Thursday, September 30, 2010

Sample 7: Buying does not need to be GUESS WORK


Buying can be a sure thing when cluster of positive indicators appear within the week or so.
This gives you the strong conclusion that "Yes", Professionals are in the game to provide
good support to the base so that price can propel further from here.

There are many powerful indicators in this Personal Trading System. I have spent more than
six months developing, testing and fine-tuning each indicator as precisely as it can be to pick up
the Smart Money activities such as when they are accummulating, distributing and idling.
Comparative Relative Strength to the Index and Moving Averages are used in my System
as references. The most important skills that I have developed over the times is to
interpret the Daily Demand and Supply with just Price and Volume only without additional
indicators such as MACD, RSI, ADX, STOCHASTICS, Moving Averages.

Yes, just Price and Volume using Candlestick. During my free time, I created many training
tools to improve my chart reading skills using Powerpoint, by reading each bar at a time and
decide to take trade or call it off, have made me more confident to even trade off with a mobile phone
that provide candlestick chart and volume.

This is what I have created to train my chart reading skills as below:
More than 50 charts with different cycles in stock trend are used for practising skills



What I want to achieve is to follow the Smart Money activities that drive the Market in either direction
to take some profit out from the trade each time.

The Expert indicators, Diamond's Scanner and  System Tester codes are not for commercial purpose.
It is solely for my Personal Trading and shared with a few good buddies.

Expert Indicators will appear on the price bar each day if certain condition is met. The programming
codes involved Price Action (Open, High, Low, Close) and Daily Transacted Volume.

The Purpose of the Expert Indicators are to decrypt the nature law of Supply and Demand in the Market Place each day, not forgetting the Professionals activities are registered in the Volume bar.

The key element in this Trading System is to predict the Professionals Activities in the near term with acceptable accuracy. Therefore a swift trade can be executed and profit can be made as the price starts
to rebounce from the successful "Test Base / Support Level". At this level, the Risk to Reward Ration
is good.

The Diamond's Scanner on the other hand, help to scan the whole SGX Market about 900+ stocks
for possible stock that meets the criterias for further analysis and possible transaction the next day as shown below. This Scanner also applicable to all tradable securities.


Using the same trading system for USA Market using http://www.updown.com/ with 1 million
dollar Practical Account.

With the Scanner to pick out trades, this is my USA Stock Portfolio.





Wednesday, September 22, 2010

Sample 4: Don't be greedy. Know when to take profit is utmost important as buying.


Everyone knows how to buy shares as long as you have money in your bank. Sadly not many know when to take profit and eventually causing a winning trade turning into a lose trade. How do you feel? definitely as lousy as you can be, self sabotage is common in this challenging Market Place.

Most of us are ruled by the two worse enemies of mankind, "Greed" and "Fear".

We want more and more and hope that price will go higher and higher and hopefully there is no roof to where price can go and we can become overnight trading champion. HaHa, I am waiting since 2001 and
have not witnessed such a miracle then. When Greed overcrowds our mind, we become irrational to make
decisive action to even take a portion of the profits out from the Market and leave the remaining one-third to
test your guts feeling.

When a stock is too far away from your entry level, you just can't give it up and look for another opportunity.
You just have to own this stock no matter what you feel. This is a part of your self sabotaging ego at work.

Witnessing price been moving up steadily for the past five days, you decided that you are not going to miss out anymore, the pain to wait for a retracement is too long to bear, impatience sets in and you decided to take a position in it. Once you have joined the herd, you feel great and glad that now you are part of the game. For the next 1-2 days, price may continue to move higher with reducing volume each day.
Knowing this could be the tell-tale sign of potential weakness in the price, you continue to hold as you are blind by the FEAR of not getting into the trade and also the FEAR of losing opportunity to get in.

Just one bad news that hit the wire, Market starts a new phase of profit taking. Unaware that the Professionals are actually pulling funds out from the Market, you decide to hold on to the position as you believe that the Market should come back up soon and luck shouldn't be that bad. And two weeks have past, the stocks that you have bought are now down by 30%, you start to worry and wonder what has happened and still hoping that the Market will come back up in the near future. Keep on waiting and waiting.....and you will discover that the transacted volume each day is getting thinner over the months and then years.

The Professionals are nolonger interested to move this stock. You keep on waiting and and resulting in holding the lousy stocks for months and even years sometimes. Finally,  you give up the hope that Stock Market is not for you anymore. Worse still, when you decide to cut loss painfully, within the next few days, the Market starts to recover and back to the breakeven level for your portfolio. Oh....You start to hate yourself for being stupid this time and more frustrated then ever.

When you buy, the Market declines, when you sell, the Market recovers.

