway - New Price Box?
Parkway price seems to trade on new "price box" now. It has broken the ascending triangle with a close above the triangle. This stock is a medium active stock. Average daily transaction is 3000 lots for the last 14 days. Latest price surge on July 1st 2009.
Entered: 1.66
Date: 2009-06-30
Price on 2009-07-01: 1.73
Support line: 1.68, 1.65, 1.50.
Original stop: 1.50, new stop: 1.64
Key factors to watch:
1. Stochastic over bought.
2. Potential wipsaw.
Sunday, June 28, 2009
Money Management
Van Tharp (Definition):
Money management is that portion of your trading system that tells you “how many” or “how much.” How many units of your investment should you put on at a given time? How much risk should you be willing to take? Aside from your personal psychological issues, this is the most critical concept you need to tackle as a trader or investor.
“Risk management is the most important thing to be well understood. Undertrade, undertrade, undertrade is my second piece of advice. Whatever you think your position ought to be, cut it at least in half” - Bruce Kovner
“Never risk more than 1% of your total equity in any one trade. By risking 1 %, I am indifferent to any individual trade. Keeping your risk small and constant is absolutely critical. ”
- Lamy Hite
“You have to minimize your losses and tv to preserve capital for those very few instances where you can make a lot in a very short period of time. what you can’t afford to do is throw away your capital on suboptimal trades. ” - Richard Dennis
NOTES:
From the above quotes, we can see that one of the most important success factor in trading or investing is "Patience". Most of the time, we are just too eagle to make the money fast and forget to follow our predetermined strategy. We always thought that we have found a short-cut. It ended up that it was our throat that was being cut. Remember the prices cannot go up forever, it will at one time stop or reverse.
RISK MANAGEMENT METHODS
Professional gamblers can use Martingale or Anti-Martingale system to trade:
Martingale:
Double your trade each time you lose until you finally won. However, there are 2 problems:
1. Limited resources. 2. The house impose limits on bet size.
Anti-Martingale:
Increase your trade when you win. Bet more on the wining trades and reduce losing trades. This involves also varying trade size as the previous case but within the limits.
Stop-Loss: This is not exactly money management but it is a tool that helps to reduce the risk and sets limits to your maximum loss. Using this tool you can set your risk limit.
MONEY MANAGEMENT MODELS:
Units per Fixed Amount of Money
In this model, you will decide for example, you can do one trade per $20,000 of capital or equity.
Equal Units Model or Equal Leverage Model
In this model, you divide your total capital into x equal parts and use that to buy different investments or asset classes.
Percentage of Margin
Depending on the margins allowed for each asset class, use that to decide the amount of holding in that asset class.
Percentage Volatility
Using price volatility of the product in conjunction with the percentage of total equity to limit your purchases. For example, using 5-day moving average of true volatility of gold to decide how many contracts to purchase. Example, volatility is $300 per contract. Your equity is $50K and risk allow is $1000 (2% of $50K) per trade . You can trade 3 contracts. Also, it will be important to limit the total volatility (sum of all trades) against your total capital.
Money management is that portion of your trading system that tells you “how many” or “how much.” How many units of your investment should you put on at a given time? How much risk should you be willing to take? Aside from your personal psychological issues, this is the most critical concept you need to tackle as a trader or investor.
“Risk management is the most important thing to be well understood. Undertrade, undertrade, undertrade is my second piece of advice. Whatever you think your position ought to be, cut it at least in half” - Bruce Kovner
“Never risk more than 1% of your total equity in any one trade. By risking 1 %, I am indifferent to any individual trade. Keeping your risk small and constant is absolutely critical. ”
- Lamy Hite
“You have to minimize your losses and tv to preserve capital for those very few instances where you can make a lot in a very short period of time. what you can’t afford to do is throw away your capital on suboptimal trades. ” - Richard Dennis
NOTES:
From the above quotes, we can see that one of the most important success factor in trading or investing is "Patience". Most of the time, we are just too eagle to make the money fast and forget to follow our predetermined strategy. We always thought that we have found a short-cut. It ended up that it was our throat that was being cut. Remember the prices cannot go up forever, it will at one time stop or reverse.
RISK MANAGEMENT METHODS
Professional gamblers can use Martingale or Anti-Martingale system to trade:
Martingale:
Double your trade each time you lose until you finally won. However, there are 2 problems:
1. Limited resources. 2. The house impose limits on bet size.
Anti-Martingale:
Increase your trade when you win. Bet more on the wining trades and reduce losing trades. This involves also varying trade size as the previous case but within the limits.
Stop-Loss: This is not exactly money management but it is a tool that helps to reduce the risk and sets limits to your maximum loss. Using this tool you can set your risk limit.
MONEY MANAGEMENT MODELS:
Units per Fixed Amount of Money
In this model, you will decide for example, you can do one trade per $20,000 of capital or equity.
Equal Units Model or Equal Leverage Model
In this model, you divide your total capital into x equal parts and use that to buy different investments or asset classes.
Percentage of Margin
Depending on the margins allowed for each asset class, use that to decide the amount of holding in that asset class.
Percentage Volatility
Using price volatility of the product in conjunction with the percentage of total equity to limit your purchases. For example, using 5-day moving average of true volatility of gold to decide how many contracts to purchase. Example, volatility is $300 per contract. Your equity is $50K and risk allow is $1000 (2% of $50K) per trade . You can trade 3 contracts. Also, it will be important to limit the total volatility (sum of all trades) against your total capital.
