Monday, January 24, 2011

Powerful Scanner picked up CapitalMallAsia For SHORT SELL on 24th Jan

Good Day  Trader

My scanner picked up CapitalMallAsia for short sell candidate. Two expert indicators appeared concurrently
denoting bearishness in the stock.


Further analysis showed that there is potential for the price to go lower towards the targeted level as
 marked on the chart. Here we are dealing with probability and no certainty, therefore whether
Long or Short order.

We must protect ourselves against unexpected outcome by setting cutloss level by all mean.

Below is the chart that I have analyzed with expert indicators and trendlines.


Wishing everyone a Profitable 2011 & Happy New Year!


Tuesday, January 4, 2011

Learn and Excel Together, Great Questions by a Reader.

Thanks bro for your questions, hope I have answered your questions thoroughly.
-------------------------------------------------------------------------------------
SGtrader says:

The folloing replies represent my opinion and does not represent the masses
or constitue to any buy or sell advice from me. Solely for educational purpose.
Don't be too serious.

We are solely responsible for our trading activity in the market, when in doubt,
please consult your financial advisor for more assistance.

Cheers

----------------------------------------------------------------------------------------------
What is usually the signal for a buy?

1. When selling pressure decreased, low supply on sell side more on buy side.

Price near support or @ support range.
When selling pressure decreases, usually the sellers have already sold most of their inventories.
Price will continue to go lower due to momentum but soon price will start to move sideway to wait
for the next event to come. The sideway movement  can last as long as the market decides.
Until the next major events occur, it will continue to stay low. Base break out usually happens much
earlier then analysts coverage or news. This is becoz in most cases, many others related to the listed
company would have already knew the good news ahead and plan their purchases much earlier awaiting for
 the news to break out to the public. This is usually detected by the unusual high transaction activities
when the stock is in sideway market but still within the trading range. This is sign of early accumulation
by the known persons.  Take note: (This is my wild assumption and may not be true as Insider trading is illegal.
Read at your own risk.)
My system seeks to reveal this type of activity as it evolves…So that I can always position myself together
with them.Impt thing is to always watch your cutloss level no matter what happens…We are dealing with
 probability in all cases.
2. Good fundermentals
I don’t use fundamental analysis..I have seemed many lousy stocks become valuable after
massive speculation by pros..I also see cash rich company kana punished like nothing, there
is no logic at all. E.g Wilmar International
Is wilmar fundamental weak after getting into property biz? No, still cash rich.
So why the stock is beaten down so much, due to fear and greed.
This sell down is seemed by me as a manipulated activities to cause many average traders to
unload their stocksto the pros who are actually accumulating but their activities are trying to
show that they are dumping.
Pros are known to play both sides of the market. They dump in the morning to create fear
and buy back cheaper at mkt close.
If you follow my blog, you will see what  I see..
http://www.sharejunction.com/sharejunction/listMessage.htm?topicId=9386&searchString=&msgbdName=Others&topicTitle=Are the Professionals ready to move
Wilmar UP?

3. How do you really tell whether a stock is poised for a jump, by your expert
indicator.
If you know how to measure market expansion and contraction and compare to the stock that you are
analyzing, you will be able to see that the stock is now outperforming or underperforming the index.
I choose to pick stocks that outperform STI and it must be in stage 2 meaning I pick stock that is going
higher and higher and I love to buy higher price from the sellers. After all, this is the only way for price to
go higher if you understand bid and ask.

Please correct me if im wrong, i only know the tip of the iceberg.

Usually i look at the normal MACD, RSI, STO. I feel those are really not trustable

and its really only the surface and lagging.
I had used those common indicators for 3yrs and I also joined TASS society and took the market
technican exam. It’s take expert to know how to combine those Indicators and many will not reveal
much in their bootcamp. Using those indicators, you must be good at spotting divergence and
convergence.
Many times, you will be left indecisive when the indicators are floating in the air..e.g. when macd
is widely apart from the signal line. The call for sell is to wait for both MACD and signal lines to cross
 over. But by then, most profits are gone or worse if it goes under your buy price.
I have tested my system again all past indicators that I use… The most important of all is that those
 indicators cant ride a trend too long. Cross over now and then giving the signal to buy or sell. meaning
 you are going to make your brokerage super-rich by trading excessively.
This system of mine help me to ride a trend up to a max of 3max which is long term to me. It will filter
short term noises and I am above to achieve very good % of returns. Just as example. If you use daily
chart to trade and how many times will the price be cutting the 13MA.
What if I used 13MA in weekly chart to trade, how far can the price goes before triggering a sell signal?
 My system looks into daily chart vulnerability and smoothen it with weekly chart.