This is really bad feeling and omen. You blame on luck and your financial advisor who gave you the stock tip earlier. Ha Ha.. Vicious cycle one after another.

Sometime you may never recover your losses and the stock that you may have purchased is suspended from trading. This is enough for you to spread bad feelings about the Stock Market experiences to your friends or loved ones that never to touch the Stock Market.

This is not a made-up story, It is real scenerios around us and we know people who had been caught by the Stock Market plunge, fear has overcome them, deep intense pain has taken control over their body and mind.

Do not talk "Stock Market" to this group as you will get a Karate Chop from them. HAHA..

Financial Skills is a learnt skills, it can be taught and learned well if given time and effort to understand
the underlying cause and effect of the Stock Market Price Movement. Beside learning how to Buy a stock,
you should pick up the other important skills on how to Short Sell a stock if the Market turns bearish.

Like me, I am a Computer Engineer who is interested in software debugging, reverse engineering to discover how an application is written and coded. I am curious and like to get into the root cause of each task that I handle. Likewise for Trading, by understanding the natural effect of the Market Demand and Supply,

I am able to create a series of programming codes that pick up stocks that are going to move up from the bottom of the channel or falling off the roof of the channel. With tedious repeated testing on Scanner codes to make sure that only a few out of hundred stocks are picked up for analysis and possible trade the next day.

Nothing is difficult if you have the heart and soul to learn and excel. Life is short, live with passion!



Monday, September 20, 2010

What is your edge over High Frequency Trading by Big Boys?

Hi All

Frankly Speaking, for Average Investors who read Financial Newspapers, watch Market News on TV, listening to your Broker's advice are just plain useless and nonsense. Average Investors are meant to be
slaughtered like the sheeps or cows for their delicious meat products.

Since Average Investors have no edge in trading the Market then why bother to open trading accounts at all.
The answer lies in the brain of everyone of us. Greed. We want to have more money by betting along with the Bullish Market and hopefully the stock that we purchase, turn out to be a home-run. Woo.... Fat Hope.

Since we are riding the Bullish Market and witnessing our capital invested starting to break even and then profit start to roll-in. We get extreme bullish and arrogant that the Market is not that difficult to make some good Money at all.  We can dream of quiting our boring jobs and become a full-time traders instead.

But how many  of us actually become successful full-time traders using retail base trading stations where the
Professionals have direct access to the Quote terminal to log in their ordres in millions of a second. We have no edge again.

Are we doom to fail in this trading Business at all? Do we have an edge to take a small bite off the huge pie and still enjoy our Return in Capital Invested?

Well, most of the technical indicators are derivatives derived from Price and Volume and most are lagging in nature.

So If you ask me then what is the leading indicators then? My answer is the actual daily Price and Volume Action where the actual Demand and Supply are reflected on the daily Price and Transacted Volume.

If one can read off the Price and volume without the use of any derivative indicators to reveal the hidden Supply and Demand from the Smart Money. Woo, this is the ultimate chart reading skills.

Trading has always been a passion and a challenge for me, like many investors. I have read near hundred of books covering from Fundamental Analysis to Contrarian Trading to Technical Trading. I must say that the more information that I absorbed, the more techniques I will be urged to test out and eventually lose a portion
of the money but losing is good for me. I start to understand what skills should I acquire instead to suit my  personality instead.

I have developed a series of codes that help me to probe the Market Momentum whether the trend is about to change direction and if I should take a position in it. The Scanner enables me to scan the hundreds of stocks each day  to pick out the potential ones that exhibit internal strength or weakness for further analysis.

The Stock chart has been colored coded to show change in trend from Positive Green to Negative Red, not to mention the Trend Cluster below the Volume chart shows the same intention.

With each carefully programmed codes for the Expert Advisors such as Professionals are Distributing, Reduced Selling Pressure, No Supply, Trap Upmove, Lack of Demand, Price Pullback Up, MarkUp Bullish, Bottom or Top Reversal, Uptrend or Downtrend, Test Base, Supply overcomes Demand or Demand overcome Supply,Strength Coming in and more.

Besides, all these codes are converted into scanning code to pick up each incident. Such as scanning for "Strength Coming In" show me all the charts that exhibit this criteria for further analysis.

So far for now, I got to logoff.  Do we have an edge as a retail investor? Now, the answer for me is YES.
You need to have the right tools to take on this challenging, cruel and realistic Market Place where the Informed Group takes all the advantages from the Uninformed.

Be part of the Wolves Pack instead of the Majority Herd in the trading arena. Good Luck and many Profitable Trading Ahead for us!

Sample 3: Another Potential Stock Picks Up by VPSA Scanner

Sample 2: How VPSA scanner picks up winning stocks all the time?