Saturday, June 27, 2009
Trading psychology - be emotionless
Nicolas Narvas:
There was no doubt in my mind now that I could not make money by buying a stock and then trying to cheer it on. JONES & LAUGHLIN had convinced me of that. I could remember how I almost felt myself willing and pushing that stock upwards. It was a very human feeling, but it had no effect upon its market any more than spectators have on a horse race. If one horse is going to win, it will win, even if thousands of onlookers are cheering for another one.
It was the same now. I knew that if I bought a stock and turned out to be wrong, all the cheering and pushing in the world would not alter the price half a point. And there was no telling how far the market might fall. I did not like the trend, but I knew it was no use trying to fight it. The situation reminded me of George Bernard Shaw's remark at the opening night of one of his plays. After the curtain fell everyone cheered and clapped except one man who booed. G.B.S.
went up to him and said: "Don't you like my play?" The man replied, "No, I don't." Whereupon Shaw said: "Neither do I, but what can the two of us do against all that crowd?"
There was no doubt in my mind now that I could not make money by buying a stock and then trying to cheer it on. JONES & LAUGHLIN had convinced me of that. I could remember how I almost felt myself willing and pushing that stock upwards. It was a very human feeling, but it had no effect upon its market any more than spectators have on a horse race. If one horse is going to win, it will win, even if thousands of onlookers are cheering for another one.
It was the same now. I knew that if I bought a stock and turned out to be wrong, all the cheering and pushing in the world would not alter the price half a point. And there was no telling how far the market might fall. I did not like the trend, but I knew it was no use trying to fight it. The situation reminded me of George Bernard Shaw's remark at the opening night of one of his plays. After the curtain fell everyone cheered and clapped except one man who booed. G.B.S.
went up to him and said: "Don't you like my play?" The man replied, "No, I don't." Whereupon Shaw said: "Neither do I, but what can the two of us do against all that crowd?"
Friday, June 26, 2009
KepCorp - Short term trend
The short term trend of Kepcorp is down but today we witnessed a surge in price after correction lasted 2 days. However, it was not able to penetrate the upper bound of the downward trend line and it showed a pull-back. The 3 white candlestick showed that bearish reversal might be on the cards. Let's see how it plays out over the next few trading sessions. If it confirm push through upper trend line, then, higher highs might be possible.
Otherwise, falling back to the lower trend line will be the way to go.
Thursday, June 25, 2009
Swing Trade - Kep Corp 20090623
Kep Corp Stop out on 23/06/2009 at 6.48. Counter closed at 6.45.
This is a test trade. It shows that using Candlestick is not a reliable swing trade tool. In any case, swing trading within 2-5 days time frame is not viable in SGX. (Refer to Getting Started in Swing Trading by Michael C Thomsett). It is extremely difficult to change small moves in SGX counter even with counters like Kep Corp which is a large cap stock with relatively high trading volumes. This is even more so for smaller cap stock with much less activity.
One key issue with index stock is the over market condition changes. Fund managers will sell down out of fear.
However, on the second day, the market shot up and KepCorp recover most of its loses and closed at 6.63 on 24/06/2009. Today, I am expecting KepCorp to go down slightly to around 6.58 - 6.60 range unless some positive news in the afternoon.
In general, short swing trades tends to be influenced by news and changes in overall market condition. This may not be a viable trading option for me because I don't want to spend too much time monitoring news and prices on screen. This is not practical.
The next method is to use Cyclical Trading Method. This is also doing Swing Trade but with a time horizon of 5 to 30 trading sessions. This method required bigger swing and will provide less trading opportunities. It means also taking bigger risk and expecting much larger profits. It may mean less than 5 trades per month on average. It also may mean following the overall market trend to trade. Some considered this as mid-term trading. For a start, I will use Stochastics combined with MACD for entry and exit signal.
This is a test trade. It shows that using Candlestick is not a reliable swing trade tool. In any case, swing trading within 2-5 days time frame is not viable in SGX. (Refer to Getting Started in Swing Trading by Michael C Thomsett). It is extremely difficult to change small moves in SGX counter even with counters like Kep Corp which is a large cap stock with relatively high trading volumes. This is even more so for smaller cap stock with much less activity.
One key issue with index stock is the over market condition changes. Fund managers will sell down out of fear.
However, on the second day, the market shot up and KepCorp recover most of its loses and closed at 6.63 on 24/06/2009. Today, I am expecting KepCorp to go down slightly to around 6.58 - 6.60 range unless some positive news in the afternoon.
In general, short swing trades tends to be influenced by news and changes in overall market condition. This may not be a viable trading option for me because I don't want to spend too much time monitoring news and prices on screen. This is not practical.
The next method is to use Cyclical Trading Method. This is also doing Swing Trade but with a time horizon of 5 to 30 trading sessions. This method required bigger swing and will provide less trading opportunities. It means also taking bigger risk and expecting much larger profits. It may mean less than 5 trades per month on average. It also may mean following the overall market trend to trade. Some considered this as mid-term trading. For a start, I will use Stochastics combined with MACD for entry and exit signal.