I read "Way of the turtle" and i feel its a fantastic book where traders learnt to trade.
They used trend trading and also bought in around when close>20d ma.
I also compare with turtle style of trading. This system is much closer to what I am using now  
but turtle triggers too much transaction in a uptrend.
For a retail trader, getting to trade in and out of the market too frequently is going to kill your capital.
My system will help me ride a trend until weakness is found.
See below chart on how I usually trade a stock. As below, I bought at channel low where two bullish
signals were picked by my combine scanner (reduced
Selling pressure + uptrend) then I sold when the price started to come into the channel, I could had
sold on the 1st weakness indicator “Trap upmove”
But decided to give the stock some more room to move. At the end, it still fell and I exited with 39% returns in a short period.

If you compare my chart above with turtle indicator applied below, check the turtle indicators on the chart.
From my original chart, you can see the the price bars were green until the day I sold whereas for the turtle below, You could see some sell stop signal and red price bar.. This may cause worry to traders who could have exited due to profit protect too early before the trend becomes mature.

It would be appreciative if you would share some of your long learnt knowledge.

Thanks,
Cheers.

040111 - Are the Professionals ready to move Wilmar UP the trend?

If you have been following my posts on wilmar, you would have knew that I have been following this
stock closely since mid december. If you have missed any of the post, the links as below.

http://volume-price-spread-for-metastock.blogspot.com/2010/12/241210-wilmar-has-fallen-19-pecent-is.html

http://volume-price-spread-for-metastock.blogspot.com/2010/12/171210-is-wilmar-ready-to-stage.html

The same question again, Is Wilmar ready to go up north from today's massive sell down?
Look at the price bar today, the closed is not above 50% of its day range but towards the day's low.
Although there is a sign of  buying back at the end but this does not constitute a "buy order" yet.
If you think that it is cheaper now, think twice as it may get cheapest in weeks ahead.

Look at the wilmar chart today, if a trader has been trying to buy into the huge down day on each
occasion or averaging down.

Let see his portfolio performance.
                                     Date            Activity            Lot          Price
                                11/11/10           BUY                  1             $6.30
                                22/12/10           BUY                  1             $5.62
                                04/01/11           BUY                  1             $5.50
 ------------------------------------------------------------------------------------
TOTAL                                                                       3              $17.42
-------------------------------------------------------------------------------------
 AVERAGE/LOT                                                        1             $5.80
LOSS/LOT (TODAY CLOSED - AVERAGE)                       -$0.30

This loss will continue to amplify if the stock price continues to fall day after day. Paper loss is REAL loss, don't be childish to think it is not. It is your real money in negative returns. Worse of all, funds are
held up too long waiting for the stock to turn back up again and some never able to survive again with
suspension or delisting issue.


So what will be the tell-tale sign that the stock may have bottom inorder to have a good entry and enjoy the joy ride soon after purchase...Check my blogsite for more information.

What to look out for this week?

Basically we need to see that the today's low is not violated for the next few sessions, what I would like to
see for the next three sessions is to look out for test base bar or reduced selling pressure bar with very low volume, negative bar  which closes within the body of today's bar. In Japanese candlestick, it should be classified as bullish harami. This will provide me with the tell-tale sign that the sellers are no longer motivated to sell down further and I would expect higher price from then. Another positive indication will be a bottom reversal bar when price opens lower than today's low and closes near the day high with enormous volume and this climatic bar actually covers at least 50% of the today's bar.

Another interesting aspect of my system is that when the trend change occurs, the price bar will turn
Green and the Trend Cluster below volume bar will turn Green too. So when price bar and trend
cluster are positive with other positive indicators alert, then I will consider to take the trade without fear.

In my opinion, I feel that Wilmar is likely to head lower towards the mid-term support at $5.25. Failure to
hold up, next will be the lower channel line (bear logo) around $5.00 mark. Till then, I have to relook into
the chart again.

As I am planning to look for long trade, until now I have not found the right timing to ride the upwave and
is fortunate to be staying sideway all these while when the stock continues to plunge.


For more information on how I prepare a stock chart for trading each time?

Youtube: http://www.youtube.com/watch?v=DhWgOq3BWHs

               http://www.youtube.com/watch?v=nlNL8hCxq3E

               http://www.youtube.com/watch?v=_nHsj_xSAhI&feature=related

Blogsite: http://volume-price-spread-for-metastock.blogspot.com/

Trading is a team sport!

Monday, January 3, 2011

040111 - StraitsAsia Mid-Day Chart Follow-up from previous post.

Hi

If you missed my previous post on how I trade StraitsAsia, the techniques and why I took the trade?
Pleas refer to the earlier post below:


04/01/11 - mid day update


Click on image to zoom

030111 - Bar by Bar Analysis on OSIM

Above chart showed the well defined support and resistance levels.


Above showed that each bar is marked with a point number for my reference
when trying to explain the rational behind the scene.

To start off here, this is my personal view and it's ok that readers may not agree
or have their own explanations. This is fine for everyone as there are thousands
of methods to decode the market as your  own experiences.

Below is my explanation and it is solely for education purpose only. Don't be too
serious with me, better get serious with your own financial business.

Refer to the chart for point 0 - A

Point (0)

Sellers dominated both of the sessions and at the end of the market day, buyers came
in and bought into the  selling spree. That was the reason for the tail on both of the bars.
This buying does not mean that the pros are ready to move up the stock price as they
will accummulate at different intervals until the timing is right to move price higher.
This can usually be spotted by my indicators such as Test Base, Reduced Selling
Pressure, Markup Bullish, Bottom Reversal, No Supply.

.Point (1)

The reason for this bar to be positive because the previous two sessions contained
buying activities at the end of the day.This positve up bar was without substantial
volume to support upside.

Point (2)

Due to the previous day upbar was without much supported volume to sustain
the upside. Expert indicator detected "Lack of Demand" from the professionals.
The recent base level hd to be retest again.

Point (3)

Notice that this was a down bar which closed lower than the previous bar
but the volume was significantly lesser which triggered my expert "Reduced
Selling Pressure" meant that there were selling but had cooled off alot.

Point (4)

Look at price opened at the previous day's low level and at the end of the
session to close at day high with low volume and triggered "Reduced Selling
Pressure". This was the definitely tell-tale sign that the base had been formed
and sellers were not motivated anymore and expect price to either more sideway
or higher from now.

Point (5)

With the previous day confirming the base, today, price was purposely marked
up to flush out any hidden sellers. Although it was a positive upbar but the
volume was still below average level. Some sellers appeared, this was witnessed
by the closed price which did not close at day's high and price was still able to
hold above 50% pivot level as the sellers were not so powerful.

Point (6)

The previous bar was now a clear signal that the sellers were weak and unable to
punch down the price.Buyers were motivated and moved price quickly up with
substantial volume to close near day's high. Now, the bulls took charge.

Point (7)
The gapped up in price attracted profit taking. Both buyers and sellers were
motivated to make their firm ground. The buyers were trying to support the
selling pressure.
Both sides of traders fought for their rights to control the  situation.
At the end, the sellers were able to create some injuries but werent life threatening.
Price still closed positive.

Point (8)

After a good fight, both sides of traders took a break to recover and consolidate position.

Point (9)

Today, the price opened lower then the last two days but was able to close at the
end of the day's high.This was clearly a sign that the sellers were badly wounded
and still in pain to whack a war again. But that wasn't meant that the buyers were
in upper hand, the buyers had won the battle but with below average activity level (volume)
which was a sign of concern on how long could this activity be supported.


Point (A)

Today, price closed positive and near 50% off its day high denoting that the
sellers are well and back again.

Conclusion:

In the near term, we could be experiencing sideway trading from this stock
until one side becomes clearly dominant.