Sunday, June 21, 2009
Jack Schwager Trading Rules - Summary
JACK SCHWAGER TRADING GUIDE
The following notes have been taken when I read Jack D Schwager’s book: Getting started in Technical Analysis. Apart from the technical knowledge of identifying opportunities, Jack emphasized much on trading discipline so that even when your ability to spot a good trade is only 50% accurate, you can still turn up a winning position overall by using proper risk control. The idea is to be able to cut losses short and let the winner run. To start trading full-time, you must treat is like normal working so that you will cover all the activities need to ensure sustainable earning.
PREPARATION TO TRADE FULL-TIME
Step One: Define Trading Philosophy / Strategy
How do you plan to make trading decisions? (a) TA (b) FA (c) Both
Step Two: Choose Market / Product
You can trade in multiple markets. For a start, focus on one. Note the diversification and volatility.
Step Three: Establish Risk Control Plan
1. Maximum risk per trade (example $200 or $500)
2. Stop Lost Strategy (2-4 bids below support / trend line)
3. Losing period adjustment (when on a losing streak, time out? How much?)
Step Four: Planning Time Routine
1. When you will update trading system data / chart (morning or evening)
2. Planning new trades (nightly or early morning)
3. Update exit points or positions (change trailing stops, update support / resistance)
4. Research work (when and frequency)
Step Five: Maintain a Traders Note Book / Record
Trading Diary. Date of Entry / Exit, Long / Short, Quantity, Prices (Entry / Exit), Initial and Current Stop Prices, Cumulative Implied Risk (Initial and Current), Risk as Percentage of Equity (Initial and current), Objective (Initial and current), Net Profit / Loss, Reasons or entry and exit.
Step Six: Maintain Traders’ Diary
Keep details of activity (reasons of trade, outcomes of trade, lessons learned)
Step Seven: Analyze Personal Trade
Analyze to understand your own trading habits and style so that you can adjust your strategy to better suite you. Understand your psychology better through real trading. This will provide you with valuation experience that no one else can teach you. Through self analysis, you can improve your trade and improve your performance.
82 TRADING RULES AND MARKET OBSERVATION
ENTERING TRADES
1. Differentiate between major position trades and short-term trades
2. If you believe a major trading opportunity exists, don’t be greedy in trying to get a slightly better entry price
3. Entry into any major position should be planned and carefully thought through, never on intraday impulse
4. Find chart that says timing is right now, don’t initiate a trade without confirming patterns
5. Place orders determined by daily analysis. If market is not close to desired entry level, record the trade idea and review it each day
6. When looking for a major reversal in trend, it’s wiser to wait for some pattern that suggests that the timing is right rather than fading the trend at projected objectives and support/resistance points
7. If you have an immediate instinctive impression when looking at a chart, go with that feeling
8. Don’t let the fact that you missed the first major portion of a new trend keep you from trading with that trend
9. Don’t fade recent price failure patterns when implementing trades, even if there are many other reasons for the trade
10. Never fade the first gap of a price move. For example, if you are waiting to enter a trade on a correction, and the correction is then formed on a price gap, don’t enter the trade
11. In most cases, use market orders rather than limit orders
12. Never double up near the original trade entry point after having been ahead. Often the fact that the market has completely retracted is a negative sign for the trade
EXITING TRADES AND RISK CONTROL (MONEY MANAGEMENT)
1. Decide on a specific protective stop point at the time of trade entry
2. Exit any trades if newly developing patterns or market actions are contrary to trade, even if stop point have not been met
3. Always get out immediately once the original premise for a trade is violated
4. If you are dramatically wrong the first day a trade is on, abandon the trade immediately especially if the market gaps against you
5. In the event of major breakout, liquidate immediately or put a close stop
6. If suddenly trades are volatile in the opposite direction, liquidate
7. If selling into resistance or buying into support and the market consolidates instead of reversing, get out
8. If the gut feeling that your recent recommendation is wrong, reverse your opinion
9. If you are unable to watch the market, either liquidate all or have stop orders on all
10. Do not get complacent about an open position. Always know when you are getting out
11. Fight the desire to immediately get back into the market after a stopped out trade
OTHER RISK CONTROL (MONEY MANAGEMENT) RULES
1. When trade goes bad, reduce position size, use tight stop losses, or be slow in taking up new trades
2. When trading is going badly, reduce risk exposure by liquidating losing trades, not winning ones.
3. Be careful not to change trading patterns after making a profit
4. Treat small positions with the same common sense as large positions
5. Avoid holding very large positions during news releases and major reports
6. Futures trades; apply the same money management principles to spreads as to outright positions
7. Don’t buy options without planning at what outright price the trade is to be liquidated
HOLDING AND EXITING WINNING TRADES
1. Do not take small, quick profits in major position trades, In particular, if you are dramatically right on a trade, never never take profits on the first day
2. Don’t be too hasty to get out of a trade with a gap in your direction. Use the gap as initial stop, then bring in stop in trailing fashion
3. Try to use trailing stops, supplemented by developing market actions, instead of objectives as a means of getting out of profitable trades
4. If large portion of objective is achieved quickly, take partial profits
5. If objective is reached and you still like the trade, stay with it with a trailing stop
6. If everything is going right, scale up and use close trailing stops
7. If long term trade, have a game plan for re-entering positions. Inability to enter at a worse price can often lead to missing major portions of a large trends
8. When trading larger positions, avoid the emotional trap to be 100% right. Take partial profits
MISCELLANEOUS PRINCIPLES AND RULES
1. Always pay more attention to market action and evolving patterns than to objectives and support/resistance areas
2. When you feel action should e taken either entering or exiting a position, act, don’t procrastinate
3. Never go counter to your own opinion of the long-term trend of the market. In other words, don’t try to dance between the raindrops
4. Winning trades tend to be ahead right from the start
5. Correct timing of entry and exit can often keep a loss small even if the trade is dead wrong
6. Intraday decisions are almost always losers. Keep screen off intraday
7. Be sure to check markets before the close on Friday
8. Act on market dreams
9. You are never immune to bad trading habits. The best you can do is to keep them latent. As soon as you get lazy or sloppy, they will return
MARKET PATTERNS
1. If the market sets new historical highs and holds, the odds strongly favoring a move very far beyond the old highs. Selling a market at new record highs is probably one of the amateur trader’s worse mistakes
2. Narrow market consolidations near the upper end of broader trading ranges are bullish patterns. Reverse bearish.
3. Play the breakout from an extended narrow range with a stop against the other side of the range
4. Breakouts from trading ranges that hold for one to two weeks or longer are among the most reliable technical indicators of impending trends
5. Flags or pennants forming right above or below prior extended and broad trading ranges tend to be fairly reliable continuation patterns
6. Trade in the direction of wide gaps
7. Gaps out of congestion patterns, particularly 1-2 months trading ranges, are often excellent signals. (works especially well in bear market)
8. If a breakaway gap is not filled during the first week, it should be viewed as a particularly reliable signal
9. A breakout to new highs or lows followed within the next week or two by a gap (particularly a wide gap) back into the range is a particularly reliable form of a bull/bear trap
10. If the market breaks out to a new high or low and then pulls back to form a flag or pennant in the pre-breakout trading range, assume that a top or bottom is in place. A position can be taken using a protective stop beyond the flag or pennant consolidation
11. A breakout from a trading range followed by a pullback deep into the range (eg ¾ or more) is yet another significant bull or bear trap formation
12. If an apparent V bottom is followed by a nearby congestion pattern, it may represent a bottom pattern. Might be going for lower lows if consolidation is broken, set protective stops near top of consolidation
13. V tops/bottoms followed by multi-month consolidation that form in close proximity to the reversal point tend to be major top or bottom formations
14. Tight flag and pennant consolidation tend to be reliable continuation patterns and allow entry into existing trends with a reasonably close, yet meaningful, stop point
15. If a tight flag/pennant consolidation leads to a breakout in the wrong direction, expect the move to continue in the direction of the breakout
16. Curved consolidations tend to suggest an accelerated move in the direction of the curve
17. The breaking of a short term curved consolidation in the direction opposite of the curve pathway tends to be a good trend reversal signal
18. Wide ranging days with a close counter to the main trend usually tend to provide a reliable early signal of a trend change, particularly if they also trigger a reversal signal
19. Near-vertical, large price moves over a period of two to four days (coming of a relative high or low) tend to be extended in the following weeks
20. Spikes are good short term reversal signals. The extremes of the spike can e used as the stop point.
21. In spike situations, look a chart both ways, with or without charts. Eg, if the spike is removed and a flag is evident, a penetration of that flag is a meaningful signal
22. The filing in of a runaway gap can be viewed as possible evidence of a possible trend reversal
23. An island reversal followed shortly thereafter with a pullback into the most recent trading ranges or consolidation patterns represents a possible major top or bottom signal
24. The ability of a stock or future to hold relatively firm when other related markets are under significant pressure can be viewed as sign of intrinsic strength
25. If a market trades consistently higher for most of the daily trading session, anticipate a close in the same direction
26. Two successive flags with little separation can be viewed as a probable continuation pattern
27. View a cured bottom, followed by a shallower, same direction curved consolidation near the top of this pattern, as a bullish formation (cup and handle)
28. Extreme sentiment readings can often occur in the absence of major tops and bottoms, but major tops and bottoms rarely occur in the absence of extreme sentiment readings
29. A failed signal is more reliable than the original one. Go the other way, using the high/low before the failed signal as a stop
30. The failure of a market to follow through on significant bullish or bearish news is often a harbinger of an imminent trend reversal
ANALYSIS AND REVIEW
1. Review charts every day, especially if you are too busy
2. Periodically review long term charts
3. Religiously maintain trader’s diary, including a chart for each trade and noting intending stop and objective, follow up as to how the trade turned out; observations and lessons, net profit or loss
4. Maintain a patterns chart book
5. Review and update trading rules, trader’s diary and pattern chart book on a regular basis
42 OBSERVATIONS REGARDING SUCCESS IN TRADING
1. First things first, why is it that you really want to trade. Examine your motives
2. Match the trading method to your personality
3. It is absolutely necessary to have an edge & know what your edge is
4. Derive a method that has an edge.
5. Developing a method is hard work but it is necessary
6. Skill VS hard work (discipline, research, improvement)
7. Good trading should be effortless (just follow system)
8. Money management and risk control. Never risk >2% of your capital on a single trade. Predetermine your exit point. If you lose >10% of your capital, take a breather and analyze what went wrong. Must have one.
9. The trading plan. Must have one.
10. Discipline – Risk control. Apply your method.
11. Understanding that you are responsible
12. The need for independence
13. Confidence
14. Losing is part of the game
15. When lack of confidence must call time outs (trade only when confident)
16. When there is an urge to seek advice on that trade, abort the trade plan
17. The virtue of patience (trade only on good opportunities)
18. The importance of sitting tight (use trailing stops) Remember - Jesse Livermore
19. Developing a low-risk idea (patience & risk control)
20. The importance of varying bet size according to chance of winning
21. Scaling in and out of trades instead of getting in or out at once
22. Being right is more important than being a genius
23. Don’t worry about looking stupid – admit your mistakes & change immediately
24. Sometimes action is more important than prudence (quick action to test first)
25. Catching part of the move is just fine (win little better than losing)
26. Maximize gains, not the number of wins
27. Learn to be disloyal (to your position or counter)
28. Pull out partial profits (when perceived risk increases)
29. Hope is a 4 letter word (act fast and cut loss)
30. Don’t do the comfortable thing, do what is right (emotionless)
31. You can’t win if you have to win (scared money never wins)
32. Think twice when the market lets you off the hook easily (you may miss major opportunity)
33. A mind is a terrible thing to close
34. The markets are an exciting place to look for excitement (don’t get excited)
35. The calm state of a trader
36. Identify and eliminate stress
37. Pay attention to intuition
38. Life’s mission and love of the endeavour
39. The elements of achievement
40. Prices are non random = the market can be beaten
41. Keep trading in perspective (there is more to life than trading)
Randy Sei Trading Rules
1. Do not buy when prices are trading on high ranges. It is too volatile.
2. It is OK to sit out without trading for a period of time when there is no good opportunity.
The following notes have been taken when I read Jack D Schwager’s book: Getting started in Technical Analysis. Apart from the technical knowledge of identifying opportunities, Jack emphasized much on trading discipline so that even when your ability to spot a good trade is only 50% accurate, you can still turn up a winning position overall by using proper risk control. The idea is to be able to cut losses short and let the winner run. To start trading full-time, you must treat is like normal working so that you will cover all the activities need to ensure sustainable earning.
PREPARATION TO TRADE FULL-TIME
Step One: Define Trading Philosophy / Strategy
How do you plan to make trading decisions? (a) TA (b) FA (c) Both
Step Two: Choose Market / Product
You can trade in multiple markets. For a start, focus on one. Note the diversification and volatility.
Step Three: Establish Risk Control Plan
1. Maximum risk per trade (example $200 or $500)
2. Stop Lost Strategy (2-4 bids below support / trend line)
3. Losing period adjustment (when on a losing streak, time out? How much?)
Step Four: Planning Time Routine
1. When you will update trading system data / chart (morning or evening)
2. Planning new trades (nightly or early morning)
3. Update exit points or positions (change trailing stops, update support / resistance)
4. Research work (when and frequency)
Step Five: Maintain a Traders Note Book / Record
Trading Diary. Date of Entry / Exit, Long / Short, Quantity, Prices (Entry / Exit), Initial and Current Stop Prices, Cumulative Implied Risk (Initial and Current), Risk as Percentage of Equity (Initial and current), Objective (Initial and current), Net Profit / Loss, Reasons or entry and exit.
Step Six: Maintain Traders’ Diary
Keep details of activity (reasons of trade, outcomes of trade, lessons learned)
Step Seven: Analyze Personal Trade
Analyze to understand your own trading habits and style so that you can adjust your strategy to better suite you. Understand your psychology better through real trading. This will provide you with valuation experience that no one else can teach you. Through self analysis, you can improve your trade and improve your performance.
82 TRADING RULES AND MARKET OBSERVATION
ENTERING TRADES
1. Differentiate between major position trades and short-term trades
2. If you believe a major trading opportunity exists, don’t be greedy in trying to get a slightly better entry price
3. Entry into any major position should be planned and carefully thought through, never on intraday impulse
4. Find chart that says timing is right now, don’t initiate a trade without confirming patterns
5. Place orders determined by daily analysis. If market is not close to desired entry level, record the trade idea and review it each day
6. When looking for a major reversal in trend, it’s wiser to wait for some pattern that suggests that the timing is right rather than fading the trend at projected objectives and support/resistance points
7. If you have an immediate instinctive impression when looking at a chart, go with that feeling
8. Don’t let the fact that you missed the first major portion of a new trend keep you from trading with that trend
9. Don’t fade recent price failure patterns when implementing trades, even if there are many other reasons for the trade
10. Never fade the first gap of a price move. For example, if you are waiting to enter a trade on a correction, and the correction is then formed on a price gap, don’t enter the trade
11. In most cases, use market orders rather than limit orders
12. Never double up near the original trade entry point after having been ahead. Often the fact that the market has completely retracted is a negative sign for the trade
EXITING TRADES AND RISK CONTROL (MONEY MANAGEMENT)
1. Decide on a specific protective stop point at the time of trade entry
2. Exit any trades if newly developing patterns or market actions are contrary to trade, even if stop point have not been met
3. Always get out immediately once the original premise for a trade is violated
4. If you are dramatically wrong the first day a trade is on, abandon the trade immediately especially if the market gaps against you
5. In the event of major breakout, liquidate immediately or put a close stop
6. If suddenly trades are volatile in the opposite direction, liquidate
7. If selling into resistance or buying into support and the market consolidates instead of reversing, get out
8. If the gut feeling that your recent recommendation is wrong, reverse your opinion
9. If you are unable to watch the market, either liquidate all or have stop orders on all
10. Do not get complacent about an open position. Always know when you are getting out
11. Fight the desire to immediately get back into the market after a stopped out trade
OTHER RISK CONTROL (MONEY MANAGEMENT) RULES
1. When trade goes bad, reduce position size, use tight stop losses, or be slow in taking up new trades
2. When trading is going badly, reduce risk exposure by liquidating losing trades, not winning ones.
3. Be careful not to change trading patterns after making a profit
4. Treat small positions with the same common sense as large positions
5. Avoid holding very large positions during news releases and major reports
6. Futures trades; apply the same money management principles to spreads as to outright positions
7. Don’t buy options without planning at what outright price the trade is to be liquidated
HOLDING AND EXITING WINNING TRADES
1. Do not take small, quick profits in major position trades, In particular, if you are dramatically right on a trade, never never take profits on the first day
2. Don’t be too hasty to get out of a trade with a gap in your direction. Use the gap as initial stop, then bring in stop in trailing fashion
3. Try to use trailing stops, supplemented by developing market actions, instead of objectives as a means of getting out of profitable trades
4. If large portion of objective is achieved quickly, take partial profits
5. If objective is reached and you still like the trade, stay with it with a trailing stop
6. If everything is going right, scale up and use close trailing stops
7. If long term trade, have a game plan for re-entering positions. Inability to enter at a worse price can often lead to missing major portions of a large trends
8. When trading larger positions, avoid the emotional trap to be 100% right. Take partial profits
MISCELLANEOUS PRINCIPLES AND RULES
1. Always pay more attention to market action and evolving patterns than to objectives and support/resistance areas
2. When you feel action should e taken either entering or exiting a position, act, don’t procrastinate
3. Never go counter to your own opinion of the long-term trend of the market. In other words, don’t try to dance between the raindrops
4. Winning trades tend to be ahead right from the start
5. Correct timing of entry and exit can often keep a loss small even if the trade is dead wrong
6. Intraday decisions are almost always losers. Keep screen off intraday
7. Be sure to check markets before the close on Friday
8. Act on market dreams
9. You are never immune to bad trading habits. The best you can do is to keep them latent. As soon as you get lazy or sloppy, they will return
MARKET PATTERNS
1. If the market sets new historical highs and holds, the odds strongly favoring a move very far beyond the old highs. Selling a market at new record highs is probably one of the amateur trader’s worse mistakes
2. Narrow market consolidations near the upper end of broader trading ranges are bullish patterns. Reverse bearish.
3. Play the breakout from an extended narrow range with a stop against the other side of the range
4. Breakouts from trading ranges that hold for one to two weeks or longer are among the most reliable technical indicators of impending trends
5. Flags or pennants forming right above or below prior extended and broad trading ranges tend to be fairly reliable continuation patterns
6. Trade in the direction of wide gaps
7. Gaps out of congestion patterns, particularly 1-2 months trading ranges, are often excellent signals. (works especially well in bear market)
8. If a breakaway gap is not filled during the first week, it should be viewed as a particularly reliable signal
9. A breakout to new highs or lows followed within the next week or two by a gap (particularly a wide gap) back into the range is a particularly reliable form of a bull/bear trap
10. If the market breaks out to a new high or low and then pulls back to form a flag or pennant in the pre-breakout trading range, assume that a top or bottom is in place. A position can be taken using a protective stop beyond the flag or pennant consolidation
11. A breakout from a trading range followed by a pullback deep into the range (eg ¾ or more) is yet another significant bull or bear trap formation
12. If an apparent V bottom is followed by a nearby congestion pattern, it may represent a bottom pattern. Might be going for lower lows if consolidation is broken, set protective stops near top of consolidation
13. V tops/bottoms followed by multi-month consolidation that form in close proximity to the reversal point tend to be major top or bottom formations
14. Tight flag and pennant consolidation tend to be reliable continuation patterns and allow entry into existing trends with a reasonably close, yet meaningful, stop point
15. If a tight flag/pennant consolidation leads to a breakout in the wrong direction, expect the move to continue in the direction of the breakout
16. Curved consolidations tend to suggest an accelerated move in the direction of the curve
17. The breaking of a short term curved consolidation in the direction opposite of the curve pathway tends to be a good trend reversal signal
18. Wide ranging days with a close counter to the main trend usually tend to provide a reliable early signal of a trend change, particularly if they also trigger a reversal signal
19. Near-vertical, large price moves over a period of two to four days (coming of a relative high or low) tend to be extended in the following weeks
20. Spikes are good short term reversal signals. The extremes of the spike can e used as the stop point.
21. In spike situations, look a chart both ways, with or without charts. Eg, if the spike is removed and a flag is evident, a penetration of that flag is a meaningful signal
22. The filing in of a runaway gap can be viewed as possible evidence of a possible trend reversal
23. An island reversal followed shortly thereafter with a pullback into the most recent trading ranges or consolidation patterns represents a possible major top or bottom signal
24. The ability of a stock or future to hold relatively firm when other related markets are under significant pressure can be viewed as sign of intrinsic strength
25. If a market trades consistently higher for most of the daily trading session, anticipate a close in the same direction
26. Two successive flags with little separation can be viewed as a probable continuation pattern
27. View a cured bottom, followed by a shallower, same direction curved consolidation near the top of this pattern, as a bullish formation (cup and handle)
28. Extreme sentiment readings can often occur in the absence of major tops and bottoms, but major tops and bottoms rarely occur in the absence of extreme sentiment readings
29. A failed signal is more reliable than the original one. Go the other way, using the high/low before the failed signal as a stop
30. The failure of a market to follow through on significant bullish or bearish news is often a harbinger of an imminent trend reversal
ANALYSIS AND REVIEW
1. Review charts every day, especially if you are too busy
2. Periodically review long term charts
3. Religiously maintain trader’s diary, including a chart for each trade and noting intending stop and objective, follow up as to how the trade turned out; observations and lessons, net profit or loss
4. Maintain a patterns chart book
5. Review and update trading rules, trader’s diary and pattern chart book on a regular basis
42 OBSERVATIONS REGARDING SUCCESS IN TRADING
1. First things first, why is it that you really want to trade. Examine your motives
2. Match the trading method to your personality
3. It is absolutely necessary to have an edge & know what your edge is
4. Derive a method that has an edge.
5. Developing a method is hard work but it is necessary
6. Skill VS hard work (discipline, research, improvement)
7. Good trading should be effortless (just follow system)
8. Money management and risk control. Never risk >2% of your capital on a single trade. Predetermine your exit point. If you lose >10% of your capital, take a breather and analyze what went wrong. Must have one.
9. The trading plan. Must have one.
10. Discipline – Risk control. Apply your method.
11. Understanding that you are responsible
12. The need for independence
13. Confidence
14. Losing is part of the game
15. When lack of confidence must call time outs (trade only when confident)
16. When there is an urge to seek advice on that trade, abort the trade plan
17. The virtue of patience (trade only on good opportunities)
18. The importance of sitting tight (use trailing stops) Remember - Jesse Livermore
19. Developing a low-risk idea (patience & risk control)
20. The importance of varying bet size according to chance of winning
21. Scaling in and out of trades instead of getting in or out at once
22. Being right is more important than being a genius
23. Don’t worry about looking stupid – admit your mistakes & change immediately
24. Sometimes action is more important than prudence (quick action to test first)
25. Catching part of the move is just fine (win little better than losing)
26. Maximize gains, not the number of wins
27. Learn to be disloyal (to your position or counter)
28. Pull out partial profits (when perceived risk increases)
29. Hope is a 4 letter word (act fast and cut loss)
30. Don’t do the comfortable thing, do what is right (emotionless)
31. You can’t win if you have to win (scared money never wins)
32. Think twice when the market lets you off the hook easily (you may miss major opportunity)
33. A mind is a terrible thing to close
34. The markets are an exciting place to look for excitement (don’t get excited)
35. The calm state of a trader
36. Identify and eliminate stress
37. Pay attention to intuition
38. Life’s mission and love of the endeavour
39. The elements of achievement
40. Prices are non random = the market can be beaten
41. Keep trading in perspective (there is more to life than trading)
Randy Sei Trading Rules
1. Do not buy when prices are trading on high ranges. It is too volatile.
2. It is OK to sit out without trading for a period of time when there is no good opportunity.
Swing Trade Log - KepCorp 20090619
KepCorp - 20090629Entry: 6.68
Stop: 6.50
Reason for entry:
1. Candlestick bullish sign
2. Hitting bottom of Bollinger Band
3. MACD histogram green
4. CCI sloping upwards from below
Premises: Possible bullish reversal after a series of correction.
Trade horizon: short term. (1-2 weeks)
Caution: This stock seems to establish a new mid term trend. The rally seems to have fizzle out of steam.
Need to monitor closely and exit trade whenever downside detected.
Wednesday, May 20, 2009
Market Trend Articles
Here are some articles for reading pleasure:
Some bearish look:
Robert Prechter - Elliot Wave: Dow towards 2000/
Credit Default Swap may derail recovery
Some bullish look:
How the New ‘Yuan Carry Trade’ Will Add to China’s Global Muscle, and Possibly Even Accelerate the U.S. Recovery
Obama’s High-Speed Vision Gets Railroad Companies Back on Track
The Six Ways to Play Canada’s Oil Sector
Some comments:
History will show Alan Greenspan has a role to play on housing bubble.
Some bearish look:
Robert Prechter - Elliot Wave: Dow towards 2000/
Credit Default Swap may derail recovery
Some bullish look:
How the New ‘Yuan Carry Trade’ Will Add to China’s Global Muscle, and Possibly Even Accelerate the U.S. Recovery
Obama’s High-Speed Vision Gets Railroad Companies Back on Track
The Six Ways to Play Canada’s Oil Sector
Some comments:
History will show Alan Greenspan has a role to play on housing bubble.
Monday, March 23, 2009
SGX Weekly Review 090320
There has been many daily reviews and weekly reviews on Dow Jones, NASDAQ, S&P500, SPY, FLX, etc, etc. Just don't find any SGX reviews. So, it's time I do one. Hopefully, someone else will also start to do it.
Looking at the daily chart of FTSE STI, the comments are as follows:
On week ending 090313, we saw a strong rally that propelled the STI advancing more than 10% over the previous week. On week ending 090320, the STI still advancing but at the slower rate. The volume has also diminished slightly but does not seemed significant. MACD showing a little bit of topping sign and we may expect red charts appearing soon even though the signals still moving up. Stochastic reaching overbought on daily basis. I expect the market to further correct itself in the coming week but it does not mean that it will close lower. However, it is highly probable that it will touch 1560. If it close below 1560 for more than 2 consecutive sessions, it could indicate further decline. However, if it bounces up from there and proceed to close above 1600, it could lead to further rally to 1670.
Looking at the daily chart of FTSE STI, the comments are as follows:
On week ending 090313, we saw a strong rally that propelled the STI advancing more than 10% over the previous week. On week ending 090320, the STI still advancing but at the slower rate. The volume has also diminished slightly but does not seemed significant. MACD showing a little bit of topping sign and we may expect red charts appearing soon even though the signals still moving up. Stochastic reaching overbought on daily basis. I expect the market to further correct itself in the coming week but it does not mean that it will close lower. However, it is highly probable that it will touch 1560. If it close below 1560 for more than 2 consecutive sessions, it could indicate further decline. However, if it bounces up from there and proceed to close above 1600, it could lead to further rally to 1670.
Sunday, March 1, 2009
Stock Trend Analysis: Head and Shoulder - CityDev
Referring to my previous blog on CityDev on Jan 12th 2009:
http://stockmarketnews.blogspot.com/2009/01/stock-price-pattern-citydev-head.html
I had mentioned that CitiDev has broken the neckline of the head and shoulder and the potential price target was S$5.12. The following chart shows closing price on Feb 27th 2009. The closing price was S$4.8. It has broken the support of $5.12. This is troublesome. It appears that this counter is forming a new down trend.
However, after more than 1 month of selling down, there is hope of a short re-bounce. Holders of CityDev will be hoping to sell into the re-bounce. That will put further pressure on this counter.
http://stockmarketnews.blogspot.com/2009/01/stock-price-pattern-citydev-head.html
I had mentioned that CitiDev has broken the neckline of the head and shoulder and the potential price target was S$5.12. The following chart shows closing price on Feb 27th 2009. The closing price was S$4.8. It has broken the support of $5.12. This is troublesome. It appears that this counter is forming a new down trend.
However, after more than 1 month of selling down, there is hope of a short re-bounce. Holders of CityDev will be hoping to sell into the re-bounce. That will put further pressure on this counter.
Importance of Major Trend
Previous blog entry, I mention that in case of indecision, the price will eventually resolved according to the major trend (in this case, it is downwards).
On the hindsight, on studying of ComfortDelgro, we can see that the counter is now trading is a downward channel. It closed at 1.46 on Jan 14th 2009. Subsequently, it went down and had a short bounce. I was lucky to had queued at 1.50 on the Jan 30th and got rid of my holdings which was bought at 1.49. It closed at 1.31 on Feb 27th, ending Feb 2009 with a loss of 0.15 (1.46 - 1.31). Feb 2009 low was 1.25.
On the hindsight, on studying of ComfortDelgro, we can see that the counter is now trading is a downward channel. It closed at 1.46 on Jan 14th 2009. Subsequently, it went down and had a short bounce. I was lucky to had queued at 1.50 on the Jan 30th and got rid of my holdings which was bought at 1.49. It closed at 1.31 on Feb 27th, ending Feb 2009 with a loss of 0.15 (1.46 - 1.31). Feb 2009 low was 1.25.
Thursday, January 15, 2009
Stock Trend Analysis - Indecision indicator
Hindsight: Comfort Delgro Ltd
Based on 14th Jan 2009 chart, if my theory is correct, it seems that the counter is trending towards a protracted downward movement. Let's see how it will turn out. If this turn out to be true, then we can deduced that during a major downtrend (i.e. when 200MA is trending down), any indecision shown on technical indicators will eventually lead to more downward movement for a period of time.
Based on 14th Jan 2009 chart, if my theory is correct, it seems that the counter is trending towards a protracted downward movement. Let's see how it will turn out. If this turn out to be true, then we can deduced that during a major downtrend (i.e. when 200MA is trending down), any indecision shown on technical indicators will eventually lead to more downward movement for a period of time.
Monday, January 12, 2009
Stock Price Pattern - CityDev - Head & Shoulder
CityDev seemed to be forming head and shoulder pattern with the neckline broken. If this is true then we should expect the price to hit S$5.12 (around there). So, there is no point to make any purchase now.
I would monitor for a few days on this counter. In any case, all the Property Sector are experiancing similar faith.
I would monitor for a few days on this counter. In any case, all the Property Sector are experiancing similar faith.
Stock Price Movement - DBS
Revised Window Of Opportunity by Time Horizon (WOOTH) for DBS updated with price adjustment due to Rights Issue:
Today, DBS is trading in the "safe entry" zone below S$8.20. But due shooting star in the weeklya and daily charts, it would be prudent to wait and see before entering. See below for a chart done last week on 7th Jan 2009 night. Shooting star appeared on 7th Jan 2009 when I happened to look at DBS. On a weekly basis, the shooting star become more pronounced.
This was followed by 3 more down days. Expected to go to below 8.15 but stay above 8.00. If 8.00 broken, further support at 7.60.
Today, DBS is trading in the "safe entry" zone below S$8.20. But due shooting star in the weeklya and daily charts, it would be prudent to wait and see before entering. See below for a chart done last week on 7th Jan 2009 night. Shooting star appeared on 7th Jan 2009 when I happened to look at DBS. On a weekly basis, the shooting star become more pronounced.
This was followed by 3 more down days. Expected to go to below 8.15 but stay above 8.00. If 8.00 broken, further support at 7.60.
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About Me
- ES Sei
- I'd like to share my experiences and knowledge about healthy and happy living as well as mid-life crisis. 不以物喜，不以己悲。