Personal opinion, there are still good upside for Osim until 1st week of February.
The very important is don't be stubborn with own's view, stay vigilant
and let the market tells you what to do next. We can be very positive
on a stock but without a contingency plan of escape when market
suddenly turns south. We could be trapped with a home-run stock which
now becomes a liability.

When I trade a stock, I am more concerned about the risk that I would take
and watch that level closely. I may have a target projection but I am not
god to know if it will happen. Therefore, as long as each trading day that
the risk level to cut loss is not triggered, I will feel safe to survive another
day with price continues to move northward. When it's time comes to trigger
the risk level, exit graciously and be happy with what you have made.

Move onto another stock and repeat the transaction (buy, sell, cutloss) again.

Cheers

Saturday, January 1, 2011

Why High Volume High Price Range May Make You Lose MONEY?


Hi Traders

Again and again, I have witnessed how professionals trapped the herd into buying while the professionals
are doing the opposite instead.

Refer on my last post on this issue.
http://volume-price-spread-for-metastock.blogspot.com/2010/10/sample-9-excessive-volume-upbar-may-not.html

Look at the above chart on Genting HK >>>

BEWARE of High Volume and High Price Range - this could be a trap that the
professionals setup for you to buy in while they are happily unloading their inventories to
you.

Check at those vertical dotted lines marked with "W", those were huge volume and
price day. If the professionals were so bullish to make the price range so wide and
huge volume, why were there be selling after the next day? Shouldnt the price continue to
go higher with good volume?

Have you been trapped in this kind of scenerio before when you watch a particular
stock starts to move wildly up and you decide to take a trade instead as the reward is
too good to resist and you feel like a champion after having a part in the game.
What happen the next day when the price starts to fall lower each day and you now
feel lousy.
You thought to yourself, every news that you can find are  saying good things about
this stock and you are sure that the stock price should continue to climbing and not
falling. You starts to notice that after the heavy transaction day, daily transacted volume
has been getting lower and lower and eventually below average level. How can it be?

You are trapped once again to believe that a new uptrend is on the way but turn out
to be a joke.
This is one of the classic traps that setup by the professionals to trap average traders
like you and me into believing that the stock is bullish while the professionals are thinking
bearish and want to unload as fast. This game is tough and cruel, it's not simple afterall....
By interpreting bar by bar, I am fortunate to decode what the hell is going on behind
the scene and trade along side with the professionals.

Expert Indicators such as "Trap Upmove", "Lack of Demand", "Supply coming in",
"Weakness coming in", "Top Reversal", "Professionals are distributing" are able to
warn me before hand and take appropiate action immdiately

Tuesday, December 28, 2010

281210 - I decided to trade Straitsasia when the momentum is RIGHT


Hi Traders

Referring to my earlier post on 24/12/10 where I explained the strategy that I would use to trade Straitsasia.
If you have missed the post, check it out below link:
http://volume-price-spread-for-metastock.blogspot.com/2010/12/241210-road-to-riches-depending-on-how.html

Straitsasia has been meandering within channel since May until today. The angle of the slope is above 45 degree which provides me with the clear indication that this stock has been a favorite by many
professionals. I had advised that I would be watching this stock for the next 1-2 weeks to make sure
that the base support is strong enough for the price to move up north again.

Today, the price displayed strength and I decided to take a speculative stake with calculated risk. None of my expert indicators has triggered positive buy signal yet. With past experiences, if price continues to move up for the next 2-3 days with average volume, I am sure that one of my indicators will trigger me to go long with this stock.

I hate this guts feeling to buy before my expert indicators say so, but sometimes it takes GUTS to stand up for what you believe and be responsible for the outcome. In this case, I chose to go with my GUTS feeling and please pray for me.

During the course of my trading years, I have developed numerous calculators such as Risk to Reward, Pivot Point and Fibonacci.

Below is one of the calculators that I use when planning a trade.

As an example, I use StraitsAsia for illustration.

Lot Size: 10lots (1 lot = 1000shares)
Buy Price: $2.51 (above pivot level and moving averages)
Cut Loss: $2.43  (below recent's support level)
Target: $2.75 (past known resistance level)

With the above information, I will be able to obtain an estimated rewards ratio for this trade.
If the ratio is less than 2, I would not consider to take trade.



Till then, cheers

Wishing you and me alot more profitable trades in the New Year 2